US Extends Bailout to Life Insurers

Treasury throwing a lifeline to a third industry
By Rob Quinn,  Newser Staff
Posted Apr 8, 2009 1:41 AM CDT
US Extends Bailout to Life Insurers
People walk out of the Travelers Life and Annuity building in New York City. Some of America's major life insurance firms will be eligible for bailout funds.   (Getty Images)

The Treasury Department has decided to give struggling life insurance companies access to federal bailout funds, insiders tell the Wall Street Journal. The industry—which had earlier seemed largely immune to the credit crisis—has been hit hard by stock market and real estate declines, leaving some firms on the hook for big payouts they may find impossible to deliver.

The move is expected to give capital markets a boost by allowing life insurers currently hoarding cash to resume buying bonds, and by saving the firms from selling off their holdings to raise cash. An official announcement that the insurers can join the TARP program is expected within days. It's unclear whether the news will spark the same outrage triggered by the bailouts of the banking and auto industries.
(More insurance stories.)

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