UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 29, 2005
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HARTFORD LIFE INSURANCE COMPANY
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(Exact name of registrant as specified in its charter)
Connecticut 001-32293 06-0974148
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Hartford Life Insurance Company
200 Hopmeadow Street
Simsbury, Connecticut 06089
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (860) 547-5000
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 8.01 OTHER EVENTS.
Hartford Life Insurance Company (the "Company") hereby files an update regarding
the regulatory developments disclosure set forth in the Company's annual report
on Form 10-K for the period ended December 31, 2004.
REGULATORY DEVELOPMENTS
In June 2004, The Hartford Financial Services Group, Inc. and its subsidiaries
(collectively, "The Hartford") received a subpoena from the New York Attorney
General's Office in connection with its inquiry into compensation arrangements
between brokers and carriers. In mid-September 2004 and subsequently, The
Hartford has received additional subpoenas from the New York Attorney General's
Office, which relate more specifically to possible anti-competitive activity
among brokers and insurers. Since the beginning of October 2004, The Hartford
has received subpoenas or other information requests from Attorneys General and
regulatory agencies in more than a dozen jurisdictions regarding broker
compensation and possible anti-competitive activity. The Hartford may receive
additional subpoenas and other information requests from Attorneys General or
other regulatory agencies regarding similar issues. The Hartford also has
received a subpoena from the New York Attorney General's Office requesting
information related to The Hartford's underwriting practices with respect to
legal professional liability insurance. In addition, The Hartford has received a
request for information from the New York Attorney General's Office concerning
The Hartford's compensation arrangements in connection with the administration
of workers compensation plans. The Hartford intends to continue cooperating
fully with these investigations, and is conducting an internal review, with the
assistance of outside counsel, regarding broker compensation issues in its
Property & Casualty and Group Benefits operations.
On October 14, 2004, the New York Attorney General's Office filed a civil
complaint against Marsh & McLennan Companies, Inc., and Marsh, Inc.
(collectively, "Marsh"). The complaint alleges, among other things, that certain
insurance companies, including The Hartford, participated with Marsh in
arrangements to submit inflated bids for business insurance and paid contingent
commissions to ensure that Marsh would direct business to them. The Hartford was
not joined as a defendant in the action, which has since settled. Although no
regulatory action has been initiated against The Hartford in connection with the
allegations described in the civil complaint, it is possible that the New York
Attorney General's Office or one or more other regulatory agencies may pursue
action against The Hartford or one or more of its employees in the future. The
potential timing of any such action is difficult to predict. If such an action
is brought, it could have a material adverse effect on The Hartford.
On October 29, 2004, the New York Attorney General's Office informed The
Hartford that the Attorney General is conducting an investigation with respect
to the timing of the previously disclosed sale by Thomas Marra, a director and
executive officer of The Hartford, of 217,074 shares of The Hartford's common
stock on September 21, 2004. The sale occurred shortly after the issuance of two
additional subpoenas dated September
17, 2004 by the New York Attorney General's Office. The Hartford has engaged
outside counsel to review the circumstances related to the transaction and is
fully cooperating with the New York Attorney General's Office. On the basis of
the review, The Hartford has determined that Mr. Marra complied with The
Hartford's applicable internal trading procedures and has found no indication
that Mr. Marra was aware of the additional subpoenas at the time of the sale.
There continues to be significant federal and state regulatory activity relating
to financial services companies, particularly mutual funds companies. These
regulatory inquiries have focused on a number of mutual fund issues, including
market timing and late trading, revenue sharing and directed brokerage, fees,
transfer agents and other fund service providers, and other mutual-fund related
issues. The Hartford has received requests for information and subpoenas from
the SEC, subpoenas from the New York Attorney General's Office, a subpoena from
the Connecticut Attorney General's Office, requests for information from the
Connecticut Securities and Investments Division of the Department of Banking,
and requests for information from the New York Department of Insurance, in each
case requesting documentation and other information regarding various mutual
fund regulatory issues.
The SEC's Division of Enforcement and the New York Attorney General's Office are
investigating aspects of The Hartford's variable annuity and mutual fund
operations related to market timing. The Hartford's mutual funds are available
for purchase by the separate accounts of different variable universal life
insurance policies, variable annuity products, and funding agreements, and they
are offered directly to certain qualified retirement plans. Although existing
products contain transfer restrictions between subaccounts, some products,
particularly older variable annuity products, do not contain restrictions on the
frequency of transfers. In addition, as a result of the settlement of litigation
against The Hartford with respect to certain owners of older variable annuity
products, The Hartford's ability to restrict transfers by these owners is
limited. In February 2005, The Hartford agreed in principle with the Boards of
Directors of the mutual funds to indemnify the mutual funds for any material
harm caused to the funds from frequent trading by these owners. The specific
terms of the indemnification have not been determined.
The SEC's Division of Enforcement also is investigating aspects of The
Hartford's variable annuity and mutual fund operations related to directed
brokerage and revenue sharing. The Hartford discontinued the use of directed
brokerage in recognition of mutual fund sales in late 2003. The Hartford also
has received subpoenas from the New York Attorney General's Office and the
Connecticut Attorney General's Office requesting information related to The
Hartford's group annuity products. The Hartford continues to cooperate fully
with the SEC, the New York Attorney General's Office and other regulatory
agencies.
To date, neither the SEC's and New York Attorney General's market timing
investigation nor the SEC's directed brokerage investigation has resulted in
either regulator initiating any formal action against The Hartford. However, The
Hartford believes that the SEC and the New York Attorney General's Office are
likely to take some action against The
Hartford at the conclusion of the respective investigations. The potential
timing of any such action is difficult to predict. Based on The Hartford's
discussions with the SEC and the New York Attorney General's Office and its own
analysis, Hartford Life, Inc. ("Hartford Life"), an indirect subsidiary of The
Hartford, recorded a charge of $66 million to establish a reserve for these
matters during the first quarter of 2005. This reserve is an estimate; in view
of the uncertainties regarding the timing and outcome of any payments relating
to these types of regulatory investigations, as well as the tax-deductibility,
if any, and any potential deferred acquisition cost effects (though no deferred
acquisition cost effects are included in this estimate) that may be applicable,
it is possible that the ultimate cost to Hartford Life of these matters may
exceed or be below the reserve amount, perhaps by a significant amount. It is
reasonably possible that the Company, an indirect subsidiary of Hartford Life,
may ultimately be liable for all or a portion of the ultimate cost to Hartford
Life. However, the ultimate liability of the Company, if any, is not reasonably
estimable at this time.
Some of the statements in this Form 8-K should be considered forward-looking
statements as defined in the Private Securities Litigation Reform Act of 1995.
These include statements about our future results of operations. We caution
investors that these forward-looking statements are not guarantees of future
performance, and actual results may differ materially. Investors should consider
the important risks and uncertainties that may cause actual results to differ.
These important risks and uncertainties include the possible occurrence of
terrorist attacks; the response of reinsurance companies under reinsurance
contracts and the availability, pricing and adequacy of reinsurance to protect
the Company against losses; changes in the stock markets, interest rates or
other financial markets, including the potential effect on the Company's
statutory capital levels; the inability to effectively mitigate the impact of
equity market volatility on the Company's financial position and results of
operations arising from obligations under annuity product guarantees; the
difficulty in predicting the Company's potential exposure arising out of
regulatory proceedings or private claims relating to incentive compensation or
payments made to brokers or other producers and alleged anti-competitive
conduct; the uncertain effect on the Company of regulatory and market-driven
changes in practices relating to the payment of incentive compensation to
brokers and other producers, including changes that have been announced and
those which may occur in the future; the possibility of more unfavorable loss
experience than anticipated; stronger than anticipated competitive activity;
unfavorable judicial or legislative developments, including the possibility that
the Terrorism Risk Insurance Act of 2002 is not extended beyond 2005; the
potential effect of domestic and foreign regulatory developments, including
those which could increase the Company's business costs and required capital
levels; the possibility of general economic and business conditions that are
less favorable than anticipated; the Company's ability to distribute its
products through distribution channels, both current and future; the uncertain
effects of emerging claim and coverage issues; the effect of assessments and
other surcharges for guaranty funds; a downgrade in the Company's claims-paying,
financial strength or credit ratings; the ability of the Company's subsidiaries
to pay dividends to the Company; and others discussed in our Quarterly
Reports on Form 10-Q, our 2004 Annual Report on Form 10-K and the other filings
we make with the Securities and Exchange Commission. We assume no obligation to
update the information set forth in this Form 8-K, which speaks as of the date
issued.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HARTFORD LIFE INSURANCE COMPANY
Date: April 29, 2005 By: /s/ Ernest M. McNeill Jr.
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Name: Ernest M. McNeill Jr.
Title: Vice President
and Chief Accounting Officer