FDIC Tells Banks To Pay $45 Billion in Premiums Early

AHN — Fri, 13 Nov 2009 00:42:12 +0000

Washington, D.C. (AHN) – American banks will have to pay forward $45 billon in insurance premiums by the end of the year that normally would be paid out over the next three years.

The Federal Deposit Insurance Corp. took the action Thursday to ensure that it has enough funds on hand to deal with future bank failures. The fund is used to repay depositors up to $250,000 per account should their bank fails.

Some 120 banks have been seized so far this year by the FDIC, compared to only three in 2007. About $32 billion has been reserved for expected failures through June, and the FDIC predicted bank failures through 2013 will cost $100 billion. The FDIC is required to rebuild the fund when the ratio of balance to insured deposits drops beneath 1.15 percent. As of June, the ratio was 0.22 percent.

The FDIC chose to require early payment of the premiums rather than get a loan from the Treasury Department or to add a special fee to the regular premiums.

James Chessen, chief economist for the American Banking Association, applauded the FDIC decision. In a statement, Chessen said “It strikes the right balance between making sure the FDIC has the cash necessary to meet its obligations and not unduly impairing banks’ ability to meet their obligations to their communities. The pre-paid assessment is far superior to another special assessment, which would likely do more harm than good as it would directly hinder capital growth and make lending much more difficult.”

Regular premiums for the banking industry will total $18 billion this year, he said.

PETA says meat eaters should pay more insurance

Samantha DeWitt — Wed, 19 Nov 2008 10:01:47 +0000

That wacky mob PETA, fresh from “flouring” Lindsay Lohan in Paris has sent a letter to BlueCross BlueShield health insurance company in Vermont on behalf of their 2 million members asking that health insurance premiums be raised for meat eaters and reduced for vegetarians.

They state that meat eating is linked to some of America’s “deadliest diseases” and that agreeing to this request will result in the company saving money, which we all know PETA cares about.

PETA argues that a a cut in insurance premiums would give people an “incentive” to do without meat and that will make them healthier. The letter also warns of the danger of E coli outbreak. I would be more worried about catching the outbreak of smug, superiority that normally accompanies being a vegetarian and PETA member.

BlueCross BlueShield said that discrimination on the grounds of eating preferences was illegal in every state. They obviously didn’t feel the need to add the bit about how they couldn’t give a crap about what PETA thinks anyway.

Via ecosalon

The Inquisitr » insurance premiums

FDIC Tells Banks To Pay $45 Billion in Premiums Early

PETA says meat eaters should pay more insurance