EXCELLENCE LIFE INSURANCE COMPANY GROUP ANTI-MONEY LAUNDERING AND ANTI-TERRORIST FINANCING POLICY FOR CANADIAN OPERATIONS.

Transcription

1 EXCELLENCE LIFE INSURANCE COMPANY GROUP ANTI-MONEY LAUNDERING AND ANTI-TERRORIST FINANCING POLICY FOR CANADIAN OPERATIONS Table of Contents Introduction... 2 Scope and Application... 2 Definitions... 2 Overview... 3 Board of Directors... 3 Senior Management... 3 Chief Anti-Money Laundering Officer... 4 Procedures... 4 Training... 5 Risk Assessments... 5 Self-Assessment of Controls... 6 Listings and Sanctions Laws... 6 Independent Review of the Anti-Money Laundering/Anti-Terrorist Financing Program... 6 Review and Amendment of this Policy... 6 Appendix A: Companies covered by this Policy... 7 Appendix B: Sample Mandate of the CAMLO... 8 Appendix C: Modification History Page 1 of 10

2 1. Introduction Money laundering consists of any act or attempted act to disguise the source of money or other assets derived from criminal activity. Terrorist financing provides funds for terrorist activity. Both are criminal offences in Canada. Generally, there are three stages in the money laundering process and these stages can overlap: Placement Placing the proceeds of crime (usually cash) into the financial system through transactions such as bank deposits; Layering Converting the proceeds of crime into another form and creating layers of financial transactions to disguise the source and ownership of the funds and to conceal the audit trail; and Integration Reintroducing the laundered proceeds of crime back into the economy to create the appearance of legitimacy. The Industrial Alliance Group of Companies is committed to deterring and detecting money laundering and terrorist financing and to preventing the use of its products and services for illegal purposes. This Policy provides an overview of the anti-money laundering ( AML ) and antiterrorist financing ( ATF ) program at the Industrial Alliance Group of Companies operating in Canada. It reflects the intent of the board of directors and senior management to ensure prudent compliance with applicable laws and regulatory requirements. An effective AML/ATF program is an integral part of reputation risk management. 2. Scope and Application This Policy applies to those companies in the Industrial Alliance Group of Companies operating in Canada that are subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17 (the Act ) and related Regulations (the Regulations ). Appendix A lists the companies covered by this Policy. 3. Definitions In this Policy, the word Company refers to Industrial Alliance Insurance and Financial Services Inc. ( IAIFS ), which acts both as the parent company of the Industrial Alliance Group of Companies and as an operating company, and the operating subsidiaries that are subject to the Act and Regulations. Guidelines mean AML/ATF guidelines issued by Regulators. Regulator means, as the context requires, the Financial Transactions Reports Analysis Centre of Canada ( FINTRAC ), the Autorité des marchés financiers ( AMF ), the Office of the Superintendent of Financial Institutions of Canada ( OSFI ), and any other organization that regulates a Company covered by this Policy. Page 2 of 10

3 4. Overview An AML/ATF program shall include: oversight by a board of directors or a committee of the board, and senior management; the appointment of a Chief Anti-Money Laundering Officer (a CAMLO ) with responsibility for implementing the AML/ATF program; development and application of written policies and procedures that are kept upto-date; the assessment, and documentation, of the inherent money laundering and terrorist financing risks faced by the Company; implementation of controls to mitigate money laundering/terrorist financing risks; an ongoing, documented AML/ATF training program; an independent review of the AML/ATF program every two years; and where required by Regulator s Guideline, a self-assessment of controls. An AML/ATF program shall be routinely evaluated, updated, and enhanced in order to reflect changes to business activities, legal requirements, and applicable supervisory standards. 5. Board of Directors Depending on the governance structure of the Company, either the board of directors, or its audit committee, shall be responsible for overseeing the AML/ATF program and this oversight accountability shall be documented in their mandate. They shall receive sufficient pertinent information to satisfy themselves as to the overall adequacy of the Company s AML/ATF program. At a minimum, they shall receive an annual report from the CAMLO and a biennial report from the Internal Audit Department covering the operation and effectiveness of the AML/ATF program. The Company s board of directors shall appoint the CAMLO. Either the board of directors, or its audit committee, as applicable, shall ensure the CAMLO is appropriately qualified, exercises an independent oversight function, and receives adequate resources to administer an effective AML/ATF program. 6. Senior Management Senior management is responsible for implementing procedures and controls commensurate with the money laundering and terrorist financing risks to which their business areas are exposed. They are ultimately accountable for the AMF/ATF program in their business areas, including: compliance with the Act, Regulations, and applicable Guidelines; ensuring money laundering and terrorist financing risks are identified, and adequately controlled, and that resources are sufficient and appropriate; and ensuring employees are qualified to implement the AML/ATF program and that employees understand the importance of doing so. Page 3 of 10

4 7. Chief Anti-Money Laundering Officer The CAMLO shall have appropriate professional qualifications, experience, and strong leadership skills. He or she shall have a solid working knowledge of anti-money laundering and anti-terrorist financing regulatory requirements, a sound knowledge of the operations of the Company, and a thorough knowledge of money laundering/terrorist financing risks and concomitant controls in the Company. The CAMLO is responsible for implementing the Company s anti-money laundering/anti-terrorist financing program. His or her specific duties shall be set out in a written mandate. A sample mandate is attached as Appendix B. The CAMLO s mandate shall be tailored to the specifics of the Company to which it applies. As, and when, requested by the CAMLO of IAIFS, the CAMLOs of the operating subsidiaries (listed in Appendix A) shall provide reports on their respective anti-money laundering/anti-terrorist financing programs to the CAMLO and the Audit Committee of IAIFS. 8. Procedures This Policy shall be supplemented by written procedures that facilitate compliance with the Act, the Regulations, Guidelines, and this Policy. Because the risk of money laundering and terrorist financing differs depending on the line of business, procedures shall be tailored to the particular risks inherent in specific business areas and shall be commensurate with the money laundering and terrorist financing risks they are intended to mitigate. Where applicable, procedures shall include, but not be limited to: background information on money laundering and terrorist financing; objectives of the AML/ATF program; key areas of inherent money laundering/terrorist financing risk; indicators of suspicious transactions, or suspicious attempted transactions, specific to the business area; a clear reporting hierarchy for escalating money laundering/terrorist financing issues and unusual transactions; a protocol for identifying transactions required to be reported to FINTRAC; the Company s protocol for filing reports with FINTRAC and other Regulators, and the importance of maintaining the confidentiality of those reports; client due diligence standards, including: o client identification requirements, client verification requirements, and other know your client requirements, including determining whether an individual is a politically exposed foreign person; o the types of clients considered to be high risk; o the enhanced due diligence applicable to high risk clients, including procedures for politically exposed foreign persons; o time limits for meeting client due diligence requirements; and the records retention requirements established by the Act and the Regulations. Page 4 of 10

5 The evolving nature of AML/ATF regulation, and changes to a Company s operations, require that procedures, including application forms and other forms used to transact business, be updated on a regular basis to ensure their continued effectiveness. Employees shall be provided with AML/ATF procedures applicable to their business area. 9. Training The CAMLO shall ensure there is a documented AML/ATF training program in place that is specific to the operations of the Company. Training materials, and presentations, shall be kept up-to-date to reflect changes to the legislation, Regulators Guidelines, and changes to the Company s products and business operations. Appropriate training shall be made available to members of the board of directors (or the audit committee, as applicable), senior management, employees, and other persons who are authorized to act on the Company s behalf pursuant to the legislation. Training shall be tailored to the target audience and provide the information the trainees require to effectively fulfill their AML/ATF responsibilities. New employees, whose duties come within the scope of the Act and Regulations, shall receive initial training within a reasonable time after commencing employment with the Company. Refresher training shall be provided annually. Employees, and others acting on behalf of the Company, shall be trained to recognize unusual business activity and to immediately escalate suspicious transactions (and suspicious attempted transactions) in accordance with established escalation procedures. 10. Risk Assessments The Company s AML/ATF compliance program shall include risk assessments. A risk assessment is a process that identifies money laundering and terrorist financing risks inherent in the operations of a Company; assesses the relative seriousness of the identified risks; and highlights the higher risks among them. By analyzing its vulnerabilities, a Company is equipped with the information it needs to implement appropriate risk mitigation strategies and is better able to: develop, and implement, appropriate risk-based controls; allocate resources to business areas where the inherent risks are high; and comply with enhanced due diligence requirements for high risk clients. A risk assessment documents the money laundering and terrorist financing risks to which a Company is exposed by considering: clients and business relationships; products and services; delivery channels through which products and services are sold; the geographic locations of operations; and other relevant factors. Page 5 of 10

6 Risk assessments change over time and changes to any of the above noted criteria should be documented. It is expected that risk-assessments will be reviewed, and if necessary updated, once a year. 11. Self-Assessment of Controls At least annually, a Company, where required by Guideline issued by its Regulator, shall, conduct a self-assessment of its control measures. This self-assessment should cover the adequacy of the inherent risk assessment, the AML/ATF Policy, the AML/ATF procedures, the training program, and other controls implemented to mitigate money laundering and terrorist financing risks. All significant information used in a selfassessment process should be verified or readily verifiable. 12. Listings and Sanctions Laws Legislative measures against terrorists, terrorist groups, and other listed individuals and entities (collectively referred to as Listed Persons ) are contained in, and implemented through, various Canadian statues and regulations (collectively referred to as Listings and Sanctions Laws ). These Listings and Sanctions Laws impose various compliance obligations targeting, among other things, the financial activities of Listed Persons and specific countries. Every company in the Industrial Alliance Group of Companies shall ensure compliance with its own specific legal obligations under the Listings and Sanctions Laws. The Industrial Alliance Group of Companies shall not knowingly transact business with sanctioned individuals, entities or countries identified by appropriate government institutions or agencies. 13. Independent Review of the Anti-Money Laundering/Anti-Terrorist Financing Program Every two years, the Company s AML/ATF program shall be reviewed by the Internal Audit Department for the purpose of testing its effectiveness. This effectiveness training shall cover all key components of the AML/ATF program. The findings of the Internal Audit review shall be reported, in written form, to the board of directors (or the audit committee as the case may be) and within thirty days after the report is completed, to appropriate members of senior management and the CAMLO. 14. Review and Amendment of this Policy This Policy shall be reviewed every two years. It shall also be reviewed whenever there are substantive changes to legislative or regulatory requirements. Amendments to this Policy must be approved by the board of directors of IAIFS and shall be communicated expeditiously to the CAMLOs of the subsidiaries listed in Appendix A. Each CAMLO shall ensure that amendments to this Policy are tabled, in a timely manner, before his or her audit committee and/or board of directors. Page 6 of 10

7 GROUP ANTI-MONEY LAUNDERING AND ANTI-TERRORIST FINANCING POLICY FOR CANADIAN OPERATIONS Companies covered by this Policy: APPENDIX A Industrial Alliance Insurance and Financial Services Inc. FundEX Investments Inc. IA Clarington Investments Inc. Industrial Alliance Investment Management Inc. Industrial Alliance Securities Inc. Industrial Alliance Trust Inc. Investia Financial Services Inc. Michel Rhéaume et associés Ltée National Financial Insurance Agency Inc. Solicour Inc. The Excellence Life Insurance Company Page 7 of 10

8 GROUP ANTI-MONEY LAUNDERING AND ANTI-TERRORIST FINANCING POLICY FOR CANADIAN OPERATIONS APPENDIX B Sample Mandate of the Chief Anti-Money Laundering Officer The Chief Anti-Money Laundering Officer (the CAMLO ) is appointed by the board of directors and is responsible for the enterprise-wide implementation and oversight of the Company s anti-money laundering and anti-terrorist financing program. Working with senior management, and key compliance personnel, the CAMLO oversees the Company s compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c.17 (the Act ) and the accompanying Regulations and applicable Guidelines. In addition, the CAMLO oversees the Company s compliance with Canada s legislative measures against terrorists, terrorist groups, and other listed and sanctioned individuals, entities, and countries. The CAMLO shall have unfettered access to, and direct communication with, senior management and the board of directors, or the audit committee, as applicable. He, or she, shall also have unfettered access to all pertinent information, records, and personnel in order to effectively carry out their mandate. The CAMLO is accountable for: oversight of AML/ATF control activity in all relevant business areas for the purpose of establishing a reasonable threshold level of control consistency throughout the Company; keeping the AML/ATF program up-to-date; overseeing the development, implementation, and documentation of: an assessment of inherent money laundering and terrorist financing risks (including ensuring new products, services, and business acquisitions are subject to timely inherent risk analysis); and overseeing the adoption of appropriate measures to control identified risks; AML/ATF procedures that are kept up-to-date and approved by a senior officer; ongoing training programs for senior management, employees, and other persons authorized to act on the Company s behalf; self-assessments of AML/ATF controls; and action plans, including timelines, to correct deficiencies in AML/ATF controls. working with management to develop appropriate methods to control identified risks, including developing, and documenting, measures to monitor high risk clients/situations; Page 8 of 10

9 ensuring a protocol is in place for filing reports with the Financial Transactions Reports Analysis Centre ( FINTRAC ) and other Regulators; monitoring business activities, including outsourced activities, to confirm compliance with anti-money laundering and anti-terrorist financing requirements; the sufficiency of resources allocated to the AML/ATF program, including those required to identify and report suspicious transactions and suspicious attempted transactions; ensuring the Internal Auditor is aware that effectiveness testing of the AML/ATF program must be carried out at least every two years; satisfying himself that systems and other processes that generate information used in reports to senior management and the board of directors (or audit committee, as applicable) are adequate and appropriate, use reasonably consistent reporting criteria, and generate accurate information; and reporting, at least once a year, to senior management and to the board of directors (or audit committee, as applicable), pertinent information about AML/ATF program adequacy and issues. The CAMLO may delegate duties as he or she deems appropriate; however the CAMLO shall take reasonable measures to be satisfied that such duties are carried out satisfactorily. Page 9 of 10

10 GROUP ANTI-MONEY LAUNDERING AND ANTI-TERRORIST FINANCING POLICY FOR CANADIAN OPERATIONS APPENDIX C Modification history to the current policy Adopted by the Board of Directors of IAIFS on: November 7, 2012 Adopted by the Board of Directors of Excellence on: February 20, 2013 Revisions to the Policy adopted by the Board of Directors of IAIFS on: Page 10 of 10