Life insurance companies could go under; half can't be helped

Life insurance companies have until Friday to request help under the Troubled Asset Relief Program (TARP), but only about half of the industry will be allowed to apply as the Treasury has said life insurers must be affiliated with banks or thrifts that are regulated at the federal level.

Life insurance companies face more cuts in their credit ratings and have little choice but to seek capital, according to the New York Times. State-chartered insurers like Hartford Financial Group and Genworth have generated interest in federal help, but will be unable to apply. Most life insurers have been unwilling to say whether they want to apply or not, for fear of sending a signal that they might need financial assistance, the Times reports.

After Goldman Sachs suggested investors sell shares of life insurers, life insurance companies' stocks plummeted. "The industry's problems may ultimately force some of the smaller institutions to exit the business," said Goldman's insurance stock analyst, Christopher M. Neczypor.