Louisiana Becomes the First Insurance Department to Share Info with FinCEN; California Follows Suit

The Louisiana Department of Insurance and the federal Financial Crimes Enforcement Network have agreed to share information in an effort to combat fraud and other financial crimes; California recently entered into a similar agreement with FinCEN.
Louisiana has become the first state to agree to share information with the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury Department, according to a recent press release by the Louisiana Department of Insurance (LDOI).

Louisiana Commissioner of Insurance, Jim Donelon, and the FinCEN Director, James H. Freis, Jr., signed a Memorandum of Understanding in late April that will allow the LDOI and FinCEN to "share important information enabling both parties to better protect the industry and consumers from criminal activity and fraud."[1]
The new [Memorandum of Understanding] will allow both parties to improve and enhance the level of [anti-money laundering] cooperation and seeks to efficiently maximize their combined resources in discharging their statutory obligations to defend against money laundering, fraud and other financial crime. The collective goal is to enhance communication and coordination between FinCEN and the Louisiana Department of Insurance to help Louisiana insurance companies better identify, deter and interdict financial crime and efficiently convey that information to FinCEN.[2]
Director Freis pointed out that Commissioner Donelon's "influential role as president-elect of the National Association of Insurance Commissioners will help set the standard for other state to follow" Donelon's lead in partnering with FinCEN to share information. Commissioner Donelon, for his part, indicated that the partnership with FinCEN was "a significant tool" that should enhance the LDOI's efforts to better protect Louisiana consumers from fraud and other criminal activity.[3]

California has recently followed Louisiana's lead. FinCEN announced in early May that Director Freis signed a Memorandum of Understanding with Dave Jones, the Insurance Commissioner for the State of California, that will allow the Director, as the "Federal Anti-Money Laundering (AML) regulator" to share information with the California state insurance regulator.[4]

Details on what types of information will be shared under the FinCEN agreements remains unclear.
Details on what types of information will be shared under the FinCEN agreements remains unclear, including whether individuals and companies regulated by the California or Louisiana state insurance regulators will have any notice or opportunity to object before information is shared with FinCEN.

Because FinCEN's regulatory activities are specifically targeted at financial crimes, the nonpublic and personally identifiable financial information of both entities regulated by the California or Louisiana state insurance regulators, and consumers that transact business with those entities, may be implicated by these information sharing agreements with FinCEN.

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