HartFord Bailout: Insurers Get Rescued

Posted by Kris | Thursday, April 09, 2009 | | 0 comments »

Shares of large U.S. life insurance companies initially surged Wednesday following news they may receive aid from the government's $700 billion financial industry rescue program. But the Treasury Department said only life insurers that own banks or saving and loans qualify for assistance, and that no new programs for the industry were being considered.

Shares of Hartford Financial Services ( HIG - news people) Group Inc., which spiked 35 percent to $11.40 minutes after the market opened, closed at $9.59, a gain of 13.5 percent.

Hartford and Lincoln National Corp.( LNC - news people ), two of the nation's largest life insurers, and several others applied to become thrift holding companies last fall. Regulators approved applications earlier this year from those two firms, as well as Prudential Financial Inc.( PRU - news people ), Genworth Financial Inc., and Aegon NV ( AEG - news people ), a Dutch company that owns U.S. insurer Transamerica.

Life insurers, which have more than $5 trillion in assets and invest some of the premiums received from customers, play an important part in consumer confidence and security.