In a bold new initiative from California Insurance Commissioner Steve Poizner, insurance companies in the Golden State could be subject to a review of their ties to Iran. Insurance companies are the world’s largest investors, so this could be the start of much-needed economic sanctions originating from a state government.
Poizner, who will officially announce his review on Monday, is acting on two fronts.
He wants to ensure compliance with a state law that took effect in January that prohibits California-based companies from investing directly in Iran’s government or companies associated with it.
He then wants to review investments in certain sectors for all insurance companies operating in California to determine whether they indirectly benefit Iran.
Economic sanctions rarely come from outside an international body or a country’s national or federal government, so Poizner’s innovative approach is refreshing. While he does not have the broad authority found within the federal government, he has considerable power, especially considering California’s vast economy.
As a consumer-protection measure, Poizner can force California-based insurance companies to divest in any investment he deems unsound.
He could, for example, order divestment if he determined that even an indirect investment in an Iranian defense, energy or banking sector was financially risky because of questions about the country’s stability.
While many worry that offering support to the protesters will provide the regime with claims of American meddling, this is a diplomatically safe bet. It avoids going through the White House or State Department, but it could still have a strong economic impact. Obama has hesitated to speak his mind on the crisis, but Poizner is offering a necessary show of support for the Iranian people.
Poizner has proven his leadership on this issue by helping to further undermine the theocratic regime. Companies that invest in Iran will need to think twice. We can hope that this is the start of similar initiatives across the country and around the world. This will bring Iranians closer to a day when they will be able to overthrow their tyrannical rulers. As David Brooks recently explained:
There is no formula for undermining a decrepit regime. And there are no circumstances in which the United States has been able to peacefully play a leading role in another nation’s revolution. But there are many tools this nation has used to support indigenous democrats: independent media, technical advice, economic and cultural sanctions, presidential visits for key dissidents, the unapologetic embrace of democratic values, the unapologetic condemnation of the regime’s barbarities.
Recently, many people thought it was clever to say that elections on their own don’t make democracies. But election campaigns stoke the mind and fraudulent elections outrage the soul. The Iranian elections have stirred a whirlwind that will lead, someday, to the regime’s collapse. Hastening that day is now the central goal.
Poizner is helping the disenfranchised protesters plant the seeds of democracy. We can hope other states will take similar steps.