The Hartford disclosed it has agreed to pay $650 million to settle sexual abuse claims against the Boy Scouts of America associated with policies mostly issued in the 1970s.
According to the insurer, the agreement is with the group’s national organization, calculated before taxes and is in connection with the BSA’s Chapter 11 bankruptcy.
The settlement is the product of what The Hartford termed as “extensive negotiations. In return for the payment, the BSA and its local councils fully release the insurer from any additional obligations under the policies it issued to the BSA and its local councils.
Plans call for the agreement to become effective once certain conditions are met, including confirmation of the BSA’s “global resolution plan,” executed releases from the local councils, and approval from the abuse claimants and bankruptcy court.
The Hartford and the BSA hope to receive court approval in the third quarter of 2021, but this could be delayed for various procedural reasons.
As a result, The Hartford estimates unfavorable prior year development of approximately $225 million, before tax, in first quarter 2021 that includes, among other items, a charge to increase reserves for the BSA settlement above the amount previously reserved for this exposure.
Separately, The Hartford estimated current accident year catastrophe losses, net of reinsurance, of approximately $214 million, before tax, including approximately $176 million, before tax, from February winter storms in Texas and other areas.
The Hartford plans to release full 2021 first quarter earnings on April 29.
Source: The Hartford
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