Hong Kong’s Insurance Authority (IA) has ordered FWD Life Insurance Company (Bermuda) Limited to pay a HK$19.5 million penalty.

It comes after an on-site inspection found gaps in the insurer’s anti-money laundering (AML) controls.

The IA ran the inspection under Cap. 615, the city’s law on money laundering and terrorist financing, known as AMLO. As a result, it raised concerns in four areas.

The regulator found shortcomings in how FWD identified the payer when money came from a third party.

It also found gaps in the insurer’s controls on potentially suspicious transactions, including cash payments.

The IA also flagged issues with how FWD recorded and screened politically exposed persons (PEPs), along with its customer due diligence on some transactions.

In total, the regulator found that FWD breached six rules in Schedule 2 of AMLO.

The law sets out how financial firms must check customers and keep records, including insurers that sell long-term policies.

In response, FWD has taken a series of steps to fix the issues and make its governance, controls and oversight stronger.

The company also said closer reviews showed delayed detection had not led it to sign up any customer who did not qualify.

The IA noted FWD’s “early acceptance of the findings” in its statement.

The regulator pointed as well to the insurer’s pledge to address the problems and improve its governance and controls.

Every insurer in long-term business must have effective controls against money laundering and terrorist financing, the IA added.

Such controls, it said, help keep Hong Kong’s place as a global finance centre.

Featured image: Edited by Fintech News Hong Kong, based on image by funtap via Magnific.