7 REPORTING OF SUSPICIOUS TRANSACTIONS
7.1 Clear guidance should be provided to all officers, employees and agents as to what constitutes a “suspicious transaction” that warrants escalation and reporting.
7.2 There should be well-defined guidelines and procedures in place for escalating, investigating, reporting and acting on suspicious transactions. The channels for reporting suspicious transactions should be clearly specified in writing and communicated to all personnel.
7.3 A clear internal reporting channel should be set up for the escalation of suspicious transaction reports from the officer, employee or agent making the report. The insurer should establish a single reference point (e.g. Chief Executive, Head of Compliance) within the organisation to whom all transactions suspected of being connected to ML/TF activity should be referred to.
7.4 The onus is on the insurer to identify and assess red flag indicators of suspicious transactions. The insurer should determine what constitutes a suspicious transaction which warrants escalation and reporting based on the scale, complexity, and inherent risk of its business. In terms of determining and assessing suspicious activity exhibited by customers, examples of suspicious circumstances that may warrant the filing of an STR may include the following:
(a) where the customer is reluctant, unable or unwilling to provide any information requested by the insurer;
(b) where the customer, without reasonable grounds, decides to withdraw a pending application to establish business relations with the insurer;
(c) where the customer, without reasonable grounds, decides to suddenly terminate existing business relations with the insurer;
(d) abnormal settlement instructions, including payment to apparently unconnected parties; or
(e) frequent changes to the customer’s address or to authorised signatories.
7.5 STRs should be filed on all suspicious transactions and cases. Where an insurer decides not to file an STR for a case that was initially thought to be suspicious, the basis for doing so should be documented, and the decision made by the initial assessor of the case should be raised to a higher authority for review and approval.
7.6 An STR should be filed within 15 business days of the case being referred by the relevant officer, employee or agent, if the insurer has assessed that the matter should be referred to the STRO, unless the circumstances are exceptional or extraordinary. The decision as to whether to refer the matter to the STRO should be regardless of the amount of the transaction, if any.
7.7 STR reporting templates are available on the Commercial Affairs Department’s website. However, insurers are strongly encouraged to use the online system provided by STRO to lodge STRs, as this also enables reporting entities to be kept apprised of STRO’s advisories. In the event that an insurer is of the view that STRO should be informed on an urgent basis, including where a transaction is known to be part of an ongoing investigation by the relevant authorities, the insurer should give initial notification to STRO by telephone or email and follow up with such other means of reporting as STRO may direct.
7.8 Under exceptional circumstances, (e.g. if the online system is down) and the insurer files an STR manually with the STRO (i.e. not through the STRO Online Notices and Reporting Platform (SONAR)), a copy of the report should be extended to the Authority for information.