CHARLOTTE, N.C. — Allstate Corp. became the second insurer Tuesday to turn down a bailout from the Treasury Department after being approved for government funding.
CHARLOTTE, N.C. — Allstate Corp. became the second insurer Tuesday to turn down a bailout from the Treasury Department after being approved for government funding. The property and casualty insurer said it has strong capital and liquidity positions. The Northbrook, Ill.-based company was among six insurers approved by the Treasury to receive government aid. On Friday, financial adviser Ameriprise Financial Inc. also turned down bailout funding. Allstate said it had $12.2 billion of equity and $23.1 billion of cash or liquid assets in its investment portfolio as of March 31. It has since bolstered its finances with a $1 billion debt offering, and its securities holdings gained more than $1.5 billion in value from the end of the first quarter through May 13, the company said. "Given Allstate’s strong capital and liquidity positions … we will not participate in this program," said Chief Executive Thomas Wilson in a prepared statement Tuesday. Last week, the federal government agreed to extend billions of bailout funds to six major life insurers, including Allstate, helping them shore up their capital positions in the wake of major investment losses. The Hartford Financial Services Group Inc. said Thursday that it had been notified by the Treasury that it was eligible for $3.4 billion from the Troubled Asset Relief Program, or TARP. Lincoln National Corp. said it has been initially cleared for a $2.5 billion capital injection. Allstate did not disclose how much money it was approved to receive. Other companies receiving approval include Prudential Financial Inc. and Principal Financial Group Inc. It is also uncertain how much these firms are eligible to receive. As the banking industry accepted billions in government bailout funds last fall, life insurers aggressively lobbied for their own piece of the federal aid, worried about their balance sheets, which had been saddled by hefty investment losses from the declines in the stock market. But the government was slow to approve the requests. Subsequently, the stocks of most public insurance companies have fallen sharply in recent months. Shares of Allstate rose $1.44, or 5.6 percent, to $27.29 in morning trading Tuesday. Its shares have traded between $13.77 and $51.55 over the past year but are down 25 percent so far this year. Separately on Tuesday, Allstate declared a quarterly dividend of 20 cents a share on its common stock. The dividend is payable July 1 to shareholders of record May 29. ______ Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.