Insurance companies get cleared for TARP bailout funds on bad investments

May 15, 2009 by · 1 Comment
Filed under: Stock Market News 

We knew this was coming, and pensions are next in line.   Many of these insurance companies used a lot of this toxic assets as fixed income securities that would help the insurers keep their obligations.  At this point, everyone is going to get a bailout in the financial industry so I think that inflation is really going to be the next issue to deal with if this turn around recovery works.  If not then we will see many banks and insurers go bankrupt but that seems unlikely with the actions of this administration to safeguard our present financial oligarchs at all costs, even devaluing the dollar.

News (Bloomberg):

Prudential Financial Inc., Hartford Financial Services Group Inc. and Allstate Corp. are among six insurers approved by the U.S. government for bailout funds after investment declines eroded capital across the industry.

Hartford won preliminary approval for $3.4 billion from the Treasury Department’s capital purchase program, the Connecticut- based insurer said today in a statement. Lincoln National Corp. said it may receive $2.5 billion. Principal Financial Group Inc. and Ameriprise Financial Inc. joined Prudential and Allstate in winning preliminary approval, said Andrew Williams, a spokesman for the Treasury.

Life insurers applied for government bailouts last year as the recession pushed down the value of corporate debt and mortgage investments held to back policies. Ratings downgrades and stock declines across the industry made it harder for insurers to raise money from private investors.

“This is welcome news for the life-insurance sector,” said Robert Haines, an analyst with CreditSights Inc. “It stops some of the bleeding and puts a Band-Aid on the wound.”

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One Response to “Insurance companies get cleared for TARP bailout funds on bad investments”
  1. Rayann says:

    You know what, I’m very much inlcined to agree.

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