Treasury Expected To Approve TARP Funds For Life Insurers (HIG, GNW, LNC)
According to reports from the Wall Street Journal, the Treasury Department will approve bailout funds to life-insurance companies, extending TARP aid to the embattled industry.
A potential liquidity problem at the life insurance companies is two-fold. Millions of customers could redeem their policies, making matter worse. In addition, the insurers invest their premiums into various securities. A failure could cause additional pressure on the various markets, including bonds and real estate, whereby stability could help support these markets.
Only insurers that own federally chartered banks will qualify for the program.
Life insurers expected to benefit from the funds include Hartford Financial (NYSE: HIG), Genworth Financial (NYSE: GNW) and Lincoln National Corp (NYSE: LNC). In addition, Prudential Financial (NYSE: PRU) and MetLife Inc (NYSE: MET). Principal Financial Group (NYSE: PFG) is another.
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