Hartford subpoenaed by state AG over structured settlement practices.

Big news for our industry, yet buried in the back pages and only pointed out by one of our readers here on the Industry rumors and gossip page.

Hartford Insurance Group was subpoenaed as part of an investigation into their structured settlement practices.

Obviously the implications of this are profound in that this is the first state AG or regulatory agency to closely look at an inhouse structure program, and their findings and opinions on this could permanently alter the practice of in house structured settlement programs at casualty markets here in the US. This investigation is part of the larger case looking into the reinsurance issues and group annuity sales investigations already on going, and as described in the article Hartford is cooperating fully with all agencies.

Regardless of the outcome for Hartford, who I think has as good a rationale for their business model as anyone in the business, this will almost certainly bring to a permanent halt the long standing industry practices of approved broker, approved company lists, and certainly curtail commission sharing or rebating between the entities. The regulatory and legal risk is now too high given the Macomber v Travelers case, and the ever increasing scrutiny of our industry practices.

We will follow this closely for you and try to get the people from Hartford to come on and give us an update from their perspective.

Posted on August 9, 2005 .