Life insurance companies are facing many of the same solvency challenges as banks, and have been trying desperately to get under the TARP. Some, like Hartford Insurance (HIG), have announced acquisitions of thrifts banks in hopes of garnering eligibility.
In fact, Hartford has been nursing its potential acquisition to the tune of $20 million in loans while it finds out whether the move will make it eligible.
Well it looks like they’re in luck.
WSJ says the move to allow insurer participation will be announced in the next few days:
How much money would be available to the insurers remains unclear. The Treasury says it has about $130 billion remaining in TARP funds. Life insurers that are bank holding companies have been eligible for TARP for some time, but the Treasury had not yet given the green-light to approve their applications.
Several have applied, including Prudential Financial Inc. (PRU), Hartford Financial Services Group Inc. (HIG) and Lincoln National (LNC) Corp. No decisions have been made yet about which applications will be approved, these people said.
Bear in mind that protecting insurers — who are among the big holders of bank debt — is one of the reasons that we’ve protected bank bondholders so far. Obviously, that alone isn’t enough.
Just $130 billion left though. Might take some creativity to stretch it out, since the prospects of getting more from Congress are daunting.
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