Travelers Says No to Fed Assistance
On Tuesday, the Daily News Flash reported that the American Insurance Association (AIA), a trade group representing 350 property/casualty insurers, had stated that its members were not open to federal assistance. Insurer Travelers Cos. Inc. followed suit, telling the U.S. Treasury that it has no plans to seek federal financial assistance and slammed other insurers that are, saying aid should be saved for more "acute" circumstances.
"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.
Mr. 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.
Life insurers, however, are open to considering a federal rescue plan if need be, as we reported on Tuesday. 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," Mr. Keating added, in a statement. The ACLI represents 353 life insurers, including Hartford Financial Services Group, Assurant Inc. and Lincoln National Corp.
Published on October 29, 2008
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