New Implementation Guidelines of the Know Your Customers Principle for Insurance Companies

Head of the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) Regulation No. PER-01/BL/2011 on the Implementation Guidelines of the Know Your Customer Principle for Insurance Companies (‘Regulation’) has been issued to implement Article 4 (5) of Minister of Finance Regulation No. 30/PMK.010/2010, which relates to non-bank financial institutions’, including insurance companies’ (loss insurance companies, life insurance companies, and insurance broker companies), obligation to establish know your customer policies.

Insurance companies must prepare implementation guidelines of know your customer principle in accordance with the guidelines elaborated in the Appendix of the Regulation, which consist of, at least:

By implementing the know your customer principle, the intention is that insurance companies will be better able to identify suspicious transactions, cash transactions, and submit reports related to overseas fund transfers to the Financial Transactions Reports and Analysis Center (PPATK).

The implementation guidelines have to be submitted to the Head of Bapepam-LK through the Head of the Insurance Bureau (Article 1 (2)). For licensed insurance companies, the implementation guidelines have to be submitted within a period of 60 working days from the issuance of this Regulation (i.e. by 6 April 2011) (Article 2 (1)).

The Head of Bapepam-LK, through the Head of the Insurance Bureau, will evaluate the submitted implementation guidelines and within 30 working days reply with any proposed revisions, alternatively, the implementation guidelines will be deemed to have been approved (Articles 2 (3) and (5)). In the event that the implementation guidelines are requested to be to be revised, the insurance company has to submit the revised guidelines within 30 working days from the date of receiving the request (Article 2 (4)).

The Regulation repeals and replaces Director General of Financial Institutions Decision No. 2833/LK/2003 on the Implementation Guidelines of the Know Your Customer Principle for Non-Bank Financial Institutions, to the extent that it applies to insurance companies.

The Regulation has been in force since 10 January 2011.