NU Online News Service, May 17, 3:20 p.m. EDT

The list of insurance companies agreeing to forgo Iran-linked investments is growing, with more than 75 percent of insurers licensed to do business in California agreeing to refrain from future investing, but some big names have not complied.

California Insurance Commissioner Steve Poizner said recently that 1,010 insurance companies have agreed not to make investments in 50 companies identified as doing business in Iran's oil and natural gas, nuclear and defense sectors.

"This is a great victory for California consumers and sends a strong message to the regime in Iran," said Mr. Poizner, who is running for governor under the state's Democratic primary. "More than 1,000 insurance companies have done the right thing and agreed that not another dime of their investments will go toward propping up that oppressive regime."

That leaves a total of close to 300 companies that have not complied with the commissioner's request, however, some of which are big names in the insurance world, including State Farm, Berkshire Hathaway, Chubb, the Hartford and Liberty Mutual.

Placing pressure on the insurers, as of March 21, the department disqualified an estimated $6 billion in holdings in the 50 Iran-related companies. The department said the estimate is based on 2008 data.

The department said that insurers' investment in the 50 companies totaled $1.8 billion in 2008 and averaged about $1 billion per year from 2005 to 2007.

Darrel Ng, press secretary for the department, said the list of 296 companies that have not agreed to a voluntary moratorium on future investments in Iran-linked companies does not mean the companies have such assets on their books. He said some companies said they would not comply, while others have not answered.

"When you give three separate opportunities and there is no response, we would consider that a no or they are just ignoring the request," he said.

He added that all insurers will be making financial filings at the end of this month in California, and it is expected they will place the disqualified assets in a separate column.

Five insurance trade groups have spoken out against the commissioner's ruling and have petitioned the office of administrative law to rule on the legality of the regulation.

On March 26, the five trade groups–Association of California Insurance Companies, the Personal Insurance Federation of California, the American Insurance Association, the American Council of Life Insurers, and the Association of California Life and Health Insurance Companies–said the regulation was created without a hearing process and would establish a "perilous precedent" because in involved regulation without due process, "with no legal authority."

Sam Sorich, president of the Association of California Insurance Companies, said the office of administrative law has until the end of the month to decide if it will accept the associations' petition. If the office does accept it, the office will have four months to make a decision.

When asked why the close to 300 companies did not agree to the voluntary request simply from a public relations standpoint, he said they "may have some valid reasons why they did not comply."

He noted that some of the companies may be standing on principal that the commissioner lacks the authority to ask for this information and should not be involved in influencing a company's investment portfolio. Other carriers may be concerned with the precedent that could be set with compliance.

Mr. Sorich said there is no clear evidence that the 50 companies on the list in fact are linked to Iran-related businesses. He went on to suggest that if the insurance commissioner is allowed to create a list of companies insurers can invest in, it also could allow a commissioner to ban investing for any issue deemed appropriate.

Mr. Sorich gave credit to Mr. Poizner for not "disparaging" the insurers over this issue and noted that this was a voluntary request.

This story was updated at 3:34 p.m. EDT

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