Insurers move to get funds as Treasury decides on more requests

The Treasury is about to approve capital injections into 20 more banks, said Neel Kashkari, the department's assistant secretary in charge of a $700 billion bank rescue plan.

"I think we're going to approve another 20 banks today, large and small across the country," Kashkari told a congressional panel yesterday.

Meanwhile, four insurance companies yesterday asked the government to allow them to buy thrifts so they can qualify to receive federal money under the financial rescue program.

Hartford Financial Services Group Inc., Genworth Financial Inc., Lincoln National Corp., and Aegon NV, a Dutch company that owns US insurer Transamerica, each asked the Office of Thrift Supervision for permission to acquire an existing savings and loan.

At least 110 banks have requested more than $170 billion from the Treasury Department's rescue fund, and many more are expected to have submitted applications before yesterday's deadline. The requests would come from the $250 billion the Treasury set aside from the $700 billion fund to purchase stock in banks.

Analysts at Keefe, Bruyette & Woods estimated that 62 banks have received full or preliminary approval from the Treasury for $173 billion from the Troubled Asset Relief Program.

Kashkari spent two hours under hostile questioning from lawmakers concerned that the Treasury's equity purchase program won't do enough to help homeowners avoid foreclosure. Kashkari's response was that the Treasury has concluded the capital injections are the fastest and best way to help revive the overall economy.

Several congressmen criticized Kashkari and Treasury Secretary Henry Paulson for changing the strategy earlier this week of the $700 billion bank rescue fund, just a month after Congress approved it.

"I don't know whether to call this `fire, ready, aim' or something more pejorative," said Darrell Issa, a Republican from California.

Paulson is scheduled to appear Tuesday before the House Financial Services Committee.

The Treasury has allocated $250 billion of the rescue plan funds to purchase stakes in US banks and has so far approved $125 billion for nine big banks. More than 50 regional US banks have offered stakes to the Treasury and are awaiting decisions, according to Bloomberg data.

Insurers that own thrifts, which are federally regulated, are eligible to apply for a piece of the $250 billion. Thrifts differ from banks in that, by law, they must have at least 65 percent of their lending in consumer loans such as mortgages.

Hartford Financial said it expects to be eligible for between $1.1 billion and $3.4 billion in government bailout money.

The Hartford-based company said it had agreed to buy Florida's Federal Trust Bank for about $10 million and to inject an undisclosed amount of capital into the federally chartered savings bank.