I work in insurance. Insurers regularly write policies to entities they know little about. They just price in the risk. It’s better to offer a policy quickly, and assume more risk, than delay and lose the client.

But insurance doesn’t have “know your customer” like banking.

If a customer commits a crime, we just don’t renew (unless we do). If a customer commits a crime and expects us to insure the criminal act, we refuse (unless we don’t).

Mortgage companies can issue small print dealing with much of legitimate financial uncertainty. Most mortgages require several types of insurance (title insurance, home insurance, and mortgage insurance).

If the financial strip search was about underwriting, it could be done in a way that didn’t require tons of paperwork from the customer.

But it’s about complying with “make sure your customer isn’t a criminal” laws.