The Insurance Regulatory Authority has sensitised insurance providers on Anti-Money Laundering regulations to safeguard financial systems from illicit activities.
The one-day workshop provided life insurers and investment-related insurance providers with guidance to uphold financial integrity and regulatory compliance. Under the Proceeds of Crime and Anti-Money Laundering Act, life insurers and investment-related insurance providers are classified as “reporting institutions”.
Insurers, brokers and agents are mandated to adhere to stringent customer identification and verification protocols to prevent financial crimes, including money laundering.
With Kenya’s insurance penetration rate currently at 2.39 per cent, which is well below the global average of 7.2 per cent, enhancing public confidence in the sector is crucial.
Speaking on behalf of the Commissioner of Insurance and IRA CEO Godfrey Kiptum, IRA director of supervision Kalai Musee said strengthening compliance frameworks and promoting transparency are key to building trust among policyholders and fostering sustainable industry growth.
“The insurance providers have been equipped with the necessary knowledge and tools to enhance customer verification processes and risk assessments, reinforcing Kenya’s financial system’s security and transparency,” Musee said.
He emphasised the critical role of Know Your Customer procedures in safeguarding financial systems from illicit activities.
“Robust KYC processes are essential in detecting, preventing and reporting suspicious transactions,” Musee said.
He spoke during the sensitisation workshop at the College of Insurance in Nairobi. Musee highlighted the broader impact of financial crimes on economic stability, saying money laundering, terrorist financing and proliferation financing erode customer confidence and weaken the financial sector’s role in economic growth.
He said Kenya’s placement on the Financial Action Task Force’s “grey list” in February last year underscored the urgency of strengthening preventive measures, including enhanced due diligence and beneficial ownership identification.
“The authority reaffirms its commitment to financial integrity by sensitising life insurance companies on Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing regulations,” he said.
He urged the insurance industry to take a key leadership role in implementing compliance measures that would contribute to Kenya’s removal from the list.
“Such measures are meant to assess the overall risk profile associated with the customer or business entity and ensure their activities align with the insurers’ regulatory requirements and the insurers’ risk appetite,” Musee said.
He said the IRA was in the process of issuing Guidance Notes to help the insurance industry stakeholders in the refinement of their AML/CFT programmes.
“The overall appeal to the life insurers remains fast-tracking the implementation of Customer Identification Policies to detect and deter AML/CFT activities within their organisations, while enhancing the industry’s overall compliance efforts,” Musee said.
