The HartHartford Financial Services Group, Simsbury, Conn., will pay $20 million to settle an investigation by both the Connecticut and New York attorneys general into claims of retirement product fraud, confirmed company spokesman Joshua King. Under the agreement, Hartford, which has $336 billion in assets under management, will pay the $20 million in restitution and fines to plan sponsors that purchased terminal or maturity funding annuities between Jan. 1, 1998, and Dec. 31, 2004, according to a news release. Roughly $3.9 million of the settlement will be divided equally between the states of New York and Connecticut.
The company must also implement reforms "designed to bring fair play and transparency to the marketing of retirement products," according to announcements by New York Attorney General Eliot Spitzer and Connecticut Attorney General Richard Blumenthal.
Mr. Spitzer's office began its investigation of the marketing of retirement products last year after receiving tips that insurance companies might be making secret payments to insurance brokers for recommending group annuities to pension plans, according to a release by the attorney general's office.