Summary
The Hartford Financial Services Group, Inc. (The Hartford) announced on September 27, 2012, a significant strategic divestiture of its individual life insurance business. Through its indirect wholly-owned subsidiary, Hartford Life, Inc., the company has entered into a Purchase and Sale Agreement with Prudential Financial, Inc. (Prudential) for $615 million in cash. This transaction involves the sale of assets related to the individual life insurance business, with the proceeds to be allocated between ceding commissions and the purchase price of other assets. The deal includes reinsurance agreements where Prudential will assume the policies from The Hartford's subsidiaries, though The Hartford's entities will retain primary liability to policyholders. The agreement contains standard representations, warranties, and indemnification clauses, and its closing is contingent upon customary conditions, including state insurance department approvals. This move signals a strategic shift for The Hartford, potentially focusing its resources on other core business areas.
Key Highlights
- 1The Hartford is selling its individual life insurance business to Prudential Financial for $615 million in cash.
- 2The transaction is structured as an asset sale, with Hartford Life, Inc. as the seller.
- 3The sale involves the transfer of policies through reinsurance agreements, with Prudential as the reinsurer.
- 4The Hartford's subsidiaries will retain primary liability to policyholders even after reinsurance.
- 5The company's parent, The Hartford Financial Services Group, Inc., is guaranteeing the obligations of the seller for six years.
- 6Closing of the deal is subject to customary conditions, including regulatory approvals from state insurance departments.