BFIU bans anonymous insurance policies

Under the new directive, insurance companies must report cash transactions of Tk 10 lakh or more by a customer in a single day to the BFIU.

The directive was issued on Monday (October 19) to managing directors and chief executive officers of all insurance companies in the country.

The BFIU has also instructed insurers to prevent individuals and entities designated as terrorists by the government or the United Nations Security Council from accessing insurance services.

Insurance companies must verify customers’ identities using reliable and independent sources, including national identity cards, birth certificates, passports, photographs and addresses. They must also examine complex, unusual or economically unjustified insurance policies for possible money laundering and terrorist financing.

Records of reportable cash transactions must be preserved for at least five years. Insurers have also been instructed to verify trade-related insurance documents against bank records and identify the ultimate beneficial owners of corporate policyholders, including those holding 20 per cent or more of shares.

The directive also requires each insurance company to establish a central compliance unit at its head office, led by a senior official, to monitor risky transactions and promptly report suspicious activities to the BFIU.

The move aims to prevent the misuse of the insurance sector and ensure compliance with international standards on combating financial crimes.

-AJM