The Insurance Regulatory and Development Authority of India (IRDAI) has issued a circular on procedure for implementation of section 12A of ‘The Weapons of Mass Destruction and their Delivery Systems Act, 2005′ (WMD Act). The circular was issued on 19th April, 2023.
The section 12A of the WMD Act forbids the financing of any prohibited activity under the Act.
All Financial Institutions are required to verify if the particulars of the entities/individual, party to the financial transactions, match with the particulars of designated list and in case of match, REs shall not carry out such transaction and shall immediately inform the transaction details with full particulars of the funds, financial assets or economic resources involved to the CNO by email, FAX and by post, without delay.
Financial Institutions are also required to run a check, on the given parameters, at the time of establishing a relation with a customer and on a periodic basis to verify whether individuals and entities in the designated list are holding any funds, financial assets or economic resources or related services, in the form of bank accounts, stocks, Insurance policies etc. In case, the particulars of any of their customers match with the particulars of designated list, REs shall immediately inform full particulars of the funds, financial assets or economic resources or related services held in the form of bank accounts, stocks or insurance policies etc., held on their books /o the CNO by email, FAX and by post, without delay
The REs shall file a Suspicious Transaction Report (STR) with FIU- IND covering all transactions as detailed above carried through or attempted.
Insurers shall also regularly check FIU-India portal for list of designated individuals/entities.
Moreover, the circular also notifies the nodal officer for implementation of the provisions of Section 12 A of WMD Act and Section 51A of Unlawful Activities (Prevention) Act, 1967 in the insurance sector.
