A Research Into The Anti-Money Laundering Institution Of Insurance Industry In China

Researching Purpose and Core ArgumentThe main purpose of this thesis is to ascertain the economical law of money laundering and anti-money laundering activities in insurance field and put forward some preliminary policy suggestions for the construction of anti-money laundering institution of insurance industry in China, mainly based on the domestic circumstance and by use of a relevant theoretical analysis. And, the core argument of this thesis is that insurance industry of China should combat and prevent money laundering openly and resolvedly, and should effectively arrange and implement the anti-money laundering institution led by government.Main Contents and Viewpoints1)The Meaning of Insurance Money LaunderingBy adoption to the criminological study on the constitution of money laundering offence, this thesis analyzes the factors of the money laundering concept, based on which it distinguishes the concept of active and passive money laundering, direct and indirect money laundering, abstract and concrete money laundering, narrow-meaning and broad-meaning money laundering, thereafter classifies the concept of insurance money laundering according to the situation of domestic and international insurance market. Thus, the narrow-meaning and direct insurance money laundering can be defined as the procedures that offenders or criminals and their conspirators process their illicit properties or earnings by use of commercial insurance transactions, under the motive of evading from lawful sanctions and for the purpose of concealing or disguising the resource and nature of the properties or earnings. The broad-meaning and direct insurance money laundering, besides the connotation above, also includes the actions that any economic body, under the motive of obtaining benefit and for the purpose of corruption and tax evading or avoidance, transforms the originally legal properties into other seemingly legal forms by use of some commercial insurance transactions which look like legal. So, it can be called indirect money laundering that insurance institutions and their staff violate the lawful obligations of anti-money laundering, such as neglecting, conniving at or facilitating the two kinds of money laundering behaviors above. Depending on the definition of concept, this thesis summarizes the main approaches and features of insurance money laundering, and compares it with banking money laundering and insurance fraud.2)The Causes and Mechanism of Insurance Money LaunderingThis thesis analyzes the causes of insurance money laundering from the aspects of the international financial surroundings, the transaction laws of insurance market and the institution background of China, of which the posterior two are more important. As far as the transaction laws of insurance market are concerned, the risks of money laundering derive from that the placement of money is easy, the amount of insurance transactions is great, the parties of insurance contract are complicated, the disposal ways of insurance policy are varied, the proportion of transactions by insurance intermediates is very high, and the authorities permit tax exemption or deduction for policy-holders. As far as the institution background of China is concerned, in terms of government regulation, so many shortcomings embedded in the institution arrangement and enforcement of anti-money laundering are the most important reasons of insurance money laundering; in terms of insurance industry, the convenience of money laundering caused by lack of self-regulation is typically performed as the imperfection of underwriting, conservation, policy cancellation and market intermediating institutions; and in terms of social circumstance, it comes down to the current weak basis of fame appreciation system of financial industry and to the vacancy of informal institution system of anti-money laundering that the formal institution system of anti- money laundering runs not quite well.Further, this thesis analyzes the inner mechanism of insurance money laundering in China with an economical model.3)The Inducements, Goals and Principles of Anti-Money Laundering Actions of Insurance IndustryThe inducements of anti-money laundering actions of insurance industry are rooted in the necessity of removing or decreasing the harmfulness of insurance money laundering. Domestically, as far as the social harmfulness is concerned, insurance money laundering aggravates the aftereffects of corruption, deepens the difficulties of tax levy, exacerbates the social unfairness, and increases the regulation costs of government; as far as the harmfulness of industry is concerned, insurance money laundering enlarges the operation risk, the fame risk and the law risk of insurance firms.As for the goals of anti-money laundering actions of insurance industry, they are divided into two layers in this thesis, one is the basic goal and the other is the transitional goal, of which the former includes that to decrease the scale of insurance money laundering, to purify the insurance market and to restrain from transgressions or offences, whereas the latter is referred to that in current period, the actions of anti-insurance money laundering in China should be connected with anti-corruption and anti-tax fraud.As for the principles of anti-money laundering actions of insurance industry, this thesis demonstrates the principle of feasibility and the principle of implementabilty from the angle of economics, which mean that the measures of anti-money laundering should ensure the insurance institutions covered have to comply with the relative regulations, meanwhile they are also willing to do so that make the government achieve its goal of anti-money laundering as well as possible.4)The Construction of Anti-Money Laundering Institution of Insurance IndustryAt first, this thesis outlines the framework of anti-money laundering institution of insurance industry in China, and depicts it as three components: the consciousness layer, the regulation layer and the execution layer. In this framework, the first layer includes three elements which are the inducements, the goals and the courses of the construction of anti-money laundering institution; the second layer includes the form arrangement and the content arrangement of the institution; and the third layer is concerned with the efficient implementation of the institution.Then, this thesis sets the goal of institution construction as that China should establish a long-term mechanism for combating and preventing insurance money laundering; as for the courses of institution construction, it argues that China should stick to the ideas of systems theory, to the intensive strategy of anti-money laundering, and to the principle of risk-based approach.Thirdly, this thesis considers that both the formal and informal anti-money laundering institution of insurance industry should be stressed, and preliminarily discusses the content arrangement of the institution, including the legislative definition of money laundering, the punitive and preventative anti-money laundering institution arrangement.In addition, this thesis discusses some issues about the implementation of anti-money laundering institution of insurance industry, based on the analysis of the causes leading to insurance money laundering, thereof several implementing systems of anti-money laundering institution should be set up or improved, insurance money laundering should be administered comprehensively, and the costs of anti-money laundering actions of insurance industry should be controlled. Innovations and Contributions1)TopicPresently, this topic is an early study special in the anti-money laundering issues of insurance industry in the form of doctorial degree thesis, probably able to offer some references for relative institutions'decisions, and it's also a beneficial attempt of the application to insurance subject,.2)Researched Issues and Academic ViewpointsA)This thesis makes a relatively deep and overall theoretical discuss about the concept of insurance money laundering, and analyses the relation between the corruption & tax fraud and insurance money laundering in China, thereby puts forward the suggestion that the legislative definition of money laundering should be made in accordance with the principle of non-criminalization separated from criminalization.B)Referring to predecessors'study, this thesis utilizes the concept of multiplier of insurance money laundering to analyze the social harmfulness of and responsive strategy for insurance money laundering.C)On the basis of theoretical analysis, this thesis brings forward and demonstrates some suggestions about the construction of anti-money laundering institution of insurance industry in China, such as: introducing the principle of risk-based approach into the arrangement and implementation of anti-money laundering institution; introducing qualification penalty into the criminal sanction system of money laundering offence, as well as applying to the civil sanction procedures for the convicted-hardly laundering activities; to determine the threshold of great-amount transaction reporting system according to the index of premium per policy; the China Insurance Regulatory Commission(CIRC) should establish a action-combined & information-sharing system with the anti-corruption and tax authorities; the benefit-sharing & compensating system of anti-money laundering should established in time and come into operation in insurance industry; insurance money laundering should be administered comprehensively, hence the National Anti-Money Laundering Strategy of China should be made promptly, and the apparent conflict between the latest anti-money laundering institution and the existent financial privacy principle should be solved as soon as possible; and the insurance industry should attach great importance to the cost-constrain in implementing anti-money laundering institution, striving for lowering the average cost of anti-money laundering.3)Researching Approaches and Theory ToolsInsisting on an inter-disciplinary analytic approach, this thesis comprehensively employs the general axioms of economics, systems theory, law, risk management & insurance etc., new-institutional economics analysis being the main tool, to explore a researching frame of the anti-money laundering issues of insurance industry.Besides, by absorption of predecessors'studying fruits, this thesis integrates a systematic, uncomplicated, clear and explanative model to expound the behavior mechanism of insurance money launderers'and the process of insurance institutions'or government's achieving their anti-money laundering goals, meanwhile it constitutes the theoretical foundation of putting forward the economics principles of how to combat insurance money laundering and the policy suggestions on how to formulate institutions or measures.Issues to Be Researched FurtherFor example, under the new institution surroundings of anti-money laundering, how to design an incomplete information dynamic game model for use of analyzing the long-run inter-reactions between government and insurance institutions; how to determine the threshold of great-amount transaction reporting system more properly and to supplement the behavior indicators of suspicious transaction reporting system of anti-money laundering in insurance industry; how to establish a reasonable appreciating system and a long-run cost-controlling system for the anti-money laundering institution of insurance industry; under the background of financial diversified operation, how to effectively supervise and regulate the anti-money laundering actions of insurance industry.