WASHINGTON--A majority of members of the American InsuranceAssociation feel they are "well capitalized and well positioned" todeal with the current economic turmoil and don't plan toparticipate in the federal government's program to buy troubledassets.

|

The AIA's position was disclosed in a statement today signed byEvan Greenberg, chairman and chief executive officer of ACE Groupand AIA chairman.

|

The AIA's position is contrary to that of the American Councilof Life Insurers and its members. In recent comments, ACLI and itsmembers said they have met with Treasury officials and asked themto allow life insurers to participate in the bailout plan, theTroubled Asset Relief Program (TARP).

|

The life insurers are asking to be included in a capitalpurchase program established under the legislation appropriating$700 billion for the Treasury to use in stabilizing credit markets.Treasury provided $125 billion to nine banks a few weeks ago underthe program.

|

The Treasury Department let it be known Friday that it wasconsidering allowing insurers to sell troubled assets to thegovernment under the TARP as well as receive cash infusions fromthe Treasury to bolster their balance sheets.

|

A formal announcement is expected later this week.

|

In his statement, Mr. Greenberg said, "We have surveyed ourboard and the substantial majority of the insurers represented byAIA do not support the inclusion of property-casualty insurers inTreasury's capital purchase program."

|

He added, "If [it is] made available, they will not elect toparticipate."

|

Mr. Greenberg said the members believe that, as p-c insurancewriters, "they are well capitalized and well positioned to weatherthe current financial market crisis without the assistance of theCPP announced by Treasury."

|

"As a result, the property-casualty insurers who are members ofAIA strongly prefer to compete in the private market and thesubstantial majority will elect not to participate in the CPP," thestatement said.

|

Members of the AIA include the Hartford Insurance Group,Fireman's Fund/Allianz, Travelers Insurance, USAA, Zurich andChubb.

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.