Mad Money Spotlight: Cramer Slams Insurers

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It's never a good idea to get on Jim Cramer's bad side. But that's just what

Lincoln National

(LNC) - Get Report

and

Hartford Financial

(HIG) - Get Report

have done.

The two insurers are the newest companies taking money from the government. But while the bailout of banks was a necessity, Jim Cramer said during his "Mad Money" segment on Monday, doling out money to insurers is ludicrous.

Unlike the banking crisis, where there was serious systemic risk, Cramer said these two insurers just took a gamble and lost, and therefore shouldn't be rewarded.

On Monday, Lincoln said it will accept as much as $950 million in capital, with preferred shares issued under the U.S. Treasury's Capital Purchase Program.

The government offered Lincoln about $2.5 billion, but the company said it will not need the full amount after selling its United Kingdom business to Canada's

Sun Life

. Lincoln expects to earn about $300 million from the deal, which should close in September. It also plans to raise $1.4 billion in stock and bond sales.

In its first quarter ended March 31, Lincoln lost $579 million, or $2.27 per share, compared with a profit of $289 million, or $1.10 a share, in the prior-year period, hurt by a goodwill write-down in its annuity business.

On Friday, Hartford said it could take on as much as $3.4 billion from the government. Hartford lost $1.21 billion, or $3.77 a share, in its first quarter ended March 31.

But there is not a nationwide problem with insurers. In fact,

Principal Financial

(PFG) - Get Report

,

Prudential Financial

(PRU) - Get Report

,

Allstate

(ALL) - Get Report

and

Ameriprise Financial

(AMP) - Get Report

all turned down the funds after raising capital through other venues.

The problem is now Lincoln and Hartford have an unfair advantage. Cramer likens the bailout of the insurers to that of

Wachovia

(WB) - Get Report

and

Washington Mutual

, who he says didn't need the TARP money.

Shares of Lincoln National tumbled 5% to $15.06 in afternoon trading, while Hartford gained 3.6% to $11.91. Go figure.

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