NYS Department of Financial Services header image

Andrew M. Cuomo
Governor

Benjamin M. Lawsky
Superintendent

Insurance Circular Letter No. 6 (2013)

July 24, 2013

TO:

All Alien Accredited Reinsurers Writing Business in New York State

RE:

Iran Freedom and Counter-Proliferation Act of 2012 Compliance

I.  Summary

This Circular Letter seeks information concerning accredited reinsurers’ compliance with the Iran Freedom and Counter-Proliferation Act of 2012 (“IFCPA”).

II.  Discussion

As you may be aware, the IFCPA became effective on July 1, 2013.1   Of particular concern to the Department, the IFCPA imposes sanctions on any entity that provides underwriting services, insurance, or reinsurance (“insurance services”) (1) “for any activity with respect to Iran for which sanctions have been imposed under this … or any other provision of law”; or (2) to or for any person engaged in transactions enumerated in the IFCPA; or (3) to or for any person included on the specially designated nationals (“SDN”) list.  IFCPA § 1246(a)(1).  Any entity that knowingly provides such services2 is subject to at least five of the sanctions described in § 6(a) of the Iran Sanctions Act of 1996.3   The range of potential sanctions is extensive and designed to encourage all entities, no matter where they are domiciled, to comply with the sanctions or risk being banned from conducting business in the United States. 

Recently, the Department learned that several companies have insured trades made with Iran.  The information received by the Department parallels recent news reports of a pattern of trades made by Glencore Xstrata and Trafigura with Iranian entities.  While these particular transactions may not have violated the sanctions regimes in place in the relevant countries at the time, engaging in a similar transaction now could be found to violate the IFCPA.  The resulting sanctions could jeopardize the ability of any involved insurer to conduct business in the United States.  The purpose of this letter is to seek information about reinsurers’ plans to implement compliance and due diligence programs designed to avoid any potential violations of the IFCPA. 

Please respond to the questions listed below on or before August 16, 2013:

Please direct any question regarding this Circular Letter, and furnish all responsive information, to:

 

Peter Dean
Deputy General Counsel for Insurance
1 State Street
New York, New York 10004
(212) 480-5278
Peter.Dean@dfs.ny.gov.

Very truly yours ,

______________________________________
Daniel S. Alter
General Counsel


1 Pub. L. 112-239, Title XII, Subtitle D (2013).

2 Knowingly is defined to include any conduct, circumstance or result of which the entity had actual knowledge or “should have known”.  IFCPA § 1242(a)(9).

3 Pub. L. 104-172 (1996).