The Treasury Department has decided to make bailout funds available to insurance companies, but one insurer announced that it was abandoning its application to receive them.
Officials said this week that they were in the process of reviewing applications from as many as twelve insurers that had bought or were attempting to buy savings and loan or banks to qualify for money under the Troubled Asset Relief Program.
BailoutSleuth reported earlier this month that insurance companies were having a difficult time gaining access to TARP funds, in part because some of the banks they are attempting to buy face severe regulatory challenges. Some of the insurers, including Hartford Financial Co., have faced questions about their own stability as well.
Until this week, the Treasury had given no indication whether it would disperse money to insurance companies that converted to bank holding companies.
It said Wednesday that it was reviewing applications from the insurers, but that they would be treated in the same way as all other applications and considered "on a rolling basis."
The delays proved too much for at least one insurer. Genworth Financial said that it was abandoning efforts to buy Minnesota-based InterBank because the process of getting TARP funding had outlasted a deadline imposed by the Office of Thrift Supervision to approve the purchase.
Although it has done so in at least one other case -- that of Hartford Financial's pending purchase of Florida-based Federal Trust Bank -- Treasury told Genworth it would not extend the deadline.
Genworth announced its plans to buy the bank in December. At the time, InterBank held approximately $1 billion in assets.
The terms of the deal were not announced, but it was contingent on approval for TARP funds. The Office of Thrift Supervision was equally interested in seeing the bank's capital refreshed with bailout money, and Genworth hoped that bailout funds would improve its own capital position.
Officials said this week that they were in the process of reviewing applications from as many as twelve insurers that had bought or were attempting to buy savings and loan or banks to qualify for money under the Troubled Asset Relief Program.
BailoutSleuth reported earlier this month that insurance companies were having a difficult time gaining access to TARP funds, in part because some of the banks they are attempting to buy face severe regulatory challenges. Some of the insurers, including Hartford Financial Co., have faced questions about their own stability as well.
Until this week, the Treasury had given no indication whether it would disperse money to insurance companies that converted to bank holding companies.
It said Wednesday that it was reviewing applications from the insurers, but that they would be treated in the same way as all other applications and considered "on a rolling basis."
The delays proved too much for at least one insurer. Genworth Financial said that it was abandoning efforts to buy Minnesota-based InterBank because the process of getting TARP funding had outlasted a deadline imposed by the Office of Thrift Supervision to approve the purchase.
Although it has done so in at least one other case -- that of Hartford Financial's pending purchase of Florida-based Federal Trust Bank -- Treasury told Genworth it would not extend the deadline.
Genworth announced its plans to buy the bank in December. At the time, InterBank held approximately $1 billion in assets.
The terms of the deal were not announced, but it was contingent on approval for TARP funds. The Office of Thrift Supervision was equally interested in seeing the bank's capital refreshed with bailout money, and Genworth hoped that bailout funds would improve its own capital position.
published April 10, 2009, 0 Comments
Leave a comment