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Anti Money Laundering (AML) guidelines

Document Cited in Related
Vincent

Sl. No.
FATF Recommendation/Criteria Reference
Extant Stipulation (Clause Ref: Master Circular on AML dated November 24, 2009)
Addition/Elaboration
a 5.1 Financial institutions should not be permitted to keep anonymous accounts or accounts in fictitious names. Clause 3.1.1 (Know Your Customer (KYC): Life insurance companies are required to carry out KYC norms which includes determination and documentation of the true identity of all customers requesting for its services While carrying out the KYC norms, special care has to be exercised to ensure that the contracts are not anonymous or under fictitious names.
b 5.7 Financial institutions should be required to conduct ongoing due diligence on the business relationship. Clause 3.1.1(vii): Besides verification of identity of the customer at the time of initial issuance of contract which includes obtaining a recent photograph, KYC should also be carried out at the claim payout stage and at times when additional top up remittances are inconsistent with the customers' known profile. KYC process is initially to be done as per the extant guidelines. Any change in the customers' recorded profile that comes to the notice of the insurer and which is inconsistent with the normal and expected activity of the customer should attract the attention of the insurer for further ongoing KYC processes and action as considered necessary.
c 6.2 Financial institutions should be required to obtain senior management approval for establishing business relationships with Politically Exposed Persons (PEPs) Clause 3.1.3 (ii) for the high risk profiles, like for customers who are non-residents, high net worth individuals...(PEPs)..who need higher due diligence, KYC and underwriting procedures should ensure higher verification and counter checks... Insurers should devise procedure to ensure that proposals for contracts with high risk customers are concluded after approval of senior management officials. It is however, emphasized that proposals of Politically Exposed Persons (PEPs) in particular requires approval of senior management, not below Head (underwriting)/Chief Risk Officer level.
d 11.2 Financial institutions should be required to examine as far as possible the background and purpose of all complex, unusual large transactions, or unusual patterns of transactions, that have no apparent or visible economic or lawful purpose and set forth their findings in writing. Clause 3.1.5 "...Large
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