Page 32 - Insurance Times March 2023

sub clause (g) of clause (1) of Rule
Need for AML Compliance
2 of the PML Rules and any
guidelines / indicators issued by
IRDAI or FIU-IND. Government
of India has notified the Central
Registry of Securitisation Asset
Reconstruction and Security
Interest of India (CERSAI), to act
as, and to perform the functions
of the CKYCR vide Gazette
Notification dated November 26,
2015.

For the purposes of KYC norms
under clause 8, while insurers are
ultimately responsible for
customer due diligence and
undertaking enhanced due
diligence measures, as
applicable, insurers may rely on
a KYC done by a third party
Know Your Customer (KYC) Norms subject to the conditions -specified under sub-rule (2) of rule
(9) of the Rules. This announcement will also help ensure
While implementing the KYC norms on juridical persons,
complete KYC for all retail insurance customers across India,
insurers have to identify and verify their legal status through
understand them to serve them better, and ensure that
various documents. Considering the potential threat of usage
insurance companies are not subjected to any money
of the insurance services by a money launderers, insurers
laundering activities.
should make best efforts to determine the true identity of
customer(s). Special care has to be exercised to ensure that
This announcement will help ensure complete KYC for all retail
the contracts are not under anonymous or fictitious names.
While implementing the KYC norms on juridical persons, insurance customers across India. Earlier, KYC was mandatory
insurers have to identify and verify their legal status through only for those paying a single premium of Rs 50,000 and above.
various documents (indicated, but not limited to, at sub-rule Now, in case of every new customer relationship, KYC will be
(6) to (9) of rule 9 of the PML Rules). required.
Contracts with Politically Exposed
Where a client is an individual person, insurers shall verify the
identity, address and recent photograph in order to comply Persons (PEPs)
with provision as specified in sub rule (4) of Rule 9 of the PML It is emphasized that proposals of Politically Exposed Persons
Rules. Under all kinds of Group Insurance (Life /General/ (PEPs) in particular requires examination by senior
Health), KYC of Master Policyholders / Juridical Person / Legal management. Insurers are directed to lay down appropriate
Entity and the respective Beneficial Owners (BO) needs to be on-going risk management procedures for identifying and
collected. However, the Master Policyholders under the group applying enhanced due diligence measures on an on-going
insurance have to maintain the details of all the individual basis to PEPs and customers who are close relatives of PEPs.
members covered, which will also be made available to the These measures are also to be applied to insurance contracts
insurer as and when required. of which a PEP is the ultimate beneficial owner (s).

At any point of time, where insurers are no longer satisfied If the on-going risk management procedures indicate that
about the true identity and the transaction made by the the customer or beneficial owner(s) is found to be PEP, or
customer, a Suspicious Transaction Report (STR) should be subsequently becomes PEP, the senior management should
filed with Financial Intelligence UnitIndia (FIU-IND) if it is be informed on this business relationship and apply enhanced
satisfied that the transaction meets the criteria specified in due diligence measures on such relationship.

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