Insurance Companies Qualify for Bailout MoneyThe Treasury Department says that some life insurance companies have met the requirements for government capital investments under an existing rescue plan, and their applications for funds are now being considered.
Treasury says there are a number of life insurers that have met requirements for the Capital Purchase Program because of their bank holding company status. They are among the hundreds of institutions in the CPP pipelines to be reviewed and funded as they are approved. This capital investment in insurance companies does not constitute a new rescue program for the insurance sector, according to a Treasury department statement.
Treasury's statement caused a downward shift in stocks, including the large insurance companies that were viewed as benefiting the most from a widened bailout.
In recent months, some insurance companies have received approval to acquire banks, paving the way for them to participate in the Capital Purchase Program, which the Treasury has estimated will top out at $218 billion. This week's tally shows that the program had $198.5 billion invested, leaving $19.5 billion in available funds, according to Treasury documents. A Treasury official says so far only a small number of life insurers have met the qualifications for the program.