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NAMIC Opposes Treasury Investment in Property/Casualty Insurance Industry

The National Association of Mutual Insurance Companies (NAMIC) said that policyholders should remain confident that they are protected as the property/casualty industry continues to be...
November 4, 2008

The National Association of Mutual Insurance Companies (NAMIC) said that policyholders should remain confident that they are protected as the property/casualty industry continues to be financially sound. The comments came as the U.S. Treasury Department considers whether to make insurance companies eligible for some of the $700 billion available through the Emergency Economic Stabilization Act approved by Congress earlier this month.

"As an industry, property/casualty insurance companies, particularly the nation's mutual insurance companies, are well capitalized and have adequate reserves to pay claims," said Charles Chamness, president and CEO of NAMIC. "NAMIC's policy, approved by our board of directors today, is to oppose the expansion of Treasury's Capital Purchase Program to include the property/casualty insurance industry."

"Our members are not interested in participating in any type of program involving direct capital infusion from the U.S. Treasury Department, and we are working with our members to promote the understanding of and commitment to mutuality," Chamness said. NAMIC represents 1,400 property/casualty insurers and more than 40 percent of the marketplace. NAMIC members are mutual companies whose sole responsibility is to their policyholders rather than stockholders.

Chamness sent a letter to Treasury Secretary Henry Paulson making clear that there is no need for the inclusion of property/casualty insurance companies in the Capital Purchase Program. NAMIC member companies remain strong and solvent and the program would create a competitive advantage for participating companies while also undermining policyholder confidence. Chamness further urged the Secretary not to burden the most solvent and efficiently regulated segment of the financial services industry with any new federal regulatory requirements.

NAMIC Letter to Treasury Secretary Paulson (PDF file, 10/30/08)