The Treasury Department now is confirming that it will open the Troubled Asset Relief Program to insurers that have federally regulated subsidiaries.
The insurers that will qualify are those that own thrifts or bank holding companies that have applied for aid through the Treasury Department’s Capital Purchase Program, a department spokesman said today.
“There’s no reason to disqualify them, because they meet the criteria,” a source familiar with the situation said Tuesday.
The source did not say when the application approvals might be disclosed, and the Treasury Department statement released today did not give that information.
Several sources say they believe that about a dozen insurers have applied for aid.
The aid applicants include Genworth Financial Inc., Richmond, Va.; Hartford Financial Services Group Inc., Hartford; Phoenix Companies Inc., Hartford; Lincoln National Corp., Radnor, Pa.; Principal Financial Group Inc., Des Moines, Iowa; Protective Life Corp.; Birmingham, Ala.; and Prudential Financial Inc., Newark, N.J.
The American Council of Life Insurers, Washington, is reacting cautiously to the report.
“We’re anxious to hear official word from Treasury,” says ACLI representative Whit Cornman.
Andrew Kligerman, an analyst at UBS Investment Research, New York, says letting insurers into TARP should not be critical for most life insurers.
“It likely will temporarily boost investor confidence, but TARP funds alone cannot eliminate the capital-liquidity pressures caused by weak credit, equity market, and economic conditions,” Kligerman writes in a comment.
But a chance to participate in the CPP “matters to insurers facing real (or just perceived) near-term capital/liquidity constraints,” Kligerman writes.