The Hartford pulls back on VA pullback — in a few states

Insurance regulators in The Hartford Life & Annuity Insurance Co.’s home state of Connecticut have given the green light to the insurer’s plan to force legacy variable annuity clients to switch to conservative investments.

But the insurer’s requirement won’t apply to clients who resided in Connecticut when they bought their contracts.

In a June 21 filing with the Securities and Exchange Commission, the life insurer noted that VA investors in Connecticut, New Jersey, New York and Oregon wouldn’t be subject to a series of new investment restrictions that were announced in May.

For those affected, the insurer applied the restrictions to existing balances in an array of contracts, including the Director M line of variable annuities. Certain clients with riders from the Lifetime Income Builder suite were told that they need to reallocate their investments into something more conservative.

Hartford’s lineup of acceptable options includes funds that require a minimum 40% allocation to fixed income and a risk-based asset allocation model with a bond allocation that is upward of 40%. Customers who fail to act by Oct. 4 will lose their living benefit altogether.

But clients in four states won’t be subject to these limitations — provided that they were living in those locations when they bought the original contract, confirmed Hartford spokesman David Collins.

In fact, some clients in those states received notice erroneously that they would need to change their allocations. Hartford is rectifying the issue.

Restoring allocations

“We are offering to restore the original allocations to any clients who may have made changes to their portfolios,” Mr. Collins said.

Residents in Connecticut won’t be subject to investment restrictions for the Principal First Preferred contract, Lifetime Income Builder II and the Lifetime Income Foundation, according to the filing.

New Jersey clients won’t have investment restrictions for the Lifetime Income Builder, LIB II and Lifetime Income Foundation. Residents in New York won’t be subject to investment restrictions if they have Hartford’s Lifetime Income Builder, LIB II, the Lifetime Income Builder Selects and the Lifetime Income Foundation features. Clients in Oregon won’t be subject to investment restrictions for Lifetime Income Builder.