In a recent statement, the American Insurance Association (AIA) expressed no plans at this time to seek financial assistance through the U.S. Treasury Department's Capital Purchase Program (CPP). The Treasury is currently deliberating as to whether to include insurance companies under the CPP, which is part of the $700 billion emergency economic stabilization package approved by Congress. The primary purpose of the creation of the CPP is to inject capital into credit markets, preventing counterparty failure of such a magnitude as to pose a systemic risk to the financial system.

"Congress established the CPP under the Troubled Asset Relief Program (TARP) to purchase preferred shares in banks and other savings institutions as a means to recapitalize and strengthen their financial position," explained Evan Greenberg, who serves as AIA chairman as well as chairman and CEO of ACE Group. "We have surveyed our Board of Directors, and the substantial majority of the insurers represented by AIA do not support the inclusion of property-casualty insurers in Treasury's program. If made available, then they will not elect to participate."

AIA went on to say that members believe that, as property-casualty insurance writers, they are well-positioned to weather the current financial market crisis without the assistance of the CPP.

"Thus, the property-casualty insurers who are members of AIA strongly prefer to compete in the private market and the substantial majority will elect not to participate in the CPP," added Greenberg.

Headquartered in Washington, D.C., AIA represents approximately 350 major insurance companies that provide all lines of property and casualty insurance and write more than $123 billion annually in premiums.

Source: www.aiadc.org

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AIA Says &quot;No Thanks&quot; To Treasury CPP

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AIA Says "No Thanks" To Treasury CPP