Genworth shut out of TARP participation

Genworth Financial Inc. won’t be able to participate in the Department of the Treasury’s Troubled Asset Relief Program. The Richmond, Va.-based insurer, like a handful of other carriers, applied to become a savings and loan holding company last fall in order to be eligible to take part in the Capital Purchase Program, which is part of TARP. But unlike the three other carriers that applied to become banks or thrifts, Genworth didn’t hear back from the Office of Thrift Supervision on its application. As a result, Genworth won’t close its announced acquisition of InterBank FSB of Maple Grove, Minn., nor will the company be able to participate in the CPP. The Hartford (Conn.) Financial Services Group Inc., Lincoln National Corp. of Radnor, Pa., and The Phoenix Cos. Inc. of Hartford all received clearance to become banks in January. The Treasury Department won’t extend the deadline for the Office of Thrift Supervision’s review of Genworth, according to a statement issued by the firm yesterday. Michael D. Fraizer, Genworth’s chief executive, said in a statement that the carrier’s participation in CPP was only one way for the company to provide capital flexibility for unforeseen events, including using reinsurance, dividend reductions and expense streamlining. “We remain comfortable with our target of a consolidated life insurance company risk-based capital ratio of 350% or above for yearend 2009,” he said. “We continue to progress in our evaluation of additional strategic opportunities ranging form selected asset sales to other governmental programs that could provide financial flexibility.” Genworth spokesman Al Orendorff said that the company had no additional comment beyond its announcement. Bill Ruberry, a spokesman for the Office of Thrift Supervision, had no comment about Genworth.