Compliance for Insurance Companies
It is critical that insurance companies and reinsurers gain a full understanding of the economic sanctions and embargo programs of the United States, and how these programs impact your business. Protect your firm’s bottom line from criminal and civil penalties and your reputation from collateral damage by staying abreast of U.S. sanctions law.
Depending on the program involved, the fines for violations of the statutes administered by the Office of Foreign Assets Control (OFAC) can be substantial. Criminal penalties can include fines ranging from $50,000 to $10,000,000 and imprisonment ranging from 10 to 30 years for willful violations. Civil penalties range from the greater of $250,000 or twice the amount of each underlying transaction to $1,075,000 for each violation.
OFAC has not only identified targeted enemy countries that are not to be traded with, but it also identifies and names numerous foreign agents and front organizations, as well as terrorist and narcotics traffickers, on their “Specially Designated Nationals” (SDN) list. If an insurance company identifies that it has engaged in business activity with a listed person or entity, they must block those policies and policy payments and report the activity within 10 days to OFAC.
Certain insurance products present a higher risk profile for money laundering activities and carry additional compliance burdens. You may be subject to all provisions of the USA PATRIOT Act, including anti-money laundering, customer identification programs and suspicious activity reporting.
Avoid government fines and increase your protection from fraud. Know your customers and reduce your risk. For more information on how economic sanctions affect the health insurance industry, call us at 888.494.8449.