May 15 (Bloomberg) -- Prudential Financial Inc.<http://www.bloomberg.com/apps/quote?ticker=PRU%3AUS> and Hartford Financial Services Group Inc.<http://www.bloomberg.com/apps/quote?ticker=HIG%3AUS> are among six insurers granted access to U.S. aid as the government moves to shore up an industry battered by investment losses.
Hartford won preliminary approval for $3.4 billion in capital from the Treasury’s Troubled Asset Relief Program, the Connecticut-based insurer said yesterday in a statement. Prudential, Allstate Corp.<http://www.bloomberg.com/apps/quote?ticker=ALL%3AUS> ,Principal Financial Group Inc.<http://www.bloomberg.com/apps/quote?ticker=PFG%3AUS> and Ameriprise Financial Inc.<http://www.bloomberg.com/apps/quote?ticker=AMP%3AUS> also won preliminary approval, said Andrew Williams<http://search.bloomberg.com/search?q=Andrew+Williams&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, a spokesman for the Treasury.Lincoln National Corp.<http://www.bloomberg.com/apps/quote?ticker=LNC%3AUS> said it may receive $2.5 billion. Life insurers have clamored for six months to get into a program that the nation’s biggest banks are trying to flee amid government restrictions and what some call TARP’s “stigma,” which makes companies look weak. Insurers need the money to quell doubts about whether they can pay claims and retirement stipends after falling stock and bond markets depleted capital. “If you had some of these companies, the bigger ones like Hartford, go into a spiral, that would just cause another round of panic,” said Robert Haines<http://search.bloomberg.com/search?q=Robert+Haines&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, an analyst with CreditSights Inc. “I don’t like the idea of the government getting involved with these companies, and you’re making to an extent a deal with the devil. But your options are really limited at this point.” Downgrades and stock drops<http://www.bloomberg.com/apps/quote?ticker=KIX%3AIND> across the industry eroded client confidence and made it harder to raise money from private investors. The dwindling funds available to the industry also contributed to the credit market freeze as life insurers, which hold about $1 trillion in corporate debt, had to scale back on purchases of new bonds. ‘The Right Step’ “Treasury is taking the right step toward helping restore lending and liquidity to the marketplace,” Frank Keating<http://search.bloomberg.com/search?q=Frank+Keating&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, president of the American Council of Life Insurers, said in a statement. Hartford jumped <http://www.bloomberg.com/apps/quote?ticker=HIG%3AUS> 9.8 percent to $16.20 in late trading yesterday after rising 17 percent on the New York Stock Exchange. Lincoln National<http://www.bloomberg.com/apps/quote?ticker=LNC%3AUS> advanced 5.2 percent to $17.09 after surging 13 percent on the NYSE. The announcements came after the close of regular trading. The government is preparing to expand its involvement amid the bailout ofAmerican International Group Inc.<http://www.bloomberg.com/apps/quote?ticker=AIG%3AUS>, once the world’s largest carrier. Treasury and the Federal Reserve have drawn fire from Congress and taxpayers for that rescue, which has grown to $182.5 billion in eight months. Seeking Rescue Discussions about a life insurer bailout began last year as stock values plummeted and the cost to protect debt issued by carriers soared. Henry Paulson<http://search.bloomberg.com/search?q=Henry+Paulson&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, the former Treasury secretary who worked on the initial bank bailout in September, instructed life insurers to buy federally regulated lenders to qualify for a U.S. rescue, according to the ACLI. In November, Hartford, Philadelphia-based Lincoln<http://www.bloomberg.com/apps/quote?ticker=LNC%3AUS> and Des Moines, Iowa-based Principal announced deals to acquire local savings and loan companies and filed their TARP applications. Hartford had reported a $2.6 billion third-quarter loss, and the $2.5 billion of debt and equity that it agreed on Oct. 6 to sell to Germany’s Allianz SE<http://www.bloomberg.com/apps/quote?ticker=ALV%3AGR> wasn’t enough to cope with the declines. Prudential and Northbrook, Illinois-based Allstate already owned lenders, as did MetLife Inc., the biggest U.S. life insurer. New York-based MetLife, led by Chief Executive Officer Robert Henrikson<http://search.bloomberg.com/search?q=Robert+Henrikson&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, strengthened its balance sheet with a $2.3 billion share sale in early October and has said it doesn’t need TARP funds. TARP a ‘Stigma’ At least nine banks that took TARP have paid back the funds or announced plans to do so. Independent Bank Corp. Chief Executive Officer Christopher Oddleifson<http://search.bloomberg.com/search?q=Christopher+Oddleifson&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1> called TARP a “stigma.” Goldman Sachs Group Inc.<http://www.bloomberg.com/apps/quote?ticker=GS%3AUS> raised $5 billion in April to help exit the program. The U.S. bailout wasn’t made available to all insurers that applied. Genworth Financial Inc. <http://www.bloomberg.com/apps/quote?ticker=GNW%3AUS>, the Richmond, Virginia-based life insurer and mortgage guarantor, was shut out. Protective Life Corp. dropped out after uncertainty over the bailout scuttled its agreement to buy a bank. Twelve insurers were waiting on TARP applications, ACLI’s Keating said in March. Allstate, the biggest publicly traded U.S. home and auto insurer, has reported three straight quarterly losses<http://www.bloomberg.com/apps/quote?ticker=ALL%3AUS> on investment declines at the life unit. Chief Executive Officer Tom Wilson<http://search.bloomberg.com/search?q=Tom+Wilson&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1> said in February that while Allstate was eligible for TARP money, he didn’t “like the terms and conditions.” Shoring Up Capital Since October, Allstate halved its dividend<http://www.bloomberg.com/apps/quote?ticker=ALL%3AUS>, halted share buybacks and announced plans to cut 1,000 jobs at its money- losing life insurance business. Lincoln completed a 1,000-worker reduction in April, and Hartford, Principal and Prudential have slashed dividends. The 11-stock Standard and Poor’s<http://www.bloomberg.com/apps/quote?ticker=S15LIFE%3AIND> Supercomposite Life & Health Insurance Index has dropped 52 percent in the 12 months through yesterday. Hartford, which isn’t part of the index, has plummeted 79 percent over the same period. Bob DeFillippo<http://search.bloomberg.com/search?q=Bob+DeFillippo&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, a spokesman for Prudential, and Michael Siemienas<http://search.bloomberg.com/search?q=Michael%0ASiemienas&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, a spokesman for Allstate, declined to comment. Prudential hasn’t decided if it will accept TARP, Chief Executive Officer John Strangfeld<http://search.bloomberg.com/search?q=John+Strangfeld&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1> said earlier this week.Susan Houser<http://search.bloomberg.com/search?q=Susan%0AHouser&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, a spokeswoman for Principal, and Ameriprise’s Benjamin Pratt<http://search.bloomberg.com/search?q=Benjamin%0APratt&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>didn’t return calls for comment. http://www.bloomberg.com/apps/news?pid=20601087&sid=auwvb7yuc52Q&refer=home -- God gave me nothing i wanted, He gave me everything i needed. 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