Hartford Financial Services Group Inc., whose investment losses in 2008 led to a U.S. bailout, was asked by regulators to explain why it expects its worst- performing holdings to rebound.
The U.S. Securities and Exchange Commission instructed Hartford to provide more details on $2.1 billion of securities that have traded at less than half of what the company says they’re worth for more than a year. The unrealized loss on these investments, held by Hartford’s life insurance subsidiary, totaled $1.5 billion as of Dec. 31, the SEC said in a letter to the company dated April 13 and disclosed today.
“Please revise your disclosure to indicate the nature of these securities and to explain why these unrealized losses, which appear to be significantly greater than credit spreads in the marketplace, are apparently not indicative of credit losses and/or other-than-temporary impairment,” Jim Rosenberg, senior assistant chief accountant, said in the letter to Glenn Lammey, chief financial officer of Hartford’s life insurer.
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