Insurance Commission Releases Thematic Report on Regulated Entities’ Compliance with Targeted Financial Sanctions Obligations
On June 14, 2022, the Insurance Commission released Circular Letter No. 2022-27, publishing its Thematic Review Report on Insurance Commission Regulated Entities (ICREs) compliance with Targeted Financial Sanctions (TFS) Obligations.
A key finding of the report was that ICREs actively practiced detailed company procedures on Customer Due Diligence in compliance with current regulatory laws. They likewise adopted mechanisms to factor in obligations in relevant United Nations Security Council Resolutions in relation to the prevention and suppression of terrorist financing and proliferation of weapons of mass destruction. These guidelines adopted also consider the risk profile of customers using the Risk Based Approach (RBA).
ICREs also enforced sanctions screening which are conducted during onboarding, when there are updates in transactions. Internal procedures ensured that most recent lists were used for scrubbing and screening. Consistent with the “without delay” principle, these screenings were conducted as soon as possible.
ICREs are also required to adopt Institutional Risk Assessments (IRAs) which must consider: “r (i) all relevant inherent ML and TF risk factors in order to determine its risk profile and (ii) assess the nature of mitigating controls, both from a design and operating effectiveness standpoint, in order to (iii) arrive at the residual risk, which should be within the financial institution’s established risk appetite.” Against these benchmarks, the report notes that more efficient implementation of these policies may be furthered by ICREs.
The report also concluded that ICREs must ensure that they can manage their Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) systems of control are effective and robust.
The full circular letter can be accessed here.