Reuters reports that t he proposed settlement refers to Spitzer’s complaint against the company for insurance broker compensation practices, where a company pays a broker to send business its way. Reuters said a similar investigation is going on by the SEC.
Spitzer previously subpoenaed information from the Hartford related to variable annuity sales to senior citizens and variable annuity purchases relating to 401(k) plans (See Spitzer Hits Hartford with Second Annuity Subpoena ).
Earlier this year the Hartford disclosed that is had reached an agreement in principle to compensate its mutual fund investors for harm caused by market timers (See Hartford Agrees to Market Timing Compensation with Mutual Funds).
The company set up a $66 million legal reserve fund in anticipation of regulatory action as a result of the probes (See Hartford Sets up $66M Legal Reserve for Probes).
Joshua King, a spokesman for Hartford said said the settlement talks could go into next year, but the actual settlement charge would be taken in the fourth quarter, according to Reuters. The possible fourth quarter settlement payments could mean that the insurance and mutual fund company’s results fall below its 2005 earnings forecast of $7.30 to $7.60 a share, the company said in a release.
In its latest quarterly filing the company said no formal action has been taken by Spitzer’s office or the SEC yet. Hartford said it believed some formal action against the company at the conclusion of their investigations is likely, which is why the firm is negotiating a “potential resolution.”
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