The UAE Central Bank issued a new guidance on anti-money laundering and combatting of the financing of terrorism (AML/CFT), on Thursday.
The guidance, for licensed financial institutions (LFIs) in the insurance sector comprising insurance and re-insurance companies, agents and brokers, comes into effect immediately.
The new norms will assist LFIs’ understanding of risks and effective implementation of their statutory AML/CFT obligations.
LFIs have one month to comply with the guidelines, CBUAE added.
The guidance discusses the money laundering and financing of terrorism 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.
Insurance operators are required to perform, document, and keep up to date an enterprise risk assessment. 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 ongoing monitoring throughout the business relationship. Moreover, the operators must apply enhanced due diligence measure if they identify a customer or relationship presenting higher ML/TF risks.
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 behavior 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.
Khaled Mohamed Balama, Governor of the CBUAE, said: “Anti-Money Laundering and Combatting 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. We expect from the LFIs of the insurance sector, to comply with this guidance and enhance their measures and efforts to maintain the soundness of the sector”.
