Anti-money laundering (AML)

What is money laundering?

Money laundering is the term that describes the various methods used by criminals to conceal the true origin and ownership of the money that they make from crime. If the money laundering process is successful it allows the criminal to maintain control of these proceeds and ultimately, provide a legitimate cover for their source of income.

Why do we need anti-money laundering regulations?

It is essential to the fight against crime that criminals be prevented, wherever possible, from legitimising the proceeds of their criminal activities by laundering money through financial institutions such as Clerical Medical.

Laundering the proceeds of criminal activity through the financial system is vital to the success of these criminal operations. The increased integration of the world's financial systems and the removal of barriers to the free movement of capital have enhanced the ease with which criminal money can be laundered. Once illegitimate funds have entered the financial system they are harder to trace and confiscate.

In addition, recent world events have increased awareness of terrorist activities and the need for increased vigilance when dealing with financial transactions.

What are the money laundering regulations?

The Isle of Man Criminal Justice (Money Laundering) Code 2008 requires regulated companies to implement anti-money laundering and counter terrorist financing policies, procedures, and practices.

Scottish Widows Limited is regulated by the Isle of Man Government Insurance and Pensions Authority (IPA). The IPA sets out the regulatory requirements for Isle of Man authorised insurers within the Insurance (Anti-Money Laundering) Regulations 2008 and the accompanying Guidance Notes on Anti-Money Laundering and Preventing of Terrorist Financing - for Insurers (Long Term Business).

What is 'Know Your Customer'?

The overriding requirement behind anti-money laundering legislation and regulation is 'Know Your Customer'. This requires that the identity of the applicant must be established prior to entering a business relationship. This applies equally wherever the applicant may be based and whether the applicant is personal, corporate, trust, nominee or any other category. Verification is required for all new business relationships and transactions. Where a firm is unable to verify the identity of an applicant, by law it is unable to proceed any further with the application.

Please be assured that these requirements in no way call into question your integrity. We must respond to regulatory requirements in a responsible manner however, to ensure as far as possible that criminals are hindered in their attempts to exploit the financial services industry.

We are keen to stress that it is in all our interests that the Isle of Man remains synonymous with financial excellence and best business practice, and we would like to take this opportunity to thank you for your co-operation in this matter.