WASHINGTON — The U.S. Treasury Department has agreed to let six insurers into the Capital Purchase Program, but some have decided not to participate.
Insurers given preliminary approval to participate in the program include Allstate Corp., Northbrook, Ill.; Ameriprise Financial Inc., Minneapolis; Hartford Financial Services Group Inc., Hartford; Lincoln National Corp., Radnor, Pa.; Principal Financial Group Inc., Des Moines, Iowa; and Prudential Financial Inc., Newark, N.J.
Analysts at Keefe, Bruyette & Woods Inc., Hartford, noted immediately after the news surfaced that some insurers that can participate in the CPP may choose not to do so. The Keefe, Bruyette analysts turned out to be correct.
Hartford says it has been approved for $3.4 billion in participation, and has agreed to participate.
“Applying for participation in the CPP was a prudent step for the Hartford, particularly given the continued economic uncertainty,” Hartford Chairman Ramani Ayer says in a statement. “These funds would fortify our capital resources and provide us with additional financial flexibility during one of the most volatile market climate’s in our nation’s history.”
All terms of the actual Treasury investment in Hartford are subject to final negotiations and approval, Ayer says
Lincoln says it has not made a decsion about the CPP.
“We appreciate this preliminary approval for inclusion in the CPP program, subject to a final review of its terms and conditions,” Lincoln President Dennis Glass says in a statement. “We are pleased that the Treasury Department has recognized the critical role that insurers play in providing liquidity to the financial system, and that it is willing to act in a manner that will strengthen the balance sheets of the nation’s insurers.”
Ameriprise says it has decided not to accept CPP funding.
“We have carefully evaluated our current position and expectations for the future, and we are confident that our current capital position and access to potential additional funding sources are more than adequate,” Ameriprise Chairman Jim Cracchiolo says in a statement. “Our prudent management approach has allowed us to maintain solid balance sheet fundamentals, including a high-quality asset portfolio, large liquidity pool, more than $1 billion in excess capital and conservative capital ratios.”
Prudential, Allstate and Principal say they have not yet decided what to do about the CPP.
Prudential “is currently evaluating all options available to the company,” the company says.