<PAGE> 1
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, 1998
OR
[ ]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
(Exact name of registrant as specified in its charter)
CONNECTICUT 06-0974148
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
200 HOPMEADOW STREET, SIMSBURY, CONNECTICUT 06089
(Address of principal executive offices)
(860) 843-7716
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No[ ]
As of May 14, 1998 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.
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
----
<S> <C>
Condensed Consolidated Statements of Income - Three Months Ended
March 31, 1998 and 1997 3
Condensed Consolidated Balance Sheets - March 31, 1998 and
December 31, 1997 4
Condensed Consolidated Statements of Changes in Stockholder's Equity -
Three Months Ended March 31, 1998 and 1997 5
Condensed Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1998 and 1997 6
Notes to Condensed Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
Signature 12
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------
(In millions) 1998 1997
---- ----
(Unaudited)
REVENUES
<S> <C> <C>
Premiums and other considerations $563 $310
Net investment income 352 337
Net realized capital gains -- 4
---- ----
TOTAL REVENUES 915 651
==== ====
BENEFITS, CLAIMS AND EXPENSES
Benefits, claims and claim adjustment expenses 398 342
Amortization of deferred policy acquisition costs 94 81
Dividends to policyholders 107 54
Other insurance expenses 188 73
---- ----
TOTAL BENEFITS, CLAIMS AND EXPENSES 787 550
==== ====
INCOME BEFORE INCOME TAX EXPENSE 128 101
Income tax expense 45 38
---- ----
NET INCOME $ 83 $ 63
==== ====
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE> 4
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
(In millions, except for share data) 1998 1997
-------- -------
(Unaudited)
<S> <C> <C>
ASSETS
Investments
Fixed maturities, available for sale, at fair value (amortized cost of
$14,336 and $13,885) $ 14,609 $14,176
Equity securities, available for sale, at fair value 188 180
Policy loans, at outstanding balance 3,760 3,756
Other investments, at cost 235 47
-------- -------
Total investments 18,792 18,159
Cash 52 54
Premiums and amounts receivable 23 18
Accrued investment income 353 330
Reinsurance recoverable 6,040 6,325
Deferred policy acquisition costs 3,430 3,315
Deferred income tax 454 348
Other assets 207 352
Separate account assets 77,457 69,055
-------- -------
TOTAL ASSETS $106,808 $97,956
======== =======
LIABILITIES
Future policy benefits $ 3,325 $ 3,270
Other policyholder funds 20,980 21,034
Other liabilities 2,622 2,254
Separate account liabilities 77,457 69,055
-------- -------
TOTAL LIABILITIES 104,384 95,613
======== =======
STOCKHOLDER'S EQUITY
Common stock - authorized 1,000; issued and outstanding,
par value $5,690 6 6
Capital surplus 1,045 1,045
Accumulated other comprehensive income
Net unrealized capital gains on securities, net of tax 177 179
-------- -------
Total accumulated other comprehensive income 177 179
-------- -------
Retained earnings 1,196 1,113
-------- -------
TOTAL STOCKHOLDER'S EQUITY 2,424 2,343
-------- -------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $106,808 $97,956
======== =======
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE> 5
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
ACCUMULATED OTHER
COMPREHENSIVE INCOME
--------------------
NET
UNREALIZED
CAPITAL
GAINS
(LOSSES)
ON TOTAL
COMMON CAPITAL SECURITIES, RETAINED STOCKHOLDERS'
(In millions) (Unaudited) STOCK SURPLUS NET OF TAX EARNINGS EQUITY
---- ------ ----- ------ -------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1997 $ 6 $1,045 $ 179 $1,113 $ 2,343
Comprehensive income
Net income -- -- -- 83 83
-------
Other comprehensive income, net of tax:
Change in unrealized capital
gains (losses) on securities (1) (2) -- -- (2) -- (2)
-------
Total other comprehensive income (2)
-------
Total comprehensive income 81
---- ------ ----- ------ -------
BALANCE, MARCH 31, 1998 $ 6 $1,045 $ 177 $1,196 $ 2,424
==== ====== ===== ====== =======
</TABLE>
THREE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
ACCUMULATED OTHER
COMPREHENSIVE INCOME
--------------------
NET
UNREALIZED
CAPITAL
GAINS
(LOSSES)
ON TOTAL
COMMON CAPITAL SECURITIES, RETAINED STOCKHOLDERS'
(In millions) (Unaudited) STOCK SURPLUS NET OF TAX EARNINGS EQUITY
---- ------ ----- ------ -------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1996 $ 6 $1,045 $ 30 $811 $ 1,892
Comprehensive income
Net income -- -- -- 63 63
-------
Other comprehensive income, net of tax:
Change in unrealized capital gains
(losses) on securities (1) (2) -- -- (87) -- (87)
-------
Total other comprehensive income (87)
-------
Total comprehensive income 24
---- ------ ---- ---- -------
BALANCE, MARCH 31, 1997 $ 6 $1,045 $(57) $874 $ 1,868
==== ====== ==== ==== =======
</TABLE>
(1) Unrealized gain (loss) on securities is net of tax expense (benefit) of $95
and $(34) for March 31, 1998 and 1997, respectively.
(2) Net of reclassification adjustment for gains realized in net income of $0
and $4 for March 31, 1998 and 1997, respectively.
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE> 6
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
(In millions) 1998 1997
------- -------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 83 $ 63
ADJUSTMENTS TO NET INCOME:
Depreciation and amortization (5) 5
Net realized capital gains -- (4)
(Increase) decrease in deferred income taxes (102) 21
Increase in deferred policy acquisition costs (115) (128)
(Increase) decrease in premiums receivable and agents' balances (5) 32
(Increase) decrease in accrued investment income (23) 57
Decrease in other assets 104 25
Decrease (increase) in reinsurance recoverables 23 (112)
Increase in liabilities for future policy benefits 55 158
Increase in other liabilities 74 227
------- -------
CASH PROVIDED BY OPERATING ACTIVITIES 89 344
======= =======
INVESTING ACTIVITIES
Purchases of fixed maturity investments (2,014) (1,525)
Sales of fixed maturity investments 1,162 985
Maturities and principal paydowns of fixed maturity investments 459 664
Net (purchases) sales of other investments (118) 111
Net sales (purchases) of short-term investments 211 (102)
------- -------
CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES (300) 133
======= =======
FINANCING ACTIVITIES
Net receipts from (disbursements for) investment and universal life-type contracts
credited to (charged against) policyholder accounts 209 (447)
------- -------
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 209 (447)
======= =======
(Decrease) increase in cash (2) 30
Cash - beginning of period 54 43
------- -------
CASH - END OF PERIOD $ 52 $ 73
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
NET CASH PAID DURING THE PERIOD FOR:
Income taxes $ 56 $ 41
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
6
<PAGE> 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS EXCEPT FOR SHARE DATA UNLESS OTHERWISE STATED)
(UNAUDITED)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
Hartford Life Insurance Company (the "Company") have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures which are normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to those rules and regulations, although
the Company believes that the disclosures made are adequate to make the
information presented not misleading. In the opinion of management, these
statements include all adjustments which were normal recurring adjustments
necessary to present fairly the financial position, results of operations and
cash flows for the periods presented.
For a description of accounting policies, see Note 2 of Notes to Consolidated
Financial Statements in the Company's 1997 Form 10-K Annual Report.
Certain reclassifications have been made to prior year financial information to
conform to the current year classification of transactions and accounts.
(b) CHANGES IN ACCOUNTING PRINCIPLES
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") No. 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use". The SOP provides guidance on
accounting for the costs of internal use software and in determining whether the
software is for internal use. The SOP defines internal use software as software
that is acquired, internally developed, or modified solely to meet internal
needs and identifies stages of software development and accounting for the
related costs incurred during the stages. This statement is effective for fiscal
years beginning after December 15, 1998 and is not expected to have a material
impact on the Company's financial condition or results of operations.
Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 130, "Reporting Comprehensive Income", which establishes
standards for reporting and display of comprehensive income and its components
in a full set of general purpose financial statements. The objective of this
statement is to report a measure of all changes in equity of an enterprise that
result from transactions and other economic events of the period other than
transactions with owners. Comprehensive income is the total of net income and
all other nonowner changes in equity. Accordingly, the Company has reported
comprehensive income in the Condensed Consolidated Statements of Changes in
Stockholder's Equity.
NOTE 2. INITIAL PUBLIC OFFERING ("IPO")
On February 10, 1997, the Company's indirect parent, Hartford Life, Inc.
("Hartford Life"), filed a registration statement, as amended, with the
Securities and Exchange Commission, relating to the IPO of Hartford Life's Class
A Common Stock. Pursuant to the IPO on May 22, 1997, Hartford Life sold to the
public 26 million shares at $28.25 per share and received proceeds, net of
offering expenses, of $687. Of the proceeds, $527 was used to retire debt
related to Hartford Life's promissory notes outstanding and line of credit. The
remaining $160 was contributed by Hartford Life to Hartford Life and Accident
Insurance Company, the Company's direct parent, to support growth in its core
businesses.
The 26 million shares sold in the IPO represent approximately 18.6% of the
equity ownership in Hartford Life and approximately 4.4% of the combined voting
power of Hartford Life's Class A and Class B Common Stock. The Hartford
Financial Services Group, Inc. owns all of the 114 million outstanding shares of
Class B Common Stock of Hartford Life, representing approximately 81.4% of the
equity ownership in Hartford Life and approximately 95.6% of the combined voting
power of Hartford Life's Class A and Class B Common Stock. Holders of Class A
Common Stock generally have identical rights to the holders of Class B Common
Stock except that the holders of Class A Common Stock are entitled to one vote
per share while holders of Class B Common Stock are entitled to five votes per
share on all matters submitted to a vote of Hartford Life's stockholders.
7
<PAGE> 8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 3. COMMITMENTS AND CONTINGENCIES
LITIGATION
The Company is involved in pending and threatened litigation in the normal
course of its business in which claims for monetary and punitive damages have
been asserted. Although there can be no assurances, management, at the present
time, does not anticipate that the ultimate liability arising from such pending
or threatened litigation will have a material effect on the financial condition
or operating results of the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(DOLLAR AMOUNTS IN MILLIONS EXCEPT FOR PER SHARE DATA UNLESS OTHERWISE STATED)
Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") addresses the financial condition of the Company as of March
31, 1998, compared with December 31, 1997, and its results of operations for the
three months ended March 31, 1998 compared with the equivalent 1997 period.
This discussion should be read in conjunction with the MD&A in the Company's
1997 Form 10-K Annual Report.
Certain statements contained in this discussion, other than statements of
historical fact, are forward-looking statements. These statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and include estimates and assumptions related to economic,
competitive and legislative developments. These forward-looking statements are
subject to change and uncertainty which are, in many instances, beyond the
Company's control and have been made based upon management's expectations and
beliefs concerning future developments and their potential effect on Hartford
Life Insurance Company and subsidiaries (the "Company"). There can be no
assurance that future developments will be in accordance with management's
expectations or that the effect of future developments on the Company will be
those anticipated by management. Actual results could differ materially from
those expected by the Company, depending on the outcome of certain factors,
including those described in the forward-looking statements.
Certain reclassifications have been made to prior year financial information to
conform to the current year presentation.
INDEX
Consolidated Results of Operations: Operating Summary 8
Annuity 9
Individual Life Insurance 10
Employee Benefits 10
Guaranteed Investment Contracts 11
Accounting Standards 11
CONSOLIDATED RESULTS OF OPERATIONS: OPERATING SUMMARY
<TABLE>
<CAPTION>
OPERATING SUMMARY FIRST QUARTER ENDED
MARCH 31,
-------------------
1998 1997
---- ----
<S> <C> <C>
REVENUES $915 $651
EXPENSES 832 588
---- ----
NET INCOME $ 83 $ 63
==== ====
</TABLE>
The Company's insurance business operates in three principal segments: Annuity,
Individual Life Insurance, and Employee Benefits as well as a Guaranteed
Investments Contracts segment, which is primarily comprised of business written
prior to 1995. The Company also maintains a Corporate operation through which it
reports items that are not directly allocable to any of its business segments.
The Annuity segment focuses on the savings and retirement needs of the growing
number of individuals who are preparing for retirement or have already retired.
This segment consists of two areas of operation: Individual Annuity and Group
Annuity. The variety of products sold within this segment reflects the diverse
nature of the market. These include, in the Individual Annuity area, individual
variable annuities, fixed market value adjusted ("MVA") annuities, and mutual
funds; and in the Group Annuity area, deferred compensation and retirement plan
services for municipal governments and corporations, structured settlement
contracts and other special purpose annuity contracts, and investment management
contracts. The Individual Life Insurance segment, which focuses on the high end
estate and business planning markets, sells a variety of life insurance
products, including variable life and universal life insurance. The Employee
Benefits segment consists of two areas of operation: Group Insurance and
Specialty Insurance. Through Group Insurance, the Company offers products such
as group life insurance, group short- and long-term disability and accidental
death and dismemberment. Substantially all of the Group Insurance business
directly written by the Company is ceded to its direct parent, Hartford Life and
Accident Insurance Company. Specialty Insurance primarily consists of the
Company's corporate owned life insurance ("COLI") business. The Guaranteed
Investment Contracts segment consists of guaranteed rate contract ("GRC")
business that is supported by assets held in either the
8
<PAGE> 9
Company's general account or a guaranteed separate account and includes a closed
block of guaranteed rate contracts ("Closed Book GRC"). The Company decided in
1995, after a thorough review of its GRC business, that it would significantly
de-emphasize general account GRC, choosing to focus its distribution efforts on
other products sold through other divisions. Management expects no material
income or loss from the Guaranteed Investment Contracts segment in the future.
Revenues increased $264, or 41%, to $915 for the first quarter of 1998 from $651
for the comparable period in 1997. This was partially due to COLI revenues which
increased $161 due to renewal premium on leveraged COLI and increased fees
associated with variable COLI sales. Excluding COLI, revenues increased $103, or
22%, over the first quarter of 1997. This increase was driven by the Annuity
segment whose revenues increased $101, or 36%, for the first quarter of 1998 as
compared to the first quarter of 1997. This increase was due to higher fee
income earned on growing annuity account values where the average account value
grew $18.9 billion, or 37%, to $70.6 billion at March 31, 1998 from $51.7
billion at March 31, 1997 due to market appreciation and new sales. Also,
Individual Life Insurance revenues increased $17, or 15%, for the first quarter
of 1998 as compared to the first quarter of 1997 due to increased cost of
insurance charges and other fee income on the Company's growing block of
variable life business. Partially offsetting the increases discussed above was a
$20 decline in revenues related to Closed Book GRC.
Expenses increased $244, or 41%, to $832 for the first quarter of 1998 from $588
for the comparable period in 1997. The increase was partially driven by COLI,
whose expenses increased $160 as a result of increased operating expenses
associated with significant renewal premium and variable COLI sales for the
quarter ended March 31, 1998. Excluding COLI, expenses increased $84, or 20%,
over the first quarter of 1997. Annuity expenses grew $81 primarily due to
higher amortization of deferred policy acquisition costs and operating expenses
directly related to the growth in this segment. Individual Life Insurance
expenses increased $15 primarily due to higher benefits, claims, and claim
adjustment expenses, which is consistent with the growth in this blocks of
business. Partially offsetting the increases discussed above was a $20 decline
in expenses related to Closed Book GRC.
Net income increased $20, or 32%, to $83 for the first quarter of 1998 from $63
for the first quarter of 1997 primarily due to growth in the Annuity and the
Individual Life Insurance segments. Annuity earnings increased $20, or 47%, due
to increasing account values resulting from significant stock market
appreciation and new sales, particularly in Individual Annuity. Individual Life
Insurance earnings increased $2, or 18%, as a result of strong sales and growing
account values. Guaranteed Investment Contracts had no net income in the first
quarter of 1998 or 1997, consistent with management's expectations.
SEGMENT RESULTS
The Company's reporting segments, which reflect the management structure of the
Company, consist of Annuity, Individual Life Insurance, Employee Benefits,
Guaranteed Investment Contracts and a Corporate Operation.
Below is a summary of net income by segment.
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
MARCH 31,
-------------------
1998 1997
--- ---
<S> <C> <C>
ANNUITY $63 $43
INDIVIDUAL LIFE INSURANCE 13 11
EMPLOYEE BENEFITS 6 6
GUARANTEED INVESTMENT CONTRACTS -- --
CORPORATE OPERATION 1 3
--- ---
NET INCOME $83 $63
=== ===
</TABLE>
The sections that follow analyze each segment's results.
ANNUITY
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
MARCH 31,
-------------------
1998 1997
---- ----
<S> <C> <C>
REVENUES $381 $280
EXPENSES 318 237
---- ----
NET INCOME $ 63 $ 43
==== ====
</TABLE>
Revenues increased $101, or 36%, to $381 as of March 31, 1998 from $280 as of
March 31, 1997. Individual Annuity revenues increased $90, or 50%, over the
first quarter of 1997 primarily due to higher fee income earned on growth in
individual variable annuity
9
<PAGE> 10
account values. Average individual variable annuity account values grew $16.9
billion, or 51%, to $50.2 billion as of March 31, 1998 from $33.3 billion as of
March 31, 1997. This growth was the result of significant market appreciation as
well as strong sales of $2.4 billion in the first quarter of 1998. Also, Group
Annuity revenues increased $11, or 11%, as of March 31, 1998 as compared to
March 31, 1997 due to higher net investment income resulting from growth in
assets under management. Group Annuity average account values grew $2.0 billion,
or 22%, to $11.1 billion as March 31, 1998 from $9.1 billion as of March 31,
1997 due to market appreciation and new deposits.
Expenses increased $81, or 34%, to $318 as of March 31, 1998 from $237 as of
March 31, 1997. Benefits, claims and claim adjustment expenses increased $14
primarily due to increased interest credited on Individual Annuity general
account values, which increased $1.3 billion, or 43%, to $4.2 billion at March
31, 1998 from $2.9 billion at March 31, 1997. Amortization of DPAC increased $20
as prior and current year sales remained strong. Also, other business expenses
increased $37 as a result of the growth in this segment. However, operating
expenses as a percentage of average account value declined from 1997 levels.
Annuity net income increased $20, or 47%, to $63 as of March 31, 1998 from $43
as of March 31, 1997 as a result of growing average account values discussed
above and operating expense efficiencies.
INDIVIDUAL LIFE INSURANCE
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
MARCH 31,
-------------------
1998 1997
---- ----
<S> <C> <C>
REVENUES $128 $111
EXPENSES 115 100
---- ----
NET INCOME $ 13 $ 11
==== ====
</TABLE>
Revenues increased $17, or 15%, to $128 as of March 31, 1998 from $111 as of
March 31, 1997. This increase was primarily due to higher cost of insurance
charges and other fee income earned on the Company's growing block of variable
life insurance. Variable life average account values increased $540, or 84%, to
$1.2 billion as of March 31, 1998 from $640 as of March 31, 1997 due to market
appreciation and strong sales. Variable life product sales constituted 75%, or
$24, of total Individual Life Insurance new sales in the first quarter of 1998,
an increased of $9, or 60%, compared to the same period in 1997.
Expenses increased $15, or 15%, to $115 as of March 31, 1998 from $100 as of
March 31, 1997. This increase was primarily the result of higher benefits,
claims, and claim adjustment expenses of $20 due to the growth in this segment
as well as increased mortality experience in the first quarter of 1998. Net
income increased $2, or 18%, to $13 as of March 31, 1998 from $11 as of March
31, 1997.
EMPLOYEE BENEFITS
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
MARCH 31,
-------------------
1998 1997
---- ----
<S> <C> <C>
REVENUES $348 $179
EXPENSES 342 173
---- ----
NET INCOME $ 6 $ 6
==== ====
</TABLE>
Revenues increased $169, or 94%, to $348 as of March 31, 1998 from $179 as of
March 31, 1997. This was primarily due to COLI whose revenues increased $161, or
90%, for the first quarter of 1998 as compared to the first quarter of 1997.
This increase was due to $80 of renewal premium on leveraged COLI as well as
increased fee income of $78 related to new sales of variable COLI.
Expenses increased $169, or 98%, to $342 as of March 31, 1998 from $173 as of
March 31, 1997. COLI expenses increased $160 primarily due to higher expenses
associated with the first quarter 1998 increase in variable COLI sales and
leveraged COLI renewal premium. Net income was consistent with the prior year
results.
10
<PAGE> 11
GUARANTEED INVESTMENT CONTRACTS
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
MARCH 31,
-------------------
1998 1997
--- ---
<S> <C> <C>
REVENUES $52 $72
EXPENSES 52 72
--- ---
NET INCOME $-- $--
=== ===
</TABLE>
This segment reported no net income for the first quarter of 1998 and 1997
consistent with management's expectations that net income (loss) from Closed
Book GRC in the years subsequent to 1996 will be immaterial based on the
Company's current projections for the performance of the assets and liabilities
associated with Closed Book GRC. However, no assurance can be given that, under
certain unanticipated economic circumstances which result in the Company's
assumptions being proven inaccurate, further losses in respect of Closed Book
GRC will not occur in the future.
ACCOUNTING STANDARDS
For a discussion of accounting standards, see Note 1 of Notes to Condensed
Consolidated Financial Statements
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in pending and threatened litigation in the normal
course of its business in which claims for monetary and punitive damages have
been asserted. Although there can be no assurances, management, at the present
time, does not anticipate that the ultimate liability arising from such pending
or threatened litigation will have a material effect on the financial condition
or operating results of the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - See Exhibits Index
(b) Reports on Form 8-K - None
11
<PAGE> 12
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)
/s/ Mary Jane Fortin
-------------------------------
Mary Jane Fortin
Chief Accounting Officer and
Assistant Vice President
MAY 14, 1998
12
<PAGE> 13
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
FORM 10-Q
EXHIBITS INDEX
EXHIBIT # DESCRIPTION
27 Financial Data Schedule is filed herewith.
13
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<DEBT-HELD-FOR-SALE> 14,609
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 188
<MORTGAGE> 197
<REAL-ESTATE> 0
<TOTAL-INVEST> 18,792
<CASH> 52
<RECOVER-REINSURE> 6,040
<DEFERRED-ACQUISITION> 3,430
<TOTAL-ASSETS> 106,808
<POLICY-LOSSES> 3,325
<UNEARNED-PREMIUMS> 2
<POLICY-OTHER> 20,980
<POLICY-HOLDER-FUNDS> 77,457
<NOTES-PAYABLE> 0
0
0
<COMMON> 6
<OTHER-SE> 2,418
<TOTAL-LIABILITY-AND-EQUITY> 106,808
563
<INVESTMENT-INCOME> 352
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 0
<BENEFITS> 398
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</TABLE>
