SACRAMENTO, Calif.—Nearly 300 insurers have refused to agree to a moratorium on investments in companies that the California insurance commissioner says do business with Iran, the state agency said.

In February, California Insurance Commissioner Steve Poizner released a list of 50 companies that he said do business with the Iranian oil, natural gas, nuclear and defense sectors. Mr. Poizner asked California-licensed insurers to eliminate investments in those companies and pledge by April 2 to avoid such investments in the future.

That prompted five insurance company trade groups to file a petition with the California Office of Administrative Law seeking to invalidate the regulations as illegal.

On Thursday, Mr. Poizner released a list of 296 companies that have refused to agree to the moratorium, including MetLife Inc., Safeco Corp. and Hartford Financial Services Group Inc.

Mr. Poizner also said the department has disqualified insurers’ investments in the Iran-related companies from counting toward reserve requirements—amounting to an estimated $6 billion of investments.

The insurer trade groups have said Mr. Poizner lacks authority to ban legal investments, particularly for insurers domiciled in other states.

The trade groups also said Mr. Poizner has not articulated the criteria for placing companies on the list of firms doing business in Iran—a list that includes Siemens A.G., Royal Dutch Shell P.L.C. and Hyundai E&C Co. Ltd.

More than 1,000 insurance companies agreed to the investment moratorium, Mr. Poizner said on Thursday. Mr. Poizner, who is running in the Republican primary for governor, said that would divert hundreds of millions of investment dollars from these companies in the coming years.

Federal law long has banned direct investments in Iran. Federal lawmakers are working on legislation that would broaden the scope of those sanctions and extend them to insurers underwriting shipping interests that do business with Iran’s energy sector.