So it looks like life insurance companies will be allowed into the federal hand-out line. These are the businesses that allegedly specialize in risk management. Their entire operation is based on their ability to calculate how much risk an individual represents and set policy premiums accordingly. Yet somehow these risk experts were unable to manage their own risks, and now they want taxpayer money to help them out. The U.S. is now officially a welfare state. Only it is companies that are dependent on the dole. This goes way beyond bailing out AIG ( AIG). That insurer was into all kinds of nonsense and is so interwoven into the entire global financial system that the government felt compelled to shore it up. Apparently, bailout money will soon be offered to insurers that also own federally chartered banks. You may recall that many insurers rushed out to buy some banks last fall in the hopes of qualifying for bailout money, and now the U.S. Treasury is set to grant that wish, according to the Wall Street Journal. We're talking about some big name life insurers like Prudential Financial ( PRU), Hartford Financial Services ( HIG), Lincoln National ( LNC), Genworth Financial ( GNW)and maybe even MetLife ( MET), according to the Wall Street Journal. Some of these life insurers got into trouble by offering generous guarantees to attract more customers for annuity products that provide retirement income. They promised minimum payouts on investments regardless of market performance -- and we all know what happened to the markets. Were they a little overzealous with their promises? And that's whose problem? Right, it's yours as a taxpayer. These insurers are considered too fundamental to the overall financial system to be allowed to fail and, well, all those folks counting on those annuities to retire would otherwise have to just keep on working forever. That hardly seems fair.
You know what else isn't fair? Many other life insurers did a better job managing their investments and won't be siphoning off taxpayer funds. They won't get to enjoy much of a competitive advantage when rivals who undercut them with more aggressive annuity promises get bailed out. According to the Wall Street Journal, Massachusetts Mutual Life Insurance, New York Life Insurance, Northwestern Mutual Life Insurance and TIAA-CREF are doing just fine, thank you very much. Why not give money to every insurer and every bank? Heck, how about any company that reports a loss, like Alcoa ( AA) or those concerned about cash flow like General Electric ( GE). We've already pumped billions of dollars into General Motors so the banking barrier already has been breached. It's hard to draw a line with all this corporate welfare. But I digress. It's too late in this era of government intervention to bemoan the death of the free market. Too bad no one took out a life insurance policy for capitalism. There might have been a hefty payout now that it's dead.