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A.M. Best Removes From Under Review With Developing Implications and Affirms Ratings of Talcott Resolution Group

A.M. Best has removed from under review with developing
implications and affirmed the Financial Strength Rating of B++ (Good)
and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “bbb+” of Hartford
Life Insurance Company and Hartford Life and Annuity Insurance
Company (collectively referred to as Talcott Resolution Group
(Talcott Resolution) (formally referred to as Hartford Life Group).
Additionally, A.M. Best has removed from under review with developing
implications and affirmed the Long-Term ICR of “bbb-” of Hartford
Life, Inc. (HLI) (Delaware), along with its Long-Term Issue Credit
Ratings (Long-Term IRs). Hartford Life Insurance Company and Hartford
Life and Annuity Insurance Company are domiciled in Windsor, CT. The
outlooks assigned to these Credit Ratings (ratings) are stable. (See
below for a detailed listing of the Long-Term IRs.)

The rating actions are in response to the recent close of the
acquisition of Talcott Resolution by a group of investors led by Cornell
Capital LLC, Atlas Merchant Capital LLC, TRB Advisors LP, Global
Atlantic Financial Group Limited (Global Atlantic), Pine Brook and
J. Safra Group. While Talcott Resolution is no longer affiliated with The
Hartford Financial Services Group, Inc. (The Hartford), the Hartford
has retained a 9.7% ownership interest in Talcott Resolution. The
Hartford’s group benefits and mutual fund subsidiaries, previously under
HLI in the organizational structure, were transferred to another
subsidiary of The Hartford prior to close of the transaction.

The ratings reflect Talcott Resolution’s very strong balance sheet, as
well as its adequate operating performance, limited business profile and
appropriate enterprise risk management. The group’s risk-adjusted
capitalization remains at the strongest level, supportive of its current
investment and insurance risks. Additionally, A.M. Best does not expect
the moderately conservative investment allocation to change materially,
reflecting a diverse portfolio of invested assets across industries,
primarily in investment grade holdings. Investments will continue to be
managed by HIMCO (Hartford Investment Management Company). Overall
financial and operating leverage across the insurance entities remains
modest at under 3%, with interest coverage well in excess of debt
servicing needs. As part of the transaction, Talcott Resolution
reinsured a material portion of its fixed annuity, payout annuity and
structured settlement businesses to a subsidiary of Global Atlantic,
materially increasing its reliance on reinsurance. However, counterparty
risk is generally considered modest, due to the favorable credit ratings
of Talcott Resolution’s key reinsurance partners.

Talcott Resolution’s business profile is viewed as limited due to the
run-off nature of its operations as well as its lack of diversification
of revenue and earnings streams. As such, operating metrics are trending
downward, which is expected for a company that is managing run-off
business. A.M. Best will continue to discuss the strategic direction of
Talcott Resolution going forward, should the company decide to further
diversify or alter its current strategy. Enterprise risk management is
viewed favorably as the company works to further enhance its existing
risk management capabilities. A.M. Best believes that Talcott
Resolution’s current risk identification and mitigation strategies are
appropriate and an adequate match to the level of risk attributed to its
current business model.

Hartford Life, Inc.—

— “bbb-” on $250 million 7.65% senior unsecured debentures, due 2027
(approximately $80 million outstanding)– “bbb-” on $400 million
7.375% senior unsecured notes, due 2031 (approximately $63 million
outstanding)

Hartford Life Institutional Funding— “bbb+”on program rating

— “bbb+” on all outstanding notes issued under the program

This press release relates to Credit Ratings that have been published
on A.M. Best’s website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and A.M. Best press releases, please view Guide
for Media – Proper Use of Best’s Credit Ratings and A.M. Best Rating
Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance
rating and information source. For more information, visit www.ambest.com.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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