The agreement-in-principle was reached in connection with BSA’s Chapter 11 bankruptcy and will become a final settlement upon the occurrence of certain conditions, including execution of a definitive settlement agreement, confirmation of the BSA’s global resolution plan, receipt of executed releases from the local councils, and approval from the bankruptcy court as part of BSA’s overall plan of reorganization. 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.