Money Laundering and Insurance Companies

Financial institutions such as insurance companies play an important role in money laundering as they offer their customers the opportunity to use a wide range of investment areas and transfer funds from one place to another. The fact that insurance companies are likely to be used as intermediaries in money laundering exposes them to risks such as reputational risk, financial risk, on-the-ground risk or the risk of severe criminal sanctions both in the domestic and international sectors.

Considering that insurance intermediaries do not have adequate training on money laundering and their main objective is to make as many sales as possible, it is possible for intermediaries to overlook laundering clues such as not fully disclosing the source of funds and using unusual payment methods in the payment of insurance premiums. In the event that insurance companies' agencies use a large number of intermediaries, they are not able to follow the complex relationship transactions that occur, which weakens the possibility of recognising the customer and knowing the source of the money.

The processes to be followed in order to prevent such situations;

Establishment of corporate policies and procedures,
Carrying out risk management activities,
Carrying out monitoring and control activities,
Appointment of a compliance officer and establishment of a compliance unit,
Carrying out training activities,
Carrying out internal audit activities.
Activities related to risk management and monitoring
and control within the scope of the compliance programme are carried out by the compliance officer under the supervision, control and responsibility of the board of directors.

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