By asking the insurance companies to make sure that no policies are issued to persons with fictitious names

Insurance Regulatory and Development Authority (IRDA) of India has restrained the anti-money laundering norms by asking the insurance companies to make sure that no policies are issued to persons with fictitious names – reported Business Standard.

IRDA said: While carrying out the KYC (know-your-customer) norms, special care has to be exercised to ensure that the contracts are not anonymous or under fictitious names.”

The insurance regulatory body has also asked the insurance companies to find out ways to ensure that contracts with high risk customers are concluded only after approval of senior management staffs.

The insurance companies have been allotted time up to October 31, 2009, to abide by the new norms.

It also stated that proposals of politically-exposed persons should be approved by the insurance companies only after vetting of the contract by the senior management staffs, not below the rank of underwriting head or chief risk officer, reported myiris.

IRDA further stated that any change in the customers’ recorded profile, which is inconsistent with the normal and expected activity of the customer, must be verified further by the insurance companies as part of the KYC process. The review follows the recommendations of the Financial Action Task Force, an inter-governmental body developing and promoting policies to check money laundering and terrorist financing, as quoted in Business Standard.