MAS Insurance AML/CFT Guidelines: Introduction

1 INTRODUCTION

1.1 These Guidelines apply to all insurers licensed under section 8 of the Insurance Act (Cap. 142) (“the Act”) and to all foreign insurers operating in Singapore under a foreign insurer scheme established under Part IIA of the Act1.

1.2 Direct life insurers writing life policies should refer to MAS Notice 314 on “Prevention of Money Laundering and Countering the Financing of Terrorism – Direct Life Insurers” and the accompanying guidelines in relation to direct life insurance business. For all other insurers, including foreign insurers operating in Singapore under a foreign insurer scheme and direct life insurers writing accident and health policies, these Guidelines are intended to provide guidance on the prevention of money laundering and countering the financing of terrorism.

1.3 For the purposes of these Guidelines, the licensed insurers and foreign insurers operating in Singapore under a foreign insurer scheme as defined in paragraph 1.1 will be collectively known as “insurers”.

1.4 Singapore’s primary legislations to combat money laundering (“ML”) and terrorism financing (“TF”) are the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap. 65A) (“CDSA”) and the Terrorism (Suppressing of Financing) Act (“TSOFA”) respectively. Insurers may refer to the Inter-Ministry Committee on Terrorist Designation’s website for more information2 in relation to the TSOFA, and the Commercial Affairs Department’s website3 for more information on the CDSA and the reporting of suspicious transactions.

1.5 ML is a process4 intended to mask the benefits derived from criminal conduct so that they appear to have originated from a legitimate source.

1.6 TF refers to the financing of terrorist acts, and of terrorists and terrorist organisations.

1.7 Proliferation financing (“PF”) refers to the act of providing funds or financial services which are used, in whole or in part, for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical or biological weapons and their means of delivery and related materiels (including both technologies and dual use goods used for non-legitimate purposes), in contravention of national laws or, where applicable, international obligations.

1.8 In addition, targeted financial sanctions (“TFS”) relate to specific sanctions imposed in relation to both asset freezing and prohibitions to prevent funds or other assets from being made available, directly or indirectly, for the benefit of designated persons and entities5. TFS include the following components:

(a) Sanctions relating to TF (i.e. the lists indicated under the First Schedule of the TSOFA and any other lists or information provided by the Monetary Authority of Singapore (“the Authority”) or other relevant authorities in Singapore regarding sanctions relating to TF);

(b) Sanctions relating to PF that make reference to resolutions effected by the United Nations Security Council (“UNSC”)6; and

(c) Sanctions relating to resolutions effected by the UNSC on undesirable persons7.

In these Guidelines, regulations issued by the Authority in relation to paragraphs 1.8(b) and 1.8(c) will be collectively known as the “MAS TFS Regulations”.

1.9 For the purposes of these Guidelines, the risks of TF, PF and non-compliance with TFS will be collectively known as “TF risks”. Similarly, where the term “countering the financing of terrorism” (“CFT”) is used in relation to controls, this would refer to control processes to counter both TF and PF, and to ensure compliance with TFS.

1.10 The expressions used in these Guidelines have the same meaning as those found in the Act, except where expressly defined in these Guidelines or where the context otherwise requires.

1.11 The degree of observance with these Guidelines by an insurer may have an impact on the Authority’s overall risk assessment of the insurer, including the quality of its board and senior management oversight, governance, internal controls and risk management processes.

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