OFAC FAQ (Current) # 62 - Compliance for the Insurance Industry [PDF contains amended version(s)]

Date issued: Nov. 13 2024

Last substantive commentary amendment:
Nov. 15 2024

TURBOFAC Commentary (171 words)

Notes:

1) OFAC expects routine re-screening of pre-existing customers. See AXA Equitable Life Insurance Company (2016), Bupa Florida (2014) and GEICO General Insurance Company (2nd action) (2010) for examples of insurance companies being fined for failing to re-screen pre-existing persons insured.

2) FAQ amended on 11-13-24 to specify that “underwriters, brokers, and agents” are each responsible for OFAC compliance, and make other edits.

3) OFAC says “[i]f the blocked person sends a deposit to the insurer along with the application, the deposit must be blocked and reported to OFAC within 10 business days, unless authorized or exempt,” but what if the deposit isn’t sent? Would the mere filing of an application for insurance that a U.S. person cannot accept due to sanctions constitute a “rejected transaction” for purposes of 501.604 of the RPPR? If so, it is somewhat unusual that OFAC would explicitly flag the RPPR obligation to block funds, but not the rejected transaction obligation if funds are not provided along with the application.