‘Insurers to act against agents/intermediaries who bring clients in violation of anti-money laundering norms’

IRDAI has asked insurance companies to implement the new guidelines on anti-money laundering and counter financing of terrorism (AML/CFL) Act 2022 by January 1, 2023.

According to the new AML/CFL norms, insurance companies can take strict action against agents/intermediaries who bring clients in violation of the said norms.

The new guidelines have put responsibility of putting in place a system to counter AML/CFT on insurance companies.

In a circular, IRDAI said, “The guidelines place the responsibility of a robust AML/CFT program on the insurers. Nonetheless, it is necessary that the steps are taken to strengthen the level of control on the intermediaries/representative of insurer engaged by the insurers.”

Here are a few changes that will come into effect from Jan 1, 2023 and matter to you most:

• Insurers will have to put in place rules and regulations covering performance of intermediaries

• Insurers will have to take strict action against erring intermediaries who bring investors in violation of AML/CFT guidelines on multiple occasion

• Insurers will have to carry out due diligence before selecting agents and monitor suspicious activities among existing intermediaries