Insurer Resolves VA Timing Allegations

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.”