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1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2007
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from ____________ to ______________
Commission file number 001-13958
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3317783
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Hartford Plaza, Hartford, Connecticut 06155
(Address of principal executive offices)
(860) 547-5000
(Registrant’ s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: the following, all of which are listed on the New York Stock Exchange, Inc.
Common Stock, par value $0.01 per share
6.1% Notes due October 1, 2041
Securities registered pursuant to Section 12(g) of the Act:
5.55% Notes due August 16, 2008 4.75% Notes due March 1, 2014
6.375% Notes due November 1, 2008 7.3% Debentures due November 1, 2015
5.663% Notes due November 16, 2008 5.5% Notes due October 15, 2016
7.9% Notes due June 15, 2010 5.375% Notes due March 15, 2017
5.25% Notes due October 15, 2011 5.95% Notes due October 15, 2036
4.625% Notes due July 15, 2013
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [X] No [ ]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [X] Accelerated filer [ ] Non-accelerated filer [ ] Smaller Reporting Company [ ]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
The aggregate market value of the shares of Common Stock held by non-affiliates of the registrant as of June 30, 2007 was approximately $31.2
billion, based on the closing price of $98.51 per share of the Common Stock on the New York Stock Exchange on June 29, 2007.
As of February 15, 2008, there were outstanding 314,011,389 shares of Common Stock, $0.01 par value per share, of the registrant.
Documents Incorporated by Reference
Portions of the registrant’s definitive proxy statement for its 2008 annual meeting of shareholders are incorporated by reference in Part III of this Form
10-K.

Table of contents

  • Page 1
    ... (Address of principal executive offices) (860) 547-5000 (Registrant' s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: the following, all of which are listed on the New York Stock Exchange, Inc. Common Stock, par value $0.01 per share 6.1% Notes...

  • Page 2
    ...Purchases of Equity Securities...Selected Financial Data...Management' s Discussion and Analysis of Financial Condition and Results of Operations...Quantitative and Qualitative Disclosures About Market Risk...Financial Statements and Supplementary Data...Changes in and Disagreements With Accountants...

  • Page 3
    ...with group life, accident and disability coverage, along with other products and services, including voluntary benefits and group retiree health. International, which has operations located in Japan, Brazil, Ireland and the United Kingdom, provides investments, retirement savings and other insurance...

  • Page 4
    ..., umbrella and marine coverages, primarily to companies with greater than $5 in annual payroll, $15 in annual revenues or $15 in total property values. The Specialty Commercial segment offers a variety of customized insurance products and risk management services. Specialty Commercial provides...

  • Page 5
    ... in 2007, 2006 and 2005, respectively. Life sells both variable and fixed individual annuity products through a wide distribution network of national and regional broker-dealer organizations, banks and other financial institutions and independent financial advisors. Life is among market leaders in...

  • Page 6
    ... has played a significant role in The Hartford' s growth over the past decade. As a wholesaler, PLANCO distributes Life' s fixed and variable annuities, mutual funds, 529 plans and offshore products by providing sales support to registered representatives and financial planners at broker-dealers and...

  • Page 7
    ... companies as well as certain banks, securities brokerage firms, asset management organizations and other financial intermediaries marketing annuities, mutual funds and other retirement-oriented products. Product sales are affected by competitive factors such as investment performance ratings...

  • Page 8
    ...providing sales support to registered representatives, financial planners and broker-dealers at brokerage firms and banks across the United States. In addition, Life uses internal personnel with extensive experience in the 401(k) market to sell its products and services in the retirement plan market...

  • Page 9
    ... either through investment management firms or directly, using Hartford employees. In the institutional annuities market, Life sells its group annuity products to retirement plan sponsors through three different channels: (1) a small number of specialty brokers; (2) large benefits consulting firms...

  • Page 10
    ... multiple retail sales channels. Life sells both variable and fixed individual life products through a wide distribution network of national and regional broker-dealer organizations, banks and independent financial advisors. Life is a market leader in selling individual life insurance through...

  • Page 11
    ... reputation, financial strength and stability and Life' s approach to claims management. Life also offers voluntary, or employee-paid, short-term and longterm disability group benefits. Life' s efforts in the group disability market focus on early intervention, return-to-work programs and successful...

  • Page 12
    ... of International with net income of $253, $252 and $101 in 2007, 2006 and 2005, respectively. The Company' s Japan operation sells both variable and fixed individual annuity products through a wide distribution network of Japan' s broker-dealer organizations, banks and other financial institutions...

  • Page 13
    ...and international insurance companies. Product sales are affected by competitive factors such as investment performance ratings, product design, visibility in the marketplace, financial strength ratings, distribution capabilities, levels of charges and credited rates, reputation and customer service...

  • Page 14
    ...provides customized pricing based on the policyholder' s individualized risk characteristics. As of the end of 2007, Next Generation Auto had been rolled out to 44 states. Marketing and Distribution Small Commercial provides insurance products and services through its home office located in Hartford...

  • Page 15
    ... stock companies, mutual companies and alternative risk sharing groups. These competitors sell primarily through independent agents and brokers across a broad array of product lines, and with a high level of variation regarding geographic, marketing and customer segmentation. Middle Market business...

  • Page 16
    ... business. Disciplined underwriting and targeted returns are the objectives of Specialty Commercial since premium writings may fluctuate based on the segment' s view of perceived market opportunity. Specialty Commercial competes with other stock companies, mutual companies, alternative risk sharing...

  • Page 17
    ... equal to net reserves reported on a statutory basis. Under U.S. GAAP, liabilities for unpaid losses for permanently disabled workers' compensation claimants are discounted at rates that are no higher than risk-free interest rates and which generally exceed the statutory discount rates set by...

  • Page 18
    ... to Consolidated Financial Statements. A table depicting the historical development of the liabilities for unpaid losses and loss adjustment expenses, net of reinsurance, follows. Loss Development Table Property And Casualty Loss And Loss Adjustment Expense Liability Development - Net of Reinsurance...

  • Page 19
    ... reinsurance and unexpected development on mature claims in both general liability and workers' compensation. Reserve releases for accident year 2002 during calendar years 2003 and 2004 come largely from short-tail lines of business, where results emerge quickly and actual reported losses are...

  • Page 20
    ... of securities for the benefit of policyholders; approval of policy forms; periodic examinations of the affairs of companies; annual and other reports required to be filed on the financial condition of companies or for other purposes; fixing maximum interest rates on life insurance policy loans...

  • Page 21
    ... 31,000 employees as of December 31, 2007. Available Information The Hartford makes available, free of charge, on or through its Internet website (http://www.thehartford.com) The Hartford' s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments...

  • Page 22
    ... long-term nature of the liabilities associated with certain of our Life businesses, such as structured settlements and guaranteed benefits on variable annuities, sustained declines in long term interest rates may subject us to reinvestment risks and increased hedging costs. Our exposure to credit...

  • Page 23
    .... Some of the products offered by our life businesses, especially variable annuities, offer certain guaranteed benefits which, as a result of any decline in equity markets would not only result in potentially lower earnings, but may also increase our exposure to liability for benefit claims. We are...

  • Page 24
    ... adverse effect on our business, results of operations or financial condition. The insurance industry is highly competitive. Our competitors include other insurers and, because many of our products include an investment component, securities firms, investment advisers, mutual funds, banks and other...

  • Page 25
    ...things licensing companies and agents to transact business; calculating the value of assets to determine compliance with statutory requirements; mandating certain insurance benefits; regulating certain premium rates; reviewing and approving policy forms; regulating unfair trade and claims practices...

  • Page 26
    ... and legal developments and expense levels. We seek to price our property and casualty insurance policies such that insurance premiums and future net investment income earned on premiums received will provide for an acceptable profit in excess of underwriting expenses and the cost of paying claims...

  • Page 27
    ...to access these systems to perform necessary business functions, including, without limitation, providing insurance quotes, processing premium payments, making changes to existing policies, filing and paying claims, administering variable annuity products and mutual funds, providing customer support...

  • Page 28
    ... policies, such as personal and commercial automobile, property, life and inland marine; improper sales practices in connection with the sale of life insurance and other investment products; and improper fee arrangements in connection with mutual funds and structured settlements. The Hartford...

  • Page 29
    ... to new customers whose initial rates were higher than they would have been had the customer had a more favorable credit report. The settlement was made on a claimin, nationwide-class basis and required eligible class members to return valid claim forms postmarked no later than June 28, 2007. The...

  • Page 30
    ... Liquidity - Liquidity Requirements. There are also various legal and regulatory limitations governing the extent to which The Hartford' s insurance subsidiaries may extend credit, pay dividends or otherwise provide funds to The Hartford Financial Services Group, Inc. as discussed in Part II, Item...

  • Page 31
    ... FINANCIAL DATA (In millions, except for per share data and combined ratios) 2007 Income Statement Data Total revenues Income (loss) before cumulative effect of accounting changes [1] Net income (loss) [1] [2] Balance Sheet Data Total assets [3] Long-term debt Total stockholders' equity Earnings...

  • Page 32
    ... and fixed annuities, mutual funds, private placement life insurance and retirement plan services, individual life insurance products including variable universal life, universal life, interest sensitive whole life and term life; and group benefit products, such as group life and group disability...

  • Page 33
    ...: the underwriting segments of Personal Lines, Small Commercial, Middle Market and Specialty Commercial (collectively "Ongoing Operations"), and the Other Operations segment. Through Property & Casualty the Company provides a number of coverages, as well as insurance-related services, to businesses...

  • Page 34
    ...and loss adjustment expense reserves by line of business and by reporting segment as of December 31, 2007, net of reinsurance: Personal Lines Reserve Line of Business Property Auto physical damage Auto liability Package business Workers' compensation General liability Professional liability Fidelity...

  • Page 35
    ...reserves for property, auto physical damage, auto liability, package business, workers' compensation, most general liability, professional liability and fidelity and surety. Other nonA&E reserves are reviewed semi-annually (twice per year) or annually. These include, but are not limited to, reserves...

  • Page 36
    ... specifically adjust for changes in case reserve adequacy and claim disposal rates. Auto Liability - Commercial Lines, Package Business and Short-Tailed General Liability. As with Personal Lines auto liability, the Company performs a variety of techniques, including the paid and reported development...

  • Page 37
    ...preferred risks than in the past. Such a change in mix increases the uncertainty of the reserve projections, since historical data and reporting patterns may not be applicable to the new business. In both Small Commercial and Middle Market, workers' compensation is the Company' s single biggest line...

  • Page 38
    ...either direction. Assumed annual severity for accident years prior to the two most recent accident years is likely to have minimal variability. Recorded reserves for general liability, net of reinsurance, are $2.4 billion across Small Commercial, Middle Market and Specialty Commercial. Reported loss...

  • Page 39
    ...of coverage in an insured' s liability program. Second, the Company wrote excess policies providing higher layers of coverage for losses that exhaust the limits of underlying coverage. Third, the Company acted as a reinsurer assuming a portion of those risks assumed by other insurers writing primary...

  • Page 40
    ..., the reserves recorded for the Company' s property and casualty businesses at December 31, 2007 represent the Company' s best estimate of its ultimate liability for losses and loss adjustment expenses related to losses covered by policies written by the Company. However, because of the significant...

  • Page 41
    ... Estimated Gross Profits Used in the Valuation and Amortization of Assets and Liabilities Associated with Variable Annuity and Other Universal Life-Type Contracts Accounting Policy and Assumptions Life' s deferred policy acquisition costs asset and present value of future profits ("PVFP") intangible...

  • Page 42
    ... Revenue Reserves (5) - - (8) - - (13) Death and Income Benefit Reserves [1] (4) - - - 6 - 2 Sales Inducement Assets 9 - - - - - 9 Segment After-tax (charge) benefit Retail Retirement Plans Institutional Individual Life International - Japan Corporate Total $ $ $ $ $ $ $ $ $ $ Total...

  • Page 43
    ...13) (132) Unearned Revenue Reserves 5 - 31 - - 36 Death and Income Benefit Reserves [1] (10) - - 27 - 17 Sales Inducement Assets 3 - - - - 3 Segment After-tax (charge) benefit Retail Retirement Plans Individual Life International - Japan Corporate Total $ $ $ $ $ $ $ $ $ $ Total (118) 20...

  • Page 44
    ... reserve adjustments, reflected in stockholders' equity as a component of AOCI. The equity investments associated with the variable annuity products offered in Japan are recorded at fair value and are classified as "trading" with changes in fair value recorded in net investment income. Policy loans...

  • Page 45
    ... December 31, 2007 and 2006 primarily consisted of non-144A private placements and have an average duration of 4.7 and 5.1 years, respectively. The Company assigns a credit rating to these securities based upon an internal analysis of the issuer' s financial strength. The Company performs a monthly...

  • Page 46
    ...certain retired directors providing for unfunded supplemental pension benefits. In addition, the Company provides certain health care and life insurance benefits for eligible retired employees. The Company maintains international plans which represent an immaterial percentage of total pension assets...

  • Page 47
    .... In addition, the Company also applies market return assumptions, utilized in Life' s DAC analysis, to an investment mix that generally anticipates 60% fixed income securities, 20% equity securities and 20% alternative assets to derive an expected long-term rate of return. Based upon this analysis...

  • Page 48
    ... Retail Retirement Plans Institutional Individual Life Group Benefits International Other Total Life Property & Casualty Ongoing Operations Other Operations Total Property & Casualty Corporate Net income Ongoing Operations Underwriting Results by Segment Personal Lines Small Commercial Middle Market...

  • Page 49
    ... reinsurance associated with older, long-term casualty liabilities. • Life' s net income increased $237 primarily due to growth in assets under management resulting from market growth and strong sales along with higher earned premiums. Also contributing to Life' s increased net income were...

  • Page 50
    ...by the Company including payments from its separate account assets. The separate account FTC is estimated for the current year using information from the most recent filed return, adjusted for the change in the allocation of separate account investments to the international equity markets during the...

  • Page 51
    ... of assets under management growth attained in 2007. The Company' s success depends in part on the level of credited interest rates and the Company' s credit rating. The focus of the PPLI business is variable PPLI products to fund non-qualified benefits or other post employment benefit liabilities...

  • Page 52
    ...-value. Written pricing declined in the Company' s Small Commercial and Middle Market segments during 2007 with the largest written pricing decreases on commercial auto, marine and Middle Market workers' compensation insurance. Excluding catastrophes and prior accident year development, underwriting...

  • Page 53
    ... earned premium in Middle Market, an increase in the cost of sales and service operations and investments in technology to support future growth. The policyholder dividend ratio was unusually high in 2007 due to the accrual of $25 in dividends due to certain workers' compensation policyholders...

  • Page 54
    ... products such as variable and fixed annuities, mutual funds, PPLI, and retirement plan services, individual life insurance and group benefit products, such as group life and group disability insurance. In 2007, Life changed its reporting for realized gains and losses, as well as credit risk...

  • Page 55
    ... value and other Assets under management, end of period Retirement Plans Account value, beginning of period Net flows Change in market value and other Account value, end of period Individual Life Variable universal life account value, end of period Total life insurance in-force International - Japan...

  • Page 56
    ... and favorable fund and equity market performance. The increase in Retirement Plans account values is due to positive net flows over the past year due to higher deposits and market appreciation. Individual Life variable universal life account value increased due primarily to premiums, deposits and...

  • Page 57
    ... mutual fund deposits. Individual Life death benefits increased in 2007 primarily due to a larger life insurance in-force and unfavorable mortality. Group Benefits expense ratio, excluding buyouts, increased in 2007 primarily due to higher DAC amortization. International - Japan general insurance...

  • Page 58
    ... rate swaps used in the risk management of Japan fixed annuity products. Year ended December 31, 2007 compared to year ended December 31, 2006 The increase in Retail individual annuity' s ROA, excluding realized gain (losses) and DAC unlock, was primarily due to increased net investment income...

  • Page 59
    ...expenses Total benefits, losses and expenses Income before income taxes Income tax expense Net income $ $ $ $ $ $ [1] Includes investment income and mark-to-market effects of equity securities held for trading supporting the international variable annuity business, which are classified in net...

  • Page 60
    ... Company' s retail mutual funds. Life recorded an after-tax charge of $102 in 2005 to establish reserves for regulatory matters for investigations related to market timing by the SEC and New York Attorney General' s Office, directed brokerage by the SEC, and single premium group annuities by the New...

  • Page 61
    ...fixed annuity contract hedges, net 17) - $ (17) Periodic net coupon settlements on credit derivatives/Japan $ 3 - 1 (1) 1 (63) 11 $ (48) Total gains/losses, net of tax and DAC $ (90) (7) (24) (17) (8) (47) 5 $ (188) Retail Retirement Plans Institutional Individual Life Group Benefits International...

  • Page 62
    ... Capital Markets Risk Management section of the MD&A under "Market Risk-Life". International losses on periodic net coupons from currency swaps increased $29 primarily due to increased fixed annuity assets. Other net losses were primarily driven from the change in value of non-qualifying derivatives...

  • Page 63
    ... policy benefits for insurance contracts. Retail focuses on the savings and retirement needs of the growing number of individuals who are preparing for retirement, or have already retired, through the sale of individual variable and fixed annuities, mutual funds and other investment products. Life...

  • Page 64
    ...by higher assets under management resulting primarily from market growth. The following other factors contributed to the change in income: • The increase in fee income in the variable annuity business for the year ended December 31, 2006 was mainly a result of growth in average account values. The...

  • Page 65
    ... for future policy benefits for insurance contracts. [2] In 2006, 403(b)/457 mutual fund assets declined to zero due to remaining business being transferred to the Institutional segment. In 2007, Life began selling mutual fund based products in the 403(b) market. The Retirement Plans segment...

  • Page 66
    ... in the business of providing recordkeeping services to large financial firms which offer defined contribution plans to their clients. The acquisition of Sun Life Retirement Services, Inc. will add $17 billion in Retirement Plan assets across 6,000 plans and will provide new service locations in...

  • Page 67
    ...of deferred policy acquisition costs and present value of future profits Total benefits, losses and expenses Income before income taxes Income tax expense (benefit) Net income Assets Under Management Institutional account values [1] [3] Private Placement Life Insurance account values [3] Mutual fund...

  • Page 68
    ... a pricing perspective, and a small number of cases often account for a significant portion of deposits. Therefore, the Company may not be able to sustain the level of assets under management growth attained in 2007. Hartford Income Notes and other structured notes products provide the Company with...

  • Page 69
    ...consistent with growth in general account account values. Individual Life earned additional net investment income throughout 2007 associated with higher returns from partnership investments. Benefits, losses and loss adjustment expenses increased due to life insurance in-force growth and unfavorable...

  • Page 70
    ...force. Variable fee income increased, consistent with the growth in the variable universal life insurance account value. Other fee income, another component of total fee income, increased primarily due to additional amortization of deferred revenues associated with the unlock. Earned premiums, which...

  • Page 71
    ... life, accident and disability coverage, along with other products and services, including voluntary benefits, and group retiree health. The Company also offers disability underwriting, administration, claims processing services and reinsurance to other insurers and self-funded employer plans. Group...

  • Page 72
    ... its strength in claim practices risk management, service and distribution, enabling the Company to capitalize on market opportunities. Additionally, employees continue to look to the workplace for a broader and ever expanding array of insurance products. As employers design benefit strategies...

  • Page 73
    ... on the savings and retirement needs of the growing number of individuals outside the United States who are preparing for retirement, or have already retired, through the sale of variable annuities, fixed annuities and other insurance and savings products. The Company' s Japan operation is the...

  • Page 74
    ... stocks, bonds, mutual funds, variable annuities, fixed annuities with market value adjustments and some types of bank deposits. As a result, financial institutions in Japan have implemented extensive customer assessments which must occur prior to recommending securities and other financial products...

  • Page 75
    ... by the Company' s chief operating decision maker in evaluating the International results of operations. Net investment income includes the mark-to-market adjustment for equity securities held for trading which decreased primarily due to decreased fund performance of Japan variable annuities. This...

  • Page 76
    ... by Specialty Risk Services and revenues from member contact center services provided through the AARP Health program. Total Property & Casualty Financial Highlights Earned Premiums Earned premium growth is an objective for Personal Lines, Small Commercial and Middle Market. Earned premium growth is...

  • Page 77
    ... commercial auto, general liability, workers' compensation and property. Earned premium decreases were driven by declines in earned pricing and premium renewal retention in all lines and a decline in new business premiums in all lines except workers' compensation. Specialty Commercial earned premium...

  • Page 78
    ... severity on Personal Lines homeowners claims and a higher loss and loss adjustment expense ratio for both Small Commercial package business and Middle Market workers' compensation claims. The change to net realized capital losses during 2007 was primarily due to an increase in credit-related...

  • Page 79
    ... current accident year loss and loss adjustment expense ratio for workers' compensation business in Small Commercial was largely offset by an increase in non-catastrophe property loss costs in Middle Market and Personal Lines homeowners. Key Performance Ratios and Measures The Company considers...

  • Page 80
    ... frequency on Personal Lines auto property damage claims and, to a lesser extent, increased severity on Personal Lines homeowners claims and a higher loss and loss adjustment expense ratio for both Small Commercial package business and Middle Market workers' compensation claims. Contributing to the...

  • Page 81
    ... to price its insurance policies such that insurance premiums and future net investment income earned on premiums received will cover underwriting expenses and the ultimate cost of paying claims reported on the policies and provide for a profit margin. For many of its insurance products, Property...

  • Page 82
    ... financial results on a pro rata basis over the policy period. Management believes that written premium is a performance measure that is useful to investors as it reflects current trends in the Company' s sale of property and casualty insurance products. Written and earned premium are recorded net...

  • Page 83
    ... used to determine pricing, the Company' s practice is to first make an overall assumption about claim frequency and severity for a given line of business and then, as part of the ratemaking process, adjust the assumption as appropriate for the particular state, product or coverage. Current accident...

  • Page 84
    ...Reinsurance Company, Ltd. Within the Hartford Fire Insurance Pool, invested assets are attributed to Ongoing Operations and Other Operations pursuant to the Company' s capital attribution process. The Hartford attributes capital to each line of business or segment using an internally-developed, risk...

  • Page 85
    ... of claims under errors and omissions policies or directors' and officers' insurance policies could lead the Company to reduce reserves for these liabilities in future quarters. The Company expects to perform its regular reviews of asbestos liabilities in the second quarter of 2008, Other Operations...

  • Page 86
    ...of commercial auto liability reserves for accident years 2003 and 2004 Release of reserves on Personal Lines auto liability claims for accident years 2002 to 2006 Release of reserves on errors & omissions policies for accident year 2005 Strengthening of workers' compensation loss and loss adjustment...

  • Page 87
    ..., particularly on high deductible and excess policies. The $47 reserve strengthening represented 2% of the Company' s net reserves for Specialty Commercial workers' compensation claims as of December 31, 2006. Strengthened Middle Market workers' compensation reserves by $40 for accident years 1973...

  • Page 88
    ... represented 2% of the Company' s net reserves for general liability claims as of December 31, 2006. Strengthened reserves for Specialty Commercial general and products liability claims by $34, primarily related to the 1987 to 1997 accident years. Reported losses on general and products liability...

  • Page 89
    ...Personal Lines auto liability reserves for claims with exposure in excess of policy limits Strengthening of general liability loss and loss adjustment expense reserves for accident years 1998 to 2005 Release of allocated loss adjustment expense reserves for workers' compensation and package business...

  • Page 90
    ...reserve strengthening represented 1% of the Company' s net reserves for Specialty Commercial workers' compensation claims as of December 31, 2005. Other Operations • Reduced the reinsurance recoverable asset associated with older, longer-term casualty liabilities by $243. The Company reviewed the...

  • Page 91
    ...Commercial, $7 in Middle Market, $10 in Specialty Commercial and $7 in Other Operations. During the year ended December 31, 2005, the Company' s re-estimates of prior accident year reserves included the following significant reserve changes. Ongoing Operations • Strengthened workers' compensation...

  • Page 92
    ... represented a change in estimate which was 3% of the Company' s net reserves for workers' compensation claims as of December 31, 2004. Released reserves for workers' compensation losses in Small Commercial and Middle Market by $75 related to accident years 2003 and 2004. The state of California...

  • Page 93
    ... reinsurance products are used as part of the Company' s risk management strategy, including excess of loss occurrence-based products that protect property and workers' compensation exposures, and individual risk or quota share arrangements, that protect specific classes or lines of business. There...

  • Page 94
    ... on excess and surplus property business Property catastrophe losses from a single event on property business written with national accounts Reinsurance with the Florida Hurricane Catastrophe Fund covering Florida Personal Lines property catastrophe losses from a single event Workers' compensation...

  • Page 95
    ... Company' s financial position and results of operations. The following table shows modeled loss estimates before expected reinsurance recoveries and after expected reinsurance recoveries. The loss estimates represent total property losses for hurricane events and property and workers' compensation...

  • Page 96
    ... that the President's Working Group on Financial Markets ("PWG") continue to perform an analysis regarding the long-term availability and affordability of insurance for terrorism risk. Among the findings detailed in the PWG's initial report, released October 2, 2006, were that the high level of...

  • Page 97
    ...a fee for collecting premiums and processing claims. Under the program, the Company services both personal lines and commercial lines flood insurance policies and does not assume any underwriting risk. Reinsurance Recoverables The following table shows the components of the gross and net reinsurance...

  • Page 98
    ...differing credit exposure associated with various classes of business. Participation authorizations are categorized along property, short-tail casualty and long-tail casualty lines. In addition to defining participation eligibility, the Company regularly monitors each active reinsurer' s credit risk...

  • Page 99
    TOTAL PROPERTY & CASUALTY Operating Summary Earned premiums [1] Net investment income Other revenues [2] Net realized capital gains (losses) Total revenues Losses and loss adjustment expenses Current accident year before catastrophes Current accident year catastrophes Prior accident years [3] Total ...

  • Page 100
    ...includes the four underwriting segments of Personal Lines, Small Commercial, Middle Market and Specialty Commercial. Operating Summary Net income for Ongoing Operations includes underwriting results for each of its segments, income from servicing businesses, net investment income, other expenses and...

  • Page 101
    ... policy acquisition costs and $9 of insurance operating costs and expenses. Earned premium increased by $63 Ongoing Operations' earned premium increased by $63, or 1%, to $10,491, driven by a 3% increase in both Personal Lines and Small Commercial, partially offset by a 4% decrease in Middle Market...

  • Page 102
    ... accident year loss and loss adjustment expense ratio before catastrophes in Middle Market was primarily due to a higher loss and loss adjustment expense ratio for workers' compensation, general liability and commercial auto claims driven, in part, by earned pricing decreases. For commercial auto...

  • Page 103
    ... of catastrophe treaty reinstatement premium in 2005, earned premium grew by $203, or 2%, driven by earned premium increases in Small Commercial, Personal Lines and Middle Market, partially offset by an earned premium decrease in Specialty Commercial. Refer to the earned premium discussion in the...

  • Page 104
    ... in Specialty Commercial. Net unfavorable reserve development of $36 in 2005 included a $120 increase in workers' compensation reserves related to reserves for claim payments expected to emerge after 20 years of development, a $40 strengthening of general liability reserves within Middle Market for...

  • Page 105
    ... Florida, a company established by the State of Florida to provide personal and commercial insurance to individuals and businesses in Florida who are in high risk areas of the state and are unable to obtain insurance through the private insurance markets. Amortization of deferred policy acquisition...

  • Page 106
    ... by a reduction in Other earned premium. • AARP earned premium grew $215, or 9%, reflecting growth in the size of the AARP target market, the effect of direct marketing programs and the effect of cross selling homeowners insurance to insureds who have auto policies. $ $ 2007 $ 2,750 1,123 74 3,947...

  • Page 107
    ... auto business written by Omni and on business written through affinity partners other than AARP. • • AARP earned premium grew $170, or 7%, reflecting growth in the size of the AARP target market and the effect of direct marketing programs to increase premium writings of both auto and homeowners...

  • Page 108
    ... into the rate setting process. Homeowners' written pricing continues to increase moderately due to insurance to value increases. Personal Lines -Underwriting Summary Written premiums Change in unearned premium reserve Earned premiums Losses and loss adjustment expenses Current accident year before...

  • Page 109
    ... loss adjustment expenses Operating expenses Decrease in amortization of deferred policy acquisition costs Increase in insurance operating costs and expenses Net increase in operating expenses Decrease in underwriting results from 2006 to 2007 Sale of Omni The Company sold its Omni non-standard auto...

  • Page 110
    ... for personal auto liability claims due to an increase in estimated severity on claims where the Company is exposed to losses in excess of policy limits. Operating expenses increased by $17 The expense ratio decreased by 0.3 points, to 22.4, in 2007, due largely to an increase in insurance operating...

  • Page 111
    ... for personal auto liability claims due to an increase in estimated severity on claims where the company is exposed to losses in excess of policy limits. The $53 reduction in auto liability reserves in 2006 included a $31 reduction in reserves for auto liability claims related to accident year...

  • Page 112
    ... achieve its targeted written premium growth primarily through continued direct marketing to AARP members and an expansion of underwriting appetite through the continued roll-out of the "Next Gen Auto" product. Through improvements in technology, the Company seeks to increase AARP new business flow...

  • Page 113
    ... $15 in annual revenues or $15 in total property values. This segment offers workers' compensation, property, automobile, liability and umbrella coverages. Premiums [1] Written premiums Earned premiums Premium Measures New business premium Premium renewal retention Written pricing increase (decrease...

  • Page 114
    Small Commercial - Underwriting Summary Written premiums Change in unearned premium reserve Earned premiums Losses and loss adjustment expenses Current accident year before catastrophes Current accident year catastrophes Prior accident years Total losses and loss adjustment expenses Amortization of ...

  • Page 115
    ... number of individual large losses and the higher loss and loss adjustment expense ratio for auto claims was driven, in part, by earned pricing decreases. Expected loss and loss adjustment expenses on workers' compensation claims for the 2007 accident year were lower as the assumed level of medical...

  • Page 116
    ... loss adjustment expenses Operating expenses Increase in amortization of deferred policy acquisition costs Decrease in insurance operating costs and expenses Net increase in operating expenses Increase in underwriting results from 2005 to 2006 Earned premium increased by $231 Small Commercial earned...

  • Page 117
    ... due to the sale of more liability-only policies, workers' compensation rate reductions and a lower average premium on Next Generation Auto business. Written pricing has remained relatively flat for Small Commercial business as carriers have competed for new business through new product features and...

  • Page 118
    ... lines of business, including property, commercial auto, general liability, workers' compensation and marine. New business written premium declined in all lines except workers' compensation. As written premium is earned over the 12-month term of the policies, the earned pricing changes during 2007...

  • Page 119
    ... Change in unearned premium reserve Earned premiums Losses and loss adjustment expenses Current accident year before catastrophes Current accident year catastrophes Prior accident years Total losses and loss adjustment expenses Amortization of deferred policy acquisition costs Insurance operating...

  • Page 120
    ...higher loss and loss adjustment expense ratio for workers' compensation, general liability and commercial auto claims driven, in part, by earned pricing decreases. For commercial auto, loss costs increased for both liability and property damage claims. Current accident year catastrophes decreased by...

  • Page 121
    ... earned pricing decreases and the effect of a shift to more workers' compensation premium which has a higher loss and loss adjustment expense ratio than other business in the segment. The increase in non-catastrophe property loss costs was primarily due to increasing claim severity. Current accident...

  • Page 122
    ...an expanded underwriting appetite in selected industries and regions of the country. Targeting those agents and brokers with the greatest opportunity for writing new profitable business, management plans to offer key agents added value through agency service and sales support. Including supplemental...

  • Page 123
    ...COMMERCIAL Specialty Commercial offers a variety of customized insurance products and risk management services. The segment provides standard commercial insurance products including workers' compensation, automobile and liability coverages to large-sized companies. Specialty Commercial also provides...

  • Page 124
    ...reinsurance program to Specialty Commercial and less to Personal Lines, Small Commercial and Middle Market. In addition, beginning in the third quarter of 2006, the Company reduced the premiums assumed by Specialty Commercial under inter-segment arrangements covering certain liability claims. $ 2007...

  • Page 125
    ... loss adjustment expenses Operating expenses Increase in amortization of deferred policy acquisition costs Increase in insurance operating costs and expenses Increase in operating expenses Decrease in underwriting results from 2006 to 2007 Earned premium decreased by $47 Specialty Commercial earned...

  • Page 126
    ... the Company' s principal property catastrophe reinsurance program related to the reserve strengthening were allocated to Specialty Commercial. Net unfavorable prior accident year reserve development of $103 in 2005 included a $70 strengthening of workers' compensation reserves for claim payments...

  • Page 127
    ... insurance limits of liability that provide protection to individual directors and officers. In the face of written pricing decreases, the Company will maintain underwriting discipline when writing professional liability coverage for larger public companies. The increase in contract surety business...

  • Page 128
    ... CLAIMS) Operating Summary Written premiums Change in unearned premium reserve Earned premiums Losses and loss adjustment expenses - prior year Amortization of deferred policy acquisition costs Insurance operating costs and expenses Underwriting results Net investment income Net realized...

  • Page 129
    ...of coverage in an insured' s liability program. Second, the Company wrote excess policies providing higher layers of coverage for losses that exhaust the limits of underlying coverage. Third, the Company acted as a reinsurer assuming a portion of those risks assumed by other insurers writing primary...

  • Page 130
    ...of 2007, 2006 and 2005, the Company completed its annual ground up environmental reserve evaluations. In each of these evaluations, the Company reviewed all of its open direct domestic insurance accounts exposed to environmental liability as well as assumed reinsurance accounts and its London Market...

  • Page 131
    ... quarters of 2007, 2006 and 2005, the Company completed its annual evaluations of the collectibility of the reinsurance recoverables and the adequacy of the allowance for uncollectible reinsurance associated with older, long-term casualty liabilities reported in the Other Operations segment. The...

  • Page 132
    ...and its London Market exposures for both direct insurance and assumed reinsurance. These evaluations resulted in no addition to the Company' s net asbestos reserves. The Company currently expects to continue to perform an evaluation of its asbestos liabilities annually. The Company divides its gross...

  • Page 133
    ... risks or individual policies of primary or excess insurance companies). London Market business includes the business written by one or more of the Company' s subsidiaries in the United Kingdom, which are no longer active in the insurance or reinsurance business. Such business includes both direct...

  • Page 134
    ... future developments indicate, make appropriate adjustments to the reserves. For a discussion of the Company' s reserving practices, please see the "Critical Accounting Estimates-Property & Casualty Reserves, Net of Reinsurance" section of Management' s Discussion and Analysis of Financial Condition...

  • Page 135
    ... operations of the Company as well as claims (and associated reserves) related to asbestos, environmental and other exposures. The Company will continue to review various components of all of its reserves on a regular basis. The Company expects to perform its regular reviews of asbestos liabilities...

  • Page 136
    ...-term. Return on general account invested assets is an important element of The Hartford' s financial results. Significant fluctuations in the fixed income or equity markets could weaken the Company' s financial condition or its results of operations. Additionally, changes in market interest rates...

  • Page 137
    ... long/short equity or credit, event driven strategies and structured credit. [2] Private equity funds consist of investments in funds whose assets typically consist of a diversified pool of investments in small non-public businesses with high growth potential. [3] Mortgage and real estate funds...

  • Page 138
    ...s net investment income. 2007 (Before-tax) Amount Yield [1] Fixed maturities [2] $ 3,114 5.9% Equity securities, available-for-sale 86 7.0% Mortgage loans 255 6.2% Limited partnerships and other alternative investments 115 12.0% Policy loans 135 6.5% Other [3] (133) - Investment expense (75) - Total...

  • Page 139
    ... wider credit spread environment. Net investment income on equity securities, held for trading, for the year ended December 31, 2007 were primarily attributed to a change in the value of the underlying investment funds supporting the Japanese variable annuity product due to market performance. Net...

  • Page 140
    ... or separate account plan of operations. Separate account products include variable annuities (except those sold in Japan), variable universal life insurance contracts, 401(k) and variable corporate owned life insurance. The assets and liabilities associated with variable annuity products sold in...

  • Page 141
    ... long/short equity or credit, event driven strategies and structured credit. [2] Private equity funds consist of investments in funds whose assets typically consist of a diversified pool of investments in small non-public businesses with high growth potential. [3] Mortgage and real estate funds...

  • Page 142
    ... operating cash flows. Limited partnerships and other alternative investments contributed to the increase in income compared to the prior year period due to a higher portfolio yield and greater allocation of investments to this asset class. Based upon market expectation of future interest rates...

  • Page 143
    ... to loss representing an other-than-temporary impairment recorded as a realized capital loss. HIMCO is the collateral manager for four market value CLOs (included in the VIE discussion above) that invest in senior secured bank loans through total return swaps. For two of the CLOs, the Company has...

  • Page 144
    ... the securities contractual terms or the depression in the security value is primarily related to significant issuer specific or sector credit spread widening. Company management uses average credit related impairment amounts, net of recoveries, within Life and Property & Casualty product pricing...

  • Page 145
    ..., or asset pool. Credit derivatives used by the Company include credit default swaps, credit index swaps, and total return swaps. The Company purchases credit protection through credit default swaps to economically hedge and manage credit risk of certain fixed maturity investments across multiple...

  • Page 146
    ...the credit risk receives periodic coupon payments plus changes in value of a referenced asset, portfolio or index while paying the other counterparty a fixed or floating cash flow unrelated to the referenced credit(s) or index. Typically, the net payments exchanged associated with total return swaps...

  • Page 147
    ..., impacting the overall credit market. As of December 31, 2007, investment sector allocations as a percentage of total fixed maturities have not significantly changed since December 31, 2006 except investments in ABS CDOs, financial services in corporate sector and municipal securities. The increase...

  • Page 148
    ... primarily related to the investment of the cash collateral received from securities lending programs into AAA rated CLOs that have underlying bank loan collateral. The increases in the financial services and municipal securities were due to the sectors attractive risk/return profiles. The majority...

  • Page 149
    ... life of the sub-prime residential mortgage portfolio was 3.3 years. [5] Approximately 80% of the portfolio is backed by adjustable rate mortgages. [6] Represents the current weighted average percentage, excluding wrapped securities, of the capital structure subordinated to the Company' s investment...

  • Page 150
    ... near all time lows. Recently, however, commercial real estate rents and property values have begun to soften. The following tables represent the Company' s exposure to CMBS bonds and commercial real estate CDOs by credit quality and vintage year. CMBS - Bonds [1] December 31, 2007 AAA Amortized...

  • Page 151
    ... East South Central Middle Atlantic Mountain New England Pacific South Atlantic West North Central West South Central Other [1] Total [1] Includes multi-regional properties. Industrial Lodging Agricultural Multifamily Office Retail Other Total Commercial Mortgage Loans on Real Estate by Property...

  • Page 152
    ... the timely payment of principal and interest of certain securities. Municipalities will often purchase monoline insurance to "wrap" a security issuance in order to benefit from better market execution. As of December 31, 2007, the fair value of the Company' s total monoline insured securities was...

  • Page 153
    ... below are based on the ratings of a nationally recognized rating organization or, if not rated, assigned based on the Company' s internal analysis of such securities. Consolidated Fixed Maturities by Credit Quality 2007 Percent of Amortized Total Fair Cost Fair Value Value AAA $ 28,547 $ 28,318...

  • Page 154
    .... See the "Commercial Mortgage Loans" commentary and tables above. Future changes in fair value of these securities are primarily dependent upon sector fundamentals, credit spread movements, and changes in interest rates. Financial services - As of December 31, 2007, the Company held approximately...

  • Page 155
    ... development for the Company. Rate increases are expected to provide additional net investment income, increase sales of fixed rate Life investment products, reduce the cost of the variable annuity hedging program, limit the potential risk of margin erosion due to minimum guaranteed crediting rates...

  • Page 156
    ... Credit Risk" section. The Company is also exposed to credit spread risk related to security market price and cash flows associated with changes in credit spreads. Credit spreads widening will reduce the fair value of the investment portfolio and will increase net investment income on new purchases...

  • Page 157
    ... investment and universal life-type contracts and certain insurance products such as long-term disability. Asset accumulation vehicles primarily require a fixed rate payment, often for a specified period of time. Product examples include fixed rate annuities with a market value adjustment feature...

  • Page 158
    ... The after-tax change in the net economic value of investment contracts (e.g., guaranteed investment contracts) and certain insurance product liabilities (e.g., short-term and long-term disability contracts), for which the payment rates are fixed at contract issuance and the investment experience is...

  • Page 159
    ...in net income, due to changes in interest rates, changes in the risk-free rate used for discounting equity markets and equity market volatility as use of those capital market rates are required in determining the liability' s fair value at each reporting date. Benefit guarantee liabilities accounted...

  • Page 160
    ... their time of death. In Japan, the Company offers certain variable annuity products with both a guaranteed death benefit and a guaranteed income benefit. The Company maintains a liability for these death and income benefits, under SOP 03-1, of $42 as of December 31, 2007. Declines in equity markets...

  • Page 161
    ... U.S. GAAP net income. The Company continually seeks to improve its equity risk management strategies. The Company has made considerable investment in analyzing current and potential future market risk exposures arising from a number of factors, including but not limited to, product guarantees (GMDB...

  • Page 162
    ..., Life' s investment in foreign operations, primarily Japan, and non-U.S. dollar denominated liability contracts, including the yen based individual fixed annuity product and its GMDB,GMAB, and GMIB benefits associated with its Japanese variable annuities. A portion of the Company' s foreign fixed...

  • Page 163
    ... values of Life' s non-U.S. dollar denominated investments and derivative instruments (including its yen based individual fixed annuity product) as of December 31, 2007 and 2006, management estimates that a 10% unfavorable change in exchange rates would decrease the fair values by an after-tax total...

  • Page 164
    Based on the fair values of Property & Casualty' s non-U.S. dollar denominated securities and derivative instruments as of December 31, 2007 and 2006, management estimates that a 10% unfavorable change in exchange rates would decrease the fair values by an after-tax total of approximately $37 and $...

  • Page 165
    ... while investing cash flows originate from maturities and sales of invested assets. The primary uses of funds are to pay claims, policy benefits, operating expenses and commissions and to purchase new investments. In addition, The Hartford has a policy of carrying a significant short-term investment...

  • Page 166
    ... 8/9/12 Line of Credit Life Japan Operations [2] 9/18/02 1/5/09 Total Commercial Paper, Revolving Credit Facility and Line of Credit [1] In January 2007, the commercial paper program of HLI was terminated. [2] As of December 31, 2007 and 2006, the Company' s Japanese operation line of credit in yen...

  • Page 167
    .... Life expects to fully fund the general account obligations from cash flows from general account investments and future deposits and premiums. [3] Includes future minimum lease payments on operating and capital lease agreements. See Notes 12 and 14 of Notes to Consolidated Financial Statements for...

  • Page 168
    ... and business assumptions. These assumptions include, but are not limited to, equity market performance, changes in interest rates and the Company' s other capital requirements. The Company does not have a required minimum funding contribution for the U.S. qualified defined benefit pension plan for...

  • Page 169
    ... in cash from operating activities was primarily the result of premium cash flows in excess of claim payments and increased net income as compared to prior year period. Net purchases of available-for-sale securities accounted for the majority of cash used for investing activities. Cash provided by...

  • Page 170
    ... formula for life companies establishes capital requirements relating to insurance, business, asset and interest rate risks and effective for 2005, it addresses the equity, interest rate and expense recovery risks associated with variable annuities and group annuities that contain death benefits or...

  • Page 171
    ...on the insurance business. These proposals and initiatives include, or could include, changes pertaining to the income tax treatment of insurance companies and life insurance products and annuities, repeal or reform of the estate tax and comprehensive federal tax reform. The nature and timing of any...

  • Page 172
    ...management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company' s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal...

  • Page 173
    ... on those financial statements and financial statement schedules and included an explanatory paragraph regarding the Company' s change in its method of accounting and reporting for defined benefit pension and other postretirement plans in 2006. DELOITTE & TOUCHE LLP Hartford, Connecticut February...

  • Page 174
    ... 2001. Prior to joining the Company, Mr. Johnson was Senior Executive Vice President and Chief Financial Officer of Cendant Corporation, which he joined in April 1998. In addition, before Cendant, Mr. Johnson was a Managing Director in the Investment Banking Division at Merrill Lynch, Pierce, Fenner...

  • Page 175
    ...'s Group Benefits Division. Ms. Zlatkus was named chief financial officer for Hartford Life in 2003 and was also given responsibility for actuarial, risk management and Hartford Life's information technology area. In February 2006, she was named president of International Wealth Management and Group...

  • Page 176
    ...or greater than the fair market value of common stock on the date of grant) and (v) determines the other terms and conditions of each option. Payment of the exercise price may be made in cash, other shares of the Company' s common stock or through a same day sale program. The term of an NQSO may not...

  • Page 177
    ...transactions, certain transactions involving a transfer of substantially all of the Company' s assets or a change in greater than 50% of the Board members over a two year period. See Note 18 of Notes to Consolidated Financial Statements for a description of the 2005 Stock Plan and the ESPP. Item 13...

  • Page 178
    THE HARTFORD FINANCIAL SERVICES GROUP, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES Report of Independent Registered Public Accounting Firm...Consolidated Statements of Operations - For the Years Ended December 31, 2007, 2006 and 2005...Consolidated Balance Sheets - As of December ...

  • Page 179
    ... accompanying consolidated balance sheets of The Hartford Financial Services Group, Inc. and its subsidiaries (collectively, the "Company") as of December 31, 2007 and 2006, and the related consolidated statements of operations, changes in stockholders' equity, comprehensive income, and cash flows...

  • Page 180
    ...Equity securities held for trading Total net investment income Other revenues Net realized capital gains (losses) Total revenues Benefits, losses and expenses Benefits, losses and loss adjustment expenses Amortization of deferred policy acquisition costs and present value of future profits Insurance...

  • Page 181
    ...real estate Other investments Short-term investments Total investments Cash Premiums receivable and agents' balances Reinsurance recoverables Deferred policy acquisition costs and present value of future profits Deferred income taxes Goodwill Property and equipment, net Other assets Separate account...

  • Page 182
    ... contracts Issuance of shares and compensation expense associated with incentive and stock compensation plans Tax benefit on employee stock options and awards and other Balance at end of year Retained Earnings Balance at beginning of year, before cumulative effect of accounting changes, net of tax...

  • Page 183
    ... securities, net Purchase price adjustment of business acquired Sale of subsidiary, net of cash transferred Additions to property and equipment, net Net cash used for investing activities Financing Activities Deposits and other additions to investment and universal life-type contracts Withdrawals...

  • Page 184
    ... of Presentation and Accounting Policies Basis of Presentation The Hartford Financial Services Group, Inc. is a financial holding company for a group of subsidiaries that provide investment products and life and property and casualty insurance to both individual and business customers in the United...

  • Page 185
    ... income component of equity. Because the Company recorded a decrease of $560, net of tax, in its additional minimum liability adjustment related to its pension plans, the balance sheet change was an increase of $145 in the net defined benefit postretirement plan asset and a corresponding after-tax...

  • Page 186
    ...the tax effects of share-based payment awards to employees. FSP 123(R)-3 addresses an alternative method for calculating the pool of excess tax benefits available to absorb tax deficiencies ("APIC pool") recognized subsequent to the adoption of SFAS 123(R). The Company is required to make a one time...

  • Page 187
    ... a gain from bargain purchase (negative goodwill), and (c) determines the disclosure information that is decision-useful to users of financial statements in evaluating the nature and financial effects of the business combination. Some of the significant changes to the existing accounting guidance on...

  • Page 188
    ... financial reporting by providing entities with the opportunity to mitigate volatility in reported net income caused by measuring related assets and liabilities differently. This statement permits entities to choose, at specified election dates, to measure eligible items at fair value (i.e., the...

  • Page 189
    ... rate. The impact of this change is reflected in benefits, losses and loss adjustment expenses, in net income. In the U.S., the Company sells variable annuity contracts that, in addition to the living benefits described above, offer various guaranteed death benefits. Declines in the equity market...

  • Page 190
    ... SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 1. Basis of Presentation and Accounting Policies (continued) In Japan, the Company offers certain variable annuity products with both a guaranteed death benefit and guaranteed income benefits. Declines in equity markets...

  • Page 191
    THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 1. Basis of Presentation and Accounting Policies (continued) The following table provides the account value, SFAS 133 fair value and GRB at December 31, 2007, for each type of guaranteed living benefit...

  • Page 192
    ... those regarding expected markets rates of return, market volatility, correlations of market index returns to funds, fund performance, discount rates and policyholder behavior. At each valuation date, the Company assumes expected returns based on risk-free rates as represented by the current...

  • Page 193
    ... requires nonperformance risk to be reflected in fair value. The Company calculates the Credit Standing Adjustment by using default rates provided by rating agencies, adjusted for market recoverability. Market Illiquidity Premium. This component makes an adjustment that market participants would...

  • Page 194
    ... guaranteed contracts; and certain life and annuity deferred policy acquisition costs and reserve adjustments, reflected in stockholders' equity as a component of accumulated other comprehensive income ("AOCI"). The equity investments associated with the variable annuity products offered in Japan...

  • Page 195
    THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 1. Basis of Presentation and Accounting Policies (continued) The following table presents the fair value of fixed maturity securities by pricing source as of December 31, 2007 and 2006. 2007 Percentage...

  • Page 196
    ... value over the expected remaining life of the security by adjusting the security' s yield. Net investment income on equity securities held for trading includes dividend income and the changes in market value of the securities associated with the variable annuity products sold in Japan. The returns...

  • Page 197
    ... are predominantly observable in the market place. Inputs used to value derivatives include, but are not limited to, interest swap rates, foreign currency forward and spot rates, credit spreads, interest and equity volatility and equity index levels. The Company performs a monthly analysis on the...

  • Page 198
    THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 1. Basis of Presentation and Accounting Policies (continued) Other Investment and/or Risk Management Activities The Company' s other investment and/or risk management activities primarily relate to ...

  • Page 199
    THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 1. Basis of Presentation and Accounting Policies (continued) Credit Risk The Company' s derivative counterparty exposure policy establishes market-based credit limits, favors long-term financial ...

  • Page 200
    THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 1. Basis of Presentation and Accounting Policies (continued) Separate Accounts The Company maintains separate account assets and liabilities, which are reported at fair value. Separate accounts include...

  • Page 201
    ... Revenue Reserves (5) - - (8) - - (13) Death and Income Benefit Reserves [1] (4) - - - 6 - 2 Sales Inducement Assets 9 - - - - - 9 Segment After-tax (charge) benefit Retail Retirement Plans Institutional Individual Life International - Japan Corporate Total $ $ $ $ $ $ $ $ $ $ Total...

  • Page 202
    ... majority of policyholders' funds in the separate accounts is invested in the equity market. As of December 31, 2007, the Company believed U.S. individual and Japan individual variable annuity separate account assets could fall, through a combination of negative market returns, lapses and mortality...

  • Page 203
    ... SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 1. Basis of Presentation and Accounting Policies (continued) Property & Casualty - The Hartford establishes property and casualty reserves to provide for the estimated costs of paying claims under insurance policies written...

  • Page 204
    ...share of net income on those contracts that cannot be distributed is excluded from stockholders' equity by a charge to operations and a credit to a liability. Property & Casualty - Net written premiums for participating property and casualty insurance policies represented 8%, 8% and 10% of total net...

  • Page 205
    ... exercise price payments, unamortized stock compensation expense and tax benefits realized in excess of the tax benefit recognized in net income. The difference between the number of shares assumed issued and number of shares purchased represents the dilutive shares. Under the treasury stock method...

  • Page 206
    ... group life, accident and disability coverage, along with other products and services, including voluntary benefits, and group retiree health. International, which has operations located in Japan, Brazil, Ireland and the United Kingdom, provides investments, retirement savings and other insurance...

  • Page 207
    ..., umbrella and marine coverages, primarily to companies with greater than $5 in annual payroll, $15 in annual revenues or $15 in total property values. The Specialty Commercial segment offers a variety of customized insurance products and risk management services. Specialty Commercial provides...

  • Page 208
    ... Fixed MVA annuity Retail mutual funds Other Total Retail Retirement Plans 401(k) 403(b)/457 Total Retirement Plans Institutional Institutional investment products PPLI Total Institutional Individual Life Total Individual Life Group Benefits Group disability Group life and accident Other Total Group...

  • Page 209
    ... GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 3. Segment Information (continued) Revenues by Product Line (continued) Revenues Property & Casualty Ongoing Operations Earned premiums Personal Lines Automobile Homeowners Total Personal Lines Small Commercial Workers' Compensation...

  • Page 210
    ... deferred policy acquisition costs and present value of future profits Life Retail Retirement Plans Institutional Individual Life Group Benefits International Total Life Property & Casualty Ongoing Operations Personal Lines Small Commercial Middle Market Specialty Commercial Total Ongoing Operations...

  • Page 211
    ... FINANCIAL STATEMENTS (continued) 3. Segment Information (continued) Income tax expense (benefit) Life Retail Retirement Plans Institutional Individual Life Group Benefits International Other Total Life Property & Casualty Ongoing Operations Other Operations Total Property & Casualty Corporate Total...

  • Page 212
    THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 4. Investments and Derivative Instruments Components of Net Investment Income Fixed maturities [1] Equity securities held for trading Policy loans Mortgage loans on real estate Other investments Gross ...

  • Page 213
    ... as these securities are generally structured to include forms of call protections such as yield maintenance charges, prepayment penalties or lockouts, and defeasance. Sales of Fixed Maturity and Available-for-Sale Equity Security Investments 2007 Sale of Fixed Maturities Sale proceeds Gross gains...

  • Page 214
    ... 0.5%, of total invested assets. Wachovia Bank Commercial Mortgage Trust and Goldman Equity Office Properties include multiple investment grade tranches. The Company' s largest three exposures by sector, as of December 31, 2007 and 2006 were commercial mortgage and real estate, state municipalities...

  • Page 215
    ...commercial real estate fundamentals still appear strong with delinquencies, defaults and losses holding to relatively low levels. Substantially all of these securities are investment grade securities with an average price of 96% of amortized cost as of December 31, 2007. Future changes in fair value...

  • Page 216
    ... and property type. Mortgage Loans on Real Estate by Region December 31, 2007 Percent of Carrying Value Total $ 120 2.2% 9 0.2% 674 12.4% 200 3.7% 404 7.5% 1,200 22.2% 1,104 20.4% 32 0.6% 286 5.3% 1,381 25.5% $ 5,410 100.0% East North Central East South Central Middle Atlantic Mountain New England...

  • Page 217
    ... to loss representing an other-than-temporary impairment recorded as a realized capital loss. HIMCO is the collateral manager for four market value CLOs (included in the VIE discussion above) that invest in senior secured bank loans through total return swaps. For two of the CLOs, the Company has...

  • Page 218
    ... of New York insurance departments. Derivative instruments are recorded in the consolidated balance sheets at fair value. Asset and liability values are determined by calculating the net position, taking into account income accruals and cash collateral held, for each derivative counterparty by legal...

  • Page 219
    ... certain liabilities. Notional Amount 2007 2006 Fair Value 2007 2006 Interest rate swaps are also used to hedge a portion of the Company' s floating-rate guaranteed investment contracts. These derivatives convert the floating-rate guaranteed investment contract payments to a fixed rate to...

  • Page 220
    ... TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 4. Investments and Derivative Instruments (continued) Derivative Change in Value, After-tax 2007 2006 Hedging Strategy Other Investment and/or Risk Management Activities Interest rate swaps, caps and floors The Company uses interest rate swaps, caps...

  • Page 221
    ... Value 2007 2006 Derivative Change in Value, After-tax 2007 2006 Hedging Strategy Guaranteed Minimum Accumulation Benefit ("GMAB") product derivatives The Company offers certain variable annuity products in Japan that may have a GMAB rider. The GMAB is a bifurcated embedded derivative that provides...

  • Page 222
    ... payments on hedged investments in fixed maturity securities that will occur over the next twelve months, at which time the Company will recognize the deferred net gains (losses) as an adjustment to interest income over the term of the investment cash flows. The maximum term over which the Company...

  • Page 223
    ... in fixed maturities, equities, available for sale, and short-term investments in the consolidated balance sheets. The Company earns income from the cash collateral or receives a fee from the borrower. The Company recorded before-tax income from securities lending transactions, net of lending...

  • Page 224
    ... Hartford' s financial instruments at December 31, 2007 and 2006 were as follows: 2007 Assets Fixed maturities Equity securities Policy loans Mortgage loans on real estate Other investments [1] Short-term investments Liabilities Other policyholder funds and benefits payable [2] $ 15,480 Commercial...

  • Page 225
    ... products are used as part of the Company' s risk management strategy, including excess of loss occurrence-based products that protect aggregate property and workers' compensation exposures, and individual risk or quota share arrangements, that protect specific classes or lines of business...

  • Page 226
    ... HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 6. Reinsurance (continued) The effect of reinsurance on property and casualty premiums written and earned was as follows: Premiums Written Direct Assumed Ceded Net Premiums Earned Direct Assumed Ceded Net...

  • Page 227
    ... 31 is shown below. Life Retail Individual Life Total Life Property & Casualty Personal Lines Specialty Commercial Total Property & Casualty Corporate Total Goodwill $ 2007 581 224 805 119 30 149 772 1,726 $ 2006 572 224 796 119 30 149 772 1,717 $ $ Woodbury Financial Services, an indirect wholly...

  • Page 228
    ... HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 8. Goodwill and Other Intangible Assets (continued) The following table shows the Company' s acquired intangible assets that continue to be subject to amortization and aggregate amortization expense, net...

  • Page 229
    THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 9. Separate Accounts, Death Benefits and Other Insurance Benefit Features The Company records the variable portion of individual variable annuities, 401(k), institutional, 403(b)/457, private placement...

  • Page 230
    ... generated investment performance scenarios. Separate account returns, representing the Company' s long-term assumptions, varied by asset class with a low of 2.7% for Japan bonds, a high of 8.9% for foreign equities and a weighted average of 5.1%. Volatilities also varied by asset class with...

  • Page 231
    ... ratchets over time, generally based on market performance. [6] Reset: the death benefit is the greatest of current account value, net premiums paid and the most recent five to seven year anniversary account value before age 80 (adjusted for withdrawals). [7] Return of premium: the death benefit is...

  • Page 232
    ... in fixed income securities through these funds and approximately 88% were invested in equity securities. 10. Sales Inducements The Company currently offers enhanced crediting rates or bonus payments to contract holders on certain of its individual and group annuity products. The expense associated...

  • Page 233
    ... Ending liabilities for life unpaid losses and loss adjustment expenses-gross $ $ $ $ The favorable prior year claim development in 2007 and 2006 is principally due to continued strong disability claims management as well as favorable development on the experience rated financial institutions...

  • Page 234
    ... rates, the changing use of medical care procedures, the introduction of new products and changes in internal claim practices. Other trends include changes in the legislative and regulatory environment over workers' compensation claims, a lower frequency of class action lawsuits under directors...

  • Page 235
    ... policies, such as personal and commercial automobile, property, life and inland marine; improper sales practices in connection with the sale of life insurance and other investment products; and improper fee arrangements in connection with mutual funds and structured settlements. The Hartford...

  • Page 236
    ...of coverage in an insured' s liability program. Second, the Company wrote excess policies providing higher layers of coverage for losses that exhaust the limits of underlying coverage. Third, the Company acted as a reinsurer assuming a portion of those risks assumed by other insurers writing primary...

  • Page 237
    ... used to fund structured settlements, and marketing and sale of individual and group variable annuity products and (ii) the previously disclosed investigation by the New York Attorney General' s Office of aspects of the Company' s variable annuity and mutual fund operations related to market timing...

  • Page 238
    ...engaged. Assessments are generally limited for any year to one or two percent of premiums written per year depending on the state. The Hartford accounts for guaranty fund and other insurance assessments in accordance with Statement of Position No. 97-3, "Accounting by Insurance and Other Enterprises...

  • Page 239
    ...by the Company including payments from its separate account assets. The separate account FTC is estimated for the current year using information from the most recent filed return, adjusted for the change in the allocation of separate account investments to the international equity markets during the...

  • Page 240
    ...-related items Employee benefits Net unrealized losses on investments Minimum tax credit Net operating loss carryover Other Total Deferred Tax Assets Valuation Allowance Deferred Tax Assets, Net of Valuation Allowance Deferred Tax Liabilities Financial statement deferred policy acquisition costs...

  • Page 241
    ... the Internal Revenue Service will issue the 2002-2003 Revenue Agent' s Report within 12 months and reflect resolution of particular uncertain tax positions. The Company does not anticipate that the outcome of the audit will result in a material change to its financial position or in the balance of...

  • Page 242
    THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 14. Debt The following table presents short-term and long-term debt by issuance and consumer notes as of December 31, 2007 and 2006. Short-Term Debt Commercial paper Current maturities of long-term ...

  • Page 243
    ... Offerings In May 2003, The Hartford issued 13.8 million 7% equity units at a price of fifty dollars per unit and received net proceeds of approximately $669. Each equity unit initially consisted of one purchase contract for a certain number of shares of the Company' s stock on August 16, 2006 and...

  • Page 244
    ... 8/9/12 Line of Credit Life Japan Operations [2] 9/18/02 1/5/09 Total Commercial Paper, Revolving Credit Facility and Line of Credit [1] In January 2007, the commercial paper program of HLI was terminated. [2] As of December 31, 2007 and 2006, the Company' s Japanese operation line of credit in yen...

  • Page 245
    ... Solutions Group began issuing Consumer Notes through its Retail Investor Notes Program in September 2006. A Consumer Note is an investment product distributed through broker-dealers directly to retail investors as medium-term, publicly traded fixed or floating rate, or a combination of fixed...

  • Page 246
    ... statements do not reflect deferred policy acquisition costs and limit deferred income taxes, life benefit reserves predominately use interest rate and mortality assumptions prescribed by the NAIC, bonds are generally carried at amortized cost and reinsurance assets and liabilities are presented net...

  • Page 247
    ...) - (107) Change in minimum pension liability adjustment [1] - - - (140) (140) Balance, end of year $ 969 $ (110) $ (149) $ (620) $ 90 [1] Unrealized gain/loss on securities is net of tax and Life deferred acquisition costs of $(718), $137 and $(644) for the years ended December 31, 2007, 2006 and...

  • Page 248
    ... average pay formula. The Company also maintains non-qualified pension plans to accrue retirement benefits in excess of Internal Revenue Code limitations. The Company provides certain health care and life insurance benefits for eligible retired employees. The Company' s contribution for health care...

  • Page 249
    ... value of plan assets as well as the funded status of The Hartford' s defined benefit pension and postretirement health care and life insurance benefit plans for the years ended December 31, 2007 and 2006. International plans represent an immaterial percentage of total pension assets, liabilities...

  • Page 250
    THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 17. Pension Plans and Postretirement Health Care and Life Insurance Benefit Plans (continued) The fair value of assets for pension benefits, and hence the funded status, presented in the table above ...

  • Page 251
    ...FINANCIAL STATEMENTS (continued) 17. Pension Plans and Postretirement Health Care and Life Insurance Benefit Plans (continued) Plan Assets The Company' s defined benefit pension plan weighted average asset allocation at December 31, 2007 and 2006, and target allocation by asset category are provided...

  • Page 252
    ...GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 17. Pension Plans and Postretirement Health Care and Life Insurance Benefit Plans (continued) Benefit Payments The following table sets forth amounts of benefits expected to be paid over the next ten years from the Company' s pension...

  • Page 253
    ... FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 18. Stock Compensation Plans (continued) an immaterial increase in net income for the year ended December 31, 2005 and an immaterial decrease in net income for the year ended December 31, 2004. All awards provide...

  • Page 254
    ... SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 18. Stock Compensation Plans (continued) Share Awards Share awards are valued equal to the market price of the Company' s common stock on the date of grant, less a discount for those awards that do not provide for dividends...

  • Page 255
    ... of operations. The $49 income tax benefit arose because the tax basis of the Company's investment in Omni exceeded the financial statement carrying value. The assets that were sold at the closing date included $172 of cash, $8 of invested assets, $31 of premiums receivable, $3 of Personal Lines...

  • Page 256
    ... subdivisions International governments Public utilities All other corporate bonds including international All other mortgage-backed and asset-backed securities Redeemable preferred stock Total fixed maturities Equity Securities Common stocks Utilities Banks, trusts & insurance companies Industrial...

  • Page 257
    ... OF THE HARTFORD FINANCIAL SERVICES GROUP, INC. (Registrant) (In millions) Condensed Balance Sheets Assets Other assets Investment in affiliates Total assets Liabilities and Stockholders' Equity Net payable to affiliates Short-term debt (includes current maturities of long-term debt) Long-term debt...

  • Page 258
    ... assets and liabilities Cash provided by operating activities Investing Activities Net sale (purchase) of short-term investments Capital contributions to subsidiaries Cash provided by (used for) investing activities Financing Activities Issuance of shares from equity unit contracts Issuance of long...

  • Page 259
    ... Funds and Benefits Payable Segment [1] As of December 31, 2007 Life Retail Products Group Retirement Plans Institutional Solutions Group Individual Life Group Benefits International Other Total Life Property & Casualty Ongoing Operations Personal Lines Small Commercial Middle Market Specialty...

  • Page 260
    ... 31, 2007 Life Retail Products Group Retirement Plans Institutional Solutions Group Individual Life Group Benefits International Other Total Life Property & Casualty Ongoing Operations Personal Lines Small Commercial Middle Market Specialty Commercial Total Ongoing Operations Other Operations Total...

  • Page 261
    THE HARTFORD FINANCIAL SERVICES GROUP, INC. SCHEDULE IV REINSURANCE Percentage of Amount Assumed to Net (In millions) For the year ended December 31, 2007 Life insurance in-force Insurance revenues Property and casualty insurance Life insurance and annuities Accident and health insurance Total ...

  • Page 262
    THE HARTFORD FINANCIAL SERVICES GROUP, INC. SCHEDULE V VALUATION AND QUALIFYING ACCOUNTS Balance January 1, Charged to Costs and Expenses Translation Adjustment Write-offs/ Payments/ Other Balance December 31, (In millions) 2007 Allowance for doubtful accounts and other Allowance for uncollectible ...

  • Page 263
    ... duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THE HARTFORD FINANCIAL SERVICES GROUP, INC. By: /s/ Beth A. Bombara Beth A. Bombara Senior Vice President and Controller (Chief Accounting Officer and duly authorized signatory) Date: February 22, 2008...

  • Page 264
    ... The Hartford' s Current Report on Form 8-K, filed February 16, 2007). Senior Indenture, dated as of April 11, 2007, between The Hartford and The Bank of New York Trust Company, N.A., as Trustee (incorporated herein by reference to Exhibit 4.03 to the Registration Statement on Form S-3 (Registration...

  • Page 265
    ... Employee Stock Purchase Plan, as amended (incorporated herein by reference to Exhibit 10.17 to The Hartford's Annual Report on Form 10-K for the fiscal year ended December 31, 2005). The Hartford Investment and Savings Plan, as amended. †The Hartford 2005 Incentive Stock Plan Forms of Individual...

  • Page 266
    ...the New York Attorney General' s Office, the Illinois Attorney General' s Office and The Hartford, dated July 23, 2007 (incorporated herein by reference to Exhibit 10.1 to The Hartford's Current Report on Form 8-K, filed July 24, 2007). Statement Re: Computation of Ratio of Earnings to Fixed Charges...

  • Page 267
    EXHIBIT 12.01 THE HARTFORD FINANCIAL SERVICES GROUP, INC. COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES (In millions) Income (loss) from operations before federal income taxes and cumulative effect of accounting changes Add: Fixed Charges Interest expense Interest factor attributable to ...

  • Page 268
    ... 21.01 The Hartford Financial Services Group, Inc. Organizational List - Domestic and Foreign Subsidiaries 1stAgChoice, Inc. (South Dakota) Access CoverageCorp, Inc. (North Carolina) Access CoverageCorp Technologies, Inc. (North Carolina) American Maturity Life Insurance Company (Connecticut) BMG...

  • Page 269
    ..., LLC (Delaware) PPL Holdings LLC (Delaware) Property and Casualty Insurance Company of Hartford (Indiana) Santa Catarina Seguros E Previdencia S.A. (Brazil) (55%) Sentinel Insurance Company, Ltd. (Connecticut) Specialty Risk Services, LLC (Delaware) The Evergreen Group Incorporated (New York) II-7

  • Page 270
    ...) The Hartford International Asset Management Company Limited (Ireland) The Hartford International Funds (Ireland) Thesis S.A. (Argentina) Trumbull Finance, L.L.C. (Connecticut) Trumbull Flood Management, L.L.C. (Connecticut) Trumbull Insurance Company (Connecticut) Trumbull Recovery Services, Inc...

  • Page 271
    ... to the Company' s change in its method of accounting and reporting for defined benefit pension and other postretirement plans in 2006) and the effectiveness of The Hartford Financial Services Group, Inc.' s internal control over financial reporting, appearing in this Annual Report on Form 10-K of...

  • Page 272
    ... attorneys-in-fact and agents, in his or her name, place and stead to execute on his or her behalf, as an officer and/or director of The Hartford Financial Services Group, Inc. (the "Company"), an Annual Report on Form 10-K for the year ended December 31, 2007 (the "Annual Report"), and any and all...

  • Page 273
    ... Ayer, certify that: 1. 2. I have reviewed this Annual Report on Form 10-K of The Hartford Financial Services Group, Inc.; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of...

  • Page 274
    ...Johnson, certify that: 1. I have reviewed this Annual Report on Form 10-K of The Hartford Financial Services Group, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of...

  • Page 275
    ... ACT OF 2002 In connection with the Annual Report on Form 10-K for the period ended December 31, 2007 of The Hartford Financial Services Group, Inc. (the "Company"), filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies, pursuant to 18...

  • Page 276
    ... ACT OF 2002 In connection with the Annual Report on Form 10-K for the period ended December 31, 2007 of The Hartford Financial Services Group, Inc. (the "Company"), filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies, pursuant to 18...