Chubb OFAC Settlement: $66.2K (2019)

Between January 1, 2010 and December 31, 2014, ACE Europe processed at least 20,291 transactions totaling $367,847 in apparent violation of the CACR. This total comprised 20,218 premium payments totaling $287,292 that ACE received for Cuba-related travel insurance coverage of insureds' travel to Cuba, and 73 Cuba-related claims payments totaling $80,555 paid out under those coverages.

ACE Europe provided customers with travel-related coverage via individual travel insurance policies, group travel policies issued to a group policyholder extending coverage to individual members or employees, and travel insurance policies provided at No Additional Charge to a group policyholder. Beginning in 2012, ACE Europe issued group travel policies to a European online travel agency that sold global travel coverage to insureds. Under those arrangements, the European travel agency dealt with customers directly, with a third party agent processing claims, and paid ACE Europe a pre-determined premium for each individual covered under the group policy. In 2013, ACE Europe signed agreements with two additional subsidiaries of the same European travel agency, authorizing issuance of individual policies for comprehensive or trip cancellation coverage.

None of the global policies contained a sanctions exclusionary clause. In March 2012, ACE Europe's branch in Spain sought guidance from its regional compliance team on the applicability of Cuba sanctions to the European travel agency's European travel customers. The compliance team advised that such travel was governed by the EU's Anti-U.S. Sanctions Blocking Regulation and therefore no sanctions exclusionary clause was required. ACE Europe also believed coverage could be provided if Cuba-related risk constituted a de minimis portion of the portfolio. Beyond the European travel agency, ACE identified additional transactions from other group, individual, and NAC group policies that also appeared to violate the CACR. By providing this coverage, ACE appears to have violated section 515.201 of the CACR, which prohibits persons subject to U.S. jurisdiction from engaging in transactions in which Cuba or a Cuban national has an interest.

OFAC determined that ACE made a voluntary self-disclosure and that the apparent violations constitute a non-egregious case. The total base penalty amount for the apparent violations was $183,923.52. Chubb agreed to remit $66,212 to settle its potential civil liability, reflecting OFAC's consideration of aggravating and mitigating factors pursuant to the General Factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. Part 501, app. A.

This enforcement action underscores the applicability of U.S. sanctions to certain foreign-based entities; the importance of incorporating sanctions exclusionary clauses to mitigate potential sanctions violations; and the significance of maintaining robust internal controls and training practices designed to identify and prevent potential sanctions violations before they occur.

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