The UAE Central Bank has issued new guidelines for the licensed financial institutions (LFIs) operating in the insurance sector as it continues to take measures to combat money laundering and the financing of terrorism.
The guidelines, effective immediately, will help financial institutions enforce their statutory AML/CFT [anti-money laundering and countering the financing of terrorism] obligations, thebanking regulator said on Thursday.
Insurance and reinsurance companies, agents and brokers have been given one month time to comply with the new regulations.
“Anti-money laundering and combating the financing of terrorism is our top priority, as we work with the LFIs and the relevant authorities to prevent and mitigate these types of financial crime activities,” said Khaled Balama, governor of the UAE Central Bank.
“We expect the LFIs of the insurance sector, to comply with this guidance and enhance their measures and efforts to maintain the soundness of the sector.”
The new guidelines discuss the money laundering and financing of terrorism (ML/TF) risks relevant to life insurance and other investment-related insurance products, and how insurance operators can apply preventive measures to identify, assess, manage and mitigate them.
As per the new rules, insurance operators are required to perform, document and keep up to date an enterprise risk assessment, the Central Bank said. They must perform customer due diligence, understand the nature of the customer’s business and the nature and purpose of the operator’s relationship with the customer, including the expected uses to which the customer will put the operator’s products or services, and subject all customers to continuing monitoring throughout the business relationship.
In addition, insurance operators should maintain transaction monitoring systems equipped to identify patterns of activity that appear unusual and potentially suspicious and must report any behaviour that they reasonably suspect may be linked to ML/TF or a criminal offence by submitting suspicious activity or transaction reports directly to the UAE’s Financial Intelligence Unit using the “goAML” portal, according to the regulator.
The new rules come as the UAE Central Bank takes strict measures to combat money laundering and financing of terrorism.
Earlier this month, the regulator penalised an exchange house operating in the country for failing to achieve the appropriate levels of compliance with anti-money laundering regulations.
The Central Bankimposed a fine of Dh1.92 million ($525,527) on the exchange house in accordance with the law on anti-money laundering, combating the financing of terrorism and the financing of illegal organisations.
