Now that the Treasury has approved a $6 billion federal investment in General Motors' ( GM) finance arm GMAC, the prospects for several less controversial applicants to receive government funds appear brighter.

Several insurers, including Hartford Financial Services Group ( HIG) Prudential Financial ( PRU) and Genworth Financial ( GNW), have applied for savings and loan holding company status and acquired smaller banks to become eligible for federal investments through the Troubled Assets Relief Program, or TARP. MetLife ( MET), 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, Cerberus Capital, is not directly regulated by the Federal Reserve. The fact that GMAC 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."

Rob Haines, an analyst at bond research firm CreditSights, says a government investment in the life insurance sector makes sense because life insurers buy lots of corporate bonds. If insurers are healthy, they can in turn supply credit to other industries.

The GMAC approval also bodes well for other financial companies whose status as banks is less than obvious. Among these is Discover Financial Services ( DFS). The lender has received preliminary approval to become a bank holding company, but has not received any federal funds so far.

Rival American Express ( AXP) in November made the switch to bank holding company status and received approval for $3.4 billion in TARP funds last week. Investment banks Goldman Sachs ( GS) and Morgan Stanley ( MS), who were among the initial recipients of TARP investments, were granted bank holding company status in September.

Discover spokesman Jon Drummond says the credit card company estimates it is eligible for $400 million to $1.2 billion.

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