Group settles fraud probe for $20m

he Hartford Financial Services Group has agreed to pay $20 million to settle an investigation into claims of fraudulent sales practices in retirement products, the attorneys general of Connecticut and New York said Wednesday.

The Hartford agreed to return $16.1 million in profit from the sales that Connecticut Attorney General Richard Blumenthal and New York Attorney General Eliot Spitzer say were arranged in concealed financial agreements with brokers.

The practice helped The Hartford realize more than $800 million in sales from 1998 to 2004, forcing higher policy costs for customers including Montgomery Ward Co., Price WaterhouseCoopers and Mt. Sinai Medical Center of Florida, the attorneys general said.

The insurer also will pay a penalty of $1.95 million each to the two states.

“The Hartford was at the hub of a series of secret conspiracies that enriched both the brokers and The Hartford at the expense of their customers,” Blumenthal said.