Poizner Urges No Iranian Investments by Insurers
Just days ahead of Iranian President Mahmoud Ahmadinejad’s recent address to the United Nations in New York, California Insurance Commissioner Steve Poizner encouraged his fellow state insurance commissioners to follow California’s lead and to probe insurance company investments for ties to Iran.
“In California, state law prohibits insurance companies based in the state from investing in countries designated as state sponsors of terrorism,” said Poizner, in a written statement. “I have launched an inquiry to ensure compliance with this law. I am also calling on my counterparts in other states to conduct similar probes. There is no question Iran’s government is a danger to the world.”
In June, Commissioner Poizner, who is running for governor, announced an effort to ensure California insurance companies were complying with state law that prohibited insurance companies from investing in countries designated as state sponsors of terrorism.
The California insurance code specifically prohibits any investment respecting a foreign jurisdiction, or any investment denominated in the currency of that foreign jurisdiction, if that jurisdiction is designated as a state sponsor of terrorism. This section of the code took effect Jan. 1, 2009. The insurance code also authorizes the Insurance Commissioner to evaluate the “soundness” of investments by California insurance companies.
The goal of the Poizner’s survey will be to determine an insurer’s level of indirect investment in specific sectors of the Iranian economy as well as direct investments in the Iranian government. Each insurer licensed to do business in California will be required to list any investment in a company that conducts more than $20 million worth of business in the Iranian petroleum or natural gas sectors. Insurers will also be required to list investments of any amount in companies doing business in the banking, nuclear, or defense sectors of Iran, including activities relating to the production of chemical, biological or nuclear weapons and technologies.
A preliminary CDI analysis shows that insurance companies that conduct business in California, which is the fourth largest insurance market in the world, have tens of billions of dollars of investments in companies with substantial business in Iran. Insurance companies are the largest investor group in the global economy, with an estimated $3 trillion to $4 trillion in investments.
This action will join an existing array of global and local economic and trade sanctions already in place against Iran, including measures by Congress, the European Union and the states of Missouri, Texas and Florida. California has taken similar measures in the past by directing the state’s two enormous public pension funds to divest Iranian holdings. Poizner seeks to complement federal efforts related to Iran by bringing his unique authority as insurance commissioner to bear.
Before his election as insurance commissioner in 2006, Poizner served as a White House Fellow in the National Security Council in the aftermath of the Sept. 11, 2001, attacks and helped build a homeland security plan for the U.S. He is also is a member of the Council on Foreign Relations.