Report: SEC Finishes Onsite Fact Gathering at The Hartford

March 1, 2004 ( - The US Securities and Exchange Commission (SEC) recently wrapped up an on-site investigation of The Hartford's mutual fund and annuity operations while a similar probe by New York State authorities apparently continues.

According to the Hartford Courant, even though the company has not yet been a target for enforcement action, Hartford noted in a regulatory filing that “it is possible that one or more regulatory agencies may pursue action against the company in the future.” Hartford made the statement in its SEC annual report filing and refused to elaborate further, the Courant said.  

The Hartford, like other companies, had disclosed getting information demands from the SEC and a subpoena from the office of New York Attorney General Eliot Spitzer about the company’s mutual fund sales.

The Hartford noted that its mutual funds are available to holders of its variable life insurance policies, variable annuities, funding agreements and to certain retirement plans. The current products restrict transfers among funds, but some products, including older variable annuities, don’t restrict the frequency of transfers, The Hartford said. Also, past litigation has limited The Hartford’s ability to restrict transfers by owners of the older annuities.

The SEC, Spitzer and state authorities in other states are investigating mutual fund, insurance and other financial service companies over issues of market timing and late trading. Federal and state investigators are also looking into “churning” where salespeople out to make commissions improperly persuade annuity customers to replace their annuities with new ones, which can mean new fees and restrictions for consumers.