From Fox Business Report, October 24, 2008
The Treasury Department is looking at ways to aid insurance companies as part of the rescue package announced earlier this month.
FOX Business Network’s Peter Barnes reported the Treasury has an internal task force looking at ways to help insurance companies. The assistance is expected to come as part of the economic stabilization legislation announced in October, since insurance companies are consider financial institutions and are thus covered under the package.
Sources told FOX Business Network that the assistance to insurance companies could be between $50 billion and $100 billion, and would be in the form of buying distressed assets. A formal announcement on the aid may not come until after the election on Nov. 4.
Like most financial institutions, insurance companies have been taking a hit on investment losses and because of their exposure to mortgages. In recent weeks, insurance companies including Hartford Financial Services (HIG: 24.30, +3.39, +16.21%) and MetLife (MET: 29.80, +1.96, +7.04%) has raised capital. Hartford raised $2.5 billion in capital from German insurer Allianz and MetLife raised $2 billion from a stock offering.
MetLife even approached Hartford about a merger, according to a report from The Wall Street Journal, though a person familiar with the matter told FOX Business that the report was incorrect and no contact between the companies regarding a merger had occurred. Both insurers declined to comment on the matter.
Separately the U.S. Department of Commerce announced Friday it launched a Web site, www.economicrecovery.gov , which is a resource for the latest information about economic issues and what the government is doing to improve the economy.