Personal             Small             Middle           Specialty            Ongoing              Other             Total
                                             Lines            Commercial          Market           Commercial          Operations         Operations            P&C

Released reserves for general
liability claims, primarily related
to accident years 2001 to 2007             $     -            $    (10 )          $ (48 )          $      -            $    (58 )           $    -            $  (58 )
Released workers' compensation
reserves, primarily related to
accident years 2000 to 2007                      -                 (20 )            (30 )                 -                 (50 )                -               (50 )
Released reserves for directors and
officers claims for accident years
2005 and 2006                                    -                   -                -                 (30 )               (30 )                -               (30 )
Released reserves for personal auto
liability claims related to
accident years 2005 to 2007                    (23 )                 -                -                   -                 (23 )                -               (23 )
Released reserves for
extra-contractual liability claims
under non-standard personal auto
policies                                       (15 )                 -                -                   -                 (15 )                -               (15 )
Released commercial auto liability
reserves, primarily related to
accident years 2002 to 2007                      -                   -              (10 )                 -                 (10 )                -               (10 )
Other reserve re-estimates, net [1]              3                  (9 )              9                 (12 )                (9 )                3                (6 )

Total prior accident year
development for the three months
ended December 31, 2008                    $   (35 )          $    (39 )          $ (79 )          $    (42 )          $   (195 )           $    3            $ (192 )

[1] Includes
reserve
discount
accretion of
$6,
including $1
in Small
Commercial,
$2 in Middle
Market and
$3 in
Specialty
Commercial.

During the fourth quarter of 2008, the Company's re-estimates of prior accident year reserves included the following significant reserve changes:
Ongoing Operations
• Released reserves for general liability claims primarily related to the 2001 to 2007 accident years by $58. Beginning in the third quarter of 2007, the Company observed that reported losses for high hazard and umbrella general liability claims, primarily related to the 2001 to 2006 accident years, were emerging favorably and this caused management to reduce its estimate of the cost of future reported claims for these accident years, resulting in a reserve release in each quarter since the third quarter of 2007. During 2008, the Company observed that this favorable trend continued with the 2007 accident year. The number of reported claims for this line of business has been lower than expected, a trend first observed in 2005. Over time, management has come to believe that the lower than expected number of claims reported to date will not be offset by a higher than expected number of late reported claims.

• Released workers' compensation reserves primarily related to accident years 2000 to 2007 by $50. These reserve releases are a continuation of favorable developments first recognized in 2005 and recognized in 2006, 2007 and the first nine months of 2008. The reserve releases in the fourth quarter of 2008 resulted from a determination that workers' compensation losses continue to develop even more favorably than prior expectations due, in part, to state legal reforms, including in California

and Florida, and underwriting actions as well as cost reduction initiatives first instituted in 2003. In particular, the state legal reforms and underwriting actions have resulted in lower than expected medical claim severity.

• Released reserves for professional liability claims for accident years 2005 and 2006 by $30. During 2008, the Company updated its analysis of certain professional liability claims and the new analysis showed that claim severity for directors and officers losses in the 2005 and 2006 accident years were favorable to previous expectations, resulting in a reduction of reserves.

• Released reserves for Personal Lines auto liability claims by $23, principally related to AARP business for the 2005 through 2007 accident years. Beginning in the first quarter of 2008, management observed an improvement in emerged claim severity for the 2005 through 2007 accident years attributed, in part, to changes made in claim handling procedures in 2007. In the fourth quarter of 2008, the Company recognized that favorable development in reported severity was a sustained trend and accordingly, management reduced its reserve estimate.

• Released reserves for extra-contractual liability claims under non-standard personal auto policies by $15. As part of the agreement to sell its non-standard auto insurance business in November, 2006, the Company continues to be obligated for certain extra-contractual liability claims arising prior to the date of sale. Reserve estimates for extra-contractual liability claims are subject to significant variability depending on the expected settlement of individually large claims and, during the fourth quarter of 2008, the Company determined that the settlement value of a number of these claims was expected to be less than previously anticipated, resulting in a $15 release of reserves.

• Released commercial auto liability reserves by $10, primarily related to accident years 2002 to 2007. Management has observed fewer than previously expected large losses in accident years 2006 and 2007 and lower than previously expected severity on large claims in accident years 2002 to 2005. In 2008, management recognized that favorable development in reported claim severity was a sustained trend and, accordingly, management reduced its estimate of the reserves.

Company reserving actuaries regularly review non-asbestos and non-environmental reserves for the current and prior accident years using the most current claim data. The output from these reserve reviews are reserve estimates that are referred to as "actuarial indications". The actuarial indication is one of the factors considered when determining recorded net reserves. Refer to the Critical Accounting Estimates section of The Hartford's 2007 Form 10-K Annual Report for more information on how non-asbestos and environmental reserves are set. Total recorded net reserves, excluding asbestos and environmental reserves, were higher than the actuarial indication of the reserves by 3.8% as of December 31, 2008 compared to 2.9% as of December 31, 2007.

Goodwill
(Dollar amounts in millions, unless otherwise stated)
Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standard No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), requires that goodwill balances be reviewed for impairment at least annually or more frequently if events occur or circumstances change that would indicate that a triggering event, as defined in SFAS 142, has occurred. A reporting unit is defined as an operating segment or one level below an operating segment. As of December 31, 2008, the Company had goodwill allocated to the following reporting units:

                                                               Segment Goodwill          Goodwill in Corporate           Total

Other Retail                                                    $        159               $            92             $   251
Retirement Plans                                                          79                            69                 148
Institutional Solutions Group                                              -                            32                  32
Individual Life                                                          224                           118                 342
Group Benefits                                                             -                           138                 138
Personal Lines                                                           119                             -                 119
Hartford Financial Products within Specialty Commercial                   30                             -                  30

Total                                                           $        611               $           449             $ 1,060

As of December 31, 2007, the Company had goodwill allocated to the following reporting units:

                                                               Segment Goodwill          Goodwill in Corporate           Total

Individual Annuity                                              $        422               $           308             $   730
Other Retail                                                             159                            92                 251
Retirement Plans                                                           -                            69                  69
Institutional Solutions Group                                              -                            32                  32
Individual Life                                                          224                           118                 342
Group Benefits                                                             -                           138                 138
International                                                              -                            15                  15
Personal Lines                                                           119                             -                 119
Hartford Financial Products within Specialty Commercial                   30                             -                  30

Total                                                           $        954               $           772             $ 1,726

Included in the Company's fourth quarter operating results is a pre-tax impairment charge of goodwill in the amount of $745.
• $422 of this charge was recorded in Individual Annuity.

• $323 of this charge was recorded in Corporate. For purposes of impairment testing, this goodwill had been allocated to reporting units in the Company's life insurance operations, with $308 allocated to Individual Annuity and $15 to International.

As a result of the sharp decline in the equity markets during the fourth quarter of 2008 and a sharp decline in The Hartford's share price below book value per share, the Company, in connection with the preparation of its year end 2008 financial statements, concluded that the conditions had been met to warrant an interim goodwill impairment test.
Management's determination of the fair value of each reporting unit incorporates multiple inputs including discounted cash flow calculations, peer company price to earnings multiples, the level of the Company's own share price and assumptions that market participants would make in valuing the reporting unit. Other assumptions include levels of economic capital, future business growth, earnings projections, assets under management for Life reporting units and the weighted average cost of capital used for purposes of discounting. As a result of the testing performed during the fourth quarter of 2008, which included the effects of decreasing sales outlooks and declining equity markets on future earnings, the fair value for each reporting unit continued to be in excess of the respective reporting unit's carrying value except for the Individual Annuity and International reporting units. For both of these reporting units, the Company concluded that the fair value of the reporting unit had declined significantly.
If current market conditions persist during 2009, in particular, if the Company's share price remains below book value per share, or if the Company's actions to limit risk associated with its products or investments causes a significant change in any one reporting unit's fair value, the Company may need to reassess goodwill impairment at the end of each quarter as part of an annual or interim impairment test. Subsequent reviews of goodwill could result in additional impairment of goodwill during 2009.

Some of the statements in this Form 8-K should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These include statements about The Hartford's future results of operations. The Hartford cautions investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and uncertainties include, without limitation, uncertainties related to the depth and duration of the current recession and related financial crisis, and the impact of these volatile market conditions on, among other things, our investment portfolio, liabilities from variable annuity products and capital position; the success of our efforts to preserve capital and reduce risk, and the costs and charges associated therewith; our ability to participate in programs under the Emergency Economic Stabilization Act of 2008 and similar initiatives and the terms of such participation; changes in financial and capital markets, including changes in interest rates, credit spreads, equity prices and foreign exchange rates; the inability to effectively mitigate the impact of equity market volatility on the company's financial position and results of operations arising from obligations under annuity product guarantees; the amount of statutory capital that the company has, changes to the statutory reserves and/or risk based capital requirements, and the company's ability to hold sufficient statutory capital to maintain financial strength and credit ratings; a downgrade in the company's financial strength or credit ratings; the possibility of general economic and business conditions that are less favorable than anticipated; the potential for differing interpretations of the methodologies, estimations and assumptions that underlie the valuation of the company's financial instruments that could result in changes to investment valuations; the subjective determinations that underlie the company's evaluation of other-than-temporary impairments on available-for-sale securities; losses due to defaults by others; the availability of our commercial paper program; the potential for acceleration of DAC amortization; the potential for an impairment of our goodwill; the difficulty in predicting the company's potential exposure for asbestos and environmental claims; the possible occurrence of terrorist attacks; the response of reinsurance companies under reinsurance contracts and the availability, pricing and adequacy of reinsurance to protect the company against losses; the possibility of unfavorable loss development; the incidence and severity of catastrophes, both natural and man-made; stronger than anticipated competitive activity; unfavorable judicial or legislative developments; the potential effect of domestic and foreign regulatory developments, including those which could increase the company's business costs and required capital levels; the company's ability to distribute its products through distribution channels, both current and future; the uncertain effects of emerging claim and coverage issues; the ability of the company's subsidiaries to pay dividends to the company; the company's ability to adequately price its property and casualty policies; the ability to recover the company's systems and information in the event of a disaster or other unanticipated event; potential for difficulties arising from outsourcing relationships; potential changes in federal or state tax laws, including changes impacting the availability of the separate account dividend received deduction; the company's ability to protect its intellectual property and defend against claims of infringement; and other risks and uncertainties discussed in The Hartford's Quarterly Reports on Form 10-Q, the 2007 Annual Report on Form 10-K and other filings The Hartford makes with the Securities and Exchange Commission. The Hartford assumes no obligation to update the information contained herein, which speaks as of the date issued. Item 9.01 Financial Statements and Exhibits

Exhibit No.
99.1 Press Release of The Hartford Financial Services Group, Inc. dated February 5, 2009