After a long delay, six life insurance companies have been approved to receive as much as $22 billion in bailout money.
The Treasury Department announced that Hartford Financial Services Group, Prudential Financial Inc., Lincoln National Corp., Allstate Corp., Ameriprise Financial Inc. and Principal Financial Group all qualified for capital infusions under the $700 billion Troubled Asset Relief Program.
However, Ameriprise announced Friday that it would not be taking the government aid.
The insurers, many of which bought savings and loan banks in order to qualify, had received mixed signals about whether they would convince Treasury that they were deserving of assistance.
Life insurance companies have suffered as a result of the economic collapse, with some of them dangerously over-exposed to the mortgage derivatives that caused it. Others simple hoped to use TARP to gain access to an inexpensive source of capital in the midst of a difficult lending environment.
Unlike with the banking sector, where many early participants in the bailout program have since attempted to withdraw out of concern over an uncertain regulatory environment, the insurers have been steadfast in their efforts to access TARP funds.
Last month, Treasury officials indicated that the insurers' applications were likely to be approved, but that they would be considered in the normal course of business along with pending applications from banks.
Until yesterday's announcement, American International Group Inc. was the only insurer to get government help. It received a $150 billion bailout in November in the face of fears that the collapse of the insurance giant could undermine the entire financial system. It has since received an additional $30 billion in aid.
Hartford said that it was poised to receive as much as $3.4 billion. Ramani Ayer, the firm's chairman, called the decision to apply for the money "a prudent step for The Hartford, particularly given the continued economic uncertainty."
Lincoln National said it was approved for $2.5 billion in TARP money. Principal Financial did not specify how much it had been allotted, but previously said it could receive as much as $2 billion.
The Treasury Department is open to considering additional applications from the insurance industry, which "will be reviewed and funded as appropriate on a rolling basis," a spokesman told Forbes.com.
The Treasury Department announced that Hartford Financial Services Group, Prudential Financial Inc., Lincoln National Corp., Allstate Corp., Ameriprise Financial Inc. and Principal Financial Group all qualified for capital infusions under the $700 billion Troubled Asset Relief Program.
However, Ameriprise announced Friday that it would not be taking the government aid.
The insurers, many of which bought savings and loan banks in order to qualify, had received mixed signals about whether they would convince Treasury that they were deserving of assistance.
Life insurance companies have suffered as a result of the economic collapse, with some of them dangerously over-exposed to the mortgage derivatives that caused it. Others simple hoped to use TARP to gain access to an inexpensive source of capital in the midst of a difficult lending environment.
Unlike with the banking sector, where many early participants in the bailout program have since attempted to withdraw out of concern over an uncertain regulatory environment, the insurers have been steadfast in their efforts to access TARP funds.
Last month, Treasury officials indicated that the insurers' applications were likely to be approved, but that they would be considered in the normal course of business along with pending applications from banks.
Until yesterday's announcement, American International Group Inc. was the only insurer to get government help. It received a $150 billion bailout in November in the face of fears that the collapse of the insurance giant could undermine the entire financial system. It has since received an additional $30 billion in aid.
Hartford said that it was poised to receive as much as $3.4 billion. Ramani Ayer, the firm's chairman, called the decision to apply for the money "a prudent step for The Hartford, particularly given the continued economic uncertainty."
Lincoln National said it was approved for $2.5 billion in TARP money. Principal Financial did not specify how much it had been allotted, but previously said it could receive as much as $2 billion.
The Treasury Department is open to considering additional applications from the insurance industry, which "will be reviewed and funded as appropriate on a rolling basis," a spokesman told Forbes.com.
published May 15, 2009, 0 Comments
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