6 Insurers to Get Billions in Government Money – They Bought Banks to Qualify or Restructured as a Bank Holding Company

When you look through here, there are some pretty big names, none are specific to health care only, but some do have interests as far as life insurance and other holdings under a big umbrella.

Last year Blue Cross started a “bank”. The only thing I begin to wonder about though is how secure are the “reserves” at this point, the rainy day money that is put aside and hopefully they are good. Again, when I see the big names below, even though outside of specific health care insurers it somewhat makes me a bit uneasy as I wonder too how in tact their reserves are that they are required by law to maintain to keep from insolvency.

Also worth a quick note is that many health insurers have also formed Venture Capital divisions to invest in technology related mostly to health care business intelligence functionality. The insurance business and Wall Street of course are by far the heaviest users of software and analytical software around. Back on topic, how much money are we going to have to fork over here? BD

Six major insurance companies have received preliminary approval to get billions of dollars in fresh capital as part of the government’s financial rescue program, a Treasury Department spokesman confirmed Thursday night, The New York Times’s Eric Dash and Diana B. Henriques report.

The department said the Hartford Financial Services Group, Prudential Financial, Lincoln National, Allstate, Ameriprise and the Principal Financial Group have all received approval for capital infusions, subject to terms still to be negotiated.

According to the Treasury spokesman, Andrew Williams, these insurers qualified for capital infusions under the department’s Capital Purchase Program because each had restructured itself as a bank holding company and met the November deadline for the program.

Several of the insurance companies took extraordinary steps to qualify for taxpayer money, which has become even more attractive as the economic environment has worsened.

For example, Lincoln National and Hartford Financial Services both bought up smaller banks to qualify as savings banks, which made them eligible for government support.