<PAGE>
RETIREMENT PLAN SOLUTIONS
1999
HARTFORD LIFE INSURANCE COMPANY
[LOGO] HARTFORD LIFE & ANNUITY INSURANCE COMPANY
Hartford Life
SEPARATE ACCOUNTS AND
HARTFORD HLS MUTUAL FUNDS
A N N U A L R E P O R T
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Letter to Clients................................. 1
Performance Summary............................... 2
Investment Review................................. 3
Hartford Life Insurance Company Separate Account
Financial Statements for:
DC Variable Account-I......................... 16
Separate Account Two.......................... 24
Hartford HLS Mutual Funds Financial Statements
for:
Hartford Bond Income Strategy HLS Fund........ MF-1
Hartford Stock HLS Fund....................... MF-6
Hartford Money Market HLS Fund................ MF-8
Hartford Advisers HLS Fund.................... MF-10
Hartford Capital Appreciation HLS Fund........ MF-15
Hartford Mortgage Securities HLS Fund......... MF-18
Hartford Index HLS Fund....................... MF-20
Hartford International Opportunities HLS
Fund......................................... MF-26
Hartford Dividend and Growth HLS Fund......... MF-30
Hartford International Advisers HLS Fund...... MF-32
Hartford Small Company HLS Fund............... MF-39
Hartford MidCap HLS Fund...................... MF-41
Hartford Growth and Income HLS Fund........... MF-43
Hartford High Yield HLS Fund.................. MF-45
Hartford Global Leaders HLS Fund.............. MF-49
</TABLE>
<PAGE>
DC VARIABLE ACCOUNT-I
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
MONEY MARKET
BOND FUND STOCK FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------
<S> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS Fund, Inc. -
Class IA
Shares 35,027,942
Cost $35,075,750
Market Value......................... $34,812,940 -- --
Hartford Stock HLS Fund, Inc. -
Class IA
Shares 90,929,970
Cost $372,743,476
Market Value......................... -- $649,911,779 --
Hartford Money Market HLS Fund, Inc. -
Class IA
Shares 37,464,148
Cost $37,464,148
Market Value......................... -- -- $37,464,148
Hartford Advisers HLS Fund, Inc. -
Class IA
Shares 241,575,706
Cost $491,569,828
Market Value......................... -- -- --
Hartford Capital Appreciation HLS
Fund, Inc. - Class IA
Shares 80,058,557
Cost $268,461,947
Market Value......................... -- -- --
Hartford Mortgage Securities HLS
Fund, Inc. - Class IA
Shares 16,383,834
Cost $17,409,616
Market Value......................... -- -- --
Hartford Index HLS Fund, Inc. -
Class IA
Shares 45,178,039
Cost $113,674,627
Market Value......................... -- -- --
Hartford International Opportunities
HLS Fund, Inc. - Class IA
Shares 27,540,897
Cost $33,916,402
Market Value......................... -- -- --
Hartford Dividend and Growth HLS
Fund, Inc. - Class IA
Shares 25,067,270
Cost $40,459,306
Market Value......................... -- -- --
Calvert Social Balanced Portfolio
Shares 12,019,049
Cost $21,192,688
Market Value......................... -- -- --
Due from Hartford Life Insurance
Company................................. 22,065 -- --
Receivable from fund shares sold......... -- 534,856 188,721
----------- ------------ -----------
Total Assets............................. 34,835,005 650,446,635 37,652,869
----------- ------------ -----------
LIABILITIES:
Due to Hartford Life Insurance Company... -- 534,821 187,172
Payable for fund shares purchased........ 22,040 -- --
----------- ------------ -----------
Total Liabilities........................ 22,040 534,821 187,172
----------- ------------ -----------
Net Assets (variable annuity contract
liabilities)............................ $34,812,965 $649,911,814 $37,465,697
=========== ============ ===========
Deferred annuity contracts in the
accumulation period:
Group Sub-Accounts:
Units owned by participants.............. 7,196,751 28,665,974 12,051,487
Unit values*............................. $ 4.837317 $ 22.671890 $ 3.108803
</TABLE>
*Unit value amounts represent an average of individual unit values, which differ
within each sub-account.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 16
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL
ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ----------------- --------------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS Fund, Inc. -
Class IA
Shares 35,027,942
Cost $35,075,750
Market Value......................... -- -- -- -- --
Hartford Stock HLS Fund, Inc. -
Class IA
Shares 90,929,970
Cost $372,743,476
Market Value......................... -- -- -- -- --
Hartford Money Market HLS Fund, Inc. -
Class IA
Shares 37,464,148
Cost $37,464,148
Market Value......................... -- -- -- -- --
Hartford Advisers HLS Fund, Inc. -
Class IA
Shares 241,575,706
Cost $491,569,828
Market Value......................... $716,217,371 -- -- -- --
Hartford Capital Appreciation HLS
Fund, Inc. - Class IA
Shares 80,058,557
Cost $268,461,947
Market Value......................... -- $487,987,969 -- -- --
Hartford Mortgage Securities HLS
Fund, Inc. - Class IA
Shares 16,383,834
Cost $17,409,616
Market Value......................... -- -- $17,030,864 -- --
Hartford Index HLS Fund, Inc. -
Class IA
Shares 45,178,039
Cost $113,674,627
Market Value......................... -- -- -- $189,240,864 --
Hartford International Opportunities
HLS Fund, Inc. - Class IA
Shares 27,540,897
Cost $33,916,402
Market Value......................... -- -- -- -- $51,664,932
Hartford Dividend and Growth HLS
Fund, Inc. - Class IA
Shares 25,067,270
Cost $40,459,306
Market Value......................... -- -- -- -- --
Calvert Social Balanced Portfolio
Shares 12,019,049
Cost $21,192,688
Market Value......................... -- -- -- -- --
Due from Hartford Life Insurance
Company................................. -- 42,914 -- -- --
Receivable from fund shares sold......... 182,514 -- 43,601 317,424 226,380
------------ ------------ ----------- ------------ -----------
Total Assets............................. 716,399,885 488,030,883 17,074,465 189,558,288 51,891,312
------------ ------------ ----------- ------------ -----------
LIABILITIES:
Due to Hartford Life Insurance Company... 182,403 -- 43,965 317,414 226,468
Payable for fund shares purchased........ -- 42,785 -- -- --
------------ ------------ ----------- ------------ -----------
Total Liabilities........................ 182,403 42,785 43,965 317,414 226,468
------------ ------------ ----------- ------------ -----------
Net Assets (variable annuity contract
liabilities)............................ $716,217,482 $487,988,098 $17,030,500 $189,240,874 $51,664,844
============ ============ =========== ============ ===========
Deferred annuity contracts in the
accumulation period:
Group Sub-Accounts:
Units owned by participants.............. 101,429,660 39,291,550 6,077,622 62,940,685 22,410,406
Unit values*............................. $ 7.061223 $ 12.419670 $ 2.802165 $ 3.006654 $ 2.305395
<CAPTION>
CALVERT
DIVIDEND AND SOCIAL BALANCED
GROWTH FUND PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------ ---------------
<S> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS Fund, Inc. -
Class IA
Shares 35,027,942
Cost $35,075,750
Market Value......................... -- --
Hartford Stock HLS Fund, Inc. -
Class IA
Shares 90,929,970
Cost $372,743,476
Market Value......................... -- --
Hartford Money Market HLS Fund, Inc. -
Class IA
Shares 37,464,148
Cost $37,464,148
Market Value......................... -- --
Hartford Advisers HLS Fund, Inc. -
Class IA
Shares 241,575,706
Cost $491,569,828
Market Value......................... -- --
Hartford Capital Appreciation HLS
Fund, Inc. - Class IA
Shares 80,058,557
Cost $268,461,947
Market Value......................... -- --
Hartford Mortgage Securities HLS
Fund, Inc. - Class IA
Shares 16,383,834
Cost $17,409,616
Market Value......................... -- --
Hartford Index HLS Fund, Inc. -
Class IA
Shares 45,178,039
Cost $113,674,627
Market Value......................... -- --
Hartford International Opportunities
HLS Fund, Inc. - Class IA
Shares 27,540,897
Cost $33,916,402
Market Value......................... -- --
Hartford Dividend and Growth HLS
Fund, Inc. - Class IA
Shares 25,067,270
Cost $40,459,306
Market Value......................... $53,865,252 --
Calvert Social Balanced Portfolio
Shares 12,019,049
Cost $21,192,688
Market Value......................... -- $26,069,318
Due from Hartford Life Insurance
Company................................. -- 5,206
Receivable from fund shares sold......... 20,267 --
----------- -----------
Total Assets............................. 53,885,519 26,074,524
----------- -----------
LIABILITIES:
Due to Hartford Life Insurance Company... 20,249 --
Payable for fund shares purchased........ -- 725
----------- -----------
Total Liabilities........................ 20,249 725
----------- -----------
Net Assets (variable annuity contract
liabilities)............................ $53,865,270 $26,073,799
=========== ===========
Deferred annuity contracts in the
accumulation period:
Group Sub-Accounts:
Units owned by participants.............. 22,926,762 7,926,762
Unit values*............................. $ 2.349450 $ 3.290904
</TABLE>
*Unit value amounts represent an average of individual unit values, which differ
within each sub-account.
---------------------------------------------------- 17
----------------------------------------------------
<PAGE>
DC VARIABLE ACCOUNT-I
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
MONEY MARKET
BOND FUND STOCK FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends............................. $ 1,926,845 $ 4,509,588 $1,753,408
EXPENSES:
Mortality and expense undertakings.... (323,664) (5,581,356) (290,855)
----------- ------------- ----------
Net investment income (loss)........ 1,603,181 (1,071,768) 1,462,553
----------- ------------- ----------
CAPITAL GAINS INCOME.................... 308,039 63,567,855 974
----------- ------------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on security
transactions......................... 446,938 194,109,792 --
Net unrealized (depreciation)
appreciation of investments during
the period........................... (3,554,082) (126,167,137) --
----------- ------------- ----------
Net (loss) gain on investments...... (3,107,144) 67,942,655 --
----------- ------------- ----------
Net (decrease) increase in net
assets resulting from operations... $(1,195,924) $ 130,438,742 $1,463,527
=========== ============= ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 18
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL
ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ----------------- --------------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends............................. $ 15,085,324 $ 1,474,954 $ 952,816 $ 1,831,409 $ 499,816
EXPENSES:
Mortality and expense undertakings.... (5,969,355) (3,539,967) (153,921) (1,436,655) (354,285)
------------- ------------ ----------- ----------- -----------
Net investment income (loss)........ 9,115,969 (2,065,013) 798,895 394,754 145,531
------------- ------------ ----------- ----------- -----------
CAPITAL GAINS INCOME.................... 66,035,988 28,364,366 -- 2,884,801 --
------------- ------------ ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on security
transactions......................... 109,707,712 75,300,296 353,908 29,025,940 3,154,826
Net unrealized (depreciation)
appreciation of investments during
the period........................... (110,915,510) 43,096,428 (1,009,631) 1,691,276 12,059,980
------------- ------------ ----------- ----------- -----------
Net (loss) gain on investments...... (1,207,798) 118,396,724 (655,723) 30,717,216 15,214,806
------------- ------------ ----------- ----------- -----------
Net (decrease) increase in net
assets resulting from operations... $ 73,944,159 $144,696,077 $ 143,172 $33,996,771 $15,360,337
============= ============ =========== =========== ===========
<CAPTION>
CALVERT
DIVIDEND AND SOCIAL BALANCED
GROWTH FUND PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------ ---------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends............................. $ 882,872 $ 562,563
EXPENSES:
Mortality and expense undertakings.... (494,414) (203,569)
------------ -----------
Net investment income (loss)........ 388,458 358,994
------------ -----------
CAPITAL GAINS INCOME.................... 2,571,967 1,927,344
------------ -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on security
transactions......................... 9,975,175 2,311,717
Net unrealized (depreciation)
appreciation of investments during
the period........................... (10,078,741) (1,644,189)
------------ -----------
Net (loss) gain on investments...... (103,566) 667,528
------------ -----------
Net (decrease) increase in net
assets resulting from operations... $ 2,856,859 $ 2,953,866
============ ===========
</TABLE>
---------------------------------------------------- 19
----------------------------------------------------
<PAGE>
DC VARIABLE ACCOUNT-I
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
MONEY MARKET
BOND FUND STOCK FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------- ------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............... $ 1,603,181 $ (1,071,768) $ 1,462,553
Capital gains income....................... 308,039 63,567,855 974
Net realized gain on security
transactions.............................. 446,938 194,109,792 --
Net unrealized (depreciation) appreciation
of investments during the period.......... (3,554,082) (126,167,137) --
------------ ------------- ------------
Net (decrease) increase in net assets
resulting from operations................. (1,195,924) 130,438,742 1,463,527
------------ ------------- ------------
UNIT TRANSACTIONS:
Purchases.................................. 3,207,870 57,188,543 2,777,236
Net transfers.............................. (7,476,531) (82,392,780) 3,061,293
Surrenders for benefit payments and fees... (13,250,066) (307,416,804) (10,239,180)
------------ ------------- ------------
Net (decrease) in net assets resulting from
unit transactions......................... (17,518,727) (332,621,041) (4,400,651)
------------ ------------- ------------
Net (decrease) in net assets............... (18,714,651) (202,182,299) (2,937,124)
NET ASSETS:
Beginning of period........................ 53,527,616 852,094,113 40,402,821
------------ ------------- ------------
End of period.............................. $ 34,812,965 $ 649,911,814 $ 37,465,697
============ ============= ============
</TABLE>
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
MONEY MARKET
BOND FUND STOCK FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............... $ 2,183,191 $ 499,834 $ 1,519,662
Capital gains income....................... -- 23,069,120 --
Net realized gain (loss) on security
transactions.............................. 2,433 714,355 --
Net unrealized appreciation (depreciation)
of investments during the period.......... 972,564 183,443,598 --
----------- ------------ -----------
Net increase in net assets resulting from
operations................................ 3,158,188 207,726,907 1,519,662
----------- ------------ -----------
UNIT TRANSACTIONS:
Purchases.................................. 3,667,032 52,577,965 3,344,933
Net transfers.............................. 7,703,221 (30,615,196) 5,386,082
Surrenders for benefit payments and fees... (1,938,648) (19,829,778) (1,911,188)
----------- ------------ -----------
Net increase (decrease) in net assets
resulting from unit transactions.......... 9,431,605 2,132,991 6,819,827
----------- ------------ -----------
Net increase (decrease) in net assets...... 12,589,793 209,859,898 8,339,489
NET ASSETS:
Beginning of period........................ 40,937,823 642,234,215 32,063,332
----------- ------------ -----------
End of period.............................. $53,527,616 $852,094,113 $40,402,821
=========== ============ ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 20
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE
ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ----------------- --------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............... $ 9,115,969 $ (2,065,013) $ 798,895 $ 394,754
Capital gains income....................... 66,035,988 28,364,366 -- 2,884,801
Net realized gain on security
transactions.............................. 109,707,712 75,300,296 353,908 29,025,940
Net unrealized (depreciation) appreciation
of investments during the period.......... (110,915,510) 43,096,428 (1,009,631) 1,691,276
------------- ------------- ----------- ------------
Net (decrease) increase in net assets
resulting from operations................. 73,944,159 144,696,077 143,172 33,996,771
------------- ------------- ----------- ------------
UNIT TRANSACTIONS:
Purchases.................................. 60,209,515 38,405,063 1,337,928 25,883,222
Net transfers.............................. (79,780,932) (72,296,647) (2,595,863) (11,869,735)
Surrenders for benefit payments and fees... (243,193,118) (136,718,724) (6,751,436) (53,518,791)
------------- ------------- ----------- ------------
Net (decrease) in net assets resulting from
unit transactions......................... (262,764,535) (170,610,308) (8,009,371) (39,505,304)
------------- ------------- ----------- ------------
Net (decrease) in net assets............... (188,820,376) (25,914,231) (7,866,199) (5,508,533)
NET ASSETS:
Beginning of period........................ 905,037,858 513,902,329 24,896,699 194,749,407
------------- ------------- ----------- ------------
End of period.............................. $ 716,217,482 $ 487,988,098 $17,030,500 $189,240,874
============= ============= =========== ============
<CAPTION>
INTERNATIONAL DIVIDEND AND CALVERT SOCIAL
OPPORTUNITIES FUND GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ ------------ ------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............... $ 145,531 $ 388,458 $ 358,994
Capital gains income....................... -- 2,571,967 1,927,344
Net realized gain on security
transactions.............................. 3,154,826 9,975,175 2,311,717
Net unrealized (depreciation) appreciation
of investments during the period.......... 12,059,980 (10,078,741) (1,644,189)
------------ ------------ -----------
Net (decrease) increase in net assets
resulting from operations................. 15,360,337 2,856,859 2,953,866
------------ ------------ -----------
UNIT TRANSACTIONS:
Purchases.................................. 6,465,977 13,489,504 2,662,375
Net transfers.............................. (8,846,795) (25,227,178) (3,375,593)
Surrenders for benefit payments and fees... (15,181,367) (18,620,723) (8,906,608)
------------ ------------ -----------
Net (decrease) in net assets resulting from
unit transactions......................... (17,562,185) (30,358,397) (9,619,826)
------------ ------------ -----------
Net (decrease) in net assets............... (2,201,848) (27,501,538) (6,665,960)
NET ASSETS:
Beginning of period........................ 53,866,692 81,366,808 32,739,759
------------ ------------ -----------
End of period.............................. $ 51,664,844 $ 53,865,270 $26,073,799
============ ============ ===========
</TABLE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE
ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ----------------- --------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............... $ 11,397,583 $ (1,312,459) $ 1,363,211 $ 264,966
Capital gains income....................... 25,313,632 32,040,202 -- 3,422,388
Net realized gain (loss) on security
transactions.............................. 6,494,130 1,681,913 39,785 (58,579)
Net unrealized appreciation (depreciation)
of investments during the period.......... 128,375,353 35,834,365 (24,289) 35,353,337
------------ ------------ ----------- ------------
Net increase in net assets resulting from
operations................................ 171,580,698 68,244,021 1,378,707 38,982,112
------------ ------------ ----------- ------------
UNIT TRANSACTIONS:
Purchases.................................. 63,792,632 57,410,119 1,815,173 21,746,631
Net transfers.............................. (25,294,322) (97,300,197) (1,687,207) 9,830,133
Surrenders for benefit payments and fees... (22,848,470) (12,289,854) (801,083) (5,052,574)
------------ ------------ ----------- ------------
Net increase (decrease) in net assets
resulting from unit transactions.......... 15,649,840 (52,179,932) (673,117) 26,524,190
------------ ------------ ----------- ------------
Net increase (decrease) in net assets...... 187,230,538 16,064,089 705,590 65,506,302
NET ASSETS:
Beginning of period........................ 717,807,320 497,838,240 24,191,109 129,243,105
------------ ------------ ----------- ------------
End of period.............................. $905,037,858 $513,902,329 $24,896,699 $194,749,407
============ ============ =========== ============
<CAPTION>
INTERNATIONAL DIVIDEND AND CALVERT SOCIAL
OPPORTUNITIES FUND GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ ------------ ------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............... $ 262,775 $ 660,494 $ 490,049
Capital gains income....................... 3,515,336 2,779,678 1,638,236
Net realized gain (loss) on security
transactions.............................. 707,165 426,383 48,836
Net unrealized appreciation (depreciation)
of investments during the period.......... 2,062,833 7,655,244 2,144,124
------------ ------------ -----------
Net increase in net assets resulting from
operations................................ 6,548,109 11,521,799 4,321,245
------------ ------------ -----------
UNIT TRANSACTIONS:
Purchases.................................. 8,614,699 14,599,476 3,592,019
Net transfers.............................. (16,662,048) (15,975,390) (2,100,831)
Surrenders for benefit payments and fees... (1,450,359) (2,142,352) (738,890)
------------ ------------ -----------
Net increase (decrease) in net assets
resulting from unit transactions.......... (9,497,708) (3,518,266) 752,298
------------ ------------ -----------
Net increase (decrease) in net assets...... (2,949,599) 8,003,533 5,073,543
NET ASSETS:
Beginning of period........................ 56,816,291 73,363,275 27,666,216
------------ ------------ -----------
End of period.............................. $ 53,866,692 $ 81,366,808 $32,739,759
============ ============ ===========
</TABLE>
---------------------------------------------------- 21
----------------------------------------------------
<PAGE>
DC VARIABLE ACCOUNT-I
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. ORGANIZATION:
DC Variable Account-I (the Account) is a separate investment account within
Hartford Life Insurance Company (the Company) and is registered with the
Securities and Exchange Commission (SEC) as a unit investment trust under
the Investment Company Act of 1940, as amended. Both the Company and the
Account are subject to supervision and regulation by the Department of
Insurance of the State of Connecticut and the SEC. The Account invests
deposits by variable annuity contractholders of the Company in various
mutual funds (the Funds) as directed by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Realized gains and
losses on the sales of securities are computed on the basis of identified
cost of the fund shares sold. Dividend and capital gains income is
accrued as of the ex-dividend date. Capital gains income represents those
dividends from the Funds which are characterized as capital gains under
tax regulations.
b) SECURITY VALUATION--The investments in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate
Fund as of December 31, 1999.
c) UNIT TRANSACTIONS--Unit transactions are executed based on the unit
values calculated at the close of the business day.
d) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as an
insurance company under the Internal Revenue Code. Under current law, no
federal income taxes are payable with respect to the operations of the
Account.
e) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the financial statements and the reported
amounts of income and expenses during the period. Operating results in
the future could vary from the amounts derived from management's
estimates.
3. DEDUCTIONS AND CHARGES:
Certain amounts are deducted from the contracts, as described below:
a) MORTALITY AND EXPENSE RISK CHARGES--The Company will make deductions at a
maximum annual rate of 1.25% of the contract's value for the mortality
and expense risks which the Company undertakes.
b) TAX EXPENSE CHARGE--If applicable, the Company will make deductions at a
maximum rate of 3.5% of the contract's value to meet premium tax
requirements. An additional tax charge based on a percentage of the
contract's value may be assessed to partial withdrawals or surrenders.
These expenses are included in surrenders for benefit payments and fees
on the accompanying statements of changes in net assets.
c) ANNUAL MAINTENANCE FEE--An annual maintenance fee up to $18 may be
deducted from the contract's value each contract year. These expenses are
included in surrenders for benefit payments and fees on the accompanying
statements of changes in net assets.
______________________________________ 22 ______________________________________
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
BOND STOCK MONEY MARKET
FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------
<S> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS Fund, Inc. -
Class IA
Shares 15,155,028
Cost $15,395,587
Market Value...................... $15,062,007 -- --
Hartford Stock HLS Fund, Inc. -
Class IA
Shares 33,945,549
Cost $93,349,265
Market Value...................... -- $242,622,010 --
Hartford Money Market HLS
Fund, Inc. - Class IA
Shares 6,566,019
Cost $6,566,019
Market Value...................... -- -- $6,566,019
Hartford Advisers HLS Fund, Inc. -
Class IA
Shares 34,221,708
Cost $65,147,307
Market Value...................... -- -- --
Hartford Capital Appreciation HLS
Fund, Inc. - Class IA
Shares 24,732,727
Cost $80,938,460
Market Value...................... -- -- --
Hartford Mortgage Securities HLS
Fund, Inc. - Class IA
Shares 3,231,289
Cost $3,417,582
Market Value...................... -- -- --
Hartford Index HLS Fund, Inc. -
Class IA
Shares 13,851,001
Cost $34,212,808
Market Value...................... -- -- --
Hartford International Opportunities
HLS Fund, Inc. - Class IA
Shares 7,985,421
Cost $9,989,610
Market Value...................... -- -- --
Hartford Dividend and Growth HLS
Fund, Inc. - Class IA
Shares 10,749,812
Cost $18,435,960
Market Value...................... -- -- --
Calvert Social Balanced Portfolio
Shares 2,290,301
Cost $4,101,434
Market Value...................... -- -- --
Due from Hartford Life Insurance
Company.............................. 734 61,407 7,262
Receivable from fund shares sold...... -- -- --
----------- ------------ ----------
Total Assets.......................... 15,062,741 242,683,417 6,573,281
----------- ------------ ----------
LIABILITIES:
Due to Hartford Life Insurance
Company.............................. -- -- --
Payable for fund shares purchased..... 735 61,426 6,966
----------- ------------ ----------
Total Liabilities..................... 735 61,426 6,966
----------- ------------ ----------
Net Assets (variable annuity contract
liabilities)......................... $15,062,006 $242,621,991 $6,566,315
=========== ============ ==========
Deferred annuity contracts in the
accumulation period:
Group Sub-Accounts:
Units owned by participants........... 3,140,832 11,207,213 2,145,214
Unit values*.......................... $ 4.795562 $ 21.648735 $ 3.060914
</TABLE>
*Unit value amounts represent an average of individual unit values, which differ
within each sub-account.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 24
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND
ADVISERS APPRECIATION SECURITIES INDEX OPPORTUNITIES AND GROWTH
FUND FUND FUND FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS Fund, Inc. -
Class IA
Shares 15,155,028
Cost $15,395,587
Market Value...................... -- -- -- -- -- --
Hartford Stock HLS Fund, Inc. -
Class IA
Shares 33,945,549
Cost $93,349,265
Market Value...................... -- -- -- -- -- --
Hartford Money Market HLS
Fund, Inc. - Class IA
Shares 6,566,019
Cost $6,566,019
Market Value...................... -- -- -- -- -- --
Hartford Advisers HLS Fund, Inc. -
Class IA
Shares 34,221,708
Cost $65,147,307
Market Value...................... $101,459,629 -- -- -- -- --
Hartford Capital Appreciation HLS
Fund, Inc. - Class IA
Shares 24,732,727
Cost $80,938,460
Market Value...................... -- $150,755,566 -- -- -- --
Hartford Mortgage Securities HLS
Fund, Inc. - Class IA
Shares 3,231,289
Cost $3,417,582
Market Value...................... -- -- $3,358,899 -- -- --
Hartford Index HLS Fund, Inc. -
Class IA
Shares 13,851,001
Cost $34,212,808
Market Value...................... -- -- -- $58,018,795 -- --
Hartford International Opportunities
HLS Fund, Inc. - Class IA
Shares 7,985,421
Cost $9,989,610
Market Value...................... -- -- -- -- $14,980,130 --
Hartford Dividend and Growth HLS
Fund, Inc. - Class IA
Shares 10,749,812
Cost $18,435,960
Market Value...................... -- -- -- -- -- $23,099,497
Calvert Social Balanced Portfolio
Shares 2,290,301
Cost $4,101,434
Market Value...................... -- -- -- -- -- --
Due from Hartford Life Insurance
Company.............................. 98,692 11,901 2,379 36,427 194,453 6,604
Receivable from fund shares sold...... -- -- -- -- -- --
------------ ------------ ---------- ----------- ----------- -----------
Total Assets.......................... 101,558,321 150,767,467 3,361,278 58,055,222 15,174,583 23,106,101
------------ ------------ ---------- ----------- ----------- -----------
LIABILITIES:
Due to Hartford Life Insurance
Company.............................. -- -- -- -- -- --
Payable for fund shares purchased..... 98,690 11,938 2,410 38,456 194,438 6,576
------------ ------------ ---------- ----------- ----------- -----------
Total Liabilities..................... 98,690 11,938 2,410 38,456 194,438 6,576
------------ ------------ ---------- ----------- ----------- -----------
Net Assets (variable annuity contract
liabilities)......................... $101,459,631 $150,755,529 $3,358,868 $58,016,766 $14,980,145 $23,099,525
============ ============ ========== =========== =========== ===========
Deferred annuity contracts in the
accumulation period:
Group Sub-Accounts:
Units owned by participants........... 14,450,344 12,158,882 1,199,939 10,126,403 6,548,367 9,982,636
Unit values*.......................... $ 7.021261 $ 12.388609 $ 2.799198 $ 5.729257 $ 2.287616 $ 2.313970
<CAPTION>
CALVERT
SOCIAL BALANCED
PORTFOLIO
SUB-ACCOUNT
---------------
<S> <C>
ASSETS:
Investments:
Hartford Bond HLS Fund, Inc. -
Class IA
Shares 15,155,028
Cost $15,395,587
Market Value...................... --
Hartford Stock HLS Fund, Inc. -
Class IA
Shares 33,945,549
Cost $93,349,265
Market Value...................... --
Hartford Money Market HLS
Fund, Inc. - Class IA
Shares 6,566,019
Cost $6,566,019
Market Value...................... --
Hartford Advisers HLS Fund, Inc. -
Class IA
Shares 34,221,708
Cost $65,147,307
Market Value...................... --
Hartford Capital Appreciation HLS
Fund, Inc. - Class IA
Shares 24,732,727
Cost $80,938,460
Market Value...................... --
Hartford Mortgage Securities HLS
Fund, Inc. - Class IA
Shares 3,231,289
Cost $3,417,582
Market Value...................... --
Hartford Index HLS Fund, Inc. -
Class IA
Shares 13,851,001
Cost $34,212,808
Market Value...................... --
Hartford International Opportunities
HLS Fund, Inc. - Class IA
Shares 7,985,421
Cost $9,989,610
Market Value...................... --
Hartford Dividend and Growth HLS
Fund, Inc. - Class IA
Shares 10,749,812
Cost $18,435,960
Market Value...................... --
Calvert Social Balanced Portfolio
Shares 2,290,301
Cost $4,101,434
Market Value...................... $4,967,663
Due from Hartford Life Insurance
Company.............................. 1,204
Receivable from fund shares sold...... --
----------
Total Assets.......................... 4,968,867
----------
LIABILITIES:
Due to Hartford Life Insurance
Company.............................. --
Payable for fund shares purchased..... 564
----------
Total Liabilities..................... 564
----------
Net Assets (variable annuity contract
liabilities)......................... $4,968,303
==========
Deferred annuity contracts in the
accumulation period:
Group Sub-Accounts:
Units owned by participants........... 1,627,793
Unit values*.......................... $ 3.052171
</TABLE>
*Unit value amounts represent an average of individual unit values, which differ
within each sub-account.
---------------------------------------------------- 25
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
AMERICAN
CENTURY VP
CAPITAL APPRECIATION
FUND
SUB-ACCOUNT
--------------------
<S> <C>
ASSETS:
Investments:
American Century VP Capital
Appreciation Fund, Inc.
Shares 139,934
Cost $1,575,748
Market Value...................... $2,076,616
Fidelity VIP Overseas Fund, Inc.
Shares 153,914
Cost $2,912,903
Market Value...................... --
Fidelity VIP II Asset Manager
Fund, Inc.
Shares 288,915
Cost $4,713,414
Market Value...................... --
Fidelity VIP II Contrafund
Fund, Inc.
Shares 830,829
Cost $14,496,214
Market Value...................... --
Fidelity VIP Growth Fund, Inc.
Shares 585,635
Cost $21,025,317
Market Value...................... --
Due from Hartford Life Insurance
Company.............................. 1,081
Receivable from fund shares sold...... --
----------
Total Assets.......................... 2,077,697
----------
LIABILITIES:
Due to Hartford Life Insurance
Company.............................. --
Payable for fund shares purchased..... 1,074
----------
Total Liabilities..................... 1,074
----------
Net Assets (variable annuity contract
liabilities)......................... $2,076,623
==========
Deferred annuity contracts in the
accumulation period:
Group Sub-Accounts:
Units owned by participants........... 1,355,363
Unit values*.......................... $ 1.532151
</TABLE>
*Unit value amounts represent an average of individual unit values, which differ
within each sub-account.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 26
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY FIDELITY
VIP VIP II VIP II VIP
OVERSEAS ASSET MANAGER CONTRAFUND GROWTH
FUND FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
American Century VP Capital
Appreciation Fund, Inc.
Shares 139,934
Cost $1,575,748
Market Value...................... -- -- -- --
Fidelity VIP Overseas Fund, Inc.
Shares 153,914
Cost $2,912,903
Market Value...................... $4,223,395 -- -- --
Fidelity VIP II Asset Manager
Fund, Inc.
Shares 288,915
Cost $4,713,414
Market Value...................... -- $5,394,049 -- --
Fidelity VIP II Contrafund
Fund, Inc.
Shares 830,829
Cost $14,496,214
Market Value...................... -- -- $24,218,673 --
Fidelity VIP Growth Fund, Inc.
Shares 585,635
Cost $21,025,317
Market Value...................... -- -- -- $32,168,933
Due from Hartford Life Insurance
Company.............................. 2,418 1,694 8,310 17,140
Receivable from fund shares sold...... -- -- -- --
---------- ---------- ----------- -----------
Total Assets.......................... 4,225,813 5,395,743 24,226,983 32,186,073
---------- ---------- ----------- -----------
LIABILITIES:
Due to Hartford Life Insurance
Company.............................. -- -- -- --
Payable for fund shares purchased..... 2,466 1,250 8,330 17,144
---------- ---------- ----------- -----------
Total Liabilities..................... 2,466 1,250 8,330 17,144
---------- ---------- ----------- -----------
Net Assets (variable annuity contract
liabilities)......................... $4,223,347 $5,394,493 $24,218,653 $32,168,929
========== ========== =========== ===========
Deferred annuity contracts in the
accumulation period:
Group Sub-Accounts:
Units owned by participants........... 2,120,519 2,951,785 9,524,933 11,602,886
Unit values*.......................... $ 1.991553 $ 1.827536 $ 2.542659 $ 2.772494
</TABLE>
*Unit value amounts represent an average of individual unit values, which differ
within each sub-account.
---------------------------------------------------- 27
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
BOND STOCK MONEY MARKET
FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 829,146 $ 1,666,475 $303,879
EXPENSES:
Mortality and expense
undertakings.......... (169,945) (2,300,122) (68,630)
----------- ----------- --------
Net investment income
(loss).............. 659,201 (633,647) 235,249
----------- ----------- --------
CAPITAL GAINS INCOME..... 114,981 18,026,889 161
----------- ----------- --------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized (loss)
gain on security
transactions.......... (19,976) 2,484,575 --
Net unrealized
(depreciation)
appreciation of
investments during the
period................ (1,257,359) 18,838,148 --
----------- ----------- --------
Net (loss) gain on
investments......... (1,277,335) 21,322,723 --
----------- ----------- --------
Net (decrease)
increase in net
assets resulting
from operations..... $ (503,153) $38,715,965 $235,410
=========== =========== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 28
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND
ADVISERS APPRECIATION SECURITIES INDEX OPPORTUNITIES AND GROWTH CALVERT SOCIAL
FUND FUND FUND FUND FUND FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ----------- ----------- ------------- ----------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 2,124,562 $ 453,558 $ 187,585 $ 543,832 $ 138,993 $ 371,026 $107,208
EXPENSES:
Mortality and expense
undertakings.......... (1,019,523) (1,238,342) (37,929) (379,540) (121,371) (265,879) (56,336)
----------- ----------- --------- ---------- ---------- --------- --------
Net investment income
(loss).............. 1,105,039 (784,784) 149,656 164,292 17,622 105,147 50,872
----------- ----------- --------- ---------- ---------- --------- --------
CAPITAL GAINS INCOME..... 7,575,377 7,303,697 -- 756,329 -- 871,549 367,294
----------- ----------- --------- ---------- ---------- --------- --------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized (loss)
gain on security
transactions.......... 32,508 384,490 209 55,113 71,485 56,924 14,784
Net unrealized
(depreciation)
appreciation of
investments during the
period................ 8,461 33,047,538 (137,396) 8,186,922 3,936,105 (108,988) 60,504
----------- ----------- --------- ---------- ---------- --------- --------
Net (loss) gain on
investments......... 40,969 33,432,028 (137,187) 8,242,035 4,007,590 (52,064) 75,288
----------- ----------- --------- ---------- ---------- --------- --------
Net (decrease)
increase in net
assets resulting
from operations..... $ 8,721,385 $39,950,941 $ 12,469 $9,162,656 $4,025,212 $ 924,632 $493,454
=========== =========== ========= ========== ========== ========= ========
</TABLE>
---------------------------------------------------- 29
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
AMERICAN
AMERICAN CENTURY VP
CENTURY VP CAPITAL
ADVANTAGE APPRECIATION
FUND FUND
SUB-ACCOUNT SUB-ACCOUNT
----------- ------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 10,047 $ --
EXPENSES:
Mortality and expense
undertakings.......... (3,958) (16,810)
-------- --------
Net investment income
(loss).............. 6,089 (16,810)
-------- --------
CAPITAL GAINS INCOME..... 23,850 --
-------- --------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on
security
transactions.......... 38,985 3,131
Net unrealized
(depreciation)
appreciation of
investments during the
period................ (33,239) 784,514
-------- --------
Net gain on
investments......... 5,746 787,645
-------- --------
Net increase in net
assets resulting
from operations..... $ 35,685 $770,835
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 30
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY FIDELITY
VIP VIP II VIP II VIP
OVERSEAS ASSET MANAGER CONTRAFUND GROWTH
FUND FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 38,923 $156,695 $ 89,227 $ 34,374
EXPENSES:
Mortality and expense
undertakings.......... (35,894) (61,474) (248,651) (295,423)
---------- -------- ---------- ----------
Net investment income
(loss).............. 3,029 95,221 (159,424) (261,049)
---------- -------- ---------- ----------
CAPITAL GAINS INCOME..... 62,779 198,480 654,328 2,161,295
---------- -------- ---------- ----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on
security
transactions.......... 10,866 4,859 31,812 10,578
Net unrealized
(depreciation)
appreciation of
investments during the
period................ 1,091,582 177,917 3,847,668 5,999,319
---------- -------- ---------- ----------
Net gain on
investments......... 1,102,448 182,776 3,879,480 6,009,897
---------- -------- ---------- ----------
Net increase in net
assets resulting
from operations..... $1,168,256 $476,477 $4,374,384 $7,910,143
========== ======== ========== ==========
</TABLE>
---------------------------------------------------- 31
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
BOND STOCK MONEY MARKET
FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 659,201 $ (633,647) $ 235,249
Capital gains income.................. 114,981 18,026,889 161
Net realized (loss) gain on security
transactions......................... (19,976) 2,484,575 --
Net unrealized (depreciation)
appreciation of investments during
the period........................... (1,257,359) 18,838,148 --
----------- ------------ ----------
Net (decrease) increase in net assets
resulting from operations............ (503,153) 38,715,965 235,410
----------- ------------ ----------
UNIT TRANSACTIONS:
Purchases............................. 877,749 7,131,167 523,946
Net transfers......................... (881,035) 1,039,770 (237,078)
Surrenders for benefit payments and
fees................................. (1,214,915) (14,377,881) (535,282)
Net annuity transactions.............. (154,673) (1,808,549) 58,994
----------- ------------ ----------
Net (decrease) increase in net assets
resulting from unit transactions..... (1,372,874) (8,015,493) (189,420)
----------- ------------ ----------
Net (decrease) increase in net
assets............................... (1,876,027) 30,700,472 45,990
NET ASSETS:
Beginning of period................... 16,938,033 211,921,519 6,520,325
----------- ------------ ----------
End of period......................... $15,062,006 $242,621,991 $6,566,315
=========== ============ ==========
</TABLE>
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
BOND STOCK MONEY MARKET
FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 643,021 $ (320,715) $ 222,574
Capital gains income.................. -- 5,882,426 --
Net realized gain (loss) on security
transactions......................... 62,787 8,889,332 --
Net unrealized appreciation
(depreciation) of investments during
the period........................... 361,946 37,635,810 --
----------- ------------ -----------
Net increase in net assets resulting
from operations...................... 1,067,754 52,086,853 222,574
----------- ------------ -----------
UNIT TRANSACTIONS:
Purchases............................. 912,679 6,592,898 495,356
Net transfers......................... 1,735,405 242,331 1,098,990
Surrenders for benefit payments and
fees................................. (1,328,850) (11,790,542) (1,154,260)
Net annuity transactions.............. 118,114 (1,031,092) (75,788)
----------- ------------ -----------
Net increase (decrease) in net assets
resulting from unit transactions..... 1,437,348 (5,986,405) 364,298
----------- ------------ -----------
Net increase in net assets............ 2,505,102 46,100,448 586,872
NET ASSETS:
Beginning of period................... 14,432,931 165,821,071 5,933,453
----------- ------------ -----------
End of period......................... $16,938,033 $211,921,519 $ 6,520,325
=========== ============ ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 32
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND
ADVISERS APPRECIATION SECURITIES INDEX OPPORTUNITIES AND GROWTH
FUND FUND FUND FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 1,105,039 $ (784,784) $ 149,656 $ 164,292 $ 17,622 $ 105,147
Capital gains income.................. 7,575,377 7,303,697 -- 756,329 -- 871,549
Net realized (loss) gain on security
transactions......................... 32,508 384,490 209 55,113 71,485 56,924
Net unrealized (depreciation)
appreciation of investments during
the period........................... 8,461 33,047,538 (137,396) 8,186,922 3,936,105 (108,988)
------------ ------------ ---------- ----------- ----------- -----------
Net (decrease) increase in net assets
resulting from operations............ 8,721,385 39,950,941 12,469 9,162,656 4,025,212 924,632
------------ ------------ ---------- ----------- ----------- -----------
UNIT TRANSACTIONS:
Purchases............................. 5,766,833 8,678,190 256,864 4,686,636 1,026,238 2,788,276
Net transfers......................... 1,085,736 (2,258,982) (207,674) 3,228,930 220,580 (960,677)
Surrenders for benefit payments and
fees................................. (6,055,967) (7,267,595) (177,925) (2,277,171) (519,616) (1,772,801)
Net annuity transactions.............. 658,379 (211,724) (276) 257,961 (38,926) 20,963
------------ ------------ ---------- ----------- ----------- -----------
Net (decrease) increase in net assets
resulting from unit transactions..... 1,454,981 (1,060,111) (129,011) 5,896,356 688,276 75,761
------------ ------------ ---------- ----------- ----------- -----------
Net (decrease) increase in net
assets............................... 10,176,366 38,890,830 (116,542) 15,059,012 4,713,488 1,000,393
NET ASSETS:
Beginning of period................... 91,283,265 111,864,699 3,475,410 42,957,754 10,266,657 22,099,132
------------ ------------ ---------- ----------- ----------- -----------
End of period......................... $101,459,631 $150,755,529 $3,358,868 $58,016,766 $14,980,145 $23,099,525
============ ============ ========== =========== =========== ===========
<CAPTION>
CALVERT SOCIAL
BALANCED PORTFOLIO
SUB-ACCOUNT
------------------
<S> <C>
OPERATIONS:
Net investment income (loss).......... $ 50,872
Capital gains income.................. 367,294
Net realized (loss) gain on security
transactions......................... 14,784
Net unrealized (depreciation)
appreciation of investments during
the period........................... 60,504
----------
Net (decrease) increase in net assets
resulting from operations............ 493,454
----------
UNIT TRANSACTIONS:
Purchases............................. 434,582
Net transfers......................... (224,945)
Surrenders for benefit payments and
fees................................. (153,765)
Net annuity transactions.............. 175,629
----------
Net (decrease) increase in net assets
resulting from unit transactions..... 231,501
----------
Net (decrease) increase in net
assets............................... 724,955
NET ASSETS:
Beginning of period................... 4,243,348
----------
End of period......................... $4,968,303
==========
</TABLE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND
ADVISERS APPRECIATION SECURITIES INDEX OPPORTUNITIES AND GROWTH
FUND FUND FUND FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 929,613 $ (507,599) $ 179,661 $ 73,444 $ 22,163 $ 118,445
Capital gains income.................. 2,448,343 6,467,014 -- 703,652 644,678 554,310
Net realized gain (loss) on security
transactions......................... 1,582,801 3,648,830 14,296 35,759 55,547 (33,442)
Net unrealized appreciation
(depreciation) of investments during
the period........................... 11,671,877 4,206,625 (10,512) 7,410,073 384,781 1,893,095
----------- ------------ ---------- ----------- ----------- -----------
Net increase in net assets resulting
from operations...................... 16,632,634 13,814,870 183,445 8,222,928 1,107,169 2,532,408
----------- ------------ ---------- ----------- ----------- -----------
UNIT TRANSACTIONS:
Purchases............................. 5,710,527 10,043,845 290,758 3,542,564 1,295,646 2,740,504
Net transfers......................... 4,672,171 (4,177,559) (134,090) 7,709,937 (908,131) 3,854,598
Surrenders for benefit payments and
fees................................. (4,297,456) (6,489,893) (324,882) (2,057,610) (917,114) (1,314,938)
Net annuity transactions.............. 1,069,101 (70,995) 18,035 560,037 (60,468) 110,854
----------- ------------ ---------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions..... 7,154,343 (694,602) (150,179) 9,754,928 (590,067) 5,391,018
----------- ------------ ---------- ----------- ----------- -----------
Net increase in net assets............ 23,786,977 13,120,268 33,266 17,977,856 517,102 7,923,426
NET ASSETS:
Beginning of period................... 67,496,288 98,744,431 3,442,144 24,979,898 9,749,555 14,175,706
----------- ------------ ---------- ----------- ----------- -----------
End of period......................... $91,283,265 $111,864,699 $3,475,410 $42,957,754 $10,266,657 $22,099,132
=========== ============ ========== =========== =========== ===========
<CAPTION>
CALVERT SOCIAL
BALANCED PORTFOLIO
SUB-ACCOUNT
------------------
<S> <C>
OPERATIONS:
Net investment income (loss).......... $ 49,286
Capital gains income.................. 211,876
Net realized gain (loss) on security
transactions......................... 23,262
Net unrealized appreciation
(depreciation) of investments during
the period........................... 239,801
----------
Net increase in net assets resulting
from operations...................... 524,225
----------
UNIT TRANSACTIONS:
Purchases............................. 495,534
Net transfers......................... 26,347
Surrenders for benefit payments and
fees................................. (187,099)
Net annuity transactions.............. 20,431
----------
Net increase (decrease) in net assets
resulting from unit transactions..... 355,213
----------
Net increase in net assets............ 879,438
NET ASSETS:
Beginning of period................... 3,363,910
----------
End of period......................... $4,243,348
==========
</TABLE>
---------------------------------------------------- 33
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
AMERICAN
AMERICAN CENTURY VP
CENTURY VP CAPITAL
ADVANTAGE APPRECIATION
FUND FUND
SUB-ACCOUNT SUB-ACCOUNT
----------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss).................... $ 6,089 $ (16,810)
Capital gains income............................ 23,850 --
Net realized gain on security transactions...... 38,985 3,131
Net unrealized (depreciation) appreciation of
investments during the period.................. (33,239) 784,514
--------- ----------
Net increase in net assets resulting from
operations..................................... 35,685 770,835
--------- ----------
UNIT TRANSACTIONS:
Purchases....................................... 58,593 254,542
Net transfers................................... (378,748) (19,911)
Surrenders for benefit payments and fees........ (41,476) (102,225)
Net annuity transactions........................ (11,186) (550)
--------- ----------
Net (decrease) increase in net assets resulting
from unit transactions......................... (372,817) 131,856
--------- ----------
Net (decrease) increase in net assets........... (337,132) 902,691
NET ASSETS:
Beginning of period............................. 337,132 1,173,932
--------- ----------
End of period................................... $ -- $2,076,623
========= ==========
</TABLE>
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
AMERICAN
AMERICAN CENTURY VP
CENTURY VP CAPITAL
ADVANTAGE APPRECIATION
FUND FUND
SUB-ACCOUNT SUB-ACCOUNT
----------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss).................... $ 2,371 $ (14,526)
Capital gains income............................ 22,200 63,395
Net realized gain (loss) on security
transactions................................... 1,198 (16,383)
Net unrealized appreciation (depreciation) of
investments during the period.................. 17,601 (61,793)
-------- ----------
Net increase (decrease) in net assets resulting
from operations................................ 43,370 (29,307)
-------- ----------
UNIT TRANSACTIONS:
Purchases....................................... 60,545 294,260
Net transfers................................... 13,214 (521,383)
Surrenders for benefit payments and fees........ (27,765) (58,707)
Net annuity transactions........................ (768) (486)
-------- ----------
Net increase (decrease) in net assets resulting
from unit transactions......................... 45,226 (286,316)
-------- ----------
Net increase (decrease) in net assets........... 88,596 (315,623)
NET ASSETS:
Beginning of period............................. 248,536 1,489,555
-------- ----------
End of period................................... $337,132 $1,173,932
======== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 34
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY FIDELITY
VIP VIP II VIP II VIP
OVERSEAS ASSET MANAGER CONTRAFUND GROWTH
FUND FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).................... $ 3,029 $ 95,221 $ (159,424) $ (261,049)
Capital gains income............................ 62,779 198,480 654,328 2,161,295
Net realized gain on security transactions...... 10,866 4,859 31,812 10,578
Net unrealized (depreciation) appreciation of
investments during the period.................. 1,091,582 177,917 3,847,668 5,999,319
---------- ---------- ----------- -----------
Net increase in net assets resulting from
operations..................................... 1,168,256 476,477 4,374,384 7,910,143
---------- ---------- ----------- -----------
UNIT TRANSACTIONS:
Purchases....................................... 387,081 598,974 2,302,231 2,449,392
Net transfers................................... 443,568 42,815 825,702 4,848,698
Surrenders for benefit payments and fees........ (256,167) (443,450) (1,166,185) (1,212,305)
Net annuity transactions........................ -- -- (43) 11,853
---------- ---------- ----------- -----------
Net (decrease) increase in net assets resulting
from unit transactions......................... 574,482 198,339 1,961,705 6,097,638
---------- ---------- ----------- -----------
Net (decrease) increase in net assets........... 1,742,738 674,816 6,336,089 14,007,781
NET ASSETS:
Beginning of period............................. 2,480,609 4,719,677 17,882,564 18,161,148
---------- ---------- ----------- -----------
End of period................................... $4,223,347 $5,394,493 $24,218,653 $32,168,929
========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY FIDELITY
VIP VIP II VIP II VIP
OVERSEAS ASSET MANAGER CONTRAFUND GROWTH
FUND FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).................... $ 10,125 $ 54,671 $ (92,518) $ (113,377)
Capital gains income............................ 112,345 313,180 618,218 1,488,257
Net realized gain (loss) on security
transactions................................... 956 (275) 12,359 13,141
Net unrealized appreciation (depreciation) of
investments during the period.................. 96,646 146,330 3,177,338 3,253,190
---------- ---------- ----------- -----------
Net increase (decrease) in net assets resulting
from operations................................ 220,072 513,906 3,715,397 4,641,211
---------- ---------- ----------- -----------
UNIT TRANSACTIONS:
Purchases....................................... 377,694 629,178 2,095,903 1,855,983
Net transfers................................... 96,385 731,434 816,733 1,278,624
Surrenders for benefit payments and fees........ (196,825) (338,204) (696,448) (573,796)
Net annuity transactions........................ -- -- (34) (166)
---------- ---------- ----------- -----------
Net increase (decrease) in net assets resulting
from unit transactions......................... 277,254 1,022,408 2,216,154 2,560,645
---------- ---------- ----------- -----------
Net increase (decrease) in net assets........... 497,326 1,536,314 5,931,551 7,201,856
NET ASSETS:
Beginning of period............................. 1,983,283 3,183,363 11,951,013 10,959,292
---------- ---------- ----------- -----------
End of period................................... $2,480,609 $4,719,677 $17,882,564 $18,161,148
========== ========== =========== ===========
</TABLE>
---------------------------------------------------- 35
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. ORGANIZATION:
Separate Account Two (the Account) is a separate investment account within
Hartford Life Insurance Company (the Company) and is registered with the
Securities and Exchange Commission (SEC) as a unit investment trust under
the Investment Company Act of 1940, as amended. Both the Company and the
Account are subject to supervision and regulation by the Department of
Insurance of the State of Connecticut and the SEC. The Account invests
deposits by variable annuity contractholders of the Company in various
mutual funds (the Funds) as directed by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Realized gains and
losses on the sales of securities are computed on the basis of identified
cost of the fund shares sold. Dividend and capital gains income is
accrued as of the ex-dividend date. Capital gains income represents
dividends from the Funds which are characterized as capital gains under
tax regulations.
b) SECURITY VALUATION--The investments in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate
Fund as of December 31, 1999.
c) UNIT TRANSACTIONS--Unit transactions are executed based on the unit
values calculated at the close of the business day.
d) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as an
insurance company under the Internal Revenue Code. Under current law, no
federal income taxes are payable with respect to the operations of the
Account.
e) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the financial statements and the reported
amounts of income and expenses during the period. Operating results in
the future could vary from the amounts derived from management's
estimates.
3. DEDUCTIONS AND CHARGES:
Certain amounts are deducted from the contracts, as described below:
a) MORTALITY AND EXPENSE RISK CHARGES--The Company will make deductions at a
maximum annual rate of 1.25% of the contract's value for the mortality
and expense risks which the Company undertakes.
b) TAX EXPENSE CHARGE--If applicable, the Company will make deductions at a
maximum rate of 3.50% of the contract's value to meet premium tax
requirements. An additional tax charge based on a percentage of the
contract's value may be assessed to partial withrawals or surrenders.
These expenses are included in surrenders for benefit payments and fees
in the accompanying statements of changes in net assets.
c) ANNUAL MAINTENANCE FEE--An annual maintenance fee in the amount of $30
may be deducted from the contract's value each contract year. These
expenses are included in surrenders for benefit payments and fees in the
accompaying statements of changes in net assets.
______________________________________ 36 ______________________________________
<PAGE>
- -------------------------------------------------------------------------------
---------------
Hartford Life Insurance Companies BULK RATE
P.O. Box 2999 U.S. POSTAGE
Hartford, CT 06104-2999 PAID
PERMIT #20
HOLLISTON, MA
01746
---------------
HV-2233-3
Printed in U.S.A. -Registered Trademark- 2000 The Hartford, Hartford, CT 06115
