Record keeping requirements for life insurance companies, brokers and agents

June 2017 

June 2017

This guidance on record keeping is applicable to life insurance companies, brokers and agents that are subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its associated Regulations.

In order to comply with your record keeping requirements you are required to keep records in a manner in which they can be provided to FINTRAC within 30 days upon request. These records may also be requested through a judicial order by law enforcement to support an investigation of money laundering and/or terrorist activity financing. A record (or a copy) may be kept in a machine-readable or electronic form, so long as a paper copy can easily be produced.

Employees who keep records for you are not required to keep them after the end of their employment with you. The same is true for individuals in a contractual relationship with you, after the end of that contractual relationship. This means that you have to obtain and keep the records that were kept for you by any employee or contractor before the end of that individual's employment or contract with you.

There may be situations where you are required to keep records for purposes other than your requirements under the PCMLTFA. For example, a federal or provincial regulator for your sector may require you to keep records in addition to those described in this guidance. If this is the case, you must still meet the requirements described in this guidance. For example, the retention period for your records can be longer than what is described, but it cannot be shorter.

Please note that as a life insurance company, broker or agent, you have record keeping requirements in addition to those included in this guidance. These additional requirements are detailed in the following know your client guidance documents:

As a life insurance company, broker or agent, you must keep the following records:

  1. Suspicious transaction report records
  2. Large cash transaction records
  3. Client information records
  4. Reasonable measures records

**Note: Exceptions to your record keeping requirements are listed in the last section of this guidance.

**Note: When recording the nature of the principal business or occupation of a client, you must be as descriptive as possible in order to be able to determine whether a transaction or activity is consistent with what would be expected for that client. For example, in the case of a person who is a manager, the occupation recorded should reflect the area of management, such as “hotel reservations manager” or “retail clothing store manager.” The same is true when recording the nature of the principal business of an entity. For example, in the case of an entity in the field of sales, the nature of the principal business should specify the type of sales, such as “pharmaceutical sales” or “retail sales”.

1. Suspicious transaction report records

If you submit a Suspicious Transaction Report (STR) to FINTRAC, you have to keep a copy of it. This includes STRs for completed and attempted transactions.

Retention: You must keep an STR for at least five years from the date the report was submitted.

2. Large cash transaction records

You must keep a record of every large cash transaction. A large cash transaction occurs when you receive $10,000 or more in cash from a client in a single transaction. A large cash transaction also occurs when there are multiple cash transactions of less than $10,000 each that total $10,000 or more within a 24-hour period, when you know they are conducted by, or on behalf of, the same individual or entity.

When a client conducts a large cash transaction, your record must indicate the receipt of an amount of $10,000 or more in cash, along with the following:

  • the name, date of birth and address of the individual from whom you received the cash, and the nature of their principal business or occupation;
  • the amount and currency of the cash received;
  • the date of the transaction;
  • the purpose and details of the transaction, including:
    • the type of transaction (for example, the cash was used to purchase an annuity, etc.); and
    • whether any other individuals or entities were involved in the transaction;
  • how the cash was received (for example, in person, by mail, by armoured car, or any other way); and
  • if an account was affected by the transaction, include:
    • the account number and type of account;
    • the full name of the account holder; and
    • the currency in which the transactions are conducted in the account.

Retention: You must keep large cash transaction records for at least five years from the date the record was created.

3. Client information records

You must keep a client information record for every purchase of an immediate or deferred annuity, or a life insurance policy, for which a client may pay $10,000 or more (in cash or in another form) over the duration of the annuity or policy.

In the case of a group life insurance policy or group annuity, a client information record must be kept for the applicant of that policy or annuity.

If the client is an individual, you must record their name, date of birth and address, as well as the nature of their principal business or occupation.

If the client is an entity, you must record its name and address, as well as the nature of its principal business.

If the client is a corporation, you must also keep a copy of the part of the official corporate records that contains any provision relating to the power to bind the corporation regarding the transaction, if this is obtained in your normal course of business. This could be a certificate of incumbency, the articles of incorporation or the bylaws of the corporation that set out the officers duly authorized to sign on the behalf of the corporation, such as the president, treasurer, vice-president, comptroller, etc.

If there are changes to the articles or bylaws that relate to the power to bind the corporation to the transaction and these changes were in effect at the time, then the board resolution stating the change would be included in this type of record.

Retention: You must keep client information records for five years from the day the last business transaction was conducted.

4. Reasonable measures records

The term “reasonable measures” refers to activities you are expected to undertake in order to meet certain obligations. The PCMLTFA and associated Regulations explicitly state when you must take reasonable measures to meet an obligation.

As of June 17, 2017, the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations have been changed to require that a record be kept when reasonable measures were taken, but were unsuccessful. A reasonable measure is unsuccessful when you do not obtain a response, such as a yes or no, and you are unable to make a conclusive determination. Refer to sections 67.3 of the Regulations for every activity where you are required to keep records when reasonable measures were unsuccessful.

When reasonable measures are unsuccessful, you must record the following information:

  • the measures taken;
  • the date on which each measure was taken; and
  • the reasons why the measures were unsuccessful.

You must outline the reasonable measures that you take in your compliance policies and procedures. This can form part of your unsuccessful reasonable measures record, or you could document, on a case-by-case basis, the measure taken in each record for unsuccessful reasonable measures.

For example if you ask a client if they are conducting a large cash transaction on behalf of a third party and they refuse to answer your record should indicate that you asked, the date you asked and the fact that the client refused to answer yes or no.

Should you take a measure that is not included in your policies and procedures, you would have to include details of that measure taken in your record of unsuccessful reasonable measures.

Retention: You must keep records of your unsuccessful reasonable measures for at least five years following the date they were created.

Exceptions to record keeping requirements

You do not have record keeping requirements if you are a life insurance company, life insurance broker or agent if you deal in reinsurance.

If you are required to keep a record about information that is readily available in other records that you have kept, you do not have to record the same information again. This means that if you keep the required information and can produce it during a FINTRAC examination you do not need to create a new record to meet your obligations.

You are not required to keep a client information record for a public body or a very large corporation. The same is true regarding a subsidiary for either of those entities, if the financial statements of the subsidiary are consolidated with those of the public body or very large corporation.

You are not required to keep a large cash transaction record if the cash is received from a public body or financial entity.

You are not required to keep the records identified in this guidance for the following:

  • the purchase of an exempt policy as defined in subsection 306(1) of the Income Tax Regulations;
  • the purchase of a group life insurance policy that does not provide for a cash surrender value or a savings component;
  • the purchase of an immediate or deferred annuity that is paid for entirely with funds that are directly transferred from a registered pension plan or from a pension plan that is required to be registered under the Pension Benefits Standards Act, 1985, or similar provincial legislation;
  • the purchase of a registered annuity policy or a registered retirement income fund;
  • the purchase of an immediate or deferred annuity that is paid for entirely with the proceeds of a group life insurance policy;
  • a transaction that is part of a reverse mortgage or of a structured settlement.
March 2021 

March 2021

This guidance comes into effect on June 1, 2021.

Life insurance companies, brokers and agents have record keeping requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations.

If you are a life insurance company, or an entity that is a broker or agent that offers loans or prepaid payment products (PPPs), and that maintains accounts in respect of those activities, you are considered to be a financial entity (FE).Footnote 1 You can find your record keeping obligations as an FE in FINTRAC's Record keeping requirements for financial entities guidance.

This guidance does not apply to life insurance brokers or agents when they are acting as managing general agents.Footnote 2

This guidance outlines certain record keeping requirements for life insurance companies, brokers and agents. You have additional record keeping requirements that are detailed in the following guidance:

This guidance answers the following questions:

  1. What records must I keep and what must they contain?
  2. What are my responsibilities when maintaining records?
  3. What are the exceptions to my record keeping requirements?

**Note: Throughout this guidance, all references to dollar amounts (such as $10,000) are in Canadian dollars.

1. What records must I keep and what must they contain?

You must keep the following records:

  1. Reports—a copy of every report sent to FINTRAC
    • Suspicious Transaction Reports
    • Terrorist Property Reports
    • Large Cash Transaction Reports
    • Large Virtual Currency (VC) Transaction reports
  2. Large cash transaction records
  3. Large virtual currency (VC) transaction records
  4. Information records

**Note: When you are required to keep records about clients, you should be as descriptive as possible. Being descriptive when recording the nature of the principal business or occupation of a client will help determine whether a transaction or activity is consistent with what would be expected for that client. For example, when the client's occupation is "manager", the record should reflect the area of management, such as "hotel reservations manager" or "retail clothing store manager". When an entity's principal business area is "sales", the record should specify the type of sales, such as "pharmaceutical sales" or "retail sales".

a. Reports — a copy of every report sent to FINTRAC

You must keep a copy of every report that you submit to FINTRAC as a record.Footnote 3

Suspicious Transaction Reports

When you submit a Suspicious Transaction Report (STR) to FINTRAC, you must keep a copy of it.Footnote 4

Retention: At least five years after the day the STR was submitted.Footnote 5

Terrorist Property reports

When you submit a Terrorist Property Report (TPR) to FINTRAC, you must keep a copy of it.Footnote 6

Retention: At least five years after the day the TPR was submitted.Footnote 7

Large Cash Transaction Reports

When you submit a Large Cash Transaction Report (LCTR) to FINTRAC, you must keep a copy of it.Footnote 8

Retention: At least five years from the date the LCTR was created.Footnote 9

Large Virtual Currency Transaction Reports

When you submit a Large VC Transaction Report (LVCTR) to FINTRAC, you must keep a copy of it.Footnote 10

Retention: At least five years from the date the LVCTR was created.Footnote 11

b. Large cash transaction records

You must keep a large cash transaction record when you receive $10,000 or more in cash.Footnote 12

If you authorize a person or entity to receive funds on your behalf and that person or entity receives $10,000 or more in cash in accordance with the authorization, you are deemed to have received the amount when it is received by the person or entity, and you must keep a large cash transaction record.Footnote 13

**Note: This requirement is subject to the 24-hour rule.Footnote 14

A large cash transaction record must include:Footnote 15

  • the date you received the cash;
  • for any person involved in the transaction (including the person from whom you received the cash), their name, address, date of birth, and occupation, or in the case of a sole proprietor, the nature of their principal business;
  • for any entity involved in the transaction (including the entity from which you received the cash), their name, address and nature of their principal business;
  • the type and amount of each fiat currency involved in the receipt;
  • the purpose of the transaction (for example, the cash was used to purchase a policy, etc.);
  • the method by which you received the cash (for example, in person, by mail, etc.);
  • the exchange rates used and their source (if applicable);
  • if an account was affected by the transaction, include:
    • the account number and type of account (for example, business, personal, etc.); and
    • the name of each account holder; 
  • every reference number related to the transaction that is meant to be similar to an account number;
  • the following details about the remittance (i.e. the disposition) of, or exchange for, the cash received:
    • the method of remittance (for example, cheque, money order, etc.);
    • if the remittance is in funds, the type and amount of each type of funds involved;
    • if the remittance is not in funds, the type of remittance (for example, virtual currency, etc.) and value if different from the amount received in cash; and
    • the name of every person or entity involved in the remittance, their account number or policy number or, if there is no account or policy number, their identifying number.

Retention: At least five years from the date the large cash transaction record was created.Footnote 16

c. Large VC transaction records

You must keep a large VC transaction record when you receive VC in an amount equivalent to $10,000 or more.Footnote 17

If you authorize a person or an entity to receive VC on your behalf and that person or entity receives VC in an amount equivalent to $10,000 or more in accordance with the authorization, you are deemed to have received the VC when it is received by the person or entity, and you must keep a large VC transaction record.Footnote 18

**Note: This requirement is subject to the 24-hour rule.Footnote 19

A large VC transaction record must include:Footnote 20

  • the date you received the VC;
  • for any person involved in the transaction (including the person from whom you received the VC), their name, address, date of birth, and their occupation, or in the case of a sole proprietor, the nature of their principal business;
  • for any entity involved in the transaction (including the entity from which you received the VC), their name, address and the nature of their principal business;
  • the type and amount of each VC involved in the receipt;
  • the exchange rates used and their source;
  • if an account was affected by the transaction, include:
    • the account number and type of account; and
    • the name of each account holder;
  • every reference number related to the transaction that is meant to be similar to an account number; and
  • every transaction identifier (this may include a transaction hash or a similar identifier, if applicable), and every sending and receiving address.

Retention: At least five years from the date the large VC transaction record was created.Footnote 21

d. Information records

An information record must include:Footnote 22

  • if your client is a person, their name, address, date of birth and occupation, or in the case of a sole proprietor, the nature of their principal business; or
  • if your client is an entity, its name, address and the nature of its principal business.

You must keep an information record in connection with the sale of an immediate or deferred annuity, or a life insurance policy:Footnote 23

  1. a) for which you are to receive $10,000 or more over the duration of the annuity or policy; or
  2. b) under which you are to remit $10,000 or more to a beneficiary over the duration of the annuity or policy.

The information record in connection with the sale referred to in bullet (a) (above) must be created when the life insurance company or life insurance broker or agent establishes the annuity or policy, and must be kept in respect of the annuitant or policy holder.Footnote 24 In the case of a group life insurance policy or group annuity, the information record must be kept for the applicant.Footnote 25

The information record in connection with the sale referred to in bullet (b) (above) must be created before the life insurance company or life insurance broker or agent first remits funds or VC to the beneficiary under the annuity or policy, and must be kept in respect of the beneficiary.Footnote 26 You do not have to create the information record within this time period if, due to facts or circumstances beyond your control, you are unable to create the information record before you are required under federal or provincial legislation to first remit funds to a beneficiary. However, the information record must still be created and completed.Footnote 27

If the client is a corporation, you must also keep a copy of the part of the official corporate records that contains any provision relating to the power to bind the corporation regarding the transaction.Footnote 28 This could be found in, for example:

  • the articles of incorporation; or
  • the bylaws of the corporation that set out the officers duly authorized to sign on behalf of the corporation, such as the president, treasurer, vice-president, comptroller, etc.

Retention: You must keep an information record for five years from the day the last business transaction was conducted.Footnote 29

2. What are my responsibilities when maintaining records?

In order to comply with your record keeping requirements, you must keep records in such a manner that they can be provided to FINTRAC within 30 days of a request.Footnote 30 These records may also be requested through a judicial order by law enforcement to support an investigation of money laundering or terrorist activity financing. A record (or a copy) may be kept in a machine-readable or electronic form, so long as a paper copy can readily be produced.Footnote 31

Employees who keep records for you are not required to keep them after their employment ends. The same is true for persons in a contractual relationship with you, when the contractual relationship ends.Footnote 32 You have to obtain and keep the records that were kept for you by an employee or a contractor before the end of the person's employment or contract.

There may be situations where you are required to keep records for purposes other than complying with your obligations under the PCMLTFA and associated Regulations. For example, a federal or provincial regulator may require you to keep records or information similar to that which is described in this guidance. If this is the case, you must still meet the requirements of the PCMLTFA and associated Regulations. For example, the retention period for your records can be longer than what is described in this guidance, but it cannot be shorter.

3. What are the exceptions to my record keeping requirements?

You are not required to keep the records identified in this guidance if you are a life insurance company, life insurance broker or agent that is dealing in reinsurance.Footnote 33

Also, if you are required to keep a record with information that is readily available in other records, you do not have to record the information again.Footnote 34

For example, when you keep a copy of a large cash transaction report (LCTR) you may choose to use this as your large cash transaction record for the same transaction, so long as all of the information that would otherwise be kept in the large cash transaction record is captured within the report. Any requirement related to keeping the large cash transaction record would still apply, such as verifying identity.

Financial entities, public bodies, and very large corporations or trusts

You are not required to keep a large cash transaction record or a large VC transaction record if the cash or VC is received from a client that is a financial entity (FE) or a public body, or from a person who is acting on behalf of a client that is an FE or public body.Footnote 35

You are not required to keep an information record for:Footnote 36

  • a public body;
  • a very large corporation or trust ; or
  • a subsidiary of those entities, if the financial statements of the subsidiary are consolidated with those of the public body, very large corporation or trust.

Large cash transactions

You are not required to keep a large cash transaction record if the transaction involves:Footnote 37

  • the sale of an immediate or deferred annuity that is paid for entirely with funds that are directly transferred from a registered pension plan or from a pension plan that is required to be registered under the Pension Benefits Standards Act, 1985,or similar provincial legislation,
  • the sale of a registered annuity policy or a registered retirement income fund,
  • the sale of an immediate or deferred annuity that is paid for entirely with the proceeds of a group life insurance policy, or
  • part of a reverse mortgage or structured settlement.

Virtual currency

When you receive VC as compensation for the validation of a transaction that is recorded in a distributed ledger or you receive a nominal amount of VC for the sole purpose of validating another transaction or a transfer of information, you do not need to keep a large VC transaction record.Footnote 38

Other record keeping exempted activities

You are not required to keep information records for the following activities:Footnote 39

  • the sale of an exempt policy as defined in subsection 306(1) of the Income Tax Regulations;
  • the sale of a group life insurance policy that does not provide for a cash surrender value or a savings component;
  • the sale of an immediate or deferred annuity that is paid for entirely with funds that are directly transferred from a registered pension plan or from a pension plan that is required to be registered under the Pension Benefits Standards Act, 1985, or similar provincial legislation;
  • the sale of a registered annuity policy or a registered retirement income fund;
  • the sale of an immediate or deferred annuity that is paid for entirely with the proceeds of a group life insurance policy.
Date Modified: