The U.S. government appears ready to offer Troubled Asset Relief Program funding to several major life insurers who have aligned with banks to seek federal bailout funds.

The companies, including Prudential Financial Inc., Lincoln National Corp. and Hartford Financial Service Group, applied for funding through TARP’s Capital Purchase Program (CPP).

The Treasury Department was expected to announce the funding for life insurers any day, according to a Wall Street Journal article on Wednesday (April  8).

Life insurer eligibility for the CPP would be seen as “a favorable development for the industry,” according to a Standard & Poor’s ratings service report.

“Participation would bolster liquidity and capital at a time when these vital components of financial health are strained, largely because of other-than-temporary impairments and investment portfolios’ declining market values,” said Standard & Poor’s credit analyst Matt Carroll.

The CPP is a voluntary program in which the U.S. government, through the Treasury Department, invests in preferred equity securities issued by qualified financial institutions. Published reports have cited a Treasury Department statement that a number of life insurers have met the requirements for the CPP because of their bank holding company status.

Among the life insurers who have joined with banks to meet requirements for the government funds are Hartford Financial Services, Genworth Financial, Lincoln National, Prudential and Met Life.

Standard & Poor’s officials said in most cases, it does not expect participation in the CPP to result in upgrades, but it could lead to revisions of outlooks to stable from negative. In some limited cases, it said, ratings could rise if capital adequacy is currently a significant weakness to the ratings and if other factors are supportive of a higher rating.