Insurance companies have $12 billion in indirect investments related to Iran, according to California Insurance Commissioner Steve Poizner -- and he wants them to stop. He's pushing insurers in his state to divest, and the perspective is gaining popularity: his counterpart in Florida thinks the policy should go national.
Kevin McCarty, commissioner in Florida, said to National Underwriter, "I have consulted with other state insurance commissioners to evaluate the practicality of developing a national initiative similar to the undertaking by the California Department of Insurance." He's already contacted the National Association of Insurance Commissioners' Securities Valuation Office to figure out "the feasibility of leveraging national resources to review the financial statements of national insurers to determine their exposure to companies with operations in Iran."
California's Poizner, meanwhile, said that legal action will follow, along with publicity and deadlines that would require the 1,327 insurers in his jurisdiction to get Iran out of their portfolios. In a move that is designed strictly for publicity, Poizner wants to determine how much of California premium dollars are going to companies that "do business with the Iranian energy, nuclear, banking and defense industries."
A list of companies involved in these industries -- in which insurers have invested -- will be coming soon. Some of them, already identified, are Siemens (SI), Statoil (STO), Petroleo Brasileiro (PBR) and Total SA (TOT).
Poizner is proposing that insurers be given 30 days to let the California Department of Insurance know that they'll comply and 90 days to pull the trigger. If a California insurer doesn't divest, it's name will be published, along with the name and value of its Iran-related investments.
So far, 1,111 have complied with the first requirement, while 216 haven't responded in any manner. Ten of the 216 will face subpoenas, with Travelers Indemnity and PMI Mortgage Insurance Company on the list. Travelers released a statement saying that it "believes it is in compliance with the department of insurances data request and we continue to offer our cooperation with questions they have on this topic. So, no subpoena is necessary. As previously stated in our original responses to the department, we hold no Iranian investments."
No insurance company in California has direct investments in Iran. Indirect investments by industry include: $6.15 billion in banking, $40 million in defense, $3.99 billion in energy, $147 million in nuclear and $1.8 billion unclassified.
Doesn't California have real problems to solve?
The Week in Preview: Beige Book, Smithfield Foods, Talbots, Men's Wearhouse
Krispy Kreme: Time to Take a Chance?
Comfort Zone Investing: M&A: Good News ... or Bad?
