THE INSURANCE Commission (IC) has issued guidelines mandating regulated entities to implement policies versus money laundering and terrorism financing.
According to the Circular Letter 2018-48 or the Anti-Money Laundering and Combating the Financing of Terrorism Guidelines, the IC mandates insurers, reinsurers, insurance and reinsurance brokers, pre-need firms, mutual benefit associations and other Insurance Commission-regulated entities (ICRE) to apply necessary policies preventing and mitigating money laundering and terrorist financing (ML/TF).
“[ICREs must] adopt and effectively implement an appropriate…risk management system that identifies, understand, assesses monitors and controls risks associated with ML/TF,” the guidelines read.
Under the circular, regulated entities are required to implement comprehensive and risk-based ML/TF prevention programs which should include detailed procedures for compliance with and the implementation of the major requirements of the Anti-Money Laundering Act; an effective and continuous training program for responsible officers and employees to enable them to fully comply with laws against ML/TF; adequate risk-based screening and requirement process to ensure that only qualified personnel with no criminal record are employed by ICREs; and an internal audit system as well as an independent audit program to assess the completeness and accuracy of information obtained from customers, among others.
Likewise, the regulating body also instructs ICREs to sufficiently know their customers to prevent criminal elements and suspicious individuals from misusing their services.
“The ICREs shall create a system that will first establish and then record the full identity of their customers and risk assessment results.”
These firms are also tasked to designate a compliance officer and/or office to monitor day-to-day compliance with these obligations.
Insurers must also “conform with high ethical standards and observe good corporate governance” in line with the guidelines, and cooperate fully with the IC as well as the Anti-Money Laundering Council for an effective implementation of ML/TF laws and policies.
The IC did not reply to a request for additional comments as of press time.
Meanwhile, players in the insurance industry welcomed the new guidelines, saying it will be beneficial for the sector.
Nina D. Aguas, chief executive officer of Insular Life Assurance Co. Ltd., said the insurer supports the government in its efforts to combat money laundering and terrorism financing.
“We have the guidelines in place to implement and monitor these activities,” Ms. Aguas told BusinessWorld in a text message.
Meanwhile, Raul B. Tan, President and Chief Executive Officer of Jardine Lloyd Thompson Insurance Brokers, said the new guidelines will help in the prevention of unscrupulous individuals in using insurance as a tool for money laundering through the proper registration of individuals and companies.
“Through this, we can avoid our companies being used as a vehicle for money laundering wherein policies issued are properly vetted,” Mr. Tan said.
“From a company perspective, we have our own internal processes that vet a company through a worldwide investigation of their owners and directors, ensuring that we do not deal with companied that have dubious backgrounds.” — Karl Angelo N. Vidal

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