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WASHINGTON, DC-The Treasury Department is opening another front of support for the commercial real estate industry, albeit not directly: at least seven life insurance companies appear to be poised to receive TARP funding to shore up their operations. Several of these firms also are–or have been–strong investors in commercial real estate, including Allstate, Prudential Financial and Principal Financial Group.

Treasury has not made the news official however. Both Hartford Financial and Lincoln Financial have announced that they were eligible for the program–slated to receive $3.4 billion and $2.5 billion, respectively. Other companies’ names–such as Allstate, Principal, Prudential and Ameriprise Financial–have been cited in media reports. Treasury did not return a call to GlobeSt.com in time for publication.

As it has been with the capital injections into the banks made under TARP, it is difficult to say whether this latest dispersion of funds will translate into more liquidity for real estate borrowers. Indeed, it has become clear that expanding lending is only a secondary goal of the TARP program; its main objective has been to prevent the financial system from collapse and complete seizure.

Some say that this risk is still there–albeit a far less immediate one. There is some $100 billion left in TARP–and that may not be enough for the life insurance sector, Peter Cohan of Peter Cohan Assoc., tells GlobeSt.com. “The banks were the first objective for Treasury, but I think the losses could be equally as deep for life insurance companies.” Life insurance companies in particular liked to invest in MBS and CMBS because their profiles matched the expected payouts for life policies, he says. Treasury’s move to include life insurance companies, he says, “has the feel of opening up a whole new front for TARP.”

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