<PAGE>
<TABLE>
<S> <C>
WELLS FARGO NON-QUALIFIED SELECT-SM-
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
P.O. BOX 2999
HARTFORD, CONNECTICUT 06104-2999
TELEPHONE: (800) 861-1408 [LOGO]
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
This Prospectus describes information you should know before you enroll for
coverage under the Wells Fargo NON-QUALIFIED SELECT-SM- group flexible premium
variable life insurance policy. Please read it carefully.
The Wells Fargo NON-QUALIFIED SELECT-SM- group flexible premium variable life
insurance policy is a contract issued by Hartford Life and Annuity Insurance
Company to an employer, a trust sponsored by an employer or an employer
sponsored program. 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>
AIM V.I. Diversified Income Investment Division AIM Variable Insurance Diversified Income Fund
AIM V.I. Global Utilities Investment Division AIM Variable Insurance Global Utilities Fund
AIM V.I. Growth Investment Division AIM Variable Insurance Growth Fund
AIM V.I. Growth and Income Investment Division AIM Variable Insurance Growth and Income Fund
AIM V.I. Telecommunications and Technology Investment AIM Variable Insurance Telecommunications and
Division Technology Fund
AIM V.I. Value Investment Division AIM Variable Insurance Value Fund
American Century VP Balanced Investment Division American Century VP Balanced Fund
American Century VP International Investment Division American Century VP International Fund
Dreyfus Investment Portfolio, Core Bond Investment Dreyfus Investment Portfolio, Core Bond Portfolio
Division
Dreyfus Investment Portfolio, Emerging Markets Investment Dreyfus Investment Portfolio, Emerging Markets
Division Portfolio
Dreyfus Variable Investment Fund, Small Cap Investment Dreyfus Variable Investment Fund, Small Cap
Division Portfolio
Hartford Capital Appreciation Investment Division Class IA of Hartford Capital Appreciation HLS Fund
Hartford Stock Investment Division Class IA of Hartford Stock HLS Fund
Hartford Advisers Investment Division Class IA of Hartford Advisers HLS Fund
Hartford Bond Investment Division Class IA of Hartford Bond HLS Fund
Janus Aspen Aggressive Growth Investment Division Service Shares of Aggressive Growth Portfolio of
the Janus Aspen Series
Janus Aspen Balanced Investment Division Service Shares of the Balanced Portfolio of the
Janus Aspen Series
Janus Aspen Growth and Income Investment Division Service Shares of the Growth and Income Portfolio
of the Janus Aspen Series
Janus Aspen International Growth Investment Division Service Shares of the International Growth
Portfolio of the Janus Aspen Series
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT DIVISION PURCHASES SHARES OF:
<S> <C>
Janus Aspen Worldwide Growth Investment Division Service Shares of the Worldwide Growth Portfolio
of the Janus Aspen Series
Janus Aspen Flexible Income Investment Division Service Shares of the Flexible Income Portfolio of
the Janus Aspen Series
Janus Aspen High-Yield Investment Division Service Shares of the High-Yield Portfolio of the
Janus Aspen Series
MFS Emerging Growth Investment Division MFS-Registered Trademark- Emerging Growth
Series of the MFS-Registered Trademark- Variable
Insurance Trust-SM-
MFS Capital Opportunities Investment Division MFS-Registered Trademark- Capital Opportunities
Series of the MFS-Registered Trademark- Variable
Insurance Trust-SM-
MFS Utilities Investment Division MFS-Registered Trademark- Utilities Series of the
MFS-Registered Trademark- Variable Insurance
Trust-SM-
MFS High Income Investment Division MFS-Registered Trademark- High Income Series of
the MFS-Registered Trademark- Variable Insurance
Trust-SM-
MFS Global Governments Investment Division MFS-Registered Trademark- Global Governments
Series of the MFS-Registered Trademark- Variable
Insurance Trust-SM-
Variable Insurance Products Fund Asset Manager-Growth-SM- Service Class 2 of the Asset Manager-Growth-SM-
Investment Division Portfolio of the Variable Insurance Products Fund
Variable Insurance Products Fund Equity-Income Investment Service Class 2 of the Equity-Income Portfolio of
Division the Variable Insurance Products Fund
Variable Insurance Products Fund Growth Investment Service Class 2 of the Growth Portfolio of the
Division Variable Insurance Products Fund
Variable Insurance Products Fund Index 500 Investment Service Class 2 of the Index 500 Portfolio of the
Division Variable Insurance Products Fund
Wells Fargo Variable Trust Asset Allocation Investment Wells Fargo Variable Trust Asset Allocation Fund
Division
Wells Fargo Variable Trust Corporate Bond Investment Wells Fargo Variable Trust Corporate Bond Fund
Division
Wells Fargo Variable Trust Equity Income Investment Wells Fargo Variable Trust Equity Income Fund
Division
Wells Fargo Variable Trust Equity Value Investment Wells Fargo Variable Trust Equity Value Fund
Division
Wells Fargo Variable Trust Growth Investment Division Wells Fargo Variable Trust Growth Fund
Wells Fargo Variable Trust Large Company Growth Investment Wells Fargo Variable Trust Large Company Growth
Division Fund
Wells Fargo Variable Trust Money Market Investment Wells Fargo Variable Trust Money Market Fund
Division
Wells Fargo Variable Trust Small Cap Growth Investment Wells Fargo Variable Trust Small Cap Growth Fund
Division
</TABLE>
If you decide to enroll for coverage under this group life insurance policy, you
should keep this Prospectus for your records.
The Hartford, Janus and Wells Fargo prospectuses included in this Wells Fargo
NON-QUALIFIED SELECT-SM- Prospectus contain information relating to all of the
Funds they offer. Not all of the Funds in the Hartford, Janus and Wells Fargo
prospectuses are available to you. Please review this Wells Fargo NON-QUALIFIED
SELECT-SM- product prospectus for details regarding available 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.
This Prospectus can also be obtained from the Securities and Exchange
Commission's website (HTTP://WWW.SEC.GOV).
--------------------------------------------------------------------------------
PROSPECTUS DATED: AUGUST 28, 2000
<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
----------------------------------------------------------------------
What Does Your Premium Pay For? 5
----------------------------------------------------------------------
Risks of Your Policy 5
----------------------------------------------------------------------
FEE TABLES 6
----------------------------------------------------------------------
ABOUT US 9
----------------------------------------------------------------------
Hartford Life and Annuity Insurance Company 9
----------------------------------------------------------------------
ICMG Registered Variable Life Separate Account One 9
----------------------------------------------------------------------
The Funds 9
----------------------------------------------------------------------
CHARGES AND DEDUCTIONS 11
----------------------------------------------------------------------
Deductions from Premium 11
----------------------------------------------------------------------
Deductions from Investment Value 11
----------------------------------------------------------------------
YOUR CERTIFICATE 12
----------------------------------------------------------------------
Ownership Rights 12
----------------------------------------------------------------------
Beneficiary 12
----------------------------------------------------------------------
Assignment 12
----------------------------------------------------------------------
Statements 12
----------------------------------------------------------------------
Issuance of Your Certificate 12
----------------------------------------------------------------------
Right to Examine the Certificate 12
----------------------------------------------------------------------
PREMIUMS 13
----------------------------------------------------------------------
Premium Payment Flexibility 13
----------------------------------------------------------------------
Allocation of Premium Payments 13
----------------------------------------------------------------------
Accumulation Units 13
----------------------------------------------------------------------
Accumulation Unit Values 14
----------------------------------------------------------------------
Premium Limitation 14
----------------------------------------------------------------------
DEATH BENEFITS AND POLICY VALUES 14
----------------------------------------------------------------------
Values Under the Certificate 14
----------------------------------------------------------------------
Death Benefits 14
----------------------------------------------------------------------
MAKING WITHDRAWALS FROM THE CERTIFICATE 16
----------------------------------------------------------------------
Surrender 16
----------------------------------------------------------------------
Partial Withdrawals 16
----------------------------------------------------------------------
TRANSFERS AMONG INVESTMENT DIVISIONS 16
----------------------------------------------------------------------
Amount and Frequency of Transfers 16
----------------------------------------------------------------------
Transfers to or from Investment Divisions 16
----------------------------------------------------------------------
Asset Rebalancing 17
----------------------------------------------------------------------
Dollar Cost Averaging 17
----------------------------------------------------------------------
Procedures for Telephone Transfers 17
----------------------------------------------------------------------
Processing of Transactions 17
----------------------------------------------------------------------
LOANS 18
----------------------------------------------------------------------
Loan Interest 18
----------------------------------------------------------------------
</TABLE>
<PAGE>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
----------------------------------------------------------------------
<S> <C>
Credited Interest 18
----------------------------------------------------------------------
Loan Repayments 18
----------------------------------------------------------------------
Termination Due to Excessive Debt 18
----------------------------------------------------------------------
Effect of Loans on Investment Value 18
----------------------------------------------------------------------
LAPSE AND REINSTATEMENT 18
----------------------------------------------------------------------
Lapse and Grace Period 18
----------------------------------------------------------------------
Reinstatement 18
----------------------------------------------------------------------
TERMINATION OF POLICY 19
----------------------------------------------------------------------
CONTRACT LIMITATIONS 19
----------------------------------------------------------------------
Partial Withdrawals 19
----------------------------------------------------------------------
Transfers of Account Value 19
----------------------------------------------------------------------
Face Amount Increases or Decreases 19
----------------------------------------------------------------------
Valuation of Payments and Transfers 19
----------------------------------------------------------------------
Deferral of Payments 19
----------------------------------------------------------------------
CHANGES TO CONTRACT OR SEPARATE ACCOUNT 19
----------------------------------------------------------------------
Modification of Policy 19
----------------------------------------------------------------------
Substitution of Funds 19
----------------------------------------------------------------------
Change in Operation of the Separate Account 20
----------------------------------------------------------------------
Separate Account Taxes 20
----------------------------------------------------------------------
SUPPLEMENTAL BENEFITS 20
----------------------------------------------------------------------
Maturity Date Extension Rider 20
----------------------------------------------------------------------
OTHER MATTERS 20
----------------------------------------------------------------------
Reduced Charges for Eligible Groups 20
----------------------------------------------------------------------
Our Rights 20
----------------------------------------------------------------------
Limit on Right to Contest 20
----------------------------------------------------------------------
Misstatement as to Age or Sex 20
----------------------------------------------------------------------
Assignment 21
----------------------------------------------------------------------
Dividends 21
----------------------------------------------------------------------
TAXES 21
----------------------------------------------------------------------
General 21
----------------------------------------------------------------------
Taxation of Hartford and the Separate Account 21
----------------------------------------------------------------------
Income Taxation of Certificate Benefits 21
----------------------------------------------------------------------
Modified Endowment Contracts 21
----------------------------------------------------------------------
Diversification Requirements 22
----------------------------------------------------------------------
Ownership of the Assets in the Separate Account 22
----------------------------------------------------------------------
Tax Deferral During Accumulation Period 23
----------------------------------------------------------------------
Federal Income Tax Withholding 23
----------------------------------------------------------------------
Other Tax Considerations 23
----------------------------------------------------------------------
PERFORMANCE RELATED INFORMATION 23
----------------------------------------------------------------------
LEGAL PROCEEDINGS 23
----------------------------------------------------------------------
GLOSSARY OF SPECIAL TERMS 24
----------------------------------------------------------------------
WHERE YOU CAN FIND MORE INFORMATION 25
----------------------------------------------------------------------
</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:
- Option A -- Under Option A the death benefit is equal to the larger of:
- The Face Amount; and
- The Variable Insurance Amount.
- 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 20 different Investment Divisions,
from a choice of 39 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.
WHAT DOES YOUR PREMIUM PAY FOR?
Your premium payment does three things: (1) it pays for insurance coverage;
(2) it acts as an investment in the Investment Divisions; and (3) it pays for
sales loads and other charges.
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>
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED
<S> <C> <C>
--------------------------------------------------------------------------------------------
Sales Charge (1) When you pay premium. 9% of any premium paid for
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
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.
Cost Tax Charge We will adjust the charge based
on changes in the applicable tax
law.
--------------------------------------------------------------------------------------------
Transfer Fees When you make a transfer after $50 per transfer.
the 12th transfer in any
Coverage Year.
--------------------------------------------------------------------------------------------
Partial Withdrawal Fee When you take a withdrawal. $25 per partial withdrawal.
<CAPTION>
CHARGE CERTIFICATES FROM WHICH CHARGE IS DEDUCTED
<S> <C>
------------------------
Sales Charge (1) All
------------------------
Premium Tax Charge All
------------------------
Deferred Acquisition All
Cost Tax Charge
------------------------
Transfer Fees Those Certificates with more than 12
transfers per Contract Year.
------------------------
Partial Withdrawal Fee Those Certificates where a partial
withdrawal is made.
</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>
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED
<S> <C> <C>
--------------------------------------------------------------------------------------------
Cost of Insurance Monthly. The charge is the cost of
Charges insurance rate times the net
amount at risk. The cost of
insurance rates depend on issue
age, sex, insurance class and
substandard rating.
The monthly cost of insurance
charge ranges from $0.084 per
$1,000 to $85.527 per $1,000.
--------------------------------------------------------------------------------------------
Mortality and Expense Daily. On an annual basis, .65% of the
Risk Charge value of each Investment
Division's assets.
--------------------------------------------------------------------------------------------
Administrative Charge Monthly. $10 per Coverage Month.
--------------------------------------------------------------------------------------------
Rider Charges Monthly. Individualized based on optional
rider selected.
<CAPTION>
CHARGE CERTIFICATES FROM WHICH CHARGE IS DEDUCTED
<S> <C>
------------------------
Cost of Insurance All
Charges
------------------------
Mortality and Expense All
Risk Charge
------------------------
Administrative Charge All
------------------------
Rider Charges Only those Certificates with benefits
provided by rider.
</TABLE>
The next table describes the Fund fees and expenses that you will pay
periodically. The table shows the annual fees and expenses charged by the Funds
for the year ended December 31, 1999. The prospectus for each Fund contains more
detail concerning each Fund's fees and expenses.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 7
--------------------------------------------------------------------------------
Annual Fund Operating Expenses
as of Each Fund's Fiscal Year End
(as a percentage of net assets)
<TABLE>
<CAPTION>
TOTAL OPERATING
MANAGEMENT FEE OTHER EXPENSES (AFTER ANY
(AFTER ANY EXPENSES (AFTER WAIVERS AND/OR
WAIVERS) 12B-1 FEES REIMBURSEMENTS) REIMBURSEMENTS)(1)
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Diversified Income Fund 0.60% N/A 0.23% 0.83%
-------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Global Utilities Fund 0.65% N/A 0.49% 1.14%
-------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth Fund 0.63% N/A 0.10% 0.73%
-------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth and Income Fund 0.61% N/A 0.16% 0.77%
-------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Telecommunications and Technology Fund 1.00% N/A 0.27% 1.27%
-------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Value Fund 0.61% N/A 0.15% 0.76%
-------------------------------------------------------------------------------------------------------------------------------
American Century VP Balanced Fund 0.90% N/A 0.00% 0.90%
-------------------------------------------------------------------------------------------------------------------------------
American Century VP International Fund 1.34% N/A 0.00% 1.34%
-------------------------------------------------------------------------------------------------------------------------------
Dreyfus Investment Portfolio, Core Bond Portfolio (2) 0.60% N/A 0.25% 0.85%
-------------------------------------------------------------------------------------------------------------------------------
Dreyfus Investment Portfolio, Emerging Markets
Portfolio (2) 1.25% N/A 0.25% 1.50%
-------------------------------------------------------------------------------------------------------------------------------
Dreyfus Variable Investment Fund, Small Cap Portfolio 0.75% N/A 0.03% 0.78%
-------------------------------------------------------------------------------------------------------------------------------
Hartford Capital Appreciation HLS Fund -- Class IA 0.64% N/A 0.02% 0.66%
-------------------------------------------------------------------------------------------------------------------------------
Hartford Stock HLS Fund -- Class IA 0.46% N/A 0.02% 0.48%
-------------------------------------------------------------------------------------------------------------------------------
Hartford Advisers HLS Fund -- Class IA 0.63% N/A 0.02% 0.65%
-------------------------------------------------------------------------------------------------------------------------------
Hartford Bond HLS Fund -- Class IA 0.49% N/A 0.03% 0.52%
-------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Aggressive Growth Portfolio -- Service
Shares (3) 0.65% 0.25% 0.02% 0.92%
-------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Balanced Portfolio -- Service Shares (3) 0.65% 0.25% 0.02% 0.92%
-------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Growth and Income Portfolio -- Service
Shares (3) 0.65% 0.25% 0.40% 1.30%
-------------------------------------------------------------------------------------------------------------------------------
Janus Aspen International Growth Portfolio -- Service
Shares (3) 0.65% 0.25% 0.11% 1.01%
-------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Worldwide Growth Portfolio -- Service
Shares (3) 0.65% 0.25% 0.05% 0.95%
-------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Flexible Income Portfolio -- Service
Shares (3) 0.65% 0.25% 0.07% 0.97%
-------------------------------------------------------------------------------------------------------------------------------
Janus Aspen High-Yield Portfolio -- Service Shares (3) 0.00% 0.25% 1.00% 1.25%
-------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Series (4) 0.75% N/A 0.09% 0.84%
-------------------------------------------------------------------------------------------------------------------------------
MFS Capital Opportunities Series (4)(5) 0.75% N/A 0.16% 0.91%
-------------------------------------------------------------------------------------------------------------------------------
MFS Utilities Series (4) 0.75% N/A 0.16% 0.91%
-------------------------------------------------------------------------------------------------------------------------------
MFS High Income Series (4)(5) 0.75% N/A 0.16% 0.91%
-------------------------------------------------------------------------------------------------------------------------------
MFS Global Governments Series (4)(5) 0.75% N/A 0.16% 0.91%
-------------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund Asset Manager-Growth-SM-
Portfolio Service Class 2 (6)(7) 0.58% 0.25% 0.15% 0.98%
-------------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund Equity-Income Portfolio
Service Class 2 (6)(7) 0.48% 0.25% 0.10% 0.83%
-------------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund Growth Portfolio Service
Class 2 (6)(7) 0.58% 0.25% 0.10% 0.93%
-------------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund Index 500 Portfolio
Service Class 2 (6)(7) 0.24% 0.25% 0.11% 0.60%
-------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Asset Allocation Fund (8) 0.42% 0.25% 0.33% 1.00%
-------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Corporate Bond Fund (8) 0.10% 0.25% 0.55% 0.90%
-------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Equity Income Fund (8) 0.38% 0.25% 0.37% 1.00%
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL OPERATING
MANAGEMENT FEE OTHER EXPENSES (AFTER ANY
(AFTER ANY EXPENSES (AFTER WAIVERS AND/OR
WAIVERS) 12B-1 FEES REIMBURSEMENTS) REIMBURSEMENTS)(1)
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Equity Value Fund (9) 0.00% 0.25% 0.75% 1.00%
-------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Growth Fund (9) 0.32% 0.25% 0.43% 1.00%
-------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Large Company Growth Fund (9) 0.12% 0.25% 0.63% 1.00%
-------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Money Market Fund (9) 0.10% 0.25% 0.50% 0.85%
-------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Small Cap Growth Fund (9) 0.00% 0.25% 0.95% 1.20%
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) "Management Fee" generally represents the fee paid to the investment adviser
or its affiliate for investment and administrative services provided. "Other
Expenses" are operating expenses (other than management fees) deducted from
the Portfolios, including legal, accounting and custodian fees. For a
complete description of the nature of the services provided in consideration
of the operating expenses deducted, please see the Fund prospectuses.
(2) Other expenses: estimated fees to be paid by the portfolio for the current
fiscal year for miscellaneous items such as transfer agency, custody,
professional and registrations fees.
(3) All expenses are based on the estimated expenses that the new Service Shares
Class of each Portfolio expects to incur in its initial fiscal year. All
expenses are shown without the effect of expense offset arrangements. For
the Janus Aspen High-Yield Portfolio expenses are stated both with and
without contractual waivers by Janus Capital. Waivers, if applicable, are
first applied against the management fee and then against other expenses,
and will continue until at least the next annual renewal of the advisory
agreement. The fees for the Janus Aspen High-Yield Portfolio without waivers
are 0.75% management fee, 0.25% 12b-1 fees, 4.17% other expenses and 5.17%
total.
(4) Each Series has an expense offset arrangement which reduces the Series'
custodian fee based upon the amount of cash maintained by the Series with
its custodian and dividend disbursing agent. Each Series may enter into
other such arrangements and directed brokerage arrangements, which would
also have the effect of reducing the Series' expenses. "Other Expenses" do
not take into account the expense reductions, and are therefore higher than
the actual expenses of the Series.
(5) MFS has contractually agreed through at least May 1, 2001, to bear expenses
for these Series so that "Other Expenses" will not exceed 0.15% of the
average daily net assets of the Series during the current fiscal year.
Without this waiver the following would have been deducted:
<TABLE>
<CAPTION>
OTHER TOTAL OPERATING
MANAGEMENT FEE 12B-1 FEES EXPENSES EXPENSES
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
MFS Capital Opportunities Series 0.75% N/A 0.27% 1.02%
-----------------------------------------------------------------------------------------------------------
MFS High Income Series 0.75% N/A 0.22% 0.97%
-----------------------------------------------------------------------------------------------------------
MFS Global Governments Series 0.75% N/A 0.30% 1.05%
-----------------------------------------------------------------------------------------------------------
</TABLE>
(6) A portion of the brokerage commissions that certain Funds pay was used to
reduce Fund expenses. In addition, certain Funds have entered into
arrangements with their custodian whereby credits realized, as a result of
uninvested cash balances were used to reduce custodian expenses. These
reductions will continue through at least December 31, 2000 pursuant to an
agreement between the adviser and the funds. Without these reductions
Management Fees, Other Expenses and Total Operating Expenses for Variable
Insurance Products Fund Asset Manager-Growth-SM-, Equity-Income Portfolio,
Growth Portfolio and Index 500 Portfolio would have been as follows:
<TABLE>
<CAPTION>
OTHER TOTAL OPERATING
MANAGEMENT FEE 12B-1 FEES EXPENSES EXPENSES
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund Asset Manager-
Growth-SM- Portfolio Service Class 2 0.58% 0.25% 0.15% 0.98%
-----------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund Equity-Income
Portfolio Service Class 2 0.48% 0.25% 0.10% 0.83%
-----------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund Growth Portfolio
Service Class 2 0.58% 0.25% 0.10% 0.93%
-----------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund Index 500
Portfolio Service Class 2 0.24% 0.25% 0.11% 0.60%
-----------------------------------------------------------------------------------------------------------
</TABLE>
(7) Service Class 2 expenses are based on estimated expenses for the first year.
(8) Amounts above represent expenses as of December 31, 1999 and have been
adjusted for changes in contract rates that occurred during 1999.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 9
--------------------------------------------------------------------------------
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
RATING AGENCY OF RATING RATING BASIS OF RATING
<S> <C> <C> <C>
--------------------------------------------------------------------------------
A.M. Best and
Company, Inc. 4/1/00 A+ Financial performance
--------------------------------------------------------------------------------
Standard & Poor's 8/1/99 AA Insurer financial strength
--------------------------------------------------------------------------------
Fitch 7/1/99 AA+ Financial strength
--------------------------------------------------------------------------------
</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 39 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
AIM V.I. DIVERSIFIED INCOME FUND -- Seeks to achieve a high level of current
income.
AIM V.I. GLOBAL UTILITIES FUND -- Seeks high total return.
AIM V.I. GROWTH FUND -- Seeks growth of capital.
AIM V.I. GROWTH AND INCOME FUND -- Seeks growth of capital with a secondary
objective of current income.
AIM V.I. TELECOMMUNICATIONS AND TECHNOLOGY FUND -- Seeks long-term growth of
capital.
AIM V.I. VALUE FUND -- Seeks long-term growth of capital. Income is a secondary
objective.
AMERICAN CENTURY VP BALANCED FUND -- Seeks long-term growth and current income
by investing in equity securities, bonds and other fixed-income securities.
AMERICAN CENTURY VP INTERNATIONAL FUND -- Seeks capital growth.
DREYFUS INVESTMENT PORTFOLIO, CORE BOND PORTFOLIO -- Seeks to maximize total
return through capital appreciation and current income.
DREYFUS INVESTMENT PORTFOLIO, EMERGING MARKETS PORTFOLIO -- Seeks long-term
capital growth.
DREYFUS VARIABLE INVESTMENT FUND, SMALL CAP PORTFOLIO -- Seeks to maximize
capital appreciation.
HARTFORD CAPITAL APPRECIATION HLS FUND: CLASS IA -- Seeks growth of capital by
investing primarily in equity securities selected on the basis of potential for
capital appreciation.
HARTFORD STOCK HLS FUND: CLASS IA -- Seeks long-term growth of capital, with
income as a secondary consideration, by investing primarily in equity
securities.
HARTFORD ADVISERS HLS FUND: CLASS IA -- Seeks maximum long-term total return.
HARTFORD BOND HLS FUND: CLASS IA -- Seeks maximum current income consistent with
preservation of capital by investing primarily in investment grade fixed-income
securities. Up to 20% of the total assets of this Fund may be invested in debt
securities rated in the highest category below investment grade ("Ba" by Moody's
Investor Services, Inc. or "BB" by Standard & Poor's) or, if unrated, are
determined to be of comparable quality by the Fund's investment adviser.
Securities rated below investment grade are commonly referred to as "high
yield-high risk securities" or "junk bonds." For more information concerning the
risks associated with investing in such securities, please refer to the section
in the accompanying prospectus for the Funds entitled "Hartford Bond HLS Fund,
Inc."
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO: SERVICE SHARES -- Seeks long-term
growth of capital. This Portfolio is non-diversified and normally invests at
least 50% of its equity assets in medium-sized companies.
JANUS ASPEN BALANCED PORTFOLIO: SERVICE SHARES -- Seeks long-term growth of
capital, consistent with the preservation of capital and balanced by current
income.
JANUS ASPEN GROWTH AND INCOME PORTFOLIO: SERVICE SHARES -- Seeks long-term
capital growth and current income.
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10 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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JANUS ASPEN INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES -- Seeks long-term
growth of capital by investing primarily in stocks of foreign issuers.
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO: SERVICE SHARES -- Seeks long-term growth
of capital in a manner consistent with the preservation of capital. This
Portfolio invests primarily in stocks of foreign and domestic issuers.
JANUS ASPEN FLEXIBLE INCOME PORTFOLIO: SERVICE SHARES -- Seeks to obtain maximum
total return, consistent with the preservation of capital.
JANUS ASPEN HIGH-YIELD PORTFOLIO: SERVICE SHARES -- Seeks to obtain high current
income. Capital appreciation is a secondary objective when consistent with its
primary objective.
MFS EMERGING GROWTH SERIES -- Seeks to provide long-term growth of capital.
MFS CAPITAL OPPORTUNITIES SERIES -- Seeks capital appreciation.
MFS UTILITIES SERIES -- Seeks capital growth and current income (income above
that is available from a portfolio invested entirely in equity securities).
MFS HIGH INCOME SERIES -- Seeks high current income by investing primarily in a
professionally managed diversified portfolio of fixed income securities, some of
which may involve equity features.
MFS GLOBAL GOVERNMENTS SERIES -- Seeks income and capital appreciation.
VARIABLE INSURANCE PRODUCTS FUND ASSET MANAGER-GROWTH-SM- PORTFOLIO: SERVICE
CLASS 2 -- Seeks to maximize total return by allocating its assets among stocks,
bonds, short-term instruments, and other investments.
VARIABLE INSURANCE PRODUCTS FUND EQUITY-INCOME PORTFOLIO: SERVICE
CLASS 2 -- Seeks reasonable income. The Fund will also consider the potential
for capital appreciation.
VARIABLE INSURANCE PRODUCTS FUND GROWTH PORTFOLIO: SERVICE CLASS 2 -- Seeks to
achieve capital appreciation.
VARIABLE INSURANCE PRODUCTS FUND INDEX 500 PORTFOLIO: SERVICE CLASS 2 -- Seeks
investment results that correspond to the total return of common stocks publicly
traded in the United States, as represented by the Standard & Poor's 500-SM-
Index.
WELLS FARGO VARIABLE TRUST ASSET ALLOCATION FUND -- Seeks long-term total
return, consistent with reasonable risk.
WELLS FARGO VARIABLE TRUST CORPORATE BOND FUND -- Seeks a high level of current
income consistent with reasonable risk.
WELLS FARGO VARIABLE TRUST EQUITY INCOME FUND -- Seeks long-term capital
appreciation and above-average dividend income.
WELLS FARGO VARIABLE TRUST EQUITY VALUE FUND -- Seeks long-term capital
appreciation.
WELLS FARGO VARIABLE TRUST GROWTH FUND -- Seeks long-term capital appreciation.
WELLS FARGO VARIABLE TRUST LARGE COMPANY GROWTH FUND -- Seeks to achieve capital
appreciation.
WELLS FARGO VARIABLE TRUST MONEY MARKET FUND -- Seeks current income, while
preserving capital and liquidity.
WELLS FARGO VARIABLE TRUST SMALL CAP GROWTH FUND -- Seeks long-term capital
appreciation.
INVESTMENT ADVISERS -- The AIM Variable Insurance Funds are managed by A I M
Advisors, Inc. The American Century VP Funds are managed by American Century
Investment Management, Inc. The Dreyfus Investment Portfolios are managed by The
Dreyfus Corporation. Hartford Capital Appreciation HLS Fund, Inc., Hartford
Stock HLS Fund, Inc., Hartford Advisers HLS Fund, Inc. and Hartford Bond HLS
Fund, Inc. are collectively the "Hartford Funds" and are managed by HL
Investment Advisors, LLC. Wellington Management Company, LLP serves as sub-
investment advisor for Hartford Capital Appreciation HLS Fund, Inc. Hartford
Investment Management Company serves as sub-investment advisor for Hartford Bond
HLS Fund, Inc. Janus Aspen Series is managed by Janus Capital Corporation. The
MFS-Registered Trademark-Variable Insurance Trust is managed by MFS Investment
Management. Variable Insurance Products Fund and Variable Insurance Products
Fund II are managed by Fidelity Management & Research Company. The Wells Fargo
Variable Trust Funds are managed by Wells Fargo Bank, N.A. Wells Capital
Management Incorporated is the sub-advisor for the Funds (except the Wells Fargo
Variable Trust Asset Allocation Fund and Wells Fargo Variable Trust Large
Company Growth Fund). Barclays Global Fund Advisors is the sub-advisor for the
Wells Fargo Variable Trust Asset Allocation Fund. Peregrine Capital
Management, Inc. is the sub-advisor for the Wells Fargo Variable Trust Large
Company Growth Fund.
MIXED AND SHARED FUNDING -- Shares of the Funds may be sold to our other
separate accounts and our insurance company affiliates or other unaffiliated
insurance companies to serve as the underlying investment for both variable
annuity contracts and variable life insurance policies, a practice known as
"mixed and shared funding." As a result, there is a possibility that a material
conflict may arise between the interests of policy owners, owners of other
policies or owners of variable annuity contracts with values allocated to one or
more of these other separate accounts investing in any one of the Funds. In the
event of any such material conflicts, we will consider what action may be
appropriate, including removing the Fund from the Separate Account or replacing
the Fund with another underlying fund. There are certain risks associated with
mixed and shared funding, as disclosed in the Funds' prospectus.
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
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 11
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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.
ADMINISTRATIVE SERVICES -- Hartford has entered into agreements with the
investment advisers or distributors of many of the Funds. Under the terms of
these agreements, Hartford provides administrative services and the Funds pay a
fee to Hartford that is usually based on an annual percentage of the average
daily net assets of the Funds. These agreements may be different for each Fund
or each Fund family.
CHARGES AND DEDUCTIONS
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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 cost of insurance charge;
(c) the charges for additional benefits provided by rider, if any.
The Monthly Deduction Amount will vary from month to month.
Following is an explanation of the administrative expense charge and the charges
for cost of insurance and rider benefits.
(a) Administrative Expense Charge -- 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 cost of insurance charge is equal to:
- the cost of insurance rate per $1,000; multiplied by
- the net amount at risk; divided by
- $1,000.
The net amount at risk equals the death benefit minus the Cash Value on the date
we calculate this charge. The cost of insurance charge is shown on the
specification pages of the Policy and Certificate.
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, preferred and standard 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.
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12 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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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 may deduct a maximum 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 an expense credit of
.30%. The result is a net annual mortality and expense risk rate of .35%. In
Coverage Years 11 through 15, we will pay an expense credit of .40%. The result
is a net annual mortality and expense risk rate of .25%. In Coverage Years 16
and later, we will pay an expense credit of .55%. The result is a net annual
mortality and expense risk rate of .10%.
The mortality and expense risk charge is equal to:
- the mortality and expense risk rate; multiplied by
- 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.
TRANSFER FEE -- We deduct a $50 transfer fee when you transfer amounts from one
Investment Division to another for each transfer in excess of 12 transfers per
year.
PARTIAL WITHDRAWAL FEE -- We deduct a partial withdrawal fee for each withdrawal
you make. The fee is the lesser of 2% of the amount withdrawn or $25.
YOUR CERTIFICATE
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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.
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:
- the Certificate's current Cash Value, Cash Surrender Value and Face Amount;
- the premiums paid, Monthly Deduction Amounts and any Loans since your last
statement;
- the amount of any outstanding Debt;
- any notifications required by the provisions of your Certificate; and
- 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, in most cases, 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
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 13
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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:
- the total amount of premiums; or
- the Cash Value plus charges deducted under the Certificate.
The amount we return depends upon the state we issued your Certificate in.
PREMIUMS
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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.
You must pay a minimum initial premium to make your coverage effective 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 Wells Fargo Variable Trust 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 Wells Fargo Variable Trust Money Market Investment Division if
you selected it as an initial allocation option. This later date is the later
of:
- ten (10) calendar days after we receive the initial premium; and
- the date we receive the final requirements to put the Certificate in force.
We will allocate any additional premiums received prior to this later date to
the Wells Fargo Variable Trust 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
Divisions -- 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 Wells
Fargo Variable Trust Money Market Investment Division) as follows:
- Multiply the Net Premium by the appropriate allocation percentage to determine
the portion we will invest in the Investment Division; then
- 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.
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14 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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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.
DEATH BENEFITS AND POLICY VALUES
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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.
- DEATH BENEFIT OPTION A -- the death benefit is the greater of (a) the Face
Amount and (b) the Variable Insurance Amount.
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 15
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- 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.
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 -- In most cases, 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 generally must not be less
than $50,000. We will apply decreases:
- to the most recent increase; then
- successively to each prior increase, and then
- 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,
which equals attained age 100 ("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.
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16 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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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.
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. 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 which 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 and the charge for processing the 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
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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:
- the amount transferred by,
- the Accumulation Unit value for that Investment Division determined 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:
- the amount transferred divided by,
- the Accumulation Unit value for that Investment Division determined on the
Valuation Day we receive your written request.
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 17
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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 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 Wells
Fargo Variable Trust 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 Wells Fargo Variable Trust 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.
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18 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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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 1.00, minus outstanding
Debt.
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 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
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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 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:
- you make your request within three (3) years of the date of lapse. Some states
provide a longer period; and
- you submit satisfactory evidence of insurability to us.
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 19
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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.
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:
- The Investment Value at the time of termination; plus
- 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 group policyholder 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 unless your Certificate
includes the Maturity Date Extension Rider. 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
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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
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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.
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20 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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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.
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
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The following supplemental benefit will automatically be included in a
Certificate, subject to current restrictions, limitations and state approval,
unless you notify us in writing that you do not want it.
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
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REDUCED CHARGES FOR ELIGIBLE GROUPS
We may reduce or eliminate certain of the charges and deductions described above
(including, sales load, mortality and expense risk charge, cost of insurance
charge and administrative charge) 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. We determine eligibility for reduction
in charges and the amount of any reduction by a number of factors, including:
- the size of the plan;
- the expected number of participants;
- the anticipated premium payment from the plan;
- the nature of the group; and
- any other circumstances that are rationally related to the expected reduction
in expenses.
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.
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 21
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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.
DIVIDENDS
No dividends will be paid under the Certificates.
TAXES
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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.
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
<PAGE>
22 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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of basis. Taxable withdrawals are subject to a 10% federal income tax penalty,
with certain exceptions. 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 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.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 23
--------------------------------------------------------------------------------
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.
If applicable, the Investment Divisions 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 unit
value on the last day of the period. This figure reflects the Certificate
charges described below.
The Investment Division investing in the Wells Fargo Variable Trust Money Market
HLS Fund 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>
24 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
--------------------------------------------------------------------------------
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.
FUNDS: The underlying investment vehicles for the Separate Account. Each Fund is
a registered management investment company, and may be divided into series of
Portfolios.
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.
PORTFOLIO: A division or series of a Fund that serves as the underlying
investment vehicle of an Investment Division of the Separate Account. Each
Investment Division purchases shares of a Portfolio of a Fund.
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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 25
--------------------------------------------------------------------------------
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
website 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
WELLS FARGO NON-QUALIFIED SELECT-SM-
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: AUGUST 28, 2000
DATE OF STATEMENT OF ADDITIONAL INFORMATION: AUGUST 28, 2000
<PAGE>
2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
--------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GENERAL INFORMATION AND HISTORY 3
----------------------------------------------------------------------
SERVICES 5
----------------------------------------------------------------------
EXPERTS 5
----------------------------------------------------------------------
DISTRIBUTION OF THE POLICIES 5
----------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT CHARGES 6
----------------------------------------------------------------------
ILLUSTRATION OF DEATH 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 OTHER BUSINESS PROFESSION,
HARTFORD; VOCATION OR EMPLOYMENT FOR PAST
NAME YEAR OF ELECTION FIVE YEARS; OTHER DIRECTORSHIPS
<S> <C> <C>
-----------------------------------------------------------------------------------------------------------------
David A. Carlson Vice President, 1999 Assistant Vice President and Director of Taxes
(1998-1999), Hartford; Assistant Vice President and
Director of Taxes (1998-1999), Hartford; CIGNA Corporation
(1975-1998).
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);
Actuary, 1997 Assistant Vice President (1992-1995), Hartford Life and
Accident Insurance Company; Vice President (1995-Present);
Actuary (1994-Present); Assistant Vice President
(1992-1995), Hartford Life Insurance Company.
Mary Jane B. Fortin Vice President & Chief Vice President & Chief Accounting Officer (1998-Present),
Accounting 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, Chief Senior Vice President (1998-present), Vice President
Financial Officer & (1998), Assistant Vice President (1995-1998), Hartford;
Treasurer, 1998 Senior Vice President (1998-Present), Hartford Life and
Director, 1999* Accident Insurance Company; Director, Strategic Planning
Corporate Finance (1995-1996), IA Product Development
(1994-1995), Hartford; Various Actuarial Roles
(1989-1993), Milliman & Robertson.
</TABLE>
<PAGE>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
--------------------------------------------------------------------------------
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
POSITION WITH OTHER BUSINESS PROFESSION,
HARTFORD; VOCATION OR EMPLOYMENT FOR PAST
NAME YEAR OF ELECTION FIVE YEARS; OTHER DIRECTORSHIPS
<S> <C> <C>
Lynda Godkin Senior Vice President, 1997 Associate General Counsel (1995-1996); Assistant General
General Counsel, 1996 Counsel and Secretary (1994-1995), Hartford; Director
Corporate Secretary, 1996 (1997-Present); Senior Vice President (1997-Present);
Director, 1997* General Counsel (1996-Present); Corporate Secretary
(1995-Present); Associate General Counsel (1995-1996);
Assistant General Counsel and Secretary (1994-1995);
Counsel (1990-1994), Hartford Life and Accident Insurance
Company; Senior Vice President (1997-Present); General
Counsel (1996-Present); Corporate Secretary
(1995-Present); Director (1997-Present); Associate General
Counsel (1995-1996); Assistant General Counsel and
Secretary (1994-1995); Counsel (1990-1994), Hartford Life
Insurance Company; Vice President and General Counsel
(1997-Present), Hartford Life, Inc.
Lois W. Grady Senior Vice President, 1998 Vice President (1994-1998), Hartford; Senior Vice
Vice President, 1994 President (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 Senior Vice President, 1999 Vice President (1997-1999), Assistant Vice President
(1995-1997), Hartford; Assistant Vice President
(1994-1997), Hartford Life and Accident Insurance Company;
Vice President (1997-Present); Vice President (1997-1999);
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.
Robert A. Kerzner Senior Vice President, 1998 Director of Individual Life (1998-Present); Vice President
(1994-1998), Hartford; Senior Vice President
(1998-Present); Vice President (1994-1997); Regional Vice
President (1991-1994), Hartford Life Insurance Company.
Thomas M. Marra President, 2000 Executive Vice President (1996-2000), Senior Vice
Director, 1994* President (1993-1996); Hartford; Director (1994-Present);
Executive Vice President (1995-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); Senior Vice President (1994-1995); Vice
President (1989-1994); Actuary (1987-1995), Hartford Life
Insurance Company; Chief Operating Officer (2000-present),
Executive Vice President, Individual Life and Annuities
(1997-2000), Hartford Life, Inc.
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.
</TABLE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 5
--------------------------------------------------------------------------------
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
POSITION WITH OTHER BUSINESS PROFESSION,
HARTFORD; VOCATION OR EMPLOYMENT FOR PAST
NAME YEAR OF ELECTION FIVE YEARS; OTHER DIRECTORSHIPS
<S> <C> <C>
Lowndes A. Smith Chief Executive Officer, 1997 President (1989-2000), Chief Operating Officer
Director, 1985* (1989-1997), Hartford; Director (1981-Present); President
(1989-Present); Chief Executive Officer (1997-Present);
Chief Operating Officer (1989-1997), Hartford Life and
Accident Insurance Company; Director (1985-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 & Chief Vice President (1997); Senior Vice President (1997);
Investment Officer, 1997 Director, Risk Management Strategy (1996); Director
Director, 1998 (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.
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. The principal address of HESCO is
the same as Hartford. 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.
<PAGE>
6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
--------------------------------------------------------------------------------
The maximum sales commission payable to Hartford agents, independent registered
insurance brokers, and other registered broker-dealers is 12% of the premiums
paid. Additionally, expense allowances, service fees and asset-based trail
commissions may be paid.
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> <C>
--------------------------------------------------------------------
David A. Carlson Vice President
--------------------------------------------------------------------
Peter W. Cummins Senior Vice President
--------------------------------------------------------------------
David T. Foy Treasurer
--------------------------------------------------------------------
Lynda Godkin Senior Vice President, General
Counsel and Corporate Secretary
--------------------------------------------------------------------
George R. Jay Controller
--------------------------------------------------------------------
Robert A. Kerzner Executive Vice President, Director
--------------------------------------------------------------------
Thomas M. Marra President, Director
--------------------------------------------------------------------
Donald R. Salama Vice President
--------------------------------------------------------------------
Lowndes A. Smith Chief Executive Officer, Director
--------------------------------------------------------------------
</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.
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 (including, sales load, mortality and expense risk charge, cost
of insurance charge and administrative charge) may be reduced for certain sales
of the Certificates. 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. 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, preferred and standard 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.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 7
--------------------------------------------------------------------------------
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. In most cases, 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 0.93%. The 0.93% figure is based on an
average of the current management fees and expenses of the available Portfolios.
Actual fees and expenses of the Portfolios associated with a Certificate may be
more or less than 0.93%, 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>
STATEMENT OF ADDITIONAL INFORMATION 9
--------------------------------------------------------------------------------
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 0.00% (-0.93% 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 5,139 5,139 255,156 3,950 3,950 254,049
2 12,915 10,113 10,113 260,143 7,759 7,759 257,869
3 19,861 14,956 14,956 264,997 11,419 11,419 261,542
4 27,154 19,688 19,688 269,738 14,928 14,928 265,063
5 34,812 24,324 24,324 274,382 18,275 18,275 268,424
6 42,853 28,859 28,859 278,926 21,456 21,456 271,618
7 51,296 33,304 33,304 283,378 24,448 24,448 274,627
8 60,161 37,777 37,777 287,859 27,357 27,357 277,552
9 69,469 42,149 42,149 292,239 30,042 30,042 280,256
10 79,242 46,413 46,413 296,512 32,481 32,481 282,715
11 89,504 50,593 50,593 300,699 34,661 34,661 284,917
12 100,279 54,633 54,633 304,751 36,567 36,567 286,845
13 111,593 58,523 58,523 308,654 38,190 38,190 288,492
14 123,473 62,260 62,260 312,403 39,518 39,518 289,844
15 135,947 65,843 65,843 315,998 40,532 40,532 290,885
16 149,044 68,989 68,989 319,181 41,206 41,206 291,586
17 162,796 71,929 71,929 322,138 41,504 41,504 291,915
18 177,236 74,678 74,678 324,903 41,383 41,383 291,829
19 192,398 77,210 77,210 327,453 40,793 40,793 291,278
20 208,318 79,507 79,507 329,769 39,685 39,685 290,213
25 300,684 87,713 87,713 338,068 25,018 25,018 275,808
30 418,569 89,497 89,497 339,969 0 0 0
------------------------------------------------------------------------------------------------------------
</TABLE>
*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.
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
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 6.00% (5.07% 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 5,456 5,456 255,446 4,225 4,225 254,303
2 12,915 11,065 11,065 261,042 8,553 8,553 258,623
3 19,861 16,869 16,869 266,829 12,983 12,983 263,044
4 27,154 22,895 22,895 272,836 17,513 17,513 267,566
5 34,812 29,167 29,167 279,088 22,136 22,136 272,180
6 42,853 35,692 35,692 285,591 26,847 26,847 276,884
7 51,296 42,489 42,489 292,365 31,629 31,629 281,660
8 60,161 49,698 49,698 299,549 36,591 36,591 286,617
9 69,469 57,200 57,200 307,026 41,595 41,595 291,617
10 79,242 65,001 65,001 314,802 46,614 46,614 296,635
11 89,504 73,160 73,160 322,930 51,636 51,636 301,657
12 100,279 81,617 81,617 331,362 56,638 56,638 306,661
13 111,593 90,375 90,375 340,094 61,610 61,610 311,635
14 123,473 99,443 99,443 349,136 66,532 66,532 316,561
15 135,947 108,834 108,834 358,499 71,380 71,380 321,416
16 149,044 118,340 118,340 367,995 76,118 76,118 326,163
17 162,796 128,139 128,139 377,769 80,700 80,700 330,758
18 177,236 138,258 138,258 387,861 85,069 85,069 335,146
19 192,398 148,685 148,685 398,262 89,158 89,158 339,259
20 208,318 159,416 159,416 408,967 92,898 92,898 343,028
25 300,684 218,348 218,348 467,748 104,017 104,017 354,382
30 418,569 286,517 286,517 535,755 92,603 92,603 343,489
------------------------------------------------------------------------------------------------------------
</TABLE>
*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.
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>
STATEMENT OF ADDITIONAL INFORMATION 11
--------------------------------------------------------------------------------
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 12.00% (11.07% 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 5,773 5,773 255,735 4,500 4,500 254,557
2 12,915 12,055 12,055 261,973 9,383 9,383 259,406
3 19,861 18,938 18,938 268,804 14,681 14,681 264,668
4 27,154 26,504 26,504 276,310 20,434 20,434 270,382
5 34,812 34,839 34,839 284,578 26,678 26,678 276,583
6 42,853 44,021 44,021 293,686 33,456 33,456 283,314
7 51,296 54,149 54,149 303,731 40,803 40,803 290,611
8 60,161 65,456 65,456 314,946 48,892 48,892 298,646
9 69,469 77,924 77,924 327,313 57,646 57,646 307,342
10 79,242 91,668 91,668 340,946 67,110 67,110 316,744
11 89,504 106,903 106,903 356,050 77,344 77,344 326,911
12 100,279 123,685 123,685 372,697 88,409 88,409 337,903
13 111,593 142,170 142,170 391,033 100,382 100,382 349,797
14 123,473 162,536 162,536 411,234 113,341 113,341 362,670
15 135,947 184,982 184,982 433,499 127,371 127,371 376,607
16 149,044 209,638 209,638 457,961 142,552 142,552 391,687
17 162,796 236,811 236,811 484,914 158,964 158,964 407,992
18 177,236 266,791 266,791 514,649 176,691 176,691 425,604
19 192,398 299,857 299,857 547,446 195,811 195,811 444,602
20 208,318 336,327 336,327 583,618 216,417 216,417 465,079
25 300,684 583,772 583,772 864,231 346,047 346,047 593,893
30 418,569 985,520 985,520 1,327,673 532,468 532,468 779,217
-------------------------------------------------------------------------------------------------------------
</TABLE>
*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.
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 0.00% (-0.93% 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 12,338 12,338 262,362 10,969 10,969 261,076
2 30,355 24,418 24,418 274,464 21,707 21,707 271,832
3 46,680 36,278 36,278 286,342 32,208 32,208 282,353
4 63,821 47,937 47,937 298,017 42,471 42,471 292,636
5 81,819 59,411 59,411 309,507 52,486 52,486 302,672
6 100,717 70,698 70,698 320,809 62,250 62,250 312,456
7 120,560 81,807 81,807 331,933 71,742 71,742 321,971
8 126,588 80,212 80,212 330,339 68,732 68,732 318,972
9 132,917 78,593 78,593 328,722 65,574 65,574 315,825
10 139,563 76,943 76,943 327,074 62,244 62,244 312,510
11 146,541 75,309 75,309 325,439 58,729 58,729 309,010
12 153,868 73,603 73,603 323,739 55,011 55,011 305,309
13 161,561 71,815 71,815 321,958 51,084 51,084 301,399
14 169,639 69,940 69,940 320,091 46,931 46,931 297,265
15 178,121 67,977 67,977 318,135 42,535 42,535 292,889
16 187,027 65,639 65,639 315,828 37,866 37,866 288,243
17 196,378 63,150 63,150 313,351 32,890 32,890 283,293
18 206,197 60,525 60,525 310,738 27,562 27,562 277,994
19 216,507 57,739 57,739 307,965 21,831 21,831 272,295
20 227,332 54,773 54,773 305,014 15,646 15,646 266,149
25 290,140 37,458 37,458 287,770 0 0 0
30 370,300 14,998 14,998 265,406 0 0 0
------------------------------------------------------------------------------------------------------------
</TABLE>
*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.
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>
STATEMENT OF ADDITIONAL INFORMATION 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 6.00% (5.07% 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 13,091 13,091 263,052 11,669 11,669 261,719
2 30,355 26,693 26,693 276,611 23,792 23,792 273,803
3 46,680 40,867 40,867 290,736 36,382 36,382 286,354
4 63,821 55,657 55,657 305,473 49,457 49,457 299,387
5 81,819 71,105 71,105 320,865 63,027 63,027 312,915
6 100,717 87,237 87,237 336,939 77,106 77,106 326,951
7 120,560 104,094 104,094 353,734 91,697 91,697 341,498
8 126,588 108,420 108,420 358,047 93,847 93,847 343,654
9 132,917 112,905 112,905 362,518 95,906 95,906 345,721
10 139,563 117,546 117,546 367,146 97,844 97,844 347,669
11 146,541 122,446 122,446 372,024 99,638 99,638 349,475
12 153,868 127,488 127,488 377,054 101,261 101,261 351,113
13 161,561 132,667 132,667 382,221 102,695 102,695 352,563
14 169,639 137,983 137,983 387,525 103,913 103,913 353,799
15 178,121 143,441 143,441 392,972 104,882 104,882 354,790
16 187,027 148,873 148,873 398,405 105,559 105,559 355,491
17 196,378 154,394 154,394 403,919 105,889 105,889 355,851
18 206,197 160,023 160,023 409,539 105,806 105,806 355,803
19 216,507 165,738 165,738 415,246 105,233 105,233 355,272
20 227,332 171,521 171,521 421,023 104,092 104,092 354,179
25 290,140 201,778 201,778 451,244 87,128 87,128 337,558
30 370,300 233,399 233,399 482,852 40,347 40,347 291,434
------------------------------------------------------------------------------------------------------------
</TABLE>
*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.
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 12.00% (11.07% 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 13,843 13,843 263,738 12,369 12,369 262,359
2 30,355 29,059 29,059 278,833 25,961 25,961 275,845
3 46,680 45,829 45,829 295,468 40,900 40,900 290,666
4 63,821 64,337 64,337 313,825 57,324 57,324 306,961
5 81,819 84,785 84,785 334,103 75,378 75,378 324,873
6 100,717 107,374 107,374 356,505 95,229 95,229 344,567
7 120,560 132,340 132,340 381,264 117,045 117,045 366,211
8 126,588 145,890 145,890 394,703 127,320 127,320 376,413
9 132,917 160,841 160,841 409,532 138,494 138,494 387,509
10 139,563 177,334 177,334 425,890 150,637 150,637 399,567
11 146,541 195,699 195,699 444,091 163,836 163,836 412,674
12 153,868 215,950 215,950 464,177 178,183 178,183 426,921
13 161,561 238,278 238,278 486,324 193,789 193,789 442,417
14 169,639 262,902 262,902 510,748 210,770 210,770 459,278
15 178,121 290,064 290,064 541,021 229,252 229,252 477,629
16 187,027 320,051 320,051 581,934 249,361 249,361 497,596
17 196,378 353,049 353,049 626,077 271,230 271,230 519,311
18 206,197 389,385 389,385 673,784 294,995 294,995 542,911
19 216,507 429,373 429,373 725,378 320,801 320,801 568,539
20 227,332 473,365 473,365 781,212 348,809 348,809 596,355
25 290,140 769,893 769,893 1,139,770 528,914 528,914 783,921
30 370,300 1,250,686 1,250,686 1,684,899 793,057 793,057 1,069,897
---------------------------------------------------------------------------------------------------------------
</TABLE>
*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.
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>
STATEMENT OF ADDITIONAL INFORMATION 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 0.00% (-0.93% 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 5,142 5,142 250,000 3,971 3,971 250,000
2 12,915 10,125 10,125 250,000 7,820 7,820 250,000
3 19,861 14,986 14,986 250,000 11,544 11,544 250,000
4 27,154 19,746 19,746 250,000 15,143 15,143 250,000
5 34,812 24,419 24,419 250,000 18,607 18,607 250,000
6 42,853 29,004 29,004 250,000 21,935 21,935 250,000
7 51,296 33,509 33,509 250,000 25,111 25,111 250,000
8 60,161 38,055 38,055 250,000 28,244 28,244 250,000
9 69,469 42,516 42,516 250,000 31,197 31,197 250,000
10 79,242 46,887 46,887 250,000 33,956 33,956 250,000
11 89,504 51,200 51,200 250,000 36,511 36,511 250,000
12 100,279 55,404 55,404 250,000 38,853 38,853 250,000
13 111,593 59,493 59,493 250,000 40,976 40,976 250,000
14 123,473 63,467 63,467 250,000 42,870 42,870 250,000
15 135,947 67,330 67,330 250,000 44,524 44,524 250,000
16 149,044 70,916 70,916 250,000 45,913 45,913 250,000
17 162,796 74,365 74,365 250,000 47,009 47,009 250,000
18 177,236 77,693 77,693 250,000 47,776 47,776 250,000
19 192,398 80,884 80,884 250,000 48,167 48,167 250,000
20 208,318 83,932 83,932 250,000 48,139 48,139 250,000
25 300,684 97,284 97,284 250,000 40,071 40,071 250,000
30 418,569 107,153 107,153 250,000 10,047 10,047 250,000
------------------------------------------------------------------------------------------------------------
</TABLE>
*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.
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 6.00% (5.07% 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 5,459 5,459 250,000 4,247 4,247 250,000
2 12,915 11,078 11,078 250,000 8,622 8,622 250,000
3 19,861 16,904 16,904 250,000 13,128 13,128 250,000
4 27,154 22,964 22,964 250,000 17,770 17,770 250,000
5 34,812 29,285 29,285 250,000 22,549 22,549 250,000
6 42,853 35,877 35,877 250,000 27,470 27,470 250,000
7 51,296 42,763 42,763 250,000 32,524 32,524 250,000
8 60,161 50,084 50,084 250,000 37,837 37,837 250,000
9 69,469 57,729 57,729 250,000 43,284 43,284 250,000
10 79,242 65,712 65,712 250,000 48,859 48,859 250,000
11 89,504 74,105 74,105 250,000 54,569 54,569 250,000
12 100,279 82,862 82,862 250,000 60,416 60,416 250,000
13 111,593 92,000 92,000 250,000 66,411 66,411 250,000
14 123,473 101,544 101,544 250,000 72,565 72,565 250,000
15 135,947 111,522 111,522 250,000 78,885 78,885 250,000
16 149,044 121,940 121,940 250,000 85,375 85,375 250,000
17 162,796 132,859 132,859 250,000 92,039 92,039 250,000
18 177,236 144,328 144,328 250,900 98,878 98,878 250,000
19 192,398 156,272 156,272 265,229 105,894 105,894 250,000
20 208,318 168,695 168,695 279,694 113,095 113,095 250,000
25 300,684 238,959 238,959 355,401 152,852 152,852 250,000
30 418,569 325,145 325,145 440,060 201,273 201,273 272,793
------------------------------------------------------------------------------------------------------------
</TABLE>
*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.
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>
STATEMENT OF ADDITIONAL INFORMATION 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 12.00% (11.07% 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 5,776 5,776 250,000 4,523 4,523 250,000
2 12,915 12,070 12,070 250,000 9,458 9,458 250,000
3 19,861 18,978 18,978 250,000 14,847 14,847 250,000
4 27,154 26,585 26,585 250,000 20,741 20,741 250,000
5 34,812 34,983 34,983 250,000 27,190 27,190 250,000
6 42,853 44,257 44,257 250,000 34,258 34,258 250,000
7 51,296 54,511 54,511 250,000 42,002 42,002 250,000
8 60,161 65,988 65,988 250,000 50,629 50,629 250,000
9 69,469 78,684 78,684 250,000 60,101 60,101 250,000
10 79,242 92,729 92,729 250,000 70,511 70,511 250,000
11 89,504 108,371 108,371 250,000 81,977 81,977 250,000
12 100,279 125,695 125,695 253,665 94,634 94,634 250,000
13 111,593 144,809 144,809 284,549 108,644 108,644 250,000
14 123,473 165,873 165,873 317,492 124,191 124,191 250,000
15 135,947 189,086 189,086 352,678 141,392 141,392 263,944
16 149,044 214,704 214,704 390,385 160,112 160,112 291,382
17 162,796 242,909 242,909 430,761 180,470 180,470 320,322
18 177,236 273,979 273,979 474,087 202,584 202,584 350,871
19 192,398 308,184 308,184 520,643 226,580 226,580 383,146
20 208,318 345,828 345,828 570,733 252,591 252,591 417,268
25 300,684 599,669 599,669 887,765 418,612 418,612 620,439
30 418,569 1,011,352 1,011,352 1,362,473 662,048 662,048 893,155
--------------------------------------------------------------------------------------------------------------
</TABLE>
*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.
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
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 0.00% (-0.93% 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 12,345 12,345 250,000 11,022 11,022 250,000
2 30,355 24,448 24,448 250,000 21,869 21,869 250,000
3 46,680 36,351 36,351 250,000 32,544 32,544 250,000
4 63,821 48,077 48,077 250,000 43,053 43,053 250,000
5 81,819 59,642 59,642 250,000 53,397 53,397 250,000
6 100,717 71,048 71,048 250,000 63,579 63,579 250,000
7 120,560 82,305 82,305 250,000 73,596 73,596 250,000
8 126,588 80,864 80,864 250,000 71,135 71,135 250,000
9 132,917 79,409 79,409 250,000 68,550 68,550 250,000
10 139,563 77,934 77,934 250,000 65,820 65,820 250,000
11 146,541 76,495 76,495 250,000 62,930 62,930 250,000
12 153,868 75,005 75,005 250,000 59,858 59,858 250,000
13 161,561 73,457 73,457 250,000 56,592 56,592 250,000
14 169,639 71,845 71,845 250,000 53,110 53,110 250,000
15 178,121 70,167 70,167 250,000 49,389 49,389 250,000
16 187,027 68,243 68,243 250,000 45,391 45,391 250,000
17 196,378 66,199 66,199 250,000 41,074 41,074 250,000
18 206,197 64,042 64,042 250,000 36,381 36,381 250,000
19 216,507 61,749 61,749 250,000 31,245 31,245 250,000
20 227,332 59,302 59,302 250,000 25,595 25,595 250,000
25 290,140 44,716 44,716 250,000 0 0 0
30 370,300 24,690 24,690 250,000 0 0 0
------------------------------------------------------------------------------------------------------------
</TABLE>
*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.
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>
STATEMENT OF ADDITIONAL INFORMATION 19
--------------------------------------------------------------------------------
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 6.00% (5.07% 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 13,098 13,098 250,000 11,725 11,725 250,000
2 30,355 26,726 26,726 250,000 23,971 23,971 250,000
3 46,680 40,951 40,951 250,000 36,768 36,768 250,000
4 63,821 55,823 55,823 250,000 50,152 50,152 250,000
5 81,819 71,389 71,389 250,000 64,156 64,156 250,000
6 100,717 87,686 87,686 250,000 78,822 78,822 250,000
7 120,560 104,757 104,757 250,000 94,185 94,185 250,000
8 126,588 109,332 109,332 250,000 97,232 97,232 250,000
9 132,917 114,106 114,106 251,292 100,331 100,331 250,000
10 139,563 119,079 119,079 255,002 103,474 103,474 250,000
11 146,541 124,368 124,368 259,074 106,659 106,659 250,000
12 153,868 129,865 129,865 263,296 109,884 109,884 250,000
13 161,561 135,574 135,574 267,639 113,152 113,152 250,000
14 169,639 141,505 141,505 272,105 116,461 116,461 250,000
15 178,121 147,667 147,667 276,702 119,812 119,812 250,000
16 187,027 154,100 154,100 281,493 123,197 123,197 250,000
17 196,378 160,773 160,773 286,428 126,608 126,608 250,000
18 206,197 167,707 167,707 291,542 130,033 130,033 250,000
19 216,507 174,904 174,904 296,851 133,456 133,456 250,000
20 227,332 182,371 182,371 302,369 136,865 136,865 250,000
25 290,140 224,477 224,477 333,862 153,483 153,483 250,000
30 370,300 275,999 275,999 373,545 168,125 168,125 250,000
------------------------------------------------------------------------------------------------------------
</TABLE>
*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.
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
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 12.00% (11.07% 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 13,851 13,851 250,000 12,428 12,428 250,000
2 30,355 29,094 29,094 250,000 26,158 26,158 250,000
3 46,680 45,924 45,924 250,000 41,341 41,341 250,000
4 63,821 64,533 64,533 250,000 58,149 58,149 250,000
5 81,819 85,134 85,134 250,000 76,771 76,771 250,000
6 100,717 107,942 107,942 258,016 97,428 97,428 250,000
7 120,560 133,119 133,119 309,029 120,197 120,197 279,202
8 126,588 146,896 146,896 331,306 131,540 131,540 296,861
9 132,917 162,090 162,090 355,318 143,905 143,905 315,663
10 139,563 178,843 178,843 381,217 157,373 157,373 335,682
11 146,541 197,488 197,488 409,491 172,035 172,035 356,996
12 153,868 218,033 218,033 440,010 187,990 187,990 379,688
13 161,561 240,662 240,662 472,900 205,351 205,351 403,846
14 169,639 265,585 265,585 508,347 224,238 224,238 429,564
15 178,121 293,036 293,036 546,563 244,779 244,779 456,943
16 187,027 323,331 323,331 587,897 267,102 267,102 486,089
17 196,378 356,667 356,667 632,493 291,344 291,344 517,117
18 206,197 393,376 393,376 680,690 317,641 317,641 550,147
19 216,507 433,774 433,774 732,814 346,132 346,132 585,308
20 227,332 478,219 478,219 789,222 376,971 376,971 622,738
25 290,140 777,791 777,791 1,151,462 573,092 573,092 849,399
30 370,300 1,263,519 1,263,519 1,702,187 859,360 859,360 1,159,346
---------------------------------------------------------------------------------------------------------------
</TABLE>
*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.
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>
The following prospectus contains information relating to all of the funds
offered by Wells Fargo Variable Trust Funds. Not all the funds in the Wells
Fargo Variable Trust Funds prospectus are available to Wells Fargo NON-QUALIFIED
SELECT-SM- Policy owners. Please review the Wells Fargo NON-QUALIFIED SELECT-SM-
product prospectus for details regarding available Funds (see "The Funds").
<PAGE>
The following prospectus contains information relating to all of the funds
offered by Janus Aspen Series. Not all the funds in the Janus Aspen Series
prospectus are available to Wells Fargo NON-QUALIFIED SELECT-SM- Policy owners.
Please review the Wells Fargo NON-QUALIFIED SELECT-SM- product prospectus for
details regarding available Funds (see "The Funds").
<PAGE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
STATEMENTS OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
<TABLE>
December 31, 1999 Hartford Hartford Capital Fidelity VIP
Bond Appreciation Fund
Investment Investment Equity-Income
Division Division Investment
Division
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
INVESTMENTS IN THE HARTFORD HLS MUTUAL FUNDS:
--------------------------------------------------------------------------------------------------------------------
HARTFORD BOND HLS FUND, INC. -- CLASS IA
Shares 1,113,527
Cost $1,170,274
...................................................................................................................
Market Value $1,106,692 $ -- $ --
--------------------------------------------------------------------------------------------------------------------
HARTFORD CAPITAL APPRECIATION HLS FUND, INC. -- CLASS IA
Shares 157,392
Cost $776,862
...................................................................................................................
Market Value -- $ 959,365
--------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN FIDELITY VARIABLE INSURANCE PRODUCTS FUNDS:
EQUITY-INCOME PORTFOLIO
Shares 78,318
Cost $1,916,064
...................................................................................................................
Market Value -- -- 2,013,550
--------------------------------------------------------------------------------------------------------------------
Receivable from Hartford Life and Annuity Insurance Company 1,038 107,050 51,314
...................................................................................................................
Receivable from fund shares sold -- -- --
...................................................................................................................
Total assets 1,107,730 1,066,415 2,064,864
...................................................................................................................
LIABILITIES:
Payable to Hartford Life and Annuity Insurance Company -- -- --
...................................................................................................................
Payable for fund shares purchased 3,266 9,478 5,391
...................................................................................................................
Total liabilities 3,266 9,478 5,391
--------------------------------------------------------------------------------------------------------------------
NET ASSETS $1,104,464 $1,056,937 $2,059,473
--------------------------------------------------------------------------------------------------------------------
VARIABLE LIFE INSURANCE POLICIES:
...................................................................................................................
Units owned by participants 94,558 53,952 136,314
...................................................................................................................
Unit price $ 11.56 $ 19.23 $ 15.00
...................................................................................................................
Units owned by Hartford Life and Annuity Insurance Company 1,000 1,000 988
...................................................................................................................
Unit price $ 11.56 $ 19.23 $ 15.00
--------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-1
<PAGE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended December 31, 1999 Hartford Hartford Capital Fidelity VIP
Bond Appreciation Fund
Investment Investment Equity-Income
Division Division Investment
Division
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 59,863 $ 2,741 $ 19,532
...................................................................................................................
EXPENSES:
Mortality and expense risk undertakings (5,950) (3,971) (10,540)
...................................................................................................................
Net investment income (loss) 53,913 (1,230) 8,992
...................................................................................................................
Capital gains income 5,853 19,061 43,177
...................................................................................................................
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
...................................................................................................................
Net realized (loss) gain on security transactions (7,751) 2,164 2,644
...................................................................................................................
Net unrealized (depreciation) appreciation of investments
during the period (74,990) 157,434 14,549
...................................................................................................................
Net (loss) gain on investments (82,741) 159,598 17,193
--------------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $(22,975) $177,429 $ 69,362
--------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-2
<PAGE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended December 31, 1999 Hartford Hartford Capital Fidelity VIP
Bond Appreciation Fund
Investment Investment Equity-Income
Division Division Investment
Division
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 53,913 $ (1,230) $ 8,992
...................................................................................................................
Capital gains income 5,853 19,061 43,177
...................................................................................................................
Net realized (loss) gain on security transactions (7,751) 2,164 2,644
...................................................................................................................
Net unrealized (depreciation) appreciation of investments
during the period (74,990) 157,434 14,549
...................................................................................................................
Net (decrease) increase in net assets resulting from
operations (22,975) 177,429 69,362
...................................................................................................................
UNIT TRANSACTIONS:
Purchases 283,754 462,253 685,496
...................................................................................................................
Net transfers (9,776) 403 (29,136)
...................................................................................................................
Surrenders, including death benefits (3,186) (19,980) (19,312)
...................................................................................................................
Cost of insurance and other fees (5,227) (11,882) (46,257)
...................................................................................................................
Other activity 4,282 62,154 3,532
...................................................................................................................
Net increase (decrease) in net assets resulting from unit
transactions 269,847 492,948 594,323
...................................................................................................................
Net increase (decrease) in net assets 246,872 670,377 663,685
...................................................................................................................
NET ASSETS:
Beginning of period 857,592 386,560 1,395,788
--------------------------------------------------------------------------------------------------------------------
END OF PERIOD $1,104,464 $1,056,937 $2,059,473
--------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-3
<PAGE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended December 31, 1998 Hartford Hartford Capital Fidelity VIP
Bond Appreciation Fund
Investment Investment Equity-Income
Division Division Investment
Division
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income $ 36,498 $ 11,347 $ 26,489
...................................................................................................................
Net realized (loss) gain on security transactions (761) 31,050 41,758
...................................................................................................................
Net unrealized appreciation (depreciation) of investments
during the period 9,876 14,591 52,334
...................................................................................................................
Net increase in net assets resulting from operations 45,613 56,988 120,581
...................................................................................................................
UNIT TRANSACTIONS:
Purchases 552,435 203,278 933,346
...................................................................................................................
Net transfers 183 4,815 (117,771)
...................................................................................................................
Surrenders, including death benefits (162) (551) (18,115)
...................................................................................................................
Cost of insurance and other fees (3,098) (8,638) (28,676)
...................................................................................................................
Other activity 1,303 (12,761) 11,411
...................................................................................................................
Net increase (decrease) in net assets resulting from unit
transactions 550,661 186,143 780,195
...................................................................................................................
Net increase in net assets 596,274 243,131 900,776
...................................................................................................................
NET ASSETS:
Beginning of period 261,318 143,429 495,012
--------------------------------------------------------------------------------------------------------------------
END OF PERIOD $857,592 $386,560 $1,395,788
--------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-4
<PAGE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
STATEMENTS OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
<TABLE>
June 30, 2000 Hartford Hartford Hartford Capital
Bond Stock Appreciation
Investment Investment Investment
Division Division Division
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
INVESTMENTS IN THE HARTFORD HLS MUTUAL FUNDS:
--------------------------------------------------------------------------------------------------------------------
HARTFORD BOND HLS FUND, INC. -- CLASS IA
Shares 1,190,540
Cost $1,248,485
...................................................................................................................
Market Value $1,234,532 $ -- $ --
--------------------------------------------------------------------------------------------------------------------
HARTFORD STOCK HLS FUND, INC -- CLASS IA
Shares 105
Cost $742
...................................................................................................................
Market Value -- 662 --
--------------------------------------------------------------------------------------------------------------------
HARTFORD CAPITAL APPRECIATION HLS FUND, INC. -- CLASS IA
Shares 88,004
Cost $1,524,469
...................................................................................................................
Market Value -- -- 1,618,610
--------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN FIDELITY VARIABLE INSURANCE PRODUCTS FUND:
--------------------------------------------------------------------------------------------------------------------
EQUITY-INCOME PORTFOLIO
Shares 87,915
Cost $2,123,339
...................................................................................................................
Market Value -- -- --
--------------------------------------------------------------------------------------------------------------------
Receivable from Hartford Life and Annuity Insurance Company -- -- 97,391
...................................................................................................................
Receivable from fund shares sold 32,763 -- 8,754
...................................................................................................................
Total assets 1,267,295 662 1,724,755
...................................................................................................................
LIABILITIES:
Payable to Hartford Life and Annuity Insurance Company 36,547 -- --
...................................................................................................................
Payable for fund shares purchased -- -- --
...................................................................................................................
Total liabilities 36,547 -- --
--------------------------------------------------------------------------------------------------------------------
NET ASSETS $1,230,748 $ 662 $1,724,755
--------------------------------------------------------------------------------------------------------------------
VARIABLE LIFE INSURANCE POLICIES:
--------------------------------------------------------------------------------------------------------------------
Units owned by participants 100,925 65 78,805
...................................................................................................................
Unit price $ 12.08 $10.20 $ 21.61
...................................................................................................................
Units owned by Hartford Life and Annuity Insurance Company 1,000 -- 1,000
...................................................................................................................
Unit price $ 12.08 $10.20 $ 21.61
--------------------------------------------------------------------------------------------------------------------
<S> <C>
June 30, 2000 Fidelity VIP
Fund
Equity-Income
Investment
Division
-----------------------------------------------------------------------------------------------
ASSETS:
INVESTMENTS IN THE HARTFORD HLS MUTUAL FUNDS:
----------------------------------------------------------------------------------------------------------------
HARTFORD BOND HLS FUND, INC. -- CLASS IA
Shares 1,190,540
Cost $1,248,485
...........................................................
Market Value $ --
--------------------------------------------------------------------------------------------------------------------
HARTFORD STOCK HLS FUND, INC -- CLASS IA
Shares 105
Cost $742
...........................................................
Market Value --
--------------------------------------------------------------------------------------------------------------------
HARTFORD CAPITAL APPRECIATION HLS FUND, INC. -- CLASS IA
Shares 88,004
Cost $1,524,469
...........................................................
Market Value --
--------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN FIDELITY VARIABLE INSURANCE PRODUCTS FUND:
--------------------------------------------------------------------------------------------------------------------
EQUITY-INCOME PORTFOLIO
Shares 87,915
Cost $2,123,339
...........................................................
Market Value $2,014,131
--------------------------------------------------------------------------------------------------------------------
Receivable from Hartford Life and Annuity Insurance Company 42,207
...........................................................
Receivable from fund shares sold 1,089
...........................................................
Total assets 2,057,427
...........................................................
LIABILITIES:
Payable to Hartford Life and Annuity Insurance Company --
...........................................................
Payable for fund shares purchased --
...........................................................
Total liabilities --
--------------------------------------------------------------------------------------------------------------------
NET ASSETS $2,057,427
--------------------------------------------------------------------------------------------------------------------
VARIABLE LIFE INSURANCE POLICIES:
--------------------------------------------------------------------------------------------------------------------
Units owned by participants 140,385
...........................................................
Unit price $ 14.55
...........................................................
Units owned by Hartford Life and Annuity Insurance Company 1,000
...........................................................
Unit price $ 14.55
--------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-5
<PAGE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
June 30, 2000 Janus Aspen Janus Aspen Janus Aspen Janus Aspen
Aggressive Balanced Flexible Income International
Growth Investment Investment Growth
Investment Division Division Investment
Division Division
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
INVESTMENTS IN THE JANUS ASPEN SERIES:
--------------------------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH PORTFOLIO
Shares 3,853
Cost $227,960
...............................................................................................................................
Market Value $213,404 $ -- $ -- $ --
--------------------------------------------------------------------------------------------------------------------------------
BALANCED PORTFOLIO
Shares 1,928
Cost $54,088
...............................................................................................................................
Market Value -- 51,470 -- --
--------------------------------------------------------------------------------------------------------------------------------
FLEXIBLE INCOME PORTFOLIO
Shares 167
Cost $1,916
...............................................................................................................................
Market Value -- -- 1,878 --
--------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH PORTFOLIO -- -- -- --
Shares 830
Cost $33,304
...............................................................................................................................
Market Value -- -- -- 32,651
--------------------------------------------------------------------------------------------------------------------------------
WORLDWIDE GROWTH PORTFOLIO
Shares 2,238
Cost $109,876
...............................................................................................................................
Market Value -- -- -- --
--------------------------------------------------------------------------------------------------------------------------------
Receivable from Hartford Life and Annuity Insurance
Company -- 982 -- --
...............................................................................................................................
Receivable from fund shares sold -- -- -- --
...............................................................................................................................
Total assets 213,404 52,452 1,878 32,651
...............................................................................................................................
LIABILITIES:
Payable to Hartford Life and Annuity Insurance
Company 11 -- -- 3
...............................................................................................................................
Payable for fund shares purchased -- 984 -- --
...............................................................................................................................
Total liabilities 11 984 -- 3
--------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $213,393 $51,468 $1,878 $32,648
--------------------------------------------------------------------------------------------------------------------------------
VARIABLE LIFE INSURANCE POLICIES:
--------------------------------------------------------------------------------------------------------------------------------
Units owned by participants 16,791 4,791 184 2,903
...............................................................................................................................
Unit price $ 12.71 $ 10.74 $10.22 $ 11.25
--------------------------------------------------------------------------------------------------------------------------------
<S> <C>
June 30, 2000 Janus Aspen
Worldwide Growth
Investment
Division
--------------------------------------------------------------------------------------------------------------------------------
ASSETS:
INVESTMENTS IN THE JANUS ASPEN SERIES:
--------------------------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH PORTFOLIO
Shares 3,853
Cost $227,960
....................................................
Market Value $ --
--------------------------------------------------------------------------------------------------------------------------------
BALANCED PORTFOLIO
Shares 1,928
Cost $54,088
....................................................
Market Value --
--------------------------------------------------------------------------------------------------------------------------------
FLEXIBLE INCOME PORTFOLIO
Shares 167
Cost $1,916
....................................................
Market Value --
--------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH PORTFOLIO --
Shares 830
Cost $33,304
....................................................
Market Value --
--------------------------------------------------------------------------------------------------------------------------------
WORLDWIDE GROWTH PORTFOLIO
Shares 2,238
Cost $109,876
....................................................
Market Value $106,889
--------------------------------------------------------------------------------------------------------------------------------
Receivable from Hartford Life and Annuity Insurance
Company 134
....................................................
Receivable from fund shares sold --
....................................................
Total assets 107,023
....................................................
LIABILITIES:
Payable to Hartford Life and Annuity Insurance
Company --
....................................................
Payable for fund shares purchased 139
....................................................
Total liabilities 139
--------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $106,884
--------------------------------------------------------------------------------------------------------------------------------
VARIABLE LIFE INSURANCE POLICIES:
--------------------------------------------------------------------------------------------------------------------------------
Units owned by participants 9,429
....................................................
Unit price $ 11.34
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-6
<PAGE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
June 30, 2000 MFS MFS MFS
Capital Emerging High
Opportunities Growth Income
Investment Investment Investment
Division Division Division
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
INVESTMENTS IN MFS VARIABLE INSURANCE TRUST:
--------------------------------------------------------------------------------------------------------------------
CAPITAL OPPORTUNITIES PORTFOLIO
Shares 895
Cost $19,573
...................................................................................................................
Market Value 19,322 $ -- $ --
--------------------------------------------------------------------------------------------------------------------
EMERGING GROWTH PORTFOLIO
Shares 1,273
Cost $44,443
...................................................................................................................
Market Value -- 44,629 --
--------------------------------------------------------------------------------------------------------------------
HIGH INCOME PORTFOLIO
Shares 179
Cost $1,896
...................................................................................................................
Market Value -- -- 1,896
--------------------------------------------------------------------------------------------------------------------
Receivable from Hartford Life and Annuity Insurance Company 140 -- --
...................................................................................................................
Receivable from fund shares sold -- -- --
...................................................................................................................
Total assets 19,462 44,629 1,896
...................................................................................................................
LIABILITIES:
Payable to Hartford Life and Annuity Insurance Company -- 1 --
...................................................................................................................
Payable for fund shares purchased 140 -- --
...................................................................................................................
Total liabilities 140 1 --
--------------------------------------------------------------------------------------------------------------------
NET ASSETS $19,322 $44,628 $1,896
--------------------------------------------------------------------------------------------------------------------
VARIABLE LIFE INSURANCE POLICIES:
--------------------------------------------------------------------------------------------------------------------
Units owned by participants 1,752 3,917 187
...................................................................................................................
Unit price $ 11.03 $ 11.39 $10.16
--------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-7
<PAGE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended Hartford Hartford Hartford Capital
June 30, 2000 Bond Stock Appreciation
Investment Investment Investment
Division Division Division
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 5,772 $ 0 $ 661
...................................................................................................................
EXPENSES:
Mortality and expense risk undertakings (3,815) -- (4,519)
...................................................................................................................
Net investment income 1,957 -- (3,858)
...................................................................................................................
Capital gains income -- 70 218,450
...................................................................................................................
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
...................................................................................................................
Net realized gain (loss) on security transactions 620 -- 1,219
...................................................................................................................
Net unrealized appreciation (depreciation) of investments
during the period 49,629 (80) (110,407)
...................................................................................................................
Net gain (loss) on investments 50,249 (80) (109,188)
--------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $52,206 $(10) $ 105,404
--------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Period Ended Fidelity VIP
June 30, 2000 Fund
Equity-Income
Investment
Division
-----------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 32,760
...........................................................
EXPENSES:
Mortality and expense risk undertakings (6,510)
...........................................................
Net investment income 26,250
...........................................................
Capital gains income 123,422
...........................................................
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
...........................................................
Net realized gain (loss) on security transactions (3,852)
...........................................................
Net unrealized appreciation (depreciation) of investments
during the period (206,694)
...........................................................
Net gain (loss) on investments (210,546)
----------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ (60,874)
--------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-8
<PAGE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
STATEMENTS OF OPERATIONS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended Janus Aspen Janus Aspen Janus Aspen Janus Aspen
June 30, 2000 Aggressive Balanced Flexible Income International
Growth Investment Investment Growth
Investment Division* Division* Investment
Division* Division*
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 7,416 $ 401 $ 47 $ 0
...............................................................................................................................
EXPENSES:
Mortality and expense risk undertakings (31) (8) -- (7)
...............................................................................................................................
Net investment income (loss) 7,385 393 47 (7)
...............................................................................................................................
Capital gains income 3,454 1,824 -- --
...............................................................................................................................
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
...............................................................................................................................
Net realized gain (loss) on security transactions -- -- -- --
...............................................................................................................................
Net unrealized (depreciation) of investments during
the period (14,556) (2,617) (37) (654)
...............................................................................................................................
Net (loss) on investments (14,556) (2,617) (37) (654)
--------------------------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ (3,717) $ (400) $ 10 $(661)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Period Ended Janus Aspen
June 30, 2000 Worldwide Growth
Investment
Division*
--------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 196
....................................................
EXPENSES:
Mortality and expense risk undertakings (18)
....................................................
Net investment income (loss) 178
....................................................
Capital gains income 891
....................................................
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
....................................................
Net realized gain (loss) on security transactions --
....................................................
Net unrealized (depreciation) of investments during
the period (2,987)
....................................................
Net (loss) on investments (2,987)
--------------------------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $(1,918)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* From inception, May 24, 2000 to June 30,2000
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-9
<PAGE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
STATEMENTS OF OPERATIONS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended MFS MFS MFS
June 30, 2000 Capital Emerging High
Opportunities Growth Income
Investment Investment Investment
Division* Division* Division*
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 0 $ 0 $ 0
...................................................................................................................
EXPENSES:
Mortality and expense risk undertakings (3) (4) --
...................................................................................................................
Net investment (loss) (3) (4) --
...................................................................................................................
Capital gains income -- -- --
...................................................................................................................
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
...................................................................................................................
Net realized gain (loss) on security transactions -- -- --
...................................................................................................................
Net unrealized (depreciation) appreciation of investments
during the period (251) 186 --
...................................................................................................................
Net (loss) gain on investments (251) 186 --
--------------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $(254) $182 $ 0
--------------------------------------------------------------------------------------------------------------------
</TABLE>
* From inception, May 24, 2000 to June 30, 2000
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-10
<PAGE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended Hartford Hartford Hartford Capital
June 30, 2000 Bond Stock Appreciation
Investment Investment Investment
Division Division Division
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 1,957 $ 0 $ (3,858)
...................................................................................................................
Capital gains income -- 70 218,450
...................................................................................................................
Net realized gain (loss) on security transactions 620 -- 1,219
...................................................................................................................
Net unrealized appreciation (depreciation) of investments
during the period 49,629 (80) (110,407)
...................................................................................................................
Net increase (decrease) in net assets resulting from
operations 52,206 (10) 105,404
...................................................................................................................
UNIT TRANSACTIONS:
Purchases 91,925 118 283,754
...................................................................................................................
Net transfers (691) 551 (9,776)
...................................................................................................................
Surrenders, including death benefits (7,414) -- (3,186)
...................................................................................................................
Cost of insurance and other fees (6,546) -- (5,227)
...................................................................................................................
Other activity (3,196) 3 4,282
...................................................................................................................
Net increase (decrease) in net assets resulting from unit
transactions 74,078 672 269,847
...................................................................................................................
Net increase (decrease) in net assets 126,284 662 246,872
...................................................................................................................
NET ASSETS:
...................................................................................................................
Beginning of period 1,104,464 -- 1,056,937
--------------------------------------------------------------------------------------------------------------------
END OF PERIOD $1,230,748 $662 $1,724,755
--------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Period Ended Fidelity VIP
June 30, 2000 Fund
Equity-Income
Investment
Division
-----------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $ 26,250
...........................................................
Capital gains income 123,422
...........................................................
Net realized gain (loss) on security transactions (3,852)
...........................................................
Net unrealized appreciation (depreciation) of investments
during the period (206,694)
...........................................................
Net increase (decrease) in net assets resulting from
operations (60,874)
...........................................................
UNIT TRANSACTIONS:
Purchases 396,706
...........................................................
Net transfers (272,303)
...........................................................
Surrenders, including death benefits (31,876)
...........................................................
Cost of insurance and other fees (39,635)
...........................................................
Other activity 5,936
...........................................................
Net increase (decrease) in net assets resulting from unit
transactions 58,828
...........................................................
Net increase (decrease) in net assets (2,046)
...........................................................
NET ASSETS:
...........................................................
Beginning of period 2,059,473
----------------------------------------------------------------------------------------------------------------
END OF PERIOD $2,057,427
--------------------------------------------------------------------------------------------------------------------
</TABLE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended Hartford Hartford Capital Fidelity VIP
December 31, 1999 Bond Appreciation Fund
Investment Investment Equity-Income
Division Division Investment
Division
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 53,913 $ (1,230) $ 8,992
...................................................................................................................
Capital gains income 5,853 19,061 43,177
...................................................................................................................
Net realized (loss) gain on security transactions (7,751) 2,164 2,644
...................................................................................................................
Net unrealized (depreciation) appreciation of investments
during the period (74,990) 157,434 14,549
...................................................................................................................
Net (decrease) increase in net assets resulting from
operations (22,975) 177,429 69,362
...................................................................................................................
UNIT TRANSACTIONS:
Purchases 283,754 462,253 685,496
...................................................................................................................
Net transfers (9,776) 403 (29,136)
...................................................................................................................
Surrenders, including death benefits (3,186) (19,980) (19,312)
...................................................................................................................
Cost of insurance and other fees (5,227) (11,882) (46,257)
...................................................................................................................
Other activity 4,282 62,154 3,532
...................................................................................................................
Net increase (decrease) in net assets resulting from unit
transactions 269,847 492,948 594,323
...................................................................................................................
Net increase (decrease) in net assets 246,872 670,377 663,685
...................................................................................................................
NET ASSETS:
Beginning of period 857,592 386,560 1,395,788
--------------------------------------------------------------------------------------------------------------------
END OF PERIOD $1,104,464 $1,056,937 $2,059,473
--------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-11
<PAGE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended Janus Aspen Janus Aspen Janus Aspen Janus Aspen
June 30, 2000 Aggressive Balanced Flexible Income International
Growth Investment Investment Growth
Investment Division* Division* Investment
Division* Division*
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 7,385 $ 393 $ 47 $ (7)
...............................................................................................................................
Capital gains income 3,454 1,824 -- --
...............................................................................................................................
Net realized gain on security transactions -- -- -- --
...............................................................................................................................
Net unrealized (depreciation) of investments during
the period (14,556) (2,617) (37) (654)
...............................................................................................................................
Net (decrease) increase in net assets resulting from
operations (3,717) (400) 10 (661)
...............................................................................................................................
UNIT TRANSACTIONS:
Purchases 972 167 -- 154
...............................................................................................................................
Net transfers 215,079 51,573 1,868 32,667
...............................................................................................................................
Surrenders, including death benefits -- -- -- --
...............................................................................................................................
Cost of insurance and other fees (9) -- -- (2)
...............................................................................................................................
Other activity 1,068 128 -- 490
...............................................................................................................................
Net increase in net assets resulting from unit
transactions 217,110 51,868 1,868 33,309
...............................................................................................................................
Net increase in net assets 213,393 51,468 1,878 32,648
...............................................................................................................................
NET ASSETS:
Beginning of period -- -- -- --
--------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $213,393 $51,468 $1,878 $32,648
--------------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Period Ended Janus Aspen
June 30, 2000 Worldwide Growth
Investment
Division*
--------------------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $ 178
....................................................
Capital gains income 891
....................................................
Net realized gain on security transactions --
....................................................
Net unrealized (depreciation) of investments during
the period (2,987)
....................................................
Net (decrease) increase in net assets resulting from
operations (1,918)
....................................................
UNIT TRANSACTIONS:
Purchases 322
....................................................
Net transfers 108,139
....................................................
Surrenders, including death benefits --
....................................................
Cost of insurance and other fees (3)
....................................................
Other activity 344
....................................................
Net increase in net assets resulting from unit
transactions 108,802
....................................................
Net increase in net assets 106,884
....................................................
NET ASSETS:
Beginning of period --
--------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $106,884
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* From inception, May 24, 2000 to June 30,2000
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-12
<PAGE>
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE -- HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
(Unaudited)
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended MFS MFS MFS
June 30, 2000 Capital Emerging High
Opportunities Growth Income
Investment Investment Investment
Division* Division* Division*
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment (loss) income $ (3) $ (4) $ 0
...................................................................................................................
Capital gains income -- -- --
...................................................................................................................
Net realized gain (loss) on security transactions -- -- --
...................................................................................................................
Net unrealized (depreciation) appreciation of investments
during the period (251) 186 --
...................................................................................................................
Net (decrease) increase in net assets resulting from
operations (254) 182 --
...................................................................................................................
UNIT TRANSACTIONS:
Purchases 150 79 --
...................................................................................................................
Net transfers 19,414 44,422 1,899
...................................................................................................................
Surrenders, including death benefits -- -- --
...................................................................................................................
Cost of insurance and other fees -- -- --
...................................................................................................................
Other activity 12 (55) (3)
...................................................................................................................
Net increase in net assets resulting from unit transactions 19,576 44,446 1,896
...................................................................................................................
Net increase in net assets 19,322 44,628 1,896
...................................................................................................................
NET ASSETS:
Beginning of period -- -- --
--------------------------------------------------------------------------------------------------------------------
END OF PERIOD $19,322 $44,628 $1,896
--------------------------------------------------------------------------------------------------------------------
</TABLE>
* From inception, May 24, 2000 to June 30, 2000
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-13
<PAGE>
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, 1999 and
1998, 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, 1999. These statutory 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 auditing standards generally accepted
in the United States. 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 2 of notes to statutory financial
statements. When financial statements are presented for purposes other than for
filing with a regulatory agency, auditing standards generally accepted in the
United States require that an auditors' report on them state whether they are
presented in conformity with accounting principles generally accepted in the
United States. The accounting practices used by the Company vary from accounting
principles generally accepted in the United States as explained and quantified
in Note 2.
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 accounting principles generally accepted in the
United States, the financial position of the Company as of December 31, 1999 and
1998, or the results of its operations or its cash flows for each of the three
years in the period ended December 31, 1999.
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, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999 in conformity
with statutory accounting practices as described in Note 2.
Hartford, Connecticut
January 31, 2000 ARTHUR ANDERSEN LLP
F-1
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
BALANCE SHEETS
(STATUTORY BASIS)
($000)
--------------------------------------------------------
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
<S> <C> <C>
------------------------------------------------------------------------------------------------
<CAPTION>
1999 1998
------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Bonds $ 1,465,815 $ 1,453,792
Common stocks 42,430 40,650
Mortgage loans 63,784 59,548
Policy loans 59,429 47,212
Cash and short-term investments 267,579 469,955
------------------------------------------------------------------------------------------------
Other invested assets 2,892 2,188
------------------------------------------------------------------------------------------------
Total cash and invested assets 1,901,929 2,073,345
Investment income due and accrued 21,069 20,126
Other assets 39,576 45,691
Separate account assets 44,865,042 32,876,278
------------------------------------------------------------------------------------------------
TOTAL ASSETS $46,827,616 $35,015,440
------------------------------------------------------------------------------------------------
LIABILITIES
Aggregate reserves for future benefits $ 591,621 $ 579,140
Policy and contract claim liabilities 7,677 5,667
Liability for premium and other deposit funds 1,969,262 2,011,672
Asset valuation reserve 4,935 21,782
Payable to affiliates 14,084 19,271
Accrued expense allowances and other amounts due from
separate accounts (1,377,927) (1,173,513)
Remittances and items not allocated 111,582 87,449
Other liabilities 118,464 111,182
Separate account liabilities 44,865,042 32,876,278
------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 46,304,740 34,538,928
------------------------------------------------------------------------------------------------
CAPITAL AND SURPLUS
Common stock 2,500 2,500
Gross paid-in and contributed surplus 226,043 226,043
Unassigned funds 294,333 247,969
------------------------------------------------------------------------------------------------
TOTAL CAPITAL AND SURPLUS 522,876 476,512
------------------------------------------------------------------------------------------------
TOTAL LIABILITIES, CAPITAL AND SURPLUS $46,827,616 $35,015,440
------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statutory basis financial
statements.
F-2
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
(STATUTORY BASIS)
($000)
--------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
<CAPTION>
1999 1998 1997
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Premiums and annuity considerations $ 621,789 $ 469,343 $ 296,645
Annuity and other fund deposits 2,991,363 2,051,251 1,981,246
Net investment income 122,322 129,982 102,285
Commissions and expense allowances on reinsurance ceded 379,905 444,241 396,921
Reserve adjustment on reinsurance ceded 1,411,342 3,185,590 3,672,076
Fee income 647,565 448,260 290,675
Other revenues 842 9,930 (2,043)
-------------------------------------------------------------------------------------------------------
TOTAL REVENUES 6,175,128 6,738,597 6,737,805
-------------------------------------------------------------------------------------------------------
BENEFITS AND EXPENSES
Death and annuity benefits 47,372 43,152 65,961
Disability and other benefits 6,270 6,352 7,532
Surrenders and other fund withdrawals 1,250,813 739,663 454,417
Commissions 467,338 435,994 470,334
Increase (Decrease) in aggregate reserves for future
benefits 12,481 (10,711) 33,213
(Decrease) Increase in liability for premium and other
deposit funds (47,852) 218,642 640,840
General insurance expenses 192,196 190,979 77,237
Net transfers to separate accounts 4,160,501 4,956,007 4,914,980
Other expenses 35,385 22,091 15,671
-------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES 6,124,504 6,602,169 6,680,185
-------------------------------------------------------------------------------------------------------
NET GAIN FROM OPERATIONS
Before federal income tax (benefit) expense 50,624 136,428 57,620
Federal income tax (benefit) expense (10,231) 35,887 (14,878)
-------------------------------------------------------------------------------------------------------
NET GAIN FROM OPERATIONS 60,855 100,541 72,498
Net realized capital (losses) gains, after tax (36,428) 2,085 1,544
-------------------------------------------------------------------------------------------------------
NET INCOME $ 24,427 $ 102,626 $ 74,042
-------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statutory basis financial
statements.
F-3
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
(STATUTORY BASIS)
($000)
--------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------
<CAPTION>
1999 1998 1997
-------------------------------------------------------------------------------------------------
<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 247,969 143,257 74,570
Net income 24,427 102,626 74,042
Change in net unrealized capital gains on common stocks
and other invested assets 2,258 1,688 2,186
Change in asset valuation reserve 16,847 (8,112) (6,228)
Change in non-admitted assets 6,557 (1,277) (1,313)
Credit on reinsurance ceded (3,725) 9,787 --
-------------------------------------------------------------------------------------------------
Balance, end of year 294,333 247,969 143,257
-------------------------------------------------------------------------------------------------
CAPITAL AND SURPLUS,
End of year $522,876 $476,512 $371,800
-------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statutory basis financial
statements.
F-4
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
(STATUTORY BASIS)
($000)
--------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
<CAPTION>
1999 1998 1997
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Premiums and annuity considerations $3,613,217 $2,520,655 $2,277,874
Net investment income 122,998 127,425 101,991
Fee income 647,565 448,260 290,675
Other income 1,799,323 3,644,704 4,091,043
-------------------------------------------------------------------------------------------------------
Total income 6,183,103 6,741,044 6,761,583
-------------------------------------------------------------------------------------------------------
Benefits paid 1,303,801 790,051 529,733
Federal income tax (recoveries) payments (8,815) 25,780 (14,499)
Net transfers to separate accounts 4,364,914 5,222,144 5,199,354
Other expenses 669,525 626,240 547,692
-------------------------------------------------------------------------------------------------------
Total benefits and expenses 6,329,425 6,664,215 6,262,280
-------------------------------------------------------------------------------------------------------
NET CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES (146,322) 76,829 499,303
-------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
PROCEEDS FROM INVESTMENTS SOLD
Bonds 753,358 633,926 614,413
Common stocks 939 34,010 11,481
Mortgage loans 53,704 85,275 --
Other 1,490 19,990 152
-------------------------------------------------------------------------------------------------------
NET INVESTMENT PROCEEDS 809,491 773,201 626,046
-------------------------------------------------------------------------------------------------------
COST OF INVESTMENTS ACQUIRED
Bonds 804,947 586,913 848,267
Common stocks 464 7,012 28,302
Mortgage loans 57,665 59,702 85,103
Other 14,211 11,847 26,227
-------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS ACQUIRED 877,287 665,474 987,899
-------------------------------------------------------------------------------------------------------
NET CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES $ (67,796) $ 107,727 $ (361,853)
-------------------------------------------------------------------------------------------------------
FINANCING AND MISCELLANEOUS ACTIVITIES
Net other cash provided (used) 11,742 (24,033) (4,848)
-------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED FOR) FINANCING
AND MISCELLANEOUS ACTIVITIES 11,742 (24,033) (4,848)
-------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and short-term investments (202,376) 160,523 132,602
Cash and short-term investments, beginning of year 469,955 309,432 176,830
-------------------------------------------------------------------------------------------------------
CASH AND SHORT-TERM INVESTMENTS, END OF YEAR $ 267,579 $ 469,955 $ 309,432
-------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statutory basis financial
statements.
F-5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(STATUTORY BASIS)
DECEMBER 31, 1999
(AMOUNTS IN THOUSANDS UNLESS OTHERWISE STATED)
--------------------------------------------------------------------------------
1. ORGANIZATION AND DESCRIPTION OF BUSINESS:
Hartford Life and Annuity Insurance Company (the "Company") is a wholly owned
subsidiary of Hartford Life Insurance Company ("HLIC"), which is an indirect
subsidiary of Hartford Life, Inc. ("HLI"). HLI is indirectly majority owned by
The Hartford Financial Services Group, Inc. ("The Hartford"). 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 approximately 18.6% of the
equity ownership of HLI.
In 1998, the Company changed its name to Hartford Life and Annuity Insurance
Company from ITT Hartford Life and Annuity Insurance Company.
The Company offers a complete line of fixed and variable annuities, as well as
variable, universal and traditional individual life insurance.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF PRESENTATION
The accompanying statutory basis financial statements of the Company were
prepared in conformity with statutory accounting practices prescribed or
permitted by the National Association of Insurance Commissioners ("NAIC") and
the State of Connecticut Department of Insurance. Certain reclassifications have
been made to prior year financial information to conform to the current year
presentation.
Current prescribed statutory accounting practices include accounting
publications of the 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.
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 periods. 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 VERSUS GAAP
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, etc.) which are charged to expense when incurred for statutory
purposes rather than on a pro-rata basis over the expected life and gross
profit stream 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 only consist of charges assessed to policy
account balances for cost of insurance, policy administration and
surrenders. When policy charges received relate to coverage or services to
be provided in the future, the charges are recognized as revenue on a
pro-rata basis over the expected life and gross profit stream of the policy.
Also, for GAAP purposes, premiums for traditional life insurance policies
are recognized as revenues when they are due from policyholders;
(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 under GAAP;
(4) providing for income taxes based on current taxable income 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 or required under GAAP;
(5) excluding certain assets designated as non-admitted assets (e.g., negative
Interest Maintenance Reserve, and past due agents' balances) from the
balance sheet for statutory purposes by directly charging surplus;
(6) the calculation of post retirement benefits obligation which, for statutory
accounting, excludes non-vested employees whereas GAAP liabilities include a
provision for such employees; statutory and GAAP accounting permit either
immediate recognition of the liability or straight-line amortization of the
liability over a period not to exceed 20 years. For GAAP, The Hartford's
obligation was immediately recognized, whereas for statutory accounting, the
obligation is being recognized ratably over a 20 year period;
F-6
<PAGE>
(7) establishing a formula reserve for realized and unrealized losses due to
default and equity risk associated with certain invested assets (Asset
Valuation Reserve) for statutory purposes; as well as the deferral and
amortization of realized gains and losses, caused 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) for
statutory purposes; 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 for
statutory purposes; whereas on a GAAP basis, reserves are reported gross of
reinsurance with reserve credits presented as recoverable assets;
(9) the reporting of fixed maturities at amortized cost for statutory purposes,
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 separate component of Stockholder's
Equity; as well as the change in the basis of the Company's other invested
assets, which consist primarily of limited partnership investments, which is
recognized as income under GAAP and as a change in surplus under statutory
accounting; and
(10) statutory accounting calculates separate account liabilities using
prescribed actuarial methodologies, which approximate the market value of
separate account assets less applicable surrender charges. The separate
account surplus generated by these reserving methods is recorded as an
amount due to or from the separate account on the statutory basis balance
sheet, with changes reflected in the statutory basis results of operations.
On a GAAP basis, separate account assets and liabilities are held at fair
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>
1999 1998 1997
<S> <C> <C> <C>
----------------------------------------
GAAP Net Income $ 75,654 $ 74,525 $ 58,050
Deferral and amortization of policy
acquisition costs, net (272,171) (331,882) (345,657)
Change in unearned revenue reserve (64,915) 23,118 4,058
Deferred taxes 57,833 2,476 47,092
Separate account expense allowance 214,388 259,287 282,818
Asset impairments and write-downs (17,250) 17,250 --
Benefit reserve adjustment 11,491 5,360 24,666
Gain on commutation of reinsurance
(Note 4) -- 52,026 --
Prepaid reinsurance premium (3,524) -- --
Statutory voluntary reserve (6,286) -- --
Other, net 29,207 466 3,015
----------------------------------------
STATUTORY NET INCOME $ 24,427 $ 102,626 $ 74,042
----------------------------------------
GAAP Stockholder's Equity $ 676,428 $ 648,097 $ 570,469
Deferred policy acquisition costs (1,887,824) (1,615,653) (1,283,771)
Unearned revenue reserve 95,965 160,951 134,789
Deferred taxes 122,105 68,936 64,522
Separate account expense allowance 1,398,030 1,183,642 924,355
Asset impairments and write-downs -- 17,250 --
Unrealized losses (gains) on
investments 26,292 (24,955) (21,451)
Benefit reserve adjustment 81,111 69,233 16,378
Asset valuation reserve (4,935) (21,782) (13,670)
Adjustment relating to Lyndon
contribution (Note 4) -- -- (23,671)
Prepaid reinsurance premium (7,728) (4,204) --
Statutory voluntary reserve (6,286) -- --
Other, net 29,718 (5,003) 3,850
----------------------------------------
STATUTORY CAPITAL AND SURPLUS $ 522,876 $ 476,512 $ 371,800
----------------------------------------
</TABLE>
F-7
<PAGE>
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 applicable 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 the Commissioners Annuity Reserve Valuation Method
("CARVM").
The Company has established separate accounts to segregate the assets and
liabilities of certain life insurance and annuity contracts that must be
segregated from the Company's general assets under the terms of its contracts.
The assets consist primarily of marketable securities and are reported at market
value. Premiums, benefits and expenses of these contracts are reported in the
statutory basis statements of operations.
An analysis of Annuity Actuarial Reserves and Deposit Liabilities by Withdrawal
Characteristics as of December 31, 1999 (including general and separate account
liabilities) is as follows:
<TABLE>
<CAPTION>
% of
Amount Total
<S> <C> <C>
--------------------
Subject to discretionary withdrawal:
--------------------
With market value adjustment $ 4,564 0.0%
At book value less current surrender charge of 5% or more 1,427,302 3.2%
At market value 42,431,996 95.4%
--------------------
Total with adjustment or at market value 43,863,862 98.6%
At book value without adjustment (minimal or no charge or
adjustment): 573,583 1.3%
Not subject to discretionary withdrawal: 34,816 0.1%
--------------------
Total, gross 44,472,261 100.0%
Reinsurance ceded --
------------
Total, net $44,472,261
------------
</TABLE>
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 reduction in
the value of a security is deemed to be unrecoverable, the decline in value 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. Mortgage
loans, which are carried at cost and approximate fair value, include investments
in assets backed by mortgage loan pools. Other invested assets are generally
recorded at fair value.
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 AVR balances were $4,935 and $21,782
as of December 31, 1999 and 1998, respectively. Additionally, the Interest
Maintenance Reserve ("IMR") captures net realized capital gains and losses, net
of applicable income taxes, resulting from changes in interest rates and
amortizes these gains or losses into income over the life of the bond or
mortgage sold. The IMR balance as of December 31, 1999 is an asset balance of
$981 and is reflected as a component of non-admitted assets in Unassigned Funds
in accordance with statutory accounting practices. The IMR balance as of
December 31, 1998 is a liability balance of $452 and is reflected as an other
liability. The net capital (losses) gains transferred to the IMR in 1999, 1998
and 1997 were $(1,255), $852 and $(719), respectively. The amount of income
(expense) amortized from the IMR in 1999, 1998 and 1997 included in the
Company's Statements of Operations, was $178, $(207), and $(85), respectively.
Realized capital gains and losses, net of taxes, not included in the IMR are
reported in the statutory basis statements of operations. Realized investment
gains and losses are determined on a specific identification basis.
CODIFICATION
The NAIC adopted the Codification of Statutory Accounting Principles in March
1998. The proposed effective date for this statutory accounting guidance is
January 1, 2001. It is expected that Connecticut, the Company's domiciliary
state, will adopt these accounting standards and, therefore, the Company will
make the necessary accounting and reporting changes required for implementation.
The Company has not yet determined the impact that these new accounting
standards will have on its statutory basis financial statements.
F-8
<PAGE>
3. INVESTMENTS:
(a) COMPONENTS OF NET INVESTMENT INCOME
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
-----------------------------
Interest income from bonds and short-term investments $113,646 $123,370 $100,475
Interest income from policy loans 3,494 3,133 1,958
Interest and dividends from other investments 6,371 4,482 1,005
-----------------------------
Gross investment income 123,511 130,985 103,438
Less: investment expenses 1,189 1,003 1,153
-----------------------------
NET INVESTMENT INCOME $122,322 $129,982 $102,285
-----------------------------
</TABLE>
(b) COMPONENTS OF NET UNREALIZED CAPITAL (LOSSES) GAINS ON BONDS AND
SHORT-TERM INVESTMENTS
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
-----------------------------
Gross unrealized capital gains $ 561 $ 10,905 $23,357
Gross unrealized capital losses (6,441) (833) (1,906)
-----------------------------
Net unrealized capital (losses) gains (5,880) 10,072 21,451
Balance, beginning of year 10,072 21,451 7,979
-----------------------------
CHANGE IN NET UNREALIZED CAPITAL (LOSSES) GAINS ON BONDS AND
SHORT-TERM INVESTMENTS $(15,952) $(11,379) $13,472
-----------------------------
</TABLE>
(c) COMPONENTS OF NET UNREALIZED CAPITAL GAINS (LOSSES) ON COMMON STOCKS
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
--------------------------
Gross unrealized capital gains $2,508 $ 2,204 $ 537
Gross unrealized capital losses (24) (1,871) (1,820)
--------------------------
Net unrealized capital gains (losses) 2,484 333 (1,283)
Balance, beginning of year 333 (1,283) (3,447)
--------------------------
CHANGE IN NET UNREALIZED CAPITAL GAINS ON COMMON STOCKS $2,151 $ 1,616 $ 2,164
--------------------------
</TABLE>
(d) COMPONENTS OF NET REALIZED CAPITAL (LOSSES) GAINS
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
--------------------------
Bonds and short-term investments $(37,959) $1,314 $ (120)
Common stocks 104 1,624 421
Other invested assets 172 (1) (307)
--------------------------
Realized capital (losses) gains (37,683) 2,937 (6)
Capital gains benefit -- -- (831)
--------------------------
Net realized capital (losses) gains (37,683) 2,937 825
Less: amounts transferred to the IMR (1,255) 852 (719)
--------------------------
NET REALIZED CAPITAL (LOSSES) GAINS $(36,428) $2,085 $1,544
--------------------------
</TABLE>
Sales and maturities of investments in bonds and short-term investments for the
years ended December 31, 1999, 1998 and 1997 resulted in proceeds of $1,367,027,
$1,354,563 and $1,435,820, gross realized capital gains of $1,106, $1,705, and
$964 and gross realized capital losses of $39,065, $391, and $1,084,
respectively, before transfers to the IMR. Sale of common stocks for the years
ended December 31, 1999, 1998 and 1997 resulted in proceeds of $939, $33,088,
and $10,168, gross realized capital gains of $115, $1,688, and $421 and gross
realized capital losses of $11, $64, and $0, respectively.
(e) DERIVATIVE INVESTMENTS
The Company had no significant derivative holdings as of December 31, 1999, 1998
or 1997.
(f) CONCENTRATION OF CREDIT RISK
Excluding U.S. government and government agency investments, the Company is not
exposed to any significant concentrations of credit risk in fixed maturities of
a single issuer greater than 10% of capital and surplus as of December 31, 1999.
F-9
<PAGE>
(g) BONDS, SHORT-TERM INVESTMENTS AND COMMON STOCKS
<TABLE>
<CAPTION>
1999
----------------------------------------------
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 $ 4,768 $ 1 $ (37) $ 4,732
-- Guaranteed and sponsored -- asset backed 170,746 -- -- 170,746
States, municipalities and political subdivisions 10,401 -- (48) 10,353
International governments 7,351 94 (15) 7,430
Public utilities 18,413 92 (73) 18,432
All other corporate -- excluding asset-backed 592,233 374 (6,194) 586,413
All other corporate -- asset-backed 539,688 -- -- 539,688
Short-term investments 228,105 -- -- 228,105
Certificates of deposit 5,158 -- (74) 5,084
Parents, subsidiaries and affiliates 117,057 -- -- 117,057
----------------------------------------------
TOTAL BONDS AND SHORT-TERM INVESTMENTS $1,693,920 $561 $(6,441) $1,688,040
----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
<S> <C> <C> <C> <C>
--------------------------------------------
Common stock -- unaffiliated $ 4,562 $1,105 $ (24) $ 5,643
Common stock -- affiliated 35,384 1,403 -- 36,787
--------------------------------------------
TOTAL COMMON STOCKS $39,946 $2,508 $ (24) $42,430
--------------------------------------------
</TABLE>
<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 -- excluding asset-backed 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>
The amortized cost and estimated fair value of bonds and short-term investments
as of December 31, 1999 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 the Company's estimates
of the rate of
F-10
<PAGE>
future prepayments of principal over the remaining lives of the securities.
Expected maturities differ from contractual maturities due to call or prepayment
provisions.
<TABLE>
<CAPTION>
Amortized Estimated
Maturity Cost Fair Value
<S> <C> <C>
--------------------------
One year or less $ 545,290 $ 543,397
Over one year through five years 692,881 690,476
Over five years through ten years 370,835 369,548
Over ten years 84,914 84,619
--------------------------
TOTAL $1,693,920 $1,688,040
--------------------------
</TABLE>
Bonds with a carrying value of $10,457 were on deposit as of December 31, 1999
with various regulatory authorities as required.
(h) FAIR VALUE OF FINANCIAL INSTRUMENTS-BALANCE SHEET ITEMS (IN MILLIONS):
<TABLE>
<CAPTION>
1999 1998
-------------------------- --------------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
<S> <C> <C> <C> <C>
------------------------------------------------------
ASSETS
Bonds and short-term investments $1,694 $1,688 $1,898 $1,908
Common stocks 42 42 41 41
Policy loans 59 59 47 47
Mortgage loans 64 64 60 60
Other invested assets 3 3 2 2
LIABILITIES
Deposit funds and other benefits $2,051 $2,017 $2,078 $2,053
</TABLE>
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments: fair value of bonds, short-term
investments, common stock, and other invested assets approximate those
quotations published by the NAIC; policy loans and mortgage loans carrying
amounts approximates fair value; and fair value of liabilities on deposit funds
and other benefits is determined by forecasting future cash flows and
discounting the forecasted cash flows at current market rates.
4. REINSURANCE:
The Company cedes insurance to other insurers in order to limit its maximum
losses. Such transfer does not relieve the Company of its primary liability to
the policyholder. Failure of reinsurers to honor their obligations could result
in losses to the Company. The Company reduces this risk by evaluating the
financial condition of reinsurers and monitoring for possible concentrations of
credit risk.
The Company cedes significant portions of its variable annuity business written
since 1994 to RGA Reinsurance Company ("RGA"). Certain core annuity products
were excluded from this reinsurance arrangement beginning in the second quarter
of 1999 and, as such, the amounts ceded to RGA have declined significantly.
In 1995, The Hartford was "spun-off" from ITT Industries, Inc. and became its
own, autonomous entity. In conjunction with this spin-off, the assets and
liabilities of Lyndon Insurance Company (Lyndon) were merged into the Company.
The statutory net assets contributed to the Company as a result of this
transaction were approximately $112 million and were reflected as an increase in
Gross Paid-In and Contributed Surplus at December 31, 1995. This amount was
approximately $41 million lower than the value of net assets contributed on a
GAAP basis.
The majority of the business written in Lyndon was assumed from an unaffiliated
insurer. In 1998, this unaffiliated insurer recaptured the inforce blocks of
business it had been ceding to the Company through Lyndon. In conjunction with
this commutation transaction, the Company transferred statutory basis reserves
of $26,404. Additionally, the Company received fair value consideration for the
bonds it transferred which exceeded the statutory statement value of these
assets by $25,622. As a result of this activity, the Company recognized a
pre-tax gain from this transaction of $52,026 in its 1998 Statements of
Operations.
There were no material reinsurance recoverables from reinsurers outstanding as
of and for the years ended, December 31, 1999 and 1998.
F-11
<PAGE>
The effect of reinsurance as of and for the years ended December 31, is
summarized as follows:
<TABLE>
<CAPTION>
1999 Direct Assumed Ceded Net
<S> <C> <C> <C> <C>
------------------------------------------------------
Aggregate Reserves for Future
Benefits $ 784,502 $ 53 $ (192,934) $ 591,621
Policy and Contract Claim
Liabilities $ 7,827 $ 203 $ (353) $ 7,677
Premium and Annuity Considerations $ 674,219 $ 1,261 $ (53,691) $ 621,789
Annuity and Other Fund Deposits $6,195,917 $ -- $(3,204,554) $2,991,363
Death, Annuity, Disability and
Other Benefits $ 65,251 $ 1,104 $ (12,713) $ 53,642
Surrenders $2,541,449 $ -- $(1,290,636) $1,250,813
</TABLE>
<TABLE>
<CAPTION>
1998 Direct Assumed Ceded Net
<S> <C> <C> <C> <C>
------------------------------------------------------
Aggregate Reserves for Future
Benefits $ 713,375 $ 50 $ (134,285) $ 579,140
Policy and Contract Claim
Liabilities $ 5,895 $ 85 $ (313) $ 5,667
Premium and Annuity Considerations $ 483,328 $24,954 $ (38,939) $ 469,343
Annuity and Other Fund Deposits $6,461,470 $ -- $(4,410,219) $2,051,251
Death, Annuity, Disability and
Other Benefits $ 64,331 $ 1,574 $ (16,401) $ 49,504
Surrenders $1,481,797 $ -- $ (742,134) $ 739,663
</TABLE>
<TABLE>
<CAPTION>
1997 Direct Assumed Ceded Net
<S> <C> <C> <C> <C>
------------------------------------------------------
Premium and Annuity Considerations $ 266,427 $51,630 $ (21,412) $ 296,645
Annuity and Other Fund Deposits $6,515,347 $ -- $(4,534,101) $1,981,246
Death, Annuity, Disability and
Other Benefits $ 79,779 $ 839 $ (7,126) $ 73,492
Surrenders $ 882,094 $ -- $ (427,677) $ 454,417
</TABLE>
5. RELATED PARTY TRANSACTIONS:
Transactions between the Company and its affiliates, relate principally to tax
settlements, reinsurance, insurance coverages, rental and service fees, capital
contributions and payments of dividends. In addition, certain affiliated
insurance companies purchased group annuity contracts from the Company to fund
pension costs and claim annuities to settle casualty claims. Substantially all
general insurance expenses related to the Company, including rent and benefit
plan expenses, are initially paid by The Hartford. Direct expenses are allocated
using specific identification and indirect expenses are allocated using other
applicable methods. Indirect expenses include those for corporate areas which,
depending on type, are allocated based on either a percentage of direct expenses
or on utilization.
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, Hartford Life, LTD.
For additional information, see Notes 4, 6, and 8.
6. 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 affiliated group of
which The Hartford is the common parent. The Hartford and its non-life
subsidiaries filed a single consolidated Federal income tax return for 1998 and
1997 and intend to file a separate consolidated Federal income tax return for
1999. The life insurance companies filed a separate consolidated Federal income
tax return for 1998 and 1997 and intend to file a separate consolidated Federal
income tax return for 1999. Federal income taxes (received) paid by the Company
for operations and capital gains (losses) were $(8,815), $25,780, and $(14,499)
in 1999, 1998 and 1997, respectively. The effective tax rate was (73)%, 27%, and
(28)% in 1999, 1998 and 1997, respectively.
F-12
<PAGE>
The following schedule provides a reconciliation of the tax provision (including
realized capital gains(losses)) at the U.S. Federal Statutory rate to Federal
income tax (benefit) expense (in millions):
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
------------------
Tax provision at U.S. Federal Statutory rate $ 5 $48 $ 20
Tax deferred acquisition costs 31 25 25
Statutory to tax reserve differences (7) 8 1
Investments (31) (60) (61)
Other (8) 15 (1)
------------------
FEDERAL INCOME TAX (BENEFIT) EXPENSE $(10) $36 $(16)
------------------
</TABLE>
7. CAPITAL AND SURPLUS AND SHAREHOLDER DIVIDEND RESTRICTIONS:
The maximum amount of dividends which can be paid to shareholders by Connecticut
domiciled insurance companies, without prior approval, 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 1999,
1998 or 1997. The amount available for dividend in 2000 is approximately
$60,855.
8. PENSION, RETIREMENT, AND OTHER POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS:
All employees that work for The Hartford's life insurance companies 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. The Hartford'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 group
pension contracts sold by affiliates. The costs that were allocated to the
Company for pension related expenses were $762, $1,045 and $840 for 1999, 1998
and 1997, respectively.
Employees of The Hartford's life insurance companies are also provided, through
The Hartford, certain health care and life insurance benefits for eligible
retired employees. The contribution for health care benefits depends on the
retiree's date of retirement and years of service. In addition, this benefit
plan has a defined dollar cap, which limits average company contributions. The
Hartford 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 benefits
expense allocated to the Company was not material to the results of operations
for 1999, 1998 or 1997.
The assumed rate in the per capita cost of health care (the health care trend
rate) was 7.1% for 1999, 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.
Substantially all of The Hartford's life insurance companies' employees are
eligible to participate in The Hartford's Investment and Savings Plan. Under
this plan, designated contributions, which may be invested in Class A Common
Stock of HLI or certain other investments, are matched to a limit of 3% of
compensation.
9. SEPARATE ACCOUNTS:
The Company maintains separate account assets totaling $44.9 billion and $32.9
billion as of December 31, 1999 and 1998, respectively. Separate account assets
are segregated from other investments and reported at fair value. Separate
account liabilities are determined in accordance with prescribed actuarial
methodologies, which approximate the market value less applicable surrender
charges. The resulting surplus is recorded in the general account statement of
operations as a component of Net Transfers to Separate Accounts. The Company's
separate accounts are non-guaranteed, wherein the policyholder assumes
substantially all the investment risk and rewards. Investment income (including
investment gains and losses) and interest credited to policyholders on separate
account assets are not separately reflected in the statutory statements of
operations.
Separate account management fees, net of minimum guarantees, were $493 million,
$363 million, and $252 million in 1999, 1998 and 1997, respectively, and are
recorded as a component of fee income on the Company's statutory basis
Statements of Operations.
F-13
<PAGE>
10. COMMITMENTS AND CONTINGENT LIABILITIES:
(a) LITIGATION
The Company is involved in pending and threatened litigation in the normal
course of its business in which claims for alleged economic and punitive damages
have been asserted. Some of these cases have been filed as purported class
actions and some cases have been filed in certain jurisdictions that permit
punitive damage awards disproportionate to the actual damages incurred. 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,
will have a material adverse effect on the statutory capital and surplus of the
Company.
(b) GUARANTY FUNDS
Under insurance guaranty fund laws in each state, the District of Columbia and
Puerto Rico, insurers licensed to do business can be assessed by state insurance
guaranty associations for certain obligations of insolvent insurance companies
to policyholders and claimants. Recent regulatory actions against certain large
life insurers encountering financial difficulty have prompted various state
insurance guaranty associations to begin assessing life insurance companies for
the deemed losses. Most of these laws do provide, however, that an assessment
may be excused or deferred if it would threaten an insurer's solvency and
further provide annual limits on such assessments. Part of the assessments paid
by the Company pursuant to these laws may be used as credits for a portion of
the associated premium taxes. The Company paid guaranty fund assessments of
approximately $523, $1,043 and $1,544 in 1999, 1998, and 1997, respectively, of
which $318, $995, and $548 in 1999, 1998 and 1997, respectively were estimated
to be creditable against premium taxes.
(c) TAX MATTERS
The Company's Federal income tax returns are routinely audited by the Internal
Revenue Service ("IRS"). The Company's 1997 and 1996 Federal income tax returns
are currently under audit by the IRS. As of March 31, 2000, the audit was in its
initial stage and no material issues had been raised.
F-14
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------------------------
<TABLE>
<CAPTION>
SECOND
QUARTER SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
<CAPTION>
(IN MILLIONS) (UNAUDITED) 2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
Premiums and other considerations $543 $517 $1,065 $1,004
Net investment income 320 334 641 686
Net realized capital gains (losses) (32) 2 (37) 1
------------------------------------------------------------------------------------------------------------
TOTAL REVENUES 831 853 1,669 1,691
------------------------------------------------------------------------------------------------------------
BENEFITS, CLAIMS AND EXPENSES
Benefits, claims and claim adjustment expenses 385 423 714 816
Amortization of deferred policy acquisition costs 146 136 299 255
Dividends to policyholders 5 10 46 27
Other expenses 146 153 268 327
------------------------------------------------------------------------------------------------------------
TOTAL BENEFITS, CLAIMS AND EXPENSES 682 722 1,327 1,425
------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAX EXPENSE 149 131 342 266
Income tax expense 19 46 84 93
------------------------------------------------------------------------------------------------------------
NET INCOME $130 $ 85 $ 258 $ 173
------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Consolidated Financial Statements.
Q-1
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
(IN MILLIONS, EXCEPT FOR SHARE DATA) 2000 1999
<S> <C> <C>
--------------------------------------------------------------------------------------------------
<CAPTION>
(Unaudited)
ASSETS
<S> <C> <C>
Investments
Fixed maturities, available for sale, at fair value
(amortized cost of $13,412 and $13,923) $ 13,014 $ 13,499
Equity securities, at fair value 40 56
Policy loans, at outstanding balance 3,545 4,187
Other investments 671 342
--------------------------------------------------------------------------------------------------
Total investments 17,270 18,084
Cash 71 55
Premiums receivable and agents' balances 21 29
Reinsurance recoverables 1,255 1,274
Deferred policy acquisition costs 4,170 4,013
Deferred income tax 430 459
Other assets 449 654
Separate account assets 114,332 110,397
--------------------------------------------------------------------------------------------------
TOTAL ASSETS $137,998 $134,965
--------------------------------------------------------------------------------------------------
LIABILITIES
Future policy benefits $ 4,543 $ 4,332
Other policyholder funds 14,672 16,004
Other liabilities 1,663 1,613
Separate account liabilities 114,332 110,397
--------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 135,210 132,346
--------------------------------------------------------------------------------------------------
STOCKHOLDER'S EQUITY
Common stock -- 1,000 shares authorized, issued and
outstanding, par value $5,690 6 6
Capital surplus 1,045 1,045
Accumulated other comprehensive loss
Net unrealized capital losses on securities, net of
tax (244) (255)
--------------------------------------------------------------------------------------------------
Total accumulated other comprehensive loss (244) (255)
--------------------------------------------------------------------------------------------------
Retained earnings 1,981 1,823
--------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDER'S EQUITY 2,788 2,619
--------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $137,998 $134,965
--------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Consolidated Financial Statements.
Q-2
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
-------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
ACCUMULATED OTHER
COMPREHENSIVE
INCOME (LOSS)
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------
<CAPTION>
NET UNREALIZED
CAPITAL GAINS
(LOSSES) ON TOTAL
COMMON CAPITAL SECURITIES, NET RETAINED STOCKHOLDER'S
(IN MILLIONS) (UNAUDITED) STOCK SURPLUS OF TAX EARNINGS EQUITY
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1999 $6 $1,045 $(255) $1,823 $2,619
Comprehensive income (loss)
Net income 258 258
---------------------------------------------------------------------------------------------------------------
Other comprehensive income
(loss), net of tax
Net unrealized capital
gains (losses) on
securities (1) 11 11
---------------------------------------------------------------------------------------------------------------
Total other comprehensive
income (loss) 11
---------------------------------------------------------------------------------------------------------------
Total comprehensive income
(loss) 269
---------------------------------------------------------------------------------------------------------------
Dividends paid to parent (100) (100)
---------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2000 $6 $1,045 $(244) $1,981 $2,788
---------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30,
1999
<CAPTION>
ACCUMULATED OTHER
COMPREHENSIVE
INCOME (LOSS)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
<CAPTION>
NET UNREALIZED
CAPITAL GAINS
(LOSSES) ON TOTAL
COMMON CAPITAL SECURITIES, NET RETAINED STOCKHOLDER'S
(IN MILLIONS) (UNAUDITED) STOCK SURPLUS OF TAX EARNINGS EQUITY
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1998 $6 $1,045 $ 184 $1,462 $2,697
Comprehensive income (loss)
Net income 173 173
---------------------------------------------------------------------------------------------------------------
Other comprehensive income
(loss), net of tax
Net unrealized capital
gains (losses) on
securities (1) (278) (278)
---------------------------------------------------------------------------------------------------------------
Total other comprehensive
income (loss) (278)
---------------------------------------------------------------------------------------------------------------
Total comprehensive income
(loss) (105)
---------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 1999 $6 $1,045 $ (94) $1,635 $2,592
</TABLE>
------------------------
(1) Net unrealized capital gains (losses) on securities are reflected net of tax
provision (benefit) of $6 and $(150) for the six months ended June 30, 2000
and 1999, respectively. There were reclassification adjustments for
after-tax gains (losses) realized in net income of $(24) and $1 for the six
months ended June 30, 2000 and 1999, respectively.
See Notes to Consolidated Financial Statements.
Q-3
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
---------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30,
<S> <C> <C>
------------------------------------------------------------------------------------
<CAPTION>
(In millions) (Unaudited) 2000 1999
------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 258 $ 173
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES
Depreciation and amortization (12) (4)
Net realized capital losses (gains) 24 (1)
Decrease (increase) in premiums receivable and agents'
balances 9 (10)
Decrease in other liabilities (130) (58)
Change in receivables, payables and accruals 73 72
Increase (decrease) in accrued tax 159 (200)
Decrease in deferred income tax 23 119
Increase in deferred policy acquisition costs (157) (173)
Increase in future policy benefits 211 126
Decrease (increase) in reinsurance recoverables 31 (118)
Other, net 76 34
------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES 565 (40)
------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchases of investments (2,775) (4,010)
Sales of investments 2,906 5,545
Maturities and principal paydowns of fixed maturity
investments 764 979
------------------------------------------------------------------------------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 895 2,514
------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Dividends paid to parent (100) --
Net disbursements for investment and universal life-type
contracts charged against policyholder accounts (1,344) (2,417)
------------------------------------------------------------------------------------
NET CASH USED FOR FINANCING ACTIVITIES (1,444) (2,417)
------------------------------------------------------------------------------------
Net increase in cash 16 57
Cash -- beginning of period 55 17
------------------------------------------------------------------------------------
CASH -- END OF PERIOD $ 71 $ 74
------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
NET CASH (RECEIVED) PAID DURING THE PERIOD FOR
Income taxes $ (74) $ 111
</TABLE>
See Notes to Consolidated Financial Statements.
Q-4
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS, UNLESS OTHERWISE STATED)
(Unaudited)
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES:
(A) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Hartford Life
Insurance Company and subsidiaries ("Hartford Life Insurance Company" or the
"Company"), a wholly-owned subsidiary of Hartford Life and Accident Insurance
Company (its parent), a wholly-owned subsidiary of Hartford Life, Inc., have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and note disclosures which are normally
included in financial statements prepared on the basis of accounting principles
generally accepted in the United States have been condensed or omitted pursuant
to those rules and regulations, although the Company believes that the
disclosures made are adequate to make the information presented not misleading.
In the opinion of management, these statements include all adjustments which
were normal recurring adjustments necessary to present fairly the financial
position, results of operations and cash flows for the periods presented. For a
description of significant accounting policies, see Note 2 of Notes to
Consolidated Financial Statements in Hartford Life Insurance Company's 1999
Form 10-K Annual Report.
Certain reclassifications have been made to prior year financial information to
conform to the current year classification of transactions and accounts.
(B) NEW ACCOUNTING STANDARDS
In June 2000, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities", which amends SFAS
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities". Specifically, it amends SFAS No. 133 so that in interest rate
hedges, a company may designate as the hedged risk, the risk of changes only in
a benchmark interest rate. Also, credit risk is newly defined as the
company-specific spread over the benchmark interest rate and may be hedged
separately from or in combination with the benchmark interest rate. For
companies that have not adopted SFAS No. 133 before June 15, 2000, SFAS No. 138
must be adopted concurrently with the company's adoption of SFAS No. 133.
Initial application of both SFAS No. 133 and SFAS No. 138 for Hartford Life
Insurance Company will begin January 1, 2001.
Hartford Life Insurance Company has reviewed its derivative holdings and is in
the process of quantifying the impact of SFAS No. 133, as amended by SFAS No.
138. The Company is also assessing what actions, if any, need to be taken to
minimize potential volatility, while at the same time maintaining the economic
protection needed to support the goals of its business.
Effective January 1, 2000, Hartford Life Insurance Company adopted Statement of
Position (SOP) No. 98-7, "Accounting for Insurance and Reinsurance Contracts
That Do Not Transfer Insurance Risk". This SOP provides guidance on the method
of accounting for insurance and reinsurance contracts that do not transfer
insurance risk, defined in the SOP as the deposit method. Adoption of this SOP
did not have a material impact on the Company's financial condition or results
of operations.
2. COMMITMENTS AND CONTINGENT LIABILITIES
(A) LITIGATION
Hartford Life Insurance Company is involved in pending and threatened litigation
in the normal course of its business in which claims for alleged economic and
punitive damages have been asserted. Some of these cases have been filed as
purported class actions and some cases have been filed in certain jurisdictions
that permit punitive damage awards disproportionate to the actual damages
incurred. 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 estimated
losses and costs of defense, will have a material adverse effect on the
financial condition or operating results of the Company.
(B) TAX MATTERS
Hartford Life, Inc.'s federal income tax returns are routinely audited by the
Internal Revenue Service. Hartford Life, Inc.'s 1996-1997 federal income tax
returns are currently under audit by the Internal Revenue Service. Management
believes that sufficient provision has been made in the financial statements for
issues that may result from tax examinations and other tax related matters for
all open years. During the second quarter, Hartford Life, Inc. reached a
settlement with the Internal Revenue Service with respect to certain tax matters
for the 1993-1995 years. This settlement resulted in a $24 tax benefit being
recorded in Hartford Life Insurance Company's second quarter results of
operations.
3. SEGMENT INFORMATION
Hartford Life Insurance Company is organized into three reportable operating
segments which include Investment Products, Individual Life and Corporate Owned
Life Insurance (COLI). Investment Products offers individual fixed and variable
annuities, retirement plan services and other investment products. Individual
Life sells a variety of life insurance products, including variable life,
universal life, interest sensitive whole life and term life insurance. COLI
primarily offers variable products used by employers to fund non-qualified
benefits or other post-employment benefit obligations as well as leveraged COLI.
The Company includes in "Other" corporate items not directly allocable to any of
its reportable operating segments, as
Q-5
<PAGE>
well as certain group benefit products including group life and disability
insurance that is directly written by the Company and is substantially ceded to
its parent.
The accounting policies of the reportable operating segments are the same as
those described in the summary of significant accounting policies in Note 2 of
Notes to Consolidated Financial Statements in Hartford Life Insurance Company's
1999 Form 10-K Annual Report. Hartford Life Insurance Company evaluates
performance of its segments based on revenues, net income and the segment's
return on allocated capital. The Company charges direct operating expenses to
the appropriate segment and allocates the majority of indirect expenses to the
segments based on an intercompany expense arrangement. Intersegment revenues are
not significant and primarily occur between corporate and the operating
segments. These amounts include interest income on allocated surplus and the
allocation of net realized capital gains and losses through net investment
income utilizing the duration of the segment's investment portfolios.
The following tables present summarized financial information concerning the
Company's segments.
<TABLE>
<CAPTION>
Investment Individual
JUNE 30, 2000 Products Life COLI Other Total
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------
SECOND QUARTER ENDED
Total revenues $ 511 $132 $169 $ 19 $ 831
Net income 93 16 8 13 130
---------------------------------------------------------------
SIX MONTHS ENDED
Total revenues $1,026 $264 $334 $ 45 $1,669
Net income 176 34 16 32 258
---------------------------------------------------------------
Investment Individual
JUNE 30, 1999 Products Life COLI Other Total
---------------------------------------------------------------
SECOND QUARTER ENDED
Total revenues $ 474 $140 $215 $ 24 $ 853
Net income (loss) 81 17 7 (20) 85
---------------------------------------------------------------
SIX MONTHS ENDED
Total revenues $ 935 $273 $439 $ 44 $1,691
Net income (loss) 159 32 13 (31) 173
---------------------------------------------------------------
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Dollar amounts in millions, unless otherwise stated)
Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) addresses the financial condition of Hartford Life Insurance
Company and subsidiaries ("Hartford Life Insurance Company" or the "Company") as
of June 30, 2000, compared with December 31, 1999, and its results of operations
for the second quarter and six months ended June 30, 2000 compared with the
equivalent periods in 1999. This discussion should be read in conjunction with
the MD&A included in the Company's 1999 Form 10-K Annual Report.
Certain statements contained in this discussion, other than statements of
historical fact, are forward-looking statements. These statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and include estimates and assumptions related to economic,
competitive and legislative developments. These forward-looking statements are
subject to change and uncertainty which are, in many instances, beyond the
Company's control and have been made based upon management's expectations and
beliefs concerning future developments and their potential effect on the
Company. There can be no assurance that future developments will be in
accordance with management's expectations or that the effect of future
developments on Hartford Life Insurance Company will be those anticipated by
management. Actual results could differ materially from those expected by the
Company, depending on the outcome of certain factors, including the possibility
of general economic, business and legislative conditions that are less favorable
than anticipated, changes in interest rates or the stock markets, stronger than
anticipated competitive activity and those described in the forward-looking
statements.
Q-6
<PAGE>
INDEX
<TABLE>
<S> <C> <C> <C>
Consolidated Results of Operations Q-7 Corporate Owned Life Insurance (COLI) Q-9
Investment Products Q-8 Regulatory Matters and Contingencies Q-9
Individual Life Q-8 Accounting Standards Q-9
</TABLE>
CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
SECOND
QUARTER
ENDED SIX MONTHS ENDED
OPERATING SUMMARY JUNE 30, JUNE 30,
<S> <C> <C> <C> <C>
-----------------------------------------------------
2000 1999 2000 1999
-----------------------------------------------------
Revenues $831 $853 $1,669 $1,691
Expenses 701 768 1,411 1,518
-----------------------------------------------------
NET INCOME $130 $ 85 $ 258 $ 173
-----------------------------------------------------
</TABLE>
Hartford Life Insurance Company has the following reportable segments:
Investment Products, Individual Life and Corporate Owned Life Insurance (COLI).
The Company reports in "Other" corporate items not directly allocable to any of
its segments, as well as certain group benefits business, including group life
and disability insurance that is directly written by the Company and is
substantially ceded to its parent, Hartford Life and Accident Insurance Company
(HLA).
Revenues decreased slightly for the respective second quarter and six month
periods. Excluding net realized capital gains (losses) and the COLI segment,
where revenues decreased primarily due to the declining block of leveraged COLI
business, revenues increased $58, or 9%, and $121, or 10%, for the second
quarter and six months ended June 30, 2000, respectively, as compared to the
equivalent 1999 periods. The increase in revenues was primarily attributable to
growth in the Investment Products segment which was, for the most part, due to
higher fee income related to the individual annuity operation which is directly
attributable to increased assets under management.
Expenses decreased $67, or 9%, and $107, or 7%, for the second quarter and six
months ended June 30, 2000, respectively, as compared to the equivalent 1999
periods. Excluding tax benefits (described below) and the COLI segment where
expenses decreased primarily due to the declining block of leveraged COLI
business, expenses increased slightly for both periods. The increase in expenses
was lower than the growth in revenues as the Company continues to create
operating leverage by expanding its distribution platform to accelerate sales
volume while utilizing technology and prudent expense management to increase
productivity.
Net income increased $45, or 53%, and $85, or 49%, for the second quarter and
six months ended June 30, 2000, respectively, as compared to the equivalent 1999
periods driven by increases in net income across each of the Company's
reportable segments for the six months. The Company also reported a benefit
related to federal income taxes of $24 for the second quarter of 2000 (see
Note 2(b) of Notes to Consolidated Financial Statements). This, along with an $8
benefit related to state income taxes in the first quarter of 2000, resulted in
a $32 increase to net income for the six months ended June 30, 2000. Partially
offsetting this increase, the Company realized $21 and $24 of net realized
capital losses during the respective periods, primarily as a result of portfolio
re-balancing. Excluding the tax items and the net realized capital gains
(losses), net income was up $44, or 53%, and $78, or 45%, for the respective
second quarter and six month periods.
SEGMENT RESULTS
Below is a summary of net income (loss) by segment.
<TABLE>
<CAPTION>
SECOND
QUARTER SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
<S> <C> <C> <C> <C>
-----------------------------------------------------
2000 1999 2000 1999
-----------------------------------------------------
Investment Products $ 93 $81 $176 $159
Individual Life 16 17 34 32
Corporate Owned Life Insurance (COLI) 8 7 16 13
Other 13 (20) 32 (31)
-----------------------------------------------------
NET INCOME $130 $85 $258 $173
-----------------------------------------------------
</TABLE>
The sections that follow analyze each segment's results.
Q-7
<PAGE>
INVESTMENT PRODUCTS
<TABLE>
<CAPTION>
SECOND
QUARTER SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
<S> <C> <C> <C> <C>
-----------------------------------------------------
2000 1999 2000 1999
-----------------------------------------------------
Revenues $511 $474 $1,026 $935
Expenses 418 393 850 776
-----------------------------------------------------
NET INCOME $ 93 $ 81 $ 176 $159
-----------------------------------------------------
</TABLE>
Revenues in the Investment Products segment increased $37, or 8%, and $91, or
10%, for the second quarter and six months ended June 30, 2000, respectively, as
compared to the equivalent 1999 periods, primarily due to higher fee income in
the individual annuity operation. Fee income generated by individual annuities
increased $37, or 13%, and $91, or 17%, for the respective second quarter and
six month periods, as related account values grew $11.8 billion, or 15%, from
June 30, 1999. The growth in individual annuity account values was mostly due to
strong sales (including $5.8 billion for the first six months of 2000) and
equity market appreciation.
Due to the continued growth in this segment, particularly the individual annuity
operation, expenses increased $25, or 6%, or $74, or 10%, for the second quarter
and six months ended June 30, 2000, respectively, as compared to the equivalent
1999 periods. These increases were primarily driven by amortization of deferred
policy acquisition costs, which grew $15, or 15%, and $37, or 18%, for the
respective second quarter and six month periods and other expenses which
increased $23, or 28%, and $34, or 20%, over the respective prior year levels.
The segment's operating expenses as a percentage of average assets under
management were relatively consistent for the second quarter and six month
periods versus the equivalent prior year periods.
Net income increased $12, or 15%, and $17, or 11%, for the second quarter and
six months ended June 30, 2000, respectively, as compared to the equivalent 1999
periods, primarily due to the growth in revenues associated with the increase in
assets under management across the entire segment. Additionally, the Investment
Products segment continued to maintain its profit margins related to its primary
businesses thus contributing to the segment's earnings growth.
INDIVIDUAL LIFE
<TABLE>
<CAPTION>
SECOND
QUARTER SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
<S> <C> <C> <C> <C>
-------------------------------------
2000 1999 2000 1999
-------------------------------------
Revenues $132 $140 $264 $273
Expenses 116 123 230 241
-------------------------------------
NET INCOME $ 16 $ 17 $ 34 $ 32
-------------------------------------
</TABLE>
The slight decrease in revenues and expenses in the Individual Life segment is
primarily due to HLA's December 1, 1999 recapture of an in force block of
individual life insurance previously ceded to the Company. (For a discussion of
the recapture, see Note 9 of Notes to Consolidated Financial Statements in
Hartford Life Insurance Company's 1999 Form 10-K Annual Report.)
Excluding the recapture described above, revenues in the Individual Life segment
increased $15, or 13%, and $37, or 16%, for the second quarter and six months
ended June 30, 2000, respectively, as compared to the equivalent 1999 periods.
This increase in revenues is attributable to higher fee income associated with
the growing block of variable life insurance. Fee income increased $17, or 21%,
and $40, or 27%, for the respective second quarter and six month periods, as
variable life account values increased $827, or 41%, and variable life insurance
in force increased $9.1 billion, or 47%, from June 30, 1999.
Excluding the recapture described above, expenses increased $14, or 14%, and
$33, or 17%, for the second quarter and six months ended June 30, 2000,
respectively, as compared to the equivalent 1999 periods. The increase in
expenses for the second quarter was principally due to a $7, or 15%, increase in
benefits, claims and claim adjustment expenses related to the growing block of
business. The increase in expenses for the six month period was primarily due to
a $15, or 33%, increase in amortization of deferred policy acquisition costs
which was
Q-8
<PAGE>
also associated with the growth in this segment's variable life business.
Excluding the recapture described above, net income increased $1, or 7%, and $4,
or 12%, for the respective periods, primarily due to the higher fee income
previously discussed, and favorable mortality experience as death benefits
through six months remained level with 1999, while life insurance in force
increased 12%.
CORPORATE OWNED LIFE INSURANCE (COLI)
<TABLE>
<CAPTION>
SECOND
QUARTER SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
<S> <C> <C> <C> <C>
-------------------------------------
2000 1999 2000 1999
-------------------------------------
Revenues $169 $215 $334 $439
Expenses 161 208 318 426
-------------------------------------
NET INCOME $ 8 $ 7 $ 16 $ 13
-------------------------------------
</TABLE>
COLI revenues decreased $46, or 21%, and $105, or 24%, for the second quarter
and six months ended June 30, 2000, respectively, as compared to the equivalent
prior year periods. Net investment income decreased $21, or 20%, and $55, or
24%, for the respective second quarter and six month periods primarily due to
the leveraged COLI block of business, as related account values decreased $1.2
billion, or 20%, as result of the downsizing caused by the Health Insurance
Portability and Accountability Act of 1996. Revenues also decreased due to lower
sales in 2000 as compared to 1999.
Expenses decreased $47, or 23%, and $108, or 25%, for the second quarter and six
months ended June 30, 2000, respectively, as compared to the equivalent prior
year periods due to the factors described above. Net income increased $1, or
14%, and $3, or 23%, for the respective second quarter and six month periods.
These increases were primarily attributable to the variable COLI business where
account values increased $1.1 billion, or 9%, as well as increased earnings
associated with a block of leveraged COLI business recaptured (MBL Recapture) in
1998. (For a discussion of the MBL Recapture, see the Capital Resources and
Liquidity section in Hartford Life Insurance Company's 1999 Form 10-K Annual
Report.)
REGULATORY MATTERS AND CONTINGENCIES
NAIC PROPOSALS
The NAIC adopted the Codification of Statutory Accounting Principles (SAP) in
March 1998. The effective date for the statutory accounting guidance is January
1, 2001. It is expected that Hartford Life Insurance Company and its
subsidiaries' domiciliary state will adopt the SAP and the Company will make the
necessary changes required for implementation. The Company has not yet
determined the impact that the SAP will have on the statutory financial
statements of Hartford Life Insurance Company and its subsidiaries.
DEPENDENCE ON CERTAIN THIRD PARTY RELATIONSHIPS
Hartford Life Insurance Company distributes its annuity and life insurance
products through a variety of distribution channels, including broker-dealers,
banks, wholesalers, its own internal sales force and other third party marketing
organizations. The Company periodically negotiates provisions and renewals of
these relationships and there can be no assurance that such terms will remain
acceptable to the Company or such service providers. An interruption in the
Company's continuing relationship with certain of these third parties could
materially affect the Company's ability to market its products.
ACCOUNTING STANDARDS
For a discussion of accounting standards, see Note 1 of Notes to Consolidated
Financial Statements.
Q-9
