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Preventing Money Laundering and Financing of Terrorism: Guidelines for Insurance Institutions

As insurance institutions play a critical role in the global financial system, it is essential that they implement effective measures to prevent money laundering and financing of terrorism (AML/CFT). Here are the key guidelines for insurance institutions to follow:

Reporting Suspicious Transactions

Insurance institutions should report suspicious transactions to local reporting points. This includes ensuring that their foreign branches and subsidiaries apply AML/CFT measures consistent with home country requirements.

• Report all suspicious transactions to local reporting points.
• Ensure foreign branches and subsidiaries comply with home country AML/CFT regulations.

Assessing Risks and Applying a Risk-Based Approach

Insurance institutions should identify and assess money laundering and terrorist financing risks for customers, countries, products, services, transactions, or delivery channels. This involves documenting assessments to demonstrate the basis and keeping them up-to-date.

• Identify and assess money laundering and terrorist financing risks for:
  • Customers
  • Countries
  • Products
  • Services
  • Transactions
  • Delivery channels
• Document risk assessments to demonstrate the basis.
• Keep risk assessments up-to-date.

Managing and Mitigating Risks

Insurance institutions should have policies, controls, and procedures in place to manage and mitigate identified risks. They should monitor implementation and enhance controls as needed.

• Develop policies, controls, and procedures to:
  • Manage and mitigate identified risks.
  • Monitor implementation.
  • Enhance controls as needed.
• Approve these measures by senior management.

Enhanced Measures for Higher Risks

Where higher risks are identified, insurance institutions should take enhanced measures to manage and mitigate those risks.

• Take enhanced measures to:
  • Manage and mitigate higher risks.
  • Ensure effective control over these risks.

Risk Assessment for New Products and Technologies

Insurance institutions should assess money laundering or terrorist financing risks related to new products, business practices, delivery mechanisms, and technologies. They should take appropriate measures to manage and mitigate these risks before launching new products or using new technologies.

• Assess money laundering or terrorist financing risks related to:
  • New products
  • Business practices
  • Delivery mechanisms
  • Technologies
• Take measures to:
  • Manage and mitigate identified risks.
  • Ensure effective control over these risks.