The Hartford 2012 Annual Report Download - page 136

Table of Contents
Changes in internal control over financial reporting
As reported in the Q3 Form 10-Q/A, the circumstances described therein constituted a material weakness in internal control over financial reporting as of
September 30, 2012.
Based on accounting review and validation procedures performed in connection with the financial reporting and close process for the fourth quarter of 2012
and subsequent to the filing of the Third Quarter 2012 Form 10-Q, the Company identified that the impact of certain reinsurance recoverable balances
associated with the sale of the Individual Life business (the “Transaction”) was incorrectly omitted in determining the estimated gain or loss on disposition
associated with the Transaction. As a result of such identification, the Company concluded that it would be necessary to recognize an estimated pre-tax loss on
the Transaction of $533, comprised of the impairment of goodwill attributed to the Individual Life business of $342 and a loss accrual for premium
deficiency of $191, which should have been recorded in the third quarter of 2012. The estimate is subject to change pending final determination of net assets
sold, transaction costs, and other adjustments. Management performed additional procedures in order to confirm the extent of the impact of the error. As a
result of these procedures and the conclusions reached regarding the error, the Company filed the Amendment No.1 to its third quarter 2012 Form 10-Q to
recognize such third quarter 2012 reinsurance loss on disposition through the impairment of goodwill and a loss accrual for premium deficiency.
The Company performed its planned year-end procedures, which included accounting review and validation procedures performed by management and
accounting operations professionals. These procedures included a detailed evaluation of the impact to general ledger accounts associated with the Transaction
to ensure the accuracy of the reinsurance loss on disposition of business calculation associated with the Transaction and resulted in the identification of the
error described in more detail above. For future transactions involving the purchase or sale of a business, the Company will perform these accounting review
and validation procedures upon signing of a purchase or sale agreement. We believe the actions described above remediated the material weakness described in
the Q3 Form 10-Q/A.
Other than the steps taken to address the material weakness described above, there was no change in the Company's internal control over financial reporting
that occurred during the Company's current fiscal quarter that have materially affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting
Attestation report of the Company’s registered public accounting firm
The Hartford's independent registered public accounting firm, Deloitte & Touche LLP, has issued their attestation report on the Company's internal control
over financial reporting which is set forth below.
135