ASHINGTON, Dec. 5 — Law enforcement officials said today that Colombian cocaine traffickers seeking to launder tens of millions in drug profits from the United States and Mexico had begun exploiting an unlikely haven — life insurance policies.

Officials at the Treasury Department said they were so worried about the trend that they were pushing for tougher regulation of the insurance industry as a way of identifying suspicious insurance policies.

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A central concern for the authorities is that terrorist financiers, too, may seek to exploit vulnerabilities in the insurance industry to launder money for their operations.

A federal grand jury indictment brought today in Miami highlighted the phenomenon. In it, the authorities charged that five Colombians took part in an elaborate scheme to launder millions in cocaine profits originating from street sales in New York City, Florida and elsewhere.

American law enforcement officials say Colombia has indicated that it will extradite the five suspects to the United States to stand trial.

Drug traffickers often use bank deposits, wire transfers and other financial mechanisms to disguise the source of their revenues. But officials at the Customs Service said the current case was the first in which a major trafficking ring has been known to use insurance policies to cover its financial tracks.

In interviews and court documents, law enforcement officials at the Customs Service said that in recent years, brokers connected to the Cali drug cartel in Colombia had bought insurance policies in the Isle of Man and other British islands, as well as perhaps Florida and other locations, to launder more than $80 million.

Using drug proceeds from the United States and Mexico, the suspects opened some 250 different investment-grade life insurance accounts in the Isle of Man alone, investigators said. The insurance policies, worth as much as $1.9 million each, were sometimes taken out in the names of nieces, nephews and other relatives of the traffickers, investigators said.

The traffickers would typically cash out all or part of the Isle of Man policies prematurely after a year or so, paying penalties of 25 percent or more to get access to the laundered cash more quickly, investigators said.

Customs Service officials have seized $9.5 million in Florida in connection with the case, most of it in the last three weeks, officials said. They expect to seize more assets and bring more charges against others they accuse of involvement in the operation, and they are closely scrutinizing a South Florida insurance company to determine its role.

"This has opened our eyes," said John Clark, special agent in charge of the Customs Service's Miami office, which led the investigation. "We think this is just the tip the iceberg. This is a system that seems to have been used and abused by narcotics traffickers for years."

Officials in Colombia have also seized $20 million there and in Panama in connection with the money-laundering operation. They arrested at least nine people in the case last month — including three of the five defendants charged today in Miami. Another Colombian wanted in the case is thought to be at large in California.

Those indicted today in Miami on conspiracy and money-laundering charges were Rodrigo José Murillo and his son, Alexander Murillo, who investigators say were active on the drug-trafficking side of the operation; Jaime Eduardo Rey Albornoz and Arturo Delgado, who investigators say brokered the transactions; and their assistant, Esperanza Romero.

The indictment seeks the forfeiture of $2.1 million that the authorities say the defendants laundered through banks and insurance companies.

The case was brought in Florida because some of the money passed through companies in the state and because the laundering investigation grew out of a major drug-trafficking case there in the early 1990's.

The case led to the seizure of 47,000 kilograms of cocaine distributed by the Cali cartel and others. In the last several years it has also led investigators to develop high-level informers in the trafficking industry. These sources indicated that much of the cartel's money was winding its way to the Isle of Man, investigators said.

The Customs Service started the financial spinoff of its 1990's case in early 2001, working closely with counterparts in Colombia, Panama, Britain and the Isle of Man.

Officials in the Isle of Man, a hub for global insurance companies, were eager to cooperate, American officials said. After concerns were raised in recent years about whether the island's oversight of the industry was too lax, the officials "wanted to put that to rest by cooperating and to show that they weren't a money-laundering haven," said Anthony Arico, assistant special agent in charge in Miami for the Customs Service.

Isle of Man officials said today that they had instituted new safeguards against criminal use of their corporations to launder money. But they acknowledged that the high volume of global business in the territory made it an attractive target for launderers.

In the current case, investigators pulled together information from financial transactions as far away as Russia, using informants, wiretaps and undercover operations to trace the money trail, officials said.

In New York City, undercover Customs investigators acted as go-betweens, funneling cash from local street sales and forwarding it to the Isle of Man through checks or wire transfers to buy life insurance policies, officials said.

Undercover agents also got the word out to drug dealers that, for a fee, they would accept and launder large amounts of cash, according to a seizure warrant filed in federal court in New York in connection with the case.

Dealers would then drop off large sums of cash — sometimes hundreds of thousands of dollars — and direct the undercover agents to wire the money to banks and insurance companies around the world, the warrant said.

American officials said that Mr. Albornoz and Mr. Delgado, who each own financial transaction businesses in Colombia, were the "master brokers" who oversaw the insurance scheme. Colombian officials said Mr. Albornoz even organized conferences on money laundering for insurance companies and financial institutions around the world.

"The case just underscores the clever and crafty schemes that drug traffickers and terrorists, too, are capable of conceiving to move their money," said Rob Nichols, a spokesman for the Treasury Department.

The department proposed in September that insurance companies be required to adopt programs to better detect accounts opened expressly to hide illegal revenues.

Officials said the investigation in Colombia was a driving force in the still pending proposals, which have met with general support from many insurance groups.

Mr. Clark of the Customs Service said that if insurance companies were subject to the same types of rigorous reporting and monitoring requirements as banks, the authorities would have been able to detect some of the suspicious tactics used by the Colombian launderers.

Insurance companies might have reported, for instance, that policyholders were authorizing unrelated third parties to withdraw money from their accounts or were frequently cashing out their policies early, he said.

The proposed restrictions, he said, would help the authorities "spot the type of irregular flow of money that we were seeing here."