Reserve bank sanctions insurers for FICA transgressions
The South African Reserve Bank (SARB) has imposed a fine of R200 000 on Clientele Life Assurance and cautioned two other life insurance companies, Hollard Life Insurance and Outsurance Life Insurance, after finding weaknesses in the companies’ money laundering control measures in terms of the Financial Intelligence Centre Act (FICA), following inspections conducted last year.
The Registrar of Banks, whose role was assumed by the Prudential Authority (which falls under the SARB), is the FICA supervisory body for financial institutions.
The SARB says the administrative sanctions were imposed because of weaknesses identified with regard to compliance with the provisions of FICA by the insurers, and not because they were found to have facilitated transactions involving money laundering or the financing of terrorism.
The administrative sanctions imposed are as follows:
- Clientele Life: A financial penalty of R200 000 and a caution not to repeat the conduct that led to the non-compliance, for failure to comply with cash threshold reporting requirements under section 28 of FICA.
- Hollard Life Insurance: A caution not to repeat the conduct which led to the non-compliance, for failure to comply with employee training requirements under section 43 of the FICA.
- Outsurance Life Insurance: A caution not to repeat the conduct which led to the non-compliance, for failure to comply with employee training requirements under section 43 of FICA.
The SARB says the life insurers are cooperating with the authority and have agreed to undertake the necessary measures to address the compliance deficiencies and control weaknesses. The financial penalty has been paid by Clientele Life.