To,

All the Insurers,

Dear Sir/Madam,
           
Further to our circular no. 043/IRDA/LIFE/AML/MAR-06 dt. 31/03/06, “Guidelines on Anti-Money Laundering Programme for Insurers”. The following clarifications/relaxations are being issued in response to the doubts/queries raised by the insurers.

1. Application of AML guidelines to existing customers:

In view of the practical hardships on account of retrospective application of AML guidelines from 1st April 2004, and in order to reduce the burden for carrying out KYC exercise for the very large number of existing customers, compliance of KYC norms on existing customers should be carried out by you with effect from 1st January 2006. The compliance requirements are also further limited to the policies coming into force on or after 1st January 2006 and those covered under detailed due diligence procedures vide para 3.1.1 (ii), 3.1.3 and 3.1.5 of the circular. The AML requirements may not be applied to the remaining existing customers, i.e, those below the threshold premium of Rs. 1 lakh per annum.

2. Documentation for identity and proof of residence:

a. All insurance customers would need to give identity of their name, through any of the documents listed in Annexure I of the guidelines (split into identity/proof of residence requirements). If the document of identity also gives the proof of residence, no further documentation would be necessary in cases where proof of residence needs to be obtained. In other cases, the companies may verify their current residential detail as given in the guidelines.

b. The following documentary evidences could also be treated as valid proofs of identity and residence besides the documents mentioned in Annexure I of the guidelines:

i. Written confirmation from the banks where the prospect is a customer, regarding identification and proof of residence.
ii. Personal identification and certification of the employees of the insurer for identity of the prospective policyholder.
iii. Valid lease agreement along with rent receipt, which is not more than 3 months old as a residence proof.
iv. Employer’s certificate as a proof of residence. (Certificates of employers who have in place systematic procedures for recruitment along with maintenance of mandatory records of its employees are generally reliable).

c. The following documentary evidences under Annexure I of the guidelines are valid proofs only under the specified condition:

i. Bank account statement includes any bank account opened by the customer wherein his permanent/present residence address is available. However, the statement should not be older than six months as on the date of acceptance.
ii. Telephone bill pertaining to any kind of telephone connection like, mobile, landline, wireless etc is a valid proof of residence, provided it is not older than six months from the date of insurance contract.

3. In these guidelines unless the context otherwise requires-

a. “Public Authority” is as defined under Section 2(h) of the Right to Information Act, 2005. (http://persmin.nic.in/RTI/WebActRTI.htm)

b.“Public Servant” is as defined in Section 2(c) of the ‘The Prevention of Corruption Act, 1988. (http://www.indialawinfo.com/bareacts/prevca.html#_Toc509302969)
c. ‘Politically Exposed Persons’ is as defined in the KYC norms issued by Reserve Bank of India (http://www.rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=2039)


The other requirements listed in the circular dated 31st March 2006 remain unchanged. Insurers are advised to take note of the above modifications and ensure compliance with the framework in entirety.


Yours faithfully,


(C. R. Muralidharan)
Member