Hartford Financial , the No. 4 U.S. insurer beset by worries about capital, won approval on Thursday to raise $3.4 billion via the government's bank bailout plan, sending its shares 6 percent higher.

Shares in a raft of U.S. insurers -- including Principal Financial Group

and Lincoln National Corp

Investors have worried about the health of Hartford and other insurers since the near-collapse in September of American International Group .

The Wall Street Journal, citing an unidentified Treasury spokesman, said Allstate Corp and Ameriprise Financial Inc had been cleared to get funds via the Troubled Assets Relief Program.

Three other insurers that also secured a greenlight from included Prudential Financial Inc

, Lincoln National Corp , and the Principal Financial Group

, the Washington Post cited a Treasury spokesman as saying.

Executives at Allstate, Ameriprise and Prudential were not immediately available for comment. Lincoln and Principal spokesmen did not return calls for comment.

Hartford, which in April posted its third straight quarterly loss because of dismal financial markets, said in a statement it received preliminary approval for the capital participation -- subject to final negotiation and approval.

Applying for participation in the CPP was a prudent step for the Hartford, particularly given the continued economic uncertainty, Chief Executive Ramani Ayer said.

These funds would further fortify our capital resources and provide us with additional financial flexibility during one of the most volatile market climates in our nation's history.


Life insurers such as Hartford have endured criticism in the past year for taking reckless bets, such as variable annuities or policies that promised unrealistic guarantees to buyers.

Walloped also by tanking financial markets, the largest U.S. insurers have sought government aid to tide them over the financial and economic crisis.

As a condition for taking part in the Treasury Department's Capital Purchase Program, Hartford had agreed to buy Florida-based Federal Trust Corp, a small savings and loan.

Hartford said at the time it would be eligible to sell $1.1 billion to $3.4 billion of preferred shares to the government under the Treasury Department's $700 billion Troubled Asset Relief Program.

Shares in Hartford climbed to $15.65 in after-hours trade from a $14.75 regular close. Stock in Lincoln rallied 4.6 percent. Principal gained more than 3 percent.

But Allstate, Ameriprise and Prudential, which had gained between 2.5 percent and 6.4 percent during the regular session, held steady in extended trade.

(Reporting by Edwin Chan; Additional reporting by Lilla Zuill; Editing Bernard Orr)