Irda fines Tata AIA for violating anti-money laundering norms

Don't want to miss the best from Business Standard?

Insurance sector regulator Irda has imposed a fine of Rs 1 lakh on Tata AIA Life Insurance Company for violating anti-money laundering (AML) norms and not putting in place effective system for cash transactions.
The Insurance Regulatory and Development Authority (Irda) in its order said that effective systems were not in place to report cash transactions and in various instances no review was carried out for reporting cash transactions.
It also observed that in certain instances, Tata AIA accepted multiple cash transactions exceeding Rs 50,000 on a single policy from same payer without PAN number.
"The violations referred ... Are considered serious in nature. Therefore, in addition to the directions issued in the respective decisions, the Authority imposes a penalty of Rs 1,00,000," the order said.

Among others, Irda has dicected the insurer to strictly comply with AML guidelines as it was revealed that the company did not make KYC norms as a binding clause and asked to put in place fool proof systems to ensure compliance with the AML norms.
Irda also said that the life insurer in various instances accepted multiple DDs (demand draft) towards a single policy or multiple polices for same payer and no review was carried out.
"However, the Life Insurer is warned for the deviations noticed in the charge and advised to ensure compliance to the guidelines/circulars issued by the Authority in this regard."

Irda also said the company did not have effective systems to ensure authenticity of KYC (know your customer) documents and directed to be vigilant in complying with KYC norms.