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AIA: P/C Companies Do Not Seek Financial Assistance Through the Treasury

Evan Greenberg, Chairman and Chief Executive Officer of ACE Group and Chairman of the American Insurance Association (AIA), issued the following statement on October 27,...
October 29, 2008

Evan Greenberg, Chairman and Chief Executive Officer of ACE Group and Chairman of the American Insurance Association (AIA), issued the following statement on October 27, as the U.S. Treasury Department deliberates on if it will include insurance companies under the Capital Purchase Program (CPP) that is part of the $700 billion emergency economic stabilization package approved by Congress:

"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.

"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 Capital Purchase Program. If made available, they will not elect to participate.

"Those members believe that, as property-casualty insurance writers, they are well-capitalized and well-positioned to weather the current financial market crisis without the assistance of the CPP announced by Treasury.

"As a result, 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."

AIA's position is in contrast to that taken by the American Council of Life Insurers (ACLI) and its members. The National Underwriter has reported that in recent comments, ACLI and its members said they have met with Treasury officials and asked them to allow life insurers to participate in the bailout plan, the Troubled Asset Relief Program (TARP).

AIA Members Don't Need Fed Plan (National Underwriter 10/27/08)
 
Text of AIA Statement (AIA 10/27/08)