AIA fined HK$23m for AML failures

Hong Kong’s regulatory body has imposed a penalty on the local division of the insurance behemoth AIA for failures related to anti-money laundering measures.

AIA was fined HK$23 million ($3 million) after an inspection conducted by the Insurance Authority (IA) at its Hong Kong branch revealed numerous shortcomings in their anti-money laundering procedures. During the period spanning from March 2016 to October 2022, the IA identified technical deficiencies in the utilisation of AIA’s anti-money laundering system and its corresponding algorithm.

The investigation uncovered instances where not all customers designated as politically exposed persons (PEP) were properly flagged during the screening process. Additionally, certain customers classified as “high risk” did not undergo enhanced due diligence procedures in a timely manner.

In response, AIA has taken various steps to tackle the issues, which include “additional investments to improve its AML system and related procedures”. Additionally, the insurer must provide a report from an external consultant to verify the ongoing effectiveness of the corrective measures.

The Insurance Authority has stressed that all authorised insurers and licensed insurance intermediaries engaged in long-term activities should establish efficient controls and procedures to combat money laundering and the financing of terrorism. This regulatory enforcement illustrates that they will be accountable for their actions, regardless of the scale of their operations.

Source: Finews.asia