Now that the Treasury has approved a $6 billion federal investment in
(GM - Get Report)
, the prospects for several less controversial applicants to receive government funds appear brighter.
Several insurers, including
Hartford Financial Services Group
(HIG - Get Report)
, have applied for savings and loan holding company status and acquired
to become eligible for federal investments through the Troubled Assets Relief Program, or TARP.
(MET - Get Report)
, which has been a bank holding company since 2001, has not said whether it has applied for TARP, but looks to have a good case.
"I'd assume they wouldn't have gone through all this trouble unless they were getting strong signals from Treasury they were going to get the money," says Robert Litan, vice president of Research and Policy at the Kauffman Foundation.
Still, Litan says the GMAC approval makes the insurers' case even clearer. Banks are not supposed to be affiliated with commercial activities, such as selling cars. Not to mention that GMAC's majority owner,
, is not directly regulated by the
. The fact that
got around these hurdles makes any issues the insurers face seem comparatively minor, he says.
Steve Ricchiuto, chief economist at Mizuho Securities USA, believes several life insurers will need federal support due to troubled commercial real estate loan portfolios.
"People are too passive about where we are," he says. "They're thinking this is done -- that we've crested. I don't find anything in the data to show that we've crested."