Ethics Legal Framework, Privacy & AML question: federal anti-money-laundering rules

EthicsLegal Framework, Privacy & AML

Jerome has been a licensed life agent in Winnipeg for six years. A new client, Viktor, 52, owns two restaurants and wants a single-premium non-registered universal life policy to leave money to his nephew. At their second meeting Viktor hands Jerome $12,000 in Canadian bank notes for the premium, saying his business deals mostly in cash. No exception under the regulations applies. What must happen under the federal anti-money-laundering rules?

A The agent must refuse any cash over $10,000
B Nothing, because the money is going into insurance
C Only a record is kept; no report is needed
D It must be reported to FINTRAC and recorded

Show the answer and explanation

Answer: D. It must be reported to FINTRAC and recorded

A life insurance company or life insurance broker or agent that receives $10,000 or more in cash in a single transaction must report it to FINTRAC (a large cash transaction report) and keep a large cash transaction record, unless an exception applies, such as funds from a financial entity or certain registered or pension transfers. Accepting cash is not banned; it is reported. Source: Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, SOR/2002-184 (current to 21 Sep 2026; as at 12 Oct 2026), ss. 18, 20.

Common mistake

Thinking insurance purchases are outside the anti-money-laundering rules.

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Meera, 64, is retiring from a Saskatchewan school board. She wants guaranteed income and decides to buy an immediate life annuity for $40,000, paid entirely by a direct transfer from her registered pension plan to the insurer. Her agent notes the amount is above $10,000 and wonders what the anti-money-laundering rules require for this purchase. Does the large cash transaction reporting rule apply?Akira, 38, is a software developer in Halifax with two young children. He wants to save for retirement outside his RRSP and buys a non-registered deferred annuity from a life insurer, making deposits of $2,500 a year, which he plans to pay by pre-authorized debit from his chequing account for at least 20 years. Akira asks why the agent needs to see his photo ID. Under the federal anti-money-laundering rules, does the agent's firm have to keep an information record and verify Akira's identity?Hana completed an application for $400,000 of term life insurance on 2 June and paid nothing with it. The policy was issued on the terms she applied for and mailed to her agent on 20 June. Before the agent delivered it, Hana was diagnosed with a serious heart condition. The agent then delivered the policy and collected the first premium. Is the contract in force?

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Original study material mapped to the public CISRO curriculum; not a real test question.Not affiliated with CISRO, CCIR or any provincial insurance regulator. Verify figures and rules against current guidance before relying on them.