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.
However, the insurance department is taking a further step by requiring companies to disclose even indirect investments in Iran. The U.S. lists the country as a state sponsor of terrorism.
Starting April 1 in California, companies will no longer be permitted to count those indirect investments toward the surpluses and reserves they must maintain to be considered financially sound.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
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.
