The New York State Department of Financial Service has initiated a probe into 20 non-US insurers regarding ties with Iran and potential violation of the Iran Freedom and Counter-Proliferation Act of 2012.

The insurers include Hannover Ruckversicherungs-Aktiengesellschaft, Mapfre Re and AXA Global Risks, Montpelier Reinsurance, Lancashire Insurance Company and Aspen Insurance UK, as well as Zurich Insurance Group.

A letter was dispatched by the state financial regulators to the insurers asking them to submit their policies and procedures to avoid violations of the law, which is effective from 1 July this year.

The new regulation forbids a non-US organization doing business in the US from maintaining any trading relation with Iran, failing which will result in huge penalties and even banning their business in the US.

Department general counsel Daniel Alter was quoted by The Wall Street Journal as saying, "Recently, the department learned that several companies have insured trades made with Iran."

"While these particular transactions may not have violated the sanctions regimes in place in the relevant countries at the time, engaging in a similar transaction now could be found to violate," Alter added.

The US and EU has imposed a number of bans against Iran to force the country to abandon its nuclear program.