California seeks full divestment of insurers from Iran

SACRAMENTO, Calif. (AP) — California’s insurance regulator plans to take steps Wednesday to

pressure insurance companies into ending any financial relationship they have with Iran.

A state law that took effect last year outlaws direct investments in Iran by California-based

companies. An insurance department review released in December found no such investments by any

insurance company doing business in California.

The state Department of Insurance has taken a further step by requiring insurance companies to

disclose their indirect investments in Iran, which the U.S. lists as a state sponsor of

terrorism. 

It has found that about 340 insurance companies licensed to do business in California have

about $6 billion invested in multinational companies that are involved in Iran’s nuclear,

defense and energy industries.

Insurance Commissioner Steve Poizner said the investments are risky and that California

consumers should not have their insurance premiums go toward supporting Iran.

He said he will ask companies to sign pledges to avoid any new investments in companies that do

business with Iran.

“These investments are a risk. These investments could go up in a puff of smoke, literally,”

Poizner said in an interview Tuesday. “My goal here is to hopefully structure this so insurance

companies will step up and do the right thing.”

Starting April 1, insurance companies will no longer be permitted to count indirect investments

in Iran toward the surpluses and reserves they must maintain to be considered financially

sound.

While the move may cause accounting headaches for insurance companies, it is not likely to

affect any insurers’ ability to do business in California, said Adam Cole, the Department of

Insurance’s general counsel.