Insurance intermediaries must comply with the obligations under money laundering law if they broker life insurance policies within the meaning of Directive 2009/138/EC (Solvency II), accident insurance policies with premium refunds, capitalization products or insurance loans. This sounds clear at first. However, modern brokerage models are increasingly moving away from traditional sales “to the customer” and raise the question of how insurance brokers have to fulfill their obligations under money laundering law and to what extent this is still in line with the original legislative considerations.
Table of Contents
Finally, the new EU Anti-Money Laundering Regulation (Regulation (EU)2024/1624 – the “AMLR”) is also casting its shadow. Is everything really new here or is it just old wine in new bottles?
1. Limits of the obligations under money laundering law
Insurance intermediaries are subject to the obligations under money laundering law only and insofar as they broker life insurance policies, accident insurance policies with premium refunds, capitalization products or loans. Loan brokerage relevant under money laundering law is limited to loans granted by insurance companies. If, for example, an insurance broker (with an additional license as a loan broker in accordance with Section 34c (1) GewO) also represents loans granted by credit institutions, he does so as a loan broker and not as an insurance broker and is therefore not subject to the MLA obligation.
Pure loan brokers in accordance with Section 34c AMLA – who broker loans issued by credit institutions – are not (yet) obliged entities under the AMLA. This lack of concurrence of the obligated party status seems ill-conceived, especially in view of the potential risk content of the brokered products, and will therefore change under the AMLR: from July 10, 2027, the majority of mortgage and consumer credit brokers will also be subject to anti-money laundering obligations.
On the other hand, tied agents and intermediaries acting on an ancillary product basis are not subject to any obligations under money laundering law (Section 34d (6), (7) No. 1 GewO). An intermediary who offers goods or services as part of their main activity, but also represents insurance products as an appendage to goods and services on behalf of an insurer or main professional intermediary, acts as an accessory to the product. Tied agents act exclusively on behalf of one or more insurers and under their “liability umbrella”.
With these types of intermediaries, it is assumed that the intermediaries are integrated into the organization of the respective superordinate intermediary or insurance company and are therefore subject to their control and a separate obligation under money laundering law is not required. However, practical problems can arise if intermediaries who are actually product processors cooperate with third parties (e.g. credit institutions) and these require a license under trade law as “proof of legitimacy” for the cooperation. This effectively puts an end to license-free product-accessory brokerage, as the broker who is actually “only” acting as a product-accessory broker then formally has a license under the GewO – and in turn falls out of the exempt status under money laundering law and into the obligated party status under the GwG.
2. Practical problems using the example of the brokerage of residual debt insurance
In particular, the brokerage of residual debt / residual credit insurance products can pose various problems under money laundering law: Until now (i.e. until the amendment to Section 7a (5) VVG on January 1, 2025), residual debt products were usually brokered as an annex to consumer loan or leasing contracts. The brokers often only had a license in accordance with Section 34c GewO and were therefore not subject to any obligations under money laundering law
However, if the credit institution made the cooperation dependent on an actual license as an insurance intermediary and the intermediary received such a license, the sale of residual debt insurance products was often already accompanied by the obligation under money laundering law. The main reason for this is that the definition of life insurance, which is decisive for the status of an obliged entity under money laundering law, is extremely broad.
If the risk of death is covered, payment protection insurance is regularly classified as a sub-category of life insurance relevant under money laundering law. This may be rightly criticized, because residual debt insurance does not pose a money laundering risk, as it is simply not suitable for money laundering. The death benefit from residual debt insurance serves exclusively to secure the corresponding loan and does not contain any capital-forming components. In the event of a claim, the death benefit is only paid out to the lender, not to the actual policyholder. Once again, however, the normative power of the factual prevails and residual debt insurance products with death cover are often treated as money laundering-relevant life insurance products in anticipatory regulatory obedience.
3. Platform models
If insurance products are now brokered online, particularly via sales platforms, the intermediary’s obligation under money laundering law reaches its conceptual limits.
According to the original legal basis, the insurance intermediary may still be subject to obligations under money laundering law. The aim of money laundering law is to ensure transparency in business transactions and to avoid anonymity and the concealment of money movements. The classic stereotypical insurance intermediary sitting at the kitchen table of a potential policyholder’s home (or in the front office of a bank branch) is actually “closer” than the individual insurer – who, if not this intermediary, is in a better position to establish the identity of the person purchasing a potentially money laundering-relevant insurance product?
However, this idea no longer applies to a large number of online sales structures and fully digital brokerage platforms. The platform operator may still act as an intermediary here, but ultimately it only acts as a “throughput heater” that passes customers on to the insurer after a very short click without actually being “closer” to this customer; in many cases, the platform does not even know which customers have actually concluded an insurance contract. It is reasonable to assume that the insurance intermediary’s obligation under money laundering law can hardly be meaningfully applied to such fully digital platforms. The responsible supervisory authorities have not yet taken positiona clear .
4. And in the future – money laundering law under the AMLR
From July 10, 2027, the AMLR will apply directly in the member states and will then replace the respective national law. Insurance intermediaries will remain subject to anti-money laundering obligations under the AMLR . This is not only relevant for individual insurance intermediaries, but also for insurers whose business models have so far been based on the fact that they can send individual intermediaries forward for identification and then have the identification data records created by them passed on.
This will also be possible under the AMLR subject to the following conditions: In the starting point, all insurance intermediaries acting in connection with life insurance and other investment services are obliged entities. The only explicit exception to this is the insurance intermediary “who does not collect premiums or amounts intended for the customer and acts under the responsibility of one or more insurance undertakings or intermediaries for the products concerning them” (Art. 2 para. 1 no. 6 lit. c in conjunction with Art. 3 no. 2 AMLR).
Unlike previously, the insurance intermediary must therefore fulfill two criteria at the same time in order not to be an obligated party under the AMLR:
- Firstly, he must (as before) be a tied intermediary (“under the responsibility of one or more insurance companies or intermediaries”).
- Secondly, he may not charge any premiums or amounts that are intended for the customer.
However, this also means that insurance intermediaries who only fulfill one of the two characteristics (1. a tied intermediary who charges premiums/amounts or 2. a non-tied intermediary who does not charge premiums) are not covered by this exception and therefore remain obligated parties under the AMLR.
5. Conclusion
The obligation of insurance intermediaries under money laundering law quickly reaches its practical limits in application. Particularly in the case of fully digital platform models, the idea arises that these cannot be covered by the legislative intention to impose money laundering obligations on the intermediary who is actually close to the customer.
The AMLR once again casts its shadow and indicates that the exemptions under which an obligation under money laundering law does not apply will be defined even more narrowly.
