The Hartford to pay $787m to resolve Boy Scouts sexual abuse claims

Property/casualty insurer  The Hartford has agreed has increased settlement in the Boy Scouts of America (BSA) bankruptcy case for sexual abuse claims associated with policies mostly issued in the 1970s.

The insurer will now pay a higher sum of $787 million before tax, superseding its prior agreement of $650 million settlement with BSA.

The new agreement-in-principle includes the BSA, its local councils and the representatives of a majority of the sexual abuse claimants.

In exchange, the BSA and its local councils will fully release The Hartford from any obligation under policies it issued to the BSA and its local councils, the company said in a statement. Additionally, the representatives for the claimants joining this agreement will support a plan of reorganisation which incorporates the settlement.

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 recognised in connection with the additional amounts anticipated to be paid by The Hartford pursuant to the agreement-in-principle.

The agreement 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 reorganisation.

The parties to the agreement-in-principle expect to receive court approval of the settlement in late 2021. However, it noted that 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.

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