By Rosemary ONUOHA
Terrorism and money laundering are global phenomena which has set nations on edge while the battle to nip them in the bud rages on.
In the Nigerian financial sector, there are series of efforts geared towards combating terrorism and money laundering. And since the insurance industry is a crucial arm of the financial sector, it has mapped out and continues to review its own programmes in the fight against these vices. Consequently, the insurance sector has long joined the Anti-Money Laundering and Combating Financing of Terrorism, AML/CFT, regime.
As part of efforts geared towards the above, insurance companies now view individuals and entities whose source of wealth cannot be easily identified as high risk clients.
Such high risk clients include, non resident high net-worth individuals; trusts; charities.
NGOs as well as organisations receiving donations. Others are companies with close family shareholding or beneficial ownership; Politically Exposed Persons (PEPs), as well as those with dubious reputation as per available public information requiring higher due diligence.
Recall that the Financial Action Task Force (FATF), has asked Nigeria to complete the enactment of laws that adequately criminalise money laundering and terrorist financing.
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 are senior executives of state owned corporations; important political party officials; family members or close associates of PEP’s and members of the royal families.
Accordingly, insurance companies now obtain senior management approval before relationship is established with such clients as well as approval of senior management vital for continued relation. Insurers now take steps to establish the source of wealth of PEPs as well as conduct enhanced due diligence or monitoring of the relationship and in the event of abnormal discovery, flag the contract and contact the National Insurance Commission/Nigerian Financial Intelligent Unit, NAICOM/NFIU.
All insurance companies now have AML/CFT program which at a minimum 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.
According to the Assistant Director (Inspectorate) of NAICOM, Mr. Sam Onyeka, the Nigerian financial sector should 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.
Onyeka said that the move is necessary because the country has not made sufficient progress in addressing the deficiencies in Anti-Money Laundering and Combating Financing of Terrorism AML/CFT.
For Chairman of Cornerstone Insurance Plc, Mr. Adedotun Sulaiman, the insurance sector should join the fight against money laundering and the negative trend of wanting to get businesses at all cost should stop.
Suleiman therefore charged insurance operators to look for creative, acceptable and innovative ways to do business that will take away the negative image.