California Assembly OKs Bill to Curb Insurers' Iran Investments

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Orginallypublished by LAW360 (subscription req.) on May 25, 2012

Samuel Sorich, of counsel to Barger & Wolen, was quoted in a May 25, 2012, article published by Law360 about controversy surrounding legislation aimed at deterring insurers from investing in companies that have financial ties to Iran's energy sector. 

According to the article, the bill, AB 2160, already approved by the California Assembly, would prevent insurers from counting investments connected to the Iran's energy industry toward meeting their capital requirements. Insurers argue that the proposed legislation is unconstitutional because it conflicts with federal foreign policy.

Sorich told the publication that the Constitution states that the president must establish foreign policy.

“There has been no action taken by the president to outlaw investments in companies that are doing business in Iran,” Sorich said. “The president hasn't gone that far.”

Should the bill become law, there is a strong possibility it will be challenged in court, Sorich said. “Although well-intentioned, the California law was found to be inconsistent with U.S. foreign policy established by the president.”

 


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