products to those not verifying flag registration and providing a direct route for the Office of Foreign Assets Control ( OFAC ) to gain possibly actionable information that could lead to OFAC enforcement actions as well as additional targets for sanctions designations. 3. Material misrepresentation (a) In general In maritime insurance contracts, failure to verify a vessel’s registration shall be deemed a material misrepresentation by the policyholder. (b) Rulemaking The Undersecretary for Terrorism and Financial Crimes shall issue rules to carry out this section. 4. Identification of vessels with illicit maritime insurance (a) In general The primary insurance regulatory authority of a State may report to the Undersecretary for Terrorism and Financial Crimes when, in the sole discretion of the primary insurance regulatory authority, the primary insurance regulatory authority has determined that the conditions exist for a maritime insurance contract to be voidable pursuant to section 3. (b) Limitations With respect to a maritime insurance contract, a report may only be made under subsection (a) if the primary insurance regulatory authority— (1) establishes that the maritime insurance contract has been issued by an insurer subject to the authority of the primary insurance regulatory authority