The U.S. House Financial Services Subcommittee on National Security, International Development and Monetary Policy held a hearing last week on the financing of domestic terrorism and extremism. During the hearing, there was brief discussion as to how insurance products could be used to finance terrorist groups.
Three bills were considered at the hearing, including the “Freezing Assets of Suspected Terrorists and Enemy Recruits Act” draft bill, which would require financial institutions to freeze the assets of people “arrested under suspicion of participating in domestic terrorism or providing material support to terrorists,” according to the draft language.
Reps. Josh Gottheimer (D-NJ), Brian Fitzpatrick (R-PA) and Tom Reed (R-NY) are cosponsors of the draft, which would also establish a clearinghouse to collect and share information on incidents of lone-wolf terrorism and violent extremism. It also applies to individuals who provide material support to terrorist groups, including ISIS and al Qaeda, as well as individuals suspected of domestic terrorism.
For purposes of domestic terrorism asset freezes, the term “financial institution” would have the meaning given in Section 5312 of Title 31 in the U.S. Code, according to the draft bill. The Title 31 Section 5312 definition of financial institutions includes insurance companies. In practice, most asset freeze requests would most likely involve annuities and cash-value life insurance policies.
Heather Eilers-Bowser is Big “I” counsel, federal government affairs.