The South African Reserve Bank (SARB) last week announced it has imposed administrative sanctions on Old Mutual Life Assurance Company for non-compliance with the Financial Intelligence Centre Act (FICA).
The sanctions include a financial penalty totalling R15.9 million, of which R5.9m was conditionally suspended for 36 months from 23 July 2024, the SARB said in a statement on Friday.
The non-compliance was discovered by the Prudential Authority (PA) during an inspection conducted in 2020. The PA, operating within the administration of the SARB, is mandated to supervise and enforce compliance by accountable institutions with the provisions of FICA.
The PA said it received the co-operation of Old Mutual Life throughout the process, and the life insurer has undertaken the necessary remedial action to address all the identified compliance deficiencies and control weaknesses.
The SARB said the PA’s inspection identified the following areas of non-compliance:
- Old Mutual Life did not comply with its customer due diligence (CDD) obligations in terms of sections 21(1) and/or 21A to 21H of FICA because it did not perform due diligence on the sampled active customer relationships. The non-compliance included the failure to verify the physical address of clients and identify the beneficial owners of clients.
The PA cautioned Old Mutual not to repeat the conduct that led to the non-compliance and imposed a fine of R6m, of which R2m was conditionally suspended for 36 months.
- Old Mutual Life did not comply with its cash threshold reporting (CTR) obligations in terms of section 28 of FICA, read with regulations 22B, 22C and 24(4), because it failed timeously to report cash transactions above the threshold to the Financial Intelligence Centre (FIC).
The PA cautioned Old Mutual not to repeat the conduct that led to the non-compliance and imposed a fine of R4.9m, of which R1.9m was conditionally suspended for 36 months.
- Old Mutual did not timeously report suspicious and unusual transactions to the FIC as required by section 29 of FICA, read with regulation 24(3).
The life insurer was cautioned not to repeat the conduct that led to the non-compliance.
- Old Mutual failed to comply with section 42 of FICA because it did not adequately develop and implement its Risk Management and Compliance Programme, which included:
- identifying, assessing, and monitoring its money laundering (ML), terrorist financing (TF), and proliferation financing risks;
- adequately risk-rating clients before on-boarding;
- evidence that the ML/TF risk rating methodology is applied consistently;
- implementing secondary ML/TF risk indicators;
- evidence that it had documented its consideration of geographical location risks; and
- adequately implementing its anti-money laundering and countering the financing of terrorism obligations and controls in relation to its CDD, CTR, and suspicious and unusual transaction reporting obligations.
- The PA cautioned Old Mutual Life not to repeat the conduct that led to the non-compliance and imposed a fine of R5m, of which R2m was conditionally suspended for 36 months.
- Old Mutual said it has agreed to accept the PA’s total fine of R15.9m.
- The life insurer said in a statement that the fine was the result of gaps identified in its anti-money-laundering programme, not because Old Mutual was found to be a conduit for money laundering.
I’m so happy that finally old.mutual is seen for who they really are, we as hard working people have acknowledged old.mutual as a trusting company with thoughts of trusting our hard earned money for a better future for ourselves and our family. Instead they get brokers who have manipulated people and robbed people of their hard earned money. It’s easy to see now how they got brokers to rob the people because they themselves have been doing it and finally it so good to see them caught. My husband worked hard for every penny he earned. We were an average family and knowing my husband he wanted a better life for us, an old mutual broker came and signed my husband up for a life policy, I was in the presence of both.my husband and the broker when he questioned my husband about his health. My husband never faulted when it came to being him being honest. When the broker asked about his health. He.mentioned he had high blood pressure and that it was treated and under control so how come when my husband passes away in 2013.. i got to see old.mutual for who they really were.. not only does old.mutual not pay out but there’s discrepancies in his policy. It stated that my husband did not suffer any high blood pressure… my husband stated his entire family had high blood pressure and sugar and heart attacks ran in his family..but this thieving broker came sold us a policy which he obviously tampered with. This broker had family (his dad) working in old mutual as well. Do you know what this broker did.. when my husband passed away.. he told me to tell “the good doctor to inform old mutual that my husband only got high blood pressure after taking the policy”… I have addressed this to old mutual and even showed them the emails received from the broker asking me to tell the doctor to lie . I obviously could not tell the doctor to do this. I have taken this up with the ombudsman..makes you wonder who else does old.mutual have covering their thieving and scheming ways. I’ve struggled alone to raise my 2 young boys.. I did not even get any of my husbands premiums back that they promised they would give. Nothing . Not one cent. And OLD MUTUAL I will never have anything good to say about you. You were supposed to be there for the people. Not for yourselves. Getting fake , lying, manipulate brokers to do your dirty work. Us people put so much trust in url and what did we get back.. only people that got rich were url, Taking from the poor to help url get rich. Wow
Old Mutual is really dissapointing..So many bad reviews..Feel like moving all my policy’s.
Same thing happened when my mother past away they saying she had diabetes but she died from natural causes in hospital which she picked up in hospital urine tract infection
We are still waiting for our money ,why do we have to wait for 30 days n being told to be patient ,after this i will make my decision.????