Washington – The American Insurance Association (AIA) says that financial assistance to its members under the Capital Purchase Program (CPP) set up by U.S. Treasury Department is unnecessary and unwanted.
The CPP is part of the Troubled Asset Relief Program (TARP) at the heart of the $700 billion emergency economic stabilization package approved by Congress.
“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,” says Evan Greenberg, chairman of the AIA. “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."
The CPP was created to inject capital into credit markets, and to prevent counterparty failure of such a magnitude as to pose a systemic risk to the financial system.
Source: American Insurance Association
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