UPDATE 1-U.S. nets $706.26 mln on Hartford warrants

(Adds details, background on TARP warrant program)

WASHINGTON, Sept 22 (Reuters) - The U.S. Treasury Department said on Wednesday that it expects net proceeds of $706.26 million from the auction of stock warrants in Hartford Financial Services Group Inc (HIG.N).

Treasury said it sold about 52.09 million warrants at an auction price of $13.70. The warrants, granted to the government as part of a now-repaid $3.4-billion taxpayer bailout investment in the insurer, carry a strike price of $9.79 per share and expire June 26, 2019.

Hartford Financial shares closed on Tuesday at $23.16.

Closing of the warrants sales was expected to occur on or about Sept. 27, Treasury said.

Hartford was one of three major insurance groups to receive bailout funds under the Troubled Asset Relief Program (TARP).

Treasury said the warrants offering represented sale of its remaining investment in Hartford.

The government already has sold warrants in Lincoln National Corp. (LNC.N), which repaid its $950 million bailout, but American International Group (AIG.N) still owes about $49 billion it received as part of a massive bailout two years ago at the height of the financial crisis.

AIG is in talks with Treasury on converting preferred stock to common shares that could be sold after it sells key assets and pays back Federal Reserve loans.

(Reporting by Glenn Somerville, Editing by Chizu Nomiyama)