P/C insurer groups unite in opposing federal capital aid

WASHINGTON--The three major primary property/casualty insurer trade groups may not agree on everything, but they are united in their belief that P/C insurers should not participate in the federal government's capital purchase program.

The program, which is part of the federal government's $700 billion financial market bailout package, is designed to pump capital into banks and other financial institutions.

However, all three major trade groups that represent primary property/casualty insurers issued statements last week urging their members to forgo tapping the fund.

Evan Greenberg, chairman of the Washington-based American Insurance Assn., issued a statement saying the majority of AIA members don't support inclusion of P/C insurers in the program. If the program became available to them, they would not participate, he said.

"Those members believe that...they are well-capitalized and well-positioned to weather the current financial market crisis without the assistance of the CPP," said Mr. Greenberg, who also is chairman and chief executive officer of Switzerland-based ACE Ltd.

The National Assn. of Mutual Insurance Cos. also stated its opposition to expanding the program to include P/C insurers.

"As an industry, property/casualty insurance companies, particularly the nation's mutual insurance companies, are well-capitalized and have adequate reserves to pay claims," Charles Chamness, president and CEO of Indianapolis-based NAMIC, said in a statement.

NAMIC's policy "is to oppose the expansion of Treasury's capital purchase program to include the property/casualty insurance industry," Mr. Chamness said.

The Property Casualty Insurers Assn. of America also spoke on the issue last week.

In a statement, PCI's board of directors said its position is "that the industry is generally well-capitalized and managed and is continuing to provide sound and secure products to consumers.

"PCI believes that property/casualty insurer participation in a Treasury relief program is neither necessary nor in the best interest of property/casualty consumers," the Des Plaines, Ill.-based association said in its statement.