US p/c and life group Hartford Financial Services has repaid the $3.4bn in bailout funding that it received under the US Treasury's Troubled Asset Relief Programme last year. In addition to repurchasing preferred shares that were sold to the Treasury under TARP, Hartford also made a final $21.7m dividend payment on those shares. To help fund the buyback of preferred shares, Hartford recently sold $2.38bn in stock and debt to augment its cash on hand. "We are pleased to complete our plan to return the US Treasury's investment in The Hartford", said group chairman and chief executive Liam McGee. "With the capital rise completed and the investment repaid, we are well positioned from both a capital and balance-sheet perspective". The Treasury still holds warrants to buy 52m Hartford shares at $9.79 apiece. Hartford has indicated that it does not intend to repurchase the warrants. The insurance group was one of a handful of insurers to acquire a small savings institution, thereby becoming a thrift holding company, in order to qualify for assistance under the $700bn TARP rescue.

The $16bn of losses from the Chilean earthquake in February and European Windstorm Xynthia have made the first three months of 2010 the most expensive first quarter for insurers ever, according to Willis Re. Last year reinsurers enjoyed light losses and good results, noted Willis. But, the first quarter 2010 results of reinsurers will, for the first time in many years, be worse than those of their primary insurance company clients, Willis said. In its report, "Calm Amid Calamity", the reinsurance broker concluded that the first quarter does not "bode well" for reinsurers because their largest losses are coming from smaller markets, where they are less able to generate significant premium volumes to accelerate post-loss payback. And, losses in the first three months of the year leave reinsurers exposed to the historically more loss-prone third and fourth quarters. "While one poor quarter, which is an earnings issue for reinsurers, will not be sufficient to trigger a general market turn on its own, it is likely to stiffen reinsurers' resolve on renewals later in the year as the size of the recent catastrophe losses develop and back-year reserve releases reduce," said Peter Hearn, chief executive officer of Willis Re.

The European insurance regulatory body that is producing advice on Europe's proposed capital regime Solvency II has published guidance on the pre-application process for insurers wishing to use internal models to calculate capital requirements. The guidance is the first of the so-called level three guidance produced by the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS). The guidance is a "new stage" in CEIOPS work towards "ensuring a fully functional regulatory architecture" in advance of the Solvency II implementation 2012 deadline. CEIOPS' guidance on the pre-application process for internal models follows a 10-week consultation. The voluntary pre-application process will help insurers and regulators have consistent internal models pre-application process, which would facilitate the introduction of a balanced internal models approval process, CEIOPS said.

Omega Insurance Holdings Ltd said that losses from last month's earthquake in Chile will cost it approximately $23m. The estimate, based on a current market loss estimate of between $5.5bn and $8.5bn, relates to Omega's international reinsurance account. The Bermuda-based insurer said that it does not believe it has any material losses relating to European windstorm Xynthia. Omega said that the Chilean earthquake loss, the resulting potential loss of profit commission, and the costs associated with a special general meeting held earlier this month, will have a material effect on its full year result. At the special general meeting, an investor-led proposal to replace the insurer's chairman and five other board members was passed.