Question: My vehicles have been insured with the same company for more than 10 years. When the policy came up for renewal this year, I was asked to fill out a client-information form. Among the questions asked were the following:

1) Did I hold a prominent public position, such as a "senior politician, senior government official or an executive of a political party"?

2) Was I related to any person in any of those groups?

3) Where did the money used to pay the premiums come from?

I was also asked to provide the names and addresses of two references and proof of my address.

What do these matters have to do with insurance?

- JC, Kingston 8

Answer: Welcome to the club! Several persons contacted me on the subject before you did. Also, when my wife and I changed insurers in 2008, we had to complete two separate customer-information forms or 'cinforms'.

This was in addition to the application or proposal form that we filled out. My wife refused to complete hers.

I told her that we had two choices: one was to break the law and drive without insurance; the other was to answer the questions in the forms and get coverage for the car. We did the latter.

Add to that the cases of denhaiduk@hotmail.com and sanwalker@hotmail.com.

They wrote letters of protest to the editor of this newspaper. These are not the usual insurance matters that I generally write about. As a service to you and my other readers, I decided to do a little research after you and I spoke.

The History

Your questions had me rushing in several directions - all at once.

I visited the website of the Ministry of Justice http://www.moj.gov.jm/. I downloaded a copy of The Money-Laundering Act. The Proceeds of Crime Act 2007 (POCA) was not listed.

My next virtual stop was at the insurance regulator www.fscjamaica.org. I located a 187-page document: 'Guidelines on Anti-Money Laundering and Counter-Financing of Terrorism'. It was last revised in March 2007.

An undated two-page document gave an update on POCA. I still had not seen that law with my own two eyes. The librarian in the Attorney General's Department sent me the introduction to the bill before POCA became law.

Finally, I sourced the cinforms of four insurers that in 2008 controlled nearly two-thirds of the $10.2 billion motor market.

After those activities, I felt ready to answer your questions.

Money laundering is a crime. Insurers and brokers, among other entities, are required to put steps in place to prevent fraud, theft, money laundering and the financing of terrorism and to protect the financial system. The money-laundering law says these institutions should "pay special attention to all complex, unusual or large business transactions" and, "upon reasonable suspicion that the transaction could constitute or be related to money laundering - promptly report the transaction to the designated authority".

The Financial Services Commission's (FSC's) anti-money-laundering guidelines are quite specific. For example, one set of rules - section V of the guidelines - has the title 'Know Your Customer'.

Repeal of Act

It says: "The prospective customer must be identified whenever: an account is to be opened, or a business relationship is established, or a significant one-off transaction is undertaken."

When POCA became law nearly two years ago, it resulted in the repeal of the Money-Laundering Act.

POCA provides for "the investigation, identification and recovery of the proceeds of crime and connected matters". Exactly what are "connected matters", I do not know at this time.

Want to stay in touch

The four insurers have sought to comply with POCA in different ways. Only one said it needed to collect information in order to obey the law.

Inexplicably, another one said information was being collected because "we want to stay in touch with you".

One company wanted proof of address, the names and addresses of two references and the source of funds being used to pay the premium. Another asked about the source of the funds that was used to acquire the asset being insured.

One warned that since the cinform would be attached to and form part of the policy, "any misrepresentation whatsoever can render the insurance of no effect".

None of the forms provided any guidance about who was a "senior politician, senior government official or executive of a political party".

What is also very interesting is that most of the information which is being sought in the cinform is also being requested separately by insurers in their application/proposal forms.

Frankly, given the wide variation in approach in complying with POCA, all of this talk about transparency and openness, and in the absence of more information, the cinforms appear to be a complete waste of time.

If, like most persons, you operate on the 'straight and narrow' and value your privacy, remember that your insurers - and the banks - are collecting a great deal of information about you and your family. Perhaps when one is about to make a decision about which insurer to select, one should also consider the contents of the cinform!

Cedric E. Stephens provides independent information and free advice about the management of risks and insurance. Email: aegis@cwjamaica.com.