SACRAMENTO  (AP) — Building on recent efforts for California to divest in Iran, the state Assembly on Friday passed a bill that targets insurers for investing in companies that aid the country's nuclear weapons capabilities.

The bill, AB2160, would prevent insurers from counting indirect investments in Iran when calculating their assets. Such a move could possibly affect their ability to do business in California.

The Assembly passed AB2160 on a 57-4 vote. The bill now goes to the state Senate.

Assemblyman Bob Blumenfield, D-Sherman Oaks, told lawmakers before Friday's vote that California should do "everything possible" to prevent Iran from developing its nuclear program. That includes not counting insurance investments that do business with Iran's energy sector.

Blumenfield estimated 160 insurance companies would be affected by the bill.

Supporters characterized it as consumer protection policy because insurers must demonstrate the ability to provide insurance in California, but opponents said the bill will invite lawsuits.

In a letter opposing the bill, the Association of California Insurance Companies said federal law already prevents insurance companies from investing in terrorist states. The insurance industry also questioned whether the bill is enforceable.

"If an insurer invests in company A, and company A invests in company B which then invests in company C and that company invests in Iran, can the insurer be held responsible," the association wrote.

The bill is supported by veterans and Jewish groups such as the Jewish Community Relations Council and Jewish Public Affairs Committee of California. It is opposed by the insurance industry, including State Farm.

Spearheaded by former Insurance Commissioner Steve Poizner, the state has already developed a list of companies with financial ties to Iran. Insurers reached a settlement earlier this year with current Insurance Commissioner Dave Jones to stop filing quarterly reports but allow the state keep that list public.

Separately, the state passed a law in 2007 requiring the California Public Employees' Retirement System, the country's largest public pension fund, and the California State Teachers' Retirement System, the second largest, to divest in Iran.

AB2160's co-author, Democratic Assemblyman Mike Feuer of Los Angeles, said additional sanctions will have benefits.

"As we change companies' behavior, Iran changes its behavior," Feuer said.

Republican lawmakers were divided on the legislation.

Assemblyman Chris Norby, R-Fullerton, said the bill was "inconsistent" with federal law. But Assemblywoman Linda Halderman, R-Fresno, said California has a right to defend its borders.