Nigeria's Insurance Sector

Nigeria's Insurance Sector "Not That Bad" Despite Money Laundering, Financing of Terrorism Risk

Nigeria's Insurance Sector "Not That Bad" Despite Money Laundering, Financing of Terrorism Risk

The Nigerian Financial Intelligence Unit (NFIU) has said that the insurance industry is better than some other sectors in Nigeria's finance industry, especially with regard to money laundering and financing of terrorism.

The Director of the unit, Mrs. Juliet Ibekaku, made the observation at the Sensitisation Programme on Anti-Money Laundering and Combat of Financing of Terrorism Control Measures for Insurance Companies, which held in Lagos recently.

The programme was jointly organised by NFIU and the National Insurance Commission (NAICOM) to deepen knowledge on money laundering and combating financing terrorism issues and to make that the insurance sector and the companies understand what their roles are in this regard.

Speaking on her experience with the insurance sector, she said the sector seems to be cleaner than some other sectors.

"Compared to other sectors, the insurance sector is not that bad, especially when you compare it with the banking sector; even though that we are yet to conduct a risk assessment of whether there is huge money laundering or financing of terrorism risks associated with the insurance sector.

"I will say that the risk is not as high as what we have in the banks. As such, you might not see the level of fraud as we see in the banking sector in the insurance sector," Ibekaku said.

"What we did at NFIU was to make sure that the banks are reporting first and this we have been doing for the past five years. However, we have realised that there is need for the insurance companies also to come on board as required by the law," she added.

Meanwhile, NAICOM's Assistant Director (Inspectorate), Dr. Sam Onyeka, said the anti-money laundering and combating financing terrorism workshop was meant to sensitise the insurance companies, represented by their Chief Compliance Officers and others, on how to migrate to a new platform for reporting money laundering issues to NFIU.

He recalled that insurance companies have to make three reports to the unit including reporting on suspicious transactions, cash or currency transactions and foreign transactions.

"Before now, the reporting system has not been uniform, some people report using IT platform, others report using hard copies but now we want to synchronise it. We want everybody to come on the same IT platform and for this to be possible, the NFIU had to issue guidelines explaining how to use the IT platform established for this purpose.

"We have brought insurance industry representatives to take them through the new process. But beyond reporting, we also want to look at the compliance requirements for the industry," Onyeka said.

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