Frequently Asked Questions

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?

… 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 FAQ 11 . … State insurance statutes regulate an insurer's… Read more

102. How can an insurer or reinsurer participate in worldwide insurance markets through global insurance policies if, by definition, coverage extends to potential risks in sanctioned countries?

… but the legal effect of the clause should prevent the extension of a prohibited service (e.g., insurance coverage or indemnification) to sanctioned persons or jurisdictions, or for prohibited activities. Insurers should also ensure such clauses do not create… Read more

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

… 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… Read more

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

… Yes, provided that the provision of global travel insurance and travel assistance relate to travel that is exempt or authorized. The authority … the traveler is a U.S. person traveling to Cuba pursuant to a valid OFAC authorization, a U.S. insurer may issue… 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?

… 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 … may identify to the policyholder the… Read more

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

… 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 … programs, including screening frequency, will vary depending on the size and nature of… Read more

774. May U.S. insurers issue policies and pay claims related to group health, life, and travel insurance on behalf of third-country nationals traveling to or within Cuba?

… Yes, provided that the insurance policy is a global policy, and not specific to the third-country national’s travel to … persons subject to U.S. jurisdiction to issue or provide global health, life, or travel insurance policies for individuals ordinarily resident… Read more

103. What if market circumstances of the relevant commercial setting do not permit the use of a U.S. sanctions-specific exclusionary clause?

… OFAC recognizes that U.S. insurers and reinsurers often compete in international markets where non-U.S. insurers are willing and able to issue global insurance policies without an exclusion that applies to U.S. sanctions, or where such clauses… Read more

775. May U.S. insurers, either directly or through third-country subsidiaries, issue policies, or pay insurance or reinsurance claims related to non-U.S. persons providing goods or services that facilitate travel by third-country nationals from a third country to Cuba?

… Other than certain global health, life, or travel insurance policies for individuals authorized by 31 CFR § 515.580 , absent specific authorization from OFAC, U.S. insurers and their subsidiaries are not permitted to issue policies, provide reinsurance coverage,… Read more

777. May persons subject to U.S. jurisdiction provide certain insurance-related services (such as cargo or hull insurance, or reinsurance) to persons subject to U.S. jurisdiction who are engaging in authorized activity in Cuba?

… Where the provision of insurance-related services is directly incident to activity authorized by general or specific … directly incident to engaging in religious activities in Cuba. The provision of health insurance-, life insurance-, and travel… Read more

Frequently Asked Questions

Office of Terrorism and Financial Intelligence