WASHINGTON (Jan. 15, 2010) - The National Association of Mutual Insurance Companies (NAMIC) called on lawmakers to ensure that TARP fund recovery fees are paid by those companies who received money from the federal government.
“A ‘Financial Crisis Responsibility Fee’ should be paid by those who were responsible for the financial crisis,” said Jimi Grande, senior vice president for federal and political affairs for NAMIC. “Virtually every examination of what caused the financial meltdown in 2008 has shown that property/casualty insurance played little or no significant role in the crisis. By asking insurers to pay this fee, President Obama is asking those who acted responsibly to pay for the Wall St. firms that gambled with their customers’ money and lost.”
Under the president’s proposal, financial services firms with more than $50 billion in assets would begin paying fees as of June 30 of this year. The fee is being proposed to recoup the $117 billion cost of the Troubled Asset Relief Program although firms will be assessed the fee even if they have already repaid, with interest, their TARP loans, or even if they never participated in the program at all. In announcing the proposed fee, the White House argued that companies should be required to pay the fee because every major company benefitted from the actions taken through the TARP bailouts.
“We at NAMIC reject the argument that every company benefitted from the federal bailouts of Wall Street banks and should therefore be subject to repaying them through this fee,” Grande said. “Within days of the financial meltdown, NAMIC stated unequivocally that the property/casualty insurance industry neither needed nor wanted any federal funds, and history has proved that to be true.”
Property/casualty insurers have remained financially stable throughout the financial crisis. Even at AIG, the insurance operations remained strong while its financial products division shattered the company.
“We agree that President Obama should seek to get back every dime owed to the taxpayers,” Grande said, “but the money should be collected from those companies that actually owe the taxpayers, rather than companies that are large enough to meet an arbitrary threshold.”
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Posted: Friday, January 15, 2010 4:07:15 PM.
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