By Rosemary Onuoha
In the face of growing acts of terrorism in the country, insurance practitioners are now seeing individuals whose source of wealth and acquisition cannot be easily verified as high risk clients.

Such high risk individuals and clients  include, non resident high net-worth persons; trusts; charities organisations, NGOs as well as organisations receiving donations. Others are companies with high level family  shareholding or patrimonial ownership; firms with sleeping partners; Politically Exposed Persons (PEPs) as well as those with dubious reputation as per available public information requiring higher due diligence.

Assistant Director (Inspectorate) of the National Insurance Commission, S. C Onyeka, who made this known at an anti money laundering seminar for Directors of insurance companies in Lagos said that the Financial Action Task Force (FATF) has asked Nigeria to complete the enactment of laws that adequately criminalise money laundering and terrorist financing.

Terrorist financing
The global body also urged the country to implement adequate procedures to identify and freeze terrorist assets as well as demonstrate that financial sector supervision, including customer identification against money laundering and terrorist financing is adequate and efficient.

The move became necessary because Nigeria as a country has not made sufficient progress in addressing the deficiencies in Anti-Money Laundering and Combating Financing of Terrorism AML/CFT regime. According to FATF, Politically Exposed Persons are individuals who are or have been entrusted with prominent public functions both in Nigeria and abroad and those associated with them.

They include heads of state or governments; governors; local government chairmen; senior politicians; senior government officials; as well as judicial or military or Para-military officials from the rank of major or equivalent. Others in the category are senior executives of state owned corporations; top political party officials; family members or close associates of PEP’s and members of the royal families.

Accordingly, NAICOM has charged insurance companies to obtain senior management approval before business relationship is entered into with such clients as well as approval of senior management vital for continued relation. NAICOM also charge insurers to take steps to establish the source of wealth of PEPs; conduct enhanced due diligence or monitoring of the relationship; in the event of abnormal discovery, flag the contract and contact NAICOM/NFIU.

All insurance companies, according to the regulator, should have AML/CFT program which at a minimum must include policyholder identification; suspicious and currency transaction reporting; internal policies and procedures; appointment of compliance officer; training of employees/agents; record preservation; ongoing training as well as internal control/audit.