Insurance organization Privilege Underwriters Reciprocal Exchange (PURE Insurance) agreed to pay $466,200 as part of a settlement with the Treasury Department’s Office of Foreign Assets Control (OFAC) addressing alleged sanctioned transactions on behalf of designated Ukrainian-Russian oligarch Viktor Vekselberg.
New York-based PURE Insurance was found to have engaged in 39 transactions totaling $315,891 with Vekselberg from after he was designated in April 2018 until July 2020, according to OFAC’s enforcement release published Thursday.
The apparent violations were not voluntarily self-disclosed and deemed by OFAC to be non-egregious.
The details: Beginning in 2010, PURE Insurance issued a variety of insurance policies to Panama-based Medallion that provided coverage for Vekselberg’s property. The company was aware Vekselberg was Medallion’s sole shareholder and renewed the policies annually.
When Vekselberg was designated, Medallion became a blocked entity. But PURE Insurance continued to collect premium payments from the company, according to OFAC.
“PURE’s underwriters failed to upload the shareholder information from the corporate disclosure statement into PURE’s underwriting systems where corporate ownership information is stored,” said the agency. “Further, at the time Medallion was onboarded in 2010, there was not a requirement for prospective non-U.S. policy holders to be escalated for review and approval by PURE’s management and compliance staff.”
Compliance considerations: OFAC faulted PURE Insurance for failing to exercise due caution or care for its sanctions compliance obligations. The company knew of Vekselberg’s connections to Medallion but didn’t identify the gap in its program until a government inquiry in 2022, OFAC said.
PURE Insurance received credit for its remedial measures, including screening its entire customer base through two third-party vendor tools, and cooperation with OFAC.
“This case demonstrates the importance of implementing and maintaining effective, risk-based sanctions compliance controls,” the agency said. “Such controls should capture and incorporate all relevant available information to conduct responsive and regular screening, including risk-based steps to comply with OFAC’s 50 Percent Rule and to account for changes to applicable sanctions.”
PURE Insurance did not respond to a request for comment.