Life insurers may get bailouts
The Treasury Department Wednesday confirmed that life insurers are qualified to join banks and carmakers on the list of industries getting taxpayer bailouts.
In a statement, the agency said certain life insurers are eligible to receive an unspecified amount of the money that remains from October’s $700 billion rescue program. The transfer of the money is expected soon.
"There are a number of life insurers who met the requirements for the Capital Purchase Program because of their thrift or bank holding company status. These companies applied within the appropriate deadline," Andrew Williams, a Treasury spokesman, said in a statement. "These are among the hundreds of financial institutions in the pipeline that will be reviewed and funded as appropriate on a rolling basis."
At the end of 2007, before the economy’s steep swoon, life insurers had assets under management exceeding $5 credit reports free.1 trillion, half of which was in corporate bonds. Life insurers are the largest buyers of corporate bonds, which mature over a long period. Insurers try to match these long-term investments to the risks they’re assuming as they guarantee retirees annuities that are dispersed over similarly long periods of 15 or 20 years.
In order to receive the funds, life insurers must own a regulated bank or thrift. Companies that met this qualification and sought funds include the Hartford and Lincoln National.
Prudential Financial already owned a thrift and has also applied. Two others, Genworth Financial and MetLife, qualify but hadn’t indicated whether they’ve sought funds or would in the future.
Filed under: economics by Fred