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Sharper rules, stronger compliance: MAS updates AML/CFT Guidelines for insurers

The Monetary Authority of Singapore recently revised its notices and guidelines on anti-money laundering and countering the financing of terrorism (“AML/CFT”), applicable to financial institutions (“FIs”), including direct life insurers,^₁  direct general insurance business, and foreign insurers operating in Singapore.²  The revisions took effect from 1 July 2025. 

Here is what you need to know 

The main revisions relevant to insurance businesses (including direct life insurers, direct general insurance business, and foreign insurers) involve mandating proliferation financing (“PF”) assessments as well as clarifying and updating the requirements for filing of suspicious transaction reports (“STRs”).

Additionally, specifically for direct life insurers, the Guidelines to Notice 314 also include amendments to clarify MAS’ supervisory expectations on AML/CFT measures, including on screening and Source of Wealth and Source of Funds establishment.

The purpose of the revisions is to enhance the financial sector’s AML/CFT regime, with reference to global standards set by the Financial Action Task Force (“FATF”).

(A) Mandating proliferation financing assessments

Notice 314 and both sets of guidelines now expressly refer to PF, when they previously did not. Insurers are now expressly required to carry out PF risk assessments, as part of their AML risk assessments. 

In practice, insurers should have already been covering PF risks as part of their existing AML/CFT or sanctions compliance controls. 

Offences under MAS’ sanctions regulations for financial institutions against the proliferation of weapons of mass destruction have been designated as predicate offences for money laundering, under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992.

(B) Amendments to clarify and update the requirements for filing of STRs

(i) Timelines

All persons, including insurers, must file a suspicious transaction report (“STR”) with the Suspicious Transaction Reporting Office (“STRO”), when it knows or has reasonable grounds to suspect that any property represents the proceeds of, was used in connection with or is intended to be used in connection with criminal conduct.³

Under the previous AML/CFT notices and guidelines, insurers were expected to file STRs with STRO promptly.  MAS’ previous expectation was that companies take not more than 15 business days to evaluate internally whether an STR should be filed, from the time the case was first flagged by an employee/officer. 

MAS has now clarified its expectations that:

• The filing of an STR should not exceed 5 business days after the suspicion was first established, unless there are exceptional circumstances.⁴ 
• IIn cases involving sanctioned parties, and parties acting on behalf of or under the direction of sanctioned parties, the STR should be filed as soon as possible, and no later than 1 business day after the suspicion was first established.⁵

MAS has not prescribed timelines for the conclusion of internal investigations, to determine whether there is a suspicion that property represents or is used in connection with criminal conduct. In refraining from setting out such precise timelines, MAS acknowledged the wide-ranging nature and complexity of cases, as well as the range of financial institutions’ profiles, scale and complexity of operation.⁶

(ii) Requirement to provide copies of STRs to MAS

As MAS can already access the STRs filed with STRO directly, MAS has removed the requirement for direct life insurers to extend copies of all STRs filed to MAS for information. However, MAS has clarified that direct life insurers will need to do so upon request by MAS.⁷ 

(C) Changes to the AML/CFT guidelines to clarify and reflect supervisory expectations for direct life insurers when addressing higher ML/TF risks

MAS emphasised its supervisory expectations that financial institutions, including insurers, should implement robust controls and processes to ensure the:

• Timely review of suspicious transactions, and 
• Mitigation of ML/TF/PF concerns.

These supervisory expectations are outlined in MAS’ Consultation Paper⁸, and they are of general application to all financial institutions and variable capital companies.

In addition, specifically for direct life insurers, the Guidelines to MAS Notice 314 has been amended to require direct life insurers to ensure that there are processes in place to:⁹

• Identify and prioritise the review of concerns of higher ML/TF risks;¹⁰
• Ensure that such concerns of higher ML/TF risks are reviewed promptly; and
• Require any such concerns of higher ML/TF risks that cannot be reviewed promptly to be escalated to senior management or a similar oversight body, for appropriate ML/TF risk mitigation measure to be applied. 

We highlight some of the key amendments. 

(i) Screening 

MAS clarified that where necessary, ML/TF information sources used for screening should include pertinent search engines used in countries or jurisdictions closely associated with the person screened, and screening should be conducted in the native language(s) of the person screened.¹¹

(ii) Source of wealth information obtained by a direct life insurer

Source of wealth generally refers to the origin of the customer’s and beneficial owner’s entire body of wealth (i.e. total assets). MAS has clarified in the Guidelines to Notice 314 that a customer’s source of wealth includes seed money and gifts. 

The source of wealth information obtained by the direct life insurer should give an indication about:

• the entire body size of wealth that the customer and beneficial owner would be expected to have; and 
• how the customer and beneficial owner acquired the wealth.

This is to enable the direct life insurer to make an assessment as to whether a customer or beneficial owner present a higher risk for ML/TF.¹²

(iii) Corroboration of information regarding the source of wealth and source of funds 

Direct life insurers are expected to corroborate the information regarding source of wealth and source of funds. In this regard, direct life insurers should take a risk-based approach and focus on the more material and riskier sources, and exercise prudence in the use of non-independent sources of information such as customer representations, assumptions and benchmarks.¹³

(iv) Ongoing monitoring where risks have increased 

For direct life insurers, MAS expects that, where there are indications that the risks associated with existing business relations have increased (e.g. anomalies in the control or conduct of an account or discrepancies relating to a customer’s source of wealth), the direct life insurer should promptly implement commensurate risk mitigation measures, including enhanced ongoing monitoring such as:¹⁴

• enhanced monitoring of transactions (including pre-transaction checks); and 
• impositions of restrictions on the account. 

The direct life insurer should also request additional information and conduct a review of the customer’s risk profile in order to determine if further measures are necessary.

(v) Processes regarding indicators of fraudulent or tampered data

In relation to processes regarding fraudulent or tampered data, documents or information, MAS expects a direct life insurer to ensure that:¹⁵

• Staff are provided with adequate guidance on how to identify indicators of fraudulent or tampered data, documents or information.
• Processes are in place to ensure that such indicators are escalated.
• Processes are in place to ensure that the appropriate ML/TF risk mitigation measures are applied in a timely manner. 

Examples of indicators of fraudulent or tampered data, documents, or information set out by MAS include:¹⁶

• significant discrepancies in a customer’s representations (e.g. relating to material sources of wealth or significant transactions) that are found when these representations are checked against independent sources of information, such as corporate data reports;
• anomalies in financial statements that are not in line with the direct life insurer’s understanding of the customer’s profile; and
• lack of sign-off by relevant certifying parties such as an auditor or notary public.

The recent amendments to MAS’ AML/CFT Guidelines demonstrate MAS’ continued effort to strengthen Singapore’s AML/CFT regime, to ensure it remains clear and aligned with international standards. Financial institutions should keep an eye on future updates and check that their present policies, processes and controls are in line with MAS’ expectations. 

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¹For direct life insurers, the relevant documents are: (a) MAS’ Notice 314 on the Prevention of Money Laundering and Countering the Financing of Terrorism – Direct Life Insurers, dated 30 June 2025 (“Notice 314”); and (b) MAS’ Guidelines to MAS Notice 314 on Prevention of Money Laundering and Countering the Financing of Terrorism, dated 1 July 2025 (“Guidelines to Notice 314”).

²For other MAS licensed insurers (under s 11 of the Insurance Act 1966), foreign insurers operating in Singapore under a foreign insurer scheme, and direct life insurers writing accident and health policies, the relevant document is the MAS’ Guidelines on Prevention of Money Laundering and Countering the Financing of Terrorism – Direct General Insurance Business, Reinsurance Business and Direct Life Insurance Business (Accident & Health Policies), dated 1 July 2025 (“Guidelines for non-life insurers”).

³S 45(1) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992.

⁴For Non-Life Insurers, see Guidelines for non-life insurers at paragraph 7.6. For Life Insurers, see Guidelines on Notice 314, paragraph 12-1.

⁵For Non-Life Insurers, see Guidelines for non-life insurers at paragraph 7.6. For Life Insurers, see Guidelines on Notice 314, paragraph 6-15-2.

⁶MAS Consultation Paper on Proposed Amendments to AML/CFT Notices and Guidelines, paragraph 2.13.

⁷Notice 314, paragraph 12.2.

⁸MAS Consultation Paper on Proposed Amendments to AML/CFT Notices and Guidelines at paragraph 2.13.

⁹Guidelines to Notice 314, paragraph 12-A.

¹⁰MAS has also amended the Guidelines to Notice 314 to include characteristics of higher-risk shell companies that require enhanced customer due diligence, see Guidelines to Notice 314, paragraph 8-2.

¹¹Guidelines to Notice 314, paragraph 6-15-3.

¹²Guidelines to Notice 314, paragraph 8-5-6.

¹³Guidelines to Notice 314, paragraph 8-5-8.

¹⁴Guidelines to Notice 314, paragraph 6-10-3.

¹⁵Guidelines to Notice 314, paragraph 6-5-5A.

¹⁶Guidelines to Notice 314, paragraph 6-5-5A.