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Guidelines on Anti Money Laundering programme for Insurers
Ref: 019/IRDA/LIFE/ SEP-06 Date: 26-09-2006

CEOs of All the Life Insurance Companies/Life Insurance Council

Dear Sir/Madam,
Further to our circular no. 043/IRDA/LIFE/AML/MAR-06 dt. 31/03/06, and No. 013/IRDA/LIFE/ JUL-06 dt. 27th July 2006 on “Guidelines on Anti-Money Laundering Programme for Insurers”. The following clarifications/relaxations are being issued in response to the concerns raised by the insurers.

1. Documentation for identity and proof of residence:

Doubts have been raised by insurers regarding the documents to be collected as valid identity/residence proof apart from what has been given in Annexure I to the guidelines. It is clarified that the list of documents provided in Annexure I of the guidelines for establishment of identity and residence proof may be deemed as illustrative. However while providing this flexibility to insurers on satisfactory documentation for this purpose; the Authority would reiterate that there should be no dilution of the requirement. Documents which are easily obtained in any name like birth certificates, an identity card issued by the employer of the applicant even if bearing a photograph, credit cards, business cards, driving licenses (not bearing a photograph), provisional driving licenses and student union card should not be accepted mechanically and adequate safeguards should be in place to satisfy its acceptance. In other words, any other document that is accepted by the insurer to establish the identity and proof of residence as required under Rule 9 of the PMLA rules should be
such that it would satisfy competent authorities (regulatory/enforcement authorities), if need be at a future date, that due diligence was in fact observed by the insurer in compliance with the guidelines and the Act.

2. Requirement of recent photograph /address proof under PMLA Rules:

a. We observe that documentation of permanent address and current address is mandatory for all the new contracts as required by Rule 9 of the PMLA rules. With the enlargement of the list of documents for establishment of identity as at para 2 above, the obtaining of appropriate documents for establishing the proof of residence would not be a major constraint and insurance companies are advised to comply fully with this statutory requirement in all cases.

b. There were requests to do away with the mandatory collection of the photograph in case of individual clients as required under Rule 9 of the PMLA Rules 2005. The issue was represented to FIU-IND for which they have clarified that the requirement of submitting a copy of the recent photograph by an individual client is justified and cannot be relaxed. Mandatory requirement of a recent photograph of the client would be taken up again with FIU-IND in view of the representation received from the industry. In the interim, insurers are advised to comply with the PMLA Rules until the issues are resolved by FIU-IND.

3. We have examined other suggestions/requests received from Life Insurance Companies and advise that the other requirements listed in the circular dated 31st March 2006 should 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)
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