Ms. Willis said that The Hartford typically gives full-year rather than quarterly estimates and that the company is "estimating higher for the full year than we did earlier this year."

The third-quarter earnings amount includes additional reserves for the cost of claims resulting from Hurricane Isabel and a legal dispute with Bancorp Services, LLC, the Hartford, Conn.-based company said.

The company also said in a statement it estimates claim costs related to Hurricane Isabel to be $26 million (after-tax), or 9 cents per diluted share, for the third quarter.

Reserves were increased by about $40 million (after-tax), or 14 cents per diluted share, for the third quarter. The increase reflects the company's current best estimate of the cost of resolving the Bancorp dispute.

Elizabeth Sacksteder, senior vice president of litigation, explained to National Underwriter that in 2000 Bancorp filed a suit alleging that Hartford had "infringed a patent that related to an administration system for administering a particular type of corporate owned life insurance account."

She said Bancorp also alleged that prior to obtaining a patent, The Hartford had "misappropriated an alleged trade secret which related to a different aspect of the particular type of corporate owned life insurance account."

In 2002, she continued, Bancorp received a verdict and judgment in its favor on the trade secret part of the case, which Hartford is appealing. The insurer won the patent part of the case.

The third-quarter 2003 earnings estimate assumes that the company will have no net realized capital gains or losses in the quarter. While the company may incur net realized capital gains or losses in the quarter, any such gains or losses are not expected to be material, according to The Hartford.

The Hartford also adjusted its full-year 2003 operating income per share guidance to $5.10-to-$5.25 per diluted share. This estimate excludes the effect of net realized capital gains or losses, the first-quarter asbestos charge and the third-quarter Bancorp expense.

Due to the Bancorp expense and improving performance in The Hartford's life operations, the company said its full-year 2003 operating income per diluted share guidance is as follows:

? The full-year estimate reflects diluted weighted average shares of 274.1 million.

? Calculated using diluted weighted average shares of 274.1 million for the full year. The earnings per share impact of the estimated Bancorp reserve addition in the third quarter of 14 cents is based on diluted weighted average shares of 284.8 million.

? The asbestos reserve addition had an earnings per share impact of $6.66 in the first quarter. The first-quarter EPS calculation reflected basic weighted average shares of 255.4 million. The full-year estimate reflects basic weighted average shares of 272.5 million.

? Included in net income but not in operating income is $133 million (after-tax) of net realized capital gains reported through June 30. Realized gains are not expected to be material in the third quarter and are not estimated for the fourth quarter.

The Hartford said it uses the non-GAAP financial measure operating income as an important measure of the company's operating performance.

The company said in its guidance that it presented operating income as net income, before the after-tax effect of net realized capital gains and losses, the first-quarter asbestos reserve addition and the third-quarter Bancorp reserve addition.

The company said this operating income measure excludes the effect of realized capital gains and losses, which tend to be highly variable; it excludes the effect of the first-quarter asbestos charge, which relates solely to legacy businesses; and it excludes the third-quarter Bancorp expense, which is unrelated to ongoing operations.