Hartford Financial Services Group Inc. says it has settled charges by attorney generals in New York, Connecticut and Illinois that the company permitted illegal market timing within its variable annuity contracts.

Hartford Financial, Hartford, also says staff members of the U.S. Securities and Exchange Commission have concluded their investigation into allegations of marketing timing by the company without recommending any enforcement action.

In addition, Hartford says it has settled with the New York, Connecticut and Illinois attorney generals in connection with charges that Hartford participated in improper compensation arrangements involving the company, property-casualty agents and brokers.

Hartford says it has paid $115 million to settle the market timing and broker compensation matters.

The total includes $84 million in restitution in connection with the market timing allegations, $5 million in connection with the producer compensation allegations, $3 million in Connecticut penalties, $3 million in Illinois penalties, and $20 million in New York penalties.

Hartford already has set aside $83 million in reserves for the settlement, the company says.

Hartford has not admitted or denied any violation of law in connection with the settlement.

The investigations that led to the settlement arrangements began more than 3 years ago, according to Hartford Chairman Ramani Ayer.

“We emerge from this period with an unwavering resolve to uphold our longstanding commitment to providing our customers with outstanding products and exemplary service,” Ayer says in a statement.

Hartford will place $84 million of the settlement into a fund to compensate VA contract holders who may have been harmed by market timing from 1998 through 2003.

Hartford will hire a consultant to distribute the funds, the company says.

Hartford says it has introduced a number of measures, including limits on trading frequency, to curb market timing in its individual VA products.

“The Hartford failed to act swiftly and strongly to stop and disclose market timing despite its duty to do so,” says Connecticut Attorney General Richard Blumenthal.

Although the company did not invite illegal practices, “it knew the harm and was lax and late in halting it,” Blumenthal says. “While market timing cost investors millions in lost profits, it generated millions in fees for the Hartford. The harms of market timing are increased trading costs, disruptions of investment strategies and plans, unnecessary portfolio turnover, and lost opportunities.”