Anti Money Laundering Policy
Introduction
Anti-Money Laundering (AML) includes any law or regulation requiring an institution to perform due diligence on potential clients to ensure that it is not aiding in a money-laundering scheme. If the company does not conduct due diligence properly, it may be held legally liable for money laundering activities.
The Objectives of the Anti-Money Laundry and Terrorist Compacting Manual are:
Providing general guidance on the Company’s Compliance, AML, and all regulatory issues.
Defining the roles and responsibilities of staff to apply these systems.
Identifying the procedures to be followed by the employees when engaging in AML and Terrorist Compacting settlement activities.
Defining the documents to be used by the concerned person in running day-to-day activities.
Highlighting the interaction between the concerned person and other Officers in the Company.
Components of the Manual
This Anti Money Laundry and Terrorist Compacting Manual consist of five sections, including this section, as follows:
First Section: This is an introduction that deals with general descriptions and instructions that help in maintaining and updating this manual.
Second Section: Describes the general functions of the Company in addition to the organization structure as well as the roles and responsibilities.
Third Section: Anti-Money Laundry policies.
Fourth Section: Anti-Money Laundry procedures.
Fifth Section: Forms and Templates.
Use of the Manual
The guidelines which govern Anti Money Laundry and Terrorist Compacting Manual are as follows:
The Chief Financial Officer is responsible for implementing this manual.
The manual shall have a version number to monitor any modifications to the manual; the latest version shall be distributed to concerned parties. Each copy of the manual is to be numbered and the distribution to be traced.
After the approval of the Board of Directors, circulation of the manual and subsequent updates to it are controlled and monitored by the General Manager.
Contents of the manual are confidential and are intended for internal use only. Under no circumstances may the contents of this manual be revealed to any party outside the Company without prior written permission of the General Manager.
Requests for updating the manual (including additions, deletions, or amendments) may be advised by any of the manual users by sending a formal memo to the General Manager through the Representative Officer, describing the suggestions and the rationale for the recommended changes. These suggestions will then be examined by the General Manager and will be put into effect if these changes are found necessary after the Board of Directors’ approval.
Copies of the manual revisions and amendments will be kept in the custody of the General Manager.
Copies of the manual will be distributed to the following:
General Manager
Representative Officer
All Managers
All Officers
Definitions
The following are definitions for the terms used in the Anti Money Laundry and Terrorist Compacting Manual unless otherwise indicated by the context:
Company: Refers to Fenchurch Faris Ltd.
Manual: Refers to the Anti-Money Laundry and Terrorist Compacting Manual.
GM: General Manager.
Chief Financial Manager: Is the person who will manage all the contacts with governmental bodies.
Compliance: This is the degree of committing to all rules and regulations issued by governmental bodies and DIFC.
Professional Standards Are the general principles and standards that should be practiced in dealings with their existing and potential customers.
Money Laundering: Refers to the process of providing a legitimate cover for the illegal source of income through which the owner of such illegal income attempts to conceal the original source and proceeds of their illegal activities.
Risk Management: This is the process whereby the insurer’s management takes action to assess and control the impact of past, present, and potential future events that could be detrimental to the insurer. These events can impact both the asset and liability sides of the insurer’s balance sheet and the insurer’s cash flow.
Risk: Refers to the combination of the probability and consequences of an event that will have an impact on the Company’s objectives. The event should not necessarily be interpreted negatively; it could be a lost opportunity in a positive event. This term differs from the Clients’ Business Risks that are usually accompanied by the clients’ nature of the business which is assessed by the Company in order to provide insurance services to cover those risks.
Insurance Broker: A juristic entity in return for compensation represents insured’s or the prospective insured’s to solicit, procure and negotiate insurance contracts.
Policies: Refer to the principles and base adopted by the Company in relation to the Compliance, Professional Standard, and AML activities unless otherwise was clearly stated within the Manual.
Procedures: Refer to all processes that identity, record, classify and summarize the Compliance, Professional Standard, AML, and Risk activities of the Company.
Forms/Templates: Refer to documented outputs and records of the Compliance, Professional Standard, and AML processes.
Client: Refers to current clients who bought insurance policies from the Company.
Organization Governance
Introduction
Fenchurch Faris Ltd. was established in 1984 by Basim R. Faris (BA, FCII), an Arab insurance professional, as a 50/50 partnership with Fenchurch plc, a major Lloyd’s broker, and now Arthur J. Gallagher. Mr. Faris has been the Managing Director of the Partnership since its inception. In 1998 Al Said Ltd. joined the partnership and is represented by Mr. Wael Said Khoury, who has been the Chairman of Fenchurch Faris Ltd. since 1999.
Fenchurch Faris Ltd. was created as a professional service company, operating in the Arab Middle East, to provide insurance and reinsurance consultancy & broking and risk management services backed by a major Lloyd’s broker.
Vision and Mission
Vision: To be the insurance consultant & broker that best understands and satisfies the insurance needs of individuals and businesses in the Middle East and North Africa.
Mission: To utilize the expertise of our well-trained team and exploit our extensive connections with local, regional, and continental insurance markets while maintaining the highest professional standards in providing risk mitigation strategies and insurance solutions that fulfill our clients’ needs and expectations.
Core Values
Responsible Broking
Exercising full transparency and disclosure in all of our business dealings.
Evaluating clients’ risks on the basis of sound underwriting principles while maintaining competitiveness.
Tailoring insurance products and schemes in order to best fulfill the needs of our clients.
Guaranteeing that our primary duty as an independent insurance broker is to enable our customers to meet their financial objectives.
To further establish ourselves as the benchmark of a professional and performance-driven broking house.
Operational Effectiveness
Reinforcing the Company’s efficiency through stream-line workflow procedures and a dynamic I.T. infrastructure.
Optimizing the effectiveness of the organization as a whole by ensuring that all offices and branches operate on the basis of uniform and consistent principles and procedures.
Continuous monitoring of the Company’s effectiveness by an Executive Committee utilizing well-defined Key Performance Indicators (KPIs).
Customer Focus
Offering high-caliber, secure products with the highest level of service quality.
Ensuring that our clients are personally catered to by highly trained, expert insurance professionals.
Expanding our network of offices to new territories to achieve increased effectiveness for our clients.
Arranging educational seminars for our valuable clients to reinforce our partnership approach to business.
Ensuring that our claims department continues to offer the most effective level of claims management and claims resolution.
Human Capital
Recruiting the highest caliber people to sustain a dynamic work environment.
Furnishing employees with all available resources needed to further their self-development and realize their full potential within the Company.
Complementing internal and external insurance training seminars with extensive guidance regarding leadership, efficiency, and creativity.
Encouraging all employees to further develop their insurance expertise by pursuing certifications such as the CIP, ACII, and FCIP with the full backing of the Company.
Ensuring that the conduct of all employees is at all times consistent with the core values of the Company and its founders.
Organization Structure
The corporate structure consists of the following:
Reinsurance Broking Function: This function is responsible for providing Treaty & Facultative Reinsurance Products and Services such as Facultative Reinsurance, Quota Share & Surplus Treaties, Excess of Loss Treaties, and Treaty Consulting & Management.
Country Branches: The branches are responsible for selling insurance policies to corporate clients and following up on retail claims.
In ATHENS – GREECE, the branch office transacts mainly wholesale business (reinsurance, facultative, and treaty).
In KUWAIT, Fenchurch Faris opened its first associate office, Fenchurch Faris Ltd. Kuwait, in 1985 in partnership with a Kuwaiti national, Mrs. Fetouh Al Falah. This office provides mainly retail business (direct broking and consultancy services). In 2005, Fenchurch Faris Ltd. became the underwriting agent for Jordan Insurance Company in Kuwait.
In ABU DHABI – UAE, Fenchurch Faris Ltd. opened a branch office in 2006. It transacts both retail and wholesale business.
In ATHENS – GREECE, Fenchurch Faris Hellas Ltd. was opened in 2006 to cater to the Greek market. It transacts both retail and wholesale business.
In AMMAN – JORDAN, Fenchurch Faris Ltd. opened its subsidiary office in 2007. It transacts mainly retail business.
In RIYADH – KSA, Fenchurch Faris Limited Saudi Arabia was established at the beginning of 2011 to transact both direct and reinsurance business.
In LONDON – ENGLAND, Fenchurch Faris’s partners are Arthur J. Gallagher, Lloyd’s broker and one of the largest insurance brokerages in the world.
Support Services Function: This function is responsible for providing the company with support functions such as IT, HR, Administration, and Finance.
Claims Management: This function is responsible for following up on all reinsurance claims with international insurance companies.
Direct Insurance Lines
Fenchurch Faris provides services in regard to several lines of business.
Engineering Insurance Products include the following:
CAR – EAR – MBD.
Deterioration of Stock (DOS)
Contractors Plant Equipment & Machinery (CPEM).
Energy.
Marine Insurance Products include the following:
Marine Hull.
Marine Cargo.
Yachts.
Builders All Risks.
Protection & Indemnity (P&I).
Haulers Liability, Stevedores liability, Terminals’ liability, Marina Operators Liability.
Aviation insurance products include the following:
Airport Liability.
Airport Contractors.
Aircraft Insurance.
Airline Insurance.
Loss of License.
Property insurance products include the following:
Property All Risks (PAR) / Loss of Profit (LOP).
Fire & Allied Perils.
Hotel Comprehensive Cover.
Medical, Life & Personal Accident Insurance Products include the following:
Medical (Group & Individual).
Life & PA (Group & Individual).
Credit Life.
Travel Insurance
Strategic and Operation Analysis.
Political Insurance Products include the following:
Sabotage and Terrorism S&T and Strikes Riots and Civil Commotion SRCCT.
War on Land.
Kidnap & Ransom; including Emergency Political Evacuation.
The Financial Lines insurance products include the following:
Bankers’ Blankets Bond (BBB), Electronic Computer (ECC), Professional Indemnity (PI).
Directors & Officers Liability (D&O).
Credit/Plastic Card.
Stock Brokers PI.
Credit Risk.
Money in Transit – Money in Safe.
Fidelity Guarantee.
Crime Bond – 3D.
Special Risks include all specialist niche classes of business such as:
Jewelry Block.
Event Cancellation & Abandonment.
Bloodstock/ Livestock.
Agriculture.
Specie (Fine Arts, TV, Films, VIP & Armored Cars).
Binding Services
Professional Indemnity.
Property.
Marine Cargo.
Yachts.
Liability.
Stock Brokers PI (Lloyd’s).
Sabotage and Terrorism.
Motor Physical Damage.
Reinsurance Lines
Fenchurch Faris Ltd. provides the following Treaty & Facultative Reinsurance Products and Services
Facultative Reinsurance;
Quota Share & Surplus Treaties;
Excess of Loss Treaties; and
Treaty Consulting & Management.
Anti-Money Laundry Policies
Roles and Responsibilities of Key Departments and Staff
Several Stakeholders in the Company have shared responsibility when managing and implementing the Anti-Money Laundering in the Company in order to guarantee that the Company is protected from the criminal attempts to introduce suspicious money into the Company’s transactions.
Accordingly, the Board of Directors, the General Manager, the DIFC Representative Officer, and other key Departments are all responsible in sharing responsibility in implementing the AML as follows:
Board of Directors
The following are the main roles and responsibilities of the Board of Directors:
Acts as the AML Compliance entity.
Has the highest authority concerning managing AML and delegates these authorities as necessary to the staff.
Ensures that the AML framework is in place in accordance with the regulatory requirements.
Approves the AML manual including its new updates.
General Manager
The following are the main roles and responsibilities of the General Manager:
Supervising the implementation of the AML activities.
Taking the necessary decisions and advising on the necessary mitigation actions of the identified money laundering risk.
Taking the necessary decisions concerning occurred/identified money Laundering transactions including investigation and reporting to authorities.
DIFC Representative Officer / Chief Financial Manager
The following are the main roles and responsibilities of the Representative Officer/ Chief Financial Manager:
Ensuring the implementation of the risk management activities including the ones related to AML as well as the red flags provided by the concerned organizational units.
Ensuring that all financial activities of the Company are governed by the defined AML policies and procedures along with the AML rules and regulations issued by regulatory bodies.
Identifying and investigating suspicious money laundering transactions and recommending the necessary actions to the General Manager.
Communicating with the updates related to anti Money Laundry.
Responding to the inquiries of the General Manager concerning AML.
Responding to the DIFC inquiries.
Company’s Key Staff
The following are the main roles and responsibilities of the Key Staff:
Participating in risk assessment teams assembled by the Representative Officer as and when necessary to identify and assess Money Laundering risks as well as proposing preventive and corrective actions.
Ensuring the proper communication and implementation of the AML manual including its policies and procedures as well as the AML red flags.
Inform the Representative Officer of any raised red flags or suspicious transactions indicating money laundering activities.
Providing the Representative Officer and the General Manager with the necessary information needed to support the implementation of the AML activities.
Ensuring the timely and proper implementation of the AML red flags and risk mitigation actions approved by the General Manager.
AML Policy
The Company, its business units, and departments are dedicated to the detection and prevention of potential money laundering and illegal financing through the use of its products and services.
Although the full responsibility of detecting Anti-Money Laundering activities falls under the insurance companies. Nevertheless, the Company will act as the first defense line in front of any laundering activities that may be processed through its activities.
The Company categorizes the activities that mainly generate or require illegal funds. In general, such activities are criminal or terrorist acts that would require the committer or financer to find a legitimate cover for such a source of income. Such activities are defined by the following:
Fraud, Major Thefts, and Robbery.
Forgery and Counterfeiting.
Terrorism.
Dealing in Narcotics.
Extortion and blackmail.
Other illegal activities.
Linking the Company to any of such illegal activities is considered a critical risk that could impact the business drastically. Hence, it is the responsibility of the risk management function to ensure that the Company is legally defensible towards such activities by identifying and performing the necessary due diligence on its clients and sometimes the insurance companies they deal with even if it was done in an unofficial approach.
The Company shall make sure that its services and products are regulated and in alignment with international and local rules and regulations of AML.
The Company maintains the implementation of the necessary activities promoting AML including:
Know your customer (KYC) policy.
Monitor risks generated from customers.
Ensure awareness among employees and third parties through regular training.
Have effective employee screening and selection policies and procedures.
Ensure transparent communication with the regulatory bodies concerning identified Money Laundering activities.
The Company shall provide general AML training to its staff and participate in workshops with governmental bodies and insurance companies it may represent to identify areas for cooperation in this regard. This training shall include the required core elements that have been determined by the General Manager. This training must be conducted on an annual basis, and as required.
Staff Training Policy
The company staff should receive initial and ongoing training on relevant AML legislation, regulations, guidance & procedures. The training aspects are as follows:
A description of the nature and processes of laundering and terrorist financing, including new developments and current money laundering and terrorist financing techniques, methods & trends.
A general explanation of the underlying legal obligations contained in the relevant laws.
A general explanation of AML policy and systems, including a particular emphasis on verification and the recognition of suspicious customers/transactions and the need to report suspicions to the Representative Officer.
Employees who, due to their assigned work, need more specific training can be divided into two categories. The first category of employees is those staff who deal with:
New business and the acceptance – either directly or via intermediaries – of new policyholders, such as salespersons.
The settlement of claims.
The collection of premiums or payments of claims.
A higher level of instruction covering all aspects of AML policy and procedure should be provided to the second category of staff, including directors and senior management with the responsibility for supervising or managing staff, and auditing the system. The training should include:
Their responsibility regarding AML policies and procedures.
Laws, including the offenses and penalties arising therefrom.
Procedures relating to the service of production and restraint orders (to stop writing business).
Internal reporting procedures.
The requirements for verification and record-keeping.
In addition to the training mentioned in the previous paragraphs, the Representative Officer should receive in-depth training concerning all aspects of all relevant legislation and guidance and AML policies and procedures. The Representative Officer will require extensive initial and continuing instruction on the validation and reporting of suspicious customers/transactions and freezing assets in accordance with legislation.
Know Your Customer Policy
The Company shall implement a “Know Your Customer” (KYC) policy in all its financial transactions with customers.
It shall be the responsibility of the Sales and Marketing Department as well as the Underwriting Department to implement KYC policy.
A customer shall be defined as any potential insured or policy/contract owner, current insured/contract owner, a beneficiary at the time of claim, or known third party that acts as a sponsor of the Company’s services and products.
The Company shall ensure that the necessary information of its individual customers is collected and periodically updated including, but not limited to, the following:
UAE National Identification card.
Non-local passport number and country of issuance.
Work and home address.
Occupation/ business type.
Political exposure.
The Company shall ensure that the necessary information of its corporate customers is collected and periodically updated including, but not limited to, the following, in addition to the individual’s information:
Business information including owners, equity distribution, etc.
Articles of Incorporation.
Memorandum and Articles of Association.
Registration details.
Legal status.
Audited financial statements/income.
Red Flags Policy
The Company maintains a list of money Laundering red flags that will assist in predicting and/or identifying suspicious transactions and Money Laundering activities.
New Red flags shall be added based on cooperation with the Regulatory Body and insurance companies.
The list shall be referred to all the Company’s transactions with its customers. Once a flag is triggered, the key staff shall coordinate with the Representative Officer in order to investigate the incident and escalate it as necessary.
Red flags are classified into three categories according to the insurance policy management (i.e. underwriting management, management of policy, and claims management).
It shall be the responsibility of the Representative Officer and the General Manager to continuously update the red flags according to the development of business and the practices in AML.
Red Flags of Insurance Broking /Underwriting
The list of red flags for Insurance Brokers shall be identified to assist the Company in protecting its financial transaction and the insurers it represents from accepting illegal money. These red flags correspond with the initial stage of Money Laundering (i.e. the placement stage).
The following list of red flags has been adopted by the Company concerning the Insurance Brokers’ operations. The list shall be referred to when issuing policies:
Red Flags of Issuing Policies
The customer exhibits unusual concern regarding the firm’s compliance with government reporting requirements and the firm’s AML policies.
The customer wishes to engage in transactions that lack business sense or apparent investment strategy or are inconsistent with the customer’s stated scope of business.
The information provided by the customer that identifies a legitimate source for funds is false, misleading, or substantially incorrect.
The customer is a politically exposed person.
The customer (or a person publicly associated with the customer) has a questionable background or is the subject of news reports indicating possible criminal, civil or regulatory violations.
The customer exhibits a lack of concern regarding risks, commissions, or other transaction costs.
The customer appears to be acting as an agent for an undisclosed principal, but declines or is reluctant, without legitimate commercial reasons, to provide information or is otherwise evasive regarding that person or entity.
The customer has difficulty describing the nature of his or her business or lacks general knowledge of his or her industry or suspicious business engagements.
The customer requests that a transaction be processed in such a manner to avoid the firm’s normal documentation requirements.
Customer’s sources of income are not clearly defined (for corporate).
The customer is reluctant or refuses to provide identifying information or provides seemingly fictional information.
A potential policy owner is more interested in cancellation terms than policy benefits.
Customer exercises free look option which will require the Company to refund the initial payment.
Red Flags of Money Laundering Operation
First: Cases of large one-time \ installment premiums and cash transaction
Application wherein the source of funds is unclear or incommensurable with the application’s financial position.
Sudden application for an insurance contract for customers whose previous contracts were not of the same type or size.
Absence of reasonable justification for the investment, failure to account for the source of funds, and non-cooperation in disclosure of any transaction.
Payment is not drawn on the customer‘s personal account.
Little interest on the part of the new investor in the performance of the previous investment and a keen interest in the assignment or early cancellation of the contract.
Customers desire to pay the initial (first) premium in cash in accordance with the thresholds set forth in clause (3) of the circular.
Second: Cases of assignment of insurance contracts
If the customer expressed his wish to assign the scheme (the program) to a third party within twelve months.
If the customer expressed his wish to obtain the contract‘s value by check (but not crossed “account payee” check).
If the customer (in the case of individual \ joint insurance ) expressed his wish to obtain the value of the contract by electronic transfer to an account not bearing his name.
Third: Cases of cancellation of insurance contracts
If the customer cancels the insurance contract in order to receive its value despite penalty deductions or exit fees, it should then be checked whether the customer has any other contract over the last twelve months, either with the same company or with other insurance companies.
Fourth: Cases of disguise
If the customer invests a large sum of money in any of the company‘s schemes or programs, then assigns or cancels the contract a short while after and repeated such action several times.
Red Flags of Insurance Policies Management
The list of red flags for insurance policies management shall be defined to assist the company in identifying any illegal money that has breached its financial transaction. These red flags are corresponding to the second stage of money laundering (i.e. the layering stage).
The following list of red flags has been adopted by the Company concerning the management of customers’ insurance policies and collection of claims. The list shall be referred to by the insurance staff when managing policies:
Red Flags of Policies Management
The insurance policy/contract shows more than two changes in the owner in a period of less than 12 months particularly if the new owner appears to be an unrelated third party.
The policy has sudden repetitive changes in its value without any apparent purpose.
Increase in the premium payment of the customer by more than 50%.
Receipt of premium payments from third parties unrelated to the policy.
Receipt of premium payments using monetary instruments to conceal the source of fund.
Receipt of premium payments from an agent and not the direct client and relationship not clear.
Receipt of premium payments from an offshore or under-regulated financial intermediary.
Receipt of premium payments made using cash equivalents. (i.e. sequentially numbered money orders, cashier cheques, or traveler’s cheques).
Receipt of an unscheduled large amount of insurance premium.
Overpayment of policy premiums on an existing life insurance contract.
Red Flags of Insurance Payments and Claims
The list of red flags of insurance payments and claims shall be defined to assist the company in identifying any attempt to draw any illegal money that has been layered in its financial transaction. These red flags are corresponding with the final stage of Money Laundering ( i.e. the integration stage).
A list of red flags has been adopted by the Company concerning the insurance payments and claims. The following shall be referred to by the insurance staff when managing claims.
Red Flags of Policies Payments
Customer exercises an early surrender of insurance policy, especially in high policy values.
Policy withdrawal after 10-30 days of a change in address.
The policyholder establishes a large policy and requests withdrawal within one year.
The agent uses his own address to manage customer policy including sending documentation and disbursements.
Disbursement of claims to sanctioned countries or exposed individuals.
Request for paying claims to a third party or another policy owner.
For no apparent reason, the customer has multiple accounts under a single name or multiple names, with a large number of inter-account or third-party transfers.
The customer’s account shows numerous currency or cashier’s check transactions aggregating to significant sums.
The customer attempts to make frequent or large deposits of currency, insists on dealing only in cash equivalents, or asks for exemptions from the firm’s policies relating to the deposit of cash equivalents.
The customer makes a funds deposit followed by an immediate request that the money is wired out or transferred to a third party, or to another firm, without any apparent business purpose.
The customer makes a funds deposit for the purpose of purchasing a long-term investment followed shortly thereafter by a request to liquidate the position and transfer of the proceeds out of the account.
The customer attempts to borrow the maximum cash value of a single premium policy soon after purchase.
The customer’s account has unexplained or sudden extensive wire activity, especially in accounts that had little or no previous activity.
The customer has accounts in a country identified as a non-cooperative country or prevalent drug production or drug trafficking.
Red Flags of Life Insurance policies
The life insurance premium is not coherent with the income of the insured.
Conducting different insurance policies with many entities, even with small values.
To insure in a big amount of money paid in advance and in full.
To terminate the insurance policy shortly after the issuance of the insurance policy.
Red Flags of Marine Insurance policies
When the customer pays the insurance premiums fully in cash without opening a letter of credit.
When the origin of goods and the shipping documents are not clear.
When the payments claimed by the clients don’t match the expenses declared to other entities like banks and customs.
When the insurance policy value doesn’t match the goods’ market value.
Maintenance of Records Policy
The Company will retain the necessary records for evidencing the identity and business relationship with its customers for at least the minimum retention period specified by regulatory authorities starting from the date of the transaction.
The Company shall maintain records showing at least the following:
Transaction type.
Date of transaction.
Amounts related to transactions and details related to the mode of payment.
Customer information.
Anti-Money Laundering Communication Policy
The Company shall declare to its potential customers its AML policy (or the parties it may represent) when signing new contracts or issuing new policies.
The Company shall ensure that the AML policies are communicated to its employees. An annual declaration shall be obtained from employees to ensure that they have read, understood, and agree to comply with the AML policies.
The Company shall ensure the confidentiality of identified transactions in order to ensure that the suspected customer is not tipped off.
A Suspicious Transaction Report STR shall be submitted to the General Manager on a periodic basis and shall be maintained in its records.
The Company shall establish and maintain open communication channels with Key staff in the Companies it represents and the concerned authorities in order to report any money Laundering activities in a confidential approach.
Information
Fenchurch Faris will provide the insured with adequate information regarding the insurance policy and that there must be no inducement or deception. The information provided must include the following as a minimum:
Limits of insurance coverage.
Policy exclusions.
Contribution or Premium amount(s).
Inception and expiration dates (policy period) of the policy.
Policy conditions.
Name of the Company issuing the insurance policy.
Fenchurch Faris will set up a file-keeping system and instruct the respective staff to maintain correspondence, statements, and contract notes on transactions in special files, in such a way to enable the bank/ financial institution to respond to the relevant authorities’ requests in a timely manner. In addition, the database must also contain a list of the persons who have concluded cash transactions in the amount of or more than the limit prescribed as an “indicator.”
Insurance Policy
The Insurance Policy shall be written in a clear way that can be read by the public at large and shall contain the following:
Policy number, which must also be provided in all related documents to this policy.
Policyholder’s name and mailing address.
Coverage period.
Coverage descriptions and limits.
Deductibles and Retentions.
Endorsements, Warranties, and Riders.
Conditions and Exclusions.
Insurance rates and premium amounts, the basis of premium calculation, and the amount of commission paid under the policy.
Identification of the property or activities to be insured.
Registers
Fenchurch Faris will maintain separate registers for each class of insurance as follows:
Policy Register, Such register shall include the following particulars:
Policy number and issuance date.
Policy period (effective and expiration date).
Insured’s name and address.
Property or activity to be insured.
Type of risk.
Insurance premium.
Paid premium.
Endorsements, riders, warranties, and amendments made to the policy.
Other particulars are deemed necessary by the Company.
Claims Register, Such register shall include the following particulars:
Claims number and date reported.
Policy number and period of insurance.
Insured’s name.
Date and place of the loss and the type of claim.
Technical reserves estimated and any other changes.
Claims payments date and amount.
Closed claims and the reasons for such closure.
Unpaid (outstanding) claims.
Disputed claims and any action was taken in respect thereof.
Subrogation recoveries, salvage return, or any other recoveries excluding reinsurance.
Other particulars are deemed necessary by the Company.
Reinsurance Register, Such register shall include the following particulars:
Reinsurance treaties and agreements given that; the period for each agreement and the changes made thereto shall be stated separately with the capacity and type of each agreement, the names and ceded percentage or amount for each reinsurer, and the company’s retention percentage or amount for each class of insurance, and summary of all reinsurance agreements and other particulars deem necessary by the company.
Reinsurance ceding statements.
Claims register for reinsurance paid.
AML Procedures
Introduction
These procedures provide a general approach when identifying and dealing with suspicious activities. The procedures are governed by the overall AML policies and should be implemented in alignment with the Risk Framework. Mainly, there are four procedures for dealing with Money Laundering issues: the Know Your Client Procedure; the AML Procedure during Underwriting; the AML Procedure during Policies Management or Claims Settlement, and the Suspicious Transaction Report Procedure.
The following is a description of each procedure:
Know Your Client Procedure
The Company shall ensure that the necessary information of its individual clients is collected and periodically updated including, but not limited to, the following:
ID details.
For non-local individuals, passport number and country of issuance.
Contact Information (Mobile, Landline, and Fax).
Work and home address.
Occupation/business type.
Political exposure.
The Company shall ensure that the necessary information of its corporate clients is collected and periodically updated including, but not limited to, the following, in addition to the information required for individuals:
Business information, including owners, equity distribution, business type, etc.
Registration details.
Contact Information (Mobile, Landline, and Fax).
Office(s) address.
Legal status.
Audited financial statements/income.
An AML Blacklist of any individual or entity linked to suspicious activities shall be generated by the Representative Officer, checked by the General Manager, and approved by the Board of Directors. Business Departments are prohibited from dealing with such listed individuals or entities until they are removed from the list.
The Blacklist could include clients (or potential clients) who are suspected of fraudulent activities.
The AML Blacklist could be generated due to, but not limited to, the following reasons:
The client is publicly known for his/her illegal activities.
The client was condemned by the Authorities responsible for Money Laundering or other Illegal activities.
Direct order from authorities not to deal with the Client, due to his/her suspicious activities.
The client’s previous interactions with the Company indicate suspicious activities and/or raised critical red flags, which made the Internal Audit Committee, blacklist the client.
The Client has a shareholder who is publicly known for his/her relation to suspicious or Money Laundering activities or was convicted of such activities.
FENCHURCH FARIS sales and underwriting staff shall verify the identity of clients and any beneficial owners, by checking the valid original documents, as follows:
A: Natural Persons:
UAE nationals:
The client’s National Identification Card or family record.
The client’s residential address, place of work, and work address.
Individual expatriates:
Residence permits, a passport for Gulf Cooperation Council (GCC) nationals, or a diplomatic identification card for diplomats.
The client’s residential address, place of work, and work address.
B: Legal persons:
For all clients that are legal persons, FENCHURCH FARIS sales and underwriting staff must obtain sufficient information about the nature of the business, its ownership, and control structure in order to identify the individual(s) that ultimately own(s) or control(s) the client. Specimen signatures shall be obtained for all account signatories.
Companies
A copy of the Commercial register issued by the competent authority.
A list of the persons authorized and qualified to deal with the accounts, pursuant to what is provided in the commercial register, and a copy of the identification card of each.
Nonprofit Organizations & Entities
A copy of the license issued by the relevant government authority.
A copy of the Board resolution, providing proof of the approval for the opening of the account.
A copy of the articles of association.
Authorization from the board of directors for the persons responsible for opening, dealing with, and operating the accounts, as well as a copy of the identification card of each.
A copy of the Authority’s approval for accepting the client and opening an account for him/her.
Government entities
A copy of all required documents, in accordance with governmental Law and organizational regulations.
A copy of the authority approval, for accepting the client and opening an account for him/her.
AML Procedure during Underwriting
All underwriting Officers shall implement the KYC policy and ensure that the information specified in the policy is collected from the client.
The AML Blacklist shall be inspected by the underwriting officer in order to make sure that the client is not blacklisted.
The red flags for issuing policies shall be inspected in order to make sure that there are no suspicious indicators and that the process is valid.
In the case of any red flags raised due to a lack of information or suspicious information presented to Insurance Brokers, the issue shall be raised with the direct supervisor, who shall decide the severity of the raised issue.
If the issue was found to be valid and critical, the Underwriting officers shall be informed for further investigation.
The client should not be informed of any red flags raised against him/her, or any other component of the case in order to guarantee that no suspicion is raised regarding the investigation.
It is the responsibility of the manager in charge to examine the case and contact the Representative Officer for further investigation.
If the case is found to be suspicious or is part of an attempt to start a money laundering process, the risk management framework shall be initiated, and the General Manager shall be informed.
If the case was found to be valid, the case shall be reported through an STR and brought to the attention of the Board of Directors for appropriate action such as reporting it directly to the concerned regulatory authorities for further investigation.
AML Procedure during Policy Management
When a client, or clients, request(s) that the Company alters the terms of the policy, including insurance premiums, claiming insurance coverage, or policy settlements, the concerned employee shall refer back to the red flags (for policies management, in case of changes to the policy or for claims of red flags, in case of settlement) in order to make sure that no suspicious activities are identified and that the process is valid.
In case any red flag was raised, the issue shall be communicated to the direct supervisor, who shall decide the severity of the raised issue.
If the case was found to be valid, the concerned insurance manager shall be informed for further investigation.
The client should not be informed of the red flags raised against him/her or any other component of the case in order to guarantee that no suspicions are raised, regarding the investigation.
It is the responsibility of the manager in charge to examine the case and contact the Representative Officer for further investigation.
If the case is found to be suspicious or considered to be an attempt to start a money laundering process, the risk management framework shall be initiated and the General Manager shall be informed.
If the case was found valid, the case shall be reported through an STR and brought to the attention of the Board of Directors for appropriate action, such as reporting it directly to the concerned regulatory authorities for further investigation.
Suspicious Transaction Report Procedure
Consistent with the obligations set out in the AML law and respective regulations, the FENCHURCH FARIS sales, and underwriting staff must immediately report to the DIFC any complex, significantly large, or unusual transaction, any transaction which raises doubts and suspicion concerning its nature and purpose, or is related to money laundering, financing of terrorism, terrorist acts, or terrorist organizations. A copy of any STR shall be provided to the AML unit at the Authority.
ASAP, FENCHURCH FARIS sales and underwriting staff must submit a detailed report setting out all available data and information about the suspicious transactions and parties involved. At a minimum, the report shall include the following details:
Account statements for a period of six 6 months.
Copies of all account opening documents.
Any data related to the nature of the reported transactions.
The indications and justifications for the suspicion along with all supporting documents.
Suspicious transactions must be reported, regardless of whether they are also thought to involve other matters. The fact that a report may have already been filed with the DIFC, in relation to previous transactions for the client in question, must not necessarily preclude the making of a fresh report (without delay) if new suspicions are aroused.
FENCHURCH FARIS sales and underwriting staff shall appoint an appropriately senior employee within the FENCHURCH FARIS sales and underwriting staff, to whom all staff is instructed to promptly refer all complex, significantly large, or unusual transactions, any transaction which raises doubt and suspicion concerning its nature and purpose, or is related to money laundering, financing of terrorism, terrorist acts, or terrorist organizations, for possible referral to the AMLSU & DFSA as an STR.
The Representative Officer will be a qualified person and have sufficient academic, scientific, and practical experience in AML.
The Representative Officer shall act as a central reference point within the FENCHURCH FARIS sales and underwriting staff in order to facilitate reporting to the AMLSU & DFSA. The Representative Officer must play an active role in the identification and reporting of suspicious transactions and shall review reports of large or irregular transactions generated by the FENCHURCH FARIS sales and underwriting staff’s internal systems on a regular basis, as well as of ad hoc reports made by any employee of the FENCHURCH FARIS sales and underwriting staff.
Where FENCHURCH FARIS sales and underwriting staff employee brings a transaction to the attention of the Representative Officer, the circumstances of the case shall be reviewed at that level in order to determine whether the suspicion is justified. If a decision is made to not report the transaction to the AMLSU & DFSA, the reasons for this shall be fully documented by the Representative Officer.
FENCHURCH FARIS sales and underwriting staff must keep records of all transactions referred to the Representative Officer together with all internal findings and analyses done in relation to them. A register must be maintained of all STR filings made by the AMLSU & DFSA as well as of all reports made by employees to the Representative Officer, including those where a decision is made by the Representative Officer not to report to the AMLSU & DFSA.
FENCHURCH FARIS sales and underwriting staff shall use the standard form prescribed by the AMLSU & DFSA for reporting and must report by fax, email, or any other means agreed by the AMLSU & DFSA to ensure that the DIFC receives the report promptly. If reports are initially made by telephone, the STR must be confirmed in writing within 24 hours.
The FENCHURCH FARIS sales and underwriting staff must verify that it has received an acknowledgment of receipt from the AMLSU & DFSA.
FENCHURCH FARIS sales and underwriting staff must continue to monitor the account and the client and must send a further STR, if appropriate in the case where a response is not received from the AMLSU & DFSA regarding an STR.
Where the AMLSU & DFSA requires further information from the FENCHURCH FARIS sales and underwriting staff to follow up on an STR, the Authority will act as a conduit for the request and shall ask the FENCHURCH FARIS sales and underwriting staff to provide the information requested by the AMLSU & DFSA.