AML: IVASS issued Order 144/2024 amending IVASS Regulation 44/20219

On June 4, 2024, IVASS Order No. 144 was published with amendments and additions to IVASS Regulation No. 44/2019, concerning implementing provisions aimed at preventing the use of insurance companies and insurance intermediaries for the purposes of money laundering and terrorist financing in the area of organization, procedures and internal controls and customer due diligence

1. Why was Order No. 144/2024 issued?

Order 144/2024 was issued in order to make IVASS Regulation 44/2019 fully compliant with the “Guidelines on Policies and Procedures on Compliance Management and the Role and Responsibilities of the Compliance Officer on the Prevention of Money Laundering and Financing of Terrorism” published on June 16, 2022 by the EBA (‘Guidelines’).
With regard to the insurance business, the Guidelines cover:
(a) Italian insurance companies;
(b) Italian insurance intermediaries;
(c) branch offices of insurance companies and insurance intermediaries headquartered in an EU member state, an EEA country or a third country.
The Guidelines aim to:
(i) harmonize the structure of corporate governance and internal controls on AML;
(ii) provide specific guidance on the role and duties of corporate bodies, the AML function holder and the AML/CGT Compliance Officer;
(iii) clarify outsourcing arrangements and group-wide policies, controls and procedures.

2. What are the most important changes introduced by Order 144/2024?

A) Introduction of the definition of “Body with Management Function”
with related identification of the tasks incumbent upon it. These tasks were previously the responsibility of senior management.

B) Introduction of the obligation to appoint an AML/CFT Compliance Officer
By no later than the first renewal of corporate bodies following the publication of the Order and in any case no later than April 30, 2026, all credit institutions and financial institutions subject to the AML regulations must identify a member of the management body responsible for compliance with the regulations on the prevention of money laundering and terrorist financing (AML/CFT Compliance Officer) having the following duties and characteristics:
(i) ensure that the governing body is fully aware of the money laundering and terrorist financing risks to which the enterprise is exposed;
(ii) provide the necessary guidance to the relevant corporate functions;
(iii) provide a link between the anti-money laundering function and the collegiate body with a management function (in its absence, the administrative body);
(iv) provide assurance about the full effectiveness of the system of internal controls for anti-money laundering purposes.

C) Clarification on the Anti-Money Laundering Function:
Regulation 44/2019 is already essentially compliant with the Guidelines about the role and duties of the holder of the Anti-Money Laundering Function (defined as the “function of verifying compliance with existing regulations on the prevention of money laundering and countering the financing of terrorism”)
The Order:
(i) provides clarifications regarding the relationship between the Anti-Money Laundering Function Holder and the AML/CFT Compliance Officer (sub B above);
(ii) introduces a requirement for consultation with the AML Function if the opening or continuation of an ongoing relationship with a high-risk client is subject by law to the approval of a senior manager.

D) Clarification on the outsourcing of the anti-money laundering function.
The Order clarifies that outsourcing can only relate to the tasks of the AML function and not also to the responsibility of the function. Therefore, even in the case of outsourcing, there is still an obligation to appoint an AML Function Holder to perform the tasks of monitoring and controlling the outsourced activities.

E) Obligations on Groups
The Order expands the scope of organizational requirements at the group level as follows:
a) identification of a Group AML/CFT Compliance Officer (from among the members of the body with management function of the last Italian parent company);
b) designation of a Group Anti-Money Laundering Function Holder with simultaneous indication of his or her duties, which include: i) coordination between the functions AML of the individual components of the group; ii) drafting of a group-wide risk self-assessment; iii) submission of an annual report to the bodies of the last Italian parent company; iv) development of group-wide procedures, standards and methodologies;
c) establishment of control procedures at the group level.

F) Collaboration Agreements with Insurance Intermediaries.
Clarifications are provided on these agreements and their content with reference to the information to be exchanged in relation to “same transactions” and “same clients”
(please note that these notions were already identified by Article 18 of Regulation No. 44/2019 as amended by Measure No. 111/2021).

G) Changes to eligibility requirements
Following the issuance of Order No. 142/2024 (which, in implementation of the Decree of the Ministry of Economic Development No. 88/2022, supplements and amends IVASS Regulations No. 29/2016 and No. 38/2018), changes are introduced regarding the eligibility requirements for the office of the exponents and the holder of the AML function, as well as the SOS manager, if a different person.