Insurers doing business in California should eliminate any investments in international companies with ties to Iran’s defense, energy and nuclear sectors, state Insurance Commissioner and Republican gubernatorial candidate Steve Poizner said Wednesday.
Poizner issued a list of 50 such companies in 20 nations, mostly in Asia and Europe, in which some of California’s 1,300 insurers have invested about $6 billion. That’s a tiny slice of California insurers’ $4 trillion portfolio, he said, but it’s significant to Iran.
“These investments could literally just go up in a puff of smoke. … They put California consumers at risk, and they’re a mistake,” Poizner told reporters during a news conference in San Francisco, citing Iran’s increasing political volatility.
The investments also help prop up a regime that’s “a threat to their own people, to their neighbors and to the national security of this nation,” he said.
Iran this week informed international authorities it would start producing higher-grade nuclear fuel, a move it insists is for medical research but that other nations fear is another step toward a nuclear weapons program.
The announcement brought international cries for increased sanctions, and made Iran a political whipping boy.
State Attorney General Jerry Brown, a presumed candidate for the Democratic nomination for governor, on Monday urged the state’s massive public pension funds to step up their Iran divestiture efforts. The same day, Republican U.S. Senate candidate Carly Fiorina urged adopting “crippling sanctions.”
A state law that took effect at the start of 2009 forbids insurance companies doing business in California from investing directly in Iran. But Poizner said his staff has “found a big loophole,” discovering some insurers have invested in 50 third-party companies based overseas, which in turn invest in Iran.
Now that he has made those companies’ names public, he said, he’ll write to all California insurers telling them that as of March 31 he’ll disqualify investments in those companies so they can’t be counted toward the reserves and surpluses insurers must maintain in order to do business in California. He’ll also ask for a voluntary moratorium on any new investments in the 50 companies.
Poizner said two insurers — one a health insurer, the other a provider of auto and homeowner’s insurance — already have agreed to divest themselves of these Iran-related investments. The insurers asked not to be identified, he said.
“There’s definitely some insurance companies that are going to be finding ways not to comply here with my request,” Poizner said. “I think they’re wrong legally, I think they’re wrong morally, and we’re going to do whatever it takes. … I’m clearly trying to send a message that, from my point of view, these investments are risky and they’re wrong and they should think twice about holding onto them.”
Among the companies on Poizner’s list are Netherlands-based oil giant Royal Dutch Shell, South Korea’s Hyundai Heavy Industries, the China National Petroleum Corp. and Germany-based Siemens.
Siemens — Europe’s biggest engineering conglomerate — declined to comment on Poizner’s list Wednesday, but noted it announced last month that it would reject any further orders from Iran, though existing orders would be fulfilled.
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