Life Insurance

The Hartford enters $650 million settlement agreement with the Boy Scouts of America

After years of legal dispute, The Hartford has entered into a settlement agreement and release with the Boy Scouts of America (BSA), wherein the insurer would pay $650 million (before tax) for sexual abuse claims against the BSA associated with policies mainly issued in the 1970s.

It is hoped that the settlement will receive court approval in the third quarter of 2021.

The agreement, which came to be following “extensive negotiations,” outlines that in exchange for The Hartford’s payment the BSA and its local councils will fully release the insurer from any more obligation under policies it had issued to the BSA and its local councils, a release said.

Read more: Boy Scouts of America battle insurers over coverage for sex abuse scandal

This development comes after the BSA filed for Chapter 11 bankruptcy, and it becomes effective once certain conditions are met. Such conditions include confirmation of the BSA’s global resolution plan, executed releases from the BSA local councils, and approval from the abuse claimants and bankruptcy court.

The BSA recently filed a new bankruptcy reorganization plan after the previous one was picked apart by the lawyers of abuse victims. The new plan increases the contribution of local BSA councils to a trust fund for child sexual abuse victims, but also has provisions to cut out local councils from the fund, leaving them to pay for the lawsuits out of their own pockets.

Read more: Boy Scouts bankruptcy plan includes new insurance estimate

An attorney acting as a fiduciary in the bankruptcy case for all abuse victims has criticized the new plan for downplaying the liability exposure of insurers.

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