Document:

EX-10.1

 

Exhibit 10.1

Agreement Among the Attorney General of the State of Connecticut and the Attorney General of the

State of New York, and The Hartford Financial Services Group, Inc. and its subsidiaries and

affiliates (collectively “Hartford”) dated May 10, 2006

     WHEREAS, the Connecticut Attorney General has commenced an action against The Hartford
Financial Services Group, Inc. and Hartford Life, Inc. pursuant to the Connecticut Unfair Trade
Practices Act, Conn. Gen. Stat. (§§ 42-110a et seq.) dated May 10, 2006 (the
“Connecticut Complaint”) related to Hartford’s practices in the marketing, sale, or placement of
terminal and maturity funding single premium group annuity contracts to pension plan sponsors
(“Terminal/Maturity Funding Group Annuity(ies)”) and has conducted an investigation related thereto
(the “Connecticut Attorney General’s Investigation”);

     WHEREAS, the New York Attorney General has commenced an action against The Hartford Financial
Services Group, Inc. and Hartford Life, Inc. pursuant to Executive Law § 63 (12) and the common
law of the State of New York dated May 10, 2006 (the “New York Complaint”) related to Hartford’s
practices in the marketing, sale, or placement of Terminal/Maturity Funding Group Annuity(ies) to
pension plan sponsors and has conducted an investigation related thereto (the “New York Attorney
General’s Investigation”);

     WHEREAS, the Connecticut and New York Attorneys General have alleged that Hartford unlawfully
deceived its Terminal/Maturity Funding Group Annuity pension plan customers by: a) participating
in schemes to steer business to Hartford; and (b) providing false information to Hartford’s
Terminal/Maturity Funding Group Annuity pension plan customers regarding the compensation paid to
brokers of
Terminal/Maturity Funding Group Annuity(ies);

     WHEREAS, without admitting or denying any claim in the Complaints, Hartford is
entering into this Agreement prior to any court making any findings of fact or conclusions of

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law
pursuant to any allegations by the Attorneys General;

     WHEREAS, Hartford has been and is continuing to cooperate with the investigations being
conducted by the Connecticut Attorney General and the New York Attorney General (collectively the
“Attorneys General”);

     WHEREAS, in the wake of the Attorneys General’s Investigations, Hartford has agreed under this
Agreement (the “Agreement”) to implement a number of business reforms;

     WHEREAS, nothing herein shall be construed to apply to any business or operations other than
Terminal/Maturity Funding Group Annuity(ies);

     WHEREAS, the Attorneys General and Hartford wish to enter into this Agreement to resolve all
issues related to Hartford raised to date in the Connecticut Attorney General’s Investigation and
the New York Attorney General’s Investigation;

     WHEREAS,
the Attorneys General find the relief and agreements contained in this Agreement appropriate and in the public interest, and are willing to accept this Agreement as
a settlement of the Connecticut Attorney General’s Complaint and Investigation and the New York
Attorney General’s Complaint and Investigation;

     WHEREAS, this Agreement is entered into solely for the purpose of resolving the Complaints and
is not intended to be used for any other purpose; and

     NOW THEREFORE, Hartford and the Attorneys General hereby enter into this Agreement with a
statement of apology attached as Exhibit 1, and agree as follows:

MONETARY RELIEF

     A. Terminal/Maturity Funding Group Annuity Fund

     1. On or before May 19, 2006, Hartford shall pay $16,100,000 into a fund (the

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“Terminal/Maturity Funding Group Annuity Fund”) created and held by Hartford to be paid to
Hartford’s pension plan customers that purchased Hartford’s Terminal/Maturity Funding Group
Annuity(ies) during the period from January 1, 1998 through December 31, 2004 using either
Brentwood Asset Advisors, LLC, or USI Consulting Group, or Dietrich & Associates, or BCG Terminal
Funding Company, or those brokers’ or consultants’ predecessors, as their broker or consultant, and
at the time of the sale, their broker or consultant had an expense reimbursement or other
production-based incentive agreement, including but not limited to a consulting agreement or
marketing allowance agreement, with Hartford and (i) the sale resulted in a payment to the broker
or consultant pursuant to the expense reimbursement or other production-based incentive agreement,
or (ii) an amount reflecting the payment for an expense reimbursement or other production-based
incentive agreement was added to the premium but not otherwise paid to the broker or consultant or
(iii) the sale was credited toward achieving a threshold to obtain such payment under such an
agreement (the “Eligible Customers”). All of the money paid into the Terminal/Maturity Funding
Group Annuity Fund and any investment or interest income earned thereon shall be paid to Eligible
Customers pursuant to this Agreement. No portion of the Terminal/Maturity Funding Group Annuity
Fund shall be considered a fine or a penalty.

     2. The Terminal/Maturity Funding Group Annuity Fund shall be invested in a designated money
market fund subject to the prior approval of the Attorneys General.

     3. Hartford shall (a) by June 9, 2006 calculate the amount of money each of the
Eligible Customers paid for Terminal/Maturity Funding Group Annuity(ies) with
inception dates during the period from January 1, 1998 through December 31, 2004 using either
Brentwood

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Asset Advisors, USI Consulting, Dietrich & Associates, or BCG Terminal Funding or those
brokers’ or consultants’ predecessors as their broker or consultant where at the time of the sale,
their broker or consultant had an expense reimbursement or other production-based incentive
agreement, including but not limited to a consulting agreement or marketing allowance agreement,
with Hartford and (i) the sale resulted in a payment to the broker or consultant pursuant to the
expense reimbursement or other production-based incentive agreement, or (ii) an amount reflecting
the payment for an expense reimbursement or other production-based incentive agreement was added to
the premium but not otherwise paid to the broker or consultant or (iii) the sale was credited
toward achieving a threshold to obtain such payment under such an agreement (the “Eligible
Annuities”); (b) within ten days of completing these calculations, file a report with the Attorneys
General, certified by an officer of Hartford, setting forth: (i) each Eligible Customer’s name and
address; (ii) the Eligible Customer’s Eligible Annuity(ies) (by group annuity number(s)); (iii) the
amount the Eligible Customer paid in premiums for each Eligible Annuity; and (iv) the amount each
Eligible Customer is eligible to receive from the Terminal/Maturity Funding Group Annuity Fund,
which shall equal each Eligible Customer’s pro rata share of the Terminal/Maturity Funding Group
Annuity Fund as calculated by multiplying the amount in the Terminal/Maturity Funding Group Annuity
Fund by the ratio of the Eligible Customer’s total paid premium for Eligible Annuity(ies), divided
by the total paid premium for
all Eligible Annuities; and (c) by July 10, 2006, send a notice to each Eligible Customer, setting
forth the items in (b)(ii) through (iv), above, and stating that the amount paid may increase if
there is less than full participation by Eligible Customers in the Terminal/Maturity Funding Group
Annuity Fund (the “Annuity Notice”). The form of the Annuity Notice shall be subject to

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the prior
approval of the Attorneys General.

     4. In the event impediments arise with respect to the identification of Eligible Customers, or
the distribution from the Terminal/Maturity Funding Group Annuity Fund to a particular Eligible
Customer, both the Attorneys General and Hartford agree to use their best efforts to achieve the
parties’ stated intention to distribute to each Eligible Customer their pro rata share of the
Terminal/Maturity Funding Group Annuity Fund. Any amounts not distributed to Eligible Customers,
despite the best efforts of the parties, shall be distributed to Participating Customers, as
defined in paragraph 5, consistent with paragraph 9 of this Agreement.

     5. Eligible Customers who receive an Annuity Notice and who voluntarily elect to receive a
cash distribution (the “Participating Customers”) shall tender a release in the form attached
hereto as Exhibit 2 on or before November 7, 2006.

     6. On or before November 22, 2006, Hartford shall pay each Participating Customer the amount
that that Participating Customer is eligible to receive from the Terminal/Maturity Funding Group
Annuity Fund as set forth in paragraph 3(b)(iv) above, and any interest or investment income earned
thereon.

     7. On or before December 7, 2006, Hartford shall file an interim report with the Attorneys
General, certified by an officer of Hartford, listing all amounts paid from the Terminal/Maturity
Funding Group Annuity Fund.

     8. In the event that any Eligible Customer elects not to participate or otherwise
does not respond to the Annuity Notice (the “Non-Participating Customers”), the amount that
such policyholder was eligible to receive from the Terminal/Maturity Funding Group Annuity Fund as
set forth in paragraph 3(b)(iv) may, up until January 6, 2007, be used by Hartford to

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satisfy any
pending or other claims asserted by Non-Participating Customers relating to the Terminal/Maturity
Funding Group Annuity allegations set forth in the Complaints, provided that: a) in no event shall
a distribution be made from the Terminal/Maturity Funding Group Annuity Fund to any
Non-Participating Customer until all Participating Customers have been paid the full aggregate
amount set forth in paragraph 3(b)(iv) above, and any interest or investment income earned thereon;
and b) in no event shall the total payments from the Terminal/Maturity Funding Group Annuity Fund
to any Non-Participating Customer exceed 80% of the amount that Non-Participating Customer was
originally eligible to receive as set forth in paragraph 3(b)(iv).

     9. If any money remains in the Terminal/Maturity Funding Group Annuity Fund as of January 6,
2007 after distribution as provided in paragraphs 6 and 8, any such funds shall be distributed by
January 22, 2007 on a pro rata basis to the Participating Customers.

     10. In no event shall any of the money in the Terminal/Maturity Funding Group Annuity Fund or
the investment or interest income earned thereon be used to pay or be considered in the calculation
of attorneys’ fees.

     11. In no event shall any of the money in the Terminal/Maturity Funding Group Annuity Fund or
the investment or interest income earned thereon be used to pay or be considered in the calculation
of commissions, administrative or other fees to Hartford.

     12. On or before February 5, 2007, Hartford shall file a report with the Attorneys
General, certified by an officer of Hartford, listing all amounts paid from the
Terminal/Maturity Funding Group Annuity Fund, including any payments subsequent to the payments
described in paragraph 6.

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     B. Fine and Penalty

     13. On or before May 19, 2006, Hartford shall pay $1,950,000 as a penalty, by wire
transfer to the State of Connecticut.

     14. On or before May 19, 2006, Hartford shall pay $1,950,000 as a fine, by wire
transfer to the State of New York.

BUSINESS REFORMS

     15. Within 60 days of the date of this Agreement, Hartford shall undertake the
following business reforms. Hartford will not undertake any transaction for the purpose of
circumventing the prohibitions contained in this Agreement.

     16. For purposes of this Agreement, Compensation shall mean anything of material
value given to a Producer1 including, but not limited to, money, credits, loans,
forgiveness of principal or interest, vacations, prizes, gifts or the payment of employee salaries
or expenses, provided that Compensation shall not mean customary, non-excessive meals and
entertainment expenses. Hartford shall develop and implement policies for its relevant employees
explaining the provisions of this paragraph as part of the written standards described in paragraph 25 below.
Prior to July 10, 2006, Hartford shall submit to the Attorneys General a draft of the intended
policies for their approval.

     17. For purposes of this Agreement, Contingent Compensation is any Compensation

 

			
	1	 	For purposes of this Agreement,
“Producer” shall mean any insurance broker as that term is defined
in § 2101(c) of the Insurance Law of the State of New York who sells,
places or consults with clients respecting Terminal/Maturity Funding Group
Annuities or any independent insurance agent as that term is defined in § 2101(b) of the Insurance Law of the State of New York and who offers
Terminal/Maturity Funding Group Annuities from more than one insurer or
affiliated group of insurers.

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contingent upon any Producer: (a) placing a particular number of contracts or policies or
dollar value of premium with Hartford; (b) achieving a particular level of growth in the number of
contracts or policies placed or dollar value of premium with Hartford; (c) meeting a particular
rate of retention or renewal of contracts or policies in force with Hartford; (d) placing or
keeping sufficient insurance business with Hartford to achieve a particular loss ratio or any other
measure of profitability; (e) providing preferential treatment to Hartford in the placement
process, including but not limited to giving last looks, first looks, rights of first refusal,
competitive bidding information not otherwise given to other insurers, presenting Hartford’s
competitors in the placement process in unfavorable terms or limiting the number of quotes sought
from insurers for insurance placements; or (f) obtaining anything else of material value for
Hartford. This definition does not include Compensation paid to employees of Hartford or to
Hartford’s Producers that are captive or are exclusive to Hartford with respect to
Terminal/Maturity Funding Group Annuities that are clearly and conspicuously identified in
marketing materials as Hartford’s Terminal/Maturity Funding Group Annuities’ Producers.

     18. Hartford shall disclose in writing to each of its Terminal/Maturity
Funding Group Annuity pension plan customers, prior to binding on all proposals, quotes and
applications for each Terminal/Maturity Funding Group Annuity contract, and on a cover page
accompanying the contract, all Compensation paid or to be paid to the Producer in relation to that
pension plan
customer’s Terminal/Maturity Funding Group Annuity(ies) and shall obtain the written consent of
each of its Terminal/Maturity Funding Group Annuity pension plan customers to the Compensation paid
or to be paid to the Producer in relation to that pension plan customer’s Terminal/Maturity Funding
Group Annuity(ies). In the event that the amount of Compensation

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to be paid to the producer in
relation to a given pension plan customer’s Terminal/Maturity Funding Group Annuity(ies) is not
immediately calculable, Hartford shall have complied with this provision by disclosing in writing
to that pension plan customer: (a) the material terms by which that Compensation will be
calculated; and (b) at the end of the calendar year, all Compensation paid or to be paid to the
Producer in relation to that pension plan customer’s Terminal/Maturity Funding Group Annuity(ies)
during the past calendar year. In addition, Hartford shall obtain the written consent of each of
its Terminal/Maturity Funding Group Annuity pension plan customers to such Compensation plan.
Additionally, beginning one (1) month from the date of this Agreement, Hartford shall disclose on
its website, information relating to Hartford’s practices and policies regarding Compensation
sufficient to inform pension plan sponsors of the nature and range of Compensation paid by Hartford
to Producers of Terminal/Maturity Funding Group Annuities. Prior to posting such disclosure on its
website, Hartford shall submit to the Attorneys General the proposed format and content of the
website disclosure. The final form and content of the website disclosure shall be subject to the
prior approval of the Attorneys General.

     19. Hartford shall disclose all information as is contained within its business records
and is needed by its Terminal/Maturity Funding Group Annuity pension plan customers to complete
Schedule A of the Form 5500 Annual Report of Employee Benefit Plan, including but
not limited to the name of each Producer, and the full amount of any Compensation paid or to be
paid to that Producer that is directly or indirectly attributable to a Terminal/Maturity Funding
Group Annuity contract between the pension plan customer and Hartford.

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     20. Prohibition on Contingent Compensation for Terminal/Maturity
Funding Group Annuities. During the period of May 10, 2006 through May 10, 2009, Hartford shall
not pay any Producer any Contingent Compensation relating to the sale or placement of any
Terminal/Maturity Funding Group Annuity. Subsequent to May 10, 2009, Terminal/Maturity Funding
Group Annuity sales and placements shall be subject to the provisions of paragraphs 23-24.

     21. Except as set forth in paragraphs 23-24 below, in connection with its sale,
placement, issuance, renewal or servicing of Terminal/Maturity Funding Group Annuities through a
Producer, Hartford shall pay as Compensation only a specific dollar amount or percentage commission
on the premium set at the time of each sale, placement or servicing of a particular
Terminal/Maturity Funding Group Annuity.

     22. Prohibition on Pay-to-Play. Hartford shall not offer to pay or pay, directly or
indirectly, any Producer any Compensation in connection with the Producer’s solicitation of bids
for Terminal/Maturity Funding Group Annuities for the Producer’s clients.

     23. Limitations on Contingent Compensation for Terminal/Maturity
Funding Group Annuities after May 10, 2009. Within 30 days of receipt of a notice from either of
the Attorneys General that either of the Attorneys General have made a determination, based on
market share
information available from the LIMRA International, the National Association of Insurance
Commissioners (“NAIC”) or A.M. Best Company (or another agreed upon third-party source of market
share data if such data is not available from LIMRA, NAIC or A.M. Best for Terminal/Maturity
Funding Group Annuities), that (a) insurers who do not pay Contingent Compensation in
Terminal/Maturity Funding Group Annuities, or a segment of that insurance

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line, including but not
limited to direct writers and insurers that employ only captive agents in that insurance line (or
segment) and (b) insurers who have signed agreements with either of the Attorneys General
containing this paragraph as applied to them, together represent more than 65% of the national
gross written premiums in the Terminal/Maturity Funding Group Annuity insurance line (or segment)
in the calendar year for which market share data is most recently available (the “Notice”),
Hartford shall stop entering into or renewing Contingent Compensation agreements for the
Terminal/Maturity Funding Group Annuity line (or segment) and shall further, beginning on January 1
of the next calendar year following the date of the Notice, stop paying Contingent Compensation for
Terminal/Maturity Funding Group Annuity sales or placements and terminate all existing agreements
which contemplate the payment of Contingent Compensation for Terminal/Maturity Funding Group
Annuity sales or placement. If, in any given calendar year after the date of the Notice described
above, the market share used in the Notice falls below 60%, Hartford shall notify the Attorneys
General of the change. If, within 60 days, neither of the Attorneys General object to Hartford’s
determination that the market share used in the Notice is below 60%, any prohibition on Contingent
Compensation described in the Notice shall cease. If either of the Attorneys General does object
to Hartford’s determination, the objecting Attorney General shall set forth the reasons for such
objections in a written notice to
Hartford within 60 days of Hartford’s notification to the Attorneys General. Resort to court
action to resolve a dispute related to the determination of market share or the determination that
a given insurer does not pay Contingent Compensation under this paragraph shall not be deemed a
violation of this Agreement. Until a court finally adjudicates such a dispute in Hartford’s favor,
the ban on the payment of Contingent Compensation in the Terminal/Maturity Funding Group

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Annuity
line shall remain in effect.

     24. In the event that Hartford intends to enter into any agreement potentially
obligating it to make Contingent Compensation payments for the Terminal/Maturity Funding Group
Annuity insurance line (or a segment of that line) for any period after May 10, 2009, Hartford
agrees to give the Attorneys General written notice and a copy of the intended agreement at least
60 days prior to the execution of any such agreement.

     25. Standards of Conduct and Training. Hartford shall implement written standards of
conduct regarding Compensation paid to Producers of Terminal/Maturity Funding Group Annuities,
consistent with the terms of this Agreement, subject to approval of the Attorneys General, which
implementation shall include, inter alia, appropriate training of relevant employees, including but
not limited to training in business ethics, professional obligations, conflicts of interest,
antitrust and trade practices compliance, and record keeping. Before July 10, 2006, Hartford shall
submit to the Attorneys General a draft of these materials for their approval.

     26. Hartford agrees to support legislation and regulations to abolish Contingent Compensation for group annuity products, including 401(k), 403(b), and 457 group annuities, and
terminal and maturity funding group annuities. Hartford further agrees to support legislation and
regulations requiring greater disclosure of Compensation.

     27. Hartford shall not engage or attempt to engage in violations of the Connecticut
Antitrust Act (§§ 35-24 et seq.), Connecticut Unfair Trade Practices Act, Conn.
Gen. Stat. (§§ 42-110a et seq.), the Connecticut Unfair Insurance Practices Act,
(§§ 38a-815 et seq.), the New York Executive Law § 63 (12), the Donnelly Act (New
York Gen. Bus. Law § 340 et seq.), and

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the common law of New York.

COOPERATION WITH THE ATTORNEYS GENERAL

     28. Hartford shall fully and promptly cooperate with the Attorneys
General with regard to their Investigations, and related proceedings and actions, of any other
person, corporation or entity, including but not limited to Hartford’s current and former
employees, concerning the insurance industry. Hartford shall use its best efforts to ensure that
all its officers, directors, employees, and agents also fully and promptly cooperate with the
Attorneys General in their Investigations and related proceedings and actions. Cooperation shall
include without limitation: (a) with respect to the Connecticut Attorney General’s investigation,
Hartford shall accept service of subpoena(s) and produce pursuant thereto any information and all
documents or tangible evidence reasonably requested by the Connecticut Attorney General and any
compilation or summaries of information or data that the Connecticut Attorney General reasonably
requests be prepared, subject only to the receipt of reasonable assurance of confidential treatment
of such production without service of subpoena; (b) production voluntarily and without service of
subpoena of any information and all documents or other tangible evidence reasonably requested by
the New York Attorney General, and any compilations or summaries of information or data that the
New York Attorney General reasonably requests be prepared; (c) without the necessity of a subpoena,
having Hartford’s officers, directors, employees and agents attend any proceedings at
which the presence of any such persons is requested by either of the Attorneys General and having
such persons answer any and all inquiries that may be put by either of the Attorneys General (or
any of either of the Attorneys General’s deputies, assistants or agents) to any of them at any
proceedings or otherwise (“proceedings” include but are not limited to any meetings,

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interviews,
depositions, hearings, grand jury hearing, trial or other proceedings); (d) fully, fairly and
truthfully disclosing all information and producing all records and other evidence in its
possession relevant to all inquiries reasonably made by either of the Attorneys General concerning
any fraudulent or criminal conduct whatsoever about which it has any knowledge or information; (e)
in the event any document is withheld or redacted on grounds of privilege, work-product or other
legal doctrine, a statement shall be submitted in writing by Hartford indicating: (i) the type of
document; (ii) the date of the document; (iii) the author and recipient of the document; (iv) the
general subject matter of the document; (v) the reason for withholding the document; and (vi) the
Bates number or range of the withheld document. Either of the Attorneys General may challenge such
claim in any forum of its choice and may, without limitation, rely on all documents or
communications theretofore produced or the contents of which have been described by Hartford, its
officers, directors, employees, or agents; and (f) Hartford shall not jeopardize the safety of any
investigator or the confidentiality of any aspect of either of the Attorneys General’s
Investigations, including sharing or disclosing evidence, documents, or other information with
others during the course of the investigation, without the consent of the Attorneys General.
Nothing herein shall prevent Hartford from providing such evidence to other regulators, or as
otherwise required by law.

     29. Hartford shall comply fully with the terms of this Agreement. If
Hartford violates
the terms of paragraph 28 in any material respect, as determined solely by either of the Attorneys
General: (a) either of the Attorneys General may pursue any action, criminal or civil, against any
entity for any crime it has committed, as authorized by law, without limitation; (b) as to any
criminal prosecution brought by the New York Attorney General for violation of law committed

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within
six years prior to the date of this Agreement or for any violation committed on or after the date
of this Agreement, Hartford shall waive any claim that such prosecution is time barred on grounds
of speedy trial or speedy arraignment or the statute of limitations.

OTHER PROVISIONS

     30. The provisions of this Agreement shall apply only to Hartford’s Terminal/Maturity
Funding Group Annuity line of business where: (a) the pension plan customer is domiciled in the
United States or its territories; or (b) the contract is principally associated with providing
retirement benefits to residents of the United States or its territories.

     31. Hartford agrees to review all of its communications with state insurance regulators
regarding Terminal/Maturity Funding Group Annuities to ensure full and complete disclosure.

     32. Hartford shall not seek or accept, directly or indirectly, indemnification pursuant
to any insurance policy, with regard to any or all of the amounts payable pursuant to this
Agreement.

     33. The Attorneys General agree that any prior approval required under the terms of
this Agreement shall not be unreasonably withheld.

     34. This Agreement is not intended to disqualify Hartford, or any current employees of
Hartford, from engaging in any business in Connecticut or New York or in any other jurisdiction.
Nothing in this Agreement shall relieve Hartford’s obligations imposed by any
applicable state insurance law or regulations or other applicable law.

     35. This Agreement shall not confer any rights upon any persons or entities besides
the Attorneys General and Hartford.

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     36. Hartford shall maintain custody of, or make arrangements to have
maintained, all
documents and records of Hartford related to this matter for a period of not less than six years.

     37. Either the Attorney General of the State of Connecticut or the Attorney General of
the State of New York may make such applications as appropriate to enforce or interpret the
provisions of this Agreement, or in the alternative, maintain any actions, either civil or
criminal, for such other and further relief as either of the Attorneys General may determine is
proper and necessary for the enforcement of this Agreement. If compliance with any aspect of this
Agreement proves impracticable, Hartford reserves the right to request that the parties modify the
Agreement accordingly.

     38. In any application or in any such action, facsimile transmission of a copy of any
papers to current counsel for Hartford shall be good and sufficient service on Hartford unless
Hartford designates, in a writing to the Attorneys General, another person to receive service by
facsimile transmission.

     39. Facsimile transmission of a copy of this Agreement to counsel for Hartford shall be
good and sufficient service on Hartford.

     40. This Agreement shall be governed by the laws of the State of Connecticut without
regard to conflict of laws principles, except that with respect to enforcement actions taken by the
New York Attorney General, the actions will be governed by the laws of the State of New York
without regard to conflict of laws principles.

     41. Any disputes arising out of or related to this Agreement with
respect to the Connecticut Attorney General shall be subject to the exclusive jurisdiction of the
superior court for the judicial district of Hartford, or to the extent federal jurisdiction exists,
the United States

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District Court for the District of Connecticut, any disputes arising out of or
related to this Agreement with respect to the New York Attorney General shall be subject to the
exclusive jurisdiction of the Supreme Court of the State of New York, County of New York, or to the
extent federal jurisdiction exists, the United States District Court for the Southern District of
New York.

     42. The Connecticut Attorney General will promptly file a Withdrawal with prejudice, in
the form attached hereto as Exhibit 3, voluntarily dismissing the Connecticut Complaint with
prejudice, and will not initiate a new case against Hartford related to the matters set forth in
the Connecticut Complaint or uncovered to date relating to Terminal/Maturity Funding Group
Annuities by the Connecticut Attorney General’s Investigation.

     43. The New York Attorney General will promptly file a Notice Discontinuing Action with
Prejudice, in the form attached hereto as Exhibit 4, voluntarily dismissing the New York Complaint
with prejudice, and will not initiate a new case against Hartford related to the matters set forth
in the New York Complaint or uncovered to date relating to Terminal/Maturity Funding Group
Annuities by the New York Attorney General’s Investigation.

     44. This Agreement may be executed in counterparts.

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     WHEREFORE, the following signatures are affixed hereto on this 10th day of
May, 2006.

RICHARD BLUMENTHAL

 

Attorney General of the

State of Connecticut

55 Elm Street

Hartford, CT 06141-0120

ELIOT SPITZER

 

Attorney General of the

State of New York

120 Broadway, 25th Floor

New York, New York 10271

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

 

by: Neal Wolin, Esq.

Executive Vice President and

          General Counsel

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EXHIBIT 1

The Hartford apologizes to our single premium group annuity pension plan customers for the conduct
that led to the actions filed by the Connecticut and New York Attorneys General. It was wrong to
withhold from our pension plan customers the full amount of compensation paid to brokers in
connection with the placements of these annuities. As part of the settlements, The Hartford has
agreed not to pay contingent compensation for single premium group annuities.

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EXHIBIT 2

RELEASE

     This RELEASE (the “Release”) is executed this                      day of                                      
   , 2006 by RELEASOR (defined
below) in favor of RELEASEE (defined below).

DEFINITIONS

     “RELEASOR” refers to [fill in name                                         ] and any of its affiliates, subsidiaries,
associates, general or limited partners or partnerships, predecessors, successors, or assigns,
including, without limitation, any of their respective present or former officers, directors,
trustees, employees, agents, attorneys, representatives and shareholders, affiliates, associates,
general or limited partners or partnerships, heirs, executors, administrators, predecessors,
successors, assigns or insurers acting on behalf of RELEASOR.

     “RELEASEE” refers to The Hartford Financial Services Group, Inc. and any of its subsidiaries,
affiliates, associates, general or limited partners or partnerships, predecessors, successors, or
assigns, including, without limitation, any of their respective present or former officers,
directors, trustees, employees, agents, attorneys, representatives and shareholders, affiliates,
associates, general or limited partners or partnerships, heirs, executors, administrators,
predecessors, successors, assigns or insurers (collectively, “Hartford”).

     “AGREEMENT” refers to a certain agreement between Hartford and the Attorney General of the
State of Connecticut (“CTAG”) and the Attorney General of the State of New York (“NYAG”) dated May
10, 2006, relating to an action commenced against Hartford by CTAG dated May 10, 2006, captioned
“State of Connecticut against The Hartford Financial Services Group, Inc. and Hartford Life, Inc.,”
and an Investigation by CTAG relating to same (collectively, the “Connecticut Complaint”); and an
action commenced against Hartford by NYAG dated May 10, 2006, captioned “The People of the State of
New York against The Hartford Financial Services Group, Inc. and Hartford Life, Inc.,” and an
Investigation by NYAG relating to same (collectively, the “New York Complaint”).

RELEASE

     1. In consideration for the total payment of $                                         in accordance with the terms of the
AGREEMENT, RELEASOR does hereby fully release, waive and forever discharge RELEASEE from any and
all claims, demands, debts, rights, causes of action or liabilities whatsoever, including known and
unknown claims, in law, equity or otherwise, whether under state, federal or foreign statutory or
common law, and whether possessed or asserted directly, indirectly, derivatively, representatively
or in any other capacity (collectively, “Claims”), to the extent any such Claims are based upon,
arise out of or relate to, in whole or in part, any of the allegations, acts, omissions,
transactions, events, or matters discussed in the AGREEMENT, in the
Connecticut or New York Complaints, or that are the subject of the Attorneys General’s
Investigations (as that term is defined in the AGREEMENT), and occurring up to the date of the
AGREEMENT.

     2. In the event that the total payment referred to in paragraph 1 is not made for any reason, then
this RELEASE shall be deemed null and void, provided that any payments received by RELEASOR shall
be credited to Hartford in connection with any Claims that RELEASOR may assert against Hartford, or
that are asserted on behalf of RELEASOR or by a class of which RELEASOR is a member, against
Hartford.

     3. This RELEASE may not be changed orally and shall be governed by and interpreted in accordance
with the laws of the State of Connecticut, without regard to conflict of law principles, except to
the extent that federal law requires that federal law governs. Any disputes arising out of or
related to this RELEASE shall be subject to the exclusive jurisdiction of the superior court for
the judicial district of Hartford or, to the extent federal jurisdiction exists, the United States
District Court for the District of Connecticut.

     4. RELEASOR represents and warrants that the Claims have not been sold, assigned or
hypothecated

20

 

in whole or in part.

	 	 	 	 	 
	 
	 	 	 	 
	Dated:

	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	RELEASOR:
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	Print Name:
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 	 	 	 	 

21

 

EXHIBIT 3

	WITHDRAWAL
JD-CV-41 Rev 10-01
COMPLETE            ALL            SECTIONS BELOW
—
NAME OF CASE (FIRST-NAMED PLAINTIFF            Vs            FIRST NAMED DEFENDANT)
EXHIBIT 3
STATE OF CONNECTICUT
SUPERIOR COURT
www.jud.state.ct.us            us
DOCKET
RETURN DATE
5/,j /06
Judicial            Housing            ADDRESS OF COURT (No., street, town and zip code)
‘x District            I~ Session            G.A. No. I95 Washington            Street, Hartford, CT 06106

	SECTION I (check only one box) THIS WITHDRAWAL IS BEING FILED BECAUSE THE DISPUTE HAS BEEN
RESOLVED B1

I. COURT-ANNEXED ADR

	411088 I- Early intervention
0.17089 i- Early Neutral Evaluation
417090 Attorney Trial Referee
477097 Fact-Finding
411092  —  Arbitration
471094 r            Mediation
411095 -Special Masters
I
411096 r            Summary Jury Trial

	SECTION 11
II. COURT INTERVENTION
411098 I- Pretrial Conference
411099 (- Trial Management Conference
411100 T- Commencement of Trial(court trial -Frstwltness sworn;
jury foal — trial jurors sworn)
III. PRIVATE ADR
411102 i — Provider Name:
IV. OTHER
411103 IX            Discussion of parties on Their Own
415602 Unilateral Action of Party(ies)

	WITHDRAWAL

	(Do no! check the following two boxes d any Intervening complaints, cross complaints,
counterclaims, or third party complaints remain pending in this case See below for partial
withdrawal of action.)

	DISPOSITIVE
( WDACT) IX            The Plaintiffs action is WITHDRAWN AS TO ALL DEFENDANTS without costs to any party.
(WOARD) A judgment has been rendered against Defendant(s): WITH PREJUDICE
and the Plaintiffs action is WITHDRAWN AS TO ALL REMAINING DEFENDANTS without costs
PARTIAL
(WDCOMP) r Complaint
(WDCOUNT) r            Counts of the complaint (WDINTCO) I- Intervening Complaint (WDTHPC) r’ Third Party Complaint
(WAPPCOM) ( — Apportionment Complaint
(WDCC) ~CrossComplaint(crossclaim)
(WOC) I- Counterclaim
(woAAP) I- Plaintiffs)
(WOAAD) F            Complaint against defendants)

	I            Other: in the above entitled action is withdrawn.
SIGNATURE REQUIRED
Plaintiff            State of Connecticut

	Plaintiff
Defendant
Defendant
NAME & ADDRESS Michael E. Cole, Assistant Attorney General
OF SIGNER: El 55Elm Street, Hartford, CT 06106
only w/o costs
s            l~-4 A
3y .’-iA            x            t

	a
fl 1C d2, I            ssistant Atty General y Attorney
—
T,,
Attorney
BY
Attorney
By            Attorney
SECTION III            CERTIFICATION
I hereby canny (Flat a copy was mailed/delivered            GATE            SIGNED Individual attorney or pro se party) /dual attorney o pr se party            PHONE NO
(Area code            first)

	to all counsel and pro se parties of record on: 5/•= /06 X . $/ !/ .~ An ~ 860 8085040
NAME OF EACH PARTY SERVED’ ADDRESS H            I            WHICH            SERVICE            WAS            MADE’
James            H. Bicks, Esq. 400 Atlantic Street, P.O. Box 110325
Wiggin            E            Dana            Stamford, CT 06911-0325

	’ If            necessary attach additional            sheet with            names 01 each party Served and
the address at Which            service V/BB            map&

22

 

EXHIBIT 4

	 	 	 	 	 	 	 
	SUPREME COURT OF THE STATE OF NEW YORK	 	 	 	 
	COUNTY OF NEW YORK	 	 	 	 
	 

	 	 	 	X	 	 
	 
	 	 	 	 
	THE PEOPLE OF THE STATE OF NEW YORK	 	:	 	 
	by ELIOT SPITZER, Attorney General of	 	:	 	 
	the State of New York,	 	:	 	 
	 

	 	Plaintiff,
	 	:
	 	Index No.
	 

	 	 	 	:	 	 
	-against-
	 	:	 	NOTICE
	 

	 	 	 	:
	 	DISCONTINUING
	THE HARTFORD FINANCIAL SERVICES	 	:	 	ACTION WITH
	GROUP, INC. and HARTFORD LIFE, INC.,	 	:	 	PREJUDICE
	 

	 	 	 	:	 	 
	 

	 	Defendants.
	 	:	 	 
	 

	 	 	 	X	 	 
	 
	 	 	 	 

     PLEASE TAKE NOTICE that, pursuant to CPLR § 3217(a) and the agreement annexed hereto,
plaintiff hereby discontinues this action with prejudice as of this date without costs to either
party against the other.

	 	 	 	 	 	 	 
	Dated:

	 	New York, New York	 	 	 	 
	 

	 	May 10, 2006	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	ELIOT SPITZER
	 	 	 	 	Attorney General of the State of New York
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	David D. Brown, IV
	 

	 	 	 	 	 	Assistant Attorney General
	 

	 	 	 	 	 	120 Broadway
	 

	 	 	 	 	 	New York, NY 10271
	 

	 	 	 	 	 	(212) 416-8198
	 
	 	 	 	 	 	 
	 	 	 	 	Attorney for Plaintiff

23EX-10.1

 

Exhibit 10.1

Agreement Among the Attorney General of the State of Connecticut and the Attorney General of the

State of New York, and The Hartford Financial Services Group, Inc. and its subsidiaries and

affiliates (collectively “Hartford”) dated May 10, 2006

     WHEREAS, the Connecticut Attorney General has commenced an action against The Hartford
Financial Services Group, Inc. and Hartford Life, Inc. pursuant to the Connecticut Unfair Trade
Practices Act, Conn. Gen. Stat. (§§ 42-110a et seq.) dated May 10, 2006 (the
“Connecticut Complaint”) related to Hartford’s practices in the marketing, sale, or placement of
terminal and maturity funding single premium group annuity contracts to pension plan sponsors
(“Terminal/Maturity Funding Group Annuity(ies)”) and has conducted an investigation related thereto
(the “Connecticut Attorney General’s Investigation”);

     WHEREAS, the New York Attorney General has commenced an action against The Hartford Financial
Services Group, Inc. and Hartford Life, Inc. pursuant to Executive Law § 63 (12) and the common
law of the State of New York dated May 10, 2006 (the “New York Complaint”) related to Hartford’s
practices in the marketing, sale, or placement of Terminal/Maturity Funding Group Annuity(ies) to
pension plan sponsors and has conducted an investigation related thereto (the “New York Attorney
General’s Investigation”);

     WHEREAS, the Connecticut and New York Attorneys General have alleged that Hartford unlawfully
deceived its Terminal/Maturity Funding Group Annuity pension plan customers by: a) participating
in schemes to steer business to Hartford; and (b) providing false information to Hartford’s
Terminal/Maturity Funding Group Annuity pension plan customers regarding the compensation paid to
brokers of
Terminal/Maturity Funding Group Annuity(ies);

     WHEREAS, without admitting or denying any claim in the Complaints, Hartford is
entering into this Agreement prior to any court making any findings of fact or conclusions of

1

 

law
pursuant to any allegations by the Attorneys General;

     WHEREAS, Hartford has been and is continuing to cooperate with the investigations being
conducted by the Connecticut Attorney General and the New York Attorney General (collectively the
“Attorneys General”);

     WHEREAS, in the wake of the Attorneys General’s Investigations, Hartford has agreed under this
Agreement (the “Agreement”) to implement a number of business reforms;

     WHEREAS, nothing herein shall be construed to apply to any business or operations other than
Terminal/Maturity Funding Group Annuity(ies);

     WHEREAS, the Attorneys General and Hartford wish to enter into this Agreement to resolve all
issues related to Hartford raised to date in the Connecticut Attorney General’s Investigation and
the New York Attorney General’s Investigation;

     WHEREAS,
the Attorneys General find the relief and agreements contained in this Agreement appropriate and in the public interest, and are willing to accept this Agreement as
a settlement of the Connecticut Attorney General’s Complaint and Investigation and the New York
Attorney General’s Complaint and Investigation;

     WHEREAS, this Agreement is entered into solely for the purpose of resolving the Complaints and
is not intended to be used for any other purpose; and

     NOW THEREFORE, Hartford and the Attorneys General hereby enter into this Agreement with a
statement of apology attached as Exhibit 1, and agree as follows:

MONETARY RELIEF

     A. Terminal/Maturity Funding Group Annuity Fund

     1. On or before May 19, 2006, Hartford shall pay $16,100,000 into a fund (the

2

 

“Terminal/Maturity Funding Group Annuity Fund”) created and held by Hartford to be paid to
Hartford’s pension plan customers that purchased Hartford’s Terminal/Maturity Funding Group
Annuity(ies) during the period from January 1, 1998 through December 31, 2004 using either
Brentwood Asset Advisors, LLC, or USI Consulting Group, or Dietrich & Associates, or BCG Terminal
Funding Company, or those brokers’ or consultants’ predecessors, as their broker or consultant, and
at the time of the sale, their broker or consultant had an expense reimbursement or other
production-based incentive agreement, including but not limited to a consulting agreement or
marketing allowance agreement, with Hartford and (i) the sale resulted in a payment to the broker
or consultant pursuant to the expense reimbursement or other production-based incentive agreement,
or (ii) an amount reflecting the payment for an expense reimbursement or other production-based
incentive agreement was added to the premium but not otherwise paid to the broker or consultant or
(iii) the sale was credited toward achieving a threshold to obtain such payment under such an
agreement (the “Eligible Customers”). All of the money paid into the Terminal/Maturity Funding
Group Annuity Fund and any investment or interest income earned thereon shall be paid to Eligible
Customers pursuant to this Agreement. No portion of the Terminal/Maturity Funding Group Annuity
Fund shall be considered a fine or a penalty.

     2. The Terminal/Maturity Funding Group Annuity Fund shall be invested in a designated money
market fund subject to the prior approval of the Attorneys General.

     3. Hartford shall (a) by June 9, 2006 calculate the amount of money each of the
Eligible Customers paid for Terminal/Maturity Funding Group Annuity(ies) with
inception dates during the period from January 1, 1998 through December 31, 2004 using either
Brentwood

3

 

Asset Advisors, USI Consulting, Dietrich & Associates, or BCG Terminal Funding or those
brokers’ or consultants’ predecessors as their broker or consultant where at the time of the sale,
their broker or consultant had an expense reimbursement or other production-based incentive
agreement, including but not limited to a consulting agreement or marketing allowance agreement,
with Hartford and (i) the sale resulted in a payment to the broker or consultant pursuant to the
expense reimbursement or other production-based incentive agreement, or (ii) an amount reflecting
the payment for an expense reimbursement or other production-based incentive agreement was added to
the premium but not otherwise paid to the broker or consultant or (iii) the sale was credited
toward achieving a threshold to obtain such payment under such an agreement (the “Eligible
Annuities”); (b) within ten days of completing these calculations, file a report with the Attorneys
General, certified by an officer of Hartford, setting forth: (i) each Eligible Customer’s name and
address; (ii) the Eligible Customer’s Eligible Annuity(ies) (by group annuity number(s)); (iii) the
amount the Eligible Customer paid in premiums for each Eligible Annuity; and (iv) the amount each
Eligible Customer is eligible to receive from the Terminal/Maturity Funding Group Annuity Fund,
which shall equal each Eligible Customer’s pro rata share of the Terminal/Maturity Funding Group
Annuity Fund as calculated by multiplying the amount in the Terminal/Maturity Funding Group Annuity
Fund by the ratio of the Eligible Customer’s total paid premium for Eligible Annuity(ies), divided
by the total paid premium for
all Eligible Annuities; and (c) by July 10, 2006, send a notice to each Eligible Customer, setting
forth the items in (b)(ii) through (iv), above, and stating that the amount paid may increase if
there is less than full participation by Eligible Customers in the Terminal/Maturity Funding Group
Annuity Fund (the “Annuity Notice”). The form of the Annuity Notice shall be subject to

4

 

the prior
approval of the Attorneys General.

     4. In the event impediments arise with respect to the identification of Eligible Customers, or
the distribution from the Terminal/Maturity Funding Group Annuity Fund to a particular Eligible
Customer, both the Attorneys General and Hartford agree to use their best efforts to achieve the
parties’ stated intention to distribute to each Eligible Customer their pro rata share of the
Terminal/Maturity Funding Group Annuity Fund. Any amounts not distributed to Eligible Customers,
despite the best efforts of the parties, shall be distributed to Participating Customers, as
defined in paragraph 5, consistent with paragraph 9 of this Agreement.

     5. Eligible Customers who receive an Annuity Notice and who voluntarily elect to receive a
cash distribution (the “Participating Customers”) shall tender a release in the form attached
hereto as Exhibit 2 on or before November 7, 2006.

     6. On or before November 22, 2006, Hartford shall pay each Participating Customer the amount
that that Participating Customer is eligible to receive from the Terminal/Maturity Funding Group
Annuity Fund as set forth in paragraph 3(b)(iv) above, and any interest or investment income earned
thereon.

     7. On or before December 7, 2006, Hartford shall file an interim report with the Attorneys
General, certified by an officer of Hartford, listing all amounts paid from the Terminal/Maturity
Funding Group Annuity Fund.

     8. In the event that any Eligible Customer elects not to participate or otherwise
does not respond to the Annuity Notice (the “Non-Participating Customers”), the amount that
such policyholder was eligible to receive from the Terminal/Maturity Funding Group Annuity Fund as
set forth in paragraph 3(b)(iv) may, up until January 6, 2007, be used by Hartford to

5

 

satisfy any
pending or other claims asserted by Non-Participating Customers relating to the Terminal/Maturity
Funding Group Annuity allegations set forth in the Complaints, provided that: a) in no event shall
a distribution be made from the Terminal/Maturity Funding Group Annuity Fund to any
Non-Participating Customer until all Participating Customers have been paid the full aggregate
amount set forth in paragraph 3(b)(iv) above, and any interest or investment income earned thereon;
and b) in no event shall the total payments from the Terminal/Maturity Funding Group Annuity Fund
to any Non-Participating Customer exceed 80% of the amount that Non-Participating Customer was
originally eligible to receive as set forth in paragraph 3(b)(iv).

     9. If any money remains in the Terminal/Maturity Funding Group Annuity Fund as of January 6,
2007 after distribution as provided in paragraphs 6 and 8, any such funds shall be distributed by
January 22, 2007 on a pro rata basis to the Participating Customers.

     10. In no event shall any of the money in the Terminal/Maturity Funding Group Annuity Fund or
the investment or interest income earned thereon be used to pay or be considered in the calculation
of attorneys’ fees.

     11. In no event shall any of the money in the Terminal/Maturity Funding Group Annuity Fund or
the investment or interest income earned thereon be used to pay or be considered in the calculation
of commissions, administrative or other fees to Hartford.

     12. On or before February 5, 2007, Hartford shall file a report with the Attorneys
General, certified by an officer of Hartford, listing all amounts paid from the
Terminal/Maturity Funding Group Annuity Fund, including any payments subsequent to the payments
described in paragraph 6.

6

 

     B. Fine and Penalty

     13. On or before May 19, 2006, Hartford shall pay $1,950,000 as a penalty, by wire
transfer to the State of Connecticut.

     14. On or before May 19, 2006, Hartford shall pay $1,950,000 as a fine, by wire
transfer to the State of New York.

BUSINESS REFORMS

     15. Within 60 days of the date of this Agreement, Hartford shall undertake the
following business reforms. Hartford will not undertake any transaction for the purpose of
circumventing the prohibitions contained in this Agreement.

     16. For purposes of this Agreement, Compensation shall mean anything of material
value given to a Producer1 including, but not limited to, money, credits, loans,
forgiveness of principal or interest, vacations, prizes, gifts or the payment of employee salaries
or expenses, provided that Compensation shall not mean customary, non-excessive meals and
entertainment expenses. Hartford shall develop and implement policies for its relevant employees
explaining the provisions of this paragraph as part of the written standards described in paragraph 25 below.
Prior to July 10, 2006, Hartford shall submit to the Attorneys General a draft of the intended
policies for their approval.

     17. For purposes of this Agreement, Contingent Compensation is any Compensation

 

			
	1	 	For purposes of this Agreement,
“Producer” shall mean any insurance broker as that term is defined
in § 2101(c) of the Insurance Law of the State of New York who sells,
places or consults with clients respecting Terminal/Maturity Funding Group
Annuities or any independent insurance agent as that term is defined in § 2101(b) of the Insurance Law of the State of New York and who offers
Terminal/Maturity Funding Group Annuities from more than one insurer or
affiliated group of insurers.

7

 

contingent upon any Producer: (a) placing a particular number of contracts or policies or
dollar value of premium with Hartford; (b) achieving a particular level of growth in the number of
contracts or policies placed or dollar value of premium with Hartford; (c) meeting a particular
rate of retention or renewal of contracts or policies in force with Hartford; (d) placing or
keeping sufficient insurance business with Hartford to achieve a particular loss ratio or any other
measure of profitability; (e) providing preferential treatment to Hartford in the placement
process, including but not limited to giving last looks, first looks, rights of first refusal,
competitive bidding information not otherwise given to other insurers, presenting Hartford’s
competitors in the placement process in unfavorable terms or limiting the number of quotes sought
from insurers for insurance placements; or (f) obtaining anything else of material value for
Hartford. This definition does not include Compensation paid to employees of Hartford or to
Hartford’s Producers that are captive or are exclusive to Hartford with respect to
Terminal/Maturity Funding Group Annuities that are clearly and conspicuously identified in
marketing materials as Hartford’s Terminal/Maturity Funding Group Annuities’ Producers.

     18. Hartford shall disclose in writing to each of its Terminal/Maturity
Funding Group Annuity pension plan customers, prior to binding on all proposals, quotes and
applications for each Terminal/Maturity Funding Group Annuity contract, and on a cover page
accompanying the contract, all Compensation paid or to be paid to the Producer in relation to that
pension plan
customer’s Terminal/Maturity Funding Group Annuity(ies) and shall obtain the written consent of
each of its Terminal/Maturity Funding Group Annuity pension plan customers to the Compensation paid
or to be paid to the Producer in relation to that pension plan customer’s Terminal/Maturity Funding
Group Annuity(ies). In the event that the amount of Compensation

8

 

to be paid to the producer in
relation to a given pension plan customer’s Terminal/Maturity Funding Group Annuity(ies) is not
immediately calculable, Hartford shall have complied with this provision by disclosing in writing
to that pension plan customer: (a) the material terms by which that Compensation will be
calculated; and (b) at the end of the calendar year, all Compensation paid or to be paid to the
Producer in relation to that pension plan customer’s Terminal/Maturity Funding Group Annuity(ies)
during the past calendar year. In addition, Hartford shall obtain the written consent of each of
its Terminal/Maturity Funding Group Annuity pension plan customers to such Compensation plan.
Additionally, beginning one (1) month from the date of this Agreement, Hartford shall disclose on
its website, information relating to Hartford’s practices and policies regarding Compensation
sufficient to inform pension plan sponsors of the nature and range of Compensation paid by Hartford
to Producers of Terminal/Maturity Funding Group Annuities. Prior to posting such disclosure on its
website, Hartford shall submit to the Attorneys General the proposed format and content of the
website disclosure. The final form and content of the website disclosure shall be subject to the
prior approval of the Attorneys General.

     19. Hartford shall disclose all information as is contained within its business records
and is needed by its Terminal/Maturity Funding Group Annuity pension plan customers to complete
Schedule A of the Form 5500 Annual Report of Employee Benefit Plan, including but
not limited to the name of each Producer, and the full amount of any Compensation paid or to be
paid to that Producer that is directly or indirectly attributable to a Terminal/Maturity Funding
Group Annuity contract between the pension plan customer and Hartford.

9

 

     20. Prohibition on Contingent Compensation for Terminal/Maturity
Funding Group Annuities. During the period of May 10, 2006 through May 10, 2009, Hartford shall
not pay any Producer any Contingent Compensation relating to the sale or placement of any
Terminal/Maturity Funding Group Annuity. Subsequent to May 10, 2009, Terminal/Maturity Funding
Group Annuity sales and placements shall be subject to the provisions of paragraphs 23-24.

     21. Except as set forth in paragraphs 23-24 below, in connection with its sale,
placement, issuance, renewal or servicing of Terminal/Maturity Funding Group Annuities through a
Producer, Hartford shall pay as Compensation only a specific dollar amount or percentage commission
on the premium set at the time of each sale, placement or servicing of a particular
Terminal/Maturity Funding Group Annuity.

     22. Prohibition on Pay-to-Play. Hartford shall not offer to pay or pay, directly or
indirectly, any Producer any Compensation in connection with the Producer’s solicitation of bids
for Terminal/Maturity Funding Group Annuities for the Producer’s clients.

     23. Limitations on Contingent Compensation for Terminal/Maturity
Funding Group Annuities after May 10, 2009. Within 30 days of receipt of a notice from either of
the Attorneys General that either of the Attorneys General have made a determination, based on
market share
information available from the LIMRA International, the National Association of Insurance
Commissioners (“NAIC”) or A.M. Best Company (or another agreed upon third-party source of market
share data if such data is not available from LIMRA, NAIC or A.M. Best for Terminal/Maturity
Funding Group Annuities), that (a) insurers who do not pay Contingent Compensation in
Terminal/Maturity Funding Group Annuities, or a segment of that insurance

10

 

line, including but not
limited to direct writers and insurers that employ only captive agents in that insurance line (or
segment) and (b) insurers who have signed agreements with either of the Attorneys General
containing this paragraph as applied to them, together represent more than 65% of the national
gross written premiums in the Terminal/Maturity Funding Group Annuity insurance line (or segment)
in the calendar year for which market share data is most recently available (the “Notice”),
Hartford shall stop entering into or renewing Contingent Compensation agreements for the
Terminal/Maturity Funding Group Annuity line (or segment) and shall further, beginning on January 1
of the next calendar year following the date of the Notice, stop paying Contingent Compensation for
Terminal/Maturity Funding Group Annuity sales or placements and terminate all existing agreements
which contemplate the payment of Contingent Compensation for Terminal/Maturity Funding Group
Annuity sales or placement. If, in any given calendar year after the date of the Notice described
above, the market share used in the Notice falls below 60%, Hartford shall notify the Attorneys
General of the change. If, within 60 days, neither of the Attorneys General object to Hartford’s
determination that the market share used in the Notice is below 60%, any prohibition on Contingent
Compensation described in the Notice shall cease. If either of the Attorneys General does object
to Hartford’s determination, the objecting Attorney General shall set forth the reasons for such
objections in a written notice to
Hartford within 60 days of Hartford’s notification to the Attorneys General. Resort to court
action to resolve a dispute related to the determination of market share or the determination that
a given insurer does not pay Contingent Compensation under this paragraph shall not be deemed a
violation of this Agreement. Until a court finally adjudicates such a dispute in Hartford’s favor,
the ban on the payment of Contingent Compensation in the Terminal/Maturity Funding Group

11

 

Annuity
line shall remain in effect.

     24. In the event that Hartford intends to enter into any agreement potentially
obligating it to make Contingent Compensation payments for the Terminal/Maturity Funding Group
Annuity insurance line (or a segment of that line) for any period after May 10, 2009, Hartford
agrees to give the Attorneys General written notice and a copy of the intended agreement at least
60 days prior to the execution of any such agreement.

     25. Standards of Conduct and Training. Hartford shall implement written standards of
conduct regarding Compensation paid to Producers of Terminal/Maturity Funding Group Annuities,
consistent with the terms of this Agreement, subject to approval of the Attorneys General, which
implementation shall include, inter alia, appropriate training of relevant employees, including but
not limited to training in business ethics, professional obligations, conflicts of interest,
antitrust and trade practices compliance, and record keeping. Before July 10, 2006, Hartford shall
submit to the Attorneys General a draft of these materials for their approval.

     26. Hartford agrees to support legislation and regulations to abolish Contingent Compensation for group annuity products, including 401(k), 403(b), and 457 group annuities, and
terminal and maturity funding group annuities. Hartford further agrees to support legislation and
regulations requiring greater disclosure of Compensation.

     27. Hartford shall not engage or attempt to engage in violations of the Connecticut
Antitrust Act (§§ 35-24 et seq.), Connecticut Unfair Trade Practices Act, Conn.
Gen. Stat. (§§ 42-110a et seq.), the Connecticut Unfair Insurance Practices Act,
(§§ 38a-815 et seq.), the New York Executive Law § 63 (12), the Donnelly Act (New
York Gen. Bus. Law § 340 et seq.), and

12

 

the common law of New York.

COOPERATION WITH THE ATTORNEYS GENERAL

     28. Hartford shall fully and promptly cooperate with the Attorneys
General with regard to their Investigations, and related proceedings and actions, of any other
person, corporation or entity, including but not limited to Hartford’s current and former
employees, concerning the insurance industry. Hartford shall use its best efforts to ensure that
all its officers, directors, employees, and agents also fully and promptly cooperate with the
Attorneys General in their Investigations and related proceedings and actions. Cooperation shall
include without limitation: (a) with respect to the Connecticut Attorney General’s investigation,
Hartford shall accept service of subpoena(s) and produce pursuant thereto any information and all
documents or tangible evidence reasonably requested by the Connecticut Attorney General and any
compilation or summaries of information or data that the Connecticut Attorney General reasonably
requests be prepared, subject only to the receipt of reasonable assurance of confidential treatment
of such production without service of subpoena; (b) production voluntarily and without service of
subpoena of any information and all documents or other tangible evidence reasonably requested by
the New York Attorney General, and any compilations or summaries of information or data that the
New York Attorney General reasonably requests be prepared; (c) without the necessity of a subpoena,
having Hartford’s officers, directors, employees and agents attend any proceedings at
which the presence of any such persons is requested by either of the Attorneys General and having
such persons answer any and all inquiries that may be put by either of the Attorneys General (or
any of either of the Attorneys General’s deputies, assistants or agents) to any of them at any
proceedings or otherwise (“proceedings” include but are not limited to any meetings,

13

 

interviews,
depositions, hearings, grand jury hearing, trial or other proceedings); (d) fully, fairly and
truthfully disclosing all information and producing all records and other evidence in its
possession relevant to all inquiries reasonably made by either of the Attorneys General concerning
any fraudulent or criminal conduct whatsoever about which it has any knowledge or information; (e)
in the event any document is withheld or redacted on grounds of privilege, work-product or other
legal doctrine, a statement shall be submitted in writing by Hartford indicating: (i) the type of
document; (ii) the date of the document; (iii) the author and recipient of the document; (iv) the
general subject matter of the document; (v) the reason for withholding the document; and (vi) the
Bates number or range of the withheld document. Either of the Attorneys General may challenge such
claim in any forum of its choice and may, without limitation, rely on all documents or
communications theretofore produced or the contents of which have been described by Hartford, its
officers, directors, employees, or agents; and (f) Hartford shall not jeopardize the safety of any
investigator or the confidentiality of any aspect of either of the Attorneys General’s
Investigations, including sharing or disclosing evidence, documents, or other information with
others during the course of the investigation, without the consent of the Attorneys General.
Nothing herein shall prevent Hartford from providing such evidence to other regulators, or as
otherwise required by law.

     29. Hartford shall comply fully with the terms of this Agreement. If
Hartford violates
the terms of paragraph 28 in any material respect, as determined solely by either of the Attorneys
General: (a) either of the Attorneys General may pursue any action, criminal or civil, against any
entity for any crime it has committed, as authorized by law, without limitation; (b) as to any
criminal prosecution brought by the New York Attorney General for violation of law committed

14

 

within
six years prior to the date of this Agreement or for any violation committed on or after the date
of this Agreement, Hartford shall waive any claim that such prosecution is time barred on grounds
of speedy trial or speedy arraignment or the statute of limitations.

OTHER PROVISIONS

     30. The provisions of this Agreement shall apply only to Hartford’s Terminal/Maturity
Funding Group Annuity line of business where: (a) the pension plan customer is domiciled in the
United States or its territories; or (b) the contract is principally associated with providing
retirement benefits to residents of the United States or its territories.

     31. Hartford agrees to review all of its communications with state insurance regulators
regarding Terminal/Maturity Funding Group Annuities to ensure full and complete disclosure.

     32. Hartford shall not seek or accept, directly or indirectly, indemnification pursuant
to any insurance policy, with regard to any or all of the amounts payable pursuant to this
Agreement.

     33. The Attorneys General agree that any prior approval required under the terms of
this Agreement shall not be unreasonably withheld.

     34. This Agreement is not intended to disqualify Hartford, or any current employees of
Hartford, from engaging in any business in Connecticut or New York or in any other jurisdiction.
Nothing in this Agreement shall relieve Hartford’s obligations imposed by any
applicable state insurance law or regulations or other applicable law.

     35. This Agreement shall not confer any rights upon any persons or entities besides
the Attorneys General and Hartford.

15

 

     36. Hartford shall maintain custody of, or make arrangements to have
maintained, all
documents and records of Hartford related to this matter for a period of not less than six years.

     37. Either the Attorney General of the State of Connecticut or the Attorney General of
the State of New York may make such applications as appropriate to enforce or interpret the
provisions of this Agreement, or in the alternative, maintain any actions, either civil or
criminal, for such other and further relief as either of the Attorneys General may determine is
proper and necessary for the enforcement of this Agreement. If compliance with any aspect of this
Agreement proves impracticable, Hartford reserves the right to request that the parties modify the
Agreement accordingly.

     38. In any application or in any such action, facsimile transmission of a copy of any
papers to current counsel for Hartford shall be good and sufficient service on Hartford unless
Hartford designates, in a writing to the Attorneys General, another person to receive service by
facsimile transmission.

     39. Facsimile transmission of a copy of this Agreement to counsel for Hartford shall be
good and sufficient service on Hartford.

     40. This Agreement shall be governed by the laws of the State of Connecticut without
regard to conflict of laws principles, except that with respect to enforcement actions taken by the
New York Attorney General, the actions will be governed by the laws of the State of New York
without regard to conflict of laws principles.

     41. Any disputes arising out of or related to this Agreement with
respect to the Connecticut Attorney General shall be subject to the exclusive jurisdiction of the
superior court for the judicial district of Hartford, or to the extent federal jurisdiction exists,
the United States

16

 

District Court for the District of Connecticut, any disputes arising out of or
related to this Agreement with respect to the New York Attorney General shall be subject to the
exclusive jurisdiction of the Supreme Court of the State of New York, County of New York, or to the
extent federal jurisdiction exists, the United States District Court for the Southern District of
New York.

     42. The Connecticut Attorney General will promptly file a Withdrawal with prejudice, in
the form attached hereto as Exhibit 3, voluntarily dismissing the Connecticut Complaint with
prejudice, and will not initiate a new case against Hartford related to the matters set forth in
the Connecticut Complaint or uncovered to date relating to Terminal/Maturity Funding Group
Annuities by the Connecticut Attorney General’s Investigation.

     43. The New York Attorney General will promptly file a Notice Discontinuing Action with
Prejudice, in the form attached hereto as Exhibit 4, voluntarily dismissing the New York Complaint
with prejudice, and will not initiate a new case against Hartford related to the matters set forth
in the New York Complaint or uncovered to date relating to Terminal/Maturity Funding Group
Annuities by the New York Attorney General’s Investigation.

     44. This Agreement may be executed in counterparts.

17

 

     WHEREFORE, the following signatures are affixed hereto on this 10th day of
May, 2006.

RICHARD BLUMENTHAL

 

Attorney General of the

State of Connecticut

55 Elm Street

Hartford, CT 06141-0120

ELIOT SPITZER

 

Attorney General of the

State of New York

120 Broadway, 25th Floor

New York, New York 10271

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

 

by: Neal Wolin, Esq.

Executive Vice President and

          General Counsel

18

 

EXHIBIT 1

The Hartford apologizes to our single premium group annuity pension plan customers for the conduct
that led to the actions filed by the Connecticut and New York Attorneys General. It was wrong to
withhold from our pension plan customers the full amount of compensation paid to brokers in
connection with the placements of these annuities. As part of the settlements, The Hartford has
agreed not to pay contingent compensation for single premium group annuities.

19

 

EXHIBIT 2

RELEASE

     This RELEASE (the “Release”) is executed this                      day of                                      
   , 2006 by RELEASOR (defined
below) in favor of RELEASEE (defined below).

DEFINITIONS

     “RELEASOR” refers to [fill in name                                         ] and any of its affiliates, subsidiaries,
associates, general or limited partners or partnerships, predecessors, successors, or assigns,
including, without limitation, any of their respective present or former officers, directors,
trustees, employees, agents, attorneys, representatives and shareholders, affiliates, associates,
general or limited partners or partnerships, heirs, executors, administrators, predecessors,
successors, assigns or insurers acting on behalf of RELEASOR.

     “RELEASEE” refers to The Hartford Financial Services Group, Inc. and any of its subsidiaries,
affiliates, associates, general or limited partners or partnerships, predecessors, successors, or
assigns, including, without limitation, any of their respective present or former officers,
directors, trustees, employees, agents, attorneys, representatives and shareholders, affiliates,
associates, general or limited partners or partnerships, heirs, executors, administrators,
predecessors, successors, assigns or insurers (collectively, “Hartford”).

     “AGREEMENT” refers to a certain agreement between Hartford and the Attorney General of the
State of Connecticut (“CTAG”) and the Attorney General of the State of New York (“NYAG”) dated May
10, 2006, relating to an action commenced against Hartford by CTAG dated May 10, 2006, captioned
“State of Connecticut against The Hartford Financial Services Group, Inc. and Hartford Life, Inc.,”
and an Investigation by CTAG relating to same (collectively, the “Connecticut Complaint”); and an
action commenced against Hartford by NYAG dated May 10, 2006, captioned “The People of the State of
New York against The Hartford Financial Services Group, Inc. and Hartford Life, Inc.,” and an
Investigation by NYAG relating to same (collectively, the “New York Complaint”).

RELEASE

     1. In consideration for the total payment of $                                         in accordance with the terms of the
AGREEMENT, RELEASOR does hereby fully release, waive and forever discharge RELEASEE from any and
all claims, demands, debts, rights, causes of action or liabilities whatsoever, including known and
unknown claims, in law, equity or otherwise, whether under state, federal or foreign statutory or
common law, and whether possessed or asserted directly, indirectly, derivatively, representatively
or in any other capacity (collectively, “Claims”), to the extent any such Claims are based upon,
arise out of or relate to, in whole or in part, any of the allegations, acts, omissions,
transactions, events, or matters discussed in the AGREEMENT, in the
Connecticut or New York Complaints, or that are the subject of the Attorneys General’s
Investigations (as that term is defined in the AGREEMENT), and occurring up to the date of the
AGREEMENT.

     2. In the event that the total payment referred to in paragraph 1 is not made for any reason, then
this RELEASE shall be deemed null and void, provided that any payments received by RELEASOR shall
be credited to Hartford in connection with any Claims that RELEASOR may assert against Hartford, or
that are asserted on behalf of RELEASOR or by a class of which RELEASOR is a member, against
Hartford.

     3. This RELEASE may not be changed orally and shall be governed by and interpreted in accordance
with the laws of the State of Connecticut, without regard to conflict of law principles, except to
the extent that federal law requires that federal law governs. Any disputes arising out of or
related to this RELEASE shall be subject to the exclusive jurisdiction of the superior court for
the judicial district of Hartford or, to the extent federal jurisdiction exists, the United States
District Court for the District of Connecticut.

     4. RELEASOR represents and warrants that the Claims have not been sold, assigned or
hypothecated

20

 

in whole or in part.

	 	 	 	 	 
	 
	 	 	 	 
	Dated:

	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	RELEASOR:
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	Print Name:
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 	 	 	 	 

21

 

EXHIBIT 3

	WITHDRAWAL
JD-CV-41 Rev 10-01
COMPLETE            ALL            SECTIONS BELOW
—
NAME OF CASE (FIRST-NAMED PLAINTIFF            Vs            FIRST NAMED DEFENDANT)
EXHIBIT 3
STATE OF CONNECTICUT
SUPERIOR COURT
www.jud.state.ct.us            us
DOCKET
RETURN DATE
5/,j /06
Judicial            Housing            ADDRESS OF COURT (No., street, town and zip code)
‘x District            I~ Session            G.A. No. I95 Washington            Street, Hartford, CT 06106

	SECTION I (check only one box) THIS WITHDRAWAL IS BEING FILED BECAUSE THE DISPUTE HAS BEEN
RESOLVED B1

I. COURT-ANNEXED ADR

	411088 I- Early intervention
0.17089 i- Early Neutral Evaluation
417090 Attorney Trial Referee
477097 Fact-Finding
411092  —  Arbitration
471094 r            Mediation
411095 -Special Masters
I
411096 r            Summary Jury Trial

	SECTION 11
II. COURT INTERVENTION
411098 I- Pretrial Conference
411099 (- Trial Management Conference
411100 T- Commencement of Trial(court trial -Frstwltness sworn;
jury foal — trial jurors sworn)
III. PRIVATE ADR
411102 i — Provider Name:
IV. OTHER
411103 IX            Discussion of parties on Their Own
415602 Unilateral Action of Party(ies)

	WITHDRAWAL

	(Do no! check the following two boxes d any Intervening complaints, cross complaints,
counterclaims, or third party complaints remain pending in this case See below for partial
withdrawal of action.)

	DISPOSITIVE
( WDACT) IX            The Plaintiffs action is WITHDRAWN AS TO ALL DEFENDANTS without costs to any party.
(WOARD) A judgment has been rendered against Defendant(s): WITH PREJUDICE
and the Plaintiffs action is WITHDRAWN AS TO ALL REMAINING DEFENDANTS without costs
PARTIAL
(WDCOMP) r Complaint
(WDCOUNT) r            Counts of the complaint (WDINTCO) I- Intervening Complaint (WDTHPC) r’ Third Party Complaint
(WAPPCOM) ( — Apportionment Complaint
(WDCC) ~CrossComplaint(crossclaim)
(WOC) I- Counterclaim
(woAAP) I- Plaintiffs)
(WOAAD) F            Complaint against defendants)

	I            Other: in the above entitled action is withdrawn.
SIGNATURE REQUIRED
Plaintiff            State of Connecticut

	Plaintiff
Defendant
Defendant
NAME & ADDRESS Michael E. Cole, Assistant Attorney General
OF SIGNER: El 55Elm Street, Hartford, CT 06106
only w/o costs
s            l~-4 A
3y .’-iA            x            t

	a
fl 1C d2, I            ssistant Atty General y Attorney
—
T,,
Attorney
BY
Attorney
By            Attorney
SECTION III            CERTIFICATION
I hereby canny (Flat a copy was mailed/delivered            GATE            SIGNED Individual attorney or pro se party) /dual attorney o pr se party            PHONE NO
(Area code            first)

	to all counsel and pro se parties of record on: 5/•= /06 X . $/ !/ .~ An ~ 860 8085040
NAME OF EACH PARTY SERVED’ ADDRESS H            I            WHICH            SERVICE            WAS            MADE’
James            H. Bicks, Esq. 400 Atlantic Street, P.O. Box 110325
Wiggin            E            Dana            Stamford, CT 06911-0325

	’ If            necessary attach additional            sheet with            names 01 each party Served and
the address at Which            service V/BB            map&

22

 

EXHIBIT 4

	 	 	 	 	 	 	 
	SUPREME COURT OF THE STATE OF NEW YORK	 	 	 	 
	COUNTY OF NEW YORK	 	 	 	 
	 

	 	 	 	X	 	 
	 
	 	 	 	 
	THE PEOPLE OF THE STATE OF NEW YORK	 	:	 	 
	by ELIOT SPITZER, Attorney General of	 	:	 	 
	the State of New York,	 	:	 	 
	 

	 	Plaintiff,
	 	:
	 	Index No.
	 

	 	 	 	:	 	 
	-against-
	 	:	 	NOTICE
	 

	 	 	 	:
	 	DISCONTINUING
	THE HARTFORD FINANCIAL SERVICES	 	:	 	ACTION WITH
	GROUP, INC. and HARTFORD LIFE, INC.,	 	:	 	PREJUDICE
	 

	 	 	 	:	 	 
	 

	 	Defendants.
	 	:	 	 
	 

	 	 	 	X	 	 
	 
	 	 	 	 

     PLEASE TAKE NOTICE that, pursuant to CPLR § 3217(a) and the agreement annexed hereto,
plaintiff hereby discontinues this action with prejudice as of this date without costs to either
party against the other.

	 	 	 	 	 	 	 
	Dated:

	 	New York, New York	 	 	 	 
	 

	 	May 10, 2006	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	ELIOT SPITZER
	 	 	 	 	Attorney General of the State of New York
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	David D. Brown, IV
	 

	 	 	 	 	 	Assistant Attorney General
	 

	 	 	 	 	 	120 Broadway
	 

	 	 	 	 	 	New York, NY 10271
	 

	 	 	 	 	 	(212) 416-8198
	 
	 	 	 	 	 	 
	 	 	 	 	Attorney for Plaintiff

23

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