News: 2010 Press Release
For Release: December 14, 2010
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Insurance Commissioner Poizner Removes Four Companies From List of Barred Iran Investments
Decision Made After Companies End Operations In Iran
Insurance Commissioner Steve Poizner announced today that the California Department of Insurance (CDI) has removed Royal Dutch Shell (Netherlands), Shell International Finance (Netherlands), Total SA (France), and Repsol YPF (Spain) from the CDI "List of Companies Doing Business with the Iranian Petroleum/Natural Gas, Nuclear, and Defense Sectors." The CDI initially published its List on February 10, 2010, in conjunction with the commissioner's announcement that licensed insurers would no longer receive credit on financial statements submitted to the department for any investments held in a company on the List. At that time Commissioner Poizner also called on insurers to agree to a moratorium on new investments in any company on the CDI List. This announcement marks the first change to the List since its initial publication.
"The decisions of these companies to end operations in Iran offer the clearest indication yet that our Iran Initiative has played an important role in reducing the level of investment in Iran," said Commissioner Poizner. "During the past six months we have seen a steep decline in new insurer investments in companies on the CDI List. By leveraging the financial power of the insurance industry, our Iran investment efforts have established a strong incentive for companies to stop doing business in Iran. Shell, Total and Repsol deserve credit for putting principle ahead of profit, and I hope the remaining 47 companies on the List follow their examples."
This year, the insurance industry has dramatically reduced the amount of new investment in companies doing business in Iran. During 2009, before the CDI moratorium went into effect, insurers invested nearly one billion dollars in companies on the CDI List; for the six months in 2010 with the moratorium in place, new investment has plummeted to $164 million - down nearly 70% from the 2009, pre-moratorium rate. A strong majority of the insurance industry - over 1,000 of the 1,300 insurers licensed in California -- has agreed to the investment moratorium. Even among the approximately 300 holdouts, only forty one insurance companies have made new investments in Iran-related assets since the moratorium took effect. Some insurers have gone beyond the moratorium pledge to stop new investments and actually divested Iran-related assets; the book value of aggregate insurance industry investment held at the start of this year in companies on the List has declined approximately $430 million.
"This change in investment patterns didn't occur by accident," said Commissioner Poizner. "In recent months, the U.S. government, the European Union, the United Nations, and the California Legislature all have adopted new policies aimed at stopping investment in Iran. CDI's efforts to address Iranian investments add a layer of financial pressure to the broader legal and public relations aspects of the Iran divestment effort. My effort also serves the critical purpose of protecting the portfolios of insurance companies doing business in California from risky investments. The insurance industry should be proud of the positive role it can play in putting pressure on Iran to end its nuclear weapons program and sponsorship of international terrorism, while simultaneously making insurer investment portfolios more secure."
The updated CDI List of Companies Doing Business with the Iranian Petroleum/Natural Gas, Nuclear, and Defense Sectors can be found on the CDI website at www.insurance.ca.gov.
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