Draft Master Guidelines on Anti -Money Laundering/Counter Financing of Terrorism (AML/CFT). 

Let us first understand the current KYC framework, before discussing the changes in the new regulations as compared to the previous regulations:

KYC Framework Prior to the New Regulation Draft

As per the current KYC framework, here is the list of documents required for Insurance KYC, with exceptional cases also listed:

Document Checklist for KYC of Insurance 

A. Individual KYC Checks

• Proof of Identity
• Proof of the name, legal form, proof of existence
• Powers that regulate and bind the juridical persons
• Address of the registered office/ main place of business
• Authorized individual person(s), who is/ are purporting to act on behalf of such client, and Ascertaining Beneficial owner(s)
• Residence (Not required, in case of document identity submitted also gives the proof of residence)
• Recent Photograph
• PAN / Form 60 (if the premium amount aggregating to more than fifty thousand rupees in a financial year) and any other documents as may be required by the insurer)

B. KYC Checks ( Other than Individual as per annexure I)

• Certificate of incorporation
• Memorandum & article of Association
• Permanent Account number of the company
• Registration Certificate
• Trust / Partnership deed
• Company Board Resolution
• Beneficiary ownership deceleration

Exception –

• For the continued operation of accounts of existing customers having an insurance policy of not more than an aggregate premium of Rs. 50,000/- in a financial year, exemption from PAN/Form 60 may be granted till such date as may be notified by the central government.
• Under an Individual Health policy, for the ‘Policyholder / Insured’, KYC may be exempted at the time of claim payout for a value less than Rs. 1,00,000/-.
• Under an Individual Travel Insurance, for the ‘Policyholder / Insured’, KYC may be exempted at the time of commencement of an Account-based relationship as well as at the time of claim payout for a value less than Rs. 1,00,000/-.
• Under All kinds of Group Insurance (Life /General/Health) except Group Credit insurance and Government Schemes, for the member beneficiary /certificate of Insurance (COI) Holders KYC may be exempted at the time of commencement of Account-based relationship as well as at the time of claim payout for a value less than Rs. 1,00,000/-, provided the KYC of Master Policyholders / Juridical Person / Legal Entity and the respective Beneficial Owners (BO) are completed.
• In cases where the total annual premium is less than 10,000, customers can be onboarded with a simplified due diligence process.

Differences in New Framework Draft V/s Currently Used framework

• Previously, AML or KYC checks during the onboarding process were only applicable to Life Insurance companies. Under the newly introduced draft framework, these guidelines shall also be applicable to General Insurance when the draft is officially introduced.

• Document collection and verification will be made mandatory according to the current draft guidelines.

• Due Diligence is required while onboarding the customer, but it is also required for the ongoing customer and also verification during every transaction including claim payout / disbursements or claim processes ( redemption, surrender, partial withdrawal, maturity, death, etc.)

Perfios’ Solutions in Synergy with the New Draft Guidelines

Perfios’ agile & scalable solutions can help Insurance companies navigate with ease through the regulatory changes.

In the table below we have listed the comprehensive range of APIs we offer for KYC checks, not all APIs are required for KYC checks. For example, it is sufficient to have either an Aadhaar or a Passport for address verification, not both.

Individual KYC Checks

Disclaimer: The above list of documents is not exhaustive and it is for illustration purpose only. For detailed and comprehensive list of documents. please refer to the Draft Master Guidelines on Anti Money Laundering/Counter Financing of Terrorism (AML/CFT).

KYC Checks ( Other than Individual as per annexure I)

• Certificate of incorporation
• Memorandum & article of Association
• Permanent Account number of the company
• Registration Certificate
• Trust / Partnership deed
• Company Board Resolution
• Beneficiary ownership deceleration

KScan for Insurance Companies

The full spectrum of proprietary information about any entity such as the type of business activity, the products or services that the company is dealing with, the industry it belongs to, stakeholders, registered office, and other financial details can be extracted by Kscan by using the data filed under MCA.

The documents that can be extracted through Kscan:

• PAN no verification of an entity
• Certificate of Incorporation
• Memorandum & Article of Association
• Registration Certificate
• Company Board Resolution
• Beneficiary ownership deceleration (if available)
• Annual report of companies

Conclusion

Perfios is always aware of rapidly changing policies, guidelines, and regulations, and accordingly develops or fine-tunes existing products to meet changing policies and regulations in an agile and seamless manner.

Perfios’ systems are built so they can incorporate policy changes without affecting the quality or delivery of services, so insurance companies get the best output with the least input.