Hong Kong Insurance Authority publishes key findings from AML/CFT inspections

On 31 May, the Hong Kong Insurance Authority (IA) published a circular setting out its key findings from anti-money laundering and counter-financing of terrorism (AML/CFT) onsite inspections of authorised insurers carrying on long term business. The IA visited more than 20 insurers to review their AML/CFT policies, procedures and controls and their compliance with the relevant legislative and regulatory requirements. This is consistent with the focus by financial services regulators on AML/CFT, particularly in the last one to two years, as we approach the AML/CFT review of Hong Kong by the Financial Action Task Force (FATF). An onsite evaluation by the FATF is scheduled to take place in October/November this year.

In the circular, the IA identified some key areas in which improvement is required, including senior management oversight, compliance functions, customer risk assessments, customer due diligence, screening of Politically Exposed Persons, terrorists and sanction designations, ongoing monitoring, suspicious transaction reporting and staff/insurance agent training.

The IA has indicated that it will continue its focus on AML/CFT compliance and assess compliance through further inspections and the use of other supervisory tools. It will also continue to provide guidance to the industry, including through seminars/briefings and circulars.