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Hartford Pays $72 Million Fine For Exactly What – Admin Fee


Hartford Basically Pays Each Claimant For Fine

Hartford pays $72 million penalty for an Annuity administrative charge. The Hartford was recently assessed a huge fine. I was surprised to see why the company was fined. It was for basically setting up settlement annuities (including Workers Comp) and charging a 15% administration fee from their own life insurance company. After reading a few of the articles, I came to the conclusion that all annuities made Hartford a 15% profit from the claimants.

Graphic Of Hartford In Location Spot

The Hartford is basically going to pay each claimant a $3,250 check. My main question would be what profit was made from this versus the fine. Annuities are a great way to settle any type of insurance claim where the claimant wanted to make sure they would receive a lifetime benefit. I always liked shifting the administrative burden of paying lifetime checks to a company that specializes in paying timely benefits.

The other part of an annuity is that you are purchasing a payment instrument at a discounted present value. The provider of the annuity knows that the future value of money is less than what money is worth today. I really do not understand what the 15% fee was for as Hartford would still have made a large profit on playing the spread between the annuity purchase price and what they would have actually had to pay out over time.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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