This is as strong an argument for receivership/recapitalization as I’ve seen. The otherwise healthy life Insurance business is getting dragged through the muck by the collapsing banking and brokerage industries:
“The tumbling financial markets are dragging down the life-insurance industry, an important cog in the U.S. economy, as mounting losses weaken the companies’ capital and erode investor confidence.
A dozen life insurers have pending applications for aid from the government’s $700 billion Troubled Asset Relief Program, and the industry is expecting an answer to its request for a bank-style bailout in the coming weeks. The government so far hasn’t said whether insurers will be eligible for the program.
Life insurers have taken a beating in recent weeks. The Dow Jones Wilshire U.S. Life Insurance Index has fallen 59% since the beginning of the year, leaving it down 82% since its May 2007 all-time high. The Dow Jones Industrial Average has lost 21% year to date, off 51% since its October 2007 record.”
The longer we dawdle . . .
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Source:
The Next Big Bailout Decision: Insurers
SCOTT PATTERSON and LESLIE SCISM
WSJ, MARCH 12, 2009
http://online.wsj.com/article/SB123681439092901753.html
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