Hartford To Assume London Pacific Business

Policyholders of the financially troubled company have the option of keeping their existing contracts if they wish, because the state guaranty fund will cover their contracts.

Assigning their contracts to the Hartford would place policyholders with a sound company with high credit ratings, a Hartford spokesman points out. Hartford had 2003 revenues of almost $19 billion, vs. $364 million in premiums placed by London Pacific in 2001, prior to the announcement of its financial problems.

Hartford is offering enhancements to existing fixed annuity contracts to induce London Pacific customers to switch carriers, the spokesman says. He did not disclose what those enhancements would be because the company had not yet formally offered them to Pacific Life customers.

The agreement follows one that state regulators reached in February with Fidelity Security Life Insurance Company, Kansas City, Mo., to assume Lincoln Pacifics variable annuity obligations.

That company assumed $21.5 million in VA accounts, according to Daniel Surber, contract service officer for Fidelity Security.

The future of London Pacific is uncertain. At press time, DOI officials had not returned calls seeking comment.

Reproduced from National Underwriter Edition, June 4, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.