The Troubled Asset Relief Program (TARP)

In April 2009, the Treasury Department decided to allow life insurance companies to apply for bailout money from the Troubled Asset Relief Program (TARP). In order to qualify for the funds, an insurer had to own a federally chartered bank. Although several companies, including Prudential Financial, Lincoln National, and Hartford Financial, did own such banks and had applied for TARP funds in 2008, the government did not give them any funds at that time, instead focusing on other industries.

After the initial announcement, the shares of several life insurance companies rose broadly. This trend indicated that TARP funds would stabilize the life insurance industry, which had suffered severe losses over the past year.

Though 12 companies initially applied for aid, just two — Hartford and Lincoln National — ultimately decided to accept the money. Some companies were not eligible to receive the funds, and others decided against accepting the aid.

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