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<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1995
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from..........to...........
Commission file number 2-89516
HARTFORD LIFE INSURANCE COMPANY
Incorporated in the State of Connecticut
06-0974148
(I.R S. Employer
Identification No.)
P.O. Box 2999, Hartford, Connecticut 06104-2999
(Principal Executive Offices)
Telephone number 203-843-8291
Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such filing requirements for the
past 90 days. Yes X No .
--- ----
As of August 11, 1995 there were outstanding 1,000 shares of common stock,
$5,690 par value per share, of the registrant, all of which were directly owned
by Hartford Life and Accident Insurance Company.
The registrant meets the conditions set forth in General Instruction H (1) (a)
and (b) of Form 10-Q and is therefore filing this form with the reduced
disclosure format.
(1)
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION: Page
Item 1. Financial Statements:
Consolidated Statements of Income -
Quarter and Six Months Ended June 30, 1995 and 1994 . . . . . . . . 3
Consolidated Balance Sheets -
June 30, 1995 and December 31, 1994. . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1995 and 1994. . . . . . . . . . . . . . . . 5
Item 2. Management's Narrative Analysis of Results of Operations*
Quarter and Six Months Ended June 30, 1995 and 1994. . . . . . . . . . 6
PART II. OTHER INFORMATION:*
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . 9
Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Exhibit Index. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(*) Item prepared in accordance with General Instruction H (2) of Form 10-Q.
(2)
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1.
FINANCIAL STATEMENTS
The following unaudited financial statements, reflect, in the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, the results of operations
and the cash flows for the periods presented. Interim results are not
indicative of the results which may be expected for any other interim period or
the full year. For a description of accounting policies, see Notes to
Consolidated Financial Statements in the 1994 Form 10-K.
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Millions)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
-------- --------
1995 1994 1995 1994
---- ---- ---- ----
(unaudited) (unaudited)
<S> <C> <C>
REVENUES:
Premiums and other considerations $ 270 $ 202 $ 720 $ 507
Net investment income 336 288 675 559
Net realized (losses) gains on investments (7) 3 (6) 6
------- ------ ------- -------
599 493 1,389 1,072
------- ------- ------- -------
BENEFITS, CLAIMS AND EXPENSES:
Benefits, claims and claim adjustment expenses 350 323 716 598
Amortization of deferred policy acquisition costs 50 35 92 77
Dividends to policyholders 69 46 297 185
Other insurance expenses 85 38 193 105
------- ------- ------- ------
554 442 1,298 965
------- ------- ------- ------
INCOME BEFORE INCOME TAX 45 51 91 107
Income tax expense 15 19 30 37
------- ------- ------- ------
NET INCOME $ 30 $ 32 $ 61 $ 70
-------- -------- -------- -------
-------- -------- -------- -------
</TABLE>
(3)
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Millions)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
-------- ------------
(unaudited)
ASSETS:
<S> <C> <C>
Investments:
Fixed maturities, available for sale, at fair value $ 14,331 13,429
Equity securities, at fair value 91 68
Mortgage loans, at outstanding principal balance 296 316
Policy loans, at outstanding balance 3,681 2,614
Other investments 104 107
------- --------
18,503 16,534
Cash 83 20
Premiums and amounts receivable 73 160
Reinsurance recoverable 5,948 5,466
Accrued investment income 371 378
Deferred policy acquisition costs 1,990 1,809
Deferred income tax 454 590
Other assets 141 83
Separate account assets 28,881 22,809
------ ------
$ 56,444 $ 47,849
------ ------
------ ------
LIABILITIES AND STOCKHOLDER'S EQUITY
Future policy benefits $ 2,245 $ 1,890
Other policyholder funds 22,578 21,328
Other liabilities 1,215 1,000
Separate account liabilities 28,881 22,809
------ ------
54,919 47,027
------ ------
------ ------
Common stock - authorized 1,000 shares, $5,690 par value,
issued and outstanding 1,000 shares 6 6
Capital surplus 1,009 826
Unrealized loss on securities, net of tax (195) (654)
Retained earnings 705 644
------ ------
1,525 822
------ ------
$ 56,444 $ 47,849
------ ------
</TABLE>
(4)
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
<TABLE>
<CAPTION>
Six Months
Ended June 30,
--------------
1995 1994
---- ----
(unaudited)
<S> <C> <C>
Operating Activities:
NET INCOME $ 61 $ 70
Adjustments to net income:
Net realized investment gains (losses) before tax 4 (3)
Net policyholder investment losses (gains) before tax 2 0
Net deferred policy acquisition costs (181) (186)
Net amortization of premium on fixed maturities 7 27
Deferred income tax benefits (120) (54)
Decrease in premiums and amounts receivable 3 27
(Increase) decrease in other assets (33) 2
(Increase) decrease in reinsurance recoverable (60) 10
Increase in liability for future policy benefits 354 139
Increase in other liabilities 57 25
Decrease (increase) in accrued investment income 7 (70)
------- -------
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES 101 (13)
------- -------
INVESTING ACTIVITIES:
Purchases of fixed maturity investments (2,150) (6,691)
Proceeds from sales of fixed maturity investments 2,835 4,127
Maturities and principal paydowns of long-term investments 574 1,336
Net purchases of other investments (1,240) (704)
Net (purchases) sales of short-term investments (894) 653
_______ _______
CASH USED FOR INVESTING ACTIVITIES (875) (1,279)
Financing activities:
Net receipts from investment and UL-type contracts credited to
policyholder account balances 837 1,227
Capital contributions 0 100
CASH PROVIDED BY FINANCING ACTIVITIES 837 1,327
------- ------
NET INCREASE IN CASH 63 35
Cash at beginning of period 20 1
CASH AT END OF PERIOD $ 83 $ 36
</TABLE>
(5)
<PAGE>
Item 2. MANAGEMENT'S NARRATIVE ANALYSIS OF
RESULTS OF OPERATIONS
(In Millions)
QUARTER ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
ILAD AMS SPECIALTY TOTAL
---- --- ---------- -----
1995 1994 1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
REVENUES $218 $167 $182 $194 $199 $132 $599 $493
BENEFITS, CLAIMS, EXPENSES AND TAXES 186 145 190 188 193 128 569 461
NET INCOME (LOSS) $32 $22 $(8) $6 $6 $4 $30 $32
</TABLE>
INDIVIDUAL LIFE AND ANNUITY DIVISION (ILAD)
The premiums, investment income, management and maintenance fees and cost of
insurance associated with this growing asset base continue to be the source of
ILAD's increased revenues. New deposits of fixed and variable annuities in the
three months ended June 30, 1995 were approximately $1 billion, a decrease from
prior year sales of $1.6 billion, but are not reported as revenues. New
business sales have slowed, however the past two years have seen
unprecedented growth for this line of business and the current trend is more
indicative of stable continual growth. Net income continues to grow due to the
nature of these products in that revenues and earnings are earned primarily
on the existing asset base.
ASSET MANAGEMENT SERVICES (AMS)
Second quarter results remain consistent with first quarter experience but are
down from the prior year quarter. The guaranteed rate contract (GRC) line was
particularly impacted by investment prepayment activity. Additionally, since
interest credited to contractholders is fixed, this expense remains constant
even as investment income declines.
SPECIALTY
The growth of the Specialty line is based primarily on increased sales of
corporate owned life insurance. New deposit premiums (not reported as revenues)
during the second quarter were $500 million compared to $400 million in 1994.
Revenues increased due to the continued growth in this line of business
resulting in increases in cost of insurance and maintenance fees and interest
earned on policy loans. In part, this reflects the 1994 recapture of
reinsurance previously ceded to a third party. The corresponding increase in
benefits, claims and expenses is primarily due to increases in dividends to
policyholders, as a significant portion of this block is written on a
participating basis.
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
ILAD AMS SPECIALTY TOTAL
---- --- --------- ------
1995 1994 1995 1994 1995 1994 1995 1994
----- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES $408 $322 $388 $394 $593 $356 $1,389 $1,072
BENEFITS, CLAIMS, EXPENSES AND TAXES 341 277 405 377 582 348 1,328 1,002
---- ---- ---- ---- ---- ---- ------ ------
NET INCOME (LOSS) $67 $45 $(17) $17 $11 $8 $61 $70
---- ---- ---- ---- ---- ---- ------ ------
---- ---- ---- ---- ---- ---- ------ ------
</TABLE>
(6)
<PAGE>
Item 2. MANAGEMENT'S NARRATIVE ANALYSIS OF
RESULTS OF OPERATIONS
(In Millions)
INDIVIDUAL LIFE AND ANNUITY DIVISION (ILAD)
Growth in fixed and variable annuity sales, as well as several assumption
reinsurance transactions in the last several years have increased the assets
under management in this segment to over $26 billion through June 1995. The
premiums, investment income, management and maintenance fees and cost of
insurance associated with this growing asset base continue to be the source of
ILAD's increased revenues. New deposits of fixed and variable annuities in the
first six months of 1995 were approximately $3 billion, but are not reported as
revenues, a slight decrease from prior year sales of $3.2 billion.
ASSET MANAGEMENT SERVICES (AMS)
This segment, consistent with the industry, has experienced a decline in net
investment income due to interest rate drops. The guaranteed rate contract
(GRC) line was particularly impacted by investment prepayment activity in
excess of expectations. Additionally, since interest credited to
contractholders is fixed, this expense remains constant even as investment
income declines. Although income for this line will continue to be impacted
from these prepayments, hedging strategies are in place that limit volatility
against future interest rate movements.
SPECIALTY
The growth of the Specialty line is based primarily on increased sales of
corporate owned life insurance. New deposit premiums (not reported as revenues)
during the first six months were $1.8 billion compared to $900 million in
1994. Revenues increased due to the continued growth in this line of business
resulting in increases in cost of insurance and maintenance fees and interest
earned on policy loans. In part, this reflects the 1994 recapture of
reinsurance previously ceded to a third party, as well as revenues on a block of
business assumed from a third party in December of 1994. The corresponding
increase in benefits, claims and expenses is primarily due to increases in
dividends to policyholders, as a significant portion of this block is written on
a participating basis.
(7)
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS:
On June 30, 1995, The Company received a non-cash capital contribution
of $183 million.
(8)
<PAGE>
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Exhibit Index
(b) None.
(9)
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Hartford Life Insurance Company
(Registrant)
by Stephen P. Minihan
-----------------------------------
August 11, 1995 Stephen P. Minihan
Assistant Vice President and
Controller
(Chief Accounting Officer)
(10)
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Location
------ ----------- ---------
(2) Plan of acquisition, reorganization, arrangement,
liquidation or succession None
(4) Instruments defining the rights of security holders,
including indentures None
(11) Statement re computation of per share earnings None
(15) Letter re unaudited interim financial information None
(18) Letter re change in accounting principles None
(19) Previously unfiled documents None
(20) Report furnished to security holders None
(23) Published report regarding matters submitted to
vote of security holders None
(24) Consents of experts and counsel None
(25) Power of attorney None
(28) Additional exhibits None
(11)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<DEBT-HELD-FOR-SALE> 14,331
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 91
<MORTGAGE> 296
<REAL-ESTATE> 0
<TOTAL-INVEST> 18,503
<CASH> 83
<RECOVER-REINSURE> 5,948
<DEFERRED-ACQUISITION> 1,990
<TOTAL-ASSETS> 56,444
<POLICY-LOSSES> 2,245
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 22,578
<POLICY-HOLDER-FUNDS> 28,881
<NOTES-PAYABLE> 0
<COMMON> 6
0
0
<OTHER-SE> 1,519
<TOTAL-LIABILITY-AND-EQUITY> 56,444
720
<INVESTMENT-INCOME> 675
<INVESTMENT-GAINS> (6)
<OTHER-INCOME> 0
<BENEFITS> 716
<UNDERWRITING-AMORTIZATION> 92
<UNDERWRITING-OTHER> 490
<INCOME-PRETAX> 91
<INCOME-TAX> 30
<INCOME-CONTINUING> 61
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 61
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
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