Insurance Industry Migrates to Suspicious Transactions Reporting

15 Mar 2013

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Fola Daniel, Commissioner for Insurance 

Nnamdi Duru

In furtherance of their responsibilities under the Anti-money Laundering and Financial Terrorism Act, insurance companies in the country are now transiting from Cash Transactions Reporting (CTR) to Suspicious Transactions Reporting (STR).

The Director of the Nigerian Financial Intelligence Unit (NFIU), Mrs. Juliet Ibekaku, disclosed this at the Sensitisation Programme on Anti-Money Laundering and Combat of Financing of Terrorism Control Measures for Insurance Companies in Lagos yesterday.
She said the migration became necessary to enable the fraud prevention unit to identify and stop transactions that may be injurious to the economy in this regard.

“They have been reporting what we call currency transaction report since the NFIU was established in 2006 but that is not sufficient. What we want to see is more of suspicious transactions report,” she said.

According to her, suspicious transactions reporting as required by the law, when the compliance officer sees any potential crime being committed within his company, or that a person in the insurance sector may be used to commit the crime, he reports it to NFIU immediately.

“If they report STR, we can take actions immediately. This is different from CTR which reflects on a daily basis what they deal in as opposed to suspicious transactions which shows that there is a possibility that a financial institution might be used to commit crime,” Ibekaku stated.

“There are two different reports. Here we are trying to emphasise more on the suspicious reporting because NFIU has the powers to restrain transactions and to freeze transactions before they occur,” she added.

Also speaking on the unit’s experience with the industry in the area of money laundering and financing terrorism, the director gave the insurance industry a pass mark, saying the incidence is low when compared to other sectors including the banking sector.
“Compared to other sectors; I think it is not that bad, especially when you compare it with the banking sector. The insurance sector, even though that we are yet to conduct a risk assessment of whether there is huge money laundering or financing of terrorism risks associated with the insurance sector, I will say that the risks is not as high as what we have in the banks. As such, you might not see the level of fraud as we see in the banking sector in the insurance sector.

“What we did at NFIU was first of all to get the banks to make sure that their reporting and this we have been doing for the past five years. However, we have realised that there is need for the insurance companies also come on board as required by the law,” she said.

Speaking on the programme which was jointly organised by NFIU and the National Insurance Commission (NAICOM), Ibekaku said: “What we are trying to do is to first of all deepen knowledge on money laundering and combating financing terrorism issues and to make that the insurance sector and the companies understand what their roles are. The Anti-money Laundering and Financial Terrorism Act require firms to report back to the NFIU.”

Meanwhile, NAICOM’s Assistant Director (Inspectorate), Dr. Sam Onyeka, said the anti-money laundering and combating financing terrorism workshop was meant to sensitise the insurance companies here represented by their Chief Compliance Officers and others on how to migrate to a new platform for reporting money laundering issues to NFIU.
He recalled that insurance companies had to make three reports to the unit including reporting on suspicious transactions, cash or currency transactions and foreign transactions.

“Before now, the reporting system has not been uniform, some people report using IT platform, others report using hard copies but now we want to synchronise it. We want everybody to come on the same IT platform and for this to be possible, the NFIU had to issue guidelines explaining how to use the IT platform established for this purpose.

“We have brought insurance industry representatives to take them through the new process. But beyond reporting, we also want to look at the compliance requirements for the industry,” Onyeka said.

Tags: Business, Nigeria, Featured, Industry, Transactions

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