Knowing your customer means understanding his or her unique needs—and accordingly, knowing how to best address those needs.

But how well do you really know your customers? What about the beneficiaries named within policies? What about your vendors?

As burdensome as compliance may seem, the effort it requires is small compared to the cost of non-compliance. Regulatory fines can be substantial, as can reputational damage to your organization. Compliance is everyone’s responsibility—and you play an essential role in helping to protect your organization from reputation risk and regulatory fines.

What OFAC’s regulatory requirements mean for insurers

Every company within the United States is governed by the Office of Foreign Assets Control (OFAC), which requires all companies to scan their entire customer database to identify any entities on OFAC’s watchlists. Learn more about what OFAC’s Specially Designated Nationals (SDN) list means for insurers.

Notably, insurance companies have a finite period of time from policy opening to report any profile matches to OFAC.

Why should insurers continually monitor their book against OFAC lists?

As mentioned in my previous blog post, insurers, at a minimum, should scan their books at policy/account opening, before paying out claims and every time OFAC updates its list.

Reference the OFAC watchlists at other times, as well. Examples of data points insurance may wish to scan against OFAC lists include:

  • New policyholders
  • Beneficiaries or other parties involved in insurance contracts
  • Recipients of claims payments
  • All parties to a contract
  • Vendors
  • Locations that insured goods will follow
  • Bank names, especially before forwarding premiums or claims settlements to foreign accounts

Also, it’s best practice to scan your complete customer database regularly. How often? That will depend on your organization’s risk appetite. At a minimum, you should be scanning your entire customer database every time OFAC updates its watch lists—which can be several times per month.

In short, insurers should take a risk-based approach in deciding which compliance activities are most appropriate for their situation, and wherein the workflow to incorporate compliance-related steps.

The new normal

In today’s marketplace, every organization must grapple with increasingly stringent regulations. Leading organizations are taking the opportunity to see compliance as a cultural initiative—one that, when properly executed, can help companies innovate and do business with confidence.

Streamlined, standardized compliance processes are one factor in fostering a culture of compliance. LexisNexis® Bridger Insight® XG can help your organization ensure compliance and mitigate risk. This fully integrated compliance platform can help you consolidate compliance processes, standardize controls, and enable enterprise-wide operational consistency. Learn more about LexisNexis Bridger Insight XG.

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