Agreement between CT, NY and Hartford in which Hartford agreed topay $20 million in restitution and fines, and implement reforms designed to bring fair play and transparency to the marketing of retirement products. Agreement resolved charges that insurance companies were making secret payments to
insurance brokers to recommend group annuities to pension plans. According to a complaint filed with the settlement agreement, the scheme involved sham
“expense reimbursement agreements” (ERAs) between Hartford and each of four brokers who held themselves out as trusted advisors to retirement plans: Dietrich & Associates; Brentwood Asset Advisors; BCG Terminal Funding; and USI Consulting Group. The ERAs actually had nothing to do with expense reimbursements; they were simply volume-based bonuses designed to reward brokers for pushing Hartford products. Under the settlement agreement, Hartford is obligated to improve disclosures and stop making the payments for a three-year period. The company will support legislation to curtail such payments
thereafter.