The Hartford has entered into a new agreement-in-principle in the Boy Scouts of America (BSA) bankruptcy that will see the firm pay $787 million, before tax, for claims associated with policies mostly issued in the 1970s.
In exchange for The Hartford’s payment, the BSA and its local councils will fully release The Hartford from any obligation under policies The Hartford issued to the BSA and its local councils.
Furthermore, the representatives for the claimants joining this agreement-in-principle will support a plan of reorganisation 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 agreement-in-principle was reached in connection with BSA’s Chapter 11 bankruptcy and will become a final settlement The parties to the agreement-in-principle expect to receive court approval of the settlement in late 2021.
No assurance can be given that all the conditions precedent to the settlement will be satisfied or that bankruptcy court approval, if obtained, will not be delayed for various procedural reasons.
The Hartford expects to record a charge against earnings of approximately $137 million, before tax, in the third quarter 2021 for prior accident year development recognized in connection with the additional amounts anticipated to be paid by The Hartford pursuant to the agreement-in-principle described above.