California Insurance Commissioner Ricardo Lara issued a Notice to all insurance companies doing business in California to review their financial holdings and take immediate steps to identify and divest from any direct investments in Russian assets or property that could support the Russian regime in the wake of its military invasion of Ukraine.
“California stands with the world community in rejecting Russia’s invasion of Ukraine and its assault on freedom and equality,” said Commissioner Lara. “As the nation’s largest insurance market and the fourth largest insurance market in the world, 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. 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 legislative leaders of 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 our 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), Chair of the California Senate Insurance Committee. “I am ready to support the goals that Commissioner Lara has laid out for insurance companies to divest 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 organization recently reported, U.S.-based insurers’ direct investments exposed to Ukraine and Russia include nearly $2 billion in bonds while indirect investments in businesses that derive a share of earnings from Russia may be more substantial. Many global companies have already acted to cut off capital support for the Russian government with likely more to come.
“Californians join the world in denouncing Russia’s brutal invasion of Ukraine and its continued heinous violations of human rights,” said Assemblymember Tom Daly (D-Anaheim), Chair of the Assembly Insurance Committee. “Because of the size and strength of California’s insurance market, actions by 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 all remedies available under California insurance law to push the industry to demonstrate that they are aligning with the global community to 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.
