Anti-Money Laundering: The Insurance Regulatory Authority hosted a one-day workshop at the College of Insurance in Nairobi where they sensitized life and investment insurance providers on Anti-Money Laundering (AML) regulations.
The AML systems have been put in place to protect the industry from illegal activities whilst ensuring it upholds financial integrity and regulatory compliance. Life Insurance and Investment-related insurance providers are classified as ‘reporting institutions’ under the Proceeds of Crime and Anti-Money Laundering Act.
In order to ensure protection against financial crimes such as money laundering, insurers, brokers and agents have been tasked with strict customer identification and verification requirements.
“The insurance providers have been equipped with the necessary knowledge and tools to enhance customer verification processes and risk assessments, reinforcing Kenya’s financial system’s security and transparency,” spoke IRA director of supervision, Kalai Musee.
Figures of the insurance penetration rate in the country at the moment stand at 2.39%, a figure well below the global average of 7.2%.
On behalf of Commissioner of Insurance and IRA CEO Godfrey Kiptum, Musee emphasized on the importance of strong frameworks and transparency in building trust amongst policyholders which will spur industrial growth.
He maintained that it was important for insurance companies to stick to Know Your Customer (KYC) procedures which will in turn protect the industry from plagues associated with illegal activities.
“Robust KYC processes are essential in detecting, preventing and reporting suspicious transactions,” he said.
Kalai Musee further pointed out that Kenya has been placed in the Financial Action Task Force’s ‘grey list’ in February. It asserted the urgency of preventive measures including enhanced due diligence and ownership identification.
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“The authority reaffirms its commitment to financial integrity by sensitising life insurance companies on Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing Regulations,” he noted.
“Such measures are meant to assess the overall risk profile associated with the customer or business entity and ensure their activities align with the insurers’ regulatory requirements and the insurers’ risk appetite.”
Noteworthy, the insurance regulator is preparing the issuance of Guidance Notes to assist insurance industry stakeholders refine their AML/CFT programs.
“The overall appeal to the life insurers remains fast-tracking the implementation of Customer Identification policies to detect and deter AML/CFT activities within their organisations while enhancing the industry’s overall compliance efforts,” Musee stated.
