<PAGE>
As filed with the Securities and Exchange Commission on May 22, 2000.
File No. 333-84263
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT #1 TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
A. Exact name of trust: ICMG Registered Variable Life Separate Account One
B. Name of depositor: Hartford Life and Annuity Insurance Company
C. Complete address of depositor's principal executive offices:
P.O. Box 2999
Hartford, CT 06104-2999
D. Name and complete address of agent for service:
Thomas S. Clark, Esq.
Hartford Life and Annuity Insurance Company
P.O. Box 2999
Hartford, CT 06104-2999
E. Title and amount of securities being registered: Pursuant to Rule 24f-2
under the Investment Company Act of 1940, the Registrant will register
an indefinite amount of securities.
F. Proposed maximum aggregate offering price to the public of the
securities being registered: Not yet determined.
G. Amount of filing fee: Not applicable.
H. Approximate date of proposed public offering: As soon as practicable after
the effective date of this registration statement.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration shall
become effective on such date as the Commission, acting pursuant to Section
8(a), may determine.
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
<TABLE>
<CAPTION>
Item No. of Form N-8B-2 Caption In Prospectus
----------------------- ---------------------
<S> <C>
1. Cover Page
2. Cover Page
3. Not Applicable
4. Statement of Additional Information - Distribution of
the Policies
5. About Us - ICMG Registered Variable Life Separate Account One
6. About Us - ICMG Registered Variable Life Separate Account One
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. About Us - ICMG Registered Variable Life Separate Account One; The Funds
11. About Us - ICMG Registered Variable Life Separate Account One; The Funds
12. About Us - The Funds
13. Fee Table; Charges and Deductions
14. Premiums
15. Premiums
16. Premiums
17. Making Withdrawals From Your Policy
18. About Us - The Funds; Charges and Deductions
19. Your Policy - Contract Rights
20. Not Applicable
21. Loans
22. Not Applicable
23. Not Applicable
24. Not Applicable
25. About Us - Hartford Life and Annuity Insurance Company
26. Not Applicable
27. About Us - Hartford Life and Annuity Insurance Company
28. Statement of Additional Information - General
Information and History
29. About Us - Hartford Life and Annuity Insurance Company
30. Not Applicable
31. Not Applicable
32. Not Applicable
33. Not Applicable
34. Not Applicable
</TABLE>
<PAGE>
<TABLE>
<S> <C>
35. Statement of Additional Information - Distribution of
the Policies
36. Not required by Form S-6
37. Not Applicable
38. Statement of Additional Information - Distribution of
the Policies
39. Statement of Additional Information - Distribution of
the Policies
40. Not Applicable
41. Statement of Additional Information - Distribution of
the Policies
42. Not Applicable
43. Not Applicable
44. Premiums
45. Not Applicable
46. Premiums; Making Withdrawals From Your Policy
47. About Us - The Funds
48. Cover Page; About Us - Hartford Life and Annuity
Insurance Company
49. Not Applicable
50. About Us - ICMG Registered Variable Life Separate Account One
51. Not Applicable
52. About Us - The Funds
53. Taxes
54. Not Applicable
55. Not Applicable
56. Not Required by Form S-6
57. Not Required by Form S-6
58. Not Required by Form S-6
59. Not Required by Form S-6
</TABLE>
<PAGE>
PART A
<PAGE>
<TABLE>
<S> <C>
OMNISOURCE-SM- II
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE
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 OmniSource-SM- II group flexible premium variable life
insurance policy. Please read it carefully.
The OmniSource-SM- II group flexible premium variable life insurance policy is a
contract issued by Hartford Life and Annuity Insurance Company to an employer or
a trust sponsored by an employer. We will issue you a certificate of insurance
that describes your rights, benefits, obligations and options under the group
policy, including your payment of premiums and our payment of a death benefit to
your beneficiaries. Your certificate is:
x Flexible premium, because you have options when selecting the timing and
amounts of your premium payments.
x Variable, because the value of your life insurance coverage may fluctuate
with the performance of the underlying Portfolio(s).
- --------------------------------------------------------------------------------
After you enroll, you allocate your payments to separate divisions of our
separate account, known as Investment Divisions. The current Investment
Divisions available are:
<TABLE>
<CAPTION>
INVESTMENT DIVISION PURCHASES SHARES OF:
<S> <C>
Alger American Growth Investment Division Alger American Growth Portfolio of The Alger
American Fund
Deutsche VIT EAFE-Registered Trademark- Equity Index EAFE-Registered Trademark- Equity Index Fund of
Investment Division the Deutsche Asset Management VIT Funds
Deutsche VIT Equity Small Cap Index Investment Division Small Cap Index Fund of the Deutsche Asset
Management VIT Funds
Hartford Money Market Investment Division Class IA of Hartford Money Market HLS Fund
Variable Insurance Products Fund Equity-Income Investment Initial Class of Equity-Income Portfolio of the
Division Variable Insurance Products Fund
Variable Insurance Products Fund II Index 500 Investment Initial Class of Index 500 Portfolio of Variable
Division Insurance Products Fund II
</TABLE>
If you decide to enroll for coverage under this group life insurance policy, you
should keep this Prospectus for your records.
The Hartford HLS Mutual Funds prospectus included in this OmniSource-SM- II
Prospectus contains information relating to all of the Funds offered by Hartford
HLS Mutual Funds. Not all of the Funds in the Hartford HLS Mutual Funds
prospectus are available to you. Please review this OmniSource-SM- II 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: JUNE 5, 2000
<PAGE>
2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
- ----------------------------------------------------------------------
<S> <C>
SUMMARY OF BENEFITS AND RISKS 4
- ----------------------------------------------------------------------
Benefits of Your Policy 4
- ----------------------------------------------------------------------
Risks of Your Policy 4
- ----------------------------------------------------------------------
FEE TABLES 5
- ----------------------------------------------------------------------
ABOUT US 7
- ----------------------------------------------------------------------
Hartford Life and Annuity Insurance Company 7
- ----------------------------------------------------------------------
ICMG Registered Variable Life Separate Account One 7
- ----------------------------------------------------------------------
The Funds 7
- ----------------------------------------------------------------------
CHARGES AND DEDUCTIONS 8
- ----------------------------------------------------------------------
Deductions from Premium 8
- ----------------------------------------------------------------------
Deductions from Investment Value 8
- ----------------------------------------------------------------------
YOUR CERTIFICATE 9
- ----------------------------------------------------------------------
Ownership Rights 9
- ----------------------------------------------------------------------
PREMIUMS 10
- ----------------------------------------------------------------------
DEATH BENEFITS AND POLICY VALUES 11
- ----------------------------------------------------------------------
Values Under the Certificate 11
- ----------------------------------------------------------------------
Death Benefits 11
- ----------------------------------------------------------------------
MAKING WITHDRAWALS FROM THE CERTIFICATE 13
- ----------------------------------------------------------------------
Surrender 13
- ----------------------------------------------------------------------
Partial Withdrawals 13
- ----------------------------------------------------------------------
TRANSFERS AMONG INVESTMENT DIVISIONS 13
- ----------------------------------------------------------------------
Amount and Frequency of Transfers 13
- ----------------------------------------------------------------------
Transfers to or from Investment Divisions 13
- ----------------------------------------------------------------------
Asset Rebalancing 14
- ----------------------------------------------------------------------
Dollar Cost Averaging 14
- ----------------------------------------------------------------------
Procedures for Telephone Transfers 14
- ----------------------------------------------------------------------
Processing of Transactions 14
- ----------------------------------------------------------------------
LOANS 15
- ----------------------------------------------------------------------
Loan Interest 15
- ----------------------------------------------------------------------
Credited Interest 15
- ----------------------------------------------------------------------
Loan Repayments 15
- ----------------------------------------------------------------------
Termination Due to Excessive Debt 15
- ----------------------------------------------------------------------
Effect of Loans on Investment Value 15
- ----------------------------------------------------------------------
LAPSE AND REINSTATEMENT 15
- ----------------------------------------------------------------------
Lapse and Grace Period 15
- ----------------------------------------------------------------------
Reinstatement 15
- ----------------------------------------------------------------------
TERMINATION OF POLICY 16
- ----------------------------------------------------------------------
CONTRACT LIMITATIONS 16
- ----------------------------------------------------------------------
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 3
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
- ----------------------------------------------------------------------
<S> <C>
Partial Withdrawals 16
- ----------------------------------------------------------------------
Transfers of Account Value 16
- ----------------------------------------------------------------------
Face Amount Increases or Decreases 16
- ----------------------------------------------------------------------
Valuation of Payments and Transfers 16
- ----------------------------------------------------------------------
Deferral of Payments 16
- ----------------------------------------------------------------------
CHANGES TO CONTRACT OR SEPARATE ACCOUNT 17
- ----------------------------------------------------------------------
Modification of Policy 17
- ----------------------------------------------------------------------
Substitution of Funds 17
- ----------------------------------------------------------------------
Change in Operation of the Separate Account 17
- ----------------------------------------------------------------------
Separate Account Taxes 17
- ----------------------------------------------------------------------
SUPPLEMENTAL BENEFITS 17
- ----------------------------------------------------------------------
Maturity Date Extension Rider 17
- ----------------------------------------------------------------------
OTHER MATTERS 17
- ----------------------------------------------------------------------
Reduced Charges for Eligible Groups 17
- ----------------------------------------------------------------------
Our Rights 17
- ----------------------------------------------------------------------
Limit on Right to Contest 18
- ----------------------------------------------------------------------
Misstatement as to Age or Sex 18
- ----------------------------------------------------------------------
Assignment 18
- ----------------------------------------------------------------------
Dividends 18
- ----------------------------------------------------------------------
TAXES 18
- ----------------------------------------------------------------------
General 18
- ----------------------------------------------------------------------
Taxation of Hartford and the Separate Account 18
- ----------------------------------------------------------------------
Income Taxation of Certificate Benefits 18
- ----------------------------------------------------------------------
Modified Endowment Contracts 19
- ----------------------------------------------------------------------
Diversification Requirements 19
- ----------------------------------------------------------------------
Ownership of the Assets in the Separate Account 19
- ----------------------------------------------------------------------
Tax Deferral During Accumulation Period 20
- ----------------------------------------------------------------------
Federal Income Tax Withholding 20
- ----------------------------------------------------------------------
Other Tax Considerations 20
- ----------------------------------------------------------------------
PERFORMANCE RELATED INFORMATION 20
- ----------------------------------------------------------------------
LEGAL PROCEEDINGS 21
- ----------------------------------------------------------------------
GLOSSARY OF SPECIAL TERMS 22
- ----------------------------------------------------------------------
WHERE YOU CAN FIND MORE INFORMATION 23
- ----------------------------------------------------------------------
</TABLE>
<PAGE>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
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 a variety of Investment Divisions. You
may transfer money among the Investment Divisions, subject to restrictions.
PREMIUM PAYMENTS -- You have the flexibility to choose when and in what amounts
you pay premiums.
RIGHT TO EXAMINE YOUR CERTIFICATE -- For 10 days after you receive your
Certificate, you may cancel it without paying a sales charge. Some states
provide a longer examination period.
WITHDRAWALS -- You may withdraw all or part of amounts available under your
Certificate, subject to certain limitations.
LOANS -- You may take a Loan under the Certificate. The Certificate secures the
Loan.
PAYMENT OPTIONS -- Your beneficiary may choose to receive the proceeds due under
the Certificate,
- - in a lump sum; or
- - over a period of time by using one of several payment options.
DOLLAR COST AVERAGING -- You may elect to allocate your Net Premiums among the
Investment Divisions using the dollar cost averaging option program. The main
objective of this program is to minimize the impact of short-term price
fluctuations to allow you to take advantage of market fluctuations.
ASSET REBALANCING -- You may elect to have us automatically reallocate
Investment Value periodically in order to maintain a particular percentage
allocation among the Investment Divisions that you selected ("Asset
Rebalancing"). The Investment Value held in each Investment Division will
increase or decrease in value at different rates during the relevant period.
Asset Rebalancing is intended to reallocate Investment Value from those
Investment Divisions that have increased in value to those that have decreased
in value.
RISKS OF YOUR POLICY
INVESTMENT PERFORMANCE -- The value of your Certificate will fluctuate with the
performance of its Investment Divisions. Your investment options may decline in
value, or they may not perform to your expectations. We do not guarantee your
Investment Value in the Investment Divisions.
TERMINATION --
- - CERTIFICATE: Your Certificate could terminate if the Cash Surrender Value
becomes too low to pay the charges due under the Certificate. If this occurs,
Hartford will notify you in writing. You will then have sixty-one (61) days to
pay additional amounts to prevent the Certificate from terminating.
- - POLICY: Hartford or the employer may terminate participation in the policy.
The party terminating the policy must provide you with a notice of the
termination, at your last known address, at least fifteen (15) days prior to
the date of termination.
PARTIAL WITHDRAWAL LIMITATIONS -- We limit you to twelve (12) partial
withdrawals per Coverage Year. These withdrawals will reduce your Cash Surrender
Value, may reduce your death benefit, and are 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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 5
- --------------------------------------------------------------------------------
FEE TABLES
The following tables describe the MAXIMUM fees and expenses that you will pay
under the Certificate.
MAXIMUM TRANSACTION FEES
<TABLE>
<CAPTION>
CERTIFICATES FROM WHICH
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED CHARGE IS DEDUCTED
<S> <C> <C> <C>
Sales Charge (1) When you pay premium. 9% of any premium paid for All
Coverage Years 1 through 7, and
7% of any premium paid in Coverage
Years 8 and later.
Premium Tax Charge When you pay premium. Generally, between 0% and 4% of All
any premium you pay. The
percentage we deduct will vary by
locale depending on the tax rates
in effect there.
Deferred Acquisition When you pay premium. 1.25% of each premium you pay. We All
Cost Tax Charge will adjust the charge based on
changes in the applicable tax law.
Transfer Fees When you make a transfer after the $50 per transfer. Those Certificates with more than
12th transfer in any Coverage 12 transfers per Contract Year.
Year.
Partial Withdrawal Fee When you take a withdrawal. $25 per partial withdrawal. 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>
CERTIFICATES FROM WHICH
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED CHARGE IS DEDUCTED
<S> <C> <C> <C>
Cost of Insurance Monthly. The charge is the cost of All
Charges insurance rate times the net
amount at risk. The cost of
insurance rates depend on issue
age, sex, insurance class and
substandard rating. 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 All
Risk Charge value of each Investment
Division's assets.
Administrative Charge Monthly. $10 per Coverage Month. All
Rider Charges Monthly. Individualized based on optional Only those Certificates with
rider selected. benefits provided by rider.
</TABLE>
<PAGE>
6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
The next table describes the Fund fees and expenses that you will pay
periodically. The table shows fees and expenses charged by any of the Funds. The
prospectus for each Fund contains more detail concerning each Fund's fees and
expenses.
ANNUAL FUND OPERATING EXPENSES
AS OF EACH FUND'S FISCAL YEAR END
(as a percentage of net assets)
<TABLE>
<CAPTION>
TOTAL OPERATING
MANAGEMENT FEES OTHER EXPENSES EXPENSES (AFTER ANY
(AFTER ANY (AFTER WAIVERS AND/OR
WAIVERS) 12B-1 FEES REIMBURSEMENTS) REIMBURSEMENTS)(1)
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Alger American Growth Portfolio 0.75% N/A 0.04% 0.79%
- -------------------------------------------------------------------------------------------------------------------------
Deutsche VIT EAFE-Registered Trademark- Equity
Index Fund (2) 0.26% N/A 0.39% 0.65%
- -------------------------------------------------------------------------------------------------------------------------
Deutsche VIT Small Cap Index Fund (2) 0.13% N/A 0.32% 0.45%
- -------------------------------------------------------------------------------------------------------------------------
Hartford Money Market HLS Fund - Class IA 0.45% N/A 0.02% 0.47%
- -------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund Equity-Income
Portfolio (3) 0.48% N/A 0.08% 0.56%
- -------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund II Index 500
Portfolio (3) 0.24% N/A 0.04% 0.28%
- -------------------------------------------------------------------------------------------------------------------------
</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) The investment advisor, Bankers Trust Company, has contractually agreed to
waive its management fee and reimburse certain expenses. Such waivers by
Bankers Trust Company will stay in effect until at least April 30, 2001.
Without expense waivers and reimbursements, it is estimated that Management
Fees, Other Expenses and Total Operating Expenses for Deutsche VIT
EAFE-Registered Trademark-Equity Index Fund and Deutsche VIT Small Cap Index
Fund would have been as follows:
<TABLE>
<CAPTION>
TOTAL
OTHER OPERATING
MANAGEMENT FEES 12B-1 FEES EXPENSES EXPENSES
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Deutsche VIT EAFE-Registered Trademark- Equity Index
Fund 0.45% N/A 0.69% 1.14%
- ------------------------------------------------------------------------------------------------------------
Deutsche VIT Small Cap Index Fund 0.35% N/A 0.83% 1.18%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(3) 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 Equity-Income Portfolio and Variable Insurance
Products Fund II Index 500 Portfolio would have been as follows:
<TABLE>
<CAPTION>
TOTAL
OTHER OPERATING
MANAGEMENT FEES 12B-1 FEES EXPENSES EXPENSES
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund Equity-Income
Portfolio 0.48% N/A 0.09% 0.57%
- ------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund II Index 500 Portfolio 0.24% N/A 0.10% 0.34%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 7
- --------------------------------------------------------------------------------
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. 1/1/99 A+ Financial performance
- --------------------------------------------------------------------------------
Standard & Poor's 8/1/99 AA Insurer financial strength
- --------------------------------------------------------------------------------
Duff & Phelps 7/1/99 AA+ Claims paying ability
- --------------------------------------------------------------------------------
</TABLE>
ICMG REGISTERED VARIABLE LIFE
SEPARATE ACCOUNT ONE
The Investment Divisions are separate divisions of our separate account, called
ICMG Registered Variable Life Separate Account One (the "Separate Account"). The
Separate Account exists to keep your life insurance policy assets separate from
our company assets. As such, the investment performance of the Separate Account
is independent from the investment performance of our other assets. We use our
other assets to pay our insurance obligations under the policy. We hold your
assets in the Separate Account exclusively for your benefit and we may not use
them for any other liability of ours. We established the Separate Account on
October 9, 1995 under the laws of Connecticut.
Each of these Investment Divisions invests solely in a corresponding Portfolio
of the Funds. You choose the Investment Divisions that meet your investment
style. We may establish additional Investment Divisions at our discretion. The
Separate Account may include other Investment Divisions that will not be
available under the policy.
THE FUNDS
The Funds sell shares of the Portfolios to the Separate Account. The Portfolios
are set up exclusively for variable annuity and variable life insurance
products. The Portfolios are not the same mutual funds that you buy through your
stockbroker or through a retail mutual fund. However, they may have similar
investment strategies and the same portfolio managers as retail mutual funds.
We do not guarantee the investment results of any of the Portfolios. Since each
Portfolio has different investment objectives, each is subject to different
risks. The prospectuses for the Funds and the Funds' Statement of Additional
Information describe these risks and the Portfolio's expenses. We have included
the Funds' prospectuses with this Prospectus.
The following Portfolios are available under your Certificate:
ALGER AMERICAN GROWTH PORTFOLIO -- Seeks long-term capital appreciation. It
focuses on growing companies that generally have broad product lines, markets,
financial resources and depth of management. Under normal circumstances, the
Portfolio invests primarily in the equity securities of large companies. The
Portfolio considers a large company to have a market capitalization of
$1 billion or greater.
DEUTSCHE VIT EAFE-REGISTERED TRADEMARK- EQUITY INDEX FUND -- Seeks to match as
closely as possible (before deduction for expenses) the total return of the
Morgan Stanley Capital International Europe, Australia, Far East Index (the
"MSCI EAFE-Registered Trademark- Index"). The Fund invests in a statistically
selected sample of the equity securities included in the MSCI
EAFE-Registered Trademark- Index. The MSCI EAFE-Registered Trademark- Index is a
capitalization-weighted index containing approximately 1,100 equity securities
of companies located outside the United States.(1)
DEUTSCHE VIT SMALL CAP INDEX FUND -- Seeks to match as closely as possible
(before deduction for expenses) the total return of the Russell 2000-Registered
Trademark- Small Stock Index (the "Russell 2000-Registered Trademark-"). The
Russell 2000-Registered Trademark- is composed of approximately 2,000 small-
capitalization common stocks.(2)
VARIABLE INSURANCE PRODUCTS FUND EQUITY-INCOME PORTFOLIO -- Seeks reasonable
income by investing primarily in income-producing equity securities. The
potential for capital appreciation is also considered when choosing investments.
The Fund seeks a yield that exceeds the yield on the securities comprising the
Standard & Poor's 500 (The "S&P 500").(3)
VARIABLE INSURANCE PRODUCTS FUND II INDEX 500 PORTFOLIO -- Seeks to provide
investment results that correspond to the total return of a broad range of
common stocks publicly traded in the United States. To achieve this objective,
the Portfolio attempts to duplicate the composition and total return of the
S&P 500.
HARTFORD MONEY MARKET HLS FUND: CLASS IA -- Seeks maximum current income
consistent with liquidity and preservation of capital.
(1) THE EAFE-REGISTERED TRADEMARK- INDEX IS THE EXCLUSIVE PROPERTY OF MORGAN
STANLEY. MORGAN STANLEY CAPITAL INTERNATIONAL IS A SERVICE MARK OF MORGAN
STANLEY AND HAS BEEN LICENSED FOR USE BY BANKERS TRUST COMPANY.
(2) "RUSSELL 2000-REGISTERED TRADEMARK-" IS A TRADEMARK OF THE FRANK RUSSELL
COMPANY AND HAS BEEN LICENSED FOR USE BY BANKERS TRUST COMPANY.
(3) "S&P 500-REGISTERED TRADEMARK-" AND "STANDARD & POOR'S-REGISTERED
TRADEMARK-" ARE TRADEMARKS OF THE MCGRAW-HILL COMPANIES AND HAVE BEEN
LICENSED FOR USE BY BANKERS TRUST COMPANY.
<PAGE>
8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
INVESTMENT ADVISERS -- The Alger American Fund is managed by Fred Alger
Management, Inc. Deutsche Asset Management VIT Funds are managed by Bankers
Trust Company, a wholly owned subsidiary of Deutsche Bank AG. Hartford Money
Market HLS Fund is managed by HL Investment Advisors, LLC. Variable Insurance
Products Fund and Variable Insurance Products Fund II are managed by Fidelity
Management & Research Company.
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 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
- --------------------------------------------------------------------------------
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:
- - the administrative expense charge;
- - the charges for cost of insurance;
- - 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.
MONTHLY ADMINISTRATIVE FEE -- We will assess a monthly administrative charge to
compensate us for administrative costs in connection with the Certificates. We
will initially charge $5 per Coverage Month and we guarantee that the charge
will never exceed $10.00 per Coverage Month.
COST OF INSURANCE CHARGE -- The charge for the cost of insurance 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
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
for standard risks will not exceed those based on the 1980 Commissioners
Standard Ordinary Mortality Table (ANB), Male or Female, age nearest birthday.
We will charge substandard risks a higher cost of insurance rate. The cost of
insurance rates for substandard risks will not exceed rates based on a multiple
of the 1980 Commissioners Standard Ordinary Mortality Table (ANB), Male or
Female, age nearest birthday. In addition, the use of simplified underwriting or
guaranteed issue procedures, rather than medical underwriting, may result in a
higher cost of insurance charge for some individuals than if medical
underwriting procedures were used.
We will make any changes in the cost of insurance uniformly for all insureds of
the same issue ages, sexes, risk classes and whose coverage has been in-force
for the same length of time. No change in insurance class or cost will occur as
a result of the deterioration of the Insured's health.
The rate class of an Insured affects the cost of insurance rate. We and the
employer will agree on the number of rate classes and characteristics of each
rate class. The rate classes may vary by smokers and nonsmokers, active and
retired status, and/or any other nondiscriminatory classes agreed to by the
employer.
RIDER CHARGE -- If the Certificate includes riders, we deduct a charge from the
Investment Value on each Processing Date. We specify the applicable charge on
the rider. This charge is to compensate us for the anticipated cost of providing
the rider benefits.
For a description of the riders available, see "Supplemental Benefits."
MORTALITY AND EXPENSE RISK CHARGE -- For assuming mortality and expense risks
under the policy, we currently deduct a daily charge of .000795% which is equal
to .29% per year of the value of each Investment Division's assets in all
Coverage Years. The maximum mortality and expense risk charge is .001781% per
day which is equal to .65% per year.
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.
YOUR CERTIFICATE
- --------------------------------------------------------------------------------
OWNERSHIP RIGHTS
As long as your Certificate is in force, you may exercise all rights under the
Certificate while the Insured is alive and you have not named an irrevocable
beneficiary.
BENEFICIARY -- You name the beneficiary in your enrollment form for the
Certificate. You may change the beneficiary (unless irrevocably named) while the
Insured is alive by notifying us, in writing. If no beneficiary is living when
the Insured dies, we will pay the Death Proceeds to you if living; or,
otherwise, to your estate.
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, 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
<PAGE>
10 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
payment, there will be no gap in coverage. We will make charges and deductions
(other than those of the Portfolios) for this period; however, you will not
experience investment returns.
RIGHT TO EXAMINE THE CERTIFICATE -- You have a limited right to return your
Certificate for cancellation. You may deliver or mail the Certificate to us or
to the agent who sold you the Certificate within ten (10) calendar days after
delivery of the Certificate to you. Some states provide for a longer period.
In the event you return your Certificate, we will return to you within seven (7)
days of our receipt of the Certificate, either:
- - 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
- --------------------------------------------------------------------------------
PREMIUM PAYMENT FLEXIBILITY -- You have considerable flexibility as to when, in
what amounts and what level of premiums, within a range determined by us, you
pay under the Certificate. You choose a premium once you have determined the
level and pattern of the death benefit.
Your Certificate specifies the minimum initial premium amount you must pay on
the Coverage Date. You may pay additional premiums at any time, subject to the
premium limitations set by the Internal Revenue Code. For details on these
premium limitations see, "Premium Limitation." You have the right to pay
additional premiums of at least $100.00 at any time, unless otherwise agreed to
by us.
Your Certificate may lapse if the value of your Certificate becomes insufficient
to cover the Monthly Deduction Amounts. If this happens you may pay additional
premiums in order to prevent your Certificate from terminating. For details see,
"Lapse and Reinstatement."
ALLOCATION OF PREMIUM PAYMENTS -- During the right to examine period, we
allocate your initial premium payment in accordance with state law requirements.
If you choose to cancel your Certificate, some states require the return of your
initial premium, while others require the return of the Certificate's Cash
Value.
- - STATE OF ISSUE REQUIRES RETURN OF INITIAL PREMIUM
If the state of issue of your Certificate requires that we return your initial
premium, we will, when we issue your Certificate and until the end of the
right to examine period, allocate your initial Net Premium to the Hartford
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 Hartford 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 Hartford Money Market Investment Division.
- - STATE OF ISSUE REQUIRES RETURN OF CERTIFICATE'S CASH VALUE
If the state of issue of your Certificate requires that we return the
Certificate's Cash Value, we will allocate the initial Net Premium among your
chosen Investment Divisions. In this case you will bear full investment risk
for any amounts we allocate to the Investment Division during the right to
examine period. This automatic immediate investment feature only applies if
specified in your Certificate. Please check with your agent to determine the
status of your Certificate.
You may change the Net Premium allocation if you notify us in writing.
Portions you allocate to the Investment Divisions must be whole percentages of
5% or more. We will allocate subsequent Net Premiums among Investment
Divisions according to your most recent instructions, subject to the
following:
- If we receive a premium and your most recent allocation instructions would
violate the 5% requirement, we will allocate the Net Premium among the
Investment Divisions according to your previous premium allocation; and
- If the asset rebalancing option is in effect, we will allocate Net Premiums
accordingly, until you terminate this option. (See "Transfers Among
Investment Divisons -- Asset Rebalancing.")
You will receive several different types of notification that explain what your
current premium allocation is. The Certificate shows the initial allocation you
chose on the enrollment form. In addition, we will send you written
confirmation, after we receive your premium payment, that shows you how we
allocated your premium. A Certificate's annual statement will also summarize
your current premium allocation.
ACCUMULATION UNITS -- We use Net Premiums allocated to the Investment Divisions
to credit Accumulation Units under the Certificates.
We determine the number of Accumulation Units in each Investment Division to be
credited under the Certificate (including the initial allocation to the Hartford
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
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
- - Divide each portion to be invested in an Investment Division by the
Accumulation Unit value of that particular Investment Division we computed
following the receipt of the payment.
Deductions made for the monthly deduction amount on each Processing Date will
reduce the number of Accumulation Units under the Certificate. (See "Deductions
from Investment Value -- Monthly Deduction Amount.")
ACCUMULATION UNIT VALUES -- The Accumulation Unit value for each Investment
Division will vary daily to reflect the investment experience and charges of the
applicable Portfolio, as well as the daily deduction for mortality and expense
risks. We will determine the Accumulation Unit value on each Valuation Day by
multiplying the Accumulation Unit value of the particular Investment Division on
the preceding Valuation Day by a net investment factor for that Investment
Division for the Valuation Period then ended. The net investment factor for each
of the Investment Divisions is equal to the net asset value per share of the
corresponding Portfolio at the end of the Valuation Period (plus the per share
amount of any dividend or capital gain distributions paid by that Portfolio in
the Valuation Period then ended) divided by the net asset value per share of the
corresponding Portfolio at the beginning of the Valuation Period, less the daily
deduction for the mortality and expense risks assumed by us.
PREMIUM LIMITATION -- If we receive premiums that would cause the Certificate to
fail to meet the definition of a life insurance policy in accordance with the
Code, we will refund the excess premium payments. We will refund such premium
payments and any applicable interest no later than sixty (60) days after the end
of a Coverage Year.
We will accept a premium payment that results in an increase in the death
benefit greater than the amount of the premium, only after we approve evidence
of insurability.
DEATH BENEFITS AND POLICY VALUES
- --------------------------------------------------------------------------------
VALUES UNDER THE CERTIFICATE
CASH SURRENDER VALUE -- As with traditional life insurance, each Certificate
will have a Cash Surrender Value. The Cash Surrender Value is equal to the Cash
Value, less Debt, less any charges accrued but not deducted. There is no minimum
guaranteed Cash Surrender Value. The Cash Value equals the value in the
Investment Divisions plus the Loan Account Value.
INVESTMENT VALUE -- Each Certificate will also have an Investment Value. The
Investment Value of a Certificate changes on a daily basis and will be computed
on each Valuation Day. The Investment Value will vary to reflect the investment
experience of the Investment Divisions, Monthly Deduction Amounts and any
amounts transferred to the Loan Account to secure a Loan.
The Investment Value of a particular Certificate is related to the net asset
value of the Portfolios associated with the Investment Divisions to which Net
Premiums on the Certificate have been allocated. The total Investment Value in
the Investment Divisions on any Valuation Day is calculated by multiplying the
number of Accumulation Units in each Investment Division as of the Valuation Day
by the current Accumulation Unit value of that Investment Division and then
summing the result for all the Investment Divisions. The Investment Value equals
the sum of the values of the assets in the Investment Divisions. See
"Premiums -- Accumulation Unit Values."
DEATH BENEFITS
As long as the Certificate remains in force, the Certificate provides for the
payment of the Death Proceeds to the named beneficiary when the Insured under
the Certificate dies. The Death Proceeds payable to the beneficiary equal the
death benefit less any Debt outstanding under the Certificate plus any rider
benefits payable. The death benefit depends on the death benefit option you
select and is determined as of the date of the death of the Insured.
MINIMUM DEATH BENEFIT TESTING PROCEDURES -- Section 7702 of the Code defines
alternative testing procedures, the guideline premium test ("GPT") and the cash
value accumulation test ("CVAT") in order to meet the definition of life
insurance under the Code. See "Taxes -- Income Taxation of Certificate
Benefits." Each Certificate must qualify under either the GPT or the CVAT. Prior
to issue, you choose the procedure under which a Certificate will qualify. Once
you choose either the GPT or the CVAT to test a Certificate, it cannot be
changed while the Certificate is in force.
Under both testing procedures, there is a minimum death benefit required at all
times equal to the Variable Insurance Amount. This is necessary in order for the
Certificate to meet the current federal tax definition of life insurance, which
places limitations on the amount of premiums that may be paid and the Cash
Values that can accumulate relative to the death benefit. The factors used to
determine the Variable Insurance Amount depend on the testing procedure chosen
and are in the Certificate.
Under the GPT, there is also a maximum amount of premium that may be paid with
respect to each Certificate.
Use of the CVAT can be advantageous if you intend to maximize the total amount
of premiums paid under a Certificate. An offsetting consideration, however, is
that the factors we use to determine the Variable Insurance Amount are higher
under the CVAT, which can result in a higher death benefit over time and a
higher total cost of insurance.
DEATH BENEFITS OPTIONS -- Regardless of the minimum death benefit testing
procedure chosen, there are two death benefit options: Death Benefit Option A
and Death Benefit Option B.
- - Under Death Benefit Option A, the death benefit is the greater of (a) the Face
Amount and (b) the Variable Insurance Amount.
<PAGE>
12 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
- - Under Death Benefit Option B, the death benefit is the greater of (a) the Face
Amount plus the Cash Value and (b) the Variable Insurance Amount.
Regardless of which death benefit option you select, the maximum amount payable
will be the Death Proceeds.
OPTION CHANGE -- While the Certificate is in force, you may change the death
benefit option you selected. You must make your request to change your death
benefit option in writing and during the lifetime of the Insured.
CHANGE FROM OPTION A TO OPTION B -- If the change is from Death Benefit Option A
to Death Benefit Option B, the Insured must provide us with satisfactory
evidence of insurability. The Face Amount after the change will be equal to the
Face Amount before the change, less the Cash Value on the effective date of the
change.
CHANGE FROM OPTION B TO OPTION A -- If the change is from Death Benefit Option B
to Death Benefit Option A, the Face Amount after the change will be equal to the
Face Amount before the change plus the Cash Value on the effective date of
change.
Any change in the selection of a death benefit option will become effective at
the beginning of the Coverage Month following our approval of the change. We
will notify you when we have made the change.
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.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
BENEFITS AT MATURITY -- If the Insured is living on the coverage maturity date
("Maturity Date"), we will pay you the Cash Surrender Value on the date you
surrender the Certificate. However, on the Maturity Date, the Certificate will
terminate and we will have no further obligations under the Certificate.
MAKING WITHDRAWALS FROM THE CERTIFICATE
- --------------------------------------------------------------------------------
SURRENDER
At any time prior to the Maturity Date, provided the Certificate is in effect
and has a Cash Surrender Value, you may choose, without the consent of the
beneficiary (provided the designation of the beneficiary is not irrevocable) to
surrender the Certificate and receive the full Cash Surrender Value from us. To
surrender a Certificate, you must submit a written request for surrender to us.
We will determine the Cash Surrender Value as of the Valuation Day we receive
the request, in a written form satisfactory to us, at our Customer Service
Center, or the date that you request, whichever is later.
The Cash Surrender Value is the net amount available upon surrender of the
Certificate and equals the Cash Value, minus Debt, minus any charges accrued but
not yet deducted. We will terminate the Certificate on the date of receipt of
the written request, or the date you request the surrender to be effective,
whichever is later.
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. This charge is
the lesser of:
- - 2% of the amount withdrawn; and
- - $25.00.
A partial withdrawal will reduce the Cash Surrender Value, Cash Value and
Investment Value. Any partial withdrawal will permanently affect the Cash
Surrender Value and may permanently affect the death benefit payable. If Death
Benefit Option A is in effect, we reduce the Face Amount by the amount of the
partial withdrawal. Unless specified otherwise, we will deduct partial
withdrawals on a Pro Rata Basis from the Investment Divisions. A Pro Rata Basis
is an allocation method based on the proportion of the Investment Value in each
Investment Division. You must submit requests for partial withdrawals to us in
writing. The effective date of a partial withdrawal will be the Valuation Day
closest to the date that we receive the request, in writing, at our Customer
Service Center. If your Certificate is deemed to be a modified endowment
contract, a 10% penalty tax may be imposed on income distributed before the
insured attains age 59 1/2. See "Taxes -- Modified Endowment Contracts."
TRANSFERS AMONG INVESTMENT DIVISIONS
- --------------------------------------------------------------------------------
AMOUNT AND FREQUENCY OF TRANSFERS
Upon request and as long as the Certificate is in effect, you may transfer
amounts among the Investment Divisions up to twelve (12) times per Coverage Year
without charge. Transfers in excess of twelve (12) per Coverage Year will be
subject to a charge of $50 per transfer deducted from the amount of the
transfer. You must make transfer requests in writing on a form that we approve
or by telephone in accordance with established procedures. Our rules then in
effect will limit the amounts that you may transfer. The amounts that you
transfer must be in whole percentages of 5% or more, unless otherwise agreed to
by us. Currently, the minimum value of Accumulation Units that you may transfer
from one Investment Division to another is the lesser of:
- - $500; and
- - the total value of the Accumulation Units in the Investment Division.
The value of the remaining Accumulation Units in the Investment Division must
equal at least $500. If, after an ordered transfer, the value of the remaining
Accumulation Units in an Investment Division would be less than $500, we will
transfer the entire remaining amount.
Currently there are no restrictions on transfers other than those described in
this Prospectus. We reserve the right in the future to impose additional
restrictions on transfers.
TRANSFERS TO OR FROM INVESTMENT DIVISIONS
In the event of a transfer from an Investment Division, we will reduce the
number of Accumulation Units that we credit to that Investment Division. We will
determine the reduction by dividing:
- - the amount transferred by,
<PAGE>
14 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
- - the Accumulation Unit value for that Investment Division on the Valuation Day
we receive your written request for transfer.
In the event of a transfer to an Investment Division, we will increase the
number of Accumulation Units credited. The increase will equal:
- - the amount transferred divided by,
- - the Accumulation Unit value for that Investment Division determined on the
Valuation Day we receive your written request.
ASSET REBALANCING
Subject to our current rules, you may authorize us to automatically reallocate
Investment Value periodically in order to maintain a particular percentage
allocation among the Investment Divisions that you have selected. This
reallocation is known as Asset Rebalancing. The Investment Value held in each
Investment Division will increase or decrease in value at different rates during
the relevant period. Asset Rebalancing is intended to reallocate Investment
Value from those Investment Divisions that have increased in value to those that
have decreased in value.
To elect Asset Rebalancing, we must receive a written request from you. If you
elect Asset Rebalancing, you must include all Investment Value in the automatic
reallocation. The percentages that you select under Asset Rebalancing 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. There is
otherwise no additional charge for Asset Rebalancing. 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
Hartford 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 Hartford 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. There is
otherwise no additional charge for Dollar Cost Averaging.
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
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 15
- --------------------------------------------------------------------------------
("NYSE") (generally 4:00 p.m. Eastern Time) on that same day, except as
otherwise indicated in this Prospectus. We will process requests that we receive
after the close of the NYSE as of the next Valuation Day.
LOANS
- --------------------------------------------------------------------------------
As long as the Certificate is in effect, you may obtain without the consent of
the beneficiary (provided the designation of beneficiary is not irrevocable), a
cash Loan from us. The maximum Loan amount is equal to the sum of the Cash
Surrender Value plus outstanding Debt, multiplied by .90, minus outstanding
Debt.
We will transfer the amount of each Loan on a Pro Rata Basis from each of the
Investment Divisions (unless you specify otherwise) to the Loan Account. We use
the Loan Account to ensure that any outstanding Debt remains fully secured by
the Investment Value.
LOAN INTEREST
Interest will accrue daily on outstanding Debt at the adjustable loan interest
rate indicated in the Certificate. We will transfer the difference between the
value of the Loan Account and any outstanding Debt from the Investment Divisions
to the Loan Account on each Certificate Anniversary. Interest payments are due
as shown in the Certificate. If you do not pay interest within five (5) days of
its due date, we will add it to the amount of the Loan as of its due date.
The maximum adjustable loan interest rate we may charge for Loans is the greater
of:
- - 5%; and
- - the Published Monthly Average for the calendar month two (2) months prior to
the date on which we determine the adjustable loan interest rate.
The Published Monthly Average means the "Moody's Corporate Bond Yield Average --
Monthly Average Corporate" as published by Moody's Investors Service, Inc. or
any successor to that service. If that monthly average is no longer published, a
substitute average will be used.
CREDITED INTEREST
We will credit interest on amounts in the Loan Account for Coverage Years 1
through 10 at a rate equal to the adjustable loan interest rate, minus 1%. We
will credit interest on amounts in the Loan Account for Coverage Years 11 and
later at a rate equal to the adjustable loan interest rate, minus .20%.
LOAN REPAYMENTS
You can repay any part of or the entire Loan at any time. We will allocate the
amount of the Loan repayment to your chosen Investment Divisions on a Pro Rata
Basis, determined as of the date of the Loan repayment. Unless specified
otherwise, we will treat any additional premium payments that we receive during
the period when a Loan is outstanding as Loan repayments.
TERMINATION DUE TO EXCESSIVE DEBT
If total outstanding Debt equals or exceeds the Cash Surrender Value, the
Certificate will terminate thirty-one (31) calendar days after we have mailed
notice to your last known address and that of any assignees of record. If you do
not make sufficient Loan repayment by the end of this 31-day period, the
Certificate will terminate without value.
EFFECT OF LOANS ON INVESTMENT VALUE
A Loan, whether or not repaid, will have a permanent effect on the Investment
Value because the investment results of each Investment Division will apply only
to the amount remaining in such Investment Divisions. The longer a Loan is
outstanding, the greater the effect is likely to be. The effect could be
favorable or unfavorable. If the Investment Divisions earn more than the annual
interest rate for Funds held in the Loan Account, your Investment Value will not
increase as rapidly as it would have had no Loan been made. If the Investment
Divisions earn less than the Loan Account, your Investment Value will be greater
than it would have been had no Loan been made. Also, if not repaid, the
aggregate amount of outstanding Debt will reduce the Death Proceeds and Cash
Surrender Value.
LAPSE AND REINSTATEMENT
- --------------------------------------------------------------------------------
LAPSE AND GRACE PERIOD
We provide a sixty-one (61) calendar day grace period, from the date we mail you
notice that the Cash Surrender Value is insufficient to pay the charges due
under the Certificate. Unless you have given us written notice of termination in
advance of the date of termination of the Certificate, insurance will continue
in force during this period. You will be liable to us for all unpaid charges due
under the Certificate for the period that the Certificate remains in force.
In the event that total outstanding Debt equals or exceeds the Cash Surrender
Value, the Certificate will terminate thirty-one (31) calendar days after we
have mailed notice to your last known address and that of any assignees of
record. If you do not make sufficient Loan repayment by the end of this 31-day
period, the Certificate will end without value.
<PAGE>
16 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
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.
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 employer or we may terminate participation in the policy. The party
initiating the termination must provide notice of such termination to each owner
of record, at his or her last known address, at least fifteen (15) days prior to
the date of termination. In the event of such termination, we will not accept
any new enrollment forms for new Insureds on or after the date that we receive
or send notice of discontinuance, whichever is applicable. In addition, we will
not issue any new Certificates. If you discontinue premium payments, we will
continue insurance coverage under the Certificate as long as the Cash Surrender
Value is sufficient to cover the charges due. We will not continue the coverage
under the Certificate beyond attained age 100. Attained age means the Insured's
age on the birthday nearest to the Coverage Date plus the period since the
Coverage Date. In addition, we will not continue any optional benefit rider
beyond the Certificate's date of termination. If the policy is discontinued or
amended to discontinue the eligible class to which an Insured belongs (and if
the coverage on the Insured is not transferred to another insurance carrier),
any Certificate then in effect will remain in force under the discontinued
policy, provided you have not canceled or surrendered it, subject to our
qualifications then in effect. You will then pay Certificate premiums directly
to us.
CONTRACT LIMITATIONS
- --------------------------------------------------------------------------------
PARTIAL WITHDRAWALS
We limit you to twelve (12) partial withdrawals per Coverage Year.
TRANSFERS OF ACCOUNT VALUE
We reserve the right to limit the size of transfers and remaining balances and
to limit the number and frequency of transfers among the Investment Divisions.
FACE AMOUNT INCREASES OR DECREASES
We reserve the right to limit the number of Face Amount increases or decreases
made under the Certificate to no more than one (1) in any twelve (12) month
period.
VALUATION OF PAYMENTS AND TRANSFERS
We value the Certificate on every Valuation Day. We will generally pay Death
Proceeds, Cash Surrender Values, partial withdrawals, and Loan amounts
attributable to the Investment Divisions within seven (7) calendar days after we
receive all the information needed to process the payment unless the New York
Stock Exchange is closed for some reason other than a regular holiday or
Weekend, trading is restricted by the Securities and Exchange Commission ("SEC")
or the SEC declares that an emergency exists.
DEFERRAL OF PAYMENTS
We may defer payment of any Cash Surrender Values, withdrawals and loan amounts
that are not attributable to the Investment Divisions for up to six (6) months
from the date of the request. If we defer payment for more than thirty (30)
days, we will pay you interest.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 17
- --------------------------------------------------------------------------------
CHANGES TO CONTRACT OR SEPARATE ACCOUNT
MODIFICATION OF POLICY
The only way we may modify the policy is by a written agreement signed by our
President, or one of our Vice Presidents, Secretaries, or Assistant Secretaries.
SUBSTITUTION OF FUNDS
We reserve the right to substitute the shares of any other registered investment
company for the shares of any Fund already purchased or to be purchased in the
future by the Separate Account provided that the substitution has been approved
by the Securities and Exchange Commission.
CHANGE IN OPERATION OF
THE SEPARATE ACCOUNT
We may modify the operation of the Separate Account to the extent permitted by
law, including deregistration under the securities laws.
SEPARATE ACCOUNT TAXES
Currently, we do not make a charge to the Separate Account for federal, state
and local taxes that may be allocable to the Separate Account. In the future, we
may begin to charge the Separate Account for federal, state and local taxes if
the applicable federal, state or local tax laws that impose tax on us and/or the
Separate Account change. We may make charges for other taxes that are imposed on
the Separate Account.
SUPPLEMENTAL BENEFITS
- --------------------------------------------------------------------------------
The following supplemental benefit may be included in a Certificate, subject to
our current restrictions, limitations and state approval.
MATURITY DATE EXTENSION RIDER
We will extend the Maturity Date (the date on which the Certificate will
mature), to the date of death of the Insured. Certain death benefit and premium
restrictions apply. See "Taxes -- Income Taxation of Certificate Benefits."
OTHER MATTERS
- --------------------------------------------------------------------------------
REDUCED CHARGES FOR ELIGIBLE GROUPS
We may reduce certain of the charges and deductions described above for Policies
issued in connection with a specific plan, in accordance with our current
internal policies as of the date we approve the application for a policy. To
qualify for such a reduction, a plan must satisfy certain criteria, e.g., as to
size of the plan, expected number of participants and anticipated premium
payment from the plan. Generally, the sales contacts and effort, administrative
costs and mortality cost per policy vary, based on such factors as the size of
the plan, the purposes for which policies are purchased and certain
characteristics of the plan's members. The amount of reduction and the criteria
for qualification will be reflected in the reduced sales effort and
administrative costs resulting from, and the different mortality experience
expected as a result of, sales to qualifying plans. We may modify, from time to
time on a uniform basis, both the amounts of reductions and the criteria for
qualification. Reductions in these charges will not be unfairly discriminatory
against any person, including the affected policy owners invested in the
Separate Account.
OUR RIGHTS
We reserve the right to take certain actions in connection with our operations
and the operations of the Separate Account. We will take these actions in
accordance with applicable laws (including obtaining any required approval of
the Securities and Exchange Commission). If necessary, we will seek your
approval.
Specifically, we reserve the right to:
- - Add or remove any Investment Division;
- - Create new separate accounts;
- - Combine the Separate Account with one or more other separate accounts;
- - Operate the Separate Account as a management investment company under the 1940
Act or in any other form permitted by law;
- - Deregister the Separate Account under the 1940 Act;
- - Manage the Separate Account under the direction of a committee or discharge
such committee at any time;
- - Transfer the assets of the Separate Account to one or more other separate
accounts; and
- - Restrict or eliminate any of your voting rights or of any other persons who
have voting rights as to the Separate Account.
We also reserve the right to change the name of the Separate Account.
<PAGE>
18 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
LIMIT ON RIGHT TO CONTEST
We may not contest the validity of the Certificate after it has been in effect
during the Insured's lifetime for two (2) years from the Issue Date. If we
reinstate the Certificate, the 2-year period is measured from the date of
reinstatement. Any increase in the Face Amount as a result of a premium payment
is contestable for 2 years from its effective date. In addition, if the Insured
commits suicide in the 2-year period, or such period as specified in state law,
the death benefit payable will be limited to the premiums paid less any
outstanding Debt and partial withdrawals.
MISSTATEMENT AS TO AGE OR SEX
If the age or sex of the Insured is incorrectly stated, we will appropriately
adjust the amount of all benefits payable, as specified in the Certificate.
ASSIGNMENT
The Certificate may be assigned as collateral for a loan or other obligation. We
are not responsible for any payment made or action taken before receipt of
written notice of such assignment. You must file proof of interest with any
claim under a collateral assignment.
DIVIDENDS
No dividends will be paid under the Certificates.
TAXES
- --------------------------------------------------------------------------------
GENERAL
Since federal tax law is complex, the tax consequences of purchasing this policy
will vary depending on your situation. You may need tax or legal advice to help
you determine whether purchasing this policy is right for you.
Our general discussion of the tax treatment of this policy is based on our
understanding of federal income tax laws as they are currently interpreted. A
detailed description of all federal income tax consequences regarding the
purchase of this policy cannot be made in the prospectus. We also do not discuss
state, municipal or other tax laws that may apply to this policy. For detailed
information, you should consult with a qualified tax adviser familiar with your
situation.
TAXATION OF HARTFORD AND
THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford, which is taxed as a life
insurance company under Part 1 of Subchapter L of Chapter 1 of the Internal
Revenue Code ("Code"). Accordingly, the Separate Account will not be taxed as a
"regulated investment company" under Subchapter M of the Code. Investment income
and realized capital gains on the assets of the Separate Account (the underlying
Investment Divisions) are reinvested and are taken into account in determining
the value of the Accumulation Units (see "Death Benefits and Policy Values --
Values Under the Certificate"). As a result, such investment income and realized
capital gains are automatically applied to increase reserves under the
Certificate.
Hartford does not expect to incur any Federal income tax on the earnings or
realized capital gains attributable to the Separate Account. Based upon these
expectations, no charge is currently being made to the Separate Account for
Federal income taxes. If Hartford incurs income taxes attributable to the
Separate Account or determines that such taxes will be incurred, it may assess a
charge for taxes against the Separate Account.
INCOME TAXATION OF CERTIFICATE BENEFITS
For Federal income tax purposes, the Certificates should be treated as life
insurance policies under Section 7702 of the Code. The death benefit under a
life insurance policy is excluded from the gross income of the beneficiary.
Also, a life insurance policy owner is not taxed on increments in the policy
value until the policy is partially or completely surrendered. Section 7702
limits the amount of premiums that may be invested in a policy that is treated
as life insurance. Hartford intends to monitor premium levels to assure
compliance with the Section 7702 standards.
During the first fifteen policy years, an "income first" rule generally applies
to any distribution of cash that is required under Code Section 7702 because of
a reduction in benefits under the Certificate.
Hartford also believes that any Loan received under a Certificate will be
treated as Debt of the owner, and that no part of any Loan under a Certificate
will constitute income to the owner. A surrender or assignment of the
Certificate may have tax consequences depending upon the circumstances. Owners
should consult qualified tax advisers concerning the effect of such changes.
Federal, state, and local estate tax, inheritance, and other tax consequences of
ownership or receipt of Certificate proceeds depend on the circumstances of each
owner or beneficiary.
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.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 19
- --------------------------------------------------------------------------------
MODIFIED ENDOWMENT CONTRACTS
Code Section 7702A applies an additional test, the "seven-pay" test, to life
insurance contracts. A modified endowment contract is a life insurance policy
which satisfies the Section 7702 definition of life insurance but fails the
seven-pay test of Section 7702A. A policy fails the seven-pay test if the
accumulated amount paid into the Certificate at any time during the first seven
Coverage Years exceeds the sum of the net level premiums that would have been
paid up to that point if the Certificate provided for paid-up future benefits
after the payment of seven level annual premiums. Computational rules for the
seven-pay test are described in Section 7702A(c).
A policy that is classified as a modified endowment contract is eligible for
certain aspects of the beneficial tax treatment accorded to life insurance. That
is, the death benefit is excluded from income and increments in value are not
subject to current taxation. However, withdrawals and loans from a modified
endowment contract are treated first as income, then as a recovery of basis.
Taxable withdrawals are subject to a 10% 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
<PAGE>
20 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
cause the investor, rather than the insurance company, to be treated as the
owner of the assets in the account." The explanation further indicates that "the
temporary regulations provide that in appropriate cases a segregated asset
account may include multiple sub-accounts, but do not specify the extent to
which policyholders may direct their investments to particular sub-accounts
without being treated as the owners of the underlying assets. Guidance on this
and other issues will be provided in regulations or revenue rulings under
Section 817(d), relating to the definition of variable policy."
The final regulations issued under Section 817 did not provide guidance
regarding investor control, and as of the date of this prospectus, guidance has
yet to be issued. We do not know if additional guidance will be issued. If
guidance is issued, we do not know if it will have a retroactive effect.
Due to the lack of specific guidance on investor control, there is some
uncertainty about when a policy owner is considered the owner of the assets for
tax purposes. We reserve the right to modify the policy, as necessary, to
prevent you from being considered the owner of assets in the separate account.
TAX DEFERRAL DURING ACCUMULATION PERIOD
Under existing provisions of the Code, except as described below, any increase
in an owner's Investment Value is generally not taxable to the Policy Owner
unless amounts are received (or are deemed to be received) under the Policy
prior to the Insured's death. If the Policy is surrendered or matures, the
amount received will be includable in the Policy Owner's income to the extent
that it exceeds the Policy Owner's "investment in the contract." (If there is
any debt at the time of a surrender, then such debt will be treated as an amount
distributed to the owner.) The "investment in the contract" is the aggregate
amount of premium payments and other consideration paid for the Policy, less the
aggregate amount received previously under the Policy to the extent such amounts
received were excluded from gross income. Whether partial withdrawals (or other
such amounts deemed to be distributed) from the Policy constitute income to the
Policy Owner depends, in part, upon whether the Policy is considered a modified
endowment policy for Federal income tax purposes.
FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the owner, such
amounts will be subject to Federal income tax withholding and reporting,
pursuant to Section 3405 of the Internal Revenue Code.
OTHER TAX CONSIDERATIONS
Qualified tax advisers should be consulted concerning the estate and gift tax
consequences of Certificate ownership and distributions under federal, state and
local law.
PERFORMANCE RELATED INFORMATION
- --------------------------------------------------------------------------------
The Separate Account may advertise certain performance related information
concerning its Investment Divisions. Performance information about an Investment
Division is based on the Investment Division's past performance only and is no
indication of future performance.
Each Investment Division may include total return in advertisements, sales
literature, and other promotional materials. When an Investment Division
advertises its total return, it will usually be calculated for one year, three
years, five years, and ten years or some other relevant periods if the
Investment Division has not been in existence for at least ten years. Total
return may also be calculated for the most recent fiscal quarter and for the
period since underlying fund inception. Total return is measured by comparing
the value of an investment in the Investment Division at the beginning of the
relevant period to the value of the investment at the end of the period.
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 Hartford 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.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 21
- --------------------------------------------------------------------------------
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>
22 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 23
- --------------------------------------------------------------------------------
WHERE YOU CAN FIND MORE INFORMATION
You can call your representative with questions or write to us at:
International Corporate Marketing Group
Attn: Registered Products
100 Campus Drive, Suite 250
Florham Park, NJ 07932
The Statement of Additional Information, which is attached to this prospectus,
contains more information about this life insurance policy. Like this
prospectus, it is filed with the Securities and Exchange Commission. You should
read the Statement of Additional Information because you are bound by the terms
contained in it.
We file other information with the Securities and Exchange Commission. You may
read and copy any document we file at the SEC's public reference room in
Washington, DC 20549-6009. Please call the SEC at 1-800-SEC-0330 for further
information. Our SEC filings are also available to the public at the SEC's web
site at http://www.sec.gov.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE
OMNISOURCE II
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, New Jersey
07932.
DATE OF PROSPECTUS: JUNE 5, 2000
DATE OF STATEMENT OF ADDITIONAL INFORMATION: JUNE 5, 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 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 and Accident Insurance
Company, which is controlled by Hartford Life, Inc., which is controlled by
Hartford Accident and 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 (1989-1997); Director of Broker Dealer
Sales-ILAD (1989-1992), Hartford; Senior Vice President
(1997-Present); Vice President (1989-1997); Director of
Broker Dealer Sales-ILAD (1989-1991), Hartford Life and
Accident Insurance Company.
Timothy M. Fitch Vice President, 1995 Assistant Vice President (1992-1995), Hartford; Vice
President (1995-Present); Actuary (1994-Present);
Assistant Vice President (1992-1995), Hartford Life and
Accident Insurance Company.
Mary Jane B. Fortin Vice President & Chief Vice President & Chief Accounting Officer, (1998-Present),
Accounting Officer, 1998 Hartford Life & Annuity 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.
Lynda Godkin Senior Vice President, 1997 Associate General Counsel (1995-1996); Assistant General
General Counsel, 1996 Counsel and Secretary (1994-1995); Counsel (1990-1994),
Corporate Secretary, 1996 Hartford; Director (1997-Present); Senior Vice President
Director, 1997 (1997-Present); 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; Vice President and General
Counsel (1997-Present), Hartford Life, Inc.
</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>
- -----------------------------------------------------------------------------------------------------------------
Lois W. Grady Senior Vice President, 1998 Vice President (1993-1998); Assistant Vice President
(1987-1993), Hartford; Senior Vice President, 1998); Vice
President (1993-1997); Assistant Vice President
(1987-1993), Hartford Life and Accident Insurance Company.
Stephen T. Joyce Senior Vice President, 1999 Vice President (1997-1999), Assistant Vice President
(1994-1997), Hartford; Assistant Vice President
(1994-1997), Hartford Life and Accident Insurance Company;
Vice President (1997-1999), Assistant Vice President
(1994-1997), Hartford Life and Annuity 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, Senior Vice President,
(1998-Present); Vice President, (1995-1998); Regional Vice
President (1991-1994), Hartford; Vice President
(1994-1997), Hartford Life and Accident 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 (1990-1994), Hartford; Senior Vice
President (1997-Present); Chief Actuary (1995-Present);
Vice President (1993-1997); Actuary (1990-1995), Hartford
Life and Accident Insurance Company; Vice President and
Chief Actuary (1997-Present), Hartford Life, Inc.
Donald A. Salama Vice President, 1997 Vice President (1997-Present), Hartford Life and Accident
Insurance Company; Principal and Director, Institutional
Sales (1995-1998), The Vanguard Group; Senior Vice
President (1994-1995), Mercantile Bancorporation; Vice
President (1988-1994), Bankers Trust Company.
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), Hartford; Director (1998-Present);
Investment Officer, 1997 Senior Vice President (1997-Present), Hartford Life and
Director, 1998 Accident Insurance Company; Vice President, Investment
Strategy (1997-Present), Hartford Life, Inc.; Vice
President, Investment Strategy & Policy (1991-1996), Aetna
Life and Casualty.
</TABLE>
* Denotes date of election to Board of Directors of Hartford.
** Affiliated Company of The Hartford Financial Services Group, Inc.
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 5
- --------------------------------------------------------------------------------
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 report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report. Reference is made to 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.
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. A sales representative may be required to return all or
a portion of the commissions paid if a Certificate terminates prior to the
Certificate's second Certificate Anniversary.
Broker-dealers or financial institutions are compensated according to a schedule
set forth HESCO and any applicable rules or regulations for variable insurance
compensation. Compensation is generally based on premium payments. This
compensation is usually paid from the sales charges described in the Prospectus.
In addition, a broker-dealer or financial institution may also receive
additional compensation for, among other things, training, marketing or other
services provided. HESCO, its affiliates or Hartford may also make compensation
arrangements with certain broker-dealers or other financial institutions based
on total sales by the broker-dealer or financial institution of insurance
products. These payments, which may be different for broker-dealers or financial
institutions, will be made by HESCO, its affiliates or Hartford out of their
assets and will not effect the amounts paid by the policy owners or contract
owners to purchase, hold or surrender variable insurance products.
The following table shows officers and directors of HESCO:
<TABLE>
<CAPTION>
NAME POSITIONS AND OFFICES
<S> <C>
- -----------------------------------------------------------------
Lowndes A. Smith President and Chief Executive
Officer
- -----------------------------------------------------------------
Thomas M. Marra Executive Vice President, Director
- -----------------------------------------------------------------
Robert A. Kerzner Executive Vice President, Director
- -----------------------------------------------------------------
Peter W. Cummins Senior Vice President
- -----------------------------------------------------------------
Lynda Godkin Senior Vice President, General
Counsel and Corporate Secretary,
Director
- -----------------------------------------------------------------
J. Richard Garrett Vice President
- -----------------------------------------------------------------
Donald A. Salama Vice President
- -----------------------------------------------------------------
David T. Foy Treasurer
- -----------------------------------------------------------------
George R. Jay Controller
- -----------------------------------------------------------------
</TABLE>
<PAGE>
6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
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 may be reduced for certain sales of the Certificates under
circumstances which result in a saving of such sales and distribution expenses.
To qualify for this reduction, a plan must satisfy certain criteria as to, for
example, the expected number of owners and the anticipated Face Amount of all
Certificates under the plan. Generally, the sales contacts and effort and
administrative costs per Certificate vary based on such factors as the size of
the plan, the purpose for which the Certificates are purchased and certain
characteristics of the plan's members. The amount of reduction and the criteria
for qualification are related to the reduced sales effort and administrative
costs resulting from sales to qualifying plans. From time to time, we may modify
on a uniform basis, both the amounts of reductions and the criteria for
qualification. Reductions in these charges will not be unfairly discriminatory
against any person, including the affected Certificate Owners invested in ICMG
Registered Variable Life Separate Account One.
UNDERWRITING PROCEDURES -- To purchase a Certificate you must submit an
enrollment form to us. Within limits, you may choose the initial Premium and the
initial Face Amount. Certificates generally will be issued only on the lives of
insureds ages 79 and under who supply evidence of insurability satisfactory to
us. Acceptance is subject to our underwriting rules and we reserve the right to
reject an enrollment form for any reason. No change in the terms or conditions
of a Certificate will be made without your consent.
The cost of insurance charge is to cover our anticipated mortality costs. We use
various underwriting procedures, including medical underwriting procedures,
depending on the characteristics of the group to which the policies are issued.
The current cost of insurance rates for standard risks may be equal to or less
than the 1980 Commissioners Standard Ordinary Mortality Table. Substandard risks
will be charged a higher cost of insurance rate that will not exceed rates based
on a multiple of the 1980 Commissioners Standard Ordinary Mortality Table. The
multiple will be based on the Insured's risk class. The use of simplified
underwriting and guaranteed issue procedures may result in the cost of insurance
charges being higher for some individuals than if medical underwriting
procedures were used.
Cost of insurance rates are based on the age, sex (except where unisex rates
apply), and rate class of the Insured and group mortality characteristics and
the particular characteristics (such as the rate class structure) under the
policy that are agreed to by Hartford and the employer. The actual monthly cost
of insurance rates will be based on our expectations as to future experience. We
will determine the cost of insurance rate at the start of each Coverage Year.
Any changes in the cost of insurance rate will be made uniformly for all
Insureds in the same risk class.
The rate class of an Insured affects the cost of insurance rate. Hartford and
the employer will agree to the number of classes and characteristics of each
class. The classes may vary by smokers and nonsmokers, active and retired
status, and/or any other nondiscriminatory classes agreed to by the employer.
Where smoker and non-smoker divisions are provided, an Insured who is in the
nonsmoker division of a rate class will have a lower cost of insurance than an
Insured in the smoker division of the same rate class, even if each Insured has
an identical Certificate.
Because the Cash Value and the Death Benefit Amount under a Certificate may vary
from month to month, the cost of insurance charge may also vary on each
Processing Date.
INCREASES IN FACE AMOUNT -- At any time after purchasing a Certificate, You may
request In Writing to change the Face Amount. 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>
STATEMENT OF ADDITIONAL INFORMATION 7
- --------------------------------------------------------------------------------
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 0.53%. The 0.53% figure is based on an
average of the current management fees and expenses of the available Portfolios,
taking into account any applicable expense caps or reimbursement arrangements.
Actual fees and expenses of the Portfolios associated with a Certificate may be
more or less than 0.53%, 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>
8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
INCREASING DEATH BENEFIT OPTION
ISSUE AGE 45 MALE MEDICAL NON-SMOKER
$6,000 PREMIUM PAID FOR 30 YEARS
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.53% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
ACCUMULATED CASH CASH
END OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
POLICY YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
1 6,300 5,080 5,080 255,101 3,971 3,971 254,069
2 12,915 10,016 10,016 260,049 7,818 7,818 257,926
3 19,861 14,802 14,802 264,848 11,534 11,534 261,653
4 27,154 19,468 19,468 269,524 15,115 15,115 265,245
5 34,812 24,025 24,025 274,090 18,549 18,549 268,691
6 42,853 28,622 28,622 278,684 21,830 21,830 271,985
7 51,296 33,135 33,135 283,204 24,938 24,938 275,107
8 60,161 37,680 37,680 287,756 27,974 27,974 278,159
9 69,469 42,126 42,126 292,210 30,798 30,798 281,001
10 79,242 46,461 46,461 296,554 33,387 33,387 283,609
11 89,504 50,658 50,658 300,763 35,726 35,726 285,969
12 100,279 54,699 54,699 304,817 37,799 37,799 288,064
13 111,593 58,557 58,557 308,690 39,597 39,597 289,885
14 123,473 62,226 62,226 312,374 41,104 41,104 291,416
15 135,947 65,700 65,700 315,865 42,302 42,302 292,639
16 149,044 68,884 68,884 319,073 43,161 43,161 293,527
17 162,796 71,859 71,859 322,066 43,645 43,645 294,042
18 177,236 74,610 74,610 324,835 43,709 43,709 294,141
19 192,398 77,123 77,123 327,368 43,301 43,301 293,772
20 208,318 79,381 79,381 329,647 42,369 42,369 292,884
25 300,684 86,018 86,018 336,421 28,411 28,411 279,194
30 418,569 82,144 82,144 332,748 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 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 6.00% (5.47% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
ACCUMULATED CASH CASH
END OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
POLICY YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
1 6,300 5,394 5,394 255,389 4,246 4,246 254,323
2 12,915 10,961 10,961 260,942 8,616 8,616 258,683
3 19,861 16,703 16,703 266,669 13,109 13,109 263,165
4 27,154 22,657 22,657 272,605 17,726 17,726 267,772
5 34,812 28,846 28,846 278,774 22,461 22,461 272,496
6 42,853 35,434 35,434 285,328 27,311 27,311 277,337
7 51,296 42,315 42,315 292,184 32,261 32,261 282,277
8 60,161 49,625 49,625 299,467 37,421 37,421 287,430
9 69,469 57,249 57,249 307,065 42,655 42,655 292,658
10 79,242 65,190 65,190 314,978 47,941 47,941 297,939
11 89,504 73,435 73,435 323,198 53,264 53,264 303,259
12 100,279 81,981 81,981 331,718 58,606 58,606 308,600
13 111,593 90,813 90,813 340,526 63,958 63,958 313,951
14 123,473 99,939 99,939 349,627 69,302 69,302 319,296
15 135,947 109,367 109,367 359,029 74,616 74,616 324,613
16 149,044 119,011 119,011 368,655 79,865 79,865 329,867
17 162,796 128,965 128,965 378,582 85,006 85,006 335,017
18 177,236 139,227 139,227 388,818 89,984 89,984 340,009
19 192,398 149,798 149,798 399,362 94,732 94,732 344,776
20 208,318 160,672 160,672 410,211 99,182 99,182 349,251
25 300,684 219,212 219,212 468,637 114,651 114,651 364,933
30 418,569 282,750 282,750 532,113 108,880 108,880 359,664
- -----------------------------------------------------------------------------------------------
</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>
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 12.00% (11.47% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
ACCUMULATED CASH CASH
END OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
POLICY YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
1 6,300 5,708 5,708 255,676 4,521 4,521 254,576
2 12,915 11,944 11,944 261,866 9,448 9,448 259,468
3 19,861 18,759 18,759 268,630 14,819 14,819 264,800
4 27,154 26,246 26,246 276,059 20,677 20,677 270,615
5 34,812 34,494 34,494 284,240 27,063 27,063 276,955
6 42,853 43,743 43,743 293,401 34,028 34,028 283,870
7 51,296 53,973 53,973 303,546 41,614 41,614 291,401
8 60,161 65,424 65,424 314,900 50,003 50,003 299,730
9 69,469 78,086 78,086 327,456 59,128 59,128 308,791
10 79,242 92,079 92,079 341,333 69,045 69,045 318,639
11 89,504 107,524 107,524 356,652 79,825 79,825 329,344
12 100,279 124,562 124,562 373,550 91,544 91,544 340,980
13 111,593 143,339 143,339 392,175 104,295 104,295 353,641
14 123,473 164,042 164,042 412,710 118,174 118,174 367,422
15 135,947 186,880 186,880 435,360 133,287 133,287 382,426
16 149,044 211,984 211,984 460,267 149,734 149,734 398,757
17 162,796 239,693 239,693 487,748 167,626 167,626 416,522
18 177,236 270,280 270,280 518,083 187,070 187,070 435,831
19 192,398 304,049 304,049 551,574 208,182 208,182 456,797
20 208,318 341,334 341,334 588,552 231,091 231,091 479,549
25 300,684 593,650 593,650 878,840 378,522 378,522 625,963
30 418,569 998,930 998,930 1,345,841 599,430 599,430 845,406
- -----------------------------------------------------------------------------------------------
</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 11
- --------------------------------------------------------------------------------
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% (-0.53% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
ACCUMULATED CASH CASH
END OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
POLICY YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
1 14,807 12,312 12,312 262,338 11,023 11,023 261,125
2 30,355 24,421 24,421 274,464 21,863 21,863 271,981
3 46,680 36,322 36,322 286,383 32,516 32,516 282,649
4 63,821 48,044 48,044 298,119 42,977 42,977 293,126
5 81,819 59,600 59,600 309,689 53,235 53,235 303,401
6 100,717 71,138 71,138 321,229 63,285 63,285 313,468
7 120,560 82,536 82,536 332,638 73,106 73,106 323,308
8 126,588 81,202 81,202 331,308 70,408 70,408 320,622
9 132,917 79,818 79,818 329,928 67,545 67,545 317,773
10 139,563 78,369 78,369 328,485 64,493 64,493 314,737
11 146,541 76,831 76,831 326,954 61,239 61,239 311,499
12 153,868 75,184 75,184 325,315 57,762 57,762 308,041
13 161,561 73,399 73,399 323,542 54,056 54,056 304,354
14 169,639 71,471 71,471 321,626 50,104 50,104 300,422
15 178,121 69,396 69,396 319,563 45,888 45,888 296,228
16 187,027 67,075 67,075 317,262 41,377 41,377 291,741
17 196,378 64,589 64,589 314,791 36,534 36,534 286,926
18 206,197 61,924 61,924 312,140 31,315 31,315 281,738
19 216,507 59,066 59,066 309,298 25,666 25,666 276,125
20 227,332 55,996 55,996 306,246 19,536 19,536 270,035
25 290,140 36,635 36,635 287,004 0 0 0
30 370,300 7,795 7,795 258,348 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>
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 6.00% (5.47% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
ACCUMULATED CASH CASH
END OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
POLICY YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
1 14,807 13,062 13,062 263,026 11,723 11,723 261,768
2 30,355 26,694 26,694 276,609 23,956 23,956 273,958
3 46,680 40,917 40,917 290,781 36,718 36,718 286,675
4 63,821 55,790 55,790 305,599 50,032 50,032 299,942
5 81,819 71,359 71,359 321,109 63,913 63,913 313,774
6 100,717 87,812 87,812 337,486 78,382 78,382 328,193
7 120,560 105,066 105,066 354,672 93,447 93,447 343,207
8 126,588 109,812 109,812 359,403 96,106 96,106 345,869
9 132,917 114,741 114,741 364,316 98,709 98,709 348,477
10 139,563 119,846 119,846 369,406 101,228 101,228 351,003
11 146,541 125,110 125,110 374,656 103,642 103,642 353,426
12 153,868 130,520 130,520 380,054 105,925 105,925 355,720
13 161,561 136,054 136,054 385,578 108,060 108,060 357,868
14 169,639 141,712 141,712 391,225 110,020 110,020 359,843
15 178,121 147,494 147,494 396,996 111,776 111,776 361,616
16 187,027 153,303 153,303 402,802 113,283 113,283 363,144
17 196,378 159,223 159,223 408,713 114,488 114,488 364,375
18 206,197 165,243 165,243 414,725 115,327 115,327 365,245
19 216,507 171,353 171,353 420,827 115,721 115,721 365,678
20 227,332 177,537 177,537 427,004 115,594 115,594 365,595
25 290,140 208,722 208,722 458,191 104,367 104,367 354,693
30 370,300 237,063 237,063 486,617 64,229 64,229 315,201
- -----------------------------------------------------------------------------------------------
</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 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 12.00% (11.47% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------------------------------------
ACCUMULATED CASH CASH
END OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
POLICY YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
1 14,807 13,813 13,813 263,710 12,423 12,423 262,409
2 30,355 29,057 29,057 278,829 26,134 26,134 276,007
3 46,680 45,884 45,884 295,517 41,267 41,267 291,015
4 63,821 64,500 64,500 313,977 57,975 57,975 307,586
5 81,819 85,117 85,117 334,419 76,422 76,422 325,881
6 100,717 108,114 108,114 357,208 96,794 96,794 346,084
7 120,560 133,625 133,625 382,499 119,279 119,279 368,385
8 126,588 147,820 147,820 396,574 130,343 130,343 379,366
9 132,917 163,533 163,533 412,154 142,441 142,441 391,374
10 139,563 180,917 180,917 429,392 155,663 155,663 404,497
11 146,541 200,131 200,131 448,446 170,116 170,116 418,842
12 153,868 221,357 221,357 469,496 185,918 185,918 434,527
13 161,561 244,790 244,790 492,737 203,208 203,208 451,686
14 169,639 270,669 270,669 518,402 222,133 222,133 470,468
15 178,121 299,224 299,224 558,015 242,854 242,854 491,032
16 187,027 330,593 330,593 601,036 265,536 265,536 513,543
17 196,378 365,156 365,156 647,475 290,358 290,358 538,178
18 206,197 403,226 403,226 697,663 317,507 317,507 565,123
19 216,507 445,153 445,153 751,964 347,183 347,183 594,579
20 227,332 491,314 491,314 810,756 379,613 379,613 626,883
25 290,140 801,408 801,408 1,186,405 589,352 589,352 873,193
30 370,300 1,298,437 1,298,437 1,749,362 902,502 902,502 1,217,122
- ------------------------------------------------------------------------------------
</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>
14 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 0.00% (-0.53% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
ACCUMULATED CASH CASH
END OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
POLICY YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
1 6,300 5,084 5,084 250,000 3,992 3,992 250,000
2 12,915 10,033 10,033 250,000 7,880 7,880 250,000
3 19,861 14,845 14,845 250,000 11,661 11,661 250,000
4 27,154 19,551 19,551 250,000 15,332 15,332 250,000
5 34,812 24,165 24,165 250,000 18,887 18,887 250,000
6 42,853 28,819 28,819 250,000 22,320 22,320 250,000
7 51,296 33,405 33,405 250,000 25,616 25,616 250,000
8 60,161 38,040 38,040 250,000 28,884 28,884 250,000
9 69,469 42,597 42,597 250,000 31,987 31,987 250,000
10 79,242 47,068 47,068 250,000 34,910 34,910 250,000
11 89,504 51,434 51,434 250,000 37,643 37,643 250,000
12 100,279 55,686 55,686 250,000 40,175 40,175 250,000
13 111,593 59,804 59,804 250,000 42,501 42,501 250,000
14 123,473 63,790 63,790 250,000 44,610 44,610 250,000
15 135,947 67,644 67,644 250,000 46,490 46,490 250,000
16 149,044 71,302 71,302 250,000 48,117 48,117 250,000
17 162,796 74,826 74,826 250,000 49,462 49,462 250,000
18 177,236 78,212 78,212 250,000 50,488 50,488 250,000
19 192,398 81,453 81,453 250,000 51,150 51,150 250,000
20 208,318 84,543 84,543 250,000 51,404 51,404 250,000
25 300,684 97,338 97,338 250,000 44,909 44,909 250,000
30 418,569 104,314 104,314 250,000 16,782 16,782 250,000
- -----------------------------------------------------------------------------------------------
</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>
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 6.00% (5.47% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
ACCUMULATED CASH CASH
END OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
POLICY YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
1 6,300 5,399 5,399 250,000 4,268 4,268 250,000
2 12,915 10,980 10,980 250,000 8,685 8,685 250,000
3 19,861 16,752 16,752 250,000 13,255 13,255 250,000
4 27,154 22,756 22,756 250,000 17,987 17,987 250,000
5 34,812 29,019 29,019 250,000 22,882 22,882 250,000
6 42,853 35,688 35,688 250,000 27,946 27,946 250,000
7 51,296 42,677 42,677 250,000 33,176 33,176 250,000
8 60,161 50,127 50,127 250,000 38,699 38,699 250,000
9 69,469 57,932 57,932 250,000 44,394 44,394 250,000
10 79,242 66,104 66,104 250,000 50,259 50,259 250,000
11 89,504 74,649 74,649 250,000 56,303 56,303 250,000
12 100,279 83,581 83,581 250,000 62,533 62,533 250,000
13 111,593 92,912 92,912 250,000 68,966 68,966 250,000
14 123,473 102,672 102,672 250,000 75,615 75,615 250,000
15 135,947 112,893 112,893 250,000 82,497 82,497 250,000
16 149,044 123,564 123,564 250,000 89,621 89,621 250,000
17 162,796 134,774 134,774 250,000 96,999 96,999 250,000
18 177,236 146,543 146,543 254,722 104,643 104,643 250,000
19 192,398 158,800 158,800 269,488 112,565 112,565 250,000
20 208,318 171,558 171,558 284,410 120,788 120,788 250,000
25 300,684 243,379 243,379 361,964 168,055 168,055 250,144
30 418,569 330,051 330,051 446,727 224,121 224,121 303,649
- -----------------------------------------------------------------------------------------------
</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>
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 12.00% (11.47% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------------------------------------
ACCUMULATED CASH CASH
END OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
POLICY YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
1 6,300 5,713 5,713 250,000 4,545 4,545 250,000
2 12,915 11,965 11,965 250,000 9,524 9,524 250,000
3 19,861 18,815 18,815 250,000 14,986 14,986 250,000
4 27,154 26,363 26,363 250,000 20,987 20,987 250,000
5 34,812 34,705 34,705 250,000 27,583 27,583 250,000
6 42,853 44,067 44,067 250,000 34,846 34,846 250,000
7 51,296 54,455 54,455 250,000 42,841 42,841 250,000
8 60,161 66,119 66,119 250,000 51,786 51,786 250,000
9 69,469 79,069 79,069 250,000 61,654 61,654 250,000
10 79,242 93,449 93,449 250,000 72,556 72,556 250,000
11 89,504 109,417 109,417 250,000 84,624 84,624 250,000
12 100,279 127,151 127,151 256,553 98,014 98,014 250,000
13 111,593 146,739 146,739 288,288 112,912 112,912 250,000
14 123,473 168,351 168,351 322,179 129,529 129,529 250,000
15 135,947 192,191 192,191 358,412 147,842 147,842 275,889
16 149,044 218,417 218,417 397,093 167,857 167,857 305,369
17 162,796 247,328 247,328 438,550 189,715 189,715 336,614
18 177,236 279,190 279,190 483,056 213,562 213,562 369,756
19 192,398 314,296 314,296 530,916 239,550 239,550 404,937
20 208,318 352,961 352,961 582,450 267,843 267,843 442,308
25 300,684 612,989 612,989 907,469 450,929 450,929 668,103
30 418,569 1,030,272 1,030,272 1,388,067 725,346 725,346 978,207
- ------------------------------------------------------------------------------------
</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 17
- --------------------------------------------------------------------------------
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% (-0.53% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
ACCUMULATED CASH CASH
END OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
POLICY YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
1 14,807 12,323 12,323 250,000 11,076 11,076 250,000
2 30,355 24,463 24,463 250,000 22,027 22,027 250,000
3 46,680 36,427 36,427 250,000 32,856 32,856 250,000
4 63,821 48,247 48,247 250,000 43,567 43,567 250,000
5 81,819 59,942 59,942 250,000 54,161 54,161 250,000
6 100,717 71,622 71,622 250,000 64,641 64,641 250,000
7 120,560 83,200 83,200 250,000 75,003 75,003 250,000
8 126,588 82,059 82,059 250,000 72,876 72,876 250,000
9 132,917 80,883 80,883 250,000 70,615 70,615 250,000
10 139,563 79,662 79,662 250,000 68,199 68,199 250,000
11 146,541 78,378 78,378 250,000 65,612 65,612 250,000
12 153,868 77,017 77,017 250,000 62,833 62,833 250,000
13 161,561 75,556 75,556 250,000 59,849 59,849 250,000
14 169,639 73,990 73,990 250,000 56,639 56,639 250,000
15 178,121 72,313 72,313 250,000 53,179 53,179 250,000
16 187,027 70,452 70,452 250,000 49,431 49,431 250,000
17 196,378 68,461 68,461 250,000 45,352 45,352 250,000
18 206,197 66,324 66,324 250,000 40,887 40,887 250,000
19 216,507 64,027 64,027 250,000 35,967 35,967 250,000
20 227,332 61,552 61,552 250,000 30,521 30,521 250,000
25 290,140 45,559 45,559 250,000 0 0 0
30 370,300 19,886 19,886 250,000 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>
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 6.00% (5.47% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
ACCUMULATED CASH CASH
END OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
POLICY YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
1 14,807 13,074 13,074 250,000 11,779 11,779 250,000
2 30,355 26,740 26,740 250,000 24,136 24,136 250,000
3 46,680 41,036 41,036 250,000 37,108 37,108 250,000
4 63,821 56,031 56,031 250,000 50,737 50,737 250,000
5 81,819 71,780 71,780 250,000 65,061 65,061 250,000
6 100,717 88,434 88,434 250,000 80,131 80,131 250,000
7 120,560 105,954 105,954 250,000 95,992 95,992 250,000
8 126,588 111,014 111,014 251,459 99,580 99,580 250,000
9 132,917 116,303 116,303 256,050 103,269 103,269 250,000
10 139,563 121,824 121,824 260,801 107,055 107,055 250,000
11 146,541 127,575 127,575 265,693 110,941 110,941 250,000
12 153,868 133,556 133,556 270,721 114,930 114,930 250,000
13 161,561 139,765 139,765 275,856 119,031 119,031 250,000
14 169,639 146,212 146,212 281,104 123,250 123,250 250,000
15 178,121 152,908 152,908 286,471 127,595 127,595 250,000
16 187,027 159,814 159,814 291,892 132,068 132,068 250,000
17 196,378 166,988 166,988 297,462 136,671 136,671 250,000
18 206,197 174,438 174,438 303,208 141,406 141,406 250,000
19 216,507 182,175 182,175 309,156 146,273 146,273 250,000
20 227,332 190,206 190,206 315,324 151,277 151,277 250,969
25 290,140 235,052 235,052 349,580 177,675 177,675 264,462
30 370,300 288,545 288,545 390,548 205,850 205,850 278,893
- -----------------------------------------------------------------------------------------------
</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 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 12.00% (11.47% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------------------------------------
ACCUMULATED CASH CASH
END OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
POLICY YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
1 14,807 13,825 13,825 250,000 12,483 12,483 250,000
2 30,355 29,108 29,108 250,000 26,332 26,332 250,000
3 46,680 46,020 46,020 250,000 41,712 41,712 250,000
4 63,821 64,784 64,784 250,000 58,811 58,811 250,000
5 81,819 85,633 85,633 250,000 77,838 77,838 250,000
6 100,717 108,901 108,901 260,227 99,035 99,035 250,000
7 120,560 134,676 134,676 312,547 122,471 122,471 284,383
8 126,588 149,156 149,156 336,303 134,594 134,594 303,647
9 132,917 165,177 165,177 361,975 147,869 147,869 324,243
10 139,563 182,890 182,890 389,728 162,391 162,391 346,264
11 146,541 202,452 202,452 419,697 178,271 178,271 369,807
12 153,868 224,041 224,041 452,047 195,628 195,628 394,976
13 161,561 247,841 247,841 486,916 214,598 214,598 421,883
14 169,639 274,074 274,074 524,505 235,326 235,326 450,647
15 178,121 302,990 302,990 565,037 257,969 257,969 481,397
16 187,027 334,754 334,754 608,600 282,685 282,685 514,269
17 196,378 369,752 369,752 655,625 309,645 309,645 549,408
18 206,197 408,303 408,303 706,447 339,021 339,021 586,972
19 216,507 450,758 450,758 761,432 370,992 370,992 627,126
20 227,332 497,501 497,501 820,966 405,754 405,754 670,051
25 290,140 811,505 811,505 1,201,353 629,988 629,988 933,401
30 370,300 1,314,802 1,314,802 1,771,410 964,782 964,782 1,301,113
- ------------------------------------------------------------------------------------
</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>
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>
PART C
<PAGE>
OTHER INFORMATION
Item 27. Exhibits
(a) Resolution of the Board of Directors of Hartford Life and Annuity
Insurance Company ("Hartford") authorizing the establishment of
the Separate Account.(1)
(b) Not Applicable.
(c)(1) Form of Principal Underwriting Agreement.(1)
(c)(2) Form of Selling Agreement.(1)
(d) Form of Contract and Certificate for Group Flexible Premium
Variable Life Insurance Policy.(1)
(e) Form of Enrollment Form for Certificate Issued Under Group
Flexible Premium Variable Life Insurance Policies.(1)
(f) Certificate of Incorporation of Hartford(2) and Bylaws of
Hartford.(3)
(g) Not Applicable.
(h) Form of Participation Agreement.(1)
(i) Not Applicable.
(j) Not Applicable.
(k) Opinion and consent of Lynda Godkin, Senior Vice President,
General Counsel and Corporate Secretary.
<PAGE>
-2-
(l) Opinion and Consent of James M. Hedreen, FSA, MAAA.
(m) Not Applicable.
(n) Consent of Arthur Andersen LLP, Independent Public Accountants.
(o) No financial statement will be omitted.
(p) Not Applicable.
(q) Memorandum describing transfer and redemption procedures.(1)
(r) Power of Attorney.
(s) Organizational Chart.
- -------------------------
(1) Incorporated by reference to the Initial Filing to the Registration
Statement on Form S-6, File No. 333-84263, of Hartford Life and Annuity
Insurance Company filed with the Securities and Exchange Commission on
August 2, 1999.
(2) Incorporated by reference to the Pre-Effective Amendment No. 3 to the
Registration Statement on Form S-6, File No. 33-61267, of Hartford Life
and Annuity Insurance Company filed with the Securities and Exchange
Commission on August 26, 1996.
(3) Incorporated by reference to the Post-Effective Amendment No. 4 to the
Registration Statement on Form S-6, File No. 33-61267, of Hartford Life
and Annuity Insurance Company filed with the Securities and Exchange
Commission on July 20, 1998.
<PAGE>
-3-
Item 28. Officers and Directors.
- --------------------------------------------------------------------------------
NAME POSITION WITH HARTFORD
- --------------------------------------------------------------------------------
David A. Carlson Vice President
- --------------------------------------------------------------------------------
Peter W. Cummins Senior Vice President
- --------------------------------------------------------------------------------
Bruce W. Ferris Vice President
- --------------------------------------------------------------------------------
Timothy M. Fitch Vice President & Actuary
- --------------------------------------------------------------------------------
Mary Jane B. Fortin Vice President & Chief Accounting
Officer
- --------------------------------------------------------------------------------
David T. Foy Senior Vice President, Chief Financial
Officer & Treasurer, Director*
- --------------------------------------------------------------------------------
Lynda Godkin Senior Vice President, General Counsel
& Corporate Secretary, Director*
- --------------------------------------------------------------------------------
Lois W. Grady Senior Vice President
- --------------------------------------------------------------------------------
Stephen T. Joyce Senior Vice President
- --------------------------------------------------------------------------------
Michael D. Keeler Vice President
- --------------------------------------------------------------------------------
Robert A. Kerzner Senior Vice President
- --------------------------------------------------------------------------------
Thomas M. Marra President, Director*
- --------------------------------------------------------------------------------
Steven L. Matthiesen Vice President
- --------------------------------------------------------------------------------
Deanne Osgood Vice President
- --------------------------------------------------------------------------------
Craig R. Raymond Senior Vice President & Chief Actuary
- --------------------------------------------------------------------------------
Lowndes A. Smith Chief Executive Officer, Director*
- --------------------------------------------------------------------------------
John C. Walters Executive Vice President
- --------------------------------------------------------------------------------
David M. Znamierowski Senior Vice President & Chief
Investment Officer, Director*
- --------------------------------------------------------------------------------
Unless otherwise indicated, the principal business address of each of the
above individuals is P.O. Box 2999, Hartford, CT 06104-2999.
- ------------------------------------------------
* Denotes Board of Directors of Hartford.
Item 29. Persons Controlled By or Under Common Control with the Depositor or
Registrant
Filed herewith as Exhibit(s).
<PAGE>
-4-
Item 30: Indemnification
Sections 33-770 to 33-778, inclusive, of the Connecticut General Statutes
("CGS") provide that a corporation may provide indemnification of or advance
expenses to a director, officer, employee or agent. Reference is hereby made to
Section 33-771(e) of CGS regarding indemnification of directors and Section
33-776(d) of CGS regarding indemnification of officers, employees and agents of
Connecticut corporations. These statutes provide, in general, that Connecticut
corporations incorporated prior to January 1, 1997 shall, except to the extent
that their certificate of incorporation expressly provides otherwise, indemnify
their directors, officers, employees and agents against liability (defined as
the obligation to pay a judgment, settlement, penalty, fine, including an
excise tax assessed with respect to an employee benefit plan, or reasonable
expenses incurred with respect to a proceeding) when (1) a determination is
made pursuant to Section 33-775 that the party seeking indemnification has met
the standard of conduct set forth in Section 33-771 or (2) a court has
determined that indemnification is appropriate pursuant to Section 33-774.
Under Section 33-775, the determination of and the authorization for
indemnification are made (a) by the disinterested directors, as defined in
Section 33-770(3); (b) by special counsel; (c) by the shareholders; or (d) in
the case of indemnification of an officer, agent or employee of the
corporation, by the general counsel of the corporation or such other officer(s)
as the board of directors may specify. Also, Section 33-772 provides that a
corporation shall indemnify an individual who was wholly successful on the
merits or otherwise against reasonable expenses incurred by him in connection
with a proceeding to which he was a party because he was a director of the
corporation. In the case of a proceeding by or in the right of the corporation
or with respect to conduct for which the director, officer, agent or employee
was adjudged liable on the basis that he received a financial benefit to which
he was not entitled, indemnification is limited to reasonable expenses incurred
in connection with the proceeding against the corporation to which the
individual was named a party.
Under the Depositor's bylaws, the Depositor must indemnify both directors and
officers of the Depositor for (1) any claims and liabilities to which they
become subject by reason of being or having been directors or officers of the
Depositor and (2) legal and other expenses incurred in defending against such
claims, in each case, to the extent such is consistent with statutory
provisions.
Section 33-777 of CGS specifically authorizes a corporation to procure
indemnification insurance on behalf of an individual who was a director,
officer, employer or agent of the corporation. Consistent with the statute, the
directors and officers of the Depositor and Hartford Equity Sales Company, Inc.
("HESCO") are covered under a directors and officers liability insurance policy
issued to The Hartford Financial Services Group, Inc. and its subsidiaries.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
-5-
Item 31. Principal Underwriters
(a) HESCO acts as principal underwriter for the following investment
companies:
Hartford Life Insurance Company - Separate Account VL I
Hartford Life Insurance Company - Separate Account VL II
Hartford Life Insurance Company - ICMG Secular Trust Separate
Account
Hartford Life Insurance Company - ICMG Registered Variable Life
Separate Account A
Hartford Life and Annuity Insurance Company - Separate Account
VL I
Hartford Life and Annuity Insurance Company - Separate Account
VL II
Hartford Life and Annuity Insurance Company - ICMG Registered
Variable Life Separate One
<PAGE>
-6-
(b) Directors and Officers of HESCO
Name and Principal Positions and Offices
Business Address With Underwriter
------------------ ----------------------
Lowndes A. Smith President and Chief Executive
Officer
Thomas M. Marra Executive Vice President, Director
Robert A. Kerzner Executive Vice President, Director
Peter W. Cummins Senior Vice President
Lynda Godkin Senior Vice President, General
Counsel and Corporate Secretary,
Director
J. Richard Garrett Vice President
Donald A. Salama Vice President
David T. Foy Treasurer
George R. Jay Controller
Unless otherwise indicated, the principal business address of each of the
above individuals is P.O. Box 2999, Hartford, CT 06104-2999.
Item 32. Location of Accounts and Records
All of the accounts, books, records or other documents required to be
kept by Section 31(a) of the Investment Company Act of 1940 and rules
thereunder, are maintained by Hartford at 200 Hopmeadow Street,
Simsbury, Connecticut 06089.
Item 33. Management Services
All management contracts are discussed in Part A and Part B of this
Registration Statement.
Item 34. Representation of Reasonableness of Fees
Hartford hereby represents that the aggregate fees and charges
under the Policy are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks
assumed by Hartford.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment Company
Act, the Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, duly authorized, in the Town of Simsbury,
and State of Connecticut on the 22nd day of May, 2000.
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE
(Registrant)
*By: David T. Foy *By: /s/ Thomas S. Clark
-------------------------------------------------- --------------------
David T. Foy, Senior Vice President, Thomas S. Clark
Chief Financial Officer and Treasurer Attorney-In-Fact
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
(Depositor)
*By: David T. Foy
--------------------------------------------------
David T. Foy, Senior Vice President,
Chief Financial Officer and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons and in the capacities and on
the dates indicated.
David T. Foy, Senior Vice President, Chief
Financial Officer & Treasurer, Director*
Lynda Godkin, Senior Vice President, General *By: /s/ Thomas S. Clark
Counsel & Corporate Secretary, Director* -------------------
Thomas M. Marra, President, Director * Thomas S. Clark
Lowndes A. Smith, Chief Executive Officer, Attorney-In-Fact
Director *
David M. Znamierowski, Senior Vice President & Dated: May 22, 2000
Chief Investment Officer, Director*
<PAGE>
EXHIBIT INDEX
1.1. Opinion and Consent of Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary.
1.2. Opinion and Consent of James M. Hedreen, FSA, MAAA.
1.3. Consent of Arthur Andersen LLP, Independent Public Accountants.
1.4. Power of Attorney.
1.5. Organizational Chart.
<PAGE>
[LOGO]
HARTFORD LIFE
May 22, 2000
LYNDA GODKIN, SENIOR VICE PRESIDENT,
GENERAL COUNSEL & CORPORATE SECRETARY
Board of Directors
Hartford Life and Annuity Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
333-84263
Dear Sir/Madam:
I have acted as General Counsel to Hartford Life and Annuity Insurance Company
(the "Company"), a Connecticut insurance company, and Hartford Life and Annuity
Insurance Company ICMG Registered Variable Life Separate Account One (the
"Account") in connection with the registration of an indefinite amount of
securities in the form of flexible premium variable life insurance policies (the
"Policies") with the Securities and Exchange Commission under the Securities Act
of 1933, as amended. I have examined such documents (including the Form S-6
Registration Statement) and reviewed such questions of law as I considered
necessary and appropriate, and on the basis of such examination and review, it
is my opinion that:
1. The Company is a corporation duly organized and validly existing as a stock
life insurance company under the laws of the State of Connecticut and is
duly authorized by the Insurance Department of the State of Connecticut to
issue the Policies.
2. The Account is a duly authorized and validly existing separate account
established pursuant to the provisions of Section 38a-433 of the
Connecticut Statutes.
3. To the extent so provided under the Policies, that portion of the assets of
the Account equal to the reserves and other contract liabilities with
respect to the Account will not be chargeable with liabilities arising out
of any other business that the Company may conduct.
4. The Policies, when issued as contemplated by the Form S-6 Registration
Statement, will constitute legal, validly issued and binding obligations of
the Company.
<PAGE>
Board of Directors
Hartford Life and Annuity Insurance Company
May 22, 2000
Page 2
I hereby consent to the filing of this opinion as an exhibit to the Form S-6
Registration Statement for the Policies and the Account.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
<PAGE>
[LOGO]
Hartford Life
James Hedreen, FSA, MAAA
May 22, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Hartford Life and Annuity Insurance Company
ICMG Registered Variable Life Separate Account One
File No. 333-84263
Dear Sirs:
This opinion is furnished in connection with the Form S-6 Registration
Statement under the Securities Act of 1933, as amended ("Securities Act"), of
a certain flexible premium variable life insurance policy (the "Policy") that
will be offered and sold by Hartford Life and Annuity Insurance Company and
certain units of interest to be issued in connection with the Policy.
The hypothetical illustrations of the Policy issued in the Form S-6
Registration Statement accurately reflect reasonable estimates of projected
performance of the Policy under the stipulated rates of investment return,
the contractual expense deductions and guaranteed cost-of-insurance rates,
and utilizing a reasonable estimation for expected fund operating expenses.
I hereby consent to the use of this opinion as an exhibit to the Form S-6
Registration Statement and to the reference to my name under the heading
"Experts" in the Statement of Additional Information included as part of such
Form S-6 Registration Statement.
Very truly yours,
/s/ James Hedreen
James Hedreen, FSA, MAAA
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our report
(and to all references to our Firm) included in or made a part of this
Registration Statement File No. 333-84263 for Hartford Life and Annuity
Insurance Company ICMG Registered Variable Life Separate Account One on Form
S-6.
/s/ Arthur Andersen LLP
Hartford, Connecticut
May 22, 2000
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
POWER OF ATTORNEY
David T. Foy
Lynda Godkin
Thomas M. Marra
Lowndes A. Smith
David M. Znamierowski
do hereby jointly and severally authorize Lynda Godkin, Christine Repasy,
Marianne O'Doherty, Thomas S. Clark and Marta Czekajewski to sign as their agent
any Registration Statement, pre-effective amendment, post-effective amendment
and any application for exemptive relief of the Hartford Life and Annuity
Insurance Company under the Securities Act of 1933 and/or the Investment Company
Act of 1940, and do hereby ratify such signatures heretofore made by such
persons.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
/s/ David T. Foy
- -------------------------------- Dated as of January 15, 2000
David T. Foy
/s/ Lynda Godkin
- -------------------------------- Dated as of January 15, 2000
Lynda Godkin
/s/ Thomas M. Marra
- -------------------------------- Dated as of January 15, 2000
Thomas M. Marra
/s/ Lowndes A. Smith
- -------------------------------- Dated as of January 15, 2000
Lowndes A. Smith
/s/ David M. Znamierowski
- -------------------------------- Dated as of January 15, 2000
David M. Znamierowski
<PAGE>
ORGANIZATIONAL CHART
<TABLE>
<CAPTION>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
---------------------------------------------
NUTMEG INSURANCE COMPANY |
(CONNECTICUT) THE HARTFORD INVESTMENT
| MANAGEMENT COMPANY
HARTFORD FIRE INSURANCE COMPANY (DELAWARE)
(CONNECTICUT) |
| |
HARTFORD ACCIDENT AND INDEMNITY COMPANY HARTFORD INVESTMENT
(CONNECTICUT) SERVICES, INC.
| (CONNECTICUT)
HARTFORD LIFE, INC.
(DELAWARE)
|
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
(CONNECTICUT)
|
|
|
---------------------------------------------------------------------------------------------------------------------------
| | | | | | | | | |
HARTFORD LIFE | | | | | | PLANCO PLANCO |
INTERNATIONAL, LTD.| | | | | | FINANCIAL INCORPORATED |
(CONNECTICUT) | | | | | | SERVICES, (PENNSYLVANIA) |
| | | | | | INCORPORATED |
| | | | | | (PENNSYLVANIA) |
| | | | | | |
| HART LIFE HARTFORD FINANCIAL HARTFORD LIFE HARTFORD AMERICAN |
| INSURANCE SERVICES LIFE INSURANCE COMPANY FINANCIAL MATURITY LIFE NUTMEG
| COMPANY INSURANCE COMPANY (CONNECTICUT) SERVICES, LLC INSURANCE COMPANY LIFE INSURANCE
|(CONNECTICUT) (CONNECTICUT) | (DELAWARE) (CONNECTICUT) COMPANY
| | | | (IOWA)
| ------------------------------------ | AML FINANCIAL, INC.
| | | | | (CONNECTICUT)
|SERVUS LIFE HARTFORD HARTFORD |
| INSURANCE INTERNATIONAL LIFE AND |
| COMPANY LIFE REASSURANCE ANNUITY INSURANCE |
|(CONNECTICUT) CORPORATION COMPANY |
| (CONNECTICUT) (CONNECTICUT) |
| | |
| | |
| HARTFORD |
| LIFE, LTD. |
| (BERMUDA) |
| |
| |
----------| -----------------------------------------------------------------------
| | | | |
INTERNATIONAL HL INVESTMENT HARTFORD HARTFORD SECURITIES HARTFORD-COMPREHENSIVE
CORPORATE ADVISORS, LLC EQUITY SALES DISTRIBUTION EMPLOYEE
MARKETING GROUP, INC. (CONNECTICUT) COMPANY, INC. COMPANY, INC. BENEFIT SERVICE
(CONNECTICUT) | (CONNECTICUT) (CONNECTICUT) COMPANY
| | (CONNECTICUT)
| |
THE EVERGREEN HARTFORD INVESTMENT
GROUP, INC. FINANCIAL SERVICES
(NEW YORK) COMPANY
(DELAWARE)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
----------------------------------------------------------------------------------------------------------------------------
| | |
| | Hartford Accident and Indemnity Company
| | (Connecticut)
| | |
| | Hartford Life, Inc
| | (Delaware)
| | |
| | Hartford Life and Accident Insurance Company
| | (Connecticut)
| | |
| | HARTFORD LIFE
| | -------INTERNATIONAL LTD.
| | | (CONNECTICUT)
| | | |
| | | ITT HARTFORD
| | | ----SUDAMERICANA
| | | | HOLDING S.A.
| | | | (ARGENTINA)
| | | |------------------------------------------------------
| | | | | |
| | | | ITT HARTFORD GALICIA INSTITUTO DE
| | | | SEGUROS VIDA COMPANIA SALTA COMPANIA DE
| | | |------DE VIDA S.A. DE SEGUROS S.A. SEGUROS DE VIDA S.A.
| | | | (URUGUAY) (ARGENTINA) (ARGENTINA)
| | | |
| | ICATU | | HARTFORD
| | HARTFORD | |---SEGUROS DE VIDA S.A.
| | SEGUROS S.A.----------| | (ARGENTINA)
| | (BRAZIL) |
| | | |
| | | | HARTFORD
| | -- ----------| |-------SEGUROS DE
| | | | | RETIRO S.A.
| | | | | (ARGENTINA)
|-----------|----------------|-------------------|--------------------------------------------------------------------------
| | | | |
| | | ICATU HARTFORD | CONSULTORA DE CAPITALES
| | | FUNDO DE PENSAO | S.A. SOCIEDAD GERENTE
| | | (BRAZIL) |----DE FONDOS COMUNES
| | | | | DE ENVERSION
| | | | | (ARGENTINA)
| | | ICATU HARTFORD |
| | | CAPITALIZACAO S.A. | CLARIDAD
| | | (BRAZIL) | ADMINISTRADORA DE
| | | | |---FONDOS DE JUBILACIONES
| | | BRAZILCAP | Y PENSIONES S.A.
| | | CAPITALIZACAO S.A. | (ARGENTINA)
| | | (BRAZIL) |
| | | |
| | -------------------------- |
| |--------------- | |
| | | |
HARTFORD FIRE HARTFORD FIRE | |------- SEGPOOL S.A.
INTERNATIONAL------------INTERNATIONAL, LTD. | | (ARGENTINA)
(GERMANY) GMBH (CONNECTICUT) | |
(WEST GERMANY) | |
| |
ICATU HARTFORD | | THESIS S.A.
ADMINISTRACAO | |-------- (ARGENTINA)
DE BENEFICIOS LTDA-- | |
(BRAZIL) |
|
|
|
|--------- U.O.R., S.A.
(ARGENTINA)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
- --------------------------------------------------------------------------------------------------------------------------------|
| |
THE HARTFORD INTERNATIONAL |
|-----------------------------------------------------------------------FINANCIAL SERVICES GROUP, INC. |
| | | (DELAWARE) |
| | | ----------------------|----------------- |
| | | | | | | |
ZWOLSCHE | | ITT HARTFORD LONDON AND | HARTFORD |
ALGEMEENE N.V. | | INTERNATIONAL, LTD. EDINBURGH | EUROPE, INC. |
(NETHERLANDS) | | (U.K.) INSURANCE GROUP, LTD.| (DELAWARE) |
| | | (U.K.) | |
| | | | | |
| | | ------------- | |
| | | | | |
| ITT ASSURANCES HARTFORD INTERNATIONAL | LONDON AND -THE HARTFORD |
| S.A. INSURANCE CO., N.V. |--- EDINBURGH INTERNATIONAL |
| ZWOLSCHE ALGEMEENE (FRANCE) (BELGIUM) | INSURANCE CO., LTD. FINANCIAL |
|----SCHADEVERZEKERING | | (U.K.) SERVICES |
--------| N.V.----------------------------------- | | | GROUP CIA |
| | (NETHERLANDS) | | | | DE SEGUROS Y |
Z.A. | | | | EXCESS INSURANCE REASEGUROS S.A.|
- --VERZEKERINGEN | | | | COMPANY LTD. (SPAIN) |
| N.V. | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| (BELGIUM) |------HERVERZEKERING B.V. | | | |
| | -----| (NETHERLANDS) | | | LONDON AND |
| | | | | | |--- EDINBURGH LIFE |
| Z.A. LUX S.A. | | | | ASSURANCE CO., LTD. |
| (LUXEMBURG) | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| |--LEVENS-VERZEKERING N.V.------------ | | | |
| | (NETHERLANDS) | | | | |
- ----------------|------------------------------------|------------|------|--------------|---------------------------------------|
| | | | | | |
| -------- | | | | |
| | | | | | | |
| ZWOLSCHE | ZWOLSCHE ALGEMEENE ZWOLSCHE ALGEMEENE | | | |
| ALGEMEENE |-----HYPOTHEKEN N.V. BELEGGINGEN III B.V. | | | |
| EUROPA B.V. | (NETHERLANDS) (NETHERLANDS) | | | |
| (NETHERLANDS) | ---------- | | |
- --------| | | | | |
| EXPLOITATIEMAAT- BELEGGINGSMAAT- | | |
|----- SCHAPPIJ SCHAPPIJ | | |
| BUIZERDLAAN B.V. BUIZERDLAAN B.V. | | |
| (NETHERLANDS) (NETHERLANDS) | | |
| | | |
| | | -----
| HOLLAND | |-------------------------- |
|---- BELEGGINGSGROEP B.V. | | | |
(NETHERLANDS) | |----------------- | |
| -------| | | |
| | | | | |
| | | | | |
F.A. KNIGHT | MACALISTER & LONDON AND | HARTFORD FIRE
& SON N.V. | DUNDAS, LTD. EDINBURGH | INTERNATIONAL
(BELGIUM) | (SCOTLAND) TRUSTEES, LTD. | SERVICIOS
| (U.K.) | (SPAIN)
------------------------- -----------
| | |
FENCOURT QUOTEL LONDON AND
PRINTERS, LTD. INSURANCE EDINBURGH
(U.K.) SYSTEMS, LTD. SERVICES, LTD.
(U.K.) (U.K.)
|
EUROSURE
INSURANCE
MARKETING, LTD.
(U.K.)
</TABLE>
<PAGE>
[LOGO]
Hartford Life
May 22, 2000
Lorna MacLeod
Senior Counsel
Office of Insurance Products
Room 5122
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Commissioners:
Pursuant to Rule 461 under the Securities Act of 1933, Hartford Life and
Annuity Insurance Company, on behalf of itself and ICMG Registered Variable
Life Separate Account One, hereby requests that the registration statement
electronically filed via Edgar on Form S-6 (File No. 333-84263) be accelerated
and declared effective on June 5, 2000, or as soon thereafter as is reasonably
practicable.
ICMG REGISTERED VARIABLE LIFE SEPARATE ACCOUNT ONE
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
By: /s/ David T. Foy
--------------------------------
David T. Foy,
Senior Vice President & Treasurer
HARTFORD EQUITY SALES COMPANY, INC.
By: /s/ George R. Jay
--------------------------------
George R. Jay,
Controller
