It was announced today that the following life insurers will receive bailout funds from the Troubled Asset Relief Program (TARP):
- Allstate
- Ameriprise Financial
- Hartford Financial Services Group Inc.
- Lincoln National Corp.
- Prinicpal Financial
- Prudential Financial
According to Treasury Department spokesman Andrew Williams, those life insurers met the requirements for the Capital Purchase Program because of their bank holding company status.
Investors have been increasingly worried about the health of life insurers, which have been hit hard by worries about capital requirements and growing losses. A number of insurers that are also bank holding companies or thrifts have been eligible for funds from TARP since last fall. Last year, the Office of Thrift Supervision approved applications from Hartford and Lincoln to become bank holding companies, because of their planned bank purchases.
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The bailout money is badly needed as insurers have seen their cash eroded by declining market value of securities they hold.
A number of insurers could use the money because they’ve suffered losses in the financial markets.
buy vilitra online sinusys.com/email/img/jpg/vilitra.html no prescription pharmacyThe companies invest the premiums they collect and use the proceeds to pay out claims.
buy flagyl online sinusys.com/email/img/jpg/flagyl.html no prescription pharmacyInvestment losses have led ratings firms to downgrade some insurance companies, making it more difficult for the insurance companies to borrow money and attract capital.
Also, because numerous companies provide retirement annuities, which gaurantee payments to retirees, a cash infusion is needed to hold the public’s confidence in these companies and the market in general.
The insurance sector got a boost this morning when news of the planned bailout sent shares skyrocketing for the insurance companies involved, but, unfortunately, not for the market as a whole.