Shares Of Insurance Companies Climb On Treasury Announcement
October 24, 2008
Shares of insurance companies climbed this afternoon following the announcement that the U.S. Treasury Dept. was considering taking stakes in insurers as part of the $700B bailout program especially those that may have seen their investment portfolios plunge in the financial market turmoil.
It is reported that the Treasury is mulling having insurers participate in its $700 billion financial rescue program. There has been no final decision whether insurers will be included in the government’s purchases of preferred stock in financial companies. Investments in insurance companies would widen the scope of the rescue program as the credit crisis deepens.
According to The Wall Street Journal, only certain insurance companies would be eligible for a Treasury capital infusion which would be limited only to those insurers which have a financial institution holding company that was regulated at the federal level.
Shares of Aflac, Ambac Financial Group, Genworth Financial, Hartford Financial Services, MetLife and Prudential Financial surged with the announcement.
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