According to an article in the Wall Street Journal, the Obama administration is proposing new taxes for life insurers to the tune of nearly $13 billion over the next ten years. The new taxes would restrict exemptions associated with the purchase of certain insurance products, especially corporate-owned life insurance.

Last week, many of the Nation’s top life insurers were offered access to treasury funds under TARP. Some of the firms applied to TARP several months ago and have since increased capital; therefore they may opt to reject government assistance. While not necessarily related, the timing of the potential tax proposals (falling on the heels of offered assistance) creates an interesting visage.

Having eliminated or scaled back so many benefits and riders already, it will be interesting to see whether or not the fallout from the proposed taxes would target annuity products specifically. Fixed annuity sales have skyrocketed recently as investors and retirees are seeking a conservative retirement vehicle. The proposed tax increases would most likely hurt overall insurance sales; something the insurance industry is likely to fight tooth and nail as it tries to navigate the economic crisis.