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Financial crisis fee punishes those who acted responsibly

by Jimi Grande, senior vice president, National Association of Mutual Insurance Companies - 01/21/10 7:32 PM ET

Now, to fill the $117 billion costs of the TARP program,
President Obama has called for the fee to be assessed against any financial
services firm with more than $50 billion in assets and owns a thrift, including
property/casualty insurers, with payments beginning on June 30 of this year.
These companies will be required to pay the fee even if they have paid back
their TARP loans, with interest, and even if they never received any federal
money at all.

At NAMIC we believe this is an unfair policy that sends the
wrong message to Wall St.
and to the taxpayers. What does it say when simply meeting an arbitrary
threshold means having to pay for the failures of companies that gambled with
their customers’ money and lost?

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. In the
weeks after the crisis began, NAMIC’s board of directors resolved on behalf of
our association and its members that we did not need or want TARP funds.

Why then, would those companies who have weathered the
financial storm be asked to pay for those who couldn’t? Supporters of the fee
have argued that by stabilizing the economy, the TARP helped those companies
being asked to pay the fee. This is a flawed argument, though, because it
assumes the benefits of a stabilized economy were limited to companies with
more than $50 billion in assets. Certainly those supporters wouldn’t make that
argument.

Given how much has been spent in the name of stabilizing and
stimulating the economy, it’s vital that our elected leaders aggressively seek
to recoup as much of the taxpayers’ money as possible. But those efforts should
be, made fairly, with thought given to those who acted responsibly throughout.
We at NAMIC have no dispute with a “Financial Crisis Responsibility Fee,” we
just believe it should apply to those who bear the responsibility for the
financial crisis.