The Hartford 2008 Annual Report Download - page 200

Table of Contents
A variety of traditional reinsurance products are used as part of the Company’s risk management strategy, including excess
of loss occurrence-based products that protect property and workers’ compensation exposures, and individual risk or quota
share arrangements, that protect specific classes or lines of business. There are no significant finite risk contracts in place
and the statutory surplus benefit from all such prior year contracts is immaterial. Facultative reinsurance is also used to
manage policy-specific risk exposures based on established underwriting guidelines. The Hartford also participates in
governmentally administered reinsurance facilities such as the Florida Hurricane Catastrophe Fund (“FHCF”), the Terrorism
Risk Insurance Program established under The Terrorism Risk Insurance Program Reauthorization Act of 2007 (“TRIPRA”)
and other reinsurance programs relating to particular risks or specific lines of business.
The Company has several catastrophe reinsurance programs, including reinsurance treaties that cover property and workers’
compensation losses aggregating from single catastrophe events. The following table summarizes the primary catastrophe
treaty reinsurance coverages that the Company has in place as of January 1, 2009:
% of layer(s)
Coverage Treaty term reinsured Per occurrence limit Retention
Principal property catastrophe program covering
property catastrophe losses from a single event
1/1/2009 to
1/1/2010
Varies by layer, but
averages 90% across
all layers
Aggregates to $750 across
all layers
$250
Property catastrophe losses from a single event on
excess and surplus property business
1/1/2009 to
1/1/2010
95% Aggregates to $280 across
all layers
20
Layer covering property catastrophe losses from a
single wind or earthquake event affecting the
northeast of the United States from Virginia to
Maine
6/1/2008 to
6/1/2009
90% $300 1,000
Reinsurance with the FHCF covering Florida
Personal Lines property catastrophe losses from
a single event
6/1/2008 to
6/1/2009
90% 382[1] 83
Workers’ compensation losses arising from a single
catastrophe event
7/1/2008 to
7/1/2009
95% 280 20
[1] The per occurrence limit on the FHCF treaty is $382 for the 6/1/2008 to 6/1/2009 treaty year based on the Company’s
election to purchase additional limits under the “Temporary Increase in Coverage Limit (TICL)” statutory provision in
excess of the coverage the Company is required to purchase from the FHCF.
In addition to the property catastrophe reinsurance coverage described in the above table, the Company has other treaties and
facultative reinsurance agreements that cover property catastrophe losses on an aggregate excess of loss and on a per risk
basis. The principal property catastrophe reinsurance program and other reinsurance programs include a provision to
reinstate limits in the event that a catastrophe loss exhausts limits on one or more layers under the treaties.
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Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009