The FIAU recently issued an Interpretative Note addressed to insurance intermediaries to clarify the insurance distribution activities which fall within the definition of relevant financial business as per Regulation 2(1) of the PMLFTR ('The Prevention of Money Laundering and Funding of Terrorism Regulations').
In particular, the Interpretative Note clarifies the following:
- Insurance brokers who have limited their insurance distribution activities to general business of insurance, and have never carried out long-term business of insurance are not deemed to be subject persons and therefore such activities do not fall under the definition of ‘relevant financial business’ in terms of the PMLFTR;
- Insurance brokers would only be considered as carrying out relevant financial business when they provide long-term business of insurance. In such cases, brokers need to meet all the AML/CFT obligations arising from the PMLFTR;
- Similarly, Tied Insurance Intermediaries (TII), are considered to be subject persons when they provide long-term business of insurance. The following exceptions however apply: when the TII is a natural person acting on behalf of another corporate TII or when the TII does not collect premiums or handle claim payments.
The FIAU, through the Interpretative Note, also advised insurance brokers that do not carry out long-term business of insurance, or who otherwise ceased to do so, to notify the FIAU accordingly, by means of an apposite declaration form.
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