The Hartford to pay $650m to Boy Scouts of America to settle sex abuse claims

The Hartford has entered into a Settlement Agreement and Release with the national organisation of the Boy Scouts of America (BSA) that will see the insurer pay $650 million, before tax, for sexual abuse claims associated with policies mostly issued in the 1970s.

The agreement is the culmination of extensive negotiations between the parties and will free The Hartford from any further obligation under policies it issued to the BSA and its local councils.

The agreement is in connection with BSA’s chapter 11 bankruptcy. It will become effective upon the occurrence of certain conditions, 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, although they acknowledged it could be later than this.

The Hartford has estimated unfavorable prior year development of approximately $225 million, before tax, in Q1, 2021, related in part to increased reserves for the BSA settlement.

It also estimated current accident year catastrophe losses, net of reinsurance, of approximately $214 million, before tax. This includes approximately $176 million related to winter storms in Texas and elsewhere in February.

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