Financial Crime

International Association of Insurance Supervisors

Anti-money laundering and terrorism financing - IAIS publishes application paper - 11 November 2021

The International Association of Insurance Supervisors (IAIS) has published an application paper on combating money laundering and terrorist financing (ML/TF). IAIS application papers provide supporting material to specific supervisory documents. This paper aims to provide information and advice on where ML/TF can occur within the life insurance sector and on measures to mitigate the associated risks. It is aimed at supervisors and insurers and is intended to supplement, rather than replace, existing standards and expectations.

The paper endorses the risk-based approach (RBA) and recommendations adopted by the Financial Action Task Force (FATF) and makes the following key points:

• the development of an ML/TF risk assessment is the principal starting point for applying an RBA. This should be commensurate with the nature, size and complexity of the business of the life insurer or intermediary;
• the intensity and depth of risk mitigation measures, including customer due diligence (CDD), depends on the ML/TF risk assessment; and
• the “tone from the top” is critical, and accordingly senior management should be involved in the anti-ML/TF process.

Application Paper on Combatting Money Laundering and Terrorist Financing