HCC Insurance Holdings, Inc. OFAC Settlement: $38.4K

OFAC alleged that Houston Casualty Company ("HCC"), HCC Holdings' wholly-owned insurance subsidiary, violated §§ 560.206 and 560.208 of the ITR when it participated in a specialty aviation insurance policy that covered commercial flight operations in Iran during the period April 2005 – April 2006. Specifically, HCC participated in the hull portion of an aircraft hull and liability insurance placement by a foreign insurance broker that insured a foreign-owned commercial airline that leased aircraft to an air charter company that operated in Iran. The premium received by HCC for its participation in the aviation insurance policy totaled $113,921.

HCC voluntarily disclosed this matter to OFAC and the alleged violation constituted a non-egregious case. The base penalty amount was $56,960, established by OFAC's Economic Sanctions Enforcement Guidelines, 74 Fed. Reg. 57,593 (Nov. 9, 2009). The settlement amount of $38,448 reflects OFAC's consideration of multiple factors, including that the aviation insurance services provided by HCC were specialized and harmful to the objectives of the Iranian sanctions program; that HCC knew or had reason to know of the alleged violation because the terms of the insurance policy disclosed that some of the insured aircraft covered by the policy would be operated in Iran; that HCC cooperated with OFAC in the investigation; and that HCC had not been the subject of prior OFAC penalties or other OFAC administrative actions. HCC did not renew its participation in the policy and no longer provides insurance coverage for the air charter company that operated in Iran.

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