CORRECT:WSJ:Hartford Financial In Talks To Sell Life Insur Unit To Sun Life -Source

(Steve Kee is a spokesman for Sun Life. In the item "=WSJ:Hartford Fincl In Talks To Sell Life Insur Unit To Sun Life -Source," published at 4:19 p.m. EST, Kee's last name was misspelled. A correct version follows.)

By Leslie Scism

Of THE WALL STREET JOURNAL

Slammed with two credit downgrades in the last week and its stock lately in free fall, Hartford Financial Services Group Inc. (HIG) is in talks to sell most of its life insurance unit to Canada's Sun Life Financial Inc. (SLF), according to a person familiar with the situation.

Other options are under consideration, agreement may not be reached and "nothing is imminent," the person said. The talks earlier were reported by Bloomberg News.

The talks come at a time of turmoil for the life-insurance industry in general. Insurers make money by collecting premiums on policies, then investing that money in the credit markets. In good times, they make money on both ends - investment gains and underwriting profits. Amid a meltdown in stock and bond markets, the last several months have been brutal for many companies.

(This story and related background material will be available on The Wall Street Journal Web site, WSJ.com.)

Hartford's shares have been down more than 90% over the past 12 months, making the company one of the hardest hit of the life insurers. Hartford posted a $2.6 billion third-quarter loss, hurt by some of the steepest investment-portfolio losses of the major life insurers, and that was followed by an $806 million fourth-quarter loss.

On Wednesday, shares of Hartford rose about 11% to $5.14 in 4 p.m EST composite trading on the New York Stock Exchange.

Sun Life Financial, which earned $785 million in 2008, has signaled an interest in doing deals. Donald A. Stewart, Sun Life's chief financial officer, last month said in its fourth-quarter earnings press release: "Our strong capital base provides added protection from market volatility, as well as enhances our ability to make acquisitions and expand our business." Sun Life left its share dividend unchanged in the last quarter, at 36 cents per share. The company reported a fourth-quarter after-tax gain of $825 million from the sale of its interest in CI Financial.

Steve Kee, a spokesman for Sun Life, said Wednesday the company is "actively looking at potential opportunities in key markets."

Shares of Sun Life Financial rose about 3.8% to $14.05.

(Lavonne Kuykendall and M.P. McQueen contributed to this article.)