The Chilean Financial Analysis Unit (UAF for its acronym in Spanish), a government body whose function is to oversee the money flows within the Chilean capital market to avoid bribery, money laundry and the funding of terrorism, has issued a new rule to be complied by insurance companies when they are dealing with legal entities as insured, in order to identify its Main Shareholders.
The new rule, known as Circular Nº57, issued in June 2017 and entering in force on 13 September , defines Main Shareholders (hereinafter MS) as individuals who own, direct or indirectly, at least 10% of the capital or voting rights of a legal entity.
According to the Circular, insurance companies must require from their insured legal entities a statement containing enough details to identify their MS. In this process, carriers may request all necessary information and documents to verify the truthfulness of the statement, following the form given by the UAF’s web site.
If the policyholder refuses to provide the information, the insurer must notify the UAF promptly and may reject the client.
The MS’ information must always be available for the government when required and insurers must incorporate the requirement to their Manual of Prevention of Financial Crimes, and instruct their employees to comply with the new rule.
Circular Nº57 has been regarded as essential and mandatory for insurance companies. Not complying with this obligation could result in sanctions ranging between warnings and fines for up to $215,000 (US Dollars).