What is Article 492 that your Mexican Insurance Agent requests?

Money laundering has crept into the operational areas of insurance entities. Life insurance, property insurance, auto insurance … with the purchase of insurance is possible that someone tries to launder money. When we talk about money laundering we refer to any action that seeks to legalize money of illicit origin in order to hide its origin. When this money is “laundered”, the offender can make use of it without revealing where it comes from. Although the entities most susceptible to this type of financial operations are Banks, the insurance field is also a target of this crime.

As a result of the foregoing, article 492 of the Insurance and Bonding Institutions Regulations has the purpose of strengthening the rules to prevent, detect and report acts, omissions or operations that allow aid or cooperate in the commission of the offenses provided for in Article 139 and 400 Bis of the Federal Criminal Code that refers to operations with resources of illegal origin. The finance authority, under the concept “know your client”, requires insurance officers to fully identify the people who perform financial transactions.

For this reason, both insurers and insurance agents should ask their clients for the information and documentation -which we indicate later in this blog- in order to integrate an individual file, prior to the conclusion of the insurance or surety contract.

Why is compliance with Article 492 of insurance in Mexico required?

Because most international agreements on this subject require that all financial transactions are verified to eliminate or minimize the possibility of money laundering activities and insurance policies are considered a financial instrument.

The purpose of this provision is to prevent illegal funds from entering the financial system. In this regard, we are not only talking about drug money but about any funds that are not processed and comply with current tax legislation.

In accordance with the foregoing, in order to carry out any insurance transaction, it is mandatory for the insurance companies and brokers -insurers- to obtain the following information regarding the identification of the client:

Obtaining data | Required

  • Name of Insure  insurance-money-laundering
  • Complete address of the insured
  • The nationality of the insured
  • Date of incorporation of the insured
  • Insured – Type of business
  • Insured’s phone
  • Name of the legal representative

If you have:

  • E-mail address of the legal representative
  • Website of the company

Documents by client | Required

  • Valid official identification with photo and signature of the legal representative (driver’s license or passport).
  • Legal power
  • Incorporation documents. In case of being a foreign entity, its articles of incorporation duly apostilled by the appropriate government agency are required.
  • In the USA the Secretary of State does it – in the State where the insured was incorporated.
  • Proof of address of the company in Mexico, no more than 3 months old (water, gas or electricity bill).
  • Federal Taxpayer Registry or Tax ID number of the insured.

In conclusion

The documentation of Article 492 requested by your Insurance Agent is the mechanism through which Mexican laws have paid attention to the money laundering illicit. Due to this, they require compliance with the requirements as set by local Insurance regulations. This legislation requires the establishment of measures and procedures to prevent and detect money laundering operations and report them.

In compliance with article 492, both companies and insurance brokers are required to comply with the full identification of all named insureds.  Beneficiaries that appear in an insurance policy issued in Mexico should be included.  Therefore, the client must provide the insurance and bonding agent with the information indicated above in a complete manner.

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