includes proposed additions to law or the previous version of the bill.
includes proposed deletions to law or the previous version of the bill.
PASSED THE SENATE AUGUST 20, 2012
PASSED THE ASSEMBLY AUGUST 22, 2012
AMENDED IN SENATE AUGUST 6, 2012
AMENDED IN SENATE JUNE 12, 2012
AMENDED IN ASSEMBLY MAY 21, 2012
AMENDED IN ASSEMBLY MAY 9, 2012
AMENDED IN ASSEMBLY APRIL 30, 2012
INTRODUCED BY Assembly Members Blumenfield and Feuer
(Principal coauthor: Senator Steinberg)
(Coauthors: Assembly Members Logue and John A. Pérez)
(Coauthors: Senators Anderson, Calderon, Corbett, Correa, Gaines,
Lieu, Lowenthal, Price, and Wyland)
FEBRUARY 23, 2012
An act to add Section 1241.2 to the Insurance Code, relating to
LEGISLATIVE COUNSEL'S DIGEST
AB 2160, 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 or contracted for
development 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 that 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. The bill would deem use of the list developed for purposes
of the Iran Contracting Act of 2010 as automatic compliance with
these requirements. The bill would require the insurer to provide the
Department of Insurance, on an annual basis, with a list of the
investments the insurer has in companies included on the Department
of General Services list.
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 all of the
(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) 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
(4) It is the government of Iran, and not the people of Iran, that
is responsible for Iran's support of terrorism and that 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
(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
(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) (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 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.
(2) On or before June 30, 2013, and annually thereafter, the
insurer shall determine what investments it has in companies included
on the Department of General Services list.
(d) The insurer shall provide the department, on an annual basis,
a list of investments the insurer has in companies included on the
Department of General Services list described in subdivision (c),
including, but not limited to, the issuer, by name, of the stock,
bonds, securities, and other evidence of indebtedness.
(e) If the insurer sells or transfers all of its investments in
companies included on the Department of General Services list
described in subdivision (c), this section shall not apply to that
(f) This section shall cease to be operative if both of the
(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.
(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.