Hartford at a loss after Q3 accounting error

Due to the omission of “certain reinsurance recoverable balances on the gain/loss calculation,” Hartford now says the individual life insurance transaction will result in an after-tax loss of $393 million rather than no material gain or loss at all, as it had estimated last September.

The company says there was a “material weakness in its internal control over financial reporting” in September, but this has been resolved.

“We regret the error, but importantly the adjustments have no impact on our reported 2012 core earnings, statutory results or surplus, and announced capital management plan,” says CEO Liam E. McGee, in a statement.

He says the transactions “were attractive for The Hartford and completed on favorable financial terms.” The sales generated a statutory capital benefit of $2.2 billion, McGee adds.

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