NU Online News Service

WASHINGTON --The Treasury Department told insurers last night that they have been ruled eligible for assistance under the Troubled Asset Relief Program if they have a federal regulatory link, such as a thrift charter or a bank holding company charter.

Life insurers who are members of the American Council of Life Insurers had petitioned the agency to participate in the program in late October, but property-casualty insurers who are members of the American Insurance Association issued a statement saying they did not need to participate.

An ACLI spokesman declined to comment.

"This has always been the case," said Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable in Washington.

"But what they are doing here is saying that if you don't have a thrift or a bank holding company charter, you must have one to participate," he explained. "It is a positive step, although a small one."

And a Treasury Department spokesperson also confirmed that insurers wishing to participate in the program have been given permission to simultaneously apply for aid under the program as well as apply for the thrift or bank charter that would be a prerequisite for aid.

At the same time, an industry official said that one property-casualty insurer, Chubb, had been approached by Treasury to see if it would take money under the TARP program as a means of acquiring troubled insurers, but had rejected the approach.

A spokesman for Chubb declined to comment but pointed to an Oct. 29 letter the company had sent to Treasury Secretary Henry Paulson saying it did not see the need to participate in the program. The spokesman also said the underwriter does not have a federal financial services charter.

A spokesman for the Office of Thrift Supervision confirmed that "there had been expressions of potential interest in a thrift charter expressed by several" insurers over the last several days, "but no formal applications at this point."

The OTS official, Bill Ruberry, also said that approximately 15 insurers had thrift or thrift holding company charters. He declined to identify them.

Jennifer Zuccarelli, a spokesperson for the Treasury, said the latest statement just meant that insurers without any established federal regulatory oversight mechanism had been ruled out of participation in the program.

A statement by New York Life this morning saying it would not participate in the program sparked concerns that Treasury had finally decided on its policy on insurer participation in the program after several weeks of debate.

The statement said New York Life Insurance Company had decided "not to participate in the capital purchase program."

The spokesman said that "when it became clear to us that the program was entirely voluntary for insurers, New York Life was able to evaluate it solely from the point of view of its capital strength and its policyholders' best interests."

MetLife, New York, which has a bank holding company charter, declined to comment on whether it would participate.

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