FATF Guidance on the RBA for the Life Insurance Sector
The purpose of this Guidance is to:
Applying a risk-based approach is neither mandatory nor prescriptive. A properly applied risk-based approach does not necessarily mean a reduced burden, although it should result in a more cost effective use of resources. For some countries, applying a rules based system might be more appropriate. Countries will need to make their own determinations on whether or how to apply a risk-based approach.
The Guidance is primarily addressed to public authorities and life insurance companies and intermediaries (i.e. life insurance brokers and agents) and aims to set out the key elements of an effective risk-based approach and identifies the types of issues that both public authorities and life insurance companies and intermediaries may wish to consider when applying a risk-based approach.
The Guidance recognises that each country and its national authorities, in partnership with its life insurance companies and intermediaries, will need to identify the most appropriate regime, tailored to address individual country risks. Therefore, the Guidance does not attempt to provide a single model for the risk-based approach, but seeks to provide guidance for a broad framework based on high level principles and procedures that countries may wish to consider when applying the risk-based approach with the understanding that this guidance does not override the purview of national authorities.