<PAGE>
As filed with the Securities and Exchange Commission on April 26, 1999.
File No. 33-63731
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 8 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:
Brian Lord, Esq.
Hartford Life and Annuity Insurance Company
P.O. Box 2999
Hartford, CT 06104-2999
It is proposed that this filing will become effective:
_____ immediately upon filing pursuant to paragraph (b) of Rule 485
__X__ on May 3, 1999 pursuant to paragraph (b) of Rule 485
_____ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
_____ on ________________ pursuant to paragraph (a)(1) of Rule 485
_____ this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
E. Title and amount of securities being registered: Pursuant to Rule 24f-2
under the Investment Company Act of 1940, the Registrant will register
an indefinite amount of securities.
F. Proposed maximum aggregate offering price to the public of the
securities being registered: Not yet determined.
G. Amount of filing fee: Not applicable.
H. Approximate date of proposed public offering: As soon as practicable after
the effective date of this registration statement.
This Post-Effective Amendment No. 8 relates only to The One-Registration
Mark- Provider Group Flexible Premium Variable Life Insurance Policy issued
by Hartford Life and Annuity Insurance Company. It shall not supersede or
affect this Registration Statement as it applies to the Prospectuses or
Statements of Additional Information for any other Policies of the
Registrant.
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
<TABLE>
<CAPTION>
Item No. of Form N-8B-2 Caption In Prospectus
----------------------- ---------------------
<S> <C>
1. Cover Page
2. Cover Page
3. Not Applicable
4. Statement of Additional Information - Distribution of
the Policies
5. About Us - ICMG Registered Variable Life Separate Account One
6. About Us - ICMG Registered Variable Life Separate Account One
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. About Us - ICMG Registered Variable Life Separate Account One; The Funds
11. About Us - ICMG Registered Variable Life Separate Account One; The Funds
12. About Us - The Funds
13. Fee Table; Charges and Deductions
14. Premiums
15. Premiums
16. Premiums
17. Making Withdrawals From Your Policy
18. About Us - The Funds; Charges and Deductions
19. Your Policy - Contract Rights
20. Not Applicable
21. Loans
22. Not Applicable
23. Not Applicable
24. Not Applicable
25. About Us - Hartford Life and Annuity Insurance Company
26. Not Applicable
27. About Us - Hartford Life and Annuity Insurance Company
28. Statement of Additional Information - General
Information and History
29. About Us - Hartford Life and Annuity Insurance Company
30. Not Applicable
31. Not Applicable
32. Not Applicable
33. Not Applicable
34. Not Applicable
</TABLE>
<PAGE>
<TABLE>
<S> <C>
35. Statement of Additional Information - Distribution of
the Policies
36. Not required by Form S-6
37. Not Applicable
38. Statement of Additional Information - Distribution of
the Policies
39. Statement of Additional Information - Distribution of
the Policies
40. Not Applicable
41. Statement of Additional Information - Distribution of
the Policies
42. Not Applicable
43. Not Applicable
44. Premiums
45. Not Applicable
46. Premiums; Making Withdrawals From Your Policy
47. About Us - The Funds
48. Cover Page; About Us - Hartford Life and Annuity
Insurance Company
49. Not Applicable
50. About Us - ICMG Registered Variable Life Separate Account One
51. Not Applicable
52. About Us - The Funds
53. Taxes
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
</TABLE>
<PAGE>
THE ONE-REGISTERED TRADEMARK- PROVIDER-SM-
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
P.O. BOX 2999
HARTFORD, CONNECTICUT 06104-2999
[LOGO] TELEPHONE (800) 861-1408
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- --------------------------------------------------------------------------------
This Prospectus describes information you should know before you enroll for
coverage under The One(-Registered Trademark-) Provider-SM- (formerly known as
Pegasus Provider) group flexible premium variable life insurance policy. Please
read it carefully.
The One Provider group flexible premium variable life insurance policy is a
contract issued by Hartford Life and Annuity Insurance Company to an employer or
a trust sponsored by an employer. We will issue you a certificate of insurance
that describes your rights, benefits, obligations and options under the group
policy, including your payment of premiums and our payment of a death benefit to
your beneficiaries. Your certificate is:
X Flexible premium, because you have options when selecting the timing and
amounts of your premium payments.
X Variable, because the value of your life insurance coverage may fluctuate
with the performance of the underlying Portfolio(s).
After you enroll, you allocate your payments to separate divisions of our
separate account, known as Investment Divisions. The current Investment
Divisions available are:
<TABLE>
<CAPTION>
INVESTMENT DIVISION PURCHASES SHARES OF:
- -------------------------------------------- ----------------------------------------------------------
<S> <C> <C>
One Group Investment Trust Bond Investment -- Bond Portfolio of the One Group(-Registered Trademark-)
Division Investment Trust
One Group Investment Trust Government Bond -- Government Bond Portfolio of the One Group Investment
Investment Division Trust
One Group Investment Trust Balanced -- Balanced Portfolio of the One Group Investment Trust
Investment Division
One Group Investment Trust Large Cap Growth -- Large Cap Growth Portfolio of the One Group Investment
Investment Division Trust
One Group Investment Trust Equity Index -- Equity Index Portfolio of the One Group Investment Trust
Investment Division
One Group Investment Trust Diversified -- Diversified Equity Portfolio of the One Group Investment
Equity Investment Division Trust
One Group Investment Trust Mid Cap Growth -- Mid Cap Growth Portfolio of the One Group Investment Trust
Investment Division
One Group Investment Trust Diversified Mid -- Diversified Mid Cap Portfolio of the One Group Investment
Cap Investment Division Trust
One Group Investment Trust Mid Cap Value -- Mid Cap Value Portfolio of the One Group Investment Trust
Investment Division
Fidelity Variable Insurance Products Fund -- Equity-Income Portfolio of the Variable Insurance Products
Equity-Income Investment Division Fund
Fidelity Variable Insurance Products Fund -- High Income Portfolio of the Variable Insurance Products
High Income Investment Division Fund
Fidelity Variable Insurance Products Fund -- Money Market Portfolio of the Variable Insurance Products
Money Market Investment Division Fund
Fidelity Variable Insurance Products Fund II -- Asset Manager Portfolio of the Variable Insurance Products
Asset Manager Investment Division Fund II
Fidelity Variable Insurance Products Fund II -- Index 500 Portfolio of the Variable Insurance Products
Index 500 Investment Division Fund II
Fidelity Variable Insurance Products Fund -- Growth Opportunities Portfolio of the Variable Insurance
III Growth Opportunities Investment Products Fund III
Division
Putnam VT International Growth Investment -- Putnam VT International Growth Fund of Putnam Variable
Division Trust
Putnam VT Vista Investment Division -- Putnam VT Vista Fund of Putnam Variable Trust
Putnam VT Voyager Investment Division -- Putnam VT Voyager Fund of Putnam Variable Trust
</TABLE>
If you decide to enroll for coverage under this group life insurance policy, you
should keep this Prospectus for your records.
<PAGE>
The Fidelity-Registered Trademark- and Putnam prospectuses included in this The
One Provider Prospectus contain information relating to all of the funds they
offer. Not all the funds in the Fidelity-Registered Trademark- and Putnam
prospectuses are available to you. The One Group Investment Trust prospectus
included in this The One Provider Prospectus contains information relating to
all One Group Investment Trust portfolios. Please review this The One Provider
product prospectus for details regarding which funds are available in The One
Provider (see "The Funds").
Although we file this Prospectus with the Securities and Exchange Commission,
the Commission doesn't approve or disapprove these securities or determine if
the information is truthful or complete. Anyone who represents that the
Securities and Exchange Commission does these things may be guilty of a criminal
offense.
Variable life insurance policies are not deposits or obligations of, or endorsed
or guaranteed by, any bank, nor are they federally insured or otherwise
protected by the FDIC, the Federal Reserve Board, or any other agency; they are
subject to investment risk, including possible loss of the principal amount
invested.
This Prospectus can also be obtained from the Securities and Exchange
Commission's Website (HTTP://WWW.SEC.GOV).
- --------------------------------------------------------------------------------
PROSPECTUS DATED: MAY 3, 1999
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 3
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY OF BENEFITS AND RISKS......................................... 5
Benefits of Your Policy............................................. 5
Risks of Your Policy................................................ 5
FEE TABLES............................................................ 6
ABOUT US.............................................................. 7
Hartford Life and Annuity Insurance Company......................... 7
ICMG Registered Variable Life Separate Account One.................. 7
The Funds........................................................... 7
CHARGES AND DEDUCTIONS................................................ 9
Deductions From Premium............................................. 9
Front-End Sales Load.............................................. 9
Premium Tax Charge................................................ 9
DAC Tax Charge.................................................... 9
Deductions From Investment Value.................................... 9
Monthly Deduction Amount.......................................... 9
Mortality and Expense Risk Charge................................. 10
YOUR CERTIFICATE...................................................... 10
Ownership Rights.................................................... 10
Beneficiary......................................................... 10
Assignment.......................................................... 11
Statements.......................................................... 11
Issuance of Your Certificate........................................ 11
Right to Examine the Certificate.................................... 11
PREMIUMS.............................................................. 11
Premium Payment Flexibility......................................... 11
Allocation of Premium Payments...................................... 11
Accumulation Units.................................................. 12
Accumulation Unit Values............................................ 12
Premium Limitation.................................................. 12
DEATH BENEFITS AND POLICY VALUES...................................... 13
Values Under the Certificate........................................ 13
Cash Surrender Value.............................................. 13
Investment Value.................................................. 13
Death Benefits...................................................... 13
Minimum Death Benefit Testing Procedures.......................... 13
Death Benefits Options............................................ 13
Payment Options................................................... 14
Increases and Decreases in Face Amount............................ 14
Benefits at Maturity.............................................. 14
MAKING WITHDRAWALS FROM THE CERTIFICATE............................... 14
Surrender........................................................... 14
Partial Withdrawals................................................. 15
TRANSFERS AMONG INVESTMENT DIVISIONS.................................. 15
Amount and Frequency of Transfers................................... 15
Transfers to or from Investment Divisions........................... 15
Asset Rebalancing................................................... 15
Dollar Cost Averaging............................................... 16
Procedures for Telephone Transfers.................................. 16
Processing of Transactions.......................................... 16
LOANS................................................................. 16
Loan Interest....................................................... 17
Credited Interest................................................... 17
Loan Repayments..................................................... 17
</TABLE>
<PAGE>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
----
Termination Due to Excessive Debt................................... 17
<S> <C>
Effect of Loans on Investment Value................................. 17
LAPSE AND REINSTATEMENT............................................... 17
Lapse and Grace Period.............................................. 17
Reinstatement....................................................... 17
TERMINATION OF POLICY................................................. 18
CONTRACT LIMITATIONS.................................................. 18
Partial Withdrawals................................................. 18
Transfers of Account Value.......................................... 18
Face Amount Increases or Decreases.................................. 18
Valuation of Payments and Transfers................................. 18
Deferral of Payments................................................ 18
CHANGES TO CONTRACT OR SEPARATE ACCOUNT............................... 18
Modification of Policy.............................................. 18
Substitution of Funds............................................... 18
Change in Operation of the Separate Account......................... 18
Separate Account Taxes.............................................. 19
SUPPLEMENTAL BENEFITS................................................. 19
Maturity Date Extension Rider....................................... 19
OTHER MATTERS......................................................... 19
Reduced Charges for Eligible Groups................................. 19
Our Rights.......................................................... 19
Limit on Right to Contest........................................... 19
Misstatement as to Age or Sex....................................... 19
Assignment.......................................................... 19
Dividends........................................................... 20
YEAR 2000............................................................. 20
In General.......................................................... 20
Internal Year 2000 Efforts and Timetable............................ 20
Third Party Year 2000 Efforts and Timetable......................... 20
Year 2000 Costs..................................................... 20
Risks and Contingency Plans......................................... 21
TAXES................................................................. 21
General............................................................. 21
Taxation of Hartford and the Separate Account....................... 21
Income Taxation of Certificate Benefits............................. 21
Modified Endowment Contracts........................................ 22
Diversification Requirements........................................ 22
Ownership of the Assets in the Separate Account..................... 23
Tax Deferral During Accumulation Period............................. 23
Federal Income Tax Withholding...................................... 23
Other Tax Considerations............................................ 23
PERFORMANCE RELATED INFORMATION....................................... 23
LEGAL PROCEEDINGS..................................................... 24
GLOSSARY OF SPECIAL TERMS............................................. 25
WHERE YOU CAN FIND MORE INFORMATION................................... 26
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 5
- --------------------------------------------------------------------------------
SUMMARY OF BENEFITS
AND RISKS
BENEFITS OF YOUR POLICY
FLEXIBILITY -- We designed the Policy to be flexible to meet your specific
life insurance needs. You have the flexibility to choose death benefit options,
investment options, and premiums you pay.
DEATH BENEFIT -- We will pay a death benefit to your beneficiary if the
Insured dies while the Certificate is in force. You select one of two death
benefit options. These options are:
1. Option A -- Under Option A the death benefit is equal to the larger of:
- The Face Amount; and
- The Variable Insurance Amount.
2. Option B -- Under Option B the death benefit is equal to the larger of:
- The Face Amount plus the Cash Value; and
- The Variable Insurance Amount.
We reduce the death benefit by any money you owe us, such as outstanding
Loans or Loan interest. You may change your death benefit option under certain
circumstances. You may also increase or decrease the Face Amount on your
Certificate under certain circumstances.
INVESTMENT OPTIONS -- You may invest in up to 18 different Investment
Divisions, available under your Certificate. You may transfer money among the
Investment Divisions, subject to restrictions.
PREMIUM PAYMENTS -- You have the flexibility to choose when and in what
amounts you pay premiums.
RIGHT TO EXAMINE YOUR CERTIFICATE -- For 10 days after you receive your
Certificate, you may cancel it without paying a sales charge. Some states
provide a longer examination period.
WITHDRAWALS -- You may withdraw all or part of amounts available under your
Certificate, subject to certain limitations.
LOANS -- You may take a Loan under the Certificate. The Certificate secures
the Loan.
PAYMENT OPTIONS -- Your beneficiary may choose to receive the proceeds due
under the Certificate,
- in a lump sum; or
- over a period of time by using one of several payment options.
DOLLAR COST AVERAGING -- You may elect to allocate your Net Premiums among
the Investment Divisions using the dollar cost averaging option program. The
main objective of this program is to minimize the impact of short-term price
fluctuations to allow you to take advantage of market fluctuations.
ASSET REBALANCING -- You may elect to have us automatically reallocate
Investment Value periodically in order to maintain a particular percentage
allocation among the Investment Divisions that you selected ("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.
RISKS OF YOUR POLICY
INVESTMENT PERFORMANCE -- The value of your Certificate will fluctuate with
the performance of its Investment Divisions. Your investment options may decline
in value, or they may not perform to your expectations. We do not guarantee your
Investment Value in the Investment Divisions.
TERMINATION --
- CERTIFICATE: Your Certificate could terminate if the Cash Surrender Value
becomes too low to pay the charges due under the Certificate. If this
occurs, Hartford will notify you in writing. You will then have sixty-one
(61) days to pay additional amounts to prevent the Certificate from
terminating.
- POLICY: Hartford or the employer may terminate participation in the
Policy. The party terminating the Policy must provide you with a notice of
the termination, at your last known address, at least fifteen (15) days
prior to the date of termination.
PARTIAL WITHDRAWAL LIMITATIONS -- We limit you to twelve (12) partial
withdrawals per Coverage Year. These withdrawals will reduce your Cash Surrender
Value, may reduce your death benefit, and may be subject to a processing charge.
TRANSFER LIMITATIONS -- We reserve the right to limit the size of transfers
and remaining balances, and to limit the number and frequency of transfers among
the Investment Divisions.
LOANS -- Taking a Loan under your Certificate may increase the risk that
your Certificate will lapse, may have a permanent effect on your Investment
Value, and may reduce the Death Proceeds.
ADVERSE TAX CONSEQUENCES -- You may be subject to income tax if you receive
any Loans, withdrawals or other amounts under the Certificate. You may also be
subject to a 10% penalty tax.
<PAGE>
6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
FEE TABLES
The following tables describe the maximum fees and expenses that you will
pay under the Certificate.
MAXIMUM TRANSACTION FEES
<TABLE>
<CAPTION>
CERTIFICATES FROM WHICH
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED CHARGE IS DEDUCTED
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sales Charge(1) When you pay premium. 9% of any premium paid for All
Coverage Years 1 through 7, and
7% of any premium paid in Coverage
Years 8 and later.
----------------------------------------------------------------------------------------------------------------------------------
Premium Tax Charge When you pay premium. Generally, between 0% and 4% of All
any premium you pay. The
percentage we deduct will vary by
locale depending on the tax rates
in effect there.
----------------------------------------------------------------------------------------------------------------------------------
Deferred Acquisition When you pay premium. 1.25% of each premium you pay. We All
Cost Tax Charge will adjust the charge based on
changes in the applicable tax law.
----------------------------------------------------------------------------------------------------------------------------------
Transfer Fees When you make a transfer after the $50 per transfer. Those Certificates with more than
12th transfer in any Coverage 12 transfers per Contract Year.
Year.
----------------------------------------------------------------------------------------------------------------------------------
Partial Withdrawal Fee When you take a withdrawal after $25 per partial withdrawal. Those Certificates where more than
the 12th partial withdrawal in any 12 partial withdrawals have been
Coverage Year. made per Coverage Year.
</TABLE>
- ---------
(1)The current front end sales load charged 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 next table describes the MAXIMUM fees and expenses that you will pay
periodically, not including Fund fees and expenses.
MAXIMUM ANNUAL CHARGES OTHER THAN FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
CERTIFICATES FROM WHICH
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED CHARGE IS DEDUCTED
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cost of Insurance Monthly. The charge is the cost of All
Charges insurance rate times the net
amount at risk. The cost of
insurance rates depend on issue
age, sex, insurance class and
substandard rating.
----------------------------------------------------------------------------------------------------------------------------------
Mortality and Expense Daily. On an annual basis, .65% of the All
Risk Charge value of each Investment
Division's assets.
----------------------------------------------------------------------------------------------------------------------------------
Administrative Charge Monthly. $10 per Coverage Month. All
----------------------------------------------------------------------------------------------------------------------------------
Rider Charges Monthly. Individualized based on optional Only those Certificates with
rider selected. benefits provided by rider.
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 7
- --------------------------------------------------------------------------------
The next table describes the Fund fees and expenses that you will pay
periodically. The table shows the minimum and maximum fees and expenses charged
by any of the Funds. The prospectus for each Fund contains more detail
concerning each Fund's fees and expenses.
ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
AMOUNT DEDUCTED POLICIES FROM WHICH
CHARGE WHEN CHARGE IS DEDUCTED (ANNUALIZED) CHARGE IS DEDUCTED
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees Daily net asset values of a Fund 0.200% to 0.800% All Certificates, but deductions
reflect Management Fees already only from Investment Divisions you
deducted from assets of the Fund. selected.
----------------------------------------------------------------------------------------------------------------------------------
12b-1 Fees Daily net asset values of a Fund 0.000% to 0.150% All Certificates, but deductions
reflect 12b-1 Fees already only from Investment Divisions you
deducted from assets of the Fund. selected that charge 12b-1 fees.
----------------------------------------------------------------------------------------------------------------------------------
Other Expenses Daily net asset values of a Fund 0.040% to 0.830% All Certificates, but deductions
reflect Other Expenses already only from Investment Divisions you
deducted from the assets of the selected.
Fund.
----------------------------------------------------------------------------------------------------------------------------------
Total Fund Annual Daily net asset values of a Fund 0.300% to 1.520% All Certificates, but deductions
Expenses reflect Total Fund Annual only from Investment Divisions you
Operating Expenses already selected.
deducted from assets of the Fund.
</TABLE>
ABOUT US
HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
Hartford Life and Annuity Insurance Company 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, the District of
Columbia and Puerto Rico, except New York. On January 1, 1998, Hartford's name
changed from ITT Hartford Life and Annuity Insurance Company to Hartford Life
and Annuity Insurance Company. We were originally incorporated under the laws of
Wisconsin on January 9, 1956, and subsequently redomiciled to Connecticut. Our
offices are located in Simsbury, Connecticut; however, our mailing address is
P.O. Box 2999, Hartford, CT 06104-2999. We are ultimately controlled by The
Hartford Financial Services Group, Inc., one of the largest financial service
providers in the United States.
HARTFORD'S RATINGS
<TABLE>
<CAPTION>
EFFECTIVE
DATE OF
RATING AGENCY RATING RATING BASIS OF RATING
- -------------------- ------------- ------ -----------------------
<S> <C> <C> <C>
A.M. Best and
Company, Inc........ 1/1/99 A+ Financial performance
Insurer financial
Standard & Poor's... 6/1/98 AA strength
Duff & Phelps....... 12/21/98 AA+ Claims paying ability
</TABLE>
ICMG REGISTERED VARIABLE LIFE
SEPARATE ACCOUNT ONE
The Investment Divisions are separate divisions of our separate account,
called ICMG Registered Variable Life Separate Account One (the "Separate
Account"). The Separate Account exists to keep your life insurance policy assets
separate from our company assets. As such, the investment performance of the
Separate Account is independent from the investment performance of our other
assets. We use our other assets to pay our insurance obligations under the
Policy. We hold your assets in the Separate Account exclusively for your benefit
and we may not use them for any other liability of ours. We established the
Separate Account on October 9, 1995 under the laws of Connecticut.
The Separate Account has 18 Investment Divisions dedicated to the Policies.
Each of these Investment Divisions invests solely in a corresponding Portfolio
of the Funds. You choose the Investment Divisions that meet your investment
style. We may establish additional Investment Divisions at our discretion. The
Separate Account may include other Investment Divisions that will not be
available under the Policy.
THE FUNDS
The Funds sell shares of the Portfolios to the Separate Account. The
Portfolios are set up exclusively for variable
<PAGE>
8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
annuity and variable life insurance products. The Portfolios are not the same
mutual Funds that you buy through your stockbroker or through a retail mutual
Fund. However, they may have similar investment strategies and the same
portfolio managers as retail mutual Funds.
We do not guarantee the investment results of any of the Portfolios. Since
each Portfolio has different investment objectives, each is subject to different
risks. The prospectuses for the Funds and the Funds' Statement of Additional
Information describe these risks and the Portfolio's expenses. We have included
the Funds' prospectuses in this Prospectus.
The following Portfolios are available under your Certificate:
ONE GROUP INVESTMENT TRUST BOND PORTFOLIO -- The Portfolio seeks to maximize
total return by investing primarily in a diversified portfolio of intermediate
and long-term debt securities.
ONE GROUP INVESTMENT TRUST GOVERNMENT BOND PORTFOLIO -- The Portfolio seeks
a high level of current income with liquidity and safety of principal.
ONE GROUP INVESTMENT TRUST BALANCED PORTFOLIO -- The Portfolio seeks to
provide total return while preserving capital.
ONE GROUP INVESTMENT TRUST LARGE CAP GROWTH PORTFOLIO -- The Portfolio seeks
long-term capital appreciation and growth of income by investing primarily in
equity securities.
ONE GROUP INVESTMENT TRUST EQUITY INDEX PORTFOLIO -- The Portfolio seeks
investment results that correspond to the aggregate price and dividend
performance of securities in the Standard & Poor's 500 Composite Stock Price
Index ("S&P 500 Index").(1)
ONE GROUP INVESTMENT TRUST DIVERSIFIED EQUITY PORTFOLIO -- The Portfolio
seeks long-term capital growth of income with a secondary objective of providing
a moderate level of current income.
ONE GROUP INVESTMENT TRUST MID CAP GROWTH PORTFOLIO -- The Portfolio seeks
growth of capital and secondarily, current income by investing primarily in
equity securities.
ONE GROUP INVESTMENT TRUST DIVERSIFIED MID CAP PORTFOLIO -- The Portfolio
seeks long term capital growth by investing primarily in equity securities of
companies with intermediate capitalizations.
ONE GROUP INVESTMENT TRUST MID CAP VALUE PORTFOLIO -- The Portfolio seeks
capital appreciation with the secondary goal of achieving current income by
investing primarily in equity securities.
VARIABLE INSURANCE PRODUCTS FUND HIGH INCOME PORTFOLIO: SERVICE CLASS -- The
Portfolio seeks high current income primarily through investments in
income-producing debt securities, preferred stocks and convertible securities
with an emphasis on lower quality debt securities. These domestic and foreign
investments may present the risk of default or may be in default.
VARIABLE INSURANCE PRODUCTS FUND EQUITY-INCOME PORTFOLIO: SERVICE
CLASS -- The 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 lower quality debt
securities (commonly referred to as "junk bonds") which are subject to greater
risk than investments in higher-rated securities.
VARIABLE INSURANCE PRODUCTS FUND MONEY MARKET PORTFOLIO -- The 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.
VARIABLE INSURANCE PRODUCTS FUND II ASSET MANAGER PORTFOLIO: SERVICE
CLASS -- The 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.
VARIABLE INSURANCE PRODUCTS FUND II INDEX 500 PORTFOLIO -- The Portfolio
seeks to provide investment results that correspond to the total return of a
broad range of common stocks publicly traded in the United States. To achieve
its objective, the Portfolio attempts to duplicate the composition and total
return of the S&P 500.
VARIABLE INSURANCE PRODUCTS FUND III GROWTH OPPORTUNITIES PORTFOLIO: SERVICE
CLASS -- The Portfolio seeks to provide capital growth by investing primarily in
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.
PUTNAM VT INTERNATIONAL GROWTH FUND: CLASS IB SHARES -- Putnam VT
International Growth Fund seeks capital appreciation by investing primarily in
equity securities of
(1) "S&P 500" is a registered servicemark of Standard & Poor's Corporation,
which does not sponsor and is in no way affiliated with One Group Investment
Trust.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
companies located in countries other than the United States.
PUTNAM VT VISTA FUND: CLASS IB SHARES -- Putnam VT Vista Fund seeks capital
appreciation by investing in a diversified portfolio of common stocks which
Putnam Investment Management, Inc., (the fund's investment advisor "Putnam
Management") believes have the potential for above-average capital appreciation.
PUTNAM VT VOYAGER FUND: CLASS IB SHARES -- 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.
On March 31, 1999, tthe following portfolios of the One Group Investment
Trust were substituted for the following Pegasus Variable funds in the Contract:
<TABLE>
<CAPTION>
ONE GROUP INVESTMENT TRUST PORTFOLIO
PEGASUS VARIABLE FUND
- -------------------------------------- --------------------------------------
<C> <S> <C> <C>
1. Bond Portfolio 1. Bond Fund
2. Large Cap Growth Portfolio 2. Growth Fund
3. Diversified Mid Cap 3. Mid-Cap Opportunity Fund
Portfolio
4. Mid Cap Value Portfolio 4. Intrinsic Value Fund
5. Diversified Equity 5. Growth and Value Fund
Portfolio
</TABLE>
With the exception of the Large Cap Growth Portfolio, the Pegasus Variable
Funds are the surviving funds for accounting purposes.
INVESTMENT ADVISERS -- Banc One Investment Advisors Corporation serves as
investment adviser to the One Group Investment Trust. Fidelity Management &
Research Company is the investment adviser to the Variable Insurance Products
Fund, Variable Insurance Products Fund II, and Variable Insurance Products Fund
III. Putnam Investment Management, Inc. serves as the investment manager of
Putnam Variable Trust.
VOTING RIGHTS -- We will notify you of shareholder's meetings of the Funds
purchased by those Investment Divisions you have invested in. We will send you
proxy materials and instructions for you to vote the shares held for your
benefit by those Investment Divisions. We will arrange for the handling and
tallying of proxies received from you or other policy owners. If you give no
instructions, we will vote those shares in the same proportion as shares for
which we received instructions.
If any federal securities laws or regulations, or their present
interpretation, change to permit us to vote Fund shares on our own, we may
decide to do so. You may attend any shareholder meeting at which shares held for
your Policy may be voted. After we begin to make payouts to you, the number of
votes you have will decrease.
CHARGES AND DEDUCTIONS
DEDUCTIONS FROM PREMIUM
We deduct a percentage of your premium payment for a front-end sales load, a
premium tax charge and the deferred acquisition cost ("DAC") tax charge before
we allocate it to the Investment Divisions. The amount of each premium we
allocate to the Investment Divisions is your net premium ("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.
PREMIUM TAX CHARGE -- We deduct a tax charge from each premium you pay. The
premium tax charge covers taxes assessed against us by a state and/or other
governmental entity. The range of this charge, generally, is between 0% and 4%.
DAC TAX CHARGE -- We deduct 1.25% of each premium to cover a federal premium
tax assessed against us. This charge is reasonable in relation to our federal
income tax burden, under Section 848 of the Internal Revenue Code of 1986 ("the
Code"), resulting from the receipt of premiums. We will adjust this charge based
on changes in the applicable tax law.
DEDUCTIONS FROM INVESTMENT VALUE
MONTHLY DEDUCTION AMOUNT -- Each month we will deduct an amount from your
Investment Value to pay for the benefits provided under the Certificate. We call
this amount the Monthly Deduction Amount and it equals the sum of:
(a) the administrative expense charge;
(b) the charges for cost of insurance;
(c) the charges for additional benefits provided by rider, if any.
The Monthly Deduction Amount will vary from month to month.
<PAGE>
10 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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Following is an explanation of the administrative expense charge and the
charges for cost of insurance and rider benefits.
(a) MONTHLY ADMINISTRATIVE FEE
We will assess a monthly administrative charge to compensate us for
administrative costs in connection with the Certificates. We will initially
charge $5 per Coverage Month and we guarantee that the charge will never
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 minus the Cash Value on
the date we calculate this charge.
The purpose of the cost of insurance charge is to cover our anticipated
mortality costs. The current cost of insurance rates for standard risks will
not exceed those based on the 1980 Commissioners Standard Ordinary Mortality
Table (ANB), Male or Female, age nearest birthday. We will charge
substandard risks a higher cost of insurance rate. The cost of insurance
rates for substandard risks will not exceed rates based on a multiple of the
1980 Commissioners Standard Ordinary Mortality Table (ANB), Male or Female,
age nearest birthday. In addition, the use of simplified underwriting or
guaranteed issue procedures, rather than medical underwriting, may result in
a higher cost of insurance charge for some individuals than if medical
underwriting procedures were used.
We will make any changes in the cost of insurance uniformly for all
insureds of the same issue ages, sexes, risk classes and whose coverage has
been in-force for the same length of time. No change in insurance class or
cost will occur as a result of the deterioration of the Insured's health.
The rate class of an Insured affects the cost of insurance rate. We and
the employer will agree on the number of rate classes and characteristics of
each rate class. The rate classes may vary by smokers and nonsmokers, active
and retired status, and/or any other nondiscriminatory classes agreed to by
the employer.
(c) RIDER CHARGE
If the Certificate includes riders, we deduct a charge from the Investment
Value on each Processing Date. We specify the applicable charge on the rider.
This charge is to compensate us for the anticipated cost of providing the rider
benefits.
For a description of the riders available, see "Supplemental Benefits."
MORTALITY AND EXPENSE RISK CHARGE -- For assuming mortality and expense
risks under the Policy, we deduct a daily charge of .001781% which is equal to
.65% per year of the value of each Investment Division's assets in all Coverage
Years. We may pay an expense credit reflecting a reduction in the mortality and
expense risk rate. We will pay these credits at the end of each Coverage Month
and will use them to purchase additional Accumulation Units at the end of that
Coverage Month.
Currently, in Coverage Years 1 through 10, we will pay no expense credit.
The result is a net annual mortality and expense risk rate of .65%. In Coverage
Years 11 and later we will pay an expense credit of .15%. The result is a net
annual mortality and expense risk rate of .50%.
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 we assume is that the actual cost of insurance charges
specified in the Certificate will be insufficient to meet actual claims. The
expense risk we assume is that expenses we incur for issuing and administering
the Certificates will exceed the administrative charges we deducted from
Investment Value.
If these charges are insufficient to cover actual costs and assumed risks,
the loss will fall on us. However, if the charge proves more than sufficient, we
will add any excess to our surplus.
YOUR CERTIFICATE
OWNERSHIP RIGHTS
As long as your Certificate is in force, you may exercise all rights under
the Certificate while the Insured is alive and you have not named an irrevocable
beneficiary.
BENEFICIARY
You name the beneficiary in your enrollment form for the Certificate. You
may change the beneficiary (unless irrevocably named) while the Insured is alive
by notifying us, in writing. If no beneficiary is living when the Insured dies,
we will pay the Death Proceeds to you if living; or, otherwise, to your estate.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 11
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ASSIGNMENT
You may assign your rights under the Certificate. Until you notify us in
writing, no assignment is effective against us. We are not responsible for the
validity of any assignment.
STATEMENTS
We will send you a statement at least once each year, showing:
(a) the Certificate's current Cash Value, Cash Surrender Value and Face Amount;
(b) the premiums paid, Monthly Deduction Amounts and any Loans since your last
statement;
(c) the amount of any outstanding Debt;
(d) any notifications required by the provisions of your Certificate; and
(e) any other information required by the Insurance Department of the state
where we delivered your Certificate.
ISSUANCE OF YOUR CERTIFICATE
To purchase a Certificate you must submit an enrollment form to our Customer
Service Center. The specific form you complete will depend on the underwriting
classification and plan design of the Policy. Generally, we will only issue a
Certificate on the lives of Insureds between the ages of 20 and 79 who supply
evidence of insurability satisfactory to us. In addition, we will not issue a
Certificate with a Face Amount of less than the minimum Face Amount. Acceptance
is subject to our underwriting rules and we reserve the right to reject an
enrollment form for any reason. If we accept your enrollment form, your
Certificate will become effective on the Coverage Date only after we receive all
outstanding delivery requirements and the initial premium payment shown in your
Certificate.
In the event you are exchanging an existing contract(s) for a new
Certificate under Section 1035 of the Internal Revenue Code, the Coverage Date
will be the date that you make the 1035 exchange. You make this 1035 exchange by
assigning the existing contract(s) to us and completing an enrollment form. Upon
receipt of the assignment form, we will surrender the existing contract(s) for
its cash surrender value. We will apply the surrender proceeds we receive as
premium to the Certificate. During the time between the Coverage Date and the
date we receive the cash surrender value of the existing contract(s) or a
premium payment, there will be no gap in coverage. We will make charges and
deductions (other than those of the Portfolios) for this period; however, you
will not experience investment returns.
RIGHT TO EXAMINE THE CERTIFICATE
You have a limited right to return your Certificate for cancellation. You
may deliver or mail the Certificate to us or to the agent who sold you the
Certificate within ten (10) calendar days after delivery of the Certificate to
you. Some states provide for a longer period.
In the event you return your Certificate, we will return to you within seven
(7) days of our receipt of the Certificate, either:
(i) the total amount of premiums; or
(ii) the Cash Value plus charges deducted under the Certificate.
The amount we return depends upon the state we issued your Certificate in.
PREMIUMS
PREMIUM PAYMENT FLEXIBILITY
You have considerable flexibility as to when, in what amounts and what level
of premiums, within a range determined by us, you pay under the Certificate. You
choose a premium once you have determined the level and pattern of the death
benefit.
Your Certificate specifies the minimum initial premium amount you must pay
on the Coverage Date. You may pay additional premiums at any time, subject to
the premium limitations set by the Internal Revenue Code. For details on these
premium limitations see, "Premium Limitation." You have the right to pay
additional premiums of at least $100.00 at any time, unless otherwise agreed to
by us.
Your Certificate may lapse if the value of your Certificate becomes
insufficient to cover the Monthly Deduction Amounts. If this happens you may pay
additional premiums in order to prevent your Certificate from terminating. For
details see, "Lapse and Reinstatement."
ALLOCATION OF PREMIUM PAYMENTS
During the right to examine period, we allocate your initial premium payment
in accordance with state law requirements. If you choose to cancel your
Certificate, some states require the return of your initial premium, while
others require the return of the Certificate's Cash Value.
- - STATE OF ISSUE REQUIRES RETURN OF INITIAL PREMIUM
If the state of issue of your Certificate requires that we return your initial
premium, we will, when we issue your Certificate and until the end of the
right to examine period, allocate your initial Net Premium to the Fidelity
<PAGE>
12 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
Variable Insurance Products Fund Money Market Investment Division. Upon the
expiration of the right to examine period, we will, at a later date, invest
the initial Net Premium according to your initial allocation instructions.
However, any accrued interest will remain in the Fidelity Variable Insurance
Products Fund Money Market Investment Division if you selected it as an
initial allocation option. This later date is the later of:
1. ten (10) calendar days after we receive the Initial Premium; and
2. the date we receive the final requirements to put the Certificate in
force.
We will allocate any additional premiums received prior to this later date
to the Fidelity Variable Insurance Products Fund Money Market Investment
Division.
- - STATE OF ISSUE REQUIRES RETURN OF CERTIFICATE'S CASH VALUE
If the state of issue of your Certificate requires that we return the
Certificate's Cash Value, we will allocate the initial Net Premium among your
chosen Investment Divisions. In this case you will bear full investment risk
for any amounts we allocate to the Investment Division during the right to
examine period. This automatic immediate investment feature only applies if
specified in your Certificate. Please check with your agent to determine the
status of your Certificate.
You may change the Net Premium allocation if you notify us in writing.
Portions you allocate to the Investment Divisions must be whole percentages of
5% or more. We will allocate subsequent Net Premiums 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; and
- If the asset rebalancing option is in effect, we will allocate Net
Premiums accordingly, until you terminate this option. (See "Transfers
Among Investment Divisons -- Asset Rebalancing.")
You will receive several different types of notification that explain what
your current premium allocation is. The Certificate shows the initial allocation
you chose on the enrollment form. In addition, we will send you written
confirmation, after we receive your premium payment, that shows you how we
allocated your premium. A Certificate's annual statement will also summarize
your current premium allocation.
ACCUMULATION UNITS
We use Net Premiums allocated to the Investment Divisions to credit
Accumulation Units under the Certificates.
We determine the number of Accumulation Units in each Investment Division to
be credited under the Certificate (including the initial allocation to the
Fidelity Variable Insurance Products Fund Money Market Investment Division) as
follows:
1. Multiply the Net Premium by the appropriate allocation percentage to
determine the portion we will invest in the Investment Division; then
2. Divide each portion to be invested in an Investment Division by the
Accumulation Unit value of that particular Investment Division we computed
following the receipt of the payment.
Deductions made for the monthly deduction amount on each Processing Date
will reduce the number of Accumulation Units under the Certificate. (See
"Deductions from Investment Value -- Monthly Deduction Amount.")
ACCUMULATION UNIT VALUES
The Accumulation Unit value for each Investment Division will vary daily to
reflect the investment experience and charges of the applicable Portfolio, as
well as the daily deduction for mortality and expense risks. We will determine
the Accumulation Unit value 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 us.
PREMIUM LIMITATION
If we receive premiums that 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 any
applicable interest no later than sixty (60) days after the end of a Coverage
Year.
We will accept a premium payment that results in an increase in the death
benefit greater than the amount of the premium, only after we approve evidence
of insurability.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 13
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DEATH BENEFITS AND
POLICY VALUES
VALUES UNDER THE CERTIFICATE
CASH SURRENDER VALUE -- 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.
INVESTMENT 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."
DEATH BENEFITS
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 "Taxes -- Income Taxation of Certificate
Benefits." Each Certificate must qualify under either the GPT or the CVAT. Prior
to issue, you choose the procedure under which a Certificate will qualify. Once
you choose either the GPT or the CVAT 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. This is necessary in order for
the Certificate to meet the current federal tax definition of life insurance,
which places limitations on the amount of premiums that may be paid and the Cash
Values that can accumulate relative to the death benefit. The factors used to
determine the Variable Insurance Amount depend on the testing procedure chosen
and are in the Certificate.
Under the GPT, there is also a maximum amount of premium that may be paid
with respect to each Certificate.
Use of the CVAT can be advantageous if you intend to maximize the total
amount of premiums paid under a Certificate. An offsetting consideration,
however, is that the factors we use to determine the Variable Insurance Amount
are higher under the CVAT, which can result in a higher death benefit over time
and a higher total cost of insurance.
DEATH BENEFITS 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 will be the Death Proceeds.
OPTION CHANGE
While the Certificate is in force, you may change the death benefit option
you selected. You must make your request to change your death benefit option in
writing and during the lifetime of the Insured.
CHANGE FROM OPTION A TO OPTION B If the change is from Death Benefit Option
A to Death Benefit Option B, the Insured must provide us with satisfactory
evidence of insurability. 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.
CHANGE FROM OPTION B TO OPTION A 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 our approval of the change. We
will notify you when we have made the change.
<PAGE>
14 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
PAYMENT OPTIONS -- We may pay the Death Proceeds under the Certificate in a
lump sum or we may apply the proceeds to one of our payment options. The minimum
amount that may be placed under a payment option is $5,000 unless we consent to
a lesser amount. Once payments under payment options 2, 3 or 4 begin, you may
not surrender the Certificate to receive a lump sum settlement in place of the
life insurance payments. The following options are available under the
Certificate:
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, we may make payments less often. The first, second and third payment
options are based on a net investment rate of 3% per annum. We may, however,
from time to time, at our discretion if mortality appears more favorable and
interest rates justify, apply other tables that will result in higher monthly
payments for each $1,000 applied under one or more of the four payment options.
We may agree to other arrangements for income payments.
INCREASES AND DECREASES IN FACE AMOUNT -- The minimum Face Amount of the
Certificate is $50,000. At any time after purchasing a Certificate, you may
request a change in the Face Amount by making a written request to us at our
Customer Service Center.
You must request an increase in the Face Amount in writing to us. All
requests are subject to evidence of insurability satisfactory to us and subject
to our current rules. Any increase we approve 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. We will apply decreases:
(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 coverage maturity
date ("Maturity Date"), we will pay you the Cash Surrender Value on the date you
surrender the Certificate. However, on the Maturity Date, the Certificate will
terminate and we will have no further obligations under the Certificate.
MAKING WITHDRAWALS FROM
THE CERTIFICATE
SURRENDER
At any time prior to the Maturity Date, provided the Certificate is in
effect and has a Cash Surrender Value, you 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 written request for surrender to
us. We will determine the Cash Surrender Value as of the Valuation Day we
receive the request, in a written form satisfactory to us, at our Customer
Service Center, or the date that you request, whichever is later.
The Cash Surrender Value is the net amount available upon surrender of the
Certificate and equals the Cash Value, minus Debt, minus any charges accrued but
not yet deducted. We will terminate the Certificate on the date of receipt of
the written request, or the date you request the surrender to be effective,
whichever is later.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 15
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We may pay the Cash Surrender Value in cash or you may allocate it to any
other payment option agreed upon by us.
PARTIAL WITHDRAWALS
At any time before the Maturity Date, and subject to our rules then in
effect, we allow twelve (12) partial withdrawals per Coverage Year without
charge. However, we allow only one (1) partial withdrawal 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, minus outstanding Debt.
We currently impose a charge for processing partial withdrawals in excess of
twelve (12) per Coverage Year. This charge is the lesser of:
- - 2% of the amount withdrawn; and
- - $25.00.
A partial withdrawal will reduce the Cash Surrender Value, Cash Value and
Investment Value. Any partial withdrawal will permanently affect the Cash
Surrender Value and may permanently affect the death benefit payable. If Death
Benefit Option A is in effect, we reduce the Face Amount by the amount of the
partial withdrawal. Unless specified otherwise, we will deduct partial
withdrawals on a Pro Rata Basis from the Investment Divisions. A Pro Rata Basis
is an allocation method based on the proportion of the Investment Value in each
Investment Division. You must submit requests for partial withdrawals to us in
writing. The effective date of a partial withdrawal will be the Valuation Day
closest to the date that we receive the request, in writing, at our Customer
Service Center. If your Certificate is deemed to be a modified endowment
contract, a 10% penalty tax may be imposed on income distributed before the
insured attains age 59 1/2. See "Taxes -- Modified Endowment Contracts."
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 up to twelve (12) times per Coverage Year
without charge. 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. You must make transfer requests in writing on a form that we approve
or by telephone in accordance with established procedures. Our rules then in
effect will limit the amounts that you may transfer. The amounts that you
transfer must be in whole percentages of 5% or more, unless otherwise agreed to
by us. Currently, the minimum value of Accumulation Units that you may transfer
from one Investment Division to another is the lesser of:
- - $500; and
- - 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,
we will transfer the entire remaining amount.
Currently there are no restrictions on transfers other than those described
in this Prospectus. We reserve 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, we will reduce the
number of Accumulation Units that we credit to that Investment Division. We will
determine the reduction by dividing:
1. the amount transferred by,
2. the Accumulation Unit value for that Investment Division on the Valuation
Day we receive your written request for transfer.
In the event of a transfer to an Investment Division, we will increase the
number of Accumulation Units credited. 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 written request.
ASSET REBALANCING
Subject to our current rules, you may authorize us to automatically
reallocate Investment Value periodically in order to maintain a particular
percentage allocation among the Investment Divisions that you have selected.
This reallocation is known as 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, we must receive a written request from you. If
you elect Asset Rebalancing, you must include all Investment Value in the
automatic reallocation. The percentages that you select under Asset Rebalancing
<PAGE>
16 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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will override any prior percentage allocations that you have chosen and we will
allocate all future Net Premiums accordingly. We will count all transfers made
pursuant to Asset Rebalancing on the same day as one (1) transfer toward the
twelve (12) transfers per Coverage Year that we permit without charge. Once
elected, you may instruct us, in a written form satisfactory to us, at any time
to terminate the option. In addition, we will terminate your participation in
Asset Rebalancing if you make any transfer outside of Asset Rebalancing.
DOLLAR COST AVERAGING
You may elect to allocate your Net Premiums among the Investment Divisions
under the dollar cost averaging option program ("DCA Program"). If you choose to
participate in the DCA Program, we will deposit your Net Premiums into the
Fidelity Variable Insurance Products Fund Money Market Investment Division. Each
month, we will withdraw amounts from that Division and allocate them to the
other Investment Divisions in accordance with your allocation instructions. The
transfer date will be the monthly anniversary of your first transfer under your
initial DCA election. We will make the first transfer within five (5) business
days after we receive your initial election, either in writing or by telephone,
subject to the telephone transfer procedures described in this Prospectus.
We will allocate your Net Premium to the Investment Divisions that you
specify, in the proportions that you specify. If, on any transfer date, your
Investment Value that we have allocated to the Fidelity Variable Insurance
Products Fund Money Market Investment Division is less than the amount you have
elected to transfer, we will terminate your participation in the DCA Program.
Any transfers made in connection with the DCA Program must be whole percentages
of 5% or more, unless we otherwise agree. In addition, transfers made under the
DCA Program count toward the twelve (12) transfers per coverage year that we
permit you without charge.
You may also cancel your DCA election by notifying us in writing.
The main objective of the DCA Program is to minimize the impact of
short-term price fluctuations. The DCA Program allows you to take advantage of
market fluctuations. Since we transfer the same dollar amount to other
Investment Divisions at set intervals, the DCA Program allows you to purchase
more Accumulation Units when prices are low and fewer Accumulation Units when
prices are high. Therefore, you may achieve a lower average cost per
Accumulation Unit over the long-term. However, it is important to understand
that a DCA Program does not assure a profit or protect against loss in a
declining market. If you choose to participate in the DCA Program you should
have the financial ability to continue making investments through periods of low
price levels.
You cannot make transfers under Asset Rebalancing and participate in the DCA
Program at the same time.
PROCEDURES FOR TELEPHONE TRANSFERS
You may make telephone transfers in two ways. You may directly contact a
customer service representative. You 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. If you intend to conduct telephone transfers through the
VRU, you will be asked to complete a Telephone Authorization Form.
We 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 you. 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 us through a written letter. Moreover, all VRU transactions will
be assigned a unique confirmation number which will become part of the
Certificate's history. We are not liable for any loss, cost or expense for
action on telephone instructions which are believed to be genuine in accordance
with these procedures.
PROCESSING OF TRANSACTIONS
Generally, we process your transactions only on a Valuation Day. We will
process requests that we receive on a Valuation Day before the close of trading
on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern Time) on
that same day, except as otherwise indicated in this Prospectus. We will process
requests that we receive after the close of the NYSE as of the next Valuation
Day.
LOANS
As long as the Certificate is in effect, you may obtain without the consent
of the beneficiary (provided the designation of beneficiary is not irrevocable),
a cash Loan from us. The maximum Loan amount is equal to the sum of the Cash
Surrender Value plus outstanding Debt, multiplied by .90, minus outstanding
Debt.
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 17
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We will transfer the amount of each Loan on a Pro Rata Basis from each of
the Investment Divisions (unless you specify otherwise) to the Loan Account. We
use the Loan Account 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. We will transfer the difference
between the value of the Loan Account and any outstanding Debt from the
Investment Divisions to the Loan Account on each Certificate Anniversary.
Interest payments are due as shown in the Certificate. If you do not pay
interest within five (5) days of its due date, we will add it 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 (2) months prior to
the date on which we determine the adjustable loan interest rate.
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
We will credit interest on amounts in the Loan Account for Coverage Years 1
through 10 at a rate equal to the adjustable loan interest rate, minus 1%. We
will credit interest on amounts in the Loan Account for Coverage Years 11 and
later at a rate equal to the adjustable loan interest rate, minus .20%.
LOAN REPAYMENTS
You can repay any part of or the entire Loan at any time. We will allocate
the amount of the Loan repayment to your chosen Investment Divisions on a Pro
Rata Basis, determined as of the date of the Loan repayment. Unless specified
otherwise, we will treat any additional premium payments that we receive during
the period when a Loan is outstanding as Loan repayments.
TERMINATION DUE TO EXCESSIVE DEBT
If total outstanding Debt 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 you do
not make sufficient Loan repayment by the end of this 31-day period, the
Certificate will terminate 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, your 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, your 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.
LAPSE AND REINSTATEMENT
LAPSE AND GRACE PERIOD
We provide a sixty-one (61) calendar day grace period, from the date we mail
you notice that the Cash Surrender Value is insufficient to pay the charges due
under the Certificate. Unless you have given us written notice of termination in
advance of the date of termination of the Certificate, insurance will continue
in force during this period. You will be liable to us for all unpaid charges due
under the Certificate for the period that the Certificate remains in force.
In the event that total outstanding Debt 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 you do not make sufficient Loan repayment 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 Policy is terminated
or (ii) the Certificate has been surrendered for cash, we may reinstate the
Certificate prior to the Maturity Date, provided:
(a) you make your request within three (3) years of the date of lapse. Some
states provide a longer period; and
(b) you submit satisfactory evidence of insurability to us.
We will not require evidence of insurability, if you reinstate your
Certificate within one (1) month after the end of the 61-calendar day grace
period, provided the Insured is alive.
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18 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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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, you must repay or carry over to the reinstated
certificate any Debt at the time of termination.
TERMINATION OF POLICY
The employer or we may terminate participation in the Policy. 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, we will not accept
any new enrollment forms for new Insureds on or after the date that we receive
or send notice of discontinuance, whichever is applicable. In addition, we will
not issue any new Certificates. If you discontinue premium payments, we will
continue insurance coverage under the Certificate as long as the Cash Surrender
Value is sufficient to cover the charges due. We will not continue the coverage
under the Certificate beyond attained age 100. Attained age means the Insured's
age on the birthday nearest to the Coverage Date plus the period since the
Coverage Date. In addition, we will not continue any optional benefit rider
beyond the Certificate's date of termination. If the 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
Policy, provided you have not canceled or surrendered it, subject to our
qualifications then in effect. You will then pay Certificate premiums directly
to us.
CONTRACT LIMITATIONS
PARTIAL WITHDRAWALS
We limit you to twelve (12) partial withdrawals per Coverage Year.
TRANSFERS OF ACCOUNT VALUE
We reserve the right to limit the size of transfers and remaining balances
and to limit the number and frequency of transfers among the Investment
Divisions.
FACE AMOUNT INCREASES OR DECREASES
We reserve the right to limit the number of Face Amount increases or
decreases made under the Certificate to no more than one (1) in any twelve (12)
month period.
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 New York
Stock Exchange is closed for some reason other than a regular holiday or
Weekend, trading is restricted by the Securities and Exchange Commission ("SEC")
or the SEC declares that an emergency exists.
DEFERRAL OF PAYMENTS
We may defer payment of any Cash Surrender Values, withdrawals and loan
amounts that are not attributable to the Investment Divisions for up to six (6)
months from the date of the request. If we defer payment for more than thirty
(30) days, we will pay you interest.
CHANGES TO CONTRACT OR
SEPARATE ACCOUNT
MODIFICATION OF POLICY
The only way we may modify the policy is by a written agreement signed by
our President, or one of our Vice Presidents, Secretaries, or Assistant
Secretaries.
SUBSTITUTION OF FUNDS
We reserve the right to substitute the shares of any other registered
investment company for the shares of any Fund already purchased or to be
purchased in the future by the Separate Account provided that the substitution
has been approved by the Securities and Exchange Commission.
CHANGE IN OPERATION OF THE SEPARATE ACCOUNT
We may modify the operation of the Separate Account to the extent permitted
by law, including deregistration under the securities laws.
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 19
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SEPARATE ACCOUNT TAXES
Currently, we do not make a charge to the Separate Account for federal,
state and local taxes that may be allocable to the Separate Account. In the
future, we may begin to charge the Separate Account for federal, state and local
taxes if the applicable federal, state or local tax laws that impose tax on us
and/or the Separate Account change. We may make charges for other taxes that are
imposed on the Separate Account.
SUPPLEMENTAL BENEFITS
The following supplemental benefit may in the future be included in a
Certificate, subject to our current restrictions and limitations.
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 "Taxes -- Income Taxation of Certificate Benefits."
OTHER MATTERS
REDUCED CHARGES FOR ELIGIBLE GROUPS
We may reduce certain of the charges and deductions described above for
Policies issued in connection with a specific plan, in accordance with our
current internal policies as of the date we approve the application for a
policy. To qualify for such a reduction, a plan must satisfy certain criteria,
e.g., as to size of the plan, expected number of participants and anticipated
premium payment from the plan. Generally, the sales contacts and effort,
administrative costs and mortality cost per policy vary, based on such factors
as the size of the plan, the purposes for which policies are purchased and
certain characteristics of the plan's members. The amount of reduction and the
criteria for qualification will be reflected in the reduced sales effort and
administrative costs resulting from, and the different mortality experience
expected as a result of, sales to qualifying plans. We 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 policy owners invested in the
Separate Account.
OUR RIGHTS
We reserve the right to take certain actions in connection with our
operations and the operations of the Separate Account. We will take these
actions in accordance with applicable laws (including obtaining any required
approval of the Securities and Exchange Commission). If necessary, we will seek
your approval.
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 your voting rights or of any other persons who
have voting rights as to the Separate Account.
We also reserve the right to change the name of the Separate Account.
LIMIT ON RIGHT TO CONTEST
We may not contest the validity of the Certificate after it has been in
effect during the Insured's lifetime for two (2) years from the Issue Date. If
we reinstate the Certificate, the 2-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 2 years from its effective date. In addition, if the Insured
commits suicide in the 2-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, we will
appropriately adjust the amount of all benefits payable, as specified in the
Certificate.
ASSIGNMENT
The Certificate may be assigned as collateral for a loan or other
obligation. We are not responsible for any payment made or action taken before
receipt of written notice of such assignment. You must file proof of interest
with any claim under a collateral assignment.
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20 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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DIVIDENDS
No dividends will be paid under the Certificates.
YEAR 2000
IN GENERAL
The Year 2000 issue relates to the ability or inability of computer
hardware, software and other information technology (IT) systems, as well as
non-IT systems, such as equipment and machinery with imbedded chips and
microprocessors, to properly process information and data containing or related
to dates beginning with the year 2000 and beyond. The Year 2000 issue exists
because, historically, many IT and non-IT systems that are in use today were
developed years ago when a year was identified using a two-digit date field
rather than a four-digit date field. As information and data containing or
related to the century date are introduced to date sensitive systems, these
systems may recognize the year 2000 as "1900", or not at all, which may result
in systems processing information incorrectly. This, in turn, may significantly
and adversely affect the integrity and reliability of information databases of
IT systems, may cause the malfunctioning of certain non-IT systems, and may
result in a wide variety of adverse consequences to a company. In addition, Year
2000 problems that occur with third parties with which a company does business,
such as suppliers, computer vendors, distributors and others, may also adversely
affect any given company.
The integrity and reliability of Hartford's IT systems, as well as the
reliability of its non-IT systems, are integral aspects of Hartford's business.
Hartford issues insurance policies, annuities, mutual funds and other financial
products to individual and business customers, nearly all of which contain date
sensitive data, such as policy expiration dates, birth dates and premium payment
dates. In addition, various IT systems support communications and other systems
that integrate Hartford's various business segments and field offices. Hartford
also has business relationships with numerous third parties that affect
virtually all aspects of Hartford's business, including, without limitation,
suppliers, computer hardware and software vendors, insurance agents and brokers,
securities broker-dealers and other distributors of financial products, many of
which provide date sensitive data to Hartford, and whose operations are
important to Hartford's business.
INTERNAL YEAR 2000 EFFORTS AND TIMETABLE
Beginning in 1990, Hartford began working on making its IT systems Year 2000
ready, either through installing new programs or replacing systems. Since
January 1998, Hartford's Year 2000 efforts have focused on the remaining Year
2000 issues related to IT and non-IT systems in all of Hartford's business
segments. These Year 2000 efforts include the following five main initiatives:
(1) identifying and assessing Year 2000 issues; (2) taking actions to remediate
IT and non-IT systems so that they are Year 2000 ready; (3) testing IT and
non-IT systems for Year 2000 readiness; (4) deploying such remediated and tested
systems back into their respective production environments; and (5) conducting
internal and external integrated testing of such systems. As of December 31,
1998, Hartford substantially completed initiatives (1) through (4) of its
internal Year 2000 efforts. Hartford has begun initiative (5) and management
currently anticipates that such activity will continue into the fourth quarter
of 1999.
THIRD PARTY YEAR 2000 EFFORTS AND TIMETABLE
Hartford's Year 2000 efforts include assessing the potential impact on
Hartford of third parties' Year 2000 readiness. Hartford's third party Year 2000
efforts include the following three main initiatives: (1) identifying third
parties which have significant business relationships with Hartford, including,
without limitation, insurance agents, brokers, third party administrators, banks
and other distributors and servicers of financial products, and inquiring of
such third parties regarding their Year 2000 readiness; (2) evaluating such
third parties' responses to Hartford's inquiries; and (3) based on the
evaluation of third party responses (or a third party's failure to respond) and
the significance of the business relationship, conducting additional activities
with respect to third parties as determined to be necessary in each case. These
activities may include conducting additional inquiries, more in-depth
evaluations of Year 2000 readiness and plans, and integrated IT systems testing.
Hartford has completed the first third party initiative and, as of early 1999,
had substantially completed evaluating third party responses received. Hartford
has begun conducting the additional activities described in initiative (3) and
management currently anticipates that it will continue to do so through the end
of 1999. However, notwithstanding these third party Year 2000 efforts, Hartford
does not have control over these third parties and, as a result, Hartford cannot
currently determine to what extent future operating results may be adversely
affected by the failure of these third parties to adequately address their Year
2000 issues.
YEAR 2000 COSTS
The costs of Hartford's Year 2000 program that were incurred through the
year ended December 31, 1997 were not material to Hartford's financial condition
or results of operations. The after-tax costs of Hartford's Year 2000 efforts
for the year ended December 31, 1998 were approximately $3 million. Management
currently estimates that after-tax costs related to the Year 2000 program to be
incurred in 1999 will be less than $10 million. These costs are being expensed
as incurred.
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 21
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RISKS AND CONTINGENCY PLANS
If significant Year 2000 problems arise, including problems arising with
third parties, failures of IT and non-IT systems could occur, which in turn
could result in substantial interruptions in Hartford's business. In addition,
Hartford's investing activities are an important aspect of its business and
Hartford may be exposed to the risk that issuers of investments held by it will
be adversely impacted by Year 2000 issues. Given the uncertain nature of Year
2000 problems that may arise, especially those related to the readiness of third
parties discussed above, management cannot determine at this time whether the
consequences of Year 2000 related problems that could arise will have a material
impact on Hartford's financial condition or results of operations.
Hartford is in the process of developing certain contingency plans so that
if, despite its Year 2000 efforts, Year 2000 problems ultimately arise, the
impact of such problems may be avoided or minimized. These contingency plans are
being developed based on, among other things, known or reasonably anticipated
circumstances and potential vulnerabilities. The contingency planning also
includes assessing the dependency of Hartford's business on third parties and
their Year 2000 readiness. Hartford currently anticipates that internal and
external contingency plans will be substantially complete by the end of the
second quarter of 1999. However, in many contexts, Year 2000 issues are dynamic,
and ongoing assessments of business functions, vulnerabilities and risks must be
made. As such, new contingency plans may be needed in the future and/or existing
plans may need to be modified as circumstances warrant.
TAXES
GENERAL
Since federal tax law is complex, the tax consequences of purchasing this
policy will vary depending on your situation. You may need tax or legal advice
to help you determine whether purchasing this policy is right for you.
Our general discussion of the tax treatment of this policy is based on our
understanding of federal income tax laws as they are currently interpreted. A
detailed description of all federal income tax consequences regarding the
purchase of this policy cannot be made in the prospectus. We also do not discuss
state, municipal or other tax laws that may apply to this policy. For detailed
information, you should consult with a qualified tax adviser familiar with your
situation.
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 "Death Benefits and Policy Values --
Values Under the Certificate"). 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.
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22 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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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 contract are treated first as income, then as a recovery of basis.
Taxable withdrawals are subject to a 10% additional tax. Generally, only
distributions and loans made in the first year in which a policy becomes a
modified endowment contract, 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. In addition, if there is a reduction in benefits under the Certificate
within the first seven Coverage Years, the seven-pay test is applied as if the
Certificate had initially been issued at the reduced benefit level. Any
reduction in benefits attributable to the nonpayment of premiums will not be
taken into account for purposes of the seven-pay test if the benefits are
reinstated within 90 days after the reduction.
If the Certificate satisfies the seven-pay test for seven years,
distributions and loans made thereafter will not be subject to the modified
endowment contract 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.
Before assigning, pledging, or requesting a Loan under a Certificate that is
a modified endowment contract, an owner should consult a qualified tax adviser.
All modified endowment contracts 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 contract 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
The Code requires that investments supporting your policy be adequately
diversified. Code Section 817 provides that a variable life insurance contract
will not be treated as a life insurance contract for any period during which the
investments made by the separate account or underlying fund are not adequately
diversified. If a policy is not treated as a life insurance contract, the policy
owner will be subject to income tax on annual increases in cash value.
The Treasury Department's diversification regulations require, among other
things, that:
- - no more than 55% of the value of the total assets of the segregated asset
account 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 the
case of government securities, each government agency or instrumentality is
treated as a separate issuer.
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 still comply within a reasonable period and avoid
the taxation of contract income on an ongoing basis. However, either the company
or the policy owner must agree to pay the tax due for the period during which
the diversification requirements were not met.
We monitor the diversification of investments in the separate accounts and
test for diversification as required by
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 23
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the Code. We intend to administer all policies subject to the diversification
requirements in a manner that will maintain adequate diversification.
OWNERSHIP OF THE ASSETS
IN THE SEPARATE ACCOUNT
In order for a variable life insurance contract to qualify for tax deferral,
assets in the separate accounts supporting the contract must be considered to be
owned by the insurance company and not by the policy owner. It is unclear under
what circumstances an investor is considered to have enough control over the
assets in the separate account to be considered the owner of the assets for tax
purposes.
The IRS has issued several rulings discussing investor control. These
rulings say that certain incidents of ownership by the policy owner, such as the
ability to select and control investments in a separate account, will cause the
policy owner to be treated as the owner of the assets for tax purposes.
In its explanation of the diversification regulations, the Treasury
Department recognized that the temporary regulations "do not provide guidance
concerning the circumstances in which investor control of the investments of a
segregated asset account may cause the investor, rather than the insurance
company, to be treated as the owner of the assets in the account." The
explanation further indicates that "the temporary regulations provide that in
appropriate cases a segregated asset account may include multiple sub-accounts,
but do not specify the extent to which policyholders may direct their
investments to particular sub-accounts without being treated as the owners of
the underlying assets. Guidance on this and other issues will be provided in
regulations or revenue rulings under Section 817(d), relating to the definition
of variable policy."
The final regulations issued under Section 817 did not provide guidance
regarding investor control, and as of the date of this prospectus, guidance has
yet to be issued. We do not know if additional guidance will be issued. If
guidance is issued, we do not know if it will have a retroactive effect.
Due to the lack of specific guidance on investor control, there is some
uncertainty about when a policy owner is considered the owner of the assets for
tax purposes. We reserve the right to modify the policy, as necessary, to
prevent you from being considered the owner of assets in the separate account.
TAX DEFERRAL DURING ACCUMULATION PERIOD
Under existing provisions of the Code, except as described below, any
increase in an owner's Investment Value is generally not taxable to the Policy
Owner unless amounts are received (or are deemed to be received) under the
Policy prior to the Insured's death. If the Policy is surrendered or matures,
the amount received will be includable in the Policy Owner's income to the
extent that it exceeds the Policy Owner's "investment in the contract." (If
there is any debt at the time of a surrender, then such debt will be treated as
an amount distributed to the owner.) The "investment in the contract" is the
aggregate amount of premium payments and other consideration paid for the
Policy, less the aggregate amount received previously under the Policy to the
extent such amounts received were excluded from gross income. Whether partial
withdrawals (or other such amounts deemed to be distributed) from the Policy
constitute income to the Policy Owner depends, in part, upon whether the Policy
is considered a modified endowment policy for Federal income tax purposes.
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.
PERFORMANCE RELATED INFORMATION
The Separate Account may advertise certain performance related information
concerning its Investment Divisions. Performance information about an Investment
Division is based on the Investment Division's past performance only and is no
indication of future performance.
Each Investment Division may include total return in advertisements, sales
literature, and other promotional materials. When an Investment Division
advertises its total return, it will usually be calculated for one year, three
years, five years, and ten years or some other relevant periods if the
Investment Division has not been in existence for at least ten years. Total
return may also be calculated for the most recent fiscal quarter and for the
period since underlying fund inception. Total return is measured by comparing
the value of an investment in the Investment Division at the beginning of the
relevant period to the value of the investment at the end of the period.
The Investment Divisions investing in the One Group Investment Trust Bond
Portfolio and the One Group Investment Trust Government Bond Portfolio may
advertise yield in addition to total return. The yield will be computed in the
following manner: The net investment income per unit earned during a recent one
month period is divided by the
<PAGE>
24 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
unit value on the last day of the period. This figure reflects the Certificate
charges described below.
The Investment Division investing in the Variable Insurance Products Fund
Money Market Portfolio may advertise yield and effective yield. The yield of an
Investment Division is based upon the income earned by the Investment Division
over a seven-day period and then annualized, i.e., the income earned in the
period is assumed to be earned every seven days over a 52-week period and stated
as a percentage of the investment. Effective yield is calculated similarly, but
when annualized, the income earned by the investment is assumed to be reinvested
in Division units and thus compounded in the course of a 52-week period. Yield
reflects the Certificate charges described below.
Total return for an Investment Division includes deductions for the maximum
sales load charge, mortality and expense risk charge, DAC tax charge, and the
administrative expense charge, and is therefore lower than total return at the
Portfolio level, where there are no comparable charges. The performance results
do not reflect the cost of insurance or any state or local premium taxes. If
these charges were included, the total return figures would be lower. Total
return may also be calculated to include deductions for Separate Account
charges, but not include deductions for the sales load charge, DAC tax charge or
any state or local premium taxes. If reflected, the total return figures would
reduce the performance quoted. Yield for an Investment Division includes all
recurring charges (except sales charges) and is therefore lower than yield at
the Portfolio level, where there are no comparable charges.
We may provide information on various topics to current and prospective
owners in advertising, sales literature or other materials. These topics may
include the relationship between sectors of the economy and the economy as a
whole and its effect on various securities markets, investment strategies and
techniques (such as value investing, dollar cost averaging and asset
allocation), plan and trust arrangements, the advantages and disadvantages of
investing in tax-advantaged and taxable instruments, current and prospective
owner profiles and hypothetical purchase scenarios, financial management and tax
and retirement planning, and investment alternatives, including comparisons
between the Certificates and the characteristics of and market for such
alternatives.
LEGAL PROCEEDINGS
The Separate Account is not a party to any pending material legal
proceedings.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 25
- --------------------------------------------------------------------------------
GLOSSARY OF SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCUMULATION UNIT: A unit of measure we use to calculate the value of an
Investment Division.
CASH SURRENDER VALUE: The Cash Value, minus Debt, minus accrued charges that we
have not deducted.
CASH VALUE: The Investment Value plus the Loan Account Value.
CERTIFICATE: The form evidencing and describing your rights, benefits, and
options under the Policy. The Certificate will describe, among other things, (i)
the benefits payable upon the death of the named Insured, (ii) to whom the
benefits are payable and (iii) the limits and other terms of the Policy as they
pertain to the Insured.
CERTIFICATE ANNIVERSARY: An anniversary of the Coverage Date.
COVERAGE DATE: The date insurance under the Certificate is effective as to an
Insured and from which we determine Coverage Months and Coverage Years.
COVERAGE MONTH(S): The 1-month period and each successive 1-month period
following the Coverage Date.
COVERAGE YEAR(S): The 12-month period and each successive 12-month period
following the Coverage Date.
CUSTOMER SERVICE CENTER: The service area of Hartford Life and Annuity Insurance
Company located at 100 Campus Drive, Suite 250, Florham Park, New Jersey 07932.
DEATH PROCEEDS: The amount that we will pay on the death of the Insured. This
equals the death benefit minus any outstanding Debt plus any rider benefits
payable.
DEBT: The aggregate amount of outstanding Loans, plus any interest accrued at
the adjustable loan interest rate.
FACE AMOUNT: The minimum death benefit as long as the Certificate is in force.
We specify the Face Amount you chose on your Certificate. We may change the Face
Amount after certificate issuance on your request or due to a change in death
benefit option or a partial withdrawal.
HARTFORD OR US OR WE OR OUR: Hartford Life and Annuity Insurance Company.
INSURED: The person on whose life we issue the Certificate. We identify the
Insured 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.
INVESTMENT VALUE: The sum of the values of assets in the Investment Divisions
under the Certificate.
LOAN: Any amount borrowed against the Investment Value under the Certificate.
LOAN ACCOUNT: An account in our general account, established for any amounts
transferred from the Investment Divisions for requested loans. The Loan Account
credits a fixed rate of interest that is not based on the investment experience
of the Separate Account.
LOAN ACCOUNT VALUE: The amounts of the Investment Value transferred to (or from)
our 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%.
MONTHLY DEDUCTION AMOUNT: The fees and charges deducted from the Investment
Value on the Processing Date.
NET PREMIUM: The amount of premium credited to the Investment Divisions.
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 date.
VALUATION DAY: Every day the New York Stock Exchange is open for trading. The
value of the Separate Account is determined at the close of the New York Stock
Exchange (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.
YOU OR YOUR: The person or legal entity designated as the owner in the
enrollment form or as subsequently changed. This person or legal entity may be
someone other than the Insured. You possess all rights under the Policy with
respect to the Certificate.
<PAGE>
26 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
WHERE YOU CAN FIND MORE INFORMATION
You can call your representative with questions or write to us at:
International Corporate Marketing Group
Attn: Registered Products
100 Campus Drive, Suite 250
Florham Park, NJ 07932
The Statement of Additional Information, which is attached to this
prospectus, contains more information about this life insurance policy. Like
this prospectus, it is filed with the Securities and Exchange Commission. You
should read the Statement of Additional Information because you are bound by the
terms contained in it.
We file other information with the Securities and Exchange Commission. You
may read and copy any document we file at the SEC's public reference room in
Washington, DC 20549-6009. Please call the SEC at 1-800-SEC-0330 for further
information. Our SEC filings are also available to the public at the SEC's web
site at http://www.sec.gov.
<PAGE>
PART B
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE
THE ONE PROVIDER (FORMERLY KNOWN AS PEGASUS PROVIDER)
This Statement of Additional Information is not a prospectus. We will send
you a prospectus if you write us at International Corporate Marketing Group,
Attn: Registered Products, 100 Campus Drive, Suite 250, Florham Park, NJ 07932.
DATE OF PROSPECTUS: MAY 3, 1999
DATE OF STATEMENT OF ADDITIONAL INFORMATION: MAY 3, 1999
<PAGE>
2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GENERAL INFORMATION AND HISTORY....................................... 3
SERVICES.............................................................. 6
EXPERTS............................................................... 6
DISTRIBUTION OF THE POLICIES.......................................... 6
ADDITIONAL INFORMATION ABOUT CHARGES.................................. 6
ILLUSTRATION OF BENEFITS.............................................. 8
FINANCIAL STATEMENTS..................................................
</TABLE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 3
- --------------------------------------------------------------------------------
GENERAL INFORMATION
AND HISTORY
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("HARTFORD")
Hartford Life and Annuity Insurance Company 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, the District of
Columbia and Puerto Rico, except New York. On January 1, 1998, Hartford's name
changed from ITT Hartford Life and Annuity Insurance Company to Hartford Life
and Annuity Insurance Company. We were originally incorporated under the laws of
Wisconsin on January 9, 1956, and subsequently redomiciled to Connecticut. Our
offices are located in Simsbury, Connecticut; however, our mailing address is
P.O. Box 2999, Hartford, CT 06104-2999.
Hartford Life and Annuity Insurance Company is controlled by Hartford Life
Insurance Company, which is controlled by Hartford Life & Accident Insurance
Company, which is controlled by Hartford Life Inc., which is controlled by
Hartford Accident & Indemnity Company, which is controlled by Hartford Fire
Insurance Company, which is controlled by Nutmeg Insurance Company, which is
controlled by The Hartford Financial Services Group, Inc. Each of these
companies is engaged in the business of insurance and financial services.
The following table shows a brief description of the business experience of
officers and directors of Hartford Life and Annuity Insurance Company:
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME YEAR OF ELECTION FOR PAST FIVE YEARS; OTHER DIRECTORSHIPS
- --------------------------- ------------------------------------- ----------------------------------------------------------------
<S> <C> <C>
Wendell J. Bossen 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.
Gregory A. Boyko Senior Vice President, Vice President & Controller (1995-1997), Hartford Life Insurance
Director, 1997* Company; Director (1997-Present); Senior Vice President
(1997-Present), Chief Financial Officer & Treasurer
(1997-1998); Vice 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.
Peter W. Cummins 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.
Timothy M. Fitch Vice President, 1995 Vice President (1995-Present); Actuary (1994-Present); Assistant
Actuary, 1997 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>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME YEAR OF ELECTION FOR PAST FIVE YEARS; OTHER DIRECTORSHIPS
- --------------------------- ------------------------------------- ----------------------------------------------------------------
<S> <C> <C>
Mary Jane B. Fortin Vice President & Chief Accounting Vice President & Chief Accounting Office (1998-Present),
Officer, 1998 Hartford Life Insurance Company; Vice President & Chief
Accounting Officer, (1998-Present), Royal Life Insurance
Company of America; Vice President & Chief Accounting Officer
(1998-Present) Alpine Life Insurance Company; Chief Accounting
Officer (1997-Present), Hartford Life, Inc.; Director, Finance
(1995-1997), Value Health, Inc.; Senior Manager (1993-1995),
Coopers and Lybrand; Audit Manager (1993-1996) Arthur Andersen
& Co.
David T. Foy Senior Vice President & Senior Vice President (1998-Present), Vice President (1998),
Treasurer, 1998 Assistant Vice President (1995-1998), Hartford; Senior Vice
President (1998-Present), Hartford Life and Accident Insurance
Company; Director, Strategic Planning Corporate Finance
(1995-1996), IA Product Development (1994-1995), Hartford;
Various Actuarial Roles (1989-1993) Milliman & Robertson.
Lynda Godkin Senior Vice President, 1997 Assistant General Counsel and Secretary (1994-1995), Hartford;
General Counsel, 1996 Director (1997-Present); Senior Vice President (1997-Present);
Corporate Secretary, 1996 General Counsel (1996-Present); Corporate Secretary
Director, 1997* (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.
Lois W. Grady Senior Vice President, 1998 Vice President (1994-1998), Hartford; Senior Vice President
Vice President, 1994 (1998-Present); Vice President (1993-1997); Assistant Vice
President (1987-1993), Hartford Life and Accident Insurance
Company; Senior Vice President (1998-Present); Vice President
(1994-1997); Assistant Vice President (1987-1994), Hartford
Life Insurance Company.
Stephen T. Joyce 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.
Michael D. Keeler Vice President, 1998 Vice President (1998-Present); Hartford Life and Accident
Insurance Company; Vice President (1995-1997), Providian
Insurance; Supervisor/ Manager (1985-1995), U.S. West
Communications.
</TABLE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 5
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME YEAR OF ELECTION FOR PAST FIVE YEARS; OTHER DIRECTORSHIPS
- --------------------------- ------------------------------------- ----------------------------------------------------------------
<S> <C> <C>
Robert A. Kerzner 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.
Thomas M. Marra Executive Vice President, 1996 Senior Vice President (1993-1996); Director of Individual
Director, Individual Life and Annuities (1991-1993), Hartford; Director (1994-Present);
Annuity Division, 1993 Executive Vice President (1995-Present); Director, Individual
Director, 1994* 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.
Steven L. Matthieson Vice President, 1984 Director of New Business (1984-1997), Hartford.
Craig R. Raymond 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.
Lowndes A. Smith 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.
David M. Znamierowski Senior Vice President, 1997 Vice President (1997) Senior Vice President (1997) Director,
Director, 1998* Risk Management Strategy (1996) Director (1998), Hartford;
Director (1998-Present); Senior Vice President (1997-Present);
Hartford Life and Accident Insurance Company; Vice President,
Investment Strategy (1997-Present), Hartford Life, Inc.; Vice
President, Investment Strategy & Policy (1991-1996), Aetna
Life and Casualty.
</TABLE>
- ---------
* Denotes date of election to Board of Directors of Hartford.
** Affiliated Company of The Hartford Financial Services Group, Inc.
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
<PAGE>
6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE was established as a
separate account under Connecticut law on October 9, 1995. The Separate Account
is classified as a unit investment trust registered with the Securities and
Exchange Commission under the Investment Company Act of 1940.
SERVICES
SAFEKEEPING OF ASSETS -- Title to the assets of the Separate Account is held
by Hartford. The assets are kept physically segregated and are held separate and
apart from Hartford's general corporate assets. Records are maintained of all
purchases and redemptions of Fund shares held in each of the Investment
Divisons.
EXPERTS
INDEPENDENT PUBLIC ACCOUNTANTS -- The audited financial statements included
in this registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports. Reference is made to the report on the statutory
financial statements of Hartford Life and Annuity Insurance Company which states
the statutory 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, and
are not presented in accordance with generally accepted accounting principles.
The principal business address of Arthur Andersen LLP is One Financial Plaza,
Hartford, Connecticut 06103.
ACTUARIAL EXPERT -- The hypothetical Policy illustrations included in this
Statement of Additional Information and the registration statement with respect
to the Separate Account have been approved by James M. Hedreen, FSA, MAAA,
Actuary, for Hartford, and are included in reliance upon his opinion as to their
reasonableness.
DISTRIBUTION OF THE POLICIES
Hartford Equity Sales Company, Inc. ("HESCO") serves as principal
underwriter for the Certificates and will offer the Policies on a continuous
basis. HESCO is an affiliate of Hartford. Both HESCO and Hartford are ultimately
controlled by The Hartford Financial Services Group, Inc. HESCO is registered
with the Securities and Exchange Commission under the Securities Exchange Act of
1934 as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. ("NASD").
The Policies will be sold by salespersons who represent Hartford as
insurance agents and who are registered representatives of HESCO or certain
other registered broker-dealers who have entered into distribution agreements
with HESCO.
The maximum sales commission payable to Hartford agents, independent
registered insurance brokers, and other registered broker-dealers is 6% of the
premiums paid. Additionally, expense allowances, service fees and asset-based
trail commissions may be paid. A sales representative may be required to return
all or a portion of the commissions paid if a Certificate terminates prior to
the Certificate's second Certificate Anniversary.
Broker-dealers or financial institutions are compensated according to a
schedule set forth HESCO and any applicable rules or regulations for variable
insurance compensation. Compensation is generally based on premium payments.
This compensation is usually paid from the sales charges described in the
Prospectus.
In addition, a broker-dealer or financial institution may also receive
additional compensation for, among other things, training, marketing or other
services provided. HESCO, its affiliates or Hartford may also make compensation
arrangements with certain broker-dealers or other financial institutions based
on total sales by the broker-dealer or financial institution of insurance
products. These payments, which may be different for broker-dealers or financial
institutions, will be made by HESCO, its affiliates or Hartford out of their
assets and will not effect the amounts paid by the policy owners or contract
owners to purchase, hold or surrender variable insurance products.
The following table shows officers and directors of HESCO:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITIONS AND OFFICES
- ----------------------- ----------------------------------------
<S> <C>
Lowndes A. Smith President and Chief Executive Officer,
Director
Thomas M. Marra Executive Vice President, Director
Peter W. Cummins Senior Vice President
Lynda Godkin Senior Vice President, General Counsel
and Corporate Secretary
Donald E. Waggaman, Jr. Treasurer
George R. Jay Controller
</TABLE>
ADDITIONAL INFORMATION
ABOUT CHARGES
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 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.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 7
- --------------------------------------------------------------------------------
Front-end sales loads cover the expenses related to the sale and
distribution of the Certificates.
REDUCED CHARGES FOR ELIGIBLE GROUPS -- Certain of the charges and deductions
described above 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 this 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 the 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. From time to time, we may modify
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 Certificate Owners invested in ICMG
Registered Variable Life Separate Account One.
UNDERWRITING PROCEDURES -- To purchase a Certificate you must submit an
enrollment form to us. Within limits, you may choose the initial Premium and the
initial Face Amount. Certificates generally will be issued only on the lives of
insureds ages 79 and under who supply evidence of insurability satisfactory to
us. Acceptance is subject to our underwriting rules and we reserve the right to
reject an enrollment form for any reason. No change in the terms or conditions
of a Certificate will be made without your consent.
The cost of insurance charge is to cover our anticipated mortality costs. We
use various underwriting procedures, including medical underwriting procedures,
depending on the characteristics of the group to which the 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
Policy that are agreed to by Hartford and the employer. The actual monthly cost
of insurance rates will be based on our expectations as to future experience. We
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 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 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.
INCREASES IN FACE AMOUNT -- At any time after purchasing a Certificate, You
may request In Writing to change the Face Amount. The minimum Face Amount of the
Certificate is $50,000.
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 Us 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. We reserve the right to limit the number of increases made under the
Certificate to not more than one in any 12 month period.
<PAGE>
8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES
AND CASH SURRENDER VALUES
The following tables illustrate how the death benefit, Cash Value and Cash
Surrender Value of a Policy may change with the investment experience of the
Separate Account. They show how the death benefit, Cash Value and Cash Surrender
Value of a Certificate issued to an Insured of a given age would vary over time
if the investment return on the assets held in each Portfolio were a uniform,
gross annual rate of 0%, 6% and 12%. The death benefit, Cash Value and Cash
Surrender Value would be different from those shown if the gross annual
investment returns averaged 0%, 6% and 12% over a period of years, but
fluctuated above and below those averages for individual Coverage Years. They
assume that no Loans are made and that no partial withdrawals have been made.
The tables are also based on the assumption that the Owner has not requested an
increase or decrease in the Face Amount and that no transfers have been made in
any Coverage Years.
The tables illustrate a Certificate issued to a Male Insured, Age 45 in the
Medical Non-Smoker Class with an Initial Face Amount of $250,000. The death
benefit, Cash Value and Cash Surrender Value would be lower if the Insured was a
smoker or in a special class since the cost of insurance charges would increase.
The tables reflect the fact that the net return on the assets held in the
Investment Divisions is lower than the gross after-tax return of the Portfolios.
This is because these tables assume an investment management fee and other
estimated Portfolio expenses totaling 0.77%. The 0.77% figure is based on an
average of the current management fees and expenses of the available 18
Portfolios, taking into account any applicable expense caps or reimbursement
arrangements. Actual fees and expenses of the Portfolios associated with a
Certificate may be more or less than 0.77%, will vary from year to year, and
will depend on how the Cash Value is allocated.
As their headings indicate, the tables reflect the deductions of current
contractual charges and guaranteed contractual charges for a single gross
interest rate. These charges include the front-end sales load, the daily charge
to the Separate Account for assuming mortality and expense risks, and the
monthly administrative expense and cost of insurance charges. All tables assume
a charge of 2.00% for taxes attributable to premiums, a 1.25% charge for the
federal DAC tax and reflect the fact that no charges against the Separate
Account are currently made for federal, state or local taxes attributable to the
Policy or Certificate.
Each table also shows the amount to which the premiums would accumulate if
an amount equal to those premiums were invested to earn interest, after taxes,
at 5% compounded annually.
Upon request, Hartford will furnish a comparable illustration based on a
proposed Certificate's specific circumstances.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
LEVEL DEATH BENEFIT OPTION
ISSUE AGE 45 MALE MEDICAL NON-SMOKER
$14,102 PREMIUM PAID FOR 7 YEARS
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.77% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------ ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- -------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 14,807 12,248 12,248 250,000 11,006 11,006 250,000
2 30,355 24,242 24,242 250,000 21,822 21,822 250,000
3 46,680 35,988 35,988 250,000 32,452 32,452 250,000
4 63,821 47,523 47,523 250,000 42,901 42,901 250,000
5 81,819 58,865 58,865 250,000 53,170 53,170 250,000
6 100,717 70,127 70,127 250,000 63,265 63,265 250,000
7 120,560 81,222 81,222 250,000 73,182 73,182 250,000
8 126,588 79,610 79,610 250,000 70,623 70,623 250,000
9 132,917 77,975 77,975 250,000 67,944 67,944 250,000
10 139,563 76,307 76,307 250,000 65,125 65,125 250,000
11 146,541 74,700 74,700 250,000 62,148 62,148 250,000
12 153,868 73,021 73,021 250,000 58,993 58,993 250,000
13 161,561 71,251 71,251 250,000 55,648 55,648 250,000
14 169,639 69,381 69,381 250,000 52,091 52,091 250,000
15 178,121 67,407 67,407 250,000 48,298 48,298 250,000
16 187,027 65,254 65,254 250,000 44,233 44,233 250,000
17 196,378 62,977 62,977 250,000 39,852 39,852 250,000
18 206,197 60,561 60,561 250,000 35,099 35,099 250,000
19 216,507 57,991 57,991 250,000 29,907 29,907 250,000
20 227,332 55,247 55,247 250,000 24,205 24,205 250,000
25 290,140 37,996 37,996 250,000 -- -- --
30 370,300 11,178 11,178 250,000 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES AND
FRONT-END SALES LOADS.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES, AND
FRONT-END SALES LOADS.
THE DEATH BENEFIT MAY, AND THE CASH VALUE AND CASH SURRENDER VALUE WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE, AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 0%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
10 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
LEVEL DEATH BENEFIT OPTION
ISSUE AGE 45 MALE MEDICAL NON-SMOKER
$14,102 PREMIUM PAID FOR 7 YEARS
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.23% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------- -------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- -------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 14,807 12,996 12,996 250,000 11,706 11,706 250,000
2 30,355 26,501 26,501 250,000 23,915 23,915 250,000
3 46,680 40,544 40,544 250,000 36,654 36,654 250,000
4 63,821 55,186 55,186 250,000 49,958 49,958 250,000
5 81,819 70,472 70,472 250,000 63,856 63,856 250,000
6 100,717 86,543 86,543 250,000 78,388 78,388 250,000
7 120,560 103,351 103,351 250,000 93,588 93,588 250,000
8 126,588 107,634 107,634 250,000 96,458 96,458 250,000
9 132,917 112,087 112,087 250,000 99,364 99,364 250,000
10 139,563 116,713 116,713 250,000 102,299 102,299 250,000
11 146,541 121,685 121,685 253,521 105,258 105,258 250,000
12 153,868 126,831 126,831 257,183 108,238 108,238 250,000
13 161,561 132,145 132,145 260,911 111,240 111,240 250,000
14 169,639 137,633 137,633 264,706 114,261 114,261 250,000
15 178,121 143,303 143,303 268,575 117,297 117,297 250,000
16 187,027 149,117 149,117 272,455 120,340 120,340 250,000
17 196,378 155,126 155,126 276,433 123,378 123,378 250,000
18 206,197 161,335 161,335 280,534 126,394 126,394 250,000
19 216,507 167,749 167,749 284,780 129,369 129,369 250,000
20 227,332 174,375 174,375 289,185 132,284 132,284 250,000
25 290,140 210,792 210,792 313,614 145,495 145,495 250,000
30 370,300 253,124 253,124 342,731 153,822 153,822 250,000
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES AND
FRONT-END SALES LOADS.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES, AND
FRONT-END SALES LOADS.
THE DEATH BENEFIT MAY, AND THE CASH VALUE AND CASH SURRENDER VALUE WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE, AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 6%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
LEVEL DEATH BENEFIT OPTION
ISSUE AGE 45 MALE MEDICAL NON-SMOKER
$14,102 PREMIUM PAID FOR 7 YEARS
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.23% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ---------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ---------- ---------- ---------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 14,807 13,745 13,745 250,000 12,408 12,408 250,000
2 30,355 28,851 28,851 250,000 26,094 26,094 250,000
3 46,680 45,470 45,470 250,000 41,204 41,204 250,000
4 63,821 63,802 63,802 250,000 57,905 57,905 250,000
5 81,819 84,052 84,052 250,000 76,379 76,379 250,000
6 100,717 106,529 106,529 254,682 96,838 96,838 250,000
7 120,560 131,290 131,290 304,835 119,365 119,365 277,304
8 126,588 144,570 144,570 326,119 130,424 130,424 294,382
9 132,917 159,177 159,177 348,995 142,462 142,462 312,537
10 139,563 175,233 175,233 373,591 155,550 155,550 331,837
11 146,541 193,150 193,150 400,556 169,776 169,776 352,353
12 153,868 212,837 212,837 429,592 185,230 185,230 374,162
13 161,561 234,443 234,443 460,758 202,019 202,019 397,344
14 169,639 258,155 258,155 494,214 220,253 220,253 421,986
15 178,121 284,175 284,175 530,137 240,052 240,052 448,178
16 187,027 312,630 312,630 568,578 261,534 261,534 476,017
17 196,378 343,845 343,845 609,903 284,823 284,823 505,608
18 206,197 378,077 378,077 654,382 310,044 310,044 537,059
19 216,507 415,613 415,613 702,312 337,325 337,325 570,489
20 227,332 456,758 456,758 754,001 366,803 366,803 606,020
25 290,140 729,330 729,330 1,080,083 553,280 553,280 820,141
30 370,300 1,156,746 1,156,746 1,559,017 823,179 823,179 1,110,678
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES AND
FRONT-END SALES LOADS.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES, AND
FRONT-END SALES LOADS.
THE DEATH BENEFIT MAY, AND THE CASH VALUE AND CASH SURRENDER VALUE WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE, AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 12%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
12 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
INCREASING DEATH BENEFIT OPTION
ISSUE AGE 45 MALE MEDICAL NON-SMOKER
$14,102 PREMIUM PAID FOR 7 YEARS
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.77% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------ ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- -------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 14,807 12,237 12,237 262,270 10,953 10,953 261,061
2 30,355 24,200 24,200 274,255 21,660 21,660 271,788
3 46,680 35,885 35,885 285,963 32,116 32,116 282,265
4 63,821 47,323 47,323 297,422 42,321 42,321 292,491
5 81,819 58,530 58,530 308,648 52,265 52,265 302,456
6 100,717 69,655 69,655 319,780 61,944 61,944 312,157
7 120,560 80,577 80,577 330,719 71,340 71,340 321,576
8 126,588 78,782 78,782 328,926 68,239 68,239 318,486
9 132,917 76,951 76,951 327,098 64,995 64,995 315,254
10 139,563 75,071 75,071 325,222 61,586 61,586 311,858
11 146,541 73,226 73,226 323,374 57,997 57,997 308,284
12 153,868 71,284 71,284 321,440 54,212 54,212 304,515
13 161,561 69,215 69,215 319,382 50,222 50,222 300,543
14 169,639 67,016 67,016 317,193 46,014 46,014 296,353
15 178,121 64,681 64,681 314,869 41,570 41,570 291,928
16 187,027 62,113 62,113 312,321 36,860 36,860 287,240
17 196,378 59,396 59,396 309,616 31,850 31,850 282,254
18 206,197 56,513 56,513 306,746 26,495 26,495 276,928
19 216,507 53,452 53,452 303,700 20,745 20,745 271,211
20 227,332 50,195 50,195 300,460 14,550 14,550 265,053
25 290,140 30,170 30,170 280,546 -- -- --
30 370,300 1,228 1,228 251,778 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES AND
FRONT-END SALES LOADS.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES, AND
FRONT-END SALES LOADS.
THE DEATH BENEFIT MAY, AND THE CASH VALUE AND CASH SURRENDER VALUE WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE, AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 0%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
INCREASING DEATH BENEFIT OPTION
ISSUE AGE 45 MALE MEDICAL NON-SMOKER
$14,102 PREMIUM PAID FOR 7 YEARS
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.23% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------- -------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- -------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 14,807 12,985 12,985 262,955 11,651 11,651 261,702
2 30,355 26,455 26,455 276,384 23,737 23,737 273,751
3 46,680 40,426 40,426 290,313 36,270 36,270 286,246
4 63,821 54,949 54,949 304,788 49,266 49,266 299,203
5 81,819 70,060 70,060 319,849 62,732 62,732 312,629
6 100,717 85,937 85,937 335,661 76,683 76,683 326,539
7 120,560 102,489 102,489 352,156 91,118 91,118 340,933
8 126,588 106,473 106,473 356,129 93,102 93,102 342,923
9 132,917 110,575 110,575 360,221 94,984 94,984 344,814
10 139,563 114,786 114,786 364,423 96,733 96,733 346,574
11 146,541 119,263 119,263 368,877 98,328 98,328 348,182
12 153,868 123,826 123,826 373,433 99,740 99,740 349,610
13 161,561 128,449 128,449 378,050 100,951 100,951 350,838
14 169,639 133,127 133,127 382,724 101,933 101,933 351,839
15 178,121 137,856 137,856 387,449 102,655 102,655 352,583
16 187,027 142,539 142,539 392,135 103,071 103,071 353,026
17 196,378 147,253 147,253 396,847 103,128 103,128 353,113
18 206,197 151,983 151,983 401,576 102,760 102,760 352,781
19 216,507 156,715 156,715 406,308 101,889 101,889 351,953
20 227,332 161,429 161,429 411,023 100,437 100,437 350,551
25 290,140 183,711 183,711 433,352 81,756 81,756 332,217
30 370,300 200,098 200,098 449,880 33,073 33,073 284,192
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES AND
FRONT-END SALES LOADS.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES, AND
FRONT-END SALES LOADS.
THE DEATH BENEFIT MAY, AND THE CASH VALUE AND CASH SURRENDER VALUE WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE, AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 6%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
14 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
INCREASING DEATH BENEFIT OPTION
ISSUE AGE 45 MALE MEDICAL NON-SMOKER
$14,102 PREMIUM PAID FOR 7 YEARS
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.23% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ---------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ---------- ---------- ---------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 14,807 13,733 13,733 263,637 12,349 12,349 262,341
2 30,355 28,801 28,801 278,588 25,898 25,898 275,785
3 46,680 45,336 45,336 294,996 40,765 40,765 290,538
4 63,821 63,523 63,523 313,039 57,084 57,084 306,730
5 81,819 83,547 83,547 332,903 74,994 74,994 324,502
6 100,717 105,757 105,757 354,922 94,655 94,655 344,010
7 120,560 130,253 130,253 379,218 116,226 116,226 365,414
8 126,588 143,243 143,243 392,105 126,216 126,216 375,334
9 132,917 157,534 157,534 406,283 137,056 137,056 386,101
10 139,563 173,247 173,247 421,872 148,811 148,811 397,776
11 146,541 190,791 190,791 439,255 161,561 161,561 410,439
12 153,868 210,079 210,079 458,390 175,389 175,389 424,173
13 161,561 231,266 231,266 479,412 190,396 190,396 439,078
14 169,639 254,548 254,548 502,512 206,690 206,690 455,259
15 178,121 280,144 280,144 527,905 224,383 224,383 472,830
16 187,027 308,185 308,185 560,495 243,588 243,588 491,903
17 196,378 338,955 338,955 601,230 264,424 264,424 512,597
18 206,197 372,700 372,700 645,075 287,010 287,010 535,030
19 216,507 409,701 409,701 692,322 311,472 311,472 559,329
20 227,332 450,260 450,260 743,274 337,951 337,951 585,632
25 290,140 718,949 718,949 1,064,709 506,966 506,966 753,521
30 370,300 1,140,275 1,140,275 1,536,818 754,180 754,180 1,017,582
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES AND
FRONT-END SALES LOADS.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES, AND
FRONT-END SALES LOADS.
THE DEATH BENEFIT MAY, AND THE CASH VALUE AND CASH SURRENDER VALUE WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE, AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 12%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 15
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
LEVEL DEATH BENEFIT OPTION
ISSUE AGE 45 MALE MEDICAL NON-SMOKER
$6,000 PREMIUM PAID FOR 30 YEARS
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.77% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------ ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- -------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 6,300 5,053 5,053 250,000 3,965 3,965 250,000
2 12,915 9,941 9,941 250,000 7,802 7,802 250,000
3 19,861 14,664 14,664 250,000 11,510 11,510 250,000
4 27,154 19,253 19,253 250,000 15,086 15,086 250,000
5 34,812 23,724 23,724 250,000 18,524 18,524 250,000
6 42,853 28,209 28,209 250,000 21,822 21,822 250,000
7 51,296 32,600 32,600 250,000 24,962 24,962 250,000
8 60,161 37,014 37,014 250,000 28,055 28,055 250,000
9 69,469 41,326 41,326 250,000 30,965 30,965 250,000
10 79,242 45,526 45,526 250,000 33,676 33,676 250,000
11 89,504 49,674 49,674 250,000 36,180 36,180 250,000
12 100,279 53,688 53,688 250,000 38,467 38,467 250,000
13 111,593 57,550 57,550 250,000 40,531 40,531 250,000
14 123,473 61,263 61,263 250,000 42,365 42,365 250,000
15 135,947 64,827 64,827 250,000 43,954 43,954 250,000
16 149,044 68,176 68,176 250,000 45,275 45,275 250,000
17 162,796 71,376 71,376 250,000 46,302 46,302 250,000
18 177,236 74,420 74,420 250,000 46,995 46,995 250,000
19 192,398 77,302 77,302 250,000 47,311 47,311 250,000
20 208,318 80,016 80,016 250,000 47,204 47,204 250,000
25 300,684 90,655 90,655 250,000 38,707 38,707 250,000
30 418,569 94,896 94,896 250,000 8,188 8,188 250,000
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES AND
FRONT-END SALES LOADS.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES, AND
FRONT-END SALES LOADS.
THE DEATH BENEFIT MAY, AND THE CASH VALUE AND CASH SURRENDER VALUE WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE, AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 0%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
16 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
LEVEL DEATH BENEFIT OPTION
ISSUE AGE 45 MALE MEDICAL NON-SMOKER
$6,000 PREMIUM PAID FOR 30 YEARS
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.23% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------- -------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- -------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 6,300 5,366 5,366 250,000 4,240 4,240 250,000
2 12,915 10,881 10,881 250,000 8,600 8,600 250,000
3 19,861 16,549 16,549 250,000 13,085 13,085 250,000
4 27,154 22,408 22,408 250,000 17,698 17,698 250,000
5 34,812 28,482 28,482 250,000 22,439 22,439 250,000
6 42,853 34,915 34,915 250,000 27,312 27,312 250,000
7 51,296 41,615 41,615 250,000 32,308 32,308 250,000
8 60,161 48,718 48,718 250,000 37,552 37,552 250,000
9 69,469 56,114 56,114 250,000 42,918 42,918 250,000
10 79,242 63,808 63,808 250,000 48,399 48,399 250,000
11 89,504 71,909 71,909 250,000 54,001 54,001 250,000
12 100,279 80,335 80,335 250,000 59,723 59,723 250,000
13 111,593 89,089 89,089 250,000 65,578 65,578 250,000
14 123,473 98,197 98,197 250,000 71,571 71,571 250,000
15 135,947 107,684 107,684 250,000 77,712 77,712 250,000
16 149,044 117,530 117,530 250,000 84,000 84,000 250,000
17 162,796 127,815 127,815 250,000 90,436 90,436 250,000
18 177,236 138,571 138,571 250,000 97,020 97,020 250,000
19 192,398 149,814 149,814 254,331 103,750 103,750 250,000
20 208,318 161,464 161,464 267,774 110,629 110,629 250,000
25 300,684 226,144 226,144 336,454 148,047 148,047 250,000
30 418,569 302,437 302,437 409,501 193,395 193,395 262,148
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES AND
FRONT-END SALES LOADS.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES, AND
FRONT-END SALES LOADS.
THE DEATH BENEFIT MAY, AND THE CASH VALUE AND CASH SURRENDER VALUE WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE, AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 6%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 17
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
LEVEL DEATH BENEFIT OPTION
ISSUE AGE 45 MALE MEDICAL NON-SMOKER
$6,000 PREMIUM PAID FOR 30 YEARS
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.23% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS --------------------------------- -------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- -------- --------- ---------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 6,300 5,680 5,680 250,000 4,515 4,515 250,000
2 12,915 11,858 11,858 250,000 9,433 9,433 250,000
3 19,861 18,587 18,587 250,000 14,795 14,795 250,000
4 27,154 25,958 25,958 250,000 20,650 20,650 250,000
5 34,812 34,056 34,056 250,000 27,046 27,046 250,000
6 42,853 43,094 43,094 250,000 34,043 34,043 250,000
7 51,296 53,062 53,062 250,000 41,696 41,696 250,000
8 60,161 64,195 64,195 250,000 50,207 50,207 250,000
9 69,469 76,482 76,482 250,000 59,535 59,535 250,000
10 79,242 90,044 90,044 250,000 69,767 69,767 250,000
11 89,504 105,168 105,168 250,000 81,017 81,017 250,000
12 100,279 121,895 121,895 250,000 93,411 93,411 250,000
13 111,593 140,324 140,324 275,783 107,104 107,104 250,000
14 123,473 160,571 160,571 307,398 122,270 122,270 250,000
15 135,947 182,809 182,809 341,036 139,062 139,062 259,630
16 149,044 207,165 207,165 376,771 157,324 157,324 286,345
17 162,796 233,901 233,901 414,888 177,150 177,150 314,471
18 177,236 263,238 263,238 455,617 198,654 198,654 344,108
19 192,398 295,422 295,422 499,212 221,949 221,949 375,363
20 208,318 330,718 330,718 545,938 247,159 247,159 408,348
25 300,684 564,829 564,829 836,470 407,253 407,253 603,682
30 418,569 932,455 932,455 1,256,726 640,085 640,085 863,638
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES AND
FRONT-END SALES LOADS.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES, AND
FRONT-END SALES LOADS.
THE DEATH BENEFIT MAY, AND THE CASH VALUE AND CASH SURRENDER VALUE WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE, AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 12%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
18 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
INCREASING DEATH BENEFIT OPTION
ISSUE AGE 45 MALE MEDICAL NON-SMOKER
$6,000 PREMIUM PAID FOR 30 YEARS
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.77% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------ ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- -------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 6,300 5,049 5,049 255,073 3,944 3,944 254,044
2 12,915 9,924 9,924 259,962 7,741 7,741 257,852
3 19,861 14,622 14,622 264,675 11,384 11,384 261,509
4 27,154 19,172 19,172 269,237 14,872 14,872 265,009
5 34,812 23,587 23,587 273,664 18,194 18,194 268,345
6 42,853 28,017 28,017 278,093 21,345 21,345 271,510
7 51,296 32,338 32,338 282,423 24,304 24,304 274,485
8 60,161 36,666 36,666 286,760 27,176 27,176 277,374
9 69,469 40,872 40,872 290,976 29,820 29,820 280,037
10 79,242 44,944 44,944 295,059 32,215 32,215 282,453
11 89,504 48,930 48,930 299,052 34,350 34,350 284,609
12 100,279 52,745 52,745 302,881 36,207 36,207 286,489
13 111,593 56,361 56,361 306,513 37,781 37,781 288,086
14 123,473 59,774 59,774 309,943 39,057 39,057 289,387
15 135,947 62,981 62,981 313,167 40,020 40,020 290,376
16 149,044 65,885 65,885 316,096 40,641 40,641 291,025
17 162,796 68,570 68,570 318,800 40,886 40,886 291,302
18 177,236 71,021 71,021 321,270 40,714 40,714 291,164
19 192,398 73,228 73,228 323,497 40,073 40,073 290,562
20 208,318 75,172 75,172 325,463 38,916 38,916 289,448
25 300,684 80,186 80,186 330,614 24,061 24,061 274,853
30 418,569 74,753 74,753 325,380 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES AND
FRONT-END SALES LOADS.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES, AND
FRONT-END SALES LOADS.
THE DEATH BENEFIT MAY, AND THE CASH VALUE AND CASH SURRENDER VALUE WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE, AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 0%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 19
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
INCREASING DEATH BENEFIT OPTION
ISSUE AGE 45 MALE MEDICAL NON-SMOKER
$6,000 PREMIUM PAID FOR 30 YEARS
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.23% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------- -------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- -------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 6,300 5,362 5,362 255,360 4,218 4,218 254,297
2 12,915 10,862 10,862 260,848 8,532 8,532 258,603
3 19,861 16,500 16,500 266,475 12,941 12,941 263,004
4 27,154 22,310 22,310 272,271 17,442 17,442 267,497
5 34,812 28,313 28,313 278,257 22,028 22,028 272,076
6 42,853 34,668 34,668 284,582 26,693 26,693 276,734
7 51,296 41,264 41,264 291,157 31,420 31,420 281,456
8 60,161 48,233 48,233 298,105 36,318 36,318 286,349
9 69,469 55,457 55,457 305,307 41,245 41,245 291,274
10 79,242 62,932 62,932 312,761 46,179 46,179 296,207
11 89,504 70,749 70,749 320,548 51,102 51,102 301,131
12 100,279 78,808 78,808 328,587 55,994 55,994 306,026
13 111,593 87,091 87,091 336,851 60,844 60,844 310,879
14 123,473 95,603 95,603 345,343 65,630 65,630 315,671
15 135,947 104,346 104,346 354,066 70,329 70,329 320,378
16 149,044 113,230 113,230 362,939 74,904 74,904 324,963
17 162,796 122,345 122,345 372,034 79,308 79,308 329,382
18 177,236 131,682 131,682 381,352 83,485 83,485 333,578
19 192,398 141,238 141,238 390,890 87,367 87,367 337,485
20 208,318 151,003 151,003 400,637 90,884 90,884 341,033
25 300,684 202,341 202,341 451,910 100,657 100,657 351,047
30 418,569 255,308 255,308 504,878 87,546 87,546 338,463
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES AND
FRONT-END SALES LOADS.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES, AND
FRONT-END SALES LOADS.
THE DEATH BENEFIT MAY, AND THE CASH VALUE AND CASH SURRENDER VALUE WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE, AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 6%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
20 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
INCREASING DEATH BENEFIT OPTION
ISSUE AGE 45 MALE MEDICAL NON-SMOKER
$6,000 PREMIUM PAID FOR 30 YEARS
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.23% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS --------------------------------- -------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- -------- --------- ---------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 6,300 5,675 5,675 255,646 4,492 4,492 254,549
2 12,915 11,837 11,837 261,766 9,358 9,358 259,383
3 19,861 18,532 18,532 268,414 14,630 14,630 264,620
4 27,154 25,844 25,844 275,672 20,345 20,345 270,296
5 34,812 33,849 33,849 283,617 26,537 26,537 276,446
6 42,853 42,778 42,778 292,465 33,247 33,247 283,111
7 51,296 52,595 52,595 302,205 40,506 40,506 290,322
8 60,161 63,524 63,524 313,047 48,486 48,486 298,250
9 69,469 75,536 75,536 324,965 57,106 57,106 306,814
10 79,242 88,731 88,731 338,057 66,407 66,407 316,056
11 89,504 103,361 103,361 352,561 76,445 76,445 326,029
12 100,279 119,423 119,423 368,498 87,275 87,275 336,790
13 111,593 137,040 137,040 385,979 98,969 98,969 348,409
14 123,473 156,372 156,372 405,161 111,601 111,601 360,959
15 135,947 177,593 177,593 426,218 125,247 125,247 374,517
16 149,044 200,802 200,802 449,254 139,979 139,979 389,153
17 162,796 226,296 226,296 474,548 155,870 155,870 404,944
18 177,236 254,300 254,300 502,333 172,991 172,991 421,958
19 192,398 285,067 285,067 532,859 191,414 191,414 440,267
20 208,318 318,871 318,871 566,398 211,216 211,216 459,949
25 300,684 544,798 544,798 806,806 334,694 334,694 582,679
30 418,569 900,675 900,675 1,213,895 509,407 509,407 756,416
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES AND
FRONT-END SALES LOADS.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES, AND
FRONT-END SALES LOADS.
THE DEATH BENEFIT MAY, AND THE CASH VALUE AND CASH SURRENDER VALUE WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE, AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 12%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
Hartford Life and Annuity Insurance Company SA-1
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life and Annuity Insurance Company
ICMG Registered Variable Life Separate Account One Pegasus Provider and to the
Owners of Units of Interest therein:
We have audited the accompanying statements of assets and liabilities of
Hartford Life and Annuity Insurance Company ICMG Registered Variable Life
Separate Account One Pegasus Provider (VIP High Income Portfolio, VIP
Equity-Income Portfolio, VIP Money Market Portfolio, VIP II Asset Manager
Portfolio, VIP II Index 500 Portfolio, VIP III Growth Opportunities Portfolio,
Pegasus Bond Fund, Pegasus Growth and Value Fund, Pegasus Mid-Cap Opportunity
Fund, Pegasus Growth Fund, Pegasus Intrinsic Value Fund, Putnam VT International
Growth Fund, Putnam VT Vista Fund and Putnam VT Voyager Fund) (collectively, the
Account) as of December 31, 1998, and the related statements of operations and
statements of changes in net assets for the period presented. These financial
statements are the responsibility of the Account's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Account as of December 31,
1998 and the results of its operations and the changes in its net assets for the
period presented in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
February 25, 1999
<PAGE>
SA-2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE
PEGASUS PROVIDER
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
VIP VIP
HIGH INCOME EQUITY-INCOME
PORTFOLIO DIVISION PORTFOLIO DIVISION
--------------------- ---------------------
<S> <C> <C>
ASSETS:
Investments:
Investments in
Variable Insurance
Products Fund:
VIP High Income
Portfolio
Shares 783
Cost $9,983
Market Value..... $ 9,012 --
VIP Equity-Income
Portfolio
Shares 486
Cost $12,230
Market Value..... -- $ 12,342
VIP Money Market
Portfolio
Shares 9,814
Cost $9,814
Market Value..... -- --
Investments in
Variable Insurance
Products Fund II:
VIP II Asset
Manager Portfolio
Shares 587
Cost $10,001
Market Value..... -- --
VIP II Index 500
Portfolio
Shares 15,551
Cost $1,901,506
Market Value..... -- --
Investments in
Variable Insurance
Products Fund III:
VIP III Growth
Opportunities
Portfolio
Shares 496
Cost $10,052
Market Value..... -- --
Investments in
Pegasus Variable
Funds:
Pegasus Bond Fund
Shares 991
Cost $10,342
Market Value..... -- --
Receivable from
Hartford Life and
Annuity Insurance
Company............... -- --
----------- -----------
Total Assets........... 9,012 12,342
----------- -----------
LIABILITIES:
Payable to Hartford
Life and Annuity
Insurance Company..... 10 2,350
----------- -----------
Total Liabilities...... 10 2,350
----------- -----------
Net Assets (variable
life contract
liabilities).......... $ 9,002 $ 9,992
----------- -----------
----------- -----------
VARIABLE LIFE INSURANCE
POLICIES:
Units owned by
participants.......... -- --
Unit price............. $9.0022500 $9.9918774
Units owned by Hartford
Life and Annuity
Insurance Company..... 1,000 1,000
Unit price............. $9.0022500 $9.9918774
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SA-3
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VIP VIP II VIP II VIP III
MONEY MARKET ASSET MANAGER INDEX 500 GROWTH OPPORTUNITIES
PORTFOLIO DIVISION PORTFOLIO DIVISION PORTFOLIO DIVISION PORTFOLIO DIVISION
--------------------- --------------------- --------------------- -----------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Investments in
Variable Insurance
Products Fund:
VIP High Income
Portfolio
Shares 783
Cost $9,983
Market Value..... -- -- -- --
VIP Equity-Income
Portfolio
Shares 486
Cost $12,230
Market Value..... -- -- -- --
VIP Money Market
Portfolio
Shares 9,814
Cost $9,814
Market Value..... $ 9,814 -- -- --
Investments in
Variable Insurance
Products Fund II:
VIP II Asset
Manager Portfolio
Shares 587
Cost $10,001
Market Value..... -- $ 10,631 -- --
VIP II Index 500
Portfolio
Shares 15,551
Cost $1,901,506
Market Value..... -- -- $ 2,196,619 --
Investments in
Variable Insurance
Products Fund III:
VIP III Growth
Opportunities
Portfolio
Shares 496
Cost $10,052
Market Value..... -- -- -- $ 11,336
Investments in
Pegasus Variable
Funds:
Pegasus Bond Fund
Shares 991
Cost $10,342
Market Value..... -- -- -- --
Receivable from
Hartford Life and
Annuity Insurance
Company............... 519 -- 14,802 --
--------------------- --------------------- --------------------- ------------
Total Assets........... 10,333 10,631 2,211,421 11,336
--------------------- --------------------- --------------------- ------------
LIABILITIES:
Payable to Hartford
Life and Annuity
Insurance Company..... 17 12 14,046 12
--------------------- --------------------- --------------------- ------------
Total Liabilities...... 17 12 14,046 12
--------------------- --------------------- --------------------- ------------
Net Assets (variable
life contract
liabilities).......... $ 10,316 $ 10,619 $ 2,197,375 $ 11,324
--------------------- --------------------- --------------------- ------------
--------------------- --------------------- --------------------- ------------
VARIABLE LIFE INSURANCE
POLICIES:
Units owned by
participants.......... -- -- 196,573 --
Unit price............. $10.3163619 $10.6194706 $11.1218239 $11.3236575
Units owned by Hartford
Life and Annuity
Insurance Company..... 1,000 1,000 1,000 1,000
Unit price............. $10.3163619 $10.6194706 $11.1218239 $11.3236575
<CAPTION>
PEGASUS BOND
FUND DIVISION
---------------
<S> <C>
ASSETS:
Investments:
Investments in
Variable Insurance
Products Fund:
VIP High Income
Portfolio
Shares 783
Cost $9,983
Market Value..... --
VIP Equity-Income
Portfolio
Shares 486
Cost $12,230
Market Value..... --
VIP Money Market
Portfolio
Shares 9,814
Cost $9,814
Market Value..... --
Investments in
Variable Insurance
Products Fund II:
VIP II Asset
Manager Portfolio
Shares 587
Cost $10,001
Market Value..... --
VIP II Index 500
Portfolio
Shares 15,551
Cost $1,901,506
Market Value..... --
Investments in
Variable Insurance
Products Fund III:
VIP III Growth
Opportunities
Portfolio
Shares 496
Cost $10,052
Market Value..... --
Investments in
Pegasus Variable
Funds:
Pegasus Bond Fund
Shares 991
Cost $10,342
Market Value..... $ 10,632
Receivable from
Hartford Life and
Annuity Insurance
Company............... --
---------------
Total Assets........... 10,632
---------------
LIABILITIES:
Payable to Hartford
Life and Annuity
Insurance Company..... 11
---------------
Total Liabilities...... 11
---------------
Net Assets (variable
life contract
liabilities).......... $ 10,621
---------------
---------------
VARIABLE LIFE INSURANCE
POLICIES:
Units owned by
participants.......... --
Unit price............. $10.6208921
Units owned by Hartford
Life and Annuity
Insurance Company..... 1,000
Unit price............. $10.6208921
</TABLE>
<PAGE>
SA-4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE
PEGASUS PROVIDER
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PEGASUS PEGASUS
GROWTH AND VALUE MID-CAP OPPORTUNITY
FUND DIVISION FUND DIVISION
----------------- --------------------
<S> <C> <C>
ASSETS:
Investments:
Pegasus Growth and
Value Fund
Shares 577
Cost $10,251
Market Value..... $ 10,274 --
Pegasus Mid-Cap
Opportunity Fund
Shares 627
Cost $10,162
Market Value..... -- $ 9,252
Pegasus Growth Fund
Shares 556
Cost $9,989
Market Value..... -- --
Pegasus Intrinsic
Value Fund
Shares 833
Cost $10,291
Market Value..... -- --
Investments in Putnam
Variable Trust:
Putnam VT
International
Growth Fund
Shares 732
Cost $9,994
Market Value..... -- --
Putnam VT Vista
Fund
Shares 711
Cost $9,967
Market Value..... -- --
Putnam VT Voyager
Fund
Shares 236
Cost $9,967
Market Value..... -- --
Receivable from
Hartford Life and
Annuity Insurance
Company............... -- --
----------------- -----------
Total Assets........... 10,274 9,252
----------------- -----------
LIABILITIES:
Payable to Hartford
Life and Annuity
Insurance Company..... 11 10
----------------- -----------
Total Liabilities...... 11 10
----------------- -----------
Net Assets (variable
life contract
liabilities).......... $ 10,263 $ 9,242
----------------- -----------
----------------- -----------
VARIABLE LIFE INSURANCE
POLICIES:
Units owned by
participants.......... -- --
Unit price............. $10.2629095 $9.2423828
Units owned by Hartford
Life and Annuity
Insurance Company..... 1,000 1,000
Unit price............. $10.2629095 $9.2423828
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SA-5
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PEGASUS PUTNAM VT PUTNAM VT PUTNAM VT
PEGASUS GROWTH INTRINSIC VALUE INTERNATIONAL GROWTH VISTA VOYAGER
FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION
---------------- ---------------- --------------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Pegasus Growth and
Value Fund
Shares 577
Cost $10,251
Market Value..... -- -- -- -- --
Pegasus Mid-Cap
Opportunity Fund
Shares 627
Cost $10,162
Market Value..... -- -- -- -- --
Pegasus Growth Fund
Shares 556
Cost $9,989
Market Value..... $ 11,919 -- -- -- --
Pegasus Intrinsic
Value Fund
Shares 833
Cost $10,291
Market Value..... -- $ 8,917 -- -- --
Investments in Putnam
Variable Trust:
Putnam VT
International
Growth Fund
Shares 732
Cost $9,994
Market Value..... -- -- $ 9,886 -- --
Putnam VT Vista
Fund
Shares 711
Cost $9,967
Market Value..... -- -- -- $ 10,472 --
Putnam VT Voyager
Fund
Shares 236
Cost $9,967
Market Value..... -- -- -- -- $ 10,807
Receivable from
Hartford Life and
Annuity Insurance
Company............... -- -- -- -- --
---------------- ---------------- ----------- --------------- ---------------
Total Assets........... 11,919 8,917 9,886 10,472 10,807
---------------- ---------------- ----------- --------------- ---------------
LIABILITIES:
Payable to Hartford
Life and Annuity
Insurance Company..... 13 9 12 11 12
---------------- ---------------- ----------- --------------- ---------------
Total Liabilities...... 13 9 12 11 12
---------------- ---------------- ----------- --------------- ---------------
Net Assets (variable
life contract
liabilities).......... $ 11,906 $ 8,908 $ 9,874 $ 10,461 $ 10,795
---------------- ---------------- ----------- --------------- ---------------
---------------- ---------------- ----------- --------------- ---------------
VARIABLE LIFE INSURANCE
POLICIES:
Units owned by
participants.......... -- -- -- -- --
Unit price............. $11.9059312 $8.9078603 $9.8740118 $10.4607005 $10.7954281
Units owned by Hartford
Life and Annuity
Insurance Company..... 1,000 1,000 1,000 1,000 1,000
Unit price............. $11.9059312 $8.9078603 $9.8740118 $10.4607005 $10.7954281
</TABLE>
<PAGE>
SA-6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE
PEGASUS PROVIDER
STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM INCEPTION, APRIL 29, 1998, TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
VIP
HIGH VIP
INCOME EQUITY-INCOME
PORTFOLIO PORTFOLIO
DIVISION DIVISION
---------- --------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends............................. $ -- $ --
EXPENSES:
Mortality and expense risk
undertakings......................... (41) (42)
---------- ------
Net investment income (loss)........ (41) (42)
---------- ------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investment
transactions......................... (5) 2,156
Net unrealized appreciation
(depreciation) of investments during
the year............................. (971) 112
---------- ------
Net realized and unrealized gain
(loss) on investments................ (976) 2,268
---------- ------
Net increase (decrease) in net
assets resulting from operations... $ (1,017) $ 2,226
---------- ------
---------- ------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SA-7
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VIP VIP II VIP III
MONEY ASSET VIP II GROWTH PEGASUS
MARKET MANAGER INDEX 500 OPPORTUNITIES BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO FUND
DIVISION DIVISION DIVISION DIVISION DIVISION
---------- ---------- ---------- -------------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends............................. $ 26,815 $ -- $ -- $ -- $ 376
EXPENSES:
Mortality and expense risk
undertakings......................... (1,877) (44) (6,188) (44) (45)
---------- ----- ---------- ------ -----
Net investment income (loss)........ 24,938 (44) (6,188) (44) 331
---------- ----- ---------- ------ -----
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investment
transactions......................... -- (4) (3,420) (2) 2
Net unrealized appreciation
(depreciation) of investments during
the year............................. -- 631 295,113 1,284 290
---------- ----- ---------- ------ -----
Net realized and unrealized gain
(loss) on investments................ -- 627 291,693 1,282 292
---------- ----- ---------- ------ -----
Net increase (decrease) in net
assets resulting from operations... $ 24,938 $ 583 $ 285,505 $ 1,238 $ 623
---------- ----- ---------- ------ -----
---------- ----- ---------- ------ -----
</TABLE>
<PAGE>
SA-8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE
PEGASUS PROVIDER
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE PERIOD FROM INCEPTION, APRIL 29, 1998, TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
PEGASUS PEGASUS
GROWTH AND MID-CAP
VALUE OPPORTUNITY
FUND FUND
DIVISION DIVISION
---------- ----------
<S> <C> <C>
INVESTMENT INCOME:
Dividends............................. $ 283 $ 192
EXPENSES:
Mortality and expense risk
undertakings......................... (42) (38)
---------- ----------
Net investment income (loss)........ 241 154
---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investment
transactions......................... (2) (4)
Net unrealized appreciation
(depreciation) of investments during
the year............................. 23 (910)
---------- ----------
Net realized and unrealized gain
(loss) on investments................ 21 (914)
---------- ----------
Net increase (decrease) in net
assets resulting from operations... $ 262 $ (760)
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SA-9
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PEGASUS
PEGASUS INTRINSIC PUTNAM VT PUTNAM VT PUTNAM VT
GROWTH VALUE INTERNATIONAL VISTA VOYAGER
FUND FUND GROWTH FUND FUND
DIVISION DIVISION FUND DIVISION DIVISION DIVISION
---------- ---------- -------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends............................. $ 21 $ 322 $ 27 $ -- $ --
EXPENSES:
Mortality and expense risk
undertakings......................... (43) (39) (42) (41) (42)
---------- ---------- ------ ----- -----
Net investment income (loss)........ (22) 283 (15) (41) (42)
---------- ---------- ------ ----- -----
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investment
transactions......................... (1) (4) (6) (5) (4)
Net unrealized appreciation
(depreciation) of investments during
the year............................. 1,929 (1,373) (109) 505 840
---------- ---------- ------ ----- -----
Net realized and unrealized gain
(loss) on investments................ 1,928 (1,377) (115) 500 836
---------- ---------- ------ ----- -----
Net increase (decrease) in net
assets resulting from operations... $ 1,906 $ (1,094) $ (130) $ 459 $ 794
---------- ---------- ------ ----- -----
---------- ---------- ------ ----- -----
</TABLE>
<PAGE>
SA-10 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE
PEGASUS PROVIDER
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM INCEPTION, APRIL 29, 1998, TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
VIP VIP
HIGH INCOME EQUITY-INCOME
PORTFOLIO DIVISION PORTFOLIO DIVISION
--------------------- ---------------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ (41) $ (42)
Net realized gain
(loss) on investment
transactions.......... (5) 2,156
Net unrealized
appreciation
(depreciation) of
investments during the
year.................. (971) 112
-------- -------
Net increase (decrease)
in net assets
resulting from
operations............ (1,017) 2,226
-------- -------
UNIT TRANSACTIONS:
Premiums............... 10,000 10,000
Transfers.............. -- --
Death claims........... -- --
Administrative fee..... -- --
Cost of insurance...... -- --
Other activity......... 19 (2,234)
-------- -------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 10,019 7,766
-------- -------
Total increase in net
assets................ 9,002 9,992
NET ASSETS:
Beginning of period.... -- --
-------- -------
End of period.......... $ 9,002 $ 9,992
-------- -------
-------- -------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SA-11
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VIP VIP II VIP II VIP III
MONEY MARKET ASSET MANAGER INDEX 500 GROWTH OPPORTUNITIES
PORTFOLIO DIVISION PORTFOLIO DIVISION PORTFOLIO DIVISION PORTFOLIO DIVISION
--------------------- --------------------- --------------------- -----------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 24,938 $ (44) $ (6,188) $ (44)
Net realized gain
(loss) on investment
transactions.......... -- (4) (3,420) (2)
Net unrealized
appreciation
(depreciation) of
investments during the
year.................. -- 631 295,113 1,284
--------------------- ------- ----------- -------
Net increase (decrease)
in net assets
resulting from
operations............ 24,938 583 285,505 1,238
--------------------- ------- ----------- -------
UNIT TRANSACTIONS:
Premiums............... 2,040,218 10,000 10,000 10,000
Transfers.............. (1,999,698) -- 1,999,698 --
Death claims........... (12,816) -- (3,108) --
Administrative fee..... (1,733) -- (3,437) --
Cost of insurance...... (31,861) -- (63,548) --
Other activity......... (8,732) 36 (27,735) 86
--------------------- ------- ----------- -------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (14,622) 10,036 1,911,870 10,086
--------------------- ------- ----------- -------
Total increase in net
assets................ 10,316 10,619 2,197,375 11,324
NET ASSETS:
Beginning of period.... -- -- -- --
--------------------- ------- ----------- -------
End of period.......... $ 10,316 $10,619 $2,197,375 $11,324
--------------------- ------- ----------- -------
--------------------- ------- ----------- -------
<CAPTION>
PEGASUS BOND
FUND DIVISION
---------------
<S> <C>
OPERATIONS:
Net investment income
(loss)................ $ 331
Net realized gain
(loss) on investment
transactions.......... 2
Net unrealized
appreciation
(depreciation) of
investments during the
year.................. 290
-------
Net increase (decrease)
in net assets
resulting from
operations............ 623
-------
UNIT TRANSACTIONS:
Premiums............... 10,000
Transfers.............. --
Death claims........... --
Administrative fee..... --
Cost of insurance...... --
Other activity......... (2)
-------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 9,998
-------
Total increase in net
assets................ 10,621
NET ASSETS:
Beginning of period.... --
-------
End of period.......... $10,621
-------
-------
</TABLE>
<PAGE>
SA-12 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE
PEGASUS PROVIDER
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE PERIOD FROM INCEPTION, APRIL 29, 1998, TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
PEGASUS PEGASUS
GROWTH AND VALUE MID-CAP OPPORTUNITY
FUND DIVISION FUND DIVISION
----------------- --------------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 241 $ 154
Net realized gain
(loss) on investment
transactions.......... (2) (4)
Net unrealized
appreciation
(depreciation) of
investments during the
year.................. 23 (910)
------- -------
Net increase (decrease)
in net assets
resulting from
operations............ 262 (760)
------- -------
UNIT TRANSACTIONS:
Premiums............... 10,000 10,000
Transfers.............. -- --
Death claims........... -- --
Administrative fee..... -- --
Cost of insurance...... -- --
Other activity......... 1 2
------- -------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 10,001 10,002
------- -------
Total increase in net
assets................ 10,263 9,242
NET ASSETS:
Beginning of period.... -- --
------- -------
End of period.......... $10,263 $ 9,242
------- -------
------- -------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SA-13
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PEGASUS PUTNAM VT PUTNAM VT PUTNAM VT
PEGASUS GROWTH INTRINSIC VALUE INTERNATIONAL GROWTH VISTA VOYAGER
FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION
---------------- ---------------- --------------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ (22) $ 283 $ (15) $ (41) $ (42)
Net realized gain
(loss) on investment
transactions.......... (1) (4) (6) (5) (4)
Net unrealized
appreciation
(depreciation) of
investments during the
year.................. 1,929 (1,373) (109) 505 840
------- ------- ------- ------- -------
Net increase (decrease)
in net assets
resulting from
operations............ 1,906 (1,094) (130) 459 794
------- ------- ------- ------- -------
UNIT TRANSACTIONS:
Premiums............... 10,000 10,000 10,000 10,000 10,000
Transfers.............. -- -- -- -- --
Death claims........... -- -- -- -- --
Administrative fee..... -- -- -- -- --
Cost of insurance...... -- -- -- -- --
Other activity......... -- 2 4 2 1
------- ------- ------- ------- -------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 10,000 10,002 10,004 10,002 10,001
------- ------- ------- ------- -------
Total increase in net
assets................ 11,906 8,908 9,874 10,461 10,795
NET ASSETS:
Beginning of period.... -- -- -- -- --
------- ------- ------- ------- -------
End of period.......... $11,906 $ 8,908 $ 9,874 $10,461 $10,795
------- ------- ------- ------- -------
------- ------- ------- ------- -------
</TABLE>
<PAGE>
SA-14 Hartford Life and Annuity Insurance Company
- --------------------------------------------------------------------------------
ICMG REGISTERED VARIABLE LIFE
SEPARATE ACCOUNT ONE PEGASUS PROVIDER
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. ORGANIZATION:
ICMG Registered Variable Life Separate Account One Pegasus Provider (the
Account) is a component of ICMG Registered Variable Life Separate Account One, a
separate investment account within Hartford Life and Annuity Insurance Company
(the Company) and is registered with the Securities and Exchange Commission
(SEC) as a unit investment trust under the Investment Company Act of 1940, as
amended. The Account consists of fourteen portfolios. Both the Company and the
Account are subject to supervision and regulation by the Department of Insurance
of the State of Connecticut and the SEC. The Account invests deposits by
variable life insurance contractholders of the Company in various mutual funds
(the Funds), as directed by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting principles
in the investment company industry:
a) SECURITY TRANSACTIONS -- Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments sold is
determined on the basis of identified cost. Dividend income is accrued as of the
ex-dividend date.
b) SECURITY VALUATION -- The investments in shares of the funds are valued
at the closing net asset value per share as determined by the appropriate Fund
as of December 31, 1998.
c) FEDERAL INCOME TAXES -- The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as an
insurance company under the Internal Revenue Code. Under current law, no federal
income taxes are payable with respect to the operations of the Account.
d) USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the financial statements and the reported amounts
of income and expenses during the period. Operating results in the future could
vary from the amounts derived from management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND
RELATED CHARGES:
a) MORTALITY AND EXPENSE RISK UNDERTAKINGS -- The Company, as issuer of
variable life insurance contracts, provides the mortality and expense
undertakings and, with respect to the Account, receives an annual fee of up to
0.65% of the Account's average daily net assets.
b) DEDUCTION OF OTHER FEES -- In accordance with the terms of the contracts,
the Company makes deductions for the cost of insurance, administrative fees,
state premium taxes and other insurance charges. These charges are deducted
through termination of units of interest from applicable contractholders'
accounts.
<PAGE>
F-1 Hartford Life and Annuity Insurance Company
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Hartford Life and Annuity Insurance Company:
We have audited the accompanying statutory balance sheets of Hartford Life and
Annuity Insurance Company (a Connecticut Corporation and wholly owned subsidiary
of Hartford Life Insurance Company) (the Company) as of December 31, 1998 and
1997, and the related statutory statements of operations, changes in capital and
surplus, and cash flows for each of the three years in the period ended December
31, 1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these statutory
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
The Company presents its financial statements in conformity with statutory
accounting practices as described in Note 1 of notes to statutory financial
statements. When statutory financial statements are presented for purposes other
than for filing with a regulatory agency, generally accepted auditing standards
require that an auditors' report on them state whether they are presented in
conformity with generally accepted accounting principles. The accounting
practices used by the Company vary from generally accepted accounting principles
as explained and quantified in Note 1.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the statutory financial statements referred to above do not present
fairly, in conformity with generally accepted accounting principles, the
financial position of the Company as of December 31, 1998 and 1997, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1998.
However, in our opinion, the statutory financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as of December 31, 1998 and 1997, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1998 in
conformity with statutory accounting practices as described in Note 1.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
January 26, 1999
<PAGE>
F-2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
BALANCE SHEETS
(STATUTORY BASIS)
($000)
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------
1998 1997
----------- -----------
<S> <C> <C>
Assets
Bonds........................................... $ 1,453,792 $ 1,501,311
Common stocks................................... 40,650 64,408
Mortgage loans.................................. 59,548 85,103
Policy loans.................................... 47,212 36,533
Cash and short-term investments................. 469,955 309,432
Other invested assets........................... 2,188 20,942
----------- -----------
Total cash and invested assets................ 2,073,345 2,017,729
Investment income due and accrued............... 20,126 15,878
Premium balances receivable..................... 333 389
Receivables from affiliates..................... -- 1,269
Other assets.................................... 45,358 22,788
Separate account assets......................... 32,876,278 23,208,728
----------- -----------
Total Assets.................................. $35,015,440 $25,266,781
----------- -----------
----------- -----------
Liabilities
Aggregate reserves for future benefits.......... $ 579,140 $ 605,183
Policy and contract claims...................... 5,667 5,672
Liability for premium and other deposit funds... 2,011,672 1,795,149
Asset valuation reserve......................... 21,782 13,670
Payable to affiliates........................... 19,271 20,972
Other liabilities............................... (974,882) (754,393)
Separate account liabilities.................... 32,876,278 23,208,728
----------- -----------
Total liabilities............................. 34,538,928 24,894,981
----------- -----------
Capital and Surplus
Common stock.................................... 2,500 2,500
Gross paid-in and contributed surplus........... 226,043 226,043
Unassigned funds................................ 247,969 143,257
----------- -----------
Total capital and surplus..................... 476,512 371,800
----------- -----------
Total liabilities, capital and surplus............ $35,015,440 $25,266,781
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of
these statutory basis financial statements.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY F-3
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
(STATUTORY BASIS)
($000)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Revenues
Premiums and annuity considerations............. $ 469,343 $ 296,645 $ 250,244
Annuity and other fund deposits................. 2,051,251 1,981,246 1,897,347
Net investment income........................... 129,982 102,285 98,441
Commissions and expense allowances on
reinsurance ceded.............................. 444,241 396,921 370,637
Reserve adjustment on reinsurance ceded......... 3,185,590 3,672,076 3,864,395
Other revenues.................................. 458,190 288,632 161,906
----------- ----------- -----------
Total revenues................................ 6,738,597 6,737,805 6,642,970
----------- ----------- -----------
Benefits and expenses
Death and annuity benefits...................... 43,390 66,176 60,194
Disability and other benefit payments........... 6,114 7,316 6,555
Surrenders...................................... 739,663 454,417 270,165
Commissions and other expenses.................. 666,515 564,077 491,637
Increase (Decrease) in aggregate reserves for
future benefits................................ (26,043) 33,213 27,351
Increase in liability for premium and other
deposit funds.................................. 216,523 640,006 207,156
Net transfers to separate accounts.............. 4,956,007 4,914,980 5,492,964
----------- ----------- -----------
Total benefits and expenses................... 6,602,169 6,680,185 6,556,022
----------- ----------- -----------
Net gain from operations
Before federal income tax (benefit) expense..... 136,428 57,620 86,948
Federal income tax (benefit) expense............ 35,887 (14,878) 19,360
----------- ----------- -----------
Net gain from operations.......................... 100,541 72,498 67,588
Net realized capital gains, after tax........... 2,085 1,544 407
----------- ----------- -----------
Net income........................................ $ 102,626 $ 74,042 $ 67,995
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of
these statutory basis financial statements.
<PAGE>
F-4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
(STATUTORY BASIS)
($000)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Common stock,
Beginning and end of year....................... $ 2,500 $ 2,500 $ 2,500
----------- ----------- -----------
Gross paid-in and contributed surplus,
Beginning and end of year....................... $ 226,043 $ 226,043 $ 226,043
----------- ----------- -----------
Unassigned funds
Balance, beginning of year...................... $ 143,257 $ 74,570 $ 9,791
Net income...................................... 102,626 74,042 67,995
Change in net unrealized capital gains (losses)
on common stocks and other invested assets..... 1,688 2,186 (5,171)
Change in asset valuation reserve............... (8,112) (6,228) 568
Change in non-admitted assets................... (1,277) (1,313) 1,387
Credit on reinsurance ceded..................... 9,787 -- --
----------- ----------- -----------
Balance, end of year............................ $ 247,969 $ 143,257 $ 74,570
----------- ----------- -----------
Capital and surplus,
End of year..................................... $ 476,512 $ 371,800 $ 303,113
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of
these statutory basis financial statements.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY F-5
- --------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS
(STATUTORY BASIS)
($000)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Operations
Premiums and annuity considerations............. $ 2,520,655 $ 2,277,874 $ 2,147,627
Investment income............................... 127,425 101,991 106,178
Other income.................................... 4,092,964 4,381,718 4,396,892
----------- ----------- -----------
Total income.................................. 6,741,044 6,761,583 6,650,697
----------- ----------- -----------
Benefits paid................................... 790,051 529,733 338,998
Federal income taxes (received) paid on
operations..................................... 25,780 (14,499) 28,857
Other expenses.................................. 5,859,063 5,754,725 6,254,139
----------- ----------- -----------
Total benefits and expenses................... 6,674,894 6,269,959 6,621,994
----------- ----------- -----------
Net cash from operations...................... 66,150 491,624 28,703
----------- ----------- -----------
Proceeds from investments
Bonds........................................... 633,926 614,413 871,019
Common stocks................................... 34,010 11,481 72,100
Mortgage loans.................................. 85,275 -- --
Other........................................... 127 152 10
----------- ----------- -----------
Net investment proceeds....................... 753,338 626,046 943,129
----------- ----------- -----------
Taxes paid on capital gains..................... -- -- 936
Other cash provided............................. 1,269 -- 41,998
----------- ----------- -----------
Total proceeds................................ 820,757 1,117,670 1,012,894
----------- ----------- -----------
Cost of investments acquired
Bonds........................................... 586,913 848,267 914,523
Common stocks................................... 7,012 28,302 82,495
Mortgage loans.................................. 59,702 85,103 --
Other........................................... 1,168 18,548 130
----------- ----------- -----------
Total investments acquired.................... 654,795 980,220 997,148
----------- ----------- -----------
Other cash applied
Other........................................... 5,439 4,848 12,220
----------- ----------- -----------
Total other cash applied...................... 5,439 4,848 12,220
----------- ----------- -----------
Total applications............................ 660,234 985,068 1,009,368
----------- ----------- -----------
Net change in cash and short-term investments..... 160,523 132,602 3,526
Cash and short-term investments, beginning of
year............................................. 309,432 176,830 173,304
----------- ----------- -----------
Cash and short-term investments, end of year...... $ 469,955 $ 309,432 $ 176,830
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of
these statutory basis financial statements.
<PAGE>
F-6 Hartford Life and Annuity Insurance Company
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(STATUTORY BASIS)
DECEMBER 31, 1998
(AMOUNTS IN THOUSANDS UNLESS OTHERWISE STATED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION
Hartford Life and Annuity Insurance Company ("ILA" or "the Company"),
formerly known as ITT Hartford Life and Annuity Insurance Company, is a wholly
owned subsidiary of Hartford Life Insurance Company ("HLIC"), which is an
indirect subsidiary of Hartford Life, Inc. ("HLI"), which is majority owned by
The Hartford Financial Services Group, Inc. ("The Hartford"), formerly a wholly
owned subsidiary of ITT Corporation ("ITT"). On February 10, 1997, HLI filed a
registration statement, as amended, with the Securities and Exchange Commission
relating to the initial public offering of HLI Class A Common Stock (the
"Offering"). Pursuant to the Offering on May 22, 1997, HLI sold to the public 26
million shares, representing 18.6% of the equity ownership of HLI. On December
19, 1995, ITT Corporation distributed all the outstanding shares of The Hartford
to ITT shareholders of record in an action known herein as the "Distribution".
As a result of the Distribution, The Hartford became an independent, publicly
traded company. During 1996, ILA re-domesticated from the State of Wisconsin to
the State of Connecticut.
ILA offers a complete line of ordinary and universal life insurance,
individual annuities and certain supplemental accident and health benefit
coverages.
BASIS OF PRESENTATION
The accompanying ILA statutory basis financial statements were prepared in
conformity with statutory accounting practices prescribed or permitted by the
National Association of Insurance Commissioners ("NAIC"), the State of
Connecticut Department of Insurance and the State of Wisconsin for the 1996
period, as applicable. Certain prior year amounts and balances have been
reclassified to conform with current year presentation.
Current prescribed statutory accounting practices include accounting
publications of the National Association of Insurance Commissioners ("NAIC"), as
well as state laws, regulations and general administrative rules. Permitted
statutory accounting practices encompass accounting practices approved by State
Insurance Departments. The Company does not follow any permitted statutory
accounting practices that have a material effect on statutory surplus, statutory
net income or risk-based capital.
Final approval of the NAIC's proposed "Comprehensive Guide" on statutory
accounting principles was distributed in 1998. The requirements are effective
January 1, 2001, and are not expected to have a material impact on statutory
surplus of the Company.
The preparation of financial statements in conformity with statutory
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reported period. Actual
results could differ from those estimates. The most significant estimates
include those used in determining the liability for aggregate reserves for
future benefits and the liability for premium and other deposit funds. Although
some variability is inherent in these estimates, management believes the amounts
provided are adequate.
Statutory accounting practices and generally accepted accounting principles
("GAAP") differ in certain significant respects. These differences principally
involve:
(1) treatment of policy acquisition costs (commissions, underwriting and selling
expenses, premium taxes, etc.) which are charged to expense when incurred
for statutory purposes rather than on a pro-rata basis over the expected
life of the policy for GAAP purposes;
(2) recognition of premium revenues, which for statutory purposes are generally
recorded as collected or when due during the premium paying period of the
contract and which for GAAP purposes, for universal life policies and
investment products, generally, are only recorded for policy charges for the
cost of insurance, policy administration and surrender charges assessed to
policy account balances. Also, for GAAP purposes, premiums for traditional
life insurance policies are recognized as revenues when they are due from
policyholders and the retrospective deposit method is used in accounting for
universal life and other types of contracts where the payment pattern is
irregular or surrender charges are a significant source of profit. The
prospective deposit method is used for GAAP purposes where investment
margins are the primary source of profit;
(3) development of liabilities for future policy benefits, which for statutory
purposes predominantly use interest rate and mortality assumptions
prescribed by the NAIC which may vary considerably from interest and
mortality assumptions used for GAAP financial reporting;
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY F-7
- --------------------------------------------------------------------------------
(4) providing for income taxes based on current taxable income (tax return) only
for statutory purposes, rather than establishing additional assets or
liabilities for deferred Federal income taxes to recognize the tax effect
related to reporting revenues and expenses in different periods for
financial reporting and tax return purposes;
(5) excluding certain GAAP assets designated as non-admitted assets (e.g.,
negative Interest Maintenance Reserve, past due agents' balances and
furniture and equipment) from the balance sheet for statutory purposes by
directly charging surplus;
(6) establishing accruals for post-retirement and post-employment health care
benefits currently, or using a twenty year phase-in approach, whereas GAAP
liabilities are recorded upon adoption of the applicable standard;
(7) establishing a formula reserve for realized and unrealized losses due to
default and equity risk associated with certain invested assets (Asset
Valuation Reserve); as well as the deferral and amortization of realized
gains and losses, motivated by changes in interest rates during the period
the asset is held, into income over the remaining life to maturity of the
asset sold (Interest Maintenance Reserve); whereas on a GAAP basis, no such
formula reserve is required and realized gains and losses are recognized in
the period the asset is sold;
(8) the reporting of reserves and benefits net of reinsurance ceded, where risk
transfer has taken place, whereas on a GAAP basis, reserves are reported
gross of reinsurance with reserve credits presented as recoverable assets;
as well as, the accounting for retroactive reinsurance which is immediately
charged to surplus for statutory accounting purposes whereas GAAP precludes
immediate gain recognition unless the ceding enterprise's liability to its
policyholders is extinguished; as well as reinsurance ceded that fails to
meet GAAP risk transfer guidelines would result in deposit accounting for
GAAP where as for statutory, reserves ceded and assumed would be reflected
in the statutory basis statements of operations;
(9) the reporting of fixed maturities at amortized cost, whereas GAAP requires
that fixed maturities be classified as "held-to-maturity",
"available-for-sale" or "trading", based on the Company's intentions with
respect to the ultimate disposition of the security and its ability to
affect those intentions. The Company's bonds were classified on a GAAP basis
as "available-for-sale" and accordingly, those investments and common stocks
were reflected at fair value with the corresponding impact included as a
component of Stockholder's Equity designated as "Net unrealized capital
gains (losses) on securities net of tax". For statutory reporting purposes,
Change in Net Unrealized Capital Gains (Losses) on Common Stocks and Other
Invested Assets includes the change in unrealized gains (losses) on common
stock reported at fair value; and
(10) separate account liabilities are valued on the Commissioner's Annuity
Reserve Valuation Method ("CARVM"), with the surplus generated recorded as a
liability to the general account (and a contra liability on the balance
sheet of the general account), whereas GAAP liabilities are valued at
account value.
As of and for the years ended December 31, the significant differences
between Statutory and GAAP basis net income and capital and surplus for the
Company are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
GAAP Net Income.................... $ 74,525 $ 58,050 $ 41,202
Amortization and deferral of policy
acquisition costs, net............ (331,882) (345,657) (341,571)
Change in unearned revenue
reserve........................... 22,131 4,641 55,504
Deferred taxes..................... 2,476 47,092 2,090
Separate accounts.................. 259,287 282,818 306,978
Asset impairments and
write-downs....................... 17,250 -- --
Benefit reserve adjustment......... 32,759 24,666 (1,013)
Deposit accounting for Lyndon
reinsurance (Note 3).............. 24,627 -- --
Other, net......................... 1,453 2,432 4,805
------------ ------------ ------------
Statutory Net Income............... $ 102,626 $ 74,042 $ 67,995
------------ ------------ ------------
------------ ------------ ------------
GAAP Capital and Surplus........... $ 648,097 $ 570,469 $ 503,887
Deferred policy acquisition
costs............................. (1,615,653) (1,283,771) (938,114)
Unearned revenue reserve........... 156,920 134,789 130,148
Deferred taxes..................... 68,936 64,522 12,823
Separate accounts.................. 1,183,642 924,355 640,101
Asset impairments and
write-downs....................... 17,250 -- --
Unrealized gains on bonds.......... (26,119) (21,451) (7,978)
Benefit reserve adjustment......... 65,029 16,378 7,035
Asset valuation reserve............ (21,782) (13,670) (7,442)
Adjustment relating to Lyndon
contribution (Note 3)............. -- (23,671) (36,126)
Other, net......................... 192 3,850 (1,221)
------------ ------------ ------------
Statutory Capital and Surplus...... $ 476,512 $ 371,800 $ 303,113
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
As more fully described in Note 3, Lyndon Insurance Company (Lyndon) was
contributed to the Company on June 30, 1995. The GAAP net assets contributed
exceeded the statutory basis net assets by $41,277 as of December 31, 1995,
relating primarily to statutory reserves for future
<PAGE>
F-8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
benefits, GAAP deposit accounting receivables and deferred tax liabilities. In
1998, the majority of the former Lyndon's assumed business was recaptured by the
unaffiliated direct writer.
AGGREGATE RESERVES FOR FUTURE BENEFITS AND LIABILITY FOR PREMIUM AND OTHER
DEPOSIT FUNDS
Aggregate reserves for payment of future life, health and annuity benefits
were computed in accordance with actuarial standards. Reserves for life
insurance policies are generally based on the 1958 and 1980 Commissioner's
Standard Ordinary Mortality Tables and various valuation rates ranging from 2.5%
to 6%. Accumulation and on-benefit annuity reserves are based principally on
individual annuity tables at various rates ranging from 2.5% to 8.75% and using
CARVM. Accident and health reserves are established using a two year preliminary
term method and morbidity tables based on Company experience.
ILA has established separate accounts to segregate the assets and
liabilities of certain annuity contracts that must be segregated from the
Company's general assets under the terms of the contracts. The assets consist
primarily of marketable securities reported at market value. Premiums, benefits
and expenses of these contracts are reported in the statutory basis statements
of operations.
INVESTMENTS
Investments in bonds are carried at amortized cost. Bonds that are deemed
ineligible to be held at amortized cost by the NAIC Securities Valuation Office
("SVO") are carried at the appropriate SVO published value. When a permanent
reduction in the value of publicly traded securities occurs, the decrease is
reported as a realized loss and the carrying value is adjusted accordingly.
Short-term investments consist of money market funds and are stated at cost,
which approximates fair value. Common stocks are carried at fair value with the
current year change in the difference from cost reflected in surplus. Other
invested assets are generally recorded at fair value.
The Company uses a variety of derivative financial instruments as part of an
overall risk management strategy. These instruments, including interest rate and
foreign currency swaps, caps, and floors are used as a means of hedging exposure
to price, foreign currency and/or interest rate risk on planned investment
purchases or existing assets and liabilities. The Company does not hold or issue
derivative financial instruments for trading purposes. Derivatives must be
designated at inception as a hedge measured for effectiveness both at inception
and on an ongoing basis. The Company's correlation threshold for hedge
designation is 80% to 120%. If correlation, which is assessed monthly and
measured based on a rolling three month average, falls outside the 80% to 120%
range, hedge accounting will be terminated.
Interest rate swaps involve the periodic exchange of payments without the
exchange of underlying principal or notional amounts. Net receipts or payments
are accrued and recognized over the life of the swap agreement as an adjustment
to net investment income. Should the swap be terminated the gains or losses are
adjusted into the basis of the asset or liability and amortized over the
remaining life. Should the hedged asset be sold or liability terminated without
terminating the swap position, any swap gains or losses are immediately
recognized in net investment income. Interest rate swaps purchased in
anticipation of an asset purchase ("anticipatory transaction") are recognized
consistent with the underlying asset components such that the settlement
component is recognized in the statutory basis statements of operations while
the change in market value is recognized as an unrealized gain or loss. Foreign
currency swaps are similar to interest rate swaps except there is an initial
exchange of principal in two currencies and an agreement to re-exchange the
currencies at a future date, at an agreed upon exchange rate.
Premiums paid on purchased floor or cap agreements and the premium received
on issued cap or floor agreements (used for risk management) are adjusted into
the basis of the applicable asset and amortized over the asset life. Gains or
losses on termination of such positions are adjusted into the basis of the asset
or liability and amortized over the remaining asset life. Net payments are
recognized as an adjustment to income or basis adjusted and amortized depending
on the specific hedge strategy.
Derivatives used to create a synthetic asset must meet synthetic accounting
criteria, including designation at inception and consistency of terms between
the synthetic and the instrument being replicated. Consistent with industry
practice, synthetic instruments are accounted for like the financial instrument
they are intended to replicate. Derivatives which fail to meet risk management
criteria subsequent to acquisition, are accounted for at fair market value with
the impact reflected in the statutory basis statements of operations.
Open forward commitment contracts are marked to market through surplus. Such
contracts are accounted for at settlement by recording the purchase of specified
securities at the previously committed price. Gains or losses resulting from
termination of the forward commitment contracts before the delivery of the
securities are recognized immediately in the statutory basis statements of
operations as a component of Net Realized Capital Gains, after tax.
The Asset Valuation Reserve ("AVR") is designed to provide a standardized
reserving process for realized and unrealized losses due to default and equity
risks associated with invested assets. The reserve increased $8,112 and $6,228
in 1998 and 1997, respectively and decreased $(568) in 1996. Additionally, the
Interest Maintenance Reserve ("IMR") captures net realized capital gains and
losses, net
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY F-9
- --------------------------------------------------------------------------------
of applicable income taxes, resulting from changes in interest rates and
amortizes these gains or losses into income over the life of the mortgage loan
or bond sold. The IMR balance as of December 31, 1998 and December 31, 1997 was
$452 and $(193), respectively and is reflected in Other Liabilities and as a
component of non-admitted assets in Unassigned Funds for each of the years then
ended. For the years ended December 31, 1998, 1997 and 1996, amortization of IMR
is included in Other Revenues and was $(207), $(85) and $(392), respectively.
Realized capital gains and losses, net of taxes not included in IMR are reported
in the statutory basis statements of operations. Realized investment gains and
losses are determined on a specific identification basis.
OTHER LIABILITIES
The amount reflected in other liabilities includes a receivable from the
separate accounts of $1,187 million and $923 million as of December 31, 1998 and
1997, respectively. The balances are classified in accordance with NAIC
prescribed practices.
MORTGAGE LOANS
Mortgage loans, which are carried at cost and approximate fair value,
include investments in assets backed by mortgage loan pools.
2. INVESTMENTS:
(A) COMPONENTS OF NET INVESTMENT INCOME
<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- ---------
<S> <C> <C> <C>
Interest income from bonds and
short-term investments.......... $ 123,370 $ 100,475 $ 89,940
Interest income from policy
loans........................... 3,133 1,958 1,846
Interest and dividends from other
investments..................... 4,482 1,005 7,864
---------- ---------- ---------
Gross investment income.......... 130,985 103,438 99,650
Less: investment expenses........ 1,003 1,153 1,209
---------- ---------- ---------
Net investment income............ $ 129,982 $ 102,285 $ 98,441
---------- ---------- ---------
---------- ---------- ---------
</TABLE>
(B) COMPONENTS OF NET UNREALIZED CAPITAL GAINS (LOSSES) ON COMMON STOCKS
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Gross unrealized capital gains.. $ 2,204 $ 537 $ 713
Gross unrealized capital
losses......................... (1,871) (1,820) (4,160)
--------- --------- ---------
Net unrealized capital
(losses)/gains................. 333 (1,283) (3,447)
Balance, beginning of year...... (1,283) (3,447) 1,724
--------- --------- ---------
Change in net unrealized capital
gains (losses) on Common
stocks......................... $ 1,616 $ 2,164 $ (5,171)
--------- --------- ---------
--------- --------- ---------
</TABLE>
(C) COMPONENTS OF NET UNREALIZED CAPITAL GAINS (LOSSES) ON BONDS AND SHORT-TERM
INVESTMENTS
<TABLE>
<CAPTION>
1998 1997 1996
---------- --------- ----------
<S> <C> <C> <C>
Gross unrealized capital
gains........................ $ 10,905 $ 23,357 $ 11,821
Gross unrealized capital
losses....................... (833) (1,906) (3,842)
---------- --------- ----------
Net unrealized capital
gains........................ 10,072 21,451 7,979
Balance, beginning of year.... 21,451 7,979 20,877
---------- --------- ----------
Change in net unrealized
capital gains on bonds and
short-term investments....... $ (11,379) $ 13,472 $ (12,898)
---------- --------- ----------
---------- --------- ----------
</TABLE>
(D) COMPONENTS OF NET REALIZED CAPITAL GAINS (LOSSES)
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Bonds and short-term investments.... $ 1,314 $ (120) $ 2,756
Common stocks....................... 1,624 -- --
Real estate and other............... (1) 114 --
--------- --------- ---------
Realized capital (losses) gains..... 2,937 (6) 2,756
Capital gains (benefit) tax......... -- (831) 936
--------- --------- ---------
Net realized capital gains.......... 2,937 825 1,820
Amounts transferred to IMR.......... 852 (719) 1,413
--------- --------- ---------
Net realized capital gains.......... $ 2,085 $ 1,544 $ 407
--------- --------- ---------
--------- --------- ---------
</TABLE>
(E) OFF-BALANCE SHEET INVESTMENTS
The Company had no significant financial instruments with off-balance sheet
risk as of December 31, 1998.
(F) CONCENTRATION OF CREDIT RISK
The Company has invested in securities of a single issuer, Bankers Trust
Corporation, in an amount greater than 10% of the Company's statutory capital
and surplus. The statement value of this investment was $105,221 as of December
31, 1998. The NAIC ratings on these holdings were 1z and 2. Excluding this and
U.S. government and government agency investments, the Company had no other
significant concentrations of credit risk as of December 31, 1998.
<PAGE>
F-10 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
(G) BONDS, SHORT-TERM INVESTMENTS AND COMMON STOCKS
<TABLE>
<CAPTION>
1998
------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. government and government agencies and authorities:
-- Guaranteed and sponsored.................................... $ 4,982 $ 35 $ (2) $ 5,015
-- Guaranteed and sponsored -- asset-backed.................... 75,615 -- -- 75,615
States, municipalities and political subdivisions................ 10,402 415 -- 10,817
International governments........................................ 7,466 568 -- 8,034
Public utilities................................................. 94,475 1,330 (39) 95,766
All other corporate.............................................. 607,679 8,473 (792) 615,360
All other corporate -- asset-backed.............................. 505,900 -- -- 505,900
Short-term investments........................................... 343,783 -- -- 343,783
Certificates of deposit.......................................... 130,216 84 -- 130,300
Parents, subsidiaries and affiliates............................. 117,057 -- -- 117,057
---------- ---------- ---------- ----------
Total bonds and short-term investments........................... $1,897,575 $10,905 $(833) $1,907,647
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Common stock -- unaffiliated................................. $ 4,933 $ 290 $ (50) $ 5,173
Common stock -- affiliated................................... 35,384 1,914 (1,821) 35,477
--------- ---------- ---------- ----------
Total common stocks.......................................... $40,317 $2,204 $(1,871) $40,650
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
1997
------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. government and government agencies and authorities:
-- Guaranteed and sponsored.................................... $ 11,114 $ 55 $ (51) $ 11,118
-- Guaranteed and sponsored -- asset-backed.................... 55,506 1,056 (269) 56,293
States, municipalities and political subdivisions................ 26,404 329 -- 26,733
International governments........................................ 7,609 500 -- 8,109
Public utilities................................................. 73,024 754 (132) 73,646
All other corporate.............................................. 517,715 14,110 (704) 531,121
All other corporate -- asset-backed.............................. 630,069 5,005 (739) 634,335
Short-term investments........................................... 277,330 33 (8) 277,355
Certificates of deposit.......................................... 93,770 1,515 (3) 95,282
Parents, subsidiaries and affiliates............................. 86,100 -- -- 86,100
---------- ---------- ---------- ----------
Total bonds and short-term investments........................... $1,778,641 $23,357 $(1,906) $1,800,092
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Common stock -- unaffiliated................................. $30,307 $537 $ -- $30,844
Common stock -- affiliated................................... 35,384 -- (1,820) 33,564
--------- ----- ---------- ----------
Total common stocks.......................................... $65,691 $537 $(1,820) $64,408
--------- ----- ---------- ----------
--------- ----- ---------- ----------
</TABLE>
The amortized cost and estimated fair value of bonds and short-term
investments as of December 31, 1998 by estimated maturity year are shown below.
Asset-backed securities, including mortgage backed securities and
collaterialized mortgage obligations, are distributed to maturity year based on
ILA's estimates of the rate of future prepayments of principal over the
remaining lives of the securities. Expected maturities differ from contractual
maturities due to call or repayment provisions.
<TABLE>
<CAPTION>
AMORTIZED ESTIMATED
MATURITY COST FAIR VALUE
- ----------------------------------- ------------ ------------
<S> <C> <C>
One year or less................... $ 788,845 $ 792,826
Over one year through five years... 689,025 692,811
Over five years through ten
years............................. 308,661 310,357
Over ten years..................... 111,044 111,653
------------ ------------
Total.............................. $ 1,897,575 $ 1,907,647
------------ ------------
------------ ------------
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY F-11
- --------------------------------------------------------------------------------
Proceeds from sales and maturities of investments in bonds and short-term
investments during 1998, 1997 and 1996 were $1,354,563, $1,435,820 and
$1,139,073, respectively, resulting in gross realized gains of $1,705, $964 and
$3,675, respectively, and gross realized losses of $391, $1,084 and $919,
respectively, before transfers to IMR.
(H) FAIR VALUE OF FINANCIAL INSTRUMENTS BALANCE SHEET ITEMS (IN MILLIONS):
<TABLE>
<CAPTION>
1998 1997
-------------------------- --------------------------
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Bonds and short-term
investments..................... $ 1,898 $ 1,908 $ 1,779 $ 1,800
Common stocks.................... 41 41 64 64
Policy loans..................... 47 47 37 37
Mortgage loans................... 60 60 85 85
Other invested assets............ 2 2 21 21
LIABILITIES
Liabilities on investment
contracts....................... $ 2,053 $ 2,129 $ 1,911 $ 1,835
</TABLE>
The estimated fair value of bonds and short-term investments was determined
by the Company primarily using NAIC market values. The carrying amounts for
policy loans approximates fair value. The fair value of mortgage loans was
determined by discounting future expected cash flows using interest rates
currently being offered for similar loans. The fair value of liabilities on
investment contracts is determined by forecasting future cash flows and
discounting the forecasted cash flows at current market interest rates.
3. AGGREGATE RESERVES FOR FUTURE BENEFITS
The Company's existing reserves consist of life, health, annuity and
supplementary contracts. The Company cedes and assumes insurance to and from
non-affiliated insurers in order to limit its maximum loss. Such transfers do
not relieve the Company or the unaffiliated reinsured of their primary
liabilities. The Company cedes to RGA Reinsurance Company and its affiliate
Employers Reassurance Corporation, on a modified coinsurance basis, 80% of the
variable annuity business written since 1994 and 100% of the variable life and
variable universal life excess sales load refund obligation effective 1998.
There were no material reinsurance recoverables from reinsurers outstanding as
of, and for the years ended, December 31, 1998 and 1997.
A summary of reinsurance information as of and for the years ended December
31, follows:
<TABLE>
<CAPTION>
1998 DIRECT ASSUMED CEDED NET
- ----------------------------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Premium and Annuity
Considerations.................... $ 483,328 $ 24,954 $ (38,939) $ 469,343
Death, Annuity, Disability and
Other Benefits.................... $ 64,331 $ 1,574 $ (16,401) $ 49,504
Surrenders......................... $ 739,663 $ -- $ -- $ 739,663
Aggregate Reserves for Future
Benefits.......................... $ 713,425 $ -- $ (134,285) $ 579,140
Policy and Contract Claims......... $ 5,895 $ 85 $ (313) $ 5,667
<CAPTION>
1997 DIRECT ASSUMED CEDED NET
- ----------------------------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Premium and Annuity
Considerations.................... $ 266,427 $ 51,630 $ (21,412) $ 296,645
Death, Annuity, Disability and
Other Benefits.................... $ 79,779 $ 839 $ (7,126) $ 73,492
Surrenders......................... $ 454,417 $ -- $ -- $ 454,417
Aggregate Reserves for Future
Benefits.......................... $ 651,820 $ -- $ (46,637) $ 605,183
Policy and Contract Claims......... $ 5,861 $ 157 $ (346) $ 5,672
<CAPTION>
1996 DIRECT ASSUMED CEDED NET
- ----------------------------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Premium and Annuity
Considerations.................... $ 226,612 $ 33,817 $ (10,185) $ 250,244
Death, Annuity, Disability and
Other Benefits.................... $ 34,950 $ 35,138 $ (3,339) $ 66,749
Surrenders......................... $ 270,165 $ -- $ -- $ 270,165
</TABLE>
In connection with the distribution described in Note 1, on June 30, 1995,
the assets of Lyndon were contributed to the Company. The statutory basis assets
in excess of statutory basis liabilities was approximately $112 million and was
reflected as an increase in Gross Paid-In and Contributed Surplus at December
31, 1995. In 1998, the majority of former Lyndon's assumed business was
recaptured by the unaffiliated direct writer. A ceding commission of $25,622 and
change in reserve of $26,404 for the year ended December 31, 1998, is reflected
in Other Revenue and Increase/(Decrease) in Aggregate Reserves for Future
Benefits in the statutory basis statements of operations, respectively.
<PAGE>
F-12 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
Analysis of Annuity Actuarial Reserves and Deposit Liabilities by Withdrawal
Characteristics as of December 31, 1998 (including general and separate account
liabilities) are as follows:
<TABLE>
<CAPTION>
% OF
SUBJECT TO DISCRETIONARY WITHDRAWAL: AMOUNT TOTAL
- --------------------------------------- ------------- ---------
<S> <C> <C>
With market value adjustment........... $ 4,563 0.0%
At book value less current surrender
charge of 5% or more.................. 1,378,056 4.1%
At market value........................ 31,087,511 93.8%
------------- ---------
Total with adjustment or at market
value................................. 32,470,130 97.9%
At book value without adjustment
(minimal or no charge or
adjustment)........................... 665,159 2.0%
Not subject to discretionary
withdrawal............................ 19,739 0.1%
------------- ---------
Reinsurance ceded...................... 33,155,028
Total, net......................... $ 33,155,028
-------------
-------------
</TABLE>
4. RELATED PARTY TRANSACTIONS:
Transactions between the Company and its affiliates within The Hartford
relate principally to tax settlements, reinsurance, rental and service fees,
capital contributions and payments of dividends. The Company has also invested
in bonds of its affiliates, Hartford Financial Services Corporation and HL
Investment Advisors, Inc., and common stock of its subsidiary, ITT Hartford
Life, LTD.
5. FEDERAL INCOME TAXES:
The Company and The Hartford have entered into a tax sharing agreement under
which each member in the consolidated U.S. Federal income tax return will make
payments between them such that, with respect to any period, the amount of taxes
to be paid by the Company, subject to certain adjustments, generally will be
determined as though the Company were filing separate Federal, state and local
income tax returns.
As long as The Hartford continues to own at least 80% of the combined voting
power and 80% of the value of the outstanding capital stock of HLI, the Company
will be included for Federal income tax purposes in the consolidated group of
which The Hartford is the common parent. It is the intention of The Hartford and
its non-life subsidiaries to file a single consolidated Federal income tax
return. The life insurance companies will file a separate consolidated Federal
income tax return. Federal income taxes (received) paid by the Company for
operations and capital gains were $25,780, $(14,499) and $29,793 in 1998, 1997
and 1996, respectively. The effective tax rate was 26%, (26)% and 22% in 1998,
1997 and 1996, respectively.
The Company is currently under audit by the Internal Revenue Service (IRS)
for the three year tax period ending 1995. The audit is not yet complete. As of
December 31, 1998, the Company does not currently expect any material
adjustments to arise from this audit.
The following schedule provides a reconciliation of the tax provision at the
U.S. Federal Statutory rate to Federal income tax (benefit) expense (in
millions):
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Tax provision at U.S. Federal statutory
rate..................................... $ 48 $ 20 $ 30
Tax deferred acquisition costs............ 25 25 27
Statutory to tax reserve differences...... 8 1 --
Unrealized gain on separate accounts...... (41) (44) (21)
Investments and other..................... (4) (17) (17)
--------- --------- ---------
Federal income tax (benefit) expense...... $ 36 $ (15) $ 19
--------- --------- ---------
--------- --------- ---------
</TABLE>
6.CAPITAL AND SURPLUS AND SHAREHOLDER DIVIDEND RESTRICTIONS:
The maximum amount of dividends which can be paid, without prior approval,
by State of Connecticut insurance companies to shareholders is generally
restricted to the greater of 10% of surplus as of the preceding December 31st or
the net gain from operations for the previous year. Dividends are paid as
determined by the Board of Directors and are not cumulative. No dividends were
paid in 1998, 1997 and 1996. The amount available for dividend in 1999 is
$100,541.
7. PENSION PLANS AND OTHER POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS:
HLI's employees are included in The Hartford's non-contributory defined
benefit pension plans. These plans provide pension benefits that are based on
years of service and the employee's compensation during the last ten years of
employment. HLI's funding policy is to contribute annually an amount between the
minimum funding requirements set forth in the Employee Retirement Income
Security Act of 1974, as amended, and the maximum amount that can be deducted
for U.S. Federal income tax purposes. Generally, pension costs are funded
through the purchase of affiliated group pension contracts. The cost to HLI was
approximately $9,000 in 1998 and $7,000 in both 1997 and 1996.
HLI also provides, through The Hartford, certain health care and life
insurance benefits for eligible retired employees. A substantial portion of
HLI's employees may become eligible for these benefits upon retirement. HLI's
contribution for health care benefits will depend on the retiree's date of
retirement and years of service. In addition, the plan has a defined dollar cap
which limits average company contributions. HLI has prefunded a portion of the
health care and life insurance obligations through trust funds where such
prefunding can be accomplished on a tax effective basis. Postretirement health
care and life insurance
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY F-13
- --------------------------------------------------------------------------------
benefits expense, allocated by The Hartford, was immaterial to the results of
operations for 1998, 1997 and 1996.
The assumed rate in the per capita cost of health care (the health care
trend rate) was 7.8% for 1998, decreasing ratably to 5.0% in the year 2003.
Increasing the health care trend rates by one percent per year would have an
immaterial impact on the accumulated postretirement benefit obligation and the
annual expense. To the extent that the actual experience differs from the
inherent assumptions, the effect will be amortized over the average future
service of covered employees.
8. SEPARATE ACCOUNTS:
The Company maintains separate account assets and liabilities totaling $32.9
billion and $23.2 billion as of December 31, 1998 and 1997, respectively.
Separate account assets are reported at fair value and separate account
liabilities are determined in accordance with CARVM, which approximates the
market value less applicable surrender charges. Separate account assets are
segregated from other investments, the policyholder assumes the investment risk,
and the investment income and gains and losses accrue directly to the
policyholder. Separate account management fees, net of minimum guarantees, were
$360 million, $252 million and $144 million in 1998, 1997 and 1996,
respectively, and are recorded as a component of other revenues on the statutory
basis statements of operations.
9. COMMITMENTS AND CONTINGENCIES:
As of December 31, 1998, the Company had no material contingent liabilities,
nor had the Company committed any surplus funds for any contingent liabilities
or arrangements. The Company is involved in pending and threatened litigation in
the normal course of its business in which claims for monetary and punitive
damages have been asserted. Although there can be no assurances, at the present
time the Company does not anticipate that the ultimate liability arising from
such pending or threatened litigation, after consideration of provisions made
for potential losses and costs of defense, will have a material adverse effect
on the statutory capital and surplus of the Company.
As discussed in Note 5, issues may potentially be raised by the IRS in
future audits of open years. Management does not believe that possible audit
adjustments will have a material effect on the statutory capital and surplus of
the Company.
Under insurance guaranty fund laws in each state, insurers licensed to do
business can be assessed up to prescribed limits for policyholder losses
incurred by insolvent companies. The amount of any future assessments on ILA
under these laws cannot be reasonably estimated. Most of the laws do provide,
however, that an assessment may be excused or deferred if it would threaten an
insurer's own financial strength. Additionally, guaranty fund assessments are
used to reduce state premium taxes paid by the Company in certain states. ILA
paid guaranty fund assessments of $1,043, $1,544 and $1,262 in 1998, 1997 and
1996, respectively. ILA incurred guaranteed fund expense of $548 in 1998, 1997
and 1996.
<PAGE>
PART C
<PAGE>
OTHER INFORMATION
Item 27. Exhibits
(a) Resolution of the Board of Directors of Hartford Life and Annuity
Insurance Company ("Hartford") authorizing the establishment of
the Separate Account.(1)
(b) Not Applicable.
(c)(1) Principal Underwriting Agreement.(1)
(c)(2) Form of Selling Agreements(2)
(d) Form of Certificate for Group Flexible Premium Variable Life
Insurance Policy.(1)
(e) Form of Enrollment Form for Certificate Issued Under Group
Flexible Premium Variable Life Insurance Policies.(1)
(f) Certificate of Incorporation of Hartford(3) and Bylaws of
Hartford.(2)
(g) Contracts of Reinsurance. (4)
(h) Form of Participation Agreement. (4)
(i) Not Applicable.
(j) Not Applicable.
(k) Opinion and consent of Lynda Godkin, Senior Vice President,
General Counsel and Corporate Secretary.
<PAGE>
-2-
(l) Opinion and Consent of James M. Hedreen, FSA, MAAA. (4)
(m) Not Applicable.
(n) Consent of Arthur Andersen LLP, Independent Public
Accountants. (4)
(o) No financial statement will be omitted.
(p) Not Applicable.
(q) Memorandum describing transfer and redemption procedures.(1)
(r) Power of Attorney
(s) Organizational Chart
- -------------------------
(1) Incorporated by reference to Initial Filing to the Registration Statement
on Form S-6, File No. 33-61267, of Hartford Life and Annuity Insurance
Company filed with the Securities and Exchange Commission on October 30,
1995.
(2) Incorporated by reference to the Pre-Effective Amendment No. 1 to the
Registration Statement on Form S-6, File No. 33-61267, of Hartford Life
and Annuity Insurance Company filed with the Securities and Exchange
Commission on May 21, 1996.
(3) Incorporated by reference to the Post-Effective Amendment No. 4 to the
Registration Statement on Form S-6, File No. 33-61267, of Hartford Life
and Annuity Insurance Company filed with the Securities and Exchange
Commission on February 18, 1998.
(4) Incorporated by reference to the Post-Effective Amendment No. 7 to the
Registration Statement on Form S-6, File No. 33-63731, of Hartford Life
and Annuity Insurance Company filed with the Securities and Exchange
Commission on April 19, 1999.
<PAGE>
-3-
Item 28. Officers and Directors.
- --------------------------------------------------------------------------------
NAME, AGE POSITION WITH HARTFORD
- --------------------------------------------------------------------------------
Wendell J. Bossen Vice President
- --------------------------------------------------------------------------------
Gregory A. Boyko Senior Vice President, Director*
- --------------------------------------------------------------------------------
Peter W. Cummins Senior Vice President
- --------------------------------------------------------------------------------
Timothy M. Fitch Vice President & Actuary
- --------------------------------------------------------------------------------
Mary Jane B. Fortin Vice President & Chief Accounting
Officer
- --------------------------------------------------------------------------------
David T. Foy Senior Vice President & Treasurer
- --------------------------------------------------------------------------------
Lynda Godkin Senior Vice President, General Counsel,
and Corporate Secretary, Director*
- --------------------------------------------------------------------------------
Lois W. Grady Senior Vice President
- --------------------------------------------------------------------------------
Stephen T. Joyce Vice President
- --------------------------------------------------------------------------------
Michael D. Keeler Vice President
- --------------------------------------------------------------------------------
Robert A. Kerzner Senior Vice President
- --------------------------------------------------------------------------------
Thomas M. Marra Executive Vice President, Director*
- --------------------------------------------------------------------------------
Steven L. Matthiesen Vice President
- --------------------------------------------------------------------------------
Craig R. Raymond Senior Vice President and Chief Actuary
- --------------------------------------------------------------------------------
Lowndes A. Smith President and Chief Executive Officer,
Director*
- --------------------------------------------------------------------------------
David M. Znamierowski Senior Vice President, Director*
- --------------------------------------------------------------------------------
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
- ------------------------------------------------
* Denotes Board of Directors of Hartford.
Item 29. Persons Controlled By or Under Common Control with the Depositor or
Registrant
Filed herewith as Exhibit(s).
<PAGE>
-4-
Item 30: 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. 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 Equity
Sales Company, Inc. ("HESCO") 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.
<PAGE>
-5-
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.
Item 31. Principal Underwriters
(a) HESCO acts as principal underwriter for the following investment
companies:
Hartford Life Insurance Company - Separate Account VL I
Hartford Life Insurance Company - Separate Account VL II
Hartford Life Insurance Company - ICMG Secular Trust Separate
Account
Hartford Life Insurance Company - ICMG Registered Variable Life
Separate Account A
Hartford Life and Annuity Insurance Company - Separate Account
VL I
Hartford Life and Annuity Insurance Company - Separate Account
VL II
Hartford Life and Annuity Insurance Company - ICMG Registered
Variable Life Separate One
<PAGE>
-6-
(b) Directors and Officers of HESCO
Name and Principal Positions and Offices
Business Address With Underwriter
------------------ ----------------------
Lowndes A. Smith President and Chief Executive
Officer, Director
Thomas M. Marra Executive Vice President, Director
Peter W. Cummins Senior Vice President
Lynda Godkin Senior Vice President, General
Counsel and Corporate Secretary
Richard J. Garrett Vice President
Donald A. Salama Vice President
Donald E. Waggaman, Jr. Treasurer
George R. Jay Controller
Unless otherwise indicated, the principal business address of each the
above individuals is P.O. Box 2999, Hartford, CT 06104-2999.
Item 32. Location of Accounts and Records
All of the accounts, books, records or other documents required to be
kept by Section 31(a) of the Investment Company Act of 1940 and rules
thereunder, are maintained by Hartford at 200 Hopmeadow Street,
Simsbury, Connecticut 06089.
Item 33. Management Services
All management contracts are discussed in Part A and Part B of this
Registration Statement.
Item 34. Representation of Reasonableness of Fees
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment Company
Act, the Registrant certifies that it meets all of the requirements for
effectiveness of this registration statement under rule 485(b) under the
Securities Act and has duly caused this registration statement to be signed on
its behalf by the undersigned, duly authorized, in the Town of Simsbury, and
State of Connecticut on the 12th day of April, 1999.
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
ICMG REGISTERERED VARIABLE LIFE SEPARATE ACCOUNT ONE
(Registrant)
*By: David T. Foy *By: /s/Brian Lord
-------------------------------------------------- --------------------
David T. Foy, Senior Vice President and Treasurer Brian Lord
Attorney-In-Fact
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
(Depositor)
*By: David T. Foy
--------------------------------------------------
David T. Foy, Senior Vice President 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,
Director*
Lynda Godkin, Senior Vice President, General *By: /s/ Brian Lord
Counsel, & Corporate Secretary, Director* ------------------
Thomas M. Marra, Executive Vice Brian Lord
President, Director * Attorney-In-Fact
Lowndes A. Smith, President,
Chief Executive Officer, Director *
David M. Znamierowski, Senior Vice President, Dated: April 26, 1999
Director*
<PAGE>
EXHIBIT INDEX
1.1 Form of Reinsurance Contract.*
1.2 Form of Participation Agreement.*
1.3 Opinion and Consent of Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary.
1.4 Opinion and Consent of James M. Hedreen, FSA, MAAA.*
1.5 Consent of Arthur Andersen LLP, Independent Public Accountants.*
1.7 Power of Attorney
1.8 Organizational Chart
*Incorporated herein by reference to the Post-Effective Amendment
No. 7 to the Registration Statement File No. 33-63731 filed with
the Securities and Exchange Commission on April 19, 1999.
<PAGE>
EXHIBIT 1.3
[LOGO]
HARTFORD LIFE
April 12, 1999
LYNDA GODKIN, SENIOR VICE PRESIDENT,
GENERAL COUNSEL & CORPORATE SECRETARY
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
POST-EFFECTIVE AMENDMENT NO. 7
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 ICMG Registered Variable Life Separate Account One (the
"Account") in connection with the registration of an indefinite amount of
securities in the form of flexible premium variable life insurance policies (the
"Policies") 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 Policies.
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 Policies, 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.
4. The Policies, when issued as contemplated by the Form S-6 Registration
Statement, will constitute legal, validly issued and binding obligations of
the Company.
<PAGE>
Board of Directors
Hartford Life and Annuity Insurance Company
April 12, 1999
Page 2
I hereby consent to the filing of this opinion as an exhibit to the Form S-6
Registration Statement for the Policies and the Account.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
POWER OF ATTORNEY
-----------------
Gregory A. Boyko
David T. Foy
Lynda Godkin
Thomas M. Marra
Lowndes A. Smith
David M. Znamierowski
do hereby jointly and severally authorize Lynda Godkin, Christine Repasy,
Marianne O'Doherty, Thomas S. Clark and Brian Lord to sign as their agent,
any Registration Statement, pre-effective amendment, post-effective amendment
and any application for exemptive relief of the Hartford Life and Annuity
Insurance Company under the Securities Act of 1933 and/or the Investment
Company Act of 1940, and do hereby ratify any such signatures heretofore made
by such persons.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for
the purpose herein set forth.
/s/ Gregory A. Boyko Dated as of January 15, 1999
- ------------------------------
Gregory A. Boyko
/s/ David T. Foy Dated as of January 15, 1999
- ------------------------------
David T. Foy
/s/ Lynda Godkin Dated as of January 15, 1999
- ------------------------------
Lynda Godkin
/s/ Thomas M. Marra Dated as of January 15, 1999
- ------------------------------
Thomas M. Marra
/s/ Lowndes A. Smith Dated as of January 15, 1999
- ------------------------------
Lowndes A. Smith
/s/ David M. Znamierowski Dated as of January 15, 1999
- ------------------------------
David M. Znamierowski
<PAGE>
ORGANIZATIONAL CHART
<TABLE>
<CAPTION>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
---------------------------------------------
NUTMEG INSURANCE COMPANY |
(CONNECTICUT) THE HARTFORD INVESTMENT
| MANAGEMENT COMPANY
HARTFORD FIRE INSURANCE COMPANY (DELAWARE)
(CONNECTICUT) |
| |
HARTFORD ACCIDENT AND INDEMNITY COMPANY HARTFORD INVESTMENT
(CONNECTICUT) SERVICES, INC.
| (CONNECTICUT)
HARTFORD LIFE, INC.
(DELAWARE)
|
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
(CONNECTICUT)
|
|
|
-------------------------------------------------------------------------------------------------------------------------
| | | | | | | | |
ITT HARTFORD LIFE | | | | | | HLIC PLANCO
INTERNATIONAL LTD. | | | | | | CANADA FINANCIAL
(CONNECTICUT) | | | | | | HOLDINGS, INC. SERVICES,
| | | | | | | (CANADA) INCORPORATED
| | | | | | | | (PENNSYLVANIA)
| | | | | | | | |
| | ALPINE LIFE HARTFORD FINANCIAL HARTFORD LIFE HARTFORD AMERICAN | |
| | INSURANCE SERVICES LIFE INSURANCE COMPANY FINANCIAL MATURITY LIFE | |
| | COMPANY INSURANCE CO. (CONNECTICUT) SERVICES, LLC INSURANCE COMPANY | |
| | (CONNECTICUT) (CONNECTICUT) | (DELAWARE) (CONNECTICUT) | PLANCO, INC.
| | | | | | (PENNSYLVANIA)
| | ------------------------------------- | AML FINANCIAL, INC. |
HARTFORD CALMA | | | | | (CONNECTICUT) |
COMPANY | ROYAL LIFE HARTFORD HARTFORD | HARTFORD
(FLORIDA) | INSURANCE INTERNATIONAL LIFE AND | LIFE INSURANCE
| COMPANY LIFE REASSURANCE ANNUITY INSURANCE | COMPANY
| OF AMERICA CORP. COMPANY | OF CANADA
|(CONNECTICUT) (CONNECTICUT) (CONNECTICUT) | (CANADA)
| | |
| | |
| ITT HARTFORD |
| LIFE, LTD. |
| (BERMUDA) |
| |
| |
----------| ---------------------------------------------------------------------------------------------
| | | | | |
INTERNATIONAL MS FUND HL INVESTMENT HARTFORD HARTFORD SECURITIES HARTFORD COMP. EMP.
CORPORATE AMERICA 1993-K ADVISORS, LLC EQUITY SALES DISTRIBUTION BENEFITS SERVICE
MARKETING GROUP, INC. SPE, INC. (CONNECTICUT) COMPANY, INC. COMPANY, INC. COMPANY
(CONNECTICUT) (DELAWARE) | (CONNECTICUT) (CONNECTICUT) (CONNECTICUT)
| |
| |
THE EVERGREEN HARTFORD INVESTMENT
GROUP, INC. FINANCIAL SERVICES
(NEW YORK) COMPANY
(DELAWARE)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
----------------------------------------------------------------------------------------------------------------------------
| | |
| | ITT HARTFORD LIFE
| | -------INTERNATIONAL LTD.
| | | (CONNECTICUT)
| | | |
| | | ITT HARTFORD
| | | ----SUDAMERICANA
| | | | HOLDING S.A.
| | | | (ARGENTINA)
| | | |------------------------------------------------------
| | | | | |
| | | | HARTFORD GALICIA INSTITUTO DE
| | | | SEGUROS VIDA COMPANIA SALTA COMPANIA DE
| | | |--------DE VIDA DE SEGUROS S.A. SEGUROS DE VIDA S.A.
| | | | (URUGUAY) (ARGENTINA) (ARGENTINA)
| | | |
| | ICATU | | ITT HARTFORD
| | HARTFORD | |-----SEGUROS DE VIDA
| | SEGUROS S.A.----------| | (ARGENTINA)
| | (BRAZIL) | |
| | | | |
| | | | | ITT HARTFORD
| | -- ----------| | |------SEGUROS DE
| | | | | | RETIRO S.A.
| | | | | | (ARGENTINA)
|-----------|----------------|---------------|---|--------------------------------------------------------------------------
| | | | | |
| | | ICATU HARTFORD | | CONSULTORA DE CAPITALES
| | | FUNDO DE PENSAO | | S.A. SOCIEDAD GERENTE
| | | (BRAZIL) | |----DE FONDOS COMUNES
| | | | | | DE ENVERSION
| | | | | | (ARGENTINA)
| | | ICATU HARTFORD | |
| | | CAPITALIZACAO S.A. | | CLARIDAD
| | | (BRAZIL) | | ADMINISTRADORA DE
| | | | | |---FONDOS DE JUBILACIONES
| | | BRAZILCAP | | Y PENSIONES S.A.
| | | CAPITALIZACAO S.A. | | (ARGENTINA)
| | | (BRAZIL) | |
| | | | |
| | -------------------------- | |
| |--------------- | | |
| | | | |
HARTFORD FIRE HARTFORD FIRE | | |------- SEGPOOL S.A.
INTERNATIONAL------------INTERNATIONAL, LTD. | | | (ARGENTINA)
(GERMANY) GMBH (CONNECTICUT) | | |
(WEST GERMANY) | | |
| | |
ICATU HARTFORD | | | THESIS S.A.
ADMINISTRACAO | | |-------- (ARGENTINA)
DE BENEFICIOS LTDA-- | | |
(BRAZIL) | |
| |
----------------- |
| |
CAB |--------- U.O.R., S.A.
CORPORATION (ARGENTINA)
(BRITISH VIRGIN ISLANDS)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
- --------------------------------------------------------------------------------------------------------------------------------|
| |
THE HARTFORD INTERNATIONAL |
|-----------------------------------------------------------------------FINANCIAL SERVICES GROUP, INC. |
| | | (DELAWARE) |
| | | ----------------------|----------------- |
| | | | | | | |
ZWOLSCHE | | ITT HARTFORD LONDON AND | HARTFORD |
ALGEMEENE N.V. | | INTERNATIONAL, LTD. EDINBURGH | EUROPE, INC. |
(NETHERLANDS) | | (U.K.) INSURANCE GROUP, LTD.| (DELAWARE) |
| | | (U.K.) | |
| | | | | |
| | | ------------- | |
| | | | | |
| ITT ASSURANCES HARTFORD INTERNATIONAL | LONDON AND --ITT ERCOS |
| S.A. INSURANCE CO., N.V. |--- EDINBURGH DE SEGUROS Y |
| ZWOLSCHE ALGEMEENE (FRANCE) (BELGIUM) | INSURANCE CO., LTD. REASEGUROS S.A.|
|----SCHADEVERZEKERING | | (U.K.) (SPAIN) |
--------| N.V.----------------------------------- | | | |
| | (NETHERLANDS) | | | | |
Z.A. | | | | EXCESS INSURANCE |
- --VERZEKERINGEN | | | | COMPANY LTD. |
| N.V. | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| (BELGIUM) |------HERVERZEKERING B.V. | | | |
| | -----| (NETHERLANDS) | | | LONDON AND |
| | | | | | |--- EDINBURGH LIFE |
| Z.A. LUX S.A. | | | | ASSURANCE CO., LTD. |
| (LUXEMBURG) | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| |--LEVENS-VERZEKERING N.V.------------ | | | |
| | (NETHERLANDS) | | | | |
- ----------------|------------------------------------|------------|------|--------------|---------------------------------------|
| | | | | | |
| -------- | | | | |
| | | | | | | |
| ZWOLSCHE | ZWOLSCHE ALGEMEENE ZWOLSCHE ALGEMEENE | | | |
| ALGEMEENE |-----HYPOTHEKEN N.V. BELEGGINGEN III B.V. | | | |
| EUROPA B.V. | (NETHERLANDS) (NETHERLANDS) | | | |
| (NETHERLANDS) | ---------- | | |
- --------| | | | | |
| EXPLOITATIEMAAT- BELEGGINGSMAAT- | | |
|----- SCHAPPIJ SCHAPPIJ | | |
| BUIZERDLAAN B.V. BUIZERDLAAN B.V. | | |
| (NETHERLANDS) (NETHERLANDS) | | |
| | | |
| | | -----
| HOLLAND | |-------------------------- |
|---- BELEGGINGSGROEP B.V. | | | |
(NETHERLANDS) | |----------------- | |
| -------| | | |
| | | | | |
| | | | | |
F.A. KNIGHT | MACALISTER & LONDON AND | HARTFORD FIRE
& SON N.V. | DUNDAS, LTD. EDINBURGH | INTERNATIONAL
(BELGIUM) | (SCOTLAND) TRUSTEES, LTD. | SERVICIOS
| (U.K.) | (SPAIN)
------------------------- -----------
| | |
FENCOURT QUOTEL LONDON AND
PRINTERS, LTD. INSURANCE EDINBURGH
(U.K.) SYSTEMS, LTD. SERVICES, LTD.
(U.K.) (U.K.)
|
EUROSURE
INSURANCE
MARKETING, LTD.
(U.K.)
</TABLE>
