Life insurance may come back to life
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TEXT OF STORY
Steve Chiotakis: We go down the alphabet to L, for life insurers, the next industry set to receive some sort of federal bailout. Life insurance companies are major players in the financial system. Many invested in some of the same toxic mortgage-backed assets that got the banks in trouble. And now it looks like some relief is on the way. Here’s Marketplace’s Steve Henn.
Steve Henn: For months, life insurance lobbyists have been pushing for their industry to get some of the cash set aside for the banking bailout. Several big life insurers even bought small savings and loans so they’d qualify for federal aid, but that aid hasn’t been forthcoming.
Frank Keating: Is it a matter of panic, no. Is it a matter of some disquiet, yes.
That how Frank Keating, president of the American Council of Life Insurers, explained the industry’s mood to Marketplace last month. Since then, Keating’s been waiting for word of government help. That word came — at least unofficially last night — when the Wall Street Journal published a story saying an announcement of aid to life insurers’ industry will come within days.
In the past few months, life insurance bellwethers, like the Hartford, Prudential and the Principal group have taken a beating, and the entire industry has reigned in its purchases of corporate debt. Life insurers have traditionally been one of the largest buyers of corporate bonds, and their decision to pull back from that market has been another big drag on the economy.
In Washington, I’m Steve Henn for Marketplace.
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