Hurricane Sandy Damage Insurance

story first appeared on usatoday.com

Most people stay home from work during a hurricane, but for Ben Sykes, 31, Hurricane Sandy was a time to get moving. An insurance adjuster for State Farm, Sykes works on the company's team that handles large and complex claims.

On Monday and Tuesday, he was one of hundreds of adjusters who met with homeowners to deal with their most pressing issues: finding new places to live and getting money for basic living expenses.

And a staggering number of people need assistance now. Calls are pouring in to insurance companies from up and down the East Coast. Catastrophe risk modeling firm Eqecat estimates that Sandy will do $10 billion to $20 billion in total economic damages and $5 billion to $10 billion in insured losses. More than 1 million homes have been evacuated.

An army of claims adjusters is working its way toward the hardest-hit areas, tackling the enormous task of evaluating damage, putting a price tag on it — and deciding whether it's covered by insurance. Experts agree that the nation's insurers have enough money to pay for the staggering damage done by one of the biggest storms to hit the East Coast. Just how much will be covered will depend on what kind of insurance property owners have, how well they have documented their losses — and the damage estimates that adjusters arrive at.

Army on the move

Several hundred thousand homeowners are likely to file claims for wind damage and tens of thousands for flood damage, says Robert Hunter, director of Insurance for the Consumer Federation of America.

Insurance adjusters started mobilizing last weekend as Hurricane Sandy forecasts became more dire:

• State Farm sent a convoy of adjusters and catastrophe vehicles east from its Bloomington, Ill., headquarters on Sunday, says State Farm spokeswoman Anna Bryant. 
• AIG, a leading commercial insurer, has 2,500 claims people on call and taking claims, says spokesman James Ankner. Hundreds of loss engineers are being sent to businesses to help them ascertain their losses, Ankner says.
• Liberty Mutual, the sixth-largest property insurer, has mobilized several hundred claims professionals who are largely working now by telephone. To beef up, the company trained auto adjusters to do property claims as well, and is drawing adjusters from other parts of the nation to the 1,000-mile wide affected areas, says spokesman Glenn Greenberg.

Adjusters handle the hardest-hit areas first and then move to less damaged neighborhoods. Mark Stackhouse, a Philadelphia insurance adjuster, says homeowners with severe damage, such as gashes through roofs or flooded basements, can expect estimates to be completed in 24 to 48 hours. Those with less dire issues, such as fallen shingles, should receive estimates within a week.

Hunter estimates insurers are well equipped to absorb the losses.

Some residents are replacing nearly all their belongings. Replacing furniture can be a particularly frustrating tasks. Often having filed a successful insurance claim, consumers use Furniture Reviews to help them make educated decisions.

Losses have totaled a relatively modest $16 billion or so thus far this year, resulting in part from Colorado wildfires, Hurricane Isaac on the Gulf Coast and various tornadoes and severe thunderstorms, says Robert Hartwig, president of the Insurance Information Institute.

Last year, by contrast, the industry absorbed $32 billion in losses from devastating tornadoes in Joplin, Mo., and Tuscaloosa, Ala., as well as other tornadoes and Hurricane Irene.

Profits for U.S property and casualty insurers were $16.4 billion the first half of 2012, up from $4.8 billion in the first half of 2011, according to ISO , a Verisk Analytics company that provides information about insurance risk, and the Property Casualty Insurers Association of America.

One reason insurers can afford the tab: They have "mastered the hurricane risk by shifting it to the (homeowners) and to the government," Hunter says.

Major changes were made after 1992's Hurricane Andrew, which caused deep losses for insurance companies because policies were too rich and prices were too low, Hunter says. After Andrew, insurers shifted more high-risk people to state insurance pools, cut back on coverage and added more deductibles.

After Katrina, insurers successfully raised prices even more and dropped more higher-risk areas. Homeowner insurance costs have risen about 40% in coastal areas since Katrina, he estimates.

Big decisions

The adjusters who will be crisscrossing the countryside for the next few weeks have to decide two main issues for every claim: Is it covered? And how much is the loss? Neither one is as simple as it seems.

Consider coverage. Property insurance typically covers fire and wind damage: If a tree crashes into your garage, as it did to Don Broxon's garage in Falls Church, Va., on Monday, that's wind damage, and typically covered. He called his agent Monday night and heard back Tuesday morning, although he hasn't gotten a quote from an adjuster yet.

But hurricane damage has a higher deductible than ordinary wind damage. For hurricanes now, deductibles run about 5% of the insured value of a home — in coastal areas — and more like 2% further inland, Hunter says. If the insured value of your house is $250,000, then your deductible could be as high as $12,500.

For some homeowners, the biggest shock will be that damage from flooded creeks and surging seas isn't covered by most property insurance. That's the realm of flood insurance, which is handled by the government. Louisiana, where Katrina hit, has the highest penetration of flood insurance coverage, with more than 50% of homes covered, Hunter says.

Sandy came ashore over a stretch of New Jersey beachfront where the flood program insures billions of dollars in homes and other property. In Atlantic City and neighboring Ocean City alone, the flood insurance program covers more than $5.2 billion worth of property, according to FEMA records.

How much the flood program might have to pay out won't be known until damage assessments are completed. But the stakes could be significant. The program has at least $45 billion in policies in coastal towns in New York, New Jersey and Connecticut, where the storm's surge and waves were the most devastating.

Even homeowners who have flood insurance may not be fully covered. For example, in below-ground basements, policies typically cover only boilers and other equipment that serve the living area — not furnishings or other belongings.

Then there's the matter of putting a price on the damage. The burden of proof for damage is on the homeowner, says Robert Berg with Michelman & Robinson, a San Francisco law firm. For example, if water damaged your house because a tree ripped into the roof, be prepared to prove that the water didn't enter because of a storm surge.

Insurers may sometimes argue that damage occurred because of wear and tear — in other words, the problem was your 40-year-old roof, not the hurricane. You'll have to be prepared to argue that it wasn't the roof, it was the 90 mph winds that were the culprit.

There's also the issue of whether the money paid out is enough to repair the damage, especially in light of new construction requirements.

Many homeowners will be forced to rebuild their houses to higher standards aimed at better protecting them from future flood damage, said Larry Larson, senior policy advisor at the Association of State Floodplain Managers.

That's because most communities hit by Hurricane Sandy belong to a federal insurance program that requires homes with significant flood damage to be rebuilt at a higher elevation and with other protections, Larson said.

What happens if you and your insurance company can't agree? In most cases, you'll have to go to an arbitration panel, Berg says. If you have a well-documented and persuasive claim, you're likely to prevail.

Hartwig says he doesn't expect many disputes over whether damage was caused by wind, which is typically covered by general homeowner policies, or flooding, which generally isn't covered. Usually, he says, the cause is evident.

Entire homes were obliterated during Hurricane Katrina, making it challenging to determine the cause of the damage in many cases.

But insurance attorney Jay Levin, of Reed Smith in Philadelphia, does expect such disputes with Hurricane Sandy. He says New Jersey homeowners may have more luck than New York homeowners as courts there have tended to be more friendly to policyholders while New York courts have been more friendly to insurers.

Aftermath

Hurricane Sandy also might accelerate increases in flood-insurance premiums that are to be phased in over the next five years by the Federal Emergency Management Agency (FEMA).

Most flood insurance is provided by FEMA's National Flood Insurance Program, which for decades has charged below-market premiums to hundreds of thousands of people who own property in flood-prone areas. A law enacted in July will phase out those discounts.

Eli Lehrer, president of R Street, a think tank advocating limited government, said billions of dollars in claims could drain the flood-insurance program of its reserves, forcing it to speed up efforts to collect more money from premiums.

Lehrer said that FEMA now has an additional incentive to raise premiums as fast as possible as much as possible for properties that are subsidized.

What consumers should do to help ensure a successful Hurricane Sandy insurance claim:

• Report your claim as soon as possible. Insurers generally handle them first come, first serve.
• Write down your claim number. Insurers use this to locate your file.
• When an adjuster surveys damage, find out if they are employed by your insurer or whether they're independent. If independent, ask if they'll be making decisions on your claim or whether they'll be done by a company adjuster.
•  Keep good records. Start a notebook for names and phone numbers. Keep a log of conversations and meetings with insurance officials. List dates and times and brief descriptions of exchanges. This will be helpful if you need to complain later. If an adjuster misses an appointment, note it
• Inventory your damaged possessions. If you didn't take pictures before the storm, see if you have any in photo albums that could be helpful in assembling an inventory.
•  Get a repair estimate from a trusted local contractor to use as a guide in talking with the insurance adjuster. Keep receipts from emergency repairs and any costs you incur in temporary housing. They may be reimbursable.
• If your claim is denied or you feel the offer is too low, demand that your insurer identify the language in your policy that was the basis for the decision. The decision may not be right and you might find that out if you see the actual language.
• If you're still not satisfied, complain to more senior staff in the insurance company. Use your records as backup. You can also complain to your state insurance department. All states will at least seek a response to your complaint from your company.
• Watch for "anti-concurrent-causation" clauses in policies that, insurers allege, remove coverage for wind damage if a flood happens at about the same time. The Consumer Federation of America says these clauses are ambiguous so if an insurer uses one to deny your claim, read the provision carefully.
• The federal government underwrites flood insurance coverage, but insurance companies often service claims. Use the same procedures for flood claims but direct complains to the Federal Emergency Management agency, which runs the federal flood insurance program. Toll-free number: 1-800-427-4219. 

Ohio Businesses Behind on Workers' Comp Insurance

Story first appeared in  Springfield News-Sun.

Thousands of Ohio companies violated state law by not paying their most recent workers’ compensation insurance premium, which can drive up insurance costs for businesses that follow the rules, a Dayton Daily News analysis found.

Some employers fall behind on payments because of financial woes. Some go out of business and forget to notify the state they no longer need coverage. Still others skip payments intentionally to cut costs to obtain a business advantage.

Most of the time when you see somebody who doesn’t pay their workers’ comp premium, they are trying to cut corners on their overhead. If they do not pay for insurance premiums, they can charge less for jobs.

But companies that allow their coverage to lapse risk fines and even criminal charges. Employers can also face costly lawsuits if any workers are injured on the job while coverage is expired.

If there is an injury in the workplace when they didn’t have workers' compensation coverage, it would be an issue for them because the Ohio Bureau of Workers’ Compensation will pursue reimbursement for all medical and compensation costs.

The bureau identified about 41,247 private employers in the state that failed to report their payroll data and submit premium payments to the agency by the Feb. 29 deadline. This included 1,458 employers in Butler, Champaign, Clark, Greene, Miami, Montgomery and Warren counties.

An average of about 40,000 policies are allowed to lapse annually.

The payments and paperwork due at that time covered the period between July 1 and Dec. 31 of last year. By law, private employers must pay into the workers’ compensation system twice a year or be self-insured if they are a large company.

Some employers that did not meet the February deadline caught up just weeks after it passed. By April 13, about 24,639 Ohio companies who missed the deadline brought their policies up to date, and more have caught up since then.

But more than 12,200 accounts remain outstanding, and those companies owe an estimated $5.6 million in premiums. When the accounts were past due by 45 days, the bureau sent them to the Ohio Attorney General’s office for collection.

Construction companies, child care centers, law firms, political executive committees, bars, retailers, union organizations and many types of small businesses were among the Miami Valley employers that did not make their workers’ compensation payment as required by state law, a review by the Daily News found.

Studebaker’s Urbana Soft Water Service in Champaign County was one of the companies that missed the deadline. The company currently owes about $12,600, officials said.

An attorney for the company, said his client fell behind because it sells heating fuel, and the unusually warm winter negatively impacted sales.

Bureau officials say they try to work with struggling companies before imposing penalties.

The penalties can add up, but companies risk much heftier costs if workers become injured or develop illnesses related to their employment. If the bureau approves those claims, it first covers the employee medical care and lost wages and then seeks full reimbursement from the employer.

The strictest penalty for noncoverage is that anything that occurs during that period is charged to the employer, dollar for dollar.

Recalcitrant employers also face criminal prosecution if they intentionally defraud the system or repeatedly ignore warnings about noncompliance, according to the bureau.

The former owner of Bagel Cafe in Kettering, was found guilty in February of failure to comply for operating her business without workers’ compensation coverage, officials said. She received a 60-day suspended jail sentence, was placed on probation and ordered to pay restitution.

Employers that do not pay into the system increase the premium payments for everyone else because the costs are spread across a smaller pool of accounts, officials said.

Failing to pay into the insurance system gives companies an unfair advantage when bidding for contracts or setting their prices because they can undercut competitors with their lower overhead expenses, according to the bureau.

The Ohio executive director for the National Federation of Independent Business, said it is important to remember that the vast majority of businesses pay their premiums on time. Even if you have a couple of thousand nonpaying accounts, it is probably no different than any major insurance carrier in the world.

The bureau sought collection this year on about 5 percent of the approximately 250,000 employers statewide that pay into the insurance system.


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How are insurance companies fairing in the wake of numerous natural catastrophes?

Story first appeared in USA TODAY.
Tsunami in Japan. Drought in Texas. Floods in Pennsylvania. Hurricane and earthquake in New York. The news has been filled with examples of extreme weather that often are accompanied with the risk of property damage.
Property damage is one of the dirtiest terms in the insurance industry. Insurance companies' earnings are powered by collecting premiums and, conversely, hurt by paying out claims. If there's an increase in natural disasters that cause property damage that exceeds estimates, that can create a drag on earnings.
Furthermore, if catastrophes are expected to be more frequent in the future, insurance companies must either increase their reserves for claims, which hit earnings, or try to increase premiums.
To your question, does the rash of natural disasters potentially hit the earnings of insurers? On a short-term basis, the answer is yes. Analysts are accessing and measuring the estimated damage from all the events during the third-quarter and will likely make adjustments.
Since the third quarter is a busy month for hurricanes, analysts will look at the total hit through September and tweak their forecasts.
Longer term, some investors might wonder if insurance companies' earnings might be hit by changes in the planet's climate. Earth is warming up. And if the earth does heat up, there are some who expect more storms and other potential events that could damage property. But so far, there are too many unknowns before estimates on how any changes in the climate could hurt insurers' earnings.
Currently, companies are more focused on the short term and the risk of more catastrophic events.

Ace Buys Rain and Hail for $1.1 Billion to Add Crop Insurance Coverage

Bloomberg

Ace Ltd., the Zurich-based insurer with operations in more than 50 countries, agreed to pay $1.1 billion in cash to buy a majority stake in Rain & Hail Insurance Service Inc. and expand coverage of crops in the U.S.

The price values the insurer at about 1.59 times its projected yearend book value of $840 million, Ace said in a presentation today on its website. Ace said the deal will add about 22 cents to earnings per share next year. Ace already holds about 20 percent of the common stock in the Johnston, Iowa-based insurer, which is majority-owned by employees.

Ace, led by Chief Executive Officer Evan Greenberg, is adding to the business of protecting U.S. farmers against losses after the government this year reduced subsidies for the policies. The company said in July that the changes could work in favor of the largest insurers in the business against regional competitors.

“It’s a good example of Evan Greenberg’s strategy of growing through all phases of the property-and-casualty pricing cycle,” said Daniel Theriault, an analyst at New York-based Portales Partners LLC who advises investors to buy Ace shares. “They are already a big player in the agricultural crop business so it’s a relatively low risk acquisition. It’s a pretty good feat in this current environment.”

Ace, which shuns shareholder buybacks, is expanding after remaining profitable through the credit crisis by sidestepping subprime mortgage-related securities. Greenberg said late yesterday that Ace would buy Jerneh Insurance Bhd. for about $210 million to expand in Malaysia.

‘Pretty Robust’

“Pipelines of opportunity are pretty robust right now” for acquisitions, Greenberg said in a conference call in July.

Ace advanced 68 cents, or 1.2 percent, to $57.36 at 4:01 p.m. in New York Stock Exchange composite trading. The company has climbed about 14 percent this year, beating the Standard & Poor’s 500 Index, which is little changed.

Ace competes with market leader Wells Fargo & Co., Australia’s QBE Insurance Group Ltd. and American Financial Group Inc. selling protection to farmers. Rain & Hail, with a market share of about 21 percent, ranks second to a Wells Fargo business, according to data released by Ace in the presentation.

Rain & Hail posted net income last year of $199 million, according to Ace. The company has about 400 full-time employees and sells coverage through a network of more than 11,000 agents.

“This is a business we know well,” Greenberg said in the statement. “We project a return on capital in excess of our 15 percent hurdle rate.”

Insurance Deals Head for Biggest Year Since Peak of M&A Boom

Bloomberg

 

Insurance takeovers are headed for the biggest year since the peak of the last merger boom as financial-services firms from Bank of America Corp. to Aegon NV of the Netherlands jettison assets.

Deals in the industry have jumped 60 percent to $44.8 billion so far this year, up from $28 billion in the same period of 2009, according to data compiled by Bloomberg. Bank of America, Aegon and Royal Bank of Scotland Group Plc have more than $10 billion in insurance assets currently on the block.

The financial crisis that crippled American International Group Inc. is providing a buying opportunity for competitors such as MetLife Inc. and Prudential Financial Inc., which were quicker to recover from the global recession and are seeking growth in new markets. AIG has sold more than 30 assets since its 2008 bailout, while RBS and Amsterdam-based ING Groep NV were told to sell insurance businesses as conditions of their government lifelines.

“There’s a lot of stuff on the market,” said Clark Troy, a senior analyst at researcher Aite Group LLC in Chapel Hill, North Carolina. “For deep-pocketed buyers with firm conviction, it’s a great time to be making acquisitions.”

While the year’s biggest insurance deal collapsed when Prudential Plc shareholders stymied the company’s planned $35.5 billion takeover of AIG’s biggest Asian unit in June, the total value of announced deals is still set to surpass 2008 and 2009, when there were $58 billion and $53 billion in takeovers, respectively, Bloomberg data show. That tally excludes a $40 billion U.S. government infusion into AIG in 2008.

Insurance transactions totaled $90 billion in 2007.

‘Hard Choices’

AIG, which is working to repay part of a $182.3 billion government bailout, has held talks with Newark, New Jersey-based Prudential Financial this year about selling two Japanese life insurance units, said two people with knowledge of the matter.

Prudential and AIG still have divergent views on the value of AIG’s Star Life and Edison Life units, said the people, who declined to be identified because the discussions are private. The divisions together had a book value of $4.8 billion as of June 30, AIG said in a regulatory filing.

Mark Herr, an AIG spokesman, and Robert DeFillippo, a spokesman for Prudential, declined to comment.

Insurers that were bailed out are being forced into “making hard decisions about where they want to play and where they don’t,” said Achim Bauer, an insurance partner at PricewaterhouseCoopers in London. “They are seeking to repay some of that money by selling businesses that are non-core.”

ING, RBS

ING is required to divest its insurance business by the end of 2013 as part of a restructuring plan to win European Union approval for its government rescue. While the company is preparing the business for one or two initial public offerings, ING is getting “a great deal of interest” from potential buyers, Chief Executive Officer Jan Hommen said on Aug. 11.

RBS agreed in November to unload its insurance businesses, including the Direct Line auto insurer, after receiving 25.5 billion pounds ($40 billion) of state aid. In 2008, RBS had sought as much as 5 billion pounds for the businesses.

Some asset sales are being driven by regulatory changes in the wake of the financial crisis, including the recent U.S. financial overhaul and reforms being contemplated by the Basel Committee on Banking Supervision, said David Havens, an analyst at Nomura Holdings Inc. in New York.

Bank of America, the largest U.S. lender, is being pushed by regulators to raise a net $3 billion this year. The bank’s Balboa Insurance unit, obtained as part of the Countrywide Financial Corp. acquisition in 2008, is likely to fetch roughly the amount of its policyholder surplus, which was $1.92 billion as of March 31, according to Havens.

More Capital

“The financial regulations in general are requiring firms to hold more capital, and you can achieve that concept either by raising more capital or reducing risk,” Havens said. “By selling off non-core units you can actually achieve both.

Aegon’s Transamerica Reinsurance unit, which helps life insurers pool their risks, has gotten interest from both competitors and investors, said Aegon CEO Alexander Wynaendts on an Aug. 12 conference call. It has book value, or assets minus liabilities, of 1.6 billion euros ($2 billion). Reinsurance Group of America Inc., the largest U.S. company that focuses on life reinsurance, trades at about 73 percent of book value, implying a value for Transamerica of $1.5 billion.

Some potential buyers, meanwhile, are seeking to free up their capital reserves to fund growth in faster-growing markets like Asia. Paris-based Axa SA, Europe’s second-biggest insurer, agreed in June to sell part of its U.K. life insurance unit to Clive Cowdery’s Resolution Ltd. for 2.75 billion pounds.

MetLife, based in New York, made the biggest purchase of an insurer this year when it agreed to buy AIG’s American Life Insurance Co. for $15.5 billion.

Deals are happening because there is “a greater level of stability in the system compared to where we were six or 12 months ago,” said Bauer at PricewaterhouseCoopers. “That provides a greater willingness on the part of both buyers and sellers to consider transactions.”

Insurers Buy Banks in Effort to Get Aid

U.S. life insurers, weakened by losses on their immense investment portfolios, are maneuvering to get a slice of government bailout funds by buying up tiny banks.

On Monday, Lincoln National Corp. said it agreed to buy a small savings-and-loan institution in Goodland, Ind. In recent days Genworth Financial Inc. said it agreed to buy a thrift in Maple Grove, Minn., and Hartford Financial Services Group Inc. said it had struck a deal to purchase Federal Trust Corp., in Sanford, Fla.

The insurers' goal: Turn themselves into savings-and-loan holding companies, and thus qualify for infusions from the government under the $700 billion Troubled Asset Relief Program.

It isn't yet clear whether insurers have received approval of government financing. But regulators have an interest in shoring up the insurance industry, one of the biggest providers of capital to U.S. businesses through its purchases of bonds.

The insurance industry's interest in getting TARP money complicates a heated competition for limited bailout funds.

On Monday, Treasury Secretary Henry Paulson told The Wall Street Journal that the government is unlikely to use what remains of the rescue fund to launch any substantial new programs. Instead, the government will keep in reserve some of the money from the TARP, and thus give flexibility in the bailout to the incoming administration.

While it remains early in the process, the actions of the past few days suggest a potentially significant change in the way the insurance business will be structured and regulated. For one thing, access to TARP funds requires levels of federal oversight that currently don't apply to all insurance holding companies.

Of the $350 billion in bailout funds the Treasury has to work with right now, $250 billion was marked for direct capital infusions into the nation's financial system. An additional $40 billion was set aside for American International Group Inc., the giant insurer recently bailed out by the government.

In fact, an influx of government money into the insurance industry could also help AIG, which has been scrambling to sell some of its businesses to repay its massive government loan. The natural buyers would be other insurers -- and TARP money might help them finance purchases like these, people close to the matter say.

Still, the Treasury may expose itself to criticism that it is simply shifting taxpayers' financial exposure from AIG to other insurers if it uses TARP money to support the sale of pieces of AIG to rivals.

On Monday, the Treasury said it has now provided $158.6 billion in capital to 30 financial institutions. That figure includes a total of $125 billion to nine major banks, as well as $33.6 billion to a variety of other financial institutions. That leaves a diminished pot of money, $91.4 billion, for insurers to go after, along with other financial firms.

Also on Monday, the Treasury announced new terms allowing thousands of privately held U.S. banks to join publicly traded firms in applying for federal funds -- a move that would potentially increase the pool of institutions vying for capital by nearly 4,000. These banks will have until Dec. 8 to apply for the capital injections.

Insurers are important to the health of financial markets. Among other things, life insurers are among the biggest holders of the nation's corporate debt, with $1.3 trillion on their books. That, say analysts, gives the government a strong incentive to aid them.

As turmoil from the stock and bond markets has seeped into the insurance industry, insurers have been hoarding cash to calm shareholders.

The insurance business is state-regulated. But the government fund is open to financial companies that are federally regulated. So insurers seeking TARP cash that aren't already federally regulated holding companies must first apply for that status.

One route to federal regulation involves buying a thrift. Once under the federal umbrella, assets across all of its units would figure in the calculation for an allocation of capital through TARP. The companies' insurance units would remain state-regulated.

The inclusion of insurers in TARP would mark the latest evolution of that program, which has been rapidly broadened by the Treasury since being passed by Congress in October. Though not initially promoted as a helping hand for insurers, the change would fit with the Treasury's stated goal of stabilizing global financial markets.

Life insurers make money by collecting premiums on insurance policies, then investing that money in the market. In good times, they make money on both ends -- investment gains, and profits on premiums.

But they can't take many more quarters like the one they just endured. In the third quarter, they took billions of dollars of realized losses from the collapse of holdings in the financial sector.

They also took billions of dollars of unrealized losses as the prices of corporate bonds dropped sharply while investors dumped them in order to buy safer U.S. Treasurys.

At the same time, their variable-annuity businesses are suffering as the stock market drops. On many variable annuities sold over the past six years, insurers promised their customers guaranteed minimum returns. But the value of investments in the variable-annuities have declined; meanwhile, more of those guarantees may come due over the next five to 10 years.

Amid all this, insurers' stock prices have taken a beating. Shares of Genworth, a big mortgage insurer, are down 95% so far this year as homeowner defaults have mounted. Hartford's shares are off 89%, and Prudential's and Lincoln's are each off 78%.

Financial-services research firm Keefe, Bruyette & Woods estimates that publicly traded life insurers would be eligible for sums ranging from about $76 million to roughly $8 billion for giant MetLife Inc., the largest publicly traded U.S. life insurer by assets. The calculations were based on government filings showing insurers' invested assets, and the assumption that insurers would be eligible for percentages akin to what banks had received.

MetLife declined to comment.

Hartford says it estimated that it would be eligible for an infusion of $1.1 billion to $3.4 billion under existing Treasury guidelines. Shannon Lapierre, a Hartford spokeswoman, said the insurer worked with the Office of Thrift Supervision in identifying tiny Federal Trust Corp., with $602 million in assets, as an acquisition candidate. The deal is valued at $10 million.

Lincoln National, the 12th-largest U.S. life insurer, said it agreed to purchase Newton County Loan & Savings, with just $7 million in assets, based in Goodland, Ind. A spokeswoman for Lincoln, which didn't release terms of the deal, said it is making application because, "it's prudent in this market" to have additional potential sources of capital. She said the company estimated it is eligible for up to $3 billion.

Genworth's agreement in principle is with InterBank FSB, a four-branch bank that has $895.5 million in assets. Terms weren't disclosed.