By Robert Dixon
An accounting error has turned a positive year into a negative one for The Hartford Financial Services Group, according to restated third quarter earnings filed by the company.
The restated earnings shifted The Hartford’s results for 2012 from a $350 million profit to a $38 million loss or the year. However, there was no change in “core earnings” of $1.4 billion, the insurer said in a release.
An “error in calculations” missed a $393 million goodwill writedown associated with the transaction, according to a revised 10-K annual report filed with the Securities and Exchange Commission on March 1. The Hartford said it discovered “a material weakness in its internal control over financial reporting,” and said the error had been fixed as of Jan. 1.
"We regret the error, but importantly the adjustments have no impact on our reported 2012 core earnings, statutory results or surplus," The Hartford's chairman, president and chief executive officer Liam E. McGee said in a release. "The individual life, retirement plans and Woodbury Financial Services transactions were attractive for The Hartford and completed on favorable financial terms. They generated an aggregate statutory capital benefit of $2.2 billion and this remains unchanged."
The Hartford originally said the sale of its individual life insurance business to Prudential, announced on Sept. 27, would not have an impact on its financial results for the year. The $615 million deal closed Jan. 1, Prudential said in a press release.
As a result of the deal, The Hartford agreed to provide reinsurance for some 700,000 individual policies with a combined face value of about $135 billion.
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