Friday, February 21, 2014

IRDA imposes penalty on Tata AIA Life for violating AML norms

It's been reported that insurance sector regulator in India, the Insurance Regulatory and Development Authority (IRDA) has imposed a penalty of Rs 1,00,000 on private sector life insurance player, Tata AIA Life Insurance Company Ltd. for not complying with its anti-money laundering (AML) guidelines.

In its order, the regulator also directed the insurer to hire a chartered accounting firm(s) to carry out an investigation on the operational procedures present to complying with its AML guidelines.

Further, the order said that effective systems were not in place to report cash transactions and in various instances no review was carried out for reporting cash transactions. The regulator also observed that in certain instances, the insurer accepted multiple cash transactions exceeding Rs 50,000 on a single policy from same payer without PAN number, which violates its norms.

“The accounting firm(s) should complete the study and submit its report in 45 days. The Tata AIA Life Insurance should submit the accounting firm's report to IRDA within 15 days of its submission", said the order.

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