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FORM 10-K

HARTFORD FINANCIAL SERVICES GROUP INC/DE - HIG

Filed: February 12, 2009 (period: December 31, 2008)

Annual report which provides a comprehensive overview of the company for the past year

Page 1
FORM 10-K HARTFORD FINANCIAL SERVICES GROUP INC/DE - HIG Filed: February 12, 2009 (period: December 31, 2008) Annual report which provides a comprehensive overview of the company for the past year

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... ISSUER 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 ON...

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EX-10.01 (EXHIBIT 10.01) EX-10.02 (EXHIBIT 10.02) EX-10.03 (EXHIBIT 10.03) EX-10.04 (EXHIBIT 10.04) EX-10.05 (EXHIBIT 10.05) EX-10.06 (EXHIBIT 10.06) EX-10.08 (EXHIBIT 10.08) EX-10.09 (EXHIBIT 10.09) EX-10.10 (EXHIBIT 10.10) EX-10.12 (EXHIBIT 10.12) EX-10.16 (EXHIBIT 10.16) EX-10.17 (EXHIBIT 10.17) ...

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... (Address of principal executive offices) (Zip Code) (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...

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... (as defined in Rule 12b-2 of the Exchange Act). Yes No ï¿½ The aggregate market value of the shares of Common Stock held by non-affiliates of the registrant as of June 30, 2008 was approximately $19.4 billion, based on the closing price of $64.57 per share of the Common Stock on the New York Stock...

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... Issuer 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 on...

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... Exhibit 12.01 Exhibit 21.01 Exhibit 23.01 Exhibit 24.01 Exhibit 31.01 Exhibit 31.02 Exhibit 32.01 Exhibit 32.02 2 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 8
... product line of business; corporate items not directly allocated to any of its reportable operating segments; inter-segment eliminations; and the mark-to-market adjustment for the International variable annuity account assets that are classified as equity securities held for trading reported in net...

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... by The Hartford's management primarily based upon underwriting results. Underwriting results represent premiums earned less incurred losses, loss adjustment expenses and underwriting expenses. The sum of underwriting results, other revenues, net investment income, net realized capital gains and...

Page 10
... products, including variable annuities, fixed market value adjusted ("Fixed MVA") annuities, mutual funds, private placement life insurance, which includes life insurance products purchased by a company on the lives of its employees, and retirement plan services for the savings and retirement...

Page 11
2007 and 2006, respectively. Net income (loss) in Retail was $(1.4) billion, $812 and $536 in 2008, 2007 and 2006, respectively. 4 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 12
..., or 8%, related primarily to fixed MVA annuity products. Individual variable annuity account values declined in 2008 due primarily to declining equity markets. The mutual fund business continues to be a significant business to the Life Company. Retail mutual fund assets were $31.0 billion, $48...

Page 13
... 62 mutual funds and 1 closed end fund. Life's funds are managed by Wellington Management Company, LLP ("Wellington") and Hartford Investment Management Company ("HIMCO"). Life has entered into agreements with over 1,000 financial services firms to distribute these mutual funds. 5 Source: HARTFORD...

Page 14
... companies as well as certain banks, securities brokerage firms, independent financial advisors 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 15
... variable universal life product market and is a leading seller of variable universal life insurance according to the Tillinghast VALUE Survey as of September 30, 2008. Sales in the Individual Life segment were $274, $286 and $284 in 2008, 2007 and 2006, respectively. 6 Source: HARTFORD FINANCIAL...

Page 16
..., respectively. Life also sells second-to-die universal life insurance policies. Term Life - Term life provides basic life insurance coverage at guaranteed level premium payments for a specific period of time and generally has no cash value. As of December 31, 2008 and 2007, term life accounted for...

Page 17
7 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 18
... 457 plans and to not-for-profits under Section 403(b) plans. Life offers a number of different investment products, including group variable annuities and fixed products, to the employees in Section 457 and 403(b) plans. Generally, with the variable products, Life manages the fixed income funds and...

Page 19
8 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 20
... and number three in fully-insured life premium of U.S. group carriers (according to LIMRA data as of June 30, 2008). The Company also offers disability underwriting, administration, claims processing services and reinsurance to other insurers and self-funded employer plans. Generally, policies sold...

Page 21
... on-line and self service capabilities to agents and consumers. Group Benefits competes with numerous other insurance companies and other financial intermediaries marketing insurance products. However, many of these businesses have relatively high barriers to entry and there have been few new...

Page 22
... financial advisors. Hartford Life Limited established its operations in Dublin, Ireland with a branch office in London to help market and service its business in the United Kingdom. Principal Products Individual Variable Annuities - The Company earns fees, based on policyholders' account values...

Page 23
... changes in the Company's investment return, mortality experience or expenses. The Company's primary fixed MVA annuities in Japan are yen and dollar denominated with terms varying from five to ten years with an average term to maturity of approximately seven years. In Japan, account values of fixed...

Page 24
..., income annuities, institutional mutual funds and stable value investment products. Additionally, Life is a leader in the variable private placement life insurance ("PPLI") market, which includes life insurance policies purchased by a company or a trust on the lives of its employees, with Life or...

Page 25
11 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 26
... of annual sales are through claim settlements not associated with The Hartford's Property & Casualty operations. In the longevity assurance and income annuities markets, Life sells its individual fixed payout annuity contracts through financial advisors that work with individual investors. In...

Page 27
asset managers. Stable value products typically compete on price, financial strength, stability and the Company's credit ratings. 12 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 28
...Products Personal Lines provides standard automobile, homeowners and home-based business coverages to individuals across the United States, including a special program designed exclusively for members of AARP. Beginning in 2006, the Company enhanced its new Dimensions automobile and homeowners class...

Page 29
13 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 30
... based on the policyholder's individualized risk characteristics. Marketing and Distribution Small Commercial provides insurance products and services through its home office located in Hartford, Connecticut, and multiple domestic regional office locations and insurance centers. The segment markets...

Page 31
...premium growth rates in the small commercial market have slowed and underwriting margins will likely decrease due to earned pricing decreases and increases in loss cost severity. A number of companies have sought to grow their business by increasing their underwriting appetite, appointing new agents...

Page 32
... coverages under several different products. Workers' compensation insurance accounts for the largest share of the written premium in the Middle Market segment. Marketing and Distribution Middle Market provides insurance products and services through its home office located in Hartford, Connecticut...

Page 33
2008, 2007, and 2006, respectively. 15 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 34
... administrator services for claims administration, integrated benefits and loss control through Specialty Risk Services, LLC, a subsidiary of the Company. Marketing and Distribution Specialty Commercial provides insurance products and services through its home office located in Hartford, Connecticut...

Page 35
...in 2006. Other Operations had net income (loss) of $(97), $30 and $(35) in 2008, 2007 and 2006, respectively. Total assets for Other Operations were $5.2 billion, $5.9 billion, and $6.9 billion as of December 31, 2008, 2007, and 2006, respectively. 16 Source: HARTFORD FINANCIAL S, 10-K, February 12...

Page 36
... a lower risk-free rate of return over that period. Accretion of discounts for prior accident years totaled $26 in 2008, $31 in 2007, and $32 in 2006. For annuities issued by Life to fund certain P&C workers' compensation indemnity payments where the claimant has not released the P&C Company of its...

Page 37
.... Further discussion of The Hartford's property and casualty reserves, including asbestos and environmental claims reserves, may be found in the Property and Casualty Reserves, Net of Reinsurance section of the MD&A- Critical Accounting Estimates. 17 Source: HARTFORD FINANCIAL S, 10-K, February 12...

Page 38
... 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 39
... table excludes Hartford Insurance, Singapore as a result of its sale in September 2001, Hartford Seguros as a result of its sale in February 2001, Zwolsche as a result of its sale in December 2000 and London & Edinburgh as a result of its sale in November 1998. 18 Source: HARTFORD FINANCIAL S, 10...

Page 40
..., reserve re-estimates for total Property & Casualty ranged from (3.0)% to 1.6% of total net recorded reserves. Apart from the effect of reserve reclassifications by accident year during the 2007 calendar year, the Company strengthened workers' compensation and general liability reserves in 2007 by...

Page 41
2001 and 2002 accident years was largely due to a release of workers' compensation reserves, partially offset by modest strengthening of reserves for professional liability claims. 19 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 42
... 31, 2008, 2007 and 2006, Life did not make any significant changes in the terms under which reinsurance is ceded to other insurers. For further discussion on reinsurance, see Reinsurance in the Capital Markets Risk Management section of the MD&A. Investment Operations The Hartford's investment...

Page 43
... 31, 2008 and 2007, the fair value of HIMCO's total assets under management was approximately $138.8 billion and $148.7 billion, respectively, of which $9.2 billion and $10.9 billion, respectively, were held in HIMCO managed third party accounts. 20 Source: HARTFORD FINANCIAL S, 10-K, February...

Page 44
... 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 and minimum rates for...

Page 45
... life insurers, which face significant financial and capital markets risk in their operations, we have been adversely affected, to a significant extent, by these conditions. Among other effects, we incurred significant investment losses and other charges in 2008, notably with respect to deferred...

Page 46
... affect our operations and prospects in ways that we cannot predict. For example, U.S. and overseas governmental or regulatory authorities, including the Securities and Exchange Commission (the "SEC"), the Office of Thrift Supervision ("OTS"), the New York Stock Exchange or the Financial Industry...

Page 47
... Life businesses, such as variable annuities, where fee income is earned based upon the fair value of the assets under management. During the course of 2008, the significant declines in equity markets have negatively impacted assets under management. As a result, fee income earned from those assets...

Page 48
... our exposure to the U.S. variable annuity guarantee benefits where policyholders have elected to invest in international funds. If significant, further declines in equity prices, changes in U.S. interest rates, changes in credit spreads and the strengthening or weakening of foreign currencies...

Page 49
... conditions), the amount of additional capital our insurance subsidiaries must hold to support business growth, changes in equity market levels, the value of certain fixed-income and equity securities in our investment portfolio, the value of certain derivative instruments, changes in interest rates...

Page 50
... equity or debt financing. Alternatively, if we were not to raise additional capital in such a scenario, either at our discretion or because we were unable to do so, our financial strength and credit ratings might be further downgraded by one or more rating agencies. 24 Source: HARTFORD FINANCIAL...

Page 51
... could affect our competitive position in the insurance industry and make it more difficult for us to market our products, as potential customers may select companies with higher financial strength ratings thereby reducing future sales of our products and lowering future earnings. The recent...

Page 52
... financial assets with contractual cash flows, the Company currently uses its best estimate of cash flows over the life of the security under severe recession scenarios. In addition, estimating future cash flows involves incorporating information received from third party sources and making internal...

Page 53
26 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 54
... high yielding bonds) or reinsurance and derivative instrument counterparties, could have a material adverse effect on the value of our investments, results of operations, financial condition and cash flows. Issuers or borrowers whose securities or loans we hold, customers, trading counterparties...

Page 55
..., pre-tax, with respect to its Individual Annuity and International reporting units. If current market conditions persist during 2009, in particular, if the Company's share price remains below book value per share, or if the Company's actions to limit risk associated with its products or investments...

Page 56
... claims, and our ultimate liability may exceed our currently recorded reserves, which may have a material adverse effect on our operating results, financial condition and liquidity. We continue to receive asbestos and environmental claims. Significant uncertainty limits the ability of insurers...

Page 57
... adverse effect on our business, results of operations and 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 58
30 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 59
...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 60
31 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 61
... 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. State insurance departments that regulate us often propose premium rate changes for the benefit...

Page 62
... for impaired or insolvent insurance companies. These funds periodically assess losses against all insurance companies doing business in the state. Any of these factors could have a material adverse effect on our consolidated results of operations. 32 Source: HARTFORD FINANCIAL S, 10-K, February 12...

Page 63
... affiliated third parties, 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...

Page 64
..., processes, copyrights, trademarks, trade secrets or licenses, or alternatively could be required to enter into costly licensing arrangements with third parties, all of which could have a material adverse effect on our business, results of operations and financial condition. 33 Source: HARTFORD...

Page 65
... kinds of insurance 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...

Page 66
... to disclose to the Plan's participants information about the Company's financial condition. These lawsuits seek restitution or damages for losses arising from the investment of the Plan's assets in the Company's common stock during the alleged class periods. The cases have been consolidated. The...

Page 67
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 68
... of security holders of The Hartford Financial Services Group, Inc. during the fourth quarter of 2008. PART II Item 5. MARKET FOR THE HARTFORD'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Hartford's common stock is traded on the New York Stock Exchange...

Page 69
... Hartford's annual percentage return and five-year total return on its common stock including reinvestment of dividends in comparison to the S&P 500 and the S&P Insurance Composite Index. Annual Return Percentage Company/Index The Hartford Financial Services Group, Inc. S&P 500 Index S&P Insurance...

Page 70
37 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 71
... 2008 Total Total Number of Shares Purchased Average Price Paid Per Share 28.69 10.63 6.61 23.59 3,940[1] $ 1,483[1] $ 52[1] $ 5,475 $ [1] Represents shares acquired from employees of the Company for tax withholding purposes in connection with the Company's stock compensation plans. In June 2008...

Page 72
... by net investment income and mark-to-market effects of equity securities held for trading supporting the international variable annuity business, which have corresponding amounts credited to policyholders within benefits losses and loss adjustment expenses. 2008 revenues include net investment...

Page 73
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 74
...such forward-looking statements. INDEX Overview Critical Accounting Estimates Consolidated Results of Operations Life Retail Individual Life Retirement Plans Group Benefits International Institutional Other Property & Casualty Total Property & Casualty Source: HARTFORD FINANCIAL S, 10-K, February 12...

Page 75
Ongoing Operations Personal Lines Small Commercial Middle Market Specialty Commercial Other Operations (Including Asbestos and Environmental Claims) Investments Investment Credit Risk Capital Markets Risk Management Capital Resources and Liquidity Impact of New Accounting Standards 40 124 130 136 ...

Page 76
... 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 77
... (1) periodic changes in claims handling procedures, (2) growth in new lines of business where exposure and loss development patterns are not well established or (3) changes in the quality of risk selection in the underwriting process. In the case of assumed reinsurance, all of the above risks apply...

Page 78
...or annual period. The Hartford, like other insurance companies, categorizes and tracks its insurance reserves for its segments by "line of business", such as property, auto physical damage, auto liability, commercial multi-peril package business, workers' compensation, general liability professional...

Page 79
... recoverables Total reserves-gross $ 2,052 $ 3,572 $ 4,744 $ 6,981 $ 17,349 $ 4,584 $ 21,933 [1] These net loss and loss adjustment expense reserves relate to assumed reinsurance that was moved into Other Operations (formerly known as "HartRe"). 42 Source: HARTFORD FINANCIAL S, 10...

Page 80
... for property, auto physical damage, auto liability, package business, workers' compensation, most general liability, professional liability and fidelity and surety. Other non-A&E reserves are reviewed semi-annually (twice per year) or annually. These include, but are not limited to, reserves...

Page 81
... reserves, estimates determined from this technique are affected by changes in case reserving practices. Both paid and reported development techniques assume that historical development patterns are predictive of future development patterns. 43 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 82
... apply to each coverage and accident year within a line of business. Also, as circumstances change, the methods that are given more influence will change. For example, for Personal Lines auto liability claims, reported development techniques are currently given less emphasis in making estimates for...

Page 83
..., management typically prefers frequency / severity techniques that allow it to make assumptions about the frequency of larger claims. Long-Tailed General Liability, Fidelity and Surety and Large Deductible Workers' Compensation . For these long-tailed lines of business, the Company generally relies...

Page 84
..., the introduction of new products has lead to a different mix of business by type of insured than the Company experienced in the past. Beginning in 2004, the Company introduced its Dimensions auto and homeowners product for Agency business and beginning in 2007, the Source: HARTFORD FINANCIAL S, 10...

Page 85
... AARP customers. In general, the Company now has a lower proportion of 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. 45 Source: HARTFORD FINANCIAL...

Page 86
...base means that future changes in estimates could be material to the Company's results of operations in any given period. The key assumption for Personal Lines auto liability is the annual loss cost trend, particularly the severity trend component of loss costs. A review of Insurance Services Office...

Page 87
... routine claims and larger, more complex claims. The Company has reviewed the historical variation in reported loss development patterns. If the reported loss development patterns change by 11%, the estimated net reserve need would change by $300, in either direction. An 11% change in reported loss...

Page 88
... 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 89
... and increase loss payments by insurers. In addition, some policyholders have asserted new classes of claims for coverages to which an aggregate limit of liability may not apply. Further uncertainties include insolvencies of other carriers and unanticipated developments pertaining to the Company...

Page 90
..., reinsurance arrangements or the financial condition of particular reinsurers, the Company will make adjustments to its reserves or to the amounts recoverable from its reinsurers. Total Property & Casualty Reserves, Net of Reinsurance In the opinion of management, based upon the known facts and...

Page 91
...income and universal life secondary guarantee benefits accounted for and collectively referred to as "SOP 03-1 reserves". The specific breakdown of the most significant EGP based balances by segment is as follows: Individual Variable Annuities Individual Variable Annuities U.S. Japan Individual Life...

Page 92
...impacted by separate account fund mix, less fees assessed against the contract holder's account balance, surrender and lapse rates, interest margin, mortality, and hedging costs. The assumptions are developed as part of an annual process and are dependent upon the Company's current best estimates of...

Page 93
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 94
... rate spreads, hedging costs, and separate account returns, in substantially all product lines. The new best estimate assumptions were applied to the current policy related in-force or account values to project future gross profits. The after-tax impact on the Company's assets and liabilities...

Page 95
... (5) - - (8) - - $ (13) Death and Income Benefit Reserves [1] $ (4) - - - 6 - $ 2 Sales Inducement Assets Segment After-tax (charge) benefit Retail Retirement Plans Institutional Individual Life International - Japan Corporate Total $ $ 9 - - - - - 9 $ Total [2] 180 (9) 1 16 22 3 $ 213 [1] As...

Page 96
... "in-the-moneyness" of various guarantees offered with the products. Future market conditions could significantly change the sensitivity results. [2] Sensitivity around lapses assumes lapses increase or decrease consistently across all cohort years and products. 52 Source: HARTFORD FINANCIAL S, 10...

Page 97
...-off, as the majority of policyholders' funds in the separate accounts is invested in the equity market. As of December 31, 2008, the Company believed U.S. individual and Japan individual variable annuity EGPs could fall, through a combination of negative market returns, lapses and mortality, by at...

Page 98
... including 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 assumed expected returns based on risk-free rates as represented by the...

Page 99
... adverse policyholder behavior assumptions and the best estimate assumptions used in the Pre-SFAS 157 model using interest rate and volatility assumptions that the Company believes market participants would use in developing risk margins. 54 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 100
... adjustments. 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 are carried at outstanding balance. Mortgage loans on real estate...

Page 101
... December 31, by the private placement broker and are intended to adjust security prices for issuer-specific factors. The Company assigns a credit rating to these securities based upon an internal analysis of the issuer's financial strength. 55 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 102
... fair value based upon the available market data, the price received from the third party is adjusted accordingly. At December 31, 2008, the Company made fair value determinations which lowered prices received from third party pricing services and brokers by a total of $139. The securities adjusted...

Page 103
...broker priced public securities and private placement securities qualified for sale under rule 144A, and long-dated fixed maturities where the term of significant inputs may not be sufficient to be deemed observable. CMBS primarily represents CMBS bonds and commercial real estate collateralized debt...

Page 104
Credit derivatives Interest derivatives Equity derivatives Other Total Level 3 57 $ $ 3,629 3,152 15,735 1,399 23,915 $ $ (358) 49 2,759 (120) 2,330 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 105
... date of sale. The fair value of the other-than-temporarily impaired investment becomes its new cost basis. For fixed maturities, the Company accretes the new cost basis to par or to the estimated future cash flows over the expected remaining life of the security by adjusting the security's yield...

Page 106
... health care and life insurance benefits for eligible retired employees. The Company maintains international plans which represent an immaterial percentage of total pension assets, liabilities and expense and, for reporting purposes, are combined with domestic plans. 58 Source: HARTFORD FINANCIAL...

Page 107
...Company also applies long-term 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 these analyses, management...

Page 108
59 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 109
..., 2007, the Company had goodwill allocated to the following reporting units: Individual Annuity Other Retail Retirement Plans Institutional Solutions Group Individual Life Group Benefits International Personal Lines Hartford Financial Products within Specialty Commercial Total Segment Goodwill $ 422...

Page 110
...individual reporting units within Life and Property & Casualty as of January 1, 2008 and September 30, 2008, respectively. The conclusion reached as a result of the annual goodwill impairment testing was that the fair value of each reporting unit, for which goodwill had been allocated, was in excess...

Page 111
... Fortis Financial Group, Inc. If current market conditions persist during 2009, in particular, if the Company's share price remains below book value per share, or if the Company's actions to limit risk associated with its products or investments causes a significant change in any one reporting unit...

Page 112
... Group Retirement Plans Group Benefits Total Employer Markets Group International Institutional Other Total Life Property & Casualty Ongoing Operations Underwriting results Personal Lines Small Commercial Middle Market Specialty Commercial Ongoing Operations underwriting results Net servicing income...

Page 113
62 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 114
... from personal auto and workers' compensation lines of business. The increase in net realized capital losses of $1.5 billion in 2008 was primarily due to impairments of subordinated fixed maturities and preferred equity securities in the financial services sector as well as of securitized assets...

Page 115
... based on, but not limited to, changes in eligible dividends received by the mutual funds, amounts of distributions from these mutual funds, amounts of short-term capital gains and asset values at the mutual fund level and the Company's taxable income before the DRD. Given recent financial markets...

Page 116
... are unknown, but they could result in the elimination of some or all of the separate account DRD tax benefit that the Company receives. Management believes that it is highly likely that any such regulations would apply prospectively only. 64 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 117
...the effect of rating downgrades that have occurred and those that could occur in the future. See Risk Factors in Item 1A. Life Retail In the long-term, management continues to believe the market for retirement products will expand as individuals increasingly save and plan for retirement. Demographic...

Page 118
... equity markets, policyholders may allocate more of their variable account assets to the fixed account options and fixed annuities may see increased deposits. In the fourth quarter of 2008, the Company has seen an increase in fixed annuity deposits compared to prior quarters. Management expects...

Page 119
...for term insurance and universal life products with no-lapse guarantees. These risks may have a negative impact on Individual Life's future earnings. Retirement Plans The future financial results of the Retirement Plans segment will depend on Life's ability to increase assets under management across...

Page 120
... web-based technology to address data management, administration and benefit calculations. These three acquisitions were not accretive to 2008 net income. Furthermore, net income as a percentage of assets is expected to be lower in 2009 reflecting a full year of the new business mix represented...

Page 121
... equity markets in the second half of 2008 has significantly reduced Retirement Plans assets under management, which has strained its net income. This earnings strain is expected to continue throughout 2009 or until the equity markets improve. Group Benefits Group Benefits' sales may fluctuate based...

Page 122
... stable value products and will evaluate calling these contracts individually based upon the financial benefits to the Company. The net income of this segment will depend on Institutional's ability to increase assets under management, mix of business, net investment spread and investment performance...

Page 123
... renewals in Middle Market by, among other actions, refining its pricing models, increasing its willingness to write more workers' compensation business on a mono-line basis and writing larger property policies and umbrella general liability policies. Within Specialty Commercial, management expects...

Page 124
.... For Middle Market, management expects an increase in claim cost severity in 2009 across all lines, although the increase in claim severity for non-catastrophe property claims will not likely be as high as it was in 2008 when the Company experienced a number of individually large property losses...

Page 125
the Company will make adjustments to its reserves, or the portion of liabilities it expects to cede to reinsurers. 69 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 126
... fixed annuities, mutual funds, PPLI, and retirement plan services, individual life insurance and group benefit products, such as group life and group disability insurance. Retail offers individual variable and fixed market value adjusted ("MVA") annuities, retail mutual funds, 529 college savings...

Page 127
... individual life insurance and group benefits businesses depends largely on the size of its in force block, the adequacy of product pricing and underwriting discipline, actual mortality and morbidity experience, and the efficiency of its claims and expense management. 70 Source: HARTFORD FINANCIAL...

Page 128
... Mutual Funds Assets under management, beginning of period Net sales Change in market value and other Assets under management, end of period Individual Life Insurance Variable universal life account value, end of period Total life insurance in-force Retirement Plans Group Annuities Account value...

Page 129
... and equity market volatility. Retail Mutual funds has seen positive net sales as a result of diversified sales growth. Individual Life insurance in-force growth has occurred across multiple product lines, including term, universal life and variable universal life. Retirement Plans group annuities...

Page 130
...Retail mutual funds assets under management growth. Individual Life variable universal life account values increased primarily due to market appreciation and positive net flows. Life insurance in-force increased from the prior periods due to business growth. Retirement Plans account values increased...

Page 131
...used to pay the contractual obligations under these insurance contracts. Two major factors, new sales and persistency, impact premium growth. Sales can increase or decrease in a given year based on a number of factors, including but not limited to, customer demand for the Company's product offerings...

Page 132
... realized capital gains (losses) are amounts that represent the net periodic accruals on currency rate swaps used in the risk management of Japan fixed annuity products. [3] See Unlock and Sensitivity Analysis in the Critical Accounting Estimates section of the MD&A. 73 Source: HARTFORD FINANCIAL...

Page 133
...2007 and 2008 Unlocks. The Retail general insurance expense ratio increased due to the impact of a declining asset base on relatively consistent expenses. Individual Life death benefits increased, primarily due to growth of life insurance in-force and unfavorable mortality. Group Benefits loss ratio...

Page 134
...as an input in determining where additional capital should be invested to increase net income and shareholder returns. The Company uses the return on assets for the individual annuity business for evaluating profitability. In Group Benefits and Individual Life, after-tax margin is a key indicator of...

Page 135
... guarantee universal life business which released assets supporting capital and lower variable life insurance fees from equity market declines, partially offset by life insurance in-force growth, lower credited rates and higher surrender charges. The decrease in Retirement Plans ROA, excluding...

Page 136
... available-for-sale and other Equity securities held for trading [1] Total net investment income (loss) Net realized capital losses Total revenues [2] Benefits, losses and loss adjustment expenses Benefits, losses and loss adjustment expenses - returns credited on International variable annuities...

Page 137
... unlock. Declines in assets under management in Retail, primarily driven by market depreciation of $37.8 billion for Individual Annuity and $20.2 billion for retail mutual funds during 2008, drove declines in fee income compared to 2007. 76 â€¢ â€¢ Source: HARTFORD FINANCIAL S, 10-K, February 12...

Page 138
... benefit of $210 recorded in the third quarter of 2007. Increased income on asset growth in the variable annuity, mutual fund, retirement and institutional businesses. Partially offsetting the increase in Life's net income were the following Increased non-deferrable individual annuity asset based...

Page 139
... Hedge Program Total results of variable annuity hedge program Other, net Total net realized capital gains (losses) Income tax expense (benefit) and DAC Total gains (losses), net of tax and DAC Net realized gains (losses) for the year ended December 31, 2007 Individual Group Retail Life Retirement...

Page 140
... Individual Group Retail Life Retirement Benefits International Institutional Other Total Gains/losses on sales, net $ (44) $ (1) $ (9) $ (6) $ (4) $ 23 $ (1) $ (42) Impairments (6) (18) (6) (3) (2) (32) (9) (76) Japanese fixed annuity contract hedges, net - - - - (17) - - (17) Periodic net coupon...

Page 141
... driven from the change in value of non-qualifying derivatives due to fluctuations in interest rates and foreign currency exchange rates. These losses were partially offset by a before-tax benefit of $25 received from the WorldCom security settlement. 79 Source: HARTFORD FINANCIAL S, 10-K, February...

Page 142
... 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 143
... â€¢ Earned Premiums increased primarily due to an increase in life contingent premiums combined with a decrease in reinsurance premiums as a result of the lapsing of business covered by reinsurance and the significant decline in the equity markets. 80 Source: HARTFORD FINANCIAL S, 10-K, February...

Page 144
...in income from limited partnerships and other alternative investments, combined with lower yields on fixed maturity investments due to interest rate declines, partially offset by an increase in general account assets from increased fixed account sales. Net realized capital losses increased primarily...

Page 145
... Accounting Estimates section of the MD&A. â€¢ Net investment income â€¢ Insurance operating costs and other expenses â€¢ Amortization of deferred policy acquisition costs and present value of future profits ("DAC") Income tax expense (benefit) â€¢ â€¢ The effective tax rate increased...

Page 146
... Insurance operating costs and other expenses Amortization of deferred policy acquisition costs and present value of future profits Total benefits, losses and expenses Income (loss) before income taxes Income tax expense (benefit) Net income (loss) Account Values Variable universal life insurance...

Page 147
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 148
...with growth in general account values. Individual Life earned additional net investment income throughout 2007 associated with higher returns from limited partnerships and other alternative investments. Benefits, losses and loss adjustment expenses increased due to life insurance in-force growth and...

Page 149
...future policy benefits for insurance contracts. [2] In 2007, Life began selling mutual fund based products in the 403(b) market. [3] During the year ended December 31, 2008, Life acquired the rights to service mutual fund assets from Sun Life Retirement Services, Inc., and Princeton Retirement Group...

Page 150
... The income tax benefit for 2008 as compared to the prior year periods income tax expense was due to lower income before income taxes primarily due to increased realized capital losses and increased tax benefits associated with the dividends received deduction of $12. 85 Source: HARTFORD FINANCIAL...

Page 151
... Accounting Estimates section of the MD&A. Net investment income â€¢ Benefits, losses and loss adjustment expenses Insurance operating costs and other expenses Amortization of deferred policy acquisition costs and present value of future profits â€¢ â€¢ â€¢ 86 Source: HARTFORD FINANCIAL...

Page 152
... 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 153
... in Group Benefits for the year ended December 31, 2007, primarily due to higher earned premiums, higher net investment income, a gain on a renewal rights transaction associated with the Company's medical stop loss business and a change in assumptions underlying the valuation of long term disability...

Page 154
... Insurance operating costs and other expenses Amortization of deferred policy acquisition costs Total benefits, losses and expenses Income (loss) before income taxes Income tax expense (benefit) Net income (loss) [2] Assets Under Management - Japan Japan variable annuity account values Japan fixed...

Page 155
...Capital Gains and losses by Segment table under Life's Operating Section of the MD&A. The following other factors contributed to the changes in net income: Fee income â€¢ Fee income increased primarily due to growth in Japan's variable annuity average assets under management. The increase in average...

Page 156
Amortization of deferred policy acquisition costs and present value of future profits Higher amortization of DAC resulted primarily from a decrease in the 2007 unlock benefit compared with the prior year period, as well as overall growth of operations. For further discussion, see Unlock and ...

Page 157
... account values include transfers from Retirement Plans and Retail of $763 during 2006. Institutional provides customized investment, insurance, and income solutions to select markets. Products include PPLI owned by corporations and high net worth individuals, institutional annuities, mutual funds...

Page 158
expenses Income tax expense (benefit) â€¢ projects and product development expenses. The income tax benefit increased compared to the prior year primarily due to a decline in income before taxes primarily due to increased realized capital losses. 91 Source: HARTFORD FINANCIAL S, 10-K, February 12,...

Page 159
... Life's Operating Section of the MD&A. Offsetting the impact of realized capital losses, Institutional's net income increased driven by higher assets under management, combined with increased returns on general account assets, primarily due to limited partnership and other alternative investment...

Page 160
... Equity securities held for trading [1] Total net investment income (loss) Net realized capital gains (losses) Total revenues Benefits, losses and loss adjustment expenses [1] Benefits, losses and loss adjustment expenses - returns credited on International variable annuities [1] Insurance operating...

Page 161
93 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 162
... workers' compensation, property, automobile, liability, umbrella, specialty casualty, marine, livestock, fidelity, surety, professional liability and directors and officers' liability coverages. Property & Casualty also provides automobile, homeowners and home-based business coverage to individuals...

Page 163
... decreases in all lines, including commercial auto, general liability, workers' compensation and property. Earned premium decreases were driven by declines in earned pricing and premium renewal retention in all Small Commercial â€¢ Middle Market â€¢ Source: HARTFORD FINANCIAL S, 10-K, February...

Page 164
... in new business premiums in all lines except workers' compensation. Specialty Commercial â€¢ Earned premium decreased by $47, or 3%, primarily driven by a decrease in casualty and property and a decrease in earned premiums assumed under inter-segment arrangements, partially offset by an increase in...

Page 165
... net investment income. Realized capital gains (losses) Gross gains (losses) on sales, net â€¢ Gross gains and losses on sales in 2008 primarily resulted from the sale of corporate fixed maturities resulting from the decision to reallocate the portfolio to securities with more favorable risk/return...

Page 166
... returns on hedge funds and real estate partnerships as a result of the lack of liquidity in the financial markets and credit spreads widening. The decrease in income from fixed maturities was attributable to lower income on variable rate securities due to declines in short term interest rates...

Page 167
... Market workers' compensation claims, lower claim frequency on Personal Lines auto claims and lower non-catastrophe loss costs on Small Commercial package business, partially offset by higher non-catastrophe losses on Middle Market property and Personal Lines homeowners' business. The $366 increase...

Page 168
... liability claims, increased 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...

Page 169
... due to positive operating cash flows, partially offset by the return of capital to Corporate. Contributing to the increase in net investment income was an increase in income from limited partnerships and other alternative investments, driven by a higher yield on these investments and shifting...

Page 170
... year development Catastrophe ratio Current year Prior years Total catastrophe ratio Non-catastrophe prior year development Combined ratio Other Operations net income (loss) Total Property & Casualty measures of net investment income Investment yield, after-tax Average annual invested assets at cost...

Page 171
...The change to no growth in professional liability, fidelity and surety earned premium in 2008 was largely due to larger earned pricing decreases in 2008 than in 2007 and a change to declining new business in professional liability since the third quarter of 2007. 99 Source: HARTFORD FINANCIAL S, 10...

Page 172
... yield decreased due to a change from net income to net losses from limited partnerships and other alternative investments in 2008 and, to a lesser extent, a lower investment yield for fixed maturities. Average annual invested assets at cost increased modestly due to positive operating cash...

Page 173
... liability claims, increased 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...

Page 174
... prior accident year reserve development, partially offset by a change from net realized gains in 2006 to net realized losses in 2007 and a decrease in net investment income. See the Other Operations segment MD&A for further discussion. 101 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 175
...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 & Casualty is required to obtain approval for its premium rates from...

Page 176
Reinstatement premium represents additional ceded premium paid for the reinstatement of the amount of reinsurance coverage that was reduced as a result of a reinsurance loss payment. 102 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 177
... loss adjustment expense ratio needed for the Company to achieve its targeted return on equity fluctuates from year to year based on changes in the expected investment yield over the claim settlement period, the timing of expected claim settlements and the targeted returns set by management based on...

Page 178
...more in industry insured property losses and affects a significant number of property and casualty policyholders and insurers. The catastrophe ratio includes the effect of catastrophe losses, but does not include the effect of reinstatement premiums. 103 Source: HARTFORD FINANCIAL S, 10-K, February...

Page 179
...-tax profitability derived from underwriting activities, which are managed separately from the Company's investing activities. Within Ongoing Operations, the underwriting segments of Personal Lines, Small Commercial, Middle Market and Specialty Commercial are evaluated by management primarily based...

Page 180
... 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-based capital attribution...

Page 181
... (losses) When fixed maturity, equity or other investments are sold, any gain or loss is reported in net realized capital gains (losses). Individual securities may be sold for a variety of reasons, including a decision to change the Company's asset allocation in response to market conditions and the...

Page 182
...expense incurred ratio Prior accident year development (pts.) [2] $ Personal Lines 2,042 81 1,961 Small Commercial $ 3,470 177 3,293 $ Middle Market 4,697 414 4,283 Specialty Commercial $ 6,873 2,316 4,557 $ Ongoing Operations 17,082 2,988 14,094 $ Other Operations 5,071 934 4,137 $ Total P&C 22,153...

Page 183
...as an administrator for the Write Your Own flood program on behalf of the National Flood Insurance Program under FEMA, for which it earns a fee for collecting premiums and processing claims. Under the program, the Company services both personal lines and commercial lines flood insurance policies and...

Page 184
... strengthenings (releases). Personal Lines Small Commercial Middle Market Specialty Commercial Ongoing Operations Other Operations Total P&C Released workers' compensation reserves, primarily related to accident years 2000 to 2007 $ Released reserves for general liability claims, primarily related...

Page 185
... of the Company's net reserves for Middle Market commercial auto liability claims as of December 31, 2007. Released reserves for extra-contractual liability claims under non-standard personal auto policies by $24. As part of the agreement to sell its non-standard auto insurance business in November...

Page 186
claims has exceeded previous expectations. The $25 reserve strengthening represented 2% of the Company's net reserves for Specialty Commercial general liability claims as of December 31, 2007. 109 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 187
..., 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 exposures for both direct insurance and assumed reinsurance. The Company found estimates for individual cases changed based upon...

Page 188
... to Other Operations. [2] The "loss and loss expense paid ratio" represents the ratio of paid loss and loss adjustment expenses to earned premiums. [3] "Prior accident year development (pts)" represents the ratio of prior accident year development to earned premiums. 110 Source: HARTFORD FINANCIAL...

Page 189
... 31, 2007 were the following reserve strengthenings (releases). Personal Lines Small Commercial Middle Market Specialty Commercial Ongoing Operations Other Operations Total P&C Release of workers' compensation loss and loss adjustment expense reserves, primarily for accident years 2002 to 2006...

Page 190
...management did not determine that this was a verifiable trend until the third quarter of 2007 when it released the reserves. The $18 reserve release represented 6% of the Company's net reserves for Middle Market auto liability claims as of December 31, 2006. Released reserves for Personal Lines auto...

Page 191
... larger than expected increases in loss cost severity, 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. 112 Source: HARTFORD FINANCIAL S, 10...

Page 192
...than management's previous estimates. The $40 reserve strengthening represented 2% of net reserves for Middle Market workers' compensation claims as of December 31, 2006. Strengthened general liability reserves by $39 for accident years more than 20 years old. The Company has experienced an increase...

Page 193
...and loss adjustment expenses by segment for Property & Casualty for the year ended December 31, 2006 follows: For the year ended December 31, 2006 Personal Lines Small Commercial 3,023 $ 192 2,831 Middle Market Specialty Commercial Ongoing Operations Other Operations 6,846 $ 1,955 4,891 Total P&C 22...

Page 194
...- $ Total P&C (83) (31) Net release of catastrophe loss reserves for 2004 and 2005 hurricanes Release of Personal Lines auto liability reserves for accident year 2005 Strengthening of Personal Lines auto liability reserves for claims with exposure in excess of policy limits Strengthening of general...

Page 195
...Company had reduced the 2005 accident year loss and loss adjustment expense ratio for Personal Lines auto liability claims...real trend. The $31 reserve release represented 2% of the Company's net reserves for Personal Lines auto liability claims as of December 31, 2005. 115 Source: HARTFORD FINANCIAL...

Page 196
... circumstances necessitated an increase in the reserve estimate. The $30 of reserve strengthening represented 2% of the Company's net reserves for Personal Lines auto liability claims as of December 31, 2005. Strengthened Middle Market general liability loss and loss adjustment expense reserves by...

Page 197
... liability. The Company also examined its London Market exposures for both direct insurance and assumed reinsurance. The Company found estimates for individual cases changed based upon the particular circumstances of each account, although the review found no underlying cause or change in the claim...

Page 198
... risk, The Hartford utilizes reinsurance to transfer risk to well-established and financially secure reinsurers. Reinsurance is used to manage aggregations of risk as well as specific risks based on accumulated property and casualty liabilities in certain geographic zones. All treaty purchases...

Page 199
administered by a centralized function to support a consistent strategy and ensure that the reinsurance activities are fully integrated into the organization's risk management processes. 117 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 200
... 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 are no significant finite...

Page 201
...events and property and workers' compensation losses for earthquake events resulting from a single event. The estimates provided are based on 250-year return period loss estimates, which have a 0.4% likelihood of being exceeded in any single year. The net loss estimates assume that the Company would...

Page 202
..., workers' compensation policies generally have no exclusions or limitations. The GAO found that commercial property and casualty policyholders, including companies that own high-value properties in large cities, generally reported that they could not obtain NBCR coverage. Commercial property and...

Page 203
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 204
... ("Citizens") provides property insurance to Florida homeowners and businesses that are unable to obtain insurance from other carriers, including for properties deemed to be "high risk". Citizens maintains a Personal Lines account, a Commercial Lines account and a High Risk account. If Citizens...

Page 205
... 100.0% $ $ [1] Based on A.M. Best ratings as of December 31, 2008 and 2007, respectively. Where its contracts permit, the Company secures future claim obligations with various forms of collateral, including irrevocable letters of credit, secured trusts, funds held accounts and group wide offsets...

Page 206
... of deferred policy acquisition costs Insurance operating costs and expenses Other expense Total benefits, losses and expenses Income (loss) before income taxes Income tax expense (benefit) Net income [2] Net Income Ongoing Operations Other Operations Total Property & Casualty net income $ 2008 10...

Page 207
... years Total losses and loss adjustment expenses Amortization of deferred policy acquisition costs Insurance operating costs and expenses Underwriting results Net servicing income [1] Net investment income Net realized capital losses Other expenses Income before income taxes Income tax benefit...

Page 208
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 209
... investments in 2008 were largely due to negative returns on hedge funds and real estate partnerships as a result of the lack of liquidity in the financial markets and credit spread widening. The decrease in income from fixed maturities was attributable to lower income on variable rate securities...

Page 210
...by a decrease in servicing income from the AARP Health program, Specialty Risk Services and the Write Your Own flood program and the write-off of software used in administering policies for third parties. A $608 change from income tax expense to an income tax benefit Source: HARTFORD FINANCIAL S, 10...

Page 211
...was a net income tax benefit in 2008 because the income tax benefit on realized capital losses was greater than the income tax expense on all other components of pre-tax income. A portion of the Company's net investment income was generated from tax-exempt securities. 126 Source: HARTFORD FINANCIAL...

Page 212
... 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 business in the fourth quarter of 2006. Omni accounted for...

Page 213
... base and income earned from a higher portfolio yield. The increase in the average invested asset base contributing to the increase in investment income was primarily due to positive operating cash flows, partially offset by the return of capital to Corporate. Contributing Source: HARTFORD FINANCIAL...

Page 214
to the increase in net investment income was an increase in income from limited partnerships and other alternative investments, driven by a higher yield on these investments and shifting a greater allocation of investments to these asset classes. 128 Source: HARTFORD FINANCIAL S, 10-K, February 12,...

Page 215
... of impairments of asset-backed securities backed by sub-prime residential mortgage loans and impairments of corporate securities in the financial services and homebuilders sectors. (See the Other-Than-Temporary Impairments discussion within Investment Results for more information on the impairments...

Page 216
... Group, Inc. ("Omni") subsidiary. Personal Lines also operates a member contact center for health insurance products offered through the AARP Health program. The Hartford's exclusive licensing arrangement with AARP continues until January 1, 2020 for automobile, homeowners and home-based business...

Page 217
... of 2007. New business has offset non-renewals in 2008 and new business in 2008 has been driven by 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. Agency earned premium...

Page 218
...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. Agency earned premium grew $55, or 5%, as a result of an increase in the number of agency appointments...

Page 219
... Insurance to value is the ratio of the amount of insurance purchased to the value of the insured property. Consistent with the growth in earned premium, the number of policies in-force has increased in auto and homeowners. The growth in policies in-force does not correspond directly with the growth...

Page 220
... Net increase in losses and 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 2007 to 2008 Source: HARTFORD FINANCIAL...

Page 221
133 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 222
... personal auto policies. Net favorable reserve development of $4 in 2007 included a $16 release of reserves for loss and allocated loss and loss adjustment expenses on Personal Lines auto liability claims for accident years 2002 to 2006. Operating expenses increased by $27 Amortization of deferred...

Page 223
Decrease in underwriting results from 2006 to 2007 134 $ (107) Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 224
... 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 225
... standard commercial insurance coverage to small commercial businesses, primarily throughout the United States, with up to $5 in annual payroll, $15 in annual revenues or $15 in total property values. This segment offers workers' compensation, property, automobile, liability and umbrella coverages...

Page 226
... to increase market share and increase business appetite in certain classes of risks may be contributing to the Company's lower new business growth. Also contributing to the decrease in new business premium is lower average premium per account partly due to writing more liability-only policies...

Page 227
... decreased by $8 Insurance operating costs and expenses decreased by $9, primarily due to lower compensation-related and servicing costs, partially offset by an estimated $7 of TWIA assessments in 2008. Amortization of deferred policy acquisition costs of $636 Source: HARTFORD FINANCIAL S, 10...

Page 228
was relatively flat consistent with the change in earned premium. The expense ratio decreased slightly in 2008, to 29.1, driven by the decrease in insurance operating costs and expenses. 138 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 229
...loss and loss adjustment expense ratio for workers' compensation claims. The higher loss and loss adjustment expense ratio on package business was primarily driven by an increase in the number of individual large losses and the higher loss and loss adjustment expense ratio for auto claims was driven...

Page 230
... due to underwriting profits. Despite a 3% increase in earned premium, amortization of deferred policy acquisition costs was relatively flat from 2006 to 2007 due largely to an increase in non-deferrable salaries and benefits and other internal operating costs. 139 Source: HARTFORD FINANCIAL S, 10...

Page 231
... standard commercial insurance coverage to middle market commercial businesses, primarily throughout the United States, with greater than $5 in annual payroll, $15 in annual revenues or $15 in total property values. This segment offers workers' compensation, property, automobile, liability, umbrella...

Page 232
... decreased in all lines of business, including property, commercial auto, general liability, workers' compensation and marine. Despite the decrease in earned premium, the number of policies in force has increased. The change in policies in force does not correspond directly with the change in earned...

Page 233
... expenses Decrease in operating expenses Increase in underwriting results from 2007 to 2008 Earned premium decreased by $121 Earned premiums for the Middle Market segment decreased by $121, or 5%, driven primarily by decreases in commercial auto, workers' compensation and general liability. Refer to...

Page 234
142 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 235
... 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, loss costs increased for both liability and property damage claims. Current accident year catastrophes decreased...

Page 236
partially offset by a $40 strengthening of workers' compensation reserves for accident years 1973 & prior and a $14 strengthening of general liability reserves for accident years more than 20 years old. 143 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 237
...adjustment expense reserves for workers' compensation business related to accident years 2003 to 2005. Operating expenses increased by $20 The 1.8 point increase in the expense ratio and the 0.4 point increase in the policyholder dividend ratio was primarily due to an increase in insurance operating...

Page 238
... and excess and surplus lines coverages not normally written by standard lines insurers. Specialty Commercial provides other insurance products and services primarily to captive insurance companies, pools and self-insurance groups. In addition, Specialty Commercial provides third-party administrator...

Page 239
... pricing increases, new business growth, lower reinsurance costs and a decrease in reinstatement premium payable to reinsurers. Renewal retention has decreased in 2007, primarily due to increased competition on national account business as well as in the standard excess and surplus lines market...

Page 240
...an increase in the mix of lower limit middle market professional liability premium, partially offset by the effect of earned pricing decreases and a decrease in new business written premium. A lower frequency of class action cases in the past couple of years has put downward pressure on rates during...

Page 241
... decrease in losses and loss adjustment expenses Operating expenses Decrease in amortization of deferred policy acquisition costs Increase in insurance operating costs and expenses Net decrease in operating expenses Increase in underwriting results from 2007 to 2008 Earned premium decreased by $64...

Page 242
... effect of an increase in net acquisition costs related to writing a greater mix of higher net commission small commercial and private directors' and officers' insurance. Insurance operating costs and expenses increased by $4, primarily due to an increase in IT costs. The expense ratio increased by...

Page 243
... and loss adjustment ratio on directors and officers insurance in professional liability and a decrease in non-catastrophe property loss costs on property business, partially offset by a higher loss and loss adjustment expense ratio on casualty business. Increase in net unfavorable prior accident...

Page 244
148 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 245
... in net realized capital losses, primarily due to realized losses in 2008 from impairments of subordinated fixed maturities and preferred equity securities in the financial services sector as well as of securitized assets. A $57 increase in income tax benefit, primarily as a result of a change from...

Page 246
149 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 247
... 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 248
... a three year net survival ratio of 6.7. Net survival ratio is the quotient of the net carried reserves divided by the average annual payment amount and is an indication of the number of years that the net carried reserve would last (i.e. survive) if the future annual claim payments were consistent...

Page 249
...reviewed all of its open direct domestic insurance accounts exposed to environmental liability as well as assumed reinsurance accounts and its London Market exposures for both direct insurance and assumed reinsurance. In all three years, the Company found estimates for individual cases changed based...

Page 250
... its open direct domestic insurance accounts exposed to asbestos liability as well as assumed reinsurance accounts and its London Market exposures for both direct insurance and assumed reinsurance. In the second quarter of 2008, the Company found estimates for individual cases changed based upon the...

Page 251
... the reserves necessary for asbestos claims related to direct insureds that have not previously tendered asbestos claims to the Company and exposures related to liability claims that may not be subject to an aggregate limit under the applicable policies. An account may move between categories from...

Page 252
... broad categories of claims or blocks of business) and "facultative" reinsurance (covering specific 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...

Page 253
... limited to a relatively small percentage of a total contract placement. Claims are reported, via a broker, to the "lead" underwriter and, once agreed to, are presented to the following markets for concurrence. This reporting and claim agreement process makes estimating liabilities for this business...

Page 254
...of uncertainties, which are detailed in the "Critical Accounting Estimates-Property & Casualty Reserves, Net of Reinsurance" section of Management's Discussion and Analysis of Financial Condition and Results of Operations. The Company believes that its current asbestos and environmental reserves are...

Page 255
154 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 256
..., 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 and Results of Operations...

Page 257
...long-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 258
... operating cash flows. The decline in value in equity securities, held for trading, was due to negative market performance of the underlying investment funds supporting the Japanese variable annuity product and policyholder transfers from the accumulation to the annuitization phase of the contract...

Page 259
... and a limited amount of direct equity investments. [4] Private equity and other funds primarily consist of investments in funds whose assets typically consist of a diversified pool of investments in small non-public businesses with high growth potential. 157 Source: HARTFORD FINANCIAL S, 10...

Page 260
... asset base and a higher total portfolio yield. The increase in the average invested assets base as compared to the prior year period was primarily due to positive operating cash flows, investment contract sales such as retail and institutional notes, and universal life-type product sales. Limited...

Page 261
to a change in the value of the underlying investment funds supporting the Japanese variable annuity product due to market performance. 158 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 262
...Life's net realized capital gains and losses results. (Before-tax) Gross gains on sale Gross losses on sale Impairments Japanese fixed annuity contract hedges, net [1] Periodic net coupon settlements on credit derivatives/Japan SFAS 157 transition impact [2] Results of variable annuity hedge program...

Page 263
... from the change in value of non-qualifying derivatives due to fluctuations in interest rates and foreign currency exchange rates. These losses were partially offset by a before-tax benefit of $25 received from the WorldCom security settlement. 159 â€¢ Source: HARTFORD FINANCIAL S, 10-K, February...

Page 264
... 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 Japan and the United...

Page 265
... pool of investments in small non-public businesses with high growth potential. Investment Results The following table below summarizes Property & Casualty's net investment income. (Before-tax) Fixed maturities [2] Equity securities, available-for-sale Mortgage loans Limited partnerships and...

Page 266
... period. The increase in net investment income was primarily due to a higher average invested asset base and a higher portfolio yield. The increase in the average invested asset base as compared to the prior year period, was primarily due to positive operating cash flows. Limited partnerships and...

Page 267
... operations of the Company and to maintain sufficient funds to support the cost of those financing activities including the payment of interest for The Hartford Financial Services Group, Inc. ("HFSG") issued debt and dividends to shareholders of The Hartford's common stock. As of December 31, 2008...

Page 268
... of 102% of the market value of the loaned securities and can return the securities to the Company for cash at varying maturity dates. As of December 31, 2008, the Company loaned securities with a fair value of $2.9 billion and had received collateral against the loaned securities in the amount of...

Page 269
... investment management and administrative services for a fee and holding ownership or other interests as an investor. The Company also has involvement with VIEs as a means of accessing capital. VIEs may or may not be consolidated on the Company's consolidated financial statements. When the Company...

Page 270
163 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 271
... statements of operations. For fixed maturities, the Company accretes the new cost basis to par or to the estimated future value over the expected remaining life of the security by adjusting the security's yield. For further discussion regarding the Company's other-than-temporary impairment policy...

Page 272
164 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 273
... terms. The remaining impairments of $581 were primarily recorded on securities in various sectors, primarily high yield non-financial services corporate securities that experienced significant credit spread widening and for which the Company was uncertain of its intent to retain the investments...

Page 274
165 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 275
..., and total return swaps. Credit default swaps involve a transfer of credit risk of one or many referenced entities from one party to another in exchange for periodic payments. The party that purchases credit protection will make periodic payments based on an agreed Source: HARTFORD FINANCIAL S, 10...

Page 276
...and total return swaps involve the periodic exchange of payments with other parties, at specified intervals, calculated using the agreed upon index and notional principal amounts. Generally, no cash or principal payments are exchanged at the inception of the contract. 166 Source: HARTFORD FINANCIAL...

Page 277
... and financial services sector securities. The movement in both government rated and BB & below securities is attributable to efforts to reallocate the portfolio to higher quality, risk adverse assets through purchases of U.S. Treasuries and sales of high yield securities. Source: HARTFORD FINANCIAL...

Page 278
167 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 279
...comm. Transportation Utilities Other [7] Gov./Gov. agencies Foreign United States MBS Municipal Taxable Tax-exempt Red. preferred stock Fixed maturities $ Equity securities, available-for-sale Financial Services Other Total securities, available-for-sale [8] $ 545 $ 2,865 942 2,532 764 1,215 433 11...

Page 280
respectively, as of December 31, 2008 and $1,985, $781, and $6, respectively, as of December 31, 2007. 168 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 281
... indicative of the pricing of individual securities as rating downgrades and impairments have occurred. The following table represents the Company's exposure to the financial services sector included in the corporate and equity securities, available-for-sale lines in the Consolidated Available-for...

Page 282
... of the pricing of individual securities as rating downgrades and impairments have occurred. Credit protection represents the current weighted average percentage, excluding wrapped securities, of the outstanding capital structure subordinated to the Company's investment holding that is available...

Page 283
...growth and declining property values. The following tables represent the Company's exposure to CMBS bonds, commercial real estate CDOs, and IOs by current credit quality and vintage year. A comparison of fair value to amortized cost is not indicative of the pricing of individual securities as rating...

Page 284
.... In addition to commercial mortgage backed securities, the Company has whole loan commercial real estate investments. The carrying value of mortgage loans on real estate was $6.5 billion and $5.4 billion as of December 31, 2008 and 2007, respectively. The Company's mortgage loans are collateralized...

Page 285
[1] Includes multi-regional properties. 172 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 286
... 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. Rating agency downgrades of bond insurers have not had a significant impact on the fair value of the Company...

Page 287
... prime mortgage-backed securities and other consumer loan receivables discussed above, as well as, corporate securities. The Company also has direct investments in monoline insurers with a fair value of approximately $48 as of December 31, 2008. 173 Source: HARTFORD FINANCIAL S, 10-K, February 12...

Page 288
...Company's unrealized loss aging for available-for-sale securities by length of time the security was in a continuous greater than 20% unrealized loss position. Securitized Assets Depressed over 20% December 31, 2008 Cost or Amortized Fair Cost Value...: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 289
Total 2,328 $ 27,465 $ 15,582 $ (11,883) 281 $ 2,158 $ 1,465 $ (693) 174 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 290
... the Company's unrealized loss aging for available-for-sale securities (included in the tables above) by length of time the security was in a continuous greater than 50% unrealized loss position. Securitized Assets Depressed over 50% (included in the depressed over 20% table above) December 31, 2008...

Page 291
... losses, return of liquidity and changes in general market conditions, including interest rates and credit spread movements. As part of the Company's ongoing security monitoring process by a committee of investment and accounting professionals, the Company has reviewed its investment portfolio and...

Page 292
... a favorable 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...

Page 293
liquidate assets in an unrealized loss position. In conjunction with the interest rate risk measurement and management techniques, certain of Life's fixed income product offerings have market value adjustment provisions at contract surrender. 177 Source: HARTFORD FINANCIAL S, 10-K, February 12, ...

Page 294
... invested assets. The Company's primary exposure to equity risk relates to the potential for lower earnings associated with certain of the Life's businesses such as variable annuities where fee income is earned based upon the fair value of the assets under management. During 2008, Life's fee income...

Page 295
..., the investment in and net income of the Japanese Life and U.K. Life operations, and non-U.S. dollar denominated liability contracts, including its GMDB, GMAB, GMWB, and GMIB benefits associated with its Japanese and U.K. variable annuities, and a yen denominated individual fixed annuity product...

Page 296
... liability contracts, the investment in and net income of the Japanese and U.K. Life operations and certain foreign currency based individual fixed annuity contracts, and its GMDB, GMAB, GMWB, and GMIB benefits associated with its Japanese and U.K. variable annuities. Interest Rate Risk Life...

Page 297
179 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 298
... 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 299
value below assumes a 100 basis point upward and downward parallel shift in the yield curve. Change in Net Economic Value As of December 31, 2008 2007 - 100 + 100 - 100 + 100 (173) $ 114 $ (160) $ 60 180 Basis point shift Amount $ Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 300
...in equity markets impacts certain assets and liabilities related to the Company's variable products and the Company's earnings derived from those products. The Company's variable products include variable annuities, mutual funds, and variable life insurance sold to retail and institutional customers...

Page 301
charge of $932. â€¢ increase costs under the Company's hedging program. 181 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 302
... receive an annuity equal to the remaining GRB and, for the Company's "life-time" GMWB products, the annuity can continue beyond the GRB. As the amount of the excess of the GRB over the account value can fluctuate with equity market returns on a daily basis, and the ultimate life-time GMWB payments...

Page 303
...irrespective of the accounting model. The same would hold true if the Company's GMIB product currently offered in Japan were to be offered in the U.S. Capital market conditions in the U.S. would have a significant impact on the valuation of the GMIB. 182 Source: HARTFORD FINANCIAL S, 10-K, February...

Page 304
... and macro hedging programs. In consideration of current market conditions, the Company's risk management program for the variable annuity market will include redesigned product features which serve to lessen the financial risk of the product guarantees and increased rider fees charged for the...

Page 305
183 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 306
... investments, Life's investment in foreign operations, primarily in Japan and the U.K., and non-U.S. dollar denominated liability contracts, including the yen based individual fixed annuity product and its GMDB, GMAB, GMWB, and GMIB benefits associated with its Japanese and U.K. variable annuities...

Page 307
... fixed annuity contract remeasurement, was recorded in net realized capital gains and losses. Based on the fair 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, 2008 and 2007, management...

Page 308
...changes in foreign exchange rates. The fair value of these fixed maturity securities at December 31, 2008 and 2007 was $864 and $972, respectively. In order to manage its currency exposures, Property & Casualty enters into foreign currency swaps and forward contracts to hedge the variability in cash...

Page 309
... investment income, 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 holds a significant short-term investment...

Page 310
... stock, common stock, depositary shares, warrants, stock purchase contracts, stock purchase units and junior subordinated deferrable interest debentures of the Company, and (ii) preferred securities of any of one or more capital trusts organized by The Hartford ("The Hartford Trusts"). The Company...

Page 311
... investments in limited partnerships, mortgage and construction loans of about $1.1 billion as disclosed in Note 12 of Notes to Consolidated Financial Statements. Warrants issued to Allianz to purchase 34,806,452 shares of the Company's common stock, classified at issuance in equity at a fair value...

Page 312
... and loss adjustment expenses in cases where the payment pattern and ultimate loss costs are fixed and determinable on an individual claim basis. For the Company, these include claim settlements with permanently disabled claimants. As of December 31, 2008, the total property and casualty reserves...

Page 313
..., the return of the collateral has been included in the payments due in less than 1 year. Also included in other long term liabilities is $91 of net unrecognized tax benefits related to Financial Accounting Standards Board Interpretation No 48, "Accounting for Uncertainty in Income Taxes" ("FIN...

Page 314
... in making voluntary contributions to the U. S. qualified defined benefit pension plan, the Employee Retirement Income Security Act of 1974, as amended by the Pension Protection Act of 2006 and further amended by the Worker, Retiree, and Employer Recovery Act of 2008, and Internal Revenue Code...

Page 315
... a form of net cash settlement outside the Company's control, the Warrants to purchase the Series C Preferred Stock and the stockholder approval payment were recorded as a derivative liability at a relative fair value of $273 at issuance. As of December 31, 2008, the Warrants to purchase the Series...

Page 316
...-dealers directly to retail investors as medium-term, publicly traded fixed or floating rate, or a combination of fixed and floating rate, notes. Consumer notes are part of the Company's spread-based business and proceeds are used to purchase investment products, primarily fixed rate bonds. Proceeds...

Page 317
193 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 318
... of premium cash flows in excess of claim payments, partially offset by increases in taxes paid. Net purchases of available-for-sale securities accounted for the majority of cash used for investing activities. Cash from financing activities decreased primarily due to treasury stock acquired and...

Page 319
194 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 320
...and Annuity Insurance Company Hartford Life Insurance KK (Japan) Hartford Life Limited (Ireland) Other Ratings: The Hartford Financial Services Group, Inc.: Senior debt Commercial paper Junior subordinated debentures Hartford Life, Inc.: Senior debt Hartford Life Insurance Company: Short term rating...

Page 321
...STAT only records certain securities at fair value, such as equity securities and certain lower rated bonds required by the NAIC to be recorded at the lower of amortized cost or fair value. In the case of the Company's market value adjusted (MVA) fixed annuity products, invested assets are marked to...

Page 322
... is limited. In addition, certain assets, including a portion of premiums receivable and fixed assets, are non-admitted (recorded at zero value and charged against surplus) under US STAT. U.S. GAAP generally evaluates assets based on their recoverability. 196 Source: HARTFORD FINANCIAL S, 10...

Page 323
...number of factors and market conditions, including the level of hedging costs and other risk transfer activities, reserve requirements for death and living benefit guarantees and RBC requirements could increase resulting in lower RBC ratios. As the value of certain fixed-income and equity securities...

Page 324
pricing and expense management. 197 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 325
...the United States Treasury Department could have a material effect 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...

Page 326
198 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 327
... the Company's disclosure controls and procedures are effective for the purposes set forth in the definition thereof in Exchange Act Rule 13a-15(e) as of December 31, 2008. Management's annual report on internal control over financial reporting The management of The Hartford Financial Services Group...

Page 328
... statement schedules and included an explanatory paragraph regarding the Company's change in its method of accounting and reporting for the fair value measurement of financial instruments in 2008, and defined benefit pension and other postretirement plans in 2006. DELOITTE & TOUCHE LLP Hartford...

Page 329
...the position of Vice President, Deputy Controller, with responsibility for external financial reporting, accounting policy and internal management reporting, while continuing to oversee Sarbanes-Oxley Section 404 compliance. Prior to joining the Company, Ms. Bombara worked for the accounting firm of...

Page 330
...as Chief Operating Officer of The Hartford's life operations. Mr. Walters joined Hartford Life in April 2000 from First Union Securities, the brokerage subsidiary of First Union Corp. In that position, he managed their consulting services group, which provided investment consulting to high net worth...

Page 331
... held since May 1, 2008. Ms. Zlatkus joined the Company in 1983 and has held positions of increasing responsibility in finance, risk management and business operations. In 1996, she became director of The Hartford's disability and group life business and was elected senior vice president in 1997. In...

Page 332
... 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 333
... 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. 203 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 334
..."Governance of the Company" and is incorporated herein by reference. Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information called for by Item 14 will be set forth in the Proxy Statement under the caption "Audit Committee Charter and Report Concerning Financial Matters - Fees to Independent...

Page 335
... of Contents 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, 2008, 2007 and 2006 Consolidated Balance Sheets - As of...

Page 336
... consolidated balance sheets of The Hartford Financial Services Group, Inc. and its subsidiaries (collectively, the "Company") as of December 31, 2008 and 2007, and the related consolidated statements of operations, changes in stockholders' equity, comprehensive income (loss), and cash flows...

Page 337
... THE HARTFORD FINANCIAL SERVICES GROUP, INC. Consolidated Statements of Operations (In millions, except for per share data) Revenues Earned premiums Fee income Net investment income (loss) Securities available-for-sale and other Equity securities held for trading Total net investment income (loss...

Page 338
...-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 assets Total assets Liabilities...

Page 339
... unit 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...

Page 340
Change in net gain/loss on cash-flow hedging instruments Change in foreign currency translation adjustments Changes in pension and other postretirement plan adjustments Total other comprehensive income (loss) Total comprehensive income (loss) 784 196 (515) (6,662) (9,411) 94 146 141 (1,036) 1,913...

Page 341
...(payments) Change in all other 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...

Page 342
... plans, net Excess tax benefits on stock-based compensation Treasury stock acquired Return of shares under incentive and stock compensation plans to treasury stock Dividends paid Net cash provided by financing activities Foreign exchange rate effect on cash Net increase (decrease) in cash Cash...

Page 343
... 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 States...

Page 344
... THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 1. Basis of Presentation and Accounting Policies (continued) FSP FAS 140-4 and FIN 46(R)-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable...

Page 345
... or Disposal of Long-Lived Assets." As a result of the issuance of FSP FAS 157-2, the Company did not apply the provisions of SFAS 157 to the nonfinancial assets, nonfinancial liabilities and reporting units within the scope of FSP FAS 157-2. F-8 Source: HARTFORD FINANCIAL S, 10-K, February 12...

Page 346
Table of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 1. Basis of Presentation and Accounting Policies (continued) Fair Value Option for Financial Assets and Financial Liabilities In February 2007, the FASB issued SFAS No. 159, "The ...

Page 347
... 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 increase of $94 in the accumulated other comprehensive income component of equity. Accounting by Insurance...

Page 348
...of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 1. Basis of Presentation and Accounting Policies (continued) Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities In June 2008, the FASB...

Page 349
... but does not require, comparative disclosures. The Company adopted SFAS 161 on January 1, 2009. The adoption of this FSP by the Company is expected to result in expanded disclosures related to derivative instruments and hedging activities. F-11 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 350
... date shall not be adjusted upon adoption of SFAS 141(R) with certain exceptions for acquired deferred tax assets and acquired income tax positions. The adoption of SFAS 141(R) on January 1, 2009, did not have a material effect on the Company's consolidated financial statements. Noncontrolling...

Page 351
... FINANCIAL STATEMENTS (continued) 1. Basis of Presentation and Accounting Policies (continued) Accounting Policies Investments The Hartford's investments in fixed maturities include bonds, redeemable preferred stock and commercial paper. These investments, along with certain equity securities...

Page 352
... of the underlying collateral. In addition, projections of expected future cash flows may change based upon new information regarding the performance of the underlying collateral. Beginning in the fourth quarter of 2008, the Company implemented FSP No. EITF 99-20-1, "Amendments to the Impairment...

Page 353
... 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 and the United Kingdom. The returns on...

Page 354
F-14 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 355
...be received or paid related to a recognized asset or liability ("cash-flow" hedge), (3) a foreign-currency fair-value or cash-flow hedge ("foreign-currency" hedge), (4) a hedge of a net investment in a foreign operation ("net investment" hedge) or (5) held for other investment and/or risk management...

Page 356
... sheets, is carried at fair value with changes in fair value reported in net realized capital gains and losses. Credit Risk The Company's derivative counterparty exposure policy establishes market-based credit limits, favors long-term financial stability and creditworthiness and typically requires...

Page 357
reviewed by senior management. In addition, the compliance unit monitors counterparty credit exposure on a monthly basis to ensure compliance with Company policies and statutory limitations. The Company also maintains a policy of requiring that derivative contracts, other than exchange traded ...

Page 358
... THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 1. Basis of Presentation and Accounting Policies (continued) Product Derivatives The Company offers certain variable annuity products with a guaranteed minimum withdrawal and accumulation benefit...

Page 359
hedging costs. The assumptions are developed as part of an annual process and are dependent upon the Company's current best estimates of future events. The Company's current 20 year separate account return assumption is approximately 7.2% (after fund fees, but before mortality and expense charges) ...

Page 360
... rates, mortality and expenses, based on the Company's most recent assumption study. These scenarios are run for the Company's individual variable annuity businesses in the United States and Japan, the Company's Retirement Plans businesses, and for the Company's individual variable universal life...

Page 361
... rate spreads, hedging costs, and separate account returns, in substantially all product lines. The new best estimate assumptions were applied to the current policy related in-force or account values to project future gross profits. The after-tax impact on the Company's assets and liabilities...

Page 362
... lapses reflect that lapse behavior will be different depending upon market movements. The impact of this assumption change along with other base lapse rate changes was an approximate benefit of $40, after-tax, for U.S. variable annuities. F-19 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 363
... Expenses Life - Liabilities for the Company's group life and disability contracts as well its individual term life insurance policies include amounts for unpaid losses and future policy benefits. Liabilities for unpaid losses include estimates of amounts to fully settle known reported claims as...

Page 364
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 365
... totaling $945 as of December 31, 2008 and $962 as of December 31, 2007. Other Policyholder Funds and Benefits Payable The Company has classified its fixed and variable annuities, 401(k), certain governmental annuities, private placement life insurance ("PPLI"), variable universal life insurance...

Page 366
... at the exchange rates in effect at each year end and income statement accounts are translated at the average rates of exchange prevailing during the year. The national currencies of the international operations are generally their functional currencies. F-21 Source: HARTFORD FINANCIAL S, 10...

Page 367
... net income from participating life insurance contracts that may be distributed to stockholders, the policyholder's 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...

Page 368
... performed in purchase accounting. If the carrying amount of the reporting unit goodwill exceeds the implied goodwill value, an impairment loss shall be recognized in an amount equal to that excess. Pension Plans and Postretirement Health Care and Life Insurance Benefit Plans The Company maintains...

Page 369
... for the stock compensation plans include option 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...

Page 370
... period. The proceeds from exercise of $25.32 per share shall be assumed to be used to purchase common shares at the average market price during the period. Since the average market price of the common stock during the year ended December 31, 2008 exceeded the exercise price of the warrants of $25...

Page 371
... each make up their own group. Retail offers individual variable and fixed market value adjusted ("MVA") annuities, retail mutual funds, 529 college savings plans, Canadian and offshore investment products. Individual Life sells a variety of life insurance products, including variable universal life...

Page 372
F-25 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 373
... workers' compensation, property, automobile, liability, umbrella, marine and livestock 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...

Page 374
... earned less incurred losses, loss adjustment expenses and underwriting expenses. The sum of underwriting results, net investment income, net realized capital gains and losses, other expenses, and related income taxes is net income (loss). F-26 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 375
...Product Line Life Earned premiums, fees, and other considerations Retail Individual annuity: Individual variable annuity Fixed / MVA Annuity Retail mutual funds Other Total Retail Individual Life Total Individual Life Total Individual Markets Group Retirement Plans 401(k) 403(b)/457 Total Retirement...

Page 376
... Information (continued) Revenues by Product Line (continued) Property & Casualty Ongoing Operations Earned premiums Personal Lines Automobile Homeowners Total Personal Lines Small Commercial Workers' Compensation Package Business Automobile Total Small Commercial Middle Market Workers' Compensation...

Page 377
... Retirement Plans Group Benefits Total Employer Markets Group International Institutional Other Total Life Property & Casualty Ongoing Operations Underwriting Results Personal Lines Small Commercial Middle Market Specialty Commercial Total Ongoing Operations underwriting results Net servicing income...

Page 378
Total amortization of deferred policy acquisition costs and present value of future profits F-29 $ 4,271 $ 2,989 $ 3,558 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 379
...FINANCIAL STATEMENTS (continued) 3. Segment Information (continued) Income tax expense (benefit) Life Retail Individual Life Total Individual Markets Group Retirement Plans Group Benefits Total Employer Markets Group International Institutional Other Total Life Property & Casualty Ongoing Operations...

Page 380
...the Company's consolidated financial statements: fixed maturities, equity securities, short-term investments, freestanding and embedded derivatives, and separate account assets. These fair value disclosures include information regarding the valuation of the Company's guaranteed benefits products and...

Page 381
...over the account value can fluctuate with equity market returns on a daily basis and the ultimate lifetime GMWB payments can exceed the GRB, the ultimate amount to be paid by the Company, if any, is uncertain and could be significantly more or less than $7.7 billion. F-31 Source: HARTFORD FINANCIAL...

Page 382
... of market risk margins was not obtainable, the present value of expected future cash flows under a risk neutral framework, discounted at the risk free rate of interest, was the best available estimate of fair value in the circumstances ("Pre-SFAS 157 Fair Value"). F-32 Source: HARTFORD FINANCIAL...

Page 383
... HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 4. Fair Value Measurements (continued) The Pre-SFAS 157 Fair Value was calculated based on actuarial and capital market assumptions related to projected cash flows, including benefits and related contract...

Page 384
... adverse policyholder behavior assumptions and the best estimate assumptions used in the Pre-SFAS 157 model using interest rate and volatility assumptions that the Company believes market participants would use in developing risk margins. F-33 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 385
... of DAC amortization and income taxes. Moreover, the adoption of SFAS 157 has resulted in lower variable annuity fee income for new business issued in 2008 as Attributed Fees have increased consistent with incorporating additional risk margins and other indicia of "exit value" in the valuation of...

Page 386
...quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. Level 1 securities include highly liquid U.S. Treasury securities, money market funds, certain mortgage backed securities, and exchange traded equity and derivative...

Page 387
...these assets and liabilities, considerable judgment is used to determine the SFAS 157 Level 3 fair values. Level 3 fair values represent the Company's best estimate of an amount that could be realized in a current market exchange absent actual market exchanges. F-35 Source: HARTFORD FINANCIAL S, 10...

Page 388
... THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 4. Fair Value Measurements (continued) The following table presents the Company's assets and liabilities that are carried at fair value, by SFAS 157 hierarchy level, as of December 31, 2008: Quoted...

Page 389
... billion of investment sales receivable net of investment purchases payable that are not subject to SFAS 157. In many situations, inputs used to measure the fair value of an asset or liability position may fall into different levels of the fair value hierarchy. In these situations, the Company will...

Page 390
.... The Company determines the fair values of certain financial assets and financial liabilities based on quoted market prices, where available. The Company also determines fair value based on future cash flows discounted at the appropriate current market rate. Fair values reflect adjustments for...

Page 391
... debt, are also classified as Level 3. The matrix pricing of certain private placement debt includes significant non-observable inputs, the internally determined credit rating of the security and an externally provided credit spread. F-37 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 392
...broker-priced public securities and private placement securities qualified for sale under rule 144A, and long dated fixed maturities where the term of significant inputs may not be sufficient to be deemed observable. CMBS primarily represents CMBS bonds and commercial real estate collateralized debt...

Page 393
... are customized equity swaps that partially hedge the U.S. GMWB liabilities. Additional information on the customized transactions is provided under the "Accounting for Guaranteed Benefits Offered With Variable Annuities" section of this Note 4. These derivative instruments are valued using...

Page 394
Table of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 4. Fair Value Measurements (continued) The Company utilizes derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative ...

Page 395
...January 1, 2008 to December 31, 2008 Changes in unrealized gains (losses) included in net income (loss) related to financial instruments still held at December 31, 2008 [3] (811) (67) Assets Fixed maturities $ Equity securities, available-for-sale Freestanding derivatives [4] Customized derivatives...

Page 396
... columns are reported in net realized capital gains/losses except for $6 for the twelve months ending December 31, 2008, which is reported in benefits, losses and loss adjustment expenses. All amounts are before income taxes and amortization of DAC. F-40 Source: HARTFORD FINANCIAL S, 10-K, February...

Page 397
...separate account liabilities, which results in a net zero impact on net income for the Company. [7] Transfers in and/or (out) of Level 3 during the twelve months ended December 31, 2008 are attributable to a change in the availability of market observable information for individual securities within...

Page 398
F-41 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 399
... payout in Japan's 3Win product. [5] The increase in notional amount of the macro hedge program is primarily due to the rebalancing of the Company's risk management program to place a greater relative emphasis on protection of statutory surplus. The decrease in the net fair value of the derivative...

Page 400
... by estimating future cash flows, discounted at the current market rate. Carrying amounts approximate fair value for commercial paper. Fair value for long-term debt is based on market quotations from independent third party pricing services. F-43 â€¢ â€¢ â€¢ Source: HARTFORD FINANCIAL S, 10...

Page 401
...-sale Equity securities, held for trading Mortgage loans Policy loans Limited partnerships and other alternative investments Other investments Gross investment income Less: Investment expenses Net investment income Components of Net Realized Capital Gains (Losses) Fixed maturities Equity securities...

Page 402
Table of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 5. Investments and Derivative Instruments (continued) Components of Available-for-Sale Securities Cost or Amortized Cost $ 8,863 433 14,303 849 413 31,059 2,786 5,883 2,243 11,406 - ...

Page 403
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 404
...sector, as of December 31, 2007 were commercial mortgage and real estate, state municipalities and political subdivisions, and financial services which comprised approximately 18%, 10%, and 10%, respectively, of total invested assets. The Company's investments in states, municipalities and political...

Page 405
... THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 5. Investments and Derivative Instruments (continued) The following tables present the Company's unrealized loss aging for total fixed maturity and equity securities classified as available-for-sale...

Page 406
... corporate bonds, as well as, preferred equity issued by large high quality financial institutions that are lower in the capital structure and, as a result have incurred greater price depressions. Based upon the Company's analysis of these securities and current macroeconomic conditions, the Company...

Page 407
... of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 5. Investments and Derivative Instruments (continued) Mortgage Loans The carrying value of mortgage loans on real estate was $6.5 billion and $5.4 billion as of December 31, 2008 and 2007...

Page 408
... investment management and administrative services for a fee and holding ownership or other interests as an investor. The Company also has involvement with VIEs as a means of accessing capital. VIEs may or may not be consolidated on the Company's consolidated financial statements. When the Company...

Page 409
... 2007. Consolidated assets and liabilities are classified in fixed maturities and other liabilities, respectively. At December 31, 2007, other investments included three investment trusts, two of which have liquidated and the third remains at December 31, 2008. F-50 Source: HARTFORD FINANCIAL S, 10...

Page 410
... a market value to a cash flow CLO. At December 31, 2008 and 2007, CDOs consist of two VIEs that are financed by issuing debt having no voting rights to investors. The Company has variable interests in each CDO by virtue of its investment in that debt and fees received as the collateral manager. The...

Page 411
...rate risk or volatility; to manage liquidity; to control transaction costs; or to enter into replication transactions. On the date the derivative contract is entered into, the Company designates the derivative as a fair-value hedge, a cash-flow hedge, a foreign-currency hedge, a net investment hedge...

Page 412
... pay or receive amounts are calculated and are not reflective of credit risk. The fair value amounts of derivative assets and liabilities are presented on a net basis as of December 31, 2008 and 2007. The total ineffectiveness of all cash-flow, fair-value and net investment hedges and total change...

Page 413
currency rates. Total cash-flow hedges Fair-Value Hedges Interest rate swaps Interest rate swaps are used to hedge the changes in fair value of certain fixed rate liabilities and fixed maturity securities due to changes in the benchmark interest rate, LIBOR. Foreign currency swaps Foreign currency ...

Page 414
... CONSOLIDATED FINANCIAL STATEMENTS (continued) 5. Investments and Derivative Instruments (continued) Hedging Strategy Non-qualifying Strategies Interest rate swaps, caps, floors, and forwards The Company uses interest rate swaps, caps and floors to manage duration risk between assets and liabilities...

Page 415
... the credit index swaps is the notional value and for the total return swaps is the cash collateral associated with the transaction, which has termination triggers that limit investment losses. The Company had no exposure to such contracts at December 31, 2008. As of December 31, 2007, the maximum...

Page 416
...liability is adjusted for changes in spot rates which was $450 and $(102), before-tax, as of December 31, 2008 and 2007, respectively, and offsets the derivative change in value. Guaranteed Minimum Accumulation Benefit ("GMAB") product derivatives The Company offers certain variable annuity products...

Page 417
... of its risk exposure to the GMWB for the remaining lives of covered variable annuity contracts. Reinsurance contracts covering GMWB are accounted for as free-standing derivatives. The notional amount of the reinsurance contracts is the GRB amount. GMWB hedging instruments The Company enters into...

Page 418
...-19 that the warrants and the separate cash payment be accounted for as a derivative liability at December 31, 2008. Total non-qualifying strategies Total derivatives [1] Notional Amount 2008 2007 2008 Fair Value 2007 Derivative Change in Value, Before-tax 2008 2007 $ 256 $ 154 $ (16) $ (22...

Page 419
Change in Notional Amount The notional amount of derivatives in cash-flow hedge relationships increased $3.6 billion since December 31, 2007, primarily due to an increase in interest rate swaps used to convert interest receipts on floating-rate securities to fixed rates. The Company increased the ...

Page 420
... is based on the anticipated interest 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...

Page 421
... rate structured security. For the years ended December 31, 2007 and 2006, the Company had no net reclassifications from AOCI to earnings resulting from the discontinuance of cash-flow hedges due to forecasted transactions that were no longer probable of occurring. F-57 Source: HARTFORD FINANCIAL...

Page 422
.... The Company will receive periodic payments based on an agreed upon rate and notional amount and will only make a payment if there is a credit event. A credit event payment will typically be equal to the notional value of the swap contract less the value of the referenced security issuer...

Page 423
...term investments in the consolidated balance sheets. As of December 31, 2008, the Company had received collateral against the loaned securities in the amount of $3.0 billion. The Company earns income from the cash collateral or receives a fee from the borrower. The Company recorded before-tax income...

Page 424
F-59 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 425
... benefits, offered in connection with its variable annuity contracts. Property and Casualty In managing risk, The Hartford utilizes reinsurance to transfer risk to well-established and financially secure reinsurers. Reinsurance is used to manage aggregations of risk as well as specific risks based...

Page 426
... of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 6. Reinsurance (continued) The Company has several catastrophe reinsurance programs, including reinsurance treaties that cover property and workers' compensation losses aggregating from...

Page 427
...Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 7. Deferred Policy Acquisition Costs and Present Value of Future Profits Life Changes in deferred policy acquisition costs and present value of future profits are as follows: Balance, January...

Page 428
... FINANCIAL STATEMENTS (continued) 8. Goodwill and Other Intangible Assets The carrying amount of goodwill allocated to reporting segments as of December 31 is shown below. Life Retail Individual Life Retirement Plans Total Life Property & Casualty Personal Lines Specialty Commercial Total Property...

Page 429
Table of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 8. Goodwill and Other Intangible Assets (continued) The following is detail of the net acquired intangible asset activity for the years ended December 31, 2008, 2007 and 2006, ...

Page 430
...separate account assets, which accrue directly to, and whereby investment risk is borne by the policyholder, are offset by the related liability changes within the same line item in the consolidated statements of operations. The fees earned for administrative and contract holder maintenance services...

Page 431
... and GMIB 1000 stochastically generated investment performance scenarios. Separate account returns, representing the Company's long-term assumptions, varied by asset class with a low of 3% for Japan bonds, a high of 9% for foreign equities and a weighted average of 6%. Volatilities also varied by...

Page 432
... generally increase See Note 1 for a description of the Company's guaranteed living benefits that are accounted for at fair value. 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...

Page 433
... of accounting change, pre-tax (SOP 05-1) Balance, January 1, as adjusted Sales inducements deferred Amortization charged to income Amortization - Unlock Balance, end of period, December 31 F-67 $ 2008 467 - 467 151 (21) (44) 553 $ 2007 404 (1) 403 115 (37) (14) 467 $ $ Source: HARTFORD FINANCIAL...

Page 434
... environmental claims, see Note 12. Life The following table displays the development of the loss reserves (included in reserve for future policy benefits and unpaid losses and loss adjustment expenses in the Consolidated Balance Sheets) resulting primarily from group disability products. 2008 $ For...

Page 435
... of management, based upon the known facts and current law, the reserves recorded for The Hartford's property and casualty businesses at December 31, 2008 represent the Company's best estimate of its ultimate liability for losses and loss adjustment expenses related to losses covered by policies...

Page 436
... kinds of insurance 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...

Page 437
prejudice, and has closed both cases. The plaintiffs have appealed the dismissal of the claims in both consolidated amended complaints, except the ERISA claims. F-70 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 438
... to disclose to the Plan's participants information about the Company's financial condition. These lawsuits seek restitution or damages for losses arising from the investment of the Plan's assets in the Company's common stock during the alleged class periods. The cases have been consolidated. The...

Page 439
... 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 440
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 441
... sale of fixed and individual annuities 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...

Page 442
... based on, but not limited to, changes in eligible dividends received by the mutual funds, amounts of distributions from these mutual funds, amounts of short-term capital gains and asset values at the mutual fund level and the Company's taxable income before the DRD. Given recent financial markets...

Page 443
F-74 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 444
... Employee benefits Net unrealized losses on investments Minimum tax credit Capital loss carryover 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...

Page 445
... allowance has been recognized for realized or unrealized loss amounts, as the Company either has available tax-planning strategies that are prudent and feasible, or has the ability and intent to hold securities until their recovery. F-75 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 446
...'s net income or financial position. The Company does not anticipate that any of these items will result in a significant change in the balance of unrecognized tax benefits within 12 months. The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes...

Page 447
Table of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 14. Debt The Hartford's long-term debt securities are issued by either The Hartford Financial Services Group, Inc. ("HFSG") or HLI and are unsecured obligations of HFSG or HLI and ...

Page 448
... debentures (the "debentures") due June 15, 2068 for net proceeds of approximately $493, after deducting underwriting discounts and expenses from the offering. The debentures bear interest at an annual fixed rate of 8.125% from the date of issuance to, but excluding, June 15, 2018, payable...

Page 449
2013 Thereafter F-78 320 5,400 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 450
... THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 14. Debt (continued) Capital Lease Obligations The Company recorded capital leases of $92 and $128 in 2008 and 2007, respectively. Capital lease obligations are included in long-term debt, except...

Page 451
covenants. F-79 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 452
...-dealers directly to retail investors as medium-term, publicly traded fixed or floating rate, or a combination of fixed and floating rate, notes. Consumer notes are part of the Company's spread-based business and proceeds are used to purchase investment products, primarily fixed rate bonds. Proceeds...

Page 453
...a price of fifty dollars per unit and received net proceeds of $319. Each equity unit initially consisted of one purchase contract for a certain number of shares of the Company's stock on November 16, 2006 and fifty dollars principal amount of senior notes due November 16, 2008. The senior notes had...

Page 454
... financial 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...

Page 455
...'s life insurance subsidiaries will be permitted to pay dividends up to this amount to HLI in 2009 without prior approval from the applicable insurance commissioner. In 2008, HFSG and HLI received a combined total of $2.8 billion from their insurance subsidiaries. F-82 Source: HARTFORD FINANCIAL...

Page 456
... Income (Loss) For the year ended December 31, 2008 Balance, beginning of year Unrealized loss on securities [1] [2] Net gain on cash-flow hedging instruments [1] [3] Change in foreign currency translation adjustments [1] Change in pension and other postretirement plan adjustment [1] Balance...

Page 457
adjustments [1] Change in pension and other postretirement plan adjustment [1] Balance, end of year $ - 1,058 $ - (234) $ - (120) $ 94 (526) $ 94 178 [1] Unrealized gain/loss on securities is net of tax and Life deferred acquisition costs of $(3,366), $(718), and $137 for the years ended ...

Page 458
...Company also applies long-term 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 these analyses, management...

Page 459
Table of Contents 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) Assumed health care cost trend rates were as follows: 2008 As of December 31, 2007 N/A ...

Page 460
Table of Contents 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...

Page 461
...other postretirement plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2009 is $0, as the level of actuarial net losses does not exceed the allowable amortization corridor as defined under SFAS No. 106. F-86 Source: HARTFORD FINANCIAL S, 10...

Page 462
...of Other Postretirement Benefit Plan Assets Fair Value at December 31, 2008 2007 19% 27% 81% 73% 100% 100% Target Allocation 20% - 40% 60% - 80% Equity securities Fixed income securities Total There was no Company common stock included in the other postretirement benefit plan assets as of December...

Page 463
Employer contributions in 2008 and 2007 were made in cash and did not include contributions of the Company's common stock. F-87 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 464
Table of Contents 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) Benefit Payments The following table sets forth amounts of benefits expected to be paid ...

Page 465
F-88 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 466
...THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 18. Stock Compensation Plans (continued) Stock Option Awards Under the 2005 Stock Plan, all options granted have an exercise price equal to the market price of the Company's common stock on the date of...

Page 467
...of Contents THE HARTFORD FINANCIAL 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...

Page 468
.... 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 segment goodwill...

Page 469
Table of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 21. Investment by Allianz SE in The Hartford On October 17, 2008, the Company entered into an Investment Agreement (the "Investment Agreement"), with Allianz SE ("Allianz") under ...

Page 470
F-92 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 471
... ended September 30, 2008 and December 31, 2008 are net investment losses of $3.4 billion and $4.5 billion, respectively, related to the mark-to-market effects of equity securities held for trading supporting the International variable annuity business and net realized capital losses of $3.4 billion...

Page 472
F-93 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 473
...bonds including international All other mortgage-backed and asset-backed securities Total fixed maturities Equity Securities Common stocks Utilities Banks, trusts & insurance companies Industrial, miscellaneous and all other Non-redeemable preferred stocks Total equity securities, available-for-sale...

Page 474
... 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 475
... Change in operating assets and liabilities Cash provided by operating activities Investing Activities Net purchase of short-term investments Capital contributions to subsidiaries Cash used for investing activities Financing Activities Issuance of shares from equity unit contracts Issuance of long...

Page 476
...2008 Life Retail Individual Life Total Individual Markets Group Retirement Plans Group Benefits Total Employer Markets Group International Institutional Other Total Life Property & Casualty Ongoing Operations Personal Lines Small Commercial Middle Market Specialty Commercial Total Ongoing Operations...

Page 477
Segment information is presented in a manner by which The Hartford's chief operating decision maker views and manages the business. [2] Also includes present value of future profits. S-4 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 478
... 31, 2008 Life Retail $ Individual Life Total Individual Markets Group Retirement Plans Group Benefits Total Employer Markets Group International Institutional Other Total Life Property & Casualty Ongoing Operations Personal Lines Small Commercial Middle Market Specialty Commercial Total Ongoing...

Page 479
...Individual Life Total Individual Markets Group Retirement Plans Group Benefits Total Employer Markets Group International Institutional Other Total Life Property & Casualty Ongoing Operations Personal Lines Small Commercial Middle Market Specialty Commercial Total Ongoing Operations Other Operations...

Page 480
...Individual Life Total Individual Markets Group Retirement Plans Group Benefits Total Employer Markets Group International Institutional Other Total Life Property & Casualty Ongoing Operations Personal Lines Small Commercial Middle Market Specialty Commercial Total Ongoing Operations Other Operations...

Page 481
... FINANCIAL SERVICES GROUP, INC. SCHEDULE IV REINSURANCE Assumed From Other Companies Percentage of Amount Assumed to Net (In millions) For the year ended December 31, 2008 Life insurance in-force $ Insurance revenues Property and casualty insurance $ Life insurance and annuities Accident and health...

Page 482
Table of Contents 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) 2008 Allowance for doubtful accounts and other Allowance...

Page 483
Reserves for permanently disabled claimants and certain structured settlement contracts that fund loss run-offs have been discounted using the weighted average interest rates of 5.4%, 5.5%, and 5.6% for 2008, 2007 and 2006, respectively. S-9 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 484
.... 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 11, 2009 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been...

Page 485
II-1 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 486
... and Restated Certificate of Incorporation of The Hartford Financial Services Group, Inc. ("The Hartford"), effective May 21, 1998, as amended by Amendment No. 1, effective May 1, 2002 (incorporated herein by reference to Exhibit 3.01 to The Hartford's Annual Report on Form 10-K for the fiscal year...

Page 487
... as of June 6, 2008, between The Hartford Financial Services Group, Inc. and The Bank of New York Trust Company, N.A., as Trustee (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on June 6, 2008). 4.14 Replacement Capital Covenant, dated as of June...

Page 488
*10.09 The Hartford Incentive Stock Plan, as amended. â€ *10.10 The Hartford 2005 Incentive Stock Plan, as amended. â€ II-3 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 489
... Capital Covenant, dated as of October 17, 2008 (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K/A filed on October 17, 2008). 12.01 Statement Re: Computation of Ratio of Earnings to Fixed Charges. â€ 21.01 Subsidiaries of The Hartford Financial Services Group...

Page 490
II-4 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 491
...Certification of Lizabeth H. Zlatkus pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. â€ * â€ Management contract, compensatory plan or arrangement. Filed with the Securities and Exchange Commission as an exhibit to this report. II-5 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 492
Exhibit 10.01 AMENDED AND RESTATED EMPLOYMENT AGREEMENT (INCORPORATES AMENDMENT DATED OCTOBER 31, 2008) EMPLOYMENT AGREEMENT, amended and restated as of September 7, 2006, by and between The Hartford Financial Services Group, Inc., a Delaware corporation (the "Company"), and Ramani Ayer ("Executive...

Page 493
..., the Company shall pay Executive a base salary at the annual rate as in effect on the date hereof. The annual base salary payable under this paragraph shall be reduced, however, to the extent that Executive elects to defer such salary under the terms of any deferred compensation or savings plan or...

Page 494
... applicable affiliates, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program of thereof, and (ii) each pension, retirement, savings, deferred compensation, stock purchase or other similar plan or program...

Page 495
... of Executive's duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may require and in accordance with the generally applicable policies and procedures of the Company. (d) Office and Support Staff. During the Employment Period, Executive...

Page 496
... Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 5, notwithstanding the fact that, either on, before or after the date of termination of the Employment Period with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings...

Page 497
... Company terminates Welfare prior to July 1, 2009) Benefits Continuation Lump Sum Determined Under the Applicable Plan Not Payable Payable Not Available Available BENEFIT FORM OF PAYMENT: Accrued Pro Rata Target Salary Bonus Lump Sum Lump Sum Not Payable Payable Severance Payment Lump Sum Equity...

Page 498
...stock option, restricted stock, restricted stock unit, performance share and other equity or long-term incentive compensation awards, if any, held by Executive as of the date of his termination. "ERPs" means any excess retirement plans maintained or as hereafter amended or established by the Company...

Page 499
... have been a "covered employee" as defined in Section 162(m) of the Internal Revenue Code (the "Code") for such calendar year but for the termination of the Employment Period, such Pro-Rata Target Bonus shall only be payable to Executive if, when and to the extent that the Compensation and Personnel...

Page 500
...employment on account of Disability as defined in The Hartford Investment and Savings Plan, as may be amended from time to time. "Termination Due to Retirement" means Executive's termination of employment on account of Executive's Retirement as defined in The Hartford Investment and Savings Plan, as...

Page 501
... ESPs related thereto, and any deferred compensation or employee stock purchase plan or similar plan or program of the Company or its affiliates. "Vested Benefits Enhancement" means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable...

Page 502
.... To the extent that Welfare Benefits Continuation cannot be provided under the terms of the applicable plan, policy or program, the Company shall provide a comparable benefit under another plan or from the Company's general assets. 6. Termination Following a Change of Control. This Section 6 shall...

Page 503
... For Good Reason shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 6, notwithstanding the fact that, either on, before or after the Date...

Page 504
... For Good Reason Accrued Salary Lump Sum Payable Payable Payable Payable Pro Rata Target Bonus Lump Sum Not Payable Payable Not Payable Payable Severance Payment Lump Sum Equity Awards Determined Under the Applicable Plan Vested Benefits Determined Under the Applicable Plan Determined...

Page 505
... or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) entitled to vote in the election of directors of the Company for cash...

Page 506
... of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity; (iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company approved...

Page 507
... owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of securities of the Company. "Severance Payment" means a cash amount equal to three times the sum of (i) Executive's Base Salary at the rate in effect as of the date on which...

Page 508
...the third anniversary of the occurrence of such Change of Control, and (iii) solely for the purposes of determining eligibility for retiree medical benefits under any retirement plan or any retiree welfare benefit plan, policy or program of the Company or its affiliates, and any ERPs related thereto...

Page 509
... payments" in excess of the "base amount" (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the good faith judgment of the Company's independent certified public accountants appointed prior to the Effective Date...

Page 510
... time of the Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalty payable with respect to such excess) at the time that the amount of such excess is finally determined. 19 Source: HARTFORD FINANCIAL S, 10...

Page 511
...the date on which payment is due, the Company shall pay to Executive by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided...

Page 512
... the health insurance benefit plans shall be in two parts: (i) the first part shall continue from the date of termination to the end of the 18-month period during which Executive would have been eligible for continuation coverage under Section 601 et. seq. of the Employee Retirement Income Security...

Page 513
...affiliates, any trade secrets, customer lists, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial...

Page 514
...Control), 6 (relating to termination of the Employment Period following a Change of Control), 9 (relating to noncompetition, confidentiality, nonsolicitation and Company property), 10(b) (relating to arbitration), 10(c) (relating to legal fees) and 10(n) (relating to governing law) of this Agreement...

Page 515
... shall require any successor to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to Executive, expressly to assume and agree...

Page 516
... shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof): If to the Company: The Hartford Financial Services Group, Inc. Law Department, HO-1-09 Hartford Plaza Hartford, CT 06115...

Page 517
... "clawback" by the Company if the payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, (iii) any amounts treated as "golden parachute payments" under Section 280G of the Internal Revenue Code shall be limited to the extent...

Page 518
...be executed by its duly authorized officer, and Executive has hereunto set his hand, as of the day and year first above written. THE HARTFORD FINANCIAL SERVICES GROUP, INC. WITNESSED: By: Title: EXECUTIVE: WITNESSED: Ramani Ayer Ann M. de Raismes Executive Vice President, Human Resources 27 Source...

Page 519
... AND RESTATED EMPLOYMENT AGREEMENT (INCORPORATES AMENDMENT DATED OCTOBER 31, 2008) EMPLOYMENT AGREEMENT, amended and restated as of September 7, 2006, by and between The Hartford Financial Services Group, Inc. ("The Hartford" or the "Company"), a Delaware corporation, and Thomas M. Marra ("Executive...

Page 520
..., the Company shall pay Executive a base salary at the annual rate as in effect on the date hereof. The annual base salary payable under this paragraph shall be reduced, however, to the extent that Executive elects to defer such salary under the terms of any deferred compensation or savings plan or...

Page 521
... applicable affiliates, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program of thereof, and (ii) each pension, retirement, savings, deferred compensation, stock purchase or other similar plan or program...

Page 522
... of Executive's duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may require and in accordance with the generally applicable policies and procedures of the Company. (d) Office and Support Staff. During the Employment Period, Executive...

Page 523
... Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 5, notwithstanding the fact that, either on, before or after the date of termination of the Employment Period with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings...

Page 524
... Company terminates Welfare prior to July 1, 2009) Benefits Continuation Lump Sum Determined Under the Applicable Plan Not Payable Payable Not Available Available BENEFIT FORM OF PAYMENT: Accrued Pro Rata Target Salary Bonus Lump Sum Lump Sum Not Payable Payable Severance Payment Lump Sum Equity...

Page 525
...stock option, restricted stock, restricted stock unit, performance share and other equity or long-term incentive compensation awards, if any, held by Executive as of the date of his termination. "ERPs" means any excess retirement plans maintained or as hereafter amended or established by the Company...

Page 526
..., the Pro-Rata Target Bonus shall be the amount determined under the above formula or, if greater, the product of: (A) the bonus that would have been paid to Executive based on actual performance for such calendar year, and (B) the Service Fraction. 8 Source: HARTFORD FINANCIAL S, 10-K, February 12...

Page 527
... terms of or in accordance with any investment and savings plan or retirement plan (including any plan providing retiree medical benefits) of the Company or its affiliates, and any ERPs or ESPs related thereto, and any deferred compensation or employee stock purchase plan or similar plan or program...

Page 528
... employer. To the extent that Welfare Benefits Continuation cannot be provided under the terms of the applicable plan, policy or program, the Company shall provide a comparable benefit under another plan or from the Company's general assets. 10 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 529
..., or if none, his estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 7 hereof. Capitalized terms used in such table (and...

Page 530
... For Good Reason shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 6, notwithstanding the fact that, either on, before or after the Date...

Page 531
... For Good Reason Accrued Salary Lump Sum Payable Payable Payable Payable Pro Rata Target Bonus Lump Sum Not Payable Payable Not Payable Payable Severance Payment Lump Sum Equity Awards Determined Under the Applicable Plan Vested Benefits Determined Under the Applicable Plan Determined...

Page 532
... or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) entitled to vote in the election of directors of the Company for cash...

Page 533
... of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity; (iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company approved...

Page 534
... owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of securities of the Company. "Severance Payment" means a cash amount equal to three times the sum of (i) Executive's Base Salary at the rate in effect as of the date on which...

Page 535
... notice thereof given by Executive; (iii) the Company's requiring Executive to be based at any office or location more than 25 miles from the location at which he performed his services specified under Section 2 hereof immediately prior to the Change of Control, except for travel reasonably required...

Page 536
... anniversary of the occurrence of such Change of Control, and (iii) solely for purposes of determining eligibility for retiree medical benefits under any retirement plan or any retiree welfare benefit plan, policy or program of the Company or its affiliates, and any ERPs related thereto, Executive...

Page 537
... compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the "base amount," or such "parachute payments" are otherwise not subject to such Excise Tax, and (B) the value of any non-cash benefits or any deferred payment or benefit...

Page 538
...the date on which payment is due, the Company shall pay to Executive by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided...

Page 539
... the health insurance benefit plans shall be in two parts: (i) the first part shall continue from the date of termination to the end of the 18-month period during which Executive would have been eligible for continuation coverage under Section 601 et. seq. of the Employee Retirement Income Security...

Page 540
...affiliates, any trade secrets, customer lists, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial...

Page 541
... Section 5 hereof, or (ii) the date a Change of Control occurs, Executive shall not directly or indirectly solicit, encourage or induce any employee of the Company or its affiliates to terminate employment with such entity, and shall not directly or indirectly, either individually or as owner, agent...

Page 542
... shall require any successor to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to Executive, expressly to assume and agree...

Page 543
... shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof): If to the Company: The Hartford Financial Services Group, Inc. Law Department, HO-1-09 Hartford Plaza Hartford, CT 06115...

Page 544
... "clawback" by the Company if the payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, (iii) any amounts treated as "golden parachute payments" under Section 280G of the Internal Revenue Code shall be limited to the extent...

Page 545
... WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and Executive has hereunto set his hand, as of the day and year first above written. THE HARTFORD FINANCIAL SERVICES GROUP, INC. WITNESSED: By: Ann M. de Raismes Title: Executive Vice President, Human...

Page 546
Exhibit 10.03 AMENDED AND RESTATED EMPLOYMENT AGREEMENT (INCORPORATES AMENDMENT DATED NOVEMBER 24, 2008) EMPLOYMENT AGREEMENT, amended and restated as of September 7, 2006, by and between The Hartford Financial Services Group, Inc., a Delaware corporation (the "Company"), and Neal Wolin ("Executive...

Page 547
..., the Company shall pay Executive a base salary at the annual rate as in effect on the date hereof. The annual base salary payable under this paragraph shall be reduced, however, to the extent that Executive elects to defer such salary under the terms of any deferred compensation or savings plan or...

Page 548
... affiliates, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program of thereof that is available to Tier 1 executives, and (ii) each applicable pension, retirement, savings, deferred compensation, stock...

Page 549
... of Executive's duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may require and in accordance with the generally applicable policies and procedures of the Company. (d) Office and Support Staff. During the Employment Period, Executive...

Page 550
... Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 5, notwithstanding the fact that, either on, before or after the date of termination of the Employment Period with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings...

Page 551
... Company terminates Welfare prior to July 1, 2009) Benefits Continuation Lump Sum Determined Under the Applicable Plan Not Payable Payable Not Available Available BENEFIT FORM OF PAYMENT: Accrued Pro Rata Target Salary Bonus Lump Sum Lump Sum Not Payable Payable Severance Payment Lump Sum Equity...

Page 552
... restricted stock, restricted stock unit, performance share and other equity or long-term incentive compensation awards, if any, held by Executive as of the date of his termination. "ERPs" means any excess cash balance retirement plans maintained or as hereafter amended or established by the Company...

Page 553
... have been a "covered employee" as defined in Section 162(m) of the Internal Revenue Code (the "Code") for such calendar year but for the termination of the Employment Period, such Pro-Rata Target Bonus shall only be payable to Executive if, when and to the extent that the Compensation and Personnel...

Page 554
...employment on account of Disability as defined in The Hartford Investment and Savings Plan, as may be amended from time to time. "Termination Due to Retirement" means Executive's termination of employment on account of Executive's Retirement as defined in The Hartford Investment and Savings Plan, as...

Page 555
...cash balance retirement plan (including any plan providing retiree medical benefits) of the Company or its affiliates, and any ERPs or ESPs related thereto, and any deferred compensation or employee stock purchase plan or similar plan or program of the Company or its affiliates. 10 Source: HARTFORD...

Page 556
... employer. To the extent that Welfare Benefits Continuation cannot be provided under the terms of the applicable plan, policy or program, the Company shall provide a comparable benefit under another plan or from the Company's general assets. 11 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 557
... ascribed thereto under Section 5. Where such a capitalized term is defined solely in Section 6(d), or in both Section 5 and Section 6(d), such term shall have the meaning ascribed to it in Section 6(d). (B) The Company's obligation to make the payments provided for in this Section 6 and otherwise...

Page 558
... For Good Reason shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 6, notwithstanding the fact that, either on, before or after the Date...

Page 559
... For Good Reason Accrued Salary Lump Sum Payable Payable Payable Payable Pro Rata Target Bonus Lump Sum Not Payable Payable Not Payable Payable Severance Payment Lump Sum Equity Awards Determined Under the Applicable Plan Vested Benefits Determined Under the Applicable Plan Determined...

Page 560
... or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) entitled to vote in the election of directors of the Company for cash...

Page 561
... of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity: (iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company approved...

Page 562
... owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of securities of the Company. "Severance Payment" means a cash amount equal to three times the sum of (i) Executive's Base Salary at the rate in effect as of the date on which...

Page 563
... as providing a basis for such Termination For Good Reason are cured by the Company within 10 days of its receipt of such Notice of Termination. "Vested Benefits Enhancement" means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable...

Page 564
... anniversary of the occurrence of such Change of Control, and (iii) solely for purposes of determining eligibility for retiree medical benefits under any retirement plan or any retiree welfare benefit plan, policy or program of the Company or its affiliates, and any ERPs related thereto, Executive...

Page 565
... compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the "base amount," or such "parachute payments" are otherwise not subject to such Excise Tax, and (B) the value of any non-cash benefits or any deferred payment or benefit...

Page 566
...the date on which payment is due, the Company shall pay to Executive by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided...

Page 567
... the health insurance benefit plans shall be in two parts: (i) the first part shall continue from the date of termination to the end of the 18-month period during which Executive would have been eligible for continuation coverage under Section 601 et. seq. of the Employee Retirement Income Security...

Page 568
...affiliates, any trade secrets, customer lists, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial...

Page 569
... Section 5 hereof, or (ii) the date a Change of Control occurs, Executive shall not directly or indirectly solicit, encourage or induce any employee of the Company or its affiliates to terminate employment with such entity, and shall not directly or indirectly, either individually or as owner, agent...

Page 570
... shall require any successor to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to Executive, expressly to assume and agree...

Page 571
... shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof): If to the Company: The Hartford Financial Services Group, Inc. Law Department, HO-1-09 Hartford Plaza Hartford, CT 06115...

Page 572
... Any payments provided for herein shall be reduced by any amounts required to be withheld by the Company from time to time under applicable Federal, State or local income or employment tax laws or...the law of any other jurisdiction would apply. 27 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 573
... WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and Executive has hereunto set his hand, as of the day and year first above written. THE HARTFORD FINANCIAL SERVICES GROUP, INC. WITNESSED: By: Title: Ann M. de Raismes Executive Vice President, Human...

Page 574
Exhibit 10.04 EMPLOYMENT AGREEMENT (INCORPORATES AMENDMENT DATED NOVEMBER 10, 2008) EMPLOYMENT AGREEMENT, as of May 1, 2008 by and between The Hartford Financial Services Group, Inc., a Delaware corporation (the "Company"), and Lizabeth H. Zlatkus ("Executive"). W I T N E S S E T H: WHEREAS, the ...

Page 575
..., the Company shall pay Executive a base salary at the annual rate as in effect on the date hereof. The annual base salary payable under this paragraph shall be reduced, however, to the extent that Executive elects to defer such salary under the terms of any deferred compensation or savings plan or...

Page 576
... affiliates, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program thereof that is available to Tier 1 executives, and (ii) each applicable pension, retirement, savings, deferred compensation, stock...

Page 577
... of Executive's duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may require and in accordance with the generally applicable policies and procedures of the Company. (d) Office and Support Staff. During the Employment Period, Executive...

Page 578
... Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 5, notwithstanding the fact that, either on, before or after the date of termination of the Employment Period with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings...

Page 579
... Company terminates Welfare prior to July 1, 2009) Benefits Continuation Lump Sum Determined Under the Applicable Plan Not Payable Payable Not Available Available BENEFIT FORM OF PAYMENT: Accrued Pro Rata Target Salary Bonus Lump Sum Lump Sum Not Payable Payable Severance Payment Lump Sum Equity...

Page 580
..., restricted stock, restricted stock unit, performance share and other equity or long-term incentive compensation awards, if any, held by Executive as of the date of his/her termination. "ERPs" means any excess retirement plans maintained or as hereafter amended or established by the Company or its...

Page 581
... have been a "covered employee" as defined in Section 162(m) of the Internal Revenue Code (the "Code") for such calendar year but for the termination of the Employment Period, such Pro-Rata Target Bonus shall only be payable to Executive if, when and to the extent that the Compensation and Personnel...

Page 582
...employment on account of Disability as defined in The Hartford Investment and Savings Plan, as may be amended from time to time. "Termination Due to Retirement" means Executive's termination of employment on account of Executive's Retirement as defined in The Hartford Investment and Savings Plan, as...

Page 583
... ESPs related thereto, and any deferred compensation or employee stock purchase plan or similar plan or program of the Company or its affiliates. "Vested Benefits Enhancement" means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable...

Page 584
.... To the extent that Welfare Benefits Continuation cannot be provided under the terms of the applicable plan, policy or program, the Company shall provide a comparable benefit under another plan or from the Company's general assets. 6. Termination Following a Change of Control. This Section 6 shall...

Page 585
... For Good Reason shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 6, notwithstanding the fact that, either on, before or after the Date...

Page 586
... For Good Reason Accrued Salary Lump Sum Payable Payable Payable Payable Pro Rata Target Bonus Lump Sum Not Payable Payable Not Payable Payable Severance Payment Lump Sum Equity Awards Determined Under the Applicable Plan Vested Benefits Determined Under the Applicable Plan Determined...

Page 587
... or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) entitled to vote in the election of directors of the Company for cash...

Page 588
... of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity: (iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company approved...

Page 589
... owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of securities of the Company. "Severance Payment" means a cash amount equal to three times the sum of (i) Executive's Base Salary at the rate in effect as of the date on which...

Page 590
...thereof given by Executive; (iii) the Company's requiring Executive to be based at any office or location more than 25 miles from the location at which he/she performed his/her services specified under Section 2 hereof immediately prior to the Change of Control, except for travel reasonably required...

Page 591
... anniversary of the occurrence of such Change of Control, and (iii) solely for purposes of determining eligibility for retiree medical benefits under any retirement plan or any retiree welfare benefit plan, policy or program of the Company or its affiliates, and any ERPs related thereto, Executive...

Page 592
... compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the "base amount," or such "parachute payments" are otherwise not subject to such Excise Tax, and (B) the value of any non-cash benefits or any deferred payment or benefit...

Page 593
...the date on which payment is due, the Company shall pay to Executive by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided...

Page 594
... the health insurance benefit plans shall be in two parts: (i) the first part shall continue from the date of termination to the end of the 18-month period during which Executive would have been eligible for continuation coverage under Section 601 et. seq. of the Employee Retirement Income Security...

Page 595
...affiliates, any trade secrets, customer lists, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial...

Page 596
... Control), 6 (relating to termination of the Employment Period following a Change of Control, 9 (relating to noncompetition, confidentiality, nonsolicitation and Company property), 10(b) (relating to arbitration), 10(c) (relating to legal fees) and 10(n) (relating to governing law) of this Agreement...

Page 597
... shall require any successor to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to Executive, expressly to assume and agree...

Page 598
... shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof): If to the Company: The Hartford Financial Services Group, Inc. Law Department, HO-1-09 Hartford Plaza Hartford, CT 06115...

Page 599
... WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and Executive has hereunto set his/her hand, as of the day and year first above written. THE HARTFORD FINANCIAL SERVICES GROUP, INC. WITNESSED: By: Title: Eileen G. Whelley Executive Vice President, Human...

Page 600
... AGREEMENT (INCORPORATES AMENDMENT DATED NOVEMBER 14, 2008) EMPLOYMENT AGREEMENT, as of May 1, 2008 by and between The Hartford Financial Services Group, Inc., a Delaware corporation (the "Company"), and John C. Walters ("Executive"). W I T N E S S E T H: WHEREAS, the Company and Executive desire to...

Page 601
..., the Company shall pay Executive a base salary at the annual rate as in effect on the date hereof. The annual base salary payable under this paragraph shall be reduced, however, to the extent that Executive elects to defer such salary under the terms of any deferred compensation or savings plan or...

Page 602
... affiliates, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program thereof that is available to Tier 1 executives, and (ii) each applicable pension, retirement, savings, deferred compensation, stock...

Page 603
... of Executive's duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may require and in accordance with the generally applicable policies and procedures of the Company. (d) Office and Support Staff. During the Employment Period, Executive...

Page 604
... Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 5, notwithstanding the fact that, either on, before or after the date of termination of the Employment Period with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings...

Page 605
... Company terminates Welfare prior to July 1, 2009) Benefits Continuation Lump Sum Determined Under the Applicable Plan Not Payable Payable Not Available Available BENEFIT FORM OF PAYMENT: Accrued Pro Rata Target Salary Bonus Lump Sum Lump Sum Not Payable Payable Severance Payment Lump Sum Equity...

Page 606
..., restricted stock, restricted stock unit, performance share and other equity or long-term incentive compensation awards, if any, held by Executive as of the date of his/her termination. "ERPs" means any excess retirement plans maintained or as hereafter amended or established by the Company or its...

Page 607
... have been a "covered employee" as defined in Section 162(m) of the Internal Revenue Code (the "Code") for such calendar year but for the termination of the Employment Period, such Pro-Rata Target Bonus shall only be payable to Executive if, when and to the extent that the Compensation and Personnel...

Page 608
...employment on account of Disability as defined in The Hartford Investment and Savings Plan, as may be amended from time to time. "Termination Due to Retirement" means Executive's termination of employment on account of Executive's Retirement as defined in The Hartford Investment and Savings Plan, as...

Page 609
... terms of or in accordance with any investment and savings plan or retirement plan (including any plan providing retiree medical benefits) of the Company or its affiliates, and any ERPs or ESPs related thereto, and any deferred compensation or employee stock purchase plan or similar plan or program...

Page 610
... employer. To the extent that Welfare Benefits Continuation cannot be provided under the terms of the applicable plan, policy or program, the Company shall provide a comparable benefit under another plan or from the Company's general assets. 11 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 611
... ascribed thereto under Section 5. Where such a capitalized term is defined solely in Section 6(d), or in both Section 5 and Section 6(d), such term shall have the meaning ascribed to it in Section 6(d). (B) The Company's obligation to make the payments provided for in this Section 6 and otherwise...

Page 612
... For Good Reason shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 6, notwithstanding the fact that, either on, before or after the Date...

Page 613
... For Good Reason Accrued Salary Lump Sum Payable Payable Payable Payable Pro Rata Target Bonus Lump Sum Not Payable Payable Not Payable Payable Severance Payment Lump Sum Equity Awards Determined Under the Applicable Plan Vested Benefits Determined Under the Applicable Plan Determined...

Page 614
... or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) entitled to vote in the election of directors of the Company for cash...

Page 615
... of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity: (iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company approved...

Page 616
... owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of securities of the Company. "Severance Payment" means a cash amount equal to three times the sum of (i) Executive's Base Salary at the rate in effect as of the date on which...

Page 617
...thereof given by Executive; (iii) the Company's requiring Executive to be based at any office or location more than 25 miles from the location at which he/she performed his/her services specified under Section 2 hereof immediately prior to the Change of Control, except for travel reasonably required...

Page 618
... anniversary of the occurrence of such Change of Control, and (iii) solely for purposes of determining eligibility for retiree medical benefits under any retirement plan or any retiree welfare benefit plan, policy or program of the Company or its affiliates, and any ERPs related thereto, Executive...

Page 619
... compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the "base amount," or such "parachute payments" are otherwise not subject to such Excise Tax, and (B) the value of any non-cash benefits or any deferred payment or benefit...

Page 620
...the date on which payment is due, the Company shall pay to Executive by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided...

Page 621
... the health insurance benefit plans shall be in two parts: (i) the first part shall continue from the date of termination to the end of the 18-month period during which Executive would have been eligible for continuation coverage under Section 601 et. seq. of the Employee Retirement Income Security...

Page 622
...affiliates, any trade secrets, customer lists, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial...

Page 623
... employment with such entity, and shall not directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, employ or offer employment to any person who is or was employed by the Company or an affiliate thereof unless such person shall have ceased to be employed by...

Page 624
... shall require any successor to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to Executive, expressly to assume and agree...

Page 625
... shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof): If to the Company: The Hartford Financial Services Group, Inc. Law Department, HO-1-09 Hartford Plaza Hartford, CT 06115...

Page 626
...payments to the Executive under the Agreement being subject to an additional tax under Section 409A of the Code or to avoid compensation paid prior to a Change of Control being nondeductible to the Company under Revenue Ruling 2008... apply. 27 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 627
... officer, and Executive has hereunto set his/her hand, as of the day and year first above written. THE HARTFORD FINANCIAL SERVICES GROUP, INC. WITNESSED: By: Title: EXECUTIVE: WITNESSED: John C. Walters Eileen G. Whelley Executive Vice President, Human Resources 28 Source: HARTFORD FINANCIAL...

Page 628
... THIS AGREEMENT, dated as of , 2008, by and between The Hartford Financial Services Group, Inc., a Delaware corporation (the "Company"), and ("Executive"). WHEREAS, the Company and/or one or more subsidiaries thereof (the "Subsidiaries") have employed Executive in an officer position and has...

Page 629
... Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) for cash...

Page 630
... of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity; (iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company approved...

Page 631
...service or work is to be performed during normal business hours), or (C) pursuing Executive's personal financial and legal affairs, so long as the foregoing activities, individually... which Executive is entitled under the programs and policies of the Company that apply to similarly situated executives...

Page 632
... applicable affiliates and/or Executive against target objectives established under such Annual Plan. Subject to Executive's election to defer all or a portion of any annual bonus payable hereunder pursuant to the terms of any deferred compensation, deferred restricted stock or savings plan or other...

Page 633
... applicable affiliates, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program thereof, and (ii) each pension, retirement, savings, deferred compensation, deferred restricted stock, stock purchase or other...

Page 634
... in such table and at the time established pursuant to Section 8 hereof. Capitalized terms used in such table shall have the meanings set forth in Section 7(d) hereof. (B) The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this...

Page 635
...any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement, notwithstanding the fact that, either on, before or after the Date of Termination with respect thereto, (I) Executive was eligible for Retirement as defined in The Hartford Investment and Savings Plan, as may...

Page 636
... Cause Payable Payable Payable Termination For Good Reason Payable Payable Payable Voluntary Termination Payable Not Payable Not Payable Termination Due to Retirement Payable Termination Due to Disability Payable Determined Under the Applicable Plan Payable Not Payable Not Payable...

Page 637
... stock unit, deferred restricted stock, performance share, performance unit, and other equity or long-term incentive compensation awards, if any, held by Executive as of the Date of Termination. "ERPs" means any excess retirement plans maintained or as hereafter amended or established by the Company...

Page 638
... for such calendar year, multiplied by (B) the Service Fraction. "Severance Payment" means a cash amount equal to two times the sum of: (i) Executive's Base Salary at the rate in effect as of the Date of Termination, plus (ii) Executive's Target Bonus amount under Section 5(b) hereof for the...

Page 639
...'s termination of employment on account of Disability as defined in the Savings Plan. "Termination Due to Retirement" means Executive's termination of employment on account of Executive's Retirement as defined in the Savings Plan. "Termination For Cause" means the Company's termination of Executive...

Page 640
...ESPs related thereto, and any deferred compensation or employee stock purchase plan or similar plan or program of the Company or its affiliates. "Vested Benefits Enhancement" means: (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable...

Page 641
... under the terms of the applicable plan, policy or program, the Company shall provide a comparable benefit under another plan or from the Company's general assets. (e) Out-Placement Services. If the Employment Period terminates because of a Termination Without Cause or a Termination For Good Reason...

Page 642
... compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the "base amount," or such "parachute payments" are otherwise not subject to such Excise Tax; and (B) The value of any non-cash benefits or any deferred payment or benefit...

Page 643
...the date on which payment is due, the Company shall pay to Executive by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided...

Page 644
... the health insurance benefit plans shall be in two parts: (i) the first part shall continue from the date of termination to the end of the 18-month period during which Executive would have been eligible for continuation coverage under Section 601 et. seq. of the Employee Retirement Income Security...

Page 645
...affiliates, any trade secrets, customer lists, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial...

Page 646
... provisions of Sections 7 (relating to termination of the Employment Period following a Change of Control), 9 (relating to confidentiality and Company property), 10(b) (relating to arbitration), 10(c) (relating to legal fees and expenses) and 10(n) (relating to governing law) of this Agreement shall...

Page 647
... shall require any successor to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to Executive, expressly to assume and agree...

Page 648
... with the terms hereof): If to the Company: The Hartford Financial Services Group, Inc. Executive Row, Home Office One Hartford Plaza Hartford, CT 06155 Attention: General Counsel Debevoise & Plimpton 875 Third Avenue New York, NY 10022 Attn: Lawrence K. Cagney, Esq. The home address of Executive...

Page 649
... The Hartford 2005 Incentive Stock Plan, as it may be amended from time to time) and ending upon the earlier of (i) the second anniversary of the date of such Potential Change of Control, (ii) the date a Change of Control occurs, or (iii) the date the Board determines in good faith that a Change of...

Page 650
... be executed by its duly authorized officer, and Executive has hereunto set his or her hand, as of the day and year first above written. Executive Employee Name The Hartford Financial Services Group, Inc. Eileen Whelley Executive Vice President Human Resources Date: Witness Witness Signature Printed...

Page 651
... Employees, as the Committee may determine. 2. DEFINITIONS When used herein, the following terms shall have the following meanings: "Act" means the Securities Exchange Act of 1934, as amended. "Annual Limit" means the maximum number of shares of Stock for which Awards may be granted under the Plan...

Page 652
...person is characterized or ultimately determined by the Internal Revenue Service or any other Federal, State or local governmental authority or regulatory body to be an employee of a Participating Company or its affiliates for income or wage tax purposes or for any other purpose. 2 Source: HARTFORD...

Page 653
...determined by a Participating Company to be, an independent contractor. "Fair Market Value" unless otherwise indicated in the provisions of this Plan, means, as of any date, the composite closing price for one share of Stock on the New York Stock Exchange or, if no sales of Stock have taken place on...

Page 654
...65%) of the total of the issued and outstanding shares of the Stock and treasury Stock as reported in the Annual Report on Form 10K of the Company for the fiscal year ending immediately prior to any Plan Year (the "Reported Shares"). Any unused portion of the Annual Limit for any Plan Year shall be...

Page 655
...of one and a half percent (1.5%) (i.e., .15%) of the Reported Shares and (ii) 1,000,000 shares; except that, for the Plan Year that follows the Distribution Date, each individual employee may receive in addition to the foregoing limit that number of stock options equal to the lesser of (x) 1,050,000...

Page 656
... of the shares as to which an Option shall be exercised shall be paid to the Company at the time of exercise either in cash or Stock already owned by the optionee having a total Fair Market Value equal to the purchase price, or a combination of cash and Stock having a total fair market value, as so...

Page 657
...the calendar year in which such Key Employee's date of termination occurs unless such a later date would not, in accordance with guidance issued by the Internal Revenue Service, cause the Plan to be subject to the provisions of Section 409A of the Internal Revenue Code. (E) Any Options or Rights not...

Page 658
... Upon exercise of a Right, a Key Employee or Director shall be entitled, subject to such terms and conditions the Committee may specify, to receive upon exercise thereof all or a portion of the excess of (A) the Fair Market Value of a specified number of shares of Stock at the time of exercise, as...

Page 659
... share, (B) return on equity, (C) cash flow, (D) return on total capital, (E) return on assets, (F) economic value added, (G) increase in surplus, (H) reductions in operating expenses, (I) increases in operating margins, (J) earnings before income taxes and depreciation, (K) total shareholder return...

Page 660
... paid to the Key Employee or member of the group of Key Employees if the applicable Performance Objectives are met in whole or in part. (e) If a Key Employee terminates service with all Participating Companies during a Performance Period because of death, Total Disability, Retirement, or under other...

Page 661
... Company, elect to waive or modify any or all remaining restrictions with respect to such Key Employee's Restricted Stock; provided that, while the Committee may waive or modify the vesting conditions, the payment terms in effect under such Award documents, rules or terms and conditions at the date...

Page 662
...any Person other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) for cash...

Page 663
... applicable to shares of Restricted Stock held by Key Employees pursuant to Section 7 shall lapse upon the occurrence of a Change of Control, and such Key Employees shall receive immediately unrestricted certificates for all of such shares. 13 Source: HARTFORD FINANCIAL S, 10-K, February...

Page 664
... lump sum cash amount equal to the number of outstanding units or shares awarded to such Key Employee multiplied by the Formula Price. (vi) For purposes of this Section 9(b), "Formula Price" means (i) in the case of the exercise of any Right or Option, the Fair Market Value of the Stock at the...

Page 665
... Key Employee's, Director's or Transferee's estate, as the case may be, shall be entitled to receive the Award, if any, payable under the Plan upon his or her death. If the Committee is in doubt as to the right of any person to receive such Award, the Company may retain such Award, without liability...

Page 666
... approval by a majority of the Company's stockholders, (a) alter the group of persons eligible to participate in the Plan, or (b) except as provided in Section 13 increase the maximum number of shares of Stock which are available for Awards under the Plan. If a Change of Control has occurred, no...

Page 667
... is 1,050,000 or such lower number as may be necessary to preserve the economic value of the surrendered ITT options and related rights by any such individual employee. The terms and conditions of each substitute stock award, including, without limitation, the expiration date of the option, the time...

Page 668
...Participating Company for the benefit of its employees unless the Company shall determine otherwise. No Key Employee shall have any claim to an Award until it is actually granted under the Plan. To the extent that any person acquires a right to receive payments from the Company under this Plan, such...

Page 669
...or cash for Key Employees or Directors, and performance shares, restricted stock, restricted units or any combination of the foregoing for Key Employees, as the Committee may determine. 2. Definitions When used herein, the following terms shall have the following meanings: "Act" means the Securities...

Page 670
... an employee of any Participating Company. "Dividend Equivalents" means an amount credited with respect to an outstanding Restricted Unit equal to the cash dividends paid or property distributions awarded upon one share of Stock. "Eligible Employee" means an Employee as defined in the Plan; provided...

Page 671
... any officer or director who is also an Eligible Employee) whose responsibilities and decisions, in the judgment of the Committee, directly affect the performance of the Company and its subsidiaries. "Option" means an option awarded under Section 5 of the Plan to purchase Stock of the Company, which...

Page 672
... under the cash balance formula of the Retirement Plan, or (ii) is not eligible for coverage under the Retirement Plan, "Retirement" means satisfaction of the requirements for early or normal retirement under the final average pay formula of the Retirement Plan (assuming such Key Employee were...

Page 673
... than 200,000 shares. Subject to the above limitations, shares of Stock to be issued under the Plan may be made available from the authorized but unissued shares, or shares held by the Company in treasury or from shares purchased in the open market. 5 Source: HARTFORD FINANCIAL S, 10-K, February 12...

Page 674
... or forms of Award to be granted to any Key Employee and any Director; (iii) determine the amount or number of shares of Stock subject to each Award; and (iv) determine the terms and conditions of each Award. (b) Each Award granted under the Plan shall be evidenced by a written Award Document. Such...

Page 675
...total Fair Market Value equal to the purchase price. The Committee shall determine acceptable methods for tendering Stock as payment upon exercise of an Option and may impose such limitations and prohibitions on the use of Stock for such purpose as it deems appropriate. (g) In case of a Key Employee...

Page 676
... determined by the Committee as set forth in such Director's Award Document and/or any administrative rules or other terms and conditions adopted by the Committee from time to time applicable to such Option or Right granted to such Director. 8 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 677
... Upon exercise of a Right, a Key Employee or Director shall be entitled, subject to such terms and conditions the Committee may specify, to receive upon exercise thereof all or a portion of the excess of (A) the Fair Market Value of a specified number of shares of Stock at the time of exercise, as...

Page 678
... share, (B) return on equity, (C) cash flow, (D) return on total capital, (E) return on assets, (F) economic value added, (G) increase in surplus, (H) reductions in operating expenses, (I) increases in operating margins, (J) earnings before income taxes and depreciation, (K) total shareholder return...

Page 679
... (i) because of death, (ii) because of Total Disability, (iii) solely in the case of a Key Employee with an original hire date with a Participating Company before January 1, 2002, because of his or her voluntary termination of employment due to Retirement, or (iv) under other circumstances where the...

Page 680
... and conditions establish a payment term not associated directly with the vesting of any such Award, only the payment terms established under such rules or terms and conditions as are in effect at the date the Award is granted to the Director shall apply to such Award. 12 Source: HARTFORD FINANCIAL...

Page 681
... to pay cash or part cash and part Stock in lieu of delivering only Stock for Restricted Units. If a cash payment is made in lieu of delivering Stock, the amount of such cash payment for each share of Stock to which a Key Employee or Director is entitled shall be equal to the Fair Market Value on...

Page 682
... elect to receive Restricted Units in exchange for or in lieu of other compensation (including salaries, annual bonuses, annual retainer and meeting fees) that would otherwise have been payable to such Key Employees or Directors in cash. The Committee shall establish the terms and conditions of any...

Page 683
...any Person other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) for cash...

Page 684
... applicable to shares of Restricted Stock or to Restricted Units held by Key Employees pursuant to Section 7 shall lapse upon the occurrence of a Change of Control, and such Key Employees shall receive immediately unrestricted certificates for all of such shares. 16 Source: HARTFORD FINANCIAL S, 10...

Page 685
... equal to the excess of the Formula Price over the exercise price; b. Each Restricted Stock Award, Restricted Unit Award and Performance Share Award shall be exchanged for an immediate lump sum cash amount equal to the number of outstanding units or shares awarded to such Key Employee multiplied by...

Page 686
...estate of the Key Employee, Director or Transferee, as the case may be, shall be entitled to receive the Award, if any, payable under the Plan upon his or her death. If the Committee is in doubt as to the right of any person to receive such Award, the Company may retain such Award, without liability...

Page 687
...such Key Employees and Directors are similarly situated. (d) The Committee may, in its sole discretion, delegate such of its powers as it deems appropriate to the Company's Executive Vice President, Human Resources (or other person holding a similar position) or the Company's Chief Executive Officer...

Page 688
..., or any other change in the corporate structure or shares, the Committee shall make such adjustment in the Stock subject to Awards, including Stock subject to purchase by an Option or issuable in respect of Restricted Units, or the terms, conditions or restrictions on Stock or Awards, including...

Page 689
... local income or other taxes (including FICA obligations) incurred by reason of the operation of the Plan or an Award under the Plan, including but not limited to at any time: (i) requiring a Key Employee to submit payment to the Company for such taxes before making settlement of any Award of Stock...

Page 690
... Services Group, Inc. ("The Hartford" or "the Company") and its subsidiaries and affiliates and to thereby attract and retain Key Employees of superior ability. In addition, the Plan is intended to further opportunities for stock ownership by such Key Employees and Directors in order to increase...

Page 691
... an employee of any Participating Company. "Dividend Equivalents" means an amount credited with respect to an outstanding Restricted Unit equal to the cash dividends paid or property distributions awarded upon one share of Stock. "Eligible Employee" means an Employee as defined in the Plan; provided...

Page 692
... any officer or director who is also an Eligible Employee) whose responsibilities and decisions, in the judgment of the Committee, directly affect the performance of the Company and its subsidiaries. "Option" means an option awarded under Section 5 of the Plan to purchase Stock of the Company, which...

Page 693
... under the cash balance formula of the Retirement Plan, or (ii) is not eligible for coverage under the Retirement Plan, "Retirement" means satisfaction of the requirements for early or normal retirement under the final average pay formula of the Retirement Plan (assuming such Key Employee were...

Page 694
... awarded under Section 5 of the Plan. "Stock" means the common stock ($.01 par value) of The Hartford. "The Hartford" means the Company and its subsidiaries, and their successors and assigns. "Total Disability" means the complete and permanent inability of a Key Employee to perform all of his or...

Page 695
...referenced above. Subject to the above limitations, shares of Stock to be issued under the Plan may be made available from the authorized but unissued shares, or shares held by the Company in treasury or from shares purchased in the open market. Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 696
...counted against the foregoing limitations the number of shares of Stock subject to issuance upon exercise or settlement of Awards and the number of shares of Stock which equals the value of Performance Share Awards based upon their target payout, in each case determined as at the dates on which such...

Page 697
... be paid to the Company at the time of exercise either in cash, Stock already owned by the optionee, or a combination of the foregoing having a total Fair Market Value equal to the purchase price. The Committee shall determine acceptable methods for tendering Stock as payment upon exercise of an...

Page 698
... Award under the Plan may be transferred for value (as defined in the General Instructions to Form S-8 with respect to the registration, pursuant to the Securities Act of 1933, of employee benefit plan securities and/or interests). (i) Except as provided in Section 9, if a Director's service on the...

Page 699
... below, upon exercise of a Right, a Key Employee or Director shall be entitled, subject to such terms and conditions as the Committee may specify, to receive all or a portion of the excess of (A) the Fair Market Value of a specified number of shares of Stock at the time of exercise, as determined by...

Page 700
... and Directors or groups of Key Employees and Directors, (iv) determine the form of settlement of a Performance Share, and (v) generally determine the terms and conditions of each such Award. At any date, each Performance Share shall have a value equal to the Fair Market Value of a share of Stock at...

Page 701
... groups of Key Employees and Directors, and shall be based upon one or more of the following objective criteria, as the Committee deems appropriate: (A) earnings per share, (B) return on equity, (C) cash flow, (D) return on total capital, (E) return on assets, (F) economic value added, (G) increase...

Page 702
... directly with the vesting of any such Award, only the payment terms established under such rules or terms and conditions as are in effect at the date the Award is granted to the Director shall apply to such Award. (h) Each Award of a Performance Share shall be paid in whole shares of Stock, or cash...

Page 703
...) Total Disability, (iii) solely in the case of a Key Employee with an original hire date with a Participating Company before January 1, 2002, a voluntary termination of employment due to Retirement, or (iv) such other circumstances, such as a substantial reduction in force or a divestiture or sale...

Page 704
... reinvested in that number of Restricted Units determined based on the Fair Market Value on the date the corresponding dividend on the Stock is payable to stockholders. (h) Nothing in this Section 7 shall preclude a Key Employee or Director from exchanging any shares of Restricted Stock subject to...

Page 705
... to pay cash or part cash and part Stock in lieu of delivering only Stock for Restricted Units. If a cash payment is made in lieu of delivering Stock, the amount of such cash payment for each share of Stock to which a Key Employee or Director is entitled shall be equal to the Fair Market Value on...

Page 706
... of this Plan, a Change of Control shall occur if: (i) a report on Schedule 13D shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Act disclosing that any Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by...

Page 707
...any Person other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) for cash...

Page 708
... in Section 9(c)(vi), the restrictions applicable to shares of Restricted Stock or to Restricted Units held by Key Employees pursuant to Section 7 shall lapse upon the occurrence of a Change of Control, and such Key Employees shall receive immediately unrestricted certificates for all of such...

Page 709
... equal to the excess of the Formula Price over the exercise price; b. Each Restricted Stock, Restricted Unit and Award of Performance Shares shall be exchanged for an immediate lump sum cash amount equal to the number of outstanding units or shares awarded to such Key Employee multiplied by the...

Page 710
...estate of the Key Employee, Director or Transferee, as the case may be, shall be entitled to receive the Award, if any, payable under the Plan upon his or her death. If the Committee is in doubt as to the right of any person to receive such Award, the Company may retain such Award, without liability...

Page 711
...such Key Employees and Directors are similarly situated. (d) The Committee may, in its sole discretion, delegate such of its powers as it deems appropriate to the Company's Executive Vice President, Human Resources (or other person holding a similar position) or the Company's Chief Executive Officer...

Page 712
..., or any other change in the corporate structure or shares, the Committee shall make such adjustment in the Stock subject to Awards, including Stock subject to purchase by an Option or issuable in respect of Restricted Units, or the terms, conditions or restrictions on Stock or Awards, including...

Page 713
... local income or other taxes (including FICA obligations) incurred by reason of the operation of the Plan or an Award under the Plan, including but not limited to at any time: (i) requiring a Key Employee to submit payment to the Company for such taxes before making settlement of any Award of Stock...

Page 714
...the earlier of: (a) May 18, 2015, or (b) the date on which the Maximum Limit (as defined in Section 3 of the Plan) is reached; provided, however, that the Plan will continue in effect for existing Awards as long as any such Award is outstanding. Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 715
... for certain Key Employees and Directors to defer the receipt of certain Eligible Compensation to the extent provided herein. The Plan is intended to constitute an unfunded and unsecured deferred compensation arrangement for a select group of management or highly compensated individuals for purposes...

Page 716
... Financial Services Group, Inc. "Change of Control" means: (A) a report on Schedule 13D shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Act disclosing that any Person, other than The Hartford or a subsidiary of The Hartford or any employee benefit plan...

Page 717
... a Participating Company's sales incentive payment program, (C) the cash amount of commissions (net of expense reimbursements), if any, which may become payable to certain wholesalers under the sales incentive program established for wholesalers for Planco Financial Services, (D) the cash amount, if...

Page 718
...Savings Plan. "Excess Matching Company Contribution" shall have the meaning assigned by the Excess Savings Plan. "Excess Savings Plan" means The Hartford Excess Savings Plan IA, as it may be amended from time to time, and any successor Plan thereto. "Hypothetical Investment Fund" means a mutual fund...

Page 719
..." means The Hartford Financial Services Group, Inc., or a successor by merger, purchase or otherwise. "Valuation Date" means the close of business of the last business day of each month in an applicable calendar year, or such other date as may be designated by the Plan Administrator. ARTICLE III...

Page 720
... preceding the date of such event, unless otherwise required by the Plan. The value of a Participant's Account shall be reported to the Participant from time to time as determined appropriate by the Plan Administrator. 3.6 Obtaining of Life Insurance Policies. As a condition of participation...

Page 721
... (as to which no proper election is made) then and thereafter credited to the Participant's Account allocated to the Hypothetical Investment Fund that the Plan Administrator determines generally to have the least risk of loss of principal. 7 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 722
... of his or her Account to a Hypothetical Investment Fund with an investment experience determined primarily in relation to the investment performance of securities issued by the Company, and (C) establish such other limitations on investment allocations as the Plan Administrator may deem appropriate...

Page 723
... period in respect of the performance-based compensation) to have all or a portion of the amount credited to the Participant's Account distributed to him or her on a date and in a manner permitted by the Plan Administrator; provided, however, that the Plan Administrator may permit elections to be...

Page 724
... of the fifth business day of the month following the month in which the Participant's separation from service occurs, the Company shall distribute to the Participant a single lump sum cash payment equal to the total amount credited to the Participant's Account as of the Valuation Date immediately...

Page 725
... in a single lump sum cash payment within 90 days after such Valuation Date, to the extent consistent with Section 409A of the Code and the regulations and guidance promulgated thereunder. 6.5 Distribution to Fiduciary. If the Plan Administrator determines that any person to whom any amount is...

Page 726
... as otherwise provided by the Committee in accordance with the Plan, the Plan Administrator shall be The Hartford's Executive Vice President, Human Resources (or other person holding a similar position) or the Chief Executive Officer. Except as otherwise provided herein, required by applicable law...

Page 727
...Investment Funds hereunder will result in any particular investment experience related thereto, and The Hartford shall in no event be required to pay any amount to any person or entity on account of any loss suffered by reason of the operation of the Plan. 8.3 Tax Withholding. The Plan Administrator...

Page 728
...in its sole discretion that The Hartford will recognize income for income tax purposes with respect to any reserves accumulated under any life insurance policy obtained with respect to any Participant hereunder. The Committee or the Plan Administrator may amend the Plan to the extent (A) required by...

Page 729
...Plan, except to the extent such laws are superseded by the laws of the United States. 8.10 Severability of Provisions. If any provision of the Plan ... the Plan shall be construed and enforced as if such invalid or unenforceable provisions had not been included herein. 15 Source: HARTFORD FINANCIAL S,...

Page 730
...acquire a proprietary interest in the Company through the purchase of Shares of common stock of The Hartford. The Plan is intended to qualify as an "Employee Stock Purchase Plan" as defined in the Code. The provisions of the Plan shall be construed so as to extend and limit participation in a manner...

Page 731
... The Hartford or a subsidiary of The Hartford or any employee benefit plan sponsored by The Hartford or a subsidiary of The Hartford shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of The Hartford (or securities convertible into stock) for cash, securities or...

Page 732
... Shares purchased pursuant to the exercise of an Option identified in Section 4.1. "Fair Market Value" means, with respect to Shares on any particular date, the closing market price of the Shares on the New York Stock Exchange on such date or the nearest prior business day on which trading occurred...

Page 733
... sole discretion. "Share" means one share of common stock ($.01 par value) of The Hartford. "The Hartford" means The Hartford Financial Services Group, Inc., and any successor by merger or purchase or otherwise. "The Hartford Income Protection Plan" means The Hartford Income Protection Plan, as may...

Page 734
... of Benefits for Total Disability. An Employee shall be deemed an ineligible Employee during the period such Employee receives benefits for a total disability under The Hartford Income Protection Plan or any other long-term disability plan or program maintained by the Company or its affiliates. Such...

Page 735
... form by the designated party (or such other date as may be designated by the Plan Administrator). D. Participant's Account. The Company shall maintain payroll deduction Accounts for all Participants. Payroll deductions made from a Participant's Compensation shall be credited to the Participant...

Page 736
...) that is received prior to such last month by the party designated by the Plan Administrator, then all payroll deductions credited to the Participant's Account as of the date the Participant's employment terminates which have not already been applied for the purchase of Shares hereunder shall be...

Page 737
...dividend shall not be paid in cash, but shall be paid in the form of additional Shares ("Reinvested Shares"), upon such terms and conditions as the Plan Administrator shall determine, subject to this subsection F. Reinvested Shares may be purchased directly from The Hartford from its treasury and/or...

Page 738
...5.2 Adjustment Upon Corporate Changes. In the event of any stock dividend, stock split, recapitalization (including, without limitation, the payment of an extraordinary dividend), merger, consolidation, combination, spin-off, distribution of assets to shareholders (other than ordinary cash dividends...

Page 739
...its powers as it deems appropriate to the Executive Vice President, Human Resources (or successor or other person holding a similar position) of The Hartford or the Chief Executive Officer of The Hartford. 6.2 Delegation of Certain Authority to Plan Administrator. Except as otherwise provided in the...

Page 740
.... 7.8 Use of Funds. All funds received or held by the Company pursuant to the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such funds from its general assets. 7.9 Plan Share Purchases. Shares subject to purchase by Participants under...

Page 741
... solely of an administrative nature may be made by either The Hartford's Chairman and Chief Executive Officer or Executive Vice President, Human Resources. E. The Committee or the Board shall have the power at any time to terminate the Plan and all rights of Employees under the Plan. 7.12 Subsidiary...

Page 742
... to the Members eligible to receive the contributions in accordance with the provisions of the Planco Profit Sharing Plan. This Plan shall maintain account balances transferred from the ITT Investment and Savings Plan for Salaried Employees (the "Pre-Distribution ITT Plan") which had been maintained...

Page 743
... Section 401(a) of the Internal Revenue Code, the Plan includes a savings plan portion and a stock bonus portion. Prior to November 29, 2001, the stock bonus portion consisted of assets related to the leveraged employee stock ownership plan in effect from 1989 through the Distribution Date under...

Page 744
... 2006, the average of the ratios, calculated separately for each applicable Employee, of (A) the sum of the After-Tax Savings, Matching Company Contributions, and Planco Profit Sharing Contributions (if applicable) made for the current Plan Year to (B) the Employee's Compensation for that Plan Year...

Page 745
...-Tax Investment Account, Basic Roth 401(k) Investment Account and Basic After-Tax Investment Account. "Basic Roth 401(k) Investment Account" means that portion of the Trust Fund which, with respect to any Member or Deferred Member, is attributable to Basic Roth 401(k) Savings and any investment...

Page 746
... 1990 under the Pre-Distribution ITT Plan, and Planco Profit Sharing Contributions. Prior to January 1, 2006, no Company Contributions shall be made with respect to Employees of Planco Financial Services, Inc. "Company Contribution Account" means that portion of the Trust Fund which, with respect to...

Page 747
...of such Member that results in the Member qualifying for benefits under the Hartford Fire Insurance Company Long Term Disability Plan for salaried Employees or a similar disability plan sponsored by the Company. If a Member qualifies for benefits under such plan, then he or she shall be deemed to be...

Page 748
... Company Retirement Savings Plan, the Hartford Fire Insurance Company Deferred Profit Sharing Plan, and the Hartford Fire Insurance Company Employee Profit Sharing Plan or any successor to the foregoing plans, or (D) prior to January 1, 2006, a person who is an employee of Planco Financial Services...

Page 749
... the Employee Retirement Income Security Act of 1974, as amended from time to time. "ESOP" means the portion of the Plan that consists of assets invested in The Hartford Stock in The Hartford Stock Fund at any time on and after November 29, 2001. "ESOP Account" means that portion of the Trust Fund...

Page 750
.../or existing Plan assets may be invested. "IPO" means the initial public offerings of Hartford Life Stock. "IPO Date" means May 22, 1997, the date of consummation of the IPO. "IRS" means the Federal Internal Revenue Service. "Limitation Year" means the calendar year. -9- Source: HARTFORD FINANCIAL...

Page 751
...as to the employees of one or more of its operating subdivisions or other sub-units, and in the case of a division or unit of an affiliate of Hartford Fire, the Board of Directors of such affiliate has adopted this Plan on behalf of such division or unit. "Pension Administration Committee" means the...

Page 752
... under the cash balance formula of the Retirement Plan, or (ii) is not eligible for coverage under the Retirement Plan, "Retirement" shall mean, solely for purposes of this Plan, separation from the employment of the Company on or after reaching age 65. - 11 - Source: HARTFORD FINANCIAL S, 10...

Page 753
... an Eligible Employee's compensation from the Company at his or her base rate, including any payments made on account of such Eligible Employee's short-term disability under The Hartford Income Protection Plan, excluding any compensation deferred under a deferred compensation plan, and determined...

Page 754
...employment with the Company so long as such Eligible Employee becomes employed by the Company during 1997 in accordance with and under the terms of the AARP GHIP Management Agreement dated February 26, 1997 immediately following employment with United HealthCare Insurance Company, if such employment...

Page 755
... with the acquired business to the extent so provided by the Plan Administrator. For an individual who completes an Hour Worked as an Eligible Employee on or after January 1, 2006, service as a leased employee, within the meaning of Code Section 414(n)(2), shall be taken into account solely to the...

Page 756
...is affiliated with Hartford Fire (the sponsor of the Plan). "The Hartford Stock" means common stock of The Hartford Financial Services Group Inc., par value $.01 per share. "The Hartford Stock Fund" means the Investment Fund established pursuant to the Plan which by its terms is invested exclusively...

Page 757
...held under an insurance contract or contracts established with The Hartford or its affiliates, consisting of the funds described in Article Eight. "Trustee" means the Trustee at any time acting as such under the trust agreement established for the purposes of the Plan. "Valuation Date" means the day...

Page 758
... enrolled in the Plan may elect to have their rate of Before-Tax Savings automatically increased by a percentage they elect (up to 10%) on April 1 st of each year, or another date they may choose, up to the Plan limit or limits imposed by the IRS. - 17 - Source: HARTFORD FINANCIAL S, 10-K, February...

Page 759
...Accounts were transferred to this Plan, shall be a Member or Deferred Member under this Plan as of the Distribution Date. The Service of such Members or Deferred Members while employed by Pre-Distribution ITT before the Distribution Date shall be treated as service with Hartford Fire under this Plan...

Page 760
... reduction rate or savings as permitted by the Plan. The Plan Administrator may establish a separate limit on the percentage of Salary that a Highly Compensated Member may contribute to the Trust Fund as Before-Tax Savings. (B) Types of Before-Tax Savings; Crediting of Before-Tax Savings to Accounts...

Page 761
... changes or suspends his or her Salary reduction rate or savings as permitted by the Plan. The Plan Administrator may establish a separate limit on the percentage of Salary that a Highly Compensated Member may contribute to the Trust Fund as Roth 401(k) Savings. - 20 - Source: HARTFORD FINANCIAL...

Page 762
... of his or her Salary reduction for Basic or Supplemental Roth 401(k) Savings or Roth 401(k) Catch-Up Savings as of any business day by giving notice to the Company in a manner and by the date required by the Plan Administrator. The changed rate of Salary reduction shall be effective as of the next...

Page 763
...Member changes or suspends his or her Salary reduction rate or savings as permitted by the Plan. The Plan Administrator may establish a separate, lower limit on the percentage of Salary that a Highly Compensated Member may contribute to the Trust Fund as After-Tax Savings. The Plan Administrator may...

Page 764
...to roll over amounts to the Trust Fund, Members and Deferred Members who are not currently employed may elect to directly roll over Eligible Rollover Distributions from The Hartford Retirement Plan for U.S. Employees to a Rollover Account under the Plan. (B) Vesting in Rollovers. Amounts credited to...

Page 765
... a Hartford Excess Savings Plan) may elect to suspend or resume his or her Before-Tax, Roth 401(k) or After-Tax Savings or Before-Tax Catch-Up or Roth 401(k) Catch-Up Savings as of any business day by giving notice to the Company in the manner and by the time required by the Plan Administrator. Such...

Page 766
... to Basic Savings. Effective January 1, 2008, subject to the IRS limits described in Article Six and any other Plan limits, the Company shall, with respect to each Member principally employed by it who has completed at least six months of Service as an Eligible Employee, contribute to the Trust Fund...

Page 767
...Amounts Attributable to a Prior Plan Transfer . Each Member and Deferred Member shall at all times be fully vested in the portion of his or her Company Contribution Account attributable to a Prior Plan Transfer. (D) Vesting in Planco Profit Sharing Contributions. (i) General Rules. A Member shall be...

Page 768
... credited to his or her ESOP Account and Company Contribution Account as of the Distribution Date. (ii) Forfeitures by Members Who Did Not Previously Work for Pre-Distribution ITT. In the case of a Member or Deferred Member who did not perform services for Pre-Distribution ITT between June 30, 1995...

Page 769
... this Plan. Account balances under the Plan will be combined with the account balances or the present value of accrued benefits under any other qualified plan of the Company and its affiliates in which "key employees" participate or which enable the Plan to meet the requirements of Code Section 401...

Page 770
... year, the excess Before-Tax Savings and Roth 401(k) Savings as adjusted for investment experience will, in the sole discretion of the Plan Administrator, either (i) be deemed to have been distributed to the Member and recontributed to the Plan as After-Tax Savings, or (ii) be returned to the Member...

Page 771
..., under rules adopted by the Plan Administrator, such Members may elect to recharacterize such adjusted contributions as After-Tax Savings. Any such recharacterization or distribution of the adjusted excess contributions will be made to the Highly Compensated Employees on the basis of the respective...

Page 772
...the Plan Administrator may impose a limitation on the extent to which a Highly Compensated Member may contribute Before-Tax and Roth 401(k) Savings hereunder, based on a reasonable projection of savings rates of non-Highly Compensated Members. 6.2 IRS Limits on After-Tax Savings and Matching Company...

Page 773
... 401(m) of the Code, the Plan Administrator may impose an additional limit on the amount of After-Tax Savings that a Highly Compensated Member may contribute to the Trust Fund, based on a reasonable projection of savings rates of nonHighly Compensated Members. - 32 - Source: HARTFORD FINANCIAL...

Page 774
..."Annual Addition" to a Member's Accounts for any Limitation Year means the sum of (a) the Member's Before-Tax Savings for such Year, (b) the Member's Roth 401(k) Savings for such Year, (c) the Member's After-Tax Savings for such Year, and (d) all Matching Company Contributions, Planco Profit Sharing...

Page 775
...Company Contributions -Prior Plan Transfers -Reinvested Dividends Attributable to The Hartford Stock Fund Planco Profit Sharing Contributions ESOP balances (from Pre-Distribution ITT Plan) Sub-Account Basic Before-Tax Investment Account Basic Roth 401(k) Investment Account Basic After-Tax Investment...

Page 776
...to the Member's or Deferred Member's Accounts as of the ex-dividend date of such dividend, to have the dividend either distributed in cash to the Member or Deferred Member or reinvested in shares of The Hartford Stock in The Hartford Stock Fund. The Plan Administrator shall prescribe rules regarding...

Page 777
... with respect to The Hartford Stock Fund. Notwithstanding the foregoing, the Trustee temporarily may hold cash or make short-term investments in obligations of the United States Government, commercial paper, an interim investment fund for tax-qualified employee benefit plans established by the...

Page 778
... by an eligible individual account plan as defined in ERISA ("EIAP") and/or ESOP in employer common stock, (C) the amount of income provided by The Hartford Stock, (D) fluctuation in the fair market value of The Hartford Stock, and (E) the relative investment returns of The Hartford Stock Fund in...

Page 779
... Stable Value Fund, those amounts may not be transferred to the Hartford Money Market HLS Fund or the Hartford Total Return Bond Fund for a period of 90 days. (D) Changes / Redistributions for Company Contributions and ESOP Account Balances . Members may elect to change the Investment Funds in which...

Page 780
(F) "Round Trip" Transaction limit. To prevent excessive trading, a Member or Deferred Member will be restricted on "round trip transactions" between any Hartford HLS mutual funds. A roundtrip transaction occurs when a Member exchanges in and then out of an investment fund option within 30 days. ...

Page 781
... Deferred Member's own Savings, Company Contributions and Rollovers (including in each case any related loan repayments) directed to be invested in The Hartford Stock Fund, any amount so directed above the 10% limit shall instead be invested in the applicable Default Vanguard Target Retirement Fund...

Page 782
... the Trustee subject to the provisions of the trust agreement and the Plan. In the event that The Hartford Stock is no longer available to be acquired following a tender offer, the Company may direct the substitution of new employer securities for such Stock or for the proceeds of any disposition of...

Page 783
... (E) authorizes the Company to make regular payroll deductions to repay the loan. Loans will be permitted only if all of the conditions described in the next paragraph are satisfied. Permitted loans will be deducted from Member Accounts as of the Loan Valuation Date, and will be paid in cash as soon...

Page 784
... Company Contributions in the Company Contribution Account. (K) Vested Planco Profit Sharing Contributions, if any. (L) Reinvested Dividends Attributable to The Hartford Stock Fund. (M) Roth 401(k) Rollover Account. (N) Basic Roth 401(k) and Supplemental Roth 401(k) Investment Account. (O) Roth 401...

Page 785
... designated by the Plan Administrator. The entire outstanding balance of a loan may be prepaid at any time, with interest through the date of prepayment. The date of prepayment will be date designated by the Plan Administrator. If a Member is serving in the Armed Services of the United States, loan...

Page 786
..., which conditions shall be in writing and communicated to Members. Such written conditions are incorporated herein by reference. (C) Order of Sources for Non-Hardship Withdrawals. (i) Supplemental After-Tax Investment Account. (ii) Rollover Account. - 45 - Source: HARTFORD FINANCIAL S, 10...

Page 787
... Company Contributions that were made more than 24 months before the proposed withdrawal date. (vii) Vested Planco Profit Sharing Contribution Account. (viii) Reinvested Dividends Attributable to The Hartford Stock Fund. (ix) Prior Plan Transfers. Withdrawal of Before-Tax and Roth 401(k) Savings...

Page 788
...2001, distribution of all cash dividends currently available to the Member under Section 7.6 of this Plan and (ii) all non-taxable loans available under all retirement plans maintained by the Company, including this Plan, provided that making the payments on such loans does not result in a financial...

Page 789
... the form of The Hartford Stock, except that: (A) fractional shares will be paid in cash, (B) a recipient may request that such amounts be paid in cash, and (C) hardship withdrawals will be paid in cash. Withdrawal payments from any Investment Fund other than The Hartford Stock Fund shall be paid in...

Page 790
... distribution of the value of his or her Vested Share invested in The Hartford Stock Fund not later than one year after the end of the Plan Year- (i) in which the Member separates from service by reason of (a) Retirement in the case of a Member with an original hire date with the Company before...

Page 791
... Vested Share invested in The Hartford Fund will be made in substantially equal periodic payments of a period not longer than the greater of- (x) five years; or (y) if the fair market value of the Vested Share invested in The Hartford Stock Fund exceeds $885,000 (in 2006) as of the date distribution...

Page 792
... Hartford Stock, or cash, or both, as provided in (A), above. (D) Prior Plan Transfers. Alternative methods of distribution may apply to that portion of an Account attributable to a Prior Plan Transfer. (E) Special Distribution Rules for Certain Amounts Attributable to the Planco Profit Sharing Plan...

Page 793
... any check comprising all or a portion such distribution, the cash portion of the distribution shall be paid to his or her estate. If such a person dies before the Valuation Date or issuance of a check or shares of The Hartford Stock, then the distribution shall be paid to his or her Beneficiary...

Page 794
..., may direct any disputed Accounts be invested in the Investment Fund involving the least risk of loss of assets (as determined in the sole discretion of such Committee) pending resolution of the dispute regarding such Accounts. 11.8 Direct Rollover of Certain Distributions. (A) Effective Date. This...

Page 795
... Section 414(p). (iv) "Direct Rollover" means a payment by the Plan directly to the Eligible Retirement Plan specified by the distributee in cash and/or shares. (C) Ability to Request a Direct Rollover. If the Plan Administrator determines that a withdrawal or distribution hereunder qualifies as an...

Page 796
... to receive all, or a portion of, the benefits payable under the Plan with respect to such Member. All procedures so established shall be binding on all Members, Deferred Members and Alternate Payees. The Pension Administration Committee may charge a fee to the Accounts of a Member, Deferred Member...

Page 797
... withdrawal or distribution from the Plan, and (B) such amounts shall not be counted in determining the maximum amount available for a loan under Article Nine. 12.5 Payment from Temporary Holding Account in Certain Cases . If, by the expiration of the 18 month period beginning on the date the first...

Page 798
... THIRTEEN GENERAL MATTERS RELATING TO COMMITTEES 13.1 Appointment of Committees. The Board of Directors of Hartford Fire has appointed a Pension Administration Committee, an Investment and Savings Plan Investment Committee, and a Hardship Committee, each such Committee to be comprised of the number...

Page 799
...paid by the Company, expenses associated with such services shall be paid from the assets of the Plan. 13.9 Compensation of Committee Members. No member of any Committee shall receive any compensation for his or her services as such, and except as required by law, no bonds or other security shall be...

Page 800
... to matters that are the responsibility of the Investment and Savings Plan Investment Committee or Stock Fund Fiduciary appointed under Section 8.1 or as otherwise herein expressly provided, for general supervision of the administration of the Plan. Said Committee shall also have such authority...

Page 801
... and operating the details of the Plan in accordance with the provisions of the Plan and any policies which may from time to time be established by the Pension Administration Committee. The Plan Administrator shall be Hartford Fire's Vice President, Employee Benefits (or successor or other person...

Page 802
...a bona fide financial hardship exists in a particular case, the Hardship Committee shall take into account all pertinent facts and circumstances and shall base its determination on the meaning of the term hardship under the applicable tax laws, including cases and Internal Revenue Service guidelines...

Page 803
... or liability to make any direct payment of benefits under the Plan. Neither the Company nor the Trustee guarantees the Trust Fund against any loss or depreciation or guarantees the payment of any benefit hereunder. No person shall have any rights under the Plan with respect to the Trust Fund, or...

Page 804
... before paying benefits under the Plan or making settlement of any amount due under the Plan, (iii) making settlement of any amount due under the Plan part in shares of common stock of The Hartford and part in cash to facilitate satisfaction of such withholding obligations, or (iv) receiving shares...

Page 805
...115 and older - 64 Distribution Period 27.4 26.5 25.6 24.7 23.8 22.9 22.0 21.2 20.3 19.5 18.7 17.9 17.1 16.3 15.5 14.8 14.1 13.4 12.7 12.0 11.4 10.8 10.2 9.6 9.1 8.6 8.1 7.6 7.1 6.7 6.3 5.9 5.5 5.2 4.9 4.5 4.2 3.9 3.7 3.4 3.1 2.9 2.6 2.4 2.1 1.9 Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009

Page 806
...10.3) billion in investment income losses and mark-to-market effects of equity securities held for trading supporting the international variable annuity business. [3] NM: Not meaningful. [4] This secondary ratio is disclosed for the convenience of fixed income investors and the rating agencies that...

Page 807
...) Hartford Equity Sales Company, Inc. (Connecticut) Hartford Equity Specialists Fund, L.P. (Delaware) Hartford Europe, Ltd. (United Kingdom) Hartford Financial Products International (UK) Hartford Financial Services, LLC (Delaware) Hartford Fire General Agency, Inc. (Texas) Hartford Fire Insurance...

Page 808
... Life Private Placement, LLC (Delaware) Hartford Lloyd's Corporation (Texas) Hartford Lloyd's Insurance Company (Partnership) (Texas) Hartford Management, Ltd. (Bermuda) Hartford Residual Market, L.L.C. (Connecticut) Hartford Retirement Services, LLC (Delaware) Hartford Securities Distribution...

Page 809
... Evergreen Group Incorporated (New York) The Hartford Club of Simsbury, Inc. (Connecticut) The Hartford International Asset Management Company Limited (Ireland) Thesis S.A. (Argentina) Trumbull Flood Management, L.L.C. (Connecticut) Trumbull Insurance Company (Connecticut) Trumbull Securities, LLC...

Page 810
...relating to the Company's change in its method of accounting and reporting for the fair value measurement of financial instruments in 2008, and defined benefit pension and other postretirement plans in 2006) and the effectiveness of The Hartford Financial Services Group, Inc.'s internal control over...

Page 811
...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, 2008 (the "Annual Report"), and any and all amendments or supplements to the Annual Report...might or could do in person, with full power of substitution...

Page 812
... with respect to the period covered by this report; Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for...

Page 813
..., that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/ Lizabeth H. Zlatkus Lizabeth H. Zlatkus Executive Vice President and Chief Financial Officer b. Date: February 11, 2009 Source: HARTFORD FINANCIAL S, 10...

Page 814
... ACT OF 2002 In connection with the Annual Report on Form 10-K for the period ended December 31, 2008 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 815
... Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Lizabeth H. Zlatkus Lizabeth H. Zlatkus Executive Vice President and Chief Financial Officer Date: February...

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