Dhaka:The Bangladesh Financial Intelligence Unit (BFIU) has issued a directive to all life and non-life insurance companies in the country to enhance their anti-money laundering and counter-terrorist financing (AML/CFT) compliance. This directive includes conducting regular self-assessments at their head offices, branches, agencies, and other operational units.
According to Bangladesh Sangbad Sangstha, insurance companies are mandated to perform annual Branch Self-Assessment (BSS) exercises. These assessments aim to identify compliance gaps, evaluate financial crime risks, and implement corrective measures to prevent money laundering, terrorist financing, and proliferation financing, as outlined in a Bangladesh Bank circular.
The circular requires each branch, agency, or unit to appoint a Branch Anti-Money Laundering Compliance Officer (BAMLCO) or an equivalent compliance officer. The designated officer must be a senior and experienced employee with at least three years of relevant professional experience. The compliance officer is tasked with conducting an annual self-assessment for the calendar year using a specified checklist.
Before finalizing the assessment report, the head of the respective branch, agency, or unit must convene a meeting with relevant officials to review findings, identify operational weaknesses, and recommend corrective measures. The finalized report, signed by the compliance officer and the unit head, must be submitted to the Central Compliance Unit (CCU) and the Internal Audit or Branch Control Division by January 31.
The Internal Audit or Branch Control Division is responsible for reviewing these reports and verifying their accuracy. If significant compliance weaknesses or high-risk findings are identified, the division must organize targeted inspections and notify the CCU. The CCU, overseen by the Chief Anti-Money Laundering Compliance Officer (CAMLCO), consolidates the self-assessment findings and internal audit reports into a comprehensive institutional assessment.
This consolidated report should detail the total number of branches, agencies, and units, the number of self-assessment reports received, the overall compliance status, recurring irregularities, and corrective actions taken. The managing director or chief executive officer must provide written comments and directives before the final report is presented to the Board of Directors or Management Committee. The complete report must be submitted to the BFIU in February.
The self-assessment framework encompasses employee training, compliance officers' qualifications, knowledge of relevant laws and regulations, periodic AML/CFT meetings, customer due diligence, electronic know-your-customer (e-KYC) procedures, transaction monitoring, and record retention. It also mandates effective sanctions-screening mechanisms, identification of suspicious transactions, enhanced due diligence for high-risk customers, and addressing deficiencies identified in previous inspections.
Insurance companies must preserve customer identification records, KYC documentation, policy files, transaction records, claim-processing documents, and relevant inspection reports for at least five years post-policy closure or final claim settlement. The circular also specifies procedures for reporting cash transactions and suspicious activities to the BFIU, including reporting aggregated cash transactions exceeding Tk 10 lakh in a single day monthly via the goAML portal.
Employees are required to report suspicious activities to the designated compliance officer, who will assess and forward the information to the CCU. The CAMLCO is responsible for assessing cases and submitting a suspicious transaction report (STR) or suspicious activity report (SAR) to the BFIU when necessary. The framework strictly prohibits disclosing information about STR/SAR filings or related inquiries to unauthorized parties, a practice known as tipping-off.
The CCU must maintain a centralized record of recurring compliance deficiencies and ensure the implementation of corrective actions, operational instructions, and targeted training to address systemic weaknesses. The annual self-assessment mechanism is designed to strengthen internal controls, improve accountability, and ensure effective systems to identify, assess, and mitigate financial crime risks are maintained by insurance companies.