Reports have been circulating that insurance companies were “getting in line” to receive money from the $700 billion bailout, known as the Troubled Asset Relief Program (TARP), passed by Congress in October.
But not every insurance company is in favor of a handout from Joe Taxpayer. Says Charles Chamness, president and CEO of the National Association of Mutual Insurance Companies (NAMIC), “As an industry, property/casualty insurance companies, particularly the nation’s mutual insurance companies, are well capitalized and have adequate reserves to pay claims. NAMIC’s policy . . . is to oppose the expansion of Treasury’s Capital Purchase Program to include the property/casualty insurance industry.”
According to Chamness, it is some “large life insurance companies” that are looking for help from the Treasury Department. The property/casualty insurer members of NAMIC, on the other hand, he says, are well funded and “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 points to “prudent management” and state regulation as the reasons member companies do not feel the need for a helping hand.