The collapse and federal rescue of AIG only signaled the beginning of problems for the insurance industry which was the worst performing sector in the past month.

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The Dow Jones US Full Line Insurance Industry index is down 76% in the past 30 days.

New concerns were raised last week when Senate majority leader Harry Reid announced that an “insurance company — one with a name that everyone knows, is on the verge of going bankrupt.”  The stock prices of several major insurance companies fell sharply after the comment.

This morning, $10 billion insurance giant Hartford Financial Services Group (HIG) said it will receive a $2.5 billion investment from Allianz SE.  Hartford Financial also predicted a steep third-quarter loss, and said it is cutting its dividend in conjunction with the investment by Allianz.

Although several financial services ETFs include insurance companies in their portfolios, three ETFs focus exclusively on insurance.

The Dow Jones U.S. Insurance Index Fund (IAK) includes companies that are in the full line insurance, insurance brokers, property and casualty insurance, reinsurance and life insurance sub-sectors.

Top holdings include Aflac (AFL), Prudential (PRU), and Allstate (ALL).

The PowerShares Insurance Portfolio (PIC) uses a fundamental approach to selecting investments.  Top holdings include Chubb (CB), ACE (ACE) and Marsh and McLennan (MMC).

The KBW Insurance ETF (KIE) invests in personal and commercial lines, property and casualty, life insurance, reinsurance, brokerage and financial guarantee firms.

Top holdings include Allstate, Travelers (TRV) and Aflac.

See the ETF Directory for a complete listing of financial services ETFs.