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Anti-Money Laundering and Combating the Financing of Terrorism Policy
General Requirements
Insurance institutions have a crucial role to play in preventing money laundering and financing of terrorism. To achieve this, they must adhere to certain general requirements.
- Report Suspicious Transactions: Insurance institutions should report any suspicious transactions to local reporting points.
- Regular Review of Policies and Procedures: They should regularly review their policies, procedures, and controls on money laundering and financing of terrorism to ensure their effectiveness.
Risk Assessment and Mitigation
Insurance institutions must take proactive steps to identify and assess their money laundering and terrorist financing risks. This includes:
- Conducting a Risk Assessment: Insurance institutions should take appropriate steps to identify and assess their money laundering and terrorist financing risks.
- Documenting Risk Assessments: They should document risk assessments and keep them up-to-date.
- Implementing Policies and Controls: Based on the risk assessment, insurance institutions should implement policies, controls, and procedures to manage and mitigate identified risks.
Risk-Based Approach
The nature and extent of the risk assessment should be proportional to the size and complexity of the business. Insurance institutions may differentiate their measures based on the type and level of risk.
New Products, Business Practices, and Technologies
Insurance institutions must assess money laundering or terrorist financing risks related to new products, business practices, delivery mechanisms, and technologies before launching them. This includes:
- Assessing Money Laundering Risks: Insurance institutions should assess money laundering or terrorist financing risks related to new products, business practices, delivery mechanisms, and technologies before launching them.
- Taking Appropriate Measures: They should take appropriate measures to manage and mitigate those risks.
Customer Acceptance
Prior to establishing a business relationship, insurance institutions should assess the customer’s risk profile based on the product, purpose, and nature of the relationship. This includes:
- Assessing Customer Risk Profile: Insurance institutions should assess the customer’s risk profile based on the product, purpose, and nature of the relationship.
- Deciding Whether to Accept the Customer: Based on this assessment, they should decide whether or not to accept the customer.
These requirements are consistent with international standards for anti-money laundering (AML) and combating the financing of terrorism (CFT), such as those set by the Financial Action Task Force (FATF).