Property insurer Travelers Cos. told the U.S. Treasury Tuesday it has no plans to seek federal financial assistance and slammed other insurers which are, saying aid should be saved for more "acute" circumstances.
Travelers' declaration came a day after the American Insurance Association -- a trade group representing 350 property-casualty insurers including Travelers, Chubb Corp and Ace Ltd -- said most of its members do not support inclusion of property-casualty insurers in the Treasury's capital purchase program.
"Travelers does not require or intend to request any such assistance," Chief Executive Jay Fishman said in a letter to Treasury Secretary Henry Paulson, citing the company's strong returns on equity and holding company liquidity.
Fishman said the industry should explore "private market solutions in these circumstances, preserving federal financial assistance for more acute problems."
The Treasury is studying how it could give relief to insurance companies under a $700 billion financial services rescue, two sources familiar with the deliberations said Friday.
While property-casualty insurers have largely responded with a "thanks, but no thanks," life insurers and bond insurers are pushing to be included in the bailout.
Frank Keating, president of trade group the American Council of Life Insurers (ACLI), said the industry was "pleased" that it could be extended the aid, noting that the plan could boost the nation's confidence in financial institutions.
"Life insurers want to make sure consumers don't delay acting on their financial and retirement security needs out of concerns prompted by current economic conditions," Keating added, in a statement. The ACLI represents 353 life insurers, including Hartford Financial Services Group, Assurant Inc and Lincoln National Corp.
Bond insurers such as MBIA Inc and Ambac Financial have also held meetings with regulators to push for inclusion in the federal plan.
As the plan stands, insurers that do not have federally regulated units would not be included in the bailout but that is not ironclad.
St. Paul, Minnesota-based Travelers, which has significant operations in Hartford, last week reported an 82 percent drop in net income on higher-than-expected hurricane claims, but said its outlook was bright, with the company poised to exploit opportunities from troubles at its rival American International Group Inc.
(Reuters)