The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States. OFAC acts under Presidential national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze assets under US jurisdiction. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments.
OFAC is responsible for promulgating, developing and administering the sanctions for the Treasury under all federal statutes. The OFAC laws and regulations promote national and international security by requiring asset freezing of: oppressive governments, international terrorists, narcotics traffickers or other specially designated nationals (SDNs) and blocked persons.
Summary of OFAC Regulations for the Insurance Industry
As part of its enforcement efforts, OFAC publishes a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. Collectively, such individuals and companies are called “Specially Designated Nationals” or “SDNs.” Their assets are blocked and U.S. underwriters, brokers, agents, primary insurers and reinsurers are prohibited from engaging in transactions that in any way involve individuals or entities appearing on the SDN list established by OFAC regulations. To check names appearing on the OFAC list, please log on to the OFAC website at https://sdnsearch.ofac.treas.gov/
What does the HPIA do to comply with OFAC?
The HPIA violates OFAC requirements if it issues a policy, receives premiums, pays claims, facilitates a transaction or otherwise deals with any person or entity on the SDN List. OFAC prohibitions not only apply to policyholders, but also to additional insureds, premium payers, beneficiaries, loss payees, intermediaries and administrators, banks and bank lien holders, third-party liability claimants and other insurance-related entities. To check names appearing on the OFAC list, please log on to the OFAC website at https://sdnsearch.ofac.treas.gov/
The HPIA complies with the OFAC laws by checking persons and entities associated with all transactions where money changes hands. All potential positive matches are researched and the HPIA may request additional information. Matches are reported to the US Treasury. The HPIA will cease and desist all monetary transactions with persons and entities that are deemed to be a match.