NU Online News Service, June 3, 2004, 5:41 p.m. EDT – The Hartford Financial Services Group Inc. may take a large block of business over from a troubled North Carolina life insurer.[@@]
The Hartford insurer says it has an agreement with North Carolina insurance regulators to assume up to $1.5 billion in annuity and life insurance contracts from London Pacific Life & Annuity Company, Raleigh, N.C.
The agreement, which must be approved by a state superior court in Wake County, N.C., would let Hartford assume fixed annuity contracts from 46,000 fixed annuity customers of London Pacific.
Hartford still is negotiating to take over 2,000 variable universal life contracts from the state guaranty fund.
In papers filed with the state superior court, insurance regulators said they will move quickly to liquidate London Pacific once the contracts are reassigned.
The Hartford annuity and life agreement would let London Pacific policyholders surrender their policies for the cash value. The policyholders have been unable to cash in their policies since North Carolina Insurance Commissioner Jim Long placed London Pacific under receivership in August 2002.
Before North Carolina regulators placed London Pacific under receivership, it was a unit of London Pacific Group Ltd., Jersey, Channel Islands. Jersey Pacific suffered heavy investment losses in 2002, when some of the companies that issued the bonds it held stopped making bond payments.
Long placed London Pacific Life under receivership after officials decided that the company’s investment income was too low to cover the cost of the guaranteed rates that the company had promised to policyholders.
A spokesman for Long’s office says the company’s demise was due to poor investments.