PEPs & Sanctions in Insurance

In insurance, a PEP is a client, policyholder or counterparty who holds,
or recently held, a prominent public role, or who is a close family member or associate of someone who does. Insurers, brokers and MGAs screen for PEPs because of their higher exposure to bribery and corruption, and screen against sanctions lists because dealing with a sanctioned person or company is a criminal offence.
 
 
Insurers, brokers and MGAs are under growing pressure to strengthen onboarding controls, improve ongoing monitoring and maintain greater operational visibility across counterparties and trading relationships.
 
 
This guide explores PEPs and sanctions compliance within insurance, including regulatory expectations, operational challenges and the growing role of RegTech in supporting screening and oversight processes.

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What are Politically Exposed Persons (PEPs)?

Politically Exposed Persons (PEPs) are individuals who hold prominent public positions or have close associations with those who do.

Because PEPs may present elevated corruption or financial crime risks, regulated firms are often required to apply enhanced due diligence and ongoing monitoring procedures.

Within insurance, PEP screening may form part of:

  • Onboarding workflows
  • AML processes
  • Counterparty due diligence
  • Customer risk assessments
  • Ongoing compliance monitoring

Find out how to identify a PEP at onboarding.

What are Politically Exposed Persons (PEPs)?

What are Sanctions?

Sanctions are restrictions or measures imposed by governments and regulatory authorities against individuals, organisations or jurisdictions.

Insurance firms are expected to maintain appropriate sanctions screening and monitoring processes to help identify restricted entities and manage compliance risks.

Sanctions obligations may include:

 
 
 
 
 
 
 
 

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Why PEP & Sanctions Screening Matters in Insurance

Insurance firms operate within increasingly interconnected international trading environments involving counterparties, brokers, reinsurers and delegated authority relationships.

As a result, organisations face growing pressure to:

  • Strengthen due diligence controls
  • Improve operational visibility
  • Monitor ongoing risk exposure
  • Maintain stronger governance frameworks
  • Reduce exposure to financial crime risks
  • Support regulatory compliance obligations

PEP and sanctions screening is no longer viewed solely as an onboarding activity. Many firms now require continuous monitoring and operational oversight across wider trading relationships.

Common PEP & Sanctions Compliance Challenges

Many insurance organisations continue to face operational challenges linked to screening, monitoring and maintaining audit-ready compliance processes.

  • Fragmented Screening Processes

    Managing checks across multiple systems, spreadsheets and workflows.

  • Ongoing Monitoring Requirements

    Maintaining visibility after onboarding has been completed.

  • Ownership and Relationship Complexity

    Understanding counterparties, UBOs and connected entities.

  • Manual Administration

    Managing large volumes of reviews, documentation and approvals manually.

  • Audit Readiness

    Preparing evidence for regulatory reviews and governance oversight.

  • Operational Visibility

    Maintaining clearer oversight across distribution and trading relationships.

<h2 id="ongoing-monitoring">Ongoing Monitoring and Compliance Oversight</h2>

Ongoing Monitoring and Compliance Oversight

Effective screening processes increasingly depend on continuous oversight rather than point-in-time verification alone.

Insurance firms often need to:

  • Monitor counterparties continuously
  • Reassess risk exposure
  • Review changing ownership structures
  • Maintain compliance records
  • Evidence governance decisions
  • Support operational transparency

As regulatory expectations evolve, many firms are investing in more scalable and technology-enabled monitoring processes.

Where Screening Breaks Down in Practice

REG Technologies helps insurers, brokers and MGAs streamline screening workflows, improve operational visibility and strengthen ongoing compliance oversight across regulated trading relationships.

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How RegTech Supports PEP & Sanctions Screening

RegTech solutions are helping insurance firms simplify operational screening processes while improving governance visibility and compliance oversight.

  • Centralised Screening Processes

    Manage compliance activity and screening workflows within one operational environment.

  • Ongoing Monitoring

    Maintain visibility beyond initial onboarding and verification.

  • Improved Operational Oversight

    Strengthen visibility across counterparties, ownership structures and trading relationships.

  • Workflow Automation

    Reduce manual administration linked to screening and compliance reviews.

  • Audit-Ready Governance

    Maintain structured records supporting compliance and oversight processes.

  • Scalable Compliance Operations

    Support growing regulatory and operational screening requirements more efficiently.

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Risk Management and Governance

PEP and sanctions compliance increasingly forms part of wider governance, operational resilience and financial crime frameworks across insurance organisations.

Firms are under growing pressure to demonstrate:

  • Effective oversight processes
  • Stronger operational controls
  • Ongoing monitoring capabilities
  • Scalable governance frameworks
  • Audit-ready compliance records
  • Consistent due diligence procedures

As operational complexity increases, scalable compliance workflows and technology-enabled oversight are becoming increasingly important across the insurance industry.

PEP & Sanctions Resources

Explore additional guidance and educational resources covering PEP screening, sanctions compliance and operational oversight within insurance.

How to Identify Politically Exposed Persons (PEPs): A comprehensive Guide for Insurance Professionals

Conducting Politically Exposed Persons Checks is an important process for firms that work in the insurance and financial services sectors, particularly with the pressure they face by regulators such as the FCA. PEPs screening is also crucial for reducing the risks linked to money laundering, corruption, and other forms of financial misconduct.

Learn more: How to Identify Politically Exposed Persons (PEPs): A comprehensive Guide for Insurance Professionals
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Adverse Media Screening

The insurance industry and the regulatory requirements around counterparty risk is always evolving, and so the obligations to minimise the risk and safeguard customers is becoming much more challenging for insurance companies. In the wake of COVID-19, financial crime continues to increase and whilst not all of these can be stopped, it is crucial they are recognised.

Learn more: Adverse Media Screening
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Sanctions and Russia

With the UK government imposing a tranche of sanctions on Russia in response to the situation in Ukraine, make sure you're up to date with UK sanctions obligations. All firms regulated by the Financial Conduct Authority must have appropriate policies in place to make sure they comply with sanctions legislation. This includes carrying out regular and appropriate checks of sanctions lists...

Learn more: Sanctions and Russia
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The Future of MGA Collaboration: Tech Innovation as the Key Differentiator

The Future of PEP & Sanctions Screening

Regulatory expectations around screening, due diligence and operational oversight are expected to continue increasing across insurance and financial services.

Insurance firms are likely to invest more heavily in:

  • Ongoing monitoring capabilities
  • Operational transparency
  • Automated screening workflows
  • Centralised governance processes
  • Scalable compliance operations
  • Technology-enabled oversight

As global regulatory complexity increases, firms are increasingly focused on maintaining more resilient and operationally efficient compliance frameworks.

Frequently Asked Questions

What is a Politically Exposed Person (PEP)?

A Politically Exposed Person (PEP) is an individual who holds a prominent public position or has close associations with those who do.

Why are PEPs considered higher risk?

PEPs may present elevated corruption or financial crime risks, which is why regulated firms often apply enhanced due diligence and ongoing monitoring procedures.

What is sanctions screening?

Sanctions screening is the process of checking individuals, organisations and counterparties against consolidated sanctions lists such as the UK OFSI list and the EU and OFAC equivalents. In insurance it applies to customers, beneficiaries, brokers, MGAs and delegated authority partners, and it runs at onboarding and continuously thereafter, because list entries change without notice.

Why is sanctions compliance important in insurance?

Insurance firms are expected to maintain effective sanctions controls to help identify restricted entities, reduce financial crime risks and support regulatory compliance obligations.

What challenges do firms face with PEP and sanctions monitoring?

The recurring problems are practical rather than technical. Screening sits in one system and counterparty records in another, so matches are hard to evidence later. Ownership structures obscure who the ultimate beneficial owner is. Re-screening depends on someone remembering a date in a spreadsheet. When the regulator asks what was checked and when, the audit trail has to be reassembled by hand.

How often should insurers re-screen counterparties against PEP and sanctions lists?

Screening at onboarding alone is not sufficient. Sanctions lists change without notice and a counterparty’s PEP status can change with an appointment or an election. Firms are expected to screen continuously, or at minimum on a defined risk-based cycle, with event-driven checks at claims payouts, policy assignments, beneficiary changes and partner onboarding.

Strengthen PEP & Sanctions Oversight Across Insurance Operations

REG Technologies helps insurers, brokers and MGAs streamline screening workflows, improve operational visibility and strengthen ongoing compliance oversight across regulated trading relationships.

Book a Demo