<PAGE>
As filed with the Securities and Exchange Commission on July 16, 1999.
File No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
A. Exact name of trust: Separate Account VL I
B. Name of depositor: Hartford Life and Annuity Insurance Company
C. Complete address of depositor's principal executive offices:
P. O. Box 2999
Hartford, CT 06104-2999
D. Name and complete address of agent for service:
Brian Lord, Esq.
Hartford Life and Annuity Insurance Company
P. O. Box 2999
Hartford, CT 06104-2999
It is proposed that this filing will become effective:
____ immediately upon filing pursuant to paragraph (b) of Rule 485
____ on May 3, 1999 pursuant to paragraph (b) of Rule 485
____ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
____ on __________, 1999 pursuant to paragraph (a)(1) of Rule 485
____ this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
E. Title and amount of securities being registered: Pursuant to Rule 24f-2
under the Investment Company Act of 1940, the Registrant has registered
an indefinite amount of securities.
F. Proposed maximum aggregate offering price to the public of the
securities being registered: Not yet determined.
G. Amount of filing fee: Not applicable.
H. Approximate date of proposed public offering: As soon as practicable
after the effective date of this registration statement.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration shall
become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
<TABLE>
<CAPTION>
Item No. of Form N-8B-2 Caption In Prospectus
- ----------------------- ---------------------
<S> <C>
1. Cover Page
2. Cover Page
3. Not Applicable
4. Statement of Additional Information - Distribution of
the Policies
5. About Us - Separate Account VL I
6. About Us - Separate Account VL I
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. About Us - Separate Account VL I; The Funds
11. About Us - Separate Account VL I; The Funds
12. About Us - The Funds
13. Fee Table; Charges and Deductions
14. Premiums
15. Premiums
16. Premiums
17. Making Withdrawals From Your Policy
18. About Us - The Funds; Charges and Deductions
19. Your Policy - Contract Rights
20. Not Applicable
21. Loans
22. Not Applicable
23. Not Applicable
24. Not Applicable
25. About Us - Hartford Life and Annuity Insurance Company
26. Not Applicable
27. About Us - Hartford Life and Annuity Insurance Company
28. Statement of Additional Information - General
Information and History
29. About Us - Hartford Life and Annuity Insurance Company
30. Not Applicable
31. Not Applicable
32. Not Applicable
33. Not Applicable
34. Not Applicable
35. Statement of Additional Information - Distribution of
the Policies
36. Not required by Form S-6
37. Not Applicable
38. Statement of Additional Information - Distribution of
the Policies
39. Statement of Additional Information - Distribution of
the Policies
40. Not Applicable
41. Statement of Additional Information - Distribution of
the Policies
42. Not Applicable
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item No. of Form N-8B-2 Caption In Prospectus
- ----------------------- ---------------------
<S> <C>
43. Not Applicable
44. Premiums
45. Not Applicable
46. Premiums; Making Withdrawals From Your Policy
47. About Us - The Funds
48. Cover Page; About Us - Hartford Life and Annuity
Insurance Company
49. Not Applicable
50. About Us - Separate Account VL I
51. Not Applicable
52. About Us - The Funds
53. Taxes
54. Not Applicable
55. Not Applicable
56. Not Required by Form S-6
57. Not Required by Form S-6
58. Not Required by Form S-6
59. Not Required by Form S-6
</TABLE>
<PAGE>
"STAG PROTECTOR VARIABLE UNIVERSAL LIFE"
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
P.O. BOX 2999
HARTFORD, CT 06104-2999
TELEPHONE: (800) 231-5453 [LOGO]
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- --------------------------------------------------------------------------------
This Prospectus describes information you should know before you purchase the
Stag Protector Variable Universal Life insurance policy. Please read it
carefully.
Stag Protector Variable Universal Life is a contract between you and Hartford
Life and Annuity Insurance Company. You agree to make sufficient premium
payments to us, and we agree to pay a death benefit to your beneficiary. The
policy is a flexible premium variable universal life insurance policy. It is:
x Flexible premium, because you may add payments to your policy after the first
payment.
x Variable, because the value of your life insurance policy will fluctuate with
the performance of the investment options you select and the Fixed Account.
- --------------------------------------------------------------------------------
The following Sub-Accounts are available under the policy:
<TABLE>
<CAPTION>
<S> <C>
SUB-ACCOUNT PURCHASES SHARES OF:
<CAPTION>
<S> <C>
Hartford Advisers Fund Sub-Account Class IA of Hartford Advisers HLS Fund, Inc.
Hartford Bond Fund Sub-Account Class IA of Hartford Bond HLS Fund, Inc.
Hartford Capital Appreciation Fund Sub-Account Class IA of Hartford Capital Appreciation HLS
Fund, Inc.
Hartford Dividend and Growth Fund Sub-Account Class IA of Hartford Dividend and Growth HLS Fund,
Inc.
Hartford Growth and Income Fund Sub-Account Class IA of Hartford Growth and Income HLS Fund of
Hartford Series Fund, Inc.
Hartford Index Fund Sub-Account Class IA of Hartford Index HLS Fund, Inc.
Hartford International Advisers Fund Sub-Account Class IA of Hartford International Advisers HLS
Fund, Inc.
Hartford International Opportunities Fund Sub-Account Class IA of Hartford International Opportunities
HLS Fund, Inc.
Hartford MidCap Fund Sub-Account Class IA of Hartford MidCap HLS Fund, Inc.
Hartford Mortgage Securities Fund Sub-Account Class IA of Hartford Mortgage Securities HLS Fund,
Inc.
Hartford Money Market Fund Sub-Account Class IA of Hartford Money Market HLS Fund, Inc.
Hartford Small Company Fund Sub-Account Class IA of Hartford Small Company HLS Fund, Inc.
Hartford Stock Fund Sub-Account Class IA of Hartford Stock HLS Fund, Inc.
Putnam VT Asia Pacific Growth Fund Sub-Account Class IA of Putnam VT Asia Pacific Growth Fund of
the Putnam Variable Trust
Putnam VT Diversified Income Fund Sub-Account Class IA of Putnam VT Diversified Income Fund of
Putnam Variable Trust
Putnam VT Global Asset Allocation Fund Sub-Account Class IA of Putnam VT Global Asset Allocation Fund
of Putnam Variable Trust
Putnam VT Global Growth Fund Sub-Account Class IA of Putnam VT Global Growth Fund of Putnam
Variable Trust
Putnam VT Growth and Income Fund Sub-Account Class IA of Putnam VT Growth and Income Fund of
Putnam Variable Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SUB-ACCOUNT PURCHASES SHARES OF:
<CAPTION>
Putnam VT Health Sciences Fund Sub-Account Class IA of Putnam VT Health Sciences Fund of
Putnam Variable Trust
Putnam VT High Yield Fund Sub-Account Class IA of Putnam VT High Yield Fund of Putnam
Variable Trust
Putnam VT Income Fund Sub-Account Class IA of Putnam VT Income Fund of Putnam
Variable Trust
Putnam VT International Growth Fund Sub-Account Class IA of Putnam VT International Growth Fund of
Putnam Variable Trust
Putnam VT International Growth and Income Fund Class IA of Putnam VT International Growth and
Sub-Account Income Fund of Putnam Variable Trust
Putnam VT International New Opportunities Fund Class IA of Putnam VT International New
Sub-Account Opportunities Fund of Putnam Variable Trust
Putnam VT Investors Fund Sub-Account Class IA of Putnam VT Investors Fund of Putnam
Variable Trust
Putnam VT Money Market Fund Sub-Account Class IA of Putnam VT Money Market Fund of Putnam
Variable Trust
Putnam VT New Opportunities Fund Sub-Account Class IA of Putnam VT New Opportunities Fund of
Putnam Variable Trust
Putnam VT New Value Fund Sub-Account Class IA of Putnam VT New Value Fund of Putnam
Variable Trust
Putnam VT OTC & Emerging Growth Fund Sub-Account Class IA of Putnam VT OTC & Emerging Growth Fund
of Putnam Variable Trust
Putnam VT The George Putnam Fund of Boston Sub-Account Class IA of Putnam VT The George Putnam Fund of
Boston of Putnam Variable Trust
Putnam VT Utilities Growth and Income Fund Sub-Account Class IA of Putnam VT Utilities Growth and Income
Fund of Putnam Variable Trust
Putnam VT Vista Fund Sub-Account Class IA of Putnam VT Vista Fund of Putnam
Variable Trust
Putnam VT Voyager Fund Sub-Account Class IA of Putnam VT Voyager Fund of Putnam
Variable Trust
Fidelity VIP Equity-Income Portfolio Sub-Account Fidelity VIP Equity-Income Portfolio of Variable
Insurance Products Fund
Fidelity VIP Overseas Portfolio Sub-Account Fidelity VIP Overseas Portfolio of Variable
Insurance Products Fund
Fidelity VIP II Asset Manager Portfolio Sub-Account Fidelity VIP II Asset Manager Portfolio of
Variable Insurance Products Fund II
</TABLE>
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The policy may not be available for sale in all states.
This Prospectus can also be obtained from the Securities and Exchange
Commission's website (HTTP://WWW.SEC.GOV).
This life insurance policy IS NOT:
- a bank deposit or obligation
- federally insured
- endorsed by any bank or governmental agency
- --------------------------------------------------------------------------------
PROSPECTUS DATED:
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 3
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
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SUMMARY OF BENEFITS AND RISKS 5
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FEE TABLES 6
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ABOUT US 8
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Hartford Life and Annuity Insurance Company 8
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Separate Account VLI 8
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The Funds 8
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The Fixed Account 11
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CHARGES AND DEDUCTIONS 11
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Deductions from Premium 11
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Deductions from Account Value 11
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Charges For the Funds 12
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YOUR POLICY 12
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Contract Rights 12
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Contract Limitations 13
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Changes to Contract or Separate Account 13
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Other Benefits 13
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Class of Purchasers 14
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PREMIUMS 15
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DEATH BENEFITS AND POLICY VALUES 16
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MAKING WITHDRAWALS FROM YOUR POLICY 17
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LOANS 17
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LAPSE AND REINSTATEMENT 18
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TAXES 19
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General 19
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Taxation of Hartford and the Separate Account 19
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Income Taxation of Policy Benefits-Generally 19
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Modified Endowment Contracts 20
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Estate and Generation Skipping Taxes 20
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Diversification Requirements 21
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Ownership of the Assets in the Separate Account 21
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Tax Deferral During Accumulation Period 21
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Life Insurance Purchased for Use in Split Dollar Arrangements 21
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Federal Income Tax Withholding 22
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Non-Individual Ownership of Policies 22
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Other 22
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Life Insurance Purchases by Nonresident Aliens and Foreign
Corporations 22
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<PAGE>
</TABLE>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
----------------------------------------------------------------------------
<S> <C>
LEGAL PROCEEDINGS 22
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OTHER MATTERS 22
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Year 2000 22
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GLOSSARY OF SPECIAL TERMS 24
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WHERE YOU CAN FIND MORE INFORMATION 25
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STATEMENT OF ADDITIONAL INFORMATION
----------------------------------------------------------------------------
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 5
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SUMMARY OF BENEFITS AND RISKS
BENEFITS OF YOUR POLICY
FLEXIBILITY -- The policy is designed to be flexible to meet your specific life
insurance needs. You have the flexibility to choose death benefit options,
investment options, and premiums you pay.
DEATH BENEFIT -- While the policy is inforce and when the insured dies, we pay a
death benefit to your beneficiary. You select one of three death benefit
options:
- Level Option: The death benefit equals the current Face Amount.
- Return of Account Value Option: The death benefit is the current Face Amount
plus the Account Value of your policy;
- Return of Premium Option: The death benefit is the current Face Amount plus
the sum of premiums paid. However, it will be no more than the current Face
Amount plus the Option C limit, which is currently $2.5 million.
The death benefit is reduced by any money you owe us, such as outstanding loans,
loan interest, or unpaid charges. You may change your death benefit option under
certain circumstances. You may increase or decrease the Face Amount on your
policy under certain circumstances.
INVESTMENT CHOICES -- You may invest in up to 9 different investment choices
within your policy, from a choice of 36 investment options and a Fixed Account.
You may transfer money among your investment choices, subject to restrictions.
PREMIUM PAYMENTS -- You have the flexibility to choose how you pay premiums. You
can choose a planned premium when you purchase the policy. You may change your
planned premium, subject to certain limitations.
RIGHT TO EXAMINE YOUR POLICY -- You have a limited right to return the policy
for cancellation after purchase. See "Making Withdrawals From Your Policy --
Right to Examine a Policy."
SURRENDER -- You may surrender your policy at any time prior to the maturity
date for its Cash Surrender Value. (See "Risks of Your Policy," below).
LOANS -- You may take a loan on the policy. The policy secures the loan.
SETTLEMENT OPTIONS -- You or your beneficiary may choose to receive the proceeds
of the policy over a period of time by using one of several settlement options.
OPTIONAL COVERAGE -- You may add other coverages to your policy. See "Your
Policy-Other Benefits."
WHAT DOES YOUR PREMIUM PAY FOR?
Your premium pays for three things. It pays for insurance coverage, it acts as
an investment in the Sub-Accounts, and it pays for sales loads and other
charges.
RISKS OF YOUR POLICY
INVESTMENT PERFORMANCE -- The value of your policy will fluctuate with the
performance of the investment options you choose. Your investment options may
decline in value, or they may not perform to your expectations. Your policy
values in the Sub-Accounts are not guaranteed.
UNSUITABLE FOR SHORT-TERM SAVINGS -- The policy is designed for long term
financial planning. You should not purchase the policy if you will need the
premium payment in a short time period.
RISK OF LAPSE -- Your policy could terminate if the value of the policy becomes
too low to support the policy's monthly charges. If this occurs, we will notify
you in writing. You will then have a 61-day grace period to pay additional
amounts to prevent the policy from terminating.
WITHDRAWAL LIMITATIONS -- One partial withdrawal is allowed each month. The
minimum allowed is $500, and the maximum allowed is the Cash Surrender Value
minus $1,000. Withdrawals will reduce your policy's death benefit, and may be
subject to a surrender charge.
TRANSFER LIMITATIONS -- We reserve the right to limit the size of transfers and
remaining balances, and to limit the number and frequency of transfers among
your investment options and the Fixed Account.
LOANS -- Taking a loan from your policy may increase the risk that your policy
will lapse, will have a permanent effect on the policy's Account Value, and will
reduce the death proceeds.
ADVERSE TAX CONSEQUENCES -- You may be subject to income tax if you receive any
loans, withdrawals or other amounts from the policy, and you may be subject to a
10% penalty tax. See "Taxes."
<PAGE>
6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
FEE TABLES
The following tables describe the MAXIMUM fees and expenses that you will pay
when buying, owning, and surrendering the policy. The first table describes the
maximum fees and expenses that you will pay at the time that you buy the policy,
surrender the policy, or transfer cash value between investment options.
TRANSACTION FEES
<TABLE>
<CAPTION>
POLICIES FROM
WHICH CHARGE IS
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED DEDUCTED
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Front-end sales load When you pay premium. Policy All
Years Amount
Years 1
-20 8%
Policy Years
20 + 6%
- --------------------------------------------------------------------------------------
Tax Charge on When you pay premium. A percent of All
Premium Payments premium which
varies by your
state and
municipality of
residence. The
range of tax
charge is
generally
between 0% and
4%.
This rate will
change if your
state or
municipality
changes its tax
charges. It may
change if you
change your
state or
municipality of
residence.
- --------------------------------------------------------------------------------------
Surrender Charge When you surrender your The Surrender Policies
policy. Charge varies surrendered
When you make certain Face based on the during the
Amount decreases. Insured's age, first nine
When you take certain sex, and policy years.
withdrawals. insurance class Policies where
on the date of the Face Amount
issue. is reduced
below the
initial Face
Amount during
the first nine
policy years.
- --------------------------------------------------------------------------------------
Face Amount Increase Each month for 12 months The rate is a Policies where
Fee beginning on the effective per $1,000 the owner has
date of any unscheduled amount that made an
increase in Face Amount you varies by unscheduled
request. attained age of increase.
the Insured.
- --------------------------------------------------------------------------------------
Transfer Fees When you make a transfer after $25 per Those policies
the first transfer in any transfer. with more than
month. one transfer
per month.
- --------------------------------------------------------------------------------------
Withdrawal Charge When you take a withdrawal. $10 per Those policies
withdrawal. where the owner
has made a
withdrawal.
</TABLE>
The next table describes the MAXIMUM fees and expenses that you will pay
periodically during the time that you own the policy, not including Fund fees
and expenses.
ANNUAL CHARGES OTHER THAN FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
POLICIES FROM WHICH CHARGE IS
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED DEDUCTED
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cost of Insurance Monthly. The charge is the maximum All
Charges cost of insurance rate times
the net amount at risk.
Maximum cost of insurance
rates are individualized,
depending on issue age, sex,
insurance class, Initial
Face Amount, substandard
rating, and age of policy.
- -------------------------------------------------------------------------------------------------------------
Mortality and Monthly. Per the Sub-Account All
Expense Risk accumulated value:
Charge - 1/12 of 0.75% per month
for policy years 1-10.
- 1/12 of 0.50% per month
after the 10th policy year.
Per $1000 of initial Face
Amount during the first 10
policy years:
- individualized based on
insured's initial Face
Amount, issue age, sex ,
insurance class.
- -------------------------------------------------------------------------------------------------------------
Administrative Monthly. $10 All
Charge
- -------------------------------------------------------------------------------------------------------------
Rider Charges Monthly. Individualized based on Only those policies with
optional rider selected. benefits provided by rider.
</TABLE>
The next table describes the Fund fees and expenses that you will pay
periodically during the time that you own the policy. The table shows the
minimum and maximum fees and expenses charged by any of the Funds. More detail
concerning each Fund's fees and expenses is contained in the prospectus for each
Fund.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 7
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
POLICIES FROM WHICH CHARGE IS
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED DEDUCTED
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees Daily net asset values of a 0.382% - 1.200% All Policies, for those
Fund reflect Management Fees Sub-Accounts selected by you.
already deducted from assets
of the Fund.
- -------------------------------------------------------------------------------------------------------------
Other Expenses Daily net asset values of a 0.018% - 0.420% All Policies, for those
Fund reflect Other Expenses Sub-Accounts selected by you.
already deducted from the
assets of the Fund.
- -------------------------------------------------------------------------------------------------------------
Total Fund Annual Total of Management Fees and 0.401% - 1.620% All Policies, for those
Expenses Other Expenses shown above. Sub-Accounts selected by you.
Daily net asset values of a
Fund reflect Total Fund
Annual Operating Expenses
already deducted from assets
of the Fund.
</TABLE>
<PAGE>
8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
ABOUT US
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Hartford Life and Annuity Insurance Company is a stock life insurance company
engaged in the business of writing life insurance and annuities, both individual
and group, in all states of the United States, the District of Columbia and
Puerto Rico, except New York. On January 1, 1998, Hartford's name changed from
ITT Hartford Life and Annuity Insurance Company to Hartford Life and Annuity
Insurance Company. We were originally incorporated under the laws of Wisconsin
on January 9, 1956, and subsequently redomiciled to Connecticut. Our offices are
located in Simsbury, Connecticut; however, our mailing address is P.O. Box 2999,
Hartford, CT 06104-2999. We are ultimately controlled by The Hartford Financial
Services Group, Inc., one of the largest financial service providers in the
United States.
HARTFORD'S RATINGS
<TABLE>
<CAPTION>
EFFECTIVE DATE
RATING AGENCY OF RATING RATING BASIS OF RATING
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
A.M. Best and Company, Inc. 1/1/99 A+ Financial performance
- -------------------------------------------------------------------------------------------------
Standard & Poor's 6/1/98 AA Insurer financial strength
- -------------------------------------------------------------------------------------------------
Duff & Phelps 12/21/98 AA+ Claims paying ability
- ----------------------------------------------------------------
</TABLE>
SEPARATE ACCOUNT VL I
The Sub-Accounts are subdivisions of our separate account, called Separate
Account VL I. The Separate Account exists to keep your life insurance policy
assets separate from our company assets. As such, the investment performance of
the Separate Account is independent from the investment performance of
Hartford's other assets. Hartford's other assets are utilized to pay you
insurance obligations under the policy. Your assets in the Separate Account are
held exclusively for your benefit and may not be used for any other liability of
Hartford. Separate Account VL I was established on June 8, 1995 under the laws
of Connecticut.
THE FUNDS
The Sub-Accounts of the Separate Account purchase shares of mutual funds set up
exclusively for variable annuity and variable life insurance products. These
funds are not the same mutual funds that you buy through your stockbroker or
through a retail mutual fund, but they may have similar investment strategies
and the same portfolio managers as retail mutual funds. You choose the
Sub-Accounts that meet your investment style.
We do not guarantee the investment results of any of the underlying Funds. Since
each underlying Fund has different investment objectives, each is subject to
different risks. These risks and the Funds' expenses are described in the
prospectuses for the Funds, which are attached to this Prospectus, and the
Funds' Statements of Additional Information, which may be ordered from us. You
should read the following investment objectives and the prospectuses for each of
the Funds listed below for detailed information about each Fund before
investing. All Funds may not be available in all states.
You may also allocate some or all of your premium payments to the "Fixed
Account," which pays a declared interest rate. See "The Fixed Account."
HARTFORD ADVISERS HLS 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. Sub-advised by Wellington Management.
HARTFORD BOND HLS FUND -- Seeks maximum current income consistent with
preservation of capital by investing primarily in investment grade fixed-income
securities. Up to 20% of the total assets of this Fund may be invested in debt
securities rated in the highest category below investment grade ("Ba" by Moody's
Investor Services, Inc. or "BB" by Standard & Poor's) or, if unrated, are
determined to be of comparable quality by the Fund's investment adviser.
Securities rated below investment grade are commonly referred to as "high
yield-high risk securities" or "junk bonds." For more information concerning the
risks associated with investing in such securities, please refer to the section
in the accompanying prospectus for the Funds entitled "Hartford Bond HLS Fund,
Inc." Sub-advised by HIMCO.
HARTFORD CAPITAL APPRECIATION HLS FUND -- Seeks growth of capital by investing
in equity securities selected solely on the basis of potential for capital
appreciation. Sub-advised by Wellington Management.
HARTFORD DIVIDEND AND GROWTH HLS FUND -- Seeks a high level of current income
consistent with growth of capital by investing primarily in dividend paying
equity securities. Sub-advised by Wellington Management.
HARTFORD GROWTH AND INCOME HLS FUND -- Seeks growth of capital and current
income by investing primarily in equity securities with earnings growth
potential and steady or rising dividends. Sub-advised by Wellington Management.
HARTFORD INDEX HLS FUND -- Seeks to provide investment results which approximate
the price and yield performance of publicly-traded common stocks in the
aggregate, as represented by the Standard & Poor's 500 Composite Stock Price
Index.* Sub-advised by HIMCO.
HARTFORD INTERNATIONAL ADVISERS HLS FUND -- Seeks maximum long-term total 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
* "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
AND ANNUITY INSURANCE COMPANY. THE HARTFORD INDEX FUND, INC. ("INDEX FUND") IS
NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY STANDARD & POOR'S AND STANDARD &
POOR'S MAKES NO REPRESENTATION REGARDING THE ADVISABILITY OF INVESTING IN THE
INDEX FUND.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
will be traded in non-U.S. markets. Sub-advised by Wellington Management.
HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND -- Seeks growth of capital by
investing primarily in equity securities issued by non-U.S. companies.
Sub-advised by Wellington Management.
HARTFORD MIDCAP HLS FUND -- Seeks to achieve long-term capital growth through
capital appreciation by investing primarily in equity securities of companies
with market capitalizations within the range represented by the Standard &
Poor's MidCap 400 Index. Sub-advised by Wellington Management.
HARTFORD MONEY MARKET HLS FUND -- Seeks maximum current income consistent with
liquidity and preservation of capital. Sub-advised by HIMCO.
HARTFORD MORTGAGE SECURITIES HLS 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. Sub-advised by HIMCO.
HARTFORD SMALL COMPANY HLS FUND -- Seeks growth of capital by investing
primarily in equity securities within a range represented by the Russell 2000
Index selected on the basis of potential for capital appreciation. Sub-advised
by Wellington Management.
HARTFORD STOCK HLS FUND -- Seeks long-term growth of capital by investing
primarily in equity securities. Sub-advised by Wellington Management.
PUTNAM VT ASIA PACIFIC GROWTH FUND -- Seeks capital appreciation by investing
primarily in securities of companies located in Asia and in the Pacific Basin.
The fund's investments will normally include common stocks, preferred stocks,
securities convertible into common stocks or preferred stocks, and warrants to
purchase common stocks or preferred stocks.
PUTNAM VT DIVERSIFIED INCOME FUND -- Seeks high current income consistent with
capital preservation by investing in the following three sectors of the fixed
income securities markets: a U.S. Government and Investment Grade Sector, a High
Yield Sector (which invests primarily in securities commonly known as "junk
bonds"), and an International Sector. See the special considerations for
investments in high yield securities described in the Fund prospectus.
PUTNAM VT THE GEORGE PUTNAM FUND OF BOSTON -- Seeks to provide a balanced
investment composed of a well-diversified portfolio of stocks and bonds which
will produce both capital growth and current income.
PUTNAM VT GLOBAL ASSET ALLOCATION FUND -- Seeks a high level of long-term total
return consistent with preservation of capital by investing in U.S. equities,
international equities, U.S. fixed income securities, and international fixed
income securities.
PUTNAM VT GLOBAL GROWTH FUND -- Seeks capital appreciation through a globally
diversified portfolio of common stocks.
PUTNAM VT GROWTH AND INCOME FUND -- Seeks capital growth and current income by
investing primarily in common stocks that offer potential for capital growth,
current income, or both.
PUTNAM VT HEALTH SCIENCES FUND -- Seeks capital appreciation by investing
primarily in common stocks and other securities of companies in the health
sciences industries.
PUTNAM VT HIGH YIELD FUND -- Seeks high current income and, when consistent with
this objective, a secondary objective of capital growth, by investing primarily
in high-yielding, lower-rated fixed income securities, constituting a portfolio
which Putnam Management believes does not involve undue risk to income or
principal. See the special considerations for investments in high yield
securities described in the Fund prospectus.
PUTNAM VT INCOME FUND -- Seeks high current income consistent with what Putnam
Management believes to be prudent risk. The Fund will normally invest mostly in
bonds and other debt securities, and, to a lesser degree, in preferred stocks.
PUTNAM VT INTERNATIONAL GROWTH FUND -- Seeks capital appreciation by investing
primarily in equity securities of companies located in a country other than the
United States.
PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND -- Seeks capital growth, and a
secondary objective of high current income by investing primarily in common
stocks that Putnam Management believes offer potential for capital growth and
may, when consistent with its investment objectives, invest in common stocks
that Putnam Management believes offer potential for current income. Under normal
market conditions, the fund expects to invest substantially all of its assets in
securities principally traded on markets outside the United States.
PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND -- Seeks long term capital
appreciation by investing in companies that have above-average growth prospects
due to the fundamental growth of their market sector. Under normal market
conditions, the fund expects to invest substantially all of its total assets,
other than cash or short-term investments held pending investment, in common
stocks, preferred stocks, convertible preferred stocks, convertible bonds and
other equity securities principally traded in securities markets outside the
United States.
PUTNAM VT INVESTORS FUND -- Seeks long-term growth of capital and any increased
income that results from this growth by investing primarily in common stocks
that Putnam Management believes afford the best opportunity for capital growth
over the long term.
PUTNAM VT MONEY MARKET FUND -- Seeks as high a rate of current income as Putnam
Management believes is consistent with preservation of capital and maintenance
of liquidity by investing in high-quality money market instruments.
PUTNAM VT NEW OPPORTUNITIES FUND -- Seeks long-term capital appreciation by
investing principally in common stocks of
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10 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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companies in sectors of the economy which Putnam Management believes possess
above-average long-term growth potential.
PUTNAM VT NEW VALUE FUND -- Seeks long-term capital appreciation by investing
primarily in common stocks that Putnam Management believes are undervalued at
the time of purchase and have the potential for long-term capital appreciation.
PUTNAM VT OTC & EMERGING GROWTH FUND -- Seeks capital appreciation by investing
primarily in common stocks that Putnam Management believes have potential for
capital appreciation significantly greater than that of market averages.
PUTNAM VT UTILITIES GROWTH AND INCOME FUND -- Seeks capital growth and current
income by concentrating its investments in debt and equity securities issued by
companies in the public utilities industries.
PUTNAM VT VISTA FUND -- Seeks capital appreciation by investing in a diversified
portfolio of common stocks which Putnam Management believes have the potential
for above-average capital appreciation.
PUTNAM VT VOYAGER FUND -- Seeks capital appreciation by investing primarily in
common stocks of companies that Putnam Management believes have potential for
capital appreciation that is significantly greater than that of market averages.
FIDELITY VIP EQUITY-INCOME PORTFOLIO -- Seeks reasonable income by investing
primarily in income-producing equity securities. In choosing these securities,
the Portfolio Manager will also consider the potential for capital appreciation.
The Portfolio's goal is to achieve a yield which exceeds the composite yield on
the securities comprising the Standard & Poor's Index 500.
In addition, the Portfolio may invest in high yield, lower-rated securities
(commonly referred to as "junk bonds") which are subject to greater risk than
investments in higher-rated securities. For a further discussion of lower-rated
securities, see "Risks of Lower-Rated Debt Securities" in the Fidelity
prospectus for this Portfolio.
FIDELITY VIP OVERSEAS PORTFOLIO -- Seeks long-term growth of capital primarily
through investments in foreign securities and provides a means for aggressive
investors to diversify their own portfolios by participating in companies and
economies outside of the United States.
International funds have increased economic and political risks as they are
exposed to events and factors in the various world markets. These risks may be
greater for funds that invest in emerging markets.
FIDELITY VIP II ASSET MANAGER PORTFOLIO -- Seeks high total return with reduced
risk over the long-term by allocating its assets among stocks, bonds and
short-term money market instruments.
In addition, the Portfolio may invest in high yield, lower-rated securities
(commonly referred to as "junk bonds") which are subject to greater risk than
investments in higher-rated securities. For a further discussion of lower-rated
securities, see "Risks of Lower-Rated Debt Securities" in the Fidelity
prospectus for this Portfolio.
INVESTMENT ADVISERS -- HL Investment Advisors, LLC is investment adviser for the
Hartford Funds. Wellington Management Company, LLP ("Wellington Management") is
investment sub-adviser for Hartford Advisers HLS Fund, Inc., Hartford Capital
Appreciation HLS Fund, Inc., Hartford Dividend and Growth HLS Fund, Inc.,
Hartford Growth and Income HLS Fund, Hartford International Advisers HLS Fund,
Inc., Hartford International Opportunities HLS Fund, Inc., Hartford MidCap HLS
Fund, Inc., Hartford Small Company HLS Fund, Inc., and Hartford Stock HLS Fund,
Inc. The Hartford Investment Management Company, Inc. ("HIMCO") is investment
sub-adviser for Hartford Bond HLS Fund, Inc., Hartford Index HLS Fund, Inc.,
Hartford Mortgage Securities HLS Fund, Inc., and Hartford Money Market HLS Fund,
Inc. Each Hartford Fund, except for the Hartford Growth and Income HLS Fund, is
a separate Maryland corporation registered with the Securities and Exchange
Commission as an open-end management investment company. The Hartford Growth and
Income HLS Fund is a diversified series of Hartford Series Fund, Inc., a
Maryland corporation, also registered with the Securities and Exchange
Commission as an open-end management investment company. The shares of each Fund
have been divided into Class IA and Class IB. Only Class IA shares are available
in this policy.
Putnam Investment Management, Inc. ("Putnam Management") serves as the
investment manager for the Putnam Funds. Putnam Management is ultimately
controlled by Marsh & McLennan Companies, Inc., a publicly owned holding company
whose principal businesses are international insurance brokerage and employee
benefit consulting.
Fidelity Management & Research Company is investment adviser for the Fidelity
VIP Funds.
MIXED AND SHARED FUNDING -- Shares of the Funds may be sold to our other
separate accounts and our insurance company affiliates or other unaffiliated
insurance companies to serve as the underlying investment for both variable
annuity contracts and variable life insurance policies, a practice known as
"mixed and shared funding." As a result, there is a possibility that a material
conflict may arise between the interests of policy owners, and of owners of
other contracts whose contract values are allocated to one or more of these
other separate accounts investing in any one of the Funds. In the event of any
such material conflicts, we will consider what action may be appropriate,
including removing the Fund from the Separate Account or replacing the Fund with
another underlying fund. There are certain risks associated with mixed and
shared funding, as disclosed in the prospectuses for the Funds.
VOTING RIGHTS -- For Sub-Accounts in which you have invested, we will notify you
of shareholder's meetings of the Funds purchased by those Sub-Accounts. We will
send you proxy materials and instructions for you to vote the shares held for
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 11
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your benefit by those Sub-Accounts. We will arrange for the handling and
tallying of proxies received from you or other policy owners. If you give no
instructions, we will vote those shares in the same proportion as shares for
which we received instructions.
THE FIXED ACCOUNT
You may allocate amounts to the Fixed Account. The Fixed Account is not a part
of the Separate Account, but is a part of our general assets. As such, the Fixed
Account (and this description of the Fixed Account) is not subject to the same
securities laws as the Separate Account.
The Fixed Account credits at least 3.5% per year. We are not obligated to, but
may, credit more than 3.5% per year. If we do, such rates are determined at our
sole discretion. You assume the risk that, at any time, the Fixed Account may
credit no more than 3.5%.
CHARGES AND DEDUCTIONS
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DEDUCTIONS FROM PREMIUM
Before your premium is allocated to the Sub-Accounts and/or the Fixed Account,
we deduct a percentage from your premium for a sales load and a tax charge. The
amount allocated after the deductions is called your Net Premium.
FRONT-END SALES LOAD -- We deduct a front-end sales load from each premium you
pay. The current and maximum sales load in policy year 1 is 8%. The current
sales load after policy year 1 is 4%. The maximum sales load is 8% in policy
years 2 through 20 and 6% thereafter.
TAX CHARGE -- We deduct a tax charge from each premium you pay. The tax charge
covers taxes assessed against us by a state and/or other governmental entity.
The range of such charge generally is between 0% and 4%.
DEDUCTIONS FROM ACCOUNT VALUE
MONTHLY DEDUCTION AMOUNTS -- Each month we will deduct an amount from your
Account Value to pay for the benefits provided by your policy. This amount is
called the Monthly Deduction Amount and equals the sum of:
(1) the charge for the cost of insurance;
(2) the monthly administrative charge;
(3) the mortality and expense risk charge;
(4) any Face Amount increase fee;
(5) the charges for additional benefits provided by rider, if any.
COST OF INSURANCE CHARGE -- The charge for the cost of insurance equals:
(i) the cost of insurance rate per $1,000, multiplied by
(ii) the amount at risk, divided by
(iii) $1,000.
On any Monthly Activity Date, the amount at risk equals the Death Benefit less
the Account Value on that date, prior to assessing the Monthly Deduction Amount.
Cost of insurance rates will be determined on each policy anniversary based on
our future expectations of such factors as mortality, expenses, interest,
persistency and taxes. The cost of insurance rates will not exceed those based
on the 1980 Commissioners' Standard Ordinary Mortality Table (ALB), Male or
Female, Nonsmoker or Smoker Table, age last birthday (unisex rates may be
required in some states). A table of guaranteed cost of insurance rates per
$1,000 will be included in your policy, however, we reserve the right to use
rates less than those shown in the table. Substandard risks will be charged
higher cost of insurance rates that will not exceed rates based on a multiple of
1980 Commissioners' Standard Ordinary Mortality Table (ALB), Male or Female,
Nonsmoker or Smoker Table, age last birthday (unisex rates may be required in
some states) plus any flat extra amount assessed. The multiple will be based on
the insured's substandard rating.
Any changes in the cost of insurance rates will be made uniformly for all
insureds of the same issue ages, sexes, risk classes and whose coverage has been
in-force for the same length of time. No change in insurance class or cost will
occur on account of deterioration of the insured's health.
Because your Account Value and death benefit may vary from month to month, the
cost of insurance may also vary on each Monthly Activity Date. The cost of
insurance depends on your policy's amount at risk. Items which may affect the
amount at risk include the amount and timing of premium payments, investment
performance, fees and charges assessed, rider charges, policy loans and changes
to the Face Amount.
MONTHLY ADMINISTRATIVE CHARGE -- We deduct a monthly administrative charge from
your Account Value to compensate us for issue and administrative costs of the
policy. The current monthly administrative charge is $7.50 for initial Face
Amounts of $100,000 and above. The current charge for initial Face Amounts below
$100,000 is $10 per month. The maximum administrative charge is $10 per month
for all initial Face Amounts.
MORTALITY AND EXPENSE RISK CHARGE -- We deduct a mortality and expense risk
charge each month from your Account Value. There are two components to the
mortality and expense risk charge. Part of the charge is assessed according to
your Account Value attributable to the Sub-Accounts, and the other part is
assessed based on the initial Face Amount of your policy. The mortality and
expense risk charge each month is equal to the sum of (a) and (b) where
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12 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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(a) equals:
(i) the monthly accumulated value mortality and expense risk rate; multiplied
by
(ii) the sum of your accumulated values in the Sub-Accounts on the Monthly
Activity Date, prior to assessing the Monthly Deduction Amount.
and
(b) equals:
(i) the monthly mortality and expense risk rate per $1,000; multiplied by
(ii) the initial Face Amount; divided by
(iii) $1,000.
During the first 10 years, the current and maximum accumulated value mortality
and expense risk rate is 1/12 of 0.75% per month. Thereafter, the current rate
is 1/12 of 0.25% per month and the maximum rate is 1/12 of .50% per month.
During the first 10 years, the Face Amount mortality and expense risk rate per
$1,000 of initial Face Amount is individualized based on the Insured's initial
Face Amount, issue age, sex, and insurance class. Thereafter, there is no
charge.
The mortality and expense risk charge compensates us for mortality and expense
risks assumed under the policies. The mortality risk assumed is that the cost of
insurance charges are insufficient to meet actual claims. The expense risk
assumed is that the expense incurred in issuing, distributing and administering
the policies exceed the administrative charges and sales loads collected.
Hartford may keep any difference between cost it incurs and the charges it
collects.
FACE AMOUNT INCREASE FEE -- We deduct a dollar amount from your Account Value
for an unscheduled increase of the Face Amount on your policy. We deduct the fee
each month for twelve months after the increase. The fee is a per $1,000 amount
that varies by the attained age of the Insured.
RIDER CHARGE -- If your policy includes riders, a charge applicable to the
riders is made from the Account Value each month. The charge applicable to these
riders is to compensate Hartford for the anticipated cost of providing these
benefits and is specified on the applicable rider. For a description of the
riders available, see "Your Policy -- Supplemental Benefits."
SURRENDER CHARGE -- During the first 9 policy years, surrender charges will be
deducted from your Account Value if
- - you surrender your policy;
- - you decrease the Face Amount to an amount lower than it has ever been; or
- - you take a withdrawal that causes the Face Amount to fall below the lowest
previous Face Amount.
The amount of surrender charge is individualized based on the Insured's age,
sex, and insurance class on the date of issue. The charge compensates us for
expenses incurred in issuing the policy and the recovery of acquisition costs.
Hartford may keep any difference between cost it incurs and the charges it
collects. For partial surrender charges applicable to a decrease in the Face
Amount or withdrawal, see "Unscheduled Increases and Decreases in the Face
Amount."
CHARGES FOR THE FUNDS
The investment performance of each Fund reflects the management fee that the
Fund pays to its investment manager as well as other operating expenses that the
Fund incurs. Investment management fees are generally daily fees computed as a
percentage of a Fund's average daily net assets as an annual rate. Please read
the prospectus for each Fund for complete details.
YOUR POLICY
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CONTRACT RIGHTS
POLICY OWNER, OR "YOU" -- As long as your policy is in force, you may exercise
all rights under the policy while the insured is alive and no beneficiary has
been irrevocably named.
BENEFICIARY -- You name the beneficiary in your application for the policy. You
may change the beneficiary (unless irrevocably named) while the insured is alive
by notifying us in writing. If no beneficiary is living when the insured dies,
the death benefit will be paid to you if living; or, otherwise, to your estate.
ASSIGNMENT -- You may assign your policy. Until you notify us in writing, no
assignment will be effective against us. We are not responsible for the validity
of any assignment.
STATEMENTS -- We will send you a statement at least once each year, showing:
- - the current Account Value, Cash Surrender Value and Face Amount;
- - the premiums paid, monthly deduction amounts and any loans since your last
statement;
- - the amount of any Indebtedness;
- - any notifications required by the provisions of your policy; and
- - any other information required by the Insurance Department of the state where
your policy was delivered.
RIGHT TO EXAMINE A POLICY -- You have a limited right to return your policy for
cancellation. You may deliver or mail the policy to us or to the agent from whom
it was purchased any time during your free look period. Your free look period
begins
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 13
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on the day you get your policy and ends ten days after you get it (or longer in
some states). In such event, the policy will be rescinded and we will pay an
amount equal to the greater of the premiums paid for the policy less any
Indebtedness or the sum of: i) the Account Value less any Indebtedness, on the
date the returned policy is received by us or the agent from whom it was
purchased; and, ii) any deductions under the policy or charges associated with
the Separate Account. If your policy is replacing another policy, your free look
period and the amount paid to you upon the return of your policy vary by state.
CONTRACT LIMITATIONS
ALLOCATIONS TO SUB-ACCOUNTS AND THE FIXED ACCOUNT -- You may allocate amounts to
a maximum of nine (9) Sub-Accounts, or eight (8) Sub-Accounts and the Fixed
Account.
TRANSFERS OF ACCOUNT VALUE -- You may transfer amounts among the Fixed Account
and the Sub-Accounts subject to a charge described below. You may request
transfers in writing or by calling us at 1-800-231-5453. Transfers by telephone
may be made by your agent of record or by your attorney-in-fact pursuant to a
power of attorney. Telephone transfers may not be permitted in some states. We
will not be responsible for losses that result from acting upon telephone
requests reasonably believed to be genuine. We will employ reasonable procedures
to confirm that instructions communicated by telephone are genuine. The
procedures we follow for transactions initiated by telephone include requiring
callers to provide certain identifying information. All transfer instructions
communicated to us by telephone are tape recorded.
You may make one transfer per calendar month free of charge, excluding any
transfers made pursuant to your enrollment in the Dollar Cost Averaging Program.
Each subsequent transfer in excess of one per calendar month will be subject to
a transfer charge of up to $25. We reserve the right to limit at a future date
the size of transfers and remaining balances and to limit the number and
frequency of transfers.
TRANSFERS FROM THE FIXED ACCOUNT -- Except for transfers made under the Dollar
Cost Averaging Program, any transfers from the Fixed Account must occur during
the 30-day period following each policy anniversary, and, the maximum amount
transferred in any Policy Year will be the greater of $1,000 or 25% of the
Accumulated Value in the Fixed Account on the date of the transfer.
DEFERRAL OF PAYMENTS -- We may defer payment of any Cash Surrender Values,
withdrawals and loan amounts which are not attributable to the Sub-Accounts for
up to six months from the date of the request. If we defer payment for more than
30 days, we will pay you interest.
CHANGES TO CONTRACT OR SEPARATE ACCOUNT
MODIFICATION OF POLICY -- The only way the policy may be modified is by a
written agreement signed by our President, or one of our Vice Presidents,
Secretaries, or Assistant Secretaries.
SUBSTITUTION OF FUNDS -- We reserve the right to substitute the shares of any
other registered investment company for the shares of any Fund already purchased
or to be purchased in the future by the Separate Account provided that the
substitution has been approved by the Securities and Exchange Commission.
CHANGE IN OPERATION OF THE SEPARATE ACCOUNT -- The operation of the Separate
Account may be modified to the extent permitted by law, including deregistration
under the securities laws.
SEPARATE ACCOUNT TAXES -- Currently, no charge is made to the Separate Account
for federal, state and local taxes that may be allocable to the Separate
Account. A change in the applicable federal, state or local tax laws which
impose tax on Hartford and/ or the Separate Account may result in a charge
against the policy in the future. Charges for other taxes, if any, allocable to
the Separate Account may also be made.
OTHER BENEFITS
DOLLAR COST AVERAGING PROGRAM -- You may elect to allocate your Net Premiums
among the Sub-Accounts and the Fixed Account pursuant to the Dollar Cost
Averaging (DCA) program. If you choose the DCA program, your Net Premiums will
be deposited into the Hartford Money Market Sub-Account or the Fixed Account.
Amounts will be transferred monthly to the other investment options in
accordance with your premium allocation instructions. The dollar amount will be
allocated to the investment options that you specify, in the proportions that
you specify. If, on any transfer date, your Account Value allocated to the
Dollar Cost Averaging program is less than the amount you have elected to
transfer, your DCA program will terminate.
You may cancel your DCA election by notice in writing or by calling us at
1-800-231-5453. We reserve the right to change or discontinue the DCA program.
The main objective of a DCA program is to minimize the impact of short-term
price fluctuations. The DCA program allows you to take advantage of market
fluctuations. Since the same dollar amount is transferred to your selected
investment options at set intervals, the DCA program allows you to purchase more
accumulation units when prices are low and fewer accumulation units when prices
are high. Therefore, a lower average cost per accumulation unit may be achieved
over the long term. However, it is important to understand that the DCA program
does not assure a profit or protect against loss in a declining market.
SUPPLEMENTAL BENEFITS -- The following supplemental benefits are among the
options that may be included in a policy by rider, subject to the restrictions
and limitations set forth in the rider.
<PAGE>
14 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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- - TERM LIFE RIDER -- While the rider is in force, we will pay the term life
insurance amount upon receipt of due proof of death of the designated insured,
subject to the conditions stated in the rider.
- - DEDUCTION AMOUNT WAIVER RIDER -- We will waive the Monthly Deduction Amount in
the event of total disability prior to the insured reaching age 65 and
continuing for at least six months. If the Deduction Amount Waiver Rider is
added to your policy, the Monthly Deduction Amounts will be increased to
include the charges for the rider.
- - WAIVER OF SPECIFIED AMOUNT DISABILITY BENEFIT RIDER -- If the insured becomes
totally disabled, we will credit the policy with a premium equal to the
Specified Amount Disability Benefit as defined in your policy, for as long as
the insured remains totally disabled.
- - ACCIDENTAL DEATH BENEFIT RIDER -- We will increase in the amount paid upon the
death of the insured if the death results from an accident.
SETTLEMENT OPTIONS -- Proceeds under your policy may be paid in a lump sum or
may be applied to one of our four settlement options. The minimum amount that
may be placed under a settlement option is $5,000 (unless we consent to a lesser
amount), subject to our then-current rules. Once payments under the Second
Option, the Third Option or the Fourth Option begin, no surrender may be made
for a lump sum settlement in lieu of the life insurance payments. The following
payment options are available to you or your beneficiary. If a payment option is
not selected, proceeds will be paid in a lump sum. Your beneficiary may choose a
settlement.
FIRST OPTION -- Interest Income
Payments of interest at the rate we declare (but not less than 3% per year) on
the amount applied under this option.
SECOND OPTION -- Income of Fixed Amount
Equal payments of the amount chosen until the amount applied under this option
(with interest of not less than 3% per year) is exhausted. The final payment
will be for the balance remaining.
THIRD OPTION -- Payments for a Fixed Period
An amount payable monthly for the number of years selected, which may be from
one to 30 years.
FOURTH OPTION -- Life Income
- LIFE ANNUITY -- An annuity payable monthly during the lifetime of the
annuitant and terminating with the last monthly payment due preceding the
death of the annuitant.
- LIFE ANNUITY WITH 120 MONTHLY PAYMENTS CERTAIN -- An annuity providing
monthly income to the annuitant for a fixed period of 120 months and for as
long thereafter as the annuitant shall live.
The policy provides for guaranteed dollar amounts of monthly payments for each
$1,000 applied under the four payment options. Under the Fourth Option, the
amount of each payment will depend upon the age of the Annuitant at the time the
first payment is due. If any periodic payment due any payee is less than $200,
we may make payments less often.
The table for the Fourth Option is based on the 1983a Individual Annuity
Mortality Table, set back one year and with a net investment rate of 3% per
annum. The tables for the First, Second and Third Options are based on a net
investment rate of 3% per annum. We may, however, from time to time, at our
discretion if mortality appears more favorable and interest rates justify, apply
other tables which will result in higher monthly payments for each $1,000
applied under one or more of the four payment options.
Other arrangements for income payments may be agreed upon.
BENEFITS AT MATURITY -- The scheduled maturity date is the last date on which
you may elect to make premium payments. Unless you elect to continue the policy
beyond this date, the policy will terminate and any Cash Surrender Value will be
paid to you.
If elected, the policy may continue in force after the scheduled maturity date
if (a) the policy was in force on the scheduled maturity date; and (b) the owner
of the policy (including any assignee of record) agrees in writing to this
continuation.
At the scheduled maturity date:
- - the death benefit will be reduced to the Account Value;
- - the Account Value, if any, will continue to fluctuate with investment
performance
- - any loans will continue to accrue interest and become part of Indebtedness
- - no future Monthly Deduction Amounts will be deducted
- - no further premium payments will be accepted.
All additional benefits provided by rider will deem to have terminated at the
scheduled maturity date.
Otherwise, the policy will terminate on the scheduled maturity date.
CLASS OF PURCHASERS
REDUCED CHARGES FOR ELIGIBLE GROUPS -- Certain of the charges and deductions
described above may be reduced for policies issued in connection with a specific
plan, in accordance with our rules in effect as of the date the application for
a policy is approved. To qualify for such a reduction, a plan must satisfy
certain criteria, e.g., as to size of the plan, expected number of participants
and anticipated premium payment from the plan. Generally, the sales contacts and
effort, administrative costs and mortality cost per policy vary, based on such
factors as the size of the plan, the purposes for which policies are purchased
and certain characteristics of the plan's members. The amount of
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 15
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reduction and the criteria for qualification will be reflected in the reduced
sales effort and administrative costs resulting from, and the different
mortality experience expected as a result of, sales to qualifying plans. We may
modify, from time to time on a uniform basis, both the amounts of reductions and
the criteria for qualification. Reductions in these charges will not be unfairly
discriminatory against any person, including the affected policy owners invested
in the Separate Account.
PREMIUMS
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APPLICATION FOR A POLICY -- To purchase a policy you must submit an application
to us. Within limits, you may choose the initial Face Amount. Policies generally
will be issued only on the lives of insureds age 85 and under who supply
evidence of insurability satisfactory to us. Acceptance is subject to our
underwriting rules and we reserve the right to reject an application for any
reason. No change in the terms or conditions of a policy will be made without
your consent. The minimum initial premium is the amount required to keep the
policy in force for one month, but not less than $50.
Your policy will be effective on the policy date only after we receive all
outstanding delivery requirements and the initial premium payment. The policy
date is the date used to determine all future cyclical transactions on the
policy, such as Monthly Activity Date and policy years.
PREMIUM PAYMENT FLEXIBILITY -- You have flexibility as to when and in what
amounts you pay premiums. Prior to policy issue, you can choose a planned
premium, within a range we determined, based on the Face Amount and the
insured's sex (except where unisex rates apply), issue age and risk
classification. We will send you premium notices for planned premium. Such
notices may be sent on an annual, semi-annual or quarterly basis. You may also
have premium payments automatically deducted monthly from your checking account.
The planned premium and payment mode you select are shown on your policy's
specifications page. You may change the planned premium at any time, subject to
our minimum amount rules then in effect.
The policy will not lapse as long as the Cash Surrender Value is sufficient to
cover the Monthly Deduction Amounts or the No-Lapse Guarantee is available.
You may pay additional premiums at any time prior to the scheduled maturity
date, subject to the following limitations:
- - The minimum premium that we will accept is $50 or the amount required to keep
the policy in force.
- - We reserve the right to refund any excess premiums that would cause the policy
to fail to meet the definition of life insurance under the Internal Revenue
Code.
- - We reserve the right to require evidence of insurability for any premium
payment that results in an increase in the death benefit greater than the
amount of the premium.
- - Any premium payment in excess of $1,000,000 is subject to our approval.
ALLOCATION OF PREMIUM PAYMENTS -- The initial Net Premium (and any additional
Net Premiums received by us before the end of the right to examine period) will
be allocated to the Hartford Money Market Fund Sub-Account on the later of the
policy date or the date we receive the initial premium payment. We will then
allocate the value in the Hartford Money Market Fund Sub-Account to the Fixed
Account and the Sub-Accounts according to the premium allocation specified in
the policy application upon the expiration of the right to examine policy
period, or the date we receive the final requirement to put the policy in force,
whichever is later.
You may change your premium allocation upon request in writing. Subsequent Net
Premiums will be allocated to the Fixed Account and the Sub-Accounts according
to your most recent written instructions as long as the number of investment
choices you are allocated to does not exceed nine (9), and the percentage you
allocate to each Sub-Account and/or the Fixed Account is in whole percentages.
If we receive a premium payment with a premium allocation instruction that does
not comply with the above rules, we will allocate the Net Premium pro rata based
on the values of your existing investment choices.
You will receive several different types of notifications as to what your
current premium allocation is. Each transaction confirmation received after we
receive a premium payment will show how a Net Premium has been allocated.
Additionally, each quarterly statement summarizes the current premium allocation
in effect for such policy.
ACCUMULATION UNITS -- Net Premiums allocated to the Sub-Accounts are used to
credit accumulation units to such Sub-Accounts.
The number of accumulation units in each Sub-Account to be credited to a policy
(including the initial allocation to the Hartford Money Market Sub-Account) and
the amount to be credited to the Fixed Account will be determined, first, by
multiplying the Net Premium by the appropriate allocation percentage in order to
determine the portion of Net Premiums or transferred Account Value to be
invested in the Fixed Account or the Sub-Account. Each portion of the Net
Premium or transferred Account Value to be invested in a Sub-Account is then
divided by the accumulation unit value in a particular Sub-Account next computed
following its receipt. The resulting figure is the number of accumulation units
to be credited to each Sub-Account.
ACCUMULATION UNIT VALUES -- The accumulation unit value for each Sub-Account
will vary to reflect the investment experience of the applicable Fund and will
be determined on each Valuation Day by multiplying the accumulation unit value
of the particular Sub-Account on the preceding Valuation Day by the
<PAGE>
16 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
net investment factor for that Sub-Account for the Valuation Period then ended.
The net investment factor for each of the Sub-Accounts is equal to the net asset
value per share of the corresponding Fund at the end of the Valuation Period
(plus the per share amount of any dividend or capital gain distributions paid by
that Fund in the Valuation Period then ended) divided by the net asset value per
share of the corresponding Fund at the beginning of the Valuation Period.
All valuations in connection with a policy, e.g., with respect to determining
Account Value, in connection with policy loans, or in calculation of death
benefits, or with respect to determining the number of accumulation units to be
credited to a policy with each premium payment other than the initial premium
payment will be made on the date the request or payment is received by us at the
National Service Center, provided such date is a Valuation Day; otherwise such
determination will be made on the next succeeding date which is a Valuation Day.
ACCOUNT VALUES -- Each policy will have an Account Value. There is no minimum
guaranteed Account Value.
The Account Value of a policy changes on a daily basis and will be computed on
each Valuation Day. The Account Value will vary to reflect the investment
experience of the Sub-Accounts, the interest credited to the Fixed Account and
the Loan Account, and the Monthly Deduction Amounts, Net Premiums paid, and any
withdrawals taken.
A policy's Account Value is related to the net asset value of the Funds
associated with the Sub-Accounts, if any, to which Net Premiums on the policy
have been allocated. The Account Value in the Sub-Accounts on any Valuation Day
is calculated by, first, multiplying the number of accumulation units in each
Sub-Account as of the Valuation Day by the then current value of the
accumulation units in that Sub-Account and then totaling the result for all of
the Sub-Accounts. A policy's Account Value equals the policy's value in all of
the Sub-Accounts, the Fixed Account, and the Loan Account. A policy's Cash Value
is equal to the Account Value less any applicable surrender charges. A policy's
Cash Surrender Value, which is the net amount available upon surrender of the
policy, is the Cash Value less any Indebtedness. See "Accumulation Unit Values,"
above.
We will pay death proceeds, Cash Surrender Values, partial withdrawals, and loan
amounts allocable to the Sub-Accounts within seven days after we receive all the
information needed to process the payment, unless the New York Stock Exchange is
closed for other than a regular holiday or weekend, trading is restricted by the
Commission or the Commission declares that an emergency exists.
DEATH BENEFITS AND POLICY VALUES
- --------------------------------------------------------------------------------
DEATH BENEFIT -- Your policy provides for the payment of the death proceeds to
the named beneficiary upon receipt of due proof of the death of the insured.
Your policy will be effective on the policy date only after we receive all
outstanding delivery requirements and the initial premium payment. You must
notify us in writing as soon as possible after the death of the insured. The
death proceeds payable to the beneficiary equal the death benefit less any
Indebtedness and less any due and unpaid Monthly Deduction Amount occurring
during a grace period. The death benefit depends on the death benefit option you
select.
DEATH BENEFIT OPTIONS -- There are three death benefit options: the Level Death
Benefit Option ("Option A"), the Return of Account Value Death Benefit Option
("Option B") and the Return of Premium Death Benefit Option ("Option C").
Subject to the minimum death benefit described below, the death benefit under
each option is as follows:
- - Under Option A, the current Face Amount.
- - Under Option B, the current Face Amount plus the Account Value.
- - Under Option C, the current Face Amount plus the sum of premiums paid.
However, it will be no more than the current Face Amount plus the Option C
limit, which is currently $2.5 million.
OPTION CHANGE -- You may change your death benefit option by notifying us in
writing. Any change will become effective on the Monthly Activity Date following
the date we receive your request. If you elect to change to Option A, the Face
Amount will become that amount available as a death benefit immediately prior to
such option change. If you elect to change to Option B, the Face Amount will
become the amount available as a death benefit immediately prior to such option
change, minus the then-current Account Value. Changing your death benefit option
may result in a Surrender Charge. You should consult a tax adviser regarding the
possible adverse tax consequences resulting from a change in your death benefit
option.
MINIMUM DEATH BENEFIT -- Your policy has a minimum death benefit. We will
automatically increase the death benefit so that it will never be less than the
Account Value multiplied by the minimum death benefit percentage for the then
current year. This percentage varies according to the policy year and insured's
issue age, sex (where unisex rates are not used) and insurance class.
EXAMPLES OF MINIMUM DEATH BENEFIT
<TABLE>
<CAPTION>
A B
<S> <C> <C>
- ----------------------------------------------------------------
Face Amount $ 100,000 $ 100,000
- ----------------------------------------------------------------
Account Value 46,500 34,000
- ----------------------------------------------------------------
Specified Percentage 250% 250%
- ----------------------------------------------------------------
Death Benefit Option Level Level
- ---------------------------------------------------
</TABLE>
In Example A, the death benefit equals $116,250, i.e., the greater of $100,000
(the Face Amount) or $116,250 (the Account Value
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 17
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at the date of death of $46,500, multiplied by the specified percentage of
250%). This amount, less any outstanding Indebtedness, constitutes the death
proceeds payable to the beneficiary.
In Example B, the death benefit is $100,000, i.e., the greater of $100,000 (the
Face Amount) or $85,000 (the Account Value of $34,000, multiplied by the
specified percentage of 250%).
UNSCHEDULED INCREASES AND DECREASES IN FACE AMOUNT -- At any time after the
first policy year, you may request in writing to change the Face Amount. The
minimum amount by which the Face Amount can be increased or decreased is based
on our rules then in effect.
We reserve the right to limit the number of increases or decreases made under a
policy to no more than one in any 12 month period.
All requests to increase the Face Amount must be applied for on a new
application and accompanied by your policy. All requests will be subject to
evidence of insurability satisfactory to us. Any increase approved by us will be
effective on the Monthly Activity Date shown on the new policy specifications
page, provided that the Monthly Deduction Amount for the first month after the
effective date of the increase is made. We deduct a dollar amount from your
Account Value for an unscheduled increase of the the Face Amount of your policy.
We deduct the fee each month for twelve months after the increase. The fee is a
per $1,000 amount that varies by the attained age of the insured.
A decrease in the Face Amount will be effective on the Monthly Activity Date
following the date we receive your request in writing. The remaining Face Amount
must not be less than that specified in our minimum rules then in effect. If
during the surrender charge period, you decrease your Face Amount to an amount
lower than it has ever been, a partial surrender charge will be assessed.
The surrender charge assessed will be:
(a) the surrender charge applicable to the then current policy year, if any;
multiplied by
(b) the percentage described below.
The percentage will be determined by:
(i) subtracting the new Face Amount from the lowest previous Face Amount; and
(ii) dividing that difference by the lowest previous Face Amount.
The surrender charge assessed will be deducted from your Account Value on the
Monthly Activity Date on which the decrease becomes effective. We will also
reduce the surrender charges applicable to future policy years and provide you a
revised schedule of surrender charges.
CHARGES AND CONTRACT VALUES -- Your contract values decrease due to the
deduction of policy charges. Contract values may increase or decrease depending
on investment performance; investment expenses and fees reduce the investment
performance of the Sub-Accounts. Fluctuations in your account value may have an
effect on your death benefit. If your contract lapses, the contract terminates
and no death benefit will be paid.
MAKING WITHDRAWALS FROM YOUR POLICY
- --------------------------------------------------------------------------------
SURRENDER -- Provided your policy has a Cash Surrender Value, you may surrender
your policy to us. We will pay you the Cash Surrender Value. Our liability under
the policy will cease as of the date of your request for surrender, or the date
you request to have your policy surrendered, if later.
WITHDRAWALS -- One withdrawal is allowed per calendar month. Withdrawals may be
subject to a surrender charge, see "Surrender Charge." You may request a
withdrawal in writing. The minimum withdrawal allowed is $500. The maximum
partial withdrawal is the Cash Surrender Value, minus $1000. If the death
benefit option then in effect is Option A or Option C, the Face Amount will be
reduced by the amount of any partial withdrawal. Unless specified, the
withdrawal will be deducted on a pro rata basis from the Fixed Account and the
Sub-Accounts. You may be assessed a charge of up to $10 for each partial
withdrawal.
LOANS
- --------------------------------------------------------------------------------
AVAILABILITY OF LOANS -- At any time while the policy is in force, you may
borrow against the policy by assigning it as sole security to us. Any new loan
taken together with any existing Indebtedness may not exceed the Cash Surrender
Value on the date we grant a loan. The minimum loan amount that we will allow is
$500.
Unless you specify otherwise, all loan amounts will be transferred on a pro rata
basis from the Fixed Account and each of the Sub-Accounts to the Loan Account.
If total Indebtedness equals or exceeds the Cash Value on any Monthly Activity
Date, the policy will then go into default. See "Lapse and Reinstatement."
PREFERRED INDEBTEDNESS -- If, at any time after the tenth (10th) policy
anniversary, your Account Value exceeds the total of all premiums paid since
issue, a portion of your Indebtedness may qualify as preferred. Preferred
Indebtedness is charged a lower interest rate than non-preferred Indebtedness,
if any. The maximum amount of preferred Indebtedness is the amount by
<PAGE>
18 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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which the Account Value exceeds the total premiums paid and is determined on
each Monthly Activity Date.
LOAN REPAYMENTS -- You can repay all or any part of a loan at any time while
your policy is in force and the insured is alive. The amount of your policy loan
repayment will be deducted from the Loan Account. It will be allocated among the
Fixed Account and Sub-Accounts in the same percentage as premiums are allocated.
EFFECT OF LOANS ON ACCOUNT VALUE -- A loan, whether or not repaid, will have a
permanent effect on your Account Value. This effect occurs because the
investment results of each Sub-Account will apply only to the amount remaining
in such Sub-Accounts. In addition, the rate of interest credited to the Fixed
Account will usually be different than the rate credited to the Loan Account.
The longer a loan is outstanding, the greater the effect on your Account Value
is likely to be. Such effect could be favorable or unfavorable. If the Fixed
Account and the Sub-Accounts earn more than the annual interest rate for funds
held in the Loan Account, your Account Value will not increase as rapidly as it
would have had no loan been made. If the Fixed Account and the Sub-Accounts earn
less than the Loan Account, then your Account Value will be greater than it
would have been had no loan been made. Additionally, if not repaid, the
aggregate amount of the outstanding Indebtedness will reduce the death proceeds
and the Cash Surrender Value otherwise payable.
CREDITED INTEREST -- Any amounts in the Loan Account will be credited with
interest at an annual rate of 3.5%.
INTEREST CHARGED ON INDEBTEDNESS -- Interest will accrue daily on the
Indebtedness at the policy loan rate. Because the interest charged on
Indebtedness may exceed the rate credited to the Loan Account, the Indebtedness
may grow faster than the Loan Account. If this happens, any difference between
the value of the Loan Account and the Indebtedness will be transferred on each
Monthly Activity Date from the Fixed Account and Sub-Accounts to the Loan
Account on a pro rata basis.
POLICY LOAN RATES -- The table below shows the interest rates we will charge on
your Indebtedness.
<TABLE>
<CAPTION>
INTEREST RATE
PORTION OF CHARGED
DURING POLICY YEARS INDEBTEDNESS EQUALS 3.5% PLUS:
<S> <C> <C>
- ----------------------------------------------------------------
1-10 All 2%
- ----------------------------------------------------------------
11 and later Preferred 0%
Non-Preferred 1%
- ---------------------------------------------------
</TABLE>
LAPSE AND REINSTATEMENT
- --------------------------------------------------------------------------------
LAPSE AND GRACE PERIOD -- During the first three policy years, your policy will
be in default on any Monthly Activity Date on which the Account Value less
Indebtedness is not sufficient to cover the Monthly Deduction Amount.
During the fourth policy year and thereafter, your policy will be in default on
any Monthly Activity Date if the Cash Surrender Value is not sufficient to cover
the Monthly Deduction Amount.
A 61-day "Grace Period" will begin from the date of any policy default. Upon
default, we will mail you and any assignee written notice of the amount of
premium that will be required to continue the policy in force. The premium
required will be no greater than the amount required to pay three Monthly
Deduction Amounts as of the date the Policy Grace period began. If the No-Lapse
Guarantee is available and sufficient premium has not been paid by the end of
the Grace Period, the death benefit option will become level and any policy
riders will terminate, any future unscheduled increases are cancelled. If the
insured dies during the Grace Period, we will pay the death proceeds.
NO-LAPSE GUARANTEE DEFAULT AND GRACE PERIOD -- On every Monthly Activity Date
during the No-Lapse Guarantee period, we will compare the cumulative premium
payments received, less Indebtedness and less withdrawals, to the Cumulative
No-Lapse Guarantee Premium.
If the cumulative premium payments received, less Indebtedness and less
withdrawals, are less than the Cumulative No-Lapse Guarantee Premium, the
No-Lapse Guarantee will be deemed to be in default as of that Monthly Activity
Date and the No-Lapse Guarantee Grace Period will begin. We will mail you and
any assignee written notice of the amount of premium required to continue the
No-Lapse Guarantee.
The No-Lapse Guarantee will be removed from the policy at the end of the
No-Lapse Guarantee Grace Period if we have not received the amount of premium
required to continue such guarantee.
NO-LAPSE GUARANTEE -- The policy will remain in force at the end of the policy
Grace Period as long as the No-Lapse Guarantee is available, as described below.
The No-Lapse Guarantee is available so long as:
(a) the policy is in the No-Lapse Guarantee Period; and
(b) on each Monthly Activity Date during that period, the cumulative premiums
paid into the policy, less Indebtedness and less withdrawals from the
policy, equal or exceed an amount known as the Cumulative No-Lapse Guarantee
Premium.
The length of the No-Lapse Guarantee Period is the lesser of 10 years and to age
80. Some states may limit the maximum length of the No-Lapse Guarantee Period.
In Massachusetts, the maximum length of the No-Lapse Guarantee Period is five
(5) years. The Cumulative No-Lapse Guarantee Premium is the premium required to
maintain the No-Lapse Guarantee.
If the No-Lapse Guarantee is available and you fail to pay the required premium
as defined in your lapse notice by the end of the policy grace period, the
No-Lapse Guarantee will then go into effect. The policy will remain in force,
however:
(a) all riders will terminate;
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 19
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(b) the Death Benefit Option becomes Level;
(c) The Death Benefit will equal the current Face Amount; and
(d) Any future scheduled Increases in the Face Amount will be canceled.
As long as the policy remains in default and the No-Lapse Guarantee is
available, the No-Lapse Guarantee will remain in effect on each subsequent
Monthly Activity Dates. You may be required to make premium payments to keep the
No-Lapse Guarantee available, as described above.
If during the No-Lapse Guarantee Period, the Face Amount is increased or
decreased, or riders are added or increased, deleted or reduced, a new monthly
No-Lapse Guarantee Premium will be calculated. We will send you a notice of the
new Monthly No-Lapse Guarantee Premium, which will be used in calculating the
Cumulative No-Lapse Guarantee Premium in subsequent months.
REINSTATEMENT -- Prior to the death of the insured, a policy may be reinstated
prior to the maturity date, provided such policy has not been surrendered for
cash, and provided further that:
1. You request reinstatement in writing within five years after termination;
2. You submit satisfactory evidence of insurability to us;
3. Any Indebtedness existing at the time the policy was terminated is repaid or
carried over to the reinstated policy; and
4. You pay a premium sufficient to cover (a) all Monthly Deduction Amounts that
are due and unpaid during the Grace Period and (b) the sum of Monthly
Deduction Amounts for the next three months after the date the policy is
reinstated.
The Account Value on the reinstatement date equals:
1. The Cash Value at the time of policy termination; plus
2. Net Premiums derived from premiums paid at the time of policy reinstatement;
minus
3. the Monthly Deduction Amounts that were due and unpaid during the Grace
Period; plus
4. the Surrender Charge at the time of policy reinstatement. The Surrender
Charge is based on the duration from the original policy date.
TAXES
- --------------------------------------------------------------------------------
GENERAL
Since federal tax law is complex, the tax consequences of purchasing this policy
will vary depending on your situation. You may need tax or legal advice to help
you determine whether purchasing this policy is right for you.
Our general discussion of the tax treatment of this policy is based on our
understanding of federal income tax laws as they are currently interpreted. A
detailed description of all federal income tax consequences regarding the
purchase of this policy cannot be made in the prospectus. We also do not discuss
state, municipal or other tax laws that may apply to this policy. For detailed
information, you should consult with a qualified tax adviser familiar with your
situation.
TAXATION OF HARTFORD AND THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford which is taxed as a life
insurance company under Subchapter L of the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, the Separate Account will not be taxed as a
"regulated investment company" under Subchapter M of the Code. Investment income
and realized capital gains on the assets of the Separate Account (the underlying
Funds) are reinvested and are taken into account in determining the value of the
Accumulation Units As a result, such investment income and realized capital
gains are automatically applied to increase reserves under the policy. (See
"Premiums -- Accumulation Unit Values").
Hartford does not expect to incur any federal income tax on the earnings or
realized capital gains attributable to the Separate Account. Based upon this
expectation, no charge is currently being made to the Separate Account for
federal income taxes. If Hartford incurs income taxes attributable to the
Separate Account or determines that such taxes will be incurred, it may assess a
charge for such taxes against the Separate Account.
INCOME TAXATION OF POLICY BENEFITS-GENERALLY
For federal income tax purposes, the Policies should be treated as life
insurance contracts under Section 7702 of the Code. The death benefit under a
life insurance contract is generally excluded from the gross income of the
beneficiary. Also, a life insurance policy owner is generally not taxed on
increments in the contract value until the policy is partially or completely
surrendered. Section 7702 limits the amount of premiums that may be invested in
a policy that is treated as life insurance. Hartford intends to monitor premium
levels to assure compliance with the Section 7702 requirements.
<PAGE>
20 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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Hartford also believes that any loan received under a policy will be treated as
Indebtedness of the policy owner, and that no part of any loan under a policy
will constitute income to the policy owner. A surrender or assignment of the
policy may have tax consequences depending upon the circumstances. Policy owners
should consult a qualified tax adviser concerning the effect of such changes.
During the first fifteen policy years, an "income first" rule generally applies
to distributions of cash required to be made under Code Section 7702 because of
a reduction in benefits under the policy.
The Maturity Date Extension Provision allows a policy owner to extend the
Maturity Date to the date of the death of the insured. If the Maturity Date of
the policy is extended, Hartford believes that the policy will continue to be
treated as a life insurance contract for federal income tax purposes after the
scheduled Maturity Date. However, due to the lack of specific guidance on this
issue, the result is not certain. If the policy is not treated as a life
insurance contract for federal income tax purposes after the scheduled Maturity
Date, among other things, the Death Proceeds may be taxable to the recipient.
The policy owner should consult a qualified tax adviser regarding the possible
adverse tax consequences resulting from an extension of the scheduled Maturity
Date.
MODIFIED ENDOWMENT CONTRACTS
Code Section 7702A applies an additional test, the "seven-pay" test, to life
insurance contracts. The seven-pay test provides that premiums cannot be paid at
a rate more rapidly than that allowed by the payment of seven annual premiums
using specified computational rules described in Section 7702A(c). A modified
endowment contract ("MEC") is a life insurance policy that either: (i) satisfies
the Section 7702 definition of life insurance, but fails the seven-pay test of
Section 7702A or (ii) is exchanged for a MEC.
If the policy satisfies the seven-pay test at issuance, distributions and loans
made thereafter will not be subject to the MEC rules, unless the policy is
changed materially. The seven-pay test will be applied anew at any time the
policy undergoes a material change, which includes an increase in the Face
Amount. In addition, if there is a reduction in benefits under the policy within
the first seven years, the seven-pay test is applied as if the policy had
initially been issued at the reduced benefit level. Any reduction in benefits
attributable to the nonpayment of premiums will not be taken into account for
purposes of the seven-pay test if the benefits are reinstated within 90 days
after the reduction.
A policy that is classified as a MEC is eligible for certain aspects of the
beneficial tax treatment accorded to life insurance. That is, the death benefit
is excluded from income and increments in value are not subject to current
taxation. However, if the contract is classified as a MEC then withdrawals from
the contract will be considered first as withdrawals of income and then as a
recovery of premium payments. Thus, withdrawals will be includible in income to
the extent the contract value exceeds the investment in the contract. The amount
of any loan (including unpaid interest thereon) under the contract will be
treated as a withdrawal from the contract for tax purposes. In addition, if the
owner assigns or pledges any portion of the value of a contract (or agrees to
assign or pledge any portion), then such portion will be treated as a withdrawal
from the contract for tax purposes. Taxable withdrawals are subject to an
additional 10% tax, with certain exceptions. The owner's investment in the
contract is increased by the amount includible in income with respect to such
assignment, pledge, or loan, though it is not affected by any other aspect of
the assignment, pledge, or loan (including its release or repayment).
Generally, only distributions and loans made in the first year in which a policy
becomes a MEC, and in subsequent years, are taxable. However, distributions and
loans made in the two years prior to a policy's failing the seven-pay test are
deemed to be in anticipation of failure and are subject to tax.
Before assigning, pledging, or requesting a loan under a policy that is a MEC,
an owner should consult a qualified tax adviser.
All MEC policies that are issued within any calendar year to the same policy
owner by one company or its affiliates are treated as one MEC policy for the
purpose of determining the taxable portion of any loan or distribution.
Hartford has instituted procedures to monitor whether a policy may become
classified as a MEC after issue.
ESTATE AND GENERATION SKIPPING TAXES
When the Insured dies, the death proceeds will generally be includible in the
policy owner's estate for purposes of federal estate tax if the Insured owned
the policy. If the policy owner was not the Insured, the fair market value of
the policy would be included in the policy owner's estate upon the policy
owner's death. The policy would not be includible in the Insured's estate if the
Insured neither retained incidents of ownership at death nor had given up
ownership within three years before death.
The federal estate tax is integrated with the federal gift tax under a unified
rate schedule and unified credit which shelters up to $650,000 (for 1999) from
the estate and gift tax. The Taxpayer Relief Act of 1997 gradually raises the
credit over the next seven years to $1,000,000. In addition, an unlimited
marital deduction may be available for federal estate and gift tax purposes. The
unlimited marital deduction permits the deferral of taxes until the death of the
surviving spouse.
If the policy owner (whether or not he or she is the Insured) transfers
ownership of the policy to someone two or more generations younger, the transfer
may be subject to the generation skipping transfer tax, the taxable amount being
the value of the policy. The generation-skipping transfer tax provisions
generally apply to transfers which would be subject to the gift and estate tax
rules. Individuals are generally allowed an aggregate generation skipping
transfer exemption of $1 million as adjusted for inflation. Because these rules
are complex, the policy owner should consult with a qualified tax adviser for
specific information if ownership is passing to younger generations.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 21
- --------------------------------------------------------------------------------
DIVERSIFICATION REQUIREMENTS
The Code requires that investments supporting your policy be adequately
diversified. Code Section 817 provides that a variable life insurance contract
will not be treated as a life insurance contract for any period during which the
investments made by the separate account or underlying fund are not adequately
diversified. If a contract is not treated as a life insurance contract, the
policy owner will be subject to income tax on annual increases in cash value.
The Treasury Department's diversification regulations require, among other
things, that:
- - no more than 55% of the value of the total assets of the segregated asset
account underlying a variable contract is represented by any one investment,
- - no more than 70% is represented by any two investments,
- - no more than 80% is represented by any three investments and
- - no more than 90% is represented by any four investments.
In determining whether the diversification standards are met, all securities of
the same issuer, all interests in the same real property project, and all
interests in the same commodity are each treated as a single investment. In the
case of government securities, each government agency or instrumentality is
treated as a separate issuer.
A separate account must be in compliance with the diversification standards on
the last day of each calendar quarter or within 30 days after the quarter ends.
If an insurance company inadvertently fails to meet the diversification
requirements, the company may still comply within a reasonable period and avoid
the taxation of contract income on an ongoing basis. However, either the company
or the policy owner must agree to pay the tax due for the period during which
the diversification requirements were not met.
We monitor the diversification of investments in the separate accounts and test
for diversification as required by the Code. We intend to administer all
policies subject to the diversification requirements in a manner that will
maintain adequate diversification.
OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT
In order for a variable life insurance contract to qualify for tax deferral,
assets in the separate accounts supporting the contract must be considered to be
owned by the insurance company and not by the policy owner. It is unclear under
what circumstances an investor is considered to have enough control over the
assets in the separate account to be considered the owner of the assets for tax
purposes.
The IRS has issued several rulings discussing investor control. These rulings
say that certain incidents of ownership by the policy owner, such as the ability
to select and control investments in a separate account, will cause the policy
owner to be treated as the owner of the assets for tax purposes.
In its explanation of the diversification regulations, the Treasury Department
recognized that the temporary regulations "do not provide guidance concerning
the circumstances in which investor control of the investments of a segregated
asset account may cause the investor, rather than the insurance company, to be
treated as the owner of the assets in the account." The explanation further
indicates that "the temporary regulations provide that in appropriate cases a
segregated asset account may include multiple sub-accounts, but do not specify
the extent to which policyholders may direct their investments to particular
sub-accounts without being treated as the owners of the underlying assets.
Guidance on this and other issues will be provided in regulations or revenue
rulings under Section 817(d), relating to the definition of variable contract."
The final regulations issued under Section 817 did not provide guidance
regarding investor control, and as of the date of this prospectus, guidance has
yet to be issued. We do not know if additional guidance will be issued. If
guidance is issued, we do not know if it will have a retroactive effect.
Due to the lack of specific guidance on investor control, there is some
uncertainty about when a policy owner is considered the owner of the assets for
tax purposes. We reserve the right to modify the policy, as necessary, to
prevent you from being considered the owner of assets in the separate account.
TAX DEFERRAL DURING ACCUMULATION PERIOD
Under existing provisions of the Code, except as described below, any increase
in an owner's Investment Value is generally not taxable to the policy owner
unless amounts are received (or are deemed to be received) under the policy
prior to the insured's death. If the policy is surrendered or matures, the
amount received will be includable in the policy owner's income to the extent
that it exceeds the policy owner's "investment in the contract." (If there is
any debt at the time of a surrender, then such debt will be treated as an amount
distributed to the owner.) The "investment in the contract" is the aggregate
amount of premium payments and other consideration paid for the policy, less the
aggregate amount received previously under the policy to the extent such amounts
received were excluded from gross income. Whether partial withdrawals (or other
such amounts deemed to be distributed) from the policy constitute income to the
policy owner depends, in part, upon whether the policy is considered a modified
endowment contract for Federal income tax purposes.
LIFE INSURANCE PURCHASED FOR USE IN SPLIT DOLLAR ARRANGEMENTS
On January 26, 1996, the IRS released a technical advice memorandum ("TAM") on
the taxability of life insurance policies used
<PAGE>
22 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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in certain split dollar arrangements. A TAM, issued by the National Office of
the IRS, provides advice as to the internal revenue laws, regulations, and
related statutes with respect to a specific set of facts and a specific
taxpayer. In the TAM, among other things, the IRS concluded that an employee was
subject to current taxation on the excess of the cash surrender value of the
policy over the premiums to be returned to the employer. Purchasers of life
insurance policies to be used in split dollar arrangements are strongly advised
to consult with a qualified tax adviser to determine the tax treatment resulting
from such an arrangement.
FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the policy owner, such
amounts will be subject to federal income tax withholding and reporting,
pursuant to the Code.
NON-INDIVIDUAL OWNERSHIP OF POLICIES
In certain circumstances, the Code limits the application of specific tax
advantages to individual owners of life insurance contracts. Prospective policy
owners which are not individuals should consult a qualified tax adviser to
determine the potential impact on the purchaser.
OTHER
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership, or receipt of policy proceeds depend on the
circumstances of each policy owner or beneficiary. A qualified tax adviser
should be consulted to determine the impact of these taxes.
LIFE INSURANCE PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
The discussion above provides general information regarding U.S. federal income
tax consequences to life insurance purchasers that are U.S. citizens or
residents. Purchasers that are not U.S. citizens or residents will generally be
subject to U.S. federal income tax and withholding on taxable distributions from
life insurance policies at a 30% rate, unless a lower treaty rate applies. In
addition, purchasers may be subject to state and/or municipal taxes and taxes
that may be imposed by the purchaser's country of citizenship or residence.
Prospective purchasers are advised to consult with a qualified tax adviser
regarding U.S. state, and foreign taxation with respect to a life insurance
policy purchase.
LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------
There are no pending material legal proceedings to which the Separate Account is
a party.
OTHER MATTERS
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YEAR 2000
IN GENERAL -- The Year 2000 issue relates to the ability or inability of
computer hardware, software and other information technology (IT) systems, as
well as non-IT systems, such as equipment and machinery with imbedded chips and
microprocessors, to properly process information and data containing or related
to dates beginning with the year 2000 and beyond. The Year 2000 issue exists
because, historically, many IT and non-IT systems that are in use today were
developed years ago when a year was identified using a two-digit date field
rather than a four-digit date field. As information and data containing or
related to the century date are introduced to date sensitive systems, these
systems may recognize the year 2000 as "1900", or not at all, which may result
in systems processing information incorrectly. This, in turn, may significantly
and adversely affect the integrity and reliability of information databases of
IT systems, may cause the malfunctioning of certain non-IT systems, and may
result in a wide variety of adverse consequences to a company. In addition, Year
2000 problems that occur with third parties with which a company does business,
such as suppliers, computer vendors, distributors and others, may also adversely
affect any given company.
The integrity and reliability of Hartford's IT systems, as well as the
reliability of its non-IT systems, are integral aspects of Hartford's business.
Hartford issues insurance policies, annuities, mutual funds and other financial
products to individual and business customers, nearly all of which contain date
sensitive data, such as policy expiration dates, birth dates and premium payment
dates. In addition, various IT systems support communications and other systems
that integrate Hartford's various business segments and field offices. Hartford
also has business relationships with numerous third parties that affect
virtually all aspects of Hartford's business, including, without limitation,
suppliers, computer hardware and software vendors, insurance agents and brokers,
securities broker-dealers and other distributors of financial products, many of
which provide date sensitive data to Hartford, and whose operations are
important to Hartford's business.
INTERNAL YEAR 2000 EFFORTS AND TIMETABLE -- Beginning in 1990, Hartford began
working on making its IT systems Year 2000 ready, either through installing new
programs or replacing systems. Since January 1998, Hartford's Year 2000 efforts
have focused on the remaining Year 2000 issues related to IT and non-IT systems
in all of Hartford's business segments. These Year 2000 efforts include the
following five main initiatives: (1) identifying and assessing Year 2000 issues;
(2) taking actions to remediate IT and non-IT systems so that they are Year 2000
ready;
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 23
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(3) testing IT and non-IT systems for Year 2000 readiness; (4) deploying such
remediated and tested systems back into their respective production
environments; and (5) conducting internal and external integrated testing of
such systems. As of December 31, 1998, Hartford substantially completed
initiatives (1) through (4) of its internal Year 2000 efforts. Hartford has
begun initiative (5) and management currently anticipates that such activity
will continue into the fourth quarter of 1999.
THIRD PARTY YEAR 2000 EFFORTS AND TIMETABLE -- Hartford's Year 2000 efforts
include assessing the potential impact on Hartford of third parties' Year 2000
readiness. Hartford's third party Year 2000 efforts include the following three
main initiatives: (1) identifying third parties which have significant business
relationships with Hartford, including, without limitation, insurance agents,
brokers, third party administrators, banks and other distributors and servicers
of financial products, and inquiring of such third parties regarding their Year
2000 readiness; (2) evaluating such third parties' responses to Hartford's
inquiries; and (3) based on the evaluation of third party responses (or a third
party's failure to respond) and the significance of the business relationship,
conducting additional activities with respect to third parties as determined to
be necessary in each case. These activities may include conducting additional
inquiries, more in-depth evaluations of Year 2000 readiness and plans, and
integrated IT systems testing. Hartford has completed the first third party
initiative and, as of early 1999, had substantially completed evaluating third
party responses received. Hartford has begun conducting the additional
activities described in initiative (3) and management currently anticipates that
it will continue to do so through the end of 1999. However, notwithstanding
these third party Year 2000 efforts, Hartford does not have control over these
third parties and, as a result, Hartford cannot currently determine to what
extent future operating results may be adversely affected by the failure of
these third parties to adequately address their Year 2000 issues.
YEAR 2000 COSTS -- The costs of Hartford's Year 2000 program that were incurred
through the year ended December 31, 1997 were not material to Hartford's
financial condition or results of operations. The after-tax costs of Hartford's
Year 2000 efforts for the year ended December 31, 1998 were approximately $3
million. Management currently estimates that after-tax costs related to the Year
2000 program to be incurred in 1999 will be less than $10 million. These costs
are being expensed as incurred.
RISKS AND CONTINGENCY PLANS -- If significant Year 2000 problems arise,
including problems arising with third parties, failures of IT and non-IT systems
could occur, which in turn could result in substantial interruptions in
Hartford's business. In addition, Hartford's investing activities are an
important aspect of its business and Hartford may be exposed to the risk that
issuers of investments held by it will be adversely impacted by Year 2000
issues. Given the uncertain nature of Year 2000 problems that may arise,
especially those related to the readiness of third parties discussed above,
management cannot determine at this time whether the consequences of Year 2000
related problems that could arise will have a material impact on Hartford's
financial condition or results of operations.
Hartford is in the process of developing certain contingency plans so that if,
despite its Year 2000 efforts, Year 2000 problems ultimately arise, the impact
of such problems may be avoided or minimized. These contingency plans are being
developed based on, among other things, known or reasonably anticipated
circumstances and potential vulnerabilities. The contingency planning also
includes assessing the dependency of Hartford's business on third parties and
their Year 2000 readiness. Hartford currently anticipates that internal and
external contingency plans will be substantially complete by the end of the
second quarter of 1999. However, in many contexts, Year 2000 issues are dynamic,
and ongoing assessments of business functions, vulnerabilities and risks must be
made. As such, new contingency plans may be needed in the future and/or existing
plans may need to be modified as circumstances warrant.
<PAGE>
24 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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GLOSSARY OF SPECIAL TERMS
ACCOUNT VALUE: the total of all amounts in the Fixed Account, Loan Account and
Sub-Accounts.
CASH SURRENDER VALUE: the Cash Value less all Indebtedness
CASH VALUE: the Account Value less any applicable Surrender Charges.
CUMULATIVE NO-LAPSE GUARANTEE PREMIUM: The premium required to maintain the
No-Lapse guarantee.
FACE AMOUNT: an amount we use to determine the Death Benefit. On the policy
date, the Face Amount equals the initial Face Amount shown in your policy.
Thereafter, it may change under the terms of the policy.
FIXED ACCOUNT: part of our general account to which all or a portion of the
Account Value may be allocated.
FUNDS: the registered open-end management companies in which assets of the
Separate Account may be invested.
INDEBTEDNESS: all loans taken on the policy, plus any interest due or accrued
minus any loan repayments.
LOAN ACCOUNT: an account established for any amounts transferred from the Fixed
Account and Sub-Accounts as a result of loans. The amounts in the Loan Account
are credited with interest and are not subject to the investment experience of
any Sub-Accounts.
MONTHLY ACTIVITY DATE: the policy date and the same date in each succeeding
month as the policy date. However, whenever the Monthly Activity Date falls on a
date other than a Valuation Day, the Monthly Activity Date will be deemed to be
the next Valuation Day.
NET PREMIUM: the amount of premium credited to Account Value. It is premium paid
minus the sales load and tax charge.
NO-LAPSE GUARANTEE PREMIUM: The amount of monthly premium required to keep the
No-Lapse guarantee available, as shown in the policy's specifications page, and
used to calculate the Cumulative No-Lapse Guarantee Premium.
SEPARATE ACCOUNT: an account which has been established by us to separate the
assets funding the variable benefits for the class of contracts to which the
policy belongs from our other assets.
SUB-ACCOUNT: the subdivisions of the Separate Account
SURRENDER CHARGE: a charge that may be assessed if you surrender your policy or
the Face Amount is decreased.
VALUATION DAY: the date on which a Sub-Account is valued. This occurs every day
the New York Stock Exchange is open for trading.
WE, US, OUR: Hartford Life and Annuity Insurance Company.
YOU, YOUR: the owner of the policy.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 25
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WHERE YOU CAN FIND MORE INFORMATION
You can call us at 1-800-231-5453 to ask us questions, or to get a Statement of
Additional Information, free of charge. The Statement of Additional Information
contains more information about this life insurance policy and, like this
prospectus, is filed with the Securities and Exchange Commission. you should
read the Statement of Additional Information because you are bound by the terms
contained in it.
We file other information with the Securities and Exchange Commission. you may
read and copy any document we file at the SEC's public reference room in
Washington, DC 20549-6009. Please call the SEC at 1-800-SEC-0330 for further
information. Our SEC filings are also available to the public at the SEC's web
site at http://www.sec.gov.
Separate Account VL I's Investment Company Act file number:
<PAGE>
PART B
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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STATEMENT OF ADDITIONAL INFORMATION
SEPARATE ACCOUNT VL I
This Statement of Additional Information is not a prospectus. We will send you a
prospectus if you write us at P.O. Box 2999, Hartford, CT 06104-2999, or if you
call us at 1-800-231-5453.
DATE OF PROSPECTUS:
DATE OF STATEMENT OF ADDITIONAL INFORMATION:
<PAGE>
2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GENERAL INFORMATION AND HISTORY 3
------------------------------------------------------------------------------
SERVICES 5
------------------------------------------------------------------------------
EXPERTS 5
------------------------------------------------------------------------------
DISTRIBUTION OF THE POLICIES 6
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ADDITIONAL INFORMATION ABOUT CHARGES 6
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ILLUSTRATION OF BENEFITS 8
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FINANCIAL STATEMENTS
------------------------------------------------------------------------------
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 3
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GENERAL INFORMATION AND HISTORY
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("HARTFORD") -- Hartford Life and
Annuity Insurance Company is a stock life insurance company engaged in the
business of writing life insurance and annuities, both individual and group, in
all states of the United States, the District of Columbia and Puerto Rico,
except New York. On January 1, 1998, Hartford's name changed from ITT Hartford
Life and Annuity Insurance Company to Hartford Life and Annuity Insurance
Company. We were originally incorporated under the laws of Wisconsin on January
9, 1956, and subsequently redomiciled to Connecticut. Our offices are located in
Simsbury, Connecticut; however, our mailing address is P.O. Box 2999, Hartford,
CT 06104-2999. We are ultimately controlled by The Hartford Financial Services
Group, Inc., one of the largest financial service providers in the United
States.
Hartford Life and Annuity Insurance Company is controlled by Hartford Life
Insurance Company, which is controlled by Hartford Life & Accident Insurance
Company, which is controlled by Hartford Life Inc., which is controlled by
Hartford Accident & Indemnity Company, which is controlled by Hartford Fire
Insurance Company, which is controlled by Nutmeg Insurance Company, which is
controlled by The Hartford Financial Services Group, Inc. Each of these
companies is engaged in the business of insurance and financial services.
The following table shows a brief description of the business experience of
officers and directors of Hartford Life and Annuity Insurance Company:
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS PROFESSION,
HARTFORD; VOCATION OR EMPLOYMENT FOR PAST
NAME YEAR OF ELECTION FIVE YEARS; OTHER DIRECTORSHIPS
<S> <C> <C>
Wendell J. Bossen Vice President, 1995** Vice President (1992-Present), Hartford Life and Accident Insurance
Company; Vice President (1992-Present), Hartford Life Insurance
Company; President (1992-Present), International Corporate
Marketing Group, Inc.
Gregory A. Boyko Senior Vice President, Vice President & Controller (1995-1997), Hartford Life Insurance
Director, 1997* Company; Director (1997-Present); Senior Vice President
(1997-present), Chief Financial Officer & Treasurer (1997-1998);
Vice President & Controller (1995-1997), Hartford Life and Accident
Insurance Company; Director (1997-Present); Senior Vice President,
Chief Financial Officer & Treasurer (1997-Present); Vice President
and Controller (1995-1997), Hartford Life Insurance Company; Senior
Vice President, Chief Financial Officer & Treasurer (1997-Present),
Hartford Life, Inc.; Chief Financial Officer (1994-1995), IMG
American Life; Senior Vice President (1992-1994), Connecticut
Mutual Life Insurance Company.
Peter W. Cummins Senior Vice President, 1997 Vice President (1993-1997), Hartford; Senior Vice President,
(1997-Present); Vice President (1989-1997), Hartford Life and
Accident Insurance Company; Senior Vice President (1997-Present);
Vice President (1989-1997); Senior Vice President (1997-Present);
Vice President (1989-1997), Hartford Life Insurance Company.
Timothy M. Fitch Vice President, 1995 Vice President (1995-Present); Actuary (1994-Present); Assistant
Actuary, 1997 Vice President (1992-1995), Hartford Life and Accident Insurance
Company; Vice President (1995-Present); Actuary (1994-Present);
Assistant Vice President (1992-1995), Hartford Life Insurance
Company.
</TABLE>
<PAGE>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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<TABLE>
<S> <C> <C>
Mary Jane B. Fortin Vice President & Chief Vice President & Chief Accounting Office (1998-Present), Hartford
Accounting Officer, 1998 Life Insurance Company; Vice President & Chief Accounting Officer,
(1998-Present), Royal Life Insurance Company of America; Vice
President & Chief Accounting Officer (1998-Present) Alpine Life
Insurance Company; Chief Accounting Officer (1997-Present),
Hartford Life, Inc.; Director, Finance (1995-1997), Value Health,
Inc.; Senior Manager (1993-1995), Coopers and Lybrand; Audit
Manager (1993-1996) Arthur Andersen & Co.
David T. Foy Senior Vice President & Senior Vice President (1998-present), Vice President (1998),
Treasurer, 1998 Assistant Vice President (1995-1998), Hartford; Senior Vice
President (1998-Present), Hartford Life and Accident Insurance
Company; Director, Strategic Planning Corporate Finance
(1995-1996), IA Product Development (1994-1995), Hartford; Various
Actuarial Roles (1989-1993) Milliman & Robertson
Lynda Godkin Senior Vice President, 1997 Assistant General Counsel and Secretary (1994-1995), Hartford;
General Counsel, 1996 Director (1997-Present); Senior Vice President (1997-Present);
Corporate Secretary, 1996 General Counsel (1996-Present); Corporate Secretary (1995-Present);
Director, 1997* Associate General Counsel (1995-1996); Assistant General Counsel
and Secretary (1994-1995); Counsel (1990-1994), Hartford Life and
Accident Insurance Company; Senior Vice President (1997-Present);
General Counsel (1996-Present); Corporate Secretary (1995-Present);
Director (1997-Present); Associate General Counsel (1995-1996);
Assistant General Counsel and Secretary (1994-1995); Counsel
(1990-1994), Hartford Life Insurance Company; Vice President and
General Counsel (1997-Present), Hartford Life, Inc.
Lois W. Grady Senior Vice President, 1998 Vice President (1994-1998), Hartford; Senior Vice President
Vice President, 1994 (1998-Present); Vice President (1993-1997); Assistant Vice
President (1987-1993), Hartford Life and Accident Insurance
Company; Senior Vice President (1998-Present); Vice President
(1994-1997); Assistant Vice President (1987-1994), Hartford Life
Insurance Company.
Stephen T. Joyce Vice President, 1997 Assistant Vice President (1995-1997), Hartford; Assistant Vice
President (1994-1997), Hartford Life and Accident Insurance
Company; Vice President (1997-Present); Assistant Vice President
(1994-1997), Hartford Life Insurance Company.
Michael D. Keeler Vice President, 1998 Vice President (1998-Present); Hartford Life and Accident Insurance
Company; Vice President (1995-1997), Providian Insurance;
Supervisor/Manager (1985-1995), U.S. West Communications.
Robert A. Kerzner Senior Vice President, 1998 Senior Vice President (1998-Present); Vice President (1994-1998),
Vice President, 1997 Hartford; Senior Vice President (1998-Present); Vice President
(1994-1997); Regional Vice President (1991-1994), Hartford Life
Insurance Company.
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 5
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<TABLE>
<S> <C> <C>
Thomas M. Marra Executive Vice President, Senior Vice President (1993-1996); Director of Individual Annuities
1996 (1991-1993), Hartford; Director (1994-Present); Executive Vice
Director, Individual Life President (1995-Present); Director, Individual Life and Annuity
and Annuity Division, 1993 Division (1994-Present); Senior Vice President (1994-1995); Vice
Director, 1994* President (1989-1994); Actuary (1987-1997), Hartford Life and
Accident Insurance Company; Director (1994-Present); Executive Vice
President (1995-Present); Director, Individual Life and Annuity
Division (1994-Present); Senior Vice President (1994-1995); Vice
President (1989-1994); Actuary (1987-1995), Hartford Life Insurance
Company; Executive Vice President, Individual Life and Annuities
(1997-Present), Hartford Life, Inc.
Steven L. Matthieson Vice President, 1984 Director of New Business (1984-1997), Hartford.
Craig R. Raymond Senior Vice President, 1997 Vice President (1993-1997); Assistant Vice President (1992-1993);
Chief Actuary, 1994 Actuary (1989-1994), Hartford; Senior Vice President
(1997-Present); Chief Actuary (1995-Present); Vice President
(1993-1997); Actuary (1990-1995), Hartford Life and Accident
Insurance Company; Senior Vice President (1997-Present); Chief
Actuary (1994-Present); Vice President (1993-1997); Assistant Vice
President (1992-1993); Actuary (1989-1994), Hartford Life Insurance
Company; Vice President and Chief Actuary (1997-Present), Hartford
Life, Inc.
Lowndes A. Smith President, 1989 Chief Operating Officer (1989-1997), Hartford; Director
Chief Executive Officer, 1997 (1981-Present); President (1989-Present); Chief Executive Officer
Director, 1985* (1997-Present); Chief Operating Officer (1989-1997), Hartford Life
and Accident Insurance Company; Director (1981-Present); President
(1989-Present), Chief Executive Officer (1997-Present); Chief
Operating Officer (1989-1997), Hartford Life Insurance Company;
Chief Executive Officer and President and Director (1997-Present),
Hartford Life, Inc.
David M. Znamierowski Senior Vice President, 1997 Vice President (1997) Senior Vice President (1997) Director, Risk
Director, 1998 Management Strategy (1996) Director (1998), Hartford; Director
(1998-Present); Senior Vice President (1997-Present); Hartford Life
and Accident Insurance Company; Vice President, Investment Strategy
(1997-Present), Hartford Life, Inc.; Vice President, Investment
Strategy & Policy (1991-1996), Aetna Life and Casualty.
</TABLE>
SEPARATE ACCOUNT VL I -- was established as a separate account under
Connecticut law on June 8, 1995. The Separate Account is classified as a unit
investment trust registered with the Securities and Exchange Commission under
the Investment Company Act of 1940.
SERVICES
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SAFEKEEPING OF ASSETS -- Title to the assets of the Separate Account is held by
Hartford. The assets are kept physically segregated and are held separate and
apart from Hartford's general corporate assets. Records are maintained of all
purchases and redemptions of Fund shares held in each of the Sub-Accounts.
EXPERTS
- --------------------------------------------------------------------------------
INDEPENDENT PUBLIC ACCOUNTANTS -- The audited financial statements included in
this registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports. Reference is made to the report on the statutory
financial statements of Hartford Life and Annuity
<PAGE>
6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
Insurance Company which states the statutory financial statements are presented
in accordance with statutory accounting practices prescribed or permitted by the
National Association of Insurance Commissioners and the State of Connecticut
Insurance Department, and are not presented in accordance with generally
accepted accounting principles. The principal business address of Arthur
Andersen LLP is One Financial Plaza, Hartford, Connecticut 06103.
ACTUARIAL EXPERT -- The hypothetical Policy illustrations included in this
Statement of Additional Information and the registration statement with respect
to the Separate Account have been approved by Kenneth A. McCullum, FSA, MAAA,
Assistant Vice President and Director, Individual Life Product Development, for
Hartford, and are included in reliance upon his opinion as to their
reasonableness.
DISTRIBUTION OF POLICIES
- --------------------------------------------------------------------------------
Hartford Equity Sales Company, Inc. ('HESCO') serves as principal underwriter
for the policies and will offer the policies on a continuous basis. HESCO is
controlled by Hartford and is located at the same address as Hartford. HESCO is
registered with the Securities and Exchange Commission under the Securities
Exchange Act of 1934 as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. ('NASD').
The policies will be sold by salespersons who represent Hartford as insurance
agents and who are registered representatives of HESCO or certain other
registered broker-dealers who have entered into distribution agreements with
HESCO.
Broker-dealers or financial institutions are compensated according to a schedule
set forth by HESCO and any applicable rules or regulations for variable
insurance compensation. The compensation payable may vary with the distribution
agreements with HESCO. Compensation is generally based on premium payments. This
compensation is usually paid from the sales charges described in the Prospectus.
During the first Policy Year, the most common schedule of commission we pay is
70% of the premium paid up to the Target Premium and 2.0% of the premium in
excess of the Target Premium. The Target Premium is an amount used to calculate
sales commissions where the Target Premium amounts vary by the: (1) age; (2)
sex; and (3) insurance class of the Insured. In Policy Years 2 and later, this
schedule allows for a commission of 2% of Premiums paid. A sales representative
may be required to return all or a portion of the commissions paid if the Policy
terminates prior to the Policy's first Policy Anniversary.
In addition, a broker-dealer or financial institution may also receive
additional compensation for, among other things, training, marketing or other
services provided. HESCO, its affiliates or Hartford may also make compensation
arrangements with certain broker-dealers or other financial institutions based
on total sales by the broker-dealer or financial institution of insurance
products. These payments, which may be different for broker-dealers or financial
institutions, will be made by HESCO, its affiliates or Hartford out of their
assets and will not effect the amounts paid by the policy owner to purchase,
hold or surrender variable insurance products.
The following table shows officers and directors of HESCO:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITIONS AND OFFICES
<S> <C>
- -----------------------------------------------------------------
Lowndes A. Smith President and Chief Executive Officer,
Director
- -----------------------------------------------------------------
Thomas M. Marra Executive Vice President, Director
- -----------------------------------------------------------------
Peter W. Cummins Senior Vice President
- -----------------------------------------------------------------
Lynda Godkin Senior Vice President, General Counsel
and Corporate Secretary
- -----------------------------------------------------------------
Donald E. Waggaman, Jr. Treasurer
- -----------------------------------------------------------------
George R. Jay Controller
- ----------------------------------------------------------------
</TABLE>
ADDITIONAL INFORMATION ABOUT CHARGES
- --------------------------------------------------------------------------------
SALES LOAD -- The front-end sales load is a charge deducted from each premium
payment. The current and maximum sales load in policy year 1 is 8%. The current
sales load after policy year 1 is 4%. The maximum sales load is 8% in policy
years 2 through 20 and 6% thereafter.
The front-end load under the policies may be used to cover expenses related to
the sale and distribution of the policies.
REDUCED CHARGES FOR ELIGIBLE GROUPS -- Certain of the charges and deductions
described above may be reduced for policies issued in connection with a specific
plan, in accordance with our rules in effect as of the date the application for
a policy is approved. To qualify for such a reduction, a plan must satisfy
certain criteria, e.g., as to size of the plan, expected number of participants
and anticipated premium payment from the plan. Generally, the sales contacts and
effort, administrative costs and mortality cost per policy vary, based on such
factors as the size of the plan, the purposes for which policies are purchased
and certain characteristics of the plan's members. The amount of reduction and
the criteria for qualification will be reflected in the reduced sales effort and
administrative costs resulting from, and the different mortality experience
expected as a result of, sales to qualifying plans. We may modify, from time to
time on a uniform basis, both the amounts of reductions and the criteria for
qualification. Reductions in these charges will not be unfairly discriminatory
against any person, including the affected policy owners invested in Separate
Account VL I.
UNDERWRITING PROCEDURES -- To purchase a policy you must submit an application
to us. Within limits, you may choose the
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 7
- --------------------------------------------------------------------------------
initial Face Amount. Policies generally will be issued only on the lives of
insureds the ages of 0 and 85 who supply evidence of insurability satisfactory
to us. Acceptance is subject to our underwriting rules and we reserve the right
to reject an application for any reason.
Cost of insurance rates will be determined on each policy anniversary based on
our future expectations of such factors as mortality, expenses, interest,
persistency and taxes. For preferred and standard risks, the cost of insurance
rate will not exceed those based on the 1980 Commissioners' Standard Ordinary
Mortality Table (ALB), Male or Female, Nonsmoker or Smoker Table, age last
birthday (unisex rates may be required in some states). A table of guaranteed
cost of insurance rates per $1,000 will be included in your policy, however, we
reserve the right to use rates less than those shown in the table. Special risk
classes are used when mortality experience in excess of the standard risk
classes is expected. These substandard risks will be charged a higher cost of
insurance rate that will not exceed rates based on a multiple of 1980
Commissioners' Standard Ordinary Mortality Table (ALB), Male or Female,
Nonsmoker or Smoker Table, age last birthday (unisex rates may be required in
some states) plus any flat extra amount assessed. The multiple will be based on
the insured's substandard rating.
No change in the terms or conditions of a policy will be made without your
consent.
UNSCHEDULED INCREASES IN FACE AMOUNT -- At any time after the first policy
year, you may request in writing to change the Face Amount. The minimum amount
by which the Face Amount can be increased is based on our rules then in effect.
We reserve the right to limit the number of increases or decreases made under a
policy to no more than one in any 12 month period.
All requests to increase the Face Amount must be applied for on a new
application and accompanied by your policy. All requests will be subject to
evidence of insurability satisfactory to us. Any increase approved by us will be
effective on the Monthly Activity Date shown on the new policy specifications
page, provided that the Monthly Deduction Amount for the first month after the
effective date of the increase is made. Each unscheduled increase in Face Amount
is subject to an increase fee. We deduct the fee each month for twelve months
after the increase. The Face Increase Fee rate is per $1,000 amount and varies
by the attained age of the insured.
<PAGE>
8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
IILUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES
AND CASH SURRENDER VALUES
The following tables illustrate the way in which the Policy operates. They show
how the Death Benefit, Account Values and Cash Surrender Values could vary over
an extended period of time, assuming hypothetical gross rates of return equal to
constant after tax annual rates of 0%, 6% and 12%. The illustrations assume a
male, preferred, non-nicotine, age 35, with $250,000 of Face Amount and a
premium of $1,875 paid in all years.
The Death Benefit, Account Value and Cash Surrender Value for a Policy would be
different from those shown if the rates of return averaged 0%, 6% and 12% over a
period of years, but also fluctuated above or below those averages for
individual Policy Years. They would also differ if any Policy loan was made
during the period of time illustrated.
The tables reflect the deductions of current Policy charges and guaranteed
Policy charges for a single gross interest rate. The Death Benefits, Account
Values and Cash Surrender Values would change if current Cost of Insurance
charges change.
The amounts shown for the Death Benefit, Account Value and Cash Surrender Value
as of the end of each Policy Year take into account an average daily charge
equal to an annual charge of 0.71% of the average daily net assets of the Funds
for investment advisory and administrative services fees. The gross annual
investment return rates of 0%, 6% and 12% on the Fund's assets are equal to net
annual investment return rates (net of the 0.71% average daily charge) of
- -0.71%, 5.29% and 11.29%, respectively.
In addition, the Death Benefit, Account Value and Cash Surrender Value as of the
end of each Policy Year take into account the front-end sales load, tax charge,
Cost of Insurance charge, monthly administrative fee, and mortality and expense
risk charge. For purpose of the illustrations in this Statement of Additional
Information, the tax charge is assumed to be an average of 1.75%.
The hypothetical returns shown in the illustrations are without any tax charges
that may be allocable to the Separate Account in the future. In order to produce
after-tax returns of 0%, 6%, and 12%, the Separate Account would have to earn a
sufficient amount in excess of 0% or 6% or 12%, respectively, to cover any tax
charges.
The "Premiums Accumulated at 5% Interest Per Year" column of each illustration
table shows the amount which would accumulate if the initial premium was
invested to earn interest, after taxes, of 5% per year, compounded annually.
Hartford will furnish, upon request, a comparable illustration reflecting the
proposed Insured's age and risk classification, a Policy's proposed Face Amount
or the initial premium requested, and reflecting guaranteed Cost of Insurance
rates. Hartford will also furnish an additional similar illustration reflecting
current Cost of Insurance rates, which may be less than, but never greater than,
the guaranteed Cost of Insurance rates.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$250,000 FACE AMOUNT
ISSUE AGE 35 MALE PREFERRED NON-NICOTINE
$1,875 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.29% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 1,969 1,153 0 250,000 1,121 0 250,000
2 4,036 2,493 523 250,000 2,299 329 250,000
3 6,206 3,972 2,097 250,000 3,598 1,723 250,000
4 8,486 5,602 4,477 250,000 5,029 3,904 250,000
5 10,879 7,403 6,465 250,000 6,608 5,671 250,000
6 13,391 9,387 8,637 250,000 8,347 7,597 250,000
7 16,030 11,574 11,011 250,000 10,261 9,699 250,000
8 18,800 13,982 13,607 250,000 12,366 11,991 250,000
9 21,709 16,639 16,452 250,000 14,688 14,500 250,000
10 24,763 19,554 19,554 250,000 17,225 17,225 250,000
11 27,970 23,323 23,323 250,000 20,467 20,467 250,000
12 31,337 27,481 27,481 250,000 24,019 24,019 250,000
13 34,872 32,066 32,066 250,000 27,907 27,907 250,000
14 38,585 37,125 37,125 250,000 32,165 32,165 250,000
15 42,483 42,709 42,709 250,000 36,834 36,834 250,000
16 46,576 48,873 48,873 250,000 41,951 41,951 250,000
17 50,873 55,688 55,688 250,000 47,571 47,571 250,000
18 55,386 63,222 63,222 250,000 53,745 53,745 250,000
19 60,124 71,556 71,556 250,000 60,531 60,531 250,000
20 65,099 80,784 80,784 250,000 68,001 68,001 250,000
25 93,963 144,365 144,365 250,000 118,857 118,857 250,000
30 130,801 252,223 252,223 307,711 203,679 203,679 250,000
<CAPTION>
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
These values reflect Current Front-End Sales Loads of 8% in year 1 and 4%
thereafter, and Guaranteed Front-End Sales Loads of 8% in policy years 1 through
20 and 6% thereafter. The surrender charge effective in any year can be
determined by subtracting the cash surrender value from the account value.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
10 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$250,000 FACE AMOUNT
ISSUE AGE 35 MALE PREFERRED NON-NICOTINE
$1,875 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.29% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 1,969 1,073 0 250,000 1,042 0 250,000
2 4,036 2,258 288 250,000 2,073 103 250,000
3 6,206 3,494 1,619 250,000 3,149 1,274 250,000
4 8,486 4,783 3,658 250,000 4,268 3,143 250,000
5 10,879 6,129 5,191 250,000 5,436 4,499 250,000
6 13,391 7,531 6,781 250,000 6,651 5,901 250,000
7 16,030 8,990 8,428 250,000 7,914 7,352 250,000
8 18,800 10,508 10,133 250,000 9,224 8,849 250,000
9 21,709 12,090 11,903 250,000 10,588 10,401 250,000
10 24,763 13,722 13,722 250,000 11,986 11,986 250,000
11 27,970 15,925 15,925 250,000 13,854 13,854 250,000
12 31,337 18,211 18,211 250,000 15,772 15,772 250,000
13 34,872 20,578 20,578 250,000 17,731 17,731 250,000
14 38,585 23,028 23,028 250,000 19,732 19,732 250,000
15 42,483 25,563 25,563 250,000 21,774 21,774 250,000
16 46,576 28,182 28,182 250,000 23,850 23,850 250,000
17 50,873 30,893 30,893 250,000 25,966 25,966 250,000
18 55,386 33,695 33,695 250,000 28,116 28,116 250,000
19 60,124 36,590 36,590 250,000 30,296 30,296 250,000
20 65,099 39,580 39,580 250,000 32,506 32,506 250,000
25 93,963 55,997 55,997 250,000 43,999 43,999 250,000
30 130,801 74,695 74,695 250,000 54,822 54,822 250,000
<CAPTION>
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
These values reflect Current Front-End Sales Loads of 8% in year 1 and 4%
thereafter, and Guaranteed Front-End Sales Loads of 8% in policy years 1 through
20 and 6% thereafter. The surrender charge effective in any year can be
determined by subtracting the cash surrender value from the account value.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$250,000 FACE AMOUNT
ISSUE AGE 35 MALE PREFERRED NON-NICOTINE
$1,875 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-.71% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 1,969 994 0 250,000 964 0 250,000
2 4,036 2,033 63 250,000 1,858 0 250,000
3 6,206 3,055 1,180 250,000 2,737 862 250,000
4 8,486 4,059 2,934 250,000 3,598 2,473 250,000
5 10,879 5,047 4,110 250,000 4,445 3,508 250,000
6 13,391 6,016 5,266 250,000 5,274 4,524 250,000
7 16,030 6,965 6,403 250,000 6,084 5,521 250,000
8 18,800 7,893 7,518 250,000 6,871 6,496 250,000
9 21,709 8,803 8,615 250,000 7,643 7,455 250,000
10 24,763 9,678 9,678 250,000 8,375 8,375 250,000
11 27,970 10,999 10,999 250,000 9,479 9,479 250,000
12 31,337 12,279 12,279 250,000 10,530 10,530 250,000
13 34,872 13,511 13,511 250,000 11,517 11,517 250,000
14 38,585 14,693 14,693 250,000 12,439 12,439 250,000
15 42,483 15,824 15,824 250,000 13,293 13,293 250,000
16 46,576 16,898 16,898 250,000 14,069 14,069 250,000
17 50,873 17,918 17,918 250,000 14,773 14,773 250,000
18 55,386 18,876 18,876 250,000 15,396 15,396 250,000
19 60,124 19,771 19,771 250,000 15,930 15,930 250,000
20 65,099 20,599 20,599 250,000 16,375 16,375 250,000
25 93,963 23,532 23,532 250,000 17,122 17,122 250,000
30 130,801 23,511 23,511 250,000 13,687 13,687 250,000
<CAPTION>
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
These values reflect Current Front-End Sales Loads of 8% in year 1 and 4%
thereafter, and Guaranteed Front-End Sales Loads of 8% in policy years 1 through
20 and 6% thereafter. The surrender charge effective in any year can be
determined by subtracting the cash surrender value from the account value.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
PART C
<PAGE>
OTHER INFORMATION
Item 27. Exhibits
(a) Resolution of the Board of Directors of Hartford Life and Annuity
Insurance Company ("Hartford") authorizing the establishment of the
Separate Account.
(b) Not Applicable.
(c) Principal Underwriting Agreement.(2)
(d) Form of Flexible Premium Variable Life Insurance Policy.
(e) Form of Application for Flexible Premium Variable Life Insurance
Policies.
(f) Certificate of Incorporation of Hartford(2) and Bylaws of
Hartford.(2)
(g) Contracts of Reinsurance.
(h) Form of Participation Agreement.
(i) Not Applicable.
(j) Not Applicable.
(k) Opinion and consent of Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary.
(l) Opinion and Consent of Kenneth A. McCullum, FSA., MAAA.
(m) Not Applicable.
(n) Consent of Arthur Andersen LLP, Independent Public Accountants will
be provided by amendment.
(o) No financial statement will be omitted.
(p) Not Applicable.
(q) Memorandum describing transfer and redemption procedures.(1)
(r) Power of Attorney.
(s) Organizational Chart
___________________________
(1) Incorporated by reference to Pre-Effective Amendment No. 1 to the
Registration Statement on Form S-6, File No. 33-61267, of Hartford Life and
Annuity Insurance Company filed with the Securities and Exchange Commission
on January 23, 1996.
(2) Incorporated by reference to Pre-Effective Amendment No. 3 to the
Registration Statement on Form S-6, File No. 33-61267, of Hartford Life and
Annuity Insurance Company filed with the Securities and Exchange Commission
on August 28, 1996.
<PAGE>
Item 28. Officers and Directors.
- --------------------------------------------------------------------------
NAME, AGE POSITION WITH HARTFORD
- --------------------------------------------------------------------------
Wendell J. Bossen Vice President
- --------------------------------------------------------------------------
Gregory A. Boyko Senior Vice President, Director*
- --------------------------------------------------------------------------
Peter W. Cummins Senior Vice President
- --------------------------------------------------------------------------
Timothy M. Fitch Vice President & Actuary
- --------------------------------------------------------------------------
Mary Jane B. Fortin Vice President & Chief Accounting Officer
- --------------------------------------------------------------------------
David T. Foy Senior Vice President & Treasurer
- --------------------------------------------------------------------------
Lynda Godkin Senior Vice President, General Counsel, and
Corporate Secretary, Director*
- --------------------------------------------------------------------------
Lois W. Grady Senior Vice President
- --------------------------------------------------------------------------
Stephen T. Joyce Vice President
- --------------------------------------------------------------------------
Michael D. Keeler Vice President
- --------------------------------------------------------------------------
Robert A. Kerzner Senior Vice President
- --------------------------------------------------------------------------
Thomas M. Marra Executive Vice President, Director*
- --------------------------------------------------------------------------
Steven L. Matthiesen Vice President
- --------------------------------------------------------------------------
Craig R. Raymond Senior Vice President and Chief Actuary
- --------------------------------------------------------------------------
Lowndes A. Smith President and Chief Executive Officer, Director*
- --------------------------------------------------------------------------
David M. Znamierowski Senior Vice President, Director*
- --------------------------------------------------------------------------
Unless otherwise indicated, the principal business address of each of the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
_______________________________________________
* Denotes Board of Directors of Hartford.
Item 29. Persons Controlled By or Under Common Control with the Depositor or
Registrant
Filed herewith as Exhibit (s).
Item 30: Indemnification
Under Section 33-772 of the Connecticut General Statutes, unless
limited by its certificate of incorporation, the Registrant must
indemnify a director who was wholly successful, on the merits or
otherwise, in the defense of any proceeding to which he was a party
because he is or was a director of the corporation against
reasonable expenses incurred by him in connection with the
proceeding.
<PAGE>
The Registrant may indemnify an individual made a party to a
proceeding because he is or was a director against liability
incurred in the proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Registrant, and, with respect to any criminal
proceeding, had no reason to believe his conduct was unlawful.
Conn. Gen. Stat. Section 33-771(a). Additionally, pursuant to Conn.
Gen. Stat. Section 33-776, the Registrant may indemnify officers
and employees or agents for liability incurred and for any expenses
to which they becomes subject by reason of being or having been an
employees or officers of the Registrant. Connecticut law does not
prescribe standards for the indemnification of officers, employees
and agents and expressly states that their indemnification may be
broader than the right of indemnification granted to directors.
The foregoing statements are specifically made subject to the
detailed provisions of Section 33-770 et seq.
Notwithstanding the fact that Connecticut law obligates the
Registrant to indemnify only a director that was successful on the
merits in a suit, under Article VIII, Section 2 of the Registrant's
bylaws, the Registrant must indemnify both directors and officers
of the Registrant who are parties or threatened to be parties to a
legal proceeding by reason of his being or having been a director
or officer of the Registrant for any expenses if he acted in good
faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the company, and with respect to
criminal proceedings, had no reason to believe his conduct was
unlawful. Unless otherwise mandated by a court, no indemnification
shall be made if such officer or director is adjudged to be liable
for negligence or misconduct in the performance of his duty to the
Registrant.
Additionally, the directors and officers of Hartford and Hartford
Equity Sales Company, Inc. ("HESCO") are covered under a directors
and officers liability insurance policy issued to The Hartford
Financial Services Group, Inc. and its subsidiaries. Such policy
will reimburse the Registrant for any payments that it shall make
to directors and officers pursuant to law and will, subject to
certain exclusions contained in the policy, further pay any other
costs, charges and expenses and settlements and judgments arising
from any proceeding involving any director or officer of the
Registrant in his past or present capacity as such, and for which
he may be liable, except as to any liabilities arising from acts
that are deemed to be uninsurable.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
foregoing provisions, the Registrant has been
<PAGE>
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
Item 31. Principal Underwriters
(a) HESCO acts as principal underwriter for the following investment
companies:
Hartford Life Insurance Company - Separate Account VL I
Hartford Life Insurance Company - Separate Account VL II
Hartford Life Insurance Company - ICMG Secular Trust Separate
Account
Hartford Life Insurance Company -- ICMG Registered Variable Life
Separate Account A
Hartford Life and Annuity Insurance Company -- Separate
Account VL I
Hartford Life and Annuity Insurance Company -- Separate
Account VL II
Hartford Life and Annuity Insurance Company -- ICMG Registered
Variable Life Separate Account A
(b) Directors and Officers of HESCO
Name and Principal Positions and Offices
Business Address With Underwriter
------------------ ---------------------
Lowndes A. Smith President and Chief Executive
Officer, Director
Thomas M. Marra Executive Vice President,
Director
Peter W. Cummins Senior Vice President
Lynda Godkin Senior Vice President, General
Counsel and Corporate Secretary
Richard J. Garrett Vice President
Donald A. Salama Vice President
Donald E. Waggaman, Jr. Treasurer
George R. Jay Controller
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
<PAGE>
Item 32. Location of Accounts and Records
All of the accounts, books, records or other documents required to
be kept by Section 31(a) of the Investment Company Act of 1940 and
rules thereunder, are maintained by Hartford at 200 Hopmeadow
Street, Simsbury, Connecticut 06089.
Item 33. Management Services
All management contracts are discussed in Part A and Part B of this
Registration Statement.
Item 34. Representation of Reasonableness of Fees
Hartford hereby represents that the aggregate fees and charges under the
Policy are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by Hartford.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment Company
Act, the Registrant certifies that it duly caused this registration statement
to be signed on its behalf by the undersigned, duly authorized, in the Town
of Simsbury, and State of Connecticut on the day of July 15, 1999.
HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY SEPARATE ACCOUNT VL I
(Registrant)
*By: David T. Foy *By: /s/ Brian Lord
------------------------------------------------- ----------------
David T. Foy, Senior Vice President and Treasurer Brian Lord
Attorney-In-Fact
HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY
(Depositor)
*By: David T. Foy
-------------------------------------------------
David T. Foy, Senior Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons and in the capacities and on
the dates indicated.
Gregory A. Boyko, Senior Vice President
and Director*
Lynda Godkin, Senior Vice President, General *By: /s/ Brian Lord
Counsel, & Corporate Secretary, Director* ---------------------
Thomas M. Marra, Executive Vice Brian Lord
President, Director* Attorney-In-Fact
Lowndes A. Smith, President,
Chief Executive Officer, Director*
David M. Znamierowski, Senior Vice President, Dated: July 15, 1999
Director*
<PAGE>
EXHIBIT INDEX
1.1 Form of Flexible Premium Variable Life Insurance Policy.
1.2 Form of Application for Flexible Premium Variable Life Insurance
Policies.
1.3 Form of Reinsurance Contract.
1.4 Form of Participation Agreement.
1.5 Opinion and Consent of Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary.
1.6 Opinion and Consent of Kenneth A. McCullum, FSA, MAAA.
1.7 Power of Attorney.
1.8 Organizational Chart.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
HARTFORD, CONNECTICUT 06104-2999
(A STOCK INSURANCE COMPANY)
(THE "COMPANY")
NATIONAL SERVICE CENTER ADDRESS:
P.O. BOX 59179
MINNEAPOLIS, MINNESOTA 55459
Will pay the Death Proceeds to the Beneficiary, upon receipt at Our National
Service Center in Minneapolis, Minnesota, of due proof of the Insured's death
while the Policy was in force.
Signed for the Company
/s/ LYNDA GODKIN /s/ LOWNDES A. SMITH
Lynda Godkin, SECRETARY Lowndes A. Smith, PRESIDENT
READ YOUR POLICY CAREFULLY
This is a legal contract between You and Us
RIGHT TO EXAMINE POLICY
WE WANT YOU TO BE SATISFIED WITH THE POLICY YOU HAVE PURCHASED. WE URGE YOU
TO EXAMINE IT CLOSELY. IF, FOR ANY REASON YOU ARE NOT SATISFIED, YOU MAY
DELIVER OR MAIL THE POLICY TO US OR TO THE AGENT FROM WHOM IT WAS PURCHASED
ANYTIME DURING YOUR FREE LOOK PERIOD. YOUR FREE LOOK PERIOD BEGINS ON THE
DAY YOU GET YOUR POLICY AND ENDS TEN DAYS AFTER YOU GET IT. IN SUCH AN
EVENT, THE POLICY WILL BE RESCINDED AND WE WILL PAY AN AMOUNT EQUAL TO THE
GREATER OF THE PREMIUMS PAID FOR THE POLICY LESS ANY INDEBTEDNESS OR THE SUM
OF: I) THE ACCOUNT VALUE LESS ANY INDEBTEDNESS, ON THE DATE THE RETURNED
POLICY IS RECEIVED BY US OR TO THE AGENT FROM WHOM IT WAS PURCHASED; AND, II)
ANY DEDUCTIONS UNDER THE POLICY OR CHARGES ASSOCIATED WITH THE SEPARATE
ACCOUNT.
CASH SURRENDER VALUE PAYABLE ON THE SCHEDULED MATURITY DATE,
UNLESS EXTENDED BY ELECTION OF OWNER
DEATH PROCEEDS PAYABLE AT DEATH
ADJUSTABLE DEATH BENEFIT
PREMIUMS PAYABLE AS SHOWN ON PAGE 3
NON-PARTICIPATING
THE PORTIONS OF THE ACCOUNT VALUES PROVIDED BY THIS CONTRACT THAT ARE IN THE
SUB-ACCOUNTS ARE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT.
THEY ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. THE AMOUNT
OF THE DEATH BENEFIT MAY BE FIXED OR VARIABLE DEPENDING ON THE INVESTMENT
EXPERIENCE OF THAT SEPARATE ACCOUNT. THE NO LAPSE GUARANTEE IS SUBJECT TO
THE CONDITIONS DESCRIBED ON PAGE 14.
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE POLICY
[LOGO]
LA-1154(99) Printed in U.S.A.
<PAGE>
TABLE OF CONTENTS
PAGE
Policy Specifications 3
Definitions 5
Death Benefit 7
Increases and Decreases in Face Amount 8
Premiums 8
Valuation Provisions 10
Account Value, Cash Value
and Cash Surrender Value 11
Transfers 12
Monthly Deduction Amount 12
Lapse and Policy Grace Period 13
Reinstatement 15
Policy Loans 15
Withdrawals 16
Surrenders 16
Payments By Us 17
Taxation of The Separate Account 17
The Contract 17
Ownership and Beneficiary 19
Termination and Maturity Date 20
Income Settlement Options 21
Any Riders follow page 22
LA-1154(99) Page 2 Printed in U.S.A.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
HARTFORD, CONNECTICUT 06104-2999
(A STOCK INSURANCE COMPANY)
(THE "COMPANY")
NATIONAL SERVICE CENTER ADDRESS:
P.O. BOX 59179
MINNEAPOLIS, MINNESOTA 55459
CASH SURRENDER VALUE PAYABLE ON THE SCHEDULED MATURITY DATE,
UNLESS EXTENDED BY ELECTION OF OWNER
DEATH PROCEEDS PAYABLE AT DEATH OF INSURED
ADJUSTABLE DEATH BENEFIT
PREMIUMS PAYABLE AS SHOWN ON PAGE 3
NON-PARTICIPATING
THE PORTIONS OF THE ACCOUNT VALUES PROVIDED BY THIS CONTRACT THAT ARE IN THE
SUB-ACCOUNTS ARE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT.
THEY ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. THE AMOUNT
OF THE DEATH BENEFIT MAY BE FIXED OR VARIABLE DEPENDING ON THE INVESTMENT
EXPERIENCE OF THAT SEPARATE ACCOUNT. THE NO LAPSE GUARANTEE IS SUBJECT TO
THE CONDITIONS DESCRIBED ON PAGE 14.
[LOGO]
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE POLICY
LA-1154(99) Printed in U.S.A.
<PAGE>
POLICY SPECIFICATIONS
- -------------------------------------------------------------------------------
BASE POLICY INFORMATION
- -------------------------------------------------------------------------------
POLICY: FLEXIBLE PREMIUM VARIABLE LIFE
POLICY NUMBER: VL00001
INSURED: JOHN DOE
ISSUE AGE/SEX: 35, MALE
INSURANCE CLASS: PREFERRED/NON-NICOTINE
OWNER: JOHN DOE
BENEFICIARY: JANE DOE
INITIAL PLANNED PREMIUM: $1,000.00
PAYMENT FREQUENCY: ANNUAL
INITIAL FACE AMOUNT: $100,000
DEATH BENEFIT OPTION: A (LEVEL OPTION)
DEATH BENEFIT OPTION C LIMIT: NOT APPLICABLE
NO LAPSE GUARANTEE PERIOD: JANUARY 1, 1999 - DECEMBER 31, 2008
MONTHLY NO LAPSE
GUARANTEE PREMIUM: $47.44
POLICY DATE: JANUARY 1, 1999
DATE OF ISSUE: JANUARY 1, 1999
SCHEDULED MATURITY DATE: JANUARY 1, 2064*
ANNUAL FIXED ACCOUNT
MINIMUM CREDITED RATE: 3.5%
SEPARATE ACCOUNT: [VARIABLE LIFE I]
INITIAL PREMIUM ALLOCATION: [HARTFORD MONEY MARKET FUND]
* IT IS POSSIBLE THAT COVERAGE WILL EXPIRE PRIOR TO THE SCHEDULED MATURITY
DATE SHOWN WHERE PREMIUMS AND INVESTMENT EXPERIENCE ARE INSUFFICIENT TO
CONTINUE COVERAGE TO SUCH DATE. COVERAGE MAY ALSO BE AFFECTED BY CHANGES IN
THE MONTHLY DEDUCTION AMOUNT.
LA-1154(99) Page 3 Printed in U.S.A.
<PAGE>
POLICY NUMBER: VL0000001
POLICY SPECIFICATIONS
- -------------------------------------------------------------------------------
ADDITIONAL BENEFITS AND RIDERS
- -------------------------------------------------------------------------------
TERM RIDER
DESIGNATED INSURED: MARY DOE
ISSUE AGE/SEX: 35/FEMALE
INSURANCE CLASS: PREFERRED/NON-NICOTINE
TERM INSURANCE AMOUNT: $50,000
FIRST YEAR MONTHLY PER $1,000 ISSUE CHARGE $12.50
FIRST YEAR MONTHLY TERM INSURANCE CHARGE: $1.64
DATE OF ISSUE: 01/01/1999
RIDER EFFECTIVE DATE: 01/01/1999
TERMINATION DATE: 01/01/2064
1154(3 cont'd) Page 3 (continued) Printed in U.S.A.
<PAGE>
POLICY NUMBER: VL0000001
POLICY SPECIFICATIONS
POLICY CHARGES
- -------------------------------------------------------------------------------
DEDUCTIONS FROM PREMIUM PAYMENTS
- -------------------------------------------------------------------------------
TYPE OF CHARGE
- --------------
PERCENT OF
MAXIMUM SALES CHARGES: PREMIUMS PAID
- ---------------------- -------------
POLICY YEARS
1-20 8.00%
21+ 6.00%
PREMIUM TAX CHARGE:
- -------------------
ALL POLICY YEARS [1.75%]*
* THE PREMIUM TAX PERCENTAGE RATE DEPENDS UPON THE RATE ASSESSED BY YOUR
STATE OR MUNICIPALITY OF RESIDENCE. IF YOUR STATE OR MUNICIPALITY OF
RESIDENCE CHANGES AND/OR IF YOUR RESIDENCE STATE OR MUNICIPALITY CHANGES ITS
PREMIUM TAX RATE, THE PREMIUM TAX RATE WILL CHANGE TO EQUAL THAT NEW RATE.
- -------------------------------------------------------------------------------
MAXIMUM DEDUCTIONS FROM ACCOUNT VALUE
- -------------------------------------------------------------------------------
TYPE OF POLICY CHARGE OR
CHARGE YEARS PERCENT OF VALUE
- ------ ----- ----------------
MONTHLY ADMINISTRATIVE ALL $10.00 PER MONTH
CHARGE
MORTALITY AND EXPENSE
RISK RATES
ACCUMULATED VALUE 1-10 0.0625% PER MONTH (0.75% PER
MORTALITY AND EXPENSE YEAR) OF THE ACCUMULATED
RISK RATE VALUE IN THE SUB-ACCOUNTS.
11+ 0.0417% PER MONTH (0.50% PER
YEAR) OF THE ACCUMULATED
VALUES IN THE SUB-ACCOUNTS.
FACE AMOUNT MORTALITY 1-10 0.1449 PER MONTH PER $1,000 OF
AND EXPENSE RISK RATE PER INITIAL FACE AMOUNT.
$1,000
11+ 0
FACE AMOUNT INCREASE FOR FEES APPLICABLE TO
FEE INCREASES, SEE PAGE 3C.
- -------------------------------------------------------------------------------
1154(3A) Page 3A Printed in U.S.A.
<PAGE>
POLICY NUMBER: VL0000001
POLICY SPECIFICATIONS
POLICY CHARGES
- -------------------------------------------------------------------------------
TRANSFER CHARGE
- -------------------------------------------------------------------------------
ALL POLICY YEARS $00.00 FOR THE FIRST TRANSFER IN ANY CALENDAR MONTH.
ALL POLICY YEARS $25.00 PER TRANSFER IN EXCESS OF 1 PER CALENDAR
MONTH.
- -------------------------------------------------------------------------------
SURRENDER CHARGES
- -------------------------------------------------------------------------------
POLICY SURRENDER POLICY SURRENDER
YEAR CHARGE YEAR CHARGE
1 825.00 6 300.00
2 788.00 7 225.00
3 750.00 8 150.00
4 450.00 9 75.00
5 375.00 10 0.00
SURRENDER CHARGES WILL BE REDUCED AS THE RESULT OF ANY PRIOR SURRENDER
CHARGES ASSESSED.
1154(3B) Page 3B Printed in U.S.A.
<PAGE>
POLICY NUMBER: SPECIMEN
POLICY SPECIFICATIONS
- -------------------------------------------------------------------------------
FACE AMOUNT INCREASE FEE
- -------------------------------------------------------------------------------
MONTHLY PER $1,000 FEE APPLICABLE
TO INCREASES IN FACE AMOUNT
THIS CHARGE IS EFFECTIVE ONLY FOR THE FIRST TWELVE MONTHS FOLLOWING THE
INCREASE IN FACE AMOUNT.
ATTAINED INCREASE ATTAINED INCREASE
AGE CHARGE AGE CHARGE
--- ------ --- ------
36 0.260000 61 0.470000
37 0.270000 62 0.480000
38 0.280000 63 0.480000
39 0.280000 64 0.490000
40 0.290000 65 0.500000
41 0.300000 66 0.500000
42 0.310000 67 0.500000
43 0.320000 68 0.500000
44 0.330000 69 0.500000
45 0.330000 70 0.500000
46 0.340000 71 0.500000
47 0.350000 72 0.500000
48 0.360000 73 0.500000
49 0.370000 74 0.500000
50 0.380000 75 0.500000
51 0.380000 76 0.500000
52 0.390000 77 0.500000
53 0.400000 78 0.500000
54 0.410000 79 0.500000
55 0.420000 80 0.500000
56 0.430000 81 0.500000
57 0.430000 82 0.500000
58 0.440000 83 0.500000
59 0.450000 84 0.500000
60 0.460000 85 0.500000
1154(3C) Page 3C Printed in U.S.A.
<PAGE>
POLICY NUMBER: VL0000001
POLICY SPECIFICATIONS
- -------------------------------------------------------------------------------
SCHEDULED FACE AMOUNT INCREASES
- -------------------------------------------------------------------------------
DATE OF INCREASE SCHEDULED INCREASE AMOUNT
---------------- -------------------------
JANUARY 1, 2000 $75,000
JANUARY 1, 2001 $75,000
JANUARY 1, 2002 $75,000
JANUARY 1, 2003 $75,000
- -------------------------------------------------------------------------------
1154(3D) Page 3D Printed in U.S.A.
<PAGE>
POLICY NUMBER: VL0000001
POLICY SPECIFICATIONS
- -------------------------------------------------------------------------------
SCHEDULED FACE AMOUNT INCREASES
- -------------------------------------------------------------------------------
NONE
1154(3D) Page 3D Printed in U.S.A.
<PAGE>
POLICY NUMBER: VL0000001
POLICY SPECIFICATIONS
- -------------------------------------------------------------------------------
TABLE OF MINIMUM DEATH BENEFIT PERCENTAGES
AND MONTHLY MAXIMUM COST OF INSURANCE RATES PER $1,000
- -------------------------------------------------------------------------------
MINIMUM MAXIMUM COST MINIMUM MAXIMUM COST
POLICY DEATH BENEFIT OF INSURANCE POLICY DEATH BENEFIT OF INSURANCE
YEAR PERCENTAGES RATE YEAR PERCENTAGES RATE
1 250.00 0.0003 34 117.00 0.7182
2 250.00 0.0007 35 116.00 0.8414
3 250.00 0.0013 36 115.00 0.9879
4 250.00 0.0020 37 113.00 1.1653
5 250.00 0.0028 38 111.00 1.3822
6 250.00 0.0038 39 109.00 1.6447
7 243.00 0.0051 40 107.00 1.9553
8 236.00 0.0066 41 105.00 2.3140
9 229.00 0.0083 42 105.00 2.7198
10 222.00 0.0103 43 105.00 3.1724
11 215.00 0.0127 44 105.00 3.6760
12 209.00 0.0155 45 105.00 4.2428
13 203.00 0.0188 46 105.00 4.8903
14 197.00 0.0226 47 105.00 5.6355
15 191.00 0.0271 48 105.00 6.4950
16 185.00 0.0324 49 105.00 7.4696
17 178.00 0.0388 50 105.00 8.5493
18 171.00 0.0466 51 105.00 9.7187
19 164.00 0.0559 52 105.00 10.9650
20 157.00 0.0669 53 105.00 12.2768
21 150.00 0.0799 54 105.00 13.6477
22 146.00 0.0949 55 105.00 15.0844
23 142.00 0.1120 56 105.00 16.5963
24 138.00 0.1316 57 104.00 18.2119
25 134.00 0.1548 58 103.00 19.9859
26 130.00 0.1823 59 102.00 22.0472
27 128.00 0.2156 60 101.00 24.6880
28 126.00 0.2565 61 100.00 28.4789
29 124.00 0.3068 62 100.00 34.5196
30 122.00 0.3671 63 100.00 44.7758
31 120.00 0.4378 64 100.00 61.9954
32 119.00 0.5194 65 100.00 83.3333
33 118.00 0.6123
THE MINIMUM DEATH BENEFIT PERCENTAGES ARE DETERMINED TO COMPLY WITH SECTION
7702 OF THE INTERNAL REVENUE CODE, OR YOUR REQUESTED PERCENTAGES, IF GREATER.
THE MAXIMUM COST OF INSURANCE RATES DO NOT EXCEED THE COST OF INSURANCE
RATES BASED ON THE 1980 COMMISSIONERS STANDARD ORDINARY, MALE OR FEMALE,
SMOKER OR NONSMOKER MORTALITY TABLE, AGE LAST BIRTHDAY. THE MAXIMUM COST OF
INSURANCE RATES HAVE BEEN ADJUSTED TO REFLECT ANY SPECIAL CLASS RATING.
1154(3E) Page 3E Printed in U.S.A.
<PAGE>
POLICY NUMBER: VL0000001
POLICY SPECIFICATIONS
- -------------------------------------------------------------------------------
TERM LIFE RIDER SPECIFICATIONS
- -------------------------------------------------------------------------------
DESIGNATED INSURED: MARY DOE
TABLE TERM LIFE RIDER
MONTHLY MAXIMUM RATES(PER $1,000 OF RIDER BENEFIT)
POLICY MAXIMUM POLICY MAXIMUM
YEAR RATE YEAR RATE
1 0.1442 34 2.4933
2 0.1517 35 2.7483
3 0.1617 36 3.0367
4 0.1725 37 3.3658
5 0.1842 38 3.7458
6 0.1983 39 4.1758
7 0.2133 40 4.6483
8 0.2292 41 5.1533
9 0.2467 42 5.6867
10 0.2658 43 6.2442
11 0.2875 44 6.8292
12 0.3108 45 7.4600
13 0.3358 46 8.1567
14 0.3633 47 8.9375
15 0.3933 48 9.8183
16 0.4275 49 10.7950
17 0.4667 50 11.8483
18 0.5117 51 12.9542
19 0.5633 52 14.0983
20 0.6208 53 15.2633
21 0.6850 54 16.4442
22 0.7550 55 17.6575
23 0.8292 56 18.9208
24 0.9117 57 20.2633
25 1.0042 58 21.7350
26 1.1075 59 23.4792
27 1.2225 60 25.8192
28 1.3550 61 29.3217
29 1.5050 62 35.0825
30 1.6717 63 45.0833
31 1.8542 64 62.0958
32 2.0517 65 83.3333
33 2.2633
THE MAXIMUM RATES DO NOT EXCEED THE COST OF INSURANCE RATES BASED ON THE 1980
COMMISSIONERS STANDARD ORDINARY MALE OR FEMALE SMOKER OR NONSMOKER MORTALITY
TABLE, AGE LAST BIRTHDAY. THE MAXIMUM COST OF INSURANCE RATES HAVE BEEN
ADJUSTED TO REFLECT ANY SPECIAL CLASS RATING.
1154(4) Page 4 Printed in U.S.A.
<PAGE>
DEFINITIONS The definitions in this section apply to the following words
and phrases whenever and wherever they appear in the Policy.
ACCOUNT VALUE: the total of all amounts in the Fixed Account,
Loan Account and Sub-Accounts.
ACCUMULATION UNIT: an accounting unit used to calculate the
value of a Sub-Account.
CASH SURRENDER VALUE: the Cash Value less all Indebtedness.
CASH VALUE: the Account Value less any applicable Surrender
Charges.
COMPANY, WE, US, OUR: the Company referred to on the first
page of the Policy.
CUMULATIVE NO LAPSE GUARANTEE PREMIUM: the premium required
to maintain the No Lapse Guarantee. On the Policy Date, the
Cumulative No Lapse Guarantee Premium is the Monthly No Lapse
Guarantee Premium shown on Page 3. On each Monthly Activity
Date thereafter, the Cumulative No Lapse Premium is: (a) the
Cumulative No Lapse Guarantee Premium on the previous Monthly
Activity Date; plus (b) the current Monthly No Lapse
Guarantee Premium.
DATE OF ISSUE: the date shown on Page 3 from which Suicide
and Incontestability provisions are measured. The date may
be different from the Policy Date.
DEATH BENEFIT: the amount used to calculate the Death
Proceeds. The Death Benefit on the Policy Date is determined
by the Death Benefit Option You select on Your application.
Thereafter, it may change in accordance with the terms of the
Death Benefit Option provision, the Minimum Death Benefit
provision and the No Lapse Guarantee provision.
DEATH BENEFIT OPTION: the Death Benefit Option in effect
determines how the Death Benefit is calculated. The three
Death Benefit Options provided are described in the Death
Benefit section.
DEATH PROCEEDS: the amount which We will pay on the death of
the Insured.
DOLLAR COST AVERAGING: systematic transfers from one account
to any other available account.
FACE AMOUNT: an amount We use to determine the Death Benefit.
On the Policy Date, the Face Amount equals the Initial Face
Amount shown on Page 3. Thereafter, it may change in
accordance with the terms of the Increases and Decreases in
Face Amount provision the Death Benefit Option Changes
provision and the Withdrawal provision.
FIXED ACCOUNT: part of the Company's General Account to which
all or a portion of the Account Value may be allocated.
FUNDS: the registered open-end management companies in which
assets of the Separate Account may be invested.
GENERAL ACCOUNT: all Company assets other than those
allocated to separate accounts.
1154(5/6) Page 5 Printed in U.S.A.
<PAGE>
DEFINITIONS IN WRITING: in a written form satisfactory to Us.
(CONTINUED)
INDEBTEDNESS: all loans taken on the Policy, plus any
interest due or accrued minus any loan repayments.
INTERNAL REVENUE CODE: Internal Revenue Code of 1986, as
amended.
ISSUE AGE: as of the Policy Date, an Insured's age on his/her
last birthday.
LOAN ACCOUNT: an account established for any amounts
transferred from the Fixed Account and Sub-Accounts as a
result of loans. The amounts in the Loan Account are
credited with interest and are not subject to the investment
experience of any Sub-Accounts.
MONTHLY ACTIVITY DATE: the Policy Date and the same date in
each succeeding month as the Policy Date. However, whenever
the Monthly Activity Date falls on a date other than a
Valuation Day, the Monthly Activity Date will be deemed to be
the next Valuation Day.
NET PREMIUM: the amount of premium credited to the Account
Value. It is the premium paid minus the deductions from
premium shown on Page 3A.
PLANNED PREMIUM: the amount that the Owner intends to pay.
The Initial Planned Premium is shown on Page 3.
POLICY ANNIVERSARY: an anniversary of the Policy Date.
POLICY DATE: the date shown on Page 3 from which Policy
Anniversaries and Policy Years are determined. This is the
date the Policy goes into effect.
POLICY YEARS: years as measured from the Policy Date.
PRO RATA BASIS: an allocation method based on the proportion
of the Account Value in the Fixed Account and each
Sub-Account.
SCHEDULED MATURITY DATE: the date, shown on Page 3, on which
the Policy will mature, in accordance with the Termination
and Maturity Date provision.
SEPARATE ACCOUNT: an account, as specified on Page 3, which
has been established by Us to separate the assets funding the
variable benefits, for the class of contracts to which the
Policy belongs, from the other assets of the Company.
SUB-ACCOUNTS: the subdivisions of the Separate Account.
SURRENDER CHARGE: a charge that may be assessed if You
surrender the Policy or You request a policy change that
results in a Face Amount decrease.
VALUATION DAY: the date on which a Sub-Account is valued.
This occurs everyday We are open and the New York Stock
Exchange is open for trading.
VALUATION PERIOD: the period of time between the close of
business on successive Valuation Days.
YOU, YOUR: the Owner of the Policy.
1154(5/6) Page 6 Printed in U.S.A.
<PAGE>
DEATH BENEFIT GENERAL
Upon receipt of due proof of the Insured's death, We will pay
the Death Proceeds to the Beneficiary.
DEATH PROCEEDS
Death Proceeds equal the Death Benefit described below less
Indebtedness and less any due and unpaid Monthly Deduction
Amounts occurring during a Policy Grace Period.
However, if the Insured dies after We receive a request In
Writing from You to surrender the Policy, the Cash Surrender
Value will be paid in lieu of the Death Proceeds.
The Death Benefit is the greater of:
(a) the Death Benefit provided by the Death Benefit Option
chosen; and
(b) the Minimum Death Benefit described below.
DEATH BENEFIT OPTIONS
You have three Death Benefit Options.
1. Under Option A (Level Option), the Death Benefit is the
current Face Amount.
2. Under Option B (Return of Account Value Option), the Death
Benefit is the current Face Amount, plus the Account Value on
the date We receive due proof of the Insured's death.
3. Under Option C (Return of Premium Option), the Death
Benefit is the lesser of: (a) the current Face Amount, plus
the sum of the premiums paid; or (b) the Death Benefit Option
C Limit shown on Page 3.
DEATH BENEFIT OPTION CHANGES
You may change Your Death Benefit Option, subject to the
conditions described here. You must notify Us In Writing of
the change. Such change will be effective on the Monthly
Activity Date following the date We receive the request.
You may change Option C (Return of Premium Option) or Option
B (Return of Account Value Option) to Option A (Level
Option). If You do, the Face Amount will become that amount
available as a Death Benefit immediately prior to the option
change.
You may change Option A (Level Option) to Option B (Return of
Account Value Option). If You do, the Face Amount will
become that amount available as a Death Benefit immediately
prior to the option change, reduced by the then current
Account Value. Any resulting decrease in the Face Amount may
be subject to a partial Surrender Charge as described in the
Decreases in Face Amount provision.
MINIMUM DEATH BENEFIT
We will automatically increase the Death Benefit so that it
will never be less than the Account Value multiplied by the
Minimum Death Benefit Percentage for the then current Policy
Year. The Table of Minimum Death Benefit Percentages is
shown on Page 3E.
This is to ensure that:
(a) the Policy continues to qualify as life insurance under
the Internal Revenue Code; or
(b) the Policy maintains the relationship between the Account
Value and the Death Benefit You selected on Your
application, if greater.
1154(7/8) Page 7 Printed in U.S.A.
<PAGE>
INCREASES AND GENERAL
DECREASES IN At any time after the first Policy Year, You may make a request
FACE AMOUNT In Writing to change the Face Amount. The minimum amount by
which the Face Amount can be increased or decreased is based
on Our rules then in effect.
We reserve the right to limit You to one increase or decrease
in any 12 month period.
SCHEDULED INCREASES IN FACE AMOUNT
We will increase the Face Amount automatically by the amounts
shown on Page 3D. These scheduled increases will continue
until You request to discontinue the increases or until You
request to decrease the Face Amount of Your Policy.
Decreases in the Face Amount as a result of a withdrawal will
not affect Your scheduled increases.
Scheduled increases in the Face Amount are not subject to the
Face Amount Increase Fee.
UNSCHEDULED INCREASES IN FACE AMOUNT
All requests to increase the Face Amount must be applied for
on a new application and accompanied by the Policy. All
requests will be subject to evidence of insurability
satisfactory to Us. Any increase approved by Us will be
effective on the Monthly Activity Date shown on the new
policy specifications page, provided that the Monthly
Deduction Amount for the first month after the effective date
of the increase is made. A Face Amount Increase Fee is
assessed on the first twelve Monthly activity dates beginning
on the effective date of each increase. The Face Amount
Increase Fee will not exceed those shown on Page 3C.
DECREASES IN FACE AMOUNT
A decrease in the Face Amount will be effective on the
Monthly Activity Date following the date We receive Your
request. The remaining Face Amount must not be less than Our
minimum rules then in effect. If during the Surrender Charge
Period, You decrease Your Face Amount to an amount lower than
it has ever been, a partial Surrender Charge will be assessed.
The Surrender Charge assessed will be:
(a) the Surrender Charge applicable to the then current
Policy Year, if any; multiplied by
(b) the percentage described below.
The percentage will be determined by:
(i) subtracting the new Face Amount from the lowest previous
Face Amount; and
(ii) dividing that difference by the lowest previous Face
Amount.
The Surrender Charge assessed will be deducted from Your
Account Value on the Monthly Activity Date on which the
decrease becomes effective. We will also reduce the
Surrender Charges applicable to future Policy Years and
provide You a revised schedule of Surrender Charges.
PREMIUMS GENERAL
No insurance is effective until We receive premiums
sufficient to cover the Monthly Deduction Amount on the
Policy Date. After the first premium has been paid,
subsequent premiums can be paid at any time.
1154(7/8) Page 8 Printed in U.S.A.
<PAGE>
PREMIUMS Checks must be made payable to the Company shown on the first
(CONTINUED) page of the Policy.
Checks may be sent to either:
(a) Us at the address shown on the premium notice; or
(b) Our authorized agent in exchange for a receipt signed by
Our President or Secretary and countersigned by such agent.
We will apply any amount received under the Policy as a
premium unless it is clearly marked otherwise. The premium
will be applied on the date We receive it at the address
shown on the premium notice.
PLANNED PREMIUM PAYMENTS
We will send You a premium notice for the Planned Premium
payment. The notices may be sent at 12, 6, or 3 month
intervals. The Initial Planned Premium payment and payment
frequency You selected are shown on Page 3. You may change
the Planned Premium payment shown on the premium notices
subject to Our premium limitations.
FLEXIBLE PREMIUMS
After the first premium has been paid, Your subsequent
premium payments are flexible. The actual amount and
frequency of payment will affect the Account Value and could
affect the amount and duration of insurance provided by the
Policy. You may pay additional premiums at any time prior to
the Scheduled Maturity Date subject to Our Premium
Limitations.
PREMIUM LIMITATIONS
You may pay premiums at any time prior to the Scheduled
Maturity Date subject to the following limitations:
(a) the minimum premium that We will accept is $50 or the
amount required to keep the Policy in force.
(b) if premiums are received which would cause the Policy to
fail to meet the definition of a life insurance contract in
accordance with the Internal Revenue Code, We reserve the
right to refund the excess premium payments. Such refunds
and interest thereon will be made within 60 days after the
end of a Policy Year.
(c) We reserve the right to require evidence of insurability
for any premium payment that results in an increase in the
Death Benefit greater than the amount of the premium.
(d) any premium received in excess of $1,000,000 is subject
to Our approval.
INITIAL PREMIUM ALLOCATION
The initial Net Premium and any additional Net Premiums
received by Us prior to the end of the Right to Examine
Policy Period will be allocated as shown on Page 3 on the
later of:
(a) the Policy Date; and
(b) the date We receive the premium.
The accumulated values of these amounts will then be
allocated to the Fixed Account and Sub-Accounts according to
the premium allocation You specified in the application on
the later of:
(a) the end of the Right to Examine Policy Period; or
(b) the date We receive the final requirement to put the
Policy in force.
1154(9/10) Page 9 Printed in U.S.A.
<PAGE>
PREMIUMS SUBSEQUENT PREMIUM ALLOCATIONS
(CONTINUED) You may change how Your premiums are allocated by notifying Us
In Writing. Subsequent Net Premiums will be allocated to the
Fixed Account and Sub-Accounts according to Your most recent
instructions as long as:
(a) the total number of active Sub-Accounts does not exceed 9;
and
(b) the percentage You allocate to each Sub-Account is in whole
percentages.
If We receive a premium with a premium allocation instruction
that does not comply with the above rules, We will allocate
the Net Premium on a Pro Rata Basis.
VALUATION SUB-ACCOUNT ACCUMULATION UNITS
PROVISIONS Amounts allocated to each Sub-Account increase the number of
Accumulation Units in each Sub-Account. The number of
Accumulation Units added to each Sub-Account is determined by
dividing the amount allocated to the Sub-Account by the
dollar value of one Accumulation Unit for such Sub-Account.
Amounts taken from each Sub-Account decrease the number of
Accumulation Units in each Sub-Account. The number of
Accumulation Units subtracted from each Sub-Account is
determined by dividing the amount taken from the Sub-Account
by the dollar value of one Accumulation Unit for such
Sub-Account.
The number of Your Accumulation Units will not be affected by
any subsequent change in the value of the units. The
Accumulation Unit Values in each Sub-Account may increase or
decrease daily as described below.
SUB-ACCOUNT ACCUMULATION UNIT VALUE
The Accumulation Unit Value for each Sub-Account will vary to
reflect the investment experience of the applicable Fund and
will be determined on each Valuation Day by multiplying the
Accumulation Unit Value of the particular Sub-Account on the
preceding Valuation Day by a Net Investment Factor for that
Sub-Account for the Valuation Period then ended. The Net
Investment Factor for each of the Sub-Accounts is equal to
the net asset value per share of the corresponding Fund at
the end of the Valuation Period (plus the per share amount of
any dividend or capital gain distributions paid by that Fund
in the Valuation Period then ended) divided by the net asset
value per share of the corresponding Fund at the beginning of
the Valuation Period.
EMERGENCY PROCEDURE
If the New York Stock Exchange is closed (except for holidays
or weekends) or trading is restricted due to an existing
emergency as defined by the Securities and Exchange
Commission so that We cannot value the Sub-Accounts, We may
postpone all transactions which require valuation of the
Sub-Accounts until valuation is possible. Any provision of
the Policy which specifies a Valuation Day will be superseded
by the emergency procedure.
FIXED ACCOUNT
We will credit interest to amounts in the Fixed Account on a
monthly basis at rates We determine. The Annual Fixed
Account Minimum Credited Rate is shown on Page 3. The
interest credited will reflect the timing of amounts added to
or withdrawn from the Fixed Account.
1154(9/10) Page 10 Printed in U.S.A.
<PAGE>
ACCOUNT VALUE, Account Value
CASH VALUE Your Account Value on the Policy Date equals the initial Net
AND CASH Premium less the Monthly Deduction Amount for the first policy
SURRENDER VALUE month.
On each subsequent Monthly Activity Date, Your Account Value
equals:
(a) the sum of Your Accumulated Values in the Fixed Account
and Sub-Accounts; plus
(b) the value of Your Loan Account, if any; minus,
(c) the appropriate Monthly Deduction Amount.
On each Valuation Day (other than a Monthly Activity Date),
Your Account Value equals:
(a) the sum of Your Accumulated Values in the Fixed Account
and Sub-Accounts; plus
(b) the value of Your Loan Account, if any.
ACCUMULATED VALUE - FIXED ACCOUNT
Your Accumulated Value in the Fixed Account equals:
(a) the Net Premiums allocated to it; plus
(b) amounts transferred to it from the Sub-Accounts or the Loan
Account; plus
(c) interest credited to it; minus
(d) amounts transferred out of it to the Sub-Accounts or the
Loan Account; minus
(e) any transfer charges or Surrender Charges that have been
taken from it; minus
(f) any Monthly Deduction Amounts taken from it; minus
(g) any withdrawals taken from it.
ACCUMULATED VALUE - SUB-ACCOUNTS
Your Accumulated Value in any Sub-Account equals:
(a) the number of Your Accumulation Units in that Sub-Account on
the Valuation Day; multiplied by
(b) that Sub-Account's Accumulation Unit Value on the Valuation
Day.
The number of Accumulation Units in any Sub-Account is
increased when:
(a) Net Premiums are allocated to it; or
(b) amounts are transferred to it from other Sub-Accounts, the
Fixed Account or the Loan Account.
The number of Accumulation Units in any Sub-Account is
decreased when:
(a) amounts are transferred out of it to other Sub-Accounts,
the Fixed Account or the Loan Account; or
(b) any transfer charges or Surrender Charges have been taken
from it; or
(c) any Monthly Deduction Amounts are taken from it; or
(d) any withdrawals are taken from it.
CASH VALUE
Your Cash Value is equal to the Account Value less any
applicable Surrender Charges. The Surrender Charges and the
Policy Years during which they will be applied are shown on
Page 3B.
CASH SURRENDER VALUE
Your Cash Surrender Value is equal to Your Cash Value minus
the Indebtedness, if any.
1154(11/12) Page 11 Printed in U.S.A.
<PAGE>
TRANSFERS AMOUNT AND FREQUENCY OF TRANSFERS
Upon request and as long as the Policy is in effect, You may
transfer amounts among the Fixed Account and Sub-Accounts.
We reserve the right to limit the size of transfers and
remaining balances, and to limit the number and frequency of
transfers.
DOLLAR COST AVERAGING
From time to time, We may offer and You may enroll in a
Dollar Cost Averaging program. Prior to enrollment, You may
obtain information on the available programs from Us.
You may terminate participation in the program at any time by
calling or writing Us. In such an event, any non-transferred
balances will be allocated to the other accounts according to
Your instructions.
RESTRICTIONS ON TRANSFERS
Transfers from the Fixed Account (other than those allowed
under a Dollar Cost Averaging program) are subject to the
following:
(a) the transfer must occur during the 30 day period
following each Policy Anniversary; and
(b) the maximum amount transferred in any Policy Year will be
the greater of $1,000 or 25% of the Accumulated Value in the
Fixed Account on the date of transfer.
TRANSFER CHARGE
After a transfer has occurred, the Transfer Charge, as
specified on Page 3B, if any, will be deducted on a Pro Rata
Basis.
MONTHLY GENERAL
DEDUCTION On each Monthly Activity Date, We will deduct an amount from
AMOUNT Your Account Value to pay for the benefits provided by the
Policy. This amount is called the Monthly Deduction Amount
and equals:
(a) the Cost of Insurance; plus
(b) the Monthly Administrative Charge; plus
(c) the Mortality and Expense Risk Charge; plus
(d) the Face Amount Increase Fee, if any; plus
(e) the charges for additional benefits provided by rider, if
any.
The Monthly Deduction Amount will be taken on a Pro Rata
Basis from the Fixed Account and Sub-Accounts on each Monthly
Activity Date.
COST OF INSURANCE
The Cost of Insurance for any Monthly Activity Date is equal to:
(a) the Cost of Insurance Rate per $1,000; multiplied by
(b) the amount at risk; divided by
(c) $1,000.
On any Monthly Activity Date, the amount at risk equals the
Death Benefit less the Account Value on that date prior to
assessing the Monthly Deduction Amount.
1154(11/12) Page 12 Printed in U.S.A.
<PAGE>
MONTHLY COST OF INSURANCE RATE
DEDUCTION The Cost of Insurance Rate is based on the then current Policy
AMOUNT Year as well as the Initial Face Amount, sex, Issue Age, and
(CONTINUED) insurance class of the Insured shown on Page 3.
The Cost of Insurance Rates will not exceed those in the
Table of Monthly Maximum Cost of Insurance Rates shown on
Page 3C.
We can use Cost of Insurance Rates that are lower than the
Monthly Maximum Cost of Insurance Rates shown on Page 3E.
Rates will be determined on each Policy Anniversary based on
Our future expectations of such factors as mortality,
expenses, interest, persistency and taxes. Any change We
make will be on a uniform basis for Insureds of the same
Issue Age, sex, insurance class, Initial Face Amount, and
whose coverage has been in force for the same length of time.
Based on Our administrative rules in effect and upon
providing satisfactory evidence to Us, You may change the
insurance class to a more favorable class. Future Cost of
Insurance charges will be based on the more favorable class
and all other contract terms and provisions will remain as
established at issue. No change in insurance class or cost
will occur on account of deterioration of the Insured's
health.
MONTHLY ADMINISTRATIVE CHARGE
The Monthly Administrative Charge will not exceed the amounts
shown on Page 3C.
MORTALITY AND EXPENSE RISK CHARGE
The Mortality and Expense Risk Charge for any Monthly Activity
Date is equal to the sum of (a) and (b) where
(a) equals:
(i) the monthly Accumulated Value Mortality and Expense
Risk Rate; multiplied by
(ii) the sum of Your Accumulated Values in the Sub-Accounts
on the Monthly Activity Date, prior to assessing the
Monthly Deduction Amount.
and
(b) equals:
(i) the monthly Mortality and Expense Risk Rate per
$1,000; multiplied by
(ii) the lower of the Initial Face Amount or the current
Face Amount; divided by
(iii) $1,000.
Each month the Mortality and Expense Risk Rates will not
exceed those shown on Page 3A.
FACE AMOUNT INCREASE FEE
The Face Amount Increase Fee will not exceed the amount shown
on Page 3C.
LAPSE AND POLICY GRACE PERIOD
POLICY GRACE During the first three Policy Years, the Policy will go into
PERIOD default on any Monthly Activity Date on which the Account Value
less Indebtedness is not sufficient to cover the Monthly
Deduction Amount.
During the fourth Policy Year and thereafter, the Policy will
go into default on any Monthly Activity Date if the Cash
Surrender Value is not sufficient to cover the Monthly
Deduction Amount.
If the Policy goes into default, We will send You a lapse
notice warning You that the Policy is in danger of
terminating. That lapse notice will tell You the minimum
premium required to keep the Policy from terminating. This
minimum premium equals the amount to pay three Monthly
Deduction Amounts as of the day the Policy Grace Period
began. That notice will be mailed both to You on the first
day the Policy goes into default, at your last known address,
and to any assignee of record.
1154(13/14) Page 13 Printed in U.S.A.
<PAGE>
LAPSE AND We will keep the Policy inforce for the 61 day period
POLICY GRACE following the date Your policy goes into default. We call that
PERIOD period the Policy Grace Period. However, if We have not
(CONTINUED) received the required premiums (specified in Your lapse notice)
by the end of the Policy Grace Period, the Policy will
terminate unless the No Lapse Guarantee is in effect (see the
No Lapse Guarantee provision which follows).
If the Insured dies during the Policy Grace Period, We will
pay the Death Proceeds.
NO LAPSE GUARANTEE
The Policy will remain in force at the end of the Policy
Grace Period as long as the No Lapse Guarantee is available,
as described below.
This policy provides a No Lapse Guarantee subject to the
conditions described below to Insureds with an Issue Age of
79 or below as long as:
(a) the Policy is in the No Lapse Guarantee Period; and
(b) on each Monthly Activity Date during that period, the
cumulative premiums paid into the Policy, less Indebtedness
and less withdrawals from the Policy, equal or exceed the
Cumulative No Lapse Guarantee Premium.
The No Lapse Guarantee Period is shown on Page 3.
If the No Lapse Guarantee is available and You fail to pay
the required premium as defined in Your lapse notice by the
end of the Policy Grace Period, the No Lapse Guarantee will
then go into effect. The Policy will remain in force,
however:
(a) the Death Benefit Option becomes Level;
(b) all riders will terminate.
(c) any future scheduled increases in the Face Amount will be
canceled.
The No Lapse Guarantee will remain in effect on each
subsequent Monthly Activity Date provided:
(a) the Policy remains in default; and
(b) the No Lapse Guarantee is available.
While the No Lapse Guarantee is in effect, We guarantee that
Your Account Value will never be less than zero.
If during the No Lapse Guarantee Period, there is any
increase or decrease in the Face Amount, a new monthly No
Lapse Guarantee Premium will be calculated. We will send You
a notice of the new Monthly No Lapse Guarantee Premium, which
will be used in calculating the Cumulative No Lapse Guarantee
Premium in subsequent months.
NO LAPSE GUARANTEE GRACE PERIOD
If, on each Monthly Activity Date during the No Lapse
Guarantee Period, the cumulative premiums paid into the
Policy, less Indebtedness and less withdrawals from the
Policy, do not equal or exceed the Cumulative No Lapse
Guarantee Premium on that date, a No Lapse Guarantee Grace
Period of 61 days will begin. We will mail the Owner and any
assignee a notice. That notice will warn You that You are in
danger of losing the No Lapse Guarantee and will tell You the
amount of premium You need to pay to continue the No Lapse
Guarantee.
The No Lapse Guarantee will be removed from the Policy if the
required premium is not paid by the end of the No Lapse
Guarantee Grace Period. You will receive a written
notification of the change and the No Lapse Guarantee will
never again be available or in effect on the Policy.
1154(13/14) Page 14 Printed in U.S.A.
<PAGE>
REINSTATEMENT Unless the Policy has been surrendered for its Cash Surrender
Value, the Policy may be reinstated prior to the Scheduled
Maturity Date provided:
(a) You make Your request In Writing within five years from
the Termination Date;
(b) satisfactory evidence of insurability is submitted;
(c) any Indebtedness at the time of termination must be
repaid or carried over to the reinstated policy; and
(d) You pay sufficient premium to:
(i) cover all Monthly Deduction Amounts that are due and
unpaid during the Policy Grace Period; and
(ii) keep the Policy in force for 3 months after the date of
reinstatement.
The Account Value on the reinstatement date will equal:
(a) the Cash Value at the time of termination; plus
(b) Net Premiums attributable to premiums paid at the time of
reinstatement; minus
(c) the Monthly Deduction Amounts that were due and unpaid
during the Policy Grace Period; plus
(d) the Surrender Charge at the time of reinstatement.
The Surrender Charge will be based on the duration from the
original Policy Date as though the Policy had never lapsed.
POLICY LOANS GENERAL
At any time while the Policy is in force, You may borrow
against the Policy by assigning it as sole security to Us.
We may defer granting a loan, except to pay premiums to Us,
for the period permitted by law but not more than six months.
LOAN AMOUNTS
Any new loan taken together with any existing Indebtedness
may not exceed the Cash Value on the date We grant a loan.
The minimum loan amount that We will allow is $500.
Unless you specify otherwise, all loan amounts will be
transferred from the Fixed Account and the Sub-Accounts to
the Loan Account on a Pro Rata Basis.
If total Indebtedness equals or exceeds the Cash Value on any
Monthly Activity Date, the Policy will then go into default.
See the Lapse and Policy Grace Period provision for details.
CREDITED INTEREST
Any amounts in the Loan Account will be credited with
interest at a rate equal to the Annual Fixed Account Minimum
Credited Rate shown on Page 3.
PREFERRED INDEBTEDNESS
If, any time after the 10th Policy Anniversary, the Account
Value exceeds the total of all premiums paid since issue, a
portion of Your Indebtedness may qualify as preferred.
Preferred Indebtedness is charged a lower interest rate than
the non-preferred Indebtedness, if any. (Refer to the
Interest Charged on Indebtedness provision for details.) The
maximum amount of Preferred Indebtedness is the amount by
which the Account Value exceeds the total premiums paid and
is determined on each Monthly Activity Date.
1154(15/16) Page 15 Printed in U.S.A.
<PAGE>
POLICY LOANS LOAN REPAYMENTS
(CONTINUED) All or part of a loan may be repaid at any time that:
(a) the Policy is in force; and
(b) the Insured is alive.
However, each repayment must be at least the lesser of $50 or
the Indebtedness and clearly identified In Writing as a loan
repayment.
The amount of a loan repayment will be deducted from the Loan
Account and will be allocated among the Fixed Account and
Sub-Accounts in the same percentage as premiums are allocated.
INTEREST CHARGED ON INDEBTEDNESS
The table below shows the interest rates We will charge on
Your Indebtedness.
---------------------------------------------------------------
DURING POLICY PORTION OF INTEREST RATE CHARGED
YEARS INDEBTEDNESS EQUALS THE FIXED
ACCOUNT MINIMUM
CREDITED RATE PLUS:
---------------------------------------------------------------
1-10 All 2%
---------------------------------------------------------------
11 and later Preferred 0%
Non-Preferred 1%
---------------------------------------------------------------
Because the interest charged on Indebtedness may exceed the
rate credited to the Loan Account, the Indebtedness may grow
faster than the Loan Account. If this happens, any
difference between the value of the Loan Account and the
Indebtedness will be transferred on each Monthly Activity
Date from the Fixed Account and Sub-Accounts to the Loan
Account on a Pro Rata Basis.
WITHDRAWALS GENERAL
You may request a withdrawal In Writing. The minimum
withdrawal allowed is $500. The maximum withdrawal is the
Cash Surrender Value less $1,000. A charge of up to $10 may
be assessed for each withdrawal. One withdrawal per calendar
month is allowed. Unless specified otherwise the withdrawal
will be deducted on a Pro Rata Basis.
If the Death Benefit Option then in effect is Option A (Level
Option) or Option C (Return of Premium Option), the Face
Amount will be reduced by the amount equal to the reduction
in the Account Value resulting from the withdrawal. If the
Death Benefit Option then in effect is Option B (Return of
Account Value), the Face Amount will not be reduced.
Any withdrawal that causes the Face Amount to fall below the
lowest previous Face Amount will be subject to a partial
Surrender Charge. Refer to the Decreases in Face Amount
provision for an explanation of the applicable partial
Surrender Charge.
SURRENDERS GENERAL
While the Policy is in force, You may surrender the Policy to
Us. The Policy, and additional benefits provided by rider,
are then canceled as of the day We receive Your request In
Writing or the date You request the surrender, whichever is
later. We will then pay You the Cash Surrender Value as of
that date.
1154(15/16) Page 16 Printed in U.S.A.
<PAGE>
PAYMENTS GENERAL
BY US We will pay Death Proceeds, Cash Surrender Values, withdrawals
and loan amounts attributable to the Sub-Accounts within 7
days after We receive all the information needed to process
the payment unless:
(a) the New York Stock Exchange is closed on other than
customary weekend and holiday closings or trading on the New
York Stock Exchange is restricted as determined by the
Securities and Exchange Commission (SEC); or
(b) an emergency exists, as determined by the SEC, as a
result of which disposal of securities is not reasonably
practicable to determine the value of the Sub-Accounts; or
(c) the SEC, by order, permits postponement for the
protection of policy owners.
DEFERRAL OF PAYMENTS FROM THE FIXED ACCOUNT
We may defer payment of any Cash Surrender Values,
withdrawals and loan amounts which are not attributable to
the Sub-Accounts for up to six months from the date of the
request. If We defer payment for more than 30 days, We will
pay interest at the Annual Fixed Account Minimum Credited
Rate.
TAXATION OF GENERAL
THE SEPARATE We do not expect to incur any federal, state or local income
ACCOUNT tax on the earnings or realized capital gains attributable to
the Separate Account. Based upon these expectations, no
charge is being made to the Separate Account for federal,
state or local income taxes. If We incur income taxes
attributable to the Separate Account or determine that such
taxes will be incurred, We may assess a charge for taxes
against the Policy in the future.
THE CONTRACT ENTIRE CONTRACT
The Policy, the attached copy of the initial application, any
applications for reinstatement, all subsequent applications
to change the Policy, any endorsements or riders and all
additional policy information sections added to the Policy
are the entire contract. The contract is made in
consideration of the application and the payment of the
initial premium. We will not use any statement to cancel the
Policy or to defend a claim under it, unless that statement
is contained in an attached written application. All
statements in the application will, in the absence of fraud
(as determined by a court of competent jurisdiction), be
deemed representations and not warranties.
INTERPRETATION OF POLICY TERMS AND CONDITIONS
We have full discretion and authority to determine
eligibility for benefits and to construe and interpret all
terms and provisions of the Policy.
CONTRACT MODIFICATION
The only way this contract may be modified is by a written
agreement signed by Our President, or one of Our Vice
Presidents, Secretaries or Assistant Secretaries.
FUND MODIFICATION
We reserve the right, subject to any applicable law, to make
certain changes, including the right to add, eliminate or
substitute any investment options offered under the Policy.
NON-PARTICIPATION
The Policy is non-participating. It does not share in Our
surplus earnings, so You will receive no policy dividends
under it.
1154(17/18) Page 17 Printed in U.S.A.
<PAGE>
THE CONTRACT MISSTATEMENT OF AGE AND/OR SEX
(CONTINUED) If on the date of death:
(a) the Issue Age of the Insured is understated; or
(b) the sex of the Insured is incorrectly stated such that it
resulted in lower Costs of Insurance,
the Death Benefit will be reduced to the Death Benefit that
would have been provided by the last Cost of Insurance charge
at the correct Issue Age and/or sex.
If on the date of death:
(a) the Issue Age of the Insured is overstated; or
(b) the sex of the Insured is incorrectly stated such that it
resulted in higher Costs of Insurance,
the Death Benefit will be adjusted by the return of all
excess Costs of Insurance prior to the date of the Insured's
death.
SUICIDE
If, within 2 years from the Date of Issue, the Insured dies
by suicide, while sane or insane, Our liability will be
limited to the premiums paid less Indebtedness and less any
withdrawals.
If, within 2 years from the effective date of any increase in
the Face Amount for which evidence of insurability was
obtained, the Insured dies by suicide, while sane or insane,
Our liability with respect to such increase, will be limited
to the Cost of Insurance for the increase.
INCONTESTABILITY
We cannot contest the Policy after it has been in force,
during the Insured's lifetime, for 2 years from its Date of
Issue, except for non-payment of premium.
Any increase in the Face Amount for which evidence of
insurability was obtained, will be incontestable only after
the increase has been in force, during the Insured's
lifetime, for 2 years from the effective date of the
increase.
The Policy may not be contested for more than 2 years after
the reinstatement date. Any contest We make after the Policy
is reinstated will be limited to the material
misrepresentations in the evidence of insurability provided
to Us in the request for reinstatement. However, the
provision will not affect Our right to contest any statement
in the original application or a different reinstatement
request which was made during the Insured's lifetime from the
Date of Issue of the Policy or a subsequent reinstatement
date.
APPEALING DENIAL OF CLAIM
On any denied claim, You or Your representative may appeal to
the Company for a full and fair review. You may:
(a) request a review upon written application within 60 days
of receipt of a claim denial;
(b) review pertinent documents; and
(c) submit issues and comments In Writing.
SEPARATE ACCOUNTS
We will have exclusive and absolute ownership and control of
the assets of Our Separate Accounts. The assets of a Fund
will be available to cover the liabilities of Our General
Account only to the extent that those assets exceed the
liabilities of that Separate Account. The assets of a Fund
will be valued on each Valuation Day. Our determination of
the value of an Accumulation Unit by the method described in
the Policy will be conclusive.
1154(17/18) Page 18 Printed in U.S.A.
<PAGE>
THE CONTRACT CHANGE IN THE OPERATION OF THE SEPARATE ACCOUNT
(CONTINUED) At Our election and subject to any necessary vote by persons
having the right to give instructions on the voting of Fund
shares held by the Sub-Accounts, the Separate Account may be
operated as a management company under the Investment Company
Act of 1940 or any form permitted by law, may be deregistered
under the Investment Company Act of 1940 in the event
registration is no longer required, or may be combined with
one or more Separate Accounts.
VOTING RIGHTS
We will notify You of any Fund shareholder's meetings at
which the shares held for Your Sub-Account may be voted. We
will also send proxy materials and instructions for You to
vote the shares held for Your Sub-Account. We will arrange
for the handling and tallying of proxies received from the
Owners. We will vote the Fund shares held by Us in
accordance with the instructions received from the Owners.
You may attend any meeting, where shares held for Your
benefit may be voted.
In the event that You give no instructions or leave the
manner of voting discretionary, We will vote such shares of
the appropriate Fund in the same proportion as shares of that
Fund for which instructions have been received. Also, We
will vote the Fund shares in this proportionate manner which
are held by Us for Our own account.
ANNUAL REPORT
We will send You a report at least once each Policy Year
showing:
(a) the current Account Value, Cash Surrender Value and Face
Amount;
(b) the premiums paid, Monthly Deduction Amounts and loans
since the last report;
(c) the amount of any Indebtedness; and
(d) any other information required by the Insurance
Department of the state where the Policy was delivered.
OWNERSHIP AND CHANGE OF OWNER OR BENEFICIARY
BENEFICIARY The Owner and Beneficiary will be those named in the application
until You change them. To change the Owner or Beneficiary,
notify Us In Writing while the Insured is alive. After We
receive written notice, the change will be effective as of
the date You signed such notice, whether or not of the
Insured is living when We receive it. However, the change
will be subject to any payment We made or actions We may have
taken before We received the request.
ASSIGNMENT
You may assign the Policy. Until You notify Us In Writing,
no assignment will be effective against Us. We are not
responsible for the validity of any assignment.
OWNER'S RIGHTS
While the Insured is alive and no Beneficiary is irrevocably
named, You may:
(a) exercise all the rights and options that the Policy
provides or that We permit;
(b) assign the Policy; and
(c) agree with Us to any change to the Policy.
1154(19/20) Page 19 Printed in U.S.A.
<PAGE>
OWNERSHIP AND NO NAMED BENEFICIARY
BENEFICIARY If no named Beneficiary survives the Insured, then, unless the
(CONTINUED) Policy provides otherwise:
(a) You will be the Beneficiary; or
(b) if You are the Insured, Your estate will be the Beneficiary.
TERMINATION AND TERMINATION
MATURITY DATE The Policy will terminate upon the earliest of the following
events:
(a) the Scheduled Maturity Date of the Policy unless You
request to continue the Policy after such date as described
below; or
(b) the surrender of the Policy; or
(c) the end of the Policy Grace Period during which premiums
sufficient for the required deductions are not paid,
provided the No Lapse Guarantee is not available; or
(d) the end of the No Lapse Guarantee Period, provided the
No Lapse Guarantee is available and in effect; or
(e) the end of the No Lapse Guarantee Grace Period during
which premiums sufficient to maintain the No Lapse Guarantee
are not paid; provided the No Lapse Guarantee is available
and in effect; or
(f) the date We receive notification In Writing of the death
of the Insured. In this event, Your Death Benefit will not
be affected by any Monthly Deduction Amounts taken after the
date of the Insured's death and before We receive due proof
of death.
SCHEDULED MATURITY DATE
The Scheduled Maturity Date is the last date on which You may
elect to pay premium. Unless You elect to continue the Policy
beyond this date, the Policy will terminate and any Cash
Surrender Value will be paid to You.
If elected, the Policy may continue in force after the
Scheduled Maturity Date subject to the following conditions:
(a) the Policy must be in force on the Scheduled Maturity
Date;
(b) the Owner including any assignee of record must agree In
Writing to this continuation.
If any of the above conditions are not met, the Policy, if
still in force, will terminate on the Scheduled Maturity Date.
After the Scheduled Maturity Date:
(a) the Death Benefit will be reduced to the Account Value;
(b) the Account Value, if any will continue to be valued as
described in the Account Value, Cash Value and Cash
Surrender Value provision;
(c) any loans that are in effect on the Scheduled Maturity
Date will continue to accrue interest and become part of any
Indebtedness;
(d) No future Monthly Deduction Amounts will be deducted from
Your Account Value;
(e) No further premiums will be accepted.
All additional benefits provided by rider will deem to have
terminated at the Scheduled Maturity Date.
1154(19/20) Page 20 Printed in U.S.A.
<PAGE>
INCOME AVAILABILITY
SETTLEMENT All or parts of the proceeds of the Policy may, instead of being
OPTIONS paid in one sum, be left with Us under any one or a combination
of the following options, subject to Our minimum amount
requirements on the date of election.
We will pay interest of at least 3% per year (or higher, if
required by state law) on the Death Proceeds from the date of
the Insured's death to the date payment is made or an Income
Settlement Option is elected. These proceeds are then no
longer subject to the investment experience of a Separate
Account.
If any payee is a corporation, partnership, association,
assignee, or fiduciary, an option may be chosen only with
Our consent. Option 4 is not available to any payee whose
age exceeds 90.
DESCRIPTION OF TABLES
The options shown below and on the next page are based on
interest at a guaranteed rate of 3% per year. Payments under
Option 4 are based on mortality according to the 1983a
Individual Annuity Mortality Table, with ages set back one
year.
EXCESS INTEREST
We may pay or credit excess interest of such amount and in
such manner as We determine.
DEATH OF PAYEE
If the payee dies while receiving payments under one of the
options below, We will pay the following:
(a) Any principal and accrued interest remaining unpaid under
Option 1 or 2.
(b) The value of remaining unpaid guaranteed payments, if
any, under Option 3 or 4, commuted using interest of 3% per
year.
Any such amount will be paid in one sum to the payee's estate.
OTHER OPTIONS
To convert the monthly payments shown in the tables for
Options 3 and 4 to quarterly, semi-annual or annual payments,
multiply by the following factors:
PAYMENT INTERVAL FACTOR
Quarterly 2.99
Semi-annual 5.96
Annual 11.84
Other options may be arranged with Our consent.
OPTION 1 - INTEREST INCOME
Payments of interest at the rate We declare, but not less
than 3% per year, on the amount left under this option.
OPTION 2 - INCOME OF FIXED AMOUNT
Equal payments of the amount chosen until the amount left
under this option, with interest of not less than 3% per
year, is exhausted. The final payment will be for the
balance only.
1154(21/22) Page 21 Printed in U.S.A.
<PAGE>
INCOME OPTION 3 - INCOME FOR FIXED PERIOD
SETTLEMENT Payments, determined from the table below, are guaranteed for
OPTIONS the number of years chosen. The first payment will be due on
(CONTINUED) the date proceeds are applied under this option.
Monthly Payments Monthly Payments
Number per $1,000 of Number per $1,000 of
of Years Proceeds of Years Proceeds
1 $84.47 10 $9.61
2 42.86 15 6.87
3 28.99 20 5.51
4 22.06 25 4.71
5 17.91 30 4.18
OPTION 4 - LIFE INCOME
Payments, determined from the table shown below for the
option elected, are based on the payee's sex and age nearest
birthday on the day the first payment becomes due. The first
payment will be due on the date proceeds are applied under
this option. The Life Income available are:
(a) Payments only while the payee is alive.
(b) Payment guaranteed for 10 years; then continuing while
the payee is alive.
Monthly Payments per $1,000 of Proceeds
Option 4A Option 4B Option 4A Option 4B
Payee's Life Only 10 Yrs. Certain Payee's Life Only 10 Yrs. Certain
Age Male Female Male Female Age Male Female Male Female
20 $3.02 $2.92 $3.01 $2.92 68 $6.51 $5.68 $6.12 $5.50
25 3.12 3.00 3.12 3.00 69 6.74 5.85 6.28 5.65
30 3.25 3.10 3.24 3.10 70 6.98 6.04 6.44 5.80
35 3.41 3.23 3.40 3.23 71 7.24 6.25 6.61 5.97
40 3.61 3.39 3.60 3.38 72 7.51 6.47 6.79 6.14
45 3.87 3.59 3.85 3.58 73 7.81 6.72 6.96 6.32
50 4.19 3.85 4.15 3.83 74 8.12 6.98 7.14 6.50
51 4.27 3.91 4.22 3.89 75 8.46 7.26 7.32 6.69
52 4.35 3.97 4.30 3.95 76 8.83 7.57 7.50 6.89
53 4.43 4.03 4.37 4.01 77 9.22 7.90 7.68 7.09
54 4.51 4.10 4.45 4.08 78 9.64 8.27 7.85 7.29
55 4.61 4.18 4.54 4.15 79 10.09 8.66 8.02 7.50
56 4.70 4.25 4.63 4.22 80 10.57 9.08 8.18 7.70
57 4.80 4.34 4.72 4.30 81 11.08 9.54 8.33 7.89
58 4.91 4.42 4.82 4.38 82 11.63 10.04 8.48 8.08
59 5.03 4.52 4.92 4.47 83 12.22 10.59 8.62 8.27
60 5.15 4.62 5.03 4.56 84 12.84 11.18 8.75 8.44
61 5.28 4.72 5.15 4.66 85 13.50 11.81 8.86 8.60
62 5.43 4.83 5.27 4.76 86 14.19 12.50 8.97 8.74
63 5.58 4.95 5.39 4.87 87 14.93 13.24 9.07 8.87
64 5.74 5.08 5.53 4.98 88 15.71 14.04 9.16 8.99
65 5.91 5.21 5.67 5.10 89 16.53 14.89 9.24 9.09
66 6.10 5.36 5.81 5.23 90 17.40 15.79 9.31 9.18
67 6.30 5.51 5.96 5.36
1154(21/22) Page 22 Printed in U.S.A.
<PAGE>
[LOGO]
APPLICATION
FOR
LIFE INSURANCE
Form HL-14622 Printed in U.S.A.
<PAGE>
AGENT: THIS NOTICE MUST BE REMOVED AND LEFT WITH THE PROPOSED INSURED(S)
HARTFORD LIFE INSURANCE COMPANY
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NATIONAL SERVICE CENTER ADDRESS:
P.O. BOX 59179
MINNEAPOLIS, MN 55459
INVESTIGATIVE CONSUMER REPORT PRE-NOTIFICATION
Federal and state laws require notification that, in connection with your
application, we may request an investigative consumer report. In addition,
such a report may be requested subsequently to update our records if you
apply for additional coverage. You may request to be interviewed in
connection with the preparation of the investigative consumer report. Within
5 business days of receiving your written request, we will inform you whether
or not an investigative consumer report was requested and, if such a report
was requested, the address and telephone number of the investigative agency
to which the request was made. By contacting the local office and providing
proper identification, you may inspect or, for the appropriate fee, receive a
copy of such report. The investigative agency may retain information they
gather and disclose it at a later date to other persons.
Typically the report will contain information as to character, general
reputation, personal characteristics and mode of living, which information is
obtained through an interview with you or an adult member of your family,
employers or business associates, financial sources, friends, neighbors or
others with whom you are acquainted. The information will consist, when
applicable, of a confirmation of your identity, age, residence, marital
status, and past and present employment including occupational duties,
financial information, driving record, sports and recreational activities,
health history, use of alcohol or drugs, if any, living conditions and type
of community.
MEDICAL INFORMATION BUREAU (MIB) PRE-NOTIFICATION
Information regarding your insurability will be treated as confidential.
Hartford Life Insurance Company or Hartford Life and Annuity Insurance
Company or its reinsurer(s) may, however, make a brief report thereon to the
Medical Information Bureau, a non-profit membership organization of life
insurance companies, which operates an information exchange on behalf of its
members. If you apply to another Bureau member company for life or health
insurance coverage, or a claim for benefits is submitted to such a company,
the Bureau, upon request, will supply such a company, with the information in
its file.
Upon receipt of a request from you, the Bureau will arrange disclosure of any
information it may have in your file. If you question the accuracy of
information in the bureau's file, you may contact the Bureau and seek a
correction in accordance with the procedures set forth in the Federal Fair
Credit Reporting Act. The address of the Bureau's information office is Post
Office Box 105, Essex Station, Boston, Massachusetts 02112, telephone number
(617) 426-3660.
Hartford Life Insurance Company or Hartford Life and Annuity Insurance
Company or its reinsurer(s) may also release information in their files to
other life insurance companies to whom you may apply for life or health
insurance, or to whom a claim for benefits may be submitted.
PERSONAL HISTORY INTERVIEWS
To provide you, our client, with the best possible service, we may follow-up
your application for insurance with what we call a personal history
interview. This is a phone call placed from our underwriting office. Its
purpose is to make sure that our application information is accurate and
complete.
We strive to make you the best possible offer for your premium dollar. The
personal history interview gives us the opportunity to gather the information
necessary for fair and prompt processing of your application.
Our interviewers are trained to conduct their calls in friendly, professional
manner. The nature of the information discussed is always treated as personal
and confidential.
Form HL-14622 Printed in U.S.A.
<PAGE>
/ / HARTFORD LIFE INSURANCE COMPANY
/ / HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
PART A [LOGO]
<TABLE>
<CAPTION>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
1. PROPOSED INSURED INFORMATION - COMPLETE FOR ALL APPLICATIONS.
- ---------------------------------------------------------------------------------------------------------------------------------
a. Name of Proposed Insured b. Age c. Sex f. Date of Birth h. Social Sec. No.
------------ ----------- --------------------------- -------------------------
d. Height e. Weight g. Place of Birth
- ----------------------------------------------
i. Residence Address -------------------------- -------------------------------------------------------
j. How Long? k. Former Residence l. How Long?
- ----------------------------------------------------------------------------------------------------------------------------------
m. City, State Zip n. City, State Zip
- ----------------------------------------------------------------------------------------------------------------------------------
o. Occupation/Duties p. How Long? q. Employer's Name and Address
- ----------------------------------------------------------------------------------------------------------------------------------
2. PROPOSED JOINT INSURED/OTHER COVERED INSURED INFORMATION - COMPLETE IF APPLICABLE.
- ----------------------------------------------------------------------------------------------------------------------------------
a. Name of Proposed Insured b. Age c. Sex f. Date of Birth h. Social Sec. No.
------------ ----------- --------------------------- -------------------------
d. Height e. Weight g. Place of Birth
- ----------------------------------------------
i. Residence Address (if different from above) -------------------------- -------------------------------------------------------
j. How Long? k. Former Residence l. How Long?
- ----------------------------------------------------------------------------------------------------------------------------------
m. City, State Zip n. City, State Zip
- ----------------------------------------------------------------------------------------------------------------------------------
o. Occupation/Duties p. How Long? q. Employer's Name and Address
- ----------------------------------------------------------------------------------------------------------------------------------
3. OWNER/BENEFICIARY INFORMATION - COMPLETE FOR ALL APPLICATIONS.
- ----------------------------------------------------------------------------------------------------------------------------------
a. Policy Owner Name and Address b. Soc. Sec. No. or Tax ID c. Relationship to Proposed Insured(s)
------------------------------------------------------------------------
d. Owner is:
/ / Individual / /Partnership / /Corporation / /Trustee
- ----------------------------------------------------------------------------------------------------------------------------------
e. Primary Beneficiary(s). Name(s) / Address / Soc. Sec # f. Relationship to Proposed Insured(s) g. % of Death Benefit
- ----------------------------------------------------------------------------------------------------------------------------------
h. Contingent Beneficiary(s). Name(s) / Address / Soc. Sec # i. Relationship to Proposed Insured(s)
- ----------------------------------------------------------------------------------------------------------------------------------
4. LIFE INSURANCE PLAN INFORMATION - COMPLETE FOR ALL APPLICATIONS.
- ----------------------------------------------------------------------------------------------------------------------------------
a. Name of Basic Policy b. Face Amount of Policy (Indicate amount of Basic h. Send Billing/Correspondence to Proposed Insured's
Face Amount and Supplemental Face Amount, if / / Residence / / Business
applicable) / / Policy Owner / / Other:_________________
- ----------------------------------------------------------------------------------------------------------------------------------
c. Death Benefit Options (Choose One) i. Additional Benefits:
/ / Option A (Level) / / Option C / / Waiver of Premium / / Accidental Death Benefit
(Return of Premium) / / ____% Increase in Face Amount for ______ Year(s)
/ / Option B / / Other (Last Survivor Interest Sensitive Life Plans Only)
(Return of Account Value) / / Increase in Coverage Option Rider
- ---------------------------------------------------------------- (Individual Variable Life Plans Only)
d. Automatic Premium Loan / / Yes / / No / / Additional Insurance Benefit
- ---------------------------------------------------------------- $_________ Premium for __________ Year(s).
e. Is this Insurance Part of a If "YES", do you work / / Other:__________ / / See Attached Sheet
Qualified Retirement Plan? on a full time basis?
/ / Yes / / No / / Yes / / No --------------------------------------------------------------
- ---------------------------------------------------------------- j. Issued Policy if Offer on an Requested Policy
f. Is this Insurance Part of a If "YES", If you are an Special Class Basis? / / Yes / / No Date:______________
Corporate Owned Life employee, have you been actively --------------------------------------------------------------
Insurance Plan? at work at least 30 hours per k. Special Requests (Attach Additional sheet if necessary.)
/ / Yes / / No week for the past 90 days
doing your usual duties at your
normal place of work?
/ / Yes / / No
- ------------------------------------------------------------------
g. Premiums to be Paid:
/ / Annually / /Semi-annually / /Quarterly / / COM
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
APPLICATION CONTINUED
Form HL-14622 Printed in U.S.A.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
PART B PROPOSED
ANSWER THE FOLLOWING QUESTIONS AND GIVE DETAILS PROPOSED JOINT/OTHER
OF "YES" ANSWERS UNDER # /7./ BELOW INSURED COVERED
INSURED
---------------------
5. YES NO YES NO
- ----------------------------------------------------------------------------------------------------------------------------------
a. DURING THE PAST 5 YEARS HAVE YOU CONSULTED A PHYSICIAN OR
VISITED A CLINIC OR HOSPITAL AS A PATIENT? / / / / / / / /
- ----------------------------------------------------------------------------------------------------------------------------------
b. HAVE YOU had insurance rejected or offered with an extra premium? / / / / / / / /
- ----------------------------------------------------------------------------------------------------------------------------------
c. DO YOU plan to travel or reside outside the United States? (If yes, state when, where, how long.) / / / / / / / /
- ----------------------------------------------------------------------------------------------------------------------------------
d. HAVE YOU smoked cigarettes in the past 12 months? / / / / / / / /
- ----------------------------------------------------------------------------------------------------------------------------------
e. HAVE YOU used any other form of tobacco or nicotine replacement therapy in the past 12
months (for example - cigars, pipes, chewing tobacco, nicorette gum, nicotine patch or
nasal spray)? (If yes, specify substance(s).) / / / / / / / /
- ----------------------------------------------------------------------------------------------------------------------------------
f. HAVE YOU even been arrested for drug possession, or had or been advised to have treatment for
alcohol or drug abuse? / / / / / / / /
- ----------------------------------------------------------------------------------------------------------------------------------
g. WILL YOU replace or change life insurance or annuities in any company if this policy is issued?
IF "YES", GIVE DETAILS. / / / / / / / /
- ----------------------------------------------------------------------------------------------------------------------------------
6. HAVE YOU EVER HAD OR BEEN TREATED FOR:
- ----------------------------------------------------------------------------------------------------------------------------------
a. Diabetes, heart attack, angina, chest pain, stroke, heart murmur, high blood pressure, or
other heart, blood or circulatory disorder? / / / / / / / /
- ----------------------------------------------------------------------------------------------------------------------------------
b. Emotional or nervous disorder, epilepsy, convulsions, brain or spinal cord disorder,
cancer or tumor? / / / / / / / /
- ----------------------------------------------------------------------------------------------------------------------------------
c. Any disease of the kidney, liver, lung, lymph glands, muscles, bones, stomach or
intestines, AIDS, AIDS Related Complex or any immune deficiency disorder? / / / / / / / /
- ----------------------------------------------------------------------------------------------------------------------------------
Question NAME OF
Number PERSON 7. GIVE COMPLETE DETAILS INCLUDING NAMES AND ADDRESSES OF DOCTORS AND HOSPITALS.
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
8. DO YOU HAVE LIFE INSURANCE IN FORCE OR APPLIED FOR? GIVE COMPANY, AMOUNT, PLAN, ISSUE YEARS, OWNERSHIP AND IF WAIVER OF
PREMIUM OR ACCIDENTAL DEATH BENEFITS ARE INCLUDED.
- ----------------------------------------------------------------------------------------------------------------------------------
Proposed Insured YES / / NO / / Proposed Joint Insured YES / / NO / /
- ---------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
9. VARIABLE LIFE PLAN INFORMATION - COMPLETE IF APPLICABLE.
- ----------------------------------------------------------------------------------------------------------------------------------
a. Dollar Cost Averaging Option / /YES / / No h. NET PREMIUM ALLOCATION. SELECT UP TO 9 SUBACCOUNTS.
(Available on an Annual Mode Only) (0 OR MINIMUM OF 10%. MUST TOTAL 100%.
- --------------------------------------------------------------------- IF USING SUPPLEMENT, DISREGARD THIS SECTION.
b. Guarantee Period
- --------------------------------------------------------------------- FUND NAME % ALLOCATED
SUITABILITY YES NO
- --------------------------------------------------------------------- ---------------------------- ---------------%
c. Do you believe that this policy will meet your insurance
need and financial objectives? ---------------------------- ---------------%
- ---------------------------------------------------------------------
d. DO YOU UNDERSTAND THAT THE AMOUNT AND DURATION OF ---------------------------- ---------------%
THE DEATH BENEFIT MAY VARY, DEPENDING ON THE INVESTMENT
PERFORMANCE OF THE VARIABLE ACCOUNTS IN THE SEPARATE ACCOUNT? ---------------------------- ---------------%
- ---------------------------------------------------------------------
e. DO YOU UNDERSTAND THAT THE POLICY VALUES MAY INCREASE OR DECREASE, ---------------------------- ---------------%
DEPENDING ON THE INVESTMENT PERFORMANCE OF THE VARIABLE
ACCOUNTS IN THE SEPARATE ACCOUNT? ---------------------------- ---------------%
- ---------------------------------------------------------------------
f. Did you receive the separate account prospectus for the ---------------------------- ---------------%
policy applied for? FIXED ACCOUNT
- --------------------------------------------------------------------- ---------------------------- ---------------%
g. Date of Separate Account Prospectus: ___________________________
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
APPLICATION CONTINUED
Form HL-14622 Printed in U.S.A.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
PART C PROPOSED
HAZARDOUS ACTIVITIES OF PROPOSED INSURED(S) - COMPLETE FOR ALL APPLICATIONS. PROPOSED JOINT/OTHER
PLEASE ANSWER ALL QUESTIONS "YES" OR "NO." EXPLAIN "YES" ANSWERS IN THE SPACE PROVIDED. INSURED COVERED
INSURED
---------------------
10. YES NO YES NO
- ----------------------------------------------------------------------------------------------------------------------------------
a. Within the past 3 years, have you been convicted of, pleaded guilty or no contest to:
(I). three or more moving violations and/or accidents? / / / / / / / /
(II). driving under the influence of alcohol and/or drugs? / / / / / / / /
IF "YES", EXPLAIN:
- ----------------------------------------------------------------------------------------------------------------------------------
b. Have you ever been convicted of a felony or misdemeanor other than a minor traffic violation? / / / / / / / /
IF "YES", EXPLAIN:
- ----------------------------------------------------------------------------------------------------------------------------------
c. Are you a member, or do you intend to become a member, or the armed forces, including the Reserves? / / / / / / / /
IF "YES", EXPLAIN:
- ----------------------------------------------------------------------------------------------------------------------------------
d. Except for vacation trips, do you intend to travel outside the U.S. or Canada within the next two
years? / / / / / / / /
IF "YES", EXPLAIN:
- ----------------------------------------------------------------------------------------------------------------------------------
e. Do you participate in aeronautics (hang-gliding, soaring, sky-diving, ballooning, etc.)? / / / / / / / /
IF "YES", EXPLAIN:
- ----------------------------------------------------------------------------------------------------------
Jumps/Flights per year Total # of jumps/Flights Name of Club Date Last Jump/Flight
- ----------------------------------------------------------------------------------------------------------------------------------
f. Do you race, test or stunt drive automobiles, motorcycles, motor boats, or jet powered vehicles,
or do you use or race snow mobiles, dirt bikes, dune buggies, etc.? IF "YES", COMPLETE BELOW: / / / / / / / /
- ----------------------------------------------------------------------------------------------------------
Type of vehicle Type of terrain/race/course # of Races or Uses/year Date of Last Race or use
- ----------------------------------------------------------------------------------------------------------------------------------
g. Do you participate in skin or scuba diving? / / / / / / / /
IF "YES", COMPLETE BELOW:
- ----------------------------------------------------------------------------------------------------------
Depth of Dives # of Times per year Name of Club Date of Last Dive
- ----------------------------------------------------------------------------------------------------------------------------------
h. Do you participate in any other hazardous sports or activities (mountain climbing, competitive skiing,
rodeos, etc.? IF "YES", EXPLAIN: / / / / / / / /
- ----------------------------------------------------------------------------------------------------------------------------------
i. Have you ever engaged in or do you plan to engage in any aviation activity other than as a fare-paying
passenger? IF "YES", COMPLETE THE REMAINDER OF THIS SECTION / / / / / / / /
- ----------------------------------------------------------------------------------------------------------------------------------
j. What types and kinds of plans do you fly or intend to fly?
- ----------------------------------------------------------------------------------------------------------------------------------
PERSON FLIGHT STATUS PILOT-MILITARY OR RESERVE PILOT-CIVILIAN CREW MEMBER
- ----------------------------------------------------------------------------------------------------------------------------------
HOURS FLOWN
PAST 12 MOS.
- ----------------------------------------------------------------------------------------------------------------------------------
HOURS FLOWN
1-2 YRS. AGO
- ----------------------------------------------------------------------------------------------------------------------------------
HOURS NEXT
12 MONTHS
- ----------------------------------------------------------------------------------------------------------------------------------
Total Solo Hours Total Hours Flown as a Pilot Date of Last Flight
- ----------------------------------------------------------------------------------------------------------------------------------
k. Type of Pilot's Certificate(s) or Rating(s)? (check as appropriate)
/ / Student / / Private / / Commercial / / ATR / / IFR
Year Issued: __________________________
- ----------------------------------------------------------------------------------------------------------------------------------
l. If aviation avocation does not qualify for aviation coverage without additional premium, issue policy as follows::
/ / Aviation Coverage with Extra Premium / / Aviation Exclusion Rider
- ----------------------------------------------------------------------------------------------------------------------------------
REMARKS - IDENTIFY QUESTION, PROPOSED INSURED, AND ADDITIONAL DETAILS
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
APPLICATION CONTINUED
Form HL-14622 Printed in U.S.A.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
PART D
11. AGREEMENT AND ACKNOWLEDGEMENT - COMPLETE FOR ALL APPLICATIONS.
- ----------------------------------------------------------------------------------------------------------------------------------
Each of the undersigned declares that: the statements and answers contained in this application are complete and true to the best
of each person's knowledge and belief; and each agrees that coverage can take effect only if the Proposed Insured(s) is/are alive
and all answers material to the risk are still true and complete when the policy is delivered and paid for. I/We agree that the
statements and answers contained in this application shall form the basis of any contract for life insurance that may be issued;
and, a copy of this application shall be attached to and made part of the policy. I/We have received a copy of the Company
Compliance Illustration for the life insurance applied for herein.
I/We agree that only an Officer of the Company may alter the terms of the application, the Conditional Receipt or the policy, or
waive any of the Company's rights or requirements.
Signed at this day of 19 .
------------------------------------------------ ----------- ----------------- ------------
x
-------------------------------------------------------------- ------------------------------------------------------------
Signature of PROPOSED INSURED SIGNATURE OF PROPOSED JOINT INSURED / OTHER COVERED INSURED
(Parent or Guardian if under 15 years of Age) (PARENT OR GUARDIAN IF UNDER 15 YEARS OF AGE)
$ x
-------------------------------------------------------------- ------------------------------------------------------------
Amount Received with Application Signature of APPLICANT/OWNER if other than
Proposed Insured(s)
------------------------------------------------------------
Signature of Licensed Agent
- ----------------------------------------------------------------------------------------------------------------------------------
12. AUTHORIZATION TO OBTAIN, RELEASE, AND DISCLOSE INFORMATION - COMPLETE FOR ALL APPLICATIONS.
- ----------------------------------------------------------------------------------------------------------------------------------
I authorize Hartford Life Insurance Company or Hartford Life and Annuity Insurance Company (Hartford) to complete a Personal
History Interview and to obtain an Investigative Consumer Report on me or on my children. I authorize the release of any medical
or non-medical information that relates to: (1) past or current health conditions including illnesses; sicknesses; diseases;
disabilities; disorders; accidents; or injuries; (2) confinements in any hospital; medical facility; or medical clinic; (3)
outpatient treatment in any hospital; hospital emergency room; medical facility; or clinic; (4) treatment for alcohol abuse; drug
abuse; or mental health protected by Federal Law.
This information may be released by any person or organization that has records or knowledge of my health or to the health or my
children, if they are applying for insurance. This includes any doctor; medical professional; health practitioner; therapist;
counselor; hospital; clinic; insurer; reinsurer; consumer reporting firm; employer or the Medical Information Bureau (MIB). This
information may be released for the purpose of determining eligibility for insurance under a new or an existing policy.
This information may be released to Hartford or to their legal representative. I understand that the MIB will release records of
information only to Hartford.
Hartford may release the information in their file(s) to: their reinsurers; the MIB; any other insurance company to whom I or my
children apply for life or health insurance; or other persons and/or organizations performing business or legal services in
connection with this application or a claim. Except as specified, this information will not be given, sold or transferred to any
person without obtaining my consent. This consent must be written and state the use and the need for such information.
I understand that if I request details about any of the medical information gathered about me or my children which relates to
this application; (a) the medical information; and, (b) the identify of the medical care institution or the medical person who
provided the information; shall be released to me or to a licensed medical person of my choice.
Upon written request, I will receive details of the method I must use to exercise my right to access, correct and amend any
information gathered about me or my children which relates to this application. I may revoke, upon written request, the right to
use this consent form except to the extent that action has already been taken. A photocopy of this consent form is as valid as the
original. When requested in writing, I will receive a copy of this form. This consent form will expire: two years from the date
of the contract; or, one year from the date below, if no contract has yet been issued.
Dated Signed X
---------------------------------------- ---------------------------------------------------------------------
PROPOSED INSURED (Parent or Guardian if under 15 years of Age)
Dated Signed
---------------------------------------- ----------------------------------------------------------------------
PROPOSED JOINT INSURED / OTHER COVERED INSURED
(PARENT OR GUARDIAN IF UNDER 15 YEARS OF AGE)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
APPLICATION CONTINUED
Form HL-14622 Printed in U.S.A.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
PART E AGENT INFORMATION - COMPLETE FOR ALL APPLICATIONS.
- ----------------------------------------------------------------------------------------------------------------------------------
1. How we do you know the Proposed Insured(s)?
- ----------------------------------------------------------------------------------------------------------------------------------
2. Do you know knowledge or reason to believe that replacement of existing life insurance or annuities is involved in this
transaction?
- ----------------------------------------------------------------------------------------------------------------------------------
3. Personal History Interview
Most convenient time to call / / Morning / / Afternoon
Place to call / / Home / / Business / / Phone number _______________________
May we interview the Spouse of an adult member of the family: / / Yes / / No
Show any unusual name pronunciation phonetically.______________________________________
- ----------------------------------------------------------------------------------------------------------------------------------
4. Estimated annual income, net worth and marital status of Proposed Insured(s)?
- ----------------------------------------------------------------------------------------------------------------------------------
5. Give the purpose of this insurance and the nature of the Owner/Applicant's insurance interest.
- ----------------------------------------------------------------------------------------------------------------------------------
6. Policy Information: (COMPLIANCE ILLUSTRATION MUST ACCOMPANY EACH APPLICATION.)
Annual Scheduled Premium: First Year $________________________ Subsequent Years $ _______________________________
- ----------------------------------------------------------------------------------------------------------------------------------
7. This Application is submitted on the following basis: / / Medically / / Non-medically
/ / Other
Has a medical examination been arranged? / / Yes / / No
- ----------------------------------------------------------------------------------------------------------------------------------
REMARKS - IDENTIFY QUESTION AND GIVE DETAILS
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
IF THE APPLICATION PACKAGE IS NOT BEING SUBMITTED THROUGH YOUR BROKER/DEALER, CONTACT THAT BROKER/DEALER FOR THEIR SUITABILITY
REQUIREMENTS. WE SUGGEST YOU SEND YOUR BROKER/DEALER A COPY OF PART A (PAGE 1), SECTION 9, (PAGE 2) (SUITABILITY AND FUND
SELECTION) AND PART E (AGENT INFORMATION) OF THE APPLICATION, ALONG WITH A COPY OF THE ILLUSTRATION USED IN THE FINAL SALE.
- ----------------------------------------------------------------------------------------------------------------------------------
PRODUCER CERTIFICATION - COMPLETE FOR ALL APPLICATIONS.
- ----------------------------------------------------------------------------------------------------------------------------------
1. I CERTIFY that I asked each question separately; the answers were recorded as given; and, they are complete and accurate
to the best of my knowledge and belief.
2. I CERTIFY that I am duly licensed in the state in which this application was signed.
3. I have given the Proposed Insured(s) the appropriate Disclosure documents.
4. For Variable Life Business, I CERTIFY that I am a NASD Registered Representative.
5. I have complied with state and federal laws on disclosure, cost comparison and replacement.
6. I have reviewed the purchase of this insurance policy as to suitability.
X
-----------------------------------------------------------------------------------------------------------------------
Signature(s) of Writing Agent(s). Writing Agent's Code Number
- ----------------------------------------------------------------------------------------------------------------------------------
PAY COMMISSIONS AS INDICATED BELOW (COMMISSION SPLITS ARE AT WRITING AGENT LEVEL SPLIT
- ----------------------------------------------------------------------------------------------------------------------------------
AGENT NAME AGENT CODE SOCIAL SEC./TAX I.D. 1st Yr. Renewal
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Sales Office Use Only: F.O. # __________ Staff Code _________ Advanced Und. Code ___________ Marketing Code ___________
- ----------------------------------------------------------------------------------------------------------------------------------
WHEN CONDITIONAL RECEIPT CAN BE USED
- ----------------------------------------------------------------------------------------------------------------------------------
An advance payment may be accepted and the Conditional Receipt may be given ONLY under the following conditions:
1. The advance premium is at least equal to the amount of THE FULL FIRST PREMIUM FOR THE MODE SELECTED.
2. The answers in Part B, questions 5F AND 6 ARE "NO".
3. The Proposed Insured(s) appear to be STANDARD RISKS in all respects.
4. The Conditional receipt is given and the advance premium is collected ONLY AT THE TIME THE APPLICATION IS TAKEN and signed.
5. The application does not contain a request for POSTDATING.
6. The AGENT DOES NOT MAKE AN ADVANCE PAYMENT for the Proposed Insured or Applicant. If this is done, loss of the agent's
license could result.
7. The proposed Insured(s) is/are 75 YEARS OLD OR LESS, age last birthday.
8. The amount of insurance applied for does not exceed $500,000.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
AGENT'S REPORT
<PAGE>
CONDITIONAL RECEIPT
VALID FOR USE WITH LIFE INSURANCE ON PROPOSED INSURED(S) AGE 75 OR LESS
WITH THE AMOUNTS OF INSURANCE APPLIED FOR NOT IN EXCESS OF $500,000.
If any person proposed for coverage has answered "Yes" to question 5f or 6,
NO PAYMENT may be accepted with the application.
1. NO COVERAGE WILL BECOME EFFECTIVE PRIOR TO DELIVERY OF THE POLICY APPLIED
FOR UNLESS AND UNTIL ALL THE CONDITIONS OF THIS RECEIPT HAVE BEEN FULFILLED
EXACTLY:
(a) The amount of payment taken with the application must be at least equal
to the amount of the full premium for the mode of payment selected in
the application and for the amount of insurance which may become
effective prior to delivery of the policy.
(b) All medical examinations, test, x-rays and electrocardiograms required
by the Company must be completed and received at its National Service
Center in Minneapolis, Minnesota within 60 days from the date of
completion of Part 1 of this application.
(c) As of the effective date, as defined below, each person proposed for
insurance in this application must be a risk insurable in accordance
with the Company's rules, limits, and standards for the plan and the
amount applied for without any modification either as to plan, amount,
riders and/or the rate of premium paid.
(d) As of the effective date, the state of health and all factors affecting
the insurability of each and every person proposed for insurance must
be as stated in the application.
2. Subject to the conditions of paragraph 1, insurance, as provided by the
terms and conditions of the policy applied for and in use on the effective
date, but for an amount not exceeding that specified in paragraph 3, will
become effective as of the effective date. "Effective date", as used
herein, is the later of: (a) the date of completion of Part 1 of the
application, or (b) the date of completion of all medial examinations,
tests, x-rays and electrocardiograms required by the Company. The
effective date is determined separately for each person proposed for
coverage.
3. The total amount of insurance which may become effective on any person
proposed for insurance shall not exceed $500,000 of life insurance,
including any accidental death insurance benefits.
4. If one or more of the conditions of paragraph 1 have not been fulfilled
exactly, there shall be no liability on the part of the Company except
to return the applicable payment in exchange for this Receipt.
5. NO AGENT OR ANY OTHER PERSON IS AUTHORIZED BY THE COMPANY TO WAIVE OR
MODIFY IN ANY WAY ANY OF THE PROVISIONS OF THIS CONDITIONAL RECEIPT.
If all the conditions are not fulfilled exactly, the insurance will take
effect when the policy is delivered to the owner stated in the application;
but only if at the time of such delivery there has been no change in
insurability as represented in the application.
All premium checks must be made payable to the Insurance Company. Do not make
checks payable to the agent or leave the payee blank.
Received a check totaling $ __________ from _______________ in connection
with the application for life insurance totaling $ _____________, bearing
the same date as this Conditional Receipt.
Date at _______________ this ________ day of _______________, 19 ___________.
------------------------------------------------
Signature of Agent
I acknowledge possession of this receipt and I certify that I have read it and
the agreement in the application. The terms and conditions of this receipt,
to which I agree, and the agreement in this application have been explained
to me fully by the agent and I understand them.
X
------------------------------------------------
Signature of Applicant
THIS RECEIPT IS TO BE DETACHED AND GIVEN TO THE APPLICANT AT THE TIME OF
APPLICATION IF ANY MONEY IS TAKEN
HO COPY
<PAGE>
CONDITIONAL RECEIPT
VALID FOR USE WITH LIFE INSURANCE ON PROPOSED INSURED(S) AGE 75 OR LESS
WITH THE AMOUNTS OF INSURANCE APPLIED FOR NOT IN EXCESS OF $500,000.
If any person proposed for coverage has answered "Yes" to question 5f or 6, NO
PAYMENT may be accepted with the application.
1. NO COVERAGE WILL BECOME EFFECTIVE PRIOR TO DELIVERY OF THE POLICY APPLIED
FOR UNLESS AND UNTIL ALL THE CONDITIONS OF THIS RECEIPT HAVE BEEN FULFILLED
EXACTLY:
(a) The amount of payment taken with the application must be at least equal
to the amount of the full premium for the mode of payment selected in
the application and for the amount of insurance which may become
effective prior to delivery of the policy.
(b) All medical examinations, test, x-rays and electrocardiograms required
by the Company must be completed and received at its National Service
Center in Minneapolis, Minnesota within 60 days from the date of
completion of Part 1 of this application.
(c) As of the effective date, as defined below, each person proposed for
insurance in this application must be a risk insurable in accordance
with the Company's rules, limits, and standards for the plan and the
amount applied for without any modification either as to plan, amount,
riders and/or the rate of premium paid.
(d) As of the effective date, the state of health and all factors affecting
the insurability of each and every person proposed for insurance must
be as stated in the application.
2. Subject to the conditions of paragraph 1, insurance, as provided by the
terms and conditions of the policy applied for and in use on the effective
date, but for an amount not exceeding that specified in paragraph 3, will
become effective as of the effective date. "Effective date", as used
herein, is the later of: (a) the date of completion of Part 1 of the
application, or (b) the date of completion of all medial examinations,
tests, x-rays and electrocardiograms required by the Company. The
effective date is determined separately for each person proposed for
coverage.
3. The total amount of insurance which may become effective on any person
proposed for insurance shall not exceed $500,000 of life insurance,
including any accidental death insurance benefits.
4. If one or more of the conditions of paragraph 1 have not been fulfilled
exactly, there shall be no liability on the part of the Company except
to return the applicable payment in exchange for this Receipt.
5. NO AGENT OR ANY OTHER PERSON IS AUTHORIZED BY THE COMPANY TO WAIVE OR
MODIFY IN ANY WAY ANY OF THE PROVISIONS OF THIS CONDITIONAL RECEIPT.
If all the conditions are not fulfilled exactly, the insurance will take
effect when the policy is delivered to the owner stated in the application;
but only if at the time of such delivery there has been no change in
insurability as represented in the application.
All premium checks must be made payable to the Insurance Company. Do not make
checks payable to the agent or leave the payee blank.
Received a check totaling $ __________ from _______________ in connection
with the application for life insurance totaling $ _____________, bearing
the same date as this Conditional Receipt.
Date at _______________ this ________ day of _______________, 19 ___________.
------------------------------------------------
Signature of Agent
I acknowledge possession of this receipt and I certify that I have read it and
the agreement in the application. The terms and conditions of this receipt,
to which I agree, and the agreement in this application have been explained
to me fully by the agent and I understand them.
X
------------------------------------------------
Signature of Applicant
THIS RECEIPT IS TO BE DETACHED AND GIVEN TO THE APPLICANT AT THE TIME OF
APPLICATION IF ANY MONEY IS TAKEN
PROPOSED INSURED'S/APPLICANT'S COPY
<PAGE>
AUTOMATIC YEARLY RENEWABLE TERM
REINSURANCE AGREEMENT
between
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
HARTFORD LIFE INSURANCE COMPANY
and
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
and
[REINSURER]
Effective: [DATE]
<PAGE>
ARTICLES
I. Parties to the Agreement . . . . . . . . . . . . . 1
II. Reinsurance Coverage . . . . . . . . . . . . . . . 1
III. Liability. . . . . . . . . . . . . . . . . . . . . 3
IV. Reinsurance Premiums . . . . . . . . . . . . . . . 4
V. Oversights . . . . . . . . . . . . . . . . . . . . 5
VI. Changes, Reductions and Terminations . . . . . . . 6
VII. Increase in Retention. . . . . . . . . . . . . . . 7
VIII. Reinstatement. . . . . . . . . . . . . . . . . . . 8
IX. Expenses . . . . . . . . . . . . . . . . . . . . . 9
X. Claims . . . . . . . . . . . . . . . . . . . . . . 9
XI. Extra-Contractual Damages. . . . . . . . . . . . .11
XII. Inspection of Records. . . . . . . . . . . . . . .12
XIII. DAC Tax - Section 1.848-2 (g)(8) Election. . . . .12
XIV. Insolvency . . . . . . . . . . . . . . . . . . . .13
XV. Offset . . . . . . . . . . . . . . . . . . . . . .14
XVI. Arbitration. . . . . . . . . . . . . . . . . . . .14
XVII. Termination. . . . . . . . . . . . . . . . . . . .15
XVIII. Entire Agreement and Amendments. . . . . . . . . .15
XIX. Effective Date . . . . . . . . . . . . . . . . . .16
XX. Execution. . . . . . . . . . . . . . . . . . . . .17
SCHEDULES
A Specifications
B Basis of Reinsurance
EXHIBITS
I Reinsurance Premiums
II Retention, Binding, and Issue Limits
All Schedules and Exhibits attached will be considered part of this Reinsurance
Agreement.
<PAGE>
ARTICLE I
PARTIES TO THE AGREEMENT
This Agreement is between three Hartford Life Companies, Hartford Life Insurance
Company, Hartford Life and Accident Insurance Company, and Hartford Life and
Annuity Insurance Company (collectively referred to as the Ceding Company) and
[Reinsurance Company] (referred to as the Reinsurer). The Reinsurer agrees that
the terms and conditions of this Agreement shall apply to each of the Hartford
Life Companies individually, unless otherwise set forth herein.
ARTICLE II
REINSURANCE COVERAGE
Reinsurance under this Agreement will apply to insurance issued by Ceding
Company on the Plans of Insurance shown in Schedule A. Such Plans of Insurance
shall be reinsured with the Reinsurer on an automatic basis, subject to the
requirements set forth in Section A below or on a facultative basis, subject to
the requirements set forth in Section B below. The specifications for all
reinsurance under this Agreement are provided in Schedule A.
A. Requirements for Automatic Reinsurance
For risks which meet the requirements for automatic reinsurance as set
forth below, Reinsurer will participate in a reinsurance pool whereby
Reinsurer will automatically reinsure a portion of the insurance risks as
indicated in Schedule A. The requirements for automatic reinsurance are as
follows:
1. Each life must be a resident of the United States or Canada at the
time of application.
2. Each life must be underwritten according to the Ceding Company's
standard underwriting practices and guidelines. Any life falling into
the category of special underwriting programs will be excluded from
this Agreement unless previously agreed to by the Reinsurer via a
written amendment.
3. Any risk offered on a facultative basis by the Ceding Company to the
Reinsurer or any other company will not qualify for automatic
reinsurance under this Agreement for the same risk and same life.
4. The maximum issue age on any risk will be age 85.
<PAGE>
5. The mortality rating on each risk must not exceed Table 16, Table P,
or 500%, or its equivalent, as shown in the Ceding Company's retention
schedule, on a flat extra premium basis. However, one life may be
uninsurable if the other life meets the preceding requirements.
6. The total face amount of insurance for the Plans of Insurance in
Schedule A to be reinsured on an automatic basis must not exceed the
Automatic Issue Limits in Exhibit II.
7. The total amount of insurance issued and applied for in all companies
on each life must not exceed the jumbo limits as stated in Exhibit II.
8. The Ceding Company shall retain it's maximum limit of retention for
the age and risk classification of each life, as shown in Exhibit II,
either on previous insurance or insurance currently applied for.
B. Requirements for Facultative Reinsurance
1. If the requirements for automatic reinsurance are met, but the Ceding
Company prefers to apply for facultative reinsurance with the
Reinsurer, or if the requirements for automatic reinsurance are not
met and the Ceding Company applies for facultative reinsurance with
the Reinsurer, then the Ceding Company must submit to the Reinsurer
all the papers relating to the insurability of each life for
facultative reinsurance.
2. For applications for facultative reinsurance, Ceding Company will send
copies of all of the papers relating to the insurability of each life
to the Reinsurer. After the Reinsurer has examined the request, the
Reinsurer will promptly notify the Ceding Company of the underwriting
offer subject to additional requirements or the final underwriting
offer. The final underwriting offer on the risk will automatically
terminate upon the earlier of the withdrawal of the application or 120
days from the date of the final offer, unless accepted earlier.
3. Notwithstanding the above, if the requirements for automatic
reinsurance are met except that the face amount of insurance applied
for is greater than the Automatic Issue Limit, but does not exceed the
Auto Process Limit, then the Ceding Company will submit to the Lead
Reinsurer,(as designated in Schedule A), all papers relating to the
insurability of each life. The Lead Reinsurer
<PAGE>
shall review the papers to determine if the risk should be reinsured
by the Pool, and, if so, on what basis. The Lead Reinsurer shall
provide Ceding Company with a response within 24 hours of receipt of
the papers. Approval of the Lead Reinsurer shall be binding on all
other Pool members. This process shall be known as Automatic
Processing and subject to the limitations in Exhibit II.
C. Basis of Reinsurance
Reinsurance under this Agreement will be on the basis as stated in Schedule
B.
D. Policy Forms.
When requested, the Ceding Company will furnish the Reinsurer with a copy
of each policy, rider, rate book, and applicable sales or marketing
material which applies to the life insurance reinsured hereunder.
ARTICLE III
LIABILITY
A. The Reinsurer's liability for automatic reinsurance will begin
simultaneously with the Ceding Company's liability except for those risks
which qualify for automatic reinsurance but are submitted on a facultative
basis.
B. The Reinsurer's liability for facultative reinsurance will begin
simultaneously with the Ceding Company's liability once the Reinsurer has
accepted the application for facultative reinsurance and the Ceding Company
has accepted the offer.
C. In no event shall the reinsurance be in force and binding if the issuance
and delivery of such insurance constituted the doing of business in a
jurisdiction in which the ceding company was not properly licensed.
D. The Reinsurer's liability for reinsurance on each risk will terminate when
the Ceding Company's liability terminates.
E. The liability of each pool member shall be separate and not joint with the
other pool members.
F. Payment of reinsurance premiums is a condition precedent to the Reinsurer's
liability.
<PAGE>
G. The Reinsurer shall establish reserves on Reinsurer's portion of the policy
on the reserve basis specified in Schedule B.
<PAGE>
ARTICLE IV
REINSURANCE PREMIUMS
A. Computation.
Premiums for reinsurance under this Agreement will be computed as described
in Exhibit I.
B. Premium Accounting.
1. Payment of Reinsurance Premiums.
For automatic and facultative reinsurance, following the close of each
calendar month, the Ceding Company will send the Reinsurer a statement
and a listing of new business, changes and terminations.
If a net reinsurance premium balance is payable to the Reinsurer, the
Ceding Company will forward this balance within (60) sixty days after
the close of each month.
If a net reinsurance premium balance is payable to the Ceding Company,
the balance due will be subtracted from the reinsurance premium
payable by Ceding Company for the current month and any remaining
balance due the Ceding Company shall be paid by the Reinsurer within
(60) sixty days after the Ceding Company submits the statement.
2. Non-Payment of Premium
If reinsurance premiums are delinquent, the Reinsurer has the right to
terminate the reinsurance risks on those policies listed on the
delinquent monthly statement by giving the Ceding Company ninety days'
advance written notice. If the delinquent premiums have not been paid
as of the close of the ninety-day period, the Reinsurer's liability
will terminate for the risks described in the delinquency notice.
Regardless of the termination, the Ceding Company will continue to be
liable to the Reinsurer for all unpaid reinsurance premiums earned.
3. Reinstatement
<PAGE>
The Ceding Company may reinstate the risks terminated due to non
payment of reinsurance premium within sixty days after the effective
date of termination by paying the unpaid reinsurance premiums for the
risks in force prior to the termination. However, the Reinsurer will
not be liable for any claim incurred between the date of termination
and reinstatement. The effective date of reinstatement will be the
date the required back premiums are received.
4. Currency
The reinsurance premiums and benefits payable under this Agreement
will be payable in the lawful money of the United States.
5. Detailed Listing
The Ceding Company will send the Reinsurer a detailed listing of all
reinsurance in force as of the close of the immediately preceding
calendar year.
6. Guaranteed Rates
For technical reasons relating to the uncertain status of deficiency
reserve requirements by the various state insurance departments, the
life reinsurance rates cannot be guaranteed for more than one year.
On all reinsurance ceded at these rates, however, the Reinsurer
anticipates continuing to accept premiums on the basis of the rates
shown in Exhibit I.
ARTICLE V
OVERSIGHTS
If there is an unintentional oversight or misunderstanding in the administration
of this Agreement by Ceding Company or Reinsurer, it can be corrected provided
the correction takes place within a reasonable time after the oversight or
misunderstanding is first discovered. Both Ceding Company and the Reinsurer
will be restored to the position they would have occupied had the oversight or
misunderstanding not occurred.
<PAGE>
ARTICLE VI
CHANGES, REDUCTIONS AND TERMINATIONS
A. Replacement or Change
If there is a contractual change or non-contractual replacement of the
insurance reinsured under this Agreement where full underwriting evidence
according to the Ceding Company's regular underwriting rules is not
required, the insurance may continue to be reinsured with the Reinsurer
provided it meets the minimum reinsurance cession amount stated in Schedule
A. If a non-contractual change is requested on a facultatively reinsured
policy, the Reinsurer must consent to the change.
B. Increases or Decreases
1. If the policy face amount of a risk reinsured automatically under this
Agreement increases and:
a. The increase is subject to new underwriting evidence, then the
provisions of Article Ii, Section A, shall apply to the increase
in reinsurance.
b. The increase is not subject to new underwriting evidence, then
Reinsurer will accept automatically the increase in reinsurance
but not to exceed the automatic binding limit.
2. If the policy face amount increases, the Ceding Company's retention
will be filled first, then any remaining risk of the increase will be
ceded to the Reinsurer as of the effective date of the increase. If
the policy face amount is reduced, the reinsurance will be reduced
first, thereby maintaining the Ceding Company's retention. Reinsurer
will refund to Ceding Company all unearned reinsurance premiums not
including policy fees, less applicable allowances, arising from
reductions, terminations and changes as described in this Article.
3. In the event of a reduction in the face amount of a policy which was
ceded facultatively, the Reinsurer's percentage of the reduced face
amount should be the same percentage of the initial reinsurance ceded.
4. Increases in face amount of policies reinsured on a facultative basis,
will be submitted to the Reinsurer for acceptance.
<PAGE>
C. Reduction in Retained Coverage
If any portion of the aggregate insurance retained by Ceding Company on an
individual life reduces or terminates, any reinsurance under this Agreement
based on the same life may also be reduced or terminated. Ceding Company
will reduce the reinsurance by applying the retention limits which were in
effect at the time each policy was issued. Ceding Company will not be
required to retain an amount in excess of its regular retention limit for
the age, mortality rating and risk classification at the time of issue for
any policy on which reinsurance is being reduced.
The reinsurance to be terminated or reduced will be determined by
chronological order in which the reinsurance was first reinsured, thereby
reducing or terminating the oldest risks first.
D. Multiple Reinsurers
If a risk is shared by more than one reinsurer, Reinsurer's percentage of
any increased or reduced reinsurance will be the same as its initial
percentage of the reinsurance for that risk.
E. Termination
If the policy for a risk reinsured under this Agreement is terminated, the
reinsurance for the risk involved will be terminated on the effective date
of termination.
F. Facultative
On facultative reinsurance, if Ceding Company wishes to reduce the
mortality rating, this reduction will be subject to and reinsured under the
facultative provisions of this Agreement.
ARTICLE VII
INCREASE IN RETENTION
A. If the Ceding Company should increase the retention limits as listed in
Exhibit II, prompt written notice of the increase must be given to the
Reinsurer.
B. In the event of an increase in retention, the Ceding Company will have the
option of recapturing the reinsurance under this Agreement when the
retention limit increases. The Ceding Company may exercise its option to
<PAGE>
recapture by giving written notice to the Reinsurer within ninety days
after the effective date of the increase.
C. If the Ceding Company exercises its option to recapture, then
1. The Ceding Company must reduce the reinsurance on each risk on which
the Ceding Company retained the maximum retention limit that was in
effect at the time the reinsurance was ceded to the Reinsurer.
2. No recapture will be made to reinsurance on a risk if (a) the Ceding
Company retained a special retention limit less than the maximum
retention limit in effect at the time the reinsurance was ceded to the
Reinsurer, or if (b) the Ceding Company did not retain insurance on
the risk.
3. The Ceding Company must increase its total amount of insurance on the
risk up to the new retention limit by reducing the reinsurance. If a
risk is shared by more than one reinsurer, the Reinsurer's percentage
of the reduced reinsurance will be the same as the initial percentage
on the individual risk.
4. Upon increasing the retention limit, the reduction in reinsurance will
become effective on the next annual premium anniversary of those
policies that have been inforce for at least ten (10) years.
ARTICLE VIII
REINSTATEMENT
If an insurance policy lapses for nonpayment of premium and is reinstated under
the Ceding Company's terms and rules, the reinsurance will be reinstated by the
Reinsurer as follows:
A. Automatic Cases:
The Ceding Company must pay the Reinsurer all back reinsurance premiums in
the same manner as the Ceding Company received insurance premiums under the
policy. When the policy is reinstated by the Ceding Company, the
reinsurance will be automatically reinstated.
B. Facultative Cases:
If the Ceding Company requires reinstatement evidence of insurability, the
<PAGE>
Ceding Company will submit it to the Reinsurer for approval. In such
cases, the Reinsurer's approval is required for the reinsurance to be
reinstated. Upon the Reinsurer's approval, the Ceding Company must pay the
Reinsurer all back reinsurance premiums in the same manner as the Ceding
Company received insurance premium under the policy.
ARTICLE IX
EXPENSES
The Ceding Company must pay the expense of all medical examinations, inspection
fees and other charges in connection with the issuance of the insurance.
ARTICLE X
CLAIMS
A. Liability
The Reinsurer's liability for the insurance benefits reinsured under this
Agreement will be the same as the Ceding Company's liability for such
benefits. All reinsurance claim settlements will be subject to the terms
and conditions of the particular contract under which the Ceding Company is
liable.
B. Notification
When the Ceding Company is advised of a claim, the Reinsurer must be
notified promptly.
C. Claim Payment
1. Automatic Reinsurance on a Risk
If a claim is made on a risk reinsured automatically under this
Agreement and is not contested by the Ceding Company, Reinsurer will
abide by the issue as it is settled by the Ceding Company. Copies of
proofs or other written matters relating to any claim reimbursements
under this Agreement shall be furnished to the Reinsurer upon written
request. The Ceding Company will receive payment of the reinsurance
proceeds from the Reinsurer when the Ceding Company makes the
settlement of the policy proceeds and delivers a copy of the proof of
death, check copy or
<PAGE>
proof of payment and the claimant's statement to the Reinsurer.
2. Facultative Reinsurance on a Risk
If a claim is made on a risk reinsured facultatively under this
Agreement, the Ceding Company shall submit to Reinsurer all
relevant and/or requested documents and papers related to the
claim along with Ceding Company's recommendation. Ceding Company
shall then wait five days from the date of mailing during which
time Reinsurer shall have the opportunity to advise Ceding
Company of its consent or disagreement with the recommendation.
In the event Reinsurer does not contact Ceding Company within the
five day period, Reinsurer shall be deemed to have approved the
recommendation and Ceding Company shall be authorized to act
accordingly. The Ceding Company will receive payment of the
reinsurance proceeds from Reinsurer when Ceding Company makes the
settlement of the policy proceeds and delivers proof of payment
to the Reinsurer.
3. Payment of Reinsurance Proceeds
Payment of life reinsurance proceeds will be made in a single sum
regardless of the Ceding Company's mode of settlement with the
payee.
D. Contested Claims
The Ceding Company must promptly notify the Reinsurer of any intent to
contest a claim reinsured under this Agreement or to assert defenses. If
the Ceding Company's contest of such claim results in the increase or
reduction of liability, the Reinsurer will share in this increase or
reduction. The Reinsurer's share of the increase or decrease shall be
proportional to their share of the met amount at risk on the date of death
of the insured.
If the Reinsurer should decline to participate in the contest or assertion
of defenses, the Reinsurer will then release all of the liability by paying
the Ceding Company the full amount of reinsurance and not sharing in any
subsequent increase or reduction in liability.
E. Misstatement of Age or Sex
If the amount of insurance provided by the policy or policies reinsured
under this Agreement is increased or reduced because of misstatement of age
or sex established after the death of the insured, the Reinsurer will share
with the Ceding Company in this increase or reduction.
<PAGE>
F. Routine Expenses
The Ceding Company will pay the routine expenses incurred in connection
with settling claims. These expenses may include compensation of agent and
employees and the cost of routine investigations such as inspection
reports.
G. Non-Routine Expenses
The Reinsurer will share with the Ceding Company all expenses that are not
routine. Expenses that are not routine are those directly incurred in
connection with the contest or the possibility of a contest of a claim or
the assertion of defenses, including legal expenses. The expenses will be
shared in proportion to the net amount at risk for the Ceding Company and
Reinsurer. However, if the Reinsurer has released the liability under
Section D of this Article, the Reinsurer will not share in any expenses
incurred after the date of the Reinsurer's release.
H. Contestable Period
If, during the contestable period, Ceding Company is notified of the death
of the first joint insured, the Ceding Company will investigate the case.
ARTICLE XI
EXTRA-CONTRACTUAL DAMAGES
In no event will the Reinsurer have any liability for any extra-contractual
damages which are awarded against the Ceding Company as a result of acts,
omissions or course of conduct committed by the Ceding Company in connection
with the insurance reinsured under this Agreement.
The Reinsurer does recognize that circumstances may arise under which the
Reinsurer, in equity, should share, to the extent permitted by law, in paying
certain assessed damages. Such circumstances are difficult to define in
advance, but involve those situations in which the Reinsurer was an active party
in the act, omission or course of conduct which ultimately results in the
assessment of such damages. The extent of such sharing is dependent on good
faith assessment of culpability in each case, but all factors being equal, the
division of any such assessment would be in the proportion of total risk
accepted by each party for the plan of insurance involved.
ARTICLE XII
<PAGE>
INSPECTION OF RECORDS
Each party will have the right, at any reasonable time and upon reasonable
notice, to inspect the other party's books and documents which relate to
reinsurance under this Agreement.
ARTICLE XIII
DAC TAX
SECTION 1.848-2(g) (8) ELECTION
A. The Reinsurer and the Ceding Company hereby agree to the following pursuant
to section 1.848-2(g)(8) of the Income Tax Regulations issued December 1992
under Section 848 of the Internal Revenue Code of 1986, as amended. This
election shall be effective for 1993 and for all subsequent taxable years
for which this Agreement remains in effect.
B. The terms used in this Article are defined by reference to Regulation
Section 1.848-2 in effect December 1992.
C. The party with net positive consideration for this Agreement for each
taxable year will capitalize specified policy acquisition expenses with
respect to this Agreement without regard to the general deduction
limitation of section 848(c)(1).
D. Both parties agree to exchange information pertaining to the amount of net
consideration under this Agreement each year to ensure consistency or as
otherwise required by the Internal Revenue Service.
E. The Ceding Company will submit to the Reinsurer by May 1 of each year a
schedule of the calculation of the net consideration for the preceding
calendar year. This schedule of calculations will be accompanied by a
statement signed by an officer of the Ceding Company stating that such net
consideration will be reported in the tax return for the preceding calendar
year.
F. The Reinsurer may contest such calculation by providing an alternative
calculation to the Ceding Company in writing within 30 days of receipt of
Ceding Company's calculation. If the Reinsurer does not notify the Ceding
Company, Reinsurer will report the net consideration as determined by the
Ceding Company in the tax return for the preceding calendar year.
G. If the Reinsurer contests the Ceding Company's calculation of the net
consideration, both parties will act in good faith to reach an agreement as
<PAGE>
to the correct amount within thirty (30) days of the date the Reinsurer
submits their alternative calculation. If both parties reach agreement on
an amount of net consideration, both parties shall report such amount in
their respective tax returns for the previous calendar year.
ARTICLE XIV
INSOLVENCY
A. Insolvency of Reinsurer
If the Reinsurer becomes insolvent as determined by the Department of
Insurance responsible for such determination, amounts due the Reinsurer
will be paid net of the terms of this Agreement and directly to the
liquidator, receiver, or statutory successor without decrease. All
reinsurance ceded under this Agreement may be recaptured by the Ceding
Company without charge or penalty as of the date Reinsurer fails to meet
its obligations under this Agreement.
B. Insolvency of Ceding Company
If Hartford Life Insurance Company, Hartford Life and Accident Insurance
Company or Hartford Life and Annuity Insurance Company should become
insolvent, all reinsurance under this Agreement covering risks ceded by
that particular company will be payable by Reinsurer directly to that
Company's liquidator, receiver or statutory successor, on the basis of the
liability of that Company under the policy or policies reinsured and
without diminution because of the insolvency of the Company. However, in
the event of such insolvency, the liquidator, receiver or statutory
successor will give written notice of a pending claim against Ceding
Company on the reinsured policy. It will do so within a reasonable time
after the claim is filed in the insolvency proceedings. During the
pendency of such a claim, Reinsurer may investigate the claim and may, at
its own expense, interpose any defense or defenses which it may deem
available to the insolvent Company, its liquidator, receiver or statutory
successor, in the proceedings where the claim is to be adjudicated.
The expense thus incurred by Reinsurer will be chargeable against the
insolvent Company, subject to court approval, as part of the expense of
liquidation to the extent of a proportionate share of the benefit which may
accrue to the insolvent Company solely as a result of the defense
undertaken by Reinsurer.
Where two or more reinsurers are involved in the same claim and a majority
in interest elect to interpose defense to the claim, the expense
<PAGE>
will be apportioned in accord with the terms of the reinsurance agreement
as though the expense had been incurred by the insolvent Company.
It is agreed that the insolvency of any one of the Hartford Life Companies
shall not affect this Agreement as it applies to the remaining solvent
companies.
ARTICLE XV
OFFSET
Any debts or credits, matured or unmatured, liquidated or unliquidated,
regardless of when they arose or were incurred, in favor of or against either
the Ceding Company or the Reinsurer with respect to this Agreement or with
respect to any other claim of one party against the other are deemed mutual
debts or credits, as the case may be, and shall be set off, and only the balance
shall be allowed or paid. In the event the Ceding Company becomes insolvent,
offsets shall be allowed in accordance with applicable law.
ARTICLE XVI
ARBITRATION
Any disagreement, controversy, or claim arising out of or relating to this
Agreement between the Reinsurer and any one of the Hartford Life Companies will
be settled by arbitration. There will be three arbitrators chosen among current
or retired officers of life insurance companies other than parties or their
affiliates. Each party to the dispute will appoint one of the arbitrators and
these two arbitrators will select the third arbitrator. In the event that
either party should fail to choose an arbitrator within 30 days following a
written request by the other party to do so, the requesting party may choose two
arbitrators who shall in turn choose a third arbitrator before entering upon
arbitration. If the two arbitrators fail to agree upon the selection of a third
arbitrator within 30 days following their appointment, each arbitrator shall
nominate three candidates within 10 days thereafter, two of whom the other shall
decline, and the decision shall be made by drawing lots.
Arbitration will be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association which will be in effect on the
date of delivery of demand for arbitration. The arbitrators will base their
decision on the terms and conditions of this Agreement plus, as necessary, on
the customs and practices of the insurance and reinsurance industry rather than
solely on a strict interpretation of the applicable law. The site of any
arbitration will be determined by a majority vote of the arbitrators. All
expenses and fees of the
<PAGE>
arbitrations will be borne equally by the parties unless otherwise decreed by
the arbitrators.
The award agreed to by a majority of the arbitrators will be final and binding
and there will be no appeal from their decision. Judgment may be entered upon
it in any court having jurisdiction.
ARTICLE XVII
TERMINATION
A. Each Hartford Life Insurance Company and the Reinsurer may terminate this
Agreement as it applies to the business of each by giving (90) ninety days'
written notice of termination. The day the notice is deposited in the
mail addressed to the Home Office, or to an Officer of each party, will be
the first day of the (90) ninety-day period.
B. During the (90) ninety-day period, this Agreement will continue to be in
force between the terminating parties.
C. After termination, the terminating parties shall remain liable under the
terms of this Agreement for all automatic reinsurance which becomes
effective prior to termination of this Agreement. After termination the
terminating parties shall be liable for all automatic and facultative
reinsurance which has an application date on or before the effective date
of the termination.
D. Termination by one or two of the Hartford Life Companies shall not affect
this Agreement as it relates to the non-terminating Hartford Life Company
(ies).
ARTICLE XVIII
ENTIRE AGREEMENT AND AMENDMENT
A. Entire Contract
This Agreement with any attached Schedules and Exhibits, shall constitute
the entire agreement between the parties with respect to the business being
reinsured hereunder and there are no understandings between the parties
other than as expressed herein.
B. Modifications
<PAGE>
Any modification or change to the provisions of this Agreement shall be
null and void unless set forth in a written amendment to the Agreement
which is signed by all parties to the amendment.
<PAGE>
ARTICLE XIX
EFFECTIVE DATE
The provisions of this Agreement shall be effective with respect to policies
issued on or after [date].
<PAGE>
ARTICLE XX
EXECUTION
[REINSURER]
By _____________________________ Attest __________________________
Title _____________________________ Title __________________________
____________________________ __________________________
Date _____________________________ Date __________________________
HARTFORD LIFE INSURANCE COMPANY
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
By _____________________________ Attest __________________________
Date _____________________________ Date __________________________
<PAGE>
SCHEDULE A
SPECIFICATIONS
TYPE OF BUSINESS
REINSURANCE POOL SHARE
PLANS OF INSURANCE
DESCRIPTION GENERAL FORM NO'S.
----------- ------------------
RIDERS
------
MINIMUM REINSURANCE CESSION
LEAD REINSURER
<PAGE>
SCHEDULE B
BASIS OF REINSURANCE
LIFE PRODUCTS Life reinsurance will be on the yearly renewable term (YRT)
basis for the amount at risk on the portion of the policy
reinsured by Reinsurer. The amount at risk on a policy
shall be the death benefit of the policy less the amount
retained by the Ceding Company, less the cash value under
the policy. The basis for determining Reinsurer's liability
shall be the amount at risk used for computation of the
reinsurance premium.
EXCHANGES Exchanges from one last survivor plan reinsured under this
agreement to a different last survivor plan, for the purpose
of allowing the policyowner premium flexibility (UL) or
potentially higher investment return (VL), will be reinsured
hereunder as NEW BUSINESS at first year reinsurance rates if
the new plan has been fully underwritten and has new
contestable and suicide exclusion periods. Otherwise, the
reinsurance rates will be point-in-scale.
RESERVE BASIS Reserves are calculated according to the applicable CRVM
methodology, interest rate and mortality table. The
mortality tables used are male/female, smoker distinct, age
last birthday and ultimate. The mortality rates are
frasierized. There is a 1/2 qx unearned premium reserve
minimum.
<PAGE>
PARTICIPATION AGREEMENT
Among
______________________________,
______________________________,
______________________________,
and
HARTFORD LIFE INSURANCE COMPANY
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. Fund Shares 5
ARTICLE II. Representations and Warranties 7
ARTICLE III. Prospectuses, Reports to Shareholders and 8
Proxy Statements; Voting
ARTICLE IV. Sales Material and Information 11
ARTICLE V. Reserved 12
ARTICLE VI. Diversification 12
ARTICLE VII. Potential Conflicts 12
ARTICLE VIII. Indemnification 14
ARTICLE IX. Applicable Law 20
ARTICLE X. Termination 20
ARTICLE XI. Notices 23
ARTICLE XII. Foreign Tax Credits 23
ARTICLE XIII. Miscellaneous 23
SCHEDULE A Separate Accounts and Contracts 27
SCHEDULE B Participating Life Investment Trust 28
Portfolios
SCHEDULE C Proxy Voting Procedures 29
<PAGE>
PARTICIPATION AGREEMENT
Among
[FUND]
[UNDERWRITER]
[ADVISER]
and
HARTFORD LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of the _______ day of__________,
1998 by and among HARTFORD LIFE INSURANCE COMPANY (hereinafter the "Company"); a
Connecticut corporation, on its behalf and on behalf of each separate account of
the Company set forth on Schedule A hereto as may be amended from time to time
(each such account hereinafter referred to as the "Account") and
_______________________, a __________ corporation established under the laws of
the state of _________ ("state") (hereinafter the "Fund"); and
______________________, a ___________ corporation (hereinafter the
"Underwriter") and ____________________, a ___________ corporation (hereinafter
the "Adviser").
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established by insurance companies for individual and group life insurance
policies and annuity contracts with variable accumulation and/or pay-out
provisions (hereinafter referred to individually and/or collectively as
"Variable Insurance Products"); and
WHEREAS, insurance companies desiring to utilize the Fund as an investment
vehicle under their Variable Insurance Products are required to enter into
participation agreements with the Fund and the Underwriter (the "Participating
Insurance Companies"); and
WHEREAS, shares of the Fund are divided into several series of shares,
each representing the interest in a particular managed portfolio of
securities and other assets, any one or more of which may be made available
for Variable Insurance Products of Participating Insurance Companies; and
WHEREAS, the Fund intends to offer shares of the series set forth on
Schedule B (each such series hereinafter referred to as a "Portfolio") as may be
amended from time to time by mutual agreement of the parties hereto, under this
Agreement to the Accounts of the Company; and
3
<PAGE>
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission, granting Participating Insurance Companies and Variable Insurance
Product separate accounts exemptions from the provisions of Sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended
(hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by Variable Annuity Product separate accounts of both affiliated and
unaffiliated life insurance companies (hereinafter the "Shared Funding Exemptive
Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
laws; and
WHEREAS, the Adviser is the investment adviser of the Portfolios of the
Fund; and
WHEREAS, the Underwriter is registered as a broker/dealer under the
Securities Exchange Act of 1934, as amended (hereinafter the "1934 Act"), is a
member in good standing of the National Association of Securities Dealers, Inc.
(hereinafter "NASD") and serves as principal underwriter of the shares of the
Fund; and
WHEREAS, the Company has registered or will register certain Variable
Insurance Products under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution or under authority of the Board of
Directors of the Company, on the date shown for such Account on Schedule A
hereto, to set aside and invest assets attributable to the aforesaid Variable
Insurance Products; and
WHEREAS, the Company has registered or will register each Account as a unit
investment trust under the 1940 Act unless exempt from such registration; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on behalf
of each Account to fund certain of the aforesaid Variable Insurance Products and
the Underwriter is authorized to sell such shares to each such Account at net
asset value.
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund, the Underwriter and the Adviser agree as follows:
4
<PAGE>
ARTICLE I. FUND SHARES
1.1. The Fund and the Underwriter agree to make available for purchase
by the Company shares of the Portfolios and shall execute orders placed for each
Account on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of such order. For purposes of this Section 1.1, the
Company shall be the designee of the Fund and Underwriter for receipt of such
orders from each Account and receipt by such designee shall constitute receipt
by the Fund; provided that the Fund receives notice of such order by 10:00 a.m.
(local time where the Fund processes orders) on the next following Business Day.
Notwithstanding the foregoing, the Company shall use its best efforts to
provide the Fund with notice of such orders by 9:15 a.m. on the next following
Business Day. "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Fund calculates its net asset
value pursuant to the rules of the Securities and Exchange Commission, as set
forth in the Fund's prospectus and statement of additional information.
Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter
the "Board") may refuse to permit the Fund to sell shares of any Portfolio to
any person, or suspend or terminate the offering of shares of any Portfolio if
such action is required by law or by regulatory authorities having jurisdiction
or is, in the sole discretion of the Board acting in good faith and in light of
their fiduciary duties under federal and any applicable state laws, necessary
in the best interests of the shareholders of such Portfolio.
1.2. The Fund and the Underwriter agree that shares of the Fund will
be sold only to Participating Insurance Companies for their Variable Insurance
Products. No shares of any Portfolio will be sold to the general public.
1.3. The Fund will not make its shares available for purchase by any
insurance company or separate account unless an agreement containing provisions
which afford the Company substantially the same protections currently provided
by Sections 2.1, 2.4, 2.9, 3.4 and Article VII of this Agreement is in effect to
govern such sales.
1.4. The Fund and the Underwriter agree to redeem for cash, on the
Company's request, any full or fractional shares of the Fund held by the
Company, executing such requests on a daily basis at the net asset value next
computed after receipt by the Fund or its designee of the request for
redemption. For purposes of this Section 1.4, the Company shall be the designee
of the Fund for receipt of requests for redemption from each Account and receipt
by such designee shall constitute receipt by the Fund; provided that the
Underwriter receives notice of such request for redemption on the next following
Business Day in accordance with the timing rules described in Section 1.1.
1.5. The Company agrees that purchases and redemptions of Portfolio
shares offered by the then current prospectus of the Fund shall be made in
accordance with the provisions of such prospectus. The Accounts of the Company,
under which amounts may be invested in the Fund are listed on Schedule A
attached hereto and incorporated herein by reference, as such
5
<PAGE>
Schedule A may be amended from time to time by mutual written agreement of
all of the parties hereto. The Company will give the Fund and the Underwriter
concurrent written notice of its intention to make available in the future,
as a funding vehicle under the Contracts, any other investment company.
1.6. The Company will place separate orders to purchase or redeem
shares of each Portfolio. Each order shall describe the net amount of shares and
dollar amount of each Portfolio to be purchased or redeemed. In the event of net
purchases, the Company shall pay for Portfolio shares on the next Business Day
after an order to purchase Portfolio shares is made in accordance with the
provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted
by wire. In the event of net redemptions, the Portfolio shall pay the redemption
proceeds in federal funds transmitted by wire on the next Business Day after an
order to redeem Portfolio shares is made in accordance with the provisions of
Section 1.4 hereof. Notwithstanding the foregoing, if the payment of redemption
proceeds on the next Business Day would require the Portfolio to dispose of
Portfolio securities or otherwise incur substantial additional costs, and if the
Portfolio has determined to settle redemption transactions for all shareholders
on a delayed basis, proceeds shall be wired to the Company within seven (7) days
and the Portfolio shall notify in writing the person designated by the Company
as the recipient for such notice of such delay by 3:00 p.m. Eastern Time on the
same Business Day that the Company transmits the redemption order to the
Portfolio.
1.7. Issuance and transfer of the Fund's shares will be by book entry
only. Share certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
1.8. The Underwriter shall use its best efforts to furnish same day
notice by 6:00 p.m. in its local time zone (by wire or telephone, followed by
written confirmation) to the Company of any dividends or capital gain
distributions payable on the Fund's shares. The Company hereby elects to receive
all such dividends and capital gain distributions as are payable on the
Portfolio shares in additional shares of that Portfolio. The Company reserves
the right to revoke this election and to receive all such dividends and capital
gain distributions in cash. The Fund shall notify the Company of the number of
shares so issued as payment of such dividends and distributions.
1.9. The Underwriter shall make the net asset value per share of each
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 6:00 p.m.
Eastern Time. In the event that Underwriter is unable to meet the 6:00 p.m. time
stated immediately above, then Underwriter shall provide the Company with
additional time to notify Underwriter of purchase or redemption orders pursuant
to Sections 1.1 and 1.4, respectively, above. Such additional time shall be
equal to the additional time that Underwriter takes to make the net asset values
available to the Company; provided, however, that notification
6
<PAGE>
must be made by 11:00 a.m. Eastern Time on the Business Day such order is to
be executed, regardless of when net asset valuer is made available.
1.10. If Underwriter provides materially incorrect share net asset
value information through no fault of the Company, the Company shall be entitled
to an adjustment with respect to the Fund shares purchased or redeemed to
reflect the correct net asset value per share. The determination of the
materiality of any net asset value pricing error shall be based on the SEC's
recommended guidelines regarding such errors. The correction of any such errors
shall be made at the Company level pursuant to the SEC's recommended guidelines.
Any material error in the calculation or reporting of net asset value per share,
dividend or capital gain information shall be reported promptly upon discovery
to the Company.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the interests of the
Accounts which offer the Funds (the "Contracts") are or will be registered
unless exempt and that it will maintain such registration under the 1933 Act and
the regulations thereunder to the extent required by the 1933 Act; that the
Contracts will be issued and sold in compliance with all applicable federal and
state laws and regulations. The Company further represents and warrants that it
is an insurance company duly organized and in good standing under applicable law
and that it has legally and validly established each Account prior to any
issuance or sale thereof as a segregated asset account under the Connecticut
Insurance Code and the regulations thereunder and has registered or, prior to
any issuance or sale of the Contracts, will register and will maintain the
registration of each Account as a unit investment trust in accordance with and
to the extent required by the provisions of the 1940 Act and the regulations
thereunder, unless exempt therefrom, to serve as a segregated investment account
for the Contracts. The Company shall amend its registration statement for its
contracts under the 1933 Act and the 1940 Act from time to time as required in
order to effect the continuous offering of its Contracts.
2.2. The Fund and the Underwriter represent and warrant that Fund
shares sold pursuant to this Agreement shall be registered under the 1933 Act
and the regulations thereunder to the extent required by the 1933 Act, duly
authorized for issuance in accordance with the laws of State and sold in
compliance with all applicable federal and state securities laws and regulations
and that the Fund is and shall remain registered under the 1940 Act and the
regulations thereunder to the extent required by the 1940 Act. The Fund shall
amend the registration statement for its shares under the 1933 Act and the 1940
Act from time to time as required in order to effect the continuous offering of
its shares. The Fund shall register and qualify the shares for sale in
accordance with the laws of the various states only if and to the extent deemed
advisable by the Fund.
2.3. The Fund and the Adviser represent that the Fund is currently
qualified as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code") and that each will make every
effort to maintain such qualification (under
7
<PAGE>
Subchapter M or any successor or similar provision) and that each will notify
the Company immediately upon having a reasonable basis for believing that the
Fund has ceased to so qualify or that the Fund might not so qualify in the
future.
2.4. The Company represents that each Account is and will continue to
be a "segregated account" under applicable provisions of the Code and that each
Contract is and will be treated as a "variable contract" under applicable
provisions of the Code and that it will make every effort to maintain such
treatment and that it will notify the Fund immediately upon having a reasonable
basis for believing that the Account or Contract has ceased to be so treated or
that they might not be so treated in the future.
2.5. The Fund represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, the Fund
undertakes to have a board of directors, a majority of whom are not interested
persons of the Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.
2.6. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various
states.
2.7. The Fund and the Adviser represent that the Fund is duly
organized and validly existing under the laws of State and that the Fund does
and will comply in all material respects with the 1940 Act.
2.8. The Underwriter represents and warrants that it is and shall
remain duly registered under all applicable federal and state laws and
regulations and that it will perform its obligations for the Fund and the
Company in compliance with the laws and regulations of its state of domicile and
any applicable state and federal laws and regulations.
2.9. The Company represents and warrants that all of its trustees,
officers, employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Fund are covered by a blanket fidelity
bond or similar coverage, in an amount equal to the greater of $5 million or any
amount required by applicable federal or state law or regulation. The aforesaid
includes coverage for larceny and embezzlement is issued by a reputable bonding
company.
ARTICLE III. PROSPECTUSES; REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS; VOTING
3.1. The Fund shall provide the Company with as many printed copies of
the Fund's current prospectus and statement of additional information as the
Company may reasonably request. If requested by the Company in lieu of providing
printed copies the Fund shall provide camera-ready film or computer diskettes
containing the Fund's prospectus and statement of additional information, and
such other assistance as is reasonably necessary in order for the
8
<PAGE>
Company once each year (or more frequently if the prospectus and/or statement
of additional information for the Fund is amended during the year) to have
the prospectus for the Contracts and the Fund's prospectus printed together
in one document or separately. The Company may elect to print the Fund's
prospectus and/or its statement of additional information in combination with
other fund companies' prospectuses and statements of additional information.
3.2(a). Except as otherwise provided in this Section 3.2, all expenses of
preparing, setting in type and printing and distributing Fund prospectuses and
statements of additional information shall be the expense of the Company. For
prospectuses and statements of additional information provided by the Company to
its existing owners of Contracts in order to update disclosure as required by
the 1933 Act and/or the 1940 Act, the cost of setting in type, printing and
distributing shall be borne by the Fund. If the Company chooses to receive
camera-ready film or computer diskettes in lieu of receiving printed copies of
the Fund's prospectus and/or statement of additional information, the Fund shall
bear the cost of typesetting to provide the Fund's prospectus and/or statement
of additional information to the Company in the format in which the Fund is
accustomed to formatting prospectuses and statements of additional information,
respectively, and the Company shall bear the expense of adjusting or changing
the format to conform with any of its prospectuses and/or statements of
additional information. In such event, the Fund will reimburse the Company in an
amount equal to the product of x and y where x is the number of such
prospectuses distributed to owners of the Contracts, and y is the Fund's per
unit cost of printing the Fund's prospectuses. The same procedures shall be
followed with respect to the Fund's statement of additional information. The
Fund shall not pay any costs of typesetting, printing and distributing the
Fund's prospectus and/or statement of additional information to prospective
Contract owners.
3.2(b). The Fund, at its expense, shall provide the Company with copies
of its proxy statements, reports to shareholders, and other communications
(except for prospectuses and statements of additional information, which are
covered in Section 3.2(a) above) to shareholders in such quantity as the Company
shall reasonably require for distributing to Contract owners. The Fund shall
not pay any costs of distributing such proxy-related material, reports to
shareholders, and other communications to prospective Contract owners.
3.2(c). The Company agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund to assure that the Fund's
expenses do not include the cost of typesetting, printing or distributing any of
the foregoing documents other than those actually distributed to existing
Contract owners.
3.2(d) The Fund shall pay no fee or other compensation to the Company
under this Agreement, except that if the Fund or any Portfolio adopts and
implements a plan pursuant to Rule 12b-1 to finance distribution expenses, then
the Underwriter may make payments to the Company or to the underwriter for the
Contracts if and in amounts agreed to by the Underwriter in writing.
9
<PAGE>
3.2(e) All expenses, including expenses to be borne by the Fund pursuant
to Section 3.2 hereof, incident to performance by the Fund under this Agreement
shall be paid by the Fund. The Fund shall see to it that all its shares are
registered and authorized for issuance in accordance with applicable federal law
and, if and to the extent deemed advisable by the Fund, in accordance with
applicable state laws prior to their sale. The Fund shall bear the expenses for
the cost of registration and qualification of the Fund's shares.
3.3. The Fund's statement of additional information shall be
obtainable from the Fund, the Underwriter, the Company or such other person as
the Fund may designate.
3.4. If and to the extent required by law the Company shall
distribute all proxy material furnished by the Fund to Contract Owners to whom
voting privileges are required to be extended and shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions received
from Contract owners; and
(iii) vote Fund shares for which no instructions have been received in
the same proportion as Fund shares of such Portfolio for
which instructions have been received, so long as and to the
extent that the Securities and Exchange Commission continues
to interpret the 1940 Act to require pass-through voting
privileges for variable contract owners. The Company reserves
the right to vote Fund shares held in any segregated asset
account in its own right, to the extent permitted by law. The
Fund and the Company shall follow the procedures, and shall
have the corresponding responsibilities, for the handling of
proxy and voting instruction solicitations, as set forth in
Schedule C attached hereto and incorporated herein by
reference. Participating Insurance Companies shall be
responsible for ensuring that each of their separate
accounts participating in the Fund calculates voting
privileges in a manner consistent with the standards set
forth on Schedule C, which standards will also be provided to
the other Participating Insurance Companies.
(iv) For unregistered separate accounts subject to the Employee
Retirement Income Security Act of 1974 ("ERISA") to refrain
from voting shares for which no instructions are received if
such shares are held in an unregistered segregated asset
account subject to ERISA.
3.5. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either provide
for annual meetings (except insofar as the Securities and Exchange Commission
may interpret Section 16 not to require such meetings)
10
<PAGE>
or comply with Section 16(c) of the 1940 Act (although the Fund is not one of
the trusts described in Section 16(c) of that Act) as well as with Sections
16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the Securities and Exchange Commission's interpretation of
the requirements of Section 16(a) with respect to periodic elections of
directors and with whatever rules the Commission may promulgate with respect
thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund, the Underwriter or their designee, each piece of sales literature or other
promotional material prepared by the Company or any person contracting with the
Company in which the Fund, the Adviser or the Underwriter is described, at least
ten Business Days prior to its use. No such material shall be used if the Fund,
the Adviser, the Underwriter or their designee reasonably objects to such use
within ten Business Days after receipt of such material.
4.2. Neither the Company nor any person contracting with the Company
shall give any information or make any representations or statements on behalf
of the Fund or concerning the Fund in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement or Fund prospectus, as such registration statement or Fund prospectus
may be amended or supplemented from time to time, or in reports to shareholders
or proxy statements for the Fund, or in sales literature or other promotional
material approved by the Fund or its designee, except with the permission of the
Fund or its designee.
4.3. The Fund shall furnish, or shall cause to be furnished, to the
Company or its designee, each piece of sales literature or other promotional
material prepared by the Fund in which the Company or its Accounts, are
described at least ten Business Days prior to its use. No such material shall be
used if the Company or its designee reasonably objects to such use within ten
Business Days after receipt of such material.
4.4. Neither the Fund nor the Underwriter shall give any information
or make any representations on behalf of the Company or concerning the Company,
each Account, or the Contracts, other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement or prospectus may be amended or supplemented from time to
time, or in published reports or solicitations for voting instruction for each
Account which are in the public domain or approved by the Company for
distribution to Contract owners, or in sales literature or other promotional
material approved by the Company or its designee, except with the permission of
the Company.
4.5. The Fund will provide to the Company at least one complete copy
of all registration statements, prospectuses, statements of additional
information, reports, proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Fund or its shares,
contemporaneously with the filing of such document with the Securities and
Exchange Commission or other regulatory authorities.
11
<PAGE>
4.6. The Company will provide to the Fund, upon the Fund's request, at
least one complete copy of all registration statements, prospectuses, statements
of additional information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no action letters, and all amendments to any of the above, that
relate to the investment in an Account or Contract, contemporaneously with the
filing of such document with the Securities and Exchange Commission or other
regulatory authorities.
4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, any of the
following: advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures, or other
public media), sales literature (i.e., any written communication distributed or
made generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales literature, or published
article), educational or training materials or other communications distributed
or made generally available to some or all agents or employees, and registration
statements, prospectuses, statements of additional information, shareholder
reports, and proxy materials.
ARTICLE V. [RESERVED]
ARTICLE VI. DIVERSIFICATION
6.1. The Fund and the Adviser represent and warrant that, at all
times, the Fund will comply with Section 817(h) of the Code and Treasury
Regulation 1.817-5, relating to the diversification requirements for variable
annuity, endowment, or life insurance contracts and any amendments or other
modifications to such Section or Regulations. In the event the Fund ceases to so
qualify, it will take all reasonable steps (a) to notify Company of such event
and (b) to adequately diversify the Fund so as to achieve compliance within the
grace period afforded by Regulation 817-5.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by
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variable annuity contract owners and variable life insurance contract owners;
or (f) a decision by a Participating Insurance Company to disregard the
voting instructions of contract owners. The Board shall promptly inform the
Company if it determines that an irreconcilable material conflict exists and
the implications thereof.
7.2. The Company will report any potential or existing material
irreconcilable conflict of which it is aware to the Board. The Company will
assist the Board in carrying out its responsibilities under the Shared Funding
Exemptive Order, by providing the Board with all information reasonably
necessary for the Board to consider any issues raised. This includes, but is not
limited to, an obligation by the Company to inform the Board whenever contract
owner voting instructions are disregarded.
7.3. If it is determined by a majority of the Board, or a majority of
its disinterested trustees, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested trustees), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance policy
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account. No charge
or penalty will be imposed as a result of such withdrawal. The Company agrees
that it bears the responsibility to take remedial action in the event of a Board
determination of an irreconcilable material conflict and the cost of such
remedial action, and these responsibilities will be carried out with a view only
to the interests of Contract owners.
7.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account (at the Company's expense); provided, however that such withdrawal
and termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board. No charge or penalty will be imposed as a
result of such withdrawal. The Company agrees that it bears the responsibility
to take remedial action in the event of a Board determination of an
irreconcilable material conflict and the cost of such remedial action, and these
responsibilities will be carried out with a view only to the interests of
Contract owners.
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7.5. For purposes of Sections 7.3 through 7.4 of this Agreement, a
majority of the disinterested members of the Board shall determine whether
any proposed action adequately remedies any irreconcilable material conflict,
but in no event will the Fund be required to establish a new funding medium
for the Contracts. The Company shall not be required by Section 7.3 through
7.4 to establish a new funding medium for the Contracts if an offer to do so
has been declined by vote of a majority of Contract owners materially
adversely affected by the irreconcilable material conflict.
7.6. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then the Fund and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with Rules 6e-2
and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are
applicable.
7.7 Each of the Company and the Adviser shall at least annually
submit to the Board such reports, materials or data as the Board may reasonably
request so that the Board may fully carry out the obligations imposed upon them
by the provisions hereof and in the Shared Funding Exemptive Order, and said
reports, materials and data shall be submitted more frequently if deemed
appropriate by the Board. All reports received by the Board of potential or
existing conflicts, and all Board action with regard to determining the
existence of a conflict, notifying Participating Insurance Companies of a
conflict, and determining whether any proposed action adequately remedies a
conflict, shall be properly recorded in the minutes of the Board or other
appropriate records, and such minutes or other records shall be made available
to the Securities and Exchange Commission upon request.
ARTICLE VIII. INDEMNIFICATION
8.1. INDEMNIFICATION BY THE COMPANY
8.1 (a). The Company agrees to indemnify and hold harmless the Fund, the
Underwriter and each member of their respective Board and officers and each
person, if any, who controls the Fund within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Section
8.1) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Company) or litigation
(including legal and other expenses), to which the Indemnified Parties may
become subject under any statute, regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements are related to the sale or acquisition of the
Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained
in the registration statement or
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<PAGE>
prospectus for the Contracts or contained in the Contracts or
sales literature for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Company
by or on behalf of the Fund for use in the registration
statement or prospectus for the Contracts or in the Contracts
or sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature of the
Fund not supplied by the Company, or persons under its
control and other than statements or representations
authorized by the Fund or the Underwriter) or unlawful
conduct of the Company or persons under its control, with
respect to the sale or distribution of the Contracts or Fund
shares; or
(iii) arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature of
the Fund or any amendment thereof or supplement thereto or
the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or
omission was made in reliance upon and in conformity with
information furnished to the Fund by or on behalf of the
Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company.
8.1 (b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement.
15
<PAGE>
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at as own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses under this Agreement for any legal or other expenses
subsequently incurred by such Party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund shares or the Contracts or the operation of the
Fund.
8.2. INDEMNIFICATION BY UNDERWRITER
8.2(a). The Underwriter agrees, with respect to each Portfolio that it
distributes, to indemnify and hold harmless the Company and each of as directors
and officers and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of this Section 8.2) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Underwriter) or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of shares of the Portfolio that it distributes or the Contracts
and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of
the Fund (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with
information furnished to the Fund or the Underwriter by or on
behalf of the Company for use in the registration statement
or prospectus for the
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<PAGE>
Fund or in sales literature (or any amendment or supplement)
or otherwise for use in connection with the sale of the
Contracts or Portfolio shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature for
the Contracts not supplied by the Fund, the Underwriter or
persons under their respective control and other than
statements or representations authorized by the Company) or
unlawful conduct of the Fund or Underwriter or persons under
their control, with respect to the sale or distribution of
the Contracts or Portfolio shares; or
(iii) arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature
covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statement or statements therein not
misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on
behalf of the Fund or the Underwriter; or
(iv) arise as a result of any failure by the Fund or the Underwriter
to provide the services and furnish the materials under the
terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter; as
limited by and in accordance with the provisions of Section
8.2(b) and 8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within
a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the
Underwriter of any such claim shall not relieve the Underwriter from any
liability which it may have to the Indemnified Party against whom
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<PAGE>
such action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified
Parties, the Underwriter will be entitled to participate, at its own expense,
in the defense thereof. The Underwriter also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Underwriter to such party of the Underwriter's election
to assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Underwriter will
not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
8.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account in which the Funds are made available.
8.3. INDEMNIFICATION BY THE ADVISER
8.3(a). The Adviser agrees to indemnify and hold harmless the Company and
its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (hereinafter collectively, the
"Indemnified Parties" and individually, "Indemnified Party," for purposes of
this Section 8.3) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Adviser)
or litigation (including legal and other expenses) to which the Indemnified
Parties may become subject under any statute, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements are related to the operations of the Adviser or
the Fund and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of
the Fund (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with
information furnished to the Adviser, the Fund or the
Underwriter by or on behalf of the Company for use in the
registration statement or prospectus for the Fund or in sales
literature (or any amendment or supplement) or otherwise for
use in connection with the sale of the Contracts or Portfolio
shares; or
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<PAGE>
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature for
the Contracts not supplied by the Fund, the Adviser or
persons under its control and other than statements or
representations authorized by the Company) or unlawful
conduct of the Fund, the Adviser or persons under their
control, with respect to the sale or distribution of the
Contracts or Portfolio shares; or
(iii) arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature
covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statement or statements therein not
misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on
behalf of the Fund or the Adviser; or
(iv) arise as a result of any failure by the Adviser to provide the
services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund or the
Adviser in this Agreement or arise out of or result from any
other material breach of this Agreement by the Fund or the
Adviser, including without limitation any failure by the Fund
to comply with the conditions of Article VI hereof.
8.3(b). The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an indemnified Party as may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
8.3(c). The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Adviser will be entitled to participate, at
its own expense, in the defense thereof. The Adviser also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Adviser to such party of the Adviser's election to
assume the defense thereof, the Indemnified Party shall bear the
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<PAGE>
fees and expenses of any additional counsel retained by it, and the Adviser
will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other then reasonable costs of investigation.
8.3(d). The Company agrees to promptly notify the Adviser of the
commencement of any litigation or proceedings against it or any of as respective
officers or directors in connection with this Agreement, the issuance or sale of
the Contracts, with respect to the operation of each Account, or the sale or
acquisition of shares of the Adviser.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Connecticut.
9.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Securities and Exchange Commission may grant (including, but not limited to, the
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE X. TERMINATION
10.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason upon six-months advance
written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund, the
Adviser and the Underwriter with respect to any Portfolio
based upon the Company's determination that shares of such
Portfolio are not reasonably available to meet the
requirements of the Contracts. Reasonable advance notice of
election to terminate shall be furnished by the Company, said
termination to be effective ten (10) days after receipt of
notice unless the Fund makes available a sufficient number of
shares to reasonably meet the requirements of the Account
within said ten (10) day period; or
(c) termination by the Company upon written notice to the Fund, the
Adviser and the Underwriter with respect to any Portfolio in
the event any of the Portfolio's shares are not registered,
issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares as
the underlying investment medium of the Contracts issued or
to be issued by the Company. The terminating party shall give
prompt notice to the other parties of its decision to terminate;
or
20
<PAGE>
(d) termination by the Company upon written notice to the Fund,
the Adviser and the Underwriter with respect to any Portfolio
in the event that such portfolio ceases to qualify as a
Regulated Investment Company under Subchapter M of the Code
or under any successor or similar provision; or
(e) termination by the Company upon written notice to the Fund and
the Underwriter with respect to any Portfolio in the event
that such Portfolio fails to meet the diversification
requirements specified in Article VI hereof; or
(f) termination by either the Fund, the Adviser or the Underwriter by
written notice to the Company, if either one or more of the
Fund, the Adviser or the Underwriter, shall determine, in its
or their sole judgment exercised in good faith, that the
Company and/or their affiliated companies has suffered a
material adverse change in its business, operations,
financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity,
provided that the Fund, the Adviser or the Underwriter will
give the Company sixty (60) days' advance written notice of
such determination of as intent to terminate this Agreement,
and provided further that after consideration of the actions
taken by the Company and any other changes in circumstances
since the giving of such notice, the determination of the
Fund, the Adviser or the Underwriter shall continue to apply
on the 60th day since giving of such notice, then such 60th
day shall be the effective date of termination; or
(g) termination by the Company by written notice to the Fund, the
Adviser and the Underwriter, if the Company shall determine,
in its sole judgment exercised in good faith, that either the
Fund, the Adviser or the Underwriter has suffered a material
adverse change in its business, operations, financial
condition or prospects since the date of this Agreement or is
the subject of material adverse publicity, provided that the
Company will give the Fund, the Adviser and the Underwriter
sixty (60) days' advance written notice of such determination
of its intent to terminate this Agreement, and provided
further that after consideration of the actions taken by the
Fund, the Adviser or the Underwriter and any other changes in
circumstances since the giving of such notice, the
determination of the Company shall continue to apply on the
60th day since giving of such notice, then such 60th day
shall be the effective date of termination; or
(h) termination by the Fund, the Adviser or the Underwriter by
written notice to the Company, if the Company gives the Fund,
the Adviser and the
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Underwriter the written notice specified in Section 1.5
hereof and at the time such notice was given there was no
notice of termination outstanding under any other provision
of this Agreement; provided, however any termination under
this Section 10.1(h) shall be effective sixty (60) days after
the notice specified in Section 1.5 was given; or
(i) termination by any party upon the other party's breach of any
representation in Section 2 or any material provision of this
Agreement, which breach has not been cured to the
satisfaction of the terminating party within ten (10) days
after written notice of such breach is delivered to the Fund
or the Company, as the case may be; or
(j) termination by the Fund, Adviser or Underwriter by written notice
to the Company in the event an Account or Contract is not
registered (unless exempt from registration) or sold in
accordance with applicable federal or state law or
regulation, or the Company fails to provide pass-through
voting privileges as specified in Section 3.4.
10.2. EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Fund shall at the option of the Company, continue to make
available additional shares of the Fund pursuant to the terms and conditions of
this Agreement, for all Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as "Existing Contracts") unless such
further sale of Fund shares is proscribed by law, regulation or applicable
regulatory body, or unless the Fund determines that liquidation of the Fund
following termination of this Agreement is in the best interests of the Fund and
its shareholders. Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to direct reallocation of investments in the Fund,
redemption of investments in the Fund and/or investment in the Fund upon the
making of additional purchase payments under the Existing Contracts. The parties
agree that this Section 10.2 shall not apply to any terminations under Article
VII and the effect of such Article Vii terminations shall be governed by Article
VII of this Agreement.
10.3. The Company shall not redeem Fund shares attributable to the
Contracts (as distinct from Fund shares attributable to the Company's assets
held in the Account) except (i) as necessary to implement Contract Owner
initiated or approved transactions, or (ii) as required by state and/or federal
laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Fund and the Underwriter the
opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Fund and the Underwriter) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption. Furthermore,
except in cases where permitted under the terms of the Contracts, the Company
shall not prevent Contract Owners from allocating payments to a Portfolio that
was otherwise available under the Contracts without first giving the Fund or the
Adviser 30 days notice of its intention to do so.
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<PAGE>
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund:
____________________________
____________________________
____________________________
If to the Underwriter:
If to the Adviser:
If to the Company: With a copy to:
Hartford Life Insurance Co. Hartford Life Insurance Co.
200 Hopmeadow Street 200 Hopmeadow Street
Simsbury, Connecticut 06070 Simsbury, Connecticut 06070
Attn: Tom Marra Attn: Lynda Godkin, General Counsel
ARTICLE XII. FOREIGN TAX CREDITS
12.1. The Fund and Adviser agree to consult in advance with the Company
concerning whether any series of the Fund qualifies to provide a foreign tax
credit pursuant to Section 853 of the Code.
ARTICLE XIII. MISCELLANEOUS
13.1. All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Board, officers, agents or
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shareholders assume any personal liability for obligations entered into on
behalf of the Fund. Each of the Company, Adviser and Underwriter acknowledges
and agrees that, as provided by Article 8, Section 8.1, of the Fund's
Agreement and Declaration of Trust, the shareholders, trustees, officers,
employees and other agents of the Fund and as Portfolios shall not personally
be bound by or liable for matters set forth hereunder, nor shall resort be
had to their private property for the satisfaction of any obligation or claim
hereunder. A Certificate of Trust referring to the Fund's Agreement and
Declaration of Trust is on file with the Secretary of State of Connecticut.
13.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.
13.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
13.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
13.5. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
13.6. Each party hereto shall cooperate with each other party and
all appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the National Association of Securities
Dealers and state insurance regulators) and shall permit such authorities
(and other parties hereto) reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or
the transactions contemplated hereby.
13.7. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations at law or in equity, which the parties hereto are entitled to under
state and federal laws.
13.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto; provided, however, that the Adviser may, with advance written notice to
the other parties hereto, assign this Agreement or any rights or obligations
hereunder to any affiliate of or company under common control with the Adviser
if such assignee is duly licensed and registered to perform the obligations of
the Adviser under this Agreement.
24
<PAGE>
13.9. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee upon request, copies of the following reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under
generally accepted accounting principles ("GAAP"), if any),
as soon as practical and in any event within 90 days after
the end of each fiscal year;
(b) the Company's June 30th quarterly statements (statutory), as soon
as practical and in any event within 45 days following such
period;
(c) any financial statement, proxy statement, notice or report of the
Company sent to stockholders and/or policyholders, as soon as
practical after the delivery thereof to stockholders;
(d) any registration statement (without exhibits) and financial
reports of the Company filed with the Securities and Exchange
Commission or any state insurance regulator, as soon as
practical after the filing thereof;
(e) any other public report submitted to the Company by independent
accountants in connection with any annual, interim or special
audit made by them of the books of the Company, as soon as
practical after the receipt thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in as name and on its behalf by its duly authorized representative
as of the date specified above.
HARTFORD LIFE INSURANCE COMPANY
on behalf of Itself and each of its Accounts named in
Schedule A hereto, as amended from time to time
By:
---------------------------------------------------
Peter Cummins
Its Senior Vice President
25
<PAGE>
FUND
By:
---------------------------------------------
Its
UNDERWRITER
By:
---------------------------------------------
Its
ADVISER
By:
---------------------------------------------
Its
26
<PAGE>
SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
- --------------------------------------------------------------------------------
Name of Separate Account and Date Established Form Numbers
by Board of Directors Funded by Separate Account
- --------------------------------------------------------------------------------
Contract Form Nos.:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
27
<PAGE>
SCHEDULE B
PARTICIPATING LIFE INVESTMENT TRUST PORTFOLIOS
28
<PAGE>
SCHEDULE C
PROXY VOTING PROCEDURES
The following is a list of procedures and corresponding responsibilities for the
handling of proxies and voting instructions relating to the Fund. The defined
terms herein shall have the meanings assigned in the Participation Agreement
except that the term "Company" shall also include the department or third party
assigned by the Company to perform the steps delineated below.
1. The proxy proposals are given to the Company by the Fund as early
as possible before the date set by the Fund for the shareholder
meeting to enable the Company to consider and prepare for the
solicitation of voting instructions from owners of the Contracts and
to facilitate the establishment of tabulation procedures. At this time
the Fund will inform the Company of the Record, Mailing and Meeting
dates. This will be done verbally approximately two months before
meeting.
2. Promptly after the Record Date, the Company will perform a "tape
run," or other activity, which will generate the names, address and
number of units which are attributed to each contract
owner/policyholder (the "Customer") as of the Record Date. Allowance
should be made for account adjustments made after this date that could
affect the status of the Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the activities
described in Step #2. The Company will use its best efforts to call in
the number of Customers to the Fund, as soon as possible, but no later
than two weeks after the Record Date.
3. The Fund's Annual Report must be sent to each Customer by the
Company either before or together with the Customers' receipt of
voting instruction solicitation material. The Fund will provide the
last Annual Report to the Company pursuant to the terms of Section 3.3
of the Agreement to which this Schedule relates.
4. The text and format for the Voting Instruction Cards ("Cards" or
"Card") is provided to the Company by the Fund. The Company, at its
expense, shall produce and personalize the Voting Instruction Cards.
The Fund or its affiliate must approve the Card before it is printed.
Allow approximately 2-4 business days for printing information on the
Cards. Information commonly found on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. fund or account number
d. coding to state number of units (or equivalent shares)
e. individual Card number for use in tracking and verification of votes
(already on Cards as printed by the Fund).
29
<PAGE>
5. During this time, the Fund will develop, produce, and the Fund
will pay for the Notice of Proxy and the Proxy Statement (one
document). Printed and folded notices and statements will be sent to
Company for insertion into envelopes (envelopes and return envelopes
are provided and paid for by the Company). Contents of envelope sent
to Customers by the Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. return envelope (postage pre-paid by Company) addressed to the
Company or its tabulation agent
d. "urge buck slip" - optional, but recommended. (This is a small,
single sheet of paper that requests Customers to vote as quickly
as possible and that their vote is important. One copy will be
supplied by the Fund.)
e. cover letter - optional, supplied by Company and reviewed and
approved in advance by the Fund.
6. The above contents should be received by the Company
approximately 3-5 business days before mail date. Individual in
charge at Company reviews and approves the contents of the mailing
package to ensure correctness and completeness. Copy of this approval
sent to the Fund.
7. Package mailed by the Company at the Fund's expense.
*The Fund must allow at least a 15-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
including), the meeting, counting backwards.
8. Collection and tabulation of Cards begins. Tabulation usually
takes place in another department or another vendor depending on
process used. An often used procedure is to sort Cards on arrival by
proposal into vote categories of all yes, no, or mixed replies, and to
begin data entry.
Note: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's internal procedure
and has not been required by the Fund in the past.
9. Signatures on Card checked against legal name on account
registration which was printed on the Card.
Note: For example, if the account registration is under "John A.
Smith, Trustee," then that is the exact legal name to be printed on
the Card and is the signature needed on the Card.
30
<PAGE>
10. If Cards are mutilated, or for any reason are illegible or are
not signed properly, they are sent back to Customer with an
explanatory letter and a new Card and return envelope. The mutilated
or illegible Card is disregarded and considered to be not received for
purposes of vote tabulation. Any Cards that have been "kicked out"
(e.g., mutilated, illegible) of the procedure are "hand verified,"
(i.e., examined as to why they did not complete the system). Any
questions on those Cards are usually remedied individually.
11. There are various control procedures used to ensure proper
tabulation of votes and accuracy of that tabulation. The most
prevalent is to sort the Cards as they first arrive into categories
depending upon their vote; an estimate of how the vote is progressing
may then be calculated. If the initial estimates and the actual vote
do not coincide, then an internal audit of that vote should occur.
This may entail a recount.
12. The actual tabulation of votes is done in units (or equivalent
shares) which is then converted to shares. (It is very important that
the fund receives the tabulations stated in terms of a percentage and
the number of shares.) The Fund must review and approve tabulation
format.
13. Final tabulation in shares is verbally given by the Company to
the Fund on the morning of the meeting not later then 10:00 A.M.
Houston time. The Fund may request an earlier deadline if reasonable
and if required to calculate the vote in time for the meeting.
14. A Certification of Mailing and Authorization to Vote Shares will
be required from the Company as well as an original copy of the final
vote. The Fund will provide a standard form for each Certification.
15. The Company will be required to box and archive the Cards
received from the Customers. In the event that any vote is challenged
or if otherwise necessary for legal, regulatory, or accounting
purposes, the Fund will be permitted reasonable access to such Cards.
16. All approvals and "signing-off" may be done orally, but must
always be followed up in writing.
31
<PAGE>
EXHIBIT 1.5
July 15, 1999
LYNDA GODKIN, SENIOR VICE PRESIDENT,
GENERAL COUNSEL & CORPORATE SECRETARY
Board of Directors
Hartford Life and Annuity Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: Separate Account VL I
Hartford Life and Annuity Insurance Company
Initial
Dear Sir/Madam:
I have acted as General Counsel to Hartford Life and Annuity Insurance
Company (the "Company"), a Connecticut insurance company, and Hartford Life
and Annuity Insurance Company Separate Account VL I (the "Account") in
connection with the registration of an indefinite amount of securities in the
form of flexible premium variable life insurance policies (the "Policies")
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended. I have examined such documents (including the Form S-6
Registration Statement) and reviewed such questions of law as I considered
necessary and appropriate, and on the basis of such examination and review,
it is my opinion that:
1. The Company is a corporation duly organized and validly existing as a
stock life insurance company under the laws of the State of Connecticut
and is duly authorized by the Insurance Department of the State of
Connecticut to issue the Policies.
2. The Account is a duly authorized and validly existing separate account
established pursuant to the provisions of Section 38a-433 of the
Connecticut Statutes.
3. To the extent so provided under the Policies, that portion of the
assets of the Account equal to the reserves and other contract
liabilities with respect to the Account will not be chargeable with
liabilities arising out of any other business that the Company may
conduct.
4. The Policies, when issued as contemplated by the Form S-6 Registration
Statement, will constitute legal, validly issued and binding obligations
of the Company.
I hereby consent to the filing of this opinion as an exhibit to the Form S-6
Registration Statement for the Policies and the Account.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
<PAGE>
EXHIBIT 1.6
Kenneth A. McCullum, FSA, MAAA
Assistant Vice President
Individual Life Product Development
July 15, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir:
This opinion is furnished in connection with the Form S-6 Registration
Statement under the Securities Act of 1933, as amended ("Securities Act"), of
a certain flexible premium variable life insurance policy (the "Policy") that
will be offered and sold by Hartford Life and Annuity Insurance Company and
certain units of interest to be issued in connection with the Policy.
The hypothetical illustrations of the Policy issued in the Form S-6
Registration Statement accurately reflect reasonable estimates of projected
performance of the Policy under the stipulated rates of investment return,
the contractual expense deductions and guaranteed cost-of-insurance rates,
and utilizing a reasonable estimation for expected fund operating expenses.
I hereby consent to the use of this opinion as an exhibit to the Form S-6
Registration Statement and to the reference to my name under the heading
"Experts" in the Statement of Additional Information included as part of such
Form S-6 Registration Statement.
Very truly yours,
/s/ Kenneth A. McCullum
Kenneth A. McCullum, FSA, MAAA
Director Individual Life
Product Development
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
POWER OF ATTORNEY
-----------------
Gregory A. Boyko
David T. Foy
Lynda Godkin
Thomas M. Marra
Lowndes A. Smith
David M. Znamierowski
do hereby jointly and severally authorize Lynda Godkin, Christine Repasy,
Marianne O'Doherty, Thomas S. Clark and Brian Lord to sign as their agent,
any Registration Statement, pre-effective amendment, post-effective amendment
and any application for exemptive relief of the Hartford Life and Annuity
Insurance Company under the Securities Act of 1933 and/or the Investment
Company Act of 1940, and do hereby ratify any such signatures heretofore made
by such persons.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for
the purpose herein set forth.
/s/ Gregory A. Boyko Dated as of January 15, 1999
- ------------------------------
Gregory A. Boyko
/s/ David T. Foy Dated as of January 15, 1999
- ------------------------------
David T. Foy
/s/ Lynda Godkin Dated as of January 15, 1999
- ------------------------------
Lynda Godkin
/s/ Thomas M. Marra Dated as of January 15, 1999
- ------------------------------
Thomas M. Marra
/s/ Lowndes A. Smith Dated as of January 15, 1999
- ------------------------------
Lowndes A. Smith
/s/ David M. Znamierowski Dated as of January 15, 1999
- ------------------------------
David M. Znamierowski
<PAGE>
ORGANIZATIONAL CHART
<TABLE>
<CAPTION>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
---------------------------------------------
NUTMEG INSURANCE COMPANY |
(CONNECTICUT) THE HARTFORD INVESTMENT
| MANAGEMENT COMPANY
HARTFORD FIRE INSURANCE COMPANY (DELAWARE)
(CONNECTICUT) |
| |
HARTFORD ACCIDENT AND INDEMNITY COMPANY HARTFORD INVESTMENT
(CONNECTICUT) SERVICES, INC.
| (CONNECTICUT)
HARTFORD LIFE, INC.
(DELAWARE)
|
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
(CONNECTICUT)
|
|
|
-------------------------------------------------------------------------------------------------------------------------
| | | | | | | | |
ITT HARTFORD LIFE | | | | | | HLIC PLANCO
INTERNATIONAL LTD. | | | | | | CANADA FINANCIAL
(CONNECTICUT) | | | | | | HOLDINGS, INC. SERVICES,
| | | | | | | (CANADA) INCORPORATED
| | | | | | | | (PENNSYLVANIA)
| | | | | | | | |
| | ALPINE LIFE HARTFORD FINANCIAL HARTFORD LIFE HARTFORD AMERICAN | |
| | INSURANCE SERVICES LIFE INSURANCE COMPANY FINANCIAL MATURITY LIFE | |
| | COMPANY INSURANCE CO. (CONNECTICUT) SERVICES, LLC INSURANCE COMPANY | |
| | (CONNECTICUT) (CONNECTICUT) | (DELAWARE) (CONNECTICUT) | PLANCO, INC.
| | | | | | (PENNSYLVANIA)
| | ------------------------------------- | AML FINANCIAL, INC. |
HARTFORD CALMA | | | | | (CONNECTICUT) |
COMPANY | ROYAL LIFE HARTFORD HARTFORD | HARTFORD
(FLORIDA) | INSURANCE INTERNATIONAL LIFE AND | LIFE INSURANCE
| COMPANY LIFE REASSURANCE ANNUITY INSURANCE | COMPANY
| OF AMERICA CORP. COMPANY | OF CANADA
|(CONNECTICUT) (CONNECTICUT) (CONNECTICUT) | (CANADA)
| | |
| | |
| ITT HARTFORD |
| LIFE, LTD. |
| (BERMUDA) |
| |
| |
----------| ---------------------------------------------------------------------------------------------
| | | | | |
INTERNATIONAL MS FUND HL INVESTMENT HARTFORD HARTFORD SECURITIES HARTFORD COMP. EMP.
CORPORATE AMERICA 1993-K ADVISORS, LLC EQUITY SALES DISTRIBUTION BENEFITS SERVICE
MARKETING GROUP, INC. SPE, INC. (CONNECTICUT) COMPANY, INC. COMPANY, INC. COMPANY
(CONNECTICUT) (DELAWARE) | (CONNECTICUT) (CONNECTICUT) (CONNECTICUT)
| |
| |
THE EVERGREEN HARTFORD INVESTMENT
GROUP, INC. FINANCIAL SERVICES
(NEW YORK) COMPANY
(DELAWARE)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
----------------------------------------------------------------------------------------------------------------------------
| | |
| | ITT HARTFORD LIFE
| | -------INTERNATIONAL LTD.
| | | (CONNECTICUT)
| | | |
| | | ITT HARTFORD
| | | ----SUDAMERICANA
| | | | HOLDING S.A.
| | | | (ARGENTINA)
| | | |------------------------------------------------------
| | | | | |
| | | | HARTFORD GALICIA INSTITUTO DE
| | | | SEGUROS VIDA COMPANIA SALTA COMPANIA DE
| | | |--------DE VIDA DE SEGUROS S.A. SEGUROS DE VIDA S.A.
| | | | (URUGUAY) (ARGENTINA) (ARGENTINA)
| | | |
| | ICATU | | ITT HARTFORD
| | HARTFORD | |-----SEGUROS DE VIDA
| | SEGUROS S.A.----------| | (ARGENTINA)
| | (BRAZIL) | |
| | | | |
| | | | | ITT HARTFORD
| | -- ----------| | |------SEGUROS DE
| | | | | | RETIRO S.A.
| | | | | | (ARGENTINA)
|-----------|----------------|---------------|---|--------------------------------------------------------------------------
| | | | | |
| | | ICATU HARTFORD | | CONSULTORA DE CAPITALES
| | | FUNDO DE PENSAO | | S.A. SOCIEDAD GERENTE
| | | (BRAZIL) | |----DE FONDOS COMUNES
| | | | | | DE ENVERSION
| | | | | | (ARGENTINA)
| | | ICATU HARTFORD | |
| | | CAPITALIZACAO S.A. | | CLARIDAD
| | | (BRAZIL) | | ADMINISTRADORA DE
| | | | | |---FONDOS DE JUBILACIONES
| | | BRAZILCAP | | Y PENSIONES S.A.
| | | CAPITALIZACAO S.A. | | (ARGENTINA)
| | | (BRAZIL) | |
| | | | |
| | -------------------------- | |
| |--------------- | | |
| | | | |
HARTFORD FIRE HARTFORD FIRE | | |------- SEGPOOL S.A.
INTERNATIONAL------------INTERNATIONAL, LTD. | | | (ARGENTINA)
(GERMANY) GMBH (CONNECTICUT) | | |
(WEST GERMANY) | | |
| | |
ICATU HARTFORD | | | THESIS S.A.
ADMINISTRACAO | | |-------- (ARGENTINA)
DE BENEFICIOS LTDA-- | | |
(BRAZIL) | |
| |
----------------- |
| |
CAB |--------- U.O.R., S.A.
CORPORATION (ARGENTINA)
(BRITISH VIRGIN ISLANDS)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
- --------------------------------------------------------------------------------------------------------------------------------|
| |
THE HARTFORD INTERNATIONAL |
|-----------------------------------------------------------------------FINANCIAL SERVICES GROUP, INC. |
| | | (DELAWARE) |
| | | ----------------------|----------------- |
| | | | | | | |
ZWOLSCHE | | ITT HARTFORD LONDON AND | HARTFORD |
ALGEMEENE N.V. | | INTERNATIONAL, LTD. EDINBURGH | EUROPE, INC. |
(NETHERLANDS) | | (U.K.) INSURANCE GROUP, LTD.| (DELAWARE) |
| | | (U.K.) | |
| | | | | |
| | | ------------- | |
| | | | | |
| ITT ASSURANCES HARTFORD INTERNATIONAL | LONDON AND --ITT ERCOS |
| S.A. INSURANCE CO., N.V. |--- EDINBURGH DE SEGUROS Y |
| ZWOLSCHE ALGEMEENE (FRANCE) (BELGIUM) | INSURANCE CO., LTD. REASEGUROS S.A.|
|----SCHADEVERZEKERING | | (U.K.) (SPAIN) |
--------| N.V.----------------------------------- | | | |
| | (NETHERLANDS) | | | | |
Z.A. | | | | EXCESS INSURANCE |
- --VERZEKERINGEN | | | | COMPANY LTD. |
| N.V. | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| (BELGIUM) |------HERVERZEKERING B.V. | | | |
| | -----| (NETHERLANDS) | | | LONDON AND |
| | | | | | |--- EDINBURGH LIFE |
| Z.A. LUX S.A. | | | | ASSURANCE CO., LTD. |
| (LUXEMBURG) | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| |--LEVENS-VERZEKERING N.V.------------ | | | |
| | (NETHERLANDS) | | | | |
- ----------------|------------------------------------|------------|------|--------------|---------------------------------------|
| | | | | | |
| -------- | | | | |
| | | | | | | |
| ZWOLSCHE | ZWOLSCHE ALGEMEENE ZWOLSCHE ALGEMEENE | | | |
| ALGEMEENE |-----HYPOTHEKEN N.V. BELEGGINGEN III B.V. | | | |
| EUROPA B.V. | (NETHERLANDS) (NETHERLANDS) | | | |
| (NETHERLANDS) | ---------- | | |
- --------| | | | | |
| EXPLOITATIEMAAT- BELEGGINGSMAAT- | | |
|----- SCHAPPIJ SCHAPPIJ | | |
| BUIZERDLAAN B.V. BUIZERDLAAN B.V. | | |
| (NETHERLANDS) (NETHERLANDS) | | |
| | | |
| | | -----
| HOLLAND | |-------------------------- |
|---- BELEGGINGSGROEP B.V. | | | |
(NETHERLANDS) | |----------------- | |
| -------| | | |
| | | | | |
| | | | | |
F.A. KNIGHT | MACALISTER & LONDON AND | HARTFORD FIRE
& SON N.V. | DUNDAS, LTD. EDINBURGH | INTERNATIONAL
(BELGIUM) | (SCOTLAND) TRUSTEES, LTD. | SERVICIOS
| (U.K.) | (SPAIN)
------------------------- -----------
| | |
FENCOURT QUOTEL LONDON AND
PRINTERS, LTD. INSURANCE EDINBURGH
(U.K.) SYSTEMS, LTD. SERVICES, LTD.
(U.K.) (U.K.)
|
EUROSURE
INSURANCE
MARKETING, LTD.
(U.K.)
</TABLE>
