Insurers will not be allowed to participate in a major federal government bailout program for financial institutions, a top Treasury official said today.
Only federally regulated financial institutions will be eligible for the Treasury Department’s Capital Purchase Program, according to the official, who cannot be identified by name due to ground rules established by the agency.
But insurers will be allowed to participate in a new program that will allow financial institutions to sell troubled assets to the private market with government guarantees, the official said.
“We believe insurance companies will benefit if the steps we are taking will lead to stability in the financial markets,” the official siad.
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The comments were made at a background briefing for media after Treasury Secretary Timothy Geithner unveiled the Obama administration’s financial stability plan.
The CPP will exclude all insurers that had applied for aid, including those that already owned bank or thrift holding companies and those that recently had received to become thrift or bank holding companies, the official said.