Richmond Insurer Fails To Qualify for TARP
Genworth Tried to Become a Thrift
|
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
Friday, April 10, 2009
Genworth Financial, an insurer based in Richmond, said yesterday that it failed to meet the government's requirements for receiving an investment of federal funds under a Treasury Department program to stabilize the financial markets.
Genworth was one of several insurers that took the extraordinary step last year of trying to buy a savings bank and convert itself to a thrift holding company to qualify for the federal money. But, unlike three other insurers, Genworth has yet to receive approval for its conversion bid from the agency that regulates savings and loans. As a result, it missed a January deadline to satisfy the eligibility requirements for the government's Troubled Assets Relief Program.
Yesterday, the Treasury Department told Genworth that it would not extend the deadline.
As a result, Genworth said it was dropping its plan to buy a savings bank in Maple Grove, Minn.
Insurance companies, which are big investors, have been weakened by the financial crisis. The recession threatens to further erode the reserves they maintain to cover obligations to policyholders. Getting capital from the government could help them weather the crisis and continue investing in the broader economy.
In a statement, Genworth chief executive Michael D. Fraizer said that government support was only one of the options the company has been considering and that Genworth has made financial progress since it applied for the government money in November.
The company lost $572 million last year, including $321 million in the fourth quarter.
The collapse of Genworth's effort does not necessarily reflect on the Treasury's willingness to bolster life insurance companies. TARP considerations did not factor into the review of Genworth's application to become a thrift holding company, said William Ruberry, a spokesman for the Office of Thrift Supervision.
The OTS focuses on such factors as the management, financial resources and prospects of the company, according to agency documents.
The agency approved similar applications in January from the insurers Lincoln National, the Hartford Financial Services Group, and the Phoenix Cos. Other insurers qualified for TARP consideration because they already owned banks or thrifts.
