Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) in the Insurance Industry

Introduction

This guidance paper outlines the key requirements for anti-money laundering (AML) and combating the financing of terrorism (CFT) in the insurance industry. The guidelines aim to help insurers prevent, detect, and report suspicious transactions and activities.

Customer Due Diligence

Insurers must conduct customer due diligence (CDD) on all customers, including:

• Identification: Verifying the identity of the policyholder and beneficiary.
• Verification: Confirming the information provided by the customer.

CDD should be performed before or at the moment of contract conclusion, except in specific cases such as group pension schemes or non-face-to-face business relationships.

Transactions and Events

Insurers must perform ongoing due diligence on business relationships, monitoring for:

• Unusual or suspicious transactions: Any transaction that does not fit the profile of the customer and/or beneficiary.
• Trigger events: Changes to policy beneficiaries, increases in insured capital, use of cash or large single premiums, and requests for prepayment of benefits.

Enhanced due diligence is required for higher-risk categories.

Risk Management

Insurers must have policies and procedures in place to address the specific risks associated with:

• Non-face-to-face business relationships: Limitations on transaction types, amounts, or frequencies.
• Transactions prior to verification: Measures such as limitations on transaction types, amounts, or frequencies.

Risk management procedures should be implemented when customers are permitted to utilize a business relationship prior to verification.

Termination of Business Relationship

If an insurer is unable to comply with verification requirements after commencing a business relationship, it must:

• Terminate the relationship: Immediately cease all business activities with the customer.
• Consider making a suspicious transaction report (STR): To the Financial Intelligence Unit (FIU).

Ongoing Monitoring

Insurers should continuously monitor their business relationships for unusual or suspicious transactions or events. They should assess whether changes or transactions do not fit the profile of the customer and/or beneficiary.

Please note that this is a summary, and the actual document likely contains more detailed information and requirements.