Kathmandu. Now insurance companies have to formulate separate policies and procedures for prevention of money laundering.
Nepal Insurance Authority (INSURANCE) has made this provision by issuing directives related to prevention of money laundering, terrorist activities and financial investment in the manufacture or expansion of weapons of mass destruction, 2082 BS. Insurance companies will now have to formulate policies and procedures by incorporating various issues in addition to the provisions mentioned in Section 7A of the Prevention of Money Laundering Act, 2064.
Insurers will have to adopt the basis and methodology of risk assessment system by formulating policies and procedures. Additional responsibilities and work schedules of employees, risk-based customer identification system, system of updating and monitoring customer details and submission of information or reports to nea and financial information units through electronic means should be included in the policy and procedure.
Similarly, arrangements for the insurer to provide the method of identifying suspicious transactions and activities in the policy and procedure and the appropriate method to provide the confidentiality of suspicious transactions and activities identified in the insurer’s office or branch to the implementing officer immediately, the method of completing the tasks to be done for the withholding of assets and funds, the arrangement for audit by the compliance examiner, the provision of reviewing the institutional risk assessment annually by an independent third party. Methods to be implemented in the insurance sector’s strategy and action plan for prevention of money laundering, terrorist acts and weapons of mass destruction, provisions for identifying the real owner on the basis of capital, transaction and risk, arrangements for screening high-ranking persons and enlisted persons, compliance and relationship of beneficiaries with customers, system to identify suspicious transactions in relation to specific transactions and operators of insurers; A methodology should also be included to test the suitability of basic shareholders and chief executive officers and employees of the insurer.
Similarly, in order to formulate the policy and procedures, the insured will comply with the prevailing laws related to prevention of money laundering in the performance agreement to be made by the board of directors of the insurer with the CHIEF Executive Officer, the CHIEF Executive Officer will sign a performance agreement with the implementing officer, the implementing officer will enter into an agreement with the department or branch of the insurer to provide the details and the department or branch will also submit the details (KYC) of its customers to the insurance intermediary and other insurance service providers. Provisions for agreement, provision for enhancing institutional capacity for prevention of money laundering, provisions regarding control of financial investment in the manufacture and expansion of weapons of terrorism and mass destruction, method of adopting simplified customer identification methods to be followed, customer identification details and criteria and acts regarding the source of income to be submitted to confirm the financial status of payment of insurance fees, Other necessary matters should also be included to comply with the rules and this directive.
According to the directive, the policy and procedure should be updated by making necessary amendments at least once annually based on changes in the prevailing laws, risk assessment, changes in business and technology, changes in the way of committing crimes and trends.
