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Insurers Just Saying "No" To TARP?

Posted By James Gattuso On May 18, 2009 @ 4:54 pm In Ongoing Priorities | Comments Disabled

What if they ran a bailout program and no one came? Last year, the Bush Administration Treasury Department opened TARP’s doors to insurance companies, a number of which promptly filed for aid. Last week, the applications of six of those were approved [1], totalling some $22 billion. But rather than rush to claim their winnings, most of the firms are reconsidering. According to the Wall Street Journal [2], one — Ameriprise Financial — has already said no, and another — Prudential — is expected to decline soon. Two others, Allstate and Principal Financial Group may also decline. The remaining two — Hartford and Lincoln National — seem more likely to accept, although they want to review the final terms.

The hesitancy is due to the same factors that have led banks to run [3] screaming for the TARP exits. TARP aid, which looked relatively free at first, now comes with substantial strings — or worse, as a look at federally-occupied Detroit [4] shows.

The insurance companies are right to be afraid. They should be very afraid.

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/05/18/insurers-just-saying-no-to-tarp/

URLs in this post:

[1] approved: http://washingtontimes.com/news/2009/may/15/6-insurers-approved-for-tarp-bailouts/

[2] Wall Street Journal: http://online.wsj.com/article/BT-CO-20090515-715218.html

[3] run: http://www.foundry.org/2009/05/12/financial-prison-break-banks-flee-tarp/

[4] federally-occupied Detroit: http://www.foundry.org/2009/04/28/washington-occupies-detroit/

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