The Bangladesh Financial Intelligence Unit (BFIU) has issued strict guidelines for all insurance companies in the country to prevent money laundering and the financing of terrorism.
Under the new directive, every institution must establish a central compliance unit, verify customer identities, detect and monitor suspicious transactions, and preserve necessary documents.
The instructions were issued through Bangladesh Bank on Monday.
According to the directive, every insurance company must formulate its own policy to combat money laundering and terrorist financing with approval from its Board of Directors or highest decision-making authority.
In addition, the chief executive officer must issue a clear commitment annually to employees and agents regarding this matter and take necessary measures to ensure proper implementation of the policy.
As per the BFIU guidelines, a central compliance unit headed by a senior official must be formed at the head office of each insurance company.
The Chief Anti-Money Laundering Compliance Officer (CAMLCO) will serve as the head of this unit, which will be responsible for supervising the institution's anti-money laundering and counter-terrorist financing activities.
Furthermore, the central compliance unit must prepare an annual report covering progress, evaluations, and recommendations for activities from January to December of each year.
The report, along with the Chief Executive Officer's comments, must be presented at a meeting of the Board of Directors or the highest management committee, with a copy submitted to the BFIU by February of the following year.
The directive also mandates strengthening compliance operations at the branch level. A senior officer with at least three years of experience must be appointed as the anti-money laundering compliance officer in every branch and unit.
Similarly, designated officers must be nominated to oversee compliance for insurance agents as well.
These designated officers will be tasked with verifying customer identities, monitoring insurance policy transactions, identifying and reporting suspicious transactions, and maintaining relevant records, as well as ensuring necessary training for employees.
Regarding customer verification, no insurance policy can be opened or operated anonymously or under a pseudonym.
Opening or operating insurance policies in the name of individuals or entities listed under UN Security Council resolutions, or individuals and banned entities listed by the Bangladesh Government, is strictly prohibited.
The directive also clarifies the definition of a "customer" to include not only the policyholder, but also the ultimate beneficial owner of the policy and any person or entity operating a policy on behalf of another.
The BFIU issued these instructions using powers conferred under relevant provisions of the Money Laundering Prevention Act, 2012, and the Anti-Terrorism Act, 2009, with which all insurance institutions in the country must strictly comply.
