Hartford Financial Services Group will return $48.2 million in excess profits it earned on its workers’ compensation policies over a three-year period in a deal with Florida regulators.

Kevin McCarty

Florida Insurance Commissioner Kevin McCarty said the Hartford, Conn.-based insurer has entered into a consent agreement to return the money to state businesses for accidents in the years 2004-2006. The Hartford must provide refunds or renewal credits in the next two months and provide documentation of its compliance to McCarty’s office.

“During these tough economic times, Florida businesses will receive a very significant and important return of premium,” McCarty said in a statement. “Companies certainly are entitled to earn reasonable profits; but the excess profit law protects Florida business owners from paying more than what is actuarially justified.”

The Hartford said that during the calendar years 2004 to 2006, it generated “outstanding results” in its workers’ compensation business, qualifying customers for a pro-rata share of the $48.2 million refund, which represents its underwriting profit in excess of the allowable amount.

Florida law includes an excess profits stipulation that governs the maximum amount of underwriting profit insurers can generate over a three-year period.

Jim Ward, regional vice president of The Hartford’s Orlando, Fla., regional office, said that the insurer, “its agent and broker partners and its policyholders have long valued the importance of risk management and safety programs.”

“The combination of these loss prevention efforts, along with The Hartford’s strong workers’ compensation underwriting and risk selection in the state, resulted in lower claims costs,” Ward said in a statement. “We can think of no better testimony to the partnership achieved between our agents, policyholders and The Hartford than is reflected in the return of these funds.”

In addition to proof of compliance, The Hartford must also certify that it has attempted to locate all policyholders whose refund checks are returned, according to McCarty’s office. If the insurer is unable to locate those policyholders, the funds must be processed as unclaimed or abandoned property under Florida law. The Hartford must also pay the insurance department $5,000 in administrative costs.

The agreement with The Hartford brings the total amount of refunded excess workers’ compensation profits in Florida to more than $98.8 million this year, according to McCarty’s office. More than $29.7 million in excess profits were refunded in 2008.