The insurance industry is subject to OFAC regulations. U.S. underwriters, brokers, agents, primary insurers, and others are prohibited from engaging in prohibited transactions that involve certain countries and entities. Penalties for compliance violations can be severe - up to $5 million and 30 years in prison can be levied for failing to properly handle transactions. The insurance industry is also now subject to the USA PATRIOT Act requirement to develop risk based anti-money laundering programs.
OFAC publishes the following examples
of insurance transactions that would be blocked or prohibited:
- A life insurance policy naming a resident of Havana,
Cuba as any listed beneficiary.
- A liability policy covering the pharmaceutical operations
of a lab in Bogota, Colombia,
which has been named as a specially designated narcotics
trafficker.
- A property insurance policy written for an international
hotel chain which covers hotels in Tehran, Iran.
- A marine cargo or "goods in transit" policy
insuring a shipment of Iranian crude oil shipped
from Egyptian ports to a Spanish buyer.
There are thousands of blocked entities. Doing unauthorized transactions with any of these can result in severe penalties.
USA PATRIOT Act and OFAC regulations are designed to reduce the incidence of the aforementioned crimes while helping to mitigate any associated risks. As such, abiding by these regulations should be integral to your company's compliance policies.
What is OFAC and the USA PATRIOT Act? What practical steps can be taken to comply with these and other government regulations while mitigating various forms of risk? You may find the OFAC and USA PATRIOT Act Policy and Procedure Guides helpful in answering these questions.
Compliance with these regulations is often very complex and time intensive. Bridger Insight XG's advanced identity verification and watch list screening solution is designed to help you simplify the complex duty of compliance, while protecting your company's most valuable asset... your good reputation. Bridger Insight XG is ChoicePoint's premier USA PATRIOT Act and OFAC compliance solution, trusted by more clients than any comparable product. |
