California Insurance Commissioner Steve Poizner says he is going to court to try to stop insurers from investing in companies with ties to Iran.
No U.S. insurers are known to be investing directly in Iran or in Iranian-owned firms, but Poizner says 340 insurers admitted to do business in California have a total of $6 billion in investments in 50 companies, such as Royal Dutch Shell and Siemens, that have dealings with Iran.
Earlier this year, Poizner declared that he would not credit any investment in Iran-linked companies on an insurer’s balance sheet.
Insurance groups immediately filed a petition asking the California Office of Administrative Law to block the regulation. The trade groups that filed the petition include the Association of California Life and Health Insurance Companies, Sacramento, Calif., and the American Council of Life Insurers, Washington, as well as the Association of California Insurance Companies, Sacramento, Calif.; the Personal Insurance Federation of California, Sacramento; and the American Insurance Association, Washington.
The California last month sided with the insurance groups and said Poizner had been tried to implement the Iran-linked investments rule as an “underground regulation,” without going through the required rulemaking process.
Poizner today filed a suit seeking to challenge the administrative office determination in a state court in Los Angeles.
Attorney General Jerry Brown, a Democrat and former California governor who
recently won the California gubernatorial election, is representing Poizner in the suit, according to officials at the California Department of Insurance.
“I intend to ensure that any insurance company licensed in California is not doing business, in any way, with the Iranian regime,” Poizner says in a statement about the suit. “Insurance premium dollars that Californians pay should not end up supporting a regime that has shown time and time again its disregard for the concerns of the global community.”
Insurance groups says insurance commissioners should not use their regulatory authority over insurer investments to try to influence international relations.