The Hartford 2011 Annual Report Download - page 29

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Investment and Savings Plan ERISA and Shareholder Securities Class Action Litigation – In November and December 2008, following
a decline in the share price of the Company’ s common stock, seven putative class action lawsuits were filed in the United States District
Court for the District of Connecticut on behalf of certain participants in the Company’ s Investment and Savings Plan (the “Plan”), which
offers the Company’ s common stock as one of many investment options. These lawsuits have been consolidated, and a consolidated
amended class-action complaint was filed on March 23, 2009, alleging that the Company and certain of its officers and employees
violated ERISA by allowing the Plan’ s participants to invest in the Company’ s common stock and by failing to disclose to the Plan’ s
participants information about the Company’ s financial condition. The lawsuit seeks restitution or damages for losses arising from the
investment of the Plan’ s assets in the Company’ s common stock during the period from December 10, 2007 to the present. In January
2010, the district court denied the Company’ s motion to dismiss the consolidated amended complaint. In February 2011, the parties
reached an agreement in principle to settle on a class basis for an immaterial amount. The settlement was preliminarily approved by the
court in January 2012, and is contingent upon final court approval.
Mutual Funds Litigation — In October 2010, a derivative action was brought on behalf of six Hartford retail mutual funds in the United
States District Court for the District of Delaware, alleging that Hartford Investment Financial Services, LLC (“HIFSCO”), an indirect
subsidiary of the Company, received excessive advisory and distribution fees in violation of its statutory fiduciary duty under Section
36(b) of the Investment Company Act of 1940. In February 2011, a nearly identical derivative action was brought against HIFSCO in
the United States District Court for the District of New Jersey on behalf of six additional Hartford retail mutual funds. Both actions
were assigned to the Honorable Renee Marie Bumb, a judge in the District of New Jersey who was sitting by designation with respect to
the Delaware action. Plaintiffs in each action seek to rescind the investment management agreements and distribution plans between
HIFSCO and the Hartford mutual funds and to recover the total fees charged thereunder or, in the alternative, to recover any improper
compensation HIFSCO received. In addition, plaintiffs in the New Jersey action seek recovery of lost earnings. HIFSCO moved to
dismiss both actions and, in September 2011, the motions to dismiss were granted in part and denied in part, with leave to amend the
complaints. In November 2011, a stipulation of voluntary dismissal was filed in the Delaware action and plaintiffs in the New Jersey
action filed an amended complaint on behalf of six Hartford mutual funds, seeking the same relief as in their original complaint.
HIFSCO disputes the allegations and has filed a partial motion to dismiss.
Asbestos and Environmental Claims – As discussed in Part II, Item 7, MD&A – Critical Accounting Estimates – Property and Casualty
Insurance Product Reserves, Net of Reinsurance – Reserving for Asbestos and Environmental Claims within Property & Casualty Other
Operations, The Hartford continues to receive asbestos and environmental claims that involve significant uncertainty regarding policy
coverage issues. Regarding these claims, The Hartford continually reviews its overall reserve levels and reinsurance coverages, as well
as the methodologies it uses to estimate its exposures. Because of the significant uncertainties that limit the ability of insurers and
reinsurers to estimate the ultimate reserves necessary for unpaid losses and related expenses, particularly those related to asbestos, the
ultimate liabilities may exceed the currently recorded reserves. Any such additional liability cannot be reasonably estimated now but
could be material to The Hartford’ s consolidated operating results, financial condition and liquidity.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.