Insurance companies urged to withdraw financial support for Russian regime

California Insurance Commissioner Ricardo Lara has issued a notice to all insurance companies doing business in California to review their financial holdings and take immediate action to identify and divest themselves of any direct investments in Russian assets or property that could support the Russian regime as a result of its military. invasion of Ukraine.

“California stands with the global community in rejecting Russia’s invasion of Ukraine and its assault on freedom and equality,” Commissioner Lara said. “As the nation’s largest insurance market and the world’s fourth largest insurance market, we must not allow California consumer insurance premiums to fund an authoritarian regime that invades a sovereign government, terrorizes its people, and is an enemy of freedom of speech, speech, assembly, press and equality for LGBTQ+ people, women and ethnic and religious minorities Insurance companies must send a loud and clear message of solidarity with the people of Ukraine and the global community by withdrawing all financial support to the Russian regime.

Legislative leaders from the California Senate and Assembly Insurance Committees joined Commissioner Lara on March 14 in calling on insurance companies to take immediate action.

“The people of California are united in their resolve to support the people of Ukraine, and insurance companies have a duty to use their market power for good, not to support a corrupt regime that is an enemy of freedom” said Senator Susan Rubio (D-Baldwin Park), chairman of the California Senate Insurance Committee. “I stand ready to support the goals Commissioner Lara has set for insurance companies to divest from all investments that benefit the Russian government’s campaign of tyranny.”

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 from consumers. As a major insurance rating agency recently reported, direct investments by US-based insurers with exposure to Ukraine and Russia include nearly $2 billion in bonds, while indirect investments in companies that derive a share of the profits from Russia may be more important. Many global companies have already acted to cut capital support from the Russian government and likely more are to come.

“California people join the world in speaking out against Russia’s brutal invasion of Ukraine and its heinous and ongoing human rights abuses,” said Assemblyman Tom Daly (D-Anaheim), Chairman of the Assembly’s Insurance Committee. “Due to the size and strength of the California insurance market, the actions of insurance companies doing business here to reevaluate their investments and hold Russia accountable will be felt around the world.”

In the notice, Commissioner Lara alerted insurance companies that he will use every remedy available under California insurance law to push the industry to demonstrate that it is aligning with the global community to hold Russia accountable. “If insurance companies don’t act voluntarily now to have direct investment in Russia, I will explore all options to force them to follow,” he said.

Kristan F. Talley