Comply with anti-money laundering norms: IRDA tells insurers


January 22, 2014 5:11 IST | India Infoline News Service
The Insurance Regulatory and Development Authority (IRDA) on Tuesday directed Life Insurance Corporation and ICICI Prudential Life Insurance to comply with Anti-Money Laundering guidelines as they were found to be in violation of various norms.
The Insurance Regulatory and Development Authority carried out an onsite inspection of two of the branches of Life Insurance Corporation of India and the Corporate Office during May, 2013 to examine the procedures in place to comply with the Anti Money Laundering guidelines issued by the Authority.
The Authority forwarded the copy of the Inspection Report to the Insurer vide letter dated 24th June, 2013 seeking comments. On examining the submissions made by the Life Insurer vide letter dated 09th July, 2013, the Authority has issued a Show Cause Notice on 25th September, 2013 which was responded to by the Life Insurer vide letter dated 17th October, 2013. As requested therein, a personal hearing was given to the Insurer on 17th December, 2013.
Irda has asked LIC to put in place systems and controls to comply with AML provisions. It said there were no systems in place to detect and monitor when a person made multiple cash transactions aggregating over Rs 50,000 in cash.
"The submissions that all transactions from every office of LIC are clubbed together every week and a report is generated and scrutinised... However, the Life Insurer is hereby advised to put in place specific systems and controls to ensure avoidance of possible attempts by customers to circumvent the requirement of submission of PAN/Form 60/61."
IRDA also directed LIC to put in place system to analyse data pertaining to surrenders and directed the Corporation to be vigilant in future.
It also observed that LIC used declaration by Development Officers are valid proof of addresses and instructed it to avoid doing such activities.
In the matter of ICICI Prudential, Irda asked it to closely monitor its branches and further strengthen internal controls as there were tampered/forged documents of ID proofs, address proof and income proofs at some of its branches.

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