$10 million gets you $billions!

Several insurance and financial service companies are reportedly buying up small S&L’s, for as little as $10 million, in order to qualify for billions of dollars from the TARP bailout fund.

According to Bloomberg News,

Hartford Financial Services Group Inc.,Genworth Financial Inc. and Lincoln National Corp. plan to buy lenders, a move that may entitle the three insurers to billions of dollars from the Treasury’s bank rescue fund.

Hartford, which posted a $2.6 billion third-quarter loss, jumped 21 percent in New York trading after agreeing to buy Sanford, Florida-based Federal Trust Corp. for $10 million. That should allow the insurer to convert to a savings-and-loan holding company and qualify for $1.1 billion to $3.4 billion from the Treasury, the company said in a statement today.

Genworth and Lincoln also sought recognition as S&L holding companies as they seek to buy thrift institutions in Minnesota and Indiana, OTS spokesman Bill Ruberry said. They’re following American Express Co., Goldman Sachs Group Inc. and Morgan Stanley, which sought bank status to get U.S. backing and bolster themselves against the worst financial crisis since the Great Depression.

“Wave a wand and suddenly Hartford is not an insurance company but a bank — it’s voodoo,” said Jim Glickenhaus, who helps manage $2 billion at Glickenhaus & Co. in New York. Treasury and lawmakers “need to take a deep breath and see what they’re doing.”