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Location: Central Bank of Bahrain Volume 3—Insurance > Part A > Business Standards > FC Financial Crime > FC-1 Customer Due Diligence > FC-1.1 General Requirements > Verification of Identity and Source of Funds > FC-1.1.3
  • Verification of Identity and Source of Funds

    • FC-1.1.1

      Insurance licenseesG must establish effective systematic internal procedures for establishing and verifying the identity of their customersG and the source of their funds. Such procedures must be set out in writing and approved by the licensee's Board of Directors and senior management (as applicable) and must be strictly adhered to.

      Amended: October 2015
      Amended: January 2007

    • FC-1.1.2

      Insurance licenseesG must implement the customer due diligence measures outlined in this Chapter when:

      (a) Establishing business relations with a new or existing customer;
      (b) A change to the signatory or policyholder beneficiary is made;
      (c) A significant transaction takes place;
      (d) There is a material change in the terms of an insurance policy or in the manner in which the business relationship is conducted;
      (e) CustomerG documentation standards change substantially;
      (f) The insurance licenseeG has doubts about the veracity or adequacy of previously obtained customer due diligence information;
      (g) [This Sub-paragraph was deleted in July 2018]; or
      (h) There is a suspicion of money laundering or terrorist financing.
      Amended: July 2018
      Amended: January 2007

    • FC-1.1.2A

      Insurance licenseesG must understand, and as appropriate, obtain information on the purpose and intended nature of the business relationship.

      Added: October 2015

    • FC-1.1.2B

      Insurance licenseesG must conduct ongoing due diligence on the business relationship, including:

      (a) Scrutinizing of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the institution's knowledge of the customer, their business and risk profile, including, where necessary, the source of funds; and
      (b) Ensuring that documents, data or information collected under the CDD process is kept up-to-date and relevant, by undertaking reviews of existing records, particularly for higher risk categories of customers.
      Amended: October 2017
      Added: October 2015

    • FC-1.1.3

      For the purposes of this Module, 'customer' includes counterparties such as reinsurers and financial markets counterparties, as well as persons insured by the licensee. However, in the case of group insurance policies (such as group life or medical), the requirements in this Module need not be applied to all policyholdersG : see Paragraph FC-1.2.13. For insurance brokersG , 'customer' refers to policyholdersG .

      Amended: July 2009
      Amended: January 2007

    • FC-1.1.4

      The CBB's specific minimum standards to be followed with respect to verifying customer identity and source of funds are contained in Section FC-1.2. Enhanced requirements apply under certain high-risk situations: these requirements are contained in Sections FC-1.3 to FC-1.5 inclusive. Simplified customer due diligence measures may apply in defined circumstances: these are set out in Section FC-1.6.

      Amended: January 2007

    • FC-1.1.5

      Where an insurance licenseeG is dealing with an intermediary such as a broker, reliance may be placed on customer identification undertaken by the intermediary, if certain conditions are satisfied: please refer to Chapter FC-1.7.

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