OFAC Compliance

The Office of Foreign Assets Control (OFAC) of the U.S. Department of Treasury administers and oversees a series of laws that impose economic sanctions against hostile entities to further U.S. foreign policy and national security objectives. OFAC is responsible for promulgating, developing and administering the sanctions for the Treasury under all federal statutes. The OFAC laws and regulations promote national and international security by requiring asset freezing of: oppressive governments, international terrorists, narcotics traffickers or other specially designated nationals (SDNs) and blocked persons.

Summary of OFAC Regulations for the Insurance Industry

Underwriters, brokers, agents, primary insurers and reinsurers are prohibited from engaging in transactions that in any way involve individuals or entities appearing on the SDN list established by OFAC regulations. To check names appearing on the OFAC list, please log on to their website at www.ustreas.gov

What does the FAIR Plan do to comply with OFAC?
For new business applications, the FAIR Plan compares the applicant’s name with the OFAC database master list. If the name matches, FAIR Plan sends a letter requesting for additional information. At this point, further processing of the application is suspended pending receipt of additional information.
The FAIR Plan does the same name comparison with its existing policies in force.

What happens if you do not send in the requested information as required by OFAC?

Failure to respond will result in rejection of insurance application or non renewal of policy.
OFAC requires confidential information which may be contrary to state law.
OFAC’s position is that the federal law and OFAC regulations preempt conflicting state laws. OFAC regulations are based on Executive Order and a declaration of international emergency.