Kathmandu. Nepal Insurance Authority (NOC) has placed customer identification at the centre in its Directive on Prevention of Money Laundering, Terrorist Activities and Financial Investment in The Manufacture or Expansion of Weapons of Mass Destruction, 2082 BS.
Sub-section 12 of Section 9 of the directive stipulates that the insurer has to complete the identification and confirmation of the existing customers within six months for the first time after the issuance of the directive. That is, now all the insurers will have to update the identification and confirmation of the existing customers by March 30.
In addition, Section 5 of the directive states that the insurer should update the customer identity by obtaining the details of the national identity card of all high-ranking customers within six months for the first time after the issuance of the directive.
Section 8 of the directive stipulates that while identifying and verifying simplified customers, citizenship certificates or voter id cards with passports or photographs or national identity cards or driving licenses or identity cards with photographs issued by any government body or a photo provided by the concerned local level should be verified on the basis of recommendation.
While identifying simplified customers, the limit of the first annual insurance fee will be seventy-five thousand rupees only. If there is more than this limit, additional customers will have to be identified.
Although the AUTHORITY has directed the insurer to update the identity of the existing customer within six months, it seems that this work will be challenging for the life insurer compared to other insurers.
Since the non-life insurer has a limited customer population, most institutional customers, and the policy is issued only for a short (usually one-year) period, it is easier than life insurers to update customer identification. Similarly, reinsurance companies also have limited and institutional customers, so it does not seem to be selected to update the details of their customers.
In the case of life insurers, and especially for companies operating before 2074, the task of identifying old customers and updating details can be complicated. Older insurers have only limited details available about their insured. As the identity of the insured has not been updated, the amount of claim that the life insurer has to pay to the insured is piling up.
In the recent past, the insurance policy has been issued only after entering all the details related to the insurance proposer and the insured in the insurance software, but in the case of the old insured, the policy has been issued by entering only limited details, so now there is a problem in verifying the identity of the insured.
In the past, due to the error in underwriting life insurance, the email ID of the insured is not mandatory, the mobile number of the agent is entered into the software instead of the insured, the address of the insured’s residence is changed, the insured has lost contact with the insurer when he migrates for foreign employment, the agent is fleeing, the policy of the insured is limited with the agent and the insured is not aware of the insurance company. are.
It will be possible to update the KYC comprehensively and easily only if the life insurer is able to mobilize the concerned agent to update the details of the customer and collect the necessary documentary evidence for confirmation. Apart from this, using digital technology, life insurers can request the concerned insured to fill and update the KYC details based on their insurance number.
