MIB Set To Help Insurers Meet OFAC Requirements
Government rules aimed at cutting off terrorists and drug lords from accessing the private sector to shelter money will soon take effect, and life insurers are among those who will be expected to comply, legal experts agree.
Now MIB Group, Inc., a life insurance trade association in Westwood, Mass., says it stands ready to help life insurers stay on the right side of the law.
MIB, which checks life insurance applications for hundreds of life insurance companies, says it will soon start helping insurers comply with the USA Patriot Act of 2001. This legislation requires U.S. companies, including banks and insurers, to avoid doing business with drug dealers, terrorists, and other blocked individuals and groups listed with the federal Office of Foreign Assets Control, a division of the U.S. Treasury Department.
OFAC maintains a register of terrorists, foreign agents and drug traffickers banned from doing business with U.S. entities and their foreign subsidiaries.
Under the law passed in response to the Sept. 11 terrorist attacks, insurers, underwriters, brokers and agents are subject to OFAC requirements.
Jay Cook, CEO of MIB, points out that penalties for OFAC violations can include 12 years in jail and a $1 million fine, plus civil penalties and a whole lot of adverse publicity.
The rules barring companies from dealing with prohibited individuals and entities go into effect at the end of the second quarter 2002.
Starting in May, individuals and groups on the OFAC list will be incorporated into the MIB database, Cook says. MIB will then alert the insurer if its finds an applicant with a name similar to a group or person on the OFAC list. It will be up to the insurer to look more closely at flagged applicants to verify their identity, Cook notes.
In addition to individuals and groups listed as blocked by government, OFAC cites the following examples of prohibited insurance transactions:
–A health insurance policy for a resident of Cuba.
–A life insurance policy listing a resident of Cuba as a beneficiary.
–Return of a premium overpayment to a Cuban resident in France.