Insurers Queue Up For Bailout Money
November 23, 2008
Several troubled life insurance companies are making a bid for federal aid by attempting to transform themselves into bank holding companies, thus qualifying for part of the $700 billion in federal Troubled Assets Relief Program (TARP) money.
The Phoenix Companies could become the latest insurer to plead for federal bailout money. The Hartford-based insurer announced on November 18 that it might buy a savings association or savings and loan. Other insurers and investment banks have bought banks or become bank holding companies to become eligible for federal bailout funds.
Genworth Financial, The Hartford, Lincoln Financial, Protective Life and Transamerica, a unit of Aegon, have all announced bids for money under TARP. The federal infusions are intended to bolster the capital of banks and other financial companies and jump-start new lending.
The Hartford intends to buy Florida-based Federal Trust Corp. for $10 million with the intention of qualifying for about $3.4 billion in Treasury funds. Lincoln Financial has reached a deal to acquire Newton County Loan & Savings FSB. Only a reported $60 billion from the first $350 billion installment of TARP money remains uncommitted.
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