City turns to insurers to help stave off bankruptcy

The US city that likes to call itself ‘the world capital of insurance’ has money problems

City turns to insurers to help stave off bankruptcy

Insurance News

By Allie Sanchez

Hartford, Connecticut, is on the brink of bankruptcy and is in a scramble to keep its balance sheets in the black as it turns to negotiations with workers’ unions and scrimping on spending.

Yahoo News reports that the city is currently seeking $40 million in state funding to help mitigate the deficit in next year’s roughly $600 million budget. However, the financial support comes with caveats, such as spending cuts and collaborating with local workers’ unions to cut costs.

The state of Connecticut itself is facing a $5 billion deficit over the next two years, Yahoo also reported.

According to the report, the supplementary fund from the state will be “key” to maximizing a $50 million donation from the city’s three major employers—insurers Aetna, Travelers and The Hartford. 

Mayor Luke Bronin, who took office in 2016, said that the donation from the insurers is conditional on it being a part of a “comprehensive, sustainable solution” for the city.

The city has had to depend on short term borrowing to cover payroll and operating costs and has sought proposals from law firms that specialize in municipal bankruptcy law, the report added.

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