Financial Intelligence Unit Amends Regulations Applicable to Reporting Entities in Insurance Sector

On July 14, 2023, the Financial Intelligence Unit (UIF) issued General Resolution No. 126/2023, amending the regulatory framework in force regarding the prevention of money laundering and financing of terrorism (ML/TF) applicable to reporting entities in insurance sector (SO).
 

The purpose is to manage and mitigate ML/FT risks, in accordance with the Financial Action Task Force’s international standards, guides, and guidelines.
 

The main changes introduced by the Resolution include:

1.         Submitting the Risk Self-Assessment Technical Report before the UIF and the Superintendence of Insurance (SSN) by April 30 of each year in which it should be updated (previously, the deadline was May 31).

Likewise, the report must be updated before the established deadlines if a new risk is identified or if an existing risk is modified.

2.         Incorporating red flags alert signals to determine whether a Suspicious Transaction Report should be filed, for example in case of unusually high amounts, deviations in the client's profile, repeated total or partial redemption transactions in life insurance with savings and retirement, among others.

3.         Readjusting the automatic updating mechanism that uses as parameter the Minimum, Vital, and Mobile Wage (SMVM), which the SO uses for customer identification and transaction monitoring.

4.         Informing the UIF within 24 hours of the temporary absence, impediment, leave of absence, or removal of the Compliance Officer (previously, the term was 5 working days).

5.         Incorporating new obligations for Compliance Officers such as approving the initiation and continuity of business relationships with high-risk clients and foreign politically exposed persons.

6.         Incorporating new obligations for the SO’s Board of Directors or governing bodies concerning the ML/FTP System, such as approving annual work plans, and managing the Compliance Officer’s reports and the dependence on third parties.

7.         Establishing rules to identify, verify, and accept non face-to-face clients, establishing automated verification mechanisms.

8.         SOs may depend on third parties for carrying out customer due diligence measures only for identifying and verifying customers and beneficial owners, and for understanding the purpose and nature of the business relationship.

Likewise, the Resolution established requirements that must be complied with to depend on third parties, such as taking adequate measures to ensure that the third party will provide –upon request and without delay– copies of identifying information and other relevant documents. It should be noted that the responsibility for complying with the due diligence measures will remain the SO’s, depending on the third party.

9. Finally, regarding SOs with differentiated regimes, they will be limited as to insurance intermediaries, so that the only ones with such status will be those commercializing life insurances with savings and retirement insurances.
 

The new rule will be in force as of September 1, 2023. The same day, Resolution UIF No. 28/18 will be repealed.