Closing compliance gaps: An insurer’s guide to meeting MAS 314’s updated expectations
Introduction
The Monetary Authority of Singapore (MAS) has strengthened the Anti-Money Laundering (AML)/Countering Funding of Terrorism (CFT) compliance for insurers through its revised MAS Notice 314: Prevention of Money Laundering and Countering the Financing of Terrorism – Direct Life Insurers, which took effect on 1 July 2025.¹
These amendments were released together with an updated set of guidelines to MAS Notice 314, which clarify MAS’ supervisory expectations.²
The new updates introduce heightened clarity, compressed timelines, expanded definitions, and a sharper risk-based supervisory posture. For insurers, the question is clear: Is your current AML/CFT framework ready for MAS’ heightened expectations?
In this article, we outline the key updates of Notice 314, their practical implications, and what insurers should do next.
Key updates at a glance
Below are the most significant revisions introduced under the updated Notice 314 and its guidelines.
1. Proliferation Financing (PF) integrated into ML/TF risk assessments
The revised Notice 314 clarifies that ML risk includes PF risk, requiring insurers to integrate PF considerations into enterprise-wide risk assessments and customer-level assessments. This is significant because PF risk is no longer framed as a “sanctions-only” matter — under Notice 314, it becomes a mandatory component of AML/CFT frameworks, risk assessments, monitoring and escalation.
Insurers must therefore ensure that PF risks are:
- Assessed within enterprise-wide and customer-level risk assessments.
- Embedded into Customer Due Diligence (CDD), Enhanced Due Diligence (EDD) and ongoing monitoring processes.
- Reflected in alerting scenarios, screening configurations and typology libraries.
- Escalated and documented with the same level of rigour applied to ML/TF risks.
2. Suspicious Transaction Reporting (STR) deadlines sharply tightened
The guidelines to Notice 314 now require insurers to:
- File STRs within 5 business days after “suspicion is established”, except in exceptional circumstances.
- File STRs within 1 business day for cases involving sanctioned persons or persons acting under their direction.
- Understand that “suspicion established” refers to the point of concluding that an STR is warranted – not the conclusion of internal fact-finding.
Additionally, the automatic requirement for direct life insurers to send MAS copies of all STRs has been removed, though MAS may still request them.
The compressed timelines reinforce MAS’ expectation of speed, escalation and investigation agility, with the regulator linking delayed filings to weak controls.
Insurers must therefore ensure that their STR processes are streamlined, supported by appropriate workflow automation, and underpinned by clearly defined escalation pathways. With MAS clarifying the point at which “suspicion is established,” any ambiguity in the STR decision process has been substantially narrowed — requiring insurers to act with greater speed and certainty.
3. Strengthened expectations for CDD/EDD: SOW/SOF, corroboration, screening
The updated guidelines introduce sharper expectations in several areas:
Source of Wealth (SoW) and Source of Funds (SoF)
- SoW must now reflect the customer’s entire body of wealth and how it was accumulated.
- Gifts, seed capital and third-party funding must be evaluated as part of SoW/SoF.
- Insurers must corroborate SoW/SoF, with customer declarations and generic benchmarks considered insufficient for higher-risk cases.
Insurers have historically faced challenges in demonstrating adequate rigour in their SOW and SOF assessments. These strengthened requirements mean that higher-risk customer segments — particularly ultra-high-net-worth individuals, cross-border funders, and relationships involving third-party contributions — will necessitate more substantive inquiry, enhanced documentation, and a higher standard of verification to meet MAS’ revised supervisory threshold.
Screening processes
Screening must use jurisdiction-appropriate search engines, including native-language platforms, where customers or beneficial owners are linked to specific jurisdictions.
Insurers who purchase screening solutions from external providers are expected to understand the functions and limitations of these search engines. To ensure this new requirement is met, insurers will need to assess language functionality as part of their calibration testing.
Escalation and governance
Unresolved high-risk matters must be prioritised and escalated to senior management.
MAS is heightening expectations regarding the quality and transparency of governance over AML/CFT processes. Senior management is expected to have clear visibility of, and accountability for:
- Unresolved or protracted CDD matters.
- Delays in reviews or decision-making.
- Significant risk escalations.
- The progress and effectiveness of remediation efforts.
This elevates the role of governance, oversight and documentation to the core of supervisory scrutiny. Insurers must therefore ensure that governance structures are not only well-defined on paper but are operationally effective, evidence-based, and capable of demonstrating timely and informed senior-management engagement.
4. Enhanced expectations for ongoing monitoring and risk prioritisation
Notice 314 requires insurers to conduct ongoing monitoring “commensurate with ML/TF risks”. The updated guidelines further specify that insurers must:
- Detect changes in the customer’s risk profile.
- Promptly review and escalate higher-risk matters.
- Ensure that delays trigger senior-management oversight.
- Update CDD when material changes occur.
To meet the heightened expectations under the revised Notice 314, insurers must transition from static, manually driven compliance processes to continuous, data-enabled AML/CFT frameworks. Insurers that continue to depend on periodic reviews or manual analysis will face increasing difficulty demonstrating compliance.
MAS’ supervisory stance makes it clear that insurers must:
- Implement data-driven monitoring tools capable of detecting behavioural and transactional changes in real time.
- Conduct ongoing risk reassessments rather than relying solely on scheduled periodic reviews.
- Frequently update monitoring scenarios and thresholds to reflect emerging typologies, sectoral trends and geopolitical developments.
- ensure that customer risk profiles, alerts, and CDD refresh triggers are continuously recalibrated based on new information.
In short, AML/CFT must operate as a living framework — one that is responsive, adaptive, and informed by timely data — if insurers are to meet MAS’ revised supervisory standard.
What insurers should do now — Our guidance
Now that 6 months have elapsed since the regulation became live, insurers should have completed phases 1 and 2 below (the basics of regulatory change management). Insurers should now be looking at phases 3 and 4 (remediation, optimisation and automation).
Phase 1: Gap assessment & prioritisation
- Map current controls against Notice 314 and its guidelines.
- Integrate PF into ML/TF risk assessments.
- Review STR end-to-end workflows and measure time-to-file metrics.
- Identify high-risk segments requiring priority uplift (e.g., single-premium policies, offshore funding).
Phase 2: Policy, procedure & framework refresh
- Update policies to include PF, revised STR timelines, enhanced SoW/SOF, native-language screening.
- Build or refine escalation matrices and governance frameworks.
- Refresh training materials for employees and senior management.
Phase 3: Remediation & monitoring enhancement
- Remediate legacy high-risk customers.
- Enhance alerting, monitoring and screening tools (including language-specific capabilities).
- Implement dashboards tracking STR timeliness, risk escalations and review backlogs.
- Conduct independent assurance on compliance with Notice 314.
Phase 4: Continuous improvement & board oversight
- Establish ongoing MI reporting to Board/AML Committees.
- Conduct periodic testing and mock inspections.
- Embed PF as a standing risk dimension in enterprise risk frameworks.
- Ensure documentation is always “MAS inspection-ready”.
How we can help
We provide end-to-end support to help insurers meet MAS 314 requirements:
- Comprehensive gap analysis and benchmarking.
- Policy refreshes and process redesign (i.e., target operating model).
- High-risk customer remediation.
- Technology and vendor advisory (screening, monitoring, workflow).
- Senior management and staff training.
- Independent assurance and mock MAS inspections.
Our experience with Notice 314, MAS inspections and cross-border AML/CFT requirements enables us to provide practical, regulator-ready and business-aligned support.
Sources
Graham Dawes
