THE CAA CIRCULAR LETTER 23/3 ON THE HARMONISED QUANTITATIVE MONEY LAUNDERING AND TERRORIST FINANCING RISK EXPOSURE ASSESSMENT QUESTIONNAIRE ADDRESSES THE RELEVANT INSURANCE INTERMEDIARIES.
On 7 February 2023, the Commissariat aux Assurances ("CAA") published Circular Letter 23/3 on the harmonised quantitative money laundering and terrorist financing ("ML/TF") risk exposure assessment questionnaire addressed to relevant insurance intermediaries ("Circular 23/3").
1. Background
Circular 23/3 aims to extend the quantitative ML/TF risk exposure assessment questionnaire, introduced in 2018 under CAA Circular Letter 18/9 for life insurance companies, to relevant insurance intermediaries, by adapting it to the specificities of insurance intermediation.
Accordingly, relevant intermediaries will now also be required to complete a dedicated questionnaire for the purposes of evaluating their ML/TF risk exposure for certain categories of distributed life insurance policies ("Quantitative Questionnaire").
2. Scope of application
Circular 23/3 applies to:
- insurance brokers;
- insurance brokerage companies; and
- insurance agents and insurance agencies appointed by several
life insurance undertakings not belonging to the same group;
("Relevant Intermediaries");
which are distributing or have distributed:
- individual life insurance policies with single premiums
enabling savings and investment flexibility, which allow for
surrenders and transfers (contrats "Epargne et
investissement autres"); and/or
- bearer life insurance policies, which facilitate anonymity for the policyholders and/or beneficiaries (contrats "au porteur").
("Contracts").
3. Aim
The aims of Circular 23/3 are to:
- introduce the Quantitative Questionnaire for Relevant
Intermediaries;
- explain how Relevant Intermediaries should use the Quantitative
Questionnaire; and
- define the content, format, and timing for collecting the quantitative data referred to in the Quantitative Questionnaire.
4. Key requirements
a. Completion of the Quantitative Questionnaire
The Quantitative Questionnaire must be completed for any:
- entry into a business relationship that leads to the conclusion
of a Contract;
- Contract subject to a material movement or modification;
- Contract not subject to a material movement or modification, whose ML/TF risk is to be re-evaluated according to applicable internal due diligence procedures.
The risk scores for each Contract must be archived electronically and be accessible, to ensure a reliable audit trail.
b. Data collection
Relevant Intermediaries must additionally provide the CAA with
data on the following on an annual basis:
- entries into business relationships that have led to the
conclusion of Contracts; and
- the stock of Contracts that have been subject to at least one assessment based on the Quantitative Questionnaire.
c. Impact on internal procedures
Relevant Intermediaries are invited to document the operational
arrangements associated with the implementation of Circular 23/3 in
their internal procedures, including:
- practical guidance for completing the Quantitative
Questionnaire;
- the level of ML/TF risk and the criteria that trigger a new
assessment using the Quantitative Questionnaire; and
- the processes for establishing the annual collection of the data referred to in the Quantitative
5. Timeline
The Quantitative Questionnaire must be used as of 1 July 2023.
Relevant Intermediaries must submit the data collected to the CAA by 31 January each year.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.