Financial Crime World

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Anti-Money Laundering (AML) and Combating Terrorism Financing (CFT) Guidelines for Insurance Institutions

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Reporting Suspicious Transactions

Insurance institutions are required to report suspicious transactions to local reporting points. They must also regularly review their policies, procedures, and controls on money laundering and financing of terrorism to ensure their effectiveness.

Group-Wide Programs Against Money Laundering and Terrorist Financing

Group Policy

  • Insurance groups should implement group-wide programs against money laundering and terrorist financing.
  • These programs should be designed to prevent the misuse of financial institutions for illicit purposes.

Sharing Information Within the Group

  • Insurance institutions should share information with foreign branches and majority-owned subsidiaries through these group-level functions when relevant to risk management.

Assessing Risks & Applying a Risk-Based Approach

Insurance institutions must:

  1. Assess Money Laundering and Terrorist Financing Risks: Take appropriate steps to identify and assess their money laundering and terrorist financing risks.
  2. Update Assessments: Keep these assessments up to date.
  3. Document Assessments: Document those assessments in order to be able to demonstrate the basis for the risk assessment.

Policies, Controls, & Procedures

  • Insurance institutions should have policies, controls, and procedures that enable them to manage and mitigate effectively the risks that have been identified.
  • They must monitor the implementation of these controls and enhance them if necessary.
  • All policies, controls, and procedures should be approved by senior management.

Risk Assessment & Mitigation

Insurance institutions should consider all relevant risk factors when assessing risks. They may differentiate the extent of measures depending on the type and level of risk for various risk factors.

New Products, Business Practices, & Technologies

  • Insurance institutions must identify and assess money laundering or terrorist financing risks that may arise in relation to new products and business practices.
  • They should take appropriate measures to manage and mitigate those risks prior to the launch of new products, business practices, or the use of new technologies.

Customer Acceptance

Prior to establishing a business relationship, insurance institutions should assess the characteristic of the required product, the purpose and nature of the business relationship, and any other relevant factors in order to create and maintain a risk profile of the customer relationship.