Hartford Financial Services Group said it has an agreement with North Carolina insurance regulators to assume up to $1.5 billion in annuity and life insurance contracts from the financially distressed London Pacific Life & Annuity Company.
The agreement, which must be approved by a state superior court in Wake County, N.C., would allow Hartford, in Simsbury, Conn., to assume fixed annuity contracts from 46,000 fixed annuity customers of London Pacific, in Raleigh, N.C. The company is still negotiating to take over 2,000 variable universal life contracts from the state guaranty fund.
The agreement allows policyholders to surrender their policies for the cash value, which they had been unable to do since the company was placed in receivership.
Insurance Commissioner Jim Long placed the company in receivership in August 2002 after his agency found income from London Pacifics investments was not sufficient to cover the guaranteed rates promised to policyholders.
By the end of 2002, financial statements showed the companys liabilities exceeded its assets by more than $186 million.
Under Hartfords agreement with the North Carolina Department of Insurance and the National Organization of Life and Health Insurance Guaranty Associations, Hartford Life will assume 40,000 deferred annuity contracts and 6,000 immediate annuities.