Supervision of insurers’ foreign investments must be uniform and only administered at the federal level, according to the American Insurance Association (AIA), responding to requests by California Insurance Commissioner Steve Poizner that California domestic insurers divest any direct investment in Iranian government holdings and require all insurers doing business in California to report all investments in companies that do business with the defense, nuclear, petroleum, natural gas or banking sectors of the Iranian economy.
“For matters, such as Iran, involving national security and extremely complex foreign relations, it is absolutely critical that the U.S. speak with one voice and act exclusively at the federal level,” said David Snyder, AIA vice president and associate general counsel, public policy. “We are concerned with any action, however well-intentioned, that complicates or dilutes the efforts of the United States to effectively respond to international challenges – especially on matters of national security. The issue of Iranian assets is under the national jurisdiction of the Office of Foreign Assets Control (OFAC) within the U.S. Treasury Department.
“OFAC has responsibility for administering and enforcing economic and trade sanctions, based on U.S foreign policy and national security goals, against targeted foreign countries and regimes which represent threats to the national security, foreign policy or economy of the United States. Insurers, and all American companies, are already subject to the oversight of OFAC.”
“Any actions taken by the commissioner must be consistent and in concurrence with OFAC,” added Ken Gibson, AIA vice president, state affairs. “Though the commissioner is reminding domestic insurers of a California statute that took effect in January, we encourage the commissioner to work with OFAC to ensure that his actions are consistent with federal policy.
“As always, we are available to work with Commissioner Poizner and we hope he will appreciate the magnitude and complexity of his directive,” said Gibson.