FIC Compliance Made Easy: A Tool That Automates Sanctions Screening

The FIC recently announced a new regulation that impacts all insurance providers. In short, it requires you to screen customers against a public sanctions list at various touchpoints. (See Public Compliance Communication 44 published on 20 March 2020.)

As an insurance provider, the new regulation requires a variety of changes to your workflow. Implementing this on your own will add a lot of overhead to your team - at a time when there is immense pressure all around.

To help you stay compliant, we’ve released a new extension on Root that provides you with real-time sanction screening, out of the box. With the flick of a switch, sanction screening becomes fully automated at all the required touchpoints in your insurance operation.

If you want, you can stop reading now and immediately speak to us about enabling this. However, if you’re interested in the full low-down, we’ve got you covered below :)

Everything you need to know about sanctions screening

In South Africa (and most other countries), it is illegal to finance and facilitate terrorist and related activities. As such, doing business with persons or entities who are subject to targeted financial sanctions is prohibited.

As an insurance business, you are directly responsible for scrutinising sufficient customer information to ensure that you do not have a sanctioned person/entity as a customer or potential customer. To do this, you need to screen customer information against the United Nations Security Council (UNSC) consolidated sanctions list. The FIC also provides a copy of this list on their website.

(Important to note: a nominated beneficiary is regarded as a potential customer, who, upon the vesting of a policy, becomes your customer. See Public Compliance Communication 48.)

Should you find that a customer or potential customer is listed on the sanctions list, you are required to proceed with the following steps:

• Freeze all funds and property
• Do not proceed with the transaction or business relationship
• Report this to the FIC within 5 business days

In addition to this, your process for scrutinising client information must be comprehensively documented in your risk management and compliance programme (RMCP).

Although the FIC does not require you to have screening functionality, you will “be in contravention of the targeted financial sanctions” should you have a customer identified as a sanctioned person/entity.

Automated sanction screening with Root

We know that ticking compliance boxes requires a lot of effort, and that this is a never-ending “problem” for insurance providers. We also know that, often, compliance can easily be solved with technology - if you have the right infrastructure for it.

We are committed to making compliance a hassle-free experience - providing you with technological solutions wherever we can.

Here’s how our sanction screening tool works:

• It is an add-on to the Root platform, providing real-time sanction screening. It is available internationally, and can be enabled for any of your organisations on Root.

• It stays up to date with the sanctions list of the UNSC.

• Screening against this list automatically occurs at the following touchpoints, in alignment with your customer journey:

  • During new customer onboarding
  • When new beneficiaries are loaded
  • When customer details change
  • When changes are made to existing beneficiaries
  • Before making payouts to beneficiaries

• In addition to the touchpoint screenings, your entire customer base (including beneficiaries) are screened automatically on a regular basis.

• If a policyholder or beneficiary matches with the sanctions list, they are visually highlighted on Root so that all operations staff can see it. Root also sends an automatic email to the compliance managers in your organisation to review and action the flagged individual.

• Flagged persons can be managed directly from the Root dashboard, with a full audit trail being captured.

The FIC also provides a manual search tool on their website, but it doesn’t have an API for direct integration into your customer journey. Therefore, we’ve also made the screening API available. This allows you to easily use the sanction screening functionality in any other parts of your customer journey.

Focus on your customers, we’ll do the heavy lifting :)

In addition to sanction screening, Root also takes care of a few other compliance requirements:

• Keeping your underwriting insurer up to date with 24-hour (daily) data reports and syncs
• Sending and tracking comprehensive communications (email & sms) to your customers throughout their policy’s lifecycle, e.g. policy documents or lapse notices
• FICA customer review questionnaire tool
• Doing bank account verification (ownership) checks
• Adhering to the PPRs and TCF regulations

We believe that, with the right technology, the heavy lifting of running an insurance business can be taken care of. That’s the part we do, so that you can focus on offering more value and creating better experiences for your customers.

Are you keen to know more? Schedule a chat with us right away.

As with all things compliance, remember to check with your compliance officer about your business’ FICA requirements.