Not all the life insurance companies being offered capital from the government want it.

After nearly six months of suspense, life insurers can start receiving capital through the Treasury's TARP Capital Purchase Program. But at least two of the six insurers who won preliminary approval for the funds have turned down the chance to have the government as an investor.

Ameriprise Financial Inc. (AMP) turned down the money outright, and Prudential Financial Inc. (PRU) is also expected to say no, according to a Wall Street Journal report. Ameriprise noted that it has more than $1 billion in excess capital, which is a measure of an insurer's financial strength, in its statement turning down TARP.

Allstate Corp. (ALL) issued a non-committal statement, noting that its current position has improved.

A spokeswoman for Principal Financial Group (PFG), which raised $1 billion in a common stock offering earlier this week, said Thursday the company would evaluate the offer and make a decision once its application was accepted.

Hartford Financial Group (HIG) and Lincoln National Corp. (LNC) have said so far that they have preliminary approval for $3.4 billion and $2.5 billion, respectively, from the Troubled Asset Relief Program. Both say their acceptance is subject to a review of the final terms.

The life insurance industry has been battered by losses on investments, and from its exposure to the stock market downdraft through guarantees on variable annuities. A partial rebound in some financial markets has taken a little pressure off some insurers; the Dow Jones Life Insurance Index (DJUSIL) is down 11.4% year-to-date, but has risen 24.7% in the last 30 days.

TARP applicants Allstate and Principal Financial raised capital in recent weeks, and Prudential Financial will receive around $5 billion before tax in January as part of a deal to sell its stake in Wachovia Securities to Wells Fargo & Co. (WFC).

Some insurers may be unwilling to have the same experience as banks that participated in TARP and then had to suffer through public scrutiny and executive pay restrictions that "caused headaches for those up top," said Peter Larson, an analyst with Gradient Analytics. "If they can stay away, they keep investors happier, too."

One insurance executive said that opening TARP up to insurers may backfire by increasing public concern over the industry's solvency, continuing a drag on sales and forcing agents to spend yet more time reassuring customers.

Hartford and Lincoln may end up being the only companies to take the money, while other insurers may use it only as a "backstop" to raising their own capital, Credit-Suisse analyst Thomas Gallagher wrote in a Friday note. Strong capital levels are essential for insurers to maintain high financial strength ratings and to back up new policies they write, said a spokesman for the American Council of Life Insurers.

Mutual life insurers are allowed to apply for TARP through a parallel process. Two of the largest, New York Life Insurance Co. and Massachusetts Mutual Life Insurance Co., have said they will not participate.

Gary Wendlandt, chief investment officer and vice chairman of New York Life, said in an interview with Dow Jones Newswires Friday that, with more than $12 billion in surplus capital at the end of 2008, "we have more than enough capital to achieve our strategic objectives."

After a surge in early trading, shares of life insurers were mixed. Hartford was down 1.7% recently at $14.50, and Lincoln was down 2.3% at $15.87. Ameriprise rose 0.8% to $25.27, Principal was up 0.3% at $18.93, Prudential dropped 3.4% to $38.03 and Allstate dropped 3% to $24.47.

-By Lavonne Kuykendall, Dow Jones Newswires; 312-750 4141; lavonne.kuykendall@dowjones.com