The Wall Street Journal reports that the Treasury will announce that life insurance companies will be eligible for Troubled Asset Relief Program (TARP) funds. The article mentions Hartford Financial Services Group Inc., Genworth Financial Inc. and Lincoln National Corp., and Prudential Inc. as applicants, while there is no comment on whether MetLife has applied for funding.
Turns out, those low-risk investments they sell called annuities aren’t so low-risk after all, and they are at risk of being worthless if either the corporate bond market or the stock market falls further. Enter Uncle Sam, when private industry gets it wrong again.