Risk Analysis for Relationship-Based Risks

Name of broker/business______Date of review______

Assessing and mitigating risk is an on-going process; as risks change/evolve over time, update this document, or every two years.

Segmentation of book of business / % of book
Group 1 – policyowners with tax-exempt or ID-exempt policies (ex., registered plans, DI, term, group products (without CV)
Group 2 – customers that must be ID’d but have no identified risk factors
Group 3, 4, etc. – if you have clients that don’t fall into Group 1 or 2, they’re likely high risk. Define who they are individually, or by group, and detail enhanced measures to manage/mitigate their risk (of ML or TF) to your practice.
Some examples:
  • Clients who - use 3rd parties (intermediaries such as lawyers); deal NF2F; have complex corporate structures; off-shore assets.
  • Clients for whom you’ve filed a suspicious transactions report/terrorist property report
  • PEFP paying +$100K/single transaction
  • PEDP, heads of international organizations or their family/associates paying +$100K/single transaction
Refer to FINTRAC guidance including the Risk based approach workbook for life insurance industry, at
Risk rating
(L, M or H) / Rationale
(for the rating) / Enhanced ID measures for H risk / Mitigation measures for H risk / Process for ID updates
for H risk / Enhanced on-going monitoring
for H risk
Group 1 / N/A / Exempt / N/A / N/A / N/A / N/A
Group 2 / L / Ex. Low to medium value transactions conducted F2F in line with client profile based on regular servicing & monitoring / N/A / N/A / N/A / N/A
Group 3 / H
OVERALL RISK RATING

Risk Analysis for Business-Based Risks

Risk rating
(L, M or H) / Rationale
(for the rating) / Mitigation measures for High risk
Product Risk
% of book/# of customers with tax-exempt or ID-exempt policies = ______
% of book/# of customers with higher risk products
= _____
  • UL &WL with CV
  • non-registered annuities & segregated funds
  • Group, with CV
  • CI with ROP
Overall Product Risk= _____ / N/A
M to H
H
M
M / Exempt
M - See rationale Group 2, Relation- ship based risk; or
H – other risk factors exist
Ability to make deposits, withdrawals
N/A-absent other risk
N/A-absent other risk / N/A
N/A
More frequent monitoring, management approvals, etc.
More frequent monitoring, management approvals, etc.
Delivery Channel Risk
% of book/# of customers NF2F = ______
% of book/# of customers F2F = ______
Overall Delivery Channel Risk = ______/ M to H
L / M - See rationale Group 2, Relation- ship based risk; or
H – other risk factors exist
N/A-absent other risk / Frequent monitoring, management approvals, etc.
Geographic Risk
% of book/# of customers in high crime area = ______
% of book/# of customers near border
crossing = ______
Overall Geographic Risk
=_____ / M to H
Mto H / M - See rationale Group 2, Relation- ship based risk; or
H – other risk factors exist
M - See rationale Group 2, Relation- ship based risk; or
H – other risk factors exist / Frequent monitoring, management approvals, etc.
Frequent monitoring, management approvals, etc.
Transactions and Services Risk
% of book/# of customers that are POAs/3rd parties; transfers of ownerships; free looks, etc. = ______
Overall Transactions and Services Risk = ______/ L to H / Concerns for 3rd party control, possible placement stage of ML. / Add to list of clients for added/frequent monitoring, management approvals, consult with MGA +/or insurers, file STR.
Internal & other risks
Examples - high staff turnover (esp. compliance staff), unsupervised staff,
untrained staff
-also insurers with weak AML/ATF controls
Overall Internal and other risks = ______/ L to H
M / Loss of expertise, lack of monitoring & escalating concerns; failure to implement or comply with P&P
Info lacking on forms, records may be weak. / Ensure training happens, supervise staff, test/assess compliance with P&P.
Identify missing info, obtain from client directly, remove risk entirely
OVERALL BUSINESS RISK RATING = ______
OVERALL RISK=______

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