MASAK compliance in insurance, beneficiary and source of funds risk
In insurance, the policyholder, the insured, and the beneficiary can be different parties, and these relationships can change during the policy term. MASAK's guideline for insurance and reinsurance brokers examines the same question across six sector-specific indicator types: is the party on paper the actual person directing the transaction? TruvaLI records and screens parties individually, treating any change during the relationship as a new assessment. Deployment is available in the cloud, private cloud, or on-premise.
In the insurance sector, money laundering risk is concentrated not in the payment of the premium, but in whose name, with whose funds, and for what reason the policy is established. The sector is an obliged party under Law No. 5549: the relevant MASAK guideline specifically addresses insurance and reinsurance brokers.
Who is an obliged party, and what does the guideline cover?
The insurance sector is an obliged party under Law No. 5549 on Prevention of Laundering Proceeds of Crime, and reports are submitted electronically through the MASAK.Online system.
The indicators on this page are taken from the guideline published by MASAK for insurance and reinsurance brokers, which defines its own scope this way. Most of the indicators listed stem from the nature of the brokerage relationship and address a question that applies across the entire insurance chain: who is the actual person behind the transaction.
Which indicators does the guideline list?
| Group | Number of types | What it examines |
|---|---|---|
| Customer profile | 16 | Declarations, documents, and avoidance of declaration |
| Sector-specific | 16 | Ultimate beneficial owner (UBO), representative, source of funds |
| Terrorist organizations and risky countries | 18 | Party and geography |
| Non-profit organizations | 6 | Transactions of managers and financial officers |
| Financing of weapons of mass destruction | 17 | Sanctions regime |
What question do the sector-specific indicators ask?
| Type | Description |
|---|---|
| T-012-2.7 | Presence of a third party in all transactions, but this person not actively participating in the transaction |
| T-012-2.9 | The third party directing the transaction not being an official party in official documents |
| T-012-2.10 | Parties to the transaction not being appropriate representatives or failing to adequately explain the party they represent |
| T-012-2.11 | Concealment of the identity of the ultimate beneficial owner (UBO) in the transaction, or parties attempting to hide true ownership |
| T-012-2.12 | Lack of a logical commercial link between the parties involved in the transaction, which cannot be explained by the nature of the transaction |
| T-012-2.13 | Creation of complex ownership and partnership structures or transactions spanning multiple jurisdictions without logical or economic justification |
In insurance, this question is asked multiple times throughout the policy: the policyholder, the insured, and the beneficiary can be different people and can change during the relationship. All six types examine whether the party on paper is the same as the person actually directing the transaction.
Source of funds
T-012-2.15 considers it an indicator when a customer conducts business and transactions to conceal the source of funds, while T-012-2.16 flags attempts to make payments through an entity in a country known for inadequate money laundering laws, secret banking, or tax havens.
T-012-2.1 covers transactions made or attempted that lack a customary, reasonable legal or economic justification or logic, while T-012-2.14 covers a customer exhibiting an indifferent attitude toward risks, commissions, or other transaction costs.
The latter is not about a monetary threshold but rather the customer's attitude, and it is only recorded when the representative's observation can be documented in the case.
Structure and structuring
T-012-2.3 identifies the splitting of transactions that should customarily be conducted in bulk, without logical justification, to avoid detection and reporting. T-012-2.4 covers transactions that should normally recur remaining isolated, or vice versa.
T-012-2.2 flags seemingly independent customers providing the same address, phone number, or similar contact details. This type is particularly significant in insurance: the same contact information can appear in different roles across different policies.
What does the reporting form require?
Suspicious matters that do not involve monetary value are written in the description section of the form, not the suspicious transaction section. This means a case must be capable of carrying non-monetary events as well.
A report can be based on a single transaction or multiple transactions within a specific date range: in the case of multiple transactions, the total amount and the date range are reported together.
How is the suspicion category selected?
When reporting, the suspicion is placed into one of the categories in MASAK's reference table, and each category is mapped to the relevant legal regulation. This means case management must operate with this taxonomy rather than its own free-form tags.
What is the threshold for reports with suspension requests?
The regulation based on Article 19/A of Law No. 5549, titled "Suspension of transactions", governs the suspension of transactions based on a report. The guideline sets a clear threshold for this: beyond mere suspicion, there must be supporting documents or serious indications that the asset subject to the transaction is related to money laundering or terrorist financing offenses, and these must be submitted along with the justifications.
This threshold directly generates a system requirement: evidence must be attached to the case, the justification must be written, and the person who made the decision must be recorded.
How does TruvaLI address this?
Resolving the party structure
The policyholder, the insured, the beneficiary, and the representative are recorded as separate parties, and each is screened against sanctions, PEP, and internal lists. For corporate parties, the ownership structure is resolved to identify the ultimate beneficial owner (UBO). T-012-2.11 and T-012-2.13 cannot be met without this structure.
Relationships are not limited to day one
Parties can change during the policy term. A change in beneficiary, representative, or payment source triggers a new screening and a new risk assessment: the decision made on day one does not remain static.
Relationship analysis
A network of relationships between parties is mapped out using shared addresses, phone numbers, contact details, and payment sources. Types like T-012-2.2 and T-012-2.12, which look at the links between parties, cannot be detected through single-policy checks.
Recording observations
Indicators based on customer attitude, such as T-012-2.14, are not generated by an automated rule. The representative's observation is added to the case as a note, stored alongside the evidence, and included in the justification of the report.
Case, evidence, and category
An alert becomes a case with an owner, a duration, and evidence. The case also carries non-monetary events. The suspicion category is selected from MASAK's taxonomy, the evidence and decision justification are written to an immutable audit trail, and the second-pair-of-eyes approval is managed via maker/checker. The draft report is prepared from the same case data, and the signature remains within the institution.
Related workflows: customer onboarding, source of funds review, sanctions compliance, ongoing monitoring, and regulatory reporting. The framework is on the MASAK obligations page, and the ultimate beneficial owner side is on the KYB and UBO identification page.
Source
MASAK, "Suspicious Transaction Reporting Guideline for Insurance and Reinsurance Brokers", version 1.0.
This page does not constitute legal interpretation; it conveys the indicators and procedures listed in the guideline. Rules, thresholds, and actions are configured according to the institution's own risk policy and obligations.
Common questions
- Does this guideline cover insurance companies?
- The guideline defines its own scope as insurance and reinsurance brokers. Most of the indicators it lists stem from the nature of the brokerage relationship and apply across the entire insurance chain, but the guideline specifically addresses brokers.
- What happens when the beneficiary changes?
- A change in beneficiary, representative, or payment source triggers a new screening and a new risk assessment. The decision made on day one does not remain static.
- Are the policyholder, the insured, and the beneficiary screened separately?
- Yes. All four, including the representative, are recorded as separate parties and screened against sanctions, PEP, and internal lists. For corporate parties, the ownership structure is resolved to identify the ultimate beneficial owner (UBO).
- How is the concealment of the source of funds detected?
- The payment source is recorded and compared alongside the party structure. Types T-012-2.15 and T-012-2.16 of the guideline cover the purpose of concealing the source of funds and payments through entities in countries known as tax havens.
- Does customer data leave the institution?
- Not with an on-premise deployment. The software runs on the institution's own infrastructure, data remains within the institution's information systems, and keys and the audit trail are under the institution's control.
- Who does the guideline address?
- The relevant MASAK guideline specifically addresses insurance and reinsurance brokers in terms of its scope.
- Where is the money laundering risk concentrated in insurance?
- Not in the payment of the premium, but in whose name, with whose funds, and for what reason the policy is established. Early cancellation and transfer are also indicators.
- How is the party structure resolved?
- The policyholder, the insured, and the beneficiary are recorded as separate parties, and each is screened against sanctions, PEP, and internal lists.
- Is the relationship limited to day one?
- No. Beneficiary changes, early cancellations, additional premiums, and transfers occur later and are subject to monitoring.