LOS ANGELES (Press Release)–Insurance Commissioner Steve Poizner on Wednesday announced at the Museum of Tolerance that insurance companies licensed to do business in California have admitted to holding $12 billion in investments in companies that do business with the Iranian energy, nuclear, banking and defense industries.
“I launched this effort six months ago to ensure insurance industry compliance with a new state law that prohibits California insurance companies from investing in countries designated as state sponsors of terrorism,” said Commissioner Poizner, “I 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.
“As a result of this probe, insurance companies have reported $12 billion in investments in companies that do businesses with the Iranian energy, nuclear, banking and defense industries. Independent of the data call, at least $6 billion of insurer investments has been verified by my staff. With this new information, I call upon the insurance industry to do what’s right and divest themselves of these investments. If they do not do it voluntarily, I will use every tool at my disposal to force divestment.”
Specifically, the Department of Insurance (CDI) will soon provide a list of companies that are doing business with the Iranian energy, nuclear, banking and defense industries to insurance companies licensed to do business in California. Many of these companies are based in South America, China, Russia and Europe. They include such companies as Siemens, Statoil, Petroleo Brasileiro and Total SA. The list will be created using information from the data call and input from outside consultants and other experts.
At that point, insurance companies will be given 30 days to notify CDI 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.
For companies that do not voluntarily agree to divest, CDI will make public a list of these companies and provide the name and value of their Iran-related investments. Commissioner Poizner will also subpoena high-ranking executives of these insurance companies to testify under oath and ask them why they believe it is in the interest of California policyholders for their premium dollars to be invested in companies propping up Iran’s energy, nuclear, defense and banking sectors.
If after this hearing an insurer still refuses to divest, Commissioner Poizner will take all legal action available to him to effectuate divestment.
“The government of Iran continues its oppressive crackdown against its own people, and thumbs its nose at the international community over its expanding nuclear program,” said Commissioner Poizner. “Iran’s ambition to dominate the region under a nuclear umbrella is a very serious threat to this country and to people all over the world. It’s just wrong for consumers here in California to find out that their hard-earned money that they pay in insurance premiums are propping up the regime in Iran. We need to do whatever it takes to put maximum pressure on Iran to change its behavior.”
Non-Responding Insurance Companies
Out of 1,327 insurance companies licensed in California and required to respond to the probe, 1,111 have complied, but 216 did not respond at all. Commissioner Poizner will subpoena a representative sample of 10 of the non-responders to explain why they ignored this critical data call. That hearing will be held on January 12 in Los Angeles.
The 10 companies facing a subpoena are Travelers Indemnity Co., PMI Mortgage Insurance Company, Thrivent Financial for Lutherans, Farmington Casualty Company, Old Republic General Insurance Corporation, American Home Assurance Company, Anthem Blue Cross Life and Health Insurance Company, Insurance Company of the West, Medical Insurance Exchange of California and Sequoia Insurance Company. The Commissioner will pursue additional actions to ensure that the remaining 206 companies respond to the data call.
Terror Financing Probe – By the Numbers
- Total Indirect Investments Reported by Insurance Companies: $12 billion
- Breakdown by Sector:
Banking $6,150 million
Defense $40 million
Energy $3,994 million
Nuclear $147 million
Unclassified $1,803 million
Total $12 Billion
- Number of Companies Required to Respond to Data Call: 1,327
- Number of Companies Yet to Respond: 216
- Total Reported Direct Investments in Iran: $0
- The California Department of Insurance has so far independently verified $6 billion in indirect investments, according to 2008 filings made by insurance companies.
- Number of Companies holding the $6 billion in Indirect Iranian Investments based on 2008 filings: 341
Reactions to Poizner’s Iran initiative
Leaders in different communities have immediately offered their support for the initiative, including:
“United Against Nuclear Iran (UANI) applauds California Insurance Commissioner Steve Poizner for his effort to encourage insurance companies in California to divest from holdings in international corporations that support Iran’s petroleum, nuclear, defense, and banking sectors. UANI calls on all companies to cease doing business in Iran and supports divestment of corporations that persist in their dealings with Iran. In launching this initiative Commissioner Poizner not only demonstrates his understanding of the dangers posed by a nuclear-armed Iran, but also takes meaningful action to address the problem in a way that can bring about a change in Iran’s behavior. We commend Commissioner Poizner for his decision to implement this divestment initiative and call on all public leaders to use their good offices to apply financial pressure toward Iran.”
– Mark D. Wallace, President, United Against Nuclear Iran
“Today the California Department of Insurance issued a press release highlighting their state’s efforts to determine the extent to which insurers transacting business in California hold investments in companies that conduct business in Iran. We applaud the leadership of Insurance Commissioner Steve Poizner on this sensitive and important issue, and we look forward to working with the Commissioner on a national level… Commissioner Steve Poizner and the California Department of Insurance have taken this principle to the next level – to determine if the insurance industry investing in companies with operations in Iran, including investments in securities denominated in Iranian currency (the Rial). The Florida Office of Insurance Regulation is currently reviewing California’s methodology with an eye toward creating a complete and thorough analysis of compliance with state and national laws. “
December 2, 2009
– Florida Insurance Commissioner Kevin McCarty
“We ought to do it through the states, but in a coordinated fashion…It ought to be a top priority for all Americans, including the insurance industry. If none of the forms of deterrence that we’re using change Iran’s plans, then you have to say let them have nuclear weapons or we’re looking at a military strike.”
– Pennsylvania Insurance Commissioner Joel Ario
“Short of military action, the only hope of stopping the Iranian regimes in-your-face nuclearization is through concerted international efforts to hurt the regime economically. As the United States and other world powers push for tougher economic sanctions, we commend Commissioner Poizner’s efforts in California.”
– Rabbi Abraham Cooper, associate dean of the Simon Wiesenthal Center
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Preceding provided by California Insurance Commissioner Steve Poizner