The Hartford 2007 Annual Report Download - page 171

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Contingencies
Legal Proceedings – For a discussion regarding contingencies related to The Hartford’ s legal proceedings, please see Item 3, “Legal
Proceedings”.
Regulatory Developments – For a discussion regarding contingencies related to regulatory developments that affect The Hartford, please
see Note 12 of Notes to the Consolidated Financial Statements.
Legislative Initiatives
For a discussion of terrorism reinsurance legislation and how it affects The Hartford, see the “Risk Management Strategy-Terrorism”
under the Property & Casualty section of the MD&A.
Tax proposals and regulatory initiatives which have been or are being considered by Congress and/or 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 and comprehensive federal tax reform. The nature and timing of any Congressional or regulatory action with respect to any such
efforts is unclear.
Guaranty Fund and Other Insurance-related Assessments
In all states, insurers licensed to transact certain classes of insurance are required to become members of a guaranty fund. In most states,
in the event of the insolvency of an insurer writing any such class of insurance in the state, members of the funds are assessed to pay
certain claims of the insolvent insurer. A particular state’ s fund assesses its members based on their respective written premiums in the
state for the classes of insurance in which the insolvent insurer was engaged. Assessments are generally limited for any year to one or
two percent of premiums written per year depending on the state.
The Hartford accounts for guaranty fund and other insurance assessments in accordance with Statement of Position No. 97-3,
“Accounting by Insurance and Other Enterprises for Insurance-Related Assessments”. Liabilities for guaranty fund and other insurance-
related assessments are accrued when an assessment is probable, when it can be reasonably estimated, and when the event obligating the
Company to pay an imposed or probable assessment has occurred. Liabilities for guaranty funds and other insurance-related
assessments are not discounted and are included as part of other liabilities in the Consolidated Balance Sheets. As of December 31,
2007 and 2006, the liability balance was $147 and $149, respectively. As of December 31, 2007 and 2006, $19 and $20, respectively,
related to premium tax offsets were included in other assets.
IMPACT OF NEW ACCOUNTING STANDARDS
For a discussion of accounting standards, see Note 1 of Notes to Consolidated Financial Statements.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is set forth in the Capital Markets Risk Management section of Item 7, Management’ s Discussion
and Analysis of Financial Condition and Results of Operations and is incorporated herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Consolidated Financial Statements and Schedules elsewhere herein.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.