Kathmandu. In order to control money laundering, it is mandatory to identify different levels of customers based on the level of customer risk in the banking and insurance sector. While data confirms an increase in cases of money laundering through life insurance, life insurers are not serious about fully complying with the provisions related to customer identification.
The Customer Identification Form (KYC) does not contain important details other than the customer’s name, address, three-page details. In the KYC form, important and sensitive details such as details of other members of the customer’s family, three-page details of the person desired by the customer, citizenship number of the person other than the customer, bank account details, mobile number, e-mail address, permanent as well as current residence address are allotted to the KYC.
Nepal Insurance Authority (NEA) has found that the insurer has collected nominal KYC details during on-site monitoring. Life insurers, who have been negligent in identifying customers at the initial level, have found large customer identification incomplete and incomplete.
General customer identification, large customer identification and intensive customer identification should be done based on the assessment of the risk of money laundering from customers.
Due to the provisions related to the Prevention of Money Laundering Act, 2064, banks and financial institutions (including insurers) have to mandatorily fill the customer identification form. The Insurance Authority had also directed the insurers to fill the identification form in the case of the old insured by mid-March 2075 and fill the mandatory identification form of the new insured.
Directive 4(1) of the Directive on Prevention of Money Laundering and Control of Financing of Terrorist Activities, 2075 BS has provisions regarding customer identification. Apart from this, there is a provision in Directive 4(t) that an organized organization should take personal details of such insured while insuring its employees.
Similarly, Directive 5(1)A also provides for the creation of a mechanism to identify high-ranking persons.
Customer identification implementation is better in non-life insurers than in life insurers. Since non-life insurers have limited and most institutional customers, it is definitely faster and easier to complete the customer identification process than life insurers.
The problem brought about by an insurance proposal without the person you want
Apart from this, in the life insurance policy, it is mandatory to have details related to the person (nominee) wanted to identify the beneficiary after the remainder of the insured, but most insurance proposals do not mention anything about it. Therefore, even in the insurance policy, the section mentioning the details of the desired person is empty. In the absence of any details of such a person, it is not possible to identify the beneficiary in case of the death of the insured and they should be deprived of the benefits of insurance.
A large part of the insurance’s under-cost benefits will be deprived unless the practice of including these details in the insurance proposal and entering all the details in the insurance software is made institutionally mandatory.
In life insurance companies older than 15 years, more than a billion rupees have to be paid in the insurer’s account due to lack of updated contact number, e-mail address or residence address of the insured or beneficiary. Although the insurer has taken the benefit of interest from this, the beneficiary who has to get the actual benefit has to be deprived.
Purna Bahadur Thapa, information officer of the Insurance Authority, said that there was not much problem of KYC in the insurance company in the recent past. “The companies are issuing insurance policies by filling in the details of the customers in full,” he said, adding, “If there is any problem during the supervision and monitoring carried out by the AUTHORITY, it will direct them to resolve it immediately.” ’
