Summary
The Hartford Financial Services Group, Inc. (HIG) has entered into a definitive agreement with the Office of the New York Attorney General and the Attorney General of the State of Connecticut to resolve investigations into the company's use of expense reimbursement agreements related to its terminal/maturity funding group annuity business. This agreement, dated May 10, 2006, represents a significant development for investors as it brings closure to a period of regulatory scrutiny. The company has agreed to a payment of $20 million. A substantial portion, $16.1 million, will be distributed to plan sponsors who purchased these specific annuities between January 1, 1998, and December 31, 2004. The remaining $3.9 million will be divided equally between New York and Connecticut. Additionally, The Hartford will be prohibited from using contingent compensation in this particular business line for a period of three years, indicating a change in its sales practices.
Key Highlights
- 1The Hartford Financial Services Group, Inc. (HFSG) has reached an agreement with the New York and Connecticut Attorneys General.
- 2The agreement resolves investigations concerning expense reimbursement agreements in the terminal/maturity funding group annuity business.
- 3The company will pay a total of $20 million to settle the investigations.
- 4$16.1 million of the settlement will be paid to plan sponsors who purchased specific annuities between 1998 and 2004.
- 5The remaining $3.9 million of the settlement will be paid to the states of New York and Connecticut.
- 6The Hartford is prohibited from using contingent compensation in the specified annuity business for three years.