HARTFORD SMALL CO FUND INC, 485BPOS, 1998-04-17

HARTFORD SMALL CO FUND INC
485BPOS, 1998-04-17

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<PAGE>

As filed with the Securities and Exchange Commission on April 17, 1998

File No. 333-01551

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
------

Pre-Effective Amendment No. / /
------- ------

Post-Effective Amendment No. 4 / X /
------- ------

and/or

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / X /
------

Amendment No. 4 / X /
------- ------

HARTFORD SMALL COMPANY FUND, INC.

(Exact Name of Registrant as Specified in Charter)

P. O. Box 2999, Hartford, Connecticut 06104-2999
(Address of Principal Executive Offices)

Registrant's Telephone Number including Area Code: (203) 547-5000

C. Michael O'Halloran, Esquire
690 Asylum Avenue, Hartford, Connecticut 06115
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering:

Upon this amendment to the Registration Statement being declared effective.

It is proposed that this filing will become effective (check appropriate box)

immediately upon filing pursuant to paragraph (b) of Rule 485
------

<PAGE>

X on May 1, 1998 pursuant to paragraph (b) of Rule 485
------
60 days after filing pursuant to paragraph (a)(1) of Rule 485
------
on pursuant to paragraph (a)(1) of Rule 485
------ -----------------

75 days after filing pursuant to paragraph (a)(2) of Rule 485
------
on pursuant to paragraph (a)(2) of Rule 485
------ ----------------

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
previously elected to register an indefinite number of shares of its Common
Stock.

The Rule 24f-2 Notice for the Registrant's most recent fiscal year was filed
March 27, 1998.

<PAGE>

HARTFORD MUTUAL FUNDS
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(a)

N-1A ITEM NO. PROSPECTUS LOCATION
- ------------- -------------------
PART A
1. Cover Page Cover Page
2. Synopsis Not applicable
3. Condensed Financial Information Fund Expenses; Financial Highlights
4. General Description of Registrant The Funds; Investment Objectives and
Policies of the Funds; Common
Investment Policies and Risk Factors
5. Management of the Fund Management of the Funds;
Administrative Services for the
Funds; Expenses of the Funds
5A. Management's Discussion of Fund Annual Report to Shareholders
Performance
6. Capital Stock and Other Securities Ownership and Capitalization of the
Funds; Dividends; Federal Income
Taxes; General Information
7. Purchase of Securities Being Offered Net Asset Value; Purchase of Fund
Shares
8. Redemption or Repurchase Sale and Redemption of Shares
9. Pending Legal Proceedings General Information-Pending Legal
Proceedings

STATEMENT OF ADDITIONAL INFORMATION
PART B LOCATION
-----------------------------------

10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Not applicable
13. Investment Objectives and Policies Investment Objectives of the Funds;
Investment Restrictions of the Funds
14. Management of the Fund Management of the Fund
15. Control Persons and Principal Control Persons and Principal
Holders of Securities Holders of Securities
16. Investment Advisory and Other Management of the Fund
Services
17. Brokerage Allocation and Other Portfolio Brokerage
Practices
18. Capital Stock and Other Securities Ownership and Capitalization of the
Funds (Prospectus)
19. Purchase, Redemption and Pricing of Purchase of Fund Shares (Prospectus)
Securities Being Offered
20. Tax Status Federal Income Taxes (Prospectus)
21. Underwriters Sale and Redemption of Fund Shares
(Prospectus)
22. Calculation of Performance Data Performance Comparisons
23. Financial Statements Not applicable

PART C

Information required to be set forth in PART C is set forth under the
appropriate item, so numbered, in Part C of the Registration Statement.
<PAGE>

Hartford Mutual Funds
PROSPECTUS -- MAY 1, 1998
CLASS IA SHARES

The Hartford Mutual Funds is a family of funds comprised of twelve separate
diversified open-end management investment companies (each a "Fund" and together
the "Funds"). The Funds serve as the underlying investment vehicles for certain
variable annuity and variable life insurance separate accounts of Hartford Life
Insurance Company and Hartford Life and Annuity Insurance Company (collectively,
"The Hartford Life Insurance Companies"). Each Fund offers two classes of
shares: Class IA shares offered hereby and Class IB shares offered pursuant to
another prospectus. The Funds, which have different investment objectives and
policies, are described below.

STOCK FUNDS

<TABLE>
<CAPTION>
FUND NAME GOAL INVESTMENT STYLE
--------------------------- ------------------------------ ------------------------------------------------------------
<S> <C> <C>
Capital Appreciation Growth of capital Equity: Invests in small, medium, and large companies;
portfolio is comprised primarily of a blend of growth and
value stocks and is broadly diversified across industries.
Dividend and Growth High level of income, growth Equity: Invests primarily in large, well-known U.S.
of capital companies that have historically paid above average
dividends and have the ability to sustain and potentially
increase dividends; portfolio is broadly diversified across
industries.
Index To track general stock market Equity: Seeks investment results which approximate the price
performance and yield performance of publicly-traded common stocks in
the aggregate; attempts to approximate the capital
performance and the dividend income of the Standard & Poor's
500 Composite Stock Index.
International Opportunities Growth of capital International Equity: Invests primarily in large,
high-quality non-U.S. companies in established markets, and
on a limited basis, in smaller companies and emerging
markets; portfolio is broadly diversified across industries
and countries.
MidCap Growth of capital Equity: Invests primarily in high quality U.S. companies
with market capitalizations within the range represented by
the Standard & Poor's MidCap 400 Index; portfolio is broadly
diversified across industries which are expected to grow
faster than the overall economy.
Small Company Growth of capital Equity: Invests primarily in stocks of companies with market
capitalizations within the range represented by the Russell
2000 Index; portfolio is broadly diversified across
industries.
Stock Growth of capital Equity: Invests primarily in large, high quality U.S.
companies; portfolio is broadly diversified across
industries which are expected to grow faster than the
overall economy.
ASSET ALLOCATION FUNDS

<CAPTION>
FUND NAME GOAL INVESTMENT STYLE
--------------------------- ------------------------------ ------------------------------------------------------------
<S> <C> <C>
Advisers Long-term total return Asset Allocation: Invests in a mix of stocks, bonds and
money market instruments; portfolio assets are allocated
gradually among the asset classes based upon the portfolio
manager's view of the economy and valuation of the market
sectors; short term market timing is not used.
International Advisers Long-term total return International Asset Allocation: Invests in a mix of stocks,
bonds and money market instruments; portfolio assets are
diversified among at least five countries and are allocated
gradually among the asset classes based upon the portfolio
manager's view of the economy and valuation of the market
sectors; short term market timing is not used.
BOND FUNDS
<CAPTION>
FUND NAME GOAL INVESTMENT STYLE
--------------------------- ------------------------------ ------------------------------------------------------------
<S> <C> <C>
Bond High level of income, total Bond: Invests primarily in investment grade bonds; up to 20%
return may be invested in the highest quality tier of the high
yield rating category.
Mortgage Securities Maximum current income Mortgage-related securities: Invests primarily in high
consistent with preservation quality mortgage-related securities, including securities
of principal issued or guaranteed by government agencies,
instrumentalities or sponsored corporations.
MONEY MARKET FUND
<CAPTION>
FUND NAME GOAL INVESTMENT STYLE
--------------------------- ------------------------------ ------------------------------------------------------------
<S> <C> <C>
Money Market Maximum current income Money Market: Invests in short-term money market
consistent with preservation instruments.
of capital
</TABLE>

<PAGE>
AN INVESTMENT IN THE MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. WHILE THE MONEY MARKET FUND SEEKS TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE, THERE CAN BE NO ASSURANCE THAT THE MONEY MARKET
FUND WILL ACHIEVE THIS GOAL.
- --------------------------------------------------------------------------------

THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT A FUND THAT A
PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING. PLEASE READ AND RETAIN THIS
PROSPECTUS FOR FUTURE REFERENCE. ADDITIONAL INFORMATION ABOUT THE FUNDS HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC") IN A STATEMENT OF
ADDITIONAL INFORMATION DATED MAY 1, 1998 ("SAI"), WHICH HAS BEEN INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS. TO OBTAIN A COPY WITHOUT CHARGE CALL
1-800-862-6668 OR WRITE TO "HARTFORD FAMILY OF FUNDS, C/O INDIVIDUAL ANNUITY
OPERATIONS," P.O. BOX 2999, HARTFORD, CT 06104-2999.

- --------------------------------------------------------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE FUNDS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER BY THE FUNDS TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL FOR THE FUNDS TO MAKE SUCH OFFER.
- --------------------------------------------------------------------------------
<PAGE>
HARTFORD MUTUAL FUNDS 3
- --------------------------------------------------------------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Financial Highlights.................................................. 4
Introduction to the Hartford Mutual Funds............................. 16
Investment Objectives and Styles of the Funds......................... 16
Common Investment Policies and Risk Factors........................... 21
Management of the Funds............................................... 27
Administrative Services for the Funds................................. 30
Expenses of the Funds................................................. 30
Performance Related Information....................................... 30
Dividends............................................................. 30
Determination of Net Asset Value...................................... 31
Purchase of Fund Shares............................................... 31
Sale and Redemption of Shares......................................... 31
Federal Income Taxes.................................................. 31
Ownership and Capitalization of the Funds............................. 32
General Information................................................... 32
Appendix A: Description of Securities Ratings......................... 34
Appendix B: Credit Quality Distribution............................... 36
</TABLE>

There is the possibility that an individual Fund may be held liable for a
misstatement, inaccuracy or incomplete disclosure in this Prospectus concerning
the other Fund(s).

Additional information about the performance of each Fund, including
Management's Discussion and Analysis of Results, is contained in the Funds'
annual and semi-annual reports to shareholders, which may be obtained without
charge by calling 1-800-862-6668.
<PAGE>
4 HARTFORD CAPITAL APPRECIATION HLS FUND, INC.
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

The following information has been audited by Arthur Andersen LLP,
independent public accountants, whose report thereon is included in the
Statement of Additional Information, which is incorporated by reference to this
prospectus.

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
------------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
---------- ---------- --------- ----------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
AT BEGINNING
OF PERIOD...... $ 3.914 $ 3.490 $ 2.860 $ 3.052 $ 2.634 $ 2.607 $ 1.709 $ 2.020 $ 1.678 $ 1.341
NET INVESTMENT
INCOME......... 0.020 0.022 0.030 0.011 0.003 0.008 $ 0.021 $ 0.029 $ 0.023 $ 0.015
NET REALIZED AND
UNREALIZED
GAINS (LOSSES)
ON
INVESTMENTS.... 0.794 0.655 0.785 0.070 0.526 0.388 0.898 (0.246) 0.376 0.337
---------- ---------- --------- ----------- --------- -------- -------- -------- -------- --------
TOTAL FROM
INVESTMENT
OPERATIONS..... 0.814 0.677 0.815 0.081 0.529 0.396 0.919 (0.217) 0.399 0.352
DIVIDENDS FROM
NET INVESTMENT
INCOME......... (0.022) (0.025) (0.030) (0.011) (0.003) (0.008) (0.021) (0.029) (0.023) (0.015)
DISTRIBUTION
FROM NET
REALIZED GAINS
ON
SECURITIES..... (0.296) (0.228) (0.155) (0.262) (0.108) (0.361) 0.000 (0.065) (0.034) 0.000
RETURN OF
CAPITAL........ 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
---------- ---------- --------- ----------- --------- -------- -------- -------- -------- --------
TOTAL FROM
DISTRIBUTIONS... (0.318) (0.253) (0.185) (0.273) (0.111) (0.369) (0.021) (0.094) (0.057) (0.015)
---------- ---------- --------- ----------- --------- -------- -------- -------- -------- --------
NET INCREASE
(DECREASE) IN
NET ASSETS..... 0.496 0.424 0.630 (0.192) 0.418 0.027 0.898 (0.311) 0.342 0.337
NET ASSET VALUE
AT END OF
PERIOD......... $ 4.410 $ 3.914 $ 3.490 $ 2.860 $ 3.052 $ 2.634 $ 2.607 $ 1.709 $ 2.020 $ 1.678
---------- ---------- --------- ----------- --------- -------- -------- -------- -------- --------
---------- ---------- --------- ----------- --------- -------- -------- -------- -------- --------

TOTAL RETURN.... 22.34% 20.70% 30.25% 2.50% 20.80% 16.98% 53.99% (10.90)% 24.11% 26.37%
NET ASSETS (IN
THOUSANDS)..... 4,802,992 3,386,670 2,157,892 1,158,644 778,904 300,373 158,046 56,032 59,922 34,226
RATIO OF
OPERATING
EXPENSES TO
AVERAGE NET
ASSETS......... 0.64% 0.65% 0.68% 0.72% 0.76% 0.87% 0.92% 0.96% 0.94% 0.97%
RATIO OF NET
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS......... 0.44% 0.60% 0.95% 0.40% 0.12% 0.36% 0.92% 1.58% 1.25% 0.91%
PORTFOLIO
TURNOVER
RATE........... 57.6% 85.4% 78.6% 73.3% 91.4% 100.3% 107.2% 51.8% 35.0% 48.9%
AVERAGE
COMMISSION
RATE*.......... $ 0.0588 $ 0.06650
</TABLE>

- ---------
* Not required for years prior to 1996.
<PAGE>
HARTFORD DIVIDEND & GROWTH HLS FUND, INC. 5
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING
THROUGHOUT THE INDICATED PERIOD)
-------------------------------------------------
YEAR YEAR YEAR
ENDED ENDED ENDED 03/08/94-
12/31/97 12/31/96 12/31/95 12/31/94(a)
----------- --------- --------- -----------
<S> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD............ $ 1.547 $ 1.371 $ 0.994 $ 1.000
NET INVESTMENT INCOME............................. 0.035 0.034 0.033 0.024
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS...................................... 0.445 0.258 0.323 (0.005)
----------- --------- --------- -----------
TOTAL FROM INVESTMENT OPERATIONS.................. 0.480 0.292 0.356 0.019
DIVIDENDS FROM NET INVESTMENT INCOME.............. (0.031) (0.034) (0.033) (0.024)
DISTRIBUTION FROM NET REALIZED GAINS ON
SECURITIES....................................... (0.044) (0.028) 0.000 (0.001)
RETURN OF CAPITAL................................. 0.000 0.000 0.000 0.000
----------- --------- --------- -----------
TOTAL FROM DISTRIBUTIONS.......................... (0.075) (0.062) (0.033) (0.025)
----------- --------- --------- -----------
NET INCREASE (DECREASE) IN NET ASSETS............. 0.405 0.230 0.323 (0.006)
NET ASSET VALUE AT END OF PERIOD.................. $ 1.952 $ 1.547 $ 1.317 $ 0.994
----------- --------- --------- -----------
----------- --------- --------- -----------

TOTAL RETURN...................................... 31.89 22.91% 36.37% 1.60%***
NET ASSETS (IN THOUSANDS)......................... 1,994,653 879,980 265,070 55,066
RATIO OF OPERATING EXPENSES TO AVERAGE NET
ASSETS........................................... 0.68% 0.73% 0.77% 0.83%*
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET
ASSETS........................................... 2.21% 2.52% 2.91% 3.52%*
PORTFOLIO TURNOVER RATE........................... 34.2% 56.9% 41.4% 27.8%
AVERAGE COMMISSION RATE**......................... $ 0.0543 $0.07150
</TABLE>

- ---------
(a) The Fund was declared effective by the Securities and Exchange Commission
on March 8, 1994.

* Annualized. Management fees were waived until assets (excluding assets
contributed by companies affiliated with HL Advisors) reached $20 million.
The ratio of operating expenses to average net assets would have been higher
if management fees were not waived. The ratio of net investment income to
average net assets would have been lower if management fees were not waived.

** Not required for years prior to 1996.

*** Not annualized.

<PAGE>
6 HARTFORD INDEX HLS FUND, INC.
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
-------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
----------- --------- --------- --------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT
BEGINNING
OF PERIOD........ $ 2.382 $ 2.028 $ 1.522 $ 1.546 $ 1.450 $ 1.390 $ 1.134 $ 1.220 $ 0.960
NET INVESTMENT
INCOME........... 0.035 0.044 0.044 0.038 0.035 0.033 0.036 0.037 0.029
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS...... 0.692 0.393 0.507 (0.024) 0.096 0.060 0.294 (0.086) 0.260
----------- --------- --------- --------- --------- -------- -------- -------- --------
TOTAL FROM
INVESTMENT
OPERATIONS....... 0.727 0.437 0.551 0.014 0.131 0.093 0.330 (0.049) 0.289
DIVIDENDS FROM NET
INVESTMENT
INCOME........... (0.035) (0.044) (0.044) (0.038) (0.035) (0.033) (0.036) (0.037) (0.029)
DISTRIBUTION FROM
NET REALIZED
GAINS ON
SECURITIES....... (0.196) (0.039) (0.001) 0.000 0.000 0.000 (0.038) 0.000 0.000
RETURN OF
CAPITAL.......... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----------- --------- --------- --------- --------- -------- -------- -------- --------
TOTAL FROM
DISTRIBUTIONS.... (0.231) (0.083) (0.045) (0.038) (0.035) (0.033) (0.074) (0.037) (0.029)
----------- --------- --------- --------- --------- -------- -------- -------- --------
NET INCREASE
(DECREASE) IN NET
ASSETS........... 0.496 0.354 0.506 (0.024) 0.096 0.060 0.256 (0.086) 0.260
NET ASSET VALUE AT
END
OF PERIOD........ $ 2.878 $ 2.382 $ 2.028 $ 1.522 $ 1.546 $ 1.450 $ 1.390 $ 1.134 $ 1.220
----------- --------- --------- --------- --------- -------- -------- -------- --------
----------- --------- --------- --------- --------- -------- -------- -------- --------

TOTAL RETURN...... 32.61% 22.09% 36.55% 0.94% 9.12% 6.82% 29.53% (3.99)% 30.47%
NET ASSETS (IN
THOUSANDS)....... 1,123,455 621,065 318,253 157,660 140,396 82,335 47,770 26,641 19,456
RATIO OF OPERATING
EXPENSES TO
AVERAGE NET
ASSETS........... 0.39% 0.39% 0.39% 0.45% 0.49% 0.60% 0.67% 0.91% 1.10%
RATIO OF NET
INVESTMENT INCOME
TO AVERAGE NET
ASSETS........... 1.52% 2.07% 2.46% 2.50% 2.36% 2.48% 2.89% 3.27% 2.60%
PORTFOLIO TURNOVER
RATE............. 5.7% 19.3% 1.5% 1.8% 0.8% 1.2% 6.7% 25.5% 12.9%
AVERAGE COMMISSION
RATE*............ $ 0.0230 $0.05000

<CAPTION>
YEAR
ENDED
12/31/88
--------
<S> <C>
NET ASSET VALUE AT
BEGINNING
OF PERIOD........ $ 0.854
NET INVESTMENT
INCOME........... 0.030
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS...... 0.106
--------
TOTAL FROM
INVESTMENT
OPERATIONS....... 0.136
DIVIDENDS FROM NET
INVESTMENT
INCOME........... (0.030)
DISTRIBUTION FROM
NET REALIZED
GAINS ON
SECURITIES....... 0.000
RETURN OF
CAPITAL.......... 0.000
--------
TOTAL FROM
DISTRIBUTIONS.... (0.030)
--------
NET INCREASE
(DECREASE) IN NET
ASSETS........... 0.106
NET ASSET VALUE AT
END
OF PERIOD........ $ 0.960
--------
--------
TOTAL RETURN...... 16.35%
NET ASSETS (IN
THOUSANDS)....... 10,050
RATIO OF OPERATING
EXPENSES TO
AVERAGE NET
ASSETS........... 1.23%
RATIO OF NET
INVESTMENT INCOME
TO AVERAGE NET
ASSETS........... 3.29%
PORTFOLIO TURNOVER
RATE............. 20.9%
AVERAGE COMMISSION
RATE*............
</TABLE>

- ------------

(a) The Fund was declared effective by the Securities and Exchange Commission
on May 1, 1987.

* Not required for years prior to 1996.

<PAGE>
HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND, INC. 7
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
-----------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED 07/02/90-
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90(A)
----------- --------- --------- --------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING
OF PERIOD.................... $ 1.407 $ 1.306 $ 1.176 $ 1.215 $ 0.917 $ 0.973 $ 0.871 $ 1.000
NET INVESTMENT INCOME......... 0.022 0.023 0.020 0.016 0.009 0.013 0.011 0.015
NET REALIZED AND UNREALIZED
GAINS (LOSSES) ON
INVESTMENTS.................. (0.019) 0.140 0.141 (0.039) 0.298 (0.056) 0.102 (0.129)
----------- --------- --------- --------- --------- -------- -------- -----------
TOTAL FROM INVESTMENT
OPERATIONS................... 0.003 0.163 0.161 (0.023) 0.307 (0.043) 0.113 (0.114)
DIVIDENDS FROM NET INVESTMENT
INCOME....................... (0.012) (0.025) (0.020) (0.016) (0.009) (0.013) (0.011) (0.015)
DISTRIBUTION FROM NET REALIZED
GAINS ON SECURITIES.......... (0.104) (0.037) (0.011) 0.000 0.000 0.000 0.000 0.000
RETURN OF CAPITAL............. 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----------- --------- --------- --------- --------- -------- -------- -----------
TOTAL FROM DISTRIBUTIONS...... (0.116) (0.062) (0.031) (0.016) (0.009) (0.013) (0.011) (0.015)
----------- --------- --------- --------- --------- -------- -------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS....................... (0.113) 0.101 0.130 (0.039) 0.298 (0.056) 0.102 (0.129)
NET ASSET VALUE AT END OF
PERIOD....................... $ 1.294 $ 1.407 $ 1.306 $ 1.176 $ 1.215 $ 0.917 $ 0.973 $ 0.871
----------- --------- --------- --------- --------- -------- -------- -----------
----------- --------- --------- --------- --------- -------- -------- -----------

TOTAL RETURN.................. 0.34% 12.91% 13.93% (1.94)% 33.73% (4.43)% 13.00% (11.76)%
NET ASSETS (IN THOUSANDS)..... 1,092,946 996,543 686,475 563,765 281,608 47,560 22,854 9,352
RATIO OF OPERATING EXPENSES TO
AVERAGE NET ASSETS........... 0.77% 0.79% 0.86% 0.85% 1.00% 1.23% 1.24% 1.04%*
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS........ 1.48% 1.74% 1.60% 1.42% 0.84% 1.40% 1.17% 2.65%*
PORTFOLIO TURNOVER RATE....... 72.7% 70.0% 55.6% 46.4% 31.8% 25.1% 24.7% 3.0%
AVERAGE COMMISSION RATE**..... $ 0.0037 n/a
</TABLE>

- ------------
(a) The Fund was declared effective by the Securities and Exchange Commission
on July 2, 1990.

* Annualized.

** Not required for years prior to 1996.
<PAGE>
8 HARTFORD MIDCAP HLS FUND, INC.
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE
OUTSTANDING THROUGHOUT
THE INDICATED PERIOD)
----------------------
7/15/97-
12/31/97
----------------------
<S> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD............ $ 1.000
NET INVESTMENT INCOME............................. 0.001
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS...................................... 0.137
-------
TOTAL FROM INVESTMENT OPERATIONS.................. 0.138
DIVIDENDS FROM NET INVESTMENT INCOME.............. (0.001)
DISTRIBUTION FROM NET REALIZED GAINS ON
SECURITIES....................................... 0.000
RETURN OF CAPITAL................................. 0.000
-------
TOTAL FROM DISTRIBUTIONS.......................... (0.001)
-------
NET INCREASE (DECREASE) IN NET ASSETS............. 0.137
NET ASSET VALUE AT END OF PERIOD.................. $ 1.137
-------
-------

TOTAL RETURN...................................... 13.81%*
NET ASSETS (IN THOUSANDS)......................... 27,589
RATIO OF OPERATING EXPENSES TO AVERAGE NET
ASSETS........................................... 0.46%**
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET
ASSETS........................................... 0.45%**
PORTFOLIO TURNOVER RATE........................... 46.1%
AVERAGE COMMISSION RATE........................... $0.0247
</TABLE>

- ------------

* Not annualized.

** Annualized. Management fees were waived until assets (excluding assets
contributed by companies affiliated with HL Advisors) reached $20 million.
The ratio of operating expenses to average net assets would have been higher
if management fees were not waived. The ratio of net investment income to
average net assets would have been lower if management fees were not waived.

<PAGE>
HARTFORD SMALL COMPANY HLS FUND, INC. 9
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE
OUTSTANDING THROUGHOUT
THE INDICATED PERIOD)
----------------------------------
YEAR
ENDED 08/09/96-
12/31/97 12/31/96(a)
--------- ----------------------
<S> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD............ $ 1.069 $ 1.000
NET INVESTMENT INCOME............................. 0.001 0.002
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS...................................... 0.195 0.069
--------- --------
TOTAL FROM INVESTMENT OPERATIONS.................. 0.196 0.071
DIVIDENDS FROM NET INVESTMENT INCOME.............. (0.001) (0.002)
DISTRIBUTION FROM NET REALIZED GAINS ON
SECURITIES....................................... (0.062) 0.000
RETURN OF CAPITAL................................. 0.000 0.000
--------- --------
TOTAL FROM DISTRIBUTIONS.......................... (0.063) (0.002)
--------- --------
NET INCREASE (DECREASE) IN NET ASSETS............. 0.133 0.069
NET ASSET VALUE AT END OF PERIOD.................. $ 1.202 $ 1.069
--------- --------
--------- --------

TOTAL RETURN...................................... 18.38% 7.15%**
NET ASSETS (IN THOUSANDS)......................... 210,769 42,812
RATIO OF OPERATING EXPENSES TO AVERAGE NET
ASSETS........................................... 0.77% 0.72%*
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET
ASSETS........................................... 0.08% 0.31%*
PORTFOLIO TURNOVER RATE........................... 222.2% 31.8%
AVERAGE COMMISSION RATE........................... $ 0.412 $0.02900
</TABLE>

- ------------
(a) The Fund was declared effective by the Securities and Exchange Commission
on August 9, 1996.

** Not annualized.

<PAGE>
HARTFORD ADVISERS HLS FUND, INC. 10
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
-----------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
---------- ---------- ---------- ----------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
AT BEGINNING
OF PERIOD..... $ 4.143 $ 3.527 $ 2.801 $ 3.099 $ 2.965 $ 2.927 $ 2.452 $ 2.775 $ 2.304
NET INVESTMENT
INCOME........ 0.050 0.060 0.070 0.061 0.053 0.051 0.059 0.070 0.065
NET REALIZED
AND UNREALIZED
GAINS (LOSSES)
ON
INVESTMENTS... 1.196 0.763 0.840 (0.111) 0.339 0.219 0.532 (0.179) 0.522
---------- ---------- ---------- ----------- --------- --------- --------- --------- ---------
TOTAL FROM
INVESTMENT
OPERATIONS.... 01.246 0.823 0.910 (0.050) 0.392 0.270 0.591 (0.109) 0.587
DIVIDENDS FROM
NET INVESTMENT
INCOME........ (0.049) (0.059) (0.070) (0.061) (0.053) (0.051) (0.059) (0.070) (0.065)
DISTRIBUTION
FROM NET
REALIZED GAINS
ON
SECURITIES.... (0.217) (0.148) (0.114) (0.187) (0.205) (0.181) (0.057) (0.144) (0.051)
RETURN OF
CAPITAL....... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
---------- ---------- ---------- ----------- --------- --------- --------- --------- ---------
TOTAL FROM
DISTRIBUTIONS... (0.266) (0.207) (0.184) (0.248) (0.258) (0.232) (0.116) (0.214) (0.116)
---------- ---------- ---------- ----------- --------- --------- --------- --------- ---------
NET INCREASE
(DECREASE) IN
NET ASSETS.... 0.980 0.616 0.726 (0.298) 0.134 0.038 0.475 (0.323) 0.471
NET ASSET VALUE
AT END OF
PERIOD........ $ 5.123 $ 4.143 $ 3.527 $ 2.801 $ 3.099 $ 2.965 $ 2.927 $ 2.452 $ 2.775
---------- ---------- ---------- ----------- --------- --------- --------- --------- ---------
---------- ---------- ---------- ----------- --------- --------- --------- --------- ---------

TOTAL RETURN... 31.38% 24.33% 34.10% (1.89)% 14.34% 10.04% 24.58% (3.87)% 26.02%
NET ASSETS (IN
THOUSANDS).... 4,713,322 2,994,209 1,876,884 1,163,158 968,425 569,903 406,489 257,553 266,756
RATIO OF
OPERATING
EXPENSES TO
AVERAGE NET
ASSETS........ 0.45% 0.46% 0.48% 0.50% 0.53% 0.57% 0.60% 0.66% 0.64%
RATIO OF NET
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS........ 1.11% 1.59% 2.23% 2.17% 1.86% 1.90% 2.14% 2.76% 2.31%
PORTFOLIO
TURNOVER
RATE.......... 31.6% 42.3% 52.9% 63.8% 69.0% 69.8% 24.3% 20.2% 24.4%
AVERAGE
COMMISSION
RATE*......... $ 0.0531 $ 0.04900

<CAPTION>
YEAR
ENDED
12/31/88
---------
<S> <C>
NET ASSET VALUE
AT BEGINNING
OF PERIOD..... $ 1.977
NET INVESTMENT
INCOME........ 0.045
NET REALIZED
AND UNREALIZED
GAINS (LOSSES)
ON
INVESTMENTS... 0.327
---------
TOTAL FROM
INVESTMENT
OPERATIONS.... 0.372
DIVIDENDS FROM
NET INVESTMENT
INCOME........ (0.045)
DISTRIBUTION
FROM NET
REALIZED GAINS
ON
SECURITIES.... 0.000
RETURN OF
CAPITAL....... 0.000
---------
TOTAL FROM
DISTRIBUTIONS.. (0.045)
---------
NET INCREASE
(DECREASE) IN
NET ASSETS.... 0.327
NET ASSET VALUE
AT END OF
PERIOD........ $ 2.304
---------
---------
TOTAL RETURN... 19.00%
NET ASSETS (IN
THOUSANDS).... 187,511
RATIO OF
OPERATING
EXPENSES TO
AVERAGE NET
ASSETS........ 0.65%
RATIO OF NET
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS........ 2.08%
PORTFOLIO
TURNOVER
RATE.......... 22.9%
AVERAGE
COMMISSION
RATE*.........
</TABLE>

- ------------
* Not required for years prior to 1996.
<PAGE>
11 HARTFORD STOCK FUND HLS FUND
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
-------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
----------- ----------- ----------- ------------ ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT
BEGINNING
OF PERIOD........ $ 2.169 $ 1.958 $ 1.600 $ 1.752 $ 1.676 $ 1.649 $ 1.436 $ 1.543 $ 1.332
NET INVESTMENT
INCOME........... 0.056 0.059 0.064 0.054 0.050 0.059 0.063 0.074 0.062
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS...... 0.455 0.255 0.377 (0.100) 0.145 0.070 0.223 (0.059) 0.221
----------- ----------- ----------- ------------ ---------- --------- --------- --------- ---------
TOTAL FROM
INVESTMENT
OPERATIONS....... 0.511 0.314 0.441 (0.046) 0.195 0.129 0.286 0.015 0.283
DIVIDENDS FROM NET
INVESTMENT
INCOME........... (0.055) (0.059) (0.064) (0.054) (0.050) (0.059) (0.063) (0.074) (0.062)
DISTRIBUTION FROM
NET REALIZED
GAINS ON
SECURITIES....... (0.098) (0.044) (0.019) (0.052) (0.069) (0.043) (0.010) (0.048) (0.010)
RETURN OF
CAPITAL.......... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----------- ----------- ----------- ------------ ---------- --------- --------- --------- ---------
TOTAL FROM
DISTRIBUTIONS.... (0.153) (0.103) (0.083) (0.106) (0.119) (0.102) (0.073) (0.122) (0.072)
----------- ----------- ----------- ------------ ---------- --------- --------- --------- ---------
NET INCREASE
(DECREASE) IN NET
ASSETS........... 0.358 0.211 0.358 (0.152) 0.076 0.027 0.213 (0.107) 0.211
NET ASSET VALUE AT
END OF PERIOD.... $ 2.527 $ 2.169 $ 1.958 $ 1.600 $ 1.752 $ 1.676 $ 1.649 $ 1.436 $ 1.543
----------- ----------- ----------- ------------ ---------- --------- --------- --------- ---------
----------- ----------- ----------- ------------ ---------- --------- --------- --------- ---------

TOTAL RETURN...... 24.51% 16.62% 28.34% (2.74)% 12.25% 8.30% 20.33% 1.26% 21.72%
NET ASSETS (IN
THOUSANDS)....... 8,283,912 5,879,529 4,262,769 3,034,034 2,426,550 985,747 631,424 416,839 371,917
RATIO OF OPERATING
EXPENSES TO
AVERAGE NET
ASSETS........... 0.63% 0.63% 0.65% 0.65% 0.69% 0.78% 0.81% 0.89% 0.89%
RATIO OF NET
INVESTMENT INCOME
TO AVERAGE NET
ASSETS........... 2.44% 2.92% 3.57% 3.34% 3.07% 3.55% 4.13% 4.65% 4.14%
PORTFOLIO TURNOVER
RATE............. 36.1% 53.8% 63.5% 60.0% 55.3% 72.8% 42.1% 35.7% 33.5%
AVERAGE COMMISSION
RATE*............ $ 0.0529 $ 0.04870

<CAPTION>
YEAR
ENDED
12/31/88
---------
<S> <C>
NET ASSET VALUE AT
BEGINNING
OF PERIOD........ $ 1.213
NET INVESTMENT
INCOME........... 0.051
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS...... 0.119
---------
TOTAL FROM
INVESTMENT
OPERATIONS....... 0.170
DIVIDENDS FROM NET
INVESTMENT
INCOME........... (0.051)
DISTRIBUTION FROM
NET REALIZED
GAINS ON
SECURITIES....... 0.000
RETURN OF
CAPITAL.......... 0.000
---------
TOTAL FROM
DISTRIBUTIONS.... (0.051)
---------
NET INCREASE
(DECREASE) IN NET
ASSETS........... 0.119
NET ASSET VALUE AT
END OF PERIOD.... $ 1.332
---------
---------
TOTAL RETURN...... 14.24%
NET ASSETS (IN
THOUSANDS)....... 264,750
RATIO OF OPERATING
EXPENSES TO
AVERAGE NET
ASSETS........... 0.90%
RATIO OF NET
INVESTMENT INCOME
TO AVERAGE NET
ASSETS........... 3.93%
PORTFOLIO TURNOVER
RATE............. 30.9%
AVERAGE COMMISSION
RATE*............
</TABLE>

- -------------
* Not required for years prior to 1996.
<PAGE>
12 HARTFORD INTERNATIONAL ADVISERS HLS FUND, INC.
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
------------------------------------------
YEAR YEAR
ENDED ENDED 03/01/95-
12/31/97 12/31/96 12/31/95(a)
----------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD............ $ 1.167 $ 1.109 $ 1.000
NET INVESTMENT INCOME............................. 0.056 0.040 0.030
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS...................................... 0.006 0.093 0.126
----------- -------- -------
TOTAL FROM INVESTMENT OPERATIONS.................. 0.062 0.133 0.156
DIVIDENDS FROM NET INVESTMENT INCOME.............. ) (0.050 (0.051) (0.030)
DISTRIBUTION FROM NET REALIZED GAINS ON
SECURITIES....................................... ) (0.004 (0.024) (0.017)
RETURN OF CAPITAL................................. 0.000 0.000 0.000
----------- -------- -------
TOTAL FROM DISTRIBUTIONS.......................... ) (0.054 (0.075) (0.047)
----------- -------- -------
NET INCREASE (DECREASE) IN NET ASSETS............. 0.008 0.058 0.109
NET ASSET VALUE AT END OF PERIOD.................. $ 1.175 $ 1.167 $ 1.109
----------- -------- -------
----------- -------- -------

TOTAL RETURN...................................... % 5.52 12.25% 13.24%***
NET ASSETS (IN THOUSANDS)......................... 207,582 104,486 31,264
RATIO OF OPERATING EXPENSES TO AVERAGE NET
ASSETS........................................... % 0.87 0.96% 0.65%*
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET
ASSETS........................................... % 3.08 3.24% 3.36%*
PORTFOLIO TURNOVER RATE........................... % 162.5 95.2% 47.2%
AVERAGE COMMISSION RATE**......................... $ 0.0045 $0.00640
</TABLE>

- ------------
(a) The Fund was declared effective by the Securities and Exchange Commission
on March 1, 1995.

** Not required for years prior to 1996.

*** Not annualized.

<PAGE>
HARTFORD BOND HLS FUND, INC. 13
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
-------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
--------- --------- --------- --------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT
BEGINNING
OF PERIOD............... $ 1.000 $ 1.028 $ 0.926 $ 1.044 $ 1.024 $ 1.061 $ 0.979 $ 0.976 $ 0.945 $ 0.952
NET INVESTMENT INCOME.... 0.063 0.064 0.064 0.060 0.062 0.074 0.072 0.075 0.079 0.077
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS............. 0.047 (0.029) 0.102 (0.100) 0.039 (0.019) 0.082 0.003 0.031 (0.007)
--------- --------- --------- --------- --------- -------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS.............. 0.110 0.035 0.166 (0.040) 0.101 0.055 0.154 0.078 0.110 0.070
DIVIDENDS FROM NET
INVESTMENT
INCOME.................. (0.060) (0.063) (0.064) (0.060) (0.062) (0.074) (0.072) (0.075) (0.079) (0.077)
DISTRIBUTION FROM NET
REALIZED GAINS ON
SECURITIES.............. 0.000 0.000 0.000 (0.018) (0.019) (0.018) 0.000 0.000 0.000 0.000
RETURN OF CAPITAL........ 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
--------- --------- --------- --------- --------- -------- -------- -------- -------- --------
TOTAL FROM
DISTRIBUTIONS........... (0.060) (0.063) (0.064) (0.078) (0.081) (0.092) (0.072) (0.075) (0.079) (0.077)
--------- --------- --------- --------- --------- -------- -------- -------- -------- --------
NET INCREASE (DECREASE)
IN NET ASSETS........... 0.050 (0.028) 0.102 (0.118) 0.020 (0.037) 0.082 0.003 0.031 (0.007)
NET ASSET VALUE AT END OF
PERIOD.................. $ 1.050 $ 1.000 $ 1.028 $ 0.926 $ 1.044 $ 1.024 $ 1.061 $ 0.979 $ 0.976 $ 0.945
--------- --------- --------- --------- --------- -------- -------- -------- -------- --------
--------- --------- --------- --------- --------- -------- -------- -------- -------- --------

TOTAL RETURN............. 11.35% 3.54% 18.49% (3.95)% 10.24% 5.53% 16.43% 8.39% 12.10% 7.60%
NET ASSETS (IN
THOUSANDS).............. 552,870 402,548 342,495 247,458 239,602 128,538 97,377 70,915 61,602 54,215
RATIO OF OPERATING
EXPENSES TO AVERAGE NET
ASSETS.................. 0.51% 0.52% 0.53% 0.55% 0.57% 0.64% 0.66% 0.67% 0.67% 0.69%
RATIO OF NET INVESTMENT
INCOME TO AVERAGE NET
ASSETS.................. 6.58% 6.37% 6.51% 6.23% 5.93% 7.21% 7.29% 7.82% 8.09% 8.12%
PORTFOLIO TURNOVER
RATE.................... 112.9%** 212.0% 215.0% 328.8% 494.3% 434.1% 337.0% 161.6% 225.0% 230.3%
CURRENT YIELD*........... 6.34% 6.25% 6.46% 7.19% 4.93% 6.48% 6.62% 8.17% 7.92% 9.15%
</TABLE>

- ------------

* The yield information will fluctuate and publication of yield may not provide
a basis for comparison with bank deposits, other investments which are insured
and/or pay a fixed yield for a stated period of time, or other investment
companies. In addition, information may be of limited use for comparative
purposes because it does not reflect charges imposed at the Separate Account
level which, if included, would decrease the yield. This figure has not been
audited.

** Excluding mortgage dollar rolls.

<PAGE>
14 HARTFORD MORTGAGE SECURITIES HLS FUND, INC.
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
---------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
--------- --------- --------- --------- --------- --------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT
BEGINNING
OF PERIOD.............. $ 1.056 $ 1.071 $ 0.984 $ 1.075 $ 1.079 $ 1.115 $ 1.054 $ 1.045 $ 1.006 $ 1.011
NET INVESTMENT INCOME... 0.071 0.069 0.068 0.068 0.071 0.086 0.088 0.087 0.088 0.087
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS............ 0.022 (0.018) 0.087 (0.086) (0.004) (0.036) 0.061 0.009 0.039 (0.005)
--------- --------- --------- --------- --------- --------- --------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS............. 0.093 0.051 0.155 (0.018) 0.067 0.050 0.149 0.096 0.127 0.082
DIVIDENDS FROM NET
INVESTMENT INCOME...... (0.065) (0.066) (0.068) (0.068) (0.071) (0.086) (0.088) (0.087) (0.088) (0.087)
DISTRIBUTION FROM NET
REALIZED GAINS ON
SECURITIES............. 0.000 0.000 0.000 (0.005) 0.000 0.000 0.000 0.000 0.000 0.000
RETURN OF CAPITAL....... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
--------- --------- --------- --------- --------- --------- --------- -------- -------- --------
TOTAL FROM
DISTRIBUTIONS.......... (0.065) (0.066) (0.068) (0.073) (0.071) (0.086) (0.088) (0.087) (0.088) (0.087)
--------- --------- --------- --------- --------- --------- --------- -------- -------- --------
NET INCREASE (DECREASE)
IN NET ASSETS.......... 0.028 (0.015) 0.087 (0.091) (0.004) (0.036) 0.061 0.009 0.039 (0.005)
NET ASSET VALUE AT END
OF PERIOD.............. $ 1.084 $ 1.056 $ 1.071 $ 0.984 $ 1.075 $ 1.079 $ 1.115 $ 1.054 $ 1.045 $ 1.006
--------- --------- --------- --------- --------- --------- --------- -------- -------- --------
--------- --------- --------- --------- --------- --------- --------- -------- -------- --------

TOTAL RETURN............ 9.01% 4.99% 16.17% (1.61)% 6.31% 4.64% 14.71% 9.70% 13.13% 8.38%
NET ASSETS (IN
THOUSANDS)............. 325,702 325,495 327,565 304,147 365,198 258,711 162,484 105,620 85,908 85,075
RATIO OF OPERATING
EXPENSES TO AVERAGE NET
ASSETS................. 0.45% 0.45% 0.47% 0.48% 0.49% 0.56% 0.58% 0.58% 0.58% 0.60%
RATIO OF NET INVESTMENT
INCOME TO AVERAGE NET
ASSETS................. 6.60% 6.67% 6.50% 6.65% 6.49% 7.96% 8.25% 8.42% 8.64% 8.56%
PORTFOLIO TURNOVER
RATE................... 46.5** 200.0% 489.4% 365.7% 183.4% 277.2% 152.2% 85.6% 91.3% 185.0%
CURRENT YIELD*.......... 6.66% 6.67% 6.90% 7.84% 5.73% 7.51% 8.16% 8.21% 8.28% 9.12%
</TABLE>

- ------------

* The yield information will fluctuate and publication of yield may not provide
a basis for comparison with bank deposits, other investments which are
insured and/or pay a fixed yield for a stated period of time, or other
investment companies. In addition, information may be of limited use for
comparative purposes because it does not reflect charges imposed at the
Separate Account level which, if included, would decrease the yield. This
figure has not been audited.

** Excluding mortgage dollar rolls.
<PAGE>
HARTFORD MONEY MARKET HLS FUND, INC. 15
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT
BEGINNING OF
PERIOD............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
NET INVESTMENT
INCOME............... 0.049 0.050 0.056 0.039 0.029 0.036 0.059 0.078 0.088 0.071
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS.......... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS........... 0.049 0.050 0.056 0.039 0.029 0.036 0.059 0.078 0.088 0.071
DIVIDENDS FROM NET
INVESTMENT INCOME.... (0.049) (0.050) (0.056) (0.039) (0.029) (0.036) (0.059) (0.078) (0.088) (0.071)
DISTRIBUTION FROM NET
REALIZED GAINS ON
SECURITIES........... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
RETURN OF CAPITAL..... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL FROM
DISTRIBUTIONS........ (0.049) (0.050) (0.056) (0.039) (0.029) (0.036) (0.059) (0.078) (0.088) (0.071)
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
NET INCREASE
(DECREASE) IN NET
ASSETS............... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
NET ASSET VALUE AT END
OF
PERIOD............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN.......... 5.31% 5.09% 5.74% 3.95% 2.94% 3.63% 6.01% 8.09% 9.10% 7.40%

NET ASSETS (IN
THOUSANDS)........... 612,480 542,586 339,709 321,465 234,088 190,246 177,483 194,462 129,808 127,346
RATIO OF OPERATING
EXPENSES TO AVERAGE
NET ASSETS........... 0.44% 0.44% 0.45% 0.47% 0.48% 0.53% 0.54% 0.57% 0.58% 0.58%
RATIO OF NET
INVESTMENT INCOME TO
AVERAGE NET ASSETS... 5.21% 5.04% 5.57% 3.99% 2.91% 3.60% 5.88% 7.80% 8.75% 7.19%
PORTFOLIO TURNOVER
RATE................. -- -- -- -- -- -- -- -- -- --
CURRENT YIELD*........ 5.36% 5.1% 5.40% 5.43% 2.89% 3.09% 4.66% 7.73% 8.21% 8.49%
EFFECTIVE YIELD*...... 5.50% 5.23% 5.54% 5.58% 2.93% 3.14% 4.79% 8.03% 8.55% 8.85%
</TABLE>

- ------------

* The yield information will fluctuate and publication of yield may not provide
a basis for comparison with bank deposits, other investments which are
insured and/or pay a fixed yield for a stated period of time, or other
investment companies. In addition, information may be of limited use for
comparative purposes because it does not reflect charges imposed at the
Separate Account level which, if included, would decrease the yield. This
figure has not been audited.

<PAGE>
16 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

INTRODUCTION TO THE
HARTFORD MUTUAL FUNDS

The Funds are made available to serve as the underlying investment vehicles
for certain variable annuity and variable life insurance separate accounts of
The Hartford Life Insurance Companies. Each Fund is an open-end management
investment company, commonly known as a mutual fund, organized as a Maryland
corporation. Each Fund has different investment objectives, styles and policies.
These differences affect the types of securities in which each Fund may invest
and, therefore, the potential return of each Fund and the associated risks.
There is no assurance, however, that any Fund will meet its investment goals.
Whether an investment in a particular Fund is appropriate for you depends on
your investment goals, including the return you seek, the expected duration of
your investment and the level of risk you are willing to bear.

Each Fund offers two classes of shares: Class IA shares and Class IB shares.
The shares of each Fund are currently sold only to insurance company separate
accounts in connection with variable life insurance contracts and variable
annuity contracts issued by The Hartford Life Insurance Companies. Both classes
of shares are offered and redeemed at their net asset value without the
imposition of any sales load. Only Class IA shares are offered by this
Prospectus. Class IB shares are offered pursuant to another prospectus and are
subject to the same expenses as the Class IA shares, but unlike the Class IB
shares, Class IA shares are not subject to distribution fees imposed pursuant to
a distribution plan ("Distribution Plan") adopted pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (the "1940 Act"). Inquiries regarding Class
IB shares should be addressed to Hartford Family of Funds,
c/o Individual Annuity Operations, P.O. Box 2999, Hartford, CT 06104-2999 or by
calling 1-800-862-6668.

HL Investment Advisors, Inc. ("HL Advisors") is the investment manager to
each Fund. In addition, under HL Advisors' general management, Wellington
Management Company, LLP ("Wellington Management") serves as sub-adviser to the
Capital Appreciation HLS Fund, Dividend and Growth HLS Fund, International
Advisers HLS Fund, International Opportunities HLS Fund, MidCap HLS Fund, Small
Company HLS Fund, Stock HLS Fund, and Advisers HLS Fund. In addition, under HL
Advisors' general management, The Hartford Investment Management Company
("HIMCO-Registered Trademark-") provides investment management services for the
Index HLS Fund, Bond HLS Fund, Mortgage Securities HLS Fund, and Hartford Money
Market HLS Fund.

HL Advisors was incorporated in Connecticut in 1981 and is a majority-owned
indirect subsidiary of The Hartford Financial Services Group, Inc. ("The
Hartford"), a Connecticut insurance holding company with over $130 billion in
assets. Wellington Management, a Massachusetts limited liability partnership, is
a professional investment counseling firm that provides services to investment
companies, employee benefit plans, endowments, foundations and other
institutions and individuals. Wellington Management and its predecessor
organizations have provided investment advisory services since 1928. HIMCO is a
professional money management firm that provides services to investment
companies, employee benefit plans and its affiliated insurance companies. HIMCO
was incorporated in 1996 and is a wholly-owned subsidiary of The Hartford. As of
December 31, 1997, HL Advisors, HIMCO and their affiliates had investment
management authority with respect to approximately $54.9 billion of assets for
various clients. As of the same date, Wellington Management had investment
management authority with respect to approximately $175 billion of assets for
various clients.

INVESTMENT OBJECTIVES AND STYLES OF THE FUNDS

The Funds have different investment objectives and policies, as described
below. The differences in objectives and policies among the Funds can be
expected to affect the return of each Fund and the degree of market and
financial risk to which each Fund is subject. For more information about the
investment strategies employed by the Funds, see "Common Investment Policies and
Risk Factors." The investment objective of each Fund and certain other
investment restrictions enumerated in detail in the SAI are considered
fundamental and cannot be changed without the affirmative vote of a majority of
the outstanding voting securities of the particular Fund. All other policies not
specifically designated as fundamental are nonfundamental and may be changed by
the Board of Directors of the particular Fund. See the SAI for a complete
listing of investment restrictions. Stated below is the investment objective and
investment style for each Fund. For a description of each Fund's investment
policies and risk factors, see "Common Investment Policies and Risk Factors".

HARTFORD CAPITAL APPRECIATION HLS FUND, INC.

Hartford Capital Appreciation HLS Fund, Inc. (formerly known as Hartford
Capital Appreciation Fund, Inc.) (the "Capital Appreciation Fund") was
incorporated in 1983 under Maryland law.

INVESTMENT OBJECTIVE.

The Capital Appreciation Fund seeks growth of capital by investing in equity
securities selected on the basis of potential for capital appreciation.

<PAGE>
HARTFORD MUTUAL FUNDS 17
- --------------------------------------------------------------------------------

INVESTMENT STYLE.

The Capital Appreciation Fund invests in a diversified portfolio of
primarily equity securities. Wellington Management identifies, through
fundamental analysis, companies that it believes have substantial near-term
capital appreciation potential regardless of company size or industry sector.
Income, if any, is an incidental consideration. This approach is sometimes
referred to as a "stock picking" approach and results in having all market
capitalization sectors (i.e., small, medium, and large companies) represented.
Small and medium sized companies are selected primarily on the basis of dynamic
earnings growth potential. Larger companies are selected primarily based on the
expectation for a catalyst event that will trigger stock price appreciation.
Fundamental analysis involves the assessment of a company through such factors
as its business environment, management, balance sheet, income statement,
anticipated earnings, revenues, dividends, and other related measures of value.
Up to 20% of the Capital Appreciation Fund's total assets may be invested in
securities of non-U.S. companies.

HARTFORD DIVIDEND AND GROWTH HLS FUND, INC.

Hartford Dividend and Growth HLS Fund, Inc. (formerly known as Hartford
Dividend and Growth Fund, Inc.) (the "Dividend and Growth Fund") was
incorporated in 1993 under Maryland law.

INVESTMENT OBJECTIVE.

The Dividend and Growth Fund seeks a high level of current income consistent
with growth of capital by investing primarily in equity securities.

INVESTMENT STYLE.

The Dividend and Growth Fund invests in a diversified portfolio of primarily
equity securities that typically have above average income yield and whose
prospects for capital appreciation are considered favorable by Wellington
Management. Under normal market and economic conditions at least 65% of the
Dividend and Growth Fund's total assets are invested in dividend paying equity
securities. Wellington Management uses fundamental analysis to evaluate a
security for purchase or sale by the Dividend and Growth Fund. Fundamental
analysis involves the assessment of a company through such factors as its
business environment, management, balance sheet, income statement, anticipated
earnings, revenues, dividends, and other related measures of value. As a key
component of the fundamental analysis done for the Dividend and Growth Fund,
Wellington Management evaluates a company's ability to sustain and potentially
increase its dividend. The Dividend and Growth Fund's portfolio is broadly
diversified by industry and company. Up to 20% of the Dividend and Growth Fund's
total assets may be invested in securities of non-U.S. companies.

HARTFORD INDEX HLS FUND, INC.

Hartford Index HLS Fund, Inc. (formerly known as Hartford Index Fund, Inc.)
(the "Index Fund") was incorporated in 1983 under Maryland law.

INVESTMENT OBJECTIVE.

The Index Fund seeks to provide investment results which approximate the
price and yield performance of publicly-traded common stocks in the aggregate.

INVESTMENT STYLE.

The Index Fund uses the Standard & Poor's 500 Composite Stock Price Index
(the "Index") as its standard performance comparison because it represents a
significant proportion of the total market value of all common stocks, is well
known to investors and, in the opinion of the management of the Index Fund, is
representative of the performance of publicly-traded common stocks. Therefore,
the Index Fund attempts to approximate the capital performance and dividend
income of the Index.

The Index Fund generally invests in no fewer than 499 stocks. HIMCO selects
stocks for the Index Fund's portfolio after taking into account their individual
weights in the Index. Temporary cash balances, normally not expected to exceed
2% of the Index Fund's net assets, may be invested in short-term money market
instruments.

The Index is comprised of 500 selected common stocks, most of which are
listed on the New York Stock Exchange. Standard & Poor's Corporation ("S&P")
chooses the stocks to be included in the Index on a proprietary basis. The
weightings of stocks in the Index are based on each stock's relative total
market value, that is, its market price per share times the number of shares
outstanding. Because of this weighting, as of December 31, 1997, approximately
fifty percent of the Index was composed of the fifty-six largest companies, the
five largest being General Electric Co., Coca-Cola Company, Microsoft Corp.,
Exxon Corp. and Merck & Co., Inc.

No attempt is made to "manage" the Index Fund's portfolio in the traditional
sense, using economic, financial and market analysis, nor will the adverse
financial situation of a company directly result in its elimination from the
Index Fund's portfolio unless, of course, the company is removed from the Index.
From time to time administrative adjustments may be made in the Index Fund's
portfolio because of mergers, changes in the composition of the Index and
similar reasons.

The Index Fund's ability to approximate the performance of the Index will
depend to some extent on the size of cash flows into and out of the Index Fund.
Investment changes to accommodate these cash flows will be made to maintain the
similarity of the Index Fund's portfolio to the Index, to the maximum
practicable extent.
<PAGE>
18 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

"Standard & Poor's-Registered Trademark-", "S&P-Registered Trademark-", "S&P
500-Registered Trademark-", "Standard & Poor's 500", and "500" are trademarks of
The McGraw-Hill Companies, Inc. and have been licensed for use by Hartford Life
Insurance Company. The Index Fund is not sponsored, endorsed, sold or promoted
by S&P. S&P makes no representation or warranty, express or implied, to the
shareholders of the Index Fund regarding the advisability of investing in
securities generally or in the Index Fund particularly or the ability of the S&P
500 Index to track general stock market performance. S&P's only relationship to
Hartford Life Insurance Company is the licensing of certain trademarks and trade
names of S&P and of the S&P 500 Index which is determined, composed and
calculated by S&P without regard to the Index Fund or Hartford Life Insurance
Company. S&P has no obligation to take the needs of the Index Fund or its
shareholders, or Hartford Life Insurance Company, into consideration in
determining, composing or calculating the S&P 500 Index. S&P is not responsible
for and has not participated in the determination of the net asset value of the
Index Fund or the timing of the issuance or sale of shares in the Index Fund.
S&P has no obligation or liability in connection with the administration,
marketing or trading of the Index Fund.

In addition, S&P does not guarantee the accuracy and/ or the completeness of
the S&P 500 Index or any data included therein and S&P shall have no liability
for any errors, omissions, or interruptions therein. S&P makes no warranty,
express or implied, as to results to be obtained by the Index Fund, its
shareholders or any other person or entity from the use of the S&P 500 Index or
any data included therein. S&P makes no express or implied warranties, and
expressly disclaims all warranties of merchantability or fitness for a
particular purpose or use with respect to the S&P 500 Index or any data included
therein. Without limiting any of the foregoing, in no event shall S&P have any
liability for any special, punitive, indirect, or consequential damages
(including lost profits), even if notified of the possibility of such damages.

HARTFORD INTERNATIONAL
OPPORTUNITIES HLS FUND, INC.

Hartford International Opportunities HLS Fund, Inc. (formerly known as
Hartford International Opportunities Fund, Inc.) (the "International
Opportunities Fund") was incorporated in 1990 under Maryland law.

INVESTMENT OBJECTIVE.

The International Opportunities Fund seeks growth of capital by investing
primarily in equity securities issued by non-U.S. companies.

INVESTMENT STYLE.

The International Opportunities Fund invests in a diversified portfolio of
primarily equity securities covering a broad range of countries, industries, and
companies. Securities in which the International Opportunities Fund invests are
denominated in both U.S. dollars and non-U.S. currencies (including the European
Currency Unit and its successor, the Euro) and generally are traded in non-U.S.
markets. Under normal market conditions, at least 65% of the International
Opportunities Fund's total assets are invested in equity securities issued by
non-U.S. companies. Wellington Management uses a three-pronged investment
approach. First, Wellington Management determines the relative attractiveness of
the many countries in which the International Opportunities Fund may invest
based upon the economic and political environment of each country. Second,
Wellington Management evaluates industries on a global basis to determine which
industries offer the most potential for capital appreciation given current and
projected global and local economic and market conditions. Finally, Wellington
Management conducts fundamental research on individual companies and considers
companies for inclusion in the International Opportunities Fund's portfolio that
are typically larger, high quality companies that operate in established
markets. Fundamental analysis involves the assessment of a company through such
factors as its business environment, management, balance sheet, income
statement, anticipated earnings, revenues, dividends, and other related measures
of value. In analyzing companies for investment, Wellington Management looks
for, among other things, a strong balance sheet, attractive industry dynamics,
strong competitive advantages and attractive relative value within the context
of a security's primary trading market. The International Opportunities Fund may
also invest on a limited basis in smaller companies and less developed markets.
The International Opportunities Fund anticipates that, under normal market
conditions, it will diversify its investments in at least three countries other
than the United States. The International Opportunities Fund will be subject to
certain risks because it invests primarily in securities issued by non-U.S.
companies.

HARTFORD MIDCAP HLS FUND, INC.

Hartford MidCap HLS Fund, Inc. (formerly known as Hartford MidCap Fund,
Inc.) (the "MidCap Fund") was incorporated in 1997 under Maryland law.

INVESTMENT OBJECTIVE.

The MidCap Fund seeks to achieve long-term capital growth through capital
appreciation by investing primarily in equity securities.

INVESTMENT STYLE.

The MidCap Fund seeks to achieve its objective by investing in a diversified
portfolio of primarily equity securities and securities convertible into equity
securities. Under normal market and economic conditions at least 65% of the
MidCap Fund's total assets are invested in equity securities
<PAGE>
HARTFORD MUTUAL FUNDS 19
- --------------------------------------------------------------------------------

of companies with market capitalizations within the range represented by the
Standard & Poor's MidCap 400 Index. The MidCap Fund uses a two-tiered investment
approach. First, under what is sometimes referred to as a "top down" approach,
Wellington Management analyzes the macro economic and investment environment.
This includes an evaluation of economic conditions, U.S. fiscal and monetary
policy, and demographic trends. Through top down analysis, Wellington Management
anticipates secular and cyclical changes and identifies industries and economic
sectors that are expected to grow faster than the overall economy.

Second, top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to identify
specific securities for purchase or sale. The MidCap Fund's portfolio emphasizes
high-quality growth companies. The key characteristics of high-quality growth
companies include a leadership position within an industry, a strong balance
sheet, a high return on equity, and a strong management team. Fundamental
analysis involves the assessment of a company through such factors as its
business environment, management, balance sheet, income statement, anticipated
earnings, revenues, and other related measures of value. Up to 20% of the MidCap
Fund's total assets may be invested in securities of non-U.S. companies.

HARTFORD SMALL COMPANY HLS FUND, INC.

Hartford Small Company HLS Fund, Inc. (formerly known as Hartford Small
Company Fund, Inc.) (the "Small Company Fund") was incorporated in 1996 under
Maryland law.

INVESTMENT OBJECTIVE.

The Small Company Fund seeks growth of capital by investing primarily in
equity securities selected on the basis of potential for capital appreciation.

INVESTMENT STYLE.

Under normal market and economic conditions at least 65% of the Small
Company Fund's total assets are invested in equity securities of companies with
market capitalizations within the range represented by the Russell 2000 Index
("Small Capitalization Securities"). Wellington Management identifies, through
fundamental analysis, companies that it believes have substantial near-term
capital appreciation potential regardless of industry sector. However, overall
industry exposure is monitored by Wellington Management so as to maintain broad
industry diversification. In selecting investments, Wellington Management
considers securities of companies that, in its opinion, have potential for
above-average earnings growth, are undervalued in relation to their investment
potential, have business and/or fundamental financial characteristics that are
misunderstood by investors, or are relatively obscure, i.e., undiscovered by the
overall investment community. Fundamental analysis involves the assessment of a
company through such factors as its business environment, management, balance
sheet, income statement, anticipated earnings, revenues, dividends, and other
related measures of value. Up to 20% of the Small Company Fund's total assets
may be invested in securities of non-U.S. companies. Investing in Small
Capitalization Securities involves special risks. See "Common Investment
Policies and Risk Factors-Small Capitalization Securities".

HARTFORD STOCK HLS FUND, INC.

Hartford Stock HLS Fund, Inc. (formerly known as Hartford Stock Fund, Inc.)
(the "Stock Fund") was incorporated in 1976 under Maryland law.

INVESTMENT OBJECTIVE.

The Stock Fund seeks long-term growth of capital, with income as a secondary
consideration, by investing in primarily equity securities.

INVESTMENT STYLE.

Under normal market and economic conditions at least 65% of the Stock Fund's
total assets are invested in stocks. The Stock Fund invests in a diversified
portfolio of primarily equity securities using a two-tiered investment approach.
First, under what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the macro economic and investment environment. This includes
an evaluation of economic conditions, U.S. fiscal and monetary policy,
demographic trends, and investor sentiment. Through top down analysis,
Wellington Management anticipates secular and cyclical changes and identifies
industries and economic sectors that are expected to grow faster than the
overall economy. Second, top down analysis is followed by what is sometimes
referred to as a "bottom up" approach, which is the use of fundamental analysis
to identify specific securities for purchase or sale. The Stock Fund's portfolio
emphasizes high-quality growth companies. The key characteristics of
high-quality growth companies include a leadership position within an industry,
a strong balance sheet, a high return on equity, sustainable or increasing
dividends, a strong management team, and a globally competitive position.
Fundamental analysis involves the assessment of a company through such factors
as its business environment, management, balance sheet, income statement,
anticipated earnings, revenues, dividends, and other related measures of value.
Up to 20% of the Stock Fund's total assets may be invested in securities of
non-U.S. companies.

HARTFORD ADVISERS HLS FUND, INC.

Hartford Advisers HLS Fund, Inc. (formerly known as Hartford Advisers Fund,
Inc.) (the "Advisers Fund") was incorporated in 1982 under Maryland law.

<PAGE>
20 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE.

The Advisers Fund seeks maximum long-term total rate of return by investing
in common stocks and other equity securities, bonds and other debt securities,
and money market instruments.

INVESTMENT STYLE.

The Advisers Fund seeks to achieve its objective through the active
allocation of its assets among the asset categories of equity securities, debt
securities and money market instruments based upon Wellington Management's
judgment of the projected investment environment for financial assets, relative
fundamental values and attractiveness of each asset category, and expected
future returns of each asset category. Wellington Management bases its asset
allocation decisions on fundamental analysis and does not attempt to make
short-term market timing decisions among asset categories. As a result, shifts
in asset allocation are expected to be gradual and continuous and the Advisers
Fund will normally have some portion of its assets invested in each asset
category. The Advisers Fund does not have percentage limitations on the amount
that may be allocated to each asset category. The Advisers Fund's investments in
equity securities and securities that are convertible into equity securities
will be substantially similar to the investments permitted for the Stock Fund.
See "Hartford Stock Fund." The debt securities in which the Advisers Fund may
invest include securities issued or guaranteed by the U.S. Government and its
agencies or instrumentalities, securities rated investment grade, or if unrated,
are deemed by Wellington Management to be of comparable quality, and with
respect to 5% of the Advisers Fund's assets, securities rated below investment
grade which are known as high yield-high risk securities or junk bonds. The
money market instruments in which the Adviser's Fund may invest are described
under "Common Investment Policies and Risk Factors -- Money Market Instruments
and Temporary Investment Strategies." Up to 20% of the Advisers Fund's total
assets may be invested in securities of non-U.S. companies.

HARTFORD INTERNATIONAL ADVISERS HLS FUND, INC.

Hartford International Advisers HLS Fund, Inc. (formerly known as Hartford
International Advisers Fund, Inc.) (the "International Advisers Fund") was
incorporated in 1994 under Maryland law.

INVESTMENT OBJECTIVE.

The International Advisers Fund seeks maximum long-term total rate of return
by investing in a portfolio of equity, debt and money market securities.
Securities in which the Fund invests primarily will be denominated in non-U.S.
currencies and will be traded in non-U.S. markets.

INVESTMENT STYLE.

The International Advisers Fund seeks to achieve its objective through the
active allocation of its assets among the asset categories of equity securities,
debt securities and money market instruments based upon Wellington Management's
judgment of the projected investment environment for financial assets, relative
fundamental values and attractiveness of each asset category, and expected
future returns of each asset category. Wellington Management bases its asset
allocation decisions on fundamental analysis and does not attempt to make
short-term market timing decisions among asset categories. As a result, shifts
in asset allocation are expected to be gradual and continuous and the
International Advisers Fund will normally have some portion of its assets
invested in each asset category. The International Advisers Fund does not have
percentage limitations on the amount that may be allocated to each asset
category. The International Advisers Fund's investments in equity securities are
substantially similar to the equity securities investments permitted for the
International Opportunities Fund. See "Hartford International Opportunities
Fund, Inc.-- Investment Style."

The International Advisers Fund consists of a diversified portfolio of
securities covering a broad range of countries, industries, and companies. The
International Advisers Fund anticipates that, under normal market conditions, it
will diversify its investments in at least three countries other than the United
States.

Securities in which the International Advisers Fund invests are denominated
in both U.S. dollars and non-U.S. currencies (including the European Currency
Unit) and generally are traded on non-U.S. markets.

Debt securities in which the International Advisers Fund may invest include
investment grade, non-convertible debt securities assigned within the four
highest bond rating categories by Moody's Investors Service, Inc. ("Moody's") or
S&P, or, if unrated, which are determined by Wellington Management to be of
comparable quality. In addition, the International Advisers Fund may invest up
to 15% of its total assets in high yield-high risk securities, commonly known as
"junk bonds." Such securities may be rated as low as "C" by Moody's and by S&P,
or, if unrated, are of comparable quality as determined by Wellington
Management.

HARTFORD BOND HLS FUND, INC.

Hartford Bond HLS Fund, Inc. (formerly known as Hartford Bond Fund, Inc.)
(the "Bond Fund") was incorporated in 1982 under Maryland law.

INVESTMENT OBJECTIVE.

The Bond Fund seeks maximum current income consistent with preservation of
capital by investing primarily in fixed-income securities.
<PAGE>
HARTFORD MUTUAL FUNDS 21
- --------------------------------------------------------------------------------

INVESTMENT STYLE.

The Bond Fund is comprised of a diversified portfolio of fixed-income
securities. Under normal circumstances at least 80% of the Bond Fund's portfolio
is invested in investment grade bond-type securities. Up to 20% of the Bond Fund
may be invested in securities rated in the highest category of below investment
grade bonds ("Ba" by Moody's or "BB" by S&P, or securities which, if unrated,
are determined by HIMCO to be of comparable quality. Securities rated below
investment grade are commonly referred to as "high yield-high risk securities"
or "junk bonds". Investments in securities rated in the highest category below
investment grade may offer an attractive risk/reward trade-off and investment in
this sector may enhance the current yield and total return of the Bond Fund over
time. Investing in securities within this rating category combined with the
investment grade portion of the portfolio is designed to provide investors with
both a high level of current income and attractive relative total returns.

The Bond Fund will invest at least 65% of its total assets in bonds and debt
securities with a maturity of at least one year. The Bond Fund may invest up to
15% of its total assets in preferred stocks, convertible securities, and
securities carrying warrants to purchase equity securities. The Bond Fund will
not invest in common stocks directly, but may retain, for reasonable periods of
time, common stocks acquired upon conversion of debt securities or upon exercise
of warrants acquired with debt securities. Under normal circumstances, up to 20%
of the Bond Fund's total assets may be invested in securities of non-U.S.
companies.

HARTFORD MORTGAGE SECURITIES HLS FUND, INC.

Hartford Mortgage Securities HLS Fund, Inc. (formerly known as Hartford
Mortgage Securities Fund, Inc.) (the "Mortgage Securities Fund") was
incorporated in 1984 under Maryland law.

INVESTMENT OBJECTIVE.

The Mortgage Securities Fund seeks maximum current income consistent with
safety of principal and maintenance of liquidity by investing primarily in
mortgage-related securities, including securities issued by the Government
National Mortgage Association.

INVESTMENT STYLE.

The Mortgage Securities Fund seeks to achieve its objective by investing,
under normal circumstances, at least 65% of its total assets in high quality
mortgage-related securities either (i) issued by U.S. Government agencies,
instrumentalities or sponsored corporations or (ii) rated A or better by Moody's
or S&P or, if not rated, which are of equivalent investment quality as
determined by HIMCO. At times the Mortgage Securities Fund may invest in
mortgage-related securities not meeting the foregoing investment quality
standards when HIMCO deems such investments to be consistent with the Fund's
investment objective; however, no such investments will be made in excess of 20%
of the value of the Fund's total assets. Such investments will be considered
mortgage-related securities for purposes of the policy that the Fund invest at
least 65% of the value of its total assets in mortgage-related securities,
including securities issued by the GNMA.

HARTFORD MONEY MARKET HLS FUND, INC.

Hartford Money Market HLS Fund, Inc. (formerly known as HVA Money Market
Fund, Inc.) (the "Money Market Fund") was incorporated in 1982 under Maryland
law.

INVESTMENT OBJECTIVE.

The Money Market Fund seeks maximum current income consistent with liquidity
and preservation of capital.

INVESTMENT STYLE.

The Money Market Fund seeks to maintain a stable net asset value of $1.00
per share; however, there can be no assurance that the Fund will achieve this
goal. The Money Market Fund's portfolio will consist entirely of cash, cash
equivalents and high quality debt securities as permitted under Rule 2a-7 of the
Investment Company Act of 1940 (the "1940 Act"). Each investment will have an
effective maturity date of 397 days or less computed in accordance with Rule
2a-7. The average maturity of the portfolio will vary according to HIMCO's
appraisal of money market conditions and will not exceed 90 days. All securities
purchased by the Money Market Fund will be U.S. dollar denominated.

COMMON INVESTMENT POLICIES
AND RISK FACTORS

MONEY MARKET INSTRUMENTS AND
TEMPORARY INVESTMENT STRATEGIES

In addition to the Money Market Fund, which may hold cash and invest in
money market instruments at any time, all other Funds may hold cash and invest
in high quality money market instruments under appropriate circumstances as
determined by HIMCO or Wellington Management. Such Funds may invest up to 100%
of their assets in cash or money market instruments only for temporary defensive
purposes.

Money market instruments include: (1) banker's acceptances; (2) obligations
of governments (whether U.S. or non-U.S.) and their agencies and
instrumentalities; (3) short-term corporate obligations, including commercial
paper, notes, and bonds; (4) other short-term debt obligations; (5) obligations
of U.S. banks, non-U.S. branches of
<PAGE>
22 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

U.S. banks (Eurodollars), U.S. branches and agencies of non-U.S. banks (Yankee
dollars), and non-U.S. branches of non-U.S. banks; (6) asset-backed securities;
and (7) repurchase agreements.

REPURCHASE AGREEMENTS

Each Fund is permitted to enter into fully collateralized repurchase
agreements. A repurchase agreement is an agreement by which the seller of a
security agrees to repurchase the security sold at a mutually agreed upon time
and price. It may also be viewed as the loan of money by a Fund to the seller.
The resale price would be in excess of the purchase price, reflecting an agreed
upon market interest rate. Delays or losses could result if the other party to
the agreement defaults or becomes insolvent. The Fund's Board of Directors has
established standards for evaluation of the creditworthiness of the banks and
securities dealers with which the Funds may engage in repurchase agreements and
monitors on a quarterly basis HIMCO's and Wellington Management's compliance
with such standards.

REVERSE REPURCHASE AGREEMENTS

Each Fund may also enter into reverse repurchase agreements. Reverse
repurchase agreements involve sales by a Fund of portfolio assets concurrently
with an agreement by a Fund to repurchase the same assets at a later date at a
fixed price. Reverse repurchase agreements carry the risk that the market value
of the securities which a Fund is obligated to repurchase may decline below the
repurchase price. A reverse repurchase agreement is viewed as a collateralized
borrowing by a Fund. Borrowing magnifies the potential for gain or loss on the
portfolio securities of a Fund and, therefore, increases the possibility of
fluctuation in a Fund's net asset value. A Fund will establish a segregated
account with the Fund's custodian bank in which a Fund will maintain liquid
assets equal in value to a Fund's obligations in respect of reverse repurchase
agreements. As a non-fundamental policy, a Fund will not enter into reverse
repurchase transactions if the combination of all borrowings from banks and the
value of all reverse repurchase agreements for the particular Fund equals more
than 33 1/3% of the value of the Fund's total assets.

DEBT SECURITIES

Each Fund is permitted to invest in debt securities including: (1)
securities issued or guaranteed as to principal or interest by the U.S.
Government, its agencies or instrumentalities; (2) debt securities issued or
guaranteed by U.S. corporations or other issuers (including foreign governments
or corporations); (3) asset-backed securities (International Opportunities Fund,
International Advisers Fund, Advisers Fund, Bond Fund, Mortgage Securities Fund
and Money Market Fund only); (4) mortgage-related securities, including
collateralized mortgage obligations ("CMO's") (International Opportunities Fund,
International Advisers Fund, Advisers Fund, Bond Fund and Mortgage Securities
Fund only); and (5) securities issued or guaranteed as to principal or interest
by a sovereign government or one of its agencies or political subdivisions,
supranational entities such as development banks, non-U.S. corporations, banks
or bank holding companies, or other non-U.S. issuers.

INVESTMENT GRADE DEBT SECURITIES

Each Fund is permitted to invest in debt securities rated within the four
highest rating categories (i.e., Aaa, Aa, A or Baa by Moody's or AAA, AA, A or
BBB by S&P), or, if unrated, securities of comparable quality as determined by
HIMCO or Wellington Management. These securities are generally referred to as
"investment grade securities." Each rating category has within it different
gradations or sub-categories. If a Fund is authorized to invest in a certain
rating category, the Fund is also permitted to invest in any of the
sub-categories or gradations within that rating category. If a security is
downgraded to a rating category which does not qualify for investment, HIMCO or
Wellington Management will use its discretion on whether to hold or sell based
upon its opinion on the best method to maximize value for shareholders over the
long term. Debt securities carrying the fourth highest rating (i.e., "Baa" by
Moody's and "BBB" by S&P), and unrated securities of comparable quality (as
determined by HIMCO or Wellington Management) are viewed as having adequate
capacity for payment of principal and interest, but do involve a higher degree
of risk than that associated with investments in debt securities in the higher
rating categories.

HIGH YIELD-HIGH RISK DEBT SECURITIES

The Capital Appreciation Fund, Dividend and Growth Fund, MidCap Fund, Small
Company Fund, Stock Fund, Advisers Fund and International Opportunities Fund may
invest up to 5% of their assets and the International Advisers Fund may invest
up to 15% of its assets in high yield debt securities (i.e., rated as low as "C"
by Moody's or S&P, and unrated securities of comparable quality as determined by
Wellington Management). The Bond Fund may invest up to 20% of its assets in
securities rated in the highest level below investment grade ("Ba" by Moody's or
"BB" by S&P) or if unrated, determined to be of comparable quality by HIMCO.
Securities rated below investment grade are commonly referred to as "high
yield-high risk securities" or "junk bonds". Each rating category has within it
different gradations or sub-categories. If a Fund is authorized to invest in a
certain rating category, the Fund is also permitted to invest in any of the
sub-categories or gradations within that rating category. If a security is
downgraded to a rating category which does not qualify for investment, HIMCO or
Wellington Management will use its discretion on whether to hold or sell based
upon its opinion on the best method to

<PAGE>
HARTFORD MUTUAL FUNDS 23
- --------------------------------------------------------------------------------

maximize value for shareholders over the long term. Securities in the rating
categories below "Baa" as determined by Moody's and "BBB" as determined by S&P
are considered to be of poor standing and predominantly speculative. The rating
services' descriptions of securities are set forth in Appendix A. High
yield-high risk debt securities are considered speculative with respect to the
issuer's capacity to pay interest and repay principal in accordance with the
terms of the obligations. Accordingly, it is possible that these types of
factors could, in certain instances, reduce the value of securities held by a
Fund with a commensurate effect on the value of the Fund's shares.

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES

The Advisers Fund, International Advisers Fund, Bond Fund and Mortgage
Securities Fund may invest in mortgage-backed securities and the Advisers Fund,
International Advisers Fund, Bond Fund, Mortgage Securities Fund and Money
Market Fund may invest in asset-backed securities. Mortgage-backed securities
represent a participation in, or are secured by, mortgage loans and include
securities issued or guaranteed by the U.S. Government or one of its agencies or
instrumentalities; securities issued by private issuers that represent an
interest in, or are collateralized by, mortgage-backed securities issued or
guaranteed by the U.S. Government or one or its agencies or instrumentalities;
or securities issued by private issuers that represent an interest in or are
collateralized by mortgage loans or mortgage-backed securities without a
government guarantee but usually having some form of private credit enhancement.
Asset-backed securities are structured like mortgage-backed securities, but
instead of mortgage loans or interests in mortgage loans, the underlying assets
may include motor vehicle installment sales or installment loan contracts,
leases of various types of real and personal property, and receivables from
credit card agreements.

Due to the risk of prepayment, especially when interest rates decline,
mortgage-backed and asset-backed securities are less effective than other types
of securities as a means of "locking in" attractive long-term interest rates
and, as a result, may have less potential for capital appreciation during
periods of declining interest rates than other securities of comparable
maturities. The ability of an issuer of asset-backed securities to enforce its
security interest in the underlying assets may be limited.

EQUITY SECURITIES

All Funds except the Bond Fund, Mortgage Securities Fund and Money Market
Fund may invest in equity securities including common stocks, preferred stocks,
convertible preferred stock and rights to acquire such securities. In addition,
these Funds may invest in securities such as bonds, debentures and corporate
notes which are convertible into common stock at the option of the holder. The
Bond Fund may invest up to 15% of its total assets in preferred stocks,
convertible securities, and securities carrying warrants to purchase equity
securities. The Bond Fund will not invest in common stocks directly, but may
retain, for reasonable periods of time, common stocks acquired upon conversion
of debt securities or upon exercise of warrants acquired with debt securities.

SMALL CAPITALIZATION SECURITIES

All Funds except the Bond Fund, Mortgage Securities Fund and Money Market
Fund may invest in equity securities (including securities issued in initial
public offerings) of companies with market capitalizations within the range
represented by the Russell 2000 Index ("Small Capitalization Securities").
Because the issuers of Small Capitalization Securities tend to be smaller or
less well-established companies, they may have limited product lines, market
share or financial resources and may have less historical data with respect to
operations and management. As a result, Small Capitalization Securities are
often less marketable and experience a higher level of price volatility than
securities of larger or more well-established companies. In addition, companies
whose securities are offered in initial public offerings may be more dependent
on a limited number of key employees. Because securities issued in initial
public offerings are being offered to the public for the first time, the market
for such securities may be inefficient and less liquid.

NON-U.S. SECURITIES

Under normal circumstances the International Opportunities Fund and
International Advisers Fund intend to invest at least 65% of their assets in
securities issued by non-U.S. companies ("non-U.S. securities"). In addition,
the International Opportunities Fund and International Advisers Fund may invest
in commingled pools offered by non-U.S. banks. Each other Fund, except the
Mortgage Securities Fund, is permitted to invest up to 20% of its assets, and
the Money Market Fund is permitted to invest up to 25% of its assets, in
non-U.S. securities. The Bond Fund intends to purchase securities denominated in
U.S. dollars, or if not so denominated, to use currency transactions to reflect
U.S. dollar valuation at the time of purchase or while the security is held by
the Fund. Each Fund except the Bond Fund and Money Market Fund may invest in
American Depositary Receipts ("ADRs") and Global Depositary Receipts ("GDRs").
ADRs are certificates issued by a U.S. bank or trust company and represent the
right to receive non-U.S. securities. ADRs are traded on a U.S. securities
exchange, or in an over-the-counter market, and are denominated in U.S. dollars.
GDRs are certificates issued globally and evidence a similar ownership
arrangement. GDRs are traded on non-U.S. securities exchanges and are
denominated in non-U.S. currencies. The value of an ADR or a GDR will fluctuate
with the value of the underlying
<PAGE>
24 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

security, will reflect any changes in exchange rates and otherwise will involve
risks associated with investing in non-U.S. securities.

When selecting non-U.S. securities HIMCO or Wellington Management will
evaluate the economic and political climate and the principal securities markets
of the country in which the company is located. Investing in non-U.S. securities
involves considerations and potential risks not typically associated with
investing in securities issued by U.S. companies. Less information may be
available about non-U.S. companies than about U.S. companies and non-U.S.
companies generally are not subject to uniform accounting, auditing and
financial reporting standards or to other regulatory practices and requirements
comparable to those applicable to U.S. companies. The values of non-U.S.
securities are affected by changes in currency rates or exchange control
regulations, restrictions or prohibitions on the repatriation of non-U.S.
currencies, application of non-U.S. tax laws, including withholding taxes,
changes in governmental administration or economic or monetary policy (in the
U.S. or outside the U.S.) or changed circumstances in dealings between nations.
Costs are also incurred in connection with conversions between various
currencies. Although the International Opportunities Fund and International
Advisers Fund will focus on companies that operate in established markets, from
time to time the Funds may invest up to 25% of their assets in companies located
in emerging countries. Compared to the United States and other developed
countries, developing countries may have relatively unstable governments,
economies based on only a few industries, and securities markets that are less
liquid and trade a small number of securities. Prices on these exchanges tend to
be volatile and, in the past, securities in these countries have offered greater
potential for gain (as well as loss) than securities of companies located in
developed countries. See the SAI for additional risk disclosure concerning
non-U.S. securities.

CURRENCY TRANSACTIONS

Each Fund, except the Index Fund, Mortgage Securities Fund and Money Market
Fund, may engage in currency transactions to hedge the value of portfolio
securities denominated in particular currencies against fluctuations in relative
value. Currency transactions include forward currency contracts, currency swaps,
exchange-listed and over-the-counter ("OTC") currency futures contracts and
options thereon and exchange listed and OTC options on currencies.

Forward currency contracts involve a privately negotiated obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon by the parties, at a
price set at the time of the contract. Currency swaps are agreements to exchange
cash flows based on the notional difference between or among two or more
currencies. See "Swap Agreements."

The use of currency transactions to protect the value of a Fund's assets
against a decline in the value of a currency does not eliminate potential losses
arising from fluctuations in the value of the Fund's underlying securities.
Further, the Funds may enter into currency transactions only with counterparties
that HIMCO or Wellington Management deem to be creditworthy.

The Funds may also enter into options and futures contracts relative to
foreign currency to hedge against fluctuations in foreign currency rates. See
"Options and Futures Contracts" for a discussion of risk factors relating to
foreign currency transactions including related options and futures contracts.

OPTIONS AND FUTURES CONTRACTS

Each Fund, except the Money Market Fund, may employ certain hedging, income
enhancement and risk management techniques involving options and futures
contracts, though such techniques may also result in losses to the Fund. The
Funds may write covered call options or purchase put and call options on
individual securities, write covered put and call options and purchase put and
call options on foreign currencies, aggregates of equity and debt securities,
indices of prices of equity and debt securities and other financial indices, and
enter into futures contracts and options thereon for the purchase or sale of
aggregates of equity and debt securities, indices of equity and debt securities
and other financial indices.

A Fund may write covered options only. "Covered" means that, so long as a
Fund is obligated as the writer of an option, it will own either the underlying
securities or currency or an option to purchase or sell the same underlying
securities or currency having an expiration date not earlier than the expiration
date of the covered option and an exercise price equal to or less than the
exercise price of the covered option, or will establish or maintain with its
custodian for the term of the option a "segregated account" consisting of cash
or other liquid securities having a value equal to the fluctuating market value
of the optioned securities or currencies. A Fund receives a premium from writing
a call or put option, which increases the Fund's return if the option expires
unexercised or is closed out at a net profit.

To hedge against fluctuations in currency exchange rates, these Funds may
purchase or sell foreign currency futures contracts, and write put and call
options and purchase put and call options on such futures contracts. To the
extent that a Fund enters into futures contracts, options on futures contracts
and options on foreign currencies that are traded on an exchange regulated by
the Commodities Futures Trading Commission ("CFTC"), in each case that are not
for BONA FIDE hedging purposes (as defined by the
<PAGE>
HARTFORD MUTUAL FUNDS 25
- --------------------------------------------------------------------------------

CFTC), the aggregate initial margin and premiums required to establish those
non-hedging positions may not exceed 5% of the liquidation value of Fund's
portfolio, after taking into account the unrealized profits and unrealized
losses on any such contracts the Fund has entered into.

A Fund's use of options, futures and options thereon and forward currency
contracts (as described under "Currency Transactions") would involve certain
investment risks and transaction costs to which it might not be subject were
such strategies not employed. Such risks include: (1) dependence on the ability
of HIMCO or Wellington Management to predict movements in the prices of
individual securities, fluctuations in the general securities markets or market
sections and movements in interest rates and currency markets; (2) imperfect
correlation between movements in the price of the securities or currencies
hedged or used for cover; (3) the fact that skills and techniques needed to
trade options, futures contracts and options thereon or to use forward currency
contracts are different from those needed to select the securities in which a
Fund invests; (4) lack of assurance that a liquid secondary market will exist
for any particular option, futures contract, option thereon or forward contract
at any particular time, which may affect a Fund's ability to establish or close
out a position; (5) possible impediments to effective portfolio management or
the ability to meet current obligations caused by the segregation of a large
percentage of a Fund's assets to cover its obligations; and (6) the possible
need to defer closing out certain options, futures contracts, options thereon
and forward contracts in order to continue to qualify for the beneficial tax
treatment afforded "regulated investment companies" under the Internal Revenue
Code of 1986, as amended (the "Code"). See the SAI for additional information on
options and futures contracts. Options and futures contracts are commonly known
as "derivative" securities.

SWAP AGREEMENTS

Each Fund, except the Index Fund and Money Market Fund, may enter into
interest rate swaps, currency swaps and other types of swap agreements such as
caps, collars, and floors. In a typical interest rate swap, one party agrees to
make regular payments equal to a floating interest rate multiplied by a
"notional principal amount," in return for payments equal to a fixed rate
multiplied by the same amount, for a specified period of time. If a swap
agreement provides for payments in different currencies, the parties might agree
to exchange the notional principal amount as well. Swaps may also depend on
other prices or rates, such as the value of an index or mortgage prepayment
rates.

In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specified interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor.

Swap agreements will tend to shift a Fund's investment exposure from one
type of investment to another. For example, if a Fund agreed to exchange
floating rate payments for fixed rate payments, the swap agreement would tend to
decrease the Fund's exposure to rising interest rates. Caps and floors have an
effect similar to buying or writing options. Depending on how they are used,
swap agreements may increase or decrease the overall volatility of a Fund's
investments and its share price and yield. Swap agreements are commonly known as
"derivative" securities.

The successful utilization of hedging and risk management transactions
requires skills different from those needed in the selection of a Fund's
portfolio securities and depends on HIMCO's or Wellington Management's ability
to predict correctly the direction and degree of movement in interest rates.
Although the Funds believe that the use of the hedging and risk management
techniques described above will benefit the Funds, if HIMCO's or Wellington
Management's judgment about the direction or extent of the movement in interest
rates is incorrect, a Fund's overall performance would be worse than if it had
not entered into any such transactions. These activities are commonly used when
managing derivative investments.

ILLIQUID SECURITIES

Each Fund is permitted to invest in illiquid securities. The maximum
percentage of illiquid securities which may be purchased by each Fund is 15%
except for the Money Market Fund for which the limit is 10% of their net assets.
"Illiquid Securities" are securities that may not be sold or disposed of in the
ordinary course of business within seven days at approximately the price used to
determine a Fund's net asset value. Each Fund may purchase certain restricted
securities commonly known as Rule 144A securities that can be resold to
institutions and which may be determined to be liquid pursuant to policies and
guidelines of the Board of Directors.

Under current interpretations of the Securities and Exchange Commission
("SEC") staff, the following securities may be considered illiquid: (1)
repurchase agreements maturing in more than seven days; (2) certain restricted
securities (securities whose public resale is subject to legal or contractual
restrictions); (3) options, with respect to specific securities, not traded on a
national securities exchange that are not readily marketable; and (4) any other
securities in which a Fund may invest that are not readily marketable.
<PAGE>
26 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES

Each Fund is permitted to purchase or sell securities on a when-issued or
delayed-delivery basis. When-issued or delayed-delivery transactions arise when
securities are purchased or sold with payment and delivery taking place in the
future in order to secure what is considered to be an advantageous price and
yield at the time of entering into the transaction. While the Funds generally
purchase securities on a when-issued basis with the intention of acquiring the
securities, the Funds may sell the securities before the settlement date if
HIMCO or Wellington Management deems it advisable. At the time a Fund makes the
commitment to purchase securities on a when-issued basis, the Fund will record
the transaction and thereafter reflect the value, each day, of such security in
determining net asset value. At the time of delivery of the securities, the
value may be more or less than the purchase price.

OTHER INVESTMENT COMPANIES

Each Fund, except the Index Fund and Money Market Fund, is permitted to
invest in other investment companies. Securities in certain countries are
currently accessible to the Funds only through such investments. The investment
in other investment companies is limited in amount and will involve the indirect
payment of a portion of the expenses, including advisory fees, of such other
investment companies. A Fund will not purchase a security if, as a result, (1)
more than 10% of the Fund's assets would be invested in securities of other
investment companies, (2) such purchase would result in more than 3% of the
total outstanding voting securities of any one such investment company being
held by the Fund or (3) more than 5% of the Fund's assets would be invested in
any one such investment company.

PORTFOLIO SECURITIES LENDING

Each Fund may lend its portfolio securities to broker/ dealers and other
institutions as a means of earning interest income. Delays or losses could
result if a borrower of portfolio securities becomes bankrupt or defaults on its
obligation to return the loaned securities. A Fund may lend securities only if:
(1) each loan is fully secured by appropriate collateral at all times as
determined by HL Advisors; and (2) the value of all loaned securities of the
Fund is not more than 33 1/3% of the Fund's total assets (including collateral
received in connection with any loans).

OTHER RISK FACTORS

As mutual funds that primarily invest in equity and/or debt securities, each
Fund is subject to market risk, i.e., the possibility that equity and/or debt
prices in general will decline over short or even extended periods of time. The
financial markets tend to be cyclical, with periods when security prices
generally rise and periods when security prices generally decline.

The value of the debt securities in which the Funds invest will tend to
increase when interest rates are falling and to decrease when interest rates are
rising.

No Fund should be considered to be a complete investment program in and of
itself. Each prospective purchaser should take into account his or her own
investment objectives as well as his or her other investments when considering
the purchase of shares of any investment company.

There can be no assurance that the investment objectives of the Funds will
be met. In addition, the risk inherent in investing in the Funds is common to
any security-- the net asset value will fluctuate in response to changes in
economic conditions, interest rates and the market's perception of the
underlying portfolio securities of each Fund.

In pursuit of a Fund's investment objective, HIMCO and Wellington Management
attempt to select appropriate individual securities for inclusion in a Fund's
portfolio. In addition, HIMCO and Wellington Management attempt to successfully
forecast market trends and increase investments in the types of securities best
suited to take advantage of such trends. Thus, the investor is dependent on
HIMCO's or Wellington Management's success not only in selecting individual
securities, but also in identifying the appropriate mix of securities consistent
with a Fund's investment objective.

The services provided to the Funds by Hartford Life, HL Advisors, HIMCO,
Wellington Management and other service providers, depend on the smooth
functioning of their computer systems. Many computer software systems in use
today cannot distinguish the year 2000 from the year 1900 because of the way
dates are encoded and calculated. That failure could have a negative impact on
the handling of securities trades, pricing and account services. Hartford Life,
HL Advisors, HIMCO, Wellington Management and other service providers have been
actively working on necessary changes to their computer systems to deal with the
year 2000 and expect that their systems will be adapted in time for that event.

INVESTMENT LIMITATIONS

The Funds have adopted certain limitations in an attempt to reduce their
exposure to specific situations. Some of these limitations are that each Fund
will not:

(a) invest more than 25% of its assets in any one industry;

(b) borrow money, except from banks, and then only in amounts not exceeding
33 1/3% of the value of a Fund's total assets (although for purposes of this
restriction reverse repurchase agreements are not considered
<PAGE>
HARTFORD MUTUAL FUNDS 27
- --------------------------------------------------------------------------------

borrowings, as a non-fundamental operating policy, each Fund will limit
combined borrowings and reverse repurchase transactions to 33 1/3% of the
value of a Fund's total assets);

(c) with respect to 75% of the value of each Fund's total assets, purchase the
securities of any issuer (other than cash, cash items or securities issued
or guaranteed by the U.S. Government, its agencies, instrumentalities or
authorities) if:

(1) such purchase would cause more than 5% of the Fund's total assets taken
at market value to be invested in the securities of such issuer; or

(2) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the Fund.
These investment restrictions are considered at the time investment
securities are purchased. The limitations described above, except as noted under
(b), and those listed under Fundamental Restrictions of the Funds in the SAI,
are considered fundamental and as such can only be changed with the approval of
a majority of each Fund's shareholders.

MANAGEMENT OF THE FUNDS
Each Fund's Board of Directors manages the business and affairs of that Fund
and takes action on all matters not reserved for the shareholders, including the
annual election of officers of the Fund who carry out all orders and resolutions
of the Board of Directors and carry out functions relating to the day to day
management of the affairs of the Fund.

MANAGEMENT SERVICES

HL Advisors serves as investment manager to each Fund pursuant to written
agreements entered into between HL Advisors and each Fund. Pursuant to such
agreements HL Advisors has overall investment supervisory responsibility for
each Fund. In addition, Hartford Life Insurance Company ("Hartford Life"), an
affiliate of HL Advisors, provides administrative personnel, services, equipment
and facilities and office space for proper operation of the Funds. HL Advisors
has contracted with Wellington Management for the provision of day to day
investment management services to the Capital Appreciation Fund, Dividend and
Growth Fund, International Opportunities Fund, MidCap Fund, Small Company Fund,
Stock Fund, Advisers Fund, and International Advisers Fund. In addition, HL
Advisors has contracted with HIMCO for the provision of day to day investment
management and other services for the Bond Fund, Index Fund, Mortgage Securities
Fund and Money Market Fund. Each Fund pays a fee to HL Advisors, a portion of
which may be used to compensate Wellington Management or HIMCO.

For services rendered to the Funds, HL Advisors charges a monthly fee based
on the following annual rates as applied to the average of the calculated daily
net asset value of the Funds.

INDEX FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
All Assets 0.20%
</TABLE>

MORTGAGE SECURITIES FUND AND MONEY MARKET FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
All Assets 0.25%
</TABLE>

BOND FUND AND STOCK FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
First $250,000,000 0.325%
Next $250,000,000 0.300%
Next $500,000,000 0.275%
Amount Over $1 Billion 0.250%
</TABLE>

CAPITAL APPRECIATION FUND, DIVIDEND AND GROWTH FUND, INTERNATIONAL
OPPORTUNITIES FUND, MIDCAP FUND, SMALL COMPANY FUND, ADVISERS FUND AND
INTERNATIONAL ADVISERS FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
First $250,000,000 0.575%
Next $250,000,000 0.525%
Next $500,000,000 0.475%
Amount Over $1 Billion 0.425%
</TABLE>

Under the terms of the Investment Management Agreements, HL Advisors,
subject to the supervision of the Funds' Board of Directors, provides investment
management supervision to each Fund in accordance with the Funds' investment
objectives, policies and restrictions.

<PAGE>
28 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

For 1997, the management fees (advisory and administrative fees) for each
Fund as a percentage of average net assets were as follows:

<TABLE>
<CAPTION>
% OF ASSETS
-----------
<S> <C>
Capital Appreciation Fund .62%
Dividend and Growth Fund .66%
Index Fund .37%
International Opportunities Fund .68%
MidCap Fund (1) .13%
Small Company Fund .74%
Stock Fund .44%
Advisers Fund .61%
International Advisers Fund .75%
Bond Fund .49%
Mortgage Securities Fund .43%
Money Market Fund .42%
</TABLE>

- ---------

(1) Portion of management fee waived in 1997.

HL Advisors, Hartford Plaza, Hartford, Connecticut 06115, is a wholly-owned
subsidiary of Hartford Life and was organized under the laws of the State of
Connecticut in 1981. A wholly-owned subsidiary of HL Investment Advisors,
Hartford Investment Financial Services Company, serves as investment adviser to
several other Hartford Life-sponsored funds which are also registered with the
SEC. Hartford Life is a majority owned subsidiary of Hartford Fire Insurance
Company, one of the largest multiple lines insurance carriers in the United
States. Hartford Fire Insurance Company is a subsidiary of The Hartford
Financial Services Group, Inc.

Certain officers of the Funds are also officers and/or directors of HL
Advisors and HIMCO: Joseph H. Gareau is a Director and the President of HL
Advisors and HIMCO; Andrew W. Kohnke is a Managing Director and a Director of HL
Advisors and HIMCO; and C. Michael O'Halloran is a Director, Secretary and
General Counsel of HL Advisors and HIMCO.

INVESTMENT SUB-ADVISORY AND OTHER SERVICES

Wellington Management serves as sub-adviser to the Capital Appreciation
Fund, Dividend and Growth Fund, International Opportunities Fund, MidCap Fund,
Small Company Fund, Stock Fund, Advisers Fund and International Advisers Fund
pursuant to written contracts entered into between HL Advisors and Wellington
Management. In addition, HIMCO provides day-to-day investment management
services to HL Advisors on behalf of the Index Fund, Mortgage Securities Fund,
Bond Fund and Money Market Fund pursuant to written agreements between HL
Advisors and HIMCO.

In connection with the services provided to the Funds, Wellington Management
and HIMCO make all determinations with respect to the purchase and sale of
portfolio securities (subject to the terms and conditions of the investment
objectives, policies and restrictions of the Funds and to the general
supervision of the Fund's Boards of Directors and HL Advisors) and places, in
the name of the Funds, all orders for execution of these Funds' portfolio
transactions. In conjunction with such activities, Wellington Management and
HIMCO regularly furnish reports to the Fund's Boards of Directors concerning
economic forecasts, investment strategy, portfolio activity and performance of
the Funds.

For services rendered to the Wellington Management-advised Funds, Wellington
Management charges a quarterly fee to HL Advisors. The Funds do not pay
Wellington Management's fee nor any part thereof, nor do the Funds have any
obligation or responsibility to do so. Wellington Management's quarterly fee is
based upon the following annual rates as applied to the average of the
calculated daily net asset value of each Fund.

DIVIDEND AND GROWTH FUND, STOCK FUND AND ADVISERS FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
First $50,000,000 0.325%
Next $100,000,000 0.250%
Next $350,000,000 0.200%
Amount Over $500,000,000 0.150%
</TABLE>

CAPITAL APPRECIATION FUND, INTERNATIONAL
OPPORTUNITIES FUND, MIDCAP FUND, SMALL COMPANY
FUND AND INTERNATIONAL ADVISERS FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
First $50,000,000 0.400%
Next $100,000,000 0.300%
Next $350,000,000 0.250%
Amount Over $500,000,000 0.200%
</TABLE>

Wellington Management is a professional investment counseling firm which
provides investment services to investment companies, employee benefit plans,
endowments, foundations and other institutions and individuals. Wellington
Management and its predecessor organizations have provided investment advisory
services since 1928. As of December 31, 1997, Wellington Management held
discretionary management authority with respect to approximately $175 billion of
client assets. Wellington Management, 75 State Street, Boston, MA 02109, is a
Massachusetts limited liability partnership, of which the following persons are
managing partners: Robert W. Doran, Duncan M. McFarland and John R. Ryan.

HIMCO is a professional money management firm which provides services to
investment companies, employee benefit plans and its affiliated insurance
company accounts. HIMCO was incorporated in 1996 and is a wholly owned
subsidiary of The Hartford. As a corporate affiliate of HL Advisors, HIMCO is
reimbursed by HL Advisors for the costs it incurs in providing such services.
<PAGE>
HARTFORD MUTUAL FUNDS 29
- --------------------------------------------------------------------------------

PORTFOLIO MANAGERS

Saul J. Pannell, Senior Vice President of Wellington Management, serves as
portfolio manager to the Capital Appreciation Fund. Mr. Pannell has been a
portfolio manager with Wellington Management since 1979.

Laurie A. Gabriel, CFA and Senior Vice President of Wellington Management,
serves as portfolio manager to the Dividend and Growth Fund. Ms. Gabriel joined
Wellington Management in 1976. She has been a portfolio manager with Wellington
Management since 1987.

The International Opportunities Fund is managed by Trond Skramstad, Senior
Vice President of Wellington Management and Chairman of the firm's Global Equity
Strategy Group , a group of senior investment professionals focused on global
investing. Andrew S. Offit, Vice President, is Associate Portfolio Manager.
Prior to joining Wellington Management in 1993, Mr. Skramstad was an
international equity portfolio manager at Scudder, Stevens & Clark since 1990.
Prior to joining Wellington Management in 1997, Mr. Offit was a portfolio
manager at Chestnut Hill Management during 1997, and at Fidelity Investments
since 1987.

Phillip H. Perelmuter, Vice President of Wellington Management, serves as
portfolio manager to the MidCap Fund. Mr. Perelmuter joined Wellington
Management in 1995 as Associate Portfolio Manager of the Stock Fund and the
Advisers Fund. Prior to joining Wellington Management, Mr. Perelmuter was Vice
President of Institutional Equity Sales at CS First Boston Corporation
(1988-1995), and a financial consultant at Merrill Lynch & Company (1983-1986).
Mr. Perelmuter has over ten years of experience in the investment industry.

Mark S. Waterhouse, Vice President of Wellington Management Company, LLP,
serves as portfolio manager to the Small Company Fund. Mr. Waterhouse joined
Wellington Management in 1995 as Associate Portfolio Manager of the Capital
Appreciation Fund. Prior to joining Wellington Management in 1995, Mr.
Waterhouse was a portfolio manager with the Pioneer Group. He was previously a
financial analyst at GTE Service Corporation from 1984.

Rand L. Alexander, Senior Vice President of Wellington Management, serves as
portfolio manager to the Stock Fund. Mr. Alexander has been a portfolio manager
with Wellington Management since 1990.

Paul D. Kaplan, Senior Vice President of Wellington Management, serves as
portfolio manager to the Advisers Fund. Mr. Kaplan manages the fixed income
component of the Advisers Fund. He has been a portfolio manager with Wellington
Management since 1982. Rand L. Alexander, who is portfolio manager to the Stock
Fund, manages the equity component of the Advisers Fund.

The equity component of the International Advisers Fund is managed by Trond
Skramstad. Andrew Offit serves as Associate Portfolio Manager for the equity
component. The debt component of the International Advisers Fund is managed by
Robert L. Evans, Vice President of Wellington Management. Prior to joining
Wellington Management as a portfolio manager in 1995, Mr. Evans was a Senior
Global Fixed Income Portfolio Manager with PIMCO from 1991 through 1994, and in
the Global Fixed Income Department of Lehman Brothers International in London,
England and New York City, New York from 1985 through 1990.

The Bond Fund is managed by Alison D. Granger. Ms. Granger, a Senior Vice
President of HIMCO, joined HIMCO in 1993 as a senior corporate bond trader. She
became Director of Trading in 1994 and a portfolio manager in 1995. Prior to
joining HIMCO, Ms. Granger was a corporate bond portfolio manager at The Home
Insurance Company and Axe-Houghton Management. Ms. Granger holds a CFA and has
over sixteen years of experience with fixed income investments.

The Mortgage Securities Fund is managed by Timothy J. Wilhide. Mr. Wilhide
is a Portfolio Manager and Senior Vice President of HIMCO. He has seventeen
years of experience in the fixed income markets. Prior to joining HIMCO in June
1994, Mr. Wilhide was vice president and fixed income manager for J.P. Morgan &
Co. He received his B.A. from Gannon University and his MBA from the University
of Delaware.

PORTFOLIO TURNOVER

Each Fund may sell a portfolio investment soon after its acquisition if
HIMCO and/or Wellington Management believe that such a disposition is in the
Fund's best interest. For the fiscal year ended December 31, 1997, the portfolio
turnover rate of each Fund was below 100% except for the Small Company Fund,
International Advisers Fund and Bond Fund, which were 222%, 163% and 113%,
respectively. A high rate of portfolio turnover involves correspondingly greater
brokerage commission expenses and other transaction costs, which must be
ultimately borne by a Fund's shareholders. High portfolio turnover may result in
the realization of substantial capital gains.

BROKERAGE COMMISSIONS

Although the rules of the National Association of Securities Dealers, Inc.
prohibit its members from seeking orders for the execution of investment company
portfolio transactions on the basis of their sales of investment company shares,
under such rules, sales of investment company shares may be considered in
selecting brokers to effect portfolio transactions. Accordingly, some portfolio
transactions are, subject to such rules and to obtaining best prices and
executions, effected through dealers who sell shares of the
<PAGE>
30 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

Fund. HIMCO may also select an affiliated broker-dealer to execute transactions
for the Fund, provided that the commissions, fees or other remuneration paid to
such affiliated broker are reasonable and fair as compared to that paid to
non-affiliated brokers for comparable transactions.

ADMINISTRATIVE SERVICES
FOR THE FUNDS

An Administrative Services Agreement between each Fund and Hartford Life
provides that Hartford Life will manage the business affairs and provide
administrative services to each Fund. Under the terms of these Agreements,
Hartford Life will provide the following: administrative personnel, services,
equipment and facilities and office space for proper operation of the Funds.
Hartford Life has also agreed to arrange for the provision of additional
services necessary for the proper operation of the Funds, although the Funds pay
for these services directly. See "Expenses of the Funds." As compensation for
the services to be performed by Hartford Life, each Fund pays to Hartford Life,
as promptly as possible after the last day of each month, a monthly fee equal to
the annual rate of .175% of the average daily net assets of the Fund.

EXPENSES OF THE FUNDS

Each Fund assumes and pays the following costs and expenses: interest;
taxes; brokerage charges (which may be to affiliated broker-dealers); costs of
preparing, printing and filing any amendments or supplements to the registration
forms of each Fund and its securities; all federal and state registration,
qualification and filing costs and fees, (except the initial costs and fees,
which will be borne by Hartford Life), issuance and redemption expenses,
transfer agency and dividend and distribution disbursing agency costs and
expenses; custodian fees and expenses; accounting, auditing and legal expenses;
fidelity bond and other insurance premiums; fees and salaries of directors,
officers and employees of each Fund other than those who are also officers of
Hartford Life or its affiliates; industry membership dues; all annual and
semiannual reports and prospectuses mailed to each Fund's shareholders as well
as all quarterly, annual and any other periodic report required to be filed with
the SEC or with any state; any notices required by a federal or state regulatory
authority, and any proxy solicitation materials directed to each Fund's
shareholders as well as all printing, mailing and tabulation costs incurred in
connection therewith, and any expenses incurred in connection with the holding
of meetings of each Fund's shareholders and other miscellaneous expenses related
directly to the Funds' operations and interest.

The total expenses of each Fund including administrative and investment
advisory fees for 1997 as a percentage of the Funds' average net assets were as
follows:

<TABLE>
<CAPTION>
% OF ASSETS
-----------
<S> <C>
Capital Appreciation Fund .64%
Dividend and Growth Fund .68%
Index Fund .39%
International Opportunities Fund .77%
MidCap Fund (1) .46%
Small Company Fund .77%
Stock Fund .45%
Advisers Fund .63%
International Advisers Fund .87%
Bond Fund .51%
Mortgage Securities Fund .45%
Money Market Fund .44%
</TABLE>

- ----------

(1) Portion of fees waived in 1997.

PERFORMANCE RELATED
INFORMATION

The Funds may advertise certain performance related information. Performance
information about a Fund is based on the Fund's past performance only and is no
indication of future performance.

Each Fund may include its total return in advertisements or other sales
material. When a Fund advertises its total return, it will usually be calculated
for one year, five years, and ten years or some other relevant periods if the
Fund has not been in existence for at least ten years. Total return is measured
by comparing the value of an investment in the Fund at the beginning of the
relevant period to the value of the investment at the end of the period
(assuming immediate reinvestment of any dividends or capital gains
distributions).

The Money Market Fund may advertise yield and effective yield. The yield of
each of those Funds is based upon the income earned by the Fund 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 Fund shares and
thus compounded in the course of a 52-week period.

DIVIDENDS

The shareholders of each Fund shall be entitled to receive such dividends as
may be declared by each Fund's Board of Directors, from time to time based upon
the investment performance of the assets making up that Fund's portfolio. The
policy with respect to each Fund, except the Money Market Fund, is to pay
dividends from net investment income and to make distributions of realized
capital
<PAGE>
HARTFORD MUTUAL FUNDS 31
- --------------------------------------------------------------------------------

gains, if any, at least once each year. The Money Market Fund declares dividends
on a daily basis and pays them monthly.

Such dividends and distributions will be automatically invested in
additional full or fractional shares monthly on the last business day of each
month at the per share net asset value on that date. Provision is also made to
pay such dividends and distributions in cash if requested. Such dividends and
distributions will be in cash or in full or fractional shares of the Fund at net
asset value.

DETERMINATION OF
NET ASSET VALUE

The net asset value per share is determined for each Fund as of the close of
the NYSE (normally 4:00 p.m. Eastern Time) on each regular business day (as
previously defined) by dividing the value of the Fund's net assets by the number
of shares outstanding. The assets of each Fund (except the money market funds)
are valued primarily on the basis of market quotations. If quotations are not
readily available, assets are valued by a method that the Board of Directors
believes accurately reflects fair value. The assets of the Money Market Fund are
valued at their amortized cost pursuant to procedures established by the Board
of Directors. Foreign securities are valued on the basis of quotations from the
primary market in which they are traded, and are translated from the local
currency into U.S. dollars using current exchange rates. With respect to all
Funds, short-term investments that will mature in 60 days or less are also
valued at amortized cost, which approximates market value.

PURCHASE OF FUND SHARES

Fund shares are made available to serve as the underlying investment
vehicles for variable annuity and variable life insurance separate accounts of
The Hartford Life Insurance Companies. Shares of the Funds are sold by Hartford
Securities Distribution Company (the "Distributor") on a no-load basis at their
net asset values. See "Determination of Net Asset Value" and "Sale and
Redemption of Shares."

It is conceivable that in the future it may be disadvantageous for variable
annuity separate accounts and variable life insurance separate accounts to
invest in the Funds simultaneously. Although The Hartford Life Insurance
Companies and the Funds do not currently foresee any such disadvantages either
to variable annuity contract owners or variable life insurance policy owners,
each Fund's Board of Directors intends to monitor events in order to identify
any material conflicts between such contract owners and policy owners and to
determine what action, if any, should be taken in response thereto. If the Board
of Directors of a Fund were to conclude that separate funds should be
established for variable life and variable annuity separate accounts, the
variable life and variable annuity contract holders would not bear any expenses
attendant to the establishment of such separate funds.

The Funds offer investors two different classes of shares -- Class IA and
Class IB. Class IA shares are offered by this Prospectus. Class IB shares are
offered by a separate prospectus in connection with a variable annuity product.
The different classes of shares represent investments in the same portfolio of
securities but are subject to different expenses and will likely have different
share prices.

SALE AND REDEMPTION
OF SHARES

The shares of each Fund are sold and redeemed by the Fund at their net asset
value next determined after receipt of a purchase or redemption order in good
order in writing at its home office, P.O. Box 2999, Hartford, CT 06104-2999. The
value of shares redeemed may be more or less than original cost, depending upon
the market value of the portfolio securities at the time of redemption. Payment
for shares redeemed will be made within seven days after the redemption request
is received in proper form by the Funds. However, the right to redeem Fund
shares may be suspended or payment therefor postponed for any period during
which: (1) trading on the NYSE is closed for other than weekends and holidays;
(2) an emergency exists, as determined by the SEC, as a result of which (a)
disposal by a Fund of securities owned by it is not reasonably practicable, or
(b) it is not reasonably practicable for a Fund to determine fairly the value of
its net assets; or (3) the SEC by order so permits for the protection of
stockholders of the Funds.

FEDERAL INCOME TAXES

Each Fund has elected and intends to qualify under Subchapter M of the Code.
Each Fund intends to distribute all of its net income and gains to shareholders.
Such distributions are taxable income and capital gains. Each Fund will inform
shareholders of the amount and nature of such income and gains. Each Fund may be
subject to a 4% nondeductible excise tax as well as an income tax measured with
respect to certain undistributed amounts of income and capital gain. Each Fund
expects to make such additional distributions of net investment income as are
necessary to avoid the application of these taxes. For a discussion of the tax
implications of a purchase or sale of the Funds' shares by the insurer,
reference should be made to the section entitled "Federal Tax Considerations" in
the appropriate separate account prospectus.

If eligible, each Fund may make an election to pass through to its
shareholders, The Hartford Life Insurance Companies, a credit for any foreign
taxes paid during the year. If such election is made, the pass-through of the
<PAGE>
32 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

foreign tax credit will result in additional taxable income and income tax to
The Hartford Life Insurance Companies. The amount of additional tax may be more
than offset by the foreign tax credits which are passed through. These foreign
tax credits may provide a benefit to The Hartford Life Insurance Companies.

OWNERSHIP AND CAPITALIZATION
OF THE FUNDS

CAPITAL STOCK

The Board of Directors is authorized, without further shareholder approval,
to authorize additional shares and to classify and reclassify the Funds into one
or more classes. Accordingly, the Directors have authorized the issuance of two
classes of shares of the Funds designated as Class IA and Class IB shares. The
shares of each class represent an interest in the same portfolio of investments
of the Funds and have equal rights as to voting, redemption, and liquidation.
However, each class bears different expenses and therefore the net asset values
of the two classes and any dividends declared may differ between the two
classes.

As of the date of this Prospectus, the authorized capital stock of the Funds
consisted of the following shares at a par value of $.10 per share: Capital
Appreciation Fund, 2 billion; Dividend and Growth Fund, 2 billion; Index Fund, 1
billion; International Opportunities Fund, 1.5 billion; MidCap Fund, 750
million; Small Company Fund, 750 million; Stock Fund, 2 billion; Advisers Fund,
5 billion; International Advisers Fund, 750 million; Bond Fund, 800 million;
Mortgage Securities Fund, 800 million; and Money Market Fund, 1.3 billion. The
shares of each Fund are divided into Class IA and Class IB.

As of December 31, 1997, HL Advisors owned 3,000,000 Class IA shares
(12.36%) of the MidCap Fund.

At December 31, 1997, certain Hartford Life group pension contracts held
direct interests in Class IA shares of the Funds as follows:

<TABLE>
<CAPTION>
SHARES %
------------ ---------
<S> <C> <C>
Index Fund 23,020,319 5.90%
Mortgage Securities Fund 16,076,327 5.35%
Money Market Fund 25,433,642 4.15%
Capital Appreciation Fund 20,321,589 1.87%
International Opportunities Fund 9,832,576 1.16%
Advisers Fund 30,369,579 0.93%
Small Company Fund 1,508,936 0.86%
Bond Fund 3,649,073 0.69%
Dividend & Growth Fund 4,708,801 0.46%
International Advisers Fund 534,692 0.30%
Stock Fund 2,343,837 0.25%
</TABLE>

VOTING

Each shareholder shall be entitled to one vote for each share of the Funds
held upon all matters submitted to the shareholders generally. Class specific
issues, such as a modification to a Rule 12b-1 plan that could materially
increase fees, will be voted on only by the affected class. With respect to the
Funds' shares issued as described above under "Purchase of Fund Shares," as well
as Fund shares which are not otherwise attributable to variable annuity contract
owners or variable life policy holders, The Hartford Life Insurance Companies
shall be the shareholders of record. Each of The Hartford Life Insurance
Companies will vote all Fund shares, pro rata, according to the written
instructions of the contract owners of the variable annuity contracts and the
policy holders of the variable life contracts issued by it using the Funds as
investment vehicles. This position is consistent with the policy of the SEC
staff.

OTHER RIGHTS

Each share of Fund stock, when issued and paid for in accordance with the
terms of the offering, will be fully paid and non-assessable. Shares of Fund
stock have no pre-emptive, subscription or conversion rights and are redeemable
as set forth under "Sale and Redemption of Shares." Upon liquidation of a Fund,
the shareholders of that Fund shall be entitled to share, pro rata, in any
assets of the Fund after discharge of all liabilities and payment of the
expenses of liquidation.

GENERAL INFORMATION

REPORTS TO SHAREHOLDERS

The Funds issue unaudited semiannual reports showing current investments in
each Fund and other information and annual financial statements examined by
independent auditors for the Funds.

DISTRIBUTOR

Hartford Securities Distribution Company, Inc., P.O. Box 2999, Hartford, CT
06104-2999 serves as Distributor to the Funds.

CUSTODIAN

State Street Bank and Trust Company, Boston, Massachusetts, serves as
custodian of each Fund's assets.

<PAGE>
HARTFORD MUTUAL FUNDS 33
- --------------------------------------------------------------------------------

TRANSFER AND DIVIDEND
DISBURSING AGENTS

Hartford Life Insurance Company, P.O. Box 2999, Hartford, Connecticut
06104-2999, serves as Transfer and Dividend Disbursing Agent for the Funds.

PENDING LEGAL PROCEEDINGS

As of the date of this Prospectus, there are no material pending legal
proceedings involving the Funds, HL Advisors, HIMCO or Wellington Management as
a party.

REQUESTS FOR INFORMATION

This Prospectus does not contain all the information included in the
Registration Statement filed with the SEC. The Registration Statement, including
the exhibits filed therewith, may be examined at the SEC's office in Washington,
D.C. Statements contained in the Prospectus as to the contents of any contract
or other document referred to herein are not necessarily complete, and, in each
instance, reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part, each such statement being qualified, in all respects by such reference.

For additional information, write to "Hartford Family of Funds", c/o
Individual Annuity Operations, P.O. Box 2999, Hartford, CT 06104-2999.

<PAGE>
34 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

APPENDIX A

The rating information which follows describes how the rating services
mentioned presently rate the described securities. No reliance is made upon the
rating firms as "experts" as that term is defined for securities purposes.
Rather, reliance on this information is on the basis that such ratings have
become generally accepted in the investment business.

RATING OF BONDS

MOODY'S INVESTORS SERVICE, INC. ("MOODY'S")

Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risks appear somewhat larger than in Aaa securities.

A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.

Baa -- Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca -- Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.

C -- Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever earning any
real investment standing.

STANDARD & POOR'S CORPORATION ("STANDARD & POOR'S")

AAA -- Bonds rated AAA are the highest grade obligations. Capacity to pay
interest and repay principal is extremely strong.

AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from AAA issues only in small degree.

A -- Bonds rated A have a very strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the considerable
investment strength but are not entirely free from adverse effects of changes in
circumstances and economic conditions than debt in the highest rated categories.

BBB -- Bonds rated BBB and regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category then in higher rated categories.

BB, B, CCC, CC, C -- Debt rated BB, B, CCC, CC, and C is regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligation.
While such debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions.

RATING OF COMMERCIAL PAPER

Purchases of corporate debt securities used for short-term investment,
generally called commercial paper, will be limited to the top two grades of
Moody's, Standard & Poor's, Duff & Phelps, Fitch Investor Services and Thomson
Bank Watch or other NRSROs (nationally recognized statistical rating
organizations) rating services and will be an eligible security under Rule 2a-7.
<PAGE>
HARTFORD MUTUAL FUNDS 35
- --------------------------------------------------------------------------------

MOODY'S

Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics:

- - Leading market positions in well-established industries.

- - High rates of return on funds employed.

- - Conservative capitalization structures with moderate reliance on debt and
ample asset protection.

- - Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

- - Well-established access to a range of financial markets and assured sources of
alternate liquidity.

Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Issuers rated Prime-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.

Issuers rated Not Prime do not fall within any of the Prime rating
categories.

STANDARD & POOR'S

The relative strength or weakness of the following factors determines
whether the issuer's commercial paper is rated A-1 or A-2.

- - Liquidity ratios are adequate to meet cash requirements.

Liquidity ratios are basically as follows, broken down by the type of
issuer:

Industrial Company: acid test ratio, cash flow as a percent of current
liabilities, short-term debt as a percent of current liabilities, short-term
debt as a percent of current assets.

Utility: current liabilities as a percent of revenues, cash flow as a
percent of current liabilities, short-term debt as a percent of capitalization.

Finance Company: current ratio, current liabilities as a percent of net
receivables, current liabilities as a percent of total liabilities.

- - The long-term senior debt rating is "A" or better; in some instances "BBB"
credits may be allowed if other factors outweigh the "BBB".

- - The issuer has access to at least two additional channels of borrowing.

- - Basic earnings and cash flow have an upward trend with allowances made for
unusual circumstances.

- - Typically, the issuer's industry is well established and the issuer has a
strong position within its industry.

- - The reliability and quality of management are unquestioned.
<PAGE>
36 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

APPENDIX B

CREDIT QUALITY DISTRIBUTION

HARTFORD BOND FUND

The average quality distribution of the portfolio of the Hartford Bond Fund as
of December 31, 1997 as assigned by Moody's Investors Services, Inc. ("Moody's")
and Standard & Poor's Corporation ("Standard & Poor's"), was as follows:

<TABLE>
<CAPTION>
QUALITY
DISTRIBUTION QUALITY
AS DISTRIBUTION AS
ASSIGNED BY PERCENTAGE OF ASSIGNED BY PERCENTAGE OF
MOODY'S PORTFOLIO STANDARD & POOR'S PORTFOLIO
- ------------- ------------- ----------------- -------------
<S> <C> <C> <C>
Aaa 46.0% AAA 47.4%
Aa 9.9% AA 10.7%
A 8.8% A 7.0%
Baa 11.2% BBB 14.4%
Ba 20.8% BB 13.9%
B 1.1% B 4.6%
Unrated 2.2% Unrated 2.0%
------------- -------------
Total 100.0% Total 100.0%
</TABLE>

<PAGE>
PART B

STATEMENT OF ADDITIONAL INFORMATION

HARTFORD CAPITAL APPRECIATION HLS FUND, INC.
HARTFORD DIVIDEND AND GROWTH HLS FUND, INC.
HARTFORD INDEX HLS FUND, INC.
HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND, INC.
HARTFORD MIDCAP HLS FUND, INC.
HARTFORD SMALL COMPANY HLS FUND, INC.
HARTFORD STOCK HLS FUND, INC.
HARTFORD ADVISERS HLS FUND, INC.
HARTFORD INTERNATIONAL ADVISERS HLS FUND, INC.
HARTFORD BOND HLS FUND, INC.
HARTFORD MORTGAGE SECURITIES HLS FUND, INC.
HARTFORD MONEY MARKET HLS FUND, INC.

CLASS IA and CLASS IB SHARES

P.O. Box 2999
Hartford, CT 06104-2999

This Statement of Additional Information ("SAI") is not a prospectus but
should be read in conjunction with the prospectus. To obtain a free copy of the
prospectus send a written request to: Hartford Family of Funds, c/o Individual
Annuity Operations, P.O. Box 2999, Hartford, CT 06104-2999 or call
1-800-862-6668.

Date of Prospectus: May 1, 1998

Date of Statement of Additional Information: May 1, 1998

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TABLE OF CONTENTS PAGE
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GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . 1

MANAGEMENT OF THE FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . 16

INVESTMENT MANAGEMENT ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . 22

PORTFOLIO TURNOVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

FUND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

DISTRIBUTION ARRANGEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 28

PORTFOLIO TRANSACTIONS AND BROKERAGE . . . . . . . . . . . . . . . . . . . . 28

DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . 30

PURCHASE AND REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . . 31

INVESTMENT PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

TRANSFER AGENT SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 42

INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . 42

OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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GENERAL INFORMATION

The Hartford Capital Appreciation HLS Fund, Inc., Hartford Dividend and
Growth HLS Fund, Inc., Hartford Index HLS Fund, Inc., Hartford International
Opportunities HLS Fund, Inc., Hartford MidCap HLS Fund, Inc., Hartford Small
Company HLS Fund, Inc., Hartford Stock HLS Fund, Inc., Hartford Advisers HLS
Fund, Inc., Hartford International Advisers HLS Fund, Inc., Hartford Bond HLS
Fund, Inc., Hartford Mortgage Securities HLS Fund, Inc. and Hartford Money
Market HLS Fund, Inc., are open-end management investment companies consisting
of separate diversified portfolios (each a "Fund" or together the "Funds"). This
SAI relates to all twelve Funds. HL Investment Advisors, Inc. ("HL Advisors") is
the investment manager to each Fund. HL Advisors is an indirect majority owned
subsidiary of The Hartford Financial Services Group, Inc., ("The Hartford") an
insurance holding company with over $130 billion in assets. In addition,
Wellington Management Company, LLP ("Wellington Management") and The Hartford
Investment Management Company ("HIMCO"), an affiliate of HL Advisors, are
sub-advisers to certain of the Funds. Prior to May 1, 1998, each Fund did not
carry the HLS in its name and the Hartford Money Market HLS Fund, Inc. was known
as the HVA Money Market Fund, Inc.

INVESTMENT OBJECTIVES AND POLICIES

A. FUNDAMENTAL RESTRICTIONS OF THE FUNDS

Each Fund has adopted the following fundamental investment restrictions
which may not be changed without approval of a majority of the applicable Fund's
outstanding voting securities. Under the Investment Company Act of 1940 (the
"1940 Act"), and as used in the Prospectus and this SAI, a "majority of the
outstanding voting securities" means the approval of the lesser of (1) the
holders of 67% or more of the shares of a Fund represented at a meeting if the
holders of more than 50% of the outstanding shares of the Fund are present in
person or by proxy or (2) the holders of more than 50% of the outstanding shares
of the Fund.

The investment objective, investment style and certain investment policies
of each Fund are set forth in the Prospectus. Set forth below are the
fundamental investment policies applicable to each Fund followed by the
non-fundamental policies applicable to each Fund.

Each Fund may not:

1. Issue senior securities. For purposes of this restriction, the
issuance of shares of common stock in multiple classes or series, obtaining of
short-term credits as may be necessary for the clearance of purchases and sales
of portfolio securities, short sales against the box, and the following
practices when a segregated account has been established to cover such
transactions or when an offsetting position has been established by the Fund are
not deemed to be issuances of senior securities: the purchase or sale of
permissible options and

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futures transactions (and the use of initial and maintenance margin arrangements
with respect to futures contracts or related options transactions), the purchase
or sale of securities on a when issued or delayed delivery basis, permissible
borrowings entered into in accordance with the Fund's investment policies, and
reverse repurchase agreements and mortgage dollar rolls.

2. Borrow money, except from banks and then only if immediately after
each such borrowing there is asset coverage of at least 300% as defined in the
1940 Act. Although reverse repurchase agreements, mortgage dollar rolls, short
sales against the box, futures contracts, options on futures contracts,
securities or indices, when issued and delayed delivery transactions and
securities lending are not subject to this restriction, in most cases a
segregated account will be set up to cover such transactions.

3. Act as an underwriter for securities of other issuers.

4. Purchase or sell real estate, except that a Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers that
invest in real estate or interests therein, (e.g. real estate investment trusts)
(iii) invest in securities that are secured by real estate or interests therein,
(iv) purchase and sell mortgage-related securities, (v) hold and sell real
estate acquired by the Fund as a result of the ownership of securities and (vi)
invest in real estate limited partnerships.

5. Invest in commodities, except that a Fund may (i) invest in securities
of issuers that invest in commodities, and (ii) engage in permissible options
and futures transactions and forward foreign currency contracts, entered into in
accordance with the Fund's investment policies.

6. Make loans, except that a Fund (i) may lend portfolio securities in
accordance with the Fund's investment policies in amounts up to 33-1/3% of the
Fund's total assets taken at market value, (ii) enter into fully collateralized
repurchase agreements, and (iii) purchase debt obligations in which the Fund may
invest consistent with its investment policies.

7. Purchase the securities of issuers conducting their principal activity
in the same industry if, immediately after such purchase, the value of its
investments in such industry would exceed 25% of its total assets taken at
market value at the time of such investment. This limitation does not apply to
investments in obligations issued or guaranteed by the U.S. Government or any of
its agencies, instrumentalities or authorities.

In addition, each Fund will operate as a "diversified" fund within the
meaning of the 1940 Act. This means that with respect to 75% of a Fund's total
assets, a Fund will not purchase securities of an issuer (other than cash, cash
items or securities issued or guaranteed by the U.S. Government, its agencies,
instrumentalities or authorities), if

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(a) such purchase would cause more than 5% of the Fund's total assets
taken at market value to be invested in the securities of such issuer;
or

(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the Fund.

If a percentage restriction on investment or utilization of assets as set
forth above is adhered to at the time an investment is made, a later change in
percentage resulting from changes in the values of a Fund's assets will not be
considered a violation of the restriction; provided, however, that the asset
coverage requirement applicable to borrowings under Section 18(f)(1) of the 1940
Act shall be maintained in the manner contemplated by that Section.

In order to permit the sale of shares of the Funds in certain states, the
Board of Directors may, in its sole discretion, adopt restrictions on investment
policy more restrictive than those described above. Should the Board of
Directors determine that any such more restrictive policy is no longer in the
best interest of a Fund and its shareholders, the Fund may cease offering shares
in the state involved and the Board of Directors may revoke such restrictive
policy. Moreover, if the states involved shall no longer require any such
restrictive policy, the Board of Directors may, in its sole discretion, revoke
such policy.

B. NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUNDS.

The following restrictions are designated as non-fundamental and may be
changed by the Board of Directors without the approval of shareholders.

Each Fund may not:

1. Purchase securities on margin or make short sales of securities,
except that a Fund may obtain such short-term credit as may be necessary for the
clearance of purchases and sales of securities and except for transactions in
futures contracts and options thereon.

2. Purchase securities which are illiquid if, as a result of such
purchase, more than 15% of its net assets (10% for the Money Market Fund) would
consist of such securities.

3. Alone or together with any other of the Hartford Mutual Funds, make
investments for the purpose of exercising control over or management of any
issuer.

4. Mortgage, pledge, hypothecate, or in any manner transfer, as security
for indebtedness, any securities owned or held by it, except to secure reverse
repurchase agreements; however, for purposes of this restriction, collateral
arrangements with respect to transactions in futures contracts and options
thereon are not deemed to be a pledge of securities.

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5. Invest more than 5% of its assets in securities of other investment
companies and will not acquire more than 3% of the total outstanding voting
securities of any one investment company, except that the Index Fund and Money
Market Fund will not purchase securities of other investment companies at all.

6. Purchase additional securities when money borrowed exceeds 5% of the
Fund's total assets.

7. Borrow money, engage in reverse repurchase agreements or engage in
activities which are the economic equivalent of borrowing if the combination of
such activities exceeds 33-1/3% of a Fund's total assets.

ALL FUNDS

U.S. TREASURY DEPARTMENT DIVERSIFICATION REGULATIONS. The U.S. Treasury
Department has issued diversification regulations under Section 817 of the
Internal Revenue Code. If a mutual fund underlying a variable contract, other
than a pension plan contract, is not adequately diversified within the terms of
these regulations, the contract owner will have adverse income tax consequences.
These regulations provide, among other things, that a mutual fund shall be
considered adequately diversified if (i) no more than 55% of the value of the
assets in the fund is represented by any one investment; (ii) no more than 70%
of the value of the assets in the fund is represented by any two investments;
(iii) no more than 80% of the value of the assets in the fund is represented by
any three investments and (iv) no more than 90% of the value of the total assets
of the fund is represented by any four investments. In determining whether the
diversification standards are met, each United States Government Agency or
instrumentality shall be treated as a separate issuer.

MISCELLANEOUS INVESTMENT PRACTICES

A further description of certain of the policies described in the
Prospectus is set forth below.

MONEY MARKET INSTRUMENTS AND TEMPORARY INVESTMENT STRATEGIES

In addition to the Money Market Fund which may hold cash and invest in
money market instruments at any time, all other Funds may hold cash and invest
in high quality money market instruments under appropriate circumstances as
determined by HIMCO or Wellington Management. Such Funds may invest up to 100%
of their assets in cash or money market instruments only for temporary defensive
purposes.

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Money market instruments include: (1) banker's acceptances; (2) obligations
of governments (whether U.S. or non-U.S.) and their agencies and
instrumentalities; (3) short-term corporate obligations, including commercial
paper, notes, and bonds; (4) other short-term debt obligations; (5) obligations
of U.S. banks, non-U.S. branches of U.S. banks (Eurodollars), U.S. branches and
agencies of non-U.S. banks (Yankee dollars), and non-U.S. branches of non-U.S.
banks; (6) asset-backed securities; and (7) repurchase agreements.

REPURCHASE AGREEMENTS

Each Fund is permitted to enter into fully collateralized repurchase
agreements. The Fund's Board of Directors has established standards for
evaluation of the creditworthiness of the banks and securities dealers with
which the Funds will engage in repurchase agreements and monitors on a quarterly
basis HIMCO and Wellington Management's compliance with such standards.
Presently, each Fund may enter into repurchase agreements only with commercial
banks with at least $1 billion in assets or with recognized government
securities dealers with a minimum net capital of $100 million.

HIMCO or Wellington Management will monitor such transactions to ensure
that the value of underlying collateral will be at least equal at all times to
the total amount of the repurchase obligation, including the accrued interest.
If the seller defaults, the Fund could realize a loss on the sale of the
underlying security to the extent that the proceeds of sale including accrued
interest are less than the resale price provided in the agreement including
interest.

A repurchase agreement is an agreement by which the seller of a security
agrees to repurchase the security sold at a mutually agreed upon time and price.
It may also be viewed as the loan of money by a Fund to the seller. The resale
price would be in excess of the purchase price, reflecting an agreed upon market
interest rate.

REVERSE REPURCHASE AGREEMENTS

Each Fund may also enter into reverse repurchase agreements. Reverse
repurchase agreements involve sales by a Fund of portfolio assets concurrently
with an agreement by a Fund to repurchase the same assets at a later date at a
fixed price. Reverse repurchase agreements carry the risk that the market value
of the securities which a Fund is obligated to repurchase may decline below the
repurchase price. A reverse repurchase agreement is viewed as a collateralized
borrowing by a Fund. Borrowing magnifies the potential for gain or loss on the
portfolio securities of a Fund and, therefore, increases the possibility of
fluctuation in a Fund's net asset value. A Fund will establish a segregated
account with the Fund's custodian bank in which a Fund will maintain liquid
assets equal in value to a Fund's obligations in respect of reverse repurchase
agreements. A Fund will not enter into reverse repurchase transactions if the
combination of all borrowings from banks and the value of all reverse repurchase
agreements for the particular Fund equals more than 33-1/3% of the value the
Fund's total assets.

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DEBT SECURITIES

Each Fund is permitted to invest in debt securities including: (1)
securities issued or guaranteed as to principal or interest by the U.S.
Government, its agencies or instrumentalities; (2) non-convertible debt
securities issued or guaranteed by U.S. corporations or other issuers (including
foreign governments or corporations); (3) asset-backed securities (International
Opportunities Fund, International Advisers Fund, Advisers Fund, Bond Fund,
Mortgage Securities Fund and Money Market Fund only); (4) mortgage-related
securities, including collateralized mortgage obligations ("CMO's")
(International Opportunities Fund, International Advisers Fund, Advisers Fund,
Bond Fund and Mortgage Securities Fund only); and (5) securities issued or
guaranteed as to principal or interest by a sovereign government or one of its
agencies or political subdivisions, supranational entities such as development
banks, non-U.S. corporations, banks or bank holding companies, or other non-U.S.
issuers.

INVESTMENT GRADE DEBT SECURITIES

The Money Market Fund is permitted to invest only in high quality, short
term instruments as determined by Rule 2a-7 under the 1940 Act. Each of the
other Funds is permitted to invest in debt securities rated within the four
highest rating categories (i.e., Aaa, Aa, A or Baa by Moody's or AAA, AA, A or
BBB by S&P) (or, if unrated, securities of comparable quality as determined by
HIMCO or Wellington Management). These securities are generally referred to as
"investment grade securities." Each rating category has within it different
gradations or sub-categories. If a Fund is authorized to invest in a certain
rating category, the Fund is also permitted to invest in any of the
sub-categories or gradations within that rating category. If a security is
downgraded to a rating category which does not qualify for investment, HIMCO or
Wellington Management will use its discretion on whether to hold or sell based
upon its opinion on the best method to maximize value for shareholders over the
long term. Debt securities carrying the fourth highest rating (i.e., "Baa" by
Moody's and "BBB" by S&P), and unrated securities of comparable quality (as
determined by HIMCO or Wellington Management) are viewed to have adequate
capacity for payment of principal and interest, but do involve a higher degree
of risk than that associated with investments in debt securities in the higher
rating categories and such securities lack outstanding investment
characteristics and do have speculative characteristics.

HIGH YIELD-HIGH RISK SECURITIES

Each of the Capital Appreciation Fund, Dividend and Growth Fund, MidCap
Fund, Small Company Fund, Stock Fund, Advisers Fund and International
Opportunities Fund is permitted to invest up to 5%, and the International
Advisers Fund is permitted to invest up to 15%, of its assets in securities
rated as low as "C" by Moody's or "CC" by S&P or of comparable quality if not
rated. The Bond Fund is permitted to invest up to 20% of its assets in
securities rated in the highest level below investment grade (i.e., "Ba" for
Moody's or "BB" by S&P), or if unrated, securities determined to be of
comparable quality by HIMCO. Securities rated below

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investment grade are commonly referred to as "high yield-high risk securities"
or "junk bonds". Each rating category has within it different gradations or
sub-categories. For instance the "Ba" rating for Moody's includes "Ba3", "Ba2"
and "Ba1". Likewise the S&P rating category of "BB" includes "BB+", "BB" and
"BB-". If a Fund is authorized to invest in a certain rating category, the Fund
is also permitted to invest in any of the sub-categories or gradations within
that rating category. Securities in the highest category below investment grade
are considered to be of poor standing and predominantly speculative. These
securities are considered speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the
obligations. Accordingly, it is possible that these types of factors could, in
certain instances, reduce the value of securities held by a Fund with a
commensurate effect on the value of a Fund's shares. If a security is downgraded
to a rating category which does not qualify for investment, HIMCO or Wellington
Management will use its discretion on whether to hold or sell based upon its
opinion on the best method to maximize value for shareholders over the long
term.

MORTGAGE-RELATED SECURITIES

The mortgage-related securities in which the International Advisers Fund,
Advisers Fund, Bond Fund and Mortgage Securities Fund may invest include
interests in pools of mortgage loans made by lenders such as savings and loan
institutions, mortgage bankers, commercial banks and others. Pools of mortgage
loans are assembled for sale to investors (such as the Funds) by various
governmental, government-related and private organizations. These Funds may also
invest in similar mortgage-related securities which provide funds for
multi-family residences or commercial real estate properties.

The value of these securities may be significantly affected by interest
rates, the market's perception of the issuers and the creditworthiness of the
parties involved. These securities may also be subject to prepayment risk. The
yield characteristics of the mortgage securities differ from those of
traditional debt securities. Among the major differences are that interest and
principal payments are made more frequently on mortgage securities, usually
monthly, and that principal may be prepaid at any time because the underlying
mortgage loans or other assets generally permit prepayment at any time.
Evaluating the risks associated with prepayment and determining the rate at
which prepayment is influenced by a variety of economic, geographic,
demographic, social and other factors including interest rate levels, changes in
housing needs, net equity built by mortgagors in the mortgaged properties, job
transfers, and unemployment rates. If a Fund purchases these securities at a
premium, a prepayment rate that is faster than expected will reduce yield to
maturity, while a prepayment rate that is slower than expected will have the
opposite effect of increasing yield to maturity. Conversely, if a Fund purchases
these securities at a discount, faster than expected prepayments will increase,
while slower than expected prepayments will reduce, yield to maturity. Amounts
available for reinvestment are likely to be greater during a period of declining
interest rates and, as a result, are likely to be reinvested at lower interest
rates than during a period of declining interest rates and, as a result, are
likely to be reinvested at lower interest rates than during a period of rising
interest rates. Accelerated prepayments on securities purchased by a Fund at a
premium also impose a risk of loss of

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principal because the premium may not have been fully amortized at the time the
principal is repaid in full.

The mortgage securities in which each Fund invests differ from conventional
bonds in that principal is paid back over the life of the mortgage securities
rather than at maturity. As a result, the holder of the mortgage securities
(i.e., a Fund) receives monthly scheduled payments of principal and interest,
and may receive unscheduled principal payments representing prepayments on the
underlying mortgages. When the holder reinvests the payments and any unscheduled
prepayments of principal it receives, it may receive a rate of interest which is
lower than the rate on the existing mortgage securities. For this reason,
mortgage securities are less effective than other types of U.S. Government
securities as a means of "locking in" long-term interest rates. See "Illiquid
Securities."

ASSET-BACKED SECURITIES

The International Advisers Fund, Advisers Fund, Bond Fund, Mortgage
Securities Fund and the Money Market Fund may invest in asset-backed securities.
The securitization techniques used for asset-backed securities are similar to
those used for mortgage-related securities. The collateral for these securities
has included home equity loans, automobile and credit card receivables, boat
loans, computer leases, airplane leases, mobile home loans, recreational vehicle
loans and hospital accounts receivables. These Funds may invest in these and
other types of asset-backed securities that may be developed in the future.
These securities may be subject to the risk of prepayment or default. The
ability of an issuer of asset-backed securities to enforce its security interest
in the underlying securities may be limited.

EQUITY SECURITIES

Each Fund except the Bond Fund, Mortgage Securities Fund and Money Market
Fund may invest in equity securities which include common stocks, preferred
stocks (including convertible preferred stock) and rights to acquire such
securities. In addition, these Funds may invest in securities such as bonds,
debentures and corporate notes which are convertible into common stock at the
option of the holder. The Bond Fund may invest up to 15% of its total assets in
preferred stocks, convertible securities, and securities carrying warrants to
purchase equity securities. The Bond Fund will not invest in common stocks
directly, but may retain, for reasonable periods of time, common stocks acquired
upon conversion of debt securities or upon exercise of warrants acquired with
debt securities.

SMALL CAPITALIZATION SECURITIES

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tend to be smaller or less well-established companies, they may have limited
product lines, market share or financial resources and may have less historical
data with respect to operations and management. As a result, Small
Capitalization Securities are often less marketable and experience a higher
level of price volatility than securities of larger or more well-established
companies. In addition, companies whose securities are offered in initial public
offerings may be more dependent on a limited number of key employees. Because
securities issued in initial public offerings are being offered to the public
for the first time, the market for such securities may be inefficient and less
liquid.

NON-U.S. SECURITIES

Each Fund, except the Mortgage Securities Fund, is permitted to invest a
portion of its assets in non-U.S. securities, including, in the case of
permitted equity investments, American Depositary Receipts ("ADRs") and Global
Depositary Receipts ("GDRs"). ADRs are certificates issued by a U.S. bank or
trust company and represent the right to receive securities of a non-U.S. issuer
deposited in a domestic bank or non-U.S. branch of a U.S. bank. ADRs are traded
on a U.S. securities exchange, or in an over-the-counter market, and are
denominated in U.S. dollars. GDRs are certificates issued globally and evidence
a similar ownership arrangement. GDRs are traded on non-U.S. securities
exchanges and are denominated in non-U.S. currencies. The value of an ADR or a
GDR will fluctuate with the value of the underlying security, will reflect any
changes in exchange rates and otherwise will involve risks associated with
investing in non-U.S. securities. When selecting securities of non-U.S. issuers,
HIMCO or Wellington Management will evaluate the economic and political climate
and the principal securities markets of the country in which an issuer is
located.

Investing in securities issued by non-U.S. companies involves
considerations and potential risks not typically associated with investing in
obligations issued by U.S. companies. Less information may be available about
non-U.S. companies than about U.S. companies and non-U.S. companies generally
are not subject to uniform accounting, auditing and financial reporting
standards or to other regulatory practices and requirements comparable to those
applicable to U.S. companies. The values of non-U.S. securities are affected by
changes in currency rates or exchange control regulations, restrictions or
prohibition on the repatriation of non-U.S. currencies, application of non-U.S.
tax laws, including withholding taxes, changes in governmental administration or
economic or monetary policy (in the U.S. or outside the U.S.) or changed
circumstances in dealings between nations. Costs are also incurred in connection
with conversions between various currencies.

Investing in non-U.S. sovereign debt will expose a Fund to the direct or
indirect consequences of political, social or economic changes in the developing
and emerging countries that issue the securities. The ability and willingness of
sovereign obligers in developing and emerging countries or the governmental
authorities that control repayment of their external debt to pay principal and
interest on such debt when due may depend on general economic and political
conditions within the relevant country. Countries such as those in which the
Funds may

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invest have historically experienced, and may continue to experience, high rates
of inflation, high interest rates, exchange rate trade difficulties and
unemployment. Some of these countries are also characterized by political
uncertainty or instability. Additional factors which may influence the ability
or willingness to service debt include, but are not limited to, a country's cash
flow situation, the availability of sufficient foreign exchange on the date a
payment is due, the relative size of its debt service burden to the economy as a
whole, and its government's policy towards the IMF, the World Bank and other
international agencies.

Although the International Advisers Fund and International Opportunities
Fund will focus on companies that operate in established markets, from time to
time each Fund may invest up to 25% of its assets in companies located in
emerging countries. Compared to the United States and other developed countries,
developing countries may have relatively unstable governments, economies based
on only a few industries, and securities markets that are less liquid and trade
a small number of securities. Prices on these exchanges tend to be volatile and,
in the past, securities in these countries have offered greater potential for
gain (as well as loss) than securities of companies located in developed
countries.

CURRENCY TRANSACTIONS

The use of currency transactions to protect the value of a Fund's assets
against a decline in the value of a currency does not eliminate potential losses
arising from fluctuations in the value of the Fund's underlying securities.
Further, the Funds may enter into currency transactions only with counter
parties that HIMCO or Wellington Management deems to be creditworthy.

OPTIONS AND FUTURES CONTRACTS

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In seeking to protect against the effect of changes in equity market
values, currency exchange rates or interest rates that are adverse to the
present or prospective position of the Funds, for cash flow management, and, to
a lesser extent, to enhance returns, each Fund, except the Money Market Fund,
may employ certain hedging, income enhancement and risk management techniques,
including the purchase and sale of options, futures and options on futures
involving equity and debt securities and foreign currencies, aggregates of
equity and debt securities, indices of prices of equity and debt securities and
other financial indices. A Fund's ability to engage in these practices may be
limited by tax considerations and certain other legal considerations.

A Fund may write covered options and purchase put and call options on
individual securities as a partial hedge against an adverse movement in the
security and in circumstances consistent with the objective and policies of the
Fund. This strategy limits potential capital appreciation in the portfolio
securities subject to the put or call option.

The Funds may also write covered put and call options and purchase put and
call options on foreign currencies to hedge against the risk of foreign exchange
fluctuations on foreign securities the particular Fund holds in its portfolio or
that it intends to purchase. For example, if a Fund enters into a contract to
purchase securities denominated in foreign currency, it could effectively
establish the maximum U.S. dollar cost of the securities by purchasing call
options on that foreign currency. Similarly, if a Fund held securities
denominated in a foreign currency and anticipated a decline in the value of that
currency against the U.S. dollar, the Fund could hedge against such a decline by
purchasing a put option on the foreign currency involved.

In addition, a Fund may purchase put and call options and write covered put
and call options on aggregates of equity and debt securities, and may enter into
futures contracts and options thereon for the purchase or sale of aggregates of
equity and debt securities, indices of equity and debt securities and other
financial indices, all for the purpose of protecting against potential changes
in the market value of portfolio securities or in interest rates. Aggregates are
composites of equity or debt securities that are not tied to a commonly known
index. An index is a measure of the value of a group of securities or other
interests. An index assigns relative values to the securities included in that
index, and the index fluctuates with changes in the market value of those
securities.

A Fund may write covered options only. "Covered" means that, so long as a
Fund is obligated as the writer of a call option on particular securities or
currency, it will own either the underlying securities or currency or an option
to purchase the same underlying securities or currency having an expiration date
not earlier than the expiration date of the covered option and an exercise price
equal to or less than the exercise price of the covered option, or will
establish or maintain with its custodian for the term of the option a segregated
account consisting of cash, U.S. Government securities or other liquid, high
grade debt obligations having a value equal to the fluctuating market value of
the optioned securities or currencies. A Fund will cover any put

-11-
<PAGE>

option it writes on particular securities or currency by maintaining a
segregated account with its custodian as described above.

To hedge against fluctuations in currency exchange rates, a Fund may
purchase or sell foreign currency futures contracts, and write put and call
options and purchase put and call options on such futures contracts. For
example, a Fund may use foreign currency futures contracts when it anticipates a
general weakening of the foreign currency exchange rate that could adversely
affect the market values of the Fund's foreign securities holdings. In this
case, the sale of futures contracts on the underlying currency may reduce the
risk of a reduction in market value caused by foreign currency variations and,
by so doing, provide an alternative to the liquidation of securities positions
in the Fund and resulting transaction costs. When the Fund anticipates a
significant foreign exchange rate increase while intending to invest in a
non-U.S. security, the Fund may purchase a foreign currency futures contract to
hedge against a rise in foreign exchange rates pending completion of the
anticipated transaction. Such a purchase of a futures contract would serve as a
temporary measure to protect the Fund against any rise in the foreign exchange
rate that may add additional costs to acquiring the non-U.S. security position.
The Fund similarly may use futures contracts on equity and debt securities to
hedge against fluctuations in the value of securities it owns or expects to
acquire.

The Funds also may purchase call or put options on foreign currency futures
contracts to obtain a fixed foreign exchange rate at limited risk. A Fund may
purchase a call option on a foreign currency futures contract to hedge against a
rise in the foreign exchange rate while intending to invest in a non-U.S.
security of the same currency. A Fund may purchase put options on foreign
currency futures contracts to hedge against a decline in the foreign exchange
rate or the value of its non-U.S. securities. A Fund may write a call option on
a foreign currency futures contract as a partial hedge against the effects of
declining foreign exchange rates on the value of non-U.S. securities and in
circumstances consistent with a Fund's investment objectives and policies.

Options on indexes are settled in cash, not in delivery of securities. The
exercising holder of an index option receives, instead of a security, cash equal
to the difference between the closing price of the securities index and the
exercise price of the option. When a Fund writes a covered option on an index, a
Fund will be required to deposit and maintain with a custodian cash or
high-grade, liquid short-term debt securities equal in value to the aggregate
exercise price of a put or call option pursuant to the requirements and the
rules of the applicable exchange. If, at the close of business on any day, the
market value of the deposited securities falls below the contract price, the
Fund will deposit with the custodian cash or high-grade, liquid short-term debt
securities equal in value to the deficiency.

To the extent that a Fund enters into futures contracts, options on futures
contracts and options on foreign currencies that are traded on an exchange
regulated by the Commodities Futures Trading Commission ("CFTC"), in each case
that are not for "BONA FIDE hedging" purposes (as defined by regulations of the
CFTC), the aggregate initial margin and premiums

-12-
<PAGE>

required to establish those positions may not exceed 5% of the liquidation value
of the Fund's portfolio, after taking into account the unrealized profits and
unrealized losses on any such contracts the Fund has entered into. However, the
"in-the-money" amount of such options may be excluded in computing the 5% limit.
Adoption of this guideline will not limit the percentage of a Fund's assets at
risk to 5%.

Although any one Fund may not employ all or any of the foregoing
strategies, its use of options, futures and options thereon and forward currency
contracts (as described under "Currency Transactions") would involve certain
investment risks and transaction costs to which it might not be subject were
such strategies not employed. Such risks include: (1) dependence on the ability
of HIMCO or Wellington Management to predict movements in the prices of
individual securities, fluctuations in the general securities markets or market
sections and movements in interest rates and currency markets; (2) imperfect
correlation between movements in the price of the securities or currencies
hedged or used for cover; (3) the fact that skills and techniques needed to
trade options, futures contracts and options thereon or to use forward currency
contracts are different from those needed to select the securities in which a
Fund invests; (4) lack of assurance that a liquid secondary market will exist
for any particular option, futures contract, option thereon or forward contract
at any particular time, which may affect a Fund's ability to establish or close
out a position; (5) possible impediments to effective portfolio management or
the ability to meet current obligations caused by the segregation of a large
percentage of a Fund's assets to cover its obligations; and (6) the possible
need to defer closing out certain options, futures contracts, options thereon
and forward contracts in order to continue to qualify for the beneficial tax
treatment afforded "regulated investment companies" under the Code. In the event
that the anticipated change in the price of the securities or currencies that
are the subject of such a strategy does not occur, it may be that a Fund would
have been in a better position had it not used such a strategy at all.

SWAP AGREEMENTS

Each Fund, except the Index Fund and Money Market Fund, may enter into
interest rate swaps, currency swaps, and other types of swap agreements such as
caps, collars, and floors. In a typical interest rate swap, one party agrees to
make regular payments equal to a floating interest rate multiplied by a
"notional principal amount," in return for payments equal to a fixed rate
multiplied by the same amount, for a specified period of time. If a swap
agreement provides for payments in different currencies, the parties might agree
to exchange the notional principal amount as well. Swaps may also depend on
other prices or rates, such as the value of an index or mortgage prepayment
rates.

-13-
<PAGE>

obligated to make payments to the extent that a specified interest rate falls
below an agreed-upon level. An interest rate collar combines elements of buying
a cap and selling a floor.

The Funds will usually enter into interest rate swaps on a net basis, i.e.,
where the two parties make net payments with a Fund receiving or paying, as the
case may be, only the net amount of the two payments. The net amount of the
excess, if any, of a Fund's obligations over its entitlement with respect to
each interest rate swap will be U.S. Government Securities or other liquid high
grade debt obligations having an aggregate net asset value at least equal to the
accrued excess will be maintained by the Fund's custodian in a segregated
account. If a Fund enters into a swap on other than a net basis, the Fund will
maintain in the segregated account the full amount of the Fund's obligations
under each such swap. The Fund may enter into swaps, caps, collars and floors
with member banks of the Federal Reserve System, members of the New York Stock
Exchange or other entities determined by HIMCO or Wellington Management,
pursuant to procedures adopted and reviewed on an ongoing basis by the Board of
Directors, to be creditworthy. If a default occurs by the other party to such
transaction, a Fund will have contractual remedies pursuant to the agreements
related to the transaction but such remedies may be subject to bankruptcy and
insolvency laws which could affect such Fund's rights as a creditor.

The swap market has grown substantially in recent years with a large number
of banks and financial services firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market has
become relatively liquid. Caps, collars and floors are more recent innovations
and they are less liquid than swaps. There can be no assurance, however, that a
Fund will be able to enter into interest rate swaps or to purchase interest rate
caps, collars or floors at prices or on terms HIMCO or Wellington Management, as
appropriate, believes are advantageous to such Fund. In addition, although the
terms of interest rate swaps, caps, collars and floors may provide for
termination, there can be no assurance that a Fund will be able to terminate an
interest rate swap or to sell or offset interest rate caps, collars or floors
that it has purchased. Because interest rate swaps, caps, collars and floors are
privately negotiated transactions rather then publicly traded, they may be
considered to be illiquid securities.

-14-
<PAGE>

Management's judgment about the direction or extent of the movement in interest
rates is incorrect, a Fund's overall performance would be worse than if it had
not entered into any such transactions. For example, if a Fund had purchased an
interest rate swap or an interest rate floor to hedge against its expectation
that interest rates would decline but instead interest rates rose, such Fund
would lose part or all of the benefit of the increased payments it would receive
as a result of the rising interest rates because it would have to pay amounts to
its counter parties under the swap agreement or would have paid the purchase
price of the interest rate floor. These activities are commonly used when
managing derivative investments.

ILLIQUID SECURITIES

Each Fund is permitted to invest in illiquid securities. No illiquid
securities will be acquired if upon the purchase more than 10% of the Money
Market Fund's net assets or 15% of each other Fund's net assets would consist of
such securities. "Illiquid Securities" are securities that may not be sold or
disposed of in the ordinary course of business within seven days at
approximately the price used to determine a Fund's net asset value. Each Fund
may purchase certain restricted securities commonly known as Rule 144A
securities that can be resold to institutions and which may be determined to be
liquid pursuant to policies and guidelines of the Board of Directors. A Fund may
not be able to sell illiquid securities when HIMCO or Wellington Management
considers it desirable to do so or may have to sell such securities at a price
that is lower than the price that could be obtained if the securities were more
liquid. A sale of illiquid securities may require more time and may result in
higher dealer discounts and other selling expenses than does the sale of
securities that are not illiquid. Illiquid securities also may be more difficult
to value due to the unavailability of reliable market quotations for such
securities, and investment in illiquid securities may have an adverse impact on
net asset value.

Under current interpretations of the SEC Staff, the following types of
securities in which a Fund may invest will be considered illiquid: (1)
repurchase agreements maturing in more than seven days; (2) certain restricted
securities (securities whose public resale is subject to legal or contractual
restrictions); (3) options, with respect to specific securities, not traded on a
national securities exchange that are not readily marketable; and (4) any other
securities in which a Fund may invest that are not readily marketable.

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES

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<PAGE>

value, each day, of such security in determining the net asset value of the
Fund. At the time of delivery of the securities, the value may be more or less
than the purchase price. A Fund will maintain, in a segregated account, cash,
U.S. Government securities or other liquid, high-grade debt obligations having a
value equal to or greater than the Fund's purchase commitments; likewise a Fund
will segregate securities sold on a delayed-delivery basis.

OTHER INVESTMENT COMPANIES

Each Fund, except the Index Fund and Money Market Fund, is permitted to
invest in other investment companies. Securities in certain countries are
currently accessible to the Funds only through such investments. The investment
in other investment companies is limited in amount and will involve the indirect
payment of a portion of the expenses, including advisory fees, of such other
investment companies. A Fund will not purchase a security of an investment
company if, as a result, (1) more than 10% of the Fund's assets would be
invested in securities of other investment companies, (2) such purchase would
result in more than 3% of the total outstanding voting securities of any one
such investment company being held by the Fund; or (3) more than 5% of the
Fund's assets would be invested in any one such investment company.

PORTFOLIO SECURITIES LENDING

Each of the Funds may lend its portfolio securities to broker/dealers and
other institutions as a means of earning interest income. The borrower will be
required to deposit as collateral, cash, cash equivalents, U.S. government
securities or other high quality liquid debt securities that at all times will
be at least equal to 100% of the market value of the loaned securities and such
amount will be maintained in a segregated account of the respective Fund. While
the securities are on loan the borrower will pay the respective Fund any income
accruing thereon.

Delays or losses could result if a borrower of portfolio securities becomes
bankrupt or defaults on its obligation to return the loaned securities. The
Funds may lend securities only if: (1) each loan is fully secured by appropriate
collateral at all times; and (2) the value of all loaned securities of any Fund
is not more than 33-1/3% of the Fund's total assets taken at the time of the
loan (including collateral received in connection with any loans).

MANAGEMENT OF THE FUNDS

The directors and officers of the Fund and their principal business
occupations for the last five years are set forth below. Those directors who are
deemed to be "interested persons" of the Fund, as that term is defined in the
1940 Act are indicated by an asterisk next to their respective names.

Name, Address, Age and Position with the Fund

JOSEPH ANTHONY BIERNAT (age 70)
Director

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<PAGE>

30 Hurdle Fence Drive
Avon, CT 06001

Mr. Biernat served as Senior Vice President and Treasurer of United Technologies
Corporation from 1984 until March, 1987, when he retired. He subsequently served
as Executive Vice President of Boston Security Counselors, Inc., Hartford,
Connecticut (1988-1989), and served as Vice President-Client Services of Wright
Investors' Service, Bridgeport, Connecticut (1989-1990). Mr. Biernat presently
is consulting to organizations on financial matters, with the majority of time
spent with T.O. Richardson & Co., Farmington, Connecticut.

WINIFRED ELLEN COLEMAN (age 65)
Director
27 Buckingham Lane
West Hartford, CT 06117

Ms. Coleman has served as President of Saint Joseph College since 1991. She is a
Director of LeMoyne College, St. Francis Hospital, Connecticut Higher Education
Student Loan Administration, and The National Conference (Greater Hartford Board
of Directors).

JOSEPH HARRY GAREAU*(age 50)
Director and President
55 Farmington Avenue
Hartford, CT 06105

Mr. Gareau serves as President and Chief Investment Officer of HIMCO. Previously
he served as Executive Vice President and Chief Investment Officer of The
Hartford from 1993-1996, as Senior Vice President and Chief Investment
Officer/Property-Casualty Division (September, 1992 - April, 1993) and as Vice
President (October, 1987 - September, 1992). Mr. Gareau is also a Director
of HIMCO and a Director and Executive Vice President of Hartford Investment
Financial Services Company ("HIFSCO"), a Hartford affiliated registered
investment adviser.

WILLIAM ATCHISON O'NEILL (age 67)
Director
Box 360
East Hampton, CT 06424

The Honorable William A. O'Neill served as Governor of the State of Connecticut
from 1980 until 1991. He is presently retired.

MILLARD HANDLEY PRYOR, JR. (age 64)
Director
695 Bloomfield Avenue

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<PAGE>

Bloomfield, CT 06002

Mr. Pryor has served as Managing Director of Pryor & Clark Company, Hartford,
Connecticut, since June, 1992. He served as Chairman and Chief Executive Officer
of Corcap, Inc. from 1988-1992. In addition, Mr. Pryor is a Director of Pryor &
Clark Company, Corcap, Inc., the Wiremold Company, Hoosier Magnetics, Inc.,
Infodata Systems, Inc. and Pacific Scientific Corporation.

LOWNDES ANDREW SMITH*(age 58)
Director and Chairman
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Smith has served as Vice Chairman of Hartford Financial Services Group, Inc.
since February, 1997, as President and Chief Executive Officer of Hartford Life,
Inc. since February, 1997, and as President and Chief Operating Officer of The
Hartford Life Insurance Companies since January, 1989. He was formerly Senior
Vice President and Group Comptroller of The Hartford Insurance Group from
1987-1989. He has been a Director of Connecticut Children's Medical Center since
1993, a Director of American Counsel of Life Insurance from 1993-1996 and a
Director of Insurance Marketplace Standards Association from 1996 to present. He
is also a member of the ACLI Directors Council. Mr. Smith is also President and
a Director of HIFSCO.

JOHN KELLEY SPRINGER (age 66)
Director
225 Asylum Avenue
Hartford, CT 06103

Mr. Springer currently serves as Chairman of Medspan, Inc. From 1986 to 1997 he
served as Chief Executive Officer of Connecticut Health System, Inc. Formerly,
he served as the Chief Executive Officer of Hartford Hospital, Hartford,
Connecticut (June, 1976 - August, 1989). He is also a Director of Hartford
Hospital, and CHS Insurance Ltd.

PETER CUMMINS (age 60)
Vice President
P. O. Box 2999
Hartford, CT 06104-2999

Mr. Cummins has served as Senior Vice President since 1997 and Vice President
since 1989 of sales and marketing of the Individual Life and Annuity Division of
The Hartford Life Insurance Company. He is also a Director and Vice President of
HIFSCO.

JOHN PHILLIP GINNETTI (age 52)

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<PAGE>

Vice President
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Ginnetti has served as Executive Vice President and Director of Asset
Management Services, a division of The Hartford Life Insurance Company, since
1994. From 1988 to 1994 he served as Senior Vice President and Director of the
Individual Life and Annuities Division, also a division of The Hartford Life
Insurance Company.

ANDREW WILLIAM KOHNKE (age 39)
Vice President
55 Farmington Avenue
Hartford, CT 06105

Mr. Kohnke serves as Managing Director and a Director of HIMCO. Previously he
served as Vice President of HIMCO (1986-1996) and Investment Manager for HIMCO
(1983-1986). Mr. Kohnke is also a Director and Vice President of HIFSCO.

THOMAS MICHAEL MARRA (age 39)
Vice President
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Marra has served as an Executive Vice President since 1996, and as Senior
Vice President and Director since 1994, of the Individual Life and Annuity
Division of The Hartford Life Insurance Company. Mr. Marra is also a Director
and Executive Vice President of HIFSCO. Mr. Marra joined The Hartford Life
Insurance Company in 1980.

CHARLES MINER O'HALLORAN (age 50)
Vice President and Secretary
Hartford Plaza
Hartford, CT 06115

Mr. O'Halloran has served as Senior Vice President since January, 1998,
Corporate Secretary since 1996, Vice President since 1994 and Senior Associate
General Counsel since 1988 of The Hartford Financial Services Group, Inc. Mr.
O'Halloran is also a Director, Secretary and General Counsel of HIMCO and a
Director of HIFSCO.

GEORGE RICHARD JAY (age 45)
Controller and Treasurer
P.O. Box 2999
Hartford, CT 06104-2999

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<PAGE>

Mr. Jay has served as Secretary and Director, Life and Equity Accounting and
Financial Control, of The Hartford Life Insurance Company since 1987.

KEVIN J. CARR (age 43)
Assistant Secretary and Counsel
55 Farmington Avenue
Hartford, CT 06105

Mr. Carr has served as Counsel since November 1996 and Associate Counsel since
November 1995, of The Hartford Financial Services Group, Inc. Formerly he served
as Counsel of Connecticut Mutual Life Insurance Company from March 1995 to
November 1995, Associate Counsel of 440 Financial Group of Worcester from 1994
to 1995 and Corporate Counsel-General Manager of Parker Media, a Hartford-based
publishing company, from 1990-1994. Mr. Carr is also an Assistant Secretary of
HIFSCO.

CHRISTOPHER JAMES COSTA (age 34)
Assistant Secretary
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Costa has served as the Tax Manager of The Hartford-Sponsored Mutual Funds
since July 1996. Formerly he served as the Tax Manager and Assistant Treasurer
of The Phoenix Mutual Funds from June 1994 to June 1996 and as a Tax Consultant
with Arthur Andersen LLP from September 1990 to June 1994.

An Audit Committee and Nominating Committee have been appointed for the
Fund. Each Committee is made up of those directors who are not "interested
persons" of the Fund.

All Board members and officers of the Fund are also board members and
officers of The Hartford Mutual Funds, Inc., an open-end management investment
company comprised of ten separate funds, whose shares are sold to the general
public. Each of the Directors and principal officers affiliated with the Fund
who is also an affiliated person of HL Advisors, HIMCO or Wellington Management
is named above, together with the capacity in which such person is affiliated
with the Fund, HL Advisors, HIMCO or Wellington Management.

COMPENSATION OF OFFICERS AND DIRECTORS. The Funds pay no salaries or
compensation to any officer or director affiliated with The Hartford. The chart
below sets forth the fees paid by the Fund to the non-interested Directors and
certain other information as of December 31, 1997:

-20-
<PAGE>

<TABLE>
<CAPTION>
JOSEPH A. WINIFRED E. WILLIAM A. MILLARD H. JOHN K.
BIERNAT COLEMAN O'NEILL PRYOR SPRINGER
<S> <C> <C> <C> <C> <C>
COMPENSATION RECEIVED $18,000 $18,000 $18,000 $18,000 $18,000
FROM THE FUNDS

PENSION OR RETIREMENT $0 $0 $0 $0 $0
BENEFITS ACCRUED AS
FUND EXPENSE

TOTAL COMPENSATION $23,250 $23,250 $23,250 $23,250 $23,250
FROM THE FUNDS AND
COMPLEX PAID TO
DIRECTORS*
</TABLE>

*As of December 31, 1997, there were twenty-one funds in the Complex
(including the Funds).

OTHER INFORMATION ABOUT THE FUND. Each Fund is a Maryland corporation with
authorized capital stock, par value $0.10 per share as follows: Capital
Appreciation Fund, 2 billion; Dividend and Growth Fund, 2 billion; Index Fund, 1
billion; International Opportunities Fund, 1.5 billion; MidCap Fund, 750
million; Small Company Fund, 750 million; Stock Fund, 2 billion; Advisers Fund,
4 billion; International Advisers Fund, 750 million; Bond Fund, 800 million;
Mortgage Securities Fund, 800 million; and Money Market Fund, 1.3 billion. The
shares of each Fund have been divided into Class IA and Class IB. The Board of
Directors may reclassify authorized shares to increase or decrease the
allocation of shares in each Fund. The Board of Directors is also authorized,
from time to time and without further shareholder approval, to authorize
additional shares of each Fund.

As of December 31, 1997, HL Advisors owned 3,000,000 Class IA
shares(12.36%) of the MidCap Fund.

At December 31, 1997, certain Hartford Life group pension contracts held
direct interests in Class IA shares of the Funds as follows:

<TABLE>
<CAPTION>
Shares %
<S> <C> <C>
Index Fund 23,020,319 5.90%
Mortgage Securities Fund 16,076,327 5.35%
Money Market Fund 25,433,642 4.15%
Capital Appreciation Fund 20,321,589 1.87%
International Opportunities Fund 9,832,576 1.16%
Advisers Fund 30,369,579 0.93%
Small Company Fund 1,508,936 0.86%
Bond Fund 3,649,073 0.69%
Dividend and Growth Fund 4,708,801 0.46%
International Advisers Fund 534,692 0.30%
Stock Fund 2,343,837 0.25%
</TABLE>

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<PAGE>

VOTING

Each shareholder shall be entitled to one vote for each share of the Funds
held upon all matters submitted to the shareholders generally. With respect to
the Funds' shares issued as described above under "Purchase of Fund Shares," as
well as Fund shares which are not otherwise attributable to variable annuity
contract owners or variable life policy holders, the Hartford Life Insurance
Companies shall be the shareholders of record. Each of the Hartford Life
Insurance Companies will vote all Fund shares, pro rata, according to the
written instructions of the contract owners of the variable annuity contracts
and the policy holders of the variable life contracts issued by it using the
Funds as investment vehicles. This position is consistent with the policy of the
SEC Staff. Issues related to only one class of a Fund's shares are voted on only
by the shareholders of that class.

OTHER RIGHTS

Each share of Fund stock, when issued and paid for in accordance with the
terms of the offering, will be fully paid and non-assessable. Shares of Fund
stock have no pre-emptive, subscription or conversion rights and are redeemable
as set forth under "Sale and Redemption of Shares." There are no shareholder
pre-emptive rights. Upon liquidation of a Fund, the shareholders of that Fund
shall be entitled to share, pro rata, in any assets of the Fund after discharge
of all liabilities and payment of the expenses of liquidation.

Each Fund's Articles of Incorporation provides that the Directors, officers
and employees of the Fund may be indemnified by the Fund to the fullest extent
permitted by Maryland law and the federal securities laws. The Fund's Bylaws
provide that the Fund shall indemnify each of its Directors, officers and
employees against liabilities and expenses reasonably incurred by them, in
connection with, or resulting from, any claim, action, suit or proceeding,
threatened against or otherwise involving such Director, officer or employee,
directly or indirectly, by reason of being or having been a Director, officer or
employee of the Fund. Neither the Articles of Incorporation nor the Bylaws
authorize the Fund to indemnify any Director or officer against any liability to
which he or she would otherwise be subject by reason of or for willful
misfeasance, bad faith, gross negligence or reckless disregard of such person's
duties.

INVESTMENT MANAGEMENT ARRANGEMENTS

Each Fund has entered into an investment advisory agreement with HL
Investment Advisors, Inc. ("HL Advisors"). The investment advisory agreement
provides that HL Advisors, subject to the supervision and approval of each
Fund's Board of Directors, is responsible for the management of each Fund. HL
Advisors is responsible for investment management supervision of all Funds. HL
Advisors has entered into an investment services agreement with The Hartford
Investment Management Company ("HIMCO") for services related to the day-to-day
investment and reinvestment of the assets of the Index Fund, Mortgage Securities
Fund, Bond Fund and Money Market Fund. In connection with its management of the
such Funds, HIMCO provides

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<PAGE>

investment research and supervision of the investments held by a Fund and
conducts a continuous program of investment and reinvestment of the Funds'
assets, in accordance with the investment objectives and policies of a Fund.
HIMCO also furnishes the Funds such statistical information, with respect to the
investments which the Funds may hold or contemplate purchasing, as the Fund may
reasonably request. HIMCO will apprise the Fund of important developments
materially affecting any of the Funds and furnish the Funds from time to time
with such information as HIMCO may believe appropriate for this purpose. In
addition, Hartford Life Insurance Company ("Hartford Life"), a corporate
affiliate of HL Advisors and HIMCO, provides administrative services to the
Funds including administrative personnel, services, equipment and facilities and
office space for proper operation of the Funds. Although Hartford Life has
agreed to arrange for the provision of additional services necessary for the
proper operation of the Fund, each Fund pays for these services directly.

With respect to the Small Company Fund, Capital Appreciation Fund,
International Advisers Fund, International Opportunities Fund, MidCap Fund,
Stock Fund, Dividend and Growth Fund and Advisers Fund, HL Advisors has entered
into a sub-advisory investment management agreement with Wellington Management
Company ("Wellington Management"). Under the sub-advisory agreement, Wellington
Management, subject to the general supervision of the Board of Directors and HL
Advisors, is responsible for (among other things) the day-to-day investment and
reinvestment of the assets of such Funds and furnishing each such Fund with
advice and recommendations with respect to investments and the purchase and sale
of appropriate securities for each Fund.

As provided by the investment advisory agreement, each Fund pays HL
Advisors an investment management fee, which is accrued daily and paid monthly,
equal on an annual basis to a stated percentage of the respective Fund's average
daily net asset value. HL Advisors, not any Fund, pays the subadvisory fees of
Wellington Management as set forth in the Prospectus. HL Advisors pays HIMCO the
direct and indirect costs incurred in managing the HIMCO-advised Funds.

No person other than HL Advisors, HIMCO or Wellington Management and their
directors and employees regularly furnishes advice to the Funds with respect to
the desirability of the Funds investing in, purchasing or selling securities.
HIMCO and Wellington Management may from time to time receive statistical or
other information regarding general economic factors and trends, from The
Hartford and its affiliates.

Securities held by any Fund may also be held by other funds and other
clients for which HIMCO, Wellington Management or their respective affiliates
provide investment advice. Because of different investment objectives or other
factors, a particular security may be bought by HIMCO or Wellington Management
for one or more clients when one or more clients are selling the same security.
If purchases or sales of securities arise for consideration at or about the same
time for any Fund or client accounts (including other funds) for which HIMCO or
Wellington Management act as an investment adviser, (including the Funds
described herein)

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<PAGE>

transactions in such securities will be made, insofar as feasible, for the
respective funds and other client accounts in a manner deemed equitable to all.
To the extent that transactions on behalf of more than one client of HIMCO,
Wellington Management or their respective affiliates during the same period may
increase the demand for securities being purchased or the supply of securities
being sold, there may be an adverse effect on price.

For the last three fiscal years, each Fund has paid the following advisory
fees to HL Advisors:

FUND NAME 1997 1996 1995
- --------- ---- ---- ----
<S> <C> <C> <C>
Capital Appreciation Fund $18,471,888 $12,519,486 $7,715,873
Dividend and Growth Fund $6,910,062 $2,968,879 $757,373
Index Fund $1,771,465 $945,609 $447,326
International Opportunities $5,565,620 $4,428,186 $3,213,660
MidCap Fund(1) $28,186 --- ---
Small Company Fund $657,507 $31,521 ---
Stock Fund $10,265,666 $6,450,702 $4,134,925
Advisers Fund $31,252,771 $22,209,882 $16,044,763
International Advisers Fund $926,609 $392,271 ---
Bond Fund $1,422,689 $1,152,953 $906,000
Mortgage Securities Fund $802,900 $804,297 $790,058
Money Market Fund $1,436,068 $1,121,482 $762,534
</TABLE>

(1) Portion of advisory fee waived for 1997

For the last three fiscal years, each Fund has paid the following
administrative fees to Hartford Life:

FUND NAME 1997 1996 1995
- --------- ---- ---- ----
<S> <C> <C> <C>
Capital Appreciation Fund $7,245,777 $4,795,769 $2,814,856
Dividend and Growth Fund $2,486,421 $965,006 $230,541
Index Fund $1,550,032 $827,408 $391,411
International Opportunities $1,931,542 $1,493,655 $1,045,064
MidCap Fund(1) $9,636 --- ---
Small Company Fund $200,110 $13,232 ---
Stock Fund $6,879,714 $4,210,075 $2,586,517
Advisers Fund $12,508,493 $8,785,932 $6,244,398
International Advisers Fund $282,011 $119,528 $24,683
Bond Fund $794,107 $636,196 $491,868
Mortgage Securities Fund $562,030 $563,008 $553,041
Money Market Fund $1,005,248 $784,977 $542,895
</TABLE>

(1) Portion of administrative fee waived for 1997

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<PAGE>

Pursuant to the investment advisory agreement, subadvisory investment
agreements and investment services agreements neither HL Advisors, HIMCO nor
Wellington Management is liable to the Funds or their shareholders for any error
of judgment or mistake of law or for any loss suffered by the Funds in
connection with the matters to which their respective agreements relate, except
a loss resulting from willful misfeasance, bad faith or gross negligence on the
part of HIMCO or Wellington Management in the performance of their duties or
from their reckless disregard of the obligations and duties under the applicable
agreement.

HL Advisors, whose principal business address is at 200 Hopmeadow Street,
Simsbury, Connecticut 06070, was organized in 1981. As of December 31, 1997, HL
Advisors had approximately $24 billion in assets under management. HL Advisors
is a majority owned indirect subsidiary of The Hartford. HIMCO, whose principal
business address is 55 Farmington Avenue, Hartford, Connecticut 06105, was
organized in 1996 and is a wholly-owned subsidiary of The Hartford. HIMCO is a
professional money management firm that provides services to investment
companies, employee benefit plans and its affiliated insurance companies. As of
December 31, 1997, HIMCO and its affiliates had approximately $54.9 billion in
assets under management.

Wellington Management, 75 State Street, Boston, MA 02109, is a professional
investment counseling firm that provides services to investment companies,
employee benefit plans, endowments, foundations and other institutions and
individuals. Wellington Management and its predecessor organizations have
provided investment advisory services since 1928. As of December 31, 1997,
Wellington Management had investment management authority with respect to
approximately $175 billion in assets. Wellington Management is a Massachusetts
Limited Liability Partnership. The three managing partners of Wellington
Management are Robert W. Doran, Duncan M. McFarland and John R. Ryan.

The investment management agreement, investment subadvisory agreements and
investment services agreements continue in effect for two years from initial
approval and from year to year thereafter if approved annually by a vote of a
majority of the Directors of the Fund including a majority of the Directors who
are not parties to an agreement or interested persons of any party to the
contract, cast in person at a meeting called for the purpose of voting on such
approval, or by holders of a majority of the applicable Fund's outstanding
voting securities. The contract automatically terminates upon assignment as
defined under the 1940 Act. The investment advisory agreement may be terminated
without penalty on 60 days' notice at the option of either party to the
respective contract or by vote of the holders of a majority of the outstanding
voting securities of the applicable Fund. The investment subadvisory agreements
and investment services agreements may be terminated at any time without the
payment of any penalty by the Board of Directors, by vote of a majority of the
outstanding voting securities of the respective Fund or by HL Advisors, upon 60
days' notice to HIMCO and Wellington Management, and by Wellington Management or
HIMCO upon 90 days' written notice to HL Advisors (with respect to that Fund
only). The investment subadvisory agreement and

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<PAGE>

investment services agreements terminate automatically upon the termination of
the corresponding investment advisory agreement.

HL Advisors may make payments from time to time from its own resources,
which may include the management fees paid by the Fund to compensate broker
dealers, depository institutions, or other persons for providing distribution
assistance and administrative services and to otherwise promote the sale of
shares of the Funds including paying for the preparation, printing and
distribution of prospectuses and sales literature or other promotional
activities.

PORTFOLIO TURNOVER

For the last three fiscal years, each Fund had the following portfolio
turnover rates:

FUND NAME 1997 1996 1995
- --------- ---- ---- ----
<S> <C> <C> <C>
Capital Appreciation Fund 58% 85% 79%
Dividend and Growth Fund 34% 57% 41%
Index Fund 6% 19% 2%
International Opportunities 73% 70% 56%
MidCap Fund 46%(1) --- ---
Small Company Fund 222% 32%(2) N/A
Stock Fund 32% 42% 53%
Advisers Fund 36% 54% 64%
International Advisers Fund 163% 95% 47%(3)
Bond Fund 113%(4) 212% 215%
Mortgage Securities Fund 47%(4) 201% 489%
Money Market Fund(5) N/A N/A N/A
</TABLE>

(1) The MidCap Fund commenced operations on July 15, 1997. It is
anticipated that the portfolio turnover rate of the MidCap Fund will
not exceed 100%.
(2) For the period August 9, 1996 to December 31, 1996.
(3) For the period February 28, 1995 to December 31, 1995.
(4) Excluding mortgage dollar rolls.
(5) Because of the short-term nature of their portfolio securities and
market conditions, no meaningful or accurate prediction can be made of
the portfolio turnover rate for the Money Market Fund.

Turnover rate is computed by determining the percentage relationship of the
lesser of purchases and sales of securities to the monthly average of the value
of securities owned for the fiscal year, exclusive of securities whose
maturities at the time of acquisition were one year or less. A high turnover
rate will result in increased brokerage expenses and the likelihood of some
short term gains which may be taxable to shareholders at ordinary income tax
rates (see "Federal Income Taxes" in the Prospectus).

FUND EXPENSES

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<PAGE>

Each Fund assumes and pays the following costs and expenses: interest;
taxes; brokerage charges (which may be to affiliated broker-dealers); costs of
preparing, printing and filing any amendments or supplements to the registration
forms of each Fund and its securities; all federal and state registration,
qualification and filing costs and fees, (except the initial costs and fees,
which will be borne by Hartford Life), issuance and redemption expenses,
transfer agency and dividend and distribution disbursing agency costs and
expenses; custodian fees and expenses; accounting, auditing and legal expenses;
fidelity bond and other insurance premiums; fees and salaries of directors,
officers and employees of each Fund other than those who are also officers of
Hartford Life; industry membership dues; all annual and semiannual reports and
prospectuses mailed to each Fund's shareholders as well as all quarterly, annual
and any other periodic report required to be filed with the SEC or with any
state; any notices required by a federal or state regulatory authority, and any
proxy solicitation materials directed to each Fund's shareholders as well as all
printing, mailing and tabulation costs incurred in connection therewith, and any
expenses incurred in connection with the holding of meetings of each Fund's
shareholders, expenses related to distribution activities as provided under each
Fund's Rule 12b-1 distribution plan for Class IB shares and other miscellaneous
expenses related directly to the Funds' operations and interest.

DISTRIBUTION ARRANGEMENTS

Each Fund's shares are sold by Hartford Securities Distribution Company on
a continuous basis to separate accounts sponsored by The Hartford and its
affiliates.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Funds have no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to any policy
established by HL Advisors and the Board of Directors, HIMCO and Wellington
Management are primarily responsible for the investment decisions of each Fund
and the placing of its portfolio transactions. In placing orders, it is the
policy of each Fund to obtain the most favorable net results, taking into
account various factors, including price, dealer spread or commission, if any,
size of the transaction and difficulty of execution. While HIMCO and Wellington
Management generally seek reasonably competitive spreads or commissions. HIMCO
and Wellington Management may direct brokerage transactions to broker/dealers
who also sell The Hartford's variable annuity and variable life insurance
contracts and the sale of such contracts may be taken into account by HIMCO and
Wellington Management when allocating brokerage transactions.

HIMCO and Wellington Management will generally deal directly with the
dealers who make a market in the securities involved (unless better prices and
execution are available elsewhere) if the securities are traded primarily in the
over-the-counter market. Such dealers usually act as principals for their own
account. On occasion, securities may be purchased directly from the issuer.
Bonds and money market securities are generally traded on a net basis and do not

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<PAGE>

normally involve either brokerage commissions or transfer taxes. Portfolio
securities in the Money Market Fund normally are purchased directly from, or
sold directly to, the issuer, an underwriter or market maker for the securities.
There usually will be no brokerage commissions paid by the Money Market Fund for
such purchases or sales.

While HIMCO and Wellington Management (as applicable) seek to obtain the
most favorable net results in effecting transactions in a Fund's portfolio
securities, dealers who provide supplemental investment research to HIMCO or
Wellington Management may receive orders for transactions from HIMCO or
Wellington Management. Such supplemental research services ordinarily consist of
assessments and analyses of the business or prospects of a company, industry, or
economic sector. If, in the judgment of HIMCO or Wellington Management, a Fund
will be benefited by such supplemental research services, HIMCO and Wellington
Management are authorized to pay spreads or commissions to brokers or dealers
furnishing such services which are in excess of spreads or commissions which
another broker or dealer may charge for the same transaction. Information so
received will be in addition to and not in lieu of the services required to be
performed by HIMCO and Wellington Management under the investment advisory
agreement or the sub-investment advisory agreement. The expenses of HIMCO and
Wellington Management will not necessarily be reduced as a result of the receipt
of such supplemental information. HIMCO and Wellington Management may use such
supplemental research in providing investment advice to portfolios other than
those for which the transactions are made. Similarly, the Funds may benefit from
such research obtained by HIMCO and Wellington Management for portfolio
transactions for other clients.

Investment decisions for the Funds will be made independently from those of
any other clients that may be (or in the future may be) managed by HIMCO,
Wellington Management or their affiliates. If, however, accounts managed by
HIMCO or Wellington Management are simultaneously engaged in the purchase of the
same security, then, pursuant to general authorization of each Fund's Board of
Directors, available securities may be allocated to each Fund or other client
account and may be averaged as to price in whatever manner HIMCO or Wellington
Management deems to be fair. Such allocation and pricing may affect the amount
of brokerage commissions paid by each Fund. In some cases, this system might
adversely affect the price paid by a Fund (for example, during periods of
rapidly rising or falling interest rates) or limit the size of the position
obtainable for a Fund (for example, in the case of a small issue).

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<PAGE>

For the last three fiscal years, each Fund has paid the following brokerage
fees:

FUND NAME 1997 1996 1995
- --------- ---- ---- ----
<S> <C> <C> <C>
Capital Appreciation Fund $6,360,557 $6,257,262 $3,069,000
Dividend and Growth Fund $1,876,099 $1,256,273 $303,000
Index Fund $66,985 $258,946 $66,000
International Opportunities $4,019,255 $3,607,685 $1,986,000
MidCap Fund(1) $18,881 --- ---
Small Company Fund(2) $563,124 $32,863 N/A
Stock Fund $2,552,822 $2,403,555 $1,839,000
Advisers Fund $2,994,604 $3,413,943 $2,608,000
International Advisers Fund(3) $436,813 $238,356 $76,000
Bond Fund(4) N/A N/A N/A
Mortgage Securities Fund(4) N/A N/A N/A
Money Market Fund(4) N/A N/A N/A
</TABLE>

(1) Commenced operations in 1997.
(2) Commenced operations in 1996.
(3) Commenced operations in 1995.
(4) No brokerage commissions were paid in 1995, 1996 or 1997 by the Bond
Fund, Mortgage Securities Fund or Money Market Fund.

Changes in the amounts of brokerage commissions paid reflect changes in
portfolio turnover rates.

DETERMINATION OF NET ASSET VALUE

The net asset value of the shares of each Fund is determined by Hartford
Life, in the manner described in the Funds' Prospectus. The Funds will be closed
for business and will not price their shares on the following business holidays:
New Year's Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Securities
held by each Fund other than the Money Market Fund will be valued as follows:
Debt securities (other than short-term obligations) are valued on the basis of
valuations furnished by an unaffiliated pricing service which determines
valuations for normal institutional size trading units of debt securities.
Short-term securities held in the Money Market Fund are valued at amortized cost
or original cost plus accrued interest receivable, both of which approximate
market value. All other Funds' short-term investments with a maturity of 60 days
or less when purchased are valued at amortized cost, which approximates market
value. Short-term investments with a maturity of more than 60 days when

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<PAGE>

purchased are valued based on market quotations until the remaining days to
maturity become less than 61 days. From such time until maturity, the
investments are valued at amortized cost.

Equity securities are valued at the last sales price reported on principal
securities exchanges (domestic or foreign). If no sale took place on such day
and in the case of certain equity securities traded over-the-counter, then such
securities are valued at the mean between the bid and asked prices. Securities
quoted in foreign currencies are translated into U.S. dollars at the exchange
rate at the end of the reporting period. Options are valued at the last sales
price; if no sale took place on such day, then options are valued at the mean
between the bid and asked prices. Securities for which market quotations are not
readily available and all other assets are valued in good faith at fair value
by, or under guidelines established by, the Funds' Board of Directors.

The net asset value per share of the Money Market Fund is determined by
using the amortized cost method of valuing its portfolio instruments. Under the
amortized cost method of valuation, an instrument is valued at cost and the
interest payable at maturity upon the instrument is accrued as income, on a
daily basis, over the remaining life of the instrument. Neither the amount of
daily income nor the net asset value is affected by unrealized appreciation or
depreciation of the portfolio's investments assuming the instrument's obligation
is paid in full on maturity. In periods of declining interest rates, the
indicated daily yield on shares of the portfolio computed using amortized cost
may tend to be higher than a similar computation made using a method of
valuation based upon market prices and estimates. In periods of rising interest
rates, the indicated daily yield on shares of the portfolio computed using
amortized cost may tend to be lower than a similar computation made using a
method of valuation based upon market prices and estimates. For all Funds,
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value.

The amortized cost method of valuation permits the Money Market Fund to
maintain a stable $1.00 net asset value per share. The Fund's Board of Directors
periodically reviews the extent of any deviation from the $1.00 per share value
that would occur if a method of valuation based on market prices and estimates
were used. In the event such a deviation would exceed one-half of one percent,
the Board of Directors will promptly consider any action that reasonably should
be initiated to eliminate or reduce material dilution or other unfair results to
shareholders. Such action may include selling portfolio securities prior to
maturity, not declaring earned income dividends, valuing portfolio securities on
the basis of current market prices, if available, or, if not available, at fair
market value as determined in good faith by the Board of Directors, and
(considered highly unlikely by management of the Fund) redemption of shares in
kind (i.e., portfolio securities).

PURCHASE AND REDEMPTION OF SHARES

For information regarding the purchase of Fund shares, see "Purchase of
Fund Shares" in the Funds' Prospectus.

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<PAGE>

For a description of how a shareholder may have a Fund redeem his/her
shares, or how he/she may sell shares, see "Sale and Redemption of Shares" in
the Funds' Prospectus.

SUSPENSION OF REDEMPTIONS

A Fund may not suspend a shareholder's right of redemption, or postpone
payment for a redemption for more than seven days, unless the New York Stock
Exchange (NYSE) is closed for other than customary weekends or holidays, or
trading on the NYSE is restricted, or for any period during which an emergency
exists as a result of which (1) disposal by a Fund of securities owned by it is
not reasonably practicable, or (2) it is not reasonably practicable for a Fund
to fairly determine the value of its assets, or for such other periods as the
Securities and Exchange Commission may permit for the protection of investors.

INVESTMENT PERFORMANCE

MONEY MARKET FUNDS

In accordance with regulations prescribed by the SEC, the Fund is required
to compute the Money Market Fund's current annualized yield for a seven-day
period in a manner which does not take into consideration any realized or
unrealized gains or losses on its portfolio securities. This current annualized
yield is computed by determining the net change (exclusive of realized gains and
losses on the sale of securities and unrealized appreciation and depreciation)
in the value of a hypothetical account having a balance of one share of the
Money Market Fund at the beginning of such seven-day period, dividing such net
change in account value by the value of the account at the beginning of the
period to determine the base period return and annualizing this quotient on a
365-day basis.

The SEC also permits the Fund to disclose the effective yield of the Money
Market Fund for the same seven-day period, determined on a compounded basis. The
effective yield is calculated by compounding the unannualized base period return
by adding one to the base period return, raising the sum to a power equal to 365
divided by 7, and subtracting one from the result.

The yield on amounts held in the Money Market Fund normally will fluctuate
on a daily basis. Therefore, the disclosed yield for any given past period is
not an indication or representation of future yields or rates of return.

Hartford Money Market HLS Fund

The Money Market Fund's actual yield is affected by changes in interest
rates on money market securities, average portfolio maturity of the Money Market
Fund, the types and quality of portfolio securities held by the Money Market
Fund, and its operating expenses.

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<PAGE>

Yield calculations of the Fund used for illustration purposes are based on
the consideration of a hypothetical account having a balance of exactly one
share at the beginning of a seven day period, which period will end on the date
of the most recent financial statements. The yield for the fund during this
seven day period will be the change in the value of the hypothetical account,
including dividends declared on the original share, dividends declared on any
shares purchased with dividends on that share, and any monthly account charges
or sales charges that would affect an account of average size, but excluding any
capital changes. The following is an example of this yield calculation for the
Fund based on a seven day period ending December 31, 1997.

Example:

Assumptions:

Value of a hypothetical pre-existing account with exactly one share at the
beginning of the period: $1.000000

Value of the same account* (excluding capital changes) at the end of the
seven day period: $1.001028

*This value would include the value of any additional shares purchased with
dividends from the original share, and all dividends declared on both the
original share and any such additional shares.

Calculation:
Ending account value $1.001028
Less beginning account value 1.000000

Net change in account value $.001028
Base period return:
(adjusted change/beginning account value)
$.001028/$1.000000 = $.001028
Current yield = $.001028 X (365/7) = 5.36%
Effective yield = (1 +.001028)365/7 - 1 = 5.50%

The current yield and effective yield information will fluctuate, and
publication of yield information may not provide a basis for comparison with
bank deposits, other investments which are insured and/or pay a fixed yield for
a stated period of time, or other investment companies. In addition, the current
yield and effective yield information may be of limited use for comparative
purposes because it does not reflect charges imposed at the Separate Account
level which, if included, would decrease the yield.

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<PAGE>

OTHER FUNDS

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS. Average annual total
return quotations for the Funds are computed by finding the average annual
compounded rates of return that would cause a hypothetical investment made on
the first day of a designated period to equal the ending redeemable value of
such hypothetical investment on the last day of the designated period in
accordance with the following formula:

n
P(1+T) = ERV
Where:

P = a hypothetical initial payment of n = number of years
$1,000, less the maximum sales
load applicable to a Fund

T = average annual total return ERV = ending redeemable
value of the
hypothetical $1,000
initial payment made
at the beginning of
the designated
period (or
fractional portion
thereof)

The computation above assumes that all dividends and distributions made by a
Fund are reinvested at net asset value during the designated period. The average
annual total return quotation is determined to the nearest 1/100 of 1%.

One of the primary methods used to measure performance is "total return."
"Total return" will normally represent the percentage change in value of a class
of a Fund, or of a hypothetical investment in a class of a Fund, over any period
up to the lifetime of the class. Unless otherwise indicated, total return
calculations will assume the deduction of the maximum sales charge and usually
assume the reinvestment of all dividends and capital gains distributions and
will be expressed as a percentage increase or decrease from an initial value,
for the entire period or for one or more specified periods within the entire
period. Total return calculations that do not reflect the reduction of sales
charges will be higher than those that do reflect such charges.

Total return percentages for periods longer than one year will usually be
accompanied by total return percentages for each year within the period and/or
by the average annual compounded total return for the period. The income and
capital components of a given return may be separated and portrayed in a variety
of ways in order to illustrate their relative significance. Performance may also
be portrayed in terms of cash or investment values, without percentages. Past
performance cannot guarantee any particular future result. In determining the
average annual total return (calculated as provided above), recurring fees, if
any, that are charged to all shareholder accounts are taken into consideration.
For any account fees that vary with the size of the account, the account fee
used for purposes of the above computation is assumed to be the fee that would
be charged to the mean account size of the Fund.

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<PAGE>

Each Fund's average annual total return quotations and yield quotations as
they may appear in the Prospectus, this SAI or in advertising are calculated by
standard methods prescribed by the SEC.

Each Fund may also publish its distribution rate and/or its effective
distribution rate. A Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized, by the current net asset value
per share. A Fund's effective distribution rate is computed by dividing the
distribution rate by the ratio used to annualize the most recent monthly
distribution and reinvesting the resulting amount for a full year on the basis
of such ratio. The effective distribution rate will be higher than the
distribution rate because of the compounding effect of the assumed reinvestment.
A Fund's yield is calculated using a standardized formula, the income component
of which is computed from the yields to maturity of all debt obligations held by
the Fund based on prescribed methods (with all purchases and sales of securities
during such period included in the income calculation on a settlement date
basis), whereas the distribution rate is based on a Fund's last monthly
distribution. A Fund's monthly distribution tends to be relatively stable and
may be more or less than the amount of net investment income and short-term
capital gain actually earned by the Fund during the month (see "Dividends,
Capital Gains and Taxes" in the Funds' Prospectus).

Other data that may be advertised or published about each Fund include the
average portfolio quality, the average portfolio maturity and the average
portfolio duration.

STANDARDIZED YIELD QUOTATIONS. The yield of a class is computed by dividing
the class's net investment income per share during a base period of 30 days, or
one month, by the maximum offering price per share of the class on the last day
of such base period in accordance with the following formula:

a-b 6
2[( --- + 1 ) - 1]
cd
Where:

a = net investment income c = the average daily number of
earned during the period shares of the subject class
attributable to the outstanding during the period
subject class that were entitled to receive
dividends

b = net expenses accrued for d = the maximum offering price
the period attributable to per share of the subject
the subject class

Net investment income will be determined in accordance with rules established by
the SEC.

NON-STANDARDIZED PERFORMANCE. In addition, in order to more completely
represent a Fund's performance or more accurately compare such performance to
other measures

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<PAGE>

of investment return, a Fund also may include in advertisements, sales
literature and shareholder reports other total return performance data
("Non-Standardized Return"). Non-Standardized Return may be quoted for the same
or different periods as those for which Standardized Return is quoted; it may
consist of an aggregate or average annual percentage rate of return, actual
year-by-year rates or any combination thereof. Non-Standardized Return may or
may not take sales charges into account; performance data calculated without
taking the effect of sales charges into account will be higher than data
including the effect of such charges. All non-standardized performance will be
advertised only if the standard performance data for the same period, as well as
for the required periods, is also presented.

GENERAL INFORMATION. From time to time, the Funds may advertise their
performance compared to similar funds using certain unmanaged indices, reporting
services and publications. Descriptions of some of the indices which may be used
are listed below.

The Standard & Poor's 500 Composite Stock Price Index is a well diversified
list of 500 companies representing the U.S. Stock Market.

The Standard & Poor's MidCap 400 Index is designed to represent price
movements in the mid cap U.S. equity market. It contains companies chosen by the
Standard & Poors Index Committee for their size, liquidity and industry
representation. None of the companies in the S&P 400 overlap with those in the
S&P 500 Index or the S&P 600 Index. Decisions about stocks to be included and
deleted are made by the Committee which meets on a regular basis. S&P 400 stocks
are market cap weighted; each stock influences the Index in proportion to its
relative market cap. REITs are not eligible for inclusion. The range of
capitalization of companies in the Index as of December 29, 1995 was $118
million to $7 billion. The inception year of the S&P MidCap 400 Index is 1982.
The Index is rebalanced as needed. S&P 400 companies which merge or are acquired
are immediately replaced in the Index; other companies are replaced when the
Committee decides they are no longer representative.

The Standard and Poor's Small Cap 600 index is designed to represent price
movements in the small cap U.S. equity market. It contains companies chosen by
the Standard & Poors Index Committee for their size, industry characteristics,
and liquidity. None of the companies in the S&P 600 overlap with the S&P 500 or
the S&P 400 (MidCap Index). The S&P 600 is weighted by market capitalization.
REITs are not eligible for inclusion.

The NASDAQ Composite OTC Price Index is a market value-weighted and
unmanaged index showing the changes in the aggregate market value of
approximately 3,500 stocks.

The Lehman Government Bond Index is a measure of the market value of all
public obligations of the U.S. Treasury; all publicly issued debt of all
agencies of the U.S. Government and all quasi-federal corporations; and all
corporate debt guaranteed by the U.S. Government. Mortgage backed securities,
bonds and foreign targeted issues are not included in the Lehman Government
Index.

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<PAGE>

The Lehman Government/Corporate Bond Index is a measure of the market value
of approximately 5,300 bonds with a face value currently in excess of $1.3
trillion. To be included in the Lehman Government/Corporate Index, an issue must
have amounts outstanding in excess of $1 million, have at least one year to
maturity and be rated "Baa" or higher ("investment grade") by a nationally
recognized rating agency.

The Russell 2000 Index represents the bottom two thirds of the largest 3000
publicly traded companies domiciled in the U.S. Russell uses total market
capitalization to sort its universe to determine the companies that are included
in the Index. Only common stocks are included in the Index. REITs are eligible
for inclusion.

The Russell 2500 Index is a market value-weighted, unmanaged index showing
total return (i.e., principal changes with income) in the aggregate market value
of 2,500 stocks of publicly traded companies domiciled in the United States. The
Index includes stocks traded on the New York Stock Exchange and the American
Stock Exchange as well as in the over-the-counter market.

The Morgan Stanley Capital International EAFE Index (the "EAFE Index") is
an unmanaged index, which includes over 1,000 companies representing the stock
markets of Europe, Australia, New Zealand and the Far East. The EAFE Index is
typically shown weighted by the market capitalization. However, EAFE is also
available weighted by Gross Domestic Product (GDP). These weights are modified
on July 1st of each year to reflect the prior year's GDP. Indices with dividends
reinvested constitute an estimate of total return arrived at by reinvesting one
twelfth of the month end yield at every month end. The series with net dividends
reinvested take into account those dividends net of withholding taxes retained
at the source of payment.

The Lehman Brothers High Yield BB Index is a measure of the market value of
public debt issues with a minimum par value of $100 million and rated Ba1-Ba3 by
Moody's. All bonds within the index are U.S. dollar denominated, non-convertible
and have at least one year remaining to maturity.

The Composite Index for Hartford Advisers Fund is comprised of the S&P 500
(55%), the Lehman Government/Corporate Bond Index (35%), both mentioned above,
and 90 Day U.S. Treasury Bills (10%).

The Composite Index for the Capital Appreciation Fund is the Russell 2500
Index (60%)/S&P 500 Index (40%), both of which are mentioned above.

In addition, from time to time in reports and promotions: (1) a Fund's
performance may be compared to other groups of mutual funds tracked by: (a):
Lipper Analytical Services, a widely used independent research firm which ranks
mutual funds by overall performance,

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<PAGE>

investment objectives, and assets; (b) Morningstar, Inc., another widely used
independent research firm which ranks mutual funds by overall performance,
investment objectives, and assets; or (c) other financial or business
publications, such as Business Week, Money Magazine, Forbes and Barron's which
provide similar information; (2) the Consumer Price Index (measure for
inflation) may be used to assess the real rate of return from an investment in
the Fund; (3) other statistics such as GNP, and net import and export figures
derived form governmental publications, e.g., The Survey of Current Business or
other independent parties, e.g., the Investment Company Institute, may be used
to illustrate investment attributes to the Fund or the general economic,
business, investment, or financial environment in which the Fund operates; (4)
various financial, economic and market statistics developed by brokers, dealers
and other persons may be used to illustrate aspects of the Fund's performance;
(5) the effect of tax-deferred compounding on the Fund's investment returns, or
on returns in general, may be illustrated by graphs, charts, etc. where such
graphs or charts would compare, at various points in time, the return from an
investment in the Fund (or returns in general) on a tax-deferred basis (assuming
reinvestment of capital gains and dividends and assuming one or more tax rates)
with the return on a taxable basis; and (6) the sectors or industries in which
the Fund invests may be compared to relevant indices or surveys (e.g., S&P
Industry Surveys) in order to evaluate the Fund's historical performance or
current or potential value with respect to the particular industry or sector.

Each Fund's investment performance may be advertised in various financial
publications, newspapers, magazines including the following:

Across the Board Changing Times
Advertising Age Consumer Reports
Adviser's Magazine Consumer Digest
Adweek Crain's
Agent Dow Jones News Service
American Banker Economist
American Agent and Broker Entrepreneur
Associated Press Entrepreneurial Woman
Barron's Financial Services Week
Best's Review Financial World
Bloomberg Financial Planning
Broker World Financial Times
Business Week Forbes
Business Wire Fortune
Business News Features Hartford Courant
Business Month Inc
Business Marketing Independent Business
Business Daily Institutional Investor
Business Insurance Insurance Forum
California Broker Insurance Advocate Independent

-37-
<PAGE>

Insurance Review Investor's New England Business
Insurance Times New York Times
Insurance Week Pension World
Insurance Product News Pensions & Investments
Insurance Sales Professional Insurance Agents
Investment Dealers Digest Professional Agent
Investment Advisor Registered Representative
Journal of Commerce Reuter's
Journal of Accountancy Rough Notes
Journal of the American Society Round the Table
of CLU & ChFC Service
Kiplinger's Personal Finance Success
Knight-Ridder The Standard
Life Association News The Boston Globe
Life Insurance Selling The Washington Post
Life Times Tillinghast
LIMRA's MarketFacts Time
Lipper Analytical Services, Inc. U.S. News & World Report
MarketFacts U.S. Banker
Medical Economics United Press International
Money USA Today
Morningstar, Inc. Value Line
Nation's Business Wall Street Journal
National Underwriter Wiesenberger Investment
New Choices (formerly 50 Plus) Working Woman

From time to time the Fund may publish the sales of shares of one or more
of the Funds on a gross or net basis and for various periods of time, and
compare such sales with sales similarly reported by other investment companies.

The manner in which total return and yield are calculated is described
above. The following table sets forth the average annual total return, and yield
where applicable, for the Class IA shares of each Fund through December 31,
1997.

TOTAL RETURN YIELD

FUND SINCE INCEPTION 1 YEAR 5 YEARS 10 YEARS SEC 30-DAY YIELD
(Inception Date)
<S> <C> <C> <C> <C> <C>
Capital Appreciation
(April 2, 1984) 17.77% 22.34% 18.95% 19.60%
Dividend and Growth
(March 8, 1994) 23.73% 31.89% N/A N/A
Index
(May 1, 1987) 14.53% 32.61% 19.48% 17.22%
</TABLE>

-38-

<PAGE>

TOTAL RETURN YIELD

FUND SINCE INCEPTION 1 YEAR 5 YEARS 10 YEARS SEC 30-DAY YIELD
(Inception Date)
<S> <C> <C> <C> <C> <C>

International Opportunities
(July 2, 1990) 6.58% .34% 11.10% N/A
MidCap Fund
(July 15, 1997) 13.81%* N/A N/A N/A
Small Company
(August 9, 1996) 18.59% 18.38% N/A N/A
Stock
(August 31, 1977) 15.33% 31.38% 19.70% 17.13%
Advisers
(March 31, 1983) 13.24% 24.51% 15.26% 14.06%
International Advisers
(March 1, 1995) 11.63% 5.52% N/A N/A
Bond
(August 31, 1977) 9.09% 11.35% 7.66% 8.81% 6.34%
Mortgage Securities
(January 1, 1985) 9.07% 9.01% 6.83% 8.43% 6.66%
Money Market
(June 30, 1980) 7.64% 5.31% 4.62% 5.73%
</TABLE>

*Not Annualized

TAXES

Each Fund is treated as a separate entity for accounting and tax purposes.
Each Fund has qualified and elected or intends to qualify and elect to be
treated as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and intends to continue to so
qualify in the future. As such and by complying with the applicable provisions
of the Code regarding the sources of its income, the timing of its
distributions, and the diversification of its assets, each Fund will not be
subject to federal income tax on taxable income (including net short-term and
long-term capital gains) which is distributed to shareholders at least annually
in accordance with the timing requirements of the Code.

Each Fund will be subject to a 4% non-deductible federal excise tax on
certain amounts not distributed (and not treated as having been distributed) on
a timely basis in accordance with annual minimum distribution requirements. Each
Fund intends under normal circumstances to avoid liability for such tax by
satisfying such distribution requirements.

If a Fund acquires stock in certain non-U.S. corporations that receive at
least 75% of their annual gross income from passive sources (such as interest,
dividends, rents, royalties or capital gain) or hold at least 50% of their
assets in investments producing such passive income ("passive foreign investment
companies"), that Fund could be subject to federal income tax and additional
interest charges on "excess distributions" received from such companies or gain
from the sale of stock in such companies, even if all income or gain actually
received by the Fund is timely

-39-
<PAGE>

distributed to its shareholders. The Fund would not be able to pass through to
its shareholders any credit or deduction for such a tax. Certain elections may,
if available, ameliorate these adverse tax consequences, but any such election
would require the applicable Fund to recognize taxable income or gain without
the concurrent receipt of cash. Any Fund that is permitted to acquire stock in
foreign corporations may limit and/or manage its holdings in passive foreign
investment companies to minimize its tax liability or maximize its return from
these investments.

Foreign exchange gains and losses realized by a Fund in connection with
certain transactions involving foreign currency-denominated debt securities,
certain foreign currency futures and options, foreign currency forward
contracts, foreign currencies, or payables or receivables denominated in a
foreign currency are subject to Section 988 of the Code, which generally causes
such gains and losses to be treated as ordinary income and losses and may affect
the amount, timing and character of distributions to shareholders. Any such
transactions that are not directly related to a Fund's investment in stock or
securities, possibly including speculative currency positions or currency
derivatives not used for hedging purposes, may increase the amount of gain it is
deemed to recognize from the sale of certain investments held for less than
three months, which gain is limited under the Code to less than 30% of its
annual gross income, and could under future Treasury regulations produce income
not among the types of "qualifying income" from which the Fund must derive at
least 90% of its annual gross income.

Some Funds may be subject to withholding and other taxes imposed by foreign
countries with respect to their investments in foreign securities. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes. The Funds anticipate that they generally will not qualify to pass such
foreign taxes and any associated tax deductions or credits through to their
shareholders, who therefore generally will not report such amounts on their own
tax returns.

For Federal income tax purposes, each Fund is permitted to carry forward a
net capital loss in any year to offset its own capital gains, if any, during the
eight years following the year of the loss. To the extent subsequent capital
gains are offset by such losses, they would not result in federal income tax
liability to the applicable Fund and would not be distributed as such to
shareholders.

Each Fund that invests in certain PIKs, zero coupon securities or certain
deferred interest securities (and, in general, any other securities with
original issue discount or with market discount if the Fund elects to include
market discount in income currently) must accrue income on such investments
prior to the receipt of the corresponding cash payments. However, each Fund must
distribute, at least annually, all or substantially all of its net income,
including such accrued income, to shareholders to qualify as a regulated
investment company under the Code and avoid federal income and excise taxes.
Therefore, a Fund may have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash, or may have to leverage itself
by borrowing the cash, to satisfy distribution requirements.

-40-
<PAGE>

Investment in debt obligations that are at risk of or in default presents
special tax issues for any Fund that may hold such obligations. Tax rules are
not entirely clear about issues such as when the Fund may cease to accrue
interest, original issue discount, or market discount, when and to what extent
deductions may be taken for bad debts or worthless securities, how payments
received on obligations in default should be allocated between principal and
income, and whether exchanges of debt obligations in a workout context are
taxable. These and other issues will be addressed by any Fund that may hold such
obligations in order to reduce the risk of distributing insufficient income to
preserve its status as a regulated investment company and seek to avoid becoming
subject to federal income or excise tax.

Limitations imposed by the Code on regulated investment companies like the
Funds may restrict a Fund's ability to enter into futures, options, and forward
transactions.

Certain options, futures and forward foreign currency transactions
undertaken by a Fund may cause the Fund to recognize gains or losses from
marking to market even though its positions have not been sold or terminated and
affect the character as long-term or short-term (or, in the case of certain
currency forwards, options and futures, as ordinary income or loss) and timing
of some capital gains and losses realized by the Fund. Also, certain of a Fund's
losses on its transactions involving options, futures or forward contracts
and/or offsetting portfolio positions may be deferred rather than being taken
into account currently in calculating the Fund's taxable income. Certain of the
applicable tax rules may be modified if a Fund is eligible and chooses to make
one or more of certain tax elections that may be available. These transactions
may therefore affect the amount, timing and character of a Fund's distributions
to shareholders. The Funds will take into account the special tax rules
(including consideration of available elections) applicable to options, futures
or forward contracts in order to minimize any potential adverse tax
consequences.

The federal income tax rules applicable to interest rate swaps, caps and
floors are unclear in certain respects, and a Fund may be required to account
for these transactions in a manner that, in certain circumstances, may limit the
degree to which it may utilize these transactions.

The foregoing discussion relates solely to U.S. Federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens or residents and U.S. domestic
corporations, partnerships, trusts or estates) subject to tax under such law.
The discussion does not address special tax rules applicable to certain classes
of investors, such as tax-exempt entities, insurance companies, and financial
institutions. Dividends, capital gain distributions, and ownership of or gains
realized on the redemption (including an exchange) of the shares of a Fund may
also be subject to state and local taxes. Shareholders should consult their own
tax advisers as to the federal, state or local tax consequences of ownership of
shares of, and receipt of distributions from, the Funds in their particular
circumstances.

STATE AND LOCAL. Each Fund may be subject to state or local taxes in
jurisdictions in which such Fund may be deemed to be doing business. In
addition, in those states or localities

-41-
<PAGE>

which have income tax laws, the treatment of such Fund and its shareholders
under such laws may differ from their treatment under federal income tax laws,
and investment in such Fund may have different tax consequences for shareholders
than would direct investment in such Fund's portfolio securities. Shareholders
should consult their own tax advisers concerning these matters.

CUSTODIAN

Portfolio securities of each Fund are held pursuant to Custodian Agreements
between each Fund and State Street Bank and Trust Company.

TRANSFER AGENT SERVICES

Hartford Life Insurance Company, Hartford Plaza, Hartford, Connecticut
06115, serves as Transfer and Dividend Disbursing Agent for the Funds. The
Transfer Agent issues and redeems shares of the Funds and disburses any
dividends declared by the Funds.

DISTRIBUTOR

Hartford Securities Distribution Company, 200 Hopmeadow Street, Simsbury,
Connecticut 06070, acts as the Fund's Distributor.

INDEPENDENT PUBLIC ACCOUNTANTS

The financial statements and financial highlights as of December 31, 1997
and for the year then ended, included in this Registration Statement have
been audited by Arthur Andersen LLP, independent public acountants, as stated
in their report appearing herein.

OTHER INFORMATION

The Hartford has granted the Fund the right to use the name, "The Hartford"
or "Hartford", and has reserved the right to withdraw its consent to the use of
such name by the Fund and the Funds at any time, or to grant the use of such
name to any other company.

FINANCIAL STATEMENTS

Each Fund's audited financial statements as of December 31, 1997 and for
the year then ended, together with the notes thereto and the report of Arthur
Andersen LLP, independent public accountants, are attached to this SAI.

-42-

<PAGE>

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

In Part A: Financial Highlights

In Part B: Statement of Net Assets as of December 31, 1997
Statement of Operations for the fiscal year ended
December 31, 1997
Statement of Changes in Net Assets for the fiscal year
ended December 31, 1997 and for the period
August 9, 1996 through December 31, 1996

(b) Exhibits:

(1) Articles of Incorporation(a)
(1.1) Articles Supplementary
(2) By-Laws(a)
(3) Not Applicable
(4) Share Certificate(a)
(5) Form of Investment Management Agreement(a)
(5.1) Form of Investment Sub-Advisory Agreement(a)
(6) Form of Principal Underwriting Agreement(d)
(7) Not Applicable
(8) Form of Custodian Agreement(a)
(8.1) Form of Custodian Agreement with State Street Bank and
Trust Company(b)
(9) Form of Administrative Services Agreement(a)
(9.1) Form of Share Purchase Agreement(a)
(10) Opinion and Consent of Counsel
(11) Consent of Independent Public Accountants
(12) 1997 Annual Report to Shareholders' Financial
Statements(e)
(13) Not Applicable

- -------------------------
(a) Previously filed as exhibit to Registrant's Initial Registration Statement
filed on March 7, 1996.
(b) Previously filed as exhibit to Registrant's Post-Effective Amendment #1
filed on February 6, 1997.
(c) Previously filed as exhibit to Registrant's Post-Effective Amendment #2
filed on April 10, 1997.
(d) Previously filed as exhibit to Registrant's Post-Effective Amendment #3
filed on November 19, 1997.
(e) Incorporated by reference to Registrant's filing pursuant to Rule 30d-1 of
the Investment Company Act of 1940.

<PAGE>

(14) Not Applicable
(15) Form of Rule 12b-1 Distribution Plan(d)
(16) Schedule of Computation for Performance Quotations(c)
(17) Not Applicable
(18) Form of Multi-Class Plan Pursuant to Rule 18f-3(d)
(19) Powers of Attorney
(27) Financial Data Schedule

Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Inapplicable

Item 26. NUMBER OF HOLDERS OF SECURITIES

As of March 31, 1998, the number of record holders of the Registrant's
securities were:

Title of Class Number of Record Holders
-------------- ------------------------

Class IA, Common Stock,
par value $0.10 per share 2

Class IB, Common Stock,
par value $0.10 per share 0

Item 27. INDEMNIFICATION

Article EIGHTH of the Articles of Incorporation provides:

EIGHTH: (a) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a
Director, Officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a Director or Officer of
another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, has no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, creates a rebuttable presumption
that the person did not act in good faith and in a manner

<PAGE>

which he reasonably believed to be in or not opposed to the best
interest of the Corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was
unlawful.

(b) The Corporation shall indemnify any person who was or is party or
is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to
procure, a judgment in its favor by reason of the fact that he is or
was a Director, Officer, employee or agent of the Corporation, or is
or was serving at the request of the Corporation as a Director,
Officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including
attorney's fees) actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation. No indemnification
shall be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation.

(c) To the extent that a Director, Officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in subsections (a) and
(b), or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorney's fees) actually and
reasonably incurred by him in connection therewith.

(d) Any indemnification under subsections (a) and (b) (unless ordered
by a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the
Director, Officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b). Such determination shall be made (1) by the
Board of Directors by a majority vote of a quorum consisting of
Directors who were neither interested persons nor parties to such
action suit or proceeding, or (2) if such quorum is not obtainable, or
even if obtainable a quorum of disinterested Directors so directs, by
independent legal counsel in a written opinion.

(e) Expenses incurred in defending civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the
Board of Directors in the specific case upon receipt of an undertaking
by or on behalf of the Director, Officer, employee or agent to repay
such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation as authorized in this
Article and upon meeting one of the following conditions:

(i) the indemnitee shall provide a security for his undertaking,
(ii) the investment company shall be insured against losses
arising by reason of
<PAGE>

any lawful advances, or (iii) a majority of a quorum of the
disinterested, non-party Directors of the investment company, or
an independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to
believe that the indemnitee ultimately will be found entitled to
indemnification.

(f) The corporation may purchase and maintain insurance on behalf of
any person who is or was a Director, Officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as
a Director, Officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such.

(g) Anything to the contrary in the foregoing clauses (a) through (f)
notwithstanding, no Director or Officer shall be indemnified by the
Corporation and no insurance policy obtained by the Corporation will
protect or attempt to protect any such person against any liability to
the Corporation or to its security holders to which he would otherwise
be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office, or in a manner inconsistent with Securities and
Exchange Commission Release 11330 under the Investment Company Act of
1940.

Insofar as indemnification for liability 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 in
connection with the securities being registered), the registrant
undertakes that it will, unless in the opinion of its counsel the
matter has been settled by controlling precedent submit to a court of
appropriate jurisdiction the questions whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.

Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

HL Investment Advisors, Inc. serves as investment adviser to each of
the investment companies included in this Registration Statement.

<PAGE>

Position with HL
Name Investment Advisors,Inc. Other Business
- ---- ------------------------ --------------
Joseph H. Gareau President Executive Vice President and
Director of Hartford
Investment
Financial Services Company
("HIFSCO"); President and
Director of The Hartford
Investment Management Company
("HIMCO")
Andrew W. Kohnke Managing Director Vice President and Director
and Director of HIFSCO; Managing Director
and Director of HIMCO
Bruce J. MacLean Managing Director Managing Director and
and Director Director of HIMCO
Donald E. Waggaman, Jr. Managing Director Managing Director and
and Director Director of HIMCO
Charles M. O'Halloran Director Senior Vice President and
Corporate Secretary of The
Hartford Financial Services
Group, Inc.; Director of
HIFSCO and HIMCO

Item 29. PRINCIPAL UNDERWRITERS

Hartford Securities Distribution Company, Inc. ("HSD") is an indirect
wholly owned subsidiary of The Hartford Financial Services Group, Inc. HSD is
the principal underwriter for the following registered investment companies:

Hartford Life Insurance
Company DC Variable Account I
Separate Account Two (DC Variable Account II)
Separate Account Two (Variable Account "A")
Separate Account Two (QP Variable Account)
Separate Account Two (NQ Variable Account)
Putnam Capital Manager Trust Separate Account
Separate Account One
Separate Account Two
Separate Account Three
Separate Account Five
Hartford Life and Annuity
Insurance Company Separate Account One
Separate Account Three
Separate Account Five

<PAGE>

Separate Account Six
Putnam Capital Manager Trust Separate Account
Two
American Maturity Life
Insurance Company Separate Account American Maturity Life Variable
Annuity

The Directors and principal officers of HSD and their position with the
Registrant are as follows:

Position or Office
Name* HSD with Registrant
---- --- ---------------
Peter Cummins Senior Vice-President Vice President
Lynda Godkin Senior Vice President, General None
Counsel and Corporate Secretary
John P. Ginnetti Executive Vice President Vice President
George Jay Controller & Fin. Principal Controller &
Treasurer
Stephen T. Joyce Asst. Secretary None
Glen J. Kvadus Asst. Secretary None
Thomas M. Marra Exec. Vice-Pres. Vice President
Paul Eugene Olson Supv. Registered Principal None
Edward M. Ryan, Jr. Asst. Secretary None
Lowndes A. Smith President and CEO Chairman
Donald W. Waggaman, Jr. Treasurer None

* Principal business address is P.O. Box 2999, Hartford, CT 06104-2999

Item 30. LOCATION OF ACCOUNTS AND RECORDS

The Hartford Life Insurance Company
P.O. Box 2999
Hartford, CT 06104-2999
AND
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110

Item 31. MANAGEMENT SERVICES

Not Applicable

Item 32. UNDERTAKING

1) The Registrant undertakes to furnish to each person to whom a
prospectus has been delivered a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hartford, State of Connecticut, on the 15th day of
April, 1998.

HARTFORD SMALL COMPANY FUND, INC.

By: *
----------------------------
Joseph H. Gareau
Its: President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.

SIGNATURE TITLE DATE
- --------- ----- ----

* President April 15, 1998
- ---------------------- (Chief Executive Officer
Joseph H. Gareau & Director)

* Controller & Treasurer April 15, 1998
- ---------------------- (Chief Accounting Officer &
George R. Jay Chief Financial Officer)

* Director April 15, 1998
- ----------------------
Joseph A. Biernat

* Director April 15, 1998
- ----------------------
Winifred E. Coleman

* Director April 15, 1998
- ----------------------
William A. O'Neill

<PAGE>

* Director April 15, 1998
- ----------------------
Millard H. Pryor, Jr.

* Director April 15, 1998
- ----------------------
Lowndes A. Smith

* Director April 15, 1998
- ----------------------
John K. Springer

/s/ Kevin J. Carr April 15, 1998
- ----------------------
* By Kevin J. Carr
Attorney-in-fact

<PAGE>

EXHIBIT INDEX

Exhibit No. Page No.
- ----------- --------

1.1 Articles Supplementary

10 Opinion and Consent of Counsel

11 Consent of Independent Public Accountants

19 Powers of Attorney

27 Financial Data Schedule

<PAGE>
EXHIBIT 1.1

ARTICLES OF AMENDMENT
OF
HARTFORD SMALL COMPANY FUND, INC.

Hartford Small Company Fund, Inc., a corporation organized and existing
under the laws of the State of Maryland, does hereby Certify:

FIRST: That the Articles of Incorporation of the corporation are hereby
amended by striking out Article First and inserting in lieu
thereof the following:

"FIRST: The name of the Corporation
is Hartford Small Company HLS Fund, Inc."

SECOND: That the amendment of the Articles of Incorporation of the
corporation as hereinabove set forth was duly authorized by the
Board of Directors of the corporation through the adoption of a
resolution at a meeting called and held on January 20, 1998.

THIRD: That the amendment of the Articles of Incorporation of the
corporation was approved by a majority of the entire Board of
Directors and that the amendment is limited to a change expressly
permitted by Section 2-605 of subtitle 6 to be made without
action by the stockholders, and that corporation is registered
as an open-end company under the Investment Company Act of 1940.

FOURTH: That the amendment of the Articles of Incorporation shall be
effective on May 1, 1998.

IN WITNESS WHEREOF, Hartford Small Company Fund, Inc. has caused these
Articles of Amendment to be duly executed by Joseph H. Gareau, its President,
and attested to by Kevin J. Carr, its Assistant Secretary, this 9th day of
April, 1998.

Hartford Small Company Fund, Inc.
Attest:
By: /s/ Joseph H. Gareau
----------------------------------
/s/ Kevin J. Carr Joseph H. Gareau, President
- --------------------------
Assistant Secretary

I, Joseph H. Gareau, President of Hartford Small Company Fund, Inc., hereby
acknowledge, in the name and on behalf of said corporation, the foregoing
Articles of Amendment to be the corporate act of said corporation and I further
certify that, to the best of my knowledge, information, and belief, these
matters and facts are true in all material respects, under the penalties of
perjury.

/s/ Joseph H. Gareau
----------------------------------
Joseph H. Gareau, President

<PAGE>

EXHIBIT 10

The Hartford Financial Services Group, Inc.
Hartford Plaza
Hartford, CT 06115

April 15, 1998

Hartford Small Company Fund, Inc.
Hartford Plaza
Hartford, CT 06115

Gentlemen:

I have examined the Articles of Incorporation of Hartford Small Company Fund,
Inc. (hereafter referred to as "Fund"); the By-Laws of the Fund; documents
evidencing various pertinent corporate proceedings; and such other things
considered to be material to determine the legality of the sale of the
authorized but unissued shares of the Fund's stock. Based upon my examination,
it is my opinion that the Fund is a validly organized and existing corporation
of the State of Maryland and it is legally authorized to issue up to 750,000,000
shares of common stock of a par value of ten cents (10 CENTS) per share, at
prices determined as described in the Fund's currently effective Prospectus,
when such shares are properly registered under all applicable federal and state
securities laws.

Based upon the foregoing, it is my opinion that the Fund's shares were, when
issued for cash consideration as described in the Fund's currently effective
prospectus, validly issued, fully paid and nonassessable stock of the Fund.

I hereby consent to the inclusion of this Opinion as an Exhibit to the Fund's
Post-Effective Amendment to its Registration Statement.

Very truly yours,

/s/ Kevin J. Carr

Kevin J. Carr
Counsel

<PAGE>

EXHIBIT 11

ARTHUR ANDERSEN LLP

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
(and all references to our Firm) incorporated by reference herein or made a
part of this Registration Statement File No. 333-01551 for Hartford Small
Company Fund on Form N-1A.

ARTHUR ANDERSEN LLP

Hartford, CT
April 15, 1998

<PAGE>

EXHIBIT 19

HARTFORD ADVISERS FUND, INC., HARTFORD BOND FUND, INC., HARTFORD CAPITAL
APPRECIATION FUND, INC., HARTFORD DIVIDEND AND GROWTH FUND, INC., HARTFORD INDEX
FUND, INC., HARTFORD INTERNATIONAL ADVISERS FUND, INC., HARTFORD INTERNATIONAL
OPPORTUNITIES FUND, INC., HARTFORD MIDCAP FUND, INC., HARTFORD MORTGAGE
SECURITIES FUND, INC., HARTFORD SERIES FUND, INC., HARTFORD SMALL COMPANY FUND,
INC., HARTFORD STOCK FUND, INC., HVA MONEY MARKET FUND, INC. AND THE HARTFORD
MUTUAL FUNDS, INC.,

POWER OF ATTORNEY

Joseph A. Biernat William A. O'Neill
Winifred E. Coleman Millard H. Pryor, Jr.
Joseph H. Gareau Lowndes A. Smith
George R. Jay John K. Springer
Charles M. O'Halloran

do hereby jointly and severally authorize Kevin J. Carr, Charles M. O'Halloran,
Lynda Godkin or Lewis Beers, to sign as their agent any Securities Act of 1933
and/or Investment Company Act of 1940 Registration Statement, pre-effective
amendment or post-effective amendment and any Application for Exemption Relief
or other filings with the Securities and Exchange Commission relating to each
above-described Fund.

IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.

/s/ Joseph A. Biernat (SEAL) Dated January 22, 1998
- ----------------------------------- -------------------------
Joseph A. Biernat

/s/ Winifred E. Coleman (SEAL) Dated January 22, 1998
- ----------------------------------- -------------------------
Winifred E. Coleman

/s/ Joseph H. Gareau (SEAL) Dated January 22, 1998
- ----------------------------------- -------------------------
Joseph H. Gareau

/s/ George R. Jay (SEAL) Dated January 22, 1998
- ----------------------------------- -------------------------
George R. Jay
<PAGE>

/s/ Charles M. O'Halloran (SEAL) Dated January 22, 1998
- ----------------------------------- -------------------------
Charles M. O'Halloran

/s/ William A. O'Neill (SEAL) Dated January 22, 1998
- ----------------------------------- -------------------------
William A. O'Neill

/s/ Millard H. Pryor, Jr. (SEAL) Dated January 22, 1998
- ----------------------------------- -------------------------
Millard H. Pryor, Jr.

/s/ Lowndes A. Smith (SEAL) Dated January 22, 1998
- ----------------------------------- -------------------------
Lowndes A. Smith

/s/ John K. Springer (SEAL) Dated January 22, 1998
- ----------------------------------- -------------------------
John K. Springer

<PAGE>
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<CIK> 0001006414
<NAME> HARTFORD SMALL COMPANY FUND INC.

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<PERIOD-START> JAN-01-1997
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