1200. If a non-sanctioned person files a claim with their insurance company for a loss caused by a blocked person, such as a designated terrorist organization, is the insurance company permitted to pay the claim?
OFAC is aware that insurers at times receive claims from non-sanctioned persons in non-comprehensively sanctioned jurisdictions for losses caused by individuals or entities on OFAC's List of Specially Designated Nationals and Blocked Persons (SDN List). For example, a U.S. insurance company may receive a claim request for death, injury, or property damage caused by a Specially Designated Global Terrorist. Under this scenario, the mere fact that a blocked person has caused the loss does not in and of itself create a blocked interest in the policy or any claim or payment under the policy, nor does it constitute a dealing involving the blocked person. Therefore, U.S. insurers may pay such claims to...
1) This guidance, issued on 11-13-24 concurrent with amendments to a number of other historic insurance-related FAQs (e.g. FAQ # 63 and FAQ # 64), makes a number of precedential statements concerning the relationship between the blocking prohibition and insurance policies. Most notably, OFAC clarifies that an “insurance company [may be] permitted to pay [a] claim” to a non-sanctioned person where the losses are caused by blocked persons. The example given is “a U.S. insurance company may receive a claim request for death, injury, or property damage caused by a Specially Designated Global Terrorist”. OFAC says that “the mere fact that a blocked person has caused the loss does not in and of itself create a blocked interest in the policy or any claim or payment under the policy, nor does it constitute a dealing involving the blocked person”. This is a crucially important...