Treasury says aid can go to some insurers

April 9, 2009 at 8:09 AM
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WASHINGTON, April 9 (UPI) -- A U.S. Treasury Department spokesman confirmed some life insurance companies were among firms considered eligible for federal bailout funds.

Several of the larger insurers, considered an important link in financial circles as well as in personal financing, scrambled to buy thrifts last fall to qualify for the Treasury's Troubled Asset Relief Program. But, insurers are monitored at the state level, giving the Treasury pause when it came to offering them funds, The Washington Post reported Thursday.

In an e-mail message, however, Treasury spokesman Andrew Williams said, "There are a number of life insurers who met the requirements for the Capital Purchase Program because of their thrift or bank holding status."

The Treasury was reviewing "hundreds of financial institutions" and will make decisions "on a rolling basis," Williams wrote Wednesday.

Insurers invest in a number of critical markets, including corporate bonds and real estate. The industry has also foundered in the current economic crisis.

"I surely hope they have the ability to see what they're getting into," Peter Larson, an analyst at Gradient Analytics told the Post, warning the companies' capital needs may exceed expectations.

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