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MPF intermediaries
MPFMPF Intermediaries ExaminationBefore accepting an ILAS application, an insurer learns that the applicant is a serving cabinet minister in another country. Which measures must it take?
Answer: obtain senior management approval and establish the source of wealth and funds. For a non-Hong Kong PEP, the II must obtain senior management approval and take reasonable measures to establish the source of wealth and the source of funds.Why not the others:• report the applicant to the JFIU before deciding: Being a PEP is not in itself a suspicion to report; the rule is enhanced due diligence.• reject the application, as non-Hong Kong PEPs cannot be accepted: PEPs are not banned; enhanced due diligence is required before the relationship is set up.• apply simplified due diligence, as the applicant is a public figure: A non-Hong Kong PEP calls for enhanced, not simplified, due diligence.Watch out: Treating PEP status as a ban or as a report trigger; it calls for enhanced due diligence.Rule: Non-Hong Kong PEP: before setting up or continuing the relationship, get senior management approval and establish source of wealth and source of funds.Source: IA Investment-linked Long Term Insurance Examination Study Notes, 2024 Edition (7th ed., Nov 2024; for exams from 17 Feb 2025), 5.4.1(b)(iv), p. 5/18
Treating PEP status as a ban or as a report trigger; it calls for enhanced due diligence.
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