John S vs. Aig Travel Insurance

31 August 2017

To Whom It May Concern,

Thank you for allowing us to review Mr. Stewart’s Trip Delay claim (UC8100050754).

Per the claim documentation submitted, Mr. Stewart experienced a travel delay as the flight from Havana, Cuba to Ft. Lauderdale, FL arrived late. Due to the late arrival, the connecting flight from Ft. Lauderdale to Hartford, CT was missed. Due to this delay additional expenses for hotel and meals were incurred.

As the trip included travel to Cuba, a U.S. sanctioned country, a final review was required by our Compliance Team to verify that all laws and regulations enforced by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) were compliant. This review is required regardless of where the loss occurs when the Trip involves a U.S. sanctioned country.

Please see in pertinent the policy terms that apply:

Any payments under the policy will only be made in full compliance with all United States of America economic or trade sanction laws or regulations, including, but not limited to, sanctions, laws and regulations administered and enforced by the U.S. Treasury Department's Office of Foreign Assets Control ("OFAC"). Therefore, any expenses incurred or claims made involving travel that is in violation of such sanctions, laws and regulations will not be covered under the policy. For more information, you may consult the OFAC internet website at http://www.treasury.gov/resource-center/sanctions/ or a Travel Guard representative.

Our Compliance Team determined that the travel that took place did not qualify for the certificate that was applied for, §515.574 - Support for the Cuban People as an individual and non-governmental organization that promotes independent activity intended to strengthen civil society in Cuba. Traveling to Cuba for tourism is not covered, and we do not have anything showing that the travel was for the purpose of the certificate applied for.

As it has not been demonstrated that the insured’s were not authorized to travel to Cuba under the certification applied for, AIG Claims can offer a refund of the policy premium as a full and final settlement. The refund would be issued to the original form of payment in the amount of $238.00. If you agree to the settlement, please let us know and we will initiate the refund. Please note that if you agree to the settlement, the claim file will be closed as there will be no active policy in place.

Should you have any further questions, please do not hesitate to contact us at 1-800-826-7791.

Kind Regards,

Kristina Hopp
Complex Claims Adjuster

This correspondence is sent by AIG Claims, Inc. as authorized administrator for National Union Fire Insurance Company of Pittsburgh, PA.

I quote from the AIG response and ask related questions:
"As the trip included travel to Cuba, a U.S. sanctioned country, a final review was required by our Compliance Team to verify that all laws and regulations enforced by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) were compliant. This review is required regardless of where the loss occurs when the Trip involves a U.S. sanctioned country."
Questions:
1) The purpose of the U.S. sanctions is to keep money from flowing to the Cuban government. Our loss was in Florida. How does payment go to the Cuban government?
2) Your compliance team requires further review, but I could not find any info with your provided links to the Treasury.gov site that stated your company was required to verify that we traveled properly according to the U.S. sanctions. Can you provide more direct evidence?
3) Why do other travel insurance companies, such as AllianzTravelInsurance.com not have this as part of their rules when issuing travel insurance to Cuba or reimbursements for travel problems?
4) We explained how we thought our trip met the sanction rules, which required that we keep a daily journal of our activities. We carefully kept this journal and offered to share this journal with you. Why did you not want to see it?
5) Can you show us a clear statement in your insurance policy statement that customers receive that says something to the effect: "If you travel to Cuba and have a covered travel disruption, we will not reimburse you until you have convinced us that your travel is in compliance to the U.S. sanctions law."?

Finally, I will quote from your last paragraph:
"As it has not been demonstrated that the insured’s were not authorized to travel to Cuba under the certification applied for, AIG Claims can offer a refund of the policy premium as a full and final settlement." This is a double-negative statement, which can be rendered in an equivalent form by deleting both of the "not"s and it would read as follows:
"As it has been demonstrated that the insured’s were authorized to travel to Cuba under the certification applied for, AIG Claims can offer a refund of the policy premium as a full and final settlement."

well, I can agree with that statement, but wonder if it is some attempt to use legalese to hide a bad corporate policy or decision or simply poor checking by some underpaid adjuster.

28 Sept 2017

To Whom It May Concern,

This is in response to Mr. Stewart’s inquiry in regards to his Trip Delay Claim (UC8100050754).

When adjudicating a claim, we are held to the terms and conditions outlined in the Description of Coverage. Our policy cannot be compared to another insurance company’s policy as the terms and conditions may differ. Per our policy, before any reimbursement may be issued, we have to confirm that all laws and regulations enforced by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) are being followed.

Please see in pertinent the policy terms that apply:

Any payments under the policy will only be made in full compliance with all United States of America economic or trade sanction laws or regulations, including, but not limited to, sanctions, laws and regulations administered and enforced by the U.S. Treasury Department's Office of Foreign Assets Control ("OFAC"). Therefore, any expenses incurred or claims made involving travel that is in violation of such sanctions, laws and regulations will not be covered under the policy. For more information, you may consult the OFAC internet website at http://www.treasury.gov/resource-center/sanctions/ or a Travel Guard representative.

Per our Compliance team, U.S. persons may only travel to Cuba where they are authorized under one of the 12 limited categories of authorized travel. AIG may only provide insurance cover to travelers where they are authorized, and where the traveler has provided us a certification that he or she is in fact authorized. AIG is required to review the certification, to ensure it is valid, and to retain the certification. Importantly, tourist or leisure activity in Cuba is not an authorized ground for travel to Cuba, and OFAC has specifically stated that under 31 CFR 515.565(c): “Transactions related to activities that are primarily tourist-oriented are not authorized”. The claimants here noted that they were authorized pursuant to the category of People to People travel, however the information provided indicated that in which they engaged included touring, bike riding, horseback riding, rock climbing, scuba diving and hiking. As OFAC has stated, travelers under the People to People category must “have a full time schedule of educational exchange activities that will result in meaningful interaction with the Cuban people and that are for the purpose of engaging in activities intended to enhance contact with the Cuban people, support civil society in Cuba or promote the Cuban peoples independence from Cuban authorities”.

As previously advised, it has been demonstrated that the insured’s were not authorized to travel to Cuba under the certification applied for, AIG Claims can offer a refund of the policy premium as a full and final settlement. The refund would be issued to the original form of payment in the amount of $238.00. If you agree to the settlement, please let us know and we will initiate the refund. Please note that if you agree to the settlement, the claim file will be closed as there will be no active policy in place.

Should you have any further questions, please do not hesitate to contact us at 1-800-826-7791.

Kind Regards,

Kristina Hopp
Complex Claims Adjuster

This correspondence is sent by AIG Claims, Inc. as authorized administrator for National Union Fire Insurance Company of Pittsburgh, PA.

In you first paragraph you state “Our policy cannot be compared to another insurance company’s policy as the terms and conditions may differ.” That is why I noted that AllianzTravelInsurance.com does not have this as part of their policy. I should hope that travelers to Cuba will note these differences in policies before buying AIG Travel Insurance.
I will have to agree that your policy statement did explicitly state that your company would have to verify “proper” travel to Cuba before any compensation was paid. I wish I had paid more attention to that aspect when I printed your policy, but I probably would have only paused a bit because our tour company had said our activities would qualify for the “People to People” license, and we continued the same activities in the following week on our own. People traveling to Cuba should keep in mind that your company requires an additional verification before compensation is given.
You classified our trip as a tourist trip because we engaged in many tourist activities. This classification certainly benefits you, but ignores that educational activity about two different countries and economic systems can occur as you sit across a table or as you hike, ride, or climb together and we explicitly did a lot of that as we documented in our daily journals, which you refused to inspect. As I have noted, the tour company, KBCuba, explicitly encouraged such intellectual exchanges and we followed that suggestion when travelling with them and during the following week on our own. Clearly, anyone traveling with KBCuba should not purchase AIG travel insurance since you clearly would not compensate them for travel problems.
Your response ignored my request for a citation to the federal rules that required your company to verify that our travel to Cuba met the specifics in our travel license. In searching the OFAC website, the most relevant statement is the following:
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104. Can an insurer offer global travel insurance and worldwide travel assistance without violating U.S. sanctions?
The provision of all travel related services are authorized for all OFAC country sanctions programs (including Burma, Iran and Sudan) except Cuba. Travel related services may only be provided in Cuba pursuant to a valid general or specific OFAC license. If the traveler is a U.S. person traveling to Cuba pursuant to a valid OFAC license, travel insurance may be issued to the traveler by a U.S. insurer without a separate license. Similarly, the issuance or provision of coverage for global health, life, or travel insurance policies for individuals ordinarily resident in a country outside of Cuba who travel to or within Cuba is authorized by general license, as is the servicing of such policies and payment of claim arising from events that occurred while the individual was traveling in, or to or from, Cuba. Additionally, insurers should check OFAC’s list of Specially Designated Nationals and other sanctions lists to ensure that no prohibited services are rendered to persons or entities on those lists. [01-15-15]
(https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#102)
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This does not seem to require any more of an action than what KBCuba and Southwest Airlines did: making sure that we had applied for one of the 12 acceptable licenses for travel to Cuba. So I still see your policy, which I will agree was explicitly stated, as simply a way to avoid paying some travel compensations—compensations that other travel insurance companies would pay directly without additional bureaucratic steps.

07 Nov 2017

To Whom It May Concern,

This is in response to Mr. Stewart’s inquiry in regards to his Trip Delay Claim (UC8100050754).

Per our Compliance team, the insured’s indicated that they were authorized to travel to Cuba under the category of People-to-People travel. The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has stated, travelers under the People-to-People category must “have a full time schedule of educational exchange activities that will result in meaningful interaction with the Cuban people and that are for the purpose of engaging in activities intended to enhance contact with the Cuban people, support civil society in Cuba or promote the Cuban peoples independence from Cuban authorities”. OFAC also states that “transactions related to activities that are primarily tourist-oriented are not authorized.”

The insured’s are welcome to provide a full time schedule of educational exchange activities that meet the People-to-People category for review by Compliance; however, at this time, we are unable to extend payment. In lieu of providing this, and based on our prior review, we continue to find no evidence that the insured’s were authorized under one of the 12 limited categories of authorized travel to Cuba approved by OFAC; therefore, we are offering to refund the insurance premium of $238.00 to resolve the pending dispute. If Mr. Stewart agrees to the settlement, we will initiate the refund, and the claim file will be closed as there will be no active policy in place.

Should you have any further questions, please do not hesitate to contact us at 1-800-826-7791.

Kind Regards,


Kristina Hopp
Complex Claims Adjuster

This correspondence is sent by AIG Claims, Inc. as authorized administrator for National Union Fire Insurance Company of Pittsburgh, PA.