OFAC may impose civil penalties for sanctions violations based on strict liability, meaning that a person subject to U.S. jurisdiction may be held civilly liable even if such person did not have knowledge that it was engaging in a transaction that was prohibited under sanctions laws and regulations administered by OFAC.
OFAC recommends insurers use a risk-based approach to sanctions compliance consistent with OFAC’s Framework for Compliance Commitments. Sanctions compliance programs, including screening frequency, will vary depending on the size and nature of an insurer’s business (including the particular risk factors of its products and customer base) and its relevant regulator. Routine screening of all issued policies, policyholders, beneficiaries, and other relevant counterparties improves an insurer’s ability to comply with applicable OFAC regulatory requirements.
In addition to screening all relevant policyholders, beneficiaries, and counterparties to an insurance policy upon issuance (as described in FAQ 62), insurers should also consider screening against OFAC sanctions at policy renewal, policy amendment (including, but not limited to, the addition of insured parties or beneficiaries to the policy), claim submission, claim payment, updates by OFAC to its sanctions or sanctions lists, and at any other time when an insurer may be exposed to sanctions risk. OFAC's sanctions programs and lists are updated frequently. Screening only at the point of policy issuance may expose insurers to sanctions risk, for example, providing financial benefit to subsequently blocked persons.
Date Updated: November 13, 2024