Life insurers seek aid to stabilize investments

NEW YORK (Reuters) - Life insurance companies, nervous over massive investment losses that could ultimately threaten their viability, are hoping they are next in line to get a piece of the U.S. financial bailout.

They argue federal funds could stabilize their trillions in investments and warn that any failure of a life insurer could dry up a key source of corporate financing.

But U.S. officials are not convinced.

Treasury Secretary Henry Paulson said Tuesday he had not yet decided whether other insurers would get federal funds. The only insurer to get government help so far is American International Group Inc, which was saved from bankruptcy with a rescue package that has ballooned to $152 billion.

As the biggest buyers of U.S. corporate bonds, life insurers say they grease the wheel of corporate America. Industry officials insist the failure of a large U.S. life insurer would drastically shrink bond financing, potentially creating another hurdle to the nation's economic recovery.

While no big life insurer has collapsed, companies have tightened their purse strings after heavy investment losses eroded their capital levels in the third quarter.

Hartford Financial Services Group Inc, which sells both life and property insurance, reported a $2.6 billion quarterly loss on October 30, the 189-year-old insurer's worst-ever result, mainly from bad investments in financial companies.

Prudential Financial Inc, the No. 2 U.S. life insurer, had a $108 million net loss, and withdrew its 2008 earnings forecast, citing market volatility. Genworth, a smaller insurer, recorded a $258 million net loss.

Analysts warned that the fourth-quarter outlook for the sector is even gloomier, with growing concerns that their investments in commercial mortgages will lead to more red ink as values drop.

In recent months, life insurers have scaled back the size of investments, trimmed dividends to hold on to cash and girded for further losses and possible rating downgrades, which would trigger higher capital requirements.

Jittery investors have sent the Dow Jones U.S. life insurance index .DJUSIL plummeting more than 60 percent since mid-September. Shares of Genworth Financial Inc and Hartford have fallen 90 percent in that period, and Prudential has dropped nearly 80 percent.

TRILLIONS IN BONDS

Life insurers had more than $1.8 trillion invested in corporate bonds, $462 billion in government bonds, $302 billion in commercial mortgage investments and $20 billion in real estate holdings at the end of 2007, according to the American Council of Life Insurers (ACLI).

"Life insurers are the number one purchasers of corporate bonds," said Jack Dolan, an ACLI spokesman. "They grease the wheels for financing corporate America. In essence, they are the wholesalers of credit, while banks are the retailers," he said.

The insurers are susceptible to the credit crisis through their investment portfolios, real estate holdings, and higher costs for reserves and hedging related to investment-linked retirement products they sell.

Life and retirement policy holders are largely protected if an insurer fails through state guaranty funds into which all insurers pay to insure that obligations are met.

Analysts say U.S. officials still need to be convinced.

"It is far from clear that Treasury views the possible collapse of a major insurer as posing anywhere near the systemic risk that a collapse of Citi(group) would have posed," said Barclays analyst Eric Berg in a Monday research note.

"Life insurers, while major lenders to business through their public and private bonds, are simply not as important to the day-to-day working of the economy, especially of smaller businesses, as are banks," he added.

Berg said Treasury officials have been briefed on insurers' plight in meetings with industry executives.

Federal support for life insurers would "provide a level of confidence to return to investment activities," said the ACLI's Dolan.

The government may have enough on its plate for now, though. Just days ago, the government stepped in with a major rescue of Citigroup Inc, the second largest U.S. bank by assets, injecting $20 billion in new capital and guaranteeing some $300 billion in potentially toxic assets.

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The government of the Northern Territory of Australia is now running "mandatory supervised" COVID-19 quarantine facilities, and there are a lot of conflicting reports going around about what's really happening in these "camps." Are they internment camps, summer vacation spots, or something in between?

On "The Glenn Beck Program" Monday, Glenn and Producer Stu Burguiere discussed the case of 26-year-old Australian resident Hayley Hodgson, who detailed her experience at the Center of National Resilience in Howard Springs during a recent interview with UnHerd. They compared Hodgson's description of the Howard Springs facility to images of bikini-clad Australians in quarantine who appear to be on holiday at the same facility.

So, what's really going on with Australia's COVID quarantine facilities? Watch the video clip below to hear Glenn and Stu break down what we know so far:

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Glenn Beck: Here's how YOU can fix the Great Reset's housing crisis

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How's the housing market looking these days? Because under Build Back Better (aka the Great Reset), investors are grabbing up homes at a record pace.

On "The Glenn Beck Radio Program," Glenn discussed a recent Redfin News report, which shows that almost one in five homes sold in the U.S. during the third quarter of 2021 was purchased by an investment firm, and many are paying tens of thousands of dollars over the asking price.

"Think of that, one in every five homes that are sold are going to a big investment firm," Glenn said. "Investors bought more than 90,000 homes, totaling more than $63 billion, representing 18% of all homes sold in the quarter. The numbers broke all records."

"The same factors have pushed more Americans to rent, which also creates opportunities for investors, because investors typically turn the homes they purchase into rentals," he continued. "And now they can charge higher rents. Rent for single-family homes surged by more than 10% in the 12 months, through September. The fastest annual rent inflation in 16 years."

"And nearly 77% purchased were bought in an all-cash transaction," Glenn added. "That's not your average person. These investment firms, like BlackRock, are going in and buying entire neighborhoods. They are the people that come in, and say, 'I'll give you $70,000 over the asking price.' ... Now, why would investment firms think they will just be able to make money paying $70,000 over the asking price? What is it that they know, that you don't know? Could they know, as the Great Reset states, that by 2030, you will own nothing and you'll like it?"

Watch the video clip below to hear Glenn offer his thoughts on how you can solve the Great Reset's housing crisis:


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On "Glenn TV" Wednesday, Glenn Beck exposes the radical plan to flip the United States from capitalism to socialism and into a lawless nation. It's an old strategy that mirrors a communist Cold War playbook. The goal now, as it was then, is this: How do they get a revolution without all that civil war stuff? It’s a five-step plan, and we're deep into several of the main steps RIGHT NOW.

Our justice system has been infiltrated by woke leftists, and something called "the progressive prosecutor movement" is methodically transforming Main Street USA into Main Street Gotham City. We can see it all over the country in places like San Francisco, with the Waukesha massacre as a terrifying glimpse into more of what's coming. And the media? They're currently running interference in one of the largest misinformation operations in history.

It’s happening at the city, state, AND federal levels. And President Trump might be one of the biggest victims of them all, a fact that even Trump critic Joe Rogan has realized on the Russia collusion hoax: “No one is being held accountable!” That ends now, as Glenn calls on Americans to push back on the lies that keep us divided in a cold civil war.

Watch the full episode below:

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A "one-world government" is being formed right now and it’s called the Great Reset, Glenn Beck said on the radio program Monday. And now, rebuild plans for the fire-damaged Notre Dame Cathedral hint at the formation of a global church, too.

In this clip, Glenn detailed plans for the iconic, 850-year-old church’s "woke" renovations that sound more like a 'politically correct Disneyland' complete with a "discovery trail," "emotional spaces," and 14 themed chapels.

"Notre Dame is now being built back better as a 'woke theme park' dedicated to environmentalism and social justice," Glenn explained.

"There will be several different chapels within, [for example] a chapel for social justice, and then chapel for environmental justice," he continued. "Which leads me to this point. The 'one-world government' is being formed, right now. One-world government. It is being formed and it's called The Great Reset."

Glenn went on to predict that one of the first steps in the direction of a one-world government will be a push for a global religion.

"I think we're seeing the first church now being dedicated to the new global religion — and it is social justice, environmental justice, and all this gobbledygook. We all know, it's not just wrong, it is dangerous. That's the first church, the cathedral of Notre Dame, in France, is the first global church. Mark my words. Christian, Jews, Muslims ... this global church will bring darkness unlike you've ever seen."

Watch the video clip from "The Glenn Beck Program" below:

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