Protective Life Latest Insurer to Become Bank

The Federal Reserve has cleared Protective Life Corp., the Birmingham, Ala., insurer, to become a bank holding company, making the carrier eligible to a slice of the $700 billion federal bailout.

In a bid for federal help, the life insurance company acquired all shares of Bonifay (Fla.) Holding Co. Inc. and its subsidiary The Bank of Bonifay.

The central bank gave the new union its blessing.

“Protective Life is well capitalized and all entities of Protective Life that are subject to regulatory capital requirements currently have capital levels that exceed those relevant minimum requirements,” the Fed said in its announcement.

Protective Life has $41.1 billion in total consolidated assets, while the bank has $220 million.

Other insurers joining the banking and thrift worlds include Phoenix Cos Inc., the Hartford, Conn.-based life insurer, which received approval from the Office of Thrift Supervision in Washington to acquire American Sterling Bank of Sugar Creek, Mo.

Last week, insurers Hartford (Conn.) Financial Services Group Inc. and Lincoln National Corp. in Philadelphia were also granted approval by the OTS to become thrift holding companies.