The Insurance Regulatory Authority (IRA) has sensitised life insurers and investment-related insurance providers on Anti-Money Laundering (AML) regulations. This initiative aims to protect Kenya’s financial systems from illicit activities and ensure adherence to the Proceeds of Crime and Anti-Money Laundering Act.
The one-day workshop, held at the College of Insurance in Nairobi, provided insurance stakeholders with essential knowledge and tools to enhance customer verification processes and risk assessments. Under the Act, life insurers and investment-related insurance providers are classified as “reporting institutions,” meaning they are mandated to implement stringent customer identification and verification protocols to prevent financial crimes such as money laundering.
Speaking on behalf of the Commissioner of Insurance and IRA CEO Godfrey Kiptum, IRA Director of Supervision Kalai Musee emphasised the critical role of Know Your Customer (KYC) procedures in safeguarding financial systems. He underscored that robust KYC processes are fundamental in detecting, preventing, and reporting suspicious transactions, thereby strengthening financial security and transparency.
Musee also highlighted the broader economic implications of financial crimes, including money laundering, terrorist financing, and proliferation financing. He noted that such activities undermine customer confidence and weaken the financial sector’s contribution to economic growth.
Kenya’s placement on the Financial Action Task Force’s (FATF) “grey list” in February 2023 further underscored the urgency of implementing enhanced due diligence measures. These include beneficial ownership identification and stricter compliance frameworks to mitigate financial crimes.
“The insurance providers have been equipped with the necessary knowledge and tools to reinforce Kenya’s financial system’s security and transparency,” Musee stated. He urged insurers, brokers, and agents to take a leadership role in implementing compliance measures that would contribute to Kenya’s removal from the FATF list.
To further support the industry’s compliance efforts, the IRA is in the process of issuing Guidance Notes to help stakeholders refine their AML/Combating the Financing of Terrorism (CFT) programs. Musee called upon life insurers to expedite the implementation of Customer Identification Policies, ensuring that their activities align with regulatory requirements and industry risk appetite.
With Kenya’s insurance penetration rate at just 2.39%—significantly below the global average of 7.2%—enhancing public confidence through strengthened compliance frameworks is crucial. By promoting transparency and financial integrity, the industry can foster sustainable growth and restore trust among policyholders.
