UPDATE 2-Lincoln Nat sees eventual govt OK to repay TARP

* Lincoln sees repaying TARP as early as 2nd half of 2010

* CEO cites company's Treasury ties, use of funds

* CEO says financial position shows signs of stabilizing

* Co says dividend could be reinstated after U.S. repaid

* Shares slightly higher (Adds details, management and analyst comment at investor event, byline)

By Lilla Zuill

NEW YORK, Nov 17 (Reuters) - Lincoln National Corp (LNC.N), a large U.S. life insurer that took a $950 million bailout from the U.S. Treasury, is confident it will get the green light to repay the funds when it is ready to do so, its CEO said.

"When we get to the point that we want to repay, we are pretty confident the conversations will go well," CEO Dennis Glass said on Tuesday at Lincoln's investor day.

Like other companies that received bailouts under the Troubled Asset Relief Program, Lincoln's repayment of the funds will require the approval of Treasury officials.

Lincoln suggested it could repay the debt as early as the second half of 2010, and that it could reinstate a dividend once the funds have been repaid.

Philadelphia-based Lincoln was one of a handful of life insurers to ask Washington for a cash injection earlier this year after heavy investment losses and a surge in costs for stock market-linked annuities eroded capital.

Citigroup analyst Colin Devine raised doubts over the company's readiness to repay TARP so soon, citing its need to account for another obligation -- about $1.8 billion in letters of credit maturing in 2012.

"Isn't it putting the cart before the horse to suggest repaying TARP less than a year from now?" Devine asked during investor day.

Chief Financial Officer Fred Crawford said meeting the company's debt obligations was "manageable" under its capital plan, which could include internally funding some reserves for potential liabilities.

Glass told investors his confidence in getting Treasury approval to repay TARP funds was based on the company's already close working relationship with the Treasury and the fact that Lincoln has used TARP funds to make U.S. investments.

He also pointed to signs that the company's financial position has stabilized, including improvement in regulatory capital levels, and its ability to tap capital markets for additional funds.

Lincoln shares were up 11 cents to $24.71 in midday trading on the New York Stock Exchange. (Reporting by Lilla Zuill; Editing by Lisa Von Ahn and John Wallace)