Annexure 6 – Training content for Re-instatement process

Anti-Money Laundering Refresher Training (AML Refresher Training)

Background - Dear Agent, as per IRDAI regulations it is mandatory for all agents to undergo refresher of Anti Money
Laundering training. To avoid suspension of your Niva Bupa Agency code, complete this training on AML. All insurance
companies have to comply with the AML guidelines issued by IRDAI from time to time and conduct regular ongoing AML
training for their Agents and employees.

Definition of Money Laundering (ML) It is the illegal process of concealing the origins of money obtained illegally by
passing it through a series of complex transactions so that it appears legitimate. After money has been laundered, it can
be used for legal purposes. Money Laundering is the process whereby criminals attempt to hide and disguise the true
origin and ownership of the proceeds of their criminal activities thereby avoiding prosecution, conviction and confiscation
of criminal fund. In simple words, it is a process through which dirty money is converted into clean money.

Steps in Money Laundering:

1. Placement – Purpose is to put the dirty money (obtained through illegal means such as robbery, extortion) in the
legitimate financial system. In this Phase illegal money gets introduced in financial system.
2. Layering – Purpose is to make it difficult to detect and uncover the money put in the financial system under
placement step. It involves carrying out of complex financial transactions to disguise the source of
cash/ownership/audit trail.
3. Integration – Purpose is to move previously laundered money into the economy through the banking system and
thus such monies appear to be normal business earnings. At this stage it becomes difficult to distinguish legal and
illegal wealth, this stage also provide good opportunity to money launderer to increase his wealth from proceeds of
crime.

MANUAL AML TRAINING FORM| VERSION 1.4

Regulations to Counter Money Laundering

1. Prevention of Money Laundering Act, 2002

 This act came into force w.e.f July 1, 2005 and was enacted to combat money laundering
 This Act impose obligation on Companies to verify identity of Customers which concisely includes the following:
I. Maintenance of records.
II. Furnish information pertaining to such records;
III. Verification of identity of its clients by carrying out due diligence procedures;
IV. Identification of beneficial owner, in respect of the transactions undertaken with its various clients.

2. IRDAI Guidelines on Anti Money Laundering

IRDAI has issued revised AML/ CFT Guidelines on 1st August 2022 making it mandatory to establish and implement
policies, procedures and internal controls to combat money laundering.

Steps to mitigate Money Laundering

1. Due Diligence
In this process, customer information is evaluated for any potential risk money laundering/ terrorist financing risks.
Information may include:

 Income proofs, estimated net-worth and sources of funds

 Document to establish the insurable interest between proposer and insured.
 Conducting independent enquiries on the details collected on /provided by the customer
 For politically exposed persons (PEP), NBHI has a defined questionnaire which needs to be filled by the customer.

2. KYC (Know your Customer) Norms

 As per IRDAI guidelines, mandatory KYC verification of identity, address and a recent photograph is to be done
before policy issuance.
 PAN copy also needs to be obtained from the customer before policy issuance. In case, the depositor does not
have PAN, Form 60/ 61 as per Income Tax Act, 1961 must be taken.
 KYC verification can be performed as per modes allowed in IRDAI regulations and provided by the Company.
(For the acceptable KYC modes, please get in touch with your Sales manager).
 The customers are classified into high risk and low risk as per product and individual profile. (For details, please
get in touch with your Sales manager).
 For high risk customers, the source of income and financial position also needs to be verified along with KYC
verification.
 For low risk category customers with annual premium upto Rs 10,000, simplified due diligence may be performed
by verification of following documents:
o Proof of ID:
 identity card with applicant's Photograph issued by Central/State Government Departments,
Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, and
Public Financial Institutions;
 letter issued by a gazetted officer, with a duly attested photograph of the person;

MANUAL AML TRAINING FORM| VERSION 1.4

o Proof of address:
 utility bill which is not more than two months old of any service provider (electricity, telephone,
post-paid mobile phone, piped gas, Water bill);
 property or Municipal tax receipt;
 bank account or Post Office savings bank account statement
 pension or family pension payment orders (PPOs) issued to retired employees by Government
Departments or Public Sector Undertakings, if they contain the address
 Letter of allotment of accommodation from employer issued by State or Central Government
Departments or Public Sector Undertakings, scheduled commercial banks, financial institutions
and listed companies. Similarly, leave and license agreements with such employers allotting
official accommodation; and

If KYC is performed via photo copy of OVD documents, it should be verified with the original document issued to
the customer.

Below is the list of acceptable KYC documents for Identity and address of an individual:

Proof of Identity:

i. PAN Card

ii. Job card issued by NREGA duly signed by an officer

Proof of Residence

i. Utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone,
piped gas, water bill);

ii. Current Passbook with details of permanent/present residence address (updated up to the previous month)

iii. Current statement of bank account with details of permanent/present residence address (as downloaded)

iv. Letter from any recognized public authority

v. property or Municipal tax receipt;

vi. Ration card

vii. Valid lease agreement along with rent receipt, which is not more than three months old as a residence proof

viii. pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or
Public Sector Undertakings, if they contain the address;

viii. letter of allotment of accommodation from employer issued by State Government or Central Government
Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial
institutions and listed companies and leave and license agreements with such employers allotting official accommodation:

MANUAL AML TRAINING FORM| VERSION 1.4

Proof of both Identity and Residence:

i. Passport

ii. Voter’s Identity Card

iii. Driving License

iv. Letter from a recognized Public Authority (as defined under Section 2 (h) of the Right to Information Act, 2005) or
Public Servant (as defined in Section 2(c) of the ‘The Prevention of Corruption Act, 1988’) verifying the identity and
residence of the customer

v. Personal identification and certification of the employees of the insurer for identity of the prospective policyholder.

vi. Written confirmation from the banks where the prospect is a customer, regarding identification and proof of residence.

vii. the letter issued by the Unique Identification Authority of India or the National Population Register containing details of
name, address and Aadhaar number or any other document as notified by the Central Government in consultation with
the regulator.

viii. the letter issued by the National Population Register containing details of name, address or any other document as
notified by the Central Government in consultation with the Regulator,

ix. Masked / E-Aadhar, or offline verified Aadhar number

What to report to Compliance Team

Following are illustrative scenarios which should be reported to NBHI Compliance team:
• Possible attempts to circumvent furnishing of PAN details shall be reviewed from the angle of suspicious activities
• Splitting of the insurance policies/ issue of number of policies to one or more entities facilitating individuals to
defeat the spirit of the IRDAI AML/CFT guidelines.
• Where there is possibility of transactions being integrated through a single remitter / splitting of insurance
premium transactions.
• All cash transactions, where forged or counterfeit currency notes or bank notes have been used as genuine and
where any forgery of a valuable security or a document has taken place facilitating the transaction.
• Customer reluctant to provide identifying information or providing seemingly fictitious information.
• Frequent free look surrenders / cancellation by customers.
• Policy from a place where the policyholder does not reside.
• Frequent request for change in addresses.
• Inflated or totally fraudulent claims.
• Frequent cancellation of policies for the return of premium by an insurer’s cheque.
• Insurance risk exposure for individuals/ entities connected with countries identified by FATF (Financial Action
Task Force) having deficiencies in their AML regime.

MANUAL AML TRAINING FORM| VERSION 1.4

Assessment

Tick the right option ()

1. What is the sequence of the steps of Money Laundering?

A. Placement >> Layering >> Integration
B. Layering >> Integration >> Placement
C. Placement >> Integration >> Layering
D. Integration >> Placement >> Layering

2. Which of the following documents are mandatory to be collected from an individual customer at policy issuance stage?
A. PAN
B. Proof of Identity
C. Proof of Address
D. All of the above

3. Which additional information is to be verified for high risk customers in addition to KYC verification?
A. Source of Income and Financial position
B. Marital Status
C. Birth City
D. All of the above

4. What are the scenarios which should be reported to NBHI Compliance team which raise suspicion for money
laundering?
A. Frequent free look surrenders by customers.
B. Frequent request for change in addresses.
C. Inflated or totally fraudulent claims.
D. Any of the above

5. What are the acceptable documents to be asked from the customer who is an individual as a proof of address for KYC.
A. Driving License
B. Voter ID
C. Passport
D. Any of the above

Please ensure to read the Niva Bupa Anti Money Laundering Policy. Contact your Branch office for more details.

MANUAL AML TRAINING FORM| VERSION 1.4

Declaration
I hereby declare that I have read and completed the AML Refresher Training Module myself. Also, I hereby declare that I
will comply with the AML regulations laid down by the company and IRDAI (Insurance Regulatory Development Authority
of India)

Agent Name__________________________________
Agent Code__________________________________
Signature____________________________________
Location_____________________________________

MANUAL AML TRAINING FORM| VERSION 1.4