ACE CEO Agrees With No Bailouts For Insurance Carriers
A few weeks back I wrote a very controversial article on how the federal government may actually be part of a big rigging controversy by bailing out AIG. Please use the search box and search for AIG to find the article.
It was my opinion that subsidizing an insurance carrier that was bidding against other insurance carriers for policies allowed the subsidized insurance carrier to bid lower, as they had "free money" to use to underbid the competition.
ACE's CEO Evan Greenberg commented on the situation this week. Under that scenario, "perfectly healthy insurers may well have to (participate) ... in order to compete with companies that do ... it will become a general government capital subsidy rather than a means of crisis correction," in a letter he wrote to Treasury Secretary Paulson.
The Bush Administration denied funds to GM this week. Will the handouts continue to insurance carriers? The damage to the market may be irreparable.
It was my opinion that subsidizing an insurance carrier that was bidding against other insurance carriers for policies allowed the subsidized insurance carrier to bid lower, as they had "free money" to use to underbid the competition.
ACE's CEO Evan Greenberg commented on the situation this week. Under that scenario, "perfectly healthy insurers may well have to (participate) ... in order to compete with companies that do ... it will become a general government capital subsidy rather than a means of crisis correction," in a letter he wrote to Treasury Secretary Paulson.
The Bush Administration denied funds to GM this week. Will the handouts continue to insurance carriers? The damage to the market may be irreparable.
posted by James J Moore at 8:05 PM
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