MONEY LAUNDERING IN THE INSURANCE INDUSTRY

Money laundering is a highly complex activity aimed at concealing the source and nature of illicit funds so that they appear legitimate and subsequently become usable and transferable, thereby posing a serious threat to the financial system. In addition to its primary purpose, insurance can also be used as a financial instrument in money laundering. Money laundering and terrorist financing have become opportunities for criminals to legitimize illicit proceeds derived from in- surance-related activities. This study aims to identify potential indicators that may facilitate money laundering and to examine possible prevention mechanisms. Combating money laundering as a criminal activity in the insurance industry is a continuous undertaking that requires constant adaptability, as money laundering methods are evolving and the activities through which laundering is carried out are becoming increasingly sophisticated. The findings indicate that effective prevention, as the first line of defense against money laundering in the insurance sector, can be achieved through regulatory oversight, the implementation of advanced technolo- gical solutions, and continuous employee training on money laundering risks and compliance procedures. It is concluded that the insurance industry continues to represent a significant risk channel that requires ongoing improvement of control and supervisory systems.

Keywords: insurance, risk, money laundering, compliance.

JEL Classification: G22, K42, G18.