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.

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

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

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.

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.

(Reporting by Edwin Chan)