Insurers would take modest hit from Obama’s proposed tax: KBW

Major life carriers’ earnings will take just a minor hit from President Obama’s proposed Financial Crisis Responsibility Fee, according to a report from securities firm Keefe Bruyette and Woods.
TARP recipients Hartford Financial Services Group and Lincoln National Corp. are among the carriers who will face an estimated 1% to 3% dent in their 2011 earnings if the bill is enacted. Other insurers facing a similar dent include Ameriprise Financial Inc., MetLife Inc., Principal Financial Group and Prudential Financial Inc., noted Frederick Cannon, an analyst with KBW.
The fee plan, which could last more than 10 years, would charge 15 basis points on covered liabilities each year. The levy will only apply to firms with more than $50 billion in consolidated assets, including banks, thrifts, carriers and other companies that own broker-dealers and insured depository institutions.
MetLife would face a $10 million tax, while Prudential Financial would take an $8 million tax, according to KBW. TARP recipients Lincoln and Hartford would face $3 million and $4 million, respectively, in additional annual taxes. Principal and Ameriprise would each absorb an additional $1 million annual tax under the president’s plan.
The amounts are relatively small compared to the $2.11 billion that Citigroup Inc. would have to shell out annually under the plan.