Anti Money Laundering & know client.pptx

ANTI MONEY LAUNDERING

1. Anti Money Laundering and Know Your Customer

2. Money-laundering Engaging in processes or activities related to the proceeds of crime, such as concealment, possession, acquisition, use; Projecting as untainted property, or claiming as untainted property, directly or indirectly, or knowingly assisting, being a party to, or being involved in such processes or activities, constitutes money-laundering.

3. What constitutes a Transaction

4. Regulatory Framework

5. What constitutes a suspicious transaction under PMLA

6. What to Report? Every reporting entity shall maintain for a period of 5 years after the business relationship / account has terminated.

7. Actions for noncompliance

8. Know Your Customer (KYC) Norms

9. Know Your Customer (KYC) Norms

10. Client Due Diligence (CDD) Due diligence is not necessary for Payments for superannuation / gratuity accumulations and to beneficiaries/ legal heirs / assignees in case of death benefits.

11. Conducting Client Due Diligence (CDD)

12. Sharing KYC information with Central KYC Registry (CKYCR)

13. Simplified Due Diligence (SDD)

14. Enhanced Due Diligence (EDD) - High -risk categories and Politically exposed persons.

15. Contracts emanating from countries with deficient AML/CFT regime

16. Reporting & Record Keeping

17. Monitoring of Transactions

18. Video Based Identification Process(VBIP)

19. Freezing & Unfreezing of insurance policies of ‘designated individuals / entities’

20. Examples of suspicious transaction

21. Revised Red Flag Indicators 2023 Red Flag Indicative Parameter Obligation Any person whose name appears on the watch list specified by IRDA / MEA / UNSC / MHA Name of Customer Screen at the time of policy issuance / payout of any benefit/claims Cash transaction or demand draft under 50 thousand towards premium , top-ups etc Mode of Receipt of payment Nature of Payment Aggregation Period Threshold Report transaction if the aggregate number of receipts exceed INR 5 Lakhs in a calendar month or 75 Lakhs in a financial year from a single proposer/ assignee /owner towards payment of any nature under all insurance policies or proposals Frequent Free Look cancellations where premium received via cash / demand draft less than 50 thousand Multiple Freelook cancelations Report 3 or more free look cancellations received from a single policyholder amounting to refund of 1 lakh and above in a calendar month

22. Revised Red Flag Indicators 2023 Red Flag Indicative Parameter Obligation Unusual termination of policies and refunds where premium received via cash / demand draft less than 50 thousand from a single policyholder Mode of Payment Aggregation Period Threshold limit Exclusions Raise a trigger for cancellation request of policies amounting in excess of 2 lakhs in a calendar month where premium received via cash / demand draft less than 50 thousand from a single policyholder Inflated or Fraudulent claims Policy where SI is 1 crore Annual premium exceeding 1 Lakh Claims on existent assets Submission of forged , fabricated documents Complicity of insurance intermediaries Trigger Alert Frequent Request of change of Address 3 or more request from the same policyholders in a Financial year Trigger Alert

23. Revised Red Flag Indicators 2023 Red Flag Indicative Parameter Obligation Request for refund of over payment of premium other than declinature or postponement of cover or refunds on account of change of plan Refund of Premium request in excess of 5 lakhs in a month or 25 lakhs in a financial year Trigger Alert Aggregate all policies issued to a person Customer frauds other than claims - Different KYC documents for different policies in different persons of names to avoid clubbing Common Address, PAN , email id & phone numbers Conduct checks once a month Trigger an alert where any one of the indicative parameters is established Media Reports about a customer Report of an alleged involvement of a policy holder in a crime ,action by tax authorities etc Trigger an alert

24. Revised Red Flag Indicators 2023 Red Flag Indicative Parameter Obligation Information sought by enforcement agencies or Financial Regulator Receipt of enquiry notice about a policy holder Trigger alert and provide for information Insurance of Marine export policies in cases of export on cost plus freight basis Payment of premium in cash , DD or combination for amounts less than 50 thousand Currency of claim is not mentioned in the policy Trigger an alert if 3 or more such transaction have occurred in a financial year Marine transit insurance – while seeking settlement for shortage of delivery at point of import request for reassignment of policy in favour of Indian exporter at time of settlement Requests reassignment to Indian exporter & where such reassigned policies exceeds 5 lakhs per assignment request Trigger Alert

25. Revised Red Flag Indicators 2023 Red Flag Indicative Parameter Obligation Claim settlement exceeding 10 lakhs on total loss for non hypothecated assets bought in cash Insurance of assets Non hypothecated Claims received in first year of policy Claim value exceeds 10 lakhs Raise an alert Claim settlement exceeding 1 crore for non hypothecated assets bought in cash Insurance of assets Non hypothecated Claims received in first year of policy Claim value exceeds 10 crore Raise an alert Suspicious profile of customer Complicated ownership structure of company Frequent changes of authorised signatories followed by large value top up transaction Absence of documentation Frequent claims under policies Frequent change of nominee / assignee Conduct checks once a month and Raise an alert Premium of 2 lakhs paid on login/ renewal

26. Revised Red Flag Indicators 2023 Red Flag Indicative Parameter Obligation Policies issued to entities / persons whoa are barred/disqualified by financial sector regulators /MCA Payments made by persons/ directors/companies in any mode for 5 lakhs or more Conduct monthly checks and raise an alert

27. Thank You The information contained herein is of a general nature and is not intended to address the circumstances of any individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the situation. “Master Guidelines on Anti-Money Laundering/ Counter Financing of Terrorism (AML/CFT). This report is the property of the Finexure Consulting , Bangalore. The reproduction and distribution of this material is forbidden without express written permission from Finexure. For more information write to us at [email protected]