All insurance companies and insurance brokers in Malawi are now formally financial institutions, making them answerable to the dictates of the Money Laundering, Proceeds of Serious Crime and Terrorist Financing Act of 2006.
Records we have seen show that Finance Minister Ken Lipenga formally prescribed and gazetted insurance players into the financial sector in October 2012.
The Financial Intelligence Unit (FIU) also confirmed the development saying they now expect nothing less than compliance to Money Laundering, Proceeds of Serious Crime and Terrorist Financing Act by local insurance players.
“The insurance industry was omitted in 2006. They did not fall on the list of financial institutions under the ML Act,” said FIU public relations officer Masautso Ebere.
“What this means is that the insurance industry is now mandated to comply with the obligations on fighting money laundering and combating terrorist financing,” he added.
With this development, insurance companies will be required to, among others, develop anti-money laundering and combating the financing of terrorism (AML/CFT) programmes and appoint compliance officers.
Compliance officers, according to Ebere, act as liaison links between the FIU and financial institutions.
Insurance companies, just like all other financial institutions, will also be expected to train their staff members in AML/CFT and also monitor transaction of customers and report suspicious transactions to the FIU.
“The customers will have to present identification details when entering into a relationship with the insurance companies or at any appropriate time deemed fit by the insurance companies. For instance, when there are changes in their socio-economic statuses,” said Ebere in an e-mail.
The identifications details, just like banks have been doing, shall include proper or real names, physical address, verification details such as utility bills, declaration of expected monthly income and source of income, among others.
According to the Money Laundering, Proceeds of Serious Crime and Terrorist Financing Act of 2006, there are over ten businesses and activities that define a financial institution, including but not limited to those licensed under the Banking Act.