A Model for the Guidelines and Procedures of Anti-Money Laundering and Combatting the Financing of Terrorism in Life Insurance Industry
Approved by the Financial Supervisory Commission, Executive Yuan with Letter No. Chin-Guan-Bao 3-Zi 09802027301 dated March 9th, 2009.
Approved by the Financial Supervisory Commission with Letter No. Chin-Guan-Bao-Li-Zi 09902656240 dated October 10th , 2010
Approved by Financial Supervisory Commission with Letter No. Jin-Guan-Bao-Zong-Zi 10402572090 dated March 11th, 2016
Approved by Financial Supervisory Commission with Letter No. Jin-Guan-Bao-Zong-Zi 10502914660 dated December 20th, 2016
§1 This Guidelines and Procedures are duly enacted and established in accordance with the Article 6 of the Money Laundering Control Act promulgated by the Government.
§2 The items for operation of anti-money laundering and combatting the financing of terrorism procedures:
1. Time to check and verify the customer’s identity:
(1) While establishing business relationship with the customer.
(2) While in the case of a cash payment or receipt over NT$ 500,000（including foreign currency of the equivalent value）(including all transactions recorded on cash deposit or withdrawal vouchers for accounting purposes)
(3) While there is a suspicion of money laundering or the financing of terrorism, or inward remittances from a country or region with high money laundering and terrorism financing risk.
(4) When in doubt about the veracity or appropriateness of the previously obtained identification data
2. Measures to verify the customer’s identity:
(1) Using reliable, independent source documents, data or information to identify and verify the customer’s identity, copies of the client’s identity documents or records of the relevant information shall be retained or recorded.
(2) For insuracne application, claims, contract modification or other transactions made by representatives, the insurer should verify the fact of representation, use reliable, independent source documents, data or information to identify and verify the customer’s identity, copies of the client’s identity documents or records of the relevant information shall be retained or recorded.
(3) Perform reasonable measures to identify and verify the customer’s actual beneficiary.
(4) Masures to identify the customer’s identity should include enquirying the purpose and nature of the business relationship.
3. For the (3) item of the preceding article, the insurer should realize the following information to ascertain the customer’s actual beneficiary while the said customer is a legal person or a trustee:
(1) When the customer is a legal person:
I. The identity of the natural person who ultimately has a controlling ownership interest in a legal person (such as name, birth date, nationality and ID no). A controlling ownership interest refers to owning more than 25 percent of the legal person’s shares or capital;
II. To the extent that no natural person exerting control through ownership interests is identified or there is doubt as to whether the person(s) with the controlling ownership interest are the actual beneficiary, the bank shall inquire whether there exists any natural person to exercise control of the client through other means, and if necessary, require a declaration from the client for checking and verifying the identity of the actual beneficiary.
III. If, as per prescriptions of the preceding two Points, no natural person with controlling interest is identified, the bank shall take reasonable measures to check and verify the identity of the relevant natural person who holds the position of senior managing official (such as chairman of the board, general manager or other natural person assuming similar roles).
IV. For the aforementioned actual beneficiary (natural person), the insurer should obtain at least his/her name and identity documents( such as: ID caard, a National Health Insurance Card, passport, driver’s license, or other ideifiication documents) to verify the actual beneficiary.
(2) Where the customer is a trustees:
I. When a trustee is a natural person: in additional to the regulations for verifying the customer’s identity, the insurer should realize the grantor trust, trust supervisor, beneficiary, and other people who can effectively control the trust account, and the insurer should obtain at least his/her name and identity documents( such as: ID card, a National Health Insurance Card, passport, driver’s license, or other ideifiication documents) and the legality of the representative, so as to verify his/her identity.
II. When a trustee is a legal person: the insurer, in addition to follow the (3) item of the 2 paragraph and the (1) item of the 3 paragraph of this article and other regulations to realize and verify the legal person’s and actual beneficiary’s identities, shall realize the grantor trust, trust supervisor, beneficiary, and other people who can effectively control the trust account, and the insurer should obtain at least his/her name and identity documents( such as: ID caard, a National Health Insurance Card, passport, driver’s license, or other ideifiication documents) and the legality of the representative, so as to verify his/her identity.
(3) Unless the customer is from or in high-risk countries and territories which fail to comply with the suggestions of anti-money laundering or combating financing terrorism, or the customer or transaction in suspicion of involving money laundering or financing terrorism, the insurer shall not be required to inquire if there exists any beneficiary in relation to a customer or verification of shareholder that is:
I. A R.O.C government entity;
II. An enterprise owned by the R.O.C government;
III. A foreign governmental entity;
IV. A public company and its subsidiaries;
V. An entity listed on a stock exchange outside of the R.O.C. that is subject to regulatory disclosure requirements of its principal shareholders, and the subsidiaries of such entity;
VI. A financial institution supervised by the R.O.C. government, and an investment vehicle managed by such institution;
VII. A financial institution incorporated or established outside the R.O.C. that is subject to and supervised for compliance with the requirements for combatting money laundering and the financing of terrorism consistent with standards set by the FATF and an investment vehicle managed by such institution.
VIII. The Public Service Pension Fund, Labor Insurance, Labor Pension Fund and Postal Savings of the R.O.C;
(4) When a customer applies for health insurance or insurance with no policy value, unless otherwise he/she is from or in high-risk countries and territories which fail to comply with the suggestions of anti-money laundering or combating financing terrorism, or the customer or transaction in suspicion of involving money laundering or financing terrorism, the insurer shall not be required to inquire if there exists any beneficiary in relation to a customer or verification of shareholder.
4. Notice for underwriting:
(1) While the policy applied by the individual, the solicitors shall request the Applicant and the Assured to provide documents of the identity as evidence（such as ID Card, Passport, Driver’s License or other identification document , etc.）. The insurer should check whether the client is the high-profile political person through the inquiry result from related international/local organization or PEP (politically exposed person) list created by the insurer. If the client is the high-profile political person, proper management actions should be implemented and reviewed periodically; if the evaluation result indicates that the existence of suspicious money-laundering or financing-terrorism features, the insurer should keep the transaction records, receipts and report to the Investigation Bureau of the Ministry of Justice. While the policy applied by the legal entity, the solicitors shall request the Applicant to provide the registration certificate of said entity and legal proof of its representative (such as Business License and License of Business Registration, etc.). The solicitors shall check if the above-mentioned documents fit in the content of the policy application and then note in the solicitation report.
(2) In the course of underwriting, the underwriters shall review whether the policy application is written by the Applicant his/herself and whether the identity conformity noted in solicitation report is of certainty; if necessary, further investigation of Applicant’s survival status shall be requested to proceed with relevant documents for the further review. While the policy applied by legal persons, reasonable measures should be taken to understand the nature of their business, ownership and control structure. Relevant information/document should be retained.
(3) To assure the identity of the Applicant, it may be appropriate to ask the Applicant to offer another identity-proof document except ID card or License of Business Registration when necessary; the said another document shall be discernible against identity. If the name list of an entity or school may ascertain the Applicant, the list is also discernible enough. While the Applicant refuses to provide the required documents, the Insurer should decline his/her proposal, or accept it only if a satisfactory verification of the identity is ascertained and confirmed.
(4) The Insurer should decline the proposal if the Applicant is in suspicion of fictitious or nominal name or a dummy company or false legal entity.
(5) The Insurer should decline the proposal if the Applicant holds with counterfeit or forged identity-proof documents or show with Xerox copy of documents while proposing insurance.
(6) The Insurer should decline the proposal if the documents provided by the Applicant are doubtful or ambiguous, or if the Applicant is reluctant to provide other satisfactory supporting evidence, or if the documents provided are unable to trace and check.
(7) The Insurer should decline the proposal if the Applicant postpones to provide supplementary identity evidence with unusual delay.
(8) While the proposal submitted to the Insurer, the Insurer should decline it if there are abnormal issues arising and the Applicant is unable to provide reasonable explanations with them.
(9) For customers such as unwilling to coordinate with the routine review, refuse to provide actual beneficiaries or information about exercising the control over the customers, or unwilling to explain the nature and purpose of the transaction and so on, the insurer may decline.
(10) For an insurance application made by representative, the insurer should comply with the (2) item of 3 paragraph of this article.
5. The procedures to reconfirm or ascertain the Applicant’s data after the insurance was covered:
(1) When the Applicant of jumbo case (with the amount of the premium in such case defined by each insurance company）requests to revoke such policy and return all paid premiums, the Insurer shall handle each case under unique project and confirm the identity and the motives of the Applicant to prevent from money laundering or financing terrorism activities occurred under the name of policy application.
(2) As for the materials and information about the Applicant, the Insurer, if necessary, shall use phone, letter or other ways to check and understand the occupation and domicile or residence of the individual Applicant, and the business location and nature of the Applicant which is a legal entity; the relevant materials shall be kept for records.
(3) If there is any unusual situation arising when the Applicant applies for policy loan, for change of contents of the policy such as premium-payment method or beneficiary and etc., or for policy cancellation, then the Insurer shall pay more attention on such case and proceed further review and check.
(4) For an insurance contract modification made by representative, the insurer should comply with the (2) item of 2 paragraph of this article.
(5) Ongoing monitoring on transactions:
I. An insurance business shall conduct ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the institution's knowledge of the customer, their business and risk profile, including, where necessary, the source of funds.
II. An insurance business shall periodically review the adequacy of customer identification information obtained in respect of customers and beneficial owners and ensure that the information is kept up to date, particularly for higher risk categories of customers.
III. An insurance business is entitled to rely on the identification and verification steps that it has already undertaken, therefore an insurance business is allowed not to repeatedly identify and verify the identity of each customer every time that a customer conducts a transaction unless it has doubts about the veracity of that information. Examples of situations that might lead an insurance business to have such doubts could be where there is a suspicion of money laundering or financing terrorism in relation to that customer, or where there is a material change in the way that the customer's account is operated, which is not consistent with the customer's business profile.
(6) An insurance business shall apply customer due diligence(CDD) measures to existing customers on the basis of materiality and risk, and to conduct due diligence on such existing relationships at appropriate times, taking into account whether and when CDD measures have previously been undertaken and the adequacy of data obtained
6. The regulations which should be paid attention to during payment of claim settlement:
I. While the claim settlement paid, the Insurer should request the beneficiary to provide the identity proof and keep relevant documentation; if the beneficiary demands to cancel “account payee only “remark” off the check, the Insurer should manage to understand the motives, and makes proper notes for records.
II. The Insurer should review whether or not the process during the change of beneficiary is legal, normal and reasonable.
III. The Insurer should review those to whom the claims settlements are paid to see whether or not the claim amounts and their occupations or social status are normal and reasonable.
IV. For a claim settlement made by representative, the insurer should comply with the (2) item of 2 paragraph of this article.
7. For the aforementioned verificaion of the customer’s identity and ongoing monitoring measures, the insurer shall use a risk-based approach (RBA). The enhanced CDD and ongoing monitoring measures shall be applied to those circumstances with higher risk while the simplified CDD measures are allowed where a lower risk has been identified. However, simplified CDD measures are not allowed in the following circumstances:
(1) Where the customers are from or in countries and jurisdictions known to have inadequate AML/CFT regimes, including but not limited to those which designated by international organizations on AML/CFT as countries or regions with serious deficiencies in their AML/CFT regime , and other countries or regions that do not or insufficiently comply with the recommendations of international organizations on AML/CFT as forwarded by the Financial Supervisory Commission (FSC); or