Dhaka:The Bangladesh Financial Intelligence Unit (BFIU) has mandated 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 required to perform annual Branch Self-Assessment (BSS) exercises. These exercises aim to identify compliance gaps, assess financial crime risks, and implement corrective measures to prevent money laundering, terrorist financing, and proliferation financing. A Bangladesh Bank circular issued on Monday detailed these requirements.
Each branch, agency, or unit must appoint a Branch Anti-Money Laundering Compliance Officer (BAMLCO) or a suitable compliance officer. The designated officer should be a senior and experienced employee with at least three years of relevant experience, and their duties must be clearly defined in the appointment letter. The compliance officer is responsible for conducting an annual self-assessment for the period from January to December, using a prescribed checklist.
Before finalizing the assessment report, the head of the respective branch, agency, or unit is required to meet with relevant officials to review findings, identify operational weaknesses, and recommend corrective measures. The report must be co-signed by the compliance officer and the unit head and 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 tasked with reviewing and verifying the accuracy of the submitted reports. Should any significant compliance weaknesses or high-risk findings be identified, the division must conduct targeted inspections and notify the CCU.
The CCU, overseen by the Chief Anti-Money Laundering Compliance Officer (CAMLCO), is responsible for consolidating the findings from self-assessment and internal audit reports into a comprehensive institutional assessment. This consolidated report should include detailed information about branches, agencies, units, compliance status, recurring irregularities, and corrective measures undertaken.
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 and subsequently submitted to the BFIU in February.
The self-assessment framework covers various areas, including employee training, compliance officers' qualifications, knowledge of laws and regulations, customer due diligence, e-KYC procedures, transaction monitoring, and record retention. It also emphasizes maintaining effective sanctions-screening mechanisms, identifying suspicious activities, and applying enhanced due diligence to high-risk customers.
Insurance companies are required to update KYC profiles and risk assessments for high-risk customers annually and for low-risk customers at least every five years. Additionally, they must preserve relevant records for at least five years after policy closure or claim settlement.
The circular mandates reporting of cash and suspicious transactions to the BFIU. Aggregated cash transactions exceeding Tk 10 lakh in a single day must be reported monthly through the goAML portal. Employees must report suspicious activities to the compliance officer, who will then assess and forward the information to the CCU. The CAMLCO is responsible for submitting suspicious transaction or activity reports to the BFIU as necessary.
The framework strictly prohibits disclosing information on suspicious transaction reports or related inquiries to unauthorized parties, known as tipping-off. The CCU is also required to maintain records of recurring compliance deficiencies and ensure corrective actions and targeted training are implemented.
This annual self-assessment framework is intended to strengthen internal controls, improve accountability, and ensure that insurance companies maintain effective systems to identify, assess, and mitigate financial crime risks.
Source Bangladesh Sangbad Sangstha