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Information Center > Press Releases > Insurance Authority reprimands and imposes $7 million fine for multiple contraventions of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance

Insurance Authority reprimands and imposes $7 million fine for multiple contraventions of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance

31 January 2022

The Insurance Authority (“IA”) has reprimanded and ordered the insurers formerly known as Metlife Limited and Metropolitan Life Insurance Company of Hong Kong Limited (collectively, the “Companies”) to pay a pecuniary penalty of HK$7 million for contravening seven specified provisions of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (“AMLO”)1, 2.

The disciplinary action follows an investigation by the IA which discovered the following failures by the Companies, during the period from January 2015 to October 2017:

  • The Companies failed to maintain effective procedures to determine whether their customers (or the beneficial owners of its customers) were politically exposed persons (“PEPs”) prior to entering into business relationships and failed to take reasonable measures to establish the source of funds or source of wealth or obtain senior management approval to continue the business relationships, when customers were eventually identified as PEPs;
  • The Companies failed to maintain effective procedures to assess, where a business relationship was to be established, whether such business relationship may have presented a high risk of money laundering or terrorist financing;
  • The Companies failed to review, on at least an annual basis, documents, data and information relating to customers which presented a high risk of money laundering or terrorist financing to ensure such documents, data and information were up to date;
  • The Companies failed to have in place adequate or effective monitoring procedures in relation to existing business relationships with customers to identify transactions which were complex, of an unusually large amount, of an unusual pattern and which had no apparent economic or lawful purpose; and
  • The Companies failed to take all reasonable measures to ensure proper safeguards existed to prevent the failures identified and mitigate money laundering and terrorist financing risks.

The Companies have already taken remedial measures to address the deficiencies identified.

The IA takes these failures seriously and wants to send a clear message to the industry that all authorized insurers and licensed insurance intermediaries carrying on long term business should have in place effective anti-money laundering and counter-terrorist financing controls and procedures. The insurance industry must be founded on trust and integrity and the establishment of effective systems and controls to combat money laundering and terrorist financing is imperative to reinforce that trust and maintain Hong Kong’s position as an international finance centre.

The Companies were acquired by the FWD group on 30 June 2020 and are now named FWD Life (Hong Kong) Limited and FWD Life Assurance Company (Hong Kong) Limited, and are under entirely new management.

Statement of Disciplinary Action

Ends

Notes:

1 The disciplinary action is taken under section 21 to AMLO. AMLO imposes customer due diligence and record-keeping requirements on financial institutions, including authorized insurers carrying on long term insurance business. The IA is the relevant authority under the AMLO in relation to authorized insurers and licensed insurance intermediaries carrying on long term insurance business.

2 The Companies contravened sections 5(1), 10(1), 10(2), 15, 19(1), 19(3) and 23 of Schedule 2 to AMLO.