Property/casualty insurers not seeking govt cash

WASHINGTON (Reuters) - U.S. property-casualty insurers do not want cash from the government's capital infusion program and most would not participate if assistance was offered, an industry group said on Monday.

The U.S. Treasury Department is examining how it could give relief to insurance companies under a $700 billion financial services rescue program that is being used to help banks and other financial institutions.

However, the American Insurance Association, representing 350 insurers such as Chubb Corp, Travelers Cos Inc and Ace Ltd, said most of its members do not support inclusion of property-casualty insurers in Treasury's capital repurchase program.

Insurers "strongly prefer to compete in the private market and the substantial majority will elect not to participate," said Evan Greenberg, chief executive of Ace and chairman of the insurance association, in a statement.

So far, Treasury has allocated funds to federally regulated banks, such as Bank of America Corp and PNC Financial Services Group Inc.

However, insurers are regulated by individual U.S. states, not by a federal regulator, which makes it difficult for Treasury to assess if a company is fundamentally sound.

Some life insurers approached Treasury last week to explore ways to access the rescue program and work around the lack of a federal insurance regulator.

The Wall Street Journal reported that MetLife Inc and Prudential Financial Inc are interested in exploring a sale of equity stakes to the government.

Two sources briefed on the matter told Reuters there have been talks about making an assistance program mandatory for insurers to squash any negative perceptions associated with government help.

The American Insurance Association represents members that write more than $123 billion in premiums each year.

(Reporting by Rachelle Younglai; editing by Jeffrey Benkoe)