HK Insurance Authority fines insurers HK$7m for breaking regulatory laws

The two insurers broke anti-money laundering and counter-terrorism laws.

The Hong Kong Insurance Authority has fined insurers formerly known as Metlife Limited and Metropolitan Life Insurance Company of Hong Kong Limited for breaking the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.

Investigation by the IA revealed that the insurers broke seven specified provision in the anti-money laundering and counter-terrorist financing ordinance and were fined HK$7m ($900k).

The move comes after an investigation by the IA which found out that the companies had violated the ordinance between January 2015 and 2017.

IA said the companies failed to maintain effective procedures to determine whether their customers (or the beneficial owners of its customers) were politically exposed persons (PEPs) prior to entering into business relationships. The insurers also failed to take reasonable measures to establish the source of funds or source of wealth or obtain senior management approval to continue the business relationships, when customers were eventually identified as PEPs.

The companies were found to be lacking effective procedures to assess, where a business relationship was to be established, whether such business relationship may have presented a high risk of money laundering or terrorist financing.

Both companies also failed to review, on at least an annual basis, documents, data and information relating to customers which presented a high risk of money laundering or terrorist financing to ensure such documents, data and information were up to date. Additionally, both failed to take all reasonable measures to ensure proper safeguards existed to prevent the failures identified and mitigate money laundering and terrorist financing risks.

“The IA takes these failures seriously and wants to send a clear message to the industry that all authorized insurers and licensed insurance intermediaries carrying on long term business should have in place effective anti-money laundering and counter-terrorist financing controls and procedures,” IA said.

Both companies were acquired by the FWD group on 30 June and are now named FWD Life (Hong Kong) Limited and FWD Life Assurance Company (Hong Kong) Limited.