BILL NUMBER: AB 2160	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 9, 2012
	AMENDED IN ASSEMBLY  APRIL 30, 2012

INTRODUCED BY   Assembly Members Blumenfield and Feuer

                        FEBRUARY 23, 2012

   An act to add Section 1241.2 to the Insurance Code, relating to
insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2160, as amended, Blumenfield. Insurance: retention risk.
   Existing law prohibits domestic insurers from acquiring foreign
investments from or located in foreign jurisdictions designated as
state sponsors of terrorism by the United States Secretary of State.
   Existing law, the Iran Contracting Act of 2010, provides that a
person whose name appears on a list developed by the Department of
General Services as a person determined by the department to be
engaged in investment activities in Iran is ineligible to bid on,
submit a proposal for, enter into, or renew a contract with a public
entity.
   This  bill would require a domestic insurer doing business
in California that has investments in any companies that are
invested in or engaged in business operations with entities involved
in the defense or nuclear sectors of, or in the development of
petroleum or natural gas resources of, Iran to provide a list of
those investments on an annual basis to the Insurance Commissioner.
The  bill would require that  the  
above-referenced  investments  by a domestic insurer in
companies that are included on the list maintained by the Department
of General Services  be treated as nonadmitted assets on the
financial statements of the domestic insurer  that are filed
with the commissioner  . The bill would  authorize
insurers to utilize   deem use of  the list
developed for purposes of the Iran Contracting Act of 2010 
to comply   as automatic compliance  with these
requirements.  The bill would require the insurer to provide the
department with specified information, on an annual basis, including
  a list of the investments the insurer has in companies
included on the list and a detailed summary of the business
operations the listed company has in Iran. 
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1241.2 is added to the Insurance Code, to read:

   1241.2.  (a) The Legislature finds and declares the following:
   (1) The federal Securities and Exchange Commission has determined
that business activities in foreign states, sponsoring terrorism,
such as Iran, that are subject to sanctions by the United States may
materially harm the share value of foreign companies. Shares in these
foreign companies may be held in the portfolio of insurance
companies issuing policies to California consumers.
   (2) Publicly traded companies in the United States are
substantially restricted in doing business in or with foreign states
such as Iran that the United States Department of State has
identified as sponsoring terrorism. 
   (3) Insurers in this state currently invest premiums paid by
citizens of California in publicly traded foreign companies that may
be at risk due to business ties with foreign states such as Iran that
sponsor terrorism and are involved in the proliferation of weapons
of mass destruction.  
   (4) Investments in publicly traded foreign companies that have
business operations in or with foreign states such as Iran are liable
for sanctions under United States law and increase the financial
risk contained in the investment portfolios of insurers doing
business in this state.  
   (5) 
    (3)  Identifying companies with business activities in
foreign states such as Iran that sponsor terrorism and ensuring that
those investments are financially sound is an important public policy
priority. 
   (6) The federal government has imposed numerous sanctions on Iran
and on entities that have invested at least twenty million dollars
($20,000,000) in any year since 1996 to develop petroleum or natural
gas resources of Iran.  
   (7) Direct investments in Iran and investments in companies doing
business with the Iranian energy sector are subject to financial risk
as a result of Iran's pursuit of nuclear weapons, sponsorship of
international terrorism, and consequent international isolation.
 
   (8) 
   (4)  It is the government of Iran, and not the people of
Iran, that is responsible for Iran's support of terrorism and which
commits egregious violations of human rights under which its own
citizens are required to live.
   (b) As used in this section, the following definitions shall
apply:
   (1) "Business operations" means maintaining, selling, or leasing
equipment, facilities, personnel, or any other apparatus of business
or commerce in Iran, including the ownership or possession of real or
personal property located in Iran.
   (2) "Company" means a sole proprietorship, organization,
association, corporation, partnership, venture, or other entity, its
subsidiary or affiliate that exists for profitmaking purposes or to
otherwise secure economic advantage. "Company" also means a company
owned or controlled, either directly or indirectly, by the government
of Iran, that is established or organized under the laws of or has
its principal place of business in the Islamic Republic of Iran.
   (3) "Government of Iran" means the government of Iran or its
instrumentalities or political subdivisions. "Government of Iran"
also means an individual, company, or public agency located in Iran
that provides material or financial support to the Islamic Republic
of Iran.
   (4) "Invest" or "investment" means the purchase, ownership, or
control of stock of a company, association, or corporation, the
capital stock of a mutual water company or corporation, bonds issued
by the government or a political subdivision of Iran, corporate bonds
or other debt instruments issued by a company, or the commitment of
funds or other assets to a company, including a loan or extension of
credit to that company.
   (5) "Iran" means the Islamic Republic of Iran or a territory under
the administration or control of Iran. 
   (c) This section furthers the commissioner's authority to ensure
that investments by insurers doing business in California are
financially sound and not subject to risk based on ties to Iran. In
addition to the requirements of Section 1241.1, any indirect
investment of a domestic insurer in any company that has business
operations in Iran shall be treated as a nonadmitted asset on the
financial statements of the domestic insurer filed with the
commissioner.  
   (d) (1) Any domestic insurer doing business in California shall
determine if it holds in its portfolio any companies invested in or
engaged in business operations with entities in the defense or
nuclear sectors of Iran or is invested in or engaged in business
operations with entities involved in the development of petroleum or
natural gas resources of Iran, and that company is subject to
sanctions under the appropriate federal statute.  
   (2) The insurer may utilize the list published 
    (c)     (1)   
Investments by a domestic insurer included on the list of companies
 by the Department of General Services pursuant to subdivision
(b) of Section 2203 of the Public Contract Code  to determine
whether it has an investment subject to this section  
shall be treated as nonadmitted assets  . Utilization of this
list  by a domestic insurer to review its investments  shall
be deemed automatic compliance by the department. 
   (3) 
    (2)  On or before June 30, 2013,  and annually
thereafter,  the insurer shall determine  which
companies are subject to this section   what investments
it has in companies included on the Department of General Services
list . 
   (e) 
    (d)  The insurer shall provide the department, on an
annual basis, all of the following:
   (1) A list of investments the insurer has in companies 
with business operations that satisfy the criteria in subdivision (d)
  included on the Department of General Services list
 , including, but not limited to, the issuer, by name, of the
stock, bonds, securities, and other evidence of indebtedness.
   (2) A detailed summary of the business operations a company
described in paragraph (1) has in Iran. 
   (f) 
    (e)  If the insurer sells or transfers all of its
investments in  a company with business operations in Iran
  companies included on the Department of General
Services list  , this section shall not apply to that insurer.

   (g)
    (f)  This section shall cease to be operative if both of
the following apply:
   (1) Iran is removed from the United States Department of State's
list of countries that have been determined to repeatedly provide
support for acts of international terrorism.
   (2) Pursuant to the appropriate federal statute, the President of
the United States determines and certifies to the appropriate
committee of the Congress of the United States that Iran has ceased
its efforts to design, develop, manufacture, or acquire a nuclear
explosive device or related materials and technology. 
   (h) 
    (g)  The provisions of this section are severable. If
any provision of this section or its application is held invalid,
that invalidity shall not affect other provisions or applications
that can be given effect without the invalid provision or
application.