The way things are going, the US taxpayer is going to be backstopping every bond buyer in the US. The latest wrinkle is that the TARP will be extended to “certain eligible” life insurers. The report at the Wall Street Journal is skeletal:
The Treasury Department plans to extend the Troubled Asset Relief Program to certain eligible life insurers, according to people familiar with the matter….
The Treasury is expected to announce within the next several days the inclusion of life insurers that are bank holding companies or own a thrift, these people said.
How much money would be available to the insurers remains unclear. The Treasury says it has about $130 billion remaining in TARP funds. Life insurers that are bank holding companies have been eligible for TARP for some time, but the Treasury had not yet given the green-light to approve their applications.
Several have applied, including Prudential Financial Inc., Hartford Financial Services Group Inc. and Lincoln National Corp. No decisions have been made yet about which applications will be approved, these people said.
Given how liberally the TARP legislation was drafted (the targets are “financial institutions”), I am a bit surprised at the fact that potential beneficiaries are being limited to insurers with bank holding companies. Perhaps that is deemed necessary so that the Fed has at least some regulatory oversight (the Fed oversees BHCs; insurers are regulated at the state level).