Life insurers healthy enough to stand on their own may view taking Troubled Asset Relief Program money as a last resort — unless they can use the money to fund acquisitions.

Securities analysts come to that conclusion in a flurry of comments on a U.S. Treasury Department statement that the department is open to considering TARP Capital Purchase Program applications from insurers with federally regulated subsidiaries.

Andrew Kligerman, an analyst at UBS Investment Research, New York, and other UBS analysts say admitting insurers into TARP will appeal more to insurers facing tighter-than-average capital constraints.

“It likely will temporarily boost investor confidence, but TARP funds alone cannot eliminate the capital-liquidity pressures caused by weak credit, equity market, and economic conditions,” the UBS analysts write.

But “TARP could be a relatively cheap source of capital,” the analysts write.

John Nadel and Jason Weyeneth, analysts at Sterne Agee Group Inc., New York, suggest that insurers that have had bank or thrift affiliates for many years may be in a better position to participate in TARP than insurers that have moved to acquire banks or thrifts specifically to qualify for participation in TARP.

TARP expansion could slow the insurance rating agencies’ efforts to cut ratings, and that it could help keep some insurance companies from failing outright, the Sterne Agee analysts write.

If the strongest insurers participate in TARP, that might be because the Treasury Department forces them participate, the analysts write.

The strongest insurers also might participate if “they are able to utilize TARP funds to finance M&A,” the analysts write.

An analyst team at Sanford C. Bernstein & Company L.L.C., New York, led by Suneet Kamath writes in its comment that the Treasury Department’s decision to expand access to TARP shows that “regulators have acknowledged the important role that life insurers play in credit markets.”

“The goal of policymakers appears to be to ensure that life insurers remain buyers of credit-related securities and not forced sellers of them,” the analysts write.

Because participation in federal relief programs comes with restrictions on executive compensation and other “strings,” “we feel the TARP is more of a last resort for life insurers, rather than a preferred option,” the Bernstein analysts write. “To date, companies have argued that their capital and liquidity plans do not require any federal funds.”

But companies with lower ratings, or lower capital ratios than competitors, may find the program more attractive, the analysts write.

Moreover, now that rating agencies are cutting life insurers’ to A ratings, from AA, even when the companies have risk-base capital ratios of 350%, the insurers may feel less pressure to maintain RBCs at 350%, and that increase those insurers’ flexibility, the analysts write.