ENFORCEMENT INFORMATION FOR June 3, 2010
GEICO General Insurance Company Settles Foreign Narcotics Kingpin Sanctions Regulations Allegations: GEICO General Insurance Company ("GEICO") of Chevy Chase, Maryland, has remitted $11,000.00 to settle allegations of violations of the Foreign Narcotics Kingpin Sanctions Regulations occurring on or about September 2006 to June 2007. OFAC alleged that GEICO provided an automobile insurance policy without an OFAC license to an individual named as a Specially Designated Narcotics Trafficker ("SDNTK") pursuant to the Foreign Narcotics Kingpin Designation Act. The alleged violations involved the receipt of two premium payments totaling $2,265. OFAC determined that GEICO did not voluntarily disclose this matter to OFAC and that the alleged violations constituted a non-egregious case. The base penalty for the two apparent violations was $ 11,000. The settlement amount reflects OFAC’s consideration of the following General Factors: GEICO does not screen its existing policyholders database for SDNs as the SDN list is updated but only on an annual basis. GEICO has committed to making improvements to remedy this gap in its OFAC compliance program.
1) The language of the snippet suggests that the policyholder was added to the SDN list after the initial issue of the policy, highlighting the expectation that even current ongoing customers must be rescreened on a rolling basis, as the SDN list is updated.
2) The provision of insurance to a blocked person is a provision of a service whether or not a claim is eventually made.