There were indications that inspectors of the National Insurance
Commission (NAICOM) have begun the scrutiny of compliance to guidelines
of Anti-Money Laundering and Combating the Financing of Terrorism
(AML/CFT) manual in the insurance industry.
The AML/CFT regulations and “know your policyholders” guidelines seek to minimise the risk faced by companies of being used to launder the proceeds of crime and provide protection against fraud and financial risk.
The Guardian gathered that regulatory inspectors are on the field examining structures put in place in compliance with the AML/CFT guidelines.
The chief executive of an underwriting firm who spoke on condition of anonymity said regulators are currently scrutinizing compliance level in the industry. The guidelines, he said, require that operators must know their customers and the source of business that they underwrite.
He said: “The government reforms are very keen in the growth of insurance business in this country, and the commission is working very hard to enforce best practice in the conduct of insurance business as traditional risk bearer in the economy.”
According to him, “there are challenges in the industry. For instance, we are required to implement the International Financial Reporting Standard (IFRS), AML/CFT guidelines, the ‘no premium no cover’ policy. The impacts of these challenges are enormous because we are required to implement these reforms at the same time.
“Although, it is for the growth of the industry, you can realise the financial implications that are involved in the process of implementation.
The AML/CFT compliance manual is designed to provide international best-practice guidance to companies on how to implement the legal regime. It covers design of AML/CFT policy; chief compliance officer designation and duties; customers due diligence; monitoring and responding to suspicious transactions; record keeping; and AML/CFT employee training programme.
Companies are required to adopt a risk-based approach in the identification and management of their AML/CFT risk. Companies are also reminded that AML/CFT laws not only designate money laundering and predicate offences but also prescribe criminal sanctions for non-compliance.
The AML/CFT regulations and “know your policyholders” guidelines seek to minimise the risk faced by companies of being used to launder the proceeds of crime and provide protection against fraud and financial risk.
The Guardian gathered that regulatory inspectors are on the field examining structures put in place in compliance with the AML/CFT guidelines.
The chief executive of an underwriting firm who spoke on condition of anonymity said regulators are currently scrutinizing compliance level in the industry. The guidelines, he said, require that operators must know their customers and the source of business that they underwrite.
He said: “The government reforms are very keen in the growth of insurance business in this country, and the commission is working very hard to enforce best practice in the conduct of insurance business as traditional risk bearer in the economy.”
According to him, “there are challenges in the industry. For instance, we are required to implement the International Financial Reporting Standard (IFRS), AML/CFT guidelines, the ‘no premium no cover’ policy. The impacts of these challenges are enormous because we are required to implement these reforms at the same time.
“Although, it is for the growth of the industry, you can realise the financial implications that are involved in the process of implementation.
The AML/CFT compliance manual is designed to provide international best-practice guidance to companies on how to implement the legal regime. It covers design of AML/CFT policy; chief compliance officer designation and duties; customers due diligence; monitoring and responding to suspicious transactions; record keeping; and AML/CFT employee training programme.
Companies are required to adopt a risk-based approach in the identification and management of their AML/CFT risk. Companies are also reminded that AML/CFT laws not only designate money laundering and predicate offences but also prescribe criminal sanctions for non-compliance.
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