The Hartford Agrees to Pay $787M to Settle Boy Scouts Sexual Abuse Claims

By | September 15, 2021

The Hartford announced a new agreement in the Boy Scouts of America (BSA) bankruptcy in which it will pay $787 million for sexual abuse claims under policies mostly issued in the 1970s.

The new agreement supersedes a prior $650 million agreement and now includes the BSA, its local councils and the representatives of a majority of the sexual abuse claimants.

In exchange for The Hartford’s payment, the BSA and its local councils would fully release The Hartford from any obligation under policies The Hartford issued to the BSA and its local councils.

In addition, the representatives for the claimants joining this agreement-in-principle will support a plan of reorganization which incorporates the settlement.

As announced on April 16, 2021, The Hartford had entered into a $650 million settlement with BSA; however, that previous settlement did not include the local councils or representatives of a majority of the claimants.

The BSA also announced yesterday a separate agreement for $250 million from one of its supporting organizations, the Church of Jesus Christ of Latter-day Saints.

Boy Scouts Delays Bankruptcy Step After Judge Questions Legal Fees, Insurer Deal

Attorneys for the Boy Scouts of America last month postponed a key bankruptcy hearing after Judge Laura Selber Silverstein cast some doubt on the future of the overall bankruptcy settlement case. The judge approved BSA’s proposal to enter into an agreement that includes an $850 million fund to compensate men who say Scout leaders sexually abused them as youngsters.

However, the judge rejected two provisions of the bankruptcy reorganization plan, one being the earlier Hartford agreement and the other having to do with legal fees. The judge criticized the BSA for using the bankruptcy agreement as a way to get out of the previous deal it struck with The Hartford.

The BSA is pursuing the side settlements — and one with another insurer— as part of its effort to settle abuse claims, reorganize and emerge from bankruptcy.

However, the official victims committee opposes the proposed settlements with The Hartford and the Church of Jesus Christ of Latter-day Saints. Lawyers representing other sexual abuse claimants also oppose them.

The Official Tort Claimants’ Committee claims The Hartford’s new offer is “subpar” as it yields an average of less than $9,500 per survivor.

“The Tort Claimants’ Committee investigated Hartford’s exposure and it has the ability to fairly compensate survivors without jeopardizing its financial condition,” said John Humphrey, chair of the TCC. “As Chairman of the TCC, I cannot in good conscience support the release of a major insurance company for cents on the dollar.”

The TCC said the LDS church offer would amount to $3,000 per claimant, which it said is “not reasonable compensation for the broad releases of the sexual abuse claims that occurred in local councils controlled by the LDS.”

The Hartford said the parties now expect to receive court approval of the settlement in late 2021.

The Hartford said it expects to record a charge against earnings of approximately $137 million, before tax, in the third quarter 2021.

Topics Claims Abuse Molestation

Was this article valuable?

Here are more articles you may enjoy.