The Treasury Department is preparing to extend financial support drawn from the Troubled Asset Relief Program to several struggling life insurance companies, reports The Wall Street Journal. Among the companies to benefit from taxpayer funded relief are American International Group, Hartford Financial Services, Genworth Financial, Lincoln National and Prudential Financial.
According to the Journal, “Millions of Americans have entrusted their families’ financial safety to these companies, so keeping them on solid footing is crucial to maintaining confidence…Because insurers invest the premiums they receive from customers into bonds, real estate and other investments, they are major holders of securities. If they needed to sell off holdings to raise cash, it could cause markets to tumble.”
It is noteworthy that some insurers have retained triple-A ratings, including Massachusetts Mutual Life, New York Life, Northwestern Mutual Life and TIAA-CREF. This move by the Treasury brings to three the number of industries receiving assistance from the government, along with the financial and auto industries.