Insurance Groups Oppose Pre-Funding Bailout Program

The H.R. 4173 system risk fund provision would create a fund with up to $150 billion in reserves.

To create a $100 billion fund, large financial institutions would have to pay more than $13 billion per year for the next 5 to 6 years, insurance groups and other financial services groups write in the letter.

"A new pre-funded systemic fund would threaten the economic recovery by diverting capital from job creation when previous efforts to augment capital are beginning to have an impact," the groups write.

"Further, there is no evidence that the existence of such a fund would deter the creation of new asset bubbles or other market distortions," the groups write.

The groups with representatives signing the letter include the American Council of Life Insurers, Washington, along with several property-casualty insurance groups, general financial services groups, and the Securities Industry and Financial Markets Association, New York.