Frequently Asked Questions

1199. Can a claim be paid under a policy issued to a blocked individual or entity if the payment is to an innocent third-party (for example, the injured party in an automobile accident)?

1199 … The insurance company should contact OFAC for additional guidance. OFAC will work with you on the specifics of the case. Although authorizing payments to blocked persons is rarely aligned with the U.S. foreign policy and national security objectives of OFAC sanctions, circumstances may weigh… Read more

1200. If a non-sanctioned person files a claim with their insurance company for a loss caused by a blocked person, such as a designated terrorist organization, is the insurance company permitted to pay the claim?

1200 … OFAC is aware that insurers at times receive claims from non-sanctioned persons in non-comprehensively sanctioned jurisdictions for losses caused by individuals or entities on OFAC's List of Specially Designated Nationals and Blocked Persons (SDN List). For example, a U.S. insurance company… Read more

104. Can an insurer offer global travel insurance and worldwide travel assistance without violating U.S. sanctions?

104 … Yes, provided that the provision of global travel insurance and travel assistance relate to travel that is exempt or authorized. The authority granted to the President by the International Emergency Economic Powers Act (IEEPA) does not include the authority to regulate or prohibit, directly… Read more

68. If a policyholder becomes a Specially Designated National (SDN) or blocked person after policy issuance, can the insurer notify the policyholder that the policy is now "blocked"?

68 … Yes. The insurer may notify the policyholder that the policy is blocked without obtaining a specific license from OFAC. Date Updated: November 13, 2024 … If a policyholder becomes a Specially Designated National (SDN) or blocked person after policy issuance, can the insurer notify the… Read more

69. When notifying a policyholder that their policy is "blocked" due to OFAC sanctions, may the insurer also instruct the policyholder not to send further premium payments or that the insurer will not accept additional premium payments under this account?

69 … The insurer may instruct the policyholder that in accordance with applicable U.S. laws and regulations administered by OFAC, the insurer must place any subsequent premium payments into a blocked account. For funds, such as unearned premium payments, that are blocked in addition to the policy,… Read more

61. State insurance statutes regulate an insurer's ability to withhold claim payments, cancel policies, or decline to enter into policies. In some cases, insurers must commit an ostensible violation of state insurance regulations to comply with OFAC regulations. Do OFAC regulations preempt state insurance regulations in this context?

61 … Yes. OFAC's regulations under the Trading with the Enemy Act (TWEA) and the International Emergency Economic Powers Act (IEEPA) are based on presidential declarations of national emergency and preempt state insurance regulations. For more information on who must comply with OFAC sanctions, see… Read more

62. What should an insurer do if an applicant for a policy, or the underlying insured activity, is subject to OFAC sanctions?

62 … Insurance industry participants, including underwriters, brokers, and agents, are responsible for compliance with OFAC sanctions throughout the lifecycle of their involvement with an insurance policy or other product or service. If a U.S. insurer receives an application for a policy from a… Read more

63. What should an insurer do if it discovers that a policyholder or a named beneficiary is added to OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) or located in a jurisdiction subject to sanctions?

63 … If an existing policyholder or a named beneficiary is blocked by OFAC and the provision of insurance services is not authorized or exempt, then the insurer is required to block the policy or relevant portion of the policy (e.g., the individual's policy under a group health insurance plan),… Read more

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?

64 … 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… Read more

65. How frequently is an insurer expected to screen its databases for OFAC compliance?

65 … 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… Read more

Frequently Asked Questions

Office of Terrorism and Financial Intelligence