IRDA tightens anti-money laundering rules for insurance companies

The insurance regulator has tightened anti-money laundering rules as part of consolidation of guidelines for the sector.

The rules issued to consolidate and update the guidelines on anti-money laundering replace the mixed norms issued since 2013. The main change is that exemptions and exemptions have been removed from the guidelines for companies. Therefore, no life, general or health insurer can claim any exemption for complying with the money laundering rules prescribed by the Reserve Bank of India.

Also, the Insurance Regulatory and Development Authority has made the level of risk assessment a function of the size of the companies business. Hence “the periodicity of conducting anti-money laundering and counter financing of anti-terrorism program review and compliance audit and risk assessment (will be) will not be decided but on the basis of risk exposure by the insurer”.

The guidelines come as the regulator is preparing the ground for large exposure to foreign companies and a wide range of domestic financial sector companies to enter the sector. Globally, all regulators are forewarned about these risks.

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