Updated from 2:47 p.m. EDT

Lincoln National

(LNC) - Get Report

was among the worst decliners in the financial sector Monday after the insurer announced plans to raise capital, including taking bailout money from the government.

Lincoln National

shares fell 10.8% after the life insurer and financial planner said it intends to raise more than $2 billion in fresh capital, in part through a $600 million stock offering and a $500 million senior debt offering.

Lincoln National will also accept as much as $950 million in capital by selling preferred shares under the U.S. Treasury's Capital Purchase Program. The company also said it will sell its U.K. operations to

Sun Life Financial

(SLF) - Get Report

for about $320.8 million. The stock dropped $1.92 to $15.83.

In May, the Treasury granted preliminary approval for some insurers to receive capital infusions under the Troubled Assets Relief Program, or TARP, including Lincoln National,

Hartford Financial

(HIG) - Get Report

,

Allstate

(ALL) - Get Report

,

Ameriprise

(AMP) - Get Report

,

Prudential

(PRU) - Get Report

and

Principal Financial

(PFG) - Get Report

.

Principal, Prudential, Allstate and Ameriprise have already declined to accept TARP funds.

Most insurance stocks were losing ground Monday on Lincoln National's announcement. Hartford tumbled 11.2%, Principal lost 6.8%, Allstate slipped 2%, and Prudential finished down 1.5%. Ameriprise, meanwhile, added 1.9% to close at $24.78..

In other insurer news,

Genworth Financial

(GNW) - Get Report

said it has paid in full its remaining 2009 long-term debt obligations. Genworth said it paid $331 million on its senior notes due Monday. Genworth has no long-term debt maturities until 2011, the company said. Shares ended the session down 5.9% to $6.33.

Elsewhere,

The Financial Times

reported that

Citigroup

(C) - Get Report

will unveil a $1.25 billion funding tie-up with the International Finance Corporation, the private sector arm of the World Bank. The tie-up could mark a new willingness by banks to finance trade in emerging markets, the report said. Citi shares sank 2.9% to $3.37.

Over the weekend, Rochdale Securities analyst Dick Bove raised his price target for

Bank of America

(BAC) - Get Report

to $19 a share from $14, citing improved confidence in the bank and its management, which suggests the price earnings multiple on the stock will be higher.

In addition, Bove said the analysis of bank stocks has changed from being tied to a technique based upon tangible common equity to one based upon normalized earnings. Additionally, Bove said it is becoming increasingly apparent that Bank of America's acquisitions of Countrywide and Merrill Lynch were good for the business. BofA shares shed 2.8% to $13.33.

Among other bank stocks,

Barclays

(BCS) - Get Report

lost 6.1%,

Morgan Stanley

(MS) - Get Report

gave back 4.4%,

JPMorgan Chase

(JPM) - Get Report

was down 3.2%, and

Wells Fargo

(WFC) - Get Report

shed 3%.

Meanwhile,

The Financial Times

reported that Morgan Stanley and Citigroup will have to wait up to two years to gain the full benefits of their brokerage joint venture due to troubles merging their information technology systems. The delay in integration are frustrating some of the 18,500 financial advisers who had expected to be able to sell products from both firms to their clients, the paper reported, citing unnamed people close to the situation.

In other financial-related news, President Barack Obama is expected Wednesday to propose a

reorganization of financial-market supervision

, including a move to remake powers of the

Federal Reserve

to oversee the biggest financial players,

The Wall Street Journal

reports.

The Obama plan also would give the government the power to unwind and break up systemically important companies and create a new regulator for consumer-oriented financial products, the

Journal

reports, citing people involved in the process.