May 13 (AP) – SACRAMENTO, Calif.—More than 1,000 insurance companies have agreed to avoid future investments with corporations that do business with Iran, California's insurance regulator said Thursday.
The action is in response to a state law passed last year that prohibits California-based companies from making direct investments in Iran, which the U.S. considers to be a state sponsor of terrorism. The insurance department last year found no direct investments by insurers doing business in California.
Insurance Commissioner Steve Poizner pressured 1,300 insurance companies that operate in the state to go a step further. He wanted them to drop investments in any multinational corporation that might indirectly benefit Iran's nuclear, defense and energy industries.
He also prohibited the companies from counting $6 billion in indirect Iranian investments toward the reserves they must maintain to be considered financially sound. Companies have to prove they are solvent as a condition of doing business in the state. Barring companies from counting the $6 billion in their investment portfolios is an incentive to get rid of those investments, according to the insurance department.
Poizner, who is seeking the Republican nomination for governor, announced that all but 290 of the California-licensed companies had pledged to avoid making future investments with the 50 foreign-based corporations identified by his office. The companies will be able to keep their current investments, however.
"More than 1,000 insurance companies have done the right thing and agreed that not another dime of their investments will go towards propping up that oppressive regime," Poizner said in a statement.
