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BRIDGEFORCE | Compliance News (June 2013 Issue #5)

MP900385969

An excerpt from SSQ Network Vol. 1 #8

This article provides general information on certain amendments of the regulations applicable to money laundering and is not a legal opinion. The reader should not act solely on the information contained herein. This article does not engage the responsibility of SSQ nor independent representatives.

Amendment of regulations applicable to money laundering

On February 13, 2013, the Government of Canada adopted new requirements amending the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations. These new requirements will be in effect on February 1, 2014, and will apply to life insurance companies and their independent representatives.

Some of these new regulations include:

INCREASED REQUIREMENTS WITH REGARD TO THE INFORMATION THAT MUST BE COLLECTED ABOUT CORPORATIONS AND OTHER ENTITIES

  • In addition to information about the identity of corporations and other entities (partnerships, trusts, associations, etc.) currently required, life insurance companies and their independent representatives will have to obtain the following: Information that allows for establishing ownership, control and structure of the entity (corporations and other entities).
  • For a trust, the name and address of all trustees and all known beneficiaries and settlors of the trust.
  • Documented proof from the client confirming the accuracy of the information obtained regarding the ultimate ownership and control of the entity.
  • Finally, if it isn’t possible to obtain or confirm the accuracy of the information mentioned above, life insurance companies and their independent representatives will have to do both of the following:
    • take reasonable measures to check the identity of the most senior managing officer of the entity; and
    • consider that the entity represents a higher risk and thus apply special measures in order to maintain “enhanced ongoing monitoring” of its activities.

PURPOSE AND INTENDED NATURE OF THE BUSINESS RELATIONSHIP

Insurance companies and their independent representatives will now have to keep a record that sets out the purpose and intended nature of the business relationship (i.e. determine the main reason why the client will be doing business with us).

WHAT WILL BE THE IMPACT OF THESE NEW REQUIREMENTS?

Financial security advisors will have to collect certain additional information on new clients (corporations and other entities). Our forms and other related documents will be updated in this regard in January 2014 in order to comply with the new requirements.

Additional information regarding these changes will be available in the updated Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) Guidelines in the fall of 2013.

We will keep you informed about any changes to come.

For more details, please refer to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations published in the Canada Gazette on February 13, 2013 – under: DORS/2013-15.

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