A study on the knowledge and ability of the Maltese insurance workforce to counter money laundering

Abstract

This study looks at the knowledge and ability of the Maltese insurance workforce to combat money laundering, in order to determine if relevant gaps in this regard exist within the Maltese insurance industry, and the various ways in which the situation can be remedied. To fulfil this purpose, this study seeks to identify specific anti-money laundering (AML) knowledge and ability that the Maltese insurance workforce lacks or does not possess, and the extent to which these relate to specific socio-economic and demographic factors. A vast body of interdisciplinary literature, mainly on AML legislation and regulations was reviewed, and based on the AML regulatory requirements identified, an online questionnaire was developed and distributed to individuals currently working in the Maltese insurance sector. Results indicate that the Maltese insurance workforce has knowledge and ability gaps in relation to AML legislation, regulations and FIAU Implementing Procedures, detection of suspicious transactions and activities, assessment of customer risk, and risk-based customer due diligence. Furthermore, certain socio-economic and demographic factors, mainly the completion of relevant university courses, working for an insurance brokerage, working in life insurance underwriting, and experience in the insurance sector positively influence people’s knowledge and ability in these four AML areas and practices. On the other hand, age and working in general insurance underwriting have a negative correlation with people’s knowledge and ability in these four AML areas and practices. These findings call for remedial actions by relevant stakeholders, namely insurance entities, FIAU, and the Government. Insurance entities should incentivise their staff members to pursue relevant university courses, and provide additional training on these four AML areas and practices depending on the staff members’ experience in the insurance field. Meanwhile, the FIAU should also provide additional webinars and training sessions on such topics, and the government and parliament members should amend the definition of ‘subject persons’ under the PMLFTR to include general insurance business as ‘relevant financial business’.