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The Hartford Announces New Agreement-In-Principle With Boy Scouts Of America And Majority Of Claimants
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Rhea-AI Summary
The Hartford (NYSE: HIG) has reached a new agreement-in-principle in the Boy Scouts of America (BSA) bankruptcy, replacing an earlier $650 million settlement. The new deal involves a payment of $787 million to resolve claims, mainly from policies issued in the 1970s. The BSA and local councils will release The Hartford from any obligations under these policies. A charge of approximately $137 million is expected to impact Q3 2021 earnings. Court approval of the settlement is anticipated in late 2021, subject to certain conditions.
Positive
New agreement with BSA supersedes previous settlement, indicating progress in resolving legal issues.
Full release from obligations under historical policies enhances long-term liability management.
Negative
The Hartford will incur a charge of approximately $137 million before tax in Q3 2021, impacting earnings.
Payment of $787 million could affect short-term financial performance.
HARTFORD, Conn.--(BUSINESS WIRE)--
The Hartford (NYSE: HIG) announced today that it has entered into a new agreement-in-principle in the Boy Scouts of America (BSA) bankruptcy, superseding its prior agreement, which now includes the BSA, its local councils and the representatives of a majority of the sexual abuse claimants. As part of the agreement-in-principle, The Hartford will pay $787 million, before tax, for claims associated with policies mostly issued in the 1970s. In exchange for The Hartford’s payment, the BSA and its local councils will fully release The Hartford from any obligation under policies The Hartford issued to the BSA and its local councils. In addition, the representatives for the claimants joining this agreement-in-principle will support a plan of reorganization which incorporates the settlement. As announced on April 16, 2021, The Hartford had entered into a $650 million settlement with BSA; however, that previous settlement did not include the local councils or representatives of a majority of the claimants.
The agreement-in-principle was reached in connection with BSA’s Chapter 11 bankruptcy and will become a final settlement upon the occurrence of certain conditions, including execution of a definitive settlement agreement, confirmation of the BSA’s global resolution plan, receipt of executed releases from the local councils, and approval from the bankruptcy court as part of BSA’s overall plan of reorganization. The parties to the agreement-in-principle expect to receive court approval of the settlement in late 2021. No assurance can be given that all the conditions precedent to the settlement will be satisfied or that bankruptcy court approval, if obtained, will not be delayed for various procedural reasons.
The Hartford expects to record a charge against earnings of approximately $137 million, before tax, in the third quarter 2021 for prior accident year development recognized in connection with the additional amounts anticipated to be paid by The Hartford pursuant to the agreement-in-principle described above.
About The Hartford
The Hartford is a leader in property and casualty insurance, group benefits and mutual funds. With more than 200 years of expertise, The Hartford is widely recognized for its service excellence, sustainability practices, trust and integrity. More information on the company and its financial performance is available at https://www.thehartford.com. Follow us on Twitter at @TheHartford_PR.
The Hartford Financial Services Group, Inc., (NYSE: HIG) operates through its subsidiaries under the brand name, The Hartford, and is headquartered in Hartford, Connecticut. For additional details, please read The Hartford’s legal notice.
HIG-F
Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Factors that could cause actual results to differ, possibly materially, from those in the forward-looking statements include, but are not limited to, satisfaction of the conditions precedent to the settlement agreement, including execution of a definitive settlement agreement, confirmation of the BSA’s global resolution plan, receipt of executed releases from the local councils, and approval from the bankruptcy court of the BSA plan of reorganization, as well as other factors discussed in our 2020 Annual Report on Form 10-K, subsequent Quarterly Reports on Forms 10-Q, and the other filings we make with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued.
From time to time, The Hartford may use its website and/or social media outlets, such as Twitter and Facebook, to disseminate material company information. Financial and other important information regarding The Hartford is routinely accessible through and posted on our website at https://ir.thehartford.com, Twitter account at www.twitter.com/TheHartford_PR and Facebook at https://facebook.com/thehartford. In addition, you may automatically receive email alerts and other information about The Hartford when you enroll your email address by visiting the “Email Alerts” section at https://ir.thehartford.com.
