OFAC sanctions hit insurance industry

Posted on September 14, 2016
Written by Caroline Dutot

Last Month OFAC, the US financial sanctions enforcement body, issued an enforcement notice against AXA Equitable Life Insurance Company.

OFAC issued a finding of violation against AXA Equitable Life Insurance Company in respect of health insurance policies issued in October and November 1991.  The policies were taken out to provide cover for three individuals named Leopoldo Grayeb, Noemi Fernandez and Juan Fernandez.  18 years later, in December 2009, OFAC added those three individuals to its list of Specially Designated Persons (SDN List). Subsequent to the listing, neither AXA or the third party administrator screened the names of the policyholders against the SDN list. The failure to screen against the SDN list resulted in both companies failing to block the policies and premium payments. Premium payments in excess of $14,000 were made, with the error only being noted when a new third party administrator was appointed. AXA self-reported the breaches to OFAC and entered into a settlement agreement with the US Treasury Department.

The Enforcement Notice issued by OFAC states:

“AXA’s OFAC compliance programme does not appear to have ensured names of policyholders associated with policies the company issued that were administered and/or serviced by the original TPA [third party administrator] were screened or reviewed for OFAC compliance purposes….

As a large and commercially sophisticated company that provides insurance products and services, AXA failed to implement controls and measures to ensure it could identify, block and report insurance policies, premiums, or claims payments in which an OFAC sanctioned person had an interest.”

This enforcement notice is a reminder to both insurers and third party administrators that controls, measures and training need to be in place to ensure that sanctions screening is taking place, not just against sanctions measures in force in Jersey and the UK, but also OFAC sanctions.


For advise on all aspects of financial regulation, including sanctions matters, please contact Advocate Caroline Dutot by email on cdutot@ardentchambers.com or by telephone on 01534 481809

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