Law Report

Money laundering means turning illegally acquired money, or black money, into legally acquired money by moving this money through the financial system.
But it’s not as if the insurance industry does not have a specified list of guidelines to check money laundering. Insurance regulatory and Development Authority has a clear set of guidelines that prevent money laundering through insurance products and asks the insurance companies to report all suspicious transactions
Requiremtnts of act :
It puts certain responsibilities on the banks financial institution and other intermediaries.
1. verify and maintain records
2. maintain the records in hard and soft form for 10 years
3. provide information to authorities as required.
Response of insurance industry
irda has issued guidelines on aml programme for insurers.
The company has to follow these gudielines while framing its policies and procedures to reduce the threat of money laundering.
Irda guidelines
According to the irda guidelines every company shud have an aml programme which should include
Internal policies, procedures and controls;
• Designating a compliance officer
• Recruitment and Training of employees and agents
• Internal control / audit.
Internal policies procedures and controls
Each insurance company has to establish and implement policies, procedures, and internal controls which would also integrate its agents in its anti-money laundering program
: 1. Know Your Customer (KYC)
2. When should KYC be done?
3. KYC and Risk Profile of the Customer
4. Products to be covered
5. Defining Suspicious Transactions (including Suspicious Cash transactions)
6. Reporting of Suspicious Transactions
7. Monitoring and Reporting of Cash Transactions
8. Verification at the time of redemption/surrender
9. Record Keeping
Know your customer
. Insurers need to have a know-your-customer (KYC) process for all insurance policies. This means that insurers need the identity proof, address proof...