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"On Guard" (Sept. 2007) is a very interesting article but perhaps not in-depth enough. There is a federal agency, Office of Foreign Asset Control (OFAC) under the U.S. Treasury Dept., and thus under the Homeland Security Dept. Part of this agency's responsibility is to monitor all insurance sold in the United States for so-called terrorism and drug "money laundering."

Our agency became aware of this only once and by chance. We had requested "residential dwelling fire insurance" for a client from the California Fair Plan. They sent us a demand for this client's place of birth, nationality, passport number and driver's license number before they could offer such insurance. This is because a similar name appeared on OFAC's Terrorist/ Drug Dealer hit-list.

The California Fair Plan then advised us of this agency and their federal requirements that all insurance carriers in the U.S.A. must check all names of new policy applicants against such list, and, if similar, then must notify OFAC. I can't describe here how livid I became. The plan provided a Web site for me to review, which I immediately did, this being Oct. 17, 2005.

After reviewing the OFAC Web site, I called this federal agency and left a message figuring that I would never receive a reply in my lifetime. Surprise, the very next day a very nice gentleman for this office returned my call. After spending 45 minutes on the phone with him, I learned that this regulation covered all types of insurances but they mainly looked at annuities.

After explaining my major concerns about this practice, i.e., violation of public privacy, violation of federal Fair Trade laws, and the simplest one, "it would be a very stupid person to try and launder money by buying a dwelling fire or homeowners insurance policy." The insurance carrier will always charge an earned premium. This very nice gentleman agreed, stated that the Fair Plan may have been overzealous, and then gave me a way around this problem.

James R. Zupke

James R. Zupke Insurance Services, Inc.

San Pedro, Calif.
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Title Annotation:Comment
Author:Zupke, James R.
Publication:Best's Review
Date:Nov 1, 2007
Words:348
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