New Delhi: Insurance regulator Irda on Thursday said that quoting PAN number would be mandatory for making cash payments of more than Rs 50,000 in insurance premium, a move which would help the authority track sources of funds.
“With a view to ensuring that premiums are paid out of clearly identifiable sources of funds, it has been decided to permit premium/proposal deposits remittances in cash beyond Rs 50,000 per transaction subject to the customer quoting PAN,” Irda said in a circular.
The guidelines, which aim at curbing money laundering and dealing with the menace of terror financing in the insurance sector, would take effect from 1 November.
Irda said it would be the responsibility of the insurers to verify the details of Permanent Account Number (PAN), which is issued to tax payers.
In view of increasing threat of terror financing, the Insurance Regulatory and Development Authority (Irda) said, “It becomes imperative to obtain the details of the person or entity funding the premium.”
It further said that any cash transaction above Rs 10 lakh, and integrally connected cash transactions above Rs 10 lakh per month, should be reported to the Financial Intelligence Unit-India (FIU-IND) by 15th of every succeeding month.
Insurers, it added, should also lay down proper mechanisms to check any kind of attempts to avoid disclosure of PAN details.