IIF Authors

Status: Will be live at 08/30/2021 12:35

IIF Response to IAIS Draft Revised Application Paper on Combatting Money Laundering and Terrorist Financing

On May 18, the International Association of Insurance Supervisors (IAIS) published its Draft Revised Application Paper on Combatting Money Laundering and Terrorist Financing. The original Application Paper published in October 2013 was based primarily on the then-current version of ICP 22 and the 2012 revisions to the Financial Action Task Force (FATF) Recommendations. Following various updates made to the FATF Recommendations in recent years, and the 2018 publication of the revised FATF Guidance for a Risk-Based Approach in the Life Insurance Sector, the IAIS revised ICP 22 (which was adopted by the IAIS General Meeting in Abu Dhabi in November 2019). In light of these developments, the IAIS has updated the Application Paper in order to align terminology and to ensure consistency with FATF recommendations, as well as to incorporate new guidance on elements reflected in the latest version of ICP 22. 

After holding joint sessions with the Insurance Working Group (IWG) and the Anti-Money Laundering and Anti-Terrorist Finance (AML-ATF) Working Group, the IIF responded to the Draft Revised Application Paper.  Key points raised in the response included the need to limit the guidance to life insurers, with a risk based and proportionate approach, and the need to focus on aspects of money laundering and terrorist financing risk that are particularly pertinent to life insurers. We further encouraged the IAIS to align the Draft Application Paper with developing FATF Recommendations and FATF Guidance, as well as with the treatment of proliferation finance, which the IIF recommended should be out of scope for this Application Paper until the FATF has finalized its guidance on the subject.  Finally, the IIF encouraged the IAIS to place greater emphasis on the importance of insurers being able to share information concerning financial crime matters. To facilitate this, the IIF recommended that the IAIS work with its international counterparts, including the FATF, to address the legal and regulatory barriers to such data exchange (particularly cross-border) and explore mechanisms for public/private cooperation and partnership among the insurance sector, regulators, and law enforcement, and to consider how such public/private partnerships can help address information sharing barriers.