The Association of Financial Advisers (AFA) says life insurance should be included as a risk in government advice on money laundering and terrorism financing.

In a submission to an Australian Transaction Reports and Analysis Centre (Austrac) paper on these threats, the AFA says the report is too investments-focused.

“We query whether some examples about life insurance would be of equal value,” the submission says.

The AFA says an adviser may become concerned about money laundering if a client starts to ask pointed questions, such as how to make a claim before a contract is signed, or if an exclusion period can be reduced or benefit paid to a third party.

Other red flags may include a client who asks how long they must pay premiums before a claim can be made, or an adviser submitting applications without sufficient identification details and making excuses about why the client’s data collection forms are not on file.

“The AFA trusts the input and examples it has provided will assist to clarify for advisers what their ongoing obligations are under Austrac requirements,” the submission says.