Hartford Life target of SEC investigation

The Boston Globe
By Associated Press
November 13, 2004

HARTFORD -- The Securities and Exchange Commission has opened another front in the widening investigation of insurance brokerage fees, launching a probe of Hartford Life, a unit of the Hartford Financial Services Group Inc.

The Hartford acknowledged the investigation in a filing with the SEC released yesterday. The probe, launched by the federal regulatory agency's Division of Enforcement, focuses on the Hartford-based company's use of "directed brokerage" in connection with its mutual funds, the insurer said.

A "directed brokerage" is a practice in which mutual fund companies steer trades to brokers as a reward for selling their funds to retail clients.

The Hartford was named last month in a lawsuit by New York Attorney General Eliot Spitzer against Marsh & McLennan, alleging policy brokers took payoffs from insurance companies to steer corporate clients their way rather than get the best prices, as required.

The lawsuit prompted numerous civil lawsuits by stockholders and insurance customers, in addition to lawsuits by other states' attorneys general, including Connecticut.

The SEC probe focuses on The Hartford's mutual funds and Hartford Life, which provides investment, retirement, estate planning, and group benefits insurance products to individual and business customers.

The Hartford also said it has been subpoenaed by Illinois and Texas officials regarding broker compensation and "possible anticompetitive activity."

Spokespeople for the SEC and The Hartford would not comment yesterday.

Copyright 2004 Globe Newspaper Company
Copyright 2004 The New York Times Company




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