Insurance Provider FAQs
Insurers must:
- Conduct KYC on policyholders and beneficiaries
- Assess client and product risk (e.g. single-premium plans)
- Screen for sanctions and PEPs
- Monitor for early surrenders and unusual payments
- Train agents on red flags and reporting
Risk scoring is based on:
- Policy type (e.g. life vs property)
- Payment method (cash = higher risk)
- Client background (location, occupation, PEP status)
This shapes how much due diligence is needed.
High-risk products include:
- Single-premium life insurance
- Investment-linked insurance policies (ILPs)
- Endowment plans with early surrender
- Policies allowing third-party beneficiaries or large cash payouts
These are attractive to money launderers due to their flexibility and liquidity.
Life insurers are typically required to:
- Perform Customer Due Diligence (CDD) on policyholders and beneficiaries
- Monitor transactions for unusual or suspicious patterns
- Screen clients against sanctions and PEP lists
- File Suspicious Transaction Reports (STRs)
- Maintain records for 5–10 years
- Appoint an AML compliance officer
EDD is needed when:
- The client is a politically exposed person (PEP)
- Premiums are paid in cash or crypto
- The beneficiary is unrelated or located in a high-risk country
- A policy is surrendered shortly after issuance
- The source of funds is unclear or unverifiable
Best practices include:
- Using mobile KYC tools (e.g. national ID scan + selfie verification)
- Partnering with mobile money providers for data checks
- Collecting alternate IDs (e.g. voter card, utility bill) where permitted
- Applying simplified due diligence for microinsurance products
Watch for:
- Early policy surrender without clear reason
- Large lump-sum premiums paid in cash
- Unusually complex ownership of policies
- Frequent beneficiary changes
- Customers refusing to disclose source of funds
Insurers are responsible for ensuring that agents and brokers:
- Collect proper KYC documentation
- Identify and escalate red flags
- Undergo AML training
- Do not accept anonymous payments or third-party transactions without review
- Use streamlined AML tools like Anqa to automate CDD and screening
- Apply risk-based onboarding with clear red flag triggers
- Offer mobile-first digital onboarding for remote clients
- Provide simple AML training to field agents
- Keep logs and policies ready for regulator audits