The increasing pressure from international and national regulators, with regard to the Prevention of Money Laundering and Combating the Financing of Terrorism (PBC / FT), and the intensification of supervisory actions demonstrate the importance of this issue for the financial sector.
Law No. 58/2020 of August 31, which amended Law No. 83/2017 of PBC / FT of August 18, which transposes Directive (EU) 2018/843 of May 30, 2018 and the Directive (EU) 2018/1673 of 23 October 2018, provides for the management bodies to assess the internal control system in the area of PBC / FT. At the same time, financial supervisors have been issuing sectoral regulations regarding the reporting model of those assessments.
At the end of 2020, the Insurance Supervisory Authority (ASF) reinforced, through regulatory standard no. 10/2020-R of 3 November, the mandatory reporting of “periodic and independent assessment of the quality, adequacy and effectiveness of its PBC / FT policies and procedures and controls, identifying the main flaws and / or weaknesses as well as the measures taken to improve the implemented systems ”. Assessing the adequacy and effectiveness of PBC / FT policies, procedures and controls is critical as it allows insurers and the supervisor to obtain a picture of the current degree of compliance in terms of PBC / FT and define action plans to address identified deficiencies , in order to comply with existing requirements and institute best international practices.
The implementation of an effective PBC / FT program requires significant investment, on the part of the institutions, in technical and human resources but also in promoting a culture of PBC / FT prevention throughout the organization.
As the biggest internal challenges at PBC / FT, we highlight the effort required to ensure compliance with some of the requirements, namely, ensuring the correct identification and knowledge of customers, prior to the establishment of a business relationship, the timely review / update of customer data in the course of the business relationship, the implementation of adequate information systems to ensure the integrity of the customer database, the detection of politically exposed persons, the knowledge of the beneficial owner, the assignment of a money laundering risk profile capitals and the correct parameterization of rules in the tools used, considering the risk factors identified. In addition, insurers will have to ensure that intermediaries in the distribution of insurance comply with regulatory requirements, namely, complete customer identification.
Money laundering and terrorist financing have been seen as a growing problem in the banking sector, but with the evolution and sophistication of this type of crime, the insurance sector is also exposed, which is why a strong bet on prevention is fundamental.
PBC / FT is a continuous process, and periodic evaluations result in the performance of conformity tests that allow not only to assess the adequacy of the controls implemented in terms of design and operational effectiveness, but also to measure the degree of compliance with the legal and regulatory framework. regulatory. This process is essential for the insurance sector as it contributes significantly to the strengthening and robustness of its internal control system.