by John D. Darer CLU ChFC CSSC RSP
In a further sign of settlement industry consolidation Hartford Life Insurance Company will announce that it withdrawing from the structured settlement market. Until 3rd quarter 2008, Hartford Life was one of the leading and most competitive structured settlement annuity markets.
The signs have been clear for a while now at The Hartford Life due to several factors
- A ratings downgrade, which made it much harder to place where there are minimum rating standards such as United States government business and cases where Court approval of settlement is involved.
- Hartford's property and casualty division recently loosened requirements which previously limited the funding of structured settlements resulting from the disposition of its cases with Hartford Life business. I don't have the figures on it, but the captive business is believed to be significant.
- The level of fear by consumers, attorneys and advisers about what an A rating from AM Best means that is unique to the settlement industry and its stakeholders because of the long term obligation. As a measure of comparison consider that large companies purchase their insurance from "A" rated property and casualty insurers. Consumers purchase auto insurance, boat insurance, life insurance, Medigap insurance
Whenever a company leaves the structured settlement market there is the potential for confusion that the company is going out of business. That is not the case
Have a look at the Hartford website. Other former structured settlement annuity issuers such as Massachusetts Mutual Life, Genworth, Transamerica and Aviva are still in business and honoring their commitments as they have for many years. The Hartford is a 200 year old institution.
For settlement industry participants the sad part is the human element- that friends who you have been working with for years lose their jobs. For those friends this author wishes them well in this difficult time and prays for each of them to land on their feet in the shortest time possible.
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