The Hartford 2013 Annual Report Download - page 67

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Contingencies Relating to Corporate Litigation and Regulatory Matters
Management evaluates each contingent matter separately. A loss is recorded if probable and reasonably estimable. Management
establishes reserves for these contingencies at its “best estimate,” or, if no one number within the range of possible losses is more
probable than any other, the Company records an estimated reserve at the low end of the range of losses.
The Company has a quarterly monitoring process involving legal and accounting professionals. Legal personnel first identify
outstanding corporate litigation and regulatory matters posing a reasonable possibility of loss. These matters are then jointly reviewed by
accounting and legal personnel to evaluate the facts and changes since the last review in order to determine if a provision for loss should
be recorded or adjusted, the amount that should be recorded, and the appropriate disclosure. The outcomes of certain contingencies
currently being evaluated by the Company, which relate to corporate litigation and regulatory matters, are inherently difficult to predict,
and the reserves that have been established for the estimated settlement amounts are subject to significant changes. Management expects
that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses, will not be
material to the consolidated financial condition of the Company. In view of the uncertainties regarding the outcome of these matters, as
well as the uncertainties regarding tax-deductibility of payments, it is possible that the ultimate cost to the Company of these matters
could exceed the reserve by an amount that would have a material adverse effect on the Company’s results of operations or liquidity in a
particular quarterly or annual period.