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Insurance Group Fined $279,000 for Policies Involving Cuba

Monday, May 12, 2014
Sandler, Travis & Rosenberg Trade Report

The Treasury Department’s Office of Foreign Assets Control announced May 8 that a New York-based international insurance and financial services organization has agreed to remit $279,038 to settle potential civil liability for 3,560 apparent violations of the Cuban Assets Control Regulations.

OFAC states that between January 2006 and March 2009 two of the institution’s subsidiaries in Canada issued or renewed three types of property and casualty insurance policies that insured Cuban risks of a Canadian corporate entity. One of the subsidiaries also maintained a policy that insured certain directors and officers of three Cuban joint venture partners of a Canadian corporation. Separately, a subsidiary in Canada sold, renewed or maintained 3,446 individual or annual multi-trip travel insurance policies in which the insured identified Cuba as the travel destination.

The total base penalty amount for the apparent violations was $413,390. OFAC considers the following to be aggravating factors: the institution, including certain members of its management, had actual knowledge of the conduct that led to the apparent violations; the institution’s conduct resulted in harm to U.S. sanctions program objectives; and the compliance programs of the two Canadian subsidiaries were inadequate at the time of the apparent violations. On the other hand, OFAC considers the following to be mitigating factors: the institution has not been cited for a violation in the previous five years, has taken appropriate remedial action and cooperated with OFAC’s investigation by submitting a voluntary self-disclosure and executing a statute of limitations tolling agreement and multiple extensions thereof.

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