<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 March 31, 1996
[ ] 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 203-843-3492
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 May 10, 1996 there were outstanding 1,000 shares of common stock, $5,690
par value 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 -
First Quarter Ended March 31, 1996 and 1995. . . . . . . . . . . . . . 3
Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995 . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows -
First Quarter Ended March 31, 1996 and 1995. . . . . . . . . . . . . . 5
Item 2. Management's Narrative Analysis of Results of Operations*
First Quarter Ended March 31, 1996 and 1995. . . . . . . . . . . . . . 6
Part II. OTHER INFORMATION:*
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . 7
Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(*) 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. Certain reclassifications of prior year results were made
to conform to current presentation. For a description of accounting policies,
see Notes to Consolidated Financial Statements in the 1995 Form 10-K.
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in Millions)
Three Months Ended
March 31,
---------
1996 1995
-------- --------
(unaudited)
REVENUES:
Premiums and other considerations $ 644 $ 450
Net investment income 333 339
Net realized gains on investments - 1
------ ------
977 790
------ ------
BENEFITS, CLAIMS AND EXPENSES:
Benefits, claims and claim adjustment expenses 396 366
Amortization of deferred policy acquisition costs 66 42
Dividends to policyholders 286 228
Other insurance expenses 164 108
------ ------
912 744
------ ------
INCOME BEFORE INCOME TAX 65 46
Income tax expense 22 15
------ ------
NET INCOME $ 43 $ 31
------ ------
------ ------
(3)
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Millions)
March 31, December 31,
1996 1995
--------- -------------
(unaudited)
ASSETS
Investments:
Fixed maturities, available for sale, at fair
value $ 14,279 $ 14,400
Equity securities, at fair value 64 63
Mortgage loans, at outstanding principal balance 82 265
Policy loans, at outstanding balance 3,868 3,381
Other investments 104 156
------- -------
18,397 18,265
Cash 52 46
Premiums and amounts receivable 104 165
Reinsurance recoverable 6,219 6,221
Accrued investment income 334 394
Deferred policy acquisition costs 2,283 2,188
Deferred income tax 531 420
Other assets 246 234
Separate account assets 38,951 36,264
------- -------
$ 67,117 $ 64,197
------- -------
------- -------
LIABILITIES AND STOCKHOLDER'S EQUITY
Future policy benefits $ 2,284 $ 2,373
Other policyholder funds 22,637 22,598
Other liabilities 1,603 1,233
Separate account liabilities 38,951 36,264
------- -------
65,475 62,468
Common stock -- authorized 1,000 shares, $5,690 par value,
issued and outstanding 1,000 shares 6 6
Capital surplus 1,007 1,007
Unrealized loss on investments, net of tax (187) (57)
Retained earnings 816 773
------- -------
1,642 1,729
------- -------
$ 67,117 $ 64,197
------- -------
------- -------
(4)
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
---------------
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES:
NET INCOME $ 43 $ 31
Adjustments to net income:
Net realized investment gains before tax -- (1)
Net policyholder investment gains before tax (3) --
Net deferred policy acquisition costs (95) (108)
Net amortization of premium on fixed maturities 7 1
Deferred income tax expense (40) (75)
Decrease in premiums and amounts receivable 43 14
Increase in other assets (12) (131)
Increase in reinsurance recoverable (12) (36)
(Decrease) increase in liability for future policy benefits (89) 99
Increase in other liabilities 262 141
Decrease in accrued investment income 60 26
------ ------
CASH PROVIDED (USED FOR) BY OPERATING ACTIVITIES 164 (39)
------ ------
INVESTING ACTIVITIES:
Purchases of fixed maturity investments (1,382) (1,080)
Proceeds from sales of fixed maturity investments 701 751
Maturities and principal paydowns of long-term investments 640 290
Net purchases of other investments (235) (927)
Net (purchases) sales of short-term investments (70) 98
------ ------
CASH USED FOR INVESTING ACTIVITIES (346) (868)
------ ------
FINANCING ACTIVITIES:
Net receipts from investment and UL-type contracts credited to
policyholder account balances 188 932
------ ------
CASH PROVIDED BY FINANCING ACTIVITIES 188 932
------ ------
NET INCREASE IN CASH 6 25
Cash at beginning of period 46 20
------ ------
CASH AT END OF PERIOD $ 52 $ 45
------ ------
------ ------
</TABLE>
(5)
<PAGE>
ITEM 2. MANAGEMENT'S NARRATIVE ANALYSIS OF
RESULTS OF OPERATIONS
(In Millions)
<TABLE>
<CAPTION>
ILAD AMS SPECIALTY RUNOFF TOTAL
---- --- --------- ------ -----
1996 1995 1996 1995 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES $273 $190 $99 $105 $543 $394 $62 $101 $977 $790
BENEFITS, CLAIMS, EXPENSES AND TAXES 226 155 96 101 535 389 77 114 934 759
------- ----- ----- ----- ----- ----- ------ ----- ----- -----
$47 $35 $3 $4 $8 $5 ($15) ($13) $43 $31
------- ----- ----- ----- ----- ----- ------ ----- ----- -----
------- ----- ----- ----- ----- ----- ------ ----- ----- -----
</TABLE>
INDIVIDUAL LIFE AND ANNUITY DIVISION (ILAD)
Net income, up 35% from the same period last year, continues to grow as
earnings are generated from an increasing asset base. 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
quarter of 1996 were approximately $2.3 billion, a slight increase over the
same period last year, indicative of strong, stable growth in assets.
ASSET MANAGEMENT SERVICES (AMS)
This segment continues to be an industry leader in deferred compensation
products where it is among the top providers in the country. Revenues and
expenses decreased as a result of lower investment and lower credited rates.
Asset Management Services is currently engaged in a restructuring process
that is anticipated to result in new product development as well as expense
reductions.
SPECIALTY
Increased net income in the Specialty segment is attributable to net
investment income and other revenues on the existing block of corporate owned
life insurance (COLI) business. There were no new deposits of leveraged COLI
in the first quarter of 1996 in anticipation of unfavorable tax legislation.
New products, including variable COLI and other non-qualified deferred
compensation vehicles, as well as new international ventures are being
developed. These should mitigate the earnings lost due to leveraged COLI.
RUNOFF
The Runoff segment consists of a closed block of guaranteed rate contracts
(GRC) formerly part of the AMS segment of business. GRC results have been
negatively affected by lower investment earnings on mortgaged-backed
securities due to prepayments experienced in excess of assumed levels.
(6)
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Exhibit Index
(b) None.
(7)
<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)
May 10, 1996 by /s/ Gregory A. Boyko
--------------------------------
Gregory A. Boyko
Controller
(Chief Accounting Officer)
(8)
<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
(9)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<DEBT-HELD-FOR-SALE> 14,279
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 64
<MORTGAGE> 82
<REAL-ESTATE> 0
<TOTAL-INVEST> 18,397
<CASH> 52
<RECOVER-REINSURE> 6,219
<DEFERRED-ACQUISITION> 2,283
<TOTAL-ASSETS> 67,117
<POLICY-LOSSES> 2,284
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 22,637
<POLICY-HOLDER-FUNDS> 38,951
<NOTES-PAYABLE> 0
0
0
<COMMON> 6
<OTHER-SE> 1,636
<TOTAL-LIABILITY-AND-EQUITY> 67,117
644
<INVESTMENT-INCOME> 333
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 0
<BENEFITS> 396
<UNDERWRITING-AMORTIZATION> 66
<UNDERWRITING-OTHER> 450
<INCOME-PRETAX> 65
<INCOME-TAX> 22
<INCOME-CONTINUING> 43
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43
<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>
