Mon, Jul 09, 2018 - Page 15 News List

IAFI calls on insurers to improve compliance

UNAVOIDABLE:Meeting money laundering regulations is the price that the nation must pay to participate in international commercial trade, the IAFI chairman said

By Ted Chen  /  Staff reporter

Insurance Anti-Fraud Institute Chairman Shaw Jy-juinn addresses a forum on preventing money laundering on Friday last week in New Taipei City.

Photo courtesy of Insurance Anti-Fraud Institute

The Insurance Anti-Fraud Institute (IAFI, 保險犯罪防制中心) on Friday last week held a conference in Taipei ahead of a third round of mutual evaluations by the Asia/Pacific Group on Money Laundering (APG).

As the clock ticks toward the regional intergovernmental body’s triennial test in November, the Executive Yuan’s Anti-Money Laundering Office Director Tsai Pi-chung (蔡碧仲) and Financial Supervisory Commission Vice Chairman Huang Tien-mu (黃天牧) urged the nation’s life insurers to implement what they have learned and continuously improve compliance.

While some had voiced doubts over the necessity of the office, Tsai said he feels vindicated following a case in 2016 in which US regulators fined state-run Mega International Commercial Bank (兆豐銀行) US$180 million for breaches of money laundering rules.

The landmark case sent shock waves across Taiwan’s financial sector, prompting companies to place a high priority on improving compliance with renewed fervor, Tsai said.

“Companies should refrain from adopting a defensive stance when facing checks from regulators,” Tsai said, adding that the regulators are not out to make things more difficult for businesses or their clients, but to reduce risks.

Companies should also focus on the tasks at hand and stop worrying about the challenges brought by increasingly stringent regulations, Tsai said, adding that some have gone so far as to threaten to pass on additional compliance costs to clients.

“China could take Taiwan by force and we would still have to pass the APG’s tests,” Tsai said.

Tsai wished companies that would be evaluated in November good luck, saying that the test would be a good chance for them to represent Taiwan.

Huang said the office has been instrumental in coordinating Taiwan’s policies against money laundering across different governing bodies, as well as promoting participation in international initiatives and organizations.

The commission and the government are also hoping to pass amendments to the Company Act (公司法) that would bolster compliance by tightening information disclosure rules for shareholders, Huang said.

The commission also hopes to invite compliance experts from Macau to share their insights with local life insurers, as the Chinese special administrative region has received outstanding ratings for the technical compliance of its legal framework, as well as for effectiveness in implementing measures against money laundering and terrorism financing, Huang said.

IAFI Chairman Shaw Jy-juinn (邵之雋) said that meeting money laundering regulations is unavoidable, as it is a price that Taiwan must pay to participate in international commercial trade and access global financial markets.

“In light of escalating trade wars and trade barriers being erected around the globe, the financial sector is where Taiwan can really shine,” Shaw said.

However, as Taiwan is a democracy, the government cannot adopt heavy-handed enforcement measures like China does, he said.

“Such efforts are often led by the government and a select group of high-performing companies,” Shaw said.

Building and implementing measures against money laundering and terrorism financing have been an arduous process in Taiwan, Shaw said, adding that he does not expect to see companies scrambling to prepare for the next round of evaluations.

The conference invited chief compliance officers from Taiwan’s leading life insurers to share their insights on managing high-risk investment-linked products and establishing sound record-keeping practices, as well as improving suspicious transaction reporting (STR) practices.

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