Prudential would end up reinsuring about 700,000 life policies that provide about $135 billion in coverage.
Prudential would get control over the $7 billion in assets and reserves backing the policies, and it would take over management of $5 billion in separate account assets.
"The benefits and provisions of The Hartford's in-force life insurance contracts will remain unchanged, and The Hartford's issuing companies will continue to be the named insurers," Prudential said in a statement.
Prudential will collect the policy premiums, and it will be reponsible for paying claims and providing customer service and administration, Prudential said.
Jim Avery, the chief executive officer (CEO) of the Prudential individual life business, will retire when the transaction closes, and Kent Sluyter, the chief actuary, will take over as the CEO of the business, Prudential said.
Avery has been the unit CEO for 14 years. He delayed his retirement to help negotiate the Hartford life unit deal, Prudential said.
Sluyter, the incoming CEO, has been working for Prudential since 1981. He has a bachelor's degree in mathematics from Lafayette College and holds the fellow of the Society of Actuaries and Chartered Life Underwriter professional designations.
Hartford announced in March that it would be selling its retirement plans, broker-dealer individual life businesses and focusing mainly on its property-casualty, group benefits and mutual funds businesses.
The company recently agreed to sell the Woodbury Financial Services Inc. broker-dealer arm to American International Group (AIG) and the retirement plans business to Massachusetts Mutual Life Insurance Company.
The Prudential deal announcement "represents a significant milestone in the execution of The Hartford’s strategy to deliver greater value to shareholders,” Hartford Chairman Liam McGee said in a statement. "In about six months, we have completed three agreements, all executed at attractive valuations to strong financial institutions that have a strategic interest in the businesses."
The Prudential deal and the other deals should help Hartford increase returns on equity, reduce the company's sensitivity to capital markets, cut capital costs and increase financial flexibility, McGee said.
Fitch Ratings said the Prudential deal should not have much effect on Hartford's equity but should increase net statutory capital at Hartford Life by about $1.5 billion.
Fitch likes Hartford's ability to do the Prudential deal and the other big deals quickly and to get reasonable prices, the rating agency said in a comment.
"A lengthy time horizon for a sale could have increased uncertainty and impaired the market position of these businesses and potentially forced a distressed sale," Fitch said. "Favorably, over the long term, management's decision to exit the more volatile variable annuities (VA) and individual life businesses should help to reduce risk by making the company less vulnerable to swings in performance."