The Washington Post is reporting that the Treasury Department has granted approval for insurance companies to have access to TARP funds. It is not clear what that will do to the balance in the TARP “account.” By some estimates it is down to $115 billion. Some of the banks who have received funds plan to pay that money back in the coming months. Other banks may need additional capital from the TARP.
The news does mean that the financial bailout is spreading and that the Treasury must believe that there is some systemic risk to a failure of one or more of the large insurance companies.
Earlier reports are that the Hartford (HIG), Prudential (PRU), Lincoln National (LNC), and Principal Financial Group (PFG) will receive capital.
Now taxpayers can own shares in all of those companies, too.
Douglas A. McIntyre