California Insurance Commissioner Steve Poizner says that California insurers hold $12 billion in Iran-related investments and that he will push them to divest.
Another regulator, Florida Insurance Commissioner Kevin McCarty, says Poizner’s effort should go national.
“I have consulted with other state insurance commissioners to evaluate the practicality of developing a national initiative similar to the undertaking by the California Department of Insurance,” McCarty says.
McCarty, the secretary-treasurer of the National Association of Insurance Commissioners, Kansas City, Mo., says he has contacted the NAIC’s Securities Valuation Office to “ascertain the feasibility of leveraging national resources to review the financial statements of national insurers to determine their exposure to companies with operations in Iran.”
Poizner has promised to use subpoenas, publicity and deadlines to force more than 1,300 insurers under his jurisdiction to divest Iranian investments.
The companies that California insurers have invested in “do business with the Iranian energy, nuclear, banking and defense industries,” Poizner says.
Poizner says he launched the probe 6 months ago to ensure insurance industry compliance with a new state law that prohibits California insurers from investing in countries designated as “state sponsors of terrorism.”
Poizner says he also wanted to “determine the amount of insurance premium dollars, if any, paid by California consumers that end up invested in companies that do business with the energy, nuclear, banking and defense sectors of the Iranian economy.”
Poizner has reported that, aside from the holdings that insurers reported in response to the data call, his staff has independently verified at least $6 billion of insurer Iran investments.
“I call upon the insurance industry to do what’s right and divest themselves of these investments,” Poizner says. “If they do not do it voluntarily, I will use every tool at my disposal to force divestment.”
The California Insurance Department, says Poizner soon will give insurers licensed to do business in California a list of companies that are doing business with the Iranian energy, nuclear, banking and defense industries.
Many of these companies are based in South America, China, Russia and Europe, Poizner says.
Insurers then will have 30 days to notify the California department in writing that they will comply with the divestment request and disclose the value of the identified investments. Insurers will be given 90 days to eliminate those holdings from their portfolios.