Feds give The Hartford a bank charter
A number of insurance companies are pursuing opportunities granted them by new federal legislation, and The Hartford Financial Services Group is the latest to do so, announcing plans Jan. 25 to establish a bank that offers trust and investment services, with a green light from federal banking officials.
The Office of Thrift Supervision has given The Hartford a federal thrift charter to establish a new entity, to be called Hartford Bank, that will offer trust services to insurance customers. The bank will sell services such as institutional and personal trust services, charitable remainder trusts, irrevocable life insurance trusts, and investment management services. The bank's operations, which will be run from the company's headquarters in Hartford, are expected to be up and running by mid-2000.
"In addition to offering customers products only available with a bank charter, The Hartford Bank will enhance The Hartford's asset accumulation and asset management business," says Ramani Ayer, the Hartford's chairman and CEO. John F. Becker, former regional president of Citizens Bank of Connecticut, has been named president and CEO of the new bank.
Cynthia Michener, a spokesperson for The Hartford, says the bank's services will be offered through The Hartford's traditional network of agents, brokers, and independent agents. She says the company does not plan to offer traditional bank accounts that offer savings and checking options in the future.
The Hartford's move signals another blurring of the line between insurance and financial services. President Clinton signed a financial services reform bill last year that allows financial services companies and insurance companies to sell each other's products, subject to federal approval.
Other insurance companies who have already established banks or received approval to do so are American International Group, State Farm Mutual Automobile Insurance Co., Massachusetts Mutual Life Insurance Co., Allstate Insurance Co., and Aetna.