Supervision release 14 December 2020 – 79/2020

Summary of assessment of money laundering risk concerning the life insurance sector has been published

On 14 December 2020, the Financial Supervisory Authority (FIN-FSA) published a summary of the assessment of money laundering risk concerning the life insurance sector. The sector-specific risk assessment comprises life insurance companies holding an authorisation granted by the FIN-FSA. The FIN-FSA assessed that the level of money laundering risk affecting the life insurance sector as a whole is Moderately Significant (2 Moderately Significant / 4 Very Significant).                   

Sector-specific risk assessments are a key component in the FIN-FSA’s risk-based supervision of anti-money laundering. The sector-specific risk assessment builds on the supervisor-specific assessment of money-laundering risk published on 17 March 2020, which established a so-called inherent risk level applicable to each sector supervised by the FIN-FSA. In assessing the inherent risk level, individual entities’ actual risk level or level of management methods is not considered. The sector-specific risk assessment looks into risk factors related to the sector's products and services, customers, distribution channels and geographical dimension, as well as risk management methods reported by the supervised entities.

As regards life insurance products, risk policies and voluntary pension insurance policies are associated with a low risk of money laundering, since related fund transfers are very limited. In contrast, endowment policies and capital redemption plans intended as investment and savings products, which also make up the bulk of premium income, involve a higher risk of money laundering. The funds are readily available for withdrawal in full or in instalments, they can be transferred to a third party and also be used as collateral for a loan. As a whole, the risk level associated with the products and services of the life insurance sector was deemed moderately significant.

In the assessment of management methods, the sector-specific risk assessment draws on data reported by life insurance companies in the FIN-FSA’s RA-survey of risks and controls of money laundering (ML) and terrorist financing (TF) as well as life insurance companies’ own risk assessments. The FIN-FSA paid attention to the risk-based approach in relation to companies’ activities, which refers to the procedures applied by the companies to identify, assess and understand ML/TF risks to which they are exposed and to take actions that are commensurate with the risks. As regards to shortcomings identified in relation to the risk-based approach, an example of the shortcomings is that some life insurance companies’ risk assessments lacked components required by the law. Furthermore, not all life insurance companies had procedures in place for the assessment of customer-related risks, or the customer's risk rating is not taken into account in the ongoing due diligence (ODD). Deficiencies in the risk assessment process also have an impact on KYC activities and suspicious transactions detected in monitoring.

The FIN-FSA urges life insurance companies to plan carefully how risks related to ML are identified and assessed at an adequately detailed level and what procedures and practical actions are in place to mitigate and manage identified risks. The planned risk mitigation actions must be adequate and commensurate with the ML/FT risks.

For further information, please contact

  • Ulla-Maija Kaivola, Risk Expert, telephone +358 9 183 5565 or ulla-maija.kaivola(at)
  • Pekka Vasara, Head of Division,  telephone +358 9 183 5513 or pekka.vasara(at)


Summary of the risk assessment on the life insurance sector

Further information on the risk assessment