Insurance Authority Mandates Digital Payments to Curb Money Laundering

In a bid to curb money laundering in the insurance sector, the Nepal Insurance Authority has directed all insurance companies to make all types of payments exclusively through electronic systems starting January 15.

Issuing the directive on Tuesday, the NIA instructed life, non-life, microinsurance and reinsurance companies, as well as insurance brokers, to ensure that all payments are made electronically and deposited directly into the bank accounts of beneficiaries.

The NIA claimed that the directive has been issued in line with the Anti-Money Laundering Directive, 2082, which requires insurers to deposit claim payments under insurance policies into the beneficiary’s account held at a bank or financial institution, in accordance with policy provisions or prevailing laws.

The NIA said it issued the instruction as the government has already implemented a system requiring all payments made by public bodies to be conducted digitally through the banking system.

Earlier, the NIA had also directed insurance companies to make salary and wage payments to all employees and workers—including permanent, temporary, contract-based and daily wage staff—exclusively through banks or financial institutions. -- RSS