RKMBs Forums .::Important::. Politics and Current Events Democrat Leaders Want Automaker Bailout

Four insurance companies on Friday moved to buy lenders in order to gain access to money from the Treasury Department’s $700 billion-plus bailout program, in another sign that the insurance industry may be vulnerable in the financial crisis.

Those four insurers -- Hartford Financial Services Group (HIG), Genworth (GNW), Lincoln National (LNC) and Netherlands-based Transamerica parent Aegon (AEG) -- all worked to get their bids in for government help before the Friday application deadline.

Hartford said it has applied to the Office of Thrift Supervision to become a savings and loan holding company, and has applied to participate in Treasury’s Capital Purchase Program. Hartford said it believes it’s eligible for a capital purchase of between $1.1 billion and $3.4 billion under current Treasury guidelines.

In order to make itself eligible for the CPP, Hartford moved to buy for $10 million the parent company of Sanford, Fla.-based Federal Trust Bank, a federally chartered savings bank insured by the Federal Deposit Insurance Corp. Hartford said it would provide an additional amount to recapitalize the bank.

Aegon, which already received EUR3 billion in aid from the Netherlands last month, said it wants to buy Suburban Federal Savings Bank of Crofton, Md., according to a report from Bloomberg News.

Genworth intends to buy Inter Savings Bank of Maple Grove, Minn., a spokesman from the Office of Thrift Supervision told Bloomberg. The OTS spokesman added that Lincoln National, which is based in Philadelphia, is seeking to acquire Newton County Loan & Savings of Goodland, Ind.

Hartford isn’t interested in buying Federal Trust Bank unless the purchase will give it access to government bailout money: its statement said that Hartford’s purchase of FTB “is contingent on Treasury's approval of The Hartford's participation in the CPP, approval of the acquisition by the shareholders of Federal Trust Corporation, and the Office of Thrift Supervision's approval of The Hartford's application to become a savings and loan holding company.”

Hartford took pains to present itself as a healthy and viable company that was simply being prudent amid the financial downturn.

"We are taking these actions as a strong and well-capitalized financial institution looking for maximum flexibility and stability," Ramani Ayer, Hartford's chairman and chief executive officer, was quoted as saying in the company’s press release. "Securing capital at the terms available through the Capital Purchase Program could be a prudent course in this market environment and would allow us to further supplement our existing capital resources."

Insurers of all stripes have come in for scrutiny after the near-collapse of American International Group (AIG) and as the financial crisis continues.