Next bailout: Life insurance gets lifeline from taxpayers

[Bozita]

Source: McClatchy

Next bailout: Life insurance gets lifeline from taxpayers
BY KEVIN G. HALL • MCCLATCHY NEWSPAPERS • APRIL 8, 2009

Updated at 9:02 p.m.


WASHINGTON — The Treasury Department confirmed today that life insurers are qualified to join banks and carmakers on the list of industries getting taxpayer bailouts.

In a statement, the agency said certain life insurers are eligible to receive an unspecified amount of the money that remains from October’s $700-billion Wall Street rescue program. The transfer of the money is expected soon.

“There are a number of life insurers who met the requirements for the Capital Purchase Program because of their thrift or bank holding company status. These companies applied within the appropriate deadline,” Andrew Williams, a Treasury spokesman, said in a statement. “These are among the hundreds of financial institutions in the pipeline that will be reviewed and funded as appropriate on a rolling basis.”

The $218-billion program was created as part of October’s bailout and is designed to help bolster the balance sheets of financial institutions. In exchange for receiving capital, participating companies provide senior preferred shares to the Treasury Department, paying a dividend of 5% annually for five years and 9% if the money hasn’t been repaid after that.

Read more: http://www.freep.com/article/20090408/NEWS15/90408087

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So, ... life insurance companies are banks too.

Amazing.

[customerserviceguy]

1. Andrew Tobias wrote a book a couple of decades ago

called "The Invisible Bankers" about the insurance industry. They are indeed "bankers", and all the cash value of the whole-life policies in force are just as much "savings" to the people who hold them as are certificates of deposit down at the corner bank.

[MadMaddie]

2. I don't think we should be bailing out companies that

had bad business plans. The Life Insurance companies, the other companies like All State who routinely try to deny paying customers what's owed to them.

The whole insurance industry stinks.

[Marrah_G]

15. Unlike financial institutions life insurance is heavily regulated.

I don't know of any that would be in need of bailouts.

Is the article saying that they could...or that they are?

[KoKo]

3. I read it was about all the "Annuities" they were selling since 2007 that got them

into trouble. They were doing some "CDS's" and stuff and now don't have the cash to pay the annuities for folks into the long term. It's probably lots of life insurance and diasbility policies, too. Having AIG handle some stuff for them..off the book.

Anyway, lots of folks will be out policies they depend on if they can't be paid back. One more deregulation nail in the coffin.

[UpInArms]

4. does that mean that since they are now funded by the taxpayers that

I no longer need to pay my premiums (since that would be double payments)?

[ixion]

5. OH HELL NO

Bailing out the idiots who caused the mess is bad enough. Insurance companies also contributed to the collapse in their own underhanded and unethical way.

No more bailouts...ever!

[wisteria]

6. I don't agree with and do not think Life Insurance Companies need a bail out.

This is getting to the point of ridiculous. I would like a bail out too, I could us the money to.

[Autumn]

7. Fucking ridiculous

Blows me out of the fucking water. Can I get a fucking bailout on my 401K that I lost over TWO THIRDS of?

[CoffeeCat]

8. Bailout the VICTIMS, not the PERPETRATORS!

What about the people who are losing their homes because they were snookered into the "creative financing"?

What about the people who have lost 50 percent of the value of their 401ks?

What about the people who have lost their pensions, due to bad investments that were born from these banks?

What about the people who have lost their jobs--because these stupid banks created toxic assets and sold them to every financial institution?

What about We the frickin People?????????????????????????????????????????????????????????

[Amonester]

11. I agree, but, the easy explanation of all these questions is:

because these (not stupid, but 'legally' criminal minded) banks pay BIG cash to lobbyists AND pols to do THEIR greedy bidding

the people pay them - well - never big enough (in their estimation) for pols to ever bother doing anything really worthwhile

[Quantess]

9. No way....

Ridiculous!

[2Design]

10. hell no n/t

[Joe Bacon]

12. Well, are the Health Insurers NEXT in the bailout line?

Just curious if those pimps are in the same fix as their buddies in the "life insurance" scam?

[bvar22]

18. They are going to get a different kind of "bailout".

Mandatory For Profit Health Insurance, with taxpayers providing a "subsidy" for those who can't afford it = $BILLIONS of taxpayer dollars funneled into the already bloated pockets of some of the richest CEOs in the World.

[sythe200]

13. Each and every bailout just makes things worse and worse.

Every time they bail a new company out they put the people further in debt and continue to destroy the value of our currency through debt and inflation. When will the fools in Washington finally get a little sense and just back off from their unConstitutional bailouts?

[Marrah_G]

14. They don't need bailouts- even AIG's life insurance subsidiary is doing just fine.

[high density]

16. Give me a break

Life insurance companies charge outrageous fees for their products. If they're going to take money they should be expected to stop writing new policies until it's paid back.

[sarcasmo]

17. Enough already, Insurances companies, who is next Lawyers?

[Lorien]

19. Absolutely absurd. nt