Insurance Companies Lining Up for Bailouts

Now tax cheat Tim Geithner and Barack Obama are moving in to take over the insurance industry.

Prudential Financial Inc., Hartford Financial Services Group Inc. and Allstate Corp. are among six insurers approved by the U.S. government for bailout funds after investment declines eroded capital across the industry.

Hartford won preliminary approval for $3.4 billion from the Treasury Department’s capital purchase program, the Connecticut- based insurer said today in a statement. A person familiar with the matter said five other carriers won preliminary approval, including Lincoln National Corp., Principal Financial Group Inc. and Ameriprise Financial Inc.

Life insurers applied for government bailouts last year as the recession pushed down the value of corporate debt and mortgage investments held to back policies. Ratings downgrades and stock declines across the industry made it harder for insurers to raise money from private investors.

The Treasury funds “would further fortify our capital resources and provide us with additional financial flexibility during one of the most volatile market climates in our nation’s history,” Ramani Ayer, Hartford’s chief executive officer, said in the statement.

It's like that scene in It's a Wonderful Life where Potter is buying up all the businesses in town but the Bailey Building and Loan. Except for the one big difference: Potter did it with his own money.

It's a socialist's dream out there.