True or false? Compliance is an important lever for an insurer to enable innovation, support a healthier book of business and protect the organization.
For too long, compliance has been seen as something insurers have to do, rather than something that can underpin profitability and competitiveness. By fostering a culture of compliance, an insurer can support its business initiatives with confidence, knowing that it is adhering to regulatory requirements, working within external constraints and, more generally, doing the right thing.
Compliance is everyone’s responsibility—especially when it comes to making sure that your company complies with anti-money laundering (AML) regulations.
Why scan against the OFAC SDN list?
One key step towards helping your organization fulfill its AML requirements is to scan insurance policies against the Office of Foreign Asset Control (OFAC) Specially Designated National (SDN) list.
U.S. companies are prohibited from doing business with the individuals, groups and entities on the SDN list. It’s your responsibility to understand and abide by OFAC regulations, including the SDN list and other economic sanctions or embargo programs.
Notably, OFAC can levy substantial fines for violations. In many cases, civil and criminal penalties can exceed millions of dollars.
When should I scan against the OFAC SDN list?
We recommend that you scan the OFAC SDN list at these points:
- At policy or account opening;
- When claims payments are made; and
- Every time OFAC makes an update.
At each of these points, it is a best practice to scan all names in each policy to ensure the client and/or beneficiaries don’t appear on any of the OFAC watchlists. Let’s look at each of these points in turn.
Why scan the OFAC SDN list at policy opening?
Policy opening is a crucial point in the customer relationship, and one that requires agents to do a tremendous amount of work: gather information, complete forms and verify information, all while keeping their customer happy. Importantly, agents should also verify and validate that none of the names within the policy appear on the OFAC SDN watchlist.
Once the policy is opened, all of the names within the policy should be added to the insurer’s master file of account and policy holders. By centralizing this information, you can tap into leading market solutions—like LexisNexis® Bridger Insight® XG—that can automatically scan your database against the most recent OFAC SDN lists.
Why scan the OFAC SDN list at claims payout?
Between policy opening and payout, many new names could have been added to the SDN list. Additionally, consumers or businesses on your payout list may have changed. New payee names may have been added or names changed.
With all these possible changes, it’s critical to scan against the OFAC SDN list before you pay out a claim.
Why scan when the OFAC SDN list is updated?
OFAC generally makes three to four updates a month. As new known or suspected bad actors surface, they are added to the list.
In other words, some bad actors may already be on your book, so each OFAC SDN list update gives you an opportunity to recognize them and ensure that your book is in good health. Scanning each time there is an update to the SDN list can help you ensure any policy payments you receive are not from sanctioned individuals and entities; and it helps your organization comply with regulatory requirements.
How can LexisNexis help?
It can be challenging to keep up with regulatory requirements, especially in today’s increasingly fast-paced marketplace. LexisNexis® Bridger Insight® XG can help your organization streamline its compliance processes, and transform compliance into a capability that enables innovation, confidence and profitability. Learn more about LexisNexis Bridger Insight XG