Insurance is an industry where awareness or the lack of it establishes the criterion for success in compliance. Because of their close relationship with the regulated industry, and networks they are a part of; insurers, reinsurers and brokers often assume the risks are handled by another party. Insurance enterprises underestimate the magnitude of threats they face on an almost daily basis. Insurance cheques, or fraudulent claims are regarded to be a convenient way to realize money laundering aims. But the risk panorama associated with the industry is not limited to dangers related with false claims or cheques.

Mistaken Assumptions

Several risks source from a misguided conception that risk assessment and AML responsibilities rest with another party, or that they must already have been fulfilled by the banks. Brokers assume that the banks are handling the risks associated with clients they introduce, or that the screening responsibilities rest solely with the corporate. Insurers onboard customers relying on the false assumption that the brokers and branches must have conducted adequate screenings. Furthermore, brokers also regard relationships as one- time, and all this creates a dangerous comfort zone and a tendency for negligence fed by mistaken assumptions.

An effective, up-to-date due diligence standard is required for all parties involved.

Fact in plain sight: insuring a designated party is a breach of regulations and brings severe penalties. Insurance firms must conduct thorough checks before issuing a policy, to ensure that their prospective client is not an SDN. The same procedure applies to properties associated with SDNs. Brokers must deny any service, including counsel, to SDNs.

For the insurance industry, comprehensive checks need to be conducted at all levels. The necessity of ongoing compliance applies as strictly to insurance firms as it does to the regulated industry. The SDN and sanctioned parties’ lists change daily, and an onboarded client can turn into a liability after the policy is inked. Broker – Insured party relationship is an ongoing relationship that requires periodic screenings.

Onboard with confidence

Use Sanction Trace’s robust KYC and KYB capabilities to spot suspicious parties and entities
from the onset.

Set heightened standards

Don’t settle for one-time checks, or referrals. Bolster your AML / CTF defences with end-to-
end compliance automation.

Informed decisions, across units

Know who you are insuring, at every step, empower decisions with Sanction Trace’s insights.