Hartford implies that structured settlement unit is on the block.

I'm not quite sure if I missed this announcement or it just flew under the radar, but last week the CEO of Hartford Financial acknowledged that the Institutional Products Division was probably in play, when he mentioned they were "pursuing options" for the division that sells products to banks, brokers and in the structured settlement area.

You can read the report that originally was in the Hartford Courant by clicking here.

This is another sobering article and indication that once the Hartford knows whether or not it will qualify for TARP funds and how much that allocation will be, that the buyers who have been nibbling at the various units will be able to move with some certainty.

While nobody knows what the ultimate outcome will be and if a buyer will emerge ( note that the Sun Life rumors so far have proven to be false.), it's clear that Hartford Financial, barring a miracle is essentially going to be consolidated to maybe one or two key units depending on what it's various divisions might bring from interested buyers.

The impact on the structured settlement community will be grave as the current number of markets that can effectively write structures is exceptionally small, with only NY Life, Met Life, Pacific Life, Prudential and John Hancock and to some degree Symetra, able to take on new business with out significant underwriting or capacity restriction, or suffering from a rating company down grades or prior rating company issues that either disqualifies them from bidding or scares off potential plaintiffs.

I know there is a move afoot to make A the new A+, given the changes in rating agencies, and I see no real harm in trying. However, the fact is the larger issue remains that few if any life markets are interested in entering the structured settlement market and those that are in might be facing business conditions that force them to curtail their involvement or pull out all together.

The only way we can make the structured settlement market attractive for the life insurance companies in the long term is to begin writing other life insurance and recurring income products that lessen reserve strain, broaden the base of income and build effective advocates in the planning world that value our product. The days of the one product sale and industry are coming to an end and unless the structured settlement market comes to grips with it quickly, we may be faced only 4 or 5 major life markets interested in continuing to underwrite our product.

Posted on May 11, 2009 .