Premium above Rs. 50k should not be paid in cash, says IRDA

The Insurance Regulatory and Development Authority (Irda) has asked insurance companies to strictly adhere to anti-money laundering (AML) guidelines and has asked them not to accept premiums worth more than Rs 50,000 in cash.

Irda said the premium of more than Rs 50,000 must only be accepted through banking channels such as cheque, credit card or demand draft. Insurance companies have also been advised to evolve lower threshold level for cash acceptance.

In addition, if the premium exceeds Rs 50,000 in a month, insurance companies have been asked to examine all the angles of money laundering closely.

Irda has observed certain instances where AML norms are being selectively interpreted by insurance companies by splitting insurance policies to one or more entities and hence, defeating the spirit of AML guidelines.

Source : www.insuremagic.com