The request is voluntary, for now.
California Insurance Commissioner Ricardo Lara has sent a Notice to insurance companies doing business in California, urging the payers to voluntarily divest from investments in Russia that could support Vladmir Putin's war efforts in Ukraine.
"California stands with the world community in rejecting Russia’s invasion of Ukraine and its assault on freedom and equality," Lara said. "Insurance companies must send a loud and clear message of solidarity with the people of Ukraine and the global community by withdrawing any financial support for the Russian regime."
The request is voluntary, for now.
Lara said he will use all remedies available under California insurance law to push the industry to demonstrate that they will hold Russia accountable.
"If insurance companies do not voluntarily act now to dispose of direct investments in Russia, I will explore all options to compel them to follow through,” he said.
Lara noted that California can wield significant clout as the nation’s largest insurance market and the fourth largest insurance market in the world. Investments by insurance companies are a major source of global capital, with California investing a substantial portion of approximately $370 billion in premium collected annually from consumers.
"We must not tolerate California consumers’ insurance premiums funding an authoritarian regime that invades a sovereign government, terrorizes its population, and is an enemy of free expression, speech, assembly, press, and equality for LGBTQ+ people, women, and ethnic and religious minorities," Lara said.
AM Best Information Services recently reported, U.S.-based insurers’ direct investments exposed to Ukraine and Russia include nearly $2 billion in bonds, and indirect investments in businesses that derive a share of earnings from Russia may be more substantial.
“If insurance companies do not voluntarily act now to dispose of direct investments in Russia, I will explore all options to compel them to follow through.”
California Insurance Commissioner Ricardo Lara
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
California can wield significant clout as the nation’s largest insurance market and the fourth largest insurance market in the world.
Investments by insurance companies are a major source of global capital, with California investing a substantial portion of approximately $370 billion in premiums collected annually.
U.S.-based insurers’ direct investments exposed to Ukraine and Russia include nearly $2 billion in bonds, and indirect investments in businesses that derive a share of earnings from Russia may be more.