"They may get the money, but there will be a lot of things coming with it," said Jerry Blanchard, a partner in the financial institutions practice at law firm Bryan Cave LLP. "The conditions coming down the road may be out of proportion with what they're getting."
Hartford Financial Services Group (HIG), approved for $3.4 billion, and Lincoln National Corp. (LNC), which can receive $2.5 billion, are considered the most likely to accept the funds, analysts said. Both bought banks last year in order to make themselves eligible for the program, which is only available to bank holding companies. Each released a statement saying it was considering whether to take the money.
Ameriprise Financial (AMP) approved for $2.85 billion, said it wouldn't take the money. "We have carefully evaluated our current position and expectations for the future, and we are confident that our current capital position and access to potential additional funding sources are more than adequate," said CEO Jim Cracchiolo in a statement.
Prudential Financial (PRU), Principal Financial Group (PFG) and Allstate (ALL) said they were weighing whether to accept the funds. Analysts don't seem to think they will, however.
It's not as if the benefits of the government's capital infusion won't be substantial. At Hartford Financial, it could forestall the sale of its lucrative property and casualty division, a sale bond analyst Kathleen Shanley has noted to clients "may not be the best way to maximize shareholder value."
At both Hartford Financial and Lincoln National, "the amounts available will be large enough to significantly improve the balance sheets of the companies involved," wrote analysts at Keefe Bruyette & Woods in another report.
Still, taking TARP funds will likely bring greater scrutiny from regulators. "It's a bit of a moving target," Blanchard said. "You're entering into an agreement with the government and you don't necessarily know what the terms will be in six months."
And while companies can usually pull the plug on chronically ill subsidiaries, regulators will expect nothing less than heroic, and potentially costly, efforts from Lincoln National and Hartford Financial if their banks falter, Blanchard said.
Those conditions and others -- including restrictions on executive compensation -- have spurred big banks to race to repay the investments they received from TARP. But as they look for the exits, a least a couple of insurers are ready to take their place.