<PAGE>
As Filed with the Securities and Exchange Commission on February 18, 1998.
File No. 33-63731
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 4
TO FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
A. Exact name of trust: ICMG Registered Variable Life Separate Account One
B. Name of depositor: Hartford Life and Annuity Insurance Company
C. Complete address of depositor's principal executive offices: P.O. Box 2999
Hartford, CT 06104-2999
D. Name and complete address of agent for service:
Leslie T. Soler, Esq.
Hartford Life
P.O. Box 2999
Hartford, 06104-2999
It is proposed that this filing will become effective:
___ immediately upon filing pursuant to paragraph (b) of Rule 485
___ on ___________, 1998, pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
_x_ on May 1, 1998, pursuant to paragraph (a)(1) of Rule 485
If appropriate check the following:
___ this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
E. Title and amount of securities being registered: Group Flexible Premium
Variable Life Insurance Policies. Pursuant to Rule 24f-2 under the
Investment Company Act of 1940, the Registrant has registered an indefinite
amount of these group flexible premium variable life insurance policies.
The Rule 24f-2 Notice for the Registrant's most recent fiscal year was
filed on or about February 28, 1997.
F. Proposed maximum aggregate offering price to the public of the securities
being registered: N/A
G. Amount of filing fee: N/A
H. Approximate date of proposed public offering: As soon as practicable
after the effective date of this registration statement.
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
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1. Cover page
2. Cover page
3. Not applicable
4. Hartford; Distribution of the Group Policy
5. Summary - The Separate Account
6. The Separate Account
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. Summary; The Funds; Detailed Description of
Certificate Benefits and Provisions; Other Matters
- Voting Rights, Dividends
11. Summary; The Funds
12. Summary; The Funds
13. Deductions and Charges From Investment Value;
Distribution of the Group Policy; Federal Tax
Considerations
14. Detailed Description of Certificate Benefits and
Provisions - Enrollment for a Certificate
15. Detailed Description of Certificate Benefits and
Provisions - Allocation of Premium Payments
16. The Funds; Detailed Description of Certificate
Benefits and Provisions - Allocation of Premium Payments
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
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17. Summary; Detailed Description of Certificate
Benefits and Provisions - Values Under the
Certificate, Surrender of the Certificate, The Right
to Examine the Certificate
18. The Funds; Detailed Description of Certificate
Benefits and Provisions - Deductions and Charges
From Investment Value; Federal Tax
Considerations
19. Other Matters - Statements to Owners
20. Not applicable
21. Detailed Description of Certificate Benefits and
Provisions - Loans
22. Not applicable
23. Safekeeping of the Separate Account Assets
24. Other Matters - Assignment
25. Hartford
26. Not applicable
27. Hartford
28. Hartford; Executive Officers and Directors
29. Hartford
30. Not applicable
31. Not applicable
32. Not applicable
33. Not applicable
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
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34. Not applicable
35. Distribution of the Group Policy
36. Not required by Form S-6
37. Not applicable
38. Distribution of the Group Policy
39. Hartford; Distribution of the Group Policy
40. Not applicable
41. Hartford; Distribution of the Group Policy
42. Not applicable
43. Not applicable
44. Detailed Description of Certificate Benefits and
Provisions - Allocation of Premium Payments
45. Not applicable
46. Detailed Description of Certificate Benefits and
Provisions - Values Under the Certificate
47. The Funds
48. Cover page; Hartford
49. Not applicable
50. The Separate Account
51. Summary; Hartford; Detailed Description of
Certificate Benefits and Provisions
52. The Funds - General
53. Federal Tax Considerations
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
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54. Not applicable
55. Not applicable
56. Not required by Form S-6
57. Not required by Form S-6
58. Not required by Form S-6
59. Not required by Form S-6
<PAGE>
ENDEAVOUR I-SM-
GROUP FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE POLICIES
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
P.O. BOX 2999
HARTFORD, CONNECTICUT 06104-2999
[LOGO] TELEPHONE: 1-800-861-1408
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This Prospectus describes a group flexible premium variable life insurance
policy (the "Group Policies," and each individually a "Group Policy") and
certificates of insurance (the "Certificates," and each individually a
"Certificate") offered by Hartford Life and Annuity Insurance Company
("Hartford"). The Certificates are designed to provide lifetime insurance
coverage to the Insured(s) named in the Certificates, and maximum flexibility in
connection with premium payments and the Death Benefit, together with an
opportunity to participate in the investment experience of ICMG Registered
Variable Life Separate Account One. For a given amount of Death Benefit chosen,
the Owner has considerable flexibility in selecting the timing and amount of
premium payments. In addition to the Initial Premium payment, additional premium
payments are also allowed.
Group Policies may be issued to a Participating Employer or to a trust that
is adopted by a Participating Employer. Eligible employees of Participating
Employers may own Certificates issued under their respective Participating
Employer's Group Policy. The Owners possess all rights and interests under the
Group Policy. The Owners are provided with the Certificates, which describe each
Owner's rights, benefits, and options under the Group Policy.
Sales agents can provide prospective purchasers with individualized sales
illustrations which reflect all the fees and charges associated with the
Certificate options selected.
The Certificates provide for a Death Benefit, pursuant to which Death
Proceeds are payable at the Insured's death. You may select one of two Death
Benefit options. Death Benefit Option A is an amount equal to the larger of (1)
the Face Amount and (2) the Variable Insurance Amount. Death Benefit Option B is
an amount equal to the larger of (1) the Face Amount plus the Cash Value and (2)
the Variable Insurance Amount. The Death Proceeds payable to the Beneficiary
equal the Death Benefit less any Debt outstanding under the Certificate plus any
rider benefits payable.
The Investment Value of a Certificate will also vary up or down to reflect
the investment experience of the Investment Divisions to which Net Premiums have
been allocated. The Owner bears the investment risk for all amounts so
allocated.
The Portfolios underlying the Investment Divisions presently are: the
Hartford Capital Appreciation Fund, Inc., the Hartford Bond Fund, Inc. and the
HVA Money Market Fund, Inc. of Hartford Funds; the Limited Maturity Bond
Portfolio, the Balanced Portfolio and the Partners Portfolio of Neuberger &
Berman Advisers Management Trust; the VIP High Income Portfolio, the VIP
Equity-Income Portfolio and the VIP Overseas Portfolio of Variable Insurance
Products Fund; the VIP II Asset Manager Portfolio of Variable Insurance Products
Fund II; the Alger American Small Capitalization Portfolio and the Alger
American Growth Portfolio of The Alger American Fund; the J.P. Morgan Bond
Portfolio, the J.P. Morgan Equity Portfolio, the J.P. Morgan Small Company
Portfolio and the J.P. Morgan International Equity Portfolio of J.P. Morgan
Series Trust II; the Fixed Income Portfolio, the High Yield Portfolio, the
Equity Growth Portfolio, the Value Portfolio, the Global Equity Portfolio and
the Emerging Markets Equity Portfolio of Morgan Stanley Universal Funds, Inc.;
and the EAFE-Registered Trademark- Equity Index Fund, Equity 500 Index Fund and
the Small Cap Index Fund of the BT Insurance Funds Trust.
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IT MAY NOT BE ADVANTAGEOUS TO PURCHASE FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
AS A REPLACEMENT FOR YOUR CURRENT LIFE INSURANCE OR IF YOU ALREADY OWN A
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY.
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THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED BY THE CURRENT PROSPECTUSES OF THE
AVAILABLE UNDERLYING FUNDS WHICH CONTAIN A FULL DESCRIPTION OF THOSE FUNDS. ALL
PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS , 1998.
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2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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TABLE OF CONTENTS
<TABLE>
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SPECIAL TERMS......................................................... 4
SUMMARY............................................................... 6
HARTFORD.............................................................. 9
THE SEPARATE ACCOUNT.................................................. 9
THE FUNDS............................................................. 9
General............................................................. 9
Hartford Funds.................................................... 10
Neuberger & Berman Advisers Management Trust...................... 10
Variable Insurance Products Fund and Variable Insurance Products
Fund II.......................................................... 10
The Alger American Fund........................................... 10
J.P. Morgan Series Trust II....................................... 10
Morgan Stanley Universal Funds, Inc............................... 11
BT Insurance Funds Trust.......................................... 11
The Portfolios...................................................... 11
DETAILED DESCRIPTION OF CERTIFICATE BENEFITS AND PROVISIONS........... 13
General............................................................. 13
Issuance of a Certificate........................................... 13
Premiums............................................................ 14
Premium Payment Flexibility....................................... 14
Allocation of Premium Payments.................................... 14
Accumulation Units................................................ 14
Accumulation Unit Values.......................................... 15
Premium Limitation................................................ 15
Values Under the Certificate........................................ 15
Surrender of the Certificate........................................ 15
Partial Withdrawals............................................... 15
Transfers Among Investment Divisions................................ 16
Amount and Frequency of Transfers................................. 16
Transfers To or from Investment Divisions......................... 16
Asset Rebalancing................................................. 16
Procedures for Telephone Transfer................................. 16
Valuation of Payments and Transfers................................. 16
Processing of Transactions........................................ 17
Loans............................................................... 17
Loan Interest..................................................... 17
Credited Interest................................................. 17
Loan Repayments................................................... 17
Termination Due to Excessive Debt................................. 17
Effect of Loans on Investment Value............................... 17
Death Benefit....................................................... 17
Minimum Death Benefit Testing Procedures.......................... 17
Death Benefit Options............................................. 18
Option Change..................................................... 18
Payment Options................................................... 18
Legal Developments Regarding Income Payments...................... 19
Beneficiary....................................................... 19
Increases and Decreases in Face Amount............................ 19
Benefits at Maturity................................................ 19
Termination of Participation in the Group Policy.................... 19
Lapse and Reinstatement While the Group Policy Is In Effect......... 19
Lapse and Grace Period............................................ 19
Reinstatement..................................................... 19
Enrollment for a Certificate........................................ 20
</TABLE>
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 3
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<TABLE>
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The Right to Examine the Certificate................................ 20
<S> <C>
Deductions from Premium............................................. 20
Front-End Sales Load.............................................. 20
Premium Related Tax Charge........................................ 20
DAC Tax Charge.................................................... 20
Deductions and Charges from Investment Value........................ 21
Monthly Deduction Amount.......................................... 21
Mortality and Expense Risk Charge................................... 22
Taxes............................................................... 22
OTHER MATTERS......................................................... 22
Additions, Deletions or Substitutions of Investments................ 22
Voting Rights....................................................... 22
Our Rights.......................................................... 23
Statements to Owners................................................ 23
Limit on Right to Contest........................................... 23
Misstatement as to Age or Sex....................................... 23
Assignment.......................................................... 23
Dividends........................................................... 23
Experience Credits.................................................. 23
SUPPLEMENTAL BENEFITS................................................. 23
Maturity Date Extension Rider....................................... 23
EXECUTIVE OFFICERS AND DIRECTORS...................................... 24
DISTRIBUTION OF THE GROUP POLICY...................................... 28
SAFEKEEPING OF THE SEPARATE ACCOUNT ASSETS............................ 28
FEDERAL TAX CONSIDERATIONS............................................ 28
General............................................................. 28
Taxation of Hartford and the Separate Account....................... 28
Income Taxation of Certificate Benefits............................. 28
Modified Endowment Contracts........................................ 29
Diversification Requirements........................................ 29
Federal Income Tax Withholding...................................... 30
Other Tax Considerations............................................ 30
LEGAL PROCEEDINGS..................................................... 30
EXPERTS............................................................... 30
REGISTRATION STATEMENT................................................ 30
FINANCIAL STATEMENTS..................................................
</TABLE>
THE GROUP POLICIES MAY NOT BE AVAILABLE IN ALL STATES.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER OR OTHER PERSON IS AUTHORIZED
TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON.
<PAGE>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCUMULATION UNIT: An accounting unit of measure used to calculate the value of
an Investment Division.
ADJUSTABLE LOAN INTEREST RATE: The interest rate charged on Loans that is
adjusted from time to time by Hartford. The method of calculation of the
Adjustable Loan Interest Rate is described later in this Prospectus.
ATTAINED AGE: The Issue Age plus the period since the Coverage Date.
BENEFICIARY: The person so designated by the Owner in the Certificate.
CASH SURRENDER VALUE: The Cash Value, less Debt, less any charges accrued but
not yet deducted.
CASH VALUE: The Investment Value plus the Loan Account Value.
CERTIFICATE: The form evidencing and describing the Owner's rights, benefits,
and options under the Group Policy. The Certificate will describe, among other
things, (i) the benefits for the named Insured, (ii) to whom the benefits are
payable and (iii) the limits and other terms of the Group Policy as they pertain
to the Insured.
CERTIFICATE ANNIVERSARY: An anniversary of the Coverage Date.
CHARGE DEDUCTION DIVISION: An Investment Division from which all charges are
deducted if so designated in the Enrollment Form or later elected.
CODE: The Internal Revenue Code of 1986, as amended.
COVERAGE DATE: The date insurance under the Certificate is effective as to an
Insured and from which Coverage Months and Coverage Years are determined.
COVERAGE MONTH(S): The 1-month period following the Coverage Date and each
anniversary thereof.
COVERAGE YEAR(S): The 12 month period following the Coverage Date and each
anniversary thereof.
CUSTOMER SERVICE CENTER: The service area of Hartford Life and Annuity Insurance
Company.
DEATH BENEFIT: The Death Benefit option in effect determines how the Death
Benefit is calculated. The two Death Benefit options are described under
"Detailed Description of Certificate Benefits and Provisions -- Death Benefit."
DEATH PROCEEDS: The Death Benefit less outstanding Debt plus any rider benefits
payable.
DEBT: The aggregate amount of outstanding Loans, plus any interest accrued at
the Adjustable Loan Interest Rate.
ENROLLMENT FORM: The form required to be filled out prior to issuance of a
Certificate. The specific form used will depend on the underwriting
classification and plan design.
FACE AMOUNT: The minimum Death Benefit as long as the Certificate is in force.
It is specified at issue and may be changed after issue on request, or due to a
change in Death Benefit option or a partial withdrawal.
FUNDS: The registered open-end management investment companies in which assets
of the Investment Divisions of the Separate Account may be invested. Currently,
the Funds include: (i) Hartford Capital Appreciation Fund, Inc.; (ii) Hartford
Bond Fund, Inc.; (iii) HVA Money Market Fund, Inc. ((i)-(iii) are each a
"Hartford Fund" and collectively the "Hartford Funds" and are managed by HL
Investment Advisors, Inc. ("HL Advisors")); (iv) Neuberger & Berman Advisers
Management Trust ("Neuberger & Berman AMT"), managed by Neuberger & Berman
Management Incorporated ("N&B Management"); (v) Variable Insurance Products Fund
("VIP"), managed by Fidelity Management & Research Company ("FMR"); (vi)
Variable Insurance Products Fund II ("VIP II"), managed by FMR; (vii) The Alger
American Fund ("Alger American Fund"), managed by Fred Alger Management, Inc.
("Alger Management"); (viii) J.P. Morgan Series Trust II ("J.P. Morgan Series
Trust"), managed by J.P. Morgan Investment Management Inc. ("J.P. Morgan"); (ix)
Morgan Stanley Universal Funds, Inc. ("MSUF"), managed by either Morgan Stanley
Asset Management Inc. ("MSAM") or Miller Anderson & Sherrerd, LLP ("MAS"); and
(x) BT Insurance Funds Trust, managed by Bankers Trust Global Investment
Management, a unit of Bankers Trust Company ("Bankers Trust").
GENERAL ACCOUNT: The assets of Hartford other than those allocated to the
Separate Account.
GRACE PERIOD: The 61-day period, measured in calendar days, following the date
We mail to the Owner notice that the Cash Surrender Value is insufficient to pay
the charges due. Unless the Owner has given Us written notice of the termination
in advance of the date of termination of any Certificate, insurance will
continue in force during this period.
GROUP POLICY: The group flexible premium variable life insurance policy issued
by Hartford and described in this Prospectus.
HARTFORD (ALSO REFERRED TO AS "WE," "US," "OUR"): Hartford Life and Annuity
Insurance Company.
IN WRITING: In a written form satisfactory to Us.
INITIAL PREMIUM: The amount of premium initially payable shown in Your
Certificate.
INSURED: The person on whose life the Certificate is issued. The Insured is
identified in the Certificate.
INVESTMENT DIVISION: A separate division of the Separate Account which invests
exclusively in the shares of a specified Portfolio of a Fund. The Separate
Account currently offers 25 Investment Divisions: (i) the Hartford Capital
Appreciation Investment Division, (ii) the Hartford Bond Investment Division,
(iii) the HVA Money Market Investment Division, (iv) the N&B AMT Limited
Maturity Bond Investment Division, (v) the N&B AMT Balanced Investment Division,
(vi) the N&B AMT Partners Investment Division, (vii) the
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 5
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Fidelity VIP High Income Investment Division, (viii) the Fidelity VIP
Equity-Income Investment Division, (ix) the Fidelity VIP Overseas Investment
Division, (x) the Fidelity VIP II Asset Manager Investment Division, (xi) the
Alger American Small Capitalization Investment Division, (xii) the Alger
American Growth Investment Division, (xiii) the J.P. Morgan Bond Investment
Division, (xiv) the J.P. Morgan Equity Investment Division, (xv) the J.P. Morgan
Small Company Investment Division, (xvi) the J.P. Morgan International
Opportunities Investment Division, (xvii) the MS Fixed Income Investment
Division, (xviii) the MS High Yield Investment Division, (xix) the MS Equity
Growth Investment Division, (xx) the MS Value Investment Division, (xxi) the MS
Global Equity Investment Division, (xxii) the MS Emerging Markets Equity
Investment Division, (xxiii) the BT EAFE-Equity Index Investment Division,
(xxiv) BT Equity 500 Index Investment Division, and (xxv) the BT Small Cap Index
Investment Division.
INVESTMENT VALUE: The sum of the values of assets in the Investment Divisions
under the Certificate.
ISSUE AGE: The Insured's age on the birthday nearest to the Coverage Date.
LOAN: Any amount borrowed against the Investment Value under a Certificate.
LOAN ACCOUNT: That portion of Hartford's General Account to which amounts are
transferred as a result of a Loan. The Loan Account is credited with interest
and does not participate in the investment experience of the Separate Account.
LOAN ACCOUNT VALUE: The amounts of the Investment Value transferred to (or from)
the General Account to secure Loans, plus interest accrued at the daily
equivalent of an annual rate equal to the Adjustable Loan Interest Rate actually
charged, reduced by not more than 1%.
MATURITY DATE: The date on which an Insured's coverage matures as shown in the
Certificate. We will pay the Cash Surrender Value, if any, if the Insured is
living on the Maturity Date, upon surrender of the Certificate to Hartford.
MONTHLY DEDUCTION AMOUNT: The fees and charges deducted from the Investment
Value on the Processing Date.
NET AMOUNT AT RISK: The Death Benefit less the Cash Value.
NET PREMIUM: The amount of premium actually credited to the Investment
Divisions.
NYSE: The New York Stock Exchange.
OWNER (ALSO REFERRED TO AS "YOU" OR "YOUR"): The person or legal entity so
designated in the Enrollment Form or as subsequently changed. The Owner may be
someone other than the Insured. The Owner possesses all rights under the Group
Policy with respect to the Certificate.
PARTICIPATING EMPLOYER: A participating employer, or a trust sponsored by a
participating employer, to which Hartford issues the Group Policy described in
this Prospectus.
PORTFOLIO: A Hartford Fund or a separate mutual fund, series or portfolio of the
remaining Funds. There are currently 25 Portfolios available under the Group
Policy: the Hartford Capital Appreciation Fund, Inc., Hartford Bond Fund, Inc.
and HVA Money Market Fund, Inc. of the Hartford Funds; the Limited Maturity Bond
Portfolio ("N&B AMT Limited Maturity Bond Portfolio"), Balanced Portfolio ("N&B
AMT Balanced Portfolio") and Partners Portfolio ("N&B AMT Partners Portfolio")
of Neuberger & Berman AMT; the VIP High Income Portfolio, VIP Equity-Income
Portfolio and VIP Overseas Portfolio of VIP, the VIP II Asset Manager Portfolio
of VIP II; the Alger American Small Capitalization Portfolio and Alger American
Growth Portfolio of Alger American Fund; the J.P. Morgan Bond Portfolio, J.P.
Morgan Equity Portfolio, J.P. Morgan Small Company Portfolio and J.P. Morgan
International Opportunities Portfolio of J.P. Morgan Series Trust; the Fixed
Income Portfolio ("MS Fixed Income Portfolio"), High Yield Portfolio ("MS High
Yield Portfolio"), Equity Growth Portfolio ("MS Equity Growth Portfolio"), Value
Portfolio ("MS Value Portfolio"), Global Equity Portfolio ("MS Global Equity
Portfolio"), and Emerging Markets Equity Portfolio ("MS Emerging Markets Equity
Portfolio") of MSUF; the EAFE-Registered Trademark- Equity Index Fund ("BT EAFE"
Equity Index Fund"), Equity 500 Index Fund ("BT Equity 500 Index Fund") and
Small Cap Index Fund ("BT Small Cap Index Fund") of BT Insurance Funds Trust.
PRO RATA BASIS: An allocation method based on the proportion of the Investment
Value in each Investment Division.
PROCESSING DATE(S): The day(s) on which We deduct charges from the Investment
Value. The first Processing Date is the Coverage Date. There is a Processing
Date each month. Later Processing Dates are on the same calendar day as the
Coverage Date, or on the last day of any month which has no such calendar day.
PROCESSING PERIOD: The period from the Coverage Date to the next Processing
Date, and thereafter, the period from one Processing Date to the next.
SEC: U.S. Securities and Exchange Commission.
SEPARATE ACCOUNT: ICMG Registered Variable Life Separate Account One, an account
established by Hartford to separate the assets funding the Group Policies from
other assets of Hartford.
VALUATION DAY: Each business day that Hartford and each of the Funds value their
respective investment portfolios, unless the Certificate indicates otherwise. A
business day is any day the NYSE is open for trading or any day the SEC requires
mutual funds, unit investment trusts or other investment portfolios to be
valued. The value of the Separate Account is determined at the close of the NYSE
(generally 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
VARIABLE INSURANCE AMOUNT: The Cash Value multiplied by the applicable variable
insurance factor provided in the Certificate.
VIP: Variable Insurance Products Fund.
VIP II: Variable Insurance Products Fund II.
<PAGE>
6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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SUMMARY
THE GROUP POLICY
The Group Policies, and the Certificates, offered by this Prospectus are
funded by the Separate Account, a separate account established by Hartford
pursuant to Connecticut insurance law and organized as a unit investment trust
registered under the Investment Company Act of 1940 (the "1940 Act"). The
Separate Account has 25 Investment Divisions dedicated to the Group Policies,
each of which invests solely in a corresponding Portfolio of the Funds.
Depending upon the state of issuance of Your Certificate and the applicable
provisions of Your Certificate, Your initial Net Premium will, when Your
Certificate is issued, either be (1) invested in the HVA Money Market Investment
Division during the right to examine period or (2) invested immediately in Your
chosen Investment Divisions, upon Our receipt thereof. IF YOUR INITIAL NET
PREMIUM IS INVESTED IMMEDIATELY IN YOUR CHOSEN INVESTMENT DIVISIONS, YOU WILL
BEAR FULL INVESTMENT RISK FOR ANY AMOUNTS ALLOCATED TO THE INVESTMENT DIVISIONS
DURING THE RIGHT TO EXAMINE PERIOD. Please note that this automatic immediate
investment feature only applies if Your Certificate so specifies. Please check
with Your agent to determine the status of Your Certificate. You must fill out
and send Us the appropriate form In Writing or comply with other designated
Hartford procedures if You would like to change how subsequent Net Premiums are
allocated. See "Allocation of Premium Payments," page 14.
Pursuant to the Certificates, each selected Investment Division is credited
with Accumulation Units and each selected Investment Division's assets are
invested in the applicable underlying Portfolio. Subject to certain
restrictions, an Owner may transfer amounts among the available Investment
Divisions. See "Detailed Description of Certificate Benefits and Provisions --
Transfers Among Investment Divisions," page 16.
The Group Policies are first and foremost life insurance policies and the
Certificates evidencing an Owner's interest in the Group Policies provide for
death benefits, cash values, and other features traditionally associated with
life insurance. The Group Policies are "flexible premium" because, once the
desired level and pattern of the Death Benefit have been determined, a purchaser
has considerable flexibility in the selection of the timing and amount of
premium to be paid. The Group Policies are called "variable" because, unlike the
fixed benefits of an ordinary whole life insurance policy, the Investment Value
under a Certificate will, and the Death Benefit may, increase or decrease
depending on the investment experience of the Investment Divisions to which the
Net Premiums have been allocated. See "Detailed Description of Certificate
Benefits and Provisions -- Death Benefit," page 17.
DEATH BENEFIT
The Certificates provide for two Death Benefit options. Under Death Benefit
Option A, the Death Benefit is an amount equal to the larger of (1) the Face
Amount and (2) the Variable Insurance Amount. Under Death Benefit Option B, the
Death Benefit is an amount equal to the larger of (1) the Face Amount plus the
Cash Value and (2) the Variable Insurance Amount. At the death of the Insured,
We will pay the Death Proceeds to the Beneficiary. The Death Proceeds equal the
Death Benefit less outstanding Debt plus any rider benefits payable under the
Certificate. See "Detailed Description of Certificate Benefits and Provisions --
Death Benefit," page 17.
PREMIUM
You have considerable flexibility as to when and in what amounts You pay
premiums.
No premium payment will be accepted which causes the Certificate to fail to
meet the tax qualification guidelines for life insurance under the Code.
GENERAL ACCOUNT
Amounts allocated to the Loan Account to secure a Loan become part of the
General Account assets of Hartford. Hartford invests the assets of the General
Account in accordance with applicable law governing the investments of insurance
company general accounts. See "Detailed Description of Certificate Benefits and
Provisions -- Loans," page 17.
DEDUCTIONS FROM PREMIUM
Prior to the allocation of premiums to the selected Investment Divisions, a
deduction as a percentage of premium is made for the front-end sales load, state
premium taxes, and the Deferred Acquisition Cost ("DAC") tax charge. The amount
of each premium allocated among the Investment Divisions is Your Net Premium.
FRONT-END SALES LOAD
When We receive a Premium Payment, We deduct a front-end sales load. The
current front-end sales load is 6.75% of any premium paid for Coverage Years 1
through 7 and 4.75% of any premium paid in Coverage Years 8 and later. The
maximum front-end sales load is 9% of any premium paid for Coverage Years 1
through 7 and 7% of any premium paid in Coverage Years 8 and later.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 7
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The front-end sales load covers expenses relating to the sale and
distribution of the Certificates and may be reduced for certain sales of the
Certificates under circumstances which result in savings of such sales and
distribution expenses. For more information concerning the front-end sales load,
see "Detailed Description of Certificate Benefits and Provisions -- Deductions
from Premium," page 20.
LIMITS ON FRONT-END SALES LOAD
Certain insurance laws and regulations limit the front-end sales load which
can be assessed against the Certificates. The front-end sales load assessed in
the Certificates complies with these limitations.
PREMIUM RELATED TAX CHARGE
We deduct a percentage of each premium to cover taxes assessed against
Hartford by various states and jurisdictions that are attributable to premiums.
The percentage actually deducted will vary by locale depending on the tax rates
in effect there. The range is generally between 0% and 4%.
DAC TAX CHARGE
Hartford deducts 1.25% of each premium to cover a federal premium tax
assessed against Hartford. This charge is reasonable in relation to Hartford's
federal income tax burden, under Code Section 848, resulting from the receipt of
premiums. We will adjust the charge based on changes in the applicable tax law.
DEDUCTIONS AND CHARGES
FROM INVESTMENT VALUE
As with many other types of insurance policies, each Certificate will have
an Investment Value. The Investment Value of the Certificate will increase or
decrease to reflect the investment experience of the chosen Investment
Divisions, deductions for the Monthly Deduction Amount and any amounts
transferred from the Investment Divisions into the Loan Account. There is no
minimum guaranteed Investment Value and the Owner bears the risk of the
investment in the underlying Portfolios. See "Detailed Description of
Certificate Benefits and Provisions -- Deductions and Charges from Investment
Value," page 21.
We will subtract amounts from Your Investment Value to provide for the
Monthly Deduction Amount. These will be taken from the Charge Deduction
Division, as specified in the Certificate. If there is insufficient Investment
Value in the Charge Deduction Division:
(1) Hartford will apply the Investment Value of the Charge Deduction Division to
the charges due and set the Investment Value in the Charge Deduction
Division to zero; and
(2) any additional amount due will be allocated among the remaining Investment
Divisions on a Pro Rata Basis.
If no Charge Deduction Division is selected, any amounts due will be taken
on a Pro Rata Basis from Your chosen Investment Divisions on each Processing
Date.
The Monthly Deduction Amount equals:
(a) the administrative expense charge; plus
(b) the charges for cost of insurance; plus
(c) the charges for additional benefits provided by rider, if any.
Hartford may also set up a provision for income taxes imposed on the assets
of the Separate Account. See "Deductions and Charges From Investment Value,"
page 21, and "Federal Tax Considerations," page 28.
MORTALITY AND EXPENSE RISK CHARGE
A charge is made for mortality and expense risks assumed by Hartford.
Hartford currently deducts a daily charge for Coverage Years 1 through 10 at an
effective annual rate of .65% of the value of each Investment Division's assets
and for Coverage Years 11 and later at an effective annual rate of .50% of each
Investment Division's assets. In no event will the charge exceed .65% of an
Investment Division's assets on an annual basis.
CHARGES AGAINST THE FUNDS
The Separate Account purchases Fund shares at net asset value. The net asset
value of those shares reflects investment advisory fees and administrative and
other expenses deducted from the assets of the Portfolios. Applicants should
review the prospectuses for the Funds which accompany this Prospectus for a
description of the charges assessed against the assets of each of the
Portfolios.
The following table shows annual operating expenses after reimbursement for
1997:
ANNUAL PORTFOLIO OPERATING EXPENSES
AFTER REIMBURSEMENT
(as a percentage of net assets)
<TABLE>
<CAPTION>
TOTAL
MANAGEMENT OTHER OPERATING
PORTFOLIO NAME FEE EXPENSES EXPENSES
- --------------------------------- --------------- ------------- -------------
<S> <C> <C> <C>
Hartford Capital Appreciation
Fund, Inc....................... % % %
Hartford Bond Fund, Inc.......... % % %
HVA Money Market Fund, Inc....... % % %
N&B AMT Limited Maturity Bond
Portfolio (1)................... % % %
</TABLE>
<PAGE>
8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL
MANAGEMENT OTHER OPERATING
PORTFOLIO NAME FEE EXPENSES EXPENSES
- --------------------------------- --------------- ------------- -------------
<S> <C> <C> <C>
N&B AMT Balanced Portfolio (1)... % % %
N&B AMT Partners Portfolio (1)... % % %
VIP High Income Portfolio (2).... % % %
VIP Equity-Income Portfolio...... % % %
VIP Overseas Portfolio (2)....... % % %
VIP II Asset Manager Portfolio
(2)............................. % % %
Alger American Small
Capitalization Portfolio........ % % %
Alger American Growth
Portfolio....................... % % %
J.P. Morgan Bond Portfolio (3)... % % %
J.P. Morgan Equity Portfolio
(3)............................. % % %
J.P. Morgan Small Company
Portfolio (3)................... % % %
J.P. Morgan International
Opportunities Portfolio (3)..... % % %
MS Fixed Income Portfolio (4).... % % %
MS High Yield Portfolio (4)...... % % %
MS Equity Growth Portfolio (4)... % % %
MS Value Portfolio (4)........... % % %
MS Global Equity Portfolio (4)... % % %
MS Emerging Markets Equity
Portfolio (4)................... % % %
BT EAFE-Equity Index Fund (5).... % % %
BT Equity 500 Index Fund (5)..... % % %
BT Small Cap Index Fund (5)...... % % %
</TABLE>
- ----------
(1) Neuberger & Berman AMT is divided into Portfolios, each of which invests all
of its net investable assets in a corresponding series of Advisers Managers
Trust. The figures reported under "Management Fee" include the aggregate of
the administration fees paid by the Portfolio and the management fee paid by
its corresponding series of Advisers Managers Trust. Similarly, "Other
Expenses" includes all other expenses of the Portfolio and its corresponding
series of Advisers Managers Trust.
(2) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, certain funds have entered into
arrangements with their custodian and transfer agent whereby interest earned
on uninvested cash balances was used to reduce custodian and transfer agent
expenses. Without these reductions, the total operating expenses presented
in the table would have been % for VIP Equity-Income Portfolio, % for
VIP Overseas Portfolio, and % for VIP II Asset Manager Portfolio.
(3) Pursuant to a voluntary agreement, fees and expenses were reimbursed to the
extent expenses exceeded .75%, .90%, 1.15% and 1.20% of the average daily
net assets of J.P. Morgan Bond Portfolio, J.P. Morgan Equity Portfolio, J.P.
Morgan Small Company Portfolio and J.P. Morgan International Opportunities
Portfolio, respectively. Without such reimbursement, total expenses would
have been %, %, % and % for J.P. Morgan Bond Portfolio, J.P.
Morgan Equity Portfolio, J.P. Morgan Small Company Portfolio and J.P. Morgan
International Opportunities Portfolio, respectively.
(4) MSAM has voluntarily agreed to waive its fee and reimburse the Portfolios if
their annual expenses are greater than the amounts indicated under "Total
Operating Expenses."
(5) Without expense waivers and reimbursements, the total operating expenses for
BT EAFE-Equity Index Fund, BT Equity 500 Index Fund and BT Small Cap Index
Fund would have been %, % and %, respectively.
LOANS
An Owner may obtain a cash Loan from Hartford. The Loan is secured by the
Owner's Certificate. The maximum Loan amount is equal to the sum of the Cash
Surrender Value plus outstanding Debt, multiplied by .90, less outstanding Debt.
See "Detailed Description of Certificate Benefits and Provisions -- Loans," page
17.
THE RIGHT TO EXAMINE THE CERTIFICATE
An applicant has a limited right to return his or her Certificate. Subject
to applicable state regulations, if the applicant returns the Certificate within
10 calendar days after delivery of the Certificate Hartford will return to the
applicant, within seven days thereafter, either (i) the premium paid or (ii) the
Cash Value under the Certificate plus charges deducted. See "The Right to
Examine the Certificate," page 20.
TAX CONSEQUENCES
The current federal tax law generally excludes all Death Benefit payments
from the gross income of the Beneficiary under the Certificate. See "Federal Tax
Considerations," page 28.
There are circumstances when the Certificate may become a Modified Endowment
Contract under Federal tax law. If it does, Loans and other pre-death
distributions are includable in gross income on an income-first basis. A 10%
penalty tax may be imposed on income distributed before the insured attains age
59 1/2. Prospective purchasers and Owners are advised to consult a qualified tax
adviser before taking steps that may affect whether the Certificate becomes a
Modified Endowment Contract. Hartford has instituted procedures to monitor
whether a Certificate may become a
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 9
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Modified Endowment Contract after issue. See "Federal Tax Considerations --
Modified Endowment Contract" for a discussion of the "seven-pay" test, page 29.
HARTFORD
Hartford Life and Annuity Insurance Company ("Hartford") is a stock life
insurance company engaged in the business of writing life insurance and
annuities, both individual and group, in all states of the United States and the
District of Columbia, except New York. Effective on January 1, 1998, Hartford's
name changed from ITT Hartford Life and Annuity Insurance Company to Hartford
Life and Annuity Insurance Company. Hartford was originally incorporated under
the laws of Wisconsin on January 9, 1956, and was subsequently redomiciled to
Connecticut. Its offices are located in Simsbury, Connecticut; however, its
mailing address is P.O. Box 2999, Hartford, CT 06104-2999. Hartford is a
subsidiary of Hartford Fire Insurance Company, one of the largest multiple lines
insurance carriers in the United States. Hartford is ultimately controlled by
The Hartford Financial Services Group, Inc., a Delaware corporation.
Hartford is rated A+ (superior) by A.M. Best and Company, Inc., on the basis
of its financial soundness and operating performance. Hartford is rated AA by
Standard & Poor's and AA+ by Duff and Phelps on the basis of its claims paying
ability. These rating do not apply to the investment performance of the
Sub-Accounts. The rating apply to Hartford's ability to meet its insurance
obligations, including those described in this Prospectus.
THE SEPARATE ACCOUNT
ICMG Registered Variable Life Separate Account One is a separate account
established by Hartford on October 9, 1995, under the insurance laws of the
State of Connecticut, pursuant to a resolution of Hartford's Board of Directors.
The Separate Account is organized as a unit investment trust and is registered
with the SEC under the 1940 Act. Such registration does not signify that the SEC
supervises the management or the investment practices or policies of the
Separate Account. The Separate Account meets the definition of a "separate
account" under the federal securities laws.
Under Connecticut law, the assets of the Separate Account are held
exclusively for the benefit of Owners and persons entitled to payments under the
Group Policies and the Certificates and owners of any other policies which may
be available through the Separate Account. The assets of the Separate Account
are owned by Hartford and the obligations under the Group Policies and the
Certificates are obligations of Hartford. These assets are held separately from
the other assets of Hartford and income, gains and losses incurred on the assets
in the Separate Account, whether or not realized, are credited to or charged
against the Separate Account without regard to other income, gains or losses of
Hartford (except to the extent that assets in the Separate Account exceed the
reserves and other liabilities of the Separate Account). Therefore, the
investment performance of the Separate Account is entirely independent of the
investment performance of the General Account assets or any other separate
account maintained by Hartford.
The Separate Account has 25 Investment Divisions dedicated to the Group
Policies, each of which invests solely in a corresponding Portfolio of the
Funds. Additional Investment Divisions may be established at the discretion of
Hartford. The Separate Account may include other divisions which will not be
available under the Group Policies.
THE FUNDS
GENERAL
The shares of the Portfolios are sold by the Funds to the Separate Account .
The assets of the Separate Account attributable to the Group Policies are
invested exclusively in the Investment Divisions. An Owner may allocate Net
Premium payments among the Investment Divisions. Owners should review the brief
descriptions of the investment objectives of each of the Portfolios in
connection with that allocation. See "The Funds -- The Portfolios," page 11.
Each Fund continually issues an unlimited number of full and fractional
shares of beneficial interest in the relevant Portfolios. In addition to being
offered to the Separate Account, each Fund's shares are or may be offered to
other separate accounts funding variable annuity contracts and variable life
insurance policies issued by Hartford or its affiliates and to separate accounts
of other insurance companies. It is conceivable that in the future it may become
disadvantageous for both variable annuity and variable life insurance separate
accounts or for separate accounts of other life insurance companies to invest in
shares of the Funds simultaneously. Although neither Hartford nor any of the
Funds currently foresee any such disadvantage, each Fund's Board of Directors or
Board of Trustees, as applicable (collectively, the "Boards"), will monitor
events in order to identify any material conflict between different variable
annuity and variable life owners and to determine what action, if any, should be
taken in response thereto, including the possible withdrawal of the Separate
Account's participation in any of the Funds. Material conflicts could result
from such things as (1) changes in state insurance law, (2) changes in federal
income tax law, (3) changes in the investment management of any Portfolio, or
(4) differences between voting instructions given by variable annuity and
variable life owners. If the Boards were to conclude that separate underlying
funds should be established for variable annuity and variable life
<PAGE>
10 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
insurance separate accounts, Hartford will bear the attendant expenses.
All investment income of, and other distributions to, each Investment
Division arising from the applicable Portfolio are reinvested in shares of that
Portfolio at net asset value. Hartford will purchase Portfolio shares in
connection with Net Premium payments allocated to the applicable Investment
Division in accordance with Owners' instructions and will redeem Portfolio
shares to meet obligations under the Group Policies and the Certificates or make
adjustments in reserves, if any. The Funds are required to redeem Portfolio
shares at net asset value and generally to make payment within seven (7)
calendar days.
Applicants should read the Fund prospectuses accompanying this Prospectus in
connection with the purchase of a Certificate.
HARTFORD FUNDS
The Separate Account currently invests in the Hartford Funds, a family of
funds comprised of twelve separate diversified open-end management investment
companies registered under the 1940 Act and organized as Maryland corporations.
Three of the Hartford Funds, the Hartford Capital Appreciation Fund, Inc., the
Hartford Bond Fund, Inc. and the HVA Money Market Fund, Inc., are available as
part of Endeavour I-SM-.
HL Advisors serves as the investment adviser to each of the Hartford Funds.
In addition, HL Advisors has entered an investment services agreement with The
Hartford Investment Management Company, Inc. ("HIMCO"), pursuant to which HIMCO
will provide certain investment services to Hartford Bond Fund and HVA Money
Market Fund. Wellington Management Company, L.L.P. ("Wellington Management")
serves as sub-investment adviser for Hartford Capital Appreciation Fund, Inc.
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
The Separate Account currently invests in Neuberger & Berman AMT, a
diversified open-end management investment company registered under the 1940 Act
and organized as a Delaware business trust. Neuberger & Berman AMT consists of
several portfolios, including the Limited Maturity Bond Portfolio, Balanced
Portfolio and Partners Portfolio available as part of Endeavour I-SM-.
Each portfolio of Neuberger & Berman AMT invests its assets in its
corresponding series of the Advisers Managers Trust, which is also an open-end
management investment company registered under the 1940 Act and is organized as
a New York common law trust. The investment performance of the Limited Maturity
Bond Portfolio, Balanced Portfolio and Partners Portfolio will directly
correspond with the investment performance of the corresponding series of the
Advisers Managers Trust. This "Master/Feeder Fund" structure is different from
that of many other investment companies which directly acquire and manage their
own portfolios of securities.
Neuberger & Berman Management Inc. serves as the investment manager of each
series of Advisers Managers Trust, as administrator of each portfolio of
Neuberger & Berman AMT, and as distributor of the shares of each portfolio of
Neuberger & Berman AMT. Neuberger & Berman, LLC serves as the sub-adviser for
each series of Advisers Managers Trust.
VARIABLE INSURANCE PRODUCTS FUND AND VARIABLE INSURANCE PRODUCTS FUND II (EACH,
A "FIDELITY FUND" AND COLLECTIVELY,
THE "FIDELITY FUNDS")
The Separate Account currently invests in both Fidelity Funds. The Fidelity
Funds are diversified, open-end management investment companies organized as
Massachusetts business trusts by Fidelity Management & Research Company ("FMR")
and registered under the 1940 Act. The Fidelity Funds consist of several
investment portfolios, including the VIP High Income Portfolio, VIP Equity-
Income Portfolio, VIP Overseas Portfolio and VIP II Asset Manager Portfolio
available as part of Endeavour I-SM-.
The Fidelity Funds are each managed by FMR. FMR is one of America's largest
investment management organizations. It is composed of a number of different
companies, which provide a variety of financial services and products. FMR is
the original Fidelity company, founded in 1946. It provides a number of mutual
funds and other clients with investment research and portfolio management
services.
THE ALGER AMERICAN FUND
The Separate Account currently invests in shares of the Alger American Fund,
a diversified open-end management investment company registered under the 1940
Act and organized as a Massachusetts business trust. The Alger American Fund
consists of six series, including the Alger American Small Capitalization and
Alger American Growth Portfolios available as part of Endeavour I-SM-.
The Alger American Fund is managed by Alger Management, a subsidiary of Fred
Alger & Company, Incorporated, which is in turn a subsidiary of Alger
Associates, Inc., a financial services holding company. Alger Management has
been in the business of providing investment advisory services since 1964.
J.P. MORGAN SERIES TRUST II
The Separate Account currently invests in shares of J.P. Morgan Series
Trust, a diversified open-end management investment company registered under the
1940 Act and organized as a Delaware business trust. J.P. Morgan Series Trust
consists of five portfolios, including the J.P. Morgan Bond, J.P. Morgan Equity,
J.P. Morgan Small Company and J.P. Morgan International Opportunities Portfolios
available as part of Endeavour I-SM-.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
Each Portfolio of J.P. Morgan Series Trust is advised by J.P. Morgan, a
wholly-owned subsidiary of J.P. Morgan & Co. Incorporated which is a bank
holding company with a long history of service as adviser, underwriter and
lender to an extensive roster of major companies and as financial adviser to
national governments.
MORGAN STANLEY UNIVERSAL FUNDS, INC.
The Separate Account currently invests in shares of MSUF, an open-end
management investment company registered under the 1940 Act and organized as a
corporation under the laws of the State of Maryland. MSUF consists of 17
portfolios, including the Fixed Income, High Yield, Equity Growth, Value, Global
Equity and Emerging Markets Equity Portfolios available as part of Endeavour
I-SM-.
The investment adviser for Equity Growth, Global Equity and Emerging Markets
Equity Portfolios is MSAM, a wholly-owned subsidiary of Morgan Stanley, Dean
Witter Discover & Co., which is a publicly owned global financial services
corporation. The investment adviser for Fixed Income, High Yield and Value
Portfolios is MAS, which is indirectly wholly-owned by Morgan Stanley, Dean
Witter Discover & Co.
BT INSURANCE FUNDS TRUST
The Separate Account currently invests in the BT Insurance Funds Trust, a
diversified open-end management investment company registered under the 1940 Act
and organized as a Massachusetts business trust. BT Insurance Funds Trust
consists of six series, including the EAFE0-Equity Index Fund, the Equity 500
Index Fund and the Small Cap Index Fund available as part of Endeavour I-SM-.
BT Insurance Funds Trust has retained the services of Bankers Trust Global
Investment Management, a unit of Bankers Trust, as investment manager. Bankers
Trust conducts a variety of general banking and trust activities and is a major
wholesaler supplier of financial services to the international and domestic
institutional markets.
THE PORTFOLIOS
HARTFORD CAPITAL APPRECIATION FUND, INC.
Hartford Capital Appreciation Fund Inc. seeks to achieve growth of capital
by investing in securities selected solely on the basis of potential for capital
appreciation; income, if any, is an incidental consideration.
HARTFORD BOND FUND, INC.
Hartford Bond Fund, Inc. seeks to achieve maximum current income consistent
with preservation of capital by investing primarily in fixed-income securities.
Up to 20% of the total assets of the Portfolio may be invested in debt
securities rated in the highest category below investment grade ("Ba" by Moody's
Investor Services, Inc. or "BB" by Standard & Poor's) or, if unrated, are
determined to be of comparable quality by the Portfolio's investment adviser.
Securities rated below investment grade are commonly referred to as "high
yield-high risk securities" or "junk bonds." For more information concerning the
risks associated with investing in such securities, please refer to the section
in the accompanying prospectus for the Hartford Funds entitled "High Yield --
High Risk Debt Securities."
HVA MONEY MARKET FUND, INC.
HVA Money Market Fund, Inc. seeks to achieve maximum current income
consistent with liquidity and preservation of capital. It seeks to maintain a
stable net asset value of $1.00 per share; however, there can be no assurance
that it will achieve this goal.
LIMITED MATURITY BOND PORTFOLIO
N&B AMT Limited Maturity Bond Portfolio seeks to achieve the highest current
income consistent with low risk to principal and liquidity; and secondarily,
total return. This Portfolio invests in a diversified portfolio primarily
consisting of U.S. government and agency securities and investment grade debt
securities issued by financial institutions, corporations, and others.
BALANCED PORTFOLIO
N&B AMT Balanced Portfolio seeks to achieve long-term capital growth and
reasonable current income without undue risk to principal. It is anticipated
that the Portfolio's investment program will normally be managed so that
approximately 60% of its total assets will be invested in common and preferred
stocks and the remaining assets will be invested in investment grade debt
securities. However, depending on the investment manager's views regarding
current market trends, the common stock portion of its portfolio investments may
be adjusted downward to as low as 50% or upward to as high as 70%. At least 25%
of its assets will be invested in fixed income securities.
PARTNERS PORTFOLIO
N&B AMT Partners Portfolio seeks to achieve capital growth. This Portfolio's
investment approach is to invest principally in common stocks of medium to large
capitalization established companies, using a value-oriented investment approach
designed to increase capital with reasonable risk. Its investment program seeks
securities believed to be undervalued based on strong fundamentals such as low
price-to-earnings ratios, consistent cash flow and the company's track record
through all parts of the market cycle.
VIP HIGH INCOME PORTFOLIO
VIP High Income Portfolio seeks high current income primarily through
investments in all types of income-producing debt securities, preferred stocks
and convertible securities. Although the Portfolio has no limits on the quality
and maturity of its investments, its strategy typically leads to longer-term,
lower-quality, fixed-income securities. These domestic and foreign investments
may present the risk of default or may be in default.
<PAGE>
12 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
VIP EQUITY-INCOME PORTFOLIO
VIP Equity-Income Portfolio seeks reasonable income by investing primarily
in income-producing equity securities. In choosing these securities, the
Portfolio will also consider the potential for capital appreciation. This
Portfolio's goal is to achieve a yield which exceeds the composite yield on the
securities comprising the Standard & Poor's Composite Index of 500 Stocks
(commonly referred to as "S&P 500"). The Portfolio may invest in high yielding,
lower-rated securities (commonly referred to as "junk bonds") which are subject
to greater risk than investments in higher-rated securities.
VIP OVERSEAS PORTFOLIO
VIP Overseas Portfolio seeks long-term growth of capital primarily through
investments in foreign securities and provides a means for aggressive investors
to diversify their own portfolios by participating in companies and economies
outside of the United States. International investing involves increased or
additional risks compared to investing primarily in domestic equity securities.
VIP II ASSET MANAGER PORTFOLIO
VIP II Asset Manager Portfolio seeks high total return with reduced risk
over the long term by allocating its assets among domestic and foreign stocks,
bonds and short-term instruments.
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
Alger American Small Capitalization Portfolio seeks long-term capital
appreciation by investing in a diversified, actively managed portfolio of equity
securities, primarily of companies with total market capitalization within the
range of companies included in the Russell 2000 Growth Index or the S&P SmallCap
600 Index, updated quarterly.
ALGER AMERICAN GROWTH PORTFOLIO
Alger American Growth Portfolio seeks long-term capital appreciation by
investing in a diversified, actively managed portfolio of equity securities,
primarily of companies with total market capitalization of $1 billion or
greater.
J.P. MORGAN BOND PORTFOLIO
J.P. Morgan Bond Portfolio seeks high total return consistent with moderate
risk of capital and maintenance of liquidity. Although the net asset value of
the Portfolio will fluctuate, the Portfolio attempts to preserve the value of
its investments to the extent consistent with its objective. Under normal market
conditions, 65% of the Portfolio's, assets will be invested in bonds, debentures
and other debt instruments. The Portfolio may invest up to 20% of its assets in
securities denominated in foreign currencies and may invest without limitation
in U.S. dollar-denominated securities of foreign issuers.
J.P. MORGAN EQUITY PORTFOLIO
J.P. Morgan Equity Portfolio seeks high total return from a portfolio
comprised of selected equity securities. The Portfolio invests primarily in the
common stock of U.S. corporations with market capitalizations above $1.5
billion.
J.P. MORGAN SMALL COMPANY PORTFOLIO
J.P. Morgan Small Company Portfolio seeks high total return from a portfolio
of equity securities of small companies. The Portfolio invests at least 65% of
the value of its total assets in the common stock of small U.S. companies
primarily with market capitalizations less than $1 billion.
J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO
J.P. Morgan International Opportunities Portfolio seeks high total return
from a portfolio of equity securities of foreign corporations. Under normal
market conditions, the Portfolio will invest in a minimum of three different
foreign countries.
FIXED INCOME PORTFOLIO
MS Fixed Income Portfolio seeks above average total return over a market
cycle of three to five years by investing in a diversified portfolio of U.S.
government and agency securities, corporate bonds, foreign bonds,
mortgage-backed securities of domestic issuers, and other fixed income
securities and derivatives. Under normal circumstances, the Portfolio will
invest at least 65% of its total assets in fixed income securities, not more
than 20% of which will be below investment grade (commonly referred to as "high
yield securities" or "junk bonds").
HIGH YIELD PORTFOLIO
MS High Yield Portfolio seeks above average total return over a market cycle
of three to five years by investing at least 65% of its total assets in high
yield securities of U.S. and foreign issuers including corporate bonds and other
fixed income securities. The Portfolio expects to achieve its objective through
maximizing current income, although it may seek capital growth opportunities
when consistent with its objective.
EQUITY GROWTH PORTFOLIO
MS Equity Growth Portfolio seeks long-term capital appreciation by investing
primarily in growth-oriented common and preferred stocks, convertible
securities, rights and warrants to purchase common stocks, depositary receipts
and other equity securities. Under normal circumstances, the Portfolio will
invest at least 65% of its total assets in equity securities.
VALUE PORTFOLIO
MS Value Portfolio seeks above average total return over a market cycle of
three to five years by investing primarily in common and preferred stocks,
convertible securities, rights and warrants to purchase common stocks, ADRs and
other equity securities of companies with equity
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
capitalizations usually greater than $300 million. Under normal circumstances,
the Portfolio will invest at least 65% of its total assets in equity securities.
The Portfolio may invest up to 5% of its total assets in foreign equity
securities (other than ADRs).
GLOBAL EQUITY PORTFOLIO
MS Global Equity Portfolio seeks long-term capital appreciation by investing
primarily in common and preferred stocks, convertible securities, and rights and
warrants to purchase common stocks, depositary receipts and other equity
securities of issuers throughout the world, including issuers in the United
States and emerging market countries. Under normal circumstances, at least 65%
of the total assets of the Portfolio will be invested in equity securities. At
least 20% of the Portfolio's total assets will be invested in common stocks of
U.S. issuers and the remaining equity position will be invested in at least
three countries other than the United States.
EMERGING MARKET EQUITY PORTFOLIO
MS Emerging Markets Equity Portfolio seeks long-term capital appreciation by
investing primarily in common and preferred stocks, convertible securities,
rights and warrants to purchase common stocks, sponsored or unsponsored ADRs and
other equity securities of emerging market country issuers. Under normal
circumstances, at least 65% of the Portfolio's total assets will be invested in
emerging market country equity securities.
EAFE-REGISTERED TRADEMARK- EQUITY INDEX FUND
BT EAFE-Registered Trademark- Equity Index Fund seeks to replicate as
closely as possible (before deduction for expenses) the total return of the
Europe, Australia, Far East Index (the "EAFE Index"), a capitalization-weighted
index containing approximately 1,100 equity securities of companies located
outside the United States, by investing in a statistically selected sample of
the equity securities included in the EAFE Index. It will invest primarily in
equity securities of business enterprises organized and domiciled outside of the
United States or for which the principal trading market is outside the Untied
States.
EQUITY 500 INDEX FUND
BT Equity 500 Index Fund seeks to replicate as closely as possible (before
deduction for expenses) the total return of the Standard & Poor's 500 Composite
Stock Price Index (the "S&P 500"), an index emphasizing large-capitalization
stocks. It will include the common stock of those companies included in the S&P
500, other than Bankers Trust New York Corporation, selected on the basis of
computer-generated statistical data, that are deemed representative of the
industry diversification of the entire S&P 500.
SMALL CAP INDEX FUND
BT Small Cap Index Fund seeks to replicate as closely as possible (before
deduction for expenses) the total return of the Russell 2000 Small Stock Index
(the "Russell 2000"), an index consisting of 2,000 small-capitalization common
stocks. It will include the common stock of companies included in the Russell
2000, on the basis of computer-generated statistical data, that are deemed
representative of the industry diversification of the entire Russell 2000.
There is no assurance that any Portfolio will achieve its stated objectives.
Owners are also advised to read the prospectuses for each of the Funds
accompanying this Prospectus for more detailed information. Each Fund is subject
to certain investment restrictions which may not be changed without the approval
of a majority of the shareholders of the Fund. See the accompanying prospectuses
for each of the Funds.
DETAILED DESCRIPTION
OF CERTIFICATE BENEFITS
AND PROVISIONS
GENERAL
This Prospectus describes a flexible premium group variable life insurance
policy where the Owner has considerable flexibility in selecting the timing and
amount of premium payments.
ISSUANCE OF A CERTIFICATE
Certificates will only be offered to eligible employees when provided by the
Participating Employer. Individuals wishing to purchase a Certificate must
complete an Enrollment Form In Writing, which must be received by Our Customer
Service Center before a Certificate will be issued. A Certificate will not be
issued with a specified Face Amount of less than the minimum Face Amount.
Acceptance is subject to Hartford's underwriting rules then in effect. Hartford
reserves the right to reject an Enrollment Form for any reason permitted by law.
There are two circumstances under which a Certificate may be issued with a
backdated Coverage Date. The first involves Group Policy rollovers from Section
1035 exchanges under the Code. Backdating will occur in order to prevent a gap
in coverage under the Certificate. Charges and deductions (other than those of
the Portfolios) will be made for the period the Coverage Date is backdated;
however, the Owner will not experience investment return during that time.
Backdating will also occur when an application accompanied by the Initial
Premium is received by Us but issuance of a Certificate is subject to Our
insurance underwriting requirements. The initial Net Premium will be allocated
according to the applicant's initial premium allocation
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14 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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during the underwriting period, except in those states where the initial Net
Premium will be allocated to the HVA Money Market Investment Division. See
"Premiums -- Allocation of Premium Payments" below. If the Insured meets Our
underwriting requirements, a Certificate will be issued with a backdated
Coverage Date. Charges and deductions (other than those of the Portfolios) will
be made for the backdated period. If the Insured does not meet Our underwriting
requirements, no Certificate will be issued and no coverage will have been in
effect. A conditional receipt will be given to the applicant reflecting receipt
of the Initial Premium and outlining any interim coverage in effect until the
Certificate is either issued or declined.
Backdating may only be permitted in certain states.
PREMIUMS
PREMIUM PAYMENT FLEXIBILITY
A significant feature of the Certificate is that once the desired level and
pattern of the Death Benefit have been determined, the Owner has considerable
flexibility in the selection of the timing and amount of premiums to be paid and
can choose the level of premiums, within a range determined by Hartford, based
on the Face Amount of the Certificate, the Insured's sex (except where unisex
rates apply), Issue Age, and the Insured's risk classification.
A minimum Initial Premium, as set forth in the Certificate, is due on the
Coverage Date. Unless determined otherwise by Hartford, the amount of the
minimum Initial Premium is the amount which, after the deductions for sales
load, state premium tax, and DAC tax charge, is sufficient (disregarding
investment performance) to pay twelve (12) times the first Monthly Deduction
Amount. Thereafter, additional premiums may be paid at any time, subject to the
premium limitations set forth by the Code as indicated in the section entitled
"Premium Limitation," page 15. You have the right to pay additional premiums of
at least $500.00 at any time.
ALLOCATION OF PREMIUM PAYMENTS
If the state of issue of Your Certificate requires that We return Your
Initial Premium, We will allocate the initial Net Premium when Your Certificate
is issued to the HVA Money Market Investment Division until the expiration of
the right to examine period. Upon the expiration of the right to examine period,
the initial Net Premium will, at a later date, be invested according to Your
initial allocation instructions (except that any accrued interest will remain in
the HVA Money Market Investment Division if it is selected as an initial
allocation option). This later date is the later of ten (10) calendar days after
We receive the Initial Premium and the date We receive the final requirement to
put the Certificate in force. The Certificates are credited with units
("Accumulation Units") in each selected Investment Division, the assets of which
are invested in the corresponding underlying Portfolio. An Owner may transfer
funds among the Investment Divisions subject to certain restrictions. See
"Detailed Description of Certificate Benefits and Provisions -- Transfers Among
Investment Divisions," page 16. Any additional premiums received by Us prior to
such date will be allocated to the HVA Money Market Investment Division.
Alternatively, if the state of issue of Your Certificate provides for Our
return of the Certificate's Cash Value to the Owner, We will allocate the
initial Net Premium immediately among Your chosen Investment Divisions. IN THAT
CASE YOU WILL BEAR FULL INVESTMENT RISK FOR ANY AMOUNTS ALLOCATED TO THE
INVESTMENT DIVISIONS DURING THE RIGHT TO EXAMINE PERIOD. (Please note that this
automatic immediate investment feature only applies if Your Certificate so
specifies. Please check with Your agent to determine the status of Your
Certificate.)
Upon written request, You may change the Net Premium allocation. Portions
allocated to the Investment Divisions must be whole percentages of 5% or more.
Subsequent Net Premiums will be allocated among Investment Divisions according
to Your most recent instructions, subject to the following. If We receive a
premium and Your most recent allocation instructions would violate the 5%
requirement, We will allocate the Net Premium among the Investment Divisions
according to Your previous premium allocation. If the asset rebalancing option
is in effect, Net Premiums will be allocated accordingly until that option is
terminated. See "Transfers Among Investment Divisions -- Asset Rebalancing,"
page 16.
The Owner will receive several different types of notification as to what
his or her current premium allocation is. The initial allocation chosen by the
Owner on the Enrollment Form is shown in the Certificate. In addition, every
transactional confirmation generated after a premium payment is received will
show how that premium has been allocated. A Certificate's annual statement will
also summarize the current premium allocation in effect for that Certificate.
ACCUMULATION UNITS
Net Premiums allocated to the Investment Divisions are used to credit
Accumulation Units under the Certificate.
The number of Accumulation Units in each Investment Division to be credited
under the Certificate (including the initial allocation to the HVA Money Market
Investment Division) will be determined first by multiplying the Net Premium by
the appropriate allocation percentage to determine the portion to be invested in
the Investment Division. Each portion to be invested in an Investment Division
is then divided by the Accumulation Unit Value of that particular Investment
Division next computed following receipt of the payment.
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 15
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ACCUMULATION UNIT VALUES
The Accumulation Unit value for each Investment Division will vary daily to
reflect the investment experience of the applicable Portfolio, as well as the
daily deduction for mortality and expense risks, and will be determined on each
Valuation Day by multiplying the Accumulation Unit value of the particular
Investment Division on the preceding Valuation Day by a net investment factor
for that Investment Division for the Valuation Period then ended. The net
investment factor for each of the Investment Divisions is equal to the net asset
value per share of the corresponding Portfolio at the end of the Valuation
Period (plus the per share amount of any dividend or capital gain distributions
paid by that Portfolio in the Valuation Period then ended) divided by the net
asset value per share of the corresponding Portfolio at the beginning of the
Valuation Period, less the daily deduction for the mortality and expense risks
assumed by Hartford.
All valuations in connection with a Certificate, e.g., with respect to
determining Cash Value and Investment Value, or calculating the Death Benefit,
or with respect to determining the number of Accumulation Units to be credited
to a Certificate with each premium payment, other than the Initial Premium, will
be made on the date the request or payment is received by Hartford at the
Customer Service Center if such date is a Valuation Day; otherwise such
determination will be made on the next succeeding date which is a Valuation Day.
PREMIUM LIMITATION
If premiums are received which would cause the Certificate to fail to meet
the definition of a life insurance policy in accordance with the Code, We will
refund the excess premium payments. We will refund such premium payments and
interest thereon within sixty (60) days after the end of a Coverage Year.
A premium payment that results in an increase in the Death Benefit greater
than the amount of the premium will be accepted only after We approve evidence
of insurability.
VALUES UNDER THE CERTIFICATE
As with traditional life insurance, each Certificate will have a Cash
Surrender Value. The Cash Surrender Value is equal to the Cash Value, less Debt,
less any charges accrued but not deducted. There is no minimum guaranteed Cash
Surrender Value. The Cash Value equals the value in the Investment Divisions
plus the Loan Account Value.
Each Certificate will also have an Investment Value. The Investment Value of
a Certificate changes on a daily basis and will be computed on each Valuation
Day. The Investment Value will vary to reflect the investment experience of the
Investment Divisions, Monthly Deduction Amounts and any amounts transferred to
the Loan Account to secure a Loan.
The Investment Value of a particular Certificate is related to the net asset
value of the Portfolios associated with the Investment Divisions to which Net
Premiums on the Certificate have been allocated. The total Investment Value in
the Investment Divisions on any Valuation Day is calculated by multiplying the
number of Accumulation Units in each Investment Division as of the Valuation Day
by the current Accumulation Unit value of that Investment Division and then
summing the result for all the Investment Divisions. The Investment Value equals
the sum of the values of the assets in the Investment Divisions. See "Premiums
- -- Accumulation Unit Values," page 15.
SURRENDER OF THE CERTIFICATE
At any time prior to the Maturity Date, provided the Certificate is in
effect and has a Cash Surrender Value, the Owner may choose, without the consent
of the Beneficiary (provided the designation of the Beneficiary is not
irrevocable) to surrender the Certificate and receive the full Cash Surrender
Value from Us. To surrender a Certificate, You must submit a request for
surrender In Writing. We will determine the Cash Surrender Value as of the
Valuation Day We receive the request In Writing at Our Customer Service Center,
or the date requested by the Owner, whichever is later.
The Cash Surrender Value, which is the net amount available upon surrender
of the Certificate, equals the Cash Value, less Debt, less any charges accrued
but not yet deducted. The Certificate will terminate on the date of receipt of
the written request, or the date the Owner requests the surrender to be
effective, whichever is later.
The Cash Surrender Value may be paid in cash or allocated to any other
payment option agreed upon by Us.
PARTIAL WITHDRAWALS
At any time before the Maturity Date, and subject to Hartford's rules then
in effect, up to twelve (12) partial withdrawals are allowed per Coverage Year;
however, only one (1) partial withdrawal is allowed between any successive
Processing Dates. The minimum partial withdrawal allowed is $500.00. The maximum
partial withdrawal is an amount equal to the sum of the Cash Surrender Value
plus outstanding Debt, multiplied by .90, less outstanding Debt. Hartford
currently imposes a charge for processing partial withdrawals which is the
lesser of 2% of the amount withdrawn or $25.00. A partial withdrawal will reduce
the Cash Surrender Value, Cash Value and Investment Value. Any partial
withdrawal will have a permanent effect on the Cash Surrender Value and may have
a permanent effect on the Death Benefit payable. If Death Benefit Option A is in
effect, the Face Amount is reduced by the amount of the partial withdrawal.
Unless specified otherwise, partial withdrawals will be deducted on a Pro Rata
Basis from the Investment Divisions. Requests for partial withdrawals must
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16 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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be made In Writing to Us. The effective date of a partial withdrawal will be the
Valuation Day We receive the request In Writing at Our Customer Service Center.
A 10% penalty tax may be imposed on income distributed before the insured
attains age 59 1/2. See "Federal Tax Considerations -- Modified Endowment
Contracts," page 29.
TRANSFERS AMONG INVESTMENT DIVISIONS
AMOUNT AND FREQUENCY OF TRANSFERS
Upon request and as long as the Certificate is in effect, You may transfer
amounts among the Investment Divisions, without charge, up to twelve (12) times
per Coverage Year. Transfers in excess of twelve (12) per Coverage Year will be
subject to a charge of $50 per transfer deducted from the amount of the
transfer. Transfer requests must be In Writing on a form approved by Hartford or
by telephone in accordance with established procedures. The amounts which may be
transferred will be limited by Our rules then in effect. Currently, the minimum
value of Accumulation Units that may be transferred from one Investment Division
to another is the lesser of (i) $500 or (ii) the total value of the Accumulation
Units in the Investment Division. The value of the remaining Accumulation Units
in the Investment Division must equal at least $500. If, after an ordered
transfer, the value of the remaining Accumulation Units in an Investment
Division would be less than $500, the entire value will be transferred.
Currently there are no restrictions on transfers other than those described
herein. Hartford reserves the right in the future to impose additional
restrictions on transfers.
TRANSFERS TO OR FROM INVESTMENT DIVISIONS
In the event of a transfer from an Investment Division, the number of
Accumulation Units credited to the Investment Division from which the transfer
is made will be reduced. The reduction will be determined by dividing:
1. the amount transferred by,
2. the Accumulation Unit value for that Investment Division on the Valuation
Day We receive Your request for transfer In Writing.
In the event of a transfer to an Investment Division, We will increase the
number of Accumulation Units credited thereto. The increase will equal:
1. the amount transferred divided by,
2. the Accumulation Unit value for that Investment Division determined on the
Valuation Day We receive Your request for transfer In Writing.
ASSET REBALANCING
Subject to Our rules then in effect, an Owner may authorize Hartford to
automatically reallocate Investment Value periodically in order to maintain a
particular percentage allocation among the Investment Divisions as selected by
the Owner ("Asset Rebalancing"). The Investment Value held in each Investment
Division will increase or decrease in value at different rates during the
relevant period. Asset Rebalancing is intended to reallocate Investment Value
from those Investment Divisions that have increased in value to those that have
decreased in value.
To elect Asset Rebalancing, a request In Writing must be received by
Hartford. If Asset Rebalancing is elected, all Investment Value must be included
in the automatic reallocation. The percentages selected under Asset Rebalancing
will override any prior percentage allocations chosen by the Owner and all
future Net Premiums will be allocated accordingly. Once elected, an Owner may
instruct Hartford In Writing at any time to terminate the option. In addition,
any transfer made outside of Asset Rebalancing will terminate the option.
PROCEDURES FOR TELEPHONE TRANSFERS
Owners may effect telephone transfers in two ways. All Owners may directly
contact a customer service representative. Owners may in the future also request
access to an electronic service known as a Voice Response Unit (VRU). The VRU
will permit the transfer of monies among the Investment Divisions and change of
the allocation of future payments. All Owners intending to conduct telephone
transfers through the VRU will be asked to complete a Telephone Authorization
Form.
Hartford will undertake reasonable procedures to confirm that instructions
communicated by telephone are genuine. Before a customer service representative
accepts any request, the caller will be asked for his or her social security
number and address. All calls will also be recorded. A Personal Identification
Number (PIN) will be assigned to all Owners who request VRU access. The PIN is
selected by and known only to the Owner. Proper entry of the PIN is required
before any transactions will be allowed through the VRU. Furthermore, all
transactions performed over the VRU, as well as with a customer service
representative, will be confirmed by Hartford through a written letter.
Moreover, all VRU transactions will be assigned a unique confirmation number
which will become part of the Certificate's history. Hartford is not liable for
any loss, cost or expense for action on telephone instructions which are
believed to be genuine in accordance with these procedures.
VALUATION OF PAYMENTS AND TRANSFERS
We value the Certificate on every Valuation Day.
We will generally pay Death Proceeds, Cash Surrender Values, partial
withdrawals, and Loan amounts attributable to the Investment Divisions within
seven (7) calendar days after We receive all the information needed to process
the payment unless the NYSE is closed for other than a regular
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 17
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holiday or weekend, trading is restricted by the SEC or the SEC declares that an
emergency exists.
Hartford may defer payment of any amounts not attributable to the Investment
Divisions for up to six months from the date on which We receive the request.
PROCESSING OF TRANSACTIONS
Generally, transactions initiated by an Owner will be processed only on a
Valuation Day. Requests received by Hartford on a Valuation Day by 3:00 p.m.
Eastern Time will be processed as of that day, except as otherwise indicated in
this Prospectus. Requests received after 3:00 p.m. Eastern Time will be
processed as of the next Valuation Day.
LOANS
As long as the Certificate is in effect, an Owner may obtain, without the
consent of the Beneficiary (provided the designation of Beneficiary is not
irrevocable), a cash Loan from Hartford. The maximum Loan amount is equal to the
sum of the Cash Surrender Value plus outstanding Debt, multiplied by .90, less
outstanding Debt.
The amount of each Loan will be transferred on a Pro-Rata Basis from each of
the Investment Divisions (unless the Owner specifies otherwise) to the Loan
Account. The Loan Account is the mechanism used to ensure that any outstanding
Debt remains fully secured by the Investment Value.
LOAN INTEREST
Interest will accrue daily on outstanding Debt at the Adjustable Loan
Interest Rate indicated in the Certificate. The difference between the value of
the Loan Account and any outstanding Debt will be transferred from the
Investment Divisions to the Loan Account on each Certificate Anniversary.
Interest payments are due as shown on the Certificate Specifications. If
interest is not paid within 5 days of its due date, it will be added to the
amount of the Loan as of its due date.
The maximum Adjustable Loan Interest Rate We may charge for Loans is the
greater of 5% and the Published Monthly Average for the calendar month two
months prior to the date on which the Adjustable Loan Interest Rate is
determined. The Published Monthly Average means the "Moody's Corporate Bond
Yield Average -- Monthly Average Corporate" as published by Moody's Investors
Service, Inc. or any successor to that service. If that monthly average is no
longer published, a substitute average will be used.
CREDITED INTEREST
Amounts in the Loan Account for Coverage Years 1 through 10 will be credited
with interest at a rate equal to the Adjustable Loan Interest Rate then in
effect, minus 1%. Amounts in the Loan Account for Coverage Years 11 and later
will be credited with interest at a rate equal to the Adjustable Loan Interest
Rate then in effect, minus .20%.
LOAN REPAYMENTS
You can repay any part of or the entire Loan at any time. The amount of the
Loan repayment will be allocated to Your chosen Investment Divisions on a Pro
Rata Basis, determined as of the date of the Loan repayment. Unless specified
otherwise, additional premium payments received by Hartford during the period
when a Loan is outstanding will be treated as Loan repayments.
TERMINATION DUE TO EXCESSIVE DEBT
If total Debt outstanding equals or exceeds the Cash Surrender Value, the
Certificate will terminate thirty-one (31) calendar days after We have mailed
notice to Your last known address and that of any assignees of record. If
sufficient Loan repayment is not made by the end of this 31-day period, the
Certificate will end without value.
EFFECT OF LOANS ON INVESTMENT VALUE
A Loan, whether or not repaid, will have a permanent effect on the
Investment Value because the investment results of each Investment Division will
apply only to the amount remaining in such Investment Divisions. The longer a
Loan is outstanding, the greater the effect is likely to be. The effect could be
favorable or unfavorable. If the Investment Divisions earn more than the annual
interest rate for funds held in the Loan Account, an Owner's Investment Value
will not increase as rapidly as it would have had no Loan been made. If the
Investment Divisions earn less than the Loan Account, the Owner's Investment
Value will be greater than it would have been had no Loan been made. Also, if
not repaid, the aggregate amount of outstanding Debt will reduce the Death
Proceeds and Cash Surrender Value otherwise payable.
DEATH BENEFIT
As long as the Certificate remains in force, the Certificate provides for
the payment of the Death Proceeds to the named Beneficiary when the Insured
under the Certificate dies. The Death Proceeds payable to the Beneficiary equal
the Death Benefit less any Debt outstanding under the Certificate plus any rider
benefits payable. The Death Benefit depends on the Death Benefit option You
select and is determined as of the date of the death of the Insured.
MINIMUM DEATH BENEFIT TESTING PROCEDURES
Section 7702 of the Code defines alternative testing procedures, the
guideline premium test ("GPT") and the cash value accumulation test ("CVAT") in
order to meet the definition of life insurance under the Code. See "Federal Tax
Considerations -- Income Taxation of Certificate Benefits," page 26. Each
Certificate must qualify under either the GPT or the CVAT. Prior to issue, the
Owner chooses the procedure under which a Certificate will qualify. Once
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18 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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either the GPT or the CVAT is chosen to test a Certificate, it cannot be changed
while the Certificate is in force.
Under both testing procedures, there is a minimum Death Benefit required at
all times equal to the Variable Insurance Amount. The factors used to determine
the Variable Insurance Amount depend on the testing procedure chosen and are set
forth in the Certificate.
Under the GPT, there is also a maximum amount of premium which may be paid
with respect to each Certificate.
Use of the CVAT can be advantageous if an Owner intends to maximize the
total amount of premiums paid under a Certificate. An offsetting consideration,
however, is that the higher premium permitted under the CVAT will generally also
require a higher Death Benefit and, thus, a higher total cost of insurance.
DEATH BENEFIT OPTIONS
Regardless of the minimum death benefit testing procedure chosen, there are
two Death Benefit options: Death Benefit Option A and Death Benefit Option B.
1. Under Death Benefit Option A, the Death Benefit is the greater of (a) the
Face Amount and (b) the Variable Insurance Amount.
2. Under Death Benefit Option B, the Death Benefit is the greater of (a) the
Face Amount plus the Cash Value and (b) the Variable Insurance Amount.
Regardless of which Death Benefit option You select, the maximum amount
payable under such option will be the Death Proceeds.
OPTION CHANGE
While the Certificate is in force, You may change the Death Benefit option
selected under a Certificate by making a request In Writing during the lifetime
of the Insured. If the change is from Death Benefit Option A to Death Benefit
Option B, satisfactory evidence of insurability must be provided to Hartford.
The Face Amount after the change will be equal to the Face Amount before the
change, less the Cash Value on the effective date of the change. If the change
is from Death Benefit Option B to Death Benefit Option A, the Face Amount after
the change will be equal to the Face Amount before the change plus the Cash
Value on the effective date of change. Any change in the selection of a Death
Benefit option will become effective at the beginning of the Coverage month
following Hartford's approval of such change. We will notify You that the change
has been made.
All or part of the Death Proceeds may be paid in cash or applied under one
of the payment options described below.
PAYMENT OPTIONS
Death Proceeds under the Certificate may be paid in a lump sum or may be
applied to one of Hartford's payment options. The minimum amount that may be
placed under a payment option is $5,000 unless Hartford consents to a lesser
amount. Once payments under payment options 2, 3 or 4 commence, no surrender of
the Certificate may be made for the purpose of receiving a lump sum settlement
in lieu of the life insurance payments. The following options are available
under the Certificates:
FIRST OPTION -- Interest Income
Payments of interest at the rate We declare, but not less than 3% per year,
on the amount applied under this option.
SECOND OPTION -- Income of Fixed Amount
Equal payments of the amount chosen until the amount applied under this
option, with interest of not less than 3% per year, is exhausted. The final
payment will be for the balance remaining.
THIRD OPTION -- Payments for a Fixed Period
An amount payable monthly for the number of years selected which may be from
1 to 30 years.
FOURTH OPTION -- Life Income
LIFE ANNUITY -- an annuity payable monthly during the lifetime of the
Annuitant and terminating with the last monthly payment due preceding the
death of the Annuitant. Under this option, it is possible that only one
monthly annuity payment would be made, if the Annuitant died before the second
monthly annuity payment was due.
LIFE ANNUITY WITH 120 MONTHLY PAYMENTS CERTAIN -- an annuity providing monthly
income to the Annuitant for a fixed period of 120 months and for as long
thereafter as the Annuitant shall live.
The fourth payment option is based on the 1983a Individual Annuity Mortality
Table set back one year and a net investment rate of 3% per annum. The amount of
each payment under this option will depend upon the age of the Annuitant at the
time the first payment is due. If any periodic payment due any payee is less
than $200, Hartford may make payments less often. The first, second and third
payment options are based on a net investment rate of 3% per annum. Hartford
may, however, from time to time, at Our discretion if mortality appears more
favorable and interest rates justify, apply other tables which will result in
higher monthly payments for each $1,000 applied under one or more of the four
payment options.
Hartford will make any other arrangements for income payments as may be
agreed on.
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 19
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LEGAL DEVELOPMENTS REGARDING INCOME PAYMENTS
In those states affected by the 1983 Supreme Court decision in Arizona
Governing Committee v. Norris, income payment options involving life income are
based on unisex actuarial tables. In addition, legislation has previously been
introduced in Congress which, had it been enacted, would have required the use
of tables that do not vary on the basis of sex for some or all annuities.
Currently, several states have enacted such laws.
BENEFICIARY
The Owner names the Beneficiary in the Enrollment Form for the Certificate.
The Owner may change the Beneficiary (unless irrevocably named) during the
Insured's lifetime by written request to Hartford. If no Beneficiary is living
when the Insured dies, the Death Proceeds will be paid to the Owner if living;
otherwise to the Owner's estate.
INCREASES AND DECREASES IN FACE AMOUNT
The minimum Face Amount of the Certificate is $50,000. At any time after
purchasing a Certificate, the Owner may request a change in the Face Amount by
making a request In Writing to Hartford and directing such request to Hartford's
Customer Service Center.
All requests to increase the Face Amount must be applied for on a new
Enrollment Form. All requests will be subject to evidence of insurability
satisfactory to Hartford and subject to Our rules then in effect. Any increase
approved by Us will be effective on the Processing Date following the date We
approve the request. The Monthly Deduction Amount on the first Processing Date
on or after the effective date of the increase will reflect a charge for the
increase. A decrease in the Face Amount will be effective on the first
Processing Date following the date We receive the request. Decreases must reduce
the Face Amount by at least $25,000, and the remaining Face Amount must not be
less than $50,000. Decreases will be applied:
(a) to the most recent increase; then
(b) successively to each prior increase, and then
(c) to the initial Face Amount.
We reserve the right to limit the number of Face Amount increases or
decreases made under the Certificate to no more than one in any twelve (12)
month period.
BENEFITS AT MATURITY
If the Insured is living on the Maturity Date, on surrender of the
Certificate to Hartford, Hartford will pay to the Owner the Cash Surrender Value
on the date the Certificate is surrendered. However, on the Maturity Date, the
Certificate will terminate and Hartford will have no further obligations under
the Certificate.
TERMINATION OF PARTICIPATION
IN THE GROUP POLICY
Participation in the Group Policy may be terminated by Hartford or the
Participating Employer. The party initiating the termination must provide notice
of such termination to each Owner of record, at his or her last known address,
at least fifteen (15) days prior to the date of termination. In the event of
such termination, no new Enrollment Forms for new Insureds will be accepted on
or after the date notice of discontinuance is received or sent by Hartford,
whichever is applicable, nor will any new Certificates be issued. If premium
payments are discontinued, Hartford will continue insurance coverage under the
Certificate as long as the Cash Surrender Value is sufficient to cover the
charges due. This continuation of insurance will not continue the coverage under
the Certificate beyond Attained Age 100, nor will it continue any optional
benefit rider beyond the Certificate's date of termination. If the Group Policy
is discontinued or amended to discontinue the eligible class to which an Insured
belongs (and if the coverage on the Insured is not transferred to another
insurance carrier), any Certificate then in effect will remain in force under
the discontinued Group Policy, provided it is not canceled or surrendered by the
Owner, subject to Hartford's qualifications then in effect.
LAPSE AND REINSTATEMENT WHILE
THE GROUP POLICY IS IN EFFECT
LAPSE AND GRACE PERIOD
A Grace Period will follow the date We mail notice to the Owner that the
Cash Surrender Value is insufficient to pay the charges due under the
Certificate. Unless the Owner has given Hartford written notice of termination
in advance of the date of termination of the Certificate, insurance will
continue in force during the Grace Period. The Owner will be liable to Hartford
for all charges due under the Certificate then unpaid for the period the
Certificate remains in force.
In the event that total Debt outstanding equals or exceeds the Cash
Surrender Value, the Certificate will terminate thirty-one (31) calendar days
after We have mailed notice to Your last known address and that of any assignees
of record. If sufficient Loan repayment is not made by the end of this 31-day
period, the Certificate will end without value.
REINSTATEMENT
Prior to the death of the Insured, and unless (i) the Group Policy is
terminated (see "Termination of Participation in the Group Policy" above) or
(ii) the Certificate has been surrendered for cash, the Certificate may be
reinstated prior to the Maturity Date, provided:
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20 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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(a) you make Your request within three (3) years of the date of lapse; and
(b) satisfactory evidence of insurability is submitted.
To reinstate Your Certificate, you must remit a premium payment large enough
to keep the coverage under the Certificate in force for at least three (3)
months following the date of reinstatement. The Face Amount of the reinstated
Certificate cannot exceed the Face Amount at the time of lapse. The Investment
Value on the reinstatement date will reflect:
(a) The Investment Value at the time of termination; plus
(b) Net Premiums attributable to premiums paid at the time of reinstatement.
Upon reinstatement, any Debt at the time of termination must be repaid or
carried over to the reinstated Certificate.
ENROLLMENT FOR A CERTIFICATE
Individuals wishing to purchase a Certificate must submit an Enrollment Form
to Hartford. Within limits, an applicant may choose the Initial Premium and the
initial Face Amount. A Certificate generally will be issued only on the lives of
Insureds Attained Age 79 and under who supply evidence of insurability
satisfactory to Hartford. Acceptance is subject to Hartford's underwriting rules
and Hartford reserves the right to reject an Enrollment Form for any reason. No
change in the terms or conditions of a Certificate will be made without the
consent of the Owner.
The Certificate will be effective on the Coverage Date only after Hartford
has received all outstanding delivery requirements and received the Initial
Premium. The Coverage Date is the date used to determine all future cyclical
transactions on the Certificate, e.g., Processing Date, Coverage Months and
Coverage Years.
THE RIGHT TO EXAMINE THE CERTIFICATE
An Owner has a limited right to return a Certificate. Subject to applicable
state regulation, if the Certificate is returned, by mail or personal delivery
to Hartford or to the agent who sold the Certificate, to be canceled within ten
(10) calendar days after delivery of the Certificate to the Owner, Hartford will
return either (i) the total amount of premiums or (ii) the Cash Value plus
charges deducted under the Certificate to the Owner within seven (7) days. If
the state where Your Certificate is issued requires that We return Your Initial
Premium, We will allocate Your initial Net Premium to the HVA Money Market
Investment Division. If the state of issue of Your Certificate provides for Our
return of the Certificate's Cash Value to the Owner, We will allocate the
initial Net Premium immediately among Your chosen Investment Divisions.
DEDUCTIONS FROM PREMIUM
Before allocating the Net Premium to the Investment Divisions, a deduction
as a percentage of premium is made for the front-end sales load, premium taxes
and the DAC tax charge. The amount of each premium allocated to the Investment
Divisions is Your Net Premium.
FRONT-END SALES LOAD
The current front-end sales load is 6.75% of any premium paid for Coverage
Years 1 through 7 and 4.75% of any premium paid in Coverage Years 8 and later.
The maximum front-end sales load is 9% of any premium paid in Coverage Years 1
through 7 and 7% of any premium paid in Coverage Years 8 and later.
Front-end sales loads cover expenses related to the sale and distribution of
the Certificates. The front-end sales load may be reduced for certain sales of
the Certificates under circumstances which result in a saving of such sales and
distribution expenses. To qualify for such a reduction, a plan must satisfy
certain criteria as to, for example, the expected number of Owners and the
anticipated Face Amount of all Certificates under the plan. Generally, the sales
contacts and effort and administrative costs per Certificate vary based on such
factors as the size of the plan, the purpose for which Certificates are
purchased and certain characteristics of the plan's members. The amount of
reduction and the criteria for qualification are related to the reduced sales
effort and administrative costs resulting from sales to qualifying plans.
Hartford may modify from time to time on a uniform basis both the amounts of
reductions and the criteria for qualification. Reductions in these charges will
not be unfairly discriminatory against any person, including the affected Owners
funded by the Separate Account.
PREMIUM RELATED TAX CHARGE
We deduct a percentage of each premium to cover taxes assessed against
Hartford that are attributable to premiums. This percentage will vary by locale
depending on the tax rates in effect there. The range of premium taxes actually
deducted by Hartford currently ranges from 0% to 4%.
DAC TAX CHARGE
Hartford deducts 1.25% of each premium to cover a federal premium tax
assessed against Hartford. This charge is reasonable in relation to Hartford's
federal income tax burden, under Section 848 of the Code, resulting from the
receipt of premiums. We will adjust this charge based on changes in the
applicable tax law.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 21
- --------------------------------------------------------------------------------
DEDUCTIONS AND CHARGES
FROM INVESTMENT VALUE
MONTHLY DEDUCTION AMOUNT
On the Coverage Date and on each subsequent Processing Date, Hartford will
deduct the Monthly Deduction Amount from the Investment Value to cover certain
charges and expenses incurred in connection with a Certificate. The Monthly
Deduction Amount will vary from month to month. It will be taken from the Charge
Deduction Division, if designated in the Enrollment Form for the Certificate or
later elected.
If a Charge Deduction Division has been designated but the Investment Value
in the Charge Deduction Division is less than that required to cover all charges
due on such date:
(1) Hartford will apply the Investment Value of the Charge Deduction Division to
the charges due and set the Investment Value in the Charge Deduction
Division to zero; and
(2) any additional amount due will be allocated among the remaining Investment
Divisions on a Pro Rata Basis.
If no Charge Deduction Division has been designated or elected, any amounts
due will be allocated among the Owner's chosen Investment Divisions on a Pro
Rata Basis.
The Monthly Deduction Amount equals:
(a) the administrative expense charge; plus
(b) the charges for cost of insurance; plus
(c) the charges for additional benefits provided by rider, if any.
(A) Monthly Administrative Fee and Other Expense Charges
Hartford will assess a monthly administrative charge to compensate
Hartford for administrative costs in connection with the Certificates. This
charge will be $5 per Coverage Month initially and is guaranteed never to
exceed $10.00 per Coverage Month.
(B) Cost of Insurance Charge
The charge for the cost of insurance is equal to:
(i) the cost of insurance rate per $1,000; multiplied by
(ii) the Net Amount at Risk; divided by
(iii) $1,000.
The Net Amount at Risk equals the Death Benefit less the Cash Value on
that date.
The cost of insurance charge is to cover Hartford's anticipated mortality
costs. Hartford uses various underwriting procedures, including medical
underwriting procedures, depending on the characteristics of the group to
which the Group Policies are issued. The current cost of insurance rates for
standard risks may be equal to or less than the 1980 Commissioners Standard
Ordinary Mortality Table. Substandard risks will be charged a higher cost of
insurance rate that will not exceed rates based on a multiple of the 1980
Commissioners Standard Ordinary Mortality Table. The multiple will be based
on the Insured's risk class. The use of simplified underwriting and
guaranteed issue procedures may result in the cost of insurance charges
being higher for some individuals than if medical underwriting procedures
were used.
Cost of insurance rates are based on the age, sex (except where unisex
rates apply), and rate class of the Insured and group mortality
characteristics and the particular characteristics (such as the rate class
structure) under the Group Policy that are agreed to by Hartford and the
Participating Employer. The actual monthly cost of insurance rates will be
based on Hartford's expectations as to future experience. Hartford will
determine the cost of insurance rate at the start of each Coverage Year. Any
changes in the cost of insurance rate will be made uniformly for all
Insureds in the same risk class.
The rate class of an Insured affects the cost of insurance rate. Hartford
and the Participating Employer will agree to the number of classes and
characteristics of each class. The classes may vary by smokers and
nonsmokers, active and retired status, and/or any other nondiscriminatory
classes agreed to by the Participating Employer. Where smoker and non-smoker
divisions are provided, an Insured who is in the nonsmoker division of a
rate class will have a lower cost of insurance than an Insured in the smoker
division of the same rate class, even if each Insured has an identical
Certificate.
Because the Cash Value and the Death Benefit Amount under a Certificate
may vary from month to month, the cost of insurance charge may also vary on
each Processing Date.
(C) Rider Charge
If the Certificate includes riders, a charge is deducted from the
Investment Value on each Processing Date. The applicable charge is specified
on the rider and is to compensate Hartford for the anticipated cost of
providing the benefits thereunder.
The riders available under the Certificate are described on page under
"Supplemental Benefits."
<PAGE>
22 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MORTALITY AND EXPENSE RISK CHARGE
A charge is made for mortality and expense risks assumed by Hartford.
Hartford currently deducts a daily charge for Coverage Years 1 through 10 at an
effective annual rate of .65% of the value of each Investment Division's assets
and for Coverage Years 11 and later at an effective annual rate of .50% of an
Investment Division's assets. In no event will the charge exceed .65% of an
Investment Division's assets on an annual basis. See also "Premiums --
Accumulation Unit Values," page 15.
The mortality and expense risk charge is equal to:
(i) the mortality and expense risk rate; multiplied by
(ii) the portion of the Cash Value allocated to the Investment Divisions and
the Loan Account.
The mortality risk assumed is that the actual cost of insurance charges
specified in the Certificate will be insufficient to meet actual claims. The
expense risk assumed is that expenses incurred in issuing and administering the
Certificates will exceed the administrative charges set forth therein.
If these charges are insufficient to cover actual costs and assumed risks,
the loss will fall on Hartford. Conversely, if the charge proves more than
sufficient, any excess will be added to Hartford's surplus.
TAXES
Currently, no charge is made to the Separate Account for federal, state, and
local taxes that may be attributable to the Separate Account. A change in the
applicable federal, state or local tax laws which impose tax on Hartford and/or
the Separate Account may result in a charge against the Certificates in the
future. Charges for other taxes, if any, attributable to the Separate Account
may also be made.
OTHER MATTERS
ADDITIONS, DELETIONS OR
SUBSTITUTIONS OF INVESTMENTS
Hartford reserves the right, subject to compliance with the law as then in
effect, to make additions to, deletions from, or substitutions for the Separate
Account and the Investment Divisions which fund the Group Policies. If shares of
any of the Portfolios should no longer be available for investment, or if, in
the judgment of Hartford's management, further investment in shares of any
Portfolio should become inappropriate in view of the purposes of the Group
Policies, Hartford may substitute shares of another Portfolio for shares already
purchased, or to be purchased in the future, under the Group Policies. No
substitution of securities will take place without notice to and consent of
Owners and without prior approval of the SEC to the extent required by the 1940
Act. Subject to Owner approval, if required, Hartford also reserves the right to
end the registration under the 1940 Act of the Separate Account or any other
separate accounts of which it is the depositor which may fund the Group Policy.
VOTING RIGHTS
In accordance with its view of presently applicable law, Hartford will vote
the shares of the Funds at regular and special meetings of the shareholders of
the Funds in accordance with instructions from Owners (or the assignee of the
Certificates, as the case may be) having a voting interest in the Separate
Account. The number of shares held in the Separate Account which are
attributable to each Owner is determined by dividing the Owner's interest in
each Investment Division by the net asset value of the applicable shares of the
Funds. Hartford will vote shares for which no instructions have been given and
shares which are not attributable to Owners (i.e., shares owned by Hartford) in
the same proportion as it votes shares for which it has received instructions.
If the 1940 Act or any rule promulgated thereunder should be amended, however,
or if Hartford's present interpretation should change and, as a result, Hartford
determines it is permitted to vote the shares of the Funds in its own right, it
may elect to do so.
The voting interests of the Owners (or the assignees) in the Funds will be
determined as follows: Owners may cast one vote for each full or fractional
Accumulation Unit owned under their respective Certificates and allocated to an
Investment Division the assets of which are invested in the particular Fund on
the record date for the shareholder meeting for that Fund. If, however, an Owner
has taken a Loan secured by the Certificate, amounts transferred from the
Investment Division(s) to the Loan Account(s) in connection with the Loan (see
"Detailed Description of Certificate Benefits and Provisions -- Loans," page 17)
will not be considered in determining the voting interests of the Owner. Owners
should review the prospectuses for the Funds which accompany this Prospectus to
determine matters on which shareholders may vote.
Hartford may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as to cause a change in the sub-classification or investment objective
of one or more of the Funds or to approve or disapprove an investment advisory
policy for the Funds. In addition, Hartford itself may disregard voting
instructions in favor of changes initiated by an Owner in the investment policy
or the investment adviser of the Funds if Hartford reasonably disapproves of
such changes. A change would be disapproved only if the proposed change is
contrary to state law or prohibited by state regulatory authorities. In the
event
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 23
- --------------------------------------------------------------------------------
Hartford does disregard voting instructions, a summary of that action and the
reasons for such action will be included in the next periodic report to Owners.
OUR RIGHTS
We reserve the right to take certain actions in connection with Our
operations and the operations of the Separate Account. These actions will be
taken in accordance with applicable laws (including obtaining any required
approval of the SEC). If necessary, We will seek approval by Owners.
Specifically, We reserve the right to:
- - Add or remove any Investment Division;
- - Create new separate accounts;
- - Combine the Separate Account with one or more other separate accounts;
- - Operate the Separate Account as a management investment company under the 1940
Act or in any other form permitted by law;
- - Deregister the Separate Account under the 1940 Act;
- - Manage the Separate Account under the direction of a committee or discharge
such committee at any time;
- - Transfer the assets of the Separate Account to one or more other separate
accounts; and
- - Restrict or eliminate any of the voting rights of Owners or other persons who
have voting rights as to the Separate Account.
Hartford also reserves the right to change the name of the Separate Account.
We have reserved all rights to the name of Hartford Life and Annuity
Insurance Company or any part of it. We may allow the Separate Account and other
entities to use Our name or part of it, but We may also withdraw this right.
STATEMENTS TO OWNERS
We will send You a statement at least once each Coverage Year, showing:
(a) the current Cash Value, Cash Surrender Value and Face Amount;
(b) the premiums paid, Monthly Deduction Amounts and Loans since the last
report;
(c) the amount of any outstanding Debt;
(d) notifications required by the provisions of the Certificate; and
(e) any other information required by the Insurance Department of the State
where the Certificate was delivered.
LIMIT ON RIGHT TO CONTEST
Hartford may not contest the validity of the Certificate after it has been
in effect during the Insured's lifetime for two years from the Issue Date. If
the Certificate is reinstated, the two-year period is measured from the date of
reinstatement. Any increase in the Face Amount as a result of a premium payment
is contestable for two years from its effective date. In addition, if the
Insured commits suicide in the two-year period, or such period as specified in
state law, the Death Benefit payable will be limited to the premiums paid less
any outstanding Debt and partial withdrawals.
MISSTATEMENT AS TO AGE OR SEX
If the age or sex of the Insured is incorrectly stated, the amount of all
benefits payable will be appropriately adjusted, as specified in the
Certificate.
ASSIGNMENT
The Certificate may be assigned as collateral for a loan or other
obligation. Hartford is not responsible for any payment made or action taken
before receipt of written notice of such assignment. Proof of interest must be
filed with any claim under a collateral assignment.
DIVIDENDS
No dividends will be paid under the Certificates.
EXPERIENCE CREDITS
The Certificates issued under a Group Policy may be eligible for experience
credits due to administrative savings. The amount of any experience credit may
be paid in cash or applied to and used to increase the Investment Value.
SUPPLEMENTAL BENEFITS
The following supplemental benefit may in the future be included in a
Certificate, subject to the restrictions and limitations set forth therein.
MATURITY DATE EXTENSION RIDER
We will extend the Maturity Date (the date on which the Certificate will
mature), to the date of death of the Insured. Certain Death Benefit and premium
restrictions apply. See "Federal Tax Considerations -- Income Taxation of
Certificate Benefits," page 28.
<PAGE>
24 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Bossen, Wendell J., 64 Vice President, 1995** Vice President (1992-Present), Hartford Life and Accident
Insurance Company; Vice President (1992-Present),
Hartford Life Insurance Company; President
(1992-Present), International Corporate Marketing Group,
Inc.
Boyko, Gregory A., 46 Senior Vice President, Chief Vice President & Controller (1995-1997), Hartford;
Financial Officer & Director (1997-Present); Senior Vice President, Chief
Treasurer, 1997 Financial Officer & Treasurer (1997-Present); Vice
Director, 1997* President & Controller (1995-1997), Hartford Life and
Accident Insurance Company; Director (1997-Present);
Senior Vice President, Chief Financial Officer &
Treasurer (1997-Present); Vice President and Controller
(1995-1997), Hartford Life Insurance Company; Senior
Vice President, Chief Financial Officer & Treasurer
(1997-Present), Hartford Life, Inc.; Chief Financial
Officer (1994-1995) IMG American Life; Senior Vice
President (1992-1994), Connecticut Mutual Life Insurance
Company.
Cummins, Peter W., 60 Senior Vice President, 1997 Vice President (1993-1997), Hartford; Senior Vice
President, (1997-Present); Vice President (1989-1997),
Hartford Life and Accident Insurance Company; Senior
Vice President (1997-Present); Vice President
(1989-1997); Senior Vice President (1997-Present); Vice
President (1989-1997), Hartford Life Insurance Company.
deRaismes, Ann M., 47 Senior Vice President, 1997 Vice President (1994-1997), Hartford; Senior Vice
Director of Human Resources, President (1997-Present); Vice President (1994-1997);
1994 Assistant Vice President (1992-1994); Director of Human
Resources (1991-Present), Hartford Life and Accident
Insurance Company; Senior Vice President (1997-Present);
Vice President (1994-1997); Assistant Vice President
(1992-1994); Director of Human Resources (1991-Present),
Hartford Life Insurance Company; Vice President, Human
Resources (1997-Present), Hartford Life, Inc.
Dooley, James R., 61 Vice President, 1993 Director, Information Services (1973-1997), Hartford Life
Insurance Company.
Fitch, Timothy M., 45 Vice President, 1995 Vice President, (1995-Present); Actuary (1994-Present)
Actuary, 1997 Assistant Vice President (1992-1995), Hartford Life and
Accident Insurance Company; Vice President
(1995-Present); Actuary (1994-Present); Assistant Vice
President (1992-1995), Hartford Life Insurance Company.
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 25
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Foy, David T., 31 Vice President, 1998 Assistant Vice President (1995-1998), Hartford; Vice
President (1998-Present); Assistant Vice President
(1995-1998), Hartford Life Insurance Company.
Garrett, J. Richard, 53 Vice President, 1994 Treasurer (1994-1997), Hartford; Vice President
Assistant Treasurer, 1997 (1993-Present); Assistant Treasurer (1997-Present);
Treasurer (1984-1997), Hartford Life and Accident
Insurance Company; Vice President, (1993-Present);
Assistant Treasurer (1997-Present); Treasurer
(1986-1997), Hartford Life Insurance Company; Vice
President (1997-Present), Hartford Life, Inc.
Gillette, Donald J., 52 Vice President, 1997 Assistant Vice President, (1995-1997), Hartford; Assistant
Vice President (1995-1997), Hartford Life and Accident
Insurance Company; Assistant Vice President
(1995-Present), Hartford Life Insurance Company.
Godfrey, William A., III, 41 Senior Vice President, 1997 Senior Vice President (1997-Present), Hartford; Senior
Vice President (1997-Present), Hartford Life and
Accident Insurance Company; Vice President Information
Technology (1997-Present), Hartford Life, Inc.
Godkin, Lynda, 44 Senior Vice President, 1997 Assistant General Counsel and Secretary (1994-1995),
General Counsel, 1996 Hartford; Director (1997-Present); Senior Vice President
Corporate Secretary, 1996 (1997-Present); General Counsel (1996-Present);
Director, 1997* Corporate Secretary (1995-Present); Associate General
Counsel (1995-1996); Assistant General Counsel and
Secretary (1994-1995); Counsel (1990-1994), Hartford
Life and Accident Insurance Company; Senior Vice
President (1997-Present); General Counsel
(1996-Present); Corporate Secretary (1995-Present);
Director (1997-Present); Associate General Counsel
(1995-1996); Assistant General Counsel and Secretary
(1994-1995); Counsel (1990-1994), Hartford Life
Insurance Company; Vice President and General Counsel
(1997-Present), Hartford Life, Inc.
Grady, Lois W., 53 Senior Vice President, 1998 Senior Vice President (1998-Present); Vice President
Vice President, 1994 (1993-1997); Assistant Vice President (1987-1993),
Hartford Life and Accident Insurance Company; Senior
Vice President (1998-Present); Vice President
(1993-1997); Assistant Vice President (1987-1993),
Hartford Life Insurance Company.
Graham, Christopher, 47 Vice President, 1997
Hunt, Mark E., 37 Vice President, 1998 Assistant Vice President (1997-1998), Hartford; Vice
President (1998-Present), Hartford Life and Accident
Insurance Company.
</TABLE>
<PAGE>
26 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Joyce, Stephen T., 39 Vice President, 1997 Assistant Vice President (1995-1997), Hartford; Assistant
Vice President (1994-1997), Hartford Life and Accident
Insurance Company; Vice President (1997-Present);
Assistant Vice President (1994-1997), Hartford Life
Insurance Company.
Keeler, Michael D., 37 Vice President, 1998 Vice President (1998-Present); Hartford Life and Accident
Insurance Company.
Kerzner, Robert A., 46 Senior Vice President, 1998 Senior Vice President (1998-Present); Vice President
Vice President, 1997 (1994-1998), Hartford; Senior Vice President
(1998-Present); Vice President (1994-1997); Regional
Vice President (1991-1994), Hartford Life Insurance
Company.
Levenson, David N., 31 Vice President, 1998 Assistant Vice President (1997-1998), Hartford.
Malchodi, Jr., William B., 50 Vice President, 1994 [Director of Taxes (1992-1998), Hartford;] Vice President
Director of Taxes, 1992 [delete?] (1994-Present); Director of Taxes (1992-[1998] Present),
Hartford Life and Accident Insurance Company; Vice
President (1994-Present); Director of Taxes
(1991-Present), Hartford Life Insurance Company.
Marra, Thomas M., 38 Executive Vice President, 1996 Senior Vice President (1993-1996); Director of Individual
Director, Individual Life Annuities (1991-1993), Hartford; Director
and Annuity Division, 1993 (1994-Present); Executive Vice President (1995-Present);
Director, 1994* Director, Individual Life and Annuity Division
(1994-Present); Senior Vice President (1994-1995); Vice
President (1989-1994); Actuary (1987-1997), Hartford
Life and Accident Insurance Company; Director
(1994-Present); Executive Vice President (1995-Present);
Director, Individual Life and Annuity Division
(1994-Present); Senior Vice President (1994-1995); Vice
President (1989-1994); Actuary (1987-1995), Hartford
Life Insurance Company; Executive Vice President,
Individual Life and Annuities (1997-Present), Hartford
Life, Inc.
Matthieson, Steven L., 53 Vice President, 1984 Director of New Business (1984-1997), Hartford.
O'Halloran, C. Michael, 51 Vice President, 1997 Vice President (1997-Present), Hartford Life and Accident
Insurance Company; Vice President (1997-Present),
Hartford Life Insurance Company; Corporate Secretary
(1997-Present), Hartford Life, Inc.; Senior Associate
General Counsel (1988-Present), Director of Corporate
Law (1994-Present), The Hartford Financial Services
Group.
O'Sullivan, Daniel E., 43 Vice President, 1998 Vice President (1998-Present), Hartford; Vice President
(1988-Present), Hartford Life Insurance Company.
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 27
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Raymond, Craig R., 37 Senior Vice President, 1997 Vice President (1993-1997); Assistant Vice President
Chief Actuary, 1994 (1992-1993); Actuary (1989-1994), Hartford; Senior Vice
President (1997-Present); Chief Actuary (1995-Present);
Vice President (1993-1997); Actuary (1990-1995),
Hartford Life and Accident Insurance Company; Senior
Vice President (1997-Present); Chief Actuary
(1994-Present); Vice President (1993-1997); Assistant
Vice President (1992-1993); Actuary (1989-1994),
Hartford Life Insurance Company; Vice President and
Chief Actuary (1997-Present), Hartford Life, Inc.
Schrandt, David T., 50 Vice President, 1987 Treasurer (1987-1997); Controller (1987-1997), Hartford.
Smith, Lowndes A., 58 President, 1989 Chief Operating Officer (1989-1997), Hartford; Director
Chief Executive Officer, 1997 (1981-Present); President (1989-Present); Chief
Director, 1985* Executive Officer (1997-Present); Chief Operating
Officer (1989-1997), Hartford Life and Accident
Insurance Company; Director (1981-Present); President
(1989-Present), Chief Executive Officer (1997-Present);
Chief Operating Officer (1989-1997), Hartford Life
Insurance Company; Chief Executive Officer and President
and Director (1997-Present), Hartford Life, Inc.
Welsh, Walter C., 51 Senior Vice President, 1997 Senior Vice President (1997-Present); Vice President
(1994-1997); Assistant Vice President (1992-1995),
Hartford Life and Accident Insurance Company; Senior
Vice President (1997-Present); Vice President
(1995-1997); Assistant Vice President (1992-1995),
Hartford Life Insurance Company; Vice President,
Government Affairs (1997-Present), Hartford Life, Inc.
Znamierowski, David M., 38 Senior Vice President, 1997 Director (1998-Present); Senior Vice President
Director, 1998 (1997-Present), Hartford Life and Accident Insurance
Company; Director (1998-Present); Senior Vice President
(1997-Present); Director, Risk Management Strategy
(1996-Present); Vice President (1997), Hartford Life
Insurance Company; Vice President, Investment Strategy
(1997-Present), Hartford Life, Inc.; Vice President,
Investment Strategy & Policy, Aetna Life and Casualty
Company.
- ---------
* Denotes date of election to Board of Directors of Hartford.
** Affiliated Company of The Hartford Financial Services Group, Inc.
</TABLE>
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford,
CT 06104-2999.
<PAGE>
28 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
DISTRIBUTION OF
THE GROUP POLICY
Hartford intends to sell the Group Policy in all jurisdictions where it is
licensed to do business. The Group Policy will be sold by life insurance sales
representatives who represent Hartford and who are registered representatives of
Hartford Equity Sales Company, Inc. ("HESCO"), or certain other registered
Broker-Dealers. Any sales representative or employee will have been qualified to
sell variable life insurance policies under applicable federal and state laws.
Each Broker-Dealer is registered with the SEC under the Securities Exchange Act
of 1934 and all are members of the National Association of Securities Dealers,
Inc. HESCO is the principal underwriter for the Group Policy. The maximum sales
commission payable to Hartford agents, independent registered insurance brokers,
and other registered Broker-Dealers is 6% of the premiums paid. In addition,
expense allowances, service fees and asset-based trail commissions may be paid.
The sales representative may be required to return all or a portion of the
commissions paid if a Certificate terminates prior to the second Certificate
Anniversary.
SAFEKEEPING OF THE SEPARATE ACCOUNT ASSETS
The assets of the Separate Account are held by Hartford. The assets of the
Separate Account are kept physically segregated and held separate and apart from
the General Account of Hartford. Hartford maintains records of all purchases and
redemptions of shares of the Fund. Additional protection for the assets of the
Separate Account is afforded by Hartford's blanket fidelity bond issued by Aetna
Casualty and Surety Company, in the aggregate amount of $50 million, covering
all of the officers and employees of Hartford.
FEDERAL TAX CONSIDERATIONS
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE OWNER INVOLVED AND THE TYPE OF PLAN UNDER WHICH THE
GROUP POLICY IS PURCHASED, LEGAL AND TAX ADVICE MAY BE NEEDED BY A PERSON,
TRUSTEE OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A GROUP POLICY DESCRIBED
HEREIN.
It should be understood that any detailed description of the Federal income
tax consequences regarding the purchase of the Group Policy cannot be made in
this Prospectus and that special tax rules may be applicable with respect to
certain purchase situations not discussed herein. In addition, no attempt is
made here to consider any applicable state or other tax laws. For detailed
information, a qualified tax adviser should always be consulted. This discussion
of Federal tax considerations is based upon Hartford's understanding of current
Federal income tax laws as they are currently interpreted.
TAXATION OF HARTFORD AND
THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford, which is taxed as a
life insurance company under Part 1 of Subchapter L of Chapter 1 of the Internal
Revenue Code ("Code"). Accordingly, the Separate Account will not be taxed as a
"regulated investment company" under Subchapter M of the Code. Investment income
and realized capital gains on the assets of the Separate Account (the underlying
Investment Divisions) are reinvested and are taken into account in determining
the value of the Accumulation Units (see "Detailed Description of Certificate
Benefits and Provisions -- Values Under the Certificate," on page 15). As a
result, such investment income and realized capital gains are automatically
applied to increase reserves under the Certificate.
Hartford does not expect to incur any Federal income tax on the earnings or
realized capital gains attributable to the Separate Account. Based upon these
expectations, no charge is currently being made to the Separate Account for
Federal income taxes. If Hartford incurs income taxes attributable to the
Separate Account or determines that such taxes will be incurred, it may assess a
charge for taxes against the Separate Account.
INCOME TAXATION OF CERTIFICATE BENEFITS
For Federal income tax purposes, the Certificates should be treated as life
insurance policies under Section 7702 of the Code. The death benefit under a
life insurance policy is excluded from the gross income of the Beneficiary.
Also, a life insurance policy owner is not taxed on increments in the policy
value until the policy is partially or completely surrendered. Section 7702
limits the amount of premiums that may be invested in a policy that is treated
as life insurance. Hartford intends to monitor premium levels to assure
compliance with the Section 7702 standards.
During the first fifteen policy years, an "income first" rule generally
applies to any distribution of cash that is required under Code Section 7702
because of a reduction in benefits under the Certificate.
Hartford also believes that any Loan received under a Certificate will be
treated as Debt of the Owner, and that no
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 29
- --------------------------------------------------------------------------------
part of any Loan under a Certificate will constitute income to the Owner. A
surrender or assignment of the Certificate may have tax consequences depending
upon the circumstances. Owners should consult qualified tax advisers concerning
the effect of such changes.
Federal, state, and local estate tax, inheritance, and other tax
consequences of ownership or receipt of Certificate proceeds depend on the
circumstances of each Owner or Beneficiary.
The Maturity Date Extension Rider allows an Owner to extend the Maturity
Date to the date of the death of the Insured. Although Hartford believes that
the Certificate will continue to be treated as a life insurance contract for
federal income tax purposes after the scheduled Maturity Date, due to the lack
of specific guidance on this issue, this result is not certain. If the
Certificate is not treated as a life insurance contract for federal income tax
purposes after the Maturity Date, among other things, the Death Proceeds may be
taxable to the recipient. The Owner should consult a competent tax adviser
regarding the possible adverse tax consequences resulting from an extension of
the scheduled Maturity Date.
MODIFIED ENDOWMENT CONTRACTS
Code Section 7702A applies an additional test, the "seven-pay" test, to life
insurance contracts. A modified endowment contract is a life insurance policy
which satisfies the Section 7702 definition of life insurance but fails the
seven-pay test of Section 7702A. A policy fails the seven-pay test if the
accumulated amount paid into the Certificate at any time during the first seven
Coverage Years exceeds the sum of the net level premiums that would have been
paid up to that point if the Certificate provided for paid-up future benefits
after the payment of seven level annual premiums. Computational rules for the
seven-pay test are described in Section 7702A(c).
A policy that is classified as a modified endowment contract is eligible for
certain aspects of the beneficial tax treatment accorded to life insurance. That
is, the death benefit is excluded from income and increments in value are not
subject to current taxation. However, withdrawals and loans from a modified
endowment policy are treated first as income, then as a recovery of basis.
Taxable withdrawals are subject to a 10% additional tax, with certain
exceptions. Generally, only distributions and loans made in the first year in
which a policy becomes a modified endowment policy, and in subsequent years, are
taxable. However, distributions and loans made in the two years prior to a
policy's failing the seven-pay test are deemed to be in anticipation of failure
and are subject to tax.
If the Certificate satisfies the seven-pay test for seven years,
distributions and loans made thereafter will not be subject to the modified
endowment policy rules, unless the Certificate is changed materially. The
seven-pay test will be applied anew at any time the Certificate undergoes a
material change, which includes an increase in the Face Amount.
All modified endowment policies that are issued within any calendar year to
the same policy owner by one company or its affiliates shall be treated as one
modified endowment policy for the purpose of determining the taxable portion of
any loan or distribution.
Hartford has instituted procedures to monitor whether a Certificate may
become a modified endowment contract after issue.
DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable life insurance policy
(other than a pension plan policy) will not be treated as a life insurance
policy for any period during which the investments made by the separate account
underlying the policy are not adequately diversified in accordance with
regulations prescribed by the Treasury. If a policy is not treated as a life
insurance policy, the policy owner will be subject to income tax on the annual
increases in cash value. The Treasury has issued diversification regulations
which, among other things, generally require that no more than 55% of the value
of the total assets of the segregated asset account (such as the Funds)
underlying a variable contract is represented by any one investment, no more
than 70% is represented by any two investments, no more than 80% is represented
by any three investments, and no more than 90% is represented by any four
investments. In determining whether the diversification standards are met, all
securities of the same issuer, all interests in the same real property project,
and all interests in the same commodity are each treated as a single investment.
In addition, in the case of government securities, each government agency or
instrumentality shall be treated as a separate issuer. If the diversification
standards are not met, non-pension policy owners will be subject to current tax
on the increase in cash value in the policy.
A separate account must be in compliance with the diversification standards
on the last day of each calendar quarter or within 30 days after the quarter
ends. If an insurance company inadvertently fails to meet the diversification
requirements, the company may comply within a reasonable period and avoid the
taxation of policy income on an ongoing basis. However, either the company or
Owner must agree to pay the tax due for the period during which the
diversification standards were not met. The amount required to be paid shall be
an amount based upon the tax that would have been owed by the policy owner if
they were treated as receiving the income on the policy for such period or
periods.
<PAGE>
30 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the Owner, such
amounts will be subject to Federal income tax withholding and reporting,
pursuant to Section 3405 of the Internal Revenue Code.
OTHER TAX CONSIDERATIONS
Qualified tax advisers should be consulted concerning the estate and gift
tax consequences of Certificate ownership and distributions under federal, state
and local law.
LEGAL PROCEEDINGS
There are no material legal proceedings pending to which the Separate
Account is a party.
EXPERTS
The audited statutory-basis financial statements included in this prospectus
and elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report. Reference is made to said report on the
statutory-basis financial statements of Hartford which states the
statutory-basis financial statements are presented in accordance with statutory
accounting practices prescribed or permitted by the National Association of
Insurance Commissioners and the State of Connecticut Insurance Department, not
presented in accordance with generally accepted accounting principles. The
principal business address of Arthur Andersen LLP is One Financial Plaza,
Hartford, Connecticut 06103.
The hypothetical illustrations included in this Prospectus and Registration
Statement have been approved by Pauline Gyllenhammer, ASA, MAAA, Senior
Actuarial Associate, are included in reliance upon her opinion as to their
reasonableness.
REGISTRATION STATEMENT
A registration statement has been filed with the SEC under the Securities
Act of 1933, as amended. This Prospectus does not contain all information set
forth in the registration statement, its amendments and exhibits, to all of
which reference is made for further information concerning the Separate Account,
Hartford, the Group Policies and the Certificates.
<PAGE>
As Filed with the Securities and Exchange Commission on February 18, 1998.
File No. 33-63731
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 4
TO FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
A. Exact name of trust: ICMG Registered Variable Life Separate Account One
B. Name of depositor: Hartford Life and Annuity Insurance Company
C. Complete address of depositor's principal executive offices: P.O. Box 2999
Hartford, CT 06104-2999
D. Name and complete address of agent for service:
Leslie T. Soler, Esq.
Hartford Life
P.O. Box 2999
Hartford, 06104-2999
It is proposed that this filing will become effective:
___ immediately upon filing pursuant to paragraph (b) of Rule 485
___ on ___________, 1998, pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
_x_ on May 1, 1998, pursuant to paragraph (a)(1) of Rule 485
If appropriate check the following:
___ this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
E. Title and amount of securities being registered: Group Flexible Premium
Variable Life Insurance Policies. Pursuant to Rule 24f-2 under the
Investment Company Act of 1940, the Registrant has registered an indefinite
amount of these group flexible premium variable life insurance policies.
The Rule 24f-2 Notice for the Registrant's most recent fiscal year was
filed on or about February 28, 1997.
F. Proposed maximum aggregate offering price to the public of the securities
being registered: N/A
G. Amount of filing fee: N/A
H. Approximate date of proposed public offering: As soon as practicable
after the effective date of this registration statement.
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
1. Cover page
2. Cover page
3. Not applicable
4. Hartford; Distribution of the Group Policy
5. Summary - The Separate Account
6. The Separate Account
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. Summary; The Funds; Detailed Description of
Certificate Benefits and Provisions; Other Matters
- Voting Rights, Dividends
11. Summary; The Funds
12. Summary; The Funds
13. Deductions and Charges From Investment Value;
Distribution of the Group Policy; Federal Tax
Considerations
14. Detailed Description of Certificate Benefits and
Provisions - Enrollment for a Certificate
15. Detailed Description of Certificate Benefits and
Provisions - Allocation of Premium Payments
16. The Funds; Detailed Description of Certificate
Benefits and Provisions - Allocation of Premium Payments
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
17. Summary; Detailed Description of Certificate
Benefits and Provisions - Values Under the
Certificate, Surrender of the Certificate, The Right
to Examine the Certificate
18. The Funds; Detailed Description of Certificate
Benefits and Provisions - Deductions and Charges
From Investment Value; Federal Tax
Considerations
19. Other Matters - Statements to Owners
20. Not applicable
21. Detailed Description of Certificate Benefits and
Provisions - Loans
22. Not applicable
23. Safekeeping of the Separate Account Assets
24. Other Matters - Assignment
25. Hartford
26. Not applicable
27. Hartford
28. Hartford; Executive Officers and Directors
29. Hartford
30. Not applicable
31. Not applicable
32. Not applicable
33. Not applicable
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
34. Not applicable
35. Distribution of the Group Policy
36. Not required by Form S-6
37. Not applicable
38. Distribution of the Group Policy
39. Hartford; Distribution of the Group Policy
40. Not applicable
41. Hartford; Distribution of the Group Policy
42. Not applicable
43. Not applicable
44. Detailed Description of Certificate Benefits and
Provisions - Allocation of Premium Payments
45. Not applicable
46. Detailed Description of Certificate Benefits and
Provisions - Values Under the Certificate
47. The Funds
48. Cover page; Hartford
49. Not applicable
50. The Separate Account
51. Summary; Hartford; Detailed Description of
Certificate Benefits and Provisions
52. The Funds - General
53. Federal Tax Considerations
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
54. Not applicable
55. Not applicable
56. Not required by Form S-6
57. Not required by Form S-6
58. Not required by Form S-6
59. Not required by Form S-6
<PAGE>
PEGASUS PROVIDER
GROUP FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE POLICIES
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
P.O. BOX 2999
HARTFORD, CT 06104-2999
[LOGO] TELEPHONE (800) 861-1408
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- --------------------------------------------------------------------------------
This Prospectus describes a group flexible premium variable life insurance
policy (the "Group Policies," and each individually a "Group Policy") and
certificates of insurance (the "Certificates," and each individually a
"Certificate") offered by Hartford Life and Annuity Insurance Company
("Hartford"). The Certificates are designed to provide lifetime insurance
coverage to the Insured(s) named in the Certificates, and maximum flexibility in
connection with premium payments and the Death Benefit, together with an
opportunity to participate in the investment experience of ICMG Registered
Variable Life Separate Account One. For a given amount of Death Benefit chosen,
the Owner has considerable flexibility in selecting the timing and amount of
premium payments. In addition to the Initial Premium payment, additional premium
payments are also allowed.
Group Policies may be issued to a Participating Employer or to a trust that is
adopted by a Participating Employer. Eligible employees of Participating
Employers may own Certificates issued under their respective Participating
Employer's Group Policy. The Owners possess all rights and interests under the
Group Policy. The Owners are provided with the Certificates, which describe each
Owner's rights, benefits, and options under the Group Policy.
Sales agents can provide prospective purchasers with individualized sales
illustrations which reflect all the fees and charges associated with the
Certificate options selected.
The Certificates provide for a Death Benefit, pursuant to which Death Proceeds
are payable at the Insured's death. You may select one of two Death Benefit
options. Death Benefit Option A is an amount equal to the larger of (1) the Face
Amount and (2) the Variable Insurance Amount. Death Benefit Option B is an
amount equal to the larger of (1) the Face Amount plus the Cash Value and (2)
the Variable Insurance Amount. The Death Proceeds payable to the Beneficiary
equal the Death Benefit less any Debt outstanding under the Certificate plus any
rider benefits payable.
The Investment Value of a Certificate will also vary up or down to reflect the
investment experience of the Investment Divisions to which Net Premiums have
been allocated. The Owner bears the investment risk for all amounts so
allocated.
The Portfolios underlying the Investment Divisions presently are: the VIP High
Income Portfolio, the VIP Equity-Income Portfolio, and the VIP Money Market
Portfolio of Variable Insurance Products Fund; the VIP II Asset Manager
Portfolio of Variable Insurance Products Fund II; the VIP III Growth
Opportunities Portfolio of Variable Insurance Products Fund III; the Pegasus
Bond Fund, the Pegasus Growth and Value Fund, the Pegasus Mid-Cap Opportunity
Fund, the Pegasus Growth Fund, and the Pegasus Intrinsic Value Fund of Pegasus
Variable Funds; and the Putnam VT International Growth Fund, the Putnam VT Vista
Fund, and the Putnam VT Voyager Fund of Putnam Variable Trust.
- --------------------------------------------------------------------------------
IT MAY NOT BE ADVANTAGEOUS TO PURCHASE FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
AS A REPLACEMENT FOR YOUR CURRENT LIFE INSURANCE OR IF YOU ALREADY OWN A
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY.
- --------------------------------------------------------------------------------
THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED BY THE CURRENT PROSPECTUSES OF THE
AVAILABLE UNDERLYING FUNDS WHICH CONTAIN A FULL DESCRIPTION OF THOSE FUNDS. ALL
PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE>
2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SPECIAL TERMS......................................................... 4
SUMMARY............................................................... 6
HARTFORD.............................................................. 8
THE SEPARATE ACCOUNT.................................................. 8
THE FUNDS............................................................. 9
General............................................................. 9
Variable Insurance Products Fund, Variable Insurance Products Fund
II, and
Variable Insurance Products Fund III............................. 9
Pegasus Variable Funds............................................ 10
Putnam Variable Trust............................................. 10
The Portfolios...................................................... 10
DETAILED DESCRIPTION OF CERTIFICATE BENEFITS AND PROVISIONS........... 11
General............................................................. 11
Issuance of a Certificate........................................... 11
Premiums............................................................ 11
Premium Payment Flexibility....................................... 11
Allocation of Premium Payments.................................... 12
Accumulation Units................................................ 12
Accumulation Unit Values.......................................... 12
Premium Limitation................................................ 13
Values Under the Certificate........................................ 13
Surrender of the Certificate........................................ 13
Partial Withdrawals............................................... 13
Transfers Among Investment Divisions................................ 13
Amount and Frequency of Transfers................................. 13
Transfers To or from Investment Divisions......................... 14
Asset Rebalancing................................................. 14
Procedures for Telephone Transfers................................ 14
Valuation of Payments and Transfers................................. 14
Processing of Transactions........................................ 14
Loans............................................................... 14
Loan Interest..................................................... 15
Credited Interest................................................. 15
Loan Repayments................................................... 15
Termination Due to Excessive Debt................................. 15
Effect of Loans on Investment Value............................... 15
Death Benefit....................................................... 15
Minimum Death Benefit Testing Procedures.......................... 15
Death Benefit Options............................................. 15
Option Change..................................................... 16
Payment Options................................................... 16
Legal Developments Regarding Income Payments...................... 16
Beneficiary....................................................... 16
Increases and Decreases in Face Amount............................ 16
Benefits at Maturity................................................ 17
Termination of Participation in the Group Policy.................... 17
Lapse and Reinstatement While the Group Policy Is In Effect......... 17
Lapse and Grace Period............................................ 17
Reinstatement..................................................... 17
Enrollment for a Certificate........................................ 17
The Right to Examine the Certificate................................ 18
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 3
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
----
Deductions from Premium............................................. 18
<S> <C>
Front-End Sales Load.............................................. 18
Premium Related Tax Charge........................................ 18
DAC Tax Charge.................................................... 18
Deductions and Charges from Investment Value........................ 18
Monthly Deduction Amount.......................................... 18
Mortality and Expense Risk Charge................................... 19
Taxes............................................................... 19
OTHER MATTERS......................................................... 20
Additions, Deletions or Substitutions of Investments................ 20
Voting Rights....................................................... 20
Our Rights.......................................................... 20
Statements to Owners................................................ 21
Limit on Right to Contest........................................... 21
Misstatement as to Age or Sex....................................... 21
Assignment.......................................................... 21
Dividends........................................................... 21
Experience Credits.................................................. 21
SUPPLEMENTAL BENEFITS................................................. 21
Maturity Date Extension Rider....................................... 21
EXECUTIVE OFFICERS AND DIRECTORS...................................... 21
DISTRIBUTION OF THE GROUP POLICY...................................... 25
SAFEKEEPING OF THE SEPARATE ACCOUNT ASSETS............................ 25
FEDERAL TAX CONSIDERATIONS............................................ 26
General............................................................. 26
Taxation of Hartford and the Separate Account....................... 26
Income Taxation of Certificate Benefits............................. 26
Modified Endowment Contracts........................................ 26
Diversification Requirements........................................ 27
Federal Income Tax Withholding...................................... 27
Other Tax Considerations............................................ 27
LEGAL PROCEEDINGS..................................................... 27
EXPERTS............................................................... 27
REGISTRATION STATEMENT................................................ 28
FINANCIAL STATEMENTS..................................................
</TABLE>
THE GROUP POLICIES MAY NOT BE AVAILABLE IN ALL STATES.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER OR OTHER PERSON IS AUTHORIZED
TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON.
<PAGE>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCUMULATION UNIT: An accounting unit of measure used to calculate the value of
an Investment Division.
ADJUSTABLE LOAN INTEREST RATE: The interest rate charged on Loans that is
adjusted from time to time by Hartford. The method of calculation of the
Adjustable Loan Interest Rate is described later in this Prospectus.
ATTAINED AGE: The Issue Age plus the period since the Coverage Date.
BENEFICIARY: The person so designated by the Owner in the Certificate.
CASH SURRENDER VALUE: The Cash Value, less Debt, less any charges accrued but
not yet deducted.
CASH VALUE: The Investment Value plus the Loan Account Value.
CERTIFICATE: The form evidencing and describing the Owner's rights, benefits,
and options under the Group Policy. The Certificate will describe, among other
things, (i) the benefits for the named Insured, (ii) to whom the benefits are
payable and (iii) the limits and other terms of the Group Policy as they pertain
to the Insured.
CERTIFICATE ANNIVERSARY: An anniversary of the Coverage Date.
CHARGE DEDUCTION DIVISION: An Investment Division from which all charges are
deducted if so designated in the Enrollment Form or later elected.
CODE: The Internal Revenue Code of 1986, as amended.
COVERAGE DATE: The date insurance under the Certificate is effective as to an
Insured and from which Coverage Months and Coverage Years are determined.
COVERAGE MONTH(S): The 1-month period following the Coverage Date and each
anniversary thereof.
COVERAGE YEAR(S): The 12 month period following the Coverage Date and each
anniversary thereof.
CUSTOMER SERVICE CENTER: The service area of Hartford Life and Annuity Insurance
Company.
DEATH BENEFIT: The Death Benefit option in effect determines how the Death
Benefit is calculated. The two Death Benefit options are described under
"Detailed Description of Certificate Benefits and Provisions -- Death Benefit,"
page 15.
DEATH PROCEEDS: The Death Benefit less outstanding Debt plus any rider benefits
payable.
DEBT: The aggregate amount of outstanding Loans, plus any interest accrued at
the Adjustable Loan Interest Rate.
ENROLLMENT FORM: The form required to be filled out prior to issuance of a
Certificate. The specific form used will depend on the underwriting
classification and plan design.
FACE AMOUNT: The minimum Death Benefit as long as the Certificate is in force.
It is specified at issue and may be changed after issue on request, or due to a
change in Death Benefit option or a partial withdrawal.
FUNDS: The registered open-end management investment companies in which assets
of the Investment Divisions of the Separate Account may be invested. Currently,
the Funds include: (i) Variable Insurance Products Fund ("VIP"), managed by
Fidelity Management & Research Company ("FMR"); (ii) Variable Insurance Products
Fund II ("VIP II"), managed by FMR; (iii) Variable Insurance Products Fund III
("VIP III"), managed by FMR; (iv) Pegasus Variable Funds, managed by First
Chicago NBD Investment Management Company ("FCNIMCO"); and (v) Putnam Variable
Trust, managed by Putnam Investment Management, Inc.("Putnam Management").
GENERAL ACCOUNT: The assets of Hartford other than those allocated to the
Separate Account.
GRACE PERIOD: The 61-day period, measured in calendar days, following the date
We mail to the Owner notice that the Cash Surrender Value is insufficient to pay
the charges due. Unless the Owner has given Us written notice of the termination
in advance of the date of termination of any Certificate, insurance will
continue in force during this period.
GROUP POLICY: The group flexible premium variable life insurance policy issued
by Hartford and described in this Prospectus.
HARTFORD (ALSO REFERRED TO AS "WE," "US," "OUR"): Hartford Life and Annuity
Insurance Company.
IN WRITING: In a written form satisfactory to Us.
INITIAL PREMIUM: The amount of premium initially payable shown in Your
Certificate.
INSURED: The person on whose life the Certificate is issued. The Insured is
identified in the Certificate .
INVESTMENT DIVISION: A separate division of the Separate Account which invests
exclusively in the shares of a specified Portfolio of a Fund. The Separate
Account currently offers 13 Investment Divisions: (i) the Fidelity VIP High
Income Investment Division, (ii) the Fidelity VIP Equity-Income Investment
Division, (iii) the Fidelity VIP Money Market Investment Division, (iv) the
Fidelity VIP II Asset Manager Investment Division, (v) the Fidelity VIP III
Growth Opportunities Investment Division, (vi) the Pegasus Bond Investment
Division, (vii) the Pegasus Growth and Value Investment Division, (viii) the
Pegasus Mid-Cap Opportunity Investment Division, (ix) the Pegasus Growth
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 5
- --------------------------------------------------------------------------------
Investment Division, (x) the Pegasus Intrinsic Value Investment Division, (xi)
the Putnam VT International Growth Investment Division, (xii) the Putnam VT
Vista Investment Division, and (xiii) the Putnam VT Voyager Investment Division.
INVESTMENT VALUE: The sum of the values of assets in the Investment Divisions
under the Certificate.
ISSUE AGE: The Insured's age on the birthday nearest to the Coverage Date.
LOAN: Any amount borrowed against the Investment Value under a Certificate.
LOAN ACCOUNT: That portion of Hartford's General Account to which amounts are
transferred as a result of a Loan. The Loan Account is credited with interest
and does not participate in the investment experience of the Separate Account.
LOAN ACCOUNT VALUE: The amounts of the Investment Value transferred to (or from)
the General Account to secure Loans, plus interest accrued at the daily
equivalent of an annual rate equal to the Adjustable Loan Interest Rate actually
charged, reduced by not more than 1%.
MATURITY DATE: The date on which an Insured's coverage matures as shown in the
Certificate. We will pay the Cash Surrender Value, if any, if the Insured is
living on the Maturity Date, upon surrender of the Certificate to Hartford.
MONTHLY DEDUCTION AMOUNT: The fees and charges deducted from the Investment
Value on the Processing Date.
NET AMOUNT AT RISK: The Death Benefit less the Cash Value.
NET PREMIUM: The amount of premium actually credited to the Investment
Divisions.
NYSE: The New York Stock Exchange.
OWNER (ALSO REFERRED TO AS "YOU" OR "YOUR"): The person or legal entity so
designated in the Enrollment Form or as subsequently changed. The Owner may be
someone other than the Insured. The Owner possesses all rights under the Group
Policy with respect to the Certificate.
PARTICIPATING EMPLOYER: A participating employer, or a trust sponsored by a
participating employer, to which Hartford issues the Group Policy described in
this Prospectus.
PORTFOLIO: A separate mutual fund, series or portfolio of the Funds. There are
currently 13 Portfolios available under the Policies: the VIP High Income
Portfolio, the VIP Equity-Income Portfolio, and the VIP Money Market Portfolio
of VIP Fund; the VIP II Asset Manager Portfolio of VIP Fund II; the VIP III
Growth Opportunities Portfolio of VIP Fund III; the Pegasus Bond Fund, the
Pegasus Growth and Value Fund, the Pegasus Mid-Cap Opportunity Fund, the Pegasus
Growth Fund, and the Pegasus Intrinsic Value Fund of Pegasus Variable Funds; and
the Putnam VT International Growth Fund, the Putnam VT Vista Fund, and the
Putnam VT Voyager Fund of Putnam Variable Trust.
PRO RATA BASIS: An allocation method based on the proportion of the Investment
Value in each Investment Division.
PROCESSING DATE(S): The day(s) on which We deduct charges from the Investment
Value. The first Processing Date is the Coverage Date. There is a Processing
Date each month. Later Processing Dates are on the same calendar day as the
Coverage Date, or on the last day of any month which has no such calendar day.
PROCESSING PERIOD: The period from the Coverage Date to the next Processing
Date, and thereafter, the period from one Processing Date to the next.
SEC: U.S. Securities and Exchange Commission.
SEPARATE ACCOUNT: ICMG Registered Variable Life Separate Account One, an account
established by Hartford to separate the assets funding the Group Policies from
other assets of Hartford.
VALUATION DAY: Each business day that Hartford and each of the Funds value their
respective investment portfolios, unless the Certificate indicates otherwise. A
business day is any day the NYSE is open for trading or any day the SEC requires
mutual funds, unit investment trusts or other investment portfolios to be
valued. The value of the Separate Account is determined at the close of the NYSE
(generally 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
VARIABLE INSURANCE AMOUNT: The Cash Value multiplied by the applicable variable
insurance factor provided in the Certificate.
VIP: Variable Insurance Products Fund.
VIP II: Variable Insurance Products Fund II.
VIP III: Variable Insurance Products Fund III.
<PAGE>
6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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SUMMARY
THE GROUP POLICY
The Group Policies, and the Certificates, offered by this Prospectus are
funded by the Separate Account, a separate account established by Hartford
pursuant to Connecticut insurance law and organized as a unit investment trust
registered under the Investment Company Act of 1940 (the "1940 Act"). The
Separate Account has 13 Investment Divisions dedicated to the Group Policies,
each of which invests solely in a corresponding Portfolio of the Funds.
Depending upon the state of issuance of Your Certificate and the applicable
provisions of Your Certificate, Your initial Net Premium will, when Your
Certificate is issued, either be (1) invested in the Fidelity VIP Money Market
Investment Division during the right to examine period or (2) invested
immediately in Your chosen Investment Divisions, upon Our receipt thereof. IF
YOUR INITIAL NET PREMIUM IS INVESTED IMMEDIATELY IN YOUR CHOSEN INVESTMENT
DIVISIONS, YOU WILL BEAR FULL INVESTMENT RISK FOR ANY AMOUNTS ALLOCATED TO THE
INVESTMENT DIVISIONS DURING THE RIGHT TO EXAMINE PERIOD. Please note that this
automatic immediate investment feature only applies if Your Certificate so
specifies. Please check with Your agent to determine the status of Your
Certificate. You must fill out and send Us the appropriate form In Writing or
comply with other designated Hartford procedures if You would like to change how
subsequent Net Premiums are allocated. See "Allocation of Premium Payments,"
page 12.
Pursuant to the Certificates, each selected Investment Division is credited
with Accumulation Units and each selected Investment Division's assets are
invested in the applicable underlying Portfolio. Subject to certain
restrictions, an Owner may transfer amounts among the available Investment
Divisions. See "Detailed Description of Certificate Benefits and Provisions --
Transfers Among Investment Divisions," page 13.
The Group Policies are first and foremost life insurance policies and the
Certificates evidencing an Owner's interest in the Group Policies provide for
death benefits, cash values, and other features traditionally associated with
life insurance. The Group Policies are "flexible premium" because, once the
desired level and pattern of the Death Benefit have been determined, a purchaser
has considerable flexibility in the selection of the timing and amount of
premium to be paid. The Group Policies are called "variable" because, unlike the
fixed benefits of an ordinary whole life insurance policy, the Investment Value
under a Certificate will, and the Death Benefit may, increase or decrease
depending on the investment experience of the Investment Divisions to which the
Net Premiums have been allocated. See "Detailed Description of Certificate
Benefits and Provisions -- Death Benefit," page 15.
DEATH BENEFIT
The Certificates provide for two Death Benefit options. Under Death Benefit
Option A, the Death Benefit is an amount equal to the larger of (1) the Face
Amount and (2) the Variable Insurance Amount. Under Death Benefit Option B, the
Death Benefit is an amount equal to the larger of (1) the Face Amount plus the
Cash Value and (2) the Variable Insurance Amount. At the death of the Insured,
We will pay the Death Proceeds to the Beneficiary. The Death Proceeds equal the
Death Benefit less outstanding Debt plus any rider benefits payable under the
Certificate. See "Detailed Description of Certificate Benefits and Provisions --
Death Benefit," page 15.
PREMIUM
You have considerable flexibility as to when and in what amounts You pay
premiums.
No premium payment will be accepted which causes the Certificate to fail to
meet the tax qualification guidelines for life insurance under the Code.
GENERAL ACCOUNT
Amounts allocated to the Loan Account to secure a Loan become part of the
General Account assets of Hartford. Hartford invests the assets of the General
Account in accordance with applicable law governing the investments of insurance
company general accounts. See "Detailed Description of Certificate Benefits and
Provisions -- Loans," page 14.
DEDUCTIONS FROM PREMIUM
Prior to the allocation of premiums to the selected Investment Divisions, a
deduction as a percentage of premium is made for the front-end sales load, state
premium taxes, and the Deferred Acquisition Cost ("DAC") tax charge. The amount
of each premium allocated among the Investment Divisions is Your Net Premium.
FRONT-END SALES LOAD
When We receive a Premium Payment, We deduct a front-end sales load. The
current front-end sales load is 6.75% of any premium paid for Coverage Years 1
through 7 and 4.75% of any premium paid in Coverage Years 8 and later. The
maximum front-end sales load is 9% of any premium paid for Coverage Years 1
through 7 and 7% of any premium paid in Coverage Years 8 and later.
The front-end sales load covers expenses relating to the sale and
distribution of the Certificates and may be reduced for certain sales of the
Certificates under circumstances which result in savings of such sales and
distribution
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 7
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expenses. For more information concerning the front-end sales load, see
"Detailed Description of Certificate Benefits and Provisions -- Deductions from
Premium," page 18.
LIMITS ON FRONT-END SALES LOAD
Certain insurance laws and regulations limit the front-end sales load which
can be assessed against the Certificates. The front-end sales load assessed in
the Certificates complies with these limitations.
PREMIUM RELATED TAX CHARGE
We deduct a percentage of each premium to cover taxes assessed against
Hartford by various states and jurisdictions that are attributable to premiums.
The percentage actually deducted will vary by locale depending on the tax rates
in effect there. The range is generally between 0% and 4%.
DAC TAX CHARGE
Hartford deducts 1.25% of each premium to cover a federal premium tax
assessed against Hartford. This charge is reasonable in relation to Hartford's
federal income tax burden, under Code Section 848, resulting from the receipt of
premiums. We will adjust the charge based on changes in the applicable tax law.
DEDUCTIONS AND CHARGES
FROM INVESTMENT VALUE
As with many other types of insurance policies, each Certificate will have
an Investment Value. The Investment Value of the Certificate will increase or
decrease to reflect the investment experience of the chosen Investment
Divisions, deductions for the Monthly Deduction Amount and any amounts
transferred from the Investment Divisions into the Loan Account. There is no
minimum guaranteed Investment Value and the Owner bears the risk of the
investment in the underlying Portfolios. See "Detailed Description of
Certificate Benefits and Provisions -- Deductions and Charges from Investment
Value," page 18.
We will subtract amounts from Your Investment Value to provide for the
Monthly Deduction Amount. These will be taken from the Charge Deduction
Division, as specified in the Certificate. If there is insufficient Investment
Value in the Charge Deduction Division:
(1) Hartford will apply the Investment Value of the Charge Deduction Division to
the charges due and set the Investment Value in the Charge Deduction
Division to zero; and
(2) any additional amount due will be allocated among the remaining Investment
Divisions on a Pro Rata Basis.
If no Charge Deduction Division is selected, any amounts due will be taken
on a Pro Rata Basis from Your chosen Investment Divisions on each Processing
Date.
The Monthly Deduction Amount equals:
(a) the administrative expense charge; plus
(b) the charges for cost of insurance; plus
(c) the charges for additional benefits provided by rider, if any.
Hartford may also set up a provision for income taxes imposed on the assets
of the Separate Account. See "Deductions and Charges from Investment Value,"
page 18, and "Federal Tax Considerations," page 26.
MORTALITY AND EXPENSE RISK CHARGE
A charge is made for mortality and expense risks assumed by Hartford.
Hartford currently deducts a daily charge for Coverage Years 1 through 10 at an
effective annual rate of .65% of the value of each Investment Division's assets
and for Coverage Years 11 and later at an effective annual rate of .50% of each
Investment Division's assets. In no event will the charge exceed .65% of an
Investment Division's assets on an annual basis.
CHARGES AGAINST THE FUNDS
The Separate Account purchases Fund shares at net asset value. The net asset
value of those shares reflects investment advisory fees and administrative and
other expenses deducted from the assets of the Portfolios. Applicants should
review the prospectuses for the Funds which accompany this Prospectus for a
description of the charges assessed against the assets of each of the
Portfolios.
The following table shows annual operating expenses after reimbursement for
1997:
ANNUAL PORTFOLIO OPERATING EXPENSES
AFTER REIMBURSEMENT
(as a percentage of net assets)
<TABLE>
<CAPTION>
TOTAL
MANAGEMENT OTHER OPERATING
FEE EXPENSES EXPENSES
--------------- ------------- -------------
<S> <C> <C> <C>
VIP High Income Portfolio (1).... % % %
VIP Equity-Income Portfolio...... % % %
VIP Money Market Portfolio....... % % %
VIP II Asset Manager Portfolio
(1)............................. % % %
VIP III Growth Opportunities
Portfolio....................... % % %
Pegasus Bond Fund (2)............ % % %
Pegasus Growth and Value Fund
(2)............................. % % %
Pegasus Mid-Cap Opportunity Fund
(2)............................. % % %
</TABLE>
<PAGE>
8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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<TABLE>
<CAPTION>
TOTAL
MANAGEMENT OTHER OPERATING
FEE EXPENSES EXPENSES
--------------- ------------- -------------
Pegasus Growth Fund (2).......... % % %
<S> <C> <C> <C>
Pegasus Intrinsic Value Fund
(2)............................. % % %
Putnam VT International Growth
Fund (3)........................ % % %
Putnam VT Vista Fund (3)......... % % %
Putnam VT Voyager Fund (3)....... % % %
</TABLE>
- ----------
(1) A portion of the brokerage commissions that certain Portfolios pay was used
to reduce expenses. In addition, certain Portfolios have entered into
arrangements with their custodian and transfer agent whereby interest earned
on uninvested cash balances was used to reduce custodian and transfer agent
expenses.
(2) Operating expenses of these Portfolios of the Pegasus Variable Funds reflect
the management fee schedule that will be in effect for future periods
combined with the historic or anticipated expense levels for the Portfolios.
FCNIMCO has agreed to waive portions of the management fee through December
31, 1998, in order to keep total portfolio operating expenses at the levels
shown in the table.
(3) Expenses of these Portfolios have been restated to reflect a 12b-1 fee of
0.15% payable to Class I-B shares.
LOANS
An Owner may obtain a cash Loan from Hartford. The Loan is secured by the
Owner's Certificate. The maximum Loan amount is equal to the sum of the Cash
Surrender Value plus outstanding Debt, multiplied by .90, less outstanding Debt.
See "Detailed Description of Certificate Benefits and Provisions -- Loans," page
14.
THE RIGHT TO EXAMINE THE CERTIFICATE
An applicant has a limited right to return his or her Certificate. Subject
to applicable state regulations, if the applicant returns the Certificate within
10 calendar days after delivery of the Certificate Hartford will return to the
applicant, within seven days thereafter, either (i) the premium paid or (ii) the
Cash Value under the Certificate plus charges deducted. See "The Right to
Examine the Certificate," page 18.
TAX CONSEQUENCES
The current federal tax law generally excludes all Death Benefit payments
from the gross income of the Beneficiary under the Certificate. See "Federal Tax
Considerations," page 26.
There are circumstances when the Certificate may become a Modified Endowment
Contract underFederal tax law. If it does, Loans and other pre-death
distributions are includable in gross income on an income-first basis. A 10%
penalty tax may be imposed on income distributed before the insured attains age
59 1/2. Prospective purchasers and Owners are advised to consult a qualified tax
adviser before taking steps that may affect whether the Certificate becomes a
Modified Endowment Contract. Hartford has instituted procedures to monitor
whether a Certificate may become a Modified Endowment Contract after issue. See
"Federal Tax Considerations -- Modified Endowment Contract" for a discussion of
the "seven-pay" test, page 26.
HARTFORD
Hartford Life and Annuity Insurance Company ("Hartford") is a stock life
insurance company engaged in the business of writing life insurance and
annuities, both individual and group, in all states of the United States and the
District of Columbia, except New York. Effective on January 1, 1998, Hartford's
name changed from ITT Hartford Life and Annuity Insurance Company to Hartford
Life and Annuity Insurance Company. Hartford was originally incorporated under
the laws of Wisconsin on January 9, 1956, and was subsequently redomiciled to
Connecticut. Its offices are located in Simsbury, Connecticut; however, its
mailing address is P.O. Box 2999, Hartford, CT 06104-2999. Hartford is a
subsidiary of Hartford Fire Insurance Company, one of the largest multiple lines
insurance carriers in the United States. Hartford is ultimately controlled by
The Hartford Financial Services Group, Inc., a Delaware corporation.
Hartford is rated A+ (superior) by A.M. Best and Company, Inc., on the basis
of its financial soundness and operating performance. Hartford is rated AA by
Standard & Poor's and AA+ by Duff and Phelps on the basis of its claims paying
ability. These ratings do not apply to the investment performance of the
Sub-Accounts. The ratings apply to Hartford's ability to meet its insurance
obligations, including those described in this Prospectus.
THE SEPARATE ACCOUNT
ICMG Registered Variable Life Separate Account One is a separate account
established by Hartford on October 9, 1995, under the insurance laws of the
State of Connecticut, pursuant to a resolution of Hartford's Board of Directors.
The Separate Account is organized as a unit investment trust and is registered
with the SEC under the 1940 Act. Such registration does not signify that the SEC
supervises the management or the investment practices or policies of the
Separate Account. The Separate Account meets the definition of a "separate
account" under the federal securities laws.
Under Connecticut law, the assets of the Separate Account are held
exclusively for the benefit of Owners and persons entitled to payments under the
Group Policies and
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 9
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the Certificates and owners of any other policies which may be available through
the Separate Account. The assets of the Separate Account are owned by Hartford
and the obligations under the Group Policies and the Certificates are
obligations of Hartford. These assets are held separately from the other assets
of Hartford and income, gains and losses incurred on the assets in the Separate
Account, whether or not realized, are credited to or charged against the
Separate Account without regard to other income, gains or losses of Hartford
(except to the extent that assets in the Separate Account exceed the reserves
and other liabilities of the Separate Account). Therefore, the investment
performance of the Separate Account is entirely independent of the investment
performance of the General Account assets or any other separate account
maintained by Hartford.
The Separate Account has 13 Investment Divisions dedicated to the Group
Policies, each of which invests solely in a corresponding Portfolio of the
Funds. Additional Investment Divisions may be established at the discretion of
Hartford. The Separate Account may include other divisions which will not be
available under the Group Policies.
THE FUNDS
GENERAL
The shares of the Portfolios are sold by the Funds to the Separate Account.
The assets of the Separate Account attributable to the Group Policies are
invested exclusively in the Investment Divisions. An Owner may allocate Net
Premium payments among the Investment Divisions. Owners should review the brief
descriptions of the investment objectives of each of the Portfolios in
connection with that allocation. See "The Funds -- The Portfolios," page 10.
Each Fund continually issues an unlimited number of full and fractional
shares of beneficial interest in the relevant Portfolios. In addition to being
offered to the Separate Account, each Fund's shares are or may be offered to
other separate accounts funding variable annuity contracts and variable life
insurance policies issued by Hartford or its affiliates and to separate accounts
of other insurance companies. It is conceivable that in the future it may become
disadvantageous for both variable annuity and variable life insurance separate
accounts or for separate accounts of other life insurance companies to invest in
shares of the Funds simultaneously. Although neither Hartford nor any of the
Funds currently foresee any such disadvantage, each Fund's Board of Trustees
will monitor events in order to identify any material conflict between different
variable annuity and variable life owners and to determine what action, if any,
should be taken in response thereto, including the possible withdrawal of the
Separate Account's participation in any of the Funds. Material conflicts could
result from such things as (1) changes in state insurance law, (2) changes in
federal income tax law, (3) changes in the investment management of any
Portfolio of the Funds, or (4) differences between voting instructions given by
variable annuity and variable life owners. If the Boards of Trustees were to
conclude that separate underlying funds should be established for variable
annuity and variable life insurance separate accounts, Hartford will bear the
attendant expenses.
All investment income of, and other distributions to, each Investment
Division arising from the applicable Portfolio are reinvested in shares of that
Portfolio at net asset value. Hartford will purchase Portfolio shares in
connection with Net Premium payments allocated to the applicable Investment
Division in accordance with Owners' instructions and will redeem Portfolio
shares to meet obligations under the Group Policies and the Certificates or make
adjustments in reserves, if any. The Funds are required to redeem Portfolio
shares at net asset value and generally to make payment within seven (7)
calendar days.
Applicants should read each of the Fund prospectuses accompanying this
Prospectus in connection with the purchase of a Certificate.
VARIABLE INSURANCE PRODUCTS FUND ("VIP"),
VARIABLE INSURANCE PRODUCTS FUND II ("VIP II")
AND VARIABLE INSURANCE PRODUCTS FUND III ("VIP III") (EACH,
A "FIDELITY FUND" AND COLLECTIVELY, THE "FIDELITY FUNDS").
The Separate Account currently invests in the Fidelity Funds. The Fidelity
Funds are diversified, open-end management investment companies organized as
Massachusetts business trusts by Fidelity Management & Research Company ("FMR")
and registered under the 1940 Act. The Fidelity Funds consist of several
investment portfolios, including VIP Equity-Income Portfolio, VIP High Income
Portfolio, VIP Money Market Portfolio, VIP II Asset Manager Portfolio, and VIP
III Growth Opportunities Portfolio, which are available as part of Pegasus
Provider.
Each Fidelity Fund is composed of multiple classes of shares with a common
investment objective and investment portfolio. The original class ("Original
Class") of shares is offered at net asset value and is not subject to a 12b-1
fee. The service class ("Service Class") shares are offered at net asset value
and are subject to a 12b-1 fee. Each class of shares is offered through its own
prospectus. Service Class shares of VIP Equity-Income Portfolio, VIP High Income
Portfolio, VIP II Asset Manager Portfolio, and VIP III Growth Opportunities
Portfolio and Original Class shares of VIP Money Market Portfolio are available
under the Group Policy.
The Fidelity Funds are each managed by FMR. FMR is one of America's largest
investment management organizations. It is composed of a number of different
companies, which provide a variety of financial services and products. FMR is
the original Fidelity company, founded in 1946. It provides a number of mutual
funds and other clients with investment research and portfolio management
services.
<PAGE>
10 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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PEGASUS VARIABLE FUNDS
The Separate Account currently invests in shares of the Pegasus Variable
Funds, a diversified open-end management investment company registered under the
1940 Act and organized as a Delaware business trust. The Pegasus Variable Funds
consists of seven series, including Pegasus Bond Fund, Pegasus Growth and Value
Fund, Pegasus Mid-Cap Opportunity Fund, Pegasus Growth Fund and Pegasus
Intrinsic Value Fund, which are available as part of Pegasus Provider.
First Chicago NBD Investment Management Company ("FCNIMCO") is the
investment adviser to Pegasus Variable Funds. FCNIMCO is a wholly-owned
subsidiary of The First National Bank of Chicago, which, in turn, is a
wholly-owned subsidiary of First Chicago NBD Corporation, a registered bank
holding company. Included among FCNIMCO's accounts are pension and
profit-sharing funds for major corporations and state and local governments,
commingled trust funds and a variety of institutional and personal advisory
accounts, estates and trusts, either directly or through investment services
provided through its bank affiliates. FCNIMCO also acts as investment adviser
for other registered investment companies and investment company portfolios.
PUTNAM VARIABLE TRUST
The Separate Account currently invests in shares of Putnam Variable Trust, a
diversified open-end management investment company registered under the 1940 Act
and organized as a Massachusetts business trust. Putnam Variable Trust consists
of sixteen funds, including Putnam VT International Growth Fund, Putnam VT Vista
Fund and Putnam VT Voyager Fund, which are available as part of Pegasus
Provider.
Putnam Investment Management, Inc. ("Putnam Management") serves as the
investment manager of Putnam Variable Trust. An affiliate, The Putnam Advisory
Company, Inc., manages domestic and foreign institutional accounts and mutual
funds. Another affiliate, Putnam Fiduciary Trust Company, provides investment
advice to institutional clients under its banking and fiduciary policies. Putnam
Management and its affiliates are wholly-owned subsidiaries of Marsh & McLennan
Companies, Inc., a publicly owned holding company whose principal businesses are
international insurance brokerage and employee benefit consulting.
THE PORTFOLIOS
VIP HIGH INCOME PORTFOLIO
VIP High Income Portfolio seeks high current income primarily through
investments in all types of income-producing debt securities, preferred stocks
and convertible securities. Although the Portfolio has no limits on the quality
and maturity of its investments, its strategy typically leads to longer-term,
lower-quality, fixed-income securities. These domestic and foreign investments
may present the risk of default or may be in default.
VIP EQUITY-INCOME PORTFOLIO
VIP Equity-Income Portfolio seeks reasonable income by investing primarily
in income-producing equity securities. In choosing these securities, the
Portfolio will also consider the potential for capital appreciation. This
Portfolio's goal is to achieve a yield which exceeds the composite yield on the
securities comprising the Standard & Poor's Composite Index of 500 Stocks
(commonly referred to as "S&P 500"). The Portfolio may invest in high yielding,
lower-rated securities (commonly referred to as "junk bonds") which are subject
to greater risk than investments in higher-rated securities.
VIP MONEY MARKET PORTFOLIO
VIP Money Market Portfolio seeks as high a level of current income as is
consistent with preserving capital and providing liquidity. The Portfolio will
invest only in high-quality U.S. dollar denominated money market instruments of
domestic and foreign issuers. An investment in the Portfolio is not insured or
guaranteed by the U.S. Government, and there can be no assurance that the
Portfolio will maintain a stable asset value per share of $1.00.
VIP II ASSET MANAGER PORTFOLIO
VIP II Asset Manager Portfolio seeks high total return with reduced risk
over the long-term by allocating its assets among domestic and foreign stocks,
bonds and short-term instruments.
VIP III GROWTH OPPORTUNITIES PORTFOLIO
VIP III Growth Opportunities Portfolio seeks to provide capital growth by
investing primarily in common stocks and securities convertible into common
stocks. The Portfolio also has the ability to purchase other securities, such as
preferred stock and bonds, that may produce capital growth, and may invest in
foreign securities without limitation.
PEGASUS BOND FUND
Pegasus Bond Fund seeks to maximize total rate of return by investing
predominantly in intermediate and long-term debt instruments.
PEGASUS GROWTH AND VALUE FUND
Pegasus Growth and Value Fund seeks long-term capital growth, with income as
a secondary consideration, by investing primarily in equity securities of larger
companies that are attractively priced relative to their growth potential.
PEGASUS MID-CAP OPPORTUNITY FUND
Pegasus Mid-Cap Opportunity Fund seeks long-term capital appreciation by
investing primarily in equity securities of companies with intermediate market
capitalizations.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 11
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PEGASUS GROWTH FUND
Pegasus Growth Fund seeks long-term capital appreciation by investing
primarily in equity securities of domestic issuers believed by FCNIMCO to have
above-average growth characteristics.
PEGASUS INTRINSIC VALUE FUND
Pegasus Intrinsic Value Fund seeks long-term capital appreciation by
investing primarily in equity securities believed by FCNIMCO to represent a
value or potential worth which is not fully recognized by prevailing market
prices.
PUTNAM VT INTERNATIONAL GROWTH FUND
Putnam VT International Growth Fund seeks capital appreciation by investing
primarily in equity securities of companies located in countries other than the
United States.
PUTNAM VT VISTA FUND
Putnam VT Vista Fund seeks capital appreciation by investing in a
diversified portfolio of common stocks which Putnam Management believes have the
potential for above-average capital appreciation.
PUTNAM VT VOYAGER FUND
Putnam VT Voyager Fund seeks capital appreciation by investing primarily in
common stocks of companies that Putnam Management believes have potential for
capital appreciation that is significantly greater than that of market averages.
There is no assurance that any Portfolio will achieve its stated objectives.
Owners are also advised to read the prospectuses for each of the Funds
accompanying this Prospectus for more detailed information. Each Fund is subject
to certain investment restrictions which may not be changed without the approval
of a majority of the shareholders of the Fund. See the accompanying prospectuses
for each of the Funds.
DETAILED DESCRIPTION
OF CERTIFICATE BENEFITS
AND PROVISIONS
GENERAL
This Prospectus describes a flexible premium group variable life insurance
policy where the Owner has considerable flexibility in selecting the timing and
amount of premium payments.
ISSUANCE OF A CERTIFICATE
Certificates will only be offered to eligible employees when provided by the
Participating Employer. Individuals wishing to purchase a Certificate must
complete an Enrollment Form In Writing, which must be received by Our Customer
Service Center before a Certificate will be issued. A Certificate will not be
issued with a specified Face Amount of less than the minimum Face Amount.
Acceptance is subject to Hartford's underwriting rules then in effect. Hartford
reserves the right to reject an Enrollment Form for any reason permitted by law.
There are two circumstances under which a Certificate may be issued with a
backdated Coverage Date. The first involves Group Policy rollovers from Section
1035 exchanges under the Code. Backdating will occur in order to prevent a gap
in coverage under the Certificate. Charges and deductions (other than those of
the Portfolios) will be made for the period the Coverage Date is backdated;
however, the Owner will not experience investment return during that time.
Backdating will also occur when an application accompanied by the Initial
Premium is received by Us but issuance of a Certificate is subject to Our
insurance underwriting requirements. The initial Net Premium will be allocated
according to the applicant's initial premium allocation during the underwriting
period, except in those states where the initial Net Premium will be allocated
to the Fidelity VIP Money Market Investment Division. See "Premiums --
Allocation of Premium Payments" below. If the Insured meets Our underwriting
requirements, a Certificate will be issued with a backdated Coverage Date.
Charges and deductions (other than those of the Portfolios) will be made for the
backdated period. If the Insured does not meet Our underwriting requirements, no
Certificate will be issued and no coverage will have been in effect. A
conditional receipt will be given to the applicant reflecting receipt of the
Initial Premium and outlining any interim coverage in effect until the
Certificate is either issued or declined.
Backdating may only be permitted in certain states.
PREMIUMS
PREMIUM PAYMENT FLEXIBILITY
A significant feature of the Certificate is that once the desired level and
pattern of the Death Benefit have been determined, the Owner has considerable
flexibility in the selection of the timing and amount of premiums to be paid and
can choose the level of premiums, within a range determined by Hartford, based
on the Face Amount of the Certificate, the Insured's sex (except where unisex
rates apply), Issue Age, and the Insured's risk classification.
A minimum Initial Premium, as set forth in the Certificate, is due on the
Coverage Date. Unless determined
<PAGE>
12 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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otherwise by Hartford, the amount of the minimum Initial Premium is the amount
which, after the deductions for sales load, state premium tax, and DAC tax
charge, is sufficient (disregarding investment performance) to pay twelve (12)
times the first Monthly Deduction Amount. Thereafter, additional premiums may be
paid at any time, subject to the premium limitations set forth by the Code as
indicated in the section entitled "Premium Limitation," page 13. You have the
right to pay additional premiums of at least $500.00 at any time.
ALLOCATION OF PREMIUM PAYMENTS
If the state of issue of Your Certificate requires that We return Your
Initial Premium, We will allocate the initial Net Premium when Your Certificate
is issued to the Fidelity VIP Money Market Investment Division until the
expiration of the right to examine period. Upon the expiration of the right to
examine period, the initial Net Premium will, at a later date, be invested
according to Your initial allocation instructions (except that any accrued
interest will remain in the Fidelity VIP Money Market Investment Division if it
is selected as an initial allocation option). This later date is the later of
ten (10) calendar days after We receive the Initial Premium and the date We
receive the final requirement to put the Certificate in force. The Certificates
are credited with units ("Accumulation Units") in each selected Investment
Division, the assets of which are invested in the corresponding underlying
Portfolio. An Owner may transfer funds among the Investment Divisions subject to
certain restrictions. See "Detailed Description of Certificate Benefits and
Provisions -- Transfers Among Investment Divisions," page 13. Any additional
premiums received by Us prior to such date will be allocated to the Fidelity VIP
Money Market Investment Division.
Alternatively, if the state of issue of Your Certificate provides for Our
return of the Certificate's Cash Value to the Owner, We will allocate the
initial Net Premium immediately among Your chosen Investment Divisions. In that
case You will bear full investment risk for any amounts allocated to the
Investment Divisions during the right to examine period. (Please note that this
automatic immediate investment feature only applies if Your Certificate so
specifies. Please check with Your agent to determine the status of Your
Certificate.)
Upon written request, You may change the premium allocation. Portions
allocated to the Investment Divisions must be whole percentages of 5% or more.
Subsequent Net Premiums will be allocated among Investment Divisions according
to Your most recent instructions, subject to the following. If We receive a
premium and Your most recent allocation instructions would violate the 5%
requirement, We will allocate the Net Premium among the Investment Divisions
according to Your previous premium allocation. If the asset rebalancing option
is in effect, Net Premiums will be allocated accordingly until that option is
terminated. See "Transfers Among Investment Divisions -- Asset Rebalancing,"
page 14.
The Owner will receive several different types of notification as to what
his or her current premium allocation is. The initial allocation chosen by the
Owner on the Enrollment Form is shown in the Certificate. In addition, every
transactional confirmation generated after a premium payment is received will
show how that premium has been allocated. A Certificate's annual statement will
also summarize the current premium allocation in effect for that Certificate.
ACCUMULATION UNITS
Net Premiums allocated to the Investment Divisions are used to credit
Accumulation Units under the Certificate.
The number of Accumulation Units in each Investment Division to be credited
under the Certificate (including the initial allocation to the Fidelity VIP
Money Market Investment Division) will be determined first by multiplying the
Net Premium by the appropriate allocation percentage to determine the portion to
be invested in the Investment Division. Each portion to be invested in an
Investment Division is then divided by the Accumulation Unit Value of that
particular Investment Division next computed following receipt of the payment.
ACCUMULATION UNIT VALUES
The Accumulation Unit value for each Investment Division will vary daily to
reflect the investment experience of the applicable Portfolio, as well as the
daily deduction for mortality and expense risks, and will be determined on each
Valuation Day by multiplying the Accumulation Unit value of the particular
Investment Division on the preceding Valuation Day by a net investment factor
for that Investment Division for the Valuation Period then ended. The net
investment factor for each of the Investment Divisions is equal to the net asset
value per share of the corresponding Portfolio at the end of the Valuation
Period (plus the per share amount of any dividend or capital gain distributions
paid by that Portfolio in the Valuation Period then ended) divided by the net
asset value per share of the corresponding Portfolio at the beginning of the
Valuation Period, less the daily deduction for the mortality and expense risks
assumed by Hartford.
All valuations in connection with a Certificate, e.g., with respect to
determining Cash Value and Investment Value, or calculating the Death Benefit,
or with respect to determining the number of Accumulation Units to be credited
to a Certificate with each premium payment, other than the Initial Premium, will
be made on the date the request or payment is received by Hartford at the
Customer Service Center if such date is a Valuation Day; otherwise such
determination will be made on the next succeeding date which is a Valuation Day.
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 13
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PREMIUM LIMITATION
If premiums are received which would cause the Certificate to fail to meet
the definition of a life insurance policy in accordance with the Code, We will
refund the excess premium payments. We will refund such premium payments and
interest thereon within sixty (60) days after the end of a Coverage Year.
A premium payment that results in an increase in the Death Benefit greater
than the amount of the premium will be accepted only after We approve evidence
of insurability.
VALUES UNDER THE CERTIFICATE
As with traditional life insurance, each Certificate will have a Cash
Surrender Value. The Cash Surrender Value is equal to the Cash Value, less Debt,
less any charges accrued but not deducted. There is no minimum guaranteed Cash
Surrender Value. The Cash Value equals the value in the Investment Divisions
plus the Loan Account Value.
Each Certificate will also have an Investment Value. The Investment Value of
a Certificate changes on a daily basis and will be computed on each Valuation
Day. The Investment Value will vary to reflect the investment experience of the
Investment Divisions, Monthly Deduction Amounts and any amounts transferred to
the Loan Account to secure a Loan.
The Investment Value of a particular Certificate is related to the net asset
value of the Portfolios associated with the Investment Divisions to which Net
Premiums on the Certificate have been allocated. The total Investment Value in
the Investment Divisions on any Valuation Day is calculated by multiplying the
number of Accumulation Units in each Investment Division as of the Valuation Day
by the current Accumulation Unit value of that Investment Division and then
summing the result for all the Investment Divisions. The Investment Value equals
the sum of the values of the assets in the Investment Divisions. See "Premiums
- -- Accumulation Unit Values," page 12.
SURRENDER OF THE CERTIFICATE
At any time prior to the Maturity Date, provided the Certificate is in
effect and has a Cash Surrender Value, the Owner may choose, without the consent
of the Beneficiary (provided the designation of the Beneficiary is not
irrevocable) to surrender the Certificate and receive the full Cash Surrender
Value from Us. To surrender a Certificate, You must submit a request for
surrender In Writing. We will determine the Cash Surrender Value as of the
Valuation Day We receive the request In Writing at Our Customer Service Center,
or the date requested by the Owner, whichever is later.
The Cash Surrender Value, which is the net amount available upon surrender
of the Certificate, equals the Cash Value, less Debt, less any charges accrued
but not yet deducted. The Certificate will terminate on the date of receipt of
the written request, or the date the Owner requests the surrender to be
effective, whichever is later.
The Cash Surrender Value may be paid in cash or allocated to any other
payment option agreed upon by Us.
PARTIAL WITHDRAWALS
At any time before the Maturity Date, and subject to Hartford's rules then
in effect, up to twelve (12) partial withdrawals are allowed per Coverage Year;
however, only one (1) partial withdrawal is allowed between any successive
Processing Dates. The minimum partial withdrawal allowed is $500.00. The maximum
partial withdrawal is an amount equal to the sum of the Cash Surrender Value
plus outstanding Debt, multiplied by .90, less outstanding Debt. Hartford
currently imposes a charge for processing partial withdrawals which is the
lesser of 2% of the amount withdrawn or $25.00. A partial withdrawal will reduce
the Cash Surrender Value, Cash Value and Investment Value. Any partial
withdrawal will have a permanent effect on the Cash Surrender Value and may have
a permanent effect on the Death Benefit payable. If Death Benefit Option A is in
effect, the Face Amount is reduced by the amount of the partial withdrawal.
Unless specified otherwise, partial withdrawals will be deducted on a Pro Rata
Basis from the Investment Divisions. Requests for partial withdrawals must be
made In Writing to Us. The effective date of a partial withdrawal will be the
Valuation Day We receive the request In Writing at Our Customer Service Center.
A 10% penalty tax may be imposed on income distributed before the insured
attains age 59 1/2. See "Federal Tax Considerations -- Modified Endowment
Contracts," page 26.
TRANSFERS AMONG INVESTMENT DIVISIONS
AMOUNT AND FREQUENCY OF TRANSFERS
Upon request and as long as the Certificate is in effect, You may transfer
amounts among the Investment Divisions, without charge, up to twelve (12) times
per Coverage Year. Transfers in excess of twelve (12) per Coverage Year will be
subject to a charge of $50 per transfer deducted from the amount of the
transfer. Transfer requests must be In Writing on a form approved by Hartford or
by telephone in accordance with established procedures. The amounts which may be
transferred will be limited by Our rules then in effect. Currently, the minimum
value of Accumulation Units that may be transferred from one Investment Division
to another is the lesser of (i) $500 or (ii) the total value of the Accumulation
Units in the Investment Division. The value of the remaining Accumulation Units
in the Investment Division must equal at least $500. If, after an ordered
transfer, the value of the remaining Accumulation Units in an Investment
Division would be less than $500, the entire value will be transferred.
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14 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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Currently there are no restrictions on transfers other than those described
herein. Hartford reserves the right in the future to impose additional
restrictions on transfers.
TRANSFERS TO OR FROM INVESTMENT DIVISIONS
In the event of a transfer from an Investment Division, the number of
Accumulation Units credited to the Investment Division from which the transfer
is made will be reduced. The reduction will be determined by dividing:
1. the amount transferred by,
2. the Accumulation Unit value for that Investment Division on the Valuation
Day We receive Your request for transfer In Writing.
In the event of a transfer to an Investment Division, We will increase the
number of Accumulation Units credited thereto. The increase will equal:
1. the amount transferred divided by,
2. the Accumulation Unit value for that Investment Division determined on the
Valuation Day We receive Your request for transfer In Writing.
ASSET REBALANCING
Subject to Our rules then in effect, an Owner may authorize Hartford to
automatically reallocate Investment Value periodically in order to maintain a
particular percentage allocation among the Investment Divisions as selected by
the Owner ("Asset Rebalancing"). The Investment Value held in each Investment
Division will increase or decrease in value at different rates during the
relevant period. Asset Rebalancing is intended to reallocate Investment Value
from those Investment Divisions that have increased in value to those that have
decreased in value.
To elect Asset Rebalancing, a request In Writing must be received by
Hartford. If Asset Rebalancing is elected, all Investment Value must be included
in the automatic reallocation. The percentages selected under Asset Rebalancing
will override any prior percentage allocations chosen by the Owner and all
future Net Premiums will be allocated accordingly. Once elected, an Owner may
instruct Hartford In Writing at any time to terminate the option. In addition,
any transfer made outside of Asset Rebalancing will terminate the option.
PROCEDURES FOR TELEPHONE TRANSFERS
Owners may effect telephone transfers in two ways. All Owners may directly
contact a customer service representative. Owners may in the future also request
access to an electronic service known as a Voice Response Unit (VRU). The VRU
will permit the transfer of monies among the Investment Divisions and change of
the allocation of future payments. All Owners intending to conduct telephone
transfers through the VRU will be asked to complete a Telephone Authorization
Form.
Hartford will undertake reasonable procedures to confirm that instructions
communicated by telephone are genuine. Before a customer service representative
accepts any request, the caller will be asked for his or her social security
number and address. All calls will also be recorded. A Personal Identification
Number (PIN) will be assigned to all Owners who request VRU access. The PIN is
selected by and known only to the Owner. Proper entry of the PIN is required
before any transactions will be allowed through the VRU. Furthermore, all
transactions performed over the VRU, as well as with a customer service
representative, will be confirmed by Hartford through a written letter.
Moreover, all VRU transactions will be assigned a unique confirmation number
which will become part of the Certificate's history. Hartford is not liable for
any loss, cost or expense for action on telephone instructions which are
believed to be genuine in accordance with these procedures.
VALUATION OF PAYMENTS AND TRANSFERS
We value the Certificate on every Valuation Day.
We will generally pay Death Proceeds, Cash Surrender Values, partial
withdrawals, and Loan amounts attributable to the Investment Divisions within
seven (7) calendar days after We receive all the information needed to process
the payment unless the NYSE is closed for other than a regular holiday or
weekend, trading is restricted by the SEC or the SEC declares that an emergency
exists.
Hartford may defer payment of any amounts not attributable to the Investment
Divisions for up to six months from the date on which We receive the request.
PROCESSING OF TRANSACTIONS
Generally, transactions initiated by an Owner will be processed only on a
Valuation Day. Requests received by Hartford on a Valuation Day by 3:00 p.m.
Eastern Time will be processed as of that day, except as otherwise indicated in
this Prospectus. Requests received after 3:00 p.m. Eastern Time will be
processed as of the next Valuation Day.
LOANS
As long as the Certificate is in effect, an Owner may obtain, without the
consent of the Beneficiary (provided the designation of Beneficiary is not
irrevocable), a cash Loan from Hartford. The maximum Loan amount is equal to the
sum of the Cash Surrender Value plus outstanding Debt, multiplied by .90, less
outstanding Debt.
The amount of each Loan will be transferred on a Pro-Rata Basis from each of
the Investment Divisions (unless the Owner specifies otherwise) to the Loan
Account. The Loan Account is the mechanism used to ensure that any outstanding
Debt remains fully secured by the Investment Value.
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 15
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LOAN INTEREST
Interest will accrue daily on outstanding Debt at the Adjustable Loan
Interest Rate indicated in the Certificate. The difference between the value of
the Loan Account and any outstanding Debt will be transferred from the
Investment Divisions to the Loan Account on each Certificate Anniversary.
Interest payments are due as shown on the Certificate Specifications. If
interest is not paid within 5 days of its due date, it will be added to the
amount of the Loan as of its due date.
The maximum Adjustable Loan Interest Rate We may charge for Loans is the
greater of 5% and the Published Monthly Average for the calendar month two
months prior to the date on which the Adjustable Loan Interest Rate is
determined. The Published Monthly Average means the "Moody's Corporate Bond
Yield Average -- Monthly Average Corporate" as published by Moody's Investors
Service, Inc. or any successor to that service. If that monthly average is no
longer published, a substitute average will be used.
CREDITED INTEREST
Amounts in the Loan Account for Coverage Years 1 through 10 will be credited
with interest at a rate equal to the Adjustable Loan Interest Rate then in
effect, minus 1%. Amounts in the Loan Account for Coverage Years 11 and later
will be credited with interest at a rate equal to the Adjustable Loan Interest
Rate then in effect, minus .20%.
LOAN REPAYMENTS
You can repay any part of or the entire Loan at any time. The amount of the
Loan repayment will be allocated to Your chosen Investment Divisions on a Pro
Rata Basis, determined as of the date of the Loan repayment. Unless specified
otherwise, additional premium payments received by Hartford during the period
when a Loan is outstanding will be treated as Loan repayments.
TERMINATION DUE TO EXCESSIVE DEBT
If total Debt outstanding equals or exceeds the Cash Surrender Value, the
Certificate will terminate thirty-one (31) calendar days after We have mailed
notice to Your last known address and that of any assignees of record. If
sufficient Loan repayment is not made by the end of this 31-day period, the
Certificate will end without value.
EFFECT OF LOANS ON INVESTMENT VALUE
A Loan, whether or not repaid, will have a permanent effect on the
Investment Value because the investment results of each Investment Division will
apply only to the amount remaining in such Investment Divisions. The longer a
Loan is outstanding, the greater the effect is likely to be. The effect could be
favorable or unfavorable. If the Investment Divisions earn more than the annual
interest rate for funds held in the Loan Account, an Owner's Investment Value
will not increase as rapidly as it would have had no Loan been made. If the
Investment Divisions earn less than the Loan Account, the Owner's Investment
Value will be greater than it would have been had no Loan been made. Also, if
not repaid, the aggregate amount of outstanding Debt will reduce the Death
Proceeds and Cash Surrender Value otherwise payable.
DEATH BENEFIT
As long as the Certificate remains in force, the Certificate provides for
the payment of the Death Proceeds to the named Beneficiary when the Insured
under the Certificate dies. The Death Proceeds payable to the Beneficiary equal
the Death Benefit less any Debt outstanding under the Certificate plus any rider
benefits payable. The Death Benefit depends on the Death Benefit option You
select and is determined as of the date of the death of the Insured.
MINIMUM DEATH BENEFIT TESTING PROCEDURES
Section 7702 of the Code defines alternative testing procedures, the
guideline premium test ("GPT") and the cash value accumulation test ("CVAT") in
order to meet the definition of life insurance under the Code. See "Federal Tax
Considerations -- Income Taxation of Certificate Benefits." Each Certificate
must qualify under either the GPT or the CVAT. Prior to issue, the Owner chooses
the procedure under which a Certificate will qualify. Once either the GPT or the
CVAT is chosen to test a Certificate, it cannot be changed while the Certificate
is in force.
Under both testing procedures, there is a minimum Death Benefit required at
all times equal to the Variable Insurance Amount. The factors used to determine
the Variable Insurance Amount depend on the testing procedure chosen and are set
forth in the Certificate.
Under the GPT, there is also a maximum amount of premium which may be paid
with respect to each Certificate.
Use of the CVAT can be advantageous if an Owner intends to maximize the
total amount of premiums paid under a Certificate. An offsetting consideration,
however, is that the higher premium permitted under the CVAT will generally also
require a higher Death Benefit and, thus, a higher total cost of insurance.
DEATH BENEFIT OPTIONS
Regardless of the minimum death benefit testing procedure chosen, there are
two Death Benefit options: Death Benefit Option A and Death Benefit Option B.
1. Under Death Benefit Option A, the Death Benefit is the greater of (a) the
Face Amount and (b) the Variable Insurance Amount.
2. Under Death Benefit Option B, the Death Benefit is the greater of (a) the
Face Amount plus the Cash Value and (b) the Variable Insurance Amount.
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16 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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Regardless of which Death Benefit option You select, the maximum amount
payable under such option will be the Death Proceeds.
OPTION CHANGE
While the Certificate is in force, You may change the Death Benefit option
selected under a Certificate by making a request In Writing during the lifetime
of the Insured. If the change is from Death Benefit Option A to Death Benefit
Option B, satisfactory evidence of insurability must be provided to Hartford.
The Face Amount after the change will be equal to the Face Amount before the
change, less the Cash Value on the effective date of the change. If the change
is from Death Benefit Option B to Death Benefit Option A, the Face Amount after
the change will be equal to the Face Amount before the change plus the Cash
Value on the effective date of change. Any change in the selection of a Death
Benefit option will become effective at the beginning of the Coverage Month
following Hartford's approval of such change. We will notify You that the change
has been made.
All or part of the Death Proceeds may be paid in cash or applied under one
of the payment options described below.
PAYMENT OPTIONS
Death Proceeds under the Certificate may be paid in a lump sum or may be
applied to one of Hartford's payment options. The minimum amount that may be
placed under a payment option is $5,000 unless Hartford consents to a lesser
amount. Once payments under payment options 2, 3 or 4 commence, no surrender of
the Certificate may be made for the purpose of receiving a lump sum settlement
in lieu of the life insurance payments. The following options are available
under the Certificates:
FIRST OPTION -- Interest Income
Payments of interest at the rate We declare, but not less than 3% per year,
on the amount applied under this option.
SECOND OPTION -- Income of Fixed Amount
Equal payments of the amount chosen until the amount applied under this
option, with interest of not less than 3% per year, is exhausted. The final
payment will be for the balance remaining.
THIRD OPTION -- Payments for a Fixed Period
An amount payable monthly for the number of years selected which may be from
1 to 30 years.
FOURTH OPTION -- Life Income
LIFE ANNUITY -- an annuity payable monthly during the lifetime of the
Annuitant and terminating with the last monthly payment due preceding the
death of the Annuitant. Under this option, it is possible that only one
monthly annuity payment would be made, if the Annuitant died before the second
monthly annuity payment was due.
LIFE ANNUITY WITH 120 MONTHLY PAYMENTS CERTAIN -- an annuity providing monthly
income to the Annuitant for a fixed period of 120 months and for as long
thereafter as the Annuitant shall live.
The fourth payment option is based on the 1983a Individual Annuity Mortality
Table set back one year and a net investment rate of 3% per annum. The amount of
each payment under this option will depend upon the age of the Annuitant at the
time the first payment is due. If any periodic payment due any payee is less
than $200, Hartford may make payments less often. The first, second and third
payment options are based on a net investment rate of 3% per annum. Hartford
may, however, from time to time, at Our discretion if mortality appears more
favorable and interest rates justify, apply other tables which will result in
higher monthly payments for each $1,000 applied under one or more of the four
payment options.
Hartford will make any other arrangements for income payments as may be
agreed on.
LEGAL DEVELOPMENTS REGARDING INCOME PAYMENTS
In those states affected by the 1983 Supreme Court decision in Arizona
Governing Committee v. Norris, income payment options involving life income are
based on unisex actuarial tables. In addition, legislation has previously been
introduced in Congress which, had it been enacted, would have required the use
of tables that do not vary on the basis of sex for some or all annuities.
Currently, several states have enacted such laws.
BENEFICIARY
The Owner names the Beneficiary in the Enrollment Form for the Certificate.
The Owner may change the Beneficiary (unless irrevocably named) during the
Insured's lifetime by written request to Hartford. If no Beneficiary is living
when the Insured dies, the Death Proceeds will be paid to the Owner if living;
otherwise to the Owner's estate.
INCREASES AND DECREASES IN FACE AMOUNT
The minimum Face Amount of the Certificate is $50,000. At any time after
purchasing a Certificate, the Owner may request a change in the Face Amount by
making a request In Writing to Hartford and directing such request to Hartford's
Customer Service Center.
All requests to increase the Face Amount must be applied for on a new
Enrollment Form. All requests will be subject to evidence of insurability
satisfactory to Hartford and subject to Our rules then in effect. Any increase
approved by Us will be effective on the Processing Date following the date We
approve the request. The Monthly Deduction Amount on the first Processing Date
on or after the effective date of the increase will reflect a charge for the
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 17
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increase. A decrease in the Face Amount will be effective on the first
Processing Date following the date We receive the request. Decreases must reduce
the Face Amount by at least $25,000, and the remaining Face Amount must not be
less than $50,000. Decreases will be applied:
(a) to the most recent increase; then
(b) successively to each prior increase, and then
(c) to the initial Face Amount.
We reserve the right to limit the number of Face Amount increases or
decreases made under the Certificate to no more than one in any twelve (12)
month period.
BENEFITS AT MATURITY
If the Insured is living on the Maturity Date, on surrender of the
Certificate to Hartford, Hartford will pay to the Owner the Cash Surrender Value
on the date the Certificate is surrendered. However, on the Maturity Date, the
Certificate will terminate and Hartford will have no further obligations under
the Certificate.
TERMINATION OF PARTICIPATION
IN THE GROUP POLICY
Participation in the Group Policy may be terminated by Hartford or the
Participating Employer. The party initiating the termination must provide notice
of such termination to each Owner of record, at his or her last known address,
at least fifteen (15) days prior to the date of termination. In the event of
such termination, no new Enrollment Forms for new Insureds will be accepted on
or after the date notice of discontinuance is received or sent by Hartford,
whichever is applicable, nor will any new Certificates be issued. If premium
payments are discontinued, Hartford will continue insurance coverage under the
Certificate as long as the Cash Surrender Value is sufficient to cover the
charges due. This continuation of insurance will not continue the coverage under
the Certificate beyond Attained Age 100, nor will it continue any optional
benefit rider beyond the Certificate's date of termination. If the Group Policy
is discontinued or amended to discontinue the eligible class to which an Insured
belongs (and if the coverage on the Insured is not transferred to another
insurance carrier), any Certificate then in effect will remain in force under
the discontinued Group Policy, provided it is not canceled or surrendered by the
Owner, subject to Hartford's qualifications then in effect.
LAPSE AND REINSTATEMENT WHILE
THE GROUP POLICY IS IN EFFECT
LAPSE AND GRACE PERIOD
A Grace Period will follow the date We mail notice to the Owner that the
Cash Surrender Value is insufficient to pay the charges due under the
Certificate. Unless the Owner has given Hartford written notice of termination
in advance of the date of termination of the Certificate, insurance will
continue in force during the Grace Period. The Owner will be liable to Hartford
for all charges due under the Certificate then unpaid for the period the
Certificate remains in force.
In the event that total Debt outstanding equals or exceeds the Cash
Surrender Value, the Certificate will terminate thirty-one (31) calendar days
after We have mailed notice to Your last known address and that of any assignees
of record. If sufficient Loan repayment is not made by the end of this 31-day
period, the Certificate will end without value.
REINSTATEMENT
Prior to the death of the Insured, and unless (i) the Group Policy is
terminated (see "Termination of Participation in the Group Policy" above) or
(ii) the Certificate has been surrendered for cash, the Certificate may be
reinstated prior to the Maturity Date, provided:
(a) you make Your request within three (3) years of the date of lapse; and
(b) satisfactory evidence of insurability is submitted.
To reinstate Your Certificate, you must remit a premium payment large enough
to keep the coverage under the Certificate in force for at least three (3)
months following the date of reinstatement. The Face Amount of the reinstated
Certificate cannot exceed the Face Amount at the time of lapse. The Investment
Value on the reinstatement date will reflect:
(a) The Investment Value at the time of termination; plus
(b) Net Premiums attributable to premiums paid at the time of reinstatement.
Upon reinstatement, any Debt at the time of termination must be repaid or
carried over to the reinstated Certificate.
ENROLLMENT FOR A CERTIFICATE
Individuals wishing to purchase a Certificate must submit an Enrollment Form
to Hartford. Within limits, an applicant may choose the Initial Premium and the
initial Face Amount. A Certificate generally will be issued only on the lives of
Insureds Attained Age 79 and under who supply evidence of insurability
satisfactory to Hartford. Acceptance is subject to Hartford's underwriting rules
and Hartford reserves the right to reject an Enrollment Form for any reason. No
change in the terms or conditions of a Certificate will be made without the
consent of the Owner.
The Certificate will be effective on the Coverage Date only after Hartford
has received all outstanding delivery requirements and received the Initial
Premium. The
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18 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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Coverage Date is the date used to determine all future cyclical transactions on
the Certificate, e.g., Processing Date, Coverage Months and Coverage Years.
THE RIGHT TO EXAMINE THE CERTIFICATE
An Owner has a limited right to return a Certificate. Subject to applicable
state regulation, if the Certificate is returned, by mail or personal delivery
to Hartford or to the agent who sold the Certificate, to be canceled within ten
(10) calendar days after delivery of the Certificate to the Owner, Hartford will
return either (i) the total amount of premiums or (ii) the Cash Value plus
charges deducted under the Certificate to the Owner within seven (7) days. If
the state where Your Certificate is issued requires that We return Your Initial
Premium, We will allocate Your initial Net Premium to the Fidelity VIP Money
Market Investment Division. If the state of issue of Your Certificate provides
for Our return of the Certificate's Cash Value to the Owner, We will allocate
the initial Net Premium immediately among Your chosen Investment Divisions.
DEDUCTIONS FROM PREMIUM
Before allocating the Net Premium to the Investment Divisions, a deduction
as a percentage of premium is made for the front-end sales load, premium taxes
and the DAC tax charge. The amount of each premium allocated to the Investment
Divisions is Your Net Premium.
FRONT-END SALES LOAD
The current front-end sales load is 6.75% of any premium paid for Coverage
Years 1 through 7 and 4.75% of any premium paid in Coverage Years 8 and later.
The maximum front-end sales load is 9% of any premium paid in Coverage Years 1
through 7 and 7% of any premium paid in Coverage Years 8 and later.
Front-end sales loads cover expenses related to the sale and distribution of
the Certificates. The front-end sales load may be reduced for certain sales of
the Certificates under circumstances which result in a saving of such sales and
distribution expenses. To qualify for such a reduction, a plan must satisfy
certain criteria as to, for example, the expected number of Owners and the
anticipated Face Amount of all Certificates under the plan. Generally, the sales
contacts and effort and administrative costs per Certificate vary based on such
factors as the size of the plan, the purpose for which Certificates are
purchased and certain characteristics of the plan's members. The amount of
reduction and the criteria for qualification are related to the reduced sales
effort and administrative costs resulting from sales to qualifying plans.
Hartford may modify from time to time on a uniform basis both the amounts of
reductions and the criteria for qualification. Reductions in these charges will
not be unfairly discriminatory against any person, including the affected Owners
funded by the Separate Account.
PREMIUM RELATED TAX CHARGE
We deduct a percentage of each premium to cover taxes assessed against
Hartford that are attributable to premiums. This percentage will vary by locale
depending on the tax rates in effect there. The range of premium taxes actually
deducted by Hartford currently ranges from 0% to 4%.
DAC TAX CHARGE
Hartford deducts 1.25% of each premium to cover a federal premium tax
assessed against Hartford. This charge is reasonable in relation to Hartford's
federal income tax burden, under Section 848 of the Code, resulting from the
receipt of premiums. We will adjust this charge based on changes in the
applicable tax law.
DEDUCTIONS AND CHARGES
FROM INVESTMENT VALUE
MONTHLY DEDUCTION AMOUNT
On the Coverage Date and on each subsequent Processing Date, Hartford will
deduct the Monthly Deduction Amount from the Investment Value to cover certain
charges and expenses incurred in connection with a Certificate. The Monthly
Deduction Amount will vary from month to month. It will be taken from the Charge
Deduction Division, if designated in the Enrollment Form for the Certificate or
later elected.
If a Charge Deduction Division has been designated but the Investment Value
in the Charge Deduction Division is less than that required to cover all charges
due on such date:
(1) Hartford will apply the Investment Value of the Charge Deduction Division to
the charges due and set the Investment Value in the Charge Deduction
Division to zero; and
(2) any additional amount due will be allocated among the remaining Investment
Divisions on a Pro Rata Basis.
If no Charge Deduction Division has been designated or elected, any amounts
due will be allocated among the Owner's chosen Investment Divisions on a Pro
Rata Basis.
The Monthly Deduction Amount equals:
(a) the administrative expense charge; plus
(b) the charges for cost of insurance; plus
(c) the charges for additional benefits provided by rider, if any.
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(A) Monthly Administrative Fee and Other Expense Charges
Hartford will assess a monthly administrative charge to compensate Hartford
for administrative costs in connection with the Certificates. This charge will
be $5 per Coverage Month initially and is guaranteed never to exceed $10.00 per
Coverage Month.
(B) Cost of Insurance Charge
The charge for the cost of insurance is equal to:
(i) the cost of insurance rate per $1,000; multiplied by
(ii) the Net Amount at Risk; divided by
(iii) $1,000.
The Net Amount at Risk equals the Death Benefit less the Cash Value on
that date.
The cost of insurance charge is to cover Hartford's anticipated mortality
costs. Hartford uses various underwriting procedures, including medical
underwriting procedures, depending on the characteristics of the group to
which the Group Policies are issued. The current cost of insurance rates for
standard risks may be equal to or less than the 1980 Commissioners Standard
Ordinary Mortality Table. Substandard risks will be charged a higher cost of
insurance rate that will not exceed rates based on a multiple of the 1980
Commissioners Standard Ordinary Mortality Table. The multiple will be based
on the Insured's risk class. The use of simplified underwriting and
guaranteed issue procedures may result in the cost of insurance charges
being higher for some individuals than if medical underwriting procedures
were used.
Cost of insurance rates are based on the age, sex (except where unisex
rates apply), and rate class of the Insured and group mortality
characteristics and the particular characteristics (such as the rate class
structure) under the Group Policy that are agreed to by Hartford and the
Participating Employer. The actual monthly cost of insurance rates will be
based on Hartford's expectations as to future experience. Hartford will
determine the cost of insurance rate at the start of each Coverage Year. Any
changes in the cost of insurance rate will be made uniformly for all
Insureds in the same risk class.
The rate class of an Insured affects the cost of insurance rate. Hartford
and the Participating Employer will agree to the number of classes and
characteristics of each class. The classes may vary by smokers and
nonsmokers, active and retired status, and/or any other nondiscriminatory
classes agreed to by the Participating Employer. Where smoker and non-smoker
divisions are provided, an Insured who is in the nonsmoker division of a
rate class will have a lower cost of insurance than an Insured in the smoker
division of the same rate class, even if each Insured has an identical
Certificate.
Because the Cash Value and the Death Benefit Amount under a Certificate
may vary from month to month, the cost of insurance charge may also vary on
each Processing Date.
(C) Rider Charge
If the Certificate includes riders, a charge is deducted from the
Investment Value on each Processing Date. The charge applicable to a rider
is specified on the rider and is to compensate Hartford for the anticipated
cost of providing the benefits thereunder.
The riders available are described on page 21 under "Supplemental
Benefits."
MORTALITY AND EXPENSE RISK CHARGE
A charge is made for mortality and expense risks assumed by Hartford.
Hartford currently deducts a daily charge for Coverage Years 1 through 10 at an
effective annual rate of .65% of the value of each Investment Division's assets
and for Coverage Years 11 and later at an effective annual rate of .50% of an
Investment Division's assets. In no event will the charge exceed .65% of an
Investment Division's assets on an annual basis. See also "Premiums --
Accumulation Unit Values," page 12.
The mortality and expense risk charge is equal to:
(i) the mortality and expense risk rate; multiplied by
(ii) the portion of the Cash Value allocated to the Investment Divisions and
the Loan Account.
The mortality risk assumed is that the actual cost of insurance charges
specified in the Certificate will be insufficient to meet actual claims. The
expense risk assumed is that expenses incurred in issuing and administering the
Certificates will exceed the administrative charges set forth therein.
If these charges are insufficient to cover actual costs and assumed risks,
the loss will fall on Hartford. Conversely, if the charge proves more than
sufficient, any excess will be added to Hartford's surplus.
TAXES
Currently, no charge is made to the Separate Account for federal, state, and
local taxes that may be attributable to the Separate Account. A change in the
applicable federal, state or local tax laws which impose tax on Hartford and/or
the Separate Account may result in a charge against the Certificates in the
future. Charges for other taxes, if any, attributable to the Separate Account
may also be made.
<PAGE>
20 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
OTHER MATTERS
ADDITIONS, DELETIONS OR
SUBSTITUTIONS OF INVESTMENTS
Hartford reserves the right, subject to compliance with the law as then in
effect, to make additions to, deletions from, or substitutions for the Separate
Account and the Investment Divisions which fund the Group Policies. If shares of
any of the Portfolios should no longer be available for investment, or if, in
the judgment of Hartford's management, further investment in shares of any
Portfolio should become inappropriate in view of the purposes of the Group
Policies, Hartford may substitute shares of another Portfolio for shares already
purchased, or to be purchased in the future, under the Group Policies. No
substitution of securities will take place without notice to and consent of
Owners and without prior approval of the SEC to the extent required by the 1940
Act. Subject to Owner approval, if required, Hartford also reserves the right to
end the registration under the 1940 Act of the Separate Account or any other
separate accounts of which it is the depositor which may fund the Group
Policies.
VOTING RIGHTS
In accordance with its view of presently applicable law, Hartford will vote
the shares of the Funds at regular and special meetings of the shareholders of
the Funds in accordance with instructions from Owners (or the assignee of the
Certificates, as the case may be) having a voting interest in the Separate
Account. The number of shares held in the Separate Account which are
attributable to each Owner is determined by dividing the Owner's interest in
each Investment Division by the net asset value of the applicable shares of the
Funds. Hartford will vote shares for which no instructions have been given and
shares which are not attributable to Owners (i.e., shares owned by Hartford) in
the same proportion as it votes shares for which it has received instructions.
If the 1940 Act or any rule promulgated thereunder should be amended, however,
or if Hartford's present interpretation should change and, as a result, Hartford
determines it is permitted to vote the shares of the Funds in its own right, it
may elect to do so.
The voting interests of the Owners (or the assignees) in the Funds will be
determined as follows: Owners may cast one vote for each full or fractional
Accumulation Unit owned under their respective Certificates and allocated to an
Investment Division the assets of which are invested in the particular Fund on
the record date for the shareholder meeting for that Fund. If, however, an Owner
has taken a Loan secured by the Certificate, amounts transferred from the
Investment Division(s) to the Loan Account(s) in connection with the Loan (see
"Detailed Description of Certificate Benefits and Provisions -- Loans," page 14)
will not be considered in determining the voting interests of the Owner. Owners
should review the prospectuses for the Funds which accompany this Prospectus to
determine matters on which shareholders may vote.
Hartford may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as to cause a change in the sub-classification or investment objective
of one or more of the Funds or to approve or disapprove an investment advisory
policy for the Funds. In addition, Hartford itself may disregard voting
instructions in favor of changes initiated by an Owner in the investment policy
or the investment adviser of the Funds if Hartford reasonably disapproves of
such changes. A change would be disapproved only if the proposed change is
contrary to state law or prohibited by state regulatory authorities. In the
event Hartford does disregard voting instructions, a summary of that action and
the reasons for such action will be included in the next periodic report to
Owners.
OUR RIGHTS
We reserve the right to take certain actions in connection with Our
operations and the operations of the Separate Account. These actions will be
taken in accordance with applicable laws (including obtaining any required
approval of the SEC). If necessary, We will seek approval by Owners.
Specifically, We reserve the right to:
- - Add or remove any Investment Division;
- - Create new separate accounts;
- - Combine the Separate Account with one or more other separate accounts;
- - Operate the Separate Account as a management investment company under the 1940
Act or in any other form permitted by law;
- - Deregister the Separate Account under the 1940 Act;
- - Manage the Separate Account under the direction of a committee or discharge
such committee at any time;
- - Transfer the assets of the Separate Account to one or more other separate
accounts; and
- - Restrict or eliminate any of the voting rights of Owners or other persons who
have voting rights as to the Separate Account.
Hartford also reserves the right to change the name of the Separate Account.
We have reserved all rights to the name of Hartford Life and Annuity
Insurance Company or any part of it. We may allow the Separate Account and other
entities to use Our name or part of it, but We may also withdraw this right.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 21
- --------------------------------------------------------------------------------
STATEMENTS TO OWNERS
We will send You a statement at least once each Coverage Year, showing:
(a) the current Cash Value, Cash Surrender Value and Face Amount;
(b) the premiums paid, Monthly Deduction Amounts and Loans since the last
report;
(c) the amount of any outstanding Debt;
(d) notifications required by the provisions of the Certificate; and
(e) any other information required by the Insurance Department of the State
where the Certificate was delivered.
LIMIT ON RIGHT TO CONTEST
Hartford may not contest the validity of the Certificate after it has been
in effect during the Insured's lifetime for two years from the Issue Date. If
the Certificate is reinstated, the two-year period is measured from the date of
reinstatement. Any increase in the Face Amount as a result of a premium payment
is contestable for two years from its effective date. In addition, if the
Insured commits suicide in the two-year period, or such period as specified in
state law, the Death Benefit payable will be limited to the premiums paid less
any outstanding Debt and partial withdrawals.
MISSTATEMENT AS TO AGE OR SEX
If the age or sex of the Insured is incorrectly stated, the amount of all
benefits payable will be appropriately adjusted, as specified in the
Certificate.
ASSIGNMENT
The Certificate may be assigned as collateral for a loan or other
obligation. Hartford is not responsible for any payment made or action taken
before receipt of written notice of such assignment. Proof of interest must be
filed with any claim under a collateral assignment.
DIVIDENDS
No dividends will be paid under the Certificates.
EXPERIENCE CREDITS
The Certificates issued under a Group Policy may be eligible for experience
credits due to administrative savings. The amount of any experience credit may
be paid in cash or applied to and used to increase the Investment Value.
SUPPLEMENTAL BENEFITS
The following supplemental benefit may in the future be included in a
Certificate, subject to the restrictions and limitations set forth therein.
MATURITY DATE EXTENSION RIDER
We will extend the Maturity Date (the date on which the Certificate will
mature), to the date of death of the Insured. Certain Death Benefit and premium
restrictions apply. See "Federal Tax Considerations -- Income Taxation of
Certificate Benefits," page 26.
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- -----------------------------------------------------------
<S> <C> <C>
Bossen, Wendell J., 64 Vice President, 1995** Vice President (1992-Present), Hartford Life and Accident
Insurance Company; Vice President (1992-Present),
Hartford Life Insurance Company; President
(1992-Present), International Corporate Marketing Group,
Inc.
</TABLE>
<PAGE>
22 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- -----------------------------------------------------------
<S> <C> <C>
Boyko, Gregory A., 46 Senior Vice President, Chief Vice President & Controller (1995-1997), Hartford; Director
Financial Officer & (1997-Present); Senior Vice President, Chief Financial
Treasurer, 1997 Officer & Treasurer (1997-Present); Vice President &
Director, 1997* Controller (1995-1997), Hartford Life and Accident
Insurance Company; Director (1997-Present); Senior Vice
President, Chief Financial Officer & Treasurer
(1997-Present); Vice President and Controller
(1995-1997), Hartford Life Insurance Company; Senior Vice
President, Chief Financial Officer & Treasurer
(1997-Present), Hartford Life, Inc.; Chief Financial
Officer (1994-1995) IMG American Life; Senior Vice
President (1992-1994), Connecticut Mutual Life Insurance
Company.
Cummins, Peter W., 60 Senior Vice President, 1997 Vice President (1993-1997), Hartford; Senior Vice
President, (1997-Present); Vice President (1989-1997),
Hartford Life and Accident Insurance Company; Senior Vice
President (1997-Present); Vice President (1989-1997);
Senior Vice President (1997-Present); Vice President
(1989-1997), Hartford Life Insurance Company.
deRaismes, Ann M., 47 Senior Vice President, 1997 Vice President (1994-1997), Hartford; Senior Vice President
Director of Human Resources, (1997-Present); Vice President (1994-1997); Assistant
1994 Vice President (1992-1994); Director of Human Resources
(1991-Present), Hartford Life and Accident Insurance
Company; Senior Vice President (1997-Present); Vice
President (1994-1997); Assistant Vice President
(1992-1994); Director of Human Resources (1991-Present),
Hartford Life Insurance Company; Vice President, Human
Resources (1997-Present), Hartford Life, Inc.
Dooley, James R., 61 Vice President, 1993 Director, Information Services (1973-1997), Hartford Life
Insurance Company.
Fitch, Timothy M., 45 Vice President, 1995 Vice President, (1995-Present); Actuary (1994-Present)
Actuary, 1997 Assistant Vice President (1992-1995), Hartford Life and
Accident Insurance Company; Vice President
(1995-Present); Actuary (1994-Present); Assistant Vice
President (1992-1995), Hartford Life Insurance Company.
Foy, David T., 31 Vice President, 1998 Assistant Vice President (1995-1998), Hartford; Vice
President (1998-Present); Assistant Vice President
(1995-1998), Hartford Life Insurance Company.
Garrett, J. Richard, 53 Vice President, 1994 Treasurer (1994-1997), Hartford; Vice President
Assistant Treasurer, 1997 (1993-Present); Assistant Treasurer (1997-Present);
Treasurer (1984-1997), Hartford Life and Accident
Insurance Company; Vice President, (1993-Present);
Assistant Treasurer (1997-Present); Treasurer
(1986-1997), Hartford Life Insurance Company; Vice
President (1997-Present), Hartford Life, Inc.
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 23
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- -----------------------------------------------------------
<S> <C> <C>
Gillette, Donald J., 52 Vice President, 1997 Assistant Vice President, (1995-1997), Hartford; Assistant
Vice President (1995-1997), Hartford Life and Accident
Insurance Company; Assistant Vice President
(1995-Present), Hartford Life Insurance Company.
Godfrey, William A., III, 41 Senior Vice President, 1997 Senior Vice President (1997-Present), Hartford; Senior Vice
President (1997-Present), Hartford Life and Accident
Insurance Company; Vice President Information Technology
(1997-Present), Hartford Life, Inc.
Godkin, Lynda, 44 Senior Vice President, 1997 Assistant General Counsel and Secretary (1994-1995),
General Counsel, 1996 Hartford; Director (1997-Present); Senior Vice President
Corporate Secretary, 1996 (1997-Present); General Counsel (1996-Present); Corporate
Director, 1997* Secretary (1995-Present); Associate General Counsel
(1995-1996); Assistant General Counsel and Secretary
(1994-1995); Counsel (1990-1994), Hartford Life and
Accident Insurance Company; Senior Vice President
(1997-Present); General Counsel (1996-Present); Corporate
Secretary (1995-Present); Director (1997-Present);
Associate General Counsel (1995-1996); Assistant General
Counsel and Secretary (1994-1995); Counsel (1990-1994),
Hartford Life Insurance Company; Vice President and
General Counsel (1997-Present), Hartford Life, Inc.
Grady, Lois W., 53 Senior Vice President, 1998 Senior Vice President (1998-Present); Vice President
Vice President, 1994 (1993-1997); Assistant Vice President (1987-1993),
Hartford Life and Accident Insurance Company; Senior Vice
President (1998-Present); Vice President (1993-1997);
Assistant Vice President (1987-1993), Hartford Life
Insurance Company.
Graham, Christopher, 47 Vice President, 1997
Hunt, Mark E., 37 Vice President, 1998 Assistant Vice President (1997-1998), Hartford; Vice
President (1998-Present), Hartford Life and Accident
Insurance Company.
Joyce, Stephen T., 39 Vice President, 1997 Assistant Vice President (1995-1997), Hartford; Assistant
Vice President (1994-1997), Hartford Life and Accident
Insurance Company; Vice President (1997-Present);
Assistant Vice President (1994-1997), Hartford Life
Insurance Company.
Keeler, Michael D., 37 Vice President, 1998 Vice President (1998-Present); Hartford Life and Accident
Insurance Company.
Kerzner, Robert A., 46 Senior Vice President, 1998 Senior Vice President (1998-Present); Vice President
Vice President, 1997 (1994-1998), Hartford; Senior Vice President
(1998-Present); Vice President (1994-1997); Regional Vice
President (1991-1994), Hartford Life Insurance Company.
Levenson, David N., 31 Vice President, 1998 Assistant Vice President (1997-1998), Hartford.
</TABLE>
<PAGE>
24 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- -----------------------------------------------------------
<S> <C> <C>
Malchodi, Jr., William B., 50 Vice President, 1994 [Director of Taxes (1992-1998), Hartford;] Vice President
Director of Taxes, 1992 [delete?] (1994-Present); Director of Taxes (1992-[1998] Present),
Hartford Life and Accident Insurance Company; Vice
President (1994-Present); Director of Taxes
(1991-Present), Hartford Life Insurance Company.
Marra, Thomas M., 38 Executive Vice President, 1996 Senior Vice President (1993-1996); Director of Individual
Director, Individual Life Annuities (1991-1993), Hartford; Director (1994-Present);
and Annuity Division, 1993 Executive Vice President (1995-Present); Director,
Director, 1994* Individual Life and Annuity Division (1994-Present);
Senior Vice President (1994-1995); Vice President
(1989-1994); Actuary (1987-1997), Hartford Life and
Accident Insurance Company; Director (1994-Present);
Executive Vice President (1995-Present); Director,
Individual Life and Annuity Division (1994-Present);
Senior Vice President (1994-1995); Vice President
(1989-1994); Actuary (1987-1995), Hartford Life Insurance
Company; Executive Vice President, Individual Life and
Annuities (1997-Present), Hartford Life, Inc.
Matthieson, Steven L., 53 Vice President, 1984 Director of New Business (1984-1997), Hartford.
O'Halloran, C. Michael, 51 Vice President, 1997 Vice President (1997-Present), Hartford Life and Accident
Insurance Company; Vice President (1997-Present),
Hartford Life Insurance Company; Corporate Secretary
(1997-Present), Hartford Life, Inc.; Senior Associate
General Counsel (1988-Present), Director of Corporate Law
(1994-Present), The Hartford Financial Services Group.
O'Sullivan, Daniel E., 43 Vice President, 1998 Vice President (1998-Present), Hartford; Vice President
(1988-Present), Hartford Life Insurance Company.
Raymond, Craig R., 37 Senior Vice President, 1997 Vice President (1993-1997); Assistant Vice President
Chief Actuary, 1994 (1992-1993); Actuary (1989-1994), Hartford; Senior Vice
President (1997-Present); Chief Actuary (1995-Present);
Vice President (1993-1997); Actuary (1990-1995), Hartford
Life and Accident Insurance Company; Senior Vice
President (1997-Present); Chief Actuary (1994-Present);
Vice President (1993-1997); Assistant Vice President
(1992-1993); Actuary (1989-1994), Hartford Life Insurance
Company; Vice President and Chief Actuary (1997-Present),
Hartford Life, Inc.
Schrandt, David T., 50 Vice President, 1987 Treasurer (1987-1997); Controller (1987-1997), Hartford.
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 25
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- -----------------------------------------------------------
<S> <C> <C>
Smith, Lowndes A., 58 President, 1989 Chief Operating Officer (1989-1997), Hartford; Director
Chief Executive Officer, 1997 (1981-Present); President (1989-Present); Chief Executive
Director, 1985* Officer (1997-Present); Chief Operating Officer
(1989-1997), Hartford Life and Accident Insurance
Company; Director (1981-Present); President
(1989-Present), Chief Executive Officer (1997-Present);
Chief Operating Officer (1989-1997), Hartford Life
Insurance Company; Chief Executive Officer and President
and Director (1997-Present), Hartford Life, Inc.
Welsh, Walter C., 51 Senior Vice President, 1997 Senior Vice President (1997-Present); Vice President
(1994-1997); Assistant Vice President (1992-1995),
Hartford Life and Accident Insurance Company; Senior Vice
President (1997-Present); Vice President (1995-1997);
Assistant Vice President (1992-1995), Hartford Life
Insurance Company; Vice President, Government Affairs
(1997-Present), Hartford Life, Inc.
Znamierowski, David M., 38 Senior Vice President, 1997 Director (1998-Present); Senior Vice President
Director, 1998 (1997-Present), Hartford Life and Accident Insurance
Company; Director (1998-Present); Senior Vice President
(1997-Present); Director, Risk Management Strategy
(1996-Present); Vice President (1997), Hartford Life
Insurance Company; Vice President, Investment Strategy
(1997-Present), Hartford Life, Inc.; Vice President,
Investment Strategy & Policy, Aetna Life and Casualty
Company.
- ---------
* Denotes date of election to Board of Directors of Hartford.
** Affiliated Company of The Hartford Financial Services Group, Inc.
</TABLE>
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford,
CT 06104-2999.
DISTRIBUTION OF
THE GROUP POLICY
Hartford intends to sell the Group Policy in all jurisdictions where it is
licensed to do business. The Group Policy will be sold by life insurance sales
representatives who represent Hartford and who are registered representatives of
Hartford Equity Sales Company, Inc.("HESCO"), or certain other registered
Broker-Dealers. Any sales representative or employee will have been qualified to
sell variable life insurance policies under applicable Federal and State laws.
Each Broker-Dealer is registered with the SEC under the Securities Exchange Act
of 1934 and all are members of the National Association of Securities Dealers,
Inc. HESCO is the principal underwriter for the Group Policy. The maximum sales
commission payable to Hartford agents, independent registered insurance brokers,
and other registered Broker-Dealers is 6% of the premiums paid. In addition,
expense allowances, service fees and asset-based trail commissions may be paid.
The sales representative may be required to return all or a portion of the
commissions paid if a Certificate terminates prior to the second Certificate
Anniversary.
SAFEKEEPING OF THE SEPARATE
ACCOUNT ASSETS
The assets of the Separate Account are held by Hartford. The assets of the
Separate Account are kept physically segregated and held separate and apart from
the General Account of Hartford. Hartford maintains records of all purchases and
redemptions of shares of the Fund. Additional protection for the assets of the
Separate Account is afforded by Hartford's
<PAGE>
26 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
blanket fidelity bond issued by Aetna Casualty and Surety Company, in the
aggregate amount of $50 million, covering all of the officers and employees of
Hartford.
FEDERAL TAX CONSIDERATIONS
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE OWNER INVOLVED AND THE TYPE OF PLAN UNDER WHICH THE
GROUP POLICY IS PURCHASED, LEGAL AND TAX ADVICE MAY BE NEEDED BY A PERSON,
TRUSTEE OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A GROUP POLICY DESCRIBED
HEREIN.
It should be understood that any detailed description of the Federal income
tax consequences regarding the purchase of the Group Policy cannot be made in
this Prospectus and that special tax rules may be applicable with respect to
certain purchase situations not discussed herein. In addition, no attempt is
made here to consider any applicable state or other tax laws. For detailed
information, a qualified tax adviser should always be consulted. This discussion
of Federal tax considerations is based upon Hartford's understanding of current
Federal income tax laws as they are currently interpreted.
TAXATION OF HARTFORD AND
THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford which is taxed as a life
insurance company under Part 1 of Subchapter L of Chapter 1 of the Internal
Revenue Code ("Code"). Accordingly, the Separate Account will not be taxed as a
"regulated investment company" under Subchapter M of the Code. Investment income
and realized capital gains on the assets of the Separate Account (the underlying
Investment Divisions) are reinvested and are taken into account in determining
the value of the Accumulation Units (see "Detailed Description of Certificate
Benefits and Provisions -- Values Under the Certificate," on page 13). As a
result, such investment income and realized capital gains are automatically
applied to increase reserves under the Certificate.
Hartford does not expect to incur any Federal income tax on the earnings or
realized capital gains attributable to the Separate Account. Based upon these
expectations, no charge is currently being made to the Separate Account for
Federal income taxes. If Hartford incurs income taxes attributable to the
Separate Account or determines that such taxes will be incurred, it may assess a
charge for taxes against the Separate Account.
INCOME TAXATION OF CERTIFICATE BENEFITS
For Federal income tax purposes, the Certificates should be treated as life
insurance policies under Section 7702 of the Code. The death benefit under a
life insurance policy is excluded from the gross income of the Beneficiary.
Also, a life insurance policy owner is not taxed on increments in the policy
value until the policy is partially or completely surrendered. Section 7702
limits the amount of premiums that may be invested in a policy that is treated
as life insurance. Hartford intends to monitor premium levels to assure
compliance with the Section 7702 standards.
During the first fifteen policy years, an "income first" rule generally
applies to any distribution of cash that is required under Code Section 7702
because of a reduction in benefits under the Certificate.
Hartford also believes that any Loan received under a Certificate will be
treated as Debt of the Owner, and that no part of any Loan under a Certificate
will constitute income to the Owner. A surrender or assignment of the
Certificate may have tax consequences depending upon the circumstances. Owners
should consult qualified tax advisers concerning the effect of such changes.
Federal, state, and local estate tax, inheritance, and other tax
consequences of ownership or receipt of Certificate proceeds depend on the
circumstances of each Owner or Beneficiary.
The Maturity Date Extension Rider allows an Owner to extend the Maturity
Date to the date of the death of the Insured. Although Hartford believes that
the Certificate will continue to be treated as a life insurance contract for
federal income tax purposes after the scheduled Maturity Date, due to the lack
of specific guidance on this issue, this result is not certain. If the
Certificate is not treated as a life insurance contract for federal income tax
purposes after the Maturity Date, among other things, the Death Proceeds may be
taxable to the recipient. The Owner should consult a competent tax adviser
regarding the possible adverse tax consequences resulting from an extension of
the scheduled Maturity Date.
MODIFIED ENDOWMENT CONTRACTS
Code Section 7702A applies an additional test, the "seven-pay" test, to life
insurance contracts. A modified endowment contract is a life insurance policy
which satisfies the Section 7702 definition of life insurance but fails the
seven-pay test of Section 7702A. A policy fails the seven-pay test if the
accumulated amount paid into the Certificate at any time during the first seven
Coverage Years exceeds the sum of the net level premiums that would have been
paid up to that point if the Certificate provided for paid-up future benefits
after the payment of seven level annual premiums.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 27
- --------------------------------------------------------------------------------
Computational rules for the seven-pay test are described in Section 7702A(c).
A policy that is classified as a modified endowment contract is eligible for
certain aspects of the beneficial tax treatment accorded to life insurance. That
is, the death benefit is excluded from income and increments in value are not
subject to current taxation. However, withdrawals and loans from a modified
endowment policy are treated first as income, then as a recovery of basis.
Taxable withdrawals are subject to a 10% additional tax, with certain
exceptions. Generally, only distributions and loans made in the first year in
which a policy becomes a modified endowment policy, and in subsequent years, are
taxable. However, distributions and loans made in the two years prior to a
policy's failing the seven-pay test are deemed to be in anticipation of failure
and are subject to tax.
If the Certificate satisfies the seven-pay test for seven years,
distributions and loans made thereafter will not be subject to the modified
endowment policy rules, unless the Certificate is changed materially. The
seven-pay test will be applied anew at any time the Certificate undergoes a
material change, which includes an increase in the Face Amount.
All modified endowment policies that are issued within any calendar year to
the same policy owner by one company or its affiliates shall be treated as one
modified endowment policy for the purpose of determining the taxable portion of
any loan or distribution.
Hartford has instituted procedures to monitor whether a Certificate may
become a modified endowment contract after issue.
DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable life insurance policy
(other than a pension plan policy) will not be treated as a life insurance
policy for any period during which the investments made by the separate account
underlying the policy are not adequately diversified in accordance with
regulations prescribed by the Treasury. If a policy is not treated as a life
insurance policy, the policy owner will be subject to income tax on the annual
increases in cash value. The Treasury has issued diversification regulations
which, among other things, generally require that no more than 55% of the value
of the total assets of the segregated asset account (such as the Funds)
underlying a variable contract is represented by any one investment, no more
than 70% is represented by any two investments, no more than 80% is represented
by any three investments, and no more than 90% is represented by any four
investments. In determining whether the diversification standards are met, all
securities of the same issuer, all interests in the same real property project,
and all interests in the same commodity are each treated as a single investment.
In addition, in the case of government securities, each government agency or
instrumentality shall be treated as a separate issuer. If the diversification
standards are not met, non-pension policy owners will be subject to current tax
on the increase in cash value in the policy.
A separate account must be in compliance with the diversification standards
on the last day of each calendar quarter or within 30 days after the quarter
ends. If an insurance company inadvertently fails to meet the diversification
requirements, Hartford may comply within a reasonable period and avoid the
taxation of policy income on an ongoing basis. However, either Hartford or Owner
must agree to pay the tax due for the period during which the diversification
standards were not met. The amount required to be paid shall be an amount based
upon the tax that would have been owed by the policy owner if they were treated
as receiving the income on the policy for such period or periods.
FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the Owner, such
amounts will be subject to Federal income tax withholding and reporting,
pursuant to Section 3405 of the Internal Revenue Code.
OTHER TAX CONSIDERATIONS
Qualified tax advisers should be consulted concerning the estate and gift
tax consequences of Certificate ownership and distributions under federal, state
and local law.
LEGAL PROCEEDINGS
There are no material legal proceedings pending to which the Separate
Account is a party.
EXPERTS
The audited statutory-basis financial statements included in this prospectus
and elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report. Reference is made to said report on the
statutory-basis financial statements of Hartford which states the
statutory-basis financial statements are presented in accordance with statutory
accounting practices prescribed or permitted by the National Association of
Insurance Commissioners and the State of Connecticut Insurance Department, not
presented in accordance with generally accepted accounting principles. The
principal business address of Arthur Andersen LLP is One Financial Plaza,
Hartford, Connecticut 06103.
<PAGE>
28 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
The hypothetical illustrations included in this Prospectus and Registration
Statement have been approved by Pauline Gyllenhammer, ASA, MAAA, Senior
Actuarial Associate, are included in reliance upon her opinion as to their
reasonableness.
REGISTRATION STATEMENT
A registration statement has been filed with the SEC under the Securities
Act of 1933, as amended. This Prospectus does not contain all information set
forth in the registration statement, its amendments and exhibits, to all of
which reference is made for further information concerning the Separate Account,
Hartford, the Group Policies and the Certificates.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
----------------------------------
This Registration Statement comprises the following papers and documents:
The facing sheet.
The prospectuses consisting of 58 pages.
The undertaking to file reports.
The Rule 484 undertaking.
The signatures.
(1) The following exhibits included herewith correspond to those required by
paragraph A of the instructions for exhibits to Form N-8B-2.
(A1) Resolution of Board of Directors of Hartford Life and Annuity
Insurance Company ("Hartford") authorizing the establishment of
the Separate Account. (1)
(A2) Not applicable.
(A3a) Principal Underwriting Agreement. (1)
(A3b) Form of Selling Agreements. (2)
(A3c) Not Applicable.
(A4) Not Applicable.
(A5) Form of Certificate for Group Flexible Premium Variable Life
Insurance Policy. (1)
(A6a) Charter of Hartford.
(A6b) Bylaws of Hartford. (2)
(A7) Not Applicable.
- -----------------
(1) Incorporated by reference to the Initial Submission to the
Registration Statement File No. 33-63731, filed on October 30,
1995.
(2) Incorporated by reference to the Pre-Effective Amendment No. 1 to
the Registration Statement File No. 33-63731, filed on May 21,
1996.
<PAGE>
(A8) Not Applicable.
(A9) Not Applicable.
(A10) Form of Enrollment Form for Certificate Issued Under Group
Flexible Premium Variable Life Insurance Policies. 1
(A11) Memorandum describing transfer and redemption procedures. 1
(2) Opinion and Counsel of Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary.
(3) No financial statement will be omitted from the Prospectus pursuant to
Instruction 1(b) or (c) of Part I.
(4) Not applicable.
(5) To be filed by amendment.
(6) Financial Statement will be provided by amendment.
(7) Power of Attorney.
<PAGE>
REPRESENTATION OF REASONABLENESS OF FEES
----------------------------------------
Hartford Life and Annuity Insurance Company ("Hartford") hereby represents that
the aggregate fees and charges under the Policy are reasonable in relation to
the services rendered, the expenses expected to be incurred, and the risks
assumed by Hartford.
UNDERTAKING TO FILE REPORTS
---------------------------
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
UNDERTAKINGS AND REPRESENTATIONS AS REQUIRED BY RULE 6e-3(T)
- ------------------------------------------------------------
1. ICMG Registered Variable Life Separate Account One meets the definition
of "Separate Account" under Rule 6e-3(T).
2. Hartford undertakes to keep and make available to the Commission upon
request any documents used to support the any representation in as to the
reasonableness of fees.
UNDERTAKING ON INDEMNIFICATION
------------------------------
Under Section 33-772 of the Connecticut General Statutes, unless limited by
its certificate of incorporation, the Registrant must indemnify a director
who was wholly successful, on the merits or otherwise, in the defense of any
proceeding to which he was a party because he is or was a director of the
corporation against reasonable expenses incurred by him in connection with
the proceeding.
The Registrant may indemnify an individual made a party to a proceeding
because he is or was a director against liability incurred in the proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Registrant, and, with respect to any
criminal proceeding, had no reason to believe his conduct was unlawful. Conn.
Gen. Stat. Section 33-771(a). Additionally, pursuant to Conn. Gen. Stat.
Section 33-776, the Registrant may indemnify officers and employees or agents
for liability incurred and for any expenses to which they becomes subject by
reason of being or having been an employees or officers of the Registrant.
Connecticut law does not prescribe standards for the indemnification of
officers, employees and agents and expressly states that their
indemnification may be broader than the right of indemnification granted to
directors.
The foregoing statements are specifically made subject to the detailed
provisions of Section 33-770 et seq.
<PAGE>
Notwithstanding the fact that Connecticut law obligates the Registrant to
indemnify only a director that was successful on the merits in a suit, under
Article VIII, Section 2 of the Registrant's bylaws, the Registrant must
indemnify both directors and officers of the Registrant who are parties or
threatened to be parties to a legal proceeding by reason of his being or
having been a director or officer of the Registrant for any expenses if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the company, and with respect to criminal
proceedings, had no reason to believe his conduct was unlawful. Unless
otherwise mandated by a court, no indemnification shall be made if such
officer or director is adjudged to be liable for negligence or misconduct in
the performance of his duty to the Registrant.
Additionally, the directors and officers of Hartford and Hartford Securities
Distribution Company, Inc. ("HSD") are covered under a directors and officers
liability insurance policy issued to The Hartford Financial Services Group,
Inc. and its subsidiaries. Such policy will reimburse the Registrant for any
payments that it shall make to directors and officers pursuant to law and
will, subject to certain exclusions contained in the policy, further pay any
other costs, charges and expenses and settlements and judgments arising from
any proceeding involving any director or officer of the Registrant in his
past or present capacity as such, and for which he may be liable, except as
to any liabilities arising from acts that are deemed to be uninsurable.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, and its seal to be herewith affixed and attested, all in the city
of Simsbury, and the State of Connecticut on the 17th day of February 1998.
HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY ICMG REGISTERED VARIABLE LIFE
SEPARATE ACCOUNT ONE
(Registrant)
By: /s/ Gregory A. Boyko
---------------------------------------
Gregory A. Boyko, Senior Vice President,
Chief Financial Officer and Treasurer
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
(Depositor)
By: /s/ Gregory A. Boyko
---------------------------------------
Gregory A. Boyko, Senior Vice President,
Chief Financial Officer and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons and in the capacities and
on the dates indicated.
Gregory A. Boyko, Senior Vice
President, Chief Financial Officer and
Treasurer, Director *
Lynda Godkin, Senior Vice President
General Counsel and Corporate
Secretary, Director*
Thomas M. Marra, Executive Vice *By: /s/ Lynda Godkin
President and Director , Individual -----------------
Life and Annuity Division, Director * Lynda Godkin
Lowndes A. Smith, President and Attorney-In-Fact
Chief Executive Officer,
Director * Dated: February 17, 1998
-----------------
(ICMG VUL)
<PAGE>
EXHIBIT INDEX
--------------
(A6a) Charter of Hartford
(2) Opinion and Consent of Lynda Godkin, Senior Vice President,
General Counsel and Corporate Secretary
(7) Power of Attorney
<PAGE>
EXHIBIT 6(a)
FILING #0001734855 PG 03 OF OS VOL B-00133
FILED 07/11/1997 11:32 AM PAGE 03683
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
FIRST AMENDMENT TO AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION BY ACTIONS OF THE
BOARD OF DIRECTORS AND THE SOLE SHAREHOLDER
1. The name of the Corporation is ITT Hartford Life and Annuity Insurance
Company (the "Company").
2. The Amended and Restated Certificate of Incorporation of the Company (the
"Certificate of Incorporation") is further amended by the following
resolution:
RESOLVED, that the Certificate of Incorporation be further amended
by deleting Section 1 in its entirety and replacing it with the
following, such amendment to become effective at January 1, 1998.
All other sections of the Certificate of Incorporation shall remain
unchanged and continue in full force and effect:
Section 1. Effective January 1, 1998, the name of the Company
is HARTFORD LIFE AND ANNUITY INSURANCE COMPANY.
3. The above resolution was adopted by each of the Company's Board of
Directors and its sole shareholder. The number of shares of the Company's
common capital stock entitled to vote thereon was 3,000 and the vote
required for adoption was 2,000 shares. The vote favoring adoption was
3,000 shares, which was the greatest vote required to pass the resolution.
Dated at Simsbury, Connecticut this 30 day of June, 1997.
We hereby declare, under penalty of false statement, that the statements made
in the foregoing Certificate are true.
HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
/s/ Thomas M. Marra
-----------------------------------------
Thomas M. Marra, Executive Vice President
/s/ Lynda Godkin
-----------------------------------------
Lynda Godkin, Senior Vice President,
General Counsel and Corporate Secretary
<PAGE>
FILING #0001681641 PG 04 OF 05 VOL B-00105
FILED 12/31/1996 10:00 AM PAGE 00897
SECRETARY OF STATE
CONNECTICUT SECRETARY OF THE STATE
CERTIFICATE AMENDING
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
BY ACTIONS OF THE BOARD OF DIRECTORS AND THE SOLE SHAREHOLDER
1. The name of the Corporation is ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY.
2. The Amended and Restated Certificate of Incorporation is amended by the
following resolution of each of the Board of Directors and the Sole
Shareholder:
RESOLVED, that the Amended and Restated Certificate of
Incorporation of the Company, as supplemented and amended to
date, is hereby amended by striking out Section 9 in its entirety
and adding the following Sections 9 and 10. All other sections
of the Amended and Restated Certificate of Incorporation shall
remain unchanged and continue in full force and effect.
"Section 9. The Board of Directors may, at any time, appoint
from among its own members such committees as it
may deem necessary for the proper conduct of the
business of the Company. The Board of Directors
shall be unrestricted as to the powers it may
confer upon such committees."
"Section 10. So much of the charter of said corporation, as
amended, as is inconsistent herewith is repealed,
provided that such repeal shall not invalidate or
otherwise affect any action taken pursuant to the
charter of the corporation, in accordance with its
terms, prior to the effective date of such
repeal."
3. The above resolutions were passed by the Board of Directors and the Sole
Shareholder of the Corporation. The number of shares of the Corporation's
common capital stock entitled to vote thereon was 3,000 and the vote
required for adoption was 2,000 shares. The vote favoring adoption was
3,000 shares, which was the greatest vote required to pass the resolution.
<PAGE>
2
Dated at Simsbury, Connecticut this 30th day of December, 1996.
We hereby declare, under penalty of false statement, that the statements made in
the foregoing Certificate are true.
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
/s/Thomas M. Marra
------------------------------------
Thomas M. Marra, Executive Vice
President and Director - Individual
Life and Annuity Division
/s/Lynda Godkin
------------------------------------
Lynda Godkin, General Counsel and
Corporate Secretary
<PAGE>
CERTIFICATE AMENDING AND RESTATING
THE CERTIFICATE OF INCORPORATION BY
ACTION OF THE BOARD OF DIRECTORS AND SHAREHOLDERS
The name of the Corporation is ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY.
2. The Certificate of Incorporation is amended and restated by the following
resolution of the Board of Directors and Shareholder of the Corporation.
RESOLVED, that the Certificate of Incorporation of the Corporation, as
supplemented and amended to date, is further amended and restated to read
as follows:
Section 1. The name of the Corporation is ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY.
Section 2. The address of the Registered Office of the Corporation is
Hartford Plaza, Hartford, Connecticut 06104-2999.
Section 3. The Corporation is a body politic and corporate and shall
have all the powers granted by the general statutes, as now
enacted or hereinafter amended, to corporations formed under
the Stock Corporation Act.
Section 4. The Corporation shall have the purposes and powers to write
any and all forms of insurance which any other corporation
now or hereafter chartered in Connecticut and empowered to
do an insurance business may now or hereafter lawfully do;
to accept and to cede reinsurance; to issue policies and
contracts for any kind or combination of kinds of insurance;
to issue policies or contracts either with or without
participation in profits; to acquire and hold any or all of
the shares or other securities of any insurance corporation
or any other kind of corporation; and to engage in any
lawful act or activity for which corporations may be formed
under the Stock Corporation Act. The corporation is
authorized to exercise the powers herein granted in any
state, territory or jurisdiction of the United States or
in any foreign country.
Section 5. The Corporation shall obtain a license from the insurance
commissioner prior to the commencement of business and
shall be subject to all general statutes applicable to
insurance companies.
Section 6. The aggregate number of shares which the corporation shall
have authority to issue is 3,000 shares consisting of one
class only, designated as Common Shares, of the par value
of $1,250.
Section 7. No shareholder shall, because of his ownership of shares,
have a preemptive or other right to purchase, subscribe for,
or take any part of any shares or any
<PAGE>
2
part of the notes, debentures, bonds, or other securities
convertible into or carrying options or warrants to purchase
shares of this corporation issued, optioned, or sold by it
after its incorporation.
Section 8. The minimum amount of stated capital with which the
corporation shall commence business is One Thousand
Dollars ($1,000.00).
Section 9. So much of the charter of said corporation is amended, as is
inconsistent herewith is repealed, provided such repeal shall
not invalidate or otherwise affect any action taken pursuant
to the charter of the corporation, in accordance with its
terms, prior to the effective date of such repeal.
3. The above resolution was passed by the Board of Directors and the
Shareholder of the Corporation. The number of shares entitled to vote
thereon was 3,000 and the vote required for adoption was 2,000 shares.
The vote favoring adoption was 3,000 which was the greatest vote needed to
pass the resolution.
Dated at Simsbury, Connecticut this 30th day of April, 1996.
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing Certificate are true.
ITT HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY
/s/ Lowndes A. Smith
---------------------------------
Lowndes A. Smith, President
/s/ Lynda Godkin
----------------------------------
Lynda Godkin, General Counsel
and Corporate Secretary
<PAGE>
EXHIBIT 2
February 18, 1998 LYNDA GODKIN, Senior Vice
President, General Counsel &
Corporate Secretary
Law Department
Board of Directors
Hartford Life and Annuity Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
FILE NO. 33-63731
Dear Sir/Madam:
I have acted as General Counsel to Hartford Life and Annuity Insurance
Company (the "Company"), a Connecticut insurance company, and Hartford Life
and Annuity Insurance Company Separate Account VL I (the "Account") in
connection with the registration of an indefinite amount of securities in the
form of a flexible premium variable life insurance policy (the "Policy") with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended. I have examined such documents (including the Form S-6 Registration
Statement) and reviewed such questions of law as I considered necessary and
appropriate, and on the basis of such examination and review, it is my
opinion that:
1. The Company is a corporation duly organized and validly existing as a
stock life insurance company under the laws of the State of Connecticut
and is duly authorized by the Insurance Department of the State of
Connecticut to issue the Policy.
2. The Account is a duly authorized and validly existing separate account
established pursuant to the provisions of Section 38a-433 of the
Connecticut Statutes.
3. To the extent so provided under the Policy, that portion of the assets of
the Account equal to the reserves and other contract liabilities with
respect to the Account will not be chargeable with liabilities arising
out of any other business that the Company may conduct.
<PAGE>
Board of Directors
Hartford Life and Annuity Insurance Company
February 18, 1998
Page 2
4. The Policy, when issued as contemplated by the Form S-6 Registration
Statement, will constitute legal, validly issued and binding obligations
of the Company.
I hereby consent to the filing of this opinion as an exhibit to the Form S-6
Registration Statement for the Policy and the Account.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
POWER OF ATTORNEY
Gregory A. Boyko
Lynda Godkin
Thomas M. Marra
Lowndes A. Smith
do hereby jointly and severally authorize Lynda Godkin, Marianne O'Doherty,
and Leslie T. Soler to sign as their agent, any Registration Statement,
pre-effective amendment, post-effective amendment and any application for
exemptive relief of the ITT Hartford Life and Annuity Insurance Company under
the Securities Act of 1933 and/or the Investment Company Act of 1940.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
/s/ Gregory A. Boyko Dated: October 9, 1997
- ------------------------------ ------------------------
Gregory A. Boyko
/s/ Lynda Godkin Dated: October 9, 1997
- ------------------------------ ------------------------
Lynda Godkin
/s/ Thomas M. Marra Dated: October 9, 1997
- ------------------------------ ------------------------
Thomas M. Marra
/s/ Lowndes A. Smith Dated: October 1, 1997
- ------------------------------ ------------------------
Lowndes A. Smith
