(Reuters) - Hartford Financial Services Group Inc will credit $24 million back to New York holders of accidental death and dismemberment policies under a settlement with state regulators, the New York Department of Financial Services said on Thursday.
The department said Hartford violated rules about the minimum loss ratio, which dictates the percentage of each dollar in premiums that must be spent paying claims. The company did not achieve the required 60 percent level because it overestimated what it would pay out in claims on the policies it sold, the department said in a statement.
A spokesman for the company was not immediately available to comment.
The Hartford will decrease rates by 45 percent for both current and new customers; current customers will also get a 35 percent premium discount for three years, the state said.
The net effect, the department added, is that for the next three years currently insured customers will end up paying only $35 or so a year for their coverage.
So-called AD&D policies provide coverage when someone dies or loses a limb or eyesight as the result of an accident. The Hartford mass-marketed the policies in New York to members of associations and bank customers, among others.
Around 300,000 people are eligible for the credits, the state said.
(Reporting By Ben Berkowitz; Editing by Gerald E. McCormick)