Kathmandu: The Insurance Board has launched an investigation for possible money laundering against six life insurers including Nepal Life Insurance. The investigation has been conducted upon the request of the anti-money laundering watchdog, Financial Information Unit (FIU).
The Insurance Board(IB) has warned six life insurers Nepal Life Insurance, LIC Nepal, Surya Life, Union Life, Reliance Life, and IME Life after FIU requested to it for detailed investigation into the suspicious transactions.
The FIU has launched an investigation with the support of the IB. The IB has asked for details from the life insurers to provide the details of all the insurance policies sold with the Single Premium Payment option. The FIU has expressed its concern over the possible money laundering through Single Premium Payment. Life insurance policies under single premium payment with a high sum assured and insurance premiums have been sold and surrendered in large volume by these six life insurers.
The IB is investigating under the direction of the FIU of the National Bank on the suspicion that it has helped in laundering the assets acquired from illegal sources by collecting a large volume of premium even though the source of income is not justifiable.
Even if the insurance policy is issued for a long period by paying a large number of single premiums, the FIU is shocked to see many cases of policy loans or surrenders within 30 days, 1 year, or 3 years from the date of policy sales. As the money earned through life insurance will be legally valid, there is a suspicion that the insurance policies have been used by the traders or the general public who have earned from illegal sources.
The single premium payment option provides an option to the policyholder to pay the total sum assured at once irrespective of the maturity period.
As per the legal provision, the insurance companies should not accept the amount of one hundred thousand rupees or above from the insured in cash. There is a provision to receive such payment only by cheque, electronic payment, or bank deposit.
Life and non-life insurance companies must submit regular reports to the FIU about the insured paying a premium of rupees one hundred thousand or above. Based on the study of the same report, the FIU has requested the Insurance Board to provide more information.
The unit is concerned about the fact that the source of income of the insured is not disclosed, the source of income is not sufficient, and the real background and identity of the insured is not disclosed based on the study of the insurance policy proposal and the attached evidence.
It is also of interest that the amount of insurance premium is deposited from the banking system or from outside.
