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Overview of General Insurance Mediation Business and AML

04/07/2022
  1. In Jersey, GIMB is not a financial services business under paragraph 4(b) of Schedule 2 to the Proceeds of Crime (Jersey) Law 1999.
  2. Therefore any person only carrying on GIMB is consequently NOT within the scope of the
  • MONEY LAUNDERING (JERSEY) ORDER 2008 [MLJO].
  • The MLJO requires firms to have policies and procedures to prevent and detect money laundering and terrorist financing

3. However, GIMBs need to consider the JFSC rule books [codes of practice] that outline the JFSC conduct of business and prudential requirements:-

The GIMB-CODE opens the door to AML matters.

4. The GIMB-CODE does not compel GIMBs to have an MLRO, but GIMBs are advised [in 3.3.7 – below] to appoint an MLRO

  • 3.7 A registered person is advised to appoint a suitably qualified or experienced senior employee to act as Money Laundering Reporting Officer.

5. And further to 3.3.7, the codes also say:-

  • 2.2.8 The registered person is able to guard against involvement in financial crime (including the detection and prevention of money laundering and terrorist financing) and to comply with the Code and other regulatory requirements;
  • 3.8 It is recognised that the risk of the use of general insurance for the purposes of money laundering or the financing of terrorism is less than the use of long term insurance products. [continues – see below]
  • 3.9.2 The registered person may support the Money Laundering Reporting Officer function as necessary, where one has been appointed, either by importing specialist skills or through the use of group resources or by outsourcing to a management company, if one has been retained.
  • 3.9.3 Where it is the case that the Compliance Officer and the Money Laundering Reporting Officer if appointed, is the same person, notification of such must be made, in writing, to the JFSC.
  • 6.2 A registered person must:
    • 3.6.2.3 Guard against involvement in financial crime (including the detection and prevention of money laundering) and ensure that all transactions and decisions are appropriately authorised by persons with the requisite knowledge and experience to effect such transactions or make such decisions.
  • 3.8 …… where a Money Laundering Reporting Officer has been appointed, they must:
    • 3.3.8.1 Report directly to the registered person's Jersey management board or equivalent;
    • 3.3.8.2 Be properly trained in the responsibilities and duties of such a position;
  • 3.3.8.3 Have sufficient independence and resources to properly discharge the responsibilities of the position; and
  • 3.3.8.4 Pay special attention to:
    • 3.8.4.1 Applications for insurance of a high value or unusual risks,
    • 3.8.4.2 Claims that are for large amounts of money, or
    • 3.8.4.3 Claims that are made within a short period of time following the inception of insurance cover.

So, in addition to the MLRO needing knowledge [3.3.8.2], as you can see 3.3.8.1, the board should have some ability [knowledge] to assess the MLRO reports

And against the above, the codes have x2 notes about knowledge [copied below], and I guess this would be part of the [Comsure] training brief?

  • [5] If a Money Laundering Reporting Officer is appointed under3.7, it is helpful for the registered person to understand that anti-money laundering legislation includes:
    • The Proceeds of Crime (Jersey) Law 1999; the Money Laundering (Jersey) Order 2008; and the Terrorism (Jersey) Law 2002, as well as any other applicable laws, all as amended from time to time. It also includes the international sanctions regimes implemented through the Sanctions and Asset-Freezing (Implementation of EU Regulations) (Jersey) Order 2020 and equivalent legislation relating to the implementation of UK sanctions. The legislation must be observed in conjunction with the requirements of the relevant Handbook for the Prevention and Detection of Money Laundering and the Financing of Terrorism, issued by the JFSC.
  • [3] Courses in key subjects, such as ANTI-MONEY LAUNDERING, data protection, health and safety, and IT, should be part of every employee's training programme in addition to those courses specifically related to insurance

End

JERSEY