The announcement is expected within the next several days, according to the Wall Street Journal, citing people it did not name but said were familiar with the matter.
The news sent shares of Hartford Financial Services Group Inc. up nearly 25 percent in premarket trading. Prudential Financial Inc. rose more than 11 percent.
Such a move would help stabilize the life insurance industry, which has suffered massive investment losses over the past year. The KBW Insurance index, which tracks 24 of the nation's largest insurers, is down more than 24 percent this year.
Insurers have also been under pressure to maintain solid capital positions to avoid damaging downgrades by ratings agencies. Keeping high ratings is key for insurers because lower ratings can mean higher costs, and in some cases, even a loss of business.
To improve their capital positions, earlier this year bank regulators approved applications from some insurers to become savings and loan holding companies, which is needed to qualify for federal funds.
That group includes Prudential, Hartford Financial, Genworth Financial Inc., Lincoln National Corp. and Aegon NV, a Dutch company that owns U.S. insurer Transamerica.
By acquiring a savings and loan, an insurance company would become a thrift holding company. Thift holding companies, which are federally regulated, were thought to be eligible to apply for a piece of the $250 billion the government is spending to buy shares in banks and other financial companies.
But in January, the government said only insurers that own federally chartered banks will qualify for the program. Treasury had said last year that life insurers could be eligible for TARP funds if they owned bank-holding companies, but it hadn't officially decided to give funds to these companies as it focused much of its energies on banks and auto makers.
Several life insurers have applied for the TARP funds, including Prudential Financial, Hartford Financial and Lincoln National, the Journal reported.
Prudential spokesman Simon Locke declined to comment on the report, as did a Treasury spokeswoman.
By Ieva M. Augstums(AP)
