Insurers Jump on TARP Despite Concerns

The latest moves by several insurers to try to qualify for relief under the Troubled Assets Relief Program, or TARP, are attracting a lot of attention this week. But purchasing troubled savings and loan companies as a way to reinvent themselves into banks or thrift holding companies may prompt these insurers to lose their chance at a piece of the TARP.

First off, mere eligibility for TARP funding does not mean automatic approval.

And although companies like Hartford Financial (HIG Quote), Lincoln National (LNC Quote), Genworth Financial (GNW Quote) and Aegon (AEG Quote) likely did not take the step of acquiring an S&L without a strong indication that approval would be granted, Treasury Secretary Henry Paulson has not always followed an obviously readable path. He rescued some firms but allowed Lehman Brothers to fail; and he has stated that the TARP's funds are not intended for use to bail out automakers General Motors (GM Quote), Ford (F Quote) and Chrysler. ...