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64. If an insurance policy is held by the employer on behalf of its employees, is it permissible for an insurer to maintain the policy if it covers a blocked person on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List), since the insurer is transacting only with the employer and not with the blocked person?

Answer

If an insurer has knowledge that a person covered under a group policy, for example a worker's compensation policy, is blocked pursuant to OFAC sanctions, the insurer’s coverage of that person pursuant to the worker's compensation policy is blocked. If a claim is made under the blocked portion of the policy, the claim cannot be paid without authorization from OFAC. Any premium payments made by or on behalf of the blocked person should be blocked and placed in a blocked interest-bearing account at a U.S. financial institution.

Alternatively, under some group policies, for example, a group travel policy issued to a company for their employees, an insurer may not know the names of those covered until a claim is filed. In this scenario, once a claim is filed by a blocked person, the insurer would then have reason to know of their requirement to block that individual’s coverage pursuant to the policy and any other property of that person, such as unearned premium payments. Accordingly, the insurer would be required to block that individual’s coverage and place any payments made by or on behalf of the blocked person in a blocked interest-bearing account at a U.S. financial institution.

If a person covered under a group policy is on one of OFAC's other sanctions lists or is located in a jurisdiction where OFAC has imposed broad sanctions prohibitions, a different set of restrictions may apply. If a claim is filed by an individual on one of OFAC's other sanctions lists, please see the relevant OFAC implementing regulations and the Sanctions Programs and Country Information page on OFAC's website for program-specific information or contact OFAC for additional guidance.

Date Updated: November 13, 2024

Date Released
January 30, 2015