NAICOM to debar hot money into insurance

NAICOM to debar hot money into insurance

Chuks Udo Okonta

The central financial transaction control unit of the National Insurance Commission (NAICOM) would soon come on stream Inspen has learnt.

It was gathered from a source in the commission that the unit which would help monitor the transactions of insurance firms is near completion.

The project which commenced about three years ago was conceived to help check fraudulent activities especially money laundering.   

Acting Director Inspectorate Directorate NAICOM Farinu  Olusegun, called on stakeholders to support the government and the commission in the fight against money laundering, adding that the government alone cannot successfully prevent and control the menace without the support of the civil society, especially the private sector.

He said those who developed the standards against money laundering recognised the role of industry and therefore included specific obligations and responsibilities for the industry.

Financial institutions according to the Financial Action Task Force (FATF) standards are at the fore front of the fight against financially motivated crimes.

He said: “As criminals seek to disguise the true ownership and movement of their illegal proceeds, the insurance sector is ultimately vulnerable to abuse for the purposes of laundering the proceeds from crime. This is why it is imperative to build capacity within the Insurance sector to prevent money laundering and deny wrong doers the benefits of their misconduct.”

He said NAICOM would continue to forge partnerships with all stakeholders, especially, insurance institutions that should be in vanguard of the crusade against money laundering and terrorist financing, adding that the commission shall sustain cooperation with other organisations at home and abroad to share best practices and promote greater cooperation in their collective efforts.

Director General Nigerian Insurers Association (NIA) Sunday Thomas, said insurers have been charged to preserve their customers’ information for not less than 10 years after the end of any transaction the

Thomas said the move is in line with the industry’s bid to have detail information of customers. He said companies are to display in their offices the notice stating the corporate responsibility for disclosure of information in respect of transactions above specified threshold.

 He said insurers are also to identify the nature and scope of the business to be transacted, the duty to obtain evidence of identification, keep customers information up to date and review customers’ information at every point of transaction.

He noted that insurers are to report to the NAICOM observations detrimental to the their operations, adding that they have to also receive and vet suspicious transaction reports from staff; rendering “nil” reports with the Nigeria Financial Intelligence Unit (NFIU), where necessary to ensure compliance, co-coordinating the training of staff in Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT), awareness, detection methods and reporting requirements; and serving both as a liaison officer for the NAICOM and NFIU and a point-of contact for all employees on issues relating to money laundering and terrorist financing.

He urged the operators to develop robust risk management system including procedures, internal control and audit systems, perform the necessary Customer Due Diligence (CDD) on their customers, beneficial owners and beneficiaries.

According to him, operators are also to effectively monitor unusual transactions, take enhanced measures in respect of higher risk customers, keep adequate records of transactions and promptly respond to enquires by the NFIU in respect of any transaction with any individual, entity, or organisation named in the request.

He noted that there should also be protection of the security and confidentiality of such requests, create high level awareness and training among the staff, ensuring that all branches and subsidiaries observe appropriate AML measures.