California Insurance Commissioner Dave Jones today announced the settlement of litigation concerning efforts to curtail insurer investments in companies doing business in Iran.
The terms of the settlement permit the Commissioner to maintain a public list of businesses involved in volatile sectors of the Iranian economy. As their financial statements already contain this information, insurers will no longer be required to file quarterly reports regarding their Iran-related investment activities nor will such investments be disallowed for purposes of determining financial solvency of the insurers. Under the terms of the settlement, the Commissioner retains the power to independently review and publicize the names of insurers with investments in Iran-related businesses.
"The resolution of this litigation is an important step forward for our efforts to make sure that the public, insurers, and investors are aware of companies doing business in the nuclear, military and energy sectors of Iran's economy, particularly in light of the growing nuclear threat posed by Iran," said Commissioner Jones. "The settlement preserves the Department's ability to collect and publish information about insurer investments in companies doing business in Iran, while addressing issues raised about alleged conflicts with federal and state law."
In November of 2010, Commissioner Jones' predecessor filed a lawsuit challenging a California Office of Administrative Law (OAL) determination that declared the Commissioner's Iran efforts constituted an "underground regulation." The following insurance trade associations intervened in the lawsuit and challenged the Commissioner's Iran efforts: The American Council of Life Insurers, American Insurance Association, the Association of California Insurance Companies, the Association of California Life and Health Insurance Companies and the Personal Insurance Federation of California (Insurer Trade Associations).
As a result of the settlement of this litigation, the Commissioner will withdraw the lawsuit against OAL. The Insurer Trade Associations have agreed to withdraw their legal challenge to the Commissioner's efforts to publicize insurer investments in companies engaged with Iran.
Since the Department of Insurance began publicizing information about insurance companies investing in companies doing business in Iran, significant numbers of insurance companies have ended these investments. The Commissioner's list of 43 businesses engaged in the Iranian nuclear, military or energy sectors of Iran is available to the public.