Legal Commentary

TARP To Be Extended To Life Insurance Companies

By Big Tent Democrat

Via John Cole, it turns out life insurance companies are also a lynchpin to the financial system:

The Treasury Department has decided to extend bailout funds to a number of struggling life-insurance companies, helping an industry that is a linchpin of the U.S. financial system, people familiar with the matter said.

Remember the saving the "non-banks" issue? It is front and center here:

Only insurers that own federally chartered banks will qualify for the program. Treasury had said last year that life insurers could be eligible for TARP funds if they owned bank-holding companies, but it hadn't officially decided to give funds to these companies as it focused much of its energies on banks and auto makers.

The life-insurance companies will have access to Treasury's Capital Purchase Program, which injects funds into banks. How much money would now be available to the insurers, and which particular insurers would be beneficiaries, remains unclear. The Treasury says it has about $130 billion remaining in TARP money.

A number of life insurers, including Hartford Financial Services Group Inc., Genworth Financial Inc. and Lincoln National Corp., struck deals last fall to buy regulated savings and loans so they could call themselves banks and qualify for government funds. Hartford and Lincoln have applied for TARP funds. Genworth said it has applied with the Office of Thrift Supervision to approve its thrift purchase as a step toward gaining access to the federal funds.

(Emphasis supplied.) I think if I owned a business and had the capital available, I would try and buy a small bank to get in on the giveaway.

Speaking for me only

Full post as published by TalkLeft on April 08, 2009 (boomark / email).