Sanctions screening is the process financial institutions and insurance companies use to check clients, beneficiaries, counterparties, and transactions against government sanctions lists, such as those maintained by the U.S. Office of Foreign Assets Control (OFAC) or the United Nations. The goal is to prevent doing business with blocked individuals, entities, or countries that are subject to trade restrictions, asset freezes, or other penalties. Screening typically occurs at onboarding, during claims, and periodically throughout the customer relationship. Effective sanctions screening is a critical component of anti-money laundering (AML), counterterror finance, and overall compliance programs in the insurance and financial services industries.

In daily operations, carriers and agencies run sanctions screening through automated systems that compare client data with updated watchlists, flagging potential matches for manual review. New business submissions, wire transfers, and death claims often trigger screening events. Compliance teams investigate name hits, decide whether they are true matches, and determine appropriate actions, ranging from clearing the transaction to blocking and reporting it. Advisors may occasionally experience delays while sanctions screening is resolved, especially with clients whose names resemble sanctioned parties. Understanding sanctions screening helps advisors explain such delays and reinforces the importance of accurate client identification and documentation.