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Are Californians financing Iran's economy?

December 2, 2009 12:00:00 AM PST
When you pay money to your insurance company, you could be financing investments in the government of Iran.California insurance companies admit they have $12 billion in investments in Iran. The insurance commissioner wants them to divest. And he's threatening to revoke their licenses to operate in California. The legislature outlawed investments in Iran but left a big loophole.

Scenes of protests in Iran are familiar to international viewing audiences. So are the allegations that Iran continues to violate its citizen's civil rights as it moves toward a nuclear capability.

California Insurance commissioner Steve Poizner has been trying to enforce a new law designed to pressure Iran into changing its ways. The law prohibits insurance companies from investing in Iran. Poizner says there is a huge loophole. Companies funnel the money through third parties. The companies have reported $12 billion Iran investments.

"Now $12 billion is a very large number. That represents close to one and a half percent of the entire size of the Iranian economy," said Poizner.

Rabbi Abraham Cooper says acts by local governments can have a significant impact on Iran and the companies doing business there.

"These kinds of important focused acts of leadership as far away as Sacramento, California are in some ways I think are a more powerful and have more potential for good than the political posturing and the diplomatic posturing going on at the United Nations" said Rabbi Cooper.

There are economic sanctions against Iran now. Poizner is going to subpoena some of the 216 California insurance companies who have not yet responded to his demand for data about doing business in Iran. They include companies like Anthem Blue Cross and PMI Mortgage Insurance Company.

"If they refuse to provide me the information that I need, and if the law allow me to collect anytime that I want then yes indeed the law allows me to take the ultimate step and that is to revoke their license," said Poizner.

Poizner says the department will soon provide a list of all companies doing business with Iran's energy, nuclear, banking and defense industries. Insurers then will be given ninety days to eliminate those investments from their portfolios.


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