Florida tells Hartford Financial to refund excess profit

August 13, 2009

hartford    NEW YORK, Aug 12 (Reuters) – Florida has decided that Hartford Financial Services Group Inc <HIG.N>, which took $3.4 billion of federal bailout funds, is making too much money.
   The Florida Office of Insurance Regulation on Wednesday said it ordered Hartford to return $48.2 million to Florida businesses because profits on some workers’ compensation policies from 2004 to 2006 exceeded state law.
   Florida had demanded the return of $64.8 million but reduced the sum after Hartford protested the higher amount, according to a consent agreement between the state and the property and casualty insurer.
   “During these tough economic times, Florida businesses will receive a very significant and important return of premium,” Insurance Commissioner Kevin McCarty said in a statement. “Companies certainly are entitled to earn reasonable profits, but the excess profit law protects Florida business owners from paying more than what is actuarially justified.”
   Hartford did not immediately return a call seeking comment. The insurer has 60 days to provide refunds or credits on policy renewals, McCarty’s office said.
   In June, the Hartford, Connecticut-based insurer took $3.4 billion from the federal Troubled Asset Relief Program to bolster capital in the wake of large investment losses.
   Hartford is paying an initial 5 percent annual dividend on the preferred shares it issued the government, or $170 million a year.
   Shares of Hartford closed Wednesday up $1.30, or 7.1 percent, at $19.50 on the New York Stock Exchange, amid broad gains for insurance company stocks. (Reporting by Jonathan Stempel) ((jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net)) Keywords: HARTFORD/FLORIDA
Wednesday, 12 August 2009 22:54:49RTRS [nN12173362] {C}ENDS

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