Insurance – Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) Guidelines

• The name, legal form, proof of existence,
• Powers that regulate and bind the legal persons,
• Address of the registered office/main place of business,
• The natural persons who have a controlling interest an comprise the mind and management of the legal persons.

Systems/processes laid down to meet this requirement may be based on risk perception on the entity (Eg., in case of a public limited company verification and identification of shareholders of that company is not called for)

• Development of new products
• New business practices including new delivery mechanisms
• Use of new of developing technologies for both new and pre existing products.

Special attention should especially, be paid to the non-face-to-face business relationships brought into effect through these methods.

Insurer should lay down systems to prevent their misuse in money laundering schemes. Safeguards will have to be built to manage typical risks associated in these methods like

• Ease of access to the facility;
• Speed of electronic transactions;
• Ease of making multiple fictitious applications without incurring extra cost or the risk of detection;
• Absence of physical documents; etc.

The extent of verification in respect of such non-face-to-face customers will depend on the risk profile of the product and that of the customer.

Insurers shall have in place procedures to manage specific increased risks associated with such relationships e.g., verification of details of the customer through on-site visits etc.

It the on-going risk management procedures indicate that the customer or beneficial owner is found to be, or subsequently becomes a PEP, insurers shall obtain senior management approval on this business relationship.

For the purposes of risk categorization, however, they may be considered as low risk products, unless the details indicate otherwise.