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Texas Department of Insurance
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ADVISORY 2003-06

SUBJECT: Foreign Asset Control Regulations and the Insurance Industry

On November 22, 2002, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) published a document entitled Foreign Assets Control Regulations and the Insurance Industry. OFAC administers and enforces sanctions policy applicable to all U.S. citizens, permanent residents, and companies located in the U.S. and their overseas branches. The document provides information that workers' compensation insurance carriers in the State of Texas should be aware of such as: Specially Designated Nationals, Blocked Persons and Contracts, banking issues, and possible fines and sanctions.

To briefly summarize the document, insurance carriers are prohibited from making payments to persons or entities identified on the OFAC list unless specifically authorized/licensed by OFAC, and insurance carriers are required to make payment of those monies to special interest bearing accounts. For more information regarding Foreign Assets Control Regulations and the Insurance Industry and OFAC requirements, insurance carriers may call (212) 622-2490 or visit OFAC's website.

Should an insurance carrier be liable for making workers' compensation payments to an individual or entity identified on the OFAC list of persons or entities, the carrier should comply with the requirements of OFAC and make payments accordingly. The Commission's Division of Compliance and Practices will consider documentation supporting the payment of benefits to special interest bearing accounts in accordance with OFAC's regulations as mitigating evidence when considering a complaint of an alleged violation of the Texas Workers' Compensation Act or Commission rules.

Signed on this 15th day of May, 2003

Richard F. Reynolds, Executive Director

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