Treasury OKs taxpayer bailout money for insurers
— -- The Treasury Department plans to extend bailout loans beyond banks and automakers to six of the nation's largest life insurance companies.
Hartford Financial says it expects to receive $3.4 billion.
Lincoln National says it has been initially cleared for a $2.5 billion injection.
The total capital injection into the six companies will be less than $22 billion, The Wall Street Journal reported, citing a person familiar with the situation.
Insurers that applied by the program's deadline of Nov. 14, 2008, and have bank-holding company status, were eligible for government funds. Hundreds of other financial institutions that applied "will be reviewed and funded as appropriate," Williams said.
The government has already extended taxpayer loans to banks and automakers. Its latest round of aid will boost an industry that faces declining capital levels and ballooning investment losses. Some life insurers have also grappled with insurance contracts, such as annuities, that guarantee annual sums to consumers despite companies' worsening financial condition.
The government's aid to life insurers "helps ensure the recovery effort is broad and covers all aspects of the economy," said Steve Bartlett, president of the Financial Services Roundtable, which represents insurers and banks.
In general, the TARP program should be expanded to as many areas of the financial industry as possible, Bartlett says.
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