HARTFORD ADVISORS FUND INC /CT/, 485APOS, 1997-11-19

HARTFORD ADVISORS FUND INC /CT/
485APOS, 1997-11-19

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As filed with the Securities and Exchange Commission on November 19, 1997

File No. 2-81647

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

Pre-Effective Amendment No. / /

Post-Effective Amendment No. 19 /X/

and/or

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/

Amendment No. 19 /X/

HARTFORD ADVISERS FUND, INC.
(Exact Name of Registrant as Specified in Charter)

P.O. Box 2999, Hartford, Connecticut 06104-2999
(Address of Principal Executive Offices)

Registrant's Telephone Number including Area Code: (203) 547-5000

C. Michael O'Halloran, Esquire
690 Asylum Avenue, Hartford, Connecticut 06115
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering:

Upon this amendment to the Registration Statement being declared effective.

It is proposed that this filing will become effective (check appropriate box)

___ immediately upon filing pursuant to paragraph (b) of Rule 485
___ on __________________ pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
_X_ on January 22, 1998 pursuant to paragraph (a)(1) of Rule 485
___ 75 days after filing pursuant to paragraph (a)(2) of Rule 485
___ on __________________ pursuant to paragraph (a)(2) of Rule 485

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
previously elected to register an indefinite number of shares of its Common
Stock.

The Rule 24f-2 Notice for the Registrant's most recent fiscal year was filed
February 26, 1997.

<PAGE>

HARTFORD MUTUAL FUNDS
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(a)

N-1A ITEM NO. PROSPECTUS LOCATION

PART A
1. Cover Page Cover Page
2. Synopsis Not applicable
3. Condensed Financial Information Fund Expenses; Financial
Highlights
4. General Description of Registrant The Funds; Investment Objectives
and Policies of the Funds; Common
Investment Policies and Risk
Factors
5. Management of the Fund Management of the Funds;
Administrative Services for the
Funds; Expenses of the Funds
5A. Management's Discussion of Fund Annual Report to Shareholders
Performance
6. Capital Stock and Other Ownership and Capitalization of
Securities the Funds; Dividends; Federal
Income Taxes; General Information
7. Purchase of Securities Being Net Asset Value; Purchase of Fund
Offered Shares
8. Redemption or Repurchase Sale and Redemption of Shares
9. Pending Legal Proceedings General Information-Pending Legal
Proceedings

PART B STATEMENT OF ADDITIONAL
INFORMATION LOCATION
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Not applicable
13. Investment Objectives and Investment Objectives of the
Policies Funds; Investment Restrictions of
the Funds
14. Management of the Fund Management of the Fund
15. Control Persons and Principal Control Persons and Principal
Holders of Securities Holders of Securities
16. Investment Advisory and Other Management of the Fund
Services
17. Brokerage Allocation and Other Portfolio Brokerage
Practices
18. Capital Stock and Other Ownership and Capitalization of
Securities the Funds (Prospectus)
19. Purchase, Redemption and Pricing Purchase of Fund Shares
of Securities Being Offered (Prospectus)
20. Tax Status Federal Income Taxes (Prospectus)
21. Underwriters Sale and Redemption of Fund Shares
(Prospectus)
22. Calculation of Performance Data Performance Comparisons
23. Financial Statements Not applicable

PART C

Information required to be set forth in PART C is set forth under the
appropriate item, so numbered, in Part C of the Registration Statement.

<PAGE>
Hartford Mutual Funds
PROSPECTUS -- JANUARY , 1998
CLASS IB SHARES

The Hartford Mutual Funds is a family of funds comprised of twelve separate
diversified open-end management investment companies (each a "Fund" and together
the "Funds"). The Funds serve as the underlying investment vehicles for certain
variable annuity and variable life insurance separate accounts of Hartford Life
Insurance Company and ITT Hartford Life and Annuity Insurance Company
(collectively, the "The Hartford Life Insurance Companies"). Each Fund offers
two classes of shares: Class IA shares offered pursuant to another prospectus
and Class IB shares offered hereby. The Funds, which have different investment
objectives and policies, are described below.
STOCK FUNDS

<TABLE>
<CAPTION>
FUND NAME GOAL INVESTMENT STYLE
--------------------------- ------------------------------ ------------------------------------------------------------
<S> <C> <C>
Capital Appreciation Growth of capital Equity: Invests in small, medium, and large companies;
portfolio is comprised primarily of a blend of growth and
value stocks and is broadly diversified across industries.
Dividend and Growth High level of income, growth Equity: Invests primarily in large, well-known U.S.
of capital companies that have historically paid above average
dividends and have the ability to sustain and potentially
increase dividends; portfolio is broadly diversified across
industries.
Index To track general stock market Equity: Seeks investment results which approximate the price
performance and yield performance of publicly-traded common stocks in
the aggregate; attempts to approximate the capital
performance and the dividend income of the Standard & Poor's
500 Composite Stock Index.
International Opportunities Growth of capital International Equity: Invests primarily in large,
high-quality non-U.S. companies in established markets, and
on a limited basis, in smaller companies and emerging
markets; portfolio is broadly diversified across industries
and countries.
MidCap Growth of capital Equity: Invests primarily in high quality U.S. companies
with market capitalizations between $2 billion and $6
billion; portfolio is broadly diversified across industries
which are expected to grow faster than the overall economy.
Small Company Growth of capital Equity: Invests primarily in stocks of companies with market
capitalizations of less than $2 billion; portfolio is
broadly diversified across industries.
Stock Growth of capital, income is Equity: Invests primarily in large, high quality U.S.
secondary companies; portfolio is broadly diversified across
industries which are expected to grow faster than the
overall economy.
</TABLE>

ASSET ALLOCATION FUNDS

<TABLE>
<CAPTION>
FUND NAME GOAL INVESTMENT STYLE
--------------------------- ------------------------------ ------------------------------------------------------------
<S> <C> <C>
Advisers Long-term total return Asset Allocation: Invests in a mix of stocks, bonds and
money market instruments; portfolio assets are allocated
gradually among the asset classes based upon the portfolio
manager's view of the economy and valuation of the market
sectors; short term market timing is not used.
International Advisers Long-term total return International Asset Allocation: Invests in a mix of stocks,
bonds and money market instruments; portfolio assets are
diversified among at least five countries and are allocated
gradually among the asset classes based upon the portfolio
manager's view of the economy and valuation of the market
sectors; short term market timing is not used.
</TABLE>

BOND FUNDS

<TABLE>
<CAPTION>
FUND NAME GOAL INVESTMENT STYLE
--------------------------- ------------------------------ ------------------------------------------------------------
<S> <C> <C>
Bond High level of income, total Bond: Invests primarily in investment grade bonds; up to 20%
return may be invested in the highest quality tier of the high
yield rating category.
Mortgage Securities Maximum current income Mortgage-related securities: Invests primarily in high
consistent with preservation quality mortgage-related securities, including securities
of principal issued or guaranteed by government agencies,
instrumentalities or sponsored corporations.
</TABLE>

MONEY MARKET FUND

<TABLE>
<CAPTION>
FUND NAME GOAL INVESTMENT STYLE
--------------------------- ------------------------------ ------------------------------------------------------------
<S> <C> <C>
Money Market Maximum current income Money Market: Invests in short-term money market
consistent with preservation instruments.
of capital
</TABLE>

<PAGE>
AN INVESTMENT IN THE MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. WHILE THE MONEY MARKET FUND SEEKS TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE, THERE CAN BE NO ASSURANCE THAT THE MONEY MARKET
FUND WILL ACHIEVE THIS GOAL.
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THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT A FUND THAT A
PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING. PLEASE READ AND RETAIN THIS
PROSPECTUS FOR FUTURE REFERENCE. ADDITIONAL INFORMATION ABOUT THE FUNDS HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC") IN A STATEMENT OF
ADDITIONAL INFORMATION DATED JANUARY , 1998 ("SAI"), WHICH HAS BEEN
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. TO OBTAIN A COPY WITHOUT CHARGE
CALL 1-800-862-6668 OR WRITE TO "HARTFORD FAMILY OF FUNDS, C/O INDIVIDUAL
ANNUITY OPERATIONS," P.O. BOX 2999, HARTFORD, CT 06104-2999.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE FUNDS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER BY THE FUNDS TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL FOR THE FUNDS TO MAKE SUCH OFFER.
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2 HARTFORD MUTUAL FUNDS
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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Introduction to the Hartford Mutual Funds............................. 3
Investment Objectives and Styles of the Funds......................... 3
Common Investment Policies and Risk Factors........................... 8
Management of the Funds............................................... 14
Administrative Services for the Funds................................. 16
Expenses of the Funds................................................. 17
Performance Related Information....................................... 17
Dividends............................................................. 17
Determination of Net Asset Value...................................... 17
Purchase of Fund Shares............................................... 18
Sale and Redemption of Shares......................................... 18
Federal Income Taxes.................................................. 19
Ownership and Capitalization of the Funds............................. 19
General Information................................................... 19
Appendix A: Description of Securities Ratings......................... 21
Appendix B: Credit Quality Distribution............................... 23
</TABLE>

There is the possibility that an individual Fund may be held liable for a
misstatement, inaccuracy or incomplete disclosure in this Prospectus concerning
the other Fund(s).

Additional information about the performance of each Fund, including
Management's Discussion and Analysis of Results, is contained in the Funds'
annual and semi-annual reports to shareholders, which may be obtained without
charge by calling 1-800-862-6668.
<PAGE>
HARTFORD MUTUAL FUNDS 3
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INTRODUCTION TO THE
HARTFORD MUTUAL FUNDS

The Funds are made available to serve as the underlying investment vehicles
for certain variable annuity and variable life insurance separate accounts of
The Hartford Life Insurance Companies. Each Fund is an open-end management
investment company, commonly known as a mutual fund, organized as a Maryland
corporation. Each Fund has different investment objectives, styles and policies.
These differences affect the types of securities in which each Fund may invest
and, therefore, the potential return of each Fund and the associated risks.
There is no assurance, however, that any Fund will meet its investment goals.
Whether an investment in a particular Fund is appropriate for you depends on
your investment goals, including the return you seek, the expected duration of
your investment and the level of risk you are willing to bear.

HL Investment Advisors, Inc. ("HL Advisors") is the investment manager to
each Fund. In addition, under HL Advisors' general management, Wellington
Management Company, LLP ("Wellington Management") serves as sub-adviser to the
Capital Appreciation Fund, Dividend and Growth Fund, International Advisers
Fund, International Opportunities Fund, MidCap Fund, Small Company Fund, Stock
Fund, and Advisers Fund. In addition, under HL Advisors' general management, The
Hartford Investment Management Company ("HIMCO") provides investment management
services for the Index Fund, Bond Fund, Mortgage Securities Fund, and Money
Market Fund.

HL Advisors was incorporated in Connecticut in 1981 and is a majority-owned
indirect subsidiary of The Hartford Financial Services Group, Inc. ("The
Hartford"), a Connecticut insurance holding company with over $100 billion in
assets. Wellington Management, a Massachusetts limited liability partnership, is
a professional investment counseling firm that provides services to investment
companies, employee benefit plans, endowments, foundations and other
institutions and individuals. Wellington Management and its predecessor
organizations have provided investment advisory services since 1928. HIMCO is a
professional money management firm that provides services to investment
companies, employee benefit plans and its affiliated insurance companies. HIMCO
was incorporated in 1996 and is a wholly-owned subsidiary of The Hartford. As of
September 30, 1997, HL Advisors, HIMCO and their affiliates had investment
management authority with respect to approximately $50.7 billion of assets for
various clients. As of the same date, Wellington Management had investment
management authority with respect to approximately $169 billion of assets for
various clients.

INVESTMENT OBJECTIVES AND
STYLES OF THE FUNDS

The Funds have different investment objectives and policies, as described
below. The differences in objectives and policies among the Funds can be
expected to affect the return of each Fund and the degree of market and
financial risk to which each Fund is subject. For more information about the
investment strategies employed by the Funds, see "Common Investment Policies and
Risk Factors." The investment objective of each Fund and certain other
investment restrictions enumerated in detail in the SAI are considered
fundamental and cannot be changed without the affirmative vote of a majority of
the outstanding voting securities of the particular Fund. All other policies not
specifically designated as fundamental are nonfundamental and may be changed by
the Board of Directors of the particular Fund. See the SAI for a complete
listing of investment restrictions. Stated below is the investment objective and
investment style for each Fund. For a description of each Fund's investment
policies and risk factors, see "Common Investment Policies and Risk Factors".

HARTFORD CAPITAL APPRECIATION FUND, INC.

Hartford Capital Appreciation Fund, Inc. (the "Capital Appreciation Fund")
was incorporated in 1983 under Maryland law.

INVESTMENT OBJECTIVE.

The Capital Appreciation Fund seeks growth of capital by investing in
securities selected solely on the basis of potential for capital appreciation;
income, if any, is an incidental consideration.
<PAGE>
4 HARTFORD MUTUAL FUNDS
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INVESTMENT STYLE.
The Capital Appreciation Fund invests in a diversified portfolio of
primarily equity securities. Wellington Management identifies, through
fundamental analysis, companies that it believes have substantial near-term
capital appreciation potential regardless of company size or industry sector.
This approach is sometimes referred to as a "stock picking" approach and results
in having all market capitalization sectors (i.e., small, medium, and large
companies) represented. Small and medium sized companies are selected primarily
on the basis of dynamic earnings growth potential. Larger companies are selected
primarily based on the expectation for a catalyst event that will trigger stock
price appreciation. Fundamental analysis involves the assessment of a company
through such factors as its business environment, management, balance sheet,
income statement, anticipated earnings, revenues, dividends, and other related
measures of value. Up to 20% of the Capital Appreciation Fund's total assets may
be invested in securities of non-U.S. companies.

HARTFORD DIVIDEND AND GROWTH FUND, INC.

Hartford Dividend and Growth Fund, Inc. (the "Dividend and Growth Fund") was
incorporated in 1993 under Maryland law.

INVESTMENT OBJECTIVE.

The Dividend and Growth Fund seeks a high level of current income consistent
with growth of capital and reasonable investment risk.

INVESTMENT STYLE.

The Dividend and Growth Fund invests in a diversified portfolio of primarily
equity securities that typically have above average income yield and whose
prospects for capital appreciation are considered favorable by Wellington
Management. Under normal market and economic conditions at least 65% of the
Dividend and Growth Fund's total assets are invested in dividend paying equity
securities. Wellington Management uses fundamental analysis to evaluate a
security for purchase or sale by the Dividend and Growth Fund. Fundamental
analysis involves the assessment of a company through such factors as its
business environment, management, balance sheet, income statement, anticipated
earnings, revenues, dividends, and other related measures of value. As a key
component of the fundamental analysis done for the Dividend and Growth Fund,
Wellington Management evaluates a company's ability to sustain and potentially
increase its dividend. The Dividend and Growth Fund's portfolio is broadly
diversified by industry and company. Up to 20% of the Dividend and Growth Fund's
total assets may be invested in securities of non-U.S. companies.

HARTFORD INDEX FUND, INC.

Hartford Index Fund, Inc. (the "Index Fund") was incorporated in 1983 under
Maryland law.

INVESTMENT OBJECTIVE.

The Index Fund seeks to provide investment results which approximate the
price and yield performance of publicly-traded common stocks in the aggregate.

INVESTMENT STYLE.

The Index Fund uses the Standard & Poor's 500 Composite Stock Price Index
(the "Index") as its standard performance comparison because it represents a
significant proportion of the total market value of all common stocks, is well
known to investors and, in the opinion of the management of the Index Fund, is
representative of the performance of publicly-traded common stocks. Therefore,
the Index Fund attempts to approximate the capital performance and dividend
income of the Index.

The Index Fund generally invests in no fewer than 499 stocks. HIMCO selects
stocks for the Index Fund's portfolio after taking into account their individual
weights in the Index. Temporary cash balances, normally not expected to exceed
2% of the Index Fund's net assets, may be invested in short-term money market
instruments.

The Index is comprised of 500 selected common stocks, most of which are
listed on the New York Stock Exchange. Standard & Poor's Corporation ("S&P")
chooses the stocks to be included in the Index on a proprietary basis. The
weightings of stocks in the Index are based on each stock's relative total
market value, that is, its market price per share times the number of shares
outstanding. Because of this weighting, as of December 31, 1996, approximately
fifty percent of the Index was composed of the fifty-six largest companies, the
five largest being General Electric Co., Coca-Cola Company, Exxon Corp., Intel
Corp. and Microsoft Corp.

No attempt is made to "manage" the Index Fund's portfolio in the traditional
sense, using economic, financial and market analysis, nor will the adverse
financial situation of a company directly result in its elimination from the
Index Fund's portfolio unless, of course, the company is removed from the Index.
From time to time administrative adjustments may be made in the Index Fund's
portfolio because of mergers, changes in the composition of the Index and
similar reasons.

The Index Fund's ability to approximate the performance of the Index will
depend to some extent on the size of cash flows into and out of the Index Fund.
Investment changes to accommodate these cash flows will be made to maintain the
similarity of the Index Fund's portfolio to the Index, to the maximum
practicable extent.
<PAGE>
HARTFORD MUTUAL FUNDS 5
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"Standard & Poor's-Registered Trademark-", "S&P-Registered Trademark-", "S&P
500-Registered Trademark-", "Standard & Poor's 500", and "500" are trademarks of
The McGraw-Hill Companies, Inc. and have been licensed for use by Hartford Life
Insurance Company. The Index Fund is not sponsored, endorsed, sold or promoted
by S&P. S&P makes no representation or warranty, express or implied, to the
shareholders of the Index Fund regarding the advisability of investing in
securities generally or in the Index Fund particularly or the ability of the S&P
500 Index to track general stock market performance. S&P's only relationship to
Hartford Life Insurance Company is the licensing of certain trademarks and trade
names of S&P and of the S&P 500 Index which is determined, composed and
calculated by S&P without regard to the Index Fund or Hartford Life Insurance
Company. S&P has no obligation to take the needs of the Index Fund or its
shareholders, or Hartford Life Insurance Company, into consideration in
determining, composing or calculating the S&P 500 Index. S&P is not responsible
for and has not participated in the determination of the net asset value of the
Index Fund or the timing of the issuance or sale of shares in the Index Fund.
S&P has no obligation or liability in connection with the administration,
marketing or trading of the Index Fund.

In addition, S&P does not guarantee the accuracy and/ or the completeness of
the S&P 500 Index or any data included therein and S&P shall have no liability
for any errors, omissions, or interruptions therein. S&P makes no warranty,
express or implied, as to results to be obtained by the Index Fund, its
shareholders or any other person or entity from the use of the S&P 500 Index or
any data included therein. S&P makes no express or implied warranties, and
expressly disclaims all warranties of merchantability or fitness for a
particular purpose or use with respect to the S&P 500 Index or any data included
therein. Without limiting any of the foregoing, in no event shall S&P have any
liability for any special, punitive, indirect, or consequential damages
(including lost profits), even if notified of the possibility of such damages.

HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.

Hartford International Opportunities Fund, Inc. (the "International
Opportunities Fund") was incorporated in 1990 under Maryland law.

INVESTMENT OBJECTIVE.

The International Opportunities Fund seeks long-term total rate of return
consistent with prudent investment risk through investment primarily in equity
securities issued by non-U.S. companies.

INVESTMENT STYLE.

The International Opportunities Fund invests in a diversified portfolio of
primarily equity securities covering a broad range of countries, industries, and
companies. Securities in which the International Opportunities Fund invests are
denominated in both U.S. dollars and non-U.S. currencies (including the European
Currency Unit) and generally are traded in non-U.S. markets. Under normal market
conditions, at least 65% of the International Opportunities Fund's total assets
are invested in equity securities issued by non-U.S. companies. Wellington
Management uses a three-pronged approach. First, Wellington Management
determines the relative attractiveness of the many countries in which the
International Opportunities Fund may invest based upon the economic and
political environment of each country. Second, Wellington Management evaluates
industries on a global basis to determine which industries offer the most value
and potential for capital appreciation given current and projected global and
local economic and market conditions. Finally, Wellington Management conducts
fundamental research on individual companies and considers companies for
inclusion in the International Opportunities Fund's portfolio that are typically
larger, high quality companies that operate in established markets. Fundamental
analysis involves the assessment of a company through such factors as its
business environment, management, balance sheet, income statement, anticipated
earnings, revenues, dividends, and other related measures of value. In analyzing
companies for investment, Wellington Management looks for, among other things, a
strong balance sheet, attractive industry dynamics, strong competitive
advantages and attractive relative value within the context of a security's
primary trading market. The International Opportunities Fund may also invest on
a limited basis in smaller companies and less developed markets. The
International Opportunities Fund anticipates that, under normal market
conditions, it will diversify its investments in at least three countries other
than the United States. The International Opportunities Fund will be subject to
certain risks because it invests primarily in securities issued by non-U.S.
companies.

HARTFORD MIDCAP FUND, INC.

Hartford MidCap Fund, Inc. (the "MidCap Fund") was incorporated in 1997
under Maryland law.

INVESTMENT OBJECTIVE.

The MidCap Fund seeks to achieve long-term capital growth through capital
appreciation by investing primarily in equity securities.

INVESTMENT STYLE.

The MidCap Fund seeks to achieve its objective by investing in a diversified
portfolio of primarily equity securities and securities convertible into equity
securities. Under normal market and economic conditions at least 65% of the
MidCap Fund's total assets are invested in equity securities of companies with
market capitalizations between $2 billion and $6 billion. The MidCap Fund uses a
two-tiered investment approach. First, under what is sometimes referred to as a
"top down" approach, Wellington Management
<PAGE>
6 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

analyzes the macro economic and investment environment. This includes an
evaluation of economic conditions, U.S. fiscal and monetary policy, and
demographic trends. Through top down analysis, Wellington Management anticipates
secular and cyclical changes and identifies industries and economic sectors that
are expected to grow faster than the overall economy.

Second, top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to identify
specific securities for purchase or sale. The MidCap Fund's portfolio emphasizes
high-quality growth companies. The key characteristics of high-quality growth
companies include a leadership position within an industry, a strong balance
sheet, a high return on equity, and a strong management team. Fundamental
analysis involves the assessment of a company through such factors as its
business environment, management, balance sheet, income statement, anticipated
earnings, revenues, and other related measures of value. Up to 20% of the MidCap
Fund's total assets may be invested in securities of non-U.S. companies.

HARTFORD SMALL COMPANY FUND, INC.

Hartford Small Company Fund, Inc. (the "Small Company Fund") was
incorporated in 1996 under Maryland law.

INVESTMENT OBJECTIVE.

The Small Company Fund seeks growth of capital by investing primarily in
equity securities selected on the basis of potential for capital appreciation.

INVESTMENT STYLE.

Under normal market and economic conditions at least 65% of the Small
Company Fund's total assets are invested in equity securities of companies which
have less than $2 billion in market capitalization ("Small Capitalization
Securities"). Wellington Management identifies, through fundamental analysis,
companies that it believes have substantial near-term capital appreciation
potential regardless of industry sector. However, overall industry exposure is
monitored by Wellington Management so as to maintain broad industry
diversification. In selecting investments, Wellington Management considers
securities of companies that, in its opinion, have potential for above-average
earnings growth, are undervalued in relation to their investment potential, have
business and/or fundamental financial characteristics that are misunderstood by
investors, or are relatively obscure, i.e., undiscovered by the overall
investment community. Fundamental analysis involves the assessment of a company
through such factors as its business environment, management, balance sheet,
income statement, anticipated earnings, revenues, dividends, and other related
measures of value. Up to 20% of the Small Company Fund's total assets may be
invested in securities of non-U.S. companies. Investing in Small Capitalization
Securities involves special risks. See "Common Investment Policies and Risk
Factors -- Small Capitalization Securities".

HARTFORD STOCK FUND, INC.

Hartford Stock Fund, Inc. (the "Stock Fund") was incorporated in 1976 under
Maryland law.

INVESTMENT OBJECTIVE.

The Stock Fund seeks long-term capital growth primarily through capital
appreciation, with income a secondary consideration, by investing in primarily
equity securities.

INVESTMENT STYLE.

Under normal market and economic conditions at least 65% of the Stock Fund's
total assets are invested in stocks. The Stock Fund invests in a diversified
portfolio of primarily equity securities using a two-tiered investment approach.
First, under what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the macro economic and investment environment. This includes
an evaluation of economic conditions, U.S. fiscal and monetary policy,
demographic trends, and investor sentiment. Through top down analysis,
Wellington Management anticipates secular and cyclical changes and identifies
industries and economic sectors that are expected to grow faster than the
overall economy. Second, top down analysis is followed by what is sometimes
referred to as a "bottom up" approach, which is the use of fundamental analysis
to identify specific securities for purchase or sale. The Stock Fund's portfolio
emphasizes high-quality growth companies. The key characteristics of
high-quality growth companies include a leadership position within an industry,
a strong balance sheet, a high return on equity, sustainable or increasing
dividends, a strong management team, and a globally competitive position.
Fundamental analysis involves the assessment of a company through such factors
as its business environment, management, balance sheet, income statement,
anticipated earnings, revenues, dividends, and other related measures of value.
Up to 20% of the Stock Fund's total assets may be invested in securities of
non-U.S. companies.

HARTFORD ADVISERS FUND, INC.

Hartford Advisers Fund, Inc. (the "Advisers Fund") was incorporated in 1982
under Maryland law.

INVESTMENT OBJECTIVE.

The Advisers Fund seeks maximum long-term total rate of return consistent
with prudent investment risk by investing in common stock and other equity
securities, bonds and other debt securities, and money market instruments.
<PAGE>
HARTFORD MUTUAL FUNDS 7
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INVESTMENT STYLE.

The Advisers Fund seeks to achieve its objective through the active
allocation of its assets among the asset categories of equity securities, debt
securities and money market instruments based upon Wellington Management's
judgment of the projected investment environment for financial assets, relative
fundamental values and attractiveness of each asset category, and expected
future returns of each asset category. Wellington Management bases its asset
allocation decisions on fundamental analysis and does not attempt to make
short-term market timing decisions among asset categories. As a result, shifts
in asset allocation are expected to be gradual and continuous and the Advisers
Fund will normally have some portion of its assets invested in each asset
category. The Advisers Fund does not have percentage limitations on the amount
that may be allocated to each asset category. The Advisers Fund's investments in
equity securities and securities that are convertible into equity securities
will be substantially similar to the investments permitted for the Stock Fund.
See "Hartford Stock Fund." The debt securities in which the Advisers Fund may
invest include securities issued or guaranteed by the U.S. Government and its
agencies or instrumentalities, securities rated investment grade, or if unrated,
are deemed by Wellington Management to be of comparable quality, and with
respect to 5% of the Advisers Fund's assets, securities rated below investment
grade which are known as high yield-high risk securities or junk bonds. The
money market instruments in which the Adviser's Fund may invest are described
under "Common Investment Policies and Risk Factors -- Money Market Instruments
and Temporary Investment Strategies." Up to 20% of the Advisers Fund's total
assets may be invested in securities of non-U.S. companies.

HARTFORD INTERNATIONAL ADVISERS FUND, INC.

Hartford International Advisers Fund, Inc. (the "International Advisers
Fund") was incorporated in 1994 under Maryland law.

INVESTMENT OBJECTIVE.

The International Advisers Fund seeks maximum long-term total rate of return
consistent with prudent investment risk.

INVESTMENT STYLE.

The International Advisers Fund seeks to achieve its objective through the
active allocation of its assets among the asset categories of equity securities,
debt securities and money market instruments based upon Wellington Management's
judgment of the projected investment environment for financial assets, relative
fundamental values and attractiveness of each asset category, and expected
future returns of each asset category. Wellington Management bases its asset
allocation decisions on fundamental analysis and does not attempt to make
short-term market timing decisions among asset categories. As a result, shifts
in asset allocation are expected to be gradual and continuous and the
International Advisers Fund will normally have some portion of its assets
invested in each asset category. The International Advisers Fund does not have
percentage limitations on the amount that may be allocated to each asset
category. The International Advisers Fund's investments in equity securities are
substantially similar to the equity securities investments permitted for the
International Opportunities Fund. See "Hartford International Opportunities
Fund, Inc. -- Investment Style."

The International Advisers Fund consists of a diversified portfolio of
securities covering a broad range of countries, industries, and companies. The
International Advisers Fund anticipates that, under normal market conditions, it
will diversify its investments in at least three countries other than the United
States.

Securities in which the International Advisers Fund invests are denominated
in both U.S. dollars and non-U.S. currencies (including the European Currency
Unit) and generally are traded on non-U.S. markets.

Debt securities in which the International Advisers Fund may invest include
investment grade, non-convertible debt securities assigned within the four
highest bond rating categories by Moody's Investors Service, Inc. ("Moody's") or
S&P, or, if unrated, which are determined by Wellington Management to be of
comparable quality. In addition, the International Advisers Fund may invest up
to 15% of its total assets in high yield-high risk securities, commonly known as
"junk bonds." Such securities may be rated as low as "C" by Moody's and by S&P,
or, if unrated, are of comparable quality as determined by Wellington
Management.

HARTFORD BOND FUND, INC.

Hartford Bond Fund, Inc. (the "Bond Fund") was incorporated in 1982 under
Maryland law.

INVESTMENT OBJECTIVE.

The Bond Fund seeks maximum current income consistent with preservation of
capital by investing primarily in fixed-income securities.

INVESTMENT STYLE.

The Bond Fund is comprised of a diversified portfolio of fixed-income
securities. Under normal circumstances at least 80% of the Bond Fund's portfolio
is invested in investment grade bond-type securities. Up to 20% of the Bond Fund
may be invested in securities rated in the highest category of below investment
grade bonds ("Ba" by Moody's or "BB" by S&P, or securities which, if unrated,
are determined by HIMCO to be of comparable quality. Securities rated below
investment grade are commonly referred to as "high yield-high risk securities"
or "junk bonds". No investments are made in debt securities rated below "Ba" and
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8 HARTFORD MUTUAL FUNDS
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"BB", or if unrated, determined to be of comparable quality by HIMCO.
Investments in securities rated in the highest category below investment grade
may offer an attractive risk/reward trade-off and investment in this sector may
enhance the current yield and total return of the Bond Fund over time. Investing
in securities within this rating category combined with the investment grade
portion of the portfolio is designed to provide investors with both a high level
of current income and attractive relative total returns.

The Bond Fund will invest at least 65% of its total assets in bonds and debt
securities with a maturity of at least one year. The Bond Fund may invest up to
15% of its total assets in preferred stocks, convertible securities, and
securities carrying warrants to purchase equity securities. The Bond Fund will
not invest in common stocks directly, but may retain, for reasonable periods of
time, common stocks acquired upon conversion of debt securities or upon exercise
of warrants acquired with debt securities. Under normal circumstances, up to 20%
of the Bond Fund's total assets may be invested in securities of non-U.S.
companies.

HARTFORD MORTGAGE SECURITIES FUND, INC.

Hartford Mortgage Securities Fund, Inc. (the "Mortgage Securities Fund") was
incorporated in 1984 under Maryland law.
INVESTMENT OBJECTIVE.

The Mortgage Securities Fund seeks maximum current income consistent with
safety of principal and maintenance of liquidity by investing primarily in
mortgage-related securities, including securities issued by the Government
National Mortgage Association.

INVESTMENT STYLE.

The Mortgage Securities Fund seeks to achieve its objective by investing,
under normal circumstances, at least 65% of its total assets in high quality
mortgage-related securities either (i) issued by U.S. Government agencies,
instrumentalities or sponsored corporations or (ii) rated A or better by Moody's
or S&P or, if not rated, which are of equivalent investment quality as
determined by HIMCO. At times the Mortgage Securities Fund may invest in
mortgage-related securities not meeting the foregoing investment quality
standards when HIMCO deems such investments to be consistent with the Fund's
investment objective; however, no such investments will be made in excess of 20%
of the value of the Fund's total assets. Such investments will be considered
mortgage-related securities for purposes of the policy that the Fund invest at
least 65% of the value of its total assets in mortgage-related securities,
including securities issued by the GNMA.

HVA MONEY MARKET FUND, INC.

HVA Money Market Fund, Inc. (the "Money Market Fund") was incorporated in
1982 under Maryland law.

INVESTMENT OBJECTIVE.

The Money Market Fund seeks maximum current income consistent with liquidity
and preservation of capital.

INVESTMENT STYLE.

The Money Market Fund seeks to maintain a stable net asset value of $1.00
per share; however, there can be no assurance that the Fund will achieve this
goal. The Money Market Fund's portfolio will consist entirely of cash, cash
equivalents and high quality debt securities as permitted under Rule 2a-7 of the
Investment Company Act of 1940 (the "1940 Act"). Each investment will have an
effective maturity date of 397 days or less computed in accordance with Rule
2a-7. The average maturity of the portfolio will vary according to HIMCO's
appraisal of money market conditions and will not exceed 90 days. All securities
purchased by the Money Market Fund will be U.S. dollar denominated.

COMMON INVESTMENT POLICIES
AND RISK FACTORS
MONEY MARKET INSTRUMENTS AND
TEMPORARY INVESTMENT STRATEGIES

In addition to the Money Market Fund, which may invest in cash, cash
equivalents and money market instruments at any time, all other Funds may hold
cash or cash equivalents and invest in high quality money market instruments
under appropriate circumstances as determined by HIMCO or Wellington Management.
Such Funds may invest up to 100% of their assets in cash, cash equivalents or
money market instruments only for temporary defensive purposes.

Money market instruments include: (1) banker's acceptances; (2) obligations
of governments (whether U.S. or non-U.S.) and their agencies and
instrumentalities; (3) short-term corporate obligations, including commercial
paper, notes, and bonds; (4) other short-term debt obligations; (5) obligations
of U.S. banks, non-U.S. branches of U.S. banks (Eurodollars), U.S. branches and
agencies of non-U.S. banks (Yankee dollars), and non-U.S. branches of non-U.S.
banks; (6) asset-backed securities; and (7) repurchase agreements.

REPURCHASE AGREEMENTS

Each Fund is permitted to enter into fully collateralized repurchase
agreements. A repurchase agreement is an
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HARTFORD MUTUAL FUNDS 9
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agreement by which the seller of a security agrees to repurchase the security
sold at a mutually agreed upon time and price. It may also be viewed as the loan
of money by a Fund to the seller. The resale price would be in excess of the
purchase price, reflecting an agreed upon market interest rate. Delays or losses
could result if the other party to the agreement defaults or becomes insolvent.
The Fund's Board of Directors has established standards for evaluation of the
creditworthiness of the banks and securities dealers with which the Funds may
engage in repurchase agreements and monitors on a quarterly basis HIMCO'S and
Wellington Management's compliance with such standards. Presently, each Fund may
enter into repurchase agreements only with commercial banks with at least $500
million in capital and $1 billion in assets or with recognized government
securities dealers with a minimum net capital of $100 million.

REVERSE REPURCHASE AGREEMENTS

Each Fund may also enter into reverse repurchase agreements. Reverse
repurchase agreements involve sales by a Fund of portfolio assets concurrently
with an agreement by a Fund to repurchase the same assets at a later date at a
fixed price. Reverse repurchase agreements carry the risk that the market value
of the securities which a Fund is obligated to repurchase may decline below the
repurchase price. A reverse repurchase agreement is viewed as a collateralized
borrowing by a Fund. Borrowing magnifies the potential for gain or loss on the
portfolio securities of a Fund and, therefore, increases the possibility of
fluctuation in a Fund's net asset value. A Fund will establish a segregated
account with the Fund's custodian bank in which a Fund will maintain liquid
assets equal in value to a Fund's obligations in respect of reverse repurchase
agreements. As a non-fundamental policy, a Fund will not enter into reverse
repurchase transactions if the combination of all borrowings from banks and the
value of all reverse repurchase agreements for the particular Fund equals more
than 33 1/3% of the value of the Fund's total assets.

DEBT SECURITIES

Each Fund is permitted to invest in debt securities including: (1)
securities issued or guaranteed as to principal or interest by the U.S.
Government, its agencies or instrumentalities; (2) debt securities issued or
guaranteed by U.S. corporations or other issuers (including foreign governments
or corporations); (3) asset-backed securities (International Opportunities Fund,
International Advisers Fund, Advisers Fund, Bond Fund, Mortgage Securities Fund
and Money Market Fund only); (4) mortgage-related securities, including
collateralized mortgage obligations ("CMO's") (International Opportunities Fund,
International Advisers Fund, Advisers Fund, Bond Fund and Mortgage Securities
Fund only); and (5) securities issued or guaranteed as to principal or interest
by a sovereign government or one of its agencies or political subdivisions,
supranational entities such as development banks, non-U.S. corporations, banks
or bank holding companies, or other non-U.S. issuers.

INVESTMENT GRADE DEBT SECURITIES

Each Fund is permitted to invest in debt securities rated within the four
highest rating categories (i.e., Aaa, Aa, A or Baa by Moody's or AAA, AA, A or
BBB by S&P), or, if unrated, securities of comparable quality as determined by
HIMCO or Wellington Management. These securities are generally referred to as
"investment grade securities." Each rating category has within it different
gradations or sub-categories. If a Fund is authorized to invest in a certain
rating category, the Fund is also permitted to invest in any of the
sub-categories or gradations within that rating category. If a security is
downgraded to a rating category which does not qualify for investment, HIMCO or
Wellington Management will use its discretion on whether to hold or sell based
upon its opinion on the best method to maximize value for shareholders over the
long term. Debt securities carrying the fourth highest rating (i.e., "Baa" by
Moody's and "BBB" by S&P), and unrated securities of comparable quality (as
determined by HIMCO or Wellington Management) are viewed as having adequate
capacity for payment of principal and interest, but do involve a higher degree
of risk than that associated with investments in debt securities in the higher
rating categories.

HIGH YIELD-HIGH RISK DEBT SECURITIES

The Capital Appreciation Fund, MidCap Fund, Advisers Fund and International
Opportunities Fund may invest up to 5% of their assets and the International
Advisers Fund may invest up to 15% of its assets in high yield debt securities
(i.e., rated as low as "C" by Moody's or S&P, and unrated securities of
comparable quality as determined by Wellington Management). The Bond Fund may
invest up to 20% of its assets in securities rated in the highest level below
investment grade ("Ba" by Moody's or "BB" by S&P) or if unrated, determined to
be of comparable quality by HIMCO. Securities rated below investment grade are
commonly referred to as "high yield-high risk securities" or "junk bonds". Each
rating category has within it different gradations or sub-categories. If a Fund
is authorized to invest in a certain rating category, the Fund is also permitted
to invest in any of the sub-categories or gradations within that rating
category. If a security is downgraded to a rating category which does not
qualify for investment, HIMCO or Wellington Management will use its discretion
on whether to hold or sell based upon its opinion on the best method to maximize
value for shareholders over the long term. Securities in the rating categories
below "Baa" as determined by Moody's and "BBB" as determined by S&P are
considered to be of poor standing and predominantly speculative. The rating
services' descriptions of securities are set forth in Appendix A. High
yield-high risk securities are considered
<PAGE>
10 HARTFORD MUTUAL FUNDS
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speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligations. Accordingly, it is
possible that these types of factors could, in certain instances, reduce the
value of securities held by a Fund with a commensurate effect on the value of
the Fund's shares.

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES

The Advisers Fund, International Advisers Fund, International Opportunities
Fund, Bond Fund and Mortgage Securities Fund may invest in mortgage-backed
securities and the Advisers Fund, International Advisers Fund, International
Opportunities Fund, Bond Fund, Mortgage Securities Fund and Money Market Fund
may invest in asset-backed securities. Mortgage-backed securities represent a
participation in, or are secured by, mortgage loans and include securities
issued or guaranteed by the U.S. Government or one of its agencies or
instrumentalities; securities issued by private issuers that represent an
interest in, or are collateralized by, mortgage-backed securities issued or
guaranteed by the U.S. Government or one or its agencies or instrumentalities;
or securities issued by private issuers that represent an interest in or are
collateralized by mortgage loans or mortgage-backed securities without a
government guarantee but usually having some form of private credit enhancement.
Asset-backed securities are structured like mortgage-backed securities, but
instead of mortgage loans or interests in mortgage loans, the underlying assets
may include motor vehicle installment sales or installment loan contracts,
leases of various types of real and personal property, and receivables from
credit card agreements.

Due to the risk of prepayment, especially when interest rates decline,
mortgage-backed and asset-backed securities are less effective than other types
of securities as a means of "locking in" attractive long-term interest rates
and, as a result, may have less potential for capital appreciation during
periods of declining interest rates than other securities of comparable
maturities. The ability of an issuer of asset-backed securities to enforce its
security interest in the underlying assets may be limited.

EQUITY SECURITIES

All Funds except the Bond Fund, Mortgage Securities Fund and Money Market
Fund may invest in equity securities including common stocks, preferred stocks,
convertible preferred stock and rights to acquire such securities. In addition,
these Funds may invest in securities such as bonds, debentures and corporate
notes which are convertible into common stock at the option of the holder. The
Bond Fund may invest up to 15% of its total assets in preferred stocks,
convertible securities, and securities carrying warrants to purchase equity
securities. The Bond Fund will not invest in common stocks directly, but may
retain, for reasonable periods of time, common stocks acquired upon conversion
of debt securities or upon exercise of warrants acquired with debt securities.

SMALL CAPITALIZATION SECURITIES

All Funds except the Bond Fund, Mortgage Securities Fund and Money Market
Fund may invest in equity securities (including securities issued in initial
public offerings) of companies which have less than $2 billion in market
capitalization ("Small Capitalization Securities"). Because the issuers of Small
Capitalization Securities tend to be smaller or less well-established companies,
they may have limited product lines, market share or financial resources and may
have less historical data with respect to operations and management. As a
result, Small Capitalization Securities are often less marketable and experience
a higher level of price volatility than securities of larger or more
well-established companies. In addition, companies whose securities are offered
in initial public offerings may be more dependant on a limited number of key
employees. Because securities issued in initial public offerings are being
offered to the public for the first time, the market for such securities may be
inefficient and less liquid.

NON-U.S. SECURITIES

Under normal circumstances the International Opportunities Fund and
International Advisers Fund intend to invest at least 65% of their assets in
securities issued by non-U.S. companies ("non-U.S. securities"). In addition,
the International Opportunities Fund and International Advisers Fund may invest
in commingled pools offered by non-U.S. banks. Each other Fund, except the
Mortgage Securities Fund, is permitted to invest up to 20% of its assets, and
the Money Market Fund is permitted to invest up to 25% of its assets, in
non-U.S. securities. The Bond Fund intends to purchase securities denominated in
U.S. dollars, or if not so denominated, to use currency transactions to reflect
U.S. dollar valuation at the time of purchase or while the security is held by
the Fund. Each Fund except the Bond Fund and Money Market Fund may invest in
American Depositary Receipts ("ADRs") and Global Depositary Receipts ("GDRs").
ADRs are certificates issued by a U.S. bank or trust company and represent the
right to receive non-U.S. securities. ADRs are traded on a U.S. securities
exchange, or in an over-the-counter market, and are denominated in U.S. dollars.
GDRs are certificates issued globally and evidence a similar ownership
arrangement. GDRs are traded on non-U.S. securities exchanges and are
denominated in non-U.S. currencies. The value of an ADR or a GDR will fluctuate
with the value of the underlying security, will reflect any changes in exchange
rates and otherwise will involve risks associated with investing in non-U.S.
securities.

When selecting non-U.S. securities HIMCO or Wellington Management will
evaluate the economic and
<PAGE>
HARTFORD MUTUAL FUNDS 11
- --------------------------------------------------------------------------------

political climate and the principal securities markets of the country in which
the company is located. Investing in non-U.S. securities involves considerations
and potential risks not typically associated with investing in securities issued
by U.S. companies. Less information may be available about non-U.S. companies
than about U.S. companies and non-U.S. companies generally are not subject to
uniform accounting, auditing and financial reporting standards or to other
regulatory practices and requirements comparable to those applicable to U.S.
companies. The values of non-U.S. securities are affected by changes in currency
rates or exchange control regulations, restrictions or prohibitions on the
repatriation of non-U.S. currencies, application of non-U.S. tax laws, including
withholding taxes, changes in governmental administration or economic or
monetary policy (in the U.S. or outside the U.S.) or changed circumstances in
dealings between nations. Costs are also incurred in connection with conversions
between various currencies. Although the International Opportunities Fund and
International Advisers Fund will focus on companies that operate in established
markets, from time to time the Funds may invest up to 25% of their assets in
companies located in emerging countries. Compared to the United States and other
developed countries, developing countries may have relatively unstable
governments, economies based on only a few industries, and securities markets
that are less liquid and trade a small number of securities. Prices on these
exchanges tend to be volatile and, in the past, securities in these countries
have offered greater potential for gain (as well as loss) than securities of
companies located in developed countries. See the SAI for additional risk
disclosure concerning non-U.S. securities.

CURRENCY TRANSACTIONS

Each Fund, except the Index Fund, Mortgage Securities Fund and Money Market
Fund, may engage in currency transactions to hedge the value of portfolio
securities denominated in particular currencies against fluctuations in relative
value. Currency transactions include forward currency contracts, currency swaps,
exchange-listed and over-the-counter ("OTC") currency futures contracts and
options thereon and exchange listed and OTC options on currencies.

Forward currency contracts involve a privately negotiated obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon by the parties, at a
price set at the time of the contract. Currency swaps are agreements to exchange
cash flows based on the notional difference between or among two or more
currencies. See "Swap Agreements."

The use of currency transactions to protect the value of a Fund's assets
against a decline in the value of a currency does not eliminate potential losses
arising from fluctuations in the value of the Fund's underlying securities.
Further, the Funds may enter into currency transactions only with counterparties
that HIMCO or Wellington Management deem to be creditworthy.

The Funds may also enter into options and futures contracts relative to
foreign currency to hedge against fluctuations in foreign currency rates. See
"Options and Futures Contracts" for a discussion of risk factors relating to
foreign currency transactions including related options and futures contracts.

OPTIONS AND FUTURES CONTRACTS

Each Fund, except the Money Market Fund, may employ certain hedging, income
enhancement and risk management techniques involving options and futures
contracts, though such techniques may also result in losses to the Fund. The
Funds may write covered call options or purchase put and call options on
individual securities, write covered put and call options and purchase put and
call options on foreign currencies, aggregates of equity and debt securities,
indices of prices of equity and debt securities and other financial indices, and
enter into futures contracts and options thereon for the purchase or sale of
aggregates of equity and debt securities, indices of equity and debt securities
and other financial indices.

A Fund may write covered options only. "Covered" means that, so long as a
Fund is obligated as the writer of an option, it will own either the underlying
securities or currency or an option to purchase or sell the same underlying
securities or currency having an expiration date not earlier than the expiration
date of the covered option and an exercise price equal to or less than the
exercise price of the covered option, or will establish or maintain with its
custodian for the term of the option a "segregated account" consisting of cash,
U.S. Government securities or other liquid, high grade debt obligations having a
value equal to the fluctuating market value of the optioned securities or
currencies. A Fund receives a premium from writing a call or put option, which
increases the Fund's return if the option expires unexercised or is closed out
at a net profit.

To hedge against fluctuations in currency exchange rates, these Funds may
purchase or sell foreign currency futures contracts, and write put and call
options and purchase put and call options on such futures contracts. To the
extent that a Fund enters into futures contracts, options on futures contracts
and options on foreign currencies that are traded on an exchange regulated by
the Commodities Futures Trading Commission ("CFTC"), in each case that are not
for bona fide hedging purposes (as defined by the CFTC), the aggregate initial
margin and premiums required to establish those non-hedging positions may not
exceed 5% of the liquidation value of Fund's portfolio, after taking into
account the unrealized profits and unrealized losses on any such contracts the
Fund has entered into.
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12 HARTFORD MUTUAL FUNDS
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A Fund's use of options, futures and options thereon and forward currency
contracts (as described under "Currency Transactions") would involve certain
investment risks and transaction costs to which it might not be subject were
such strategies not employed. Such risks include: (1) dependence on the ability
of HIMCO or Wellington Management to predict movements in the prices of
individual securities, fluctuations in the general securities markets or market
sections and movements in interest rates and currency markets; (2) imperfect
correlation between movements in the price of the securities or currencies
hedged or used for cover; (3) the fact that skills and techniques needed to
trade options, futures contracts and options thereon or to use forward currency
contracts are different from those needed to select the securities in which a
Fund invests; (4) lack of assurance that a liquid secondary market will exist
for any particular option, futures contract, option thereon or forward contract
at any particular time, which may affect a Fund's ability to establish or close
out a position; (5) possible impediments to effective portfolio management or
the ability to meet current obligations caused by the segregation of a large
percentage of a Fund's assets to cover its obligations; and (6) the possible
need to defer closing out certain options, futures contracts, options thereon
and forward contracts in order to continue to qualify for the beneficial tax
treatment afforded "regulated investment companies" under the Internal Revenue
Code of 1986, as amended (the "Code"). See the SAI for additional information on
options and futures contracts. Options and futures contracts are commonly known
as "derivative" securities.

SWAP AGREEMENTS

Each Fund, except the Index Fund and Money Market Fund, may enter into
interest rate swaps, currency swaps and other types of swap agreements such as
caps, collars, and floors. In a typical interest rate swap, one party agrees to
make regular payments equal to a floating interest rate multiplied by a
"notional principal amount," in return for payments equal to a fixed rate
multiplied by the same amount, for a specified period of time. If a swap
agreement provides for payments in different currencies, the parties might agree
to exchange the notional principal amount as well. Swaps may also depend on
other prices or rates, such as the value of an index or mortgage prepayment
rates.

In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specified interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor.

Swap agreements will tend to shift a Fund's investment exposure from one
type of investment to another. For example, if a Fund agreed to exchange
floating rate payments for fixed rate payments, the swap agreement would tend to
decrease the Fund's exposure to rising interest rates. Caps and floors have an
effect similar to buying or writing options. Depending on how they are used,
swap agreements may increase or decrease the overall volatility of a Fund's
investments and its share price and yield. Swap agreements are commonly known as
"derivative" securities.

ILLIQUID SECURITIES

Each Fund is permitted to invest in illiquid securities. The maximum
percentage of illiquid securities which may be purchased by each Fund is 15%
except for the Money Market Fund for which the limit is 10% of their net assets.
"Illiquid Securities" are securities that may not be sold or disposed of in the
ordinary course of business within seven days at approximately the price used to
determine a Fund's net asset value. Each Fund may purchase certain restricted
securities commonly known as Rule 144A securities that can be resold to
institutions and which may be determined to be liquid pursuant to policies and
guidelines of the Board of Directors.

Under current interpretations of the Securities and Exchange Commission
("SEC") staff, the following securities may be considered illiquid: (1)
repurchase agreements maturing in more than seven days; (2) certain restricted
securities (securities whose public resale is subject to legal or contractual
restrictions); (3) options, with respect to specific securities, not traded on a
national securities exchange that are not readily marketable; and (4) any other
securities in which a Fund may invest that are not readily marketable.

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES

Each Fund is permitted to purchase or sell securities on a when-issued or
delayed-delivery basis. When-issued or delayed-delivery transactions arise when
securities are
<PAGE>
HARTFORD MUTUAL FUNDS 13
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purchased or sold with payment and delivery taking place in the future in order
to secure what is considered to be an advantageous price and yield at the time
of entering into the transaction. While the Funds generally purchase securities
on a when-issued basis with the intention of acquiring the securities, the Funds
may sell the securities before the settlement date if HIMCO or Wellington
Management deems it advisable. At the time a Fund makes the commitment to
purchase securities on a when-issued basis, the Fund will record the transaction
and thereafter reflect the value, each day, of such security in determining net
asset value. At the time of delivery of the securities, the value may be more or
less than the purchase price.

OTHER INVESTMENT COMPANIES

Each Fund, except the Index Fund and Money Market Fund, is permitted to
invest in other investment companies. Securities in certain countries are
currently accessible to the Funds only through such investments. The investment
in other investment companies is limited in amount and will involve the indirect
payment of a portion of the expenses, including advisory fees, of such other
investment companies. A Fund will not purchase a security if, as a result, (1)
more than 10% of the Fund's assets would be invested in securities of other
investment companies, (2) such purchase would result in more than 3% of the
total outstanding voting securities of any one such investment company being
held by the Fund or (3) more than 5% of the Fund's assets would be invested in
any one such investment company.

PORTFOLIO SECURITIES LENDING

Each Fund may lend its portfolio securities to broker/ dealers and other
institutions as a means of earning interest income. Delays or losses could
result if a borrower of portfolio securities becomes bankrupt or defaults on its
obligation to return the loaned securities. A Fund may lend securities only if:
(1) the loan is fully secured by appropriate collateral at all times as
determined by HL Advisors; and (2) the value of all loaned securities of the
Fund is not more than 33 1/3% of the Fund's total assets.

OTHER RISK FACTORS

As mutual funds that primarily invest in equity and/or debt securities, each
Fund is subject to market risk, i.e., the possibility that equity and/or debt
prices in general will decline over short or even extended periods of time. The
financial markets tend to be cyclical, with periods when security prices
generally rise and periods when security prices generally decline.

The value of the debt securities in which the Funds invest will tend to
increase when interest rates are falling and to decrease when interest rates are
rising.

No Fund should be considered to be a complete investment program in and of
itself. Each prospective purchaser should take into account his or her own
investment objectives as well as his or her other investments when considering
the purchase of shares of any investment company.

There can be no assurance that the investment objectives of the Funds will
be met. In addition, the risk inherent in investing in the Funds is common to
any security -- the net asset value will fluctuate in response to changes in
economic conditions, interest rates and the market's perception of the
underlying portfolio securities of each Fund.

In pursuit of a Fund's investment objective, HIMCO and Wellington Management
attempt to select appropriate individual securities for inclusion in a Fund's
portfolio. In addition, HIMCO and Wellington Management attempt to successfully
forecast market trends and increase investments in the types of securities best
suited to take advantage of such trends. Thus, the investor is dependent on
HIMCO's or Wellington Management's success not only in selecting individual
securities, but also in identifying the appropriate mix of securities consistent
with a Fund's investment objective.

INVESTMENT LIMITATIONS

The Funds have adopted certain limitations in an attempt to reduce their
exposure to specific situations. Some of these limitations are that each Fund
will not:

(a) invest more than 25% of its assets in any one industry;

(b) borrow money, except from banks, and then only in amounts not exceeding
33 1/3% of the value of a Fund's total assets (although for purposes of this
restriction reverse repurchase agreements are not considered borrowings, as
a non-fundamental operating policy, each Fund will limit combined borrowings
and reverse repurchase transactions to 33 1/3% of the value of a Fund's
total assets);

(c) with respect to 75% of the value of each Fund's total assets, purchase the
securities of any issuer (other than cash, cash items or securities issued
or guaranteed by the U.S. Government, its agencies, instrumentalities or
authorities) if:

(1) such purchase would cause more than 5% of the Fund's total assets taken
at market value to be invested in the securities of such issuer; or

(2) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the Fund.
<PAGE>
14 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

These investment restrictions are considered at the time investment
securities are purchased. The limitations described above, except as noted under
(b), and those listed under Fundamental Restrictions of the Funds in the SAI,
are considered fundamental and as such can only be changed with the approval of
a majority of each Fund's shareholders.

MANAGEMENT OF THE FUNDS

Each Fund's Board of Directors manages the business and affairs of that Fund
and takes action on all matters not reserved for the shareholders, including the
annual election of officers of the Fund who carry out all orders and resolutions
of the Board of Directors and carry out functions relating to the day to day
management of the affairs of the Fund.

MANAGEMENT SERVICES

HL Advisors serves as investment manager to each Fund pursuant to written
agreements entered into between HL Advisors and each Fund. Pursuant to such
agreements HL Advisors has overall investment supervisory responsibility for
each Fund. In addition, Hartford Life Insurance Company ("Hartford Life"), an
affiliate of HL Advisors, provides administrative personnel, services, equipment
and facilities and office space for proper operation of the Funds. HL Advisors
has contracted with Wellington Management for the provision of day to day
investment management services to the Capital Appreciation Fund, Dividend and
Growth Fund, International Opportunities Fund, MidCap Fund, Small Company Fund,
Stock Fund, Advisers Fund, and International Advisers Fund. In addition, HL
Advisors has contracted with HIMCO for the provision of day to day investment
management and other services for the Bond Fund, Index Fund, Mortgage Securities
Fund and Money Market Fund. Each Fund pays a fee to HL Advisors, a portion of
which may be used to compensate Wellington Management or HIMCO.

For services rendered to the Funds, HL Advisors charges a monthly fee based
on the following annual rates as applied to the average of the calculated daily
net asset value of the Funds.

INDEX FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
All Assets 0.20%
</TABLE>

MORTGAGE SECURITIES FUND AND MONEY MARKET FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
All Assets 0.25%
</TABLE>

BOND FUND AND STOCK FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
First $250,000,000 0.325%
Next $250,000,000 0.300%
Next $500,000,000 0.275%
Amount Over $1 Billion 0.250%
</TABLE>

CAPITAL APPRECIATION FUND, DIVIDEND AND GROWTH FUND, INTERNATIONAL OPPORTUNITIES
FUND, MIDCAP FUND, SMALL COMPANY FUND, ADVISERS FUND AND INTERNATIONAL ADVISERS
FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
First $250,000,000 0.575%
Next $250,000,000 0.525%
Next $500,000,000 0.475%
Amount Over $1 Billion 0.425%
</TABLE>

HL Advisors has agreed to waive its fees for the MidCap Fund until the
assets of this Fund (excluding assets contributed by companies affiliated with
HL Advisors) first reach $20 million.

Under the terms of the Investment Management Agreements, HL Advisors,
subject to the supervision of the Funds' Board of Directors, provides investment
management supervision to each Fund in accordance with the Funds' investment
objectives, policies and restrictions.

For 1997, the management fees (advisory and administrative fees) for each
Fund as a percentage of average net assets were as follows:

<TABLE>
<CAPTION>
% OF ASSETS
-----------
<S> <C>
Capital Appreciation Fund
Dividend and Growth Fund
Index Fund
International Opportunities Fund
MidCap Fund (1)
Small Company Fund (2)
Stock Fund
Advisers Fund
International Advisers Fund
Bond Fund
Mortgage Securities Fund
Money Market Fund
</TABLE>

(1) Portion of management fee waived in 1997

(2) Portion of management fee waived in 1996

HL Advisors, Hartford Plaza, Hartford, Connecticut 06115, is a wholly-owned
subsidiary of Hartford Life and was organized under the laws of the State of
Connecticut in 1981. A wholly-owned subsidiary of HL Investment Advisors,
Hartford Investment Financial Services Company, serves as investment adviser to
several other Hartford Life-sponsored funds which are also registered with the
SEC. Hartford Life is a majority owned subsidiary of Hartford Fire Insurance
<PAGE>
HARTFORD MUTUAL FUNDS 15
- --------------------------------------------------------------------------------

Company, one of the largest multiple lines insurance carriers in the United
States. Hartford Fire Insurance Company is a subsidiary of The Hartford
Financial Services Group, Inc.
Certain officers of the Funds are also officers and/or directors of HL
Advisors and HIMCO: Joseph H. Gareau is a Director and the President of HL
Advisors and HIMCO; Andrew W. Kohnke is a Managing Director and a Director of HL
Advisors and HIMCO; and C. Michael O'Halloran is a Director, Secretary and
General Counsel of HL Advisors and HIMCO.

INVESTMENT SUB-ADVISORY AND OTHER SERVICES

Wellington Management serves as sub-adviser to the Capital Appreciation
Fund, Dividend and Growth Fund, International Opportunities Fund, MidCap Fund,
Small Company Fund, Stock Fund, Advisers Fund, and International Advisers Fund
pursuant to written contracts entered into between HL Advisors and Wellington
Management. In addition, HIMCO provides day-to-day investment management
services to HL Advisors on behalf of the Index Fund, Mortgage Securities Fund,
Bond Fund and Money Market Fund pursuant to written agreements between HL
Advisors and HIMCO.

In connection with the services provided to the Funds, Wellington Management
and HIMCO make all determinations with respect to the purchase and sale of
portfolio securities (subject to the terms and conditions of the investment
objectives, policies and restrictions of the Funds and to the general
supervision of the Fund's Boards of Directors and HL Advisors) and places, in
the name of the Funds, all orders for execution of these Funds' portfolio
transactions. In conjunction with such activities, Wellington Management and
HIMCO regularly furnish reports to the Fund's Boards of Directors concerning
economic forecasts, investment strategy, portfolio activity and performance of
the Funds.

For services rendered to the Wellington Management-advised Funds, Wellington
Management charges a quarterly fee to HL Advisors. The Funds do not pay
Wellington Management's fee nor any part thereof, nor do the Funds have any
obligation or responsibility to do so. Wellington Management's quarterly fee is
based upon the following annual rates as applied to the average of the
calculated daily net asset value of each Fund.

DIVIDEND AND GROWTH FUND, STOCK FUND AND
ADVISERS FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
First $50,000,000 0.325%
Next $100,000,000 0.250%
Next $350,000,000 0.200%
Amount Over $500,000,000 0.150%
</TABLE>

CAPITAL APPRECIATION FUND, INTERNATIONAL OPPORTUNITIES FUND, MIDCAP FUND, SMALL
COMPANY FUND AND INTERNATIONAL ADVISERS FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
First $50,000,000 0.400%
Next $100,000,000 0.300%
Next $350,000,000 0.250%
Amount Over $500,000,000 0.200%
</TABLE>

Wellington Management has agreed to waive its fees for the MidCap Fund until
the assets of the Fund (excluding assets contributed by companies affiliated
with HL Advisors) first reach $20 million.

Wellington Management is a professional investment counseling firm which
provides investment services to investment companies, employee benefit plans,
endowments, foundations and other institutions and individuals. Wellington
Management and its predecessor organizations have provided investment advisory
services since 1928. As of September 30, 1997, Wellington Management held
discretionary management authority with respect to approximately $169 billion of
client assets. Wellington Management, 75 State Street, Boston, MA 02109, is a
Massachusetts limited liability partnership, of which the following persons are
managing partners: Robert W. Doran, Duncan M. McFarland and John R. Ryan.

HIMCO is a professional money management firm which provides services to
investment companies, employee benefit plans and its affiliated insurance
company accounts. HIMCO was incorporated in 1996 and is a wholly owned
subsidiary of The Hartford. As a corporate affiliate of HL Advisors, HIMCO is
reimbursed by HL Advisors for the costs it incurs in providing such services.

PORTFOLIO MANAGERS

Saul J. Pannell, Senior Vice President of Wellington Management, serves as
portfolio manager to the Capital Appreciation Fund. Mr. Pannell has been a
portfolio manager with Wellington Management since 1979.

Laurie A. Gabriel, CFA and Senior Vice President of Wellington Management,
serves as portfolio manager to the Dividend and Growth Fund. Ms. Gabriel joined
Wellington Management in 1976. She has been a quantitative research analyst with
Wellington Management since 1986, and took on portfolio management
responsibilities in 1987.

The International Opportunities Fund is managed by Wellington Management's
Global Equity Strategy Group, headed by Trond Skramstad, Senior Vice President
of Wellington Management. The Global Equity Strategy Group is comprised of
global portfolio managers and senior investment professionals. No person or
persons is primarily responsible for making recommendations to or within the
<PAGE>
16 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

Global Equity Strategy Group. Prior to joining Wellington Management in 1993,
Mr. Skramstad was a global equity portfolio manager at Scudder, Stevens & Clark
since 1990.

Phillip H. Perelmuter, Vice President of Wellington Management, serves as
portfolio manager to the MidCap Fund. Mr. Perelmuter joined Wellington
Management in 1995 as Associate Portfolio Manager of the Stock Fund and the
Advisers Fund. Prior to joining Wellington Management, Mr. Perelmuter was Vice
President of Institutional Equity Sales at CS First Boston Corporation
(1988-1995), and a financial consultant at Merrill Lynch & Company (1983-1986).
Mr. Perelmuter has over ten years of experience in the investment industry.

Mark S. Waterhouse, Vice President of Wellington Management Company, LLP,
serves as portfolio manager to the Small Company Fund. Prior to joining
Wellington Management in 1995, Mr. Waterhouse was a portfolio manager with the
Pioneer Group. He was previously a financial analyst at GTE Service Corporation
from 1984.

Rand L. Alexander, Senior Vice President of Wellington Management, serves as
portfolio manager to the Stock Fund. Mr. Alexander has been a portfolio manager
with Wellington Management since 1990.
Paul D. Kaplan, Senior Vice President of Wellington Management, serves as
portfolio manager to the Advisers Fund. Mr. Kaplan manages the fixed income
component of the Advisers Fund. He has been a portfolio manager with Wellington
Management since 1982. Rand L. Alexander, who is portfolio manager to the Stock
Fund, manages the equity component of the Advisers Fund.

The equity component of the International Advisers Fund is managed by
Wellington Management's Global Equity Strategy Group, headed by Trond Skramstad.
The debt component of the International Advisers Fund is managed by Robert
Evans, Vice President of Wellington Management. Prior to joining Wellington
Management as a portfolio manager in 1995, Mr. Evans was a Senior Global Fixed
Income Portfolio Manager with Pacific Investment Management Company from 1991
through 1994, and in the Global Fixed Income Department of Lehman Brothers
International in London, England and New York City, New York from 1985 through
1990.
The Bond Fund is managed by Alison D. Granger. Ms. Granger, a Senior Vice
President of HIMCO, joined The Hartford in 1993 as a senior corporate bond
trader. She became Director of Trading in 1994 and a portfolio manager in 1995.
Prior to joining The Hartford, Ms. Granger was a corporate bond portfolio
manager at The Home Insurance Company and Axe-Houghton Management. Ms. Granger
holds a CFA and has over sixteen years of experience with fixed income
investments.

The Mortgage Securities Fund is managed by Timothy J. Wilhide. Mr. Wilhide
is a Portfolio Manager and Senior Vice President of HIMCO. He has seventeen
years of experience in the fixed income markets. Prior to joining The Hartford
in June 1994, Mr. Wilhide was vice president and fixed income manager for J.P.
Morgan & Co. He received his B.A. from Gannon University and his MBA from the
University of Delaware.

PORTFOLIO TURNOVER

Each Fund may sell a portfolio investment soon after its acquisition if
HIMCO and /or Wellington Management believe that such a disposition is in the
Fund's best interest. For the fiscal year ended December 31, 1996, the portfolio
turnover rate of each Fund was below 100% except for the Bond Fund and Mortgage
Securities Fund which were 212% and 201% respectively. The portfolio turnover
rate for the MidCap Fund is expected to be less than 100%. A high rate of
portfolio turnover involves correspondingly greater brokerage commission
expenses and other transaction costs, which must be ultimately borne by a Fund's
shareholders. High portfolio turnover may result in the realization of
substantial capital gains.

BROKERAGE COMMISSIONS

Although the rules of the National Association of Securities Dealers, Inc.
prohibit its members from seeking orders for the execution of investment company
portfolio transactions on the basis of their sales of investment company shares,
under such rules, sales of investment company shares may be considered in
selecting brokers to effect portfolio transactions. Accordingly, some portfolio
transactions are, subject to such rules and to obtaining best prices and
executions, effected through dealers who sell shares of the Funds. HIMCO or
Wellington Management may also select an affiliated broker-dealer to execute
transactions for the Fund, provided that the commissions, fees or other
remuneration paid to such affiliated broker are reasonable and fair as compared
to that paid to non-affiliated brokers for comparable transactions.

ADMINISTRATIVE SERVICES
FOR THE FUNDS

An Administrative Services Agreement between each Fund and Hartford Life
provides that Hartford Life will manage the business affairs and provide
administrative services to each Fund. Under the terms of these Agreements,
Hartford Life will provide the following: administrative personnel, services,
equipment and facilities and office space for proper operation of the Funds.
Hartford Life has also agreed to arrange for the provision of additional
services necessary for the proper operation of the Funds, although the Funds pay
for these services directly.
<PAGE>
HARTFORD MUTUAL FUNDS 17
- --------------------------------------------------------------------------------

See "Expenses of the Funds." As compensation for the services to be performed by
Hartford Life, each Fund pays to Hartford Life, as promptly as possible after
the last day of each month, a monthly fee equal to the annual rate of .175% of
the average daily net assets of the Fund.

EXPENSES OF THE FUNDS

Each Fund assumes and pays the following costs and expenses: interest;
taxes; brokerage charges (which may be to affiliated broker-dealers); costs of
preparing, printing and filing any amendments or supplements to the registration
forms of each Fund and its securities; all federal and state registration,
qualification and filing costs and fees, (except the initial costs and fees,
which will be borne by Hartford Life), issuance and redemption expenses,
transfer agency and dividend and distribution disbursing agency costs and
expenses; custodian fees and expenses; accounting, auditing and legal expenses;
fidelity bond and other insurance premiums; fees and salaries of directors,
officers and employees of each Fund other than those who are also officers of
Hartford Life or its affiliates; industry membership dues; all annual and
semiannual reports and prospectuses mailed to each Fund's shareholders as well
as all quarterly, annual and any other periodic report required to be filed with
the SEC or with any state; any notices required by a federal or state regulatory
authority, and any proxy solicitation materials directed to each Fund's
shareholders as well as all printing, mailing and tabulation costs incurred in
connection therewith, and any expenses incurred in connection with the holding
of meetings of each Fund's shareholders and other miscellaneous expenses related
directly to the Funds' operations and interest. As discussed in greater detail
below, under "Sale and Redemption of Shares", the Class IB shares may pay for
certain distribution related expenses in connection with activities primarily
intended to result in the sale of Class IB shares.
PERFORMANCE RELATED INFORMATION

The Funds may advertise certain performance related information. Performance
information about a Fund is based on the Fund's past performance only and is no
indication of future performance.

Each Fund may include its total return in advertisements or other sales
material. When a Fund advertises its total return, it will usually be calculated
for one year, five years, and ten years or some other relevant periods if the
Fund has not been in existence for at least ten years. Total return is measured
by comparing the value of an investment in the Fund at the beginning of the
relevant period to the value of the investment at the end of the period
(assuming immediate reinvestment of any dividends or capital gains
distributions).

The Money Market Fund may advertise yield and effective yield. The yield of
each of those Funds is based upon the income earned by the Fund over a seven-day
period and then annualized, i.e. the income earned in the period is assumed to
be earned every seven days over a 52-week period and stated as a percentage of
the investment. Effective yield is calculated similarly but when annualized, the
income earned by the investment is assumed to be reinvested in Fund shares and
thus compounded in the course of a 52-week period.

DIVIDENDS

The shareholders of each Fund shall be entitled to receive such dividends as
may be declared by each Fund's Board of Directors, from time to time based upon
the investment performance of the assets making up that Fund's portfolio. The
policy with respect to each Fund, except the Money Market Fund, is to pay
dividends from net investment income and to make distributions of realized
capital gains, if any, at least once each year. The Money Market Fund declares
dividends on a daily basis and pays them monthly.

Such dividends and distributions will be automatically invested in
additional full or fractional shares monthly on the last business day of each
month at the per share net asset value on that date. Provision is also made to
pay such dividends and distributions in cash if requested. Such dividends and
distributions will be in cash or in full or fractional shares of the Fund at net
asset value.

DETERMINATION OF
NET ASSET VALUE

The net asset value per share is determined for each Fund as of the close of
the NYSE (normally 4:00 p.m. Eastern Time) on each regular business day (as
previously defined) by dividing the value of the Fund's net assets by the number
of shares outstanding. The assets of each Fund (except the money market funds)
are valued primarily on the basis of market quotations. If quotations are not
readily available, assets are valued by a method that the Board of Directors
believes accurately reflects fair value. The assets of the Money Market Fund are
valued at their amortized cost pursuant to procedures established by the Board
of Directors. Foreign securities are valued on the basis of quotations from the
primary market in which they are traded, and are translated from the local
currency into U.S. dollars using current exchange rates. With respect to all
Funds, short-term investments that will mature in 60 days or less are also
valued at amortized cost, which approximates market value.
<PAGE>
18 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

PURCHASE OF FUND SHARES

Hartford Securities Distribution Company, Inc., 200 Hopmeadow Street,
Simsbury, CT 06089, (the "Distributor") serves as the principal underwriter of
each Fund's shares pursuant to a principal underwriting agreement with each
Fund. Fund shares are made available by the Distributor to serve as the
underlying investment vehicles for variable annuity and variable life insurance
separate accounts of The Hartford Life Insurance Companies. Shares of the Funds
are sold on a no-load basis at their net asset values. See "Determination of Net
Asset Value" and "Sale and Redemption of Shares."

It is conceivable that in the future it may be disadvantageous for variable
annuity separate accounts and variable life insurance separate accounts to
invest in the Funds simultaneously. Although The Hartford Life Insurance
Companies and the Funds do not currently foresee any such disadvantages either
to variable annuity contract owners or variable life insurance policy owners,
each Fund's Board of Directors intends to monitor events in order to identify
any material conflicts between such contract owners and policy owners and to
determine what action, if any, should be taken in response thereto. If the Board
of Directors of a Fund were to conclude that separate funds should be
established for variable life and variable annuity separate accounts, the
variable life and variable annuity contract holders would not bear any expenses
attendant to the establishment of such separate funds.

SALE AND REDEMPTION
OF SHARES

The Class IB shares of each Fund are sold and redeemed by the Fund at their
net asset value next determined after receipt of a purchase or redemption order
in good order in writing at its home office, P.O. Box 2999, Hartford, CT
06104-2999. The value of shares redeemed may be more or less than original cost,
depending upon the market value of the portfolio securities at the time of
redemption. Payment for shares redeemed will be made within seven days after the
redemption request is received in proper form by the Funds. However, the right
to redeem Fund shares may be suspended or payment therefor postponed for any
period during which: (1) trading on the NYSE is closed for other than weekends
and holidays; (2) an emergency exists, as determined by the SEC, as a result of
which (a) disposal by a Fund of securities owned by it is not reasonably
practicable, or (b) it is not reasonably practicable for a Fund to determine
fairly the value of its net assets; or (3) the SEC by order so permits for the
protection of stockholders of the Funds.

Each Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
1940 Act for the Class IB shares. Pursuant to the Distribution Plan, each Fund
compensates the Distributor from assets attributable to the Class IB shares for
services rendered and expenses borne in connection with activities primarily
intended to result in the sale of the Class IB shares. It is anticipated that a
portion of the amounts received by the Distributor will be used to defray
various costs incurred or paid by the Distributor in connection with the
printing and mailing of Fund prospectuses, statements of additional information,
any supplements thereto and shareholder reports and holding seminars and sales
meetings with wholesale and retail sales personnel designed to promote the
distribution of Class IB shares. The Distributor may also use a portion of the
amounts received to provide compensation to financial intermediaries and
third-party broker-dealers for their services in connection with the
distribution of Class IB shares.

Although the Distribution Plan provides that each Fund may pay annually up
to 0.25% of the average daily net assets of a Fund attributable to its Class IB
shares for activities primarily intended to result in the sale of Class IB
shares, the Distributor has voluntarily agreed to waive .07% of the fee. This
waiver may be withdrawn at any time after notice to shareholders. Under the
terms of the Distribution Plan and the principal underwriting agreement, each
Fund is authorized to make payments monthly to the Distributor which may be used
to pay or reimburse entities providing distribution and shareholder servicing
with respect to the Class IB shares for such entities' fees or expenses incurred
or paid in that regard.

The Distribution Plan is of a type known as a "compensation" plan because
payments are made for services rendered to the Fund with respect to Class IB
shares regardless of the level of expenditures by the Distributor. The Directors
will, however, take into account such expenditures for purposes of reviewing
operations under the Distribution Plan and in connection with their annual
consideration of the Plan's renewal. The Distributor has indicated that it
expects its expenditures to include, without limitation: (a) the printing and
mailing of Fund prospectuses, statements of additional information, any
supplements thereto and shareholder reports for prospective contract owners of
variable insurance products with respect to the Class IB shares of a Fund; (b)
those relating to the development, preparation, printing and mailing of
advertisements, sales literature and other promotional materials describing and/
or relating to the Class IB shares of a Fund; (c) holding seminars and sales
meetings designed to promote the distribution of Fund Class IB shares; (d)
obtaining information and providing explanations to wholesale and retail
distributors of contracts regarding Fund investment objectives and policies and
other information about a Fund, including the performance of the Funds; (e)
training sales personnel regarding the Class IB shares of a Fund; and (f)
financing any other activity that the Distributor determines is primarily
intended to result in the sale of Class IB shares.
<PAGE>
HARTFORD MUTUAL FUNDS 19
- --------------------------------------------------------------------------------

FEDERAL INCOME TAXES

Each Fund has elected and intends to qualify under Subchapter M of the Code.
Each Fund intends to distribute all of its net income and gains to shareholders.
Such distributions are taxable income and capital gains. Each Fund will inform
shareholders of the amount and nature of such income and gains. Each Fund may be
subject to a 4% nondeductible excise tax as well as an income tax measured with
respect to certain undistributed amounts of income and capital gain. Each Fund
expects to make such additional distributions of net investment income as are
necessary to avoid the application of these taxes. For a discussion of the tax
implications of a purchase or sale of the Funds' shares by the insurer,
reference should be made to the section entitled "Federal Tax Considerations" in
the appropriate separate account prospectus.

If eligible, each Fund may make an election to pass through to its
shareholders, The Hartford Life Insurance Companies, a credit for any foreign
taxes paid during the year. If such election is made, the pass-through of the
foreign tax credit will result in additional taxable income and income tax to
The Hartford Life Insurance Companies. The amount of additional tax may be more
than offset by the foreign tax credits which are passed through. These foreign
tax credits may provide a benefit to The Hartford Life Insurance Companies.

OWNERSHIP AND CAPITALIZATION
OF THE FUNDS
CAPITAL STOCK

As of the date of this prospectus, the authorized capital stock of the Funds
consisted of the following shares at a par value of $.10 per share: Capital
Appreciation Fund, 2 billion; Dividend and Growth Fund, 2 billion; Index Fund, 1
billion; International Opportunities Fund, 1.5 billion; MidCap Fund, 750
million; Small Company Fund, 750 million; Stock Fund, 2 billion; Advisers Fund,
5 billion; International Advisers Fund, 750 million; Bond Fund, 800 million;
Mortgage Securities Fund, 800 million; and Money Market Fund, 1.3 billion. Each
Fund currently offers two classes of shares: Class IA shares and Class IB
shares.

VOTING

Under each Fund's multi-class system, shares of each class of a Fund
represent an equal pro rata interest in that Fund and, generally, shall have
identical voting, dividend, liquidation, and other rights, preferences, powers,
restrictions, limitations, qualifications and terms and conditions, except that:
(a) each class shall have a different designation; (b) each class of shares
shall bear its "Class Expenses;" (c) each class shall have exclusive voting
rights on any matter submitted to shareholders that relates solely to its
distribution arrangements; (d) each class shall have separate voting rights on
any matter submitted to shareholders in which the interests of one class differ
from the interests of any other class; (e) each class may have separate exchange
privileges, although exchange privileges are not currently contemplated; and (f)
each class may have different conversion features, although a conversion feature
is not currently contemplated. Expenses currently designated as "Class Expenses"
by the Fund's Board of Directors under the plan pursuant to Rule 18f-3 are
currently limited to payments made to the Distributor for the Class IB shares,
pursuant to the Distribution Plan for the Class IB shares adopted pursuant to
Rule 12b-1 under the 1940 Act. Each shareholder shall be entitled to one vote
for each share of the Funds held upon all matters submitted to the shareholders
generally. With respect to the Funds' shares, issued as described above under
"Purchase of Fund Shares," as well as Fund shares which are not otherwise
attributable to variable annuity contract owners or variable life policy
holders, The Hartford Life Insurance Companies shall be the shareholders of
record. Each of The Hartford Life Insurance Companies will vote all Fund shares,
pro rata, according to the written instructions of the contract owners of the
variable annuity contracts and the policy holders of the variable life contracts
issued by it using the Funds as investment vehicles. This position is consistent
with the policy of the SEC staff.

OTHER RIGHTS

Each share of Fund stock, when issued and paid for in accordance with the
terms of the offering, will be fully paid and non-assessable. Shares of Fund
stock have no pre-emptive, subscription or conversion rights and are redeemable
as set forth under "Sale and Redemption of Shares." Upon liquidation of a Fund,
the shareholders of that Fund shall be entitled to share, pro rata, in any
assets of the Fund after discharge of all liabilities and payment of the
expenses of liquidation.

GENERAL INFORMATION
REPORTS TO SHAREHOLDERS

The Funds will issue unaudited semiannual reports showing current
investments in each Fund and other information and annual financial statements
examined by independent auditors for the Funds.

CUSTODIAN, TRANSFER AND
DIVIDEND DISBURSING AGENTS

State Street Bank and Trust Company, Boston, Massachusetts, serves as
custodian of the Funds' assets. Hartford
<PAGE>
20 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

Life Insurance Company, P.O. Box 2999, Hartford, Connecticut 06104-2999, serves
as Transfer and Dividend Disbursing Agent for the Funds.

PENDING LEGAL PROCEEDINGS

As of the date of this Prospectus, there are no pending legal proceedings
involving the Funds, HL Advisors, HIMCO or Wellington Management as a party.

REQUESTS FOR INFORMATION

This Prospectus does not contain all the information included in the
Registration Statement filed with the SEC. The Registration Statement, including
the exhibits filed therewith, may be examined at the SEC's office in Washington,
D.C. Statements contained in the Prospectus as to the contents of any contract
or other document referred to herein are not necessarily complete, and, in each
instance, reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part, each such statement being qualified, in all respects by such reference.

For additional information, write to "Hartford Family of Funds", c/o
Individual Annuity Operations, P.O. Box 2999, Hartford, CT 06104-2999.
<PAGE>
HARTFORD MUTUAL FUNDS 21
- --------------------------------------------------------------------------------

APPENDIX A

The rating information which follows describes how the rating services
mentioned presently rate the described securities. No reliance is made upon the
rating firms as "experts" as that term is defined for securities purposes.
Rather, reliance on this information is on the basis that such ratings have
become generally accepted in the investment business.

RATING OF BONDS

MOODY'S INVESTORS SERVICE, INC. ("MOODY'S")

Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risks appear somewhat larger than in Aaa securities.

A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.

Baa -- Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca -- Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.

C -- Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever earning any
real investment standing.

STANDARD & POOR'S CORPORATION ("STANDARD & POOR'S")

AAA -- Bonds rated AAA are the highest grade obligations. Capacity to pay
interest and repay principal is extremely strong.

AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from AAA issues only in small degree.

A -- Bonds rated A have a very strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the considerable
investment strength but are not entirely free from adverse effects of changes in
circumstances and economic conditions than debt in the highest rated categories.

BBB -- Bonds rated BBB and regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category then in higher rated categories.

BB, B, CCC, CC, C -- Debt rated BB, B, CCC, CC, and C is regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligation.
While such debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions.

RATING OF COMMERCIAL PAPER

Purchases of corporate debt securities used for short-term investment,
generally called commercial paper, will be limited to the top two grades of
Moody's, Standard & Poor's, Duff & Phelps, Fitch Investor Services and Thomson
Bank Watch or other NRSROs (nationally recognized statistical
<PAGE>
22 HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------

rating organizations) rating services and will be an eligible security under
Rule 2a-7.

MOODY'S

Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics:

- - Leading market positions in well-established industries.

- - High rates of return on funds employed.

- - Conservative capitalization structures with moderate reliance on debt and
ample asset protection.

- - Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

- - Well-established access to a range of financial markets and assured sources of
alternate liquidity.

Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Issuers rated Prime-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.

Issuers rated Not Prime do not fall within any of the Prime rating
categories.

STANDARD & POOR'S

The relative strength or weakness of the following factors determines
whether the issuer's commercial paper is rated A-1 or A-2.

- - Liquidity ratios are adequate to meet cash requirements.

Liquidity ratios are basically as follows, broken down by the type of
issuer:

Industrial Company: acid test ratio, cash flow as a percent of current
liabilities, short-term debt as a percent of current liabilities, short-term
debt as a percent of current assets.

Utility: current liabilities as a percent of revenues, cash flow as a
percent of current liabilities, short-term debt as a percent of capitalization.

Finance Company: current ratio, current liabilities as a percent of net
receivables, current liabilities as a percent of total liabilities.

- - The long-term senior debt rating is "A" or better; in some instances "BBB"
credits may be allowed if other factors outweigh the "BBB".

- - The issuer has access to at least two additional channels of borrowing.

- - Basic earnings and cash flow have an upward trend with allowances made for
unusual circumstances.

- - Typically, the issuer's industry is well established and the issuer has a
strong position within its industry.

- - The reliability and quality of management are unquestioned.
<PAGE>
HARTFORD MUTUAL FUNDS 23
- --------------------------------------------------------------------------------

APPENDIX B
CREDIT QUALITY DISTRIBUTION

HARTFORD BOND FUND

The average quality distribution of the portfolio of the Hartford Bond Fund
during the year ended December 31, 1997 as assigned by Moody's Investors
Services, Inc. ("Moody's") and Standard & Poor's Corporation ("Standard &
Poors"), was as follows:

<TABLE>
<CAPTION>
QUALITY
DISTRIBUTION QUALITY
AS DISTRIBUTION AS
ASSIGNED BY PERCENTAGE OF ASSIGNED BY PERCENTAGE OF
MOODY'S PORTFOLIO STANDARD & POOR'S PORTFOLIO
- ------------- ------------- ----------------- -------------
<S> <C> <C> <C>
Aaa AAA
Aa AA
A A
Baa BBB
Ba BB
B B
Unrated . Unrated .
------------- -------------
Total 100.0% Total 100.0%
</TABLE>
<PAGE>
PART B

STATEMENT OF ADDITIONAL INFORMATION

CLASS IB SHARES

HARTFORD CAPITAL APPRECIATION FUND, INC.
HARTFORD DIVIDEND AND GROWTH FUND, INC.
HARTFORD INDEX FUND, INC.
HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.
HARTFORD MIDCAP FUND, INC.
HARTFORD SMALL COMPANY FUND, INC.
HARTFORD STOCK FUND, INC.
HARTFORD ADVISERS FUND, INC.
HARTFORD INTERNATIONAL ADVISERS FUND, INC.
HARTFORD BOND FUND, INC.
HARTFORD MORTGAGE SECURITIES FUND, INC.
HVA MONEY MARKET FUND, INC.

P.O. Box 2999
Hartford, CT 06104-2999

This Statement of Additional Information ("SAI") is not a prospectus but
should be read in conjunction with the prospectus. To obtain a free copy of
the prospectus send a written request to: Hartford Family of Funds, c/o
Individual Annuity Operations, P.O. Box 2999, Hartford, CT 06104-2999 or call
1-800-862-6668.

Date of Prospectus: January __, 1998
Date of Statement of Additional Information: January __, 1998

<PAGE>

TABLE OF CONTENTS PAGE

General Information..........................................................-1-
Investment Objectives and Policies...........................................-2-
Management of the Funds.....................................................-17-
Investment Management Arrangements..........................................-21-
Portfolio Turnover..........................................................-25-
Fund Expenses...............................................................-25-
Distribution Arrangements...................................................-26-
Portfolio Transactions and Brokerage........................................-27-
Determination of Net Asset Value............................................-29-
Purchase and Redemption of Shares...........................................-30-
Investment Performance......................................................-31-
Taxes.......................................................................-38-
Custodian...................................................................-41-
Transfer Agent Services.....................................................-41-
Independent Public Accountants..............................................-41-
Other Information...........................................................-42-

<PAGE>

GENERAL INFORMATION

The Hartford Capital Appreciation Fund, Inc., Hartford Dividend and Growth
Fund, Inc., Hartford Index Fund, Inc., Hartford International Opportunities
Fund, Inc., Hartford MidCap Fund, Inc., Hartford Small Company Fund, Inc.,
Hartford Stock Fund, Inc., Hartford Advisers Fund, Inc., Hartford International
Advisers Fund, Inc., Hartford Bond Fund, Inc., Hartford Mortgage Securities
Fund, Inc. and HVA Money Market Fund, Inc., are open-end management investment
companies consisting of separate diversified portfolios (each a "Fund" or
together the "Funds").

Each Fund offers two classes of shares: Class IA shares and Class IB
shares. The shares of each Fund are currently sold only to insurance company
separate accounts in connection with variable life insurance contracts and
variable annuity contracts issued by Hartford Life Insurance Company and ITT
Hartford Life and Annuity Company ("The Hartford Life Insurance Companies").
Both classes of shares are offered and redeemed at their net asset value without
the imposition of any sales load. Only Class IB shares are offered by this
prospectus. The Class IB shares were first offered publicly on January ,
1998. Class IA shares are offered pursuant to another prospectus and are
subject to the same expenses as the Class IB shares, but unlike the Class IB
shares they are not subject to distribution fees imposed pursuant to a
distribution plan. Class IB shares are subject to distribution fees imposed
under a distribution plan ("Distribution Plan") adopted pursuant to Rule 12b-1
under the 1940 Act. Inquiries regarding Class IA shares should be addressed to
Hartford Family of Funds, c/o Individual Annuity Operations, P.O. Box 2999,
Hartford, CT 06104-2999 or by calling 1-800-862-6668. This SAI relates to the
Class IB shares of each Fund. HL Investment Advisors, Inc. ("HL Advisors") is
the investment manager to each Fund. HL Advisors is an indirect majority owned
subsidiary of The Hartford Financial Services Group, Inc., ("The Hartford") an
insurance holding company with over $100 billion in assets. In addition,
Wellington Management Company, LLP ("Wellington Management") and The Hartford
Investment Management Company ("HIMCO"), an affiliate of HL Advisors, are
sub-advisers to certain of the Funds.

The two classes of shares are currently offered under each Fund's
multi-class distribution system which is designed to allow promotion of
insurance products investing in the Funds through alternative distribution
channels. Under the Funds' multi-class distribution system, shares of each
class of a Fund represent an equal pro rata interest in that Fund and,
generally, will have identical voting, dividend, liquidation, and other rights,
other than the payment of distribution fees under the Distribution Plan.

The Funds continuously offer their shares exclusively to separate accounts
of insurance companies in connection with variable life insurance contracts and
variable annuity certificates and contracts (collectively, the "Contracts").
Class IA shares and Class IB shares currently are sold only to separate accounts
of The Hartford Life Insurance Companies. As of January , 1998, separate
accounts of The Hartford Life Insurance Companies owned 100% of each Fund's
outstanding Class IA shares and Class IB shares and, as a result, may be deemed
to be a control person with respect to each Fund.

-1-

<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

A. FUNDAMENTAL RESTRICTIONS OF THE FUNDS

Each Fund has adopted the following fundamental investment restrictions
which may not be changed without approval of a majority of the applicable Fund's
outstanding voting securities. Under the Investment Company Act of 1940 (the
"1940 Act"), and as used in the Prospectus and this SAI, a "majority of the
outstanding voting securities" means the approval of the lesser of (1) the
holders of 67% or more of the shares of a Fund represented at a meeting if the
holders of more than 50% of the outstanding shares of the Fund are present in
person or by proxy or (2) the holders of more than 50% of the outstanding shares
of the Fund.

The investment objective, investment style and certain investment policies
of each Fund are set forth in the Prospectus. Set forth below are the
fundamental investment policies applicable to each Fund followed by the
non-fundamental policies applicable to each Fund.

Each Fund may not:

1. Issue senior securities. For purposes of this restriction, the
issuance of shares of common stock in multiple classes or series, obtaining of
short-term credits as may be necessary for the clearance of purchases and sales
of portfolio securities, short sales against the box, the purchase or sale of
permissible options and futures transactions (and the use of initial and
maintenance margin arrangements with respect to futures contracts or related
options transactions), the purchase or sale of securities on a when issued or
delayed delivery basis, permissible borrowings entered into in accordance with a
Fund's investment policies, and reverse repurchase agreements and mortgage
dollar rolls for which a segregated account has been established to cover such
transactions or for which an offsetting position has been established by the
Fund, are not deemed to be issuances of senior securities.

2. Borrow money, except from banks and then only if immediately after
each such borrowing there is asset coverage of at least 300% as defined in the
1940 Act. For purposes of this restriction, reverse repurchase agreements,
mortgage dollar rolls, short sales against the box, futures contracts, options
on futures contracts, securities or indices, when issued and delayed delivery
transactions and securities lending shall not constitute borrowing.

3. Act as an underwriter for securities of other issuers.

4. Purchase or sell real estate, except that a Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers that
invest in real estate or interests therein, (e.g. real estate investment trusts)
(iii) invest in securities that are secured by real estate or interests therein,
(iv) purchase and sell mortgage-related securities, (v) hold and sell real
estate acquired by the Fund as a result of the ownership of securities and (vi)
invest in real estate limited partnerships.

-2-

<PAGE>
5. Invest in commodities, except that a Fund may (i) invest in securities
of issuers that invest in commodities, and (ii) engage in permissible options
and futures transactions and forward foreign currency contracts, entered into in
accordance with the Fund's investment policies.

6. Make loans, except that a Fund (i) may lend portfolio securities in
accordance with the Fund's investment policies in amounts up to 33-1/3% of the
Fund's total assets taken at market value, (ii) enter into fully collateralized
repurchase agreements, and (iii) purchase debt obligations in which the Fund may
invest consistent with its investment policies.

7. Purchase the securities of issuers conducting their principal activity
in the same industry if, immediately after such purchase, the value of its
investments in such industry would exceed 25% of its total assets taken at
market value at the time of such investment. This limitation does not apply to
investments in obligations issued or guaranteed by the U.S. Government or any of
its agencies, instrumentalities or authorities.

In addition, each Fund will operate as a "diversified" fund within the
meaning of the 1940 Act. This means that with respect to 75% of a Fund's total
assets, a Fund will not purchase securities of an issuer (other than cash, cash
items or securities issued or guaranteed by the U.S. Government, its agencies,
instrumentalities or authorities), if

(a) such purchase would cause more than 5% of the Fund's total assets
taken at market value to be invested in the securities of such issuer;
or

(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the Fund.

If a percentage restriction on investment or utilization of assets as set
forth above is adhered to at the time an investment is made, a later change in
percentage resulting from changes in the values of a Fund's assets will not be
considered a violation of the restriction; provided, however, that the asset
coverage requirement applicable to borrowings under Section 18(f)(1) of the 1940
Act shall be maintained in the manner contemplated by that Section.

In order to permit the sale of shares of the Funds in certain states, the
Board of Directors may, in its sole discretion, adopt restrictions on investment
policy more restrictive than those described above. Should the Board of
Directors determine that any such more restrictive policy is no longer in the
best interest of a Fund and its shareholders, the Fund may cease offering shares
in the state involved and the Board of Directors may revoke such restrictive
policy. Moreover, if the states involved shall no longer require any such
restrictive policy, the Board of Directors may, in its sole discretion, revoke
such policy.

-3-

<PAGE>

B. NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUNDS.

The following restrictions are designated as non-fundamental and may be
changed by the Board of Directors without the approval of shareholders.

Each Fund may not:

1. Purchase securities on margin or make short sales of securities,
except that a Fund may obtain such short-term credit as may be necessary for the
clearance of purchases and sales of securities and except for transactions in
futures contracts and options thereon.

2. Purchase securities which are illiquid if, as a result of such
purchase, more than 15% of its net assets (10% for the Money Market Fund) would
consist of such securities.

3. Alone or together with any other of the Hartford Mutual Funds, make
investments for the purpose of exercising control over or management of any
issuer.

4. Mortgage, pledge, hypothecate, or in any manner transfer, as security
for indebtedness, any securities owned or held by it, except to secure reverse
repurchase agreements; however, for purposes of this restriction, collateral
arrangements with respect to transactions in futures contracts and options
thereon are not deemed to be a pledge of securities.

5. Invest more than 5% of its assets in securities of other investment
companies and will not acquire more than 3% of the total outstanding voting
securities of any one investment company, except that the Index Fund and Money
Market Fund will not purchase securities of other investment companies at all.

6. Purchase additional securities when money borrowed exceeds 5% of the
Fund's total assets.

7. Borrow money, engage in reverse repurchase agreements or engage in
activities which are the economic equivalent of borrowing if the combination of
such activities exceeds 33-1/3% of a Fund's total assets.

ALL FUNDS

U.S. TREASURY DEPARTMENT DIVERSIFICATION REGULATIONS. The U.S. Treasury
Department has issued diversification regulations under Section 817 of the
Internal Revenue Code. If a mutual fund underlying a variable contract, other
than a pension plan contract,

-4-

<PAGE>

is not adequately diversified within the terms of these regulations, the
contract owner will have adverse income tax consequences. These regulations
provide, among other things, that a mutual fund shall be considered
adequately diversified if (i) no more than 55% of the value of the assets in
the fund is represented by any one investment; (ii) no more than 70% of the
value of the assets in the fund is represented by any two investments; (iii)
no more than 80% of the value of the assets in the fund is represented by any
three investments and (iv) no more than 90% of the value of the total assets
of the fund is represented by any four investments. In determining whether
the diversification standards are met, each United States Government Agency
or instrumentality shall be treated as a separate issuer.

MISCELLANEOUS INVESTMENT PRACTICES
- ----------------------------------

A further description of certain of the policies described in the
Prospectus is set forth below.

MONEY MARKET INSTRUMENTS AND TEMPORARY INVESTMENT STRATEGIES

In addition to the Money Market Fund which may invest in cash, cash
equivalents and money market instruments at any time, all other Funds may hold
cash or cash equivalents and invest in high quality money market instruments
under appropriate circumstances as determined by HIMCO or Wellington Management.
Such Funds may invest up to 100% of their assets in cash, cash equivalents or
money market instruments only for temporary defensive purposes.

Money market instruments include: (1) banker's acceptances; (2)
obligations of governments (whether U.S. or non-U.S.) and their agencies and
instrumentalities; (3) short-term corporate obligations, including commercial
paper, notes, and bonds; (4) other short-term debt obligations; (5) obligations
of U.S. banks, non-U.S. branches of U.S. banks (Eurodollars), U.S. branches and
agencies of non-U.S. banks (Yankee dollars), and non-U.S. branches of non-U.S.
banks; (6) asset-backed securities; and (7) repurchase agreements.

REPURCHASE AGREEMENTS

Each Fund is permitted to enter into fully collateralized repurchase
agreements. The Fund's Board of Directors has established standards for
evaluation of the creditworthiness of the banks and securities dealers with
which the Funds will engage in repurchase agreements and monitors on a
quarterly basis HIMCO and Wellington Management's compliance with such
standards. Presently, each Fund may enter into repurchase agreements only with
commercial banks with at least $1 billion in assets or with recognized
government securities dealers with a minimum net capital of $100 million.

HIMCO or Wellington Management will monitor such transactions to ensure
that the value of underlying collateral will be at least equal at all times to
the total amount of the repurchase obligation, including the accrued interest.
If the seller defaults, the Fund could realize a loss on the

-5-

<PAGE>

sale of the underlying security to the extent that the proceeds of sale
including accrued interest are less than the resale price provided in the
agreement including interest.

A repurchase agreement is an agreement by which the seller of a security
agrees to repurchase the security sold at a mutually agreed upon time and price.
It may also be viewed as the loan of money by a Fund to the seller. The resale
price would be in excess of the purchase price, reflecting an agreed upon market
interest rate.

REVERSE REPURCHASE AGREEMENTS

Each Fund may also enter into reverse repurchase agreements. Reverse
repurchase agreements involve sales by a Fund of portfolio assets concurrently
with an agreement by a Fund to repurchase the same assets at a later date at a
fixed price. Reverse repurchase agreements carry the risk that the market value
of the securities which a Fund is obligated to repurchase may decline below the
repurchase price. A reverse repurchase agreement is viewed as a collateralized
borrowing by a Fund. Borrowing magnifies the potential for gain or loss on the
portfolio securities of a Fund and, therefore, increases the possibility of
fluctuation in a Fund's net asset value. A Fund will establish a segregated
account with the Fund's custodian bank in which a Fund will maintain liquid
assets equal in value to a Fund's obligations in respect of reverse repurchase
agreements. A Fund will not enter into reverse repurchase transactions if the
combination of all borrowings from banks and the value of all reverse repurchase
agreements for the particular Fund equals more than 33-1/3% of the value the
Fund's total assets.

DEBT SECURITIES

Each Fund is permitted to invest in debt securities including: (1)
securities issued or guaranteed as to principal or interest by the U.S.
Government, its agencies or instrumentalities; (2) non-convertible debt
securities issued or guaranteed by U.S. corporations or other issuers (including
foreign governments or corporations); (3) asset-backed securities (International
Opportunities Fund, International Advisers Fund, Advisers Fund, Bond Fund,
Mortgage Securities Fund and Money Market Fund only); (4) mortgage-related
securities, including collateralized mortgage obligations ("CMO's")
(International Opportunities Fund, International Advisers Fund, Advisers Fund,
Bond Fund and Mortgage Securities Fund only); and (5) securities issued or
guaranteed as to principal or interest by a sovereign government or one of its
agencies or political subdivisions, supranational entities such as development
banks, non-U.S. corporations, banks or bank holding companies, or other non-U.S.
issuers.

INVESTMENT GRADE DEBT SECURITIES

Each of the money market funds is permitted to invest only in high quality,
short term instruments as determined by Rule 2a-7 under the 1940 Act. Each of
the other Funds is permitted to invest in debt securities rated within the four
highest rating categories (i.e., Aaa, Aa, A or Baa by Moody's or AAA, AA, A or
BBB by S&P) (or, if unrated, securities of comparable quality as

-6-

<PAGE>

determined by HIMCO or Wellington Management). These securities are
generally referred to as "investment grade securities." Each rating category
has within it different gradations or sub-categories. If a Fund is
authorized to invest in a certain rating category, the Fund is also permitted
to invest in any of the sub-categories or gradations within that rating
category. If a security is downgraded to a rating category which does not
qualify for investment, HIMCO or Wellington Management will use its
discretion on whether to hold or sell based upon its opinion o n the best
method to maximize value for shareholders over the long term. Debt
securities carrying the fourth highest rating (i.e., "Baa" by Moody's and
"BBB" by S&P), and unrated securities of comparable quality (as determined by
HIMCO or Wellington Management) are viewed to have adequate capacity for
payment of principal and interest, but do involve a higher degree of risk
than that associated with investments in debt securities in the higher
rating categories and such securities lack outstanding investment
characteristics and do have speculative characteristics.

HIGH YIELD-HIGH RISK SECURITIES

Each of the Capital Appreciation Fund, Advisers Fund and International
Opportunities Fund is permitted to invest up to 5%, and the International
Advisers Fund is permitted to invest up to 15%, of its assets in securities
rated as low as "C" by Moody's or "CC" by S&P or of comparable quality if not
rated. The Bond Fund is permitted to invest up to 20% of its assets in
securities rated in the highest level below investment grade (i.e., "Ba" for
Moody's or "BB" by S&P), or if unrated, securities determined to be of
comparable quality by HIMCO. Securities rated below investment grade are
commonly referred to as "high yield-high risk securities" or "junk bonds". Each
rating category has within it different gradations or sub-categories. For
instance the "Ba" rating for Moody's includes "Ba3", "Ba2" and "Ba1". Likewise
the S&P rating category of "BB" includes "BB+", "BB" and "BB-". If a Fund is
authorized to invest in a certain rating category, the Fund is also permitted to
invest in any of the sub-categories or gradations within that rating category.
Securities in the highest category below investment grade are considered to be
of poor standing and predominantly speculative. These securities are considered
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligations. Accordingly, it is
possible that these types of factors could, in certain instances, reduce the
value of securities held by a Fund with a commensurate effect on the value of a
Fund's shares. If a security is downgraded to a rating category which does not
qualify for investment, HIMCO or Wellington Management will use its discretion
on whether to hold or sell based upon its opinion on the best method to maximize
value for shareholders over the long term.

MORTGAGE-RELATED SECURITIES

The mortgage-related securities in which the International Advisers Fund,
International Opportunities Fund, Advisers Fund, Bond Fund and Mortgage
Securities Fund may invest include interests in pools of mortgage loans made by
lenders such as savings and loan institutions, mortgage bankers, commercial
banks and others. Pools of mortgage loans are assembled for sale to investors
(such as the Funds) by various governmental, government-related and private
organizations. These

-7-

<PAGE>

Funds may also invest in similar mortgage-related securities which provide
funds for multi-family residences or commercial real estate properties.

The value of these securities may be significantly affected by interest
rates, the market's perception of the issuers and the creditworthiness of the
parties involved. These securities may also be subject to prepayment risk. The
yield characteristics of the mortgage securities differ from those of
traditional debt securities. Among the major differences are that interest and
principal payments are made more frequently on mortgage securities, usually
monthly, and that principal may be prepaid at any time because the underlying
mortgage loans or other assets generally permit prepayment at any time.
Evaluating the risks associated with prepayment and determining the rate at
which prepayment is influenced by a variety of economic, geographic,
demographic, social and other factors including interest rate levels, changes in
housing needs, net equity built by mortgagors in the mortgaged properties, job
transfers, and unemployment rates. If a Fund purchases these securities at a
premium, a prepayment rate that is faster than expected will reduce yield to
maturity, while a prepayment rate that is slower than expected will have the
opposite effect of increasing yield to maturity. Conversely, if a Fund purchases
these securities at a discount, faster than expected prepayments will increase,
while slower than expected prepayments will reduce, yield to maturity. Amounts
available for reinvestment are likely to be greater during a period of declining
interest rates and, as a result, are likely to be reinvested at lower interest
rates than during a period of declining interest rates and, as a result, are
likely to be reinvested at lower interest rates than during a period of rising
interest rates. Accelerated prepayments on securities purchased by a Fund at a
premium also impose a risk of loss of principal because the premium may not have
been fully amortized at the time the principal is repaid in full.

The mortgage securities in which each Fund invests differ from conventional
bonds in that principal is paid back over the life of the mortgage securities
rather than at maturity. As a result, the holder of the mortgage securities
(i.e., a Fund) receives monthly scheduled payments of principal and interest,
and may receive unscheduled principal payments representing prepayments on the
underlying mortgages. When the holder reinvests the payments and any unscheduled
prepayments of principal it receives, it may receive a rate of interest which is
lower than the rate on the existing mortgage securities. For this reason,
mortgage securities are less effective than other types of U.S. Government
securities as a means of "locking in" long-term interest rates. See "Illiquid
Securities."

ASSET-BACKED SECURITIES

The International Advisers Fund, International Opportunities Fund, Advisers
Fund, Bond Fund, Mortgage Securities Fund and the Money Market Fund may invest
in asset-backed securities. The securitization techniques used for asset-backed
securities are similar to those used for mortgage-related securities. The
collateral for these securities has included home equity loans, automobile and
credit card receivables, boat loans, computer leases, airplane leases, mobile
home loans, recreational vehicle loans and hospital accounts receivables. These
Funds may invest in these and other types of asset-backed securities that may be
developed in the future. These securities may

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be subject to the risk of prepayment or default. The ability of an issuer of
asset-backed securities to enforce its security interest in the underlying
securities may be limited.

EQUITY SECURITIES

Each Fund except the Bond Fund, Mortgage Securities Fund and Money Market
Fund may invest in equity securities which include common stocks, preferred
stocks (including convertible preferred stock) and rights to acquire such
securities. In addition, these Funds may invest in securities such as bonds,
debentures and corporate notes which are convertible into common stock at the
option of the holder. The Bond Fund may invest up to 15% of its total assets in
preferred stocks, convertible securities, and securities carrying warrants to
purchase equity securities. The Bond Fund will not invest in common stocks
directly, but may retain, for reasonable periods of time, common stocks acquired
upon conversion of debt securities or upon exercise of warrants acquired with
debt securities.

SMALL CAPITALIZATION SECURITIES

NON-U.S. SECURITIES

Each Fund, except the Mortgage Securities Fund, is permitted to invest a
portion of its assets in non-U.S. securities, including, in the case of
permitted equity investments, American Depositary Receipts ("ADRs") and Global
Depositary Receipts ("GDRs"). ADRs are certificates issued by a U.S. bank or
trust company and represent the right to receive securities of a non-U.S. issuer
deposited in a domestic bank or non-U.S. branch of a U.S. bank. ADRs are traded
on a U.S. securities exchange, or in an over-the-counter market, and are
denominated in U.S. dollars. GDRs are certificates issued globally and evidence
a similar ownership arrangement. GDRs are traded on non-U.S. securities
exchanges and are denominated in non-U.S. currencies. The value of an ADR or a
GDR will fluctuate with the value of the underlying security, will reflect any
changes in exchange rates and otherwise will involve risks associated with
investing in non-U.S. securities. When selecting securities of non-U.S. issuers,
HIMCO or Wellington Management will evaluate the

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<PAGE>

economic and political climate and the principal securities markets of the
country in which an issuer is located.

Investing in securities issued by non-U.S. companies involves
considerations and potential risks not typically associated with investing in
obligations issued by U.S. companies. Less information may be available about
non-U.S. companies than about U.S. companies and non-U.S. companies generally
are not subject to uniform accounting, auditing and financial reporting
standards or to other regulatory practices and requirements comparable to those
applicable to U.S. companies. The values of non-U.S. securities are affected by
changes in currency rates or exchange control regulations, restrictions or
prohibition on the repatriation of non-U.S. currencies, application of non-U.S.
tax laws, including withholding taxes, changes in governmental administration or
economic or monetary policy (in the U.S. or outside the U.S.) or changed
circumstances in dealings between nations. Costs are also incurred in connection
with conversions between various currencies.

Investing in non-U.S. sovereign debt will expose a Fund to the direct or
indirect consequences of political, social or economic changes in the developing
and emerging countries that issue the securities. The ability and willingness of
sovereign obligers in developing and emerging countries or the governmental
authorities that control repayment of their external debt to pay principal and
interest on such debt when due may depend on general economic and political
conditions within the relevant country. Countries such as those in which the
Funds may invest have historically experienced, and may continue to experience,
high rates of inflation, high interest rates, exchange rate trade difficulties
and unemployment. Some of these countries are also characterized by political
uncertainty or instability. Additional factors which may influence the ability
or willingness to service debt include, but are not limited to, a country's cash
flow situation, the availability of sufficient foreign exchange on the date a
payment is due, the relative size of its debt service burden to the economy as a
whole, and its government's policy towards the IMF, the World Bank and other
international agencies.

Although the International Advisers Fund and International Opportunities
Fund will focus on companies that operate in established markets, from time to
time the Fund may invest up to 25% of its assets in companies located in
emerging countries. Compared to the United States and other developed countries,
developing countries may have relatively unstable governments, economies based
on only a few industries, and securities markets that are less liquid and trade
a small number of securities. Prices on these exchanges tend to be volatile and,
in the past, securities in these countries have offered greater potential for
gain (as well as loss) than securities of companies located in developed
countries.

CURRENCY TRANSACTIONS

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<PAGE>

contracts, currency swaps, exchange-listed and over-the-counter ("OTC")
currency futures contracts and options thereon and exchange listed and OTC
options on currencies.

OPTIONS AND FUTURES CONTRACTS

In seeking to protect against the effect of changes in equity market
values, currency exchange rates or interest rates that are adverse to the
present or prospective position of the Funds, for cash flow management, and, to
a lesser extent, to enhance returns, each Fund, except the Money Market Fund,
may employ certain hedging, income enhancement and risk management techniques,
including the purchase and sale of options, futures and options on futures
involving equity and debt securities and foreign currencies, aggregates of
equity and debt securities, indices of prices of equity and debt securities and
other financial indices. A Fund's ability to engage in these practices may be
limited by tax considerations and certain other legal considerations.

A Fund may write covered options and purchase put and call options on
individual securities as a partial hedge against an adverse movement in the
security and in circumstances consistent with the objective and policies of the
Fund. This strategy limits potential capital appreciation in the portfolio
securities subject to the put or call option.

The Funds may also write covered put and call options and purchase put and
call options on foreign currencies to hedge against the risk of foreign exchange
fluctuations on foreign securities the particular Fund holds in its portfolio or
that it intends to purchase. For example, if a Fund enters into a contract to
purchase securities denominated in foreign currency, it could effectively
establish the maximum U.S. dollar cost of the securities by purchasing call
options on that foreign currency. Similarly, if a Fund held securities
denominated in a foreign currency and anticipated a decline in the value of that
currency against the U.S. dollar, the Fund could hedge against such a decline by
purchasing a put option on the foreign currency involved.

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<PAGE>

In addition, a Fund may purchase put and call options and write covered put
and call options on aggregates of equity and debt securities, and may enter into
futures contracts and options thereon for the purchase or sale of aggregates of
equity and debt securities, indices of equity and debt securities and other
financial indices, all for the purpose of protecting against potential changes
in the market value of portfolio securities or in interest rates. Aggregates are
composites of equity or debt securities that are not tied to a commonly known
index. An index is a measure of the value of a group of securities or other
interests. An index assigns relative values to the securities included in that
index, and the index fluctuates with changes in the market value of those
securities.

A Fund may write covered options only. "Covered" means that, so long as a
Fund is obligated as the writer of a call option on particular securities or
currency, it will own either the underlying securities or currency or an option
to purchase the same underlying securities or currency having an expiration date
not earlier than the expiration date of the covered option and an exercise price
equal to or less than the exercise price of the covered option, or will
establish or maintain with its custodian for the term of the option a segregated
account consisting of cash, U.S. Government securities or other liquid, high
grade debt obligations having a value equal to the fluctuating market value of
the optioned securities or currencies. A Fund will cover any put option it
writes on particular securities or currency by maintaining a segregated account
with its custodian as described above.

To hedge against fluctuations in currency exchange rates, a Fund may
purchase or sell foreign currency futures contracts, and write put and call
options and purchase put and call options on such futures contracts. For
example, a Fund may use foreign currency futures contracts when it anticipates a
general weakening of the foreign currency exchange rate that could adversely
affect the market values of the Fund's foreign securities holdings. In this
case, the sale of futures contracts on the underlying currency may reduce the
risk of a reduction in market value caused by foreign currency variations and,
by so doing, provide an alternative to the liquidation of securities positions
in the Fund and resulting transaction costs. When the Fund anticipates a
significant foreign exchange rate increase while intending to invest in a
non-U.S. security, the Fund may purchase a foreign currency futures contract to
hedge against a rise in foreign exchange rates pending completion of the
anticipated transaction. Such a purchase of a futures contract would serve as a
temporary measure to protect the Fund against any rise in the foreign exchange
rate that may add additional costs to acquiring the non-U.S. security position.
The Fund similarly may use futures contracts on equity and debt securities to
hedge against fluctuations in the value of securities it owns or expects to
acquire.

The Funds also may purchase call or put options on foreign currency futures
contracts to obtain a fixed foreign exchange rate at limited risk. A Fund may
purchase a call option on a foreign currency futures contract to hedge against a
rise in the foreign exchange rate while intending to invest in a non-U.S.
security of the same currency. A Fund may purchase put options on foreign
currency futures contracts to hedge against a decline in the foreign exchange
rate or the value of its non-U.S. securities. A Fund may write a call option on
a foreign currency futures contract as a partial

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<PAGE>

hedge against the effects of declining foreign exchange rates on the value of
non-U.S. securities and in circumstances consistent with a Fund's investment
objectives and policies.

Options on indexes are settled in cash, not in delivery of securities. The
exercising holder of an index option receives, instead of a security, cash equal
to the difference between the closing price of the securities index and the
exercise price of the option. When a Fund writes a covered option on an index, a
Fund will be required to deposit and maintain with a custodian cash or
high-grade, liquid short-term debt securities equal in value to the aggregate
exercise price of a put or call option pursuant to the requirements and the
rules of the applicable exchange. If, at the close of business on any day, the
market value of the deposited securities falls below the contract price, the
Fund will deposit with the custodian cash or high-grade, liquid short-term debt
securities equal in value to the deficiency.

To the extent that a Fund enters into futures contracts, options on futures
contracts and options on foreign currencies that are traded on an exchange
regulated by the Commodities Futures Trading Commission ("CFTC"), in each case
that are not for "bona fide hedging" purposes (as defined by regulations of the
CFTC), the aggregate initial margin and premiums required to establish those
positions may not exceed 5% of the liquidation value of the Fund's portfolio,
after taking into account the unrealized profits and unrealized losses on any
such contracts the Fund has entered into. However, the "in-the-money" amount of
such options may be excluded in computing the 5% limit. Adoption of this
guideline will not limit the percentage of a Fund's assets at risk to 5%.

Although any one Fund may not employ all or any of the foregoing
strategies, its use of options, futures and options thereon and forward currency
contracts (as described under "Currency Transactions") would involve certain
investment risks and transaction costs to which it might not be subject were
such strategies not employed. Such risks include: (1) dependence on the ability
of HIMCO or Wellington Management to predict movements in the prices of
individual securities, fluctuations in the general securities markets or market
sections and movements in interest rates and currency markets; (2) imperfect
correlation between movements in the price of the securities or currencies
hedged or used for cover; (3) the fact that skills and techniques needed to
trade options, futures contracts and options thereon or to use forward currency
contracts are different from those needed to select the securities in which a
Fund invests; (4) lack of assurance that a liquid secondary market will exist
for any particular option, futures contract, option thereon or forward contract
at any particular time, which may affect a Fund's ability to establish or close
out a position; (5) possible impediments to effective portfolio management or
the ability to meet current obligations caused by the segregation of a large
percentage of a Fund's assets to cover its obligations; and (6) the possible
need to defer closing out certain options, futures contracts, options thereon
and forward contracts in order to continue to qualify for the beneficial tax
treatment afforded "regulated investment companies" under the Code. In the event
that the anticipated change in the price of the securities or currencies that
are the subject of such a strategy does not occur, it may be that a Fund would
have been in a better position had it not used such a strategy at all.

SWAP AGREEMENTS

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<PAGE>

Each Fund, except the Index Fund and Money Market Fund, may enter into
interest rate swaps, currency swaps, and other types of swap agreements such as
caps, collars, and floors. In a typical interest rate swap, one party agrees to
make regular payments equal to a floating interest rate multiplied by a
"notional principal amount," in return for payments equal to a fixed rate
multiplied by the same amount, for a specified period of time. If a swap
agreement provides for payments in different currencies, the parties might agree
to exchange the notional principal amount as well. Swaps may also depend on
other prices or rates, such as the value of an index or mortgage prepayment
rates.

In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specified interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated
to make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor.

The Funds will usually enter into interest rate swaps on a net basis, i.e.,
where the two parties make net payments with a Fund receiving or paying, as the
case may be, only the net amount of the two payments. The net amount of the
excess, if any, of a Fund's obligations over its entitlement with respect to
each interest rate swap will be U.S. Government Securities or other liquid high
grade debt obligations having an aggregate net asset value at least equal to the
accrued excess will be maintained by the Fund's custodian in a segregated
account. If a Fund enters into a swap on other than a net basis, the Fund will
maintain in the segregated account the full amount of the Fund's obligations
under each such swap. The Fund may enter into swaps, caps, collars and floors
with member banks of the Federal Reserve System, members of the New York Stock
Exchange or other entities determined by HIMCO or Wellington Management,
pursuant to procedures adopted and reviewed on an ongoing basis by the Board of
Directors, to be creditworthy. If a default occurs by the other party to such
transaction, a Fund will have contractual remedies pursuant to the agreements
related to the transaction but such remedies may be subject to bankruptcy and
insolvency laws which could affect such Fund's rights as a creditor.

The swap market has grown substantially in recent years with a large number
of banks and financial services firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market has
become relatively liquid. Caps, collars and floors are more recent innovations
and they are less liquid than swaps. There can be no assurance, however,

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<PAGE>

that a Fund will be able to enter into interest rate swaps or to purchase
interest rate caps, collars or floors at prices or on terms HIMCO or
Wellington Management, as appropriate, believes are advantageous to such
Fund. In addition, although the terms of interest rate swaps, caps, collars
and floors may provide for termination, there can be no assurance that a Fund
will be able to terminate an interest rate swap or to sell or offset interest
rate caps, collars or floors that it has purchased. Interest rate swaps,
caps, collars and floors are considered by the SEC to be illiquid securities.

The successful utilization of hedging and risk management transactions
requires skills different from those needed in the selection of a Fund's
portfolio securities and depends on HIMCO's or Wellington Management's ability
to predict correctly the direction and degree of movements in interest rates.
Although the Funds believe that use of the hedging and risk management
techniques described above will benefit the Funds, if HIMCO's or Wellington
Management's judgment about the direction or extent of the movement in interest
rates is incorrect, a Fund's overall performance would be worse than if it had
not entered into any such transactions. For example, if a Fund had purchased an
interest rate swap or an interest rate floor to hedge against its expectation
that interest rates would decline but instead interest rates rose, such Fund
would lose part or all of the benefit of the increased payments it would receive
as a result of the rising interest rates because it would have to pay amounts to
its counterparties under the swap agreement or would have paid the purchase
price of the interest rate floor. These activities are commonly used when
managing derivative investments.

ILLIQUID SECURITIES

Each Fund is permitted to invest in illiquid securities. No illiquid
securities will be acquired if upon the purchase more than 10% of the Money
Market Fund's net assets or 15% of each other Fund's net assets would consist of
such securities. "Illiquid Securities" are securities that may not be sold or
disposed of in the ordinary course of business within seven days at
approximately the price used to determine a Fund's net asset value. Each Fund
may purchase certain restricted securities commonly known as Rule 144A
securities that can be resold to institutions and which may be determined to be
liquid pursuant to policies and guidelines of the Board of Directors. A Fund may
not be able to sell illiquid securities when HIMCO or Wellington Management
considers it desirable to do so or may have to sell such securities at a price
that is lower than the price that could be obtained if the securities were more
liquid. A sale of illiquid securities may require more time and may result in
higher dealer discounts and other selling expenses than does the sale of
securities that are not illiquid. Illiquid securities also may be more difficult
to value due to the unavailability of reliable market quotations for such
securities, and investment in illiquid securities may have an adverse impact on
net asset value.

Under current interpretations of the SEC Staff, the following types of
securities in which a Fund may invest will be considered illiquid: (1)
repurchase agreements maturing in more than seven days; (2) certain restricted
securities (securities whose public resale is subject to legal or contractual
restrictions); (3) options, with respect to specific securities, not traded on a
national securities exchange that are not readily marketable; and (4) any other
securities in which a Fund may invest that are not readily marketable.

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<PAGE>

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES

Each Fund is permitted to purchase or sell securities on a when-issued or
delayed-delivery basis. When-issued or delayed-delivery transactions arise when
securities are purchased or sold with payment and delivery taking place in the
future in order to secure what is considered to be an advantageous price and
yield at the time of entering into the transaction. While the Funds generally
purchase securities on a when-issued basis with the intention of acquiring the
securities, the Funds may sell the securities before the settlement date if
HIMCO or Wellington Management deems it advisable. At the time a Fund makes the
commitment to purchase securities on a when-issued basis, the Fund will record
the transaction and thereafter reflect the value, each day, of such security in
determining the net asset value of the Fund. At the time of delivery of the
securities, the value may be more or less than the purchase price. A Fund will
maintain, in a segregated account, cash, U.S. Government securities or other
liquid, high-grade debt obligations having a value equal to or greater than the
Fund's purchase commitments; likewise a Fund will segregate securities sold on a
delayed-delivery basis.

OTHER INVESTMENT COMPANIES

Each Fund, except the Index Fund and Money Market Fund, is permitted to
invest in other investment companies. Securities in certain countries are
currently accessible to the Funds only through such investments. The investment
in other investment companies is limited in amount and will involve the indirect
payment of a portion of the expenses, including advisory fees, of such other
investment companies. A Fund will not purchase a security of an investment
company if, as a result, (1) more than 10% of the Fund's assets would be
invested in securities of other investment companies, (2) such purchase would
result in more than 3% of the total outstanding voting securities of any one
such investment company being held by the Fund; or (3) more than 5% of the
Fund's assets would be invested in any one such investment company.

PORTFOLIO SECURITIES LENDING

Each of the Funds may lend its portfolio securities to broker/dealers and
other institutions as a means of earning interest income. The borrower will be
required to deposit as collateral, cash, cash equivalents, U.S. government
securities or other high quality liquid debt securities that at all times will
be at least equal to 100% of the market value of the loaned securities and such
amount will be maintained in a segregated account of the respective Fund. While
the securities are on loan the borrower will pay the respective Fund any income
accruing thereon.

Delays or losses could result if a borrower of portfolio securities becomes
bankrupt or defaults on its obligation to return the loaned securities. The
Funds may lend securities only if: (1) the loan is fully secured by appropriate
collateral at all times; and (2) the value of all loaned securities of any Fund
is not more than 33-1/3% of the Fund's total assets taken at the time of the
loan.

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MANAGEMENT OF THE FUNDS

The directors and officers of the Fund and their principal business
occupations for the last five years are set forth below. Those directors who are
deemed to be "interested persons" of the Fund, as that term is defined in the
1940 Act are indicated by an asterisk next to their respective names.

Name, Address, Age and Position with the Fund
- ---------------------------------------------

JOSEPH ANTHONY BIERNAT (age 69)
Director
30 Hurdle Fence Drive
Avon, CT 06001

Mr. Biernat served as Senior Vice President and Treasurer of United Technologies
Corporation from 1984 until March, 1987, when he retired. He subsequently served
as Executive Vice President of Boston Security Counselors, Inc., Hartford,
Connecticut (1988-1989), and served as Vice President-Client Services of Wright
Investors' Service, Bridgeport, Connecticut (1989-1990). Mr. Biernat presently
is consulting to organizations on financial matters, with the majority of time
spent with T.O. Richardson & Co., Farmington, Connecticut.

WINIFRED ELLEN COLEMAN (age 64)
Director
27 Buckingham Lane
West Hartford, CT 06117

Ms. Coleman has served as President of Saint Joseph College since 1991. She is a
Director of LeMoyne College and St. Francis Hospital.

JOSEPH HARRY GAREAU* (age 50)
Director and President
P.O. Box 2999
Hartford, CT 06104-2999
Mr. Gareau has served as Executive Vice President and Chief Investment Officerof
The Hartford since April, 1993. Formerly, he served as Senior Vice President and
Chief Investment Officer/Property-Casualty Division (September, 1992 - April,
1993) and Vice President (October, 1987 - September, 1992). Mr. Gareau is also a
Director and the President of HIMCO, a Director and Executive Vice President of
HIFSCO and a Director of Hartford Fire Insurance Company.

WILLIAM ATCHISON O'NEILL (age 67)
Director
Box 360

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<PAGE>

East Hampton, CT 06424

The Honorable William A. O'Neill served as Governor of the State of Connecticut
from 1980 until 1991. He is presently retired.

MILLARD HANDLEY PRYOR, JR. (age 64)
Director
90 State House Square
Hartford, CT 06103

Mr. Pryor has served as Managing Director of Pryor & Clark Company, Hartford,
Connecticut, since June, 1992. He served as Chairman and Chief Executive Officer
of Corcap, Inc. from 1988-1992. In addition, Mr. Pryor is a Director of Pryor &
Clark Company, Corcap, Inc., the Wiremold Company, Hoosier Magnetics, Inc.,
Infodata Systems, Inc., Pacific Scientific Corporation and Fibralock, Inc.

LOWNDES ANDREW SMITH* (age 57)
Director and Chairman
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Smith has served as President of The Hartford Life Insurance Companies since
January, 1989. He was formerly Senior Vice President and Group Comptroller of
The Hartford Insurance Group from 1987-1989. He has been a Director of
Connecticut Children's Medical Center since 1993 and a Director of American
Counsel of Life Insurance since 1990.

JOHN KELLEY SPRINGER (age 66)
Director
225 Asylum Avenue
Hartford, CT 06103

Mr. Springer currently serves as Chairman of Medspan, Inc. From 1989 to 1997 he
served as Chief Executive Officer of Connecticut Health System, Inc. Formerly,
he served as the Chief Executive Officer of Hartford Hospital, Hartford,
Connecticut (June, 1971 - August, 1989). His is also a Director of Hartford
Hospital, Connecticut Health System, Inc., Hospital Research and Development
Institute, and CHS Insurance Ltd. (Chairman).

PETER CUMMINS (age 60)
Vice President
Hartford Plaza
Hartford, CT 06115

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<PAGE>

Mr. Cummins has served as Senior Vice President since 1997 and Vice President
since 1989 of sales and marketing of the Individual Life and Annuity Division of
The Hartford Financial Services Group, Inc. - Life Companies.

JOHN PHILLIP GINNETTI (age 51)
Vice President
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Ginnetti has served as Executive Vice President and Director of Asset
Management Services, a division of The Hartford Financial Services Group, Inc. -
Life Companies, since 1994. From 1988 to 1994 he served as Senior Vice President
and Director of the Individual Life and Annuities Division, also a division of
The Hartford Financial Services Group, Inc. - Life Companies.

ANDREW WILLIAM KOHNKE (age 39)
Vice President
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Kohnke has served as a Vice President since 1992, and as an Investment
Manager since 1983, of The Hartford Financial Services Group, Inc. - Life
Companies. Mr. Kohnke is also a Director and Managing Director of HIMCO.

THOMAS MICHAEL MARRA (age 39)
Vice President
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Marra has served as an Executive Vice President since 1996, as Senior Vice
President since 1994, and as Director of the Individual Life and Annuity
Division of The Hartford Financial Services Group, Inc. - Life Companies, since
1980.

CHARLES MINER O'HALLORAN (age 50)
Vice President and Secretary
Hartford Plaza
Hartford, CT 06115

Mr. O'Halloran has served as a Vice President since December, 1994, Senior
Associate General Counsel since 1988 and Corporate Secretary since 1996 of The
Hartford Financial Services Group, Inc. Mr. O'Halloran is also a Director,
Secretary and General Counsel of HIMCO.

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<PAGE>

GEORGE RICHARD JAY (age 45)
Controller and Treasurer
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Jay has served as Secretary and Director, Life and Equity Accounting and
Financial Control, of The Hartford Financial Services Group, Inc. - Life
Companies since 1987.

KEVIN J. CARR (age 43)
Assistant Secretary and Counsel
Hartford Plaza
Hartford, CT 06115

Mr. Carr has served as Counsel since November 1996 and Associate Counsel since
November 1995, of The Hartford Financial Services Group, Inc. Formerly he served
as Counsel of Connecticut Mutual Life Insurance Company from March 1995 to
November 1995, Associate Counsel of 440 Financial Group of Worcester from 1994
to 1995 and Corporate Counsel-General Manager of Parker Media, a Hartford-based
publishing company, from 1990-1994.

JAMES CUBANSKI (age 36)
Assistant Secretary
Hartford Plaza
Hartford, CT 06115

Mr. Cubanski has served as Director of Tax Administration of The Hartford
Financial Services Group, Inc. since July, 1995. Formerly he served as Director
of Federal Tax Administration (July, 1993 - July, 1995) and Manager of Federal
Taxes (February, 1991 - July, 1993).

An Audit Committee and Nominating Committee have been appointed for the
Fund. Each Committee is made up of those directors who are not "interested
persons" of the Fund.

All Board members and officers of the Fund are also board members and
officers of ITT Hartford Mutual Funds, Inc., an open-end management investment
company comprised of eight separate funds, whose shares are sold to the general
public. Each of the Directors and principal officers affiliated with the Fund
who is also an affiliated person of HL Advisors, HIMCO or Wellington Management
is named above, together with the capacity in which such person is affiliated
with the Fund, HL Advisors, HIMCO or Wellington Management.

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<PAGE>

COMPENSATION OF OFFICERS AND DIRECTORS. The Funds pay no salaries or
compensation to any officer or director affiliated with The Hartford. The chart
below sets forth the fees paid by the Fund to the non-interested Directors and
certain other information as of December 31, 1997:

JOSEPH A. WINIFRED E. WILLIAM A. MILLARD H. JOHN K.
BIERNAT COLEMAN O'NEILL PRYOR SPRINGER

COMPENSATION
RECEIVED FROM THE $18,000 $18,000 $18,000 $18,000 $18,000
FUNDS

PENSION OR
RETIREMENT BENEFITS
ACCRUED AS FUND $0 $0 $0 $0 $0
EXPENSE

TOTAL COMPENSATION
FROM THE FUNDS AND
COMPLEX PAID TO $23,250 $23,250 $23,250 $23,250 $23,250
DIRECTORS*

*As of December 31, 1997, there were twenty-one funds in the Complex (including
the Funds).

Other Information about the Fund. Each Fund is a Maryland corporation with
- ---------------------------------
authorized capital stock, par value $0.10 per share as follows: Capital
Appreciation Fund, 2 billion; Dividend and Growth Fund, 2 billion; Index Fund, 1
billion; International Opportunities Fund, 1.5 billion; Small Company Fund, 750
million; Stock Fund, 2 billion; Advisers Fund, 4 billion; International Advisers
Fund, 750 million; Bond Fund, 800 million; MidCap Fund, 750 million; Mortgage
Securities Fund, 800 million; and Money Market Fund, 1.3 billion. Each Fund
offers two classes of shares: Class IA shares and Class IB shares.

INVESTMENT MANAGEMENT ARRANGEMENTS

Each Fund has entered into an investment advisory agreement with HL
Investment Advisors, Inc. ("HL Advisors"). The investment advisory agreement
provides that HL Advisors, subject to the supervision and approval of each
Fund's Board of Directors, is responsible for the management of each Fund. HL
Advisors is responsible for investment management supervision of all Funds. HL
Advisors has entered into an investment services agreement with The Hartford
Investment Management Company ("HIMCO") for services related to the day-to-day
investment and reinvestment of the assets of the Index Fund, Mortgage Securities
Fund, Bond Fund and Money Market Fund. In connection with its management of the
such Funds, HIMCO provides investment research and supervision of the
investments held by a Fund and conducts a continuous program of investment and
reinvestment of the Funds' assets, in accordance with the investment objectives
and policies of a Fund. HIMCO also furnishes the Funds such statistical
information, with respect to the investments which the Funds may hold or
contemplate purchasing, as the Fund may reasonably request. HIMCO will apprise
the Fund of important developments materially affecting any of the Funds and
furnish the Funds from time to time with such information as HIMCO may believe
appropriate for this purpose. In addition, Hartford Life Insurance Company
("Hartford Life"), a corporate affiliate of HL Advisors and HIMCO, provides
administrative services to the Funds

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<PAGE>

including administrative personnel, services, equipment and facilities and
office space for proper operation of the Funds. Although Hartford Life has
agreed to arrange for the provision of additional services necessary for the
proper operation of the Fund, each Fund pays for these services directly.

With respect to the Small Company Fund, Capital Appreciation Fund,
International Advisers Fund, International Opportunities Fund, MidCap Fund,
Stock Fund, Dividend and Growth Fund and Advisers Fund, HL Advisors has entered
into a sub-advisory investment management agreement with Wellington Management
Company, LLP ("Wellington Management"). Under the sub-advisory agreement,
Wellington Management, subject to the general supervision of the Board of
Directors and HL Advisors, is responsible for (among other things) the
day-to-day investment and reinvestment of the assets of such Funds and
furnishing each such Fund with advice and recommendations with respect to
investments and the purchase and sale of appropriate securities for each Fund.

As provided by the investment advisory agreement, each Fund pays HL
Advisors an investment management fee, which is accrued daily and paid monthly,
equal on an annual basis to a stated percentage of the respective Fund's average
daily net asset value. HL Advisors, not any Fund, pays the subadvisory fees of
Wellington Management as set forth in the Prospectus. HL Advisors pays HIMCO
the direct and indirect costs incurred in managing the HIMCO-advised Funds.

No person other than HL Advisors, HIMCO or Wellington Management and their
directors and employees regularly furnishes advice to the Funds with respect to
the desirability of the Funds investing in, purchasing or selling securities.
HIMCO and Wellington Management may from time to time receive statistical or
other information regarding general economic factors and trends, from The
Hartford and its affiliates.

Securities held by any Fund may also be held by other funds and other
clients for which HIMCO, Wellington Management or their respective affiliates
provide investment advice. Because of different investment objectives or other
factors, a particular security may be bought by HIMCO or Wellington Management
for one or more clients when one or more clients are selling the same security.
If purchases or sales of securities arise for consideration at or about the same
time for any Fund or client accounts (including other funds) for which HIMCO or
Wellington Management act as an investment adviser, (including the Funds
described herein) transactions in such securities will be made, insofar as
feasible, for the respective funds and other client accounts in a manner deemed
equitable to all. To the extent that transactions on behalf of more than one
client of HIMCO, Wellington Management or their respective affiliates during the
same period may increase the demand for securities being purchased or the supply
of securities being sold, there may be an adverse effect on price.

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<PAGE>

For the last three fiscal years, each Fund has paid the following advisory
fees to HL Advisors:

FUND NAME 1997 1996 1995
- --------- ---- ---- ----
Capital Appreciation Fund $12,519,486 $7,715,873
Dividend and Growth Fund $2,968,879 $757,373
Index Fund $945,609 $447,326
International Opportunities $4,428,186 $3,213,660
MidCap Fund(1)
Small Company Fund(2) $31,521 ---
Stock Fund $6,450,702 $4,134,925
Advisers Fund $22,209,882 $16,044,763
International Advisers Fund(3) $392,271 ---
Bond Fund $1,152,953 $906,000
Mortgage Securities Fund $804,297 $790,058
Money Market Fund $1,121,482 $762,534

For the last three fiscal years, each Fund has paid the following
administrative fees to Hartford Life:

FUND NAME 1997 1996 1995
- --------- ---- ---- ----
Capital Appreciation Fund $4,795,769 $2,814,856
Dividend and Growth Fund $965,006 $230,541
Index Fund $827,408 $391,411
International Opportunities $1,493,655 $1,045,064
MidCap Fund(1)
Small Company Fund(2) $13,232 ---
Stock Fund $4,210,075 $2,586,517
Advisers Fund $8,785,932 $6,244,398
International Advisers Fund(3) $119,528 $24,683
Bond Fund $636,196 $491,868
Mortgage Securities Fund $563,008 $553,041
Money Market Fund $784,977 $542,895

(1) Commenced operations in 1997
(2) Commenced operations in 1996
(3) Commenced operations in 1995

Pursuant to the investment advisory agreement, subadvisory investment
agreements and investment services agreements neither HL Advisors, HIMCO nor
Wellington Management is liable to the Funds or their shareholders for any error
of judgment or mistake of law or for any loss suffered by the Funds in
connection with the matters to which their respective agreements relate, except
a loss resulting from willful misfeasance, bad faith or gross negligence on the
part of HIMCO or

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<PAGE>

Wellington Management in the performance of their duties or from their
reckless disregard of the obligations and duties under the applicable
agreement.

HL Advisors, whose principal business address is at 200 Hopmeadow Street,
Simsbury, Connecticut and whose mailing address is P.O. Box 2999, Hartford,
Connecticut 06104, was organized in 1981. As of September 30, 1997, HL Advisors
and its affiliates had over $50.7 billion in assets under management. HL
Advisors is a majority owned indirect subsidiary of The Hartford. HIMCO, whose
principal business and mailing addresses are the same as HL Advisors was
organized in 1996 and is a wholly-owned subsidiary of The Hartford. HIMCO is a
professional money management firm that provides services to investment
companies, employee benefit plans and its affiliated insurance companies.

Wellington Management, 75 State Street, Boston, MA 02109, is a professional
investment counseling firm that provides services to investment companies,
employee benefit plans, endowments, foundations and other institutions and
individuals. Wellington Management and its predecessor organizations have
provided investment advisory services since 1928. As of September 30, 1997,
Wellington Management had investment management authority with respect to
approximately $169 billion in assets. Wellington Management is a Massachusetts
Limited Liability Partnership. The three managing general partners of Wellington
Management are Robert W. Doran, Duncan M. McFarland and John R. Ryan.

The investment management agreement, subadvisory investment agreements and
investment services agreements continue in effect for two years from initial
approval and from year to year thereafter if approved annually by a vote of a
majority of the Directors of the Fund including a majority of the Directors who
are not parties to an agreement or interested persons of any party to the
contract, cast in person at a meeting called for the purpose of voting on such
approval, or by holders of a majority of the applicable Fund's outstanding
voting securities. The contract automatically terminates upon assignment as
defined under the 1940 Act. The investment advisory agreement may be terminated
without penalty on 60 days' notice at the option of either party to the
respective contract or by vote of the holders of a majority of the outstanding
voting securities of the applicable Fund. The subadvisory investment agreements
and investment services agreements may be terminated at any time without the
payment of any penalty by the Board of Directors, by vote of a majority of the
outstanding voting securities of the respective Fund or by HL Advisors, upon 60
days' notice to HIMCO and Wellington Management, and by Wellington Management or
HIMCO upon 90 days' written notice to HL Advisors (with respect to that Fund
only). The subadvisory investment agreements and investment services agreements
terminate automatically upon the termination of the corresponding investment
advisory agreement.

HL Advisors may make payments from time to time from its own resources,
which may include the management fees paid by the Fund to compensate broker
dealers, depository institutions, or other persons for providing distribution
assistance and administrative services and to otherwise promote the sale of
shares of the Funds including paying for the preparation, printing and
distribution of prospectuses and sales literature or other promotional
activities.

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<PAGE>

PORTFOLIO TURNOVER

For the last three fiscal years, each Fund had the following portfolio
turnover rates:

FUND NAME 1997 1996 1995
- --------- ---- ---- ----
Capital Appreciation Fund 85.4% 78.6%
Dividend and Growth Fund 56.9% 41.4%
Index Fund 19.3% 1.5%
International Opportunities 70.0% 55.6%
MidCap Fund(1)
Small Company Fund(2) 31.8% N/A
Stock Fund 42.3% 52.9%
Advisers Fund 53.8% 63.5%
International Advisers Fund 95.2% 47.2%(3)
Bond Fund 212.0% 215.0%
Mortgage Securities Fund 201.0% 489.4%
Money Market Fund(4) N/A N/A

(1)The MidCap Fund commenced operations on July 15, 1997. It is anticipated
that the portfolio turnover rate of the MidCap Fund will not exceed 100%.
(2)The Small Company Fund commenced operations on August 9, 1996. It is
anticipated that the portfolio turnover rate of the Small Company Fund will
not exceed 100%.
(3)For the period February 28, 1995 to December 31, 1995.
(4)Because of the short-term nature of their portfolio securities and market
conditions, no meaningful or accurate prediction can be made of the portfolio
turnover rate for the Money Market Fund.

Turnover rate is computed by determining the percentage relationship of the
lesser of purchases and sales of securities to the monthly average of the value
of securities owned for the fiscal year, exclusive of securities whose
maturities at the time of acquisition were one year or less. A high turnover
rate will result in increased brokerage expenses and the likelihood of some
short term gains which may be taxable to shareholders at ordinary income tax
rates (see "Federal Income Taxes" in the prospectus).

FUND EXPENSES

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<PAGE>

shareholders as well as all quarterly, annual and any other periodic report
required to be filed with the SEC or with any state; any notices required by
a federal or state regulatory authority, and any proxy solicitation materials
directed to each Fund's shareholders as well as all printing, mailing and
tabulation costs incurred in connection therewith, and any expenses incurred
in connection with the holding of meetings of each Fund's shareholders and
other miscellaneous expenses related directly to the Funds' operations and
interest. As discussed in greater detail below, under "Purchase and
Redemption of Shares", the Class IB shares may pay for certain distribution
related expenses in connection with activities previously intended to result
in the sale of Class IB shares.

DISTRIBUTION ARRANGEMENTS

Each Fund's shares are sold on a continuous basis to separate accounts
sponsored by The Hartford and its affiliates pursuant to agreements between each
Fund and Hartford Securities Distribution Company, Inc. (the "Distributor").
The Distributor, located at 200 Hopmeadow Street, Simsbury, CT 06089, is an
indirect majority owned subsidiary of The Hartford.

Each Fund's distribution agreements with respect to the Class IA shares and
Class IB shares, each dated January __, 1998 ("Distribution Agreements"),
will remain in effect until January __, 2000, and from year to year
thereafter only if each Distribution Agreement's continuance is approved
annually by (i) a majority of the Directors who are not parties to such
agreement or "interested persons" (as defined in the 1940 Act) of the Fund and,
if applicable, who have no direct or indirect financial interest in the
operation of the Distribution Plan or any such related agreement ("Independent
Directors") and (ii) either by vote of a majority of the Directors or a majority
of the outstanding voting securities (as defined in the 1940 Act) of the Fund.

The Distributor or its affiliates for the Class IA shares will pay for
printing and distributing prospectuses or reports prepared for its use in
connection with the offering of the Class IA shares to prospective investors and
preparing, printing and mailing any other literature or advertising in
connection with the offering of the Class IA shares to prospective investors.
The Funds, pursuant to the Distribution Plan, will pay for services rendered and
expenses borne in connection with the offering of the Class IB shares. Such
expenses include the printing and mailing of prospectuses, statements of
additional information and reports to prospective purchasers, as well as the
preparation, printing and mailing of advertisements and sales literature in
connection with the offering of the Class IB shares to prospective investors.
The Distributor pays all fees and expenses in connection with its qualification
and registration as a broker or dealer under federal and state laws.

In the capacity of agent, the Distributor currently offers shares of each
Fund on a continuous basis to the separate accounts of insurance companies
offering the Contracts in all states in which the Fund may from time to time be
registered or where permitted by applicable law. Each Distribution Agreement
provides that the Distributor shall accept orders for shares at net asset value
without sales commission or load being charged. The Distributor has made no firm
commitment to acquire shares of any Fund. A description of the Distribution
Plan with respect to the Class IB

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<PAGE>

shares and related services and fees thereunder is provided in the Prospectus
for the Class IB shares of the Funds.

The Boards of Directors considered various factors in connection with its
decision as to whether to approve the Distribution Plan, including: (i) the
nature and causes of the circumstances which make implementation of the
Distribution Plan necessary and appropriate; (ii) the way in which the
Distribution Plan would address those circumstances, including the nature and
potential amount of expenditures; (iii) the nature of the anticipated benefits;
(iv) the possible benefits of the Distribution Plan to any other person relative
to those of the Funds; (v) the effect of the Distribution Plan on existing
owners of variable annuity contracts and variable life insurance policies; (vi)
the merits of possible alternative plans or pricing structures; (vii)
competitive conditions in the variable products industry; and (viii) the
relationship of the Distribution Plan to other distribution efforts of the
Funds.

Based upon its review of the foregoing factors and the materials presented
to it, and in light of its fiduciary duties under the 1940 Act, the Boards of
Directors determined, in the exercise of its business judgment, that the
Distribution Plan is reasonably likely to benefit the Class IB shareholders of
the Funds.

The Distribution Plan and any Rule 12b-1 related agreement that is entered
into by the Funds or the Distributor of the Class IB shares in connection with
the Distribution Plan will continue in effect for a period of more than one year
only so long as continuance is specifically approved at least annually by a vote
of a majority of the Fund's Board of Directors, and of a majority of the
Independent Directors, cast in person at a meeting called for the purpose of
voting on the Distribution Plan, or any Rule 12b-1 related agreement, as
applicable. In addition, the Distribution Plan and any Rule 12b-1 related
agreement may be terminated as to Class IB shares of a Fund at any time, without
penalty, by vote of a majority of the outstanding Class IB shares of the Fund or
by vote of a majority of the Independent Directors. The Distribution Plan also
provides that it may not be amended to increase materially the amount (up to
.25% of average daily net assets annually) that may be spent for distribution of
Class IB shares of a Fund without the approval of Class IB shareholders of that
Fund.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Funds have no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to any policy
established by HL Advisors and the Board of Directors, HIMCO and Wellington
Management are primarily responsible for the investment decisions of each Fund
and the placing of its portfolio transactions. In placing orders, it is the
policy of each Fund to obtain the most favorable net results, taking into
account various factors, including price, dealer spread or commission, if any,
size of the transaction and difficulty of execution. While HIMCO and Wellington
Management generally seek reasonably competitive spreads or

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<PAGE>

commissions. HIMCO and Wellington Management may direct brokerage
transactions to broker/dealers who also sell The Hartford's variable annuity
and variable life insurance contracts and the sale of such contracts may be
taken into account by HIMCO and Wellington Management when allocating
brokerage transactions.

HIMCO and Wellington Management will generally deal directly with the
dealers who make a market in the securities involved (unless better prices and
execution are available elsewhere) if the securities are traded primarily in the
over-the-counter market. Such dealers usually act as principals for their own
account. On occasion, securities may be purchased directly from the issuer.
Bonds and money market securities are generally traded on a net basis and do not
normally involve either brokerage commissions or transfer taxes. Portfolio
securities in the Money Market Fund normally are purchased directly from, or
sold directly to, the issuer, an underwriter or market maker for the securities.
There usually will be no brokerage commissions paid by the Money Market Fund for
such purchases or sales.

While HIMCO and Wellington Management (as applicable) seek to obtain the
most favorable net results in effecting transactions in a Fund's portfolio
securities, dealers who provide supplemental investment research to HIMCO or
Wellington Management may receive orders for transactions from HIMCO or
Wellington Management. Such supplemental research services ordinarily consist
of assessments and analyses of the business or prospects of a company, industry,
or economic sector. If, in the judgment of HIMCO or Wellington Management, a
Fund will be benefited by such supplemental research services, HIMCO and
Wellington Management are authorized to pay spreads or commissions to brokers or
dealers furnishing such services which are in excess of spreads or commissions
which another broker or dealer may charge for the same transaction. Information
so received will be in addition to and not in lieu of the services required to
be performed by HIMCO and Wellington Management under the investment advisory
agreement or the sub-investment advisory agreement. The expenses of HIMCO and
Wellington Management will not necessarily be reduced as a result of the receipt
of such supplemental information. HIMCO and Wellington Management may use such
supplemental research in providing investment advice to portfolios other than
those for which the transactions are made. Similarly, the Funds may benefit
from such research obtained by HIMCO and Wellington Management for portfolio
transactions for other clients.

Investment decisions for the Funds will be made independently from those of
any other clients that may be (or in the future may be) managed by HIMCO,
Wellington Management or their affiliates. If, however, accounts managed by
HIMCO or Wellington Management are simultaneously engaged in the purchase of the
same security, then, pursuant to general authorization of each Fund's Board of
Directors, available securities may be allocated to each Fund or other client
account and may be averaged as to price in whatever manner HIMCO or Wellington
Management deems to be fair. Such allocation and pricing may affect the amount
of brokerage commissions paid by each Fund. In some cases, this system might
adversely affect the price paid by a Fund (for example, during periods of
rapidly rising or falling interest rates) or limit the size of the position
obtainable for a Fund (for example, in the case of a small issue).

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<PAGE>

For the last three fiscal years, each Fund has paid the following brokerage
fees:

FUND NAME 1997 1996 1995
- --------- ---- ---- ----
Capital Appreciation Fund $6,257,262 $3,069,000
Dividend and Growth Fund $1,256,273 $303,000
Index Fund $258,946 $66,000
International Opportunities $3,607,685 $1,986,000
MidCap Fund(1)
Small Company Fund(2) $32,863 N/A
Stock Fund $2,403,555 $1,839,000
Advisers Fund $3,413,943 $2,608,000
International Advisers Fund(3) $238,356 $76,000
Bond Fund(3) N/A N/A
Mortgage Securities Fund(4) N/A N/A
Money Market Fund(4) N/A N/A

(1)Commenced operations in 1997.
(2)Commenced operations in 1996.
(3)Commenced operations in 1995.
(4)No brokerage commissions were paid in 1995, 1996 or 1997 by the Bond Fund,
Mortgage Securities Fund or Money Market Fund.

Changes in the amounts of brokerage commissions paid reflect changes in
portfolio turnover rates.

DETERMINATION OF NET ASSET VALUE

The net asset value of the shares of each Fund is determined by Hartford
Life, in the manner described in the Funds' Prospectus. The Funds will be
closed for business and will not price their shares on the following business
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Securities
held by each Fund other than the Money Market Fund will be valued as follows:
Debt securities (other than short-term obligations) are valued on the basis of
valuations furnished by an unaffiliated pricing service which determines
valuations for normal institutional size trading units of debt securities.
Short-term securities held in the Money Market Fund are valued at amortized cost
or original cost plus accrued interest receivable, both of which approximate
market value. All other Funds' short-term investments with a maturity of 60
days or less when purchased are valued at amortized cost, which approximates
market value. Short-term investments with a maturity of more than 60 days when
purchased are valued based on market quotations until the remaining days to
maturity become less than 61 days. From such time until maturity, the
investments are valued at amortized cost.

Equity securities are valued at the last sales price reported on principal
securities exchanges (domestic or foreign). If no sale took place on such day
and in the case of certain equity securities traded over-the-counter, then such
securities are valued at the mean between the bid and asked

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<PAGE>

prices. Securities quoted in foreign currencies are translated into U.S.
dollars at the exchange rate at the end of the reporting period. Options are
valued at the last sales price; if no sale took place on such day, then
options are valued at the mean between the bid and asked prices. Securities
for which market quotations are not readily available and all other assets
are valued in good faith at fair value by, or under guidelines established
by, the Funds' Board of Directors.

The net asset value per share of the Money Market Fund is determined by
using the amortized cost method of valuing its portfolio instruments. Under the
amortized cost method of valuation, an instrument is valued at cost and the
interest payable at maturity upon the instrument is accrued as income, on a
daily basis, over the remaining life of the instrument. Neither the amount of
daily income nor the net asset value is affected by unrealized appreciation or
depreciation of the portfolio's investments assuming the instrument's obligation
is paid in full on maturity. In periods of declining interest rates, the
indicated daily yield on shares of the portfolio computed using amortized cost
may tend to be higher than a similar computation made using a method of
valuation based upon market prices and estimates. In periods of rising interest
rates, the indicated daily yield on shares of the portfolio computed using
amortized cost may tend to be lower than a similar computation made using a
method of valuation based upon market prices and estimates. For all Funds,
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value.

The amortized cost method of valuation permits the Money Market Fund to
maintain a stable $1.00 net asset value per share. The Fund's Board of
Directors periodically reviews the extent of any deviation from the $1.00 per
share value that would occur if a method of valuation based on market prices and
estimates were used. In the event such a deviation would exceed one-half of one
percent, the Board of Directors will promptly consider any action that
reasonably should be initiated to eliminate or reduce material dilution or other
unfair results to shareholders. Such action may include selling portfolio
securities prior to maturity, not declaring earned income dividends, valuing
portfolio securities on the basis of current market prices, if available, or, if
not available, at fair market value as determined in good faith by the Board of
Directors, and (considered highly unlikely by management of the Fund) redemption
of shares in kind (i.e., portfolio securities).

PURCHASE AND REDEMPTION OF SHARES

For information regarding the purchase of Fund shares, see "Purchase of
Fund Shares" in the Funds' Prospectus.

For a description of how a shareholder may have a Fund redeem his/her
shares, or how he/she may sell shares, see "Sale and Redemption of Shares" in
the Funds' Prospectus.

SUSPENSION OF REDEMPTIONS

A Fund may not suspend a shareholder's right of redemption, or postpone
payment for a redemption for more than seven days, unless the New York Stock
Exchange (NYSE) is closed for

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<PAGE>

other than customary weekends or holidays, or trading on the NYSE is
restricted, or for any period during which an emergency exists as a result of
which (1) disposal by a Fund of securities owned by it is not reasonably
practicable, or (2) it is not reasonably practicable for a Fund to fairly
determine the value of its assets, or for such other periods as the
Securities and Exchange Commission may permit for the protection of investors.

INVESTMENT PERFORMANCE

MONEY MARKET FUNDS

In accordance with regulations prescribed by the SEC, the Fund is required
to compute the Money Market Fund's current annualized yield for a seven-day
period in a manner which does not take into consideration any realized or
unrealized gains or losses on its portfolio securities. This current annualized
yield is computed by determining the net change (exclusive of realized gains and
losses on the sale of securities and unrealized appreciation and depreciation)
in the value of a hypothetical account having a balance of one share of the
Money Market Fund at the beginning of such seven-day period, dividing such net
change in account value by the value of the account at the beginning of the
period to determine the base period return and annualizing this quotient on a
365-day basis.

The SEC also permits the Fund to disclose the effective yield of the Money
Market Fund for the same seven-day period, determined on a compounded basis.
The effective yield is calculated by compounding the unannualized base period
return by adding one to the base period return, raising the sum to a power equal
to 365 divided by 7, and subtracting one from the result.

The yield on amounts held in the Money Market Fund normally will fluctuate
on a daily basis. Therefore, the disclosed yield for any given past period is
not an indication or representation of future yields or rates of return.

HVA Money Market Fund

The Money Market Fund's actual yield is affected by changes in interest
rates on money market securities, average portfolio maturity of the Money Market
Fund, the types and quality of portfolio securities held by the Money Market
Fund, and its operating expenses.

Yield calculations of the Fund used for illustration purposes are based on
the consideration of a hypothetical account having a balance of exactly one
share at the beginning of a seven day period, which period will end on the date
of the most recent financial statements. The yield for the fund during this
seven day period will be the change in the value of the hypothetical account,
including dividends declared on the original share, dividends declared on any
shares purchased with dividends on that share, and any monthly account charges
or sales charges that would affect an account of average size, but excluding any
capital changes. The following is an example of this yield calculation for the
Fund based on a seven day period ending December 31, 1997.

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<PAGE>

Example:

Assumptions:

Value of a hypothetical pre-existing account with exactly one share at the
beginning of the period: $1.000000

Value of the same account* (excluding capital changes) at the end of the
seven day period: $1._______

*This value would include the value of any additional shares purchased with
dividends from the original share, and all dividends declared on both the
original share and any such additional shares.

Calculation:
Ending account value $1.______
Less beginning account value 1.000000

Net change in account value $._______
Base period return:
(adjusted change/beginning account value)
$.001035/$1.000000 = $.001035
Current yield = $.______ X (365/7) = ______%
Effective yield = (1 + .______)365/7 - 1 = ______%

The current yield and effective yield information will fluctuate, and
publication of yield information may not provide a basis for comparison with
bank deposits, other investments which are insured and/or pay a fixed yield for
a stated period of time, or other investment companies. In addition, the current
yield and effective yield information may be of limited use for comparative
purposes because it does not reflect charges imposed at the Separate Account
level which, if included, would decrease the yield.

OTHER FUNDS

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS. Average annual total
return quotations for the Funds are computed by finding the average annual
compounded

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rates of return that would cause a hypothetical investment made on the first
day of a designated period to equal the ending redeemable value of such
hypothetical investment on the last day of the designated period in
accordance with the following formula:

P(1+T)(n) = ERV
Where:
P = a hypothetical initial payment n = number of years
of $1,000, less the maximum
sales load applicable to a Fund ERV = ending redeemable value of the
hypothetical $1,000 initial
T = average annual total return payment made at the beginning of
the designated period (or
fractional portion thereof)

The computation above assumes that all dividends and distributions made by a
Fund are reinvested at net asset value during the designated period. The
average annual total return quotation is determined to the nearest 1/100 of 1%.

One of the primary methods used to measure performance is "total return."
"Total return" will normally represent the percentage change in value of a class
of a Fund, or of a hypothetical investment in a class of a Fund, over any period
up to the lifetime of the class. Unless otherwise indicated, total return
calculations will assume the deduction of the maximum sales charge and usually
assume the reinvestment of all dividends and capital gains distributions and
will be expressed as a percentage increase or decrease from an initial value,
for the entire period or for one or more specified periods within the entire
period. Total return calculations that do not reflect the reduction of sales
charges will be higher than those that do reflect such charges.

Total return percentages for periods longer than one year will usually be
accompanied by total return percentages for each year within the period and/or
by the average annual compounded total return for the period. The income and
capital components of a given return may be separated and portrayed in a variety
of ways in order to illustrate their relative significance. Performance may
also be portrayed in terms of cash or investment values, without percentages.
Past performance cannot guarantee any particular future result. In determining
the average annual total return (calculated as provided above), recurring fees,
if any, that are charged to all shareholder accounts are taken into
consideration. For any account fees that vary with the size of the account, the
account fee used for purposes of the above computation is assumed to be the fee
that would be charged to the mean account size of the Fund.

Each Fund's average annual total return quotations and yield quotations as
they may appear in the Prospectus, this SAI or in advertising are calculated by
standard methods prescribed by the SEC.

-33-

<PAGE>

Each Fund may also publish its distribution rate and/or its effective
distribution rate. A Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized, by the current net asset value
per share. A Fund's effective distribution rate is computed by dividing the
distribution rate by the ratio used to annualize the most recent monthly
distribution and reinvesting the resulting amount for a full year on the basis
of such ratio. The effective distribution rate will be higher than the
distribution rate because of the compounding effect of the assumed reinvestment.
A Fund's yield is calculated using a standardized formula, the income component
of which is computed from the yields to maturity of all debt obligations held by
the Fund based on prescribed methods (with all purchases and sales of securities
during such period included in the income calculation on a settlement date
basis), whereas the distribution rate is based on a Fund's last monthly
distribution. A Fund's monthly distribution tends to be relatively stable and
may be more or less than the amount of net investment income and short- term
capital gain actually earned by the Fund during the month (see "Dividends,
Capital Gains and Taxes" in the Funds' Prospectus).

Other data that may be advertised or published about each Fund include the
average portfolio quality, the average portfolio maturity and the average
portfolio duration.

STANDARDIZED YIELD QUOTATIONS. The yield of a class is computed by
dividing the class's net investment income per share during a base period of 30
days, or one month, by the maximum offering price per share of the class on the
last day of such base period in accordance with the following formula:

a-b
2[(----- +1)(6) -1]
cd

Where:
a = net investment income earned c = the average daily number of shares
during the period attributable to of the subject class outstanding
the subject class during the period that were
entitled to receive dividends
b = net expenses accrued for the
period attributable to the subject d = the maximum offering price per
class share of the subject

Net investment income will be determined in accordance with rules established
by the SEC.

NON-STANDARDIZED PERFORMANCE. In addition, in order to more completely
represent a Fund's performance or more accurately compare such performance to
other measures of investment return, a Fund also may include in advertisements,
sales literature and shareholder reports other total return performance data
("Non-Standardized Return"). Non-Standardized Return may be quoted for the same
or different periods as those for which Standardized Return is quoted; it may
consist of an aggregate or average annual percentage rate of return, actual
year-by-year rates or any combination thereof. Non-Standardized Return may or
may not take sales charges into account; performance data calculated without
taking the effect of sales charges into account will be higher

-34-

<PAGE>

than data including the effect of such charges. All non-standardized
performance will be advertised only if the standard performance data for the
same period, as well as for the required periods, is also presented.

GENERAL INFORMATION. From time to time, the Funds may advertise their
performance compared to similar funds using certain unmanaged indices, reporting
services and publications. Descriptions of some of the indices which may be
used are listed below.

The Standard & Poor's 500 Composite Stock Price Index is a well diversified
list of 500 companies representing the U.S. Stock Market.

The Standard & Poor's MidCap 400 Index is designed to represent price
movements in the mid cap U.S. equity market. It contains companies chosen by
the Standard & Poors Index Committee for their size, liquidity and industry
representation. None of the companies in the S&P 400 overlap with those in the
S&P 500 Index or the S&P 600 Index. Decisions about stocks to be included and
deleted are made by the Committee which meets on a regular basis. S&P 400
stocks are market cap weighted; each stock influences the Index in proportion to
its relative market cap. REITs are not eligible for inclusion. The range of
capitalization of companies in the Index as of December 29, 1995 was $118
million to $7 billion. The inception year of the S&P MidCap 400 Index is 1982.
The Index is rebalanced as needed. S&P 400 companies which merge or are
acquired are immediately replaced in the Index; other companies are replaced
when the Committee decides they are no longer representative.

The Standard and Poor's Small Cap 600 index is designed to represent price
movements in the small cap U.S. equity market. It contains companies chosen by
the Standard & Poors Index Committee for their size, industry characteristics,
and liquidity. None of the companies in the S&P 600 overlap with the S&P 500 or
the S&P 400 (MidCap Index). The S&P 600 is weighted by market capitalization.
REITs are not eligible for inclusion.

The NASDAQ Composite OTC Price Index is a market value-weighted and
unmanaged index showing the changes in the aggregate market value of
approximately 3,500 stocks.

The Lehman Government Bond Index is a measure of the market value of all
public obligations of the U.S. Treasury; all publicly issued debt of all
agencies of the U.S. Government and all quasi-federal corporations; and all
corporate debt guaranteed by the U.S. Government. Mortgage backed securities,
bonds and foreign targeted issues are not included in the Lehman Government
Index.

The Lehman Government/Corporate Bond Index is a measure of the market value
of approximately 5,300 bonds with a face value currently in excess of $1.3
trillion. To be included in the Lehman Government/Corporate Index, an issue
must have amounts outstanding in excess of $1 million, have at least one year to
maturity and be rated "Baa" or higher ("investment grade") by a nationally
recognized rating agency.

-35-

<PAGE>

The Russell 2000 Index represents the bottom two thirds of the largest 3000
publicly traded companies domiciled in the U.S. Russell uses total market
capitalization to sort its universe to determine the companies that are included
in the Index. Only common stocks are included in the Index. REITs are eligible
for inclusion.

The Russell 2500 Index is a market value-weighted, unmanaged index showing
total return (i.e., principal changes with income) in the aggregate market
value of 2,500 stocks of publicly traded companies domiciled in the United
States. The Index includes stocks traded on the New York Stock Exchange and the
American Stock Exchange as well as in the over-the-counter market.

The Morgan Stanley Capital International EAFE Index (the "EAFE Index") is
an unmanaged index, which includes over 1,000 companies representing the stock
markets of Europe, Australia, New Zealand and the Far East. The EAFE Index is
typically shown weighted by the market capitalization. However, EAFE is also
available weighted by Gross Domestic Product (GDP). These weights are modified
on July 1st of each year to reflect the prior year's GDP. Indices with
dividends reinvested constitute an estimate of total return arrived at by
reinvesting one twelfth of the month end yield at every month end. The series
with net dividends reinvested take into account those dividends net of
withholding taxes retained at the source of payment.

The Lehman Brothers High Yield BB Index is a measure of the market value of
public debt issues with a minimum par value of $100 million and rated Ba1-Ba3 by
Moody's. All bonds within the index are U.S. dollar denominated,
non-convertible and have at least one year remaining to maturity.

The Composite Index for Hartford Advisers Fund is comprised of the S&P 500
(55%), the Lehman Government/Corporate Bond Index (35%), both mentioned above,
and 90 Day U.S. Treasury Bills (10%).

The Composite Index for the Capital Appreciation Fund is the Russell 2500
Index (60%)/S&P 500 Index (40%), both of which are mentioned above.

In addition, from time to time in reports and promotions: (1) a Fund's
performance may be compared to other groups of mutual funds tracked by: (a):
Lipper Analytical Services, a widely used independent research firm which ranks
mutual funds by overall performance, investment objectives, and assets; (b)
Morningstar, Inc., another widely used independent research firm which ranks
mutual funds by overall performance, investment objectives, and assets; or (c)
other financial or business publications, such as Business Week, Money Magazine,
Forbes and Barron's which provide similar information; (2) the Consumer Price
Index (measure for inflation) may be used to assess the real rate of return from
an investment in the Fund; (3) other statistics such as GNP, and net import and
export figures derived form governmental publications, e.g., The Survey of
Current Business or other independent parties, e.g.,the Investment Company
Institute, may be used to illustrate investment attributes to the Fund or the
general economic, business, investment, or financial environment in which the
Fund operates; (4) various financial, economic and market statistics developed
by brokers,

-36-

<PAGE>

dealers and other persons may be used to illustrate aspects of the Fund's
performance; (5) the effect of tax-deferred compounding on the Fund's
investment returns, or on returns in general, may be illustrated by graphs,
charts, etc. where such graphs or charts would compare, at various points in
time, the return from an investment in the Fund (or returns in general) on a
tax-deferred basis (assuming reinvestment of capital gains and dividends and
assuming one or more tax rates) with the return on a taxable basis; and (6)
the sectors or industries in which the Fund invests may be compared to
relevant indices or surveys (e.g., S&P Industry Surveys) in order to evaluate
the Fund's historical performance or current or potential value with respect
to the particular industry or sector.

Each Fund's investment performance may be advertised in various financial
publications, newspapers, magazines including the following:

Across the Board Financial Times
Advertising Age Forbes
Adviser's Magazine Fortune
Adweek Hartford Courant
Agent Inc
American Banker Independent Business
American Agent and Broker Institutional Investor
Associated Press Insurance Forum
Barron's Insurance Advocate Independent
Best's Review Insurance Review Investor's
Bloomberg Insurance Times
Broker World Insurance Week
Business Week Insurance Product News
Business Wire Insurance Sales
Business News Features Investment Dealers Digest
Business Month Investment Advisor
Business Marketing Journal of Commerce
Business Daily Journal of Accountancy
Business Insurance Journal of the American Society
California Broker of CLU & ChFC
Changing Times Kiplinger's Personal Finance
Consumer Reports Knight-Ridder
Consumer Digest Life Association News
Crain's Life Insurance Selling
Dow Jones News Service Life Times
Economist LIMRA's MarketFacts
Entrepreneur Lipper Analytical Services, Inc.
Entrepreneurial Woman MarketFacts
Financial Services Week Medical Economics
Financial World Money
Financial Planning Morningstar, Inc.

-37-

<PAGE>

Nation's Business Success
National Underwriter The Standard
New Choices (formerly 50 Plus) The Boston Globe
New England Business The Washington Post
New York Times Tillinghast
Pension World Time
Pensions & Investments U.S. News & World Report
Professional Insurance Agents U.S. Banker
Professional Agent United Press International
Registered Representative USA Today
Reuter's Value Line
Rough Notes Wall Street Journal
Round the Table Wiesenberger Investment
Service Working Woman

From time to time the Fund may publish the sales of shares of one or more
of the Funds on a gross or net basis and for various periods of time, and
compare such sales with sales similarly reported by other investment companies.

The manner in which total return and yield are calculated is described
above. The following table sets forth the average annual total return, and yield
where applicable, for each Fund through December 31, 1997.

TOTAL RETURN/YIELD
10 YEARS OR
FUND 1 YEAR 5 YEARS SINCE SEC 30-DAY YIELD
- ---- ------- ------- INCEPTION ----------------
---------
Capital Appreciation % % %
Dividend and Growth % % %
Index % % %
International Opportunities % % %
MidCap % % %
Small Company % % %
Stock % % %
Advisers % % %
International Advisers % % %
Bond % % % %
Mortgage Securities % % % %
HVA Money Market % % %

TAXES

Each Fund is treated as a separate entity for accounting and tax purposes.
Each Fund has qualified and elected or intends to qualify and elect to be
treated as a "regulated investment

-38-

<PAGE>

company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), and intends to continue to so qualify in the future. As such
and by complying with the applicable provisions of the Code regarding the
sources of its income, the timing of its distributions, and the
diversification of its assets, each Fund will not be subject to federal
income tax on taxable income (including net short-term and long-term capital
gains) which is distributed to shareholders at least annually in accordance
with the timing requirements of the Code.

Each Fund will be subject to a 4% non-deductible federal excise tax on
certain amounts not distributed (and not treated as having been distributed) on
a timely basis in accordance with annual minimum distribution requirements.
Each Fund intends under normal circumstances to avoid liability for such tax by
satisfying such distribution requirements.

If a Fund acquires stock in certain non-U.S. corporations that receive at
least 75% of their annual gross income from passive sources (such as interest,
dividends, rents, royalties or capital gain) or hold at least 50% of their
assets in investments producing such passive income ("passive foreign investment
companies"), that Fund could be subject to federal income tax and additional
interest charges on "excess distributions" received from such companies or gain
from the sale of stock in such companies, even if all income or gain actually
received by the Fund is timely distributed to its shareholders. The Fund would
not be able to pass through to its shareholders any credit or deduction for such
a tax. Certain elections may, if available, ameliorate these adverse tax
consequences, but any such election would require the applicable Fund to
recognize taxable income or gain without the concurrent receipt of cash. Any
Fund that is permitted to acquire stock in foreign corporations may limit and/or
manage its holdings in passive foreign investment companies to minimize its tax
liability or maximize its return from these investments.

Foreign exchange gains and losses realized by a Fund in connection with
certain transactions involving foreign currency-denominated debt securities,
certain foreign currency futures and options, foreign currency forward
contracts, foreign currencies, or payables or receivables denominated in a
foreign currency are subject to Section 988 of the Code, which generally causes
such gains and losses to be treated as ordinary income and losses and may affect
the amount, timing and character of distributions to shareholders. Any such
transactions that are not directly related to a Fund's investment in stock or
securities, possibly including speculative currency positions or currency
derivatives not used for hedging purposes, may increase the amount of gain it is
deemed to recognize from the sale of certain investments held for less than
three months, which gain is limited under the Code to less than 30% of its
annual gross income, and could under future Treasury regulations produce income
not among the types of "qualifying income" from which the Fund must derive at
least 90% of its annual gross income.

Some Funds may be subject to withholding and other taxes imposed by foreign
countries with respect to their investments in foreign securities. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes. The Funds anticipate that they generally will not qualify to pass such
foreign taxes and any associated tax deductions or credits through to their
shareholders, who therefore generally will not report such amounts on their own
tax returns.

-39-

<PAGE>

For Federal income tax purposes, each Fund is permitted to carry forward a
net capital loss in any year to offset its own capital gains, if any, during the
eight years following the year of the loss. To the extent subsequent capital
gains are offset by such losses, they would not result in federal income tax
liability to the applicable Fund and would not be distributed as such to
shareholders.

Each Fund that invests in certain PIKs, zero coupon securities or certain
deferred interest securities (and, in general, any other securities with
original issue discount or with market discount if the Fund elects to include
market discount in income currently) must accrue income on such investments
prior to the receipt of the corresponding cash payments. However, each Fund
must distribute, at least annually, all or substantially all of its net income,
including such accrued income, to shareholders to qualify as a regulated
investment company under the Code and avoid federal income and excise taxes.
Therefore, a Fund may have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash, or may have to leverage itself
by borrowing the cash, to satisfy distribution requirements.

Investment in debt obligations that are at risk of or in default presents
special tax issues for any Fund that may hold such obligations. Tax rules are
not entirely clear about issues such as when the Fund may cease to accrue
interest, original issue discount, or market discount, when and to what extent
deductions may be taken for bad debts or worthless securities, how payments
received on obligations in default should be allocated between principal and
income, and whether exchanges of debt obligations in a workout context are
taxable. These and other issues will be addressed by any Fund that may hold
such obligations in order to reduce the risk of distributing insufficient income
to preserve its status as a regulated investment company and seek to avoid
becoming subject to federal income or excise tax.

Limitations imposed by the Code on regulated investment companies like the
Funds may restrict a Fund's ability to enter into futures, options, and forward
transactions.

Certain options, futures and forward foreign currency transactions
undertaken by a Fund may cause the Fund to recognize gains or losses from
marking to market even though its positions have not been sold or terminated and
affect the character as long-term or short-term (or, in the case of certain
currency forwards, options and futures, as ordinary income or loss) and timing
of some capital gains and losses realized by the Fund. Also, certain of a
Fund's losses on its transactions involving options, futures or forward
contracts and/or offsetting portfolio positions may be deferred rather than
being taken into account currently in calculating the Fund's taxable income.
Certain of the applicable tax rules may be modified if a Fund is eligible and
chooses to make one or more of certain tax elections that may be available.
These transactions may therefore affect the amount, timing and character of a
Fund's distributions to shareholders. The Funds will take into account the
special tax rules (including consideration of available elections) applicable to
options, futures or forward contracts in order to minimize any potential adverse
tax consequences.

-40-

<PAGE>

The federal income tax rules applicable to interest rate swaps, caps and
floors are unclear in certain respects, and a Fund may be required to account
for these transactions in a manner that, in certain circumstances, may limit the
degree to which it may utilize these transactions.

The foregoing discussion relates solely to U.S. Federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens or residents and U.S. domestic
corporations, partnerships, trusts or estates) subject to tax under such law.
The discussion does not address special tax rules applicable to certain classes
of investors, such as tax-exempt entities, insurance companies, and financial
institutions. Dividends, capital gain distributions, and ownership of or gains
realized on the redemption (including an exchange) of the shares of a Fund may
also be subject to state and local taxes. Shareholders should consult their own
tax advisers as to the federal, state or local tax consequences of ownership of
shares of, and receipt of distributions from, the Funds in their particular
circumstances.

STATE AND LOCAL. Each Fund may be subject to state or local taxes in
jurisdictions in which such Fund may be deemed to be doing business. In
addition, in those states or localities which have income tax laws, the
treatment of such Fund and its shareholders under such laws may differ from
their treatment under federal income tax laws, and investment in such Fund may
have different tax consequences for shareholders than would direct investment in
such Fund's portfolio securities. Shareholders should consult their own tax
advisers concerning these matters.

CUSTODIAN

Portfolio securities of each Fund are held pursuant to Custodian Agreements
between each Fund and State Street Bank and Trust Company.

TRANSFER AGENT SERVICES

Hartford Life Insurance Company, Hartford Plaza, Hartford, Connecticut
06115, serves as Transfer and Dividend Disbursing Agent for the Funds. The
Transfer Agent issues and redeems shares of the Funds and disburses any
dividends declared by the Funds.

INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen LLP serves as each Fund's independent accountants. Arthur
Andersen LLP is responsible for auditing the annual financial statements of each
Fund. Arthur Andersen LLP provides a number of additional related services to
each Fund, including, from time to time, the preparation of certain reports.

-41-

<PAGE>

OTHER INFORMATION

The Hartford has granted the Fund the right to use the name, "The Hartford"
or "Hartford", and has reserved the right to withdraw its consent to the use of
such name by the Fund and the Funds at any time, or to grant the use of such
name to any other company.

-42-

<PAGE>

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits
(a) Financial Statements: Not Applicable
(b) Exhibits:
(1) Articles of Incorporation (a)
(2) By-Laws (a)
(3) Not Applicable
(4) Share Certificate (a)
(5) Form of Investment Management Agreement (b)
(5.1) Form of Investment Sub-Advisory Agreement (b)
(6) Form of Principal Underwriting Agreement
(7) Not Applicable
(8) Form of Custodian Agreement (c)
(8.1) Form of Additional Custodian Agreement (d)
(8.2) Form of Custodian Agreement with Chase Manhattan Bank(e)
(8.3) Custodian Agreement with State Street Bank and Trust
Company (i)
(9) Form of Administrative Services Agreement (f)
(9.1) Form of Share Purchase Agreement (f)
(10) Opinion and Consent of Counsel (g)
(11) Consent of Independent Public Accountants (i)
(12) 1996 Annual Report to Shareholders' Financial
Statements (i)
(13) Not Applicable
(14) Not Applicable
(15) Form of Rule 12b-1 Distribution Plan
(16) Schedule of Computation for Performance Quotations (h)
(17) Not Applicable
(18) Form of Multi-Class Plan Pursuant to Rule 18f-3
(19) Powers of Attorney (e)
(27) Financial Data Schedule (i)

______________________
(a)Previously filed as exhibit to Registrant's Registration Statement filed on
February 3, 1983.
(b)Previously filed as exhibit to Registrant's Proxy Statement dated September
19, 1984.
(c)Previously filed as exhibit to Registrant's Pre-Effective Amendment #1 filed
on April 6, 1983.
(d)Previously filed as exhibit to Registrant's Registration Statement effective
May 1, 1989.
(e)Previously filed as exhibit to Registrant's Registration Statement filed on
April 23, 1996.
(f)Previously filed as exhibit to Registrant's Registration Statement filed on
April 28, 1993.
(g)Filed with Registrant's Rule 24f-2 Notice.
(h)Previously filed with Registrant's Registration Statement effective March 31,
1988.
(i)Previously filed as exhibit to Registrant's Post-Effective Amendment #18
filed on April 10, 1997.

<PAGE>

Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Inapplicable

Item 26. NUMBER OF HOLDERS OF SECURITIES

As of November 10, 1997, the number of record holders of the
Registrant's securities were:

TITLE OF CLASS NUMBER OF RECORD HOLDERS
-------------- ------------------------
Class IA, Common Stock,
par value $0.10 per share 2

Class IB, Common Stock,
par value $0.10 per share 0

Item 27. INDEMNIFICATION

Article EIGHTH of the Articles of Incorporation provides:

EIGHTH: (a) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a
Director, Officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a Director or Officer of
another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, has no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, creates a rebuttable presumption
that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of
the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful.

(b) The Corporation shall indemnify any person who was or is party or
is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to
procure, a judgment in its favor by reason of the fact that he is or
was a Director, Officer, employee or agent of the Corporation, or is
or was serving at the request of the Corporation as a Director,

<PAGE>

Officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including
attorney's fees) actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation. No indemnification
shall be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation.

(c) To the extent that a Director, Officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in subsections (a) and
(b), or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorney's fees) actually and
reasonably incurred by him in connection therewith.

(d) Any indemnification under subsections (a) and (b) (unless ordered
by a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the
Director, Officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b). Such determination shall be made (1) by the
Board of Directors by a majority vote of a quorum consisting of
Directors who were neither interested persons nor parties to such
action suit or proceeding, or (2) if such quorum is not obtainable, or
even if obtainable a quorum of disinterested Directors so directs,
by independent legal counsel in a written opinion.

(e) Expenses incurred in defending civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the
Board of Directors in the specific case upon receipt of an undertaking
by or on behalf of the Director, Officer, employee or agent to repay
such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation as authorized in this
Article and upon meeting one of the following conditions:

(i) the indemnitee shall provide a security for his undertaking,
(ii) the investment company shall be insured against losses
arising by reason of any lawful advances, or (iii) a majority of
a quorum of the disinterested, non-party Directors of the
investment company, or an independent legal counsel in a written
opinion, shall determine, based on a review of readily available
facts (as opposed to a full trial-type inquiry), that there is
reason to believe that the indemnitee ultimately will be found
entitled to indemnification.

(f) The corporation may purchase and maintain insurance on behalf of
any person who is or was a Director, Officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as
a Director, Officer, employee or

<PAGE>

agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status
as such.

(g) Anything to the contrary in the foregoing clauses (a) through (f)
notwithstanding, no Director or Officer shall be indemnified by the
Corporation and no insurance policy obtained by the Corporation will
protect or attempt to protect any such person against any liability to
the Corporation or to its security holders to which he would otherwise
be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office, or in a manner inconsistent with Securities and
Exchange Commission Release 11330 under the Investment Company Act of
1940.

Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person in
connection with the securities being registered), the registrant
undertakes that it will, unless in the opinion of its counsel the
matter has been settled by controlling precedent submit to a court of
appropriate jurisdiction the questions whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.

Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

All of the information required by this item is set forth in Schedule
D of the Form ADV, as amended, of the Registrant's investment adviser,
HL Investment Advisors, Inc. (File No. 801-16814), Wellington
Management (File No. 801-15908) and HIMCO (File No. 801-53542), and is
incorporated herein by reference.

Item 29. PRINCIPAL UNDERWRITERS

Hartford Securities Distribution Company, Inc. ("HSD") is an indirect
wholly owned subsidiary of The Hartford Financial Services Group, Inc.
HSD is the principal underwriter for the following registered
investment companies: Hartford Life Insurance Company - DC Variable
Account I; Hartford Life Insurance Company - Separate Account Two (DC
Variable Account II); Hartford Life Insurance Company - Separate
Account Two (Variable Account "A"); Hartford Life Insurance Company -
Separate Account Two (QP Variable Account); Hartford Life Insurance
Company - Separate Account Two (NQ Variable

<PAGE>

Account); Hartford Life Insurance Company - Putnam Capital Manager
Trust Separate Account; Hartford Life Insurance Company - Separate
Account Two; Hartford Life Insurance Company - Separate Account
Three; ITT Hartford Life and Annuity Insurance Company - Separate
Account Three; Hartford Life Insurance Company - Separate Account
Five; ITT Hartford Life and Annuity Insurance Company - Separate
Account One; ITT Hartford Life and Annuity Insurance Company -
Putnam Capital Manager Trust Separate Account Two.

The Directors and principal officers of HSD and their position with
the Registrant are as follows:

POSITION OR OFFICE
NAME* HSD WITH REGISTRANT
----- ----- ------------------
Peter Cummins Vice-President Vice President
Lynda Godkin Secretary None
John P. Ginnetti Executive Vice Vice President
President
George Jay Controller & Controller & Treasurer
Fin. Principal
Stephen T. Joyce Asst. Secretary None
Glen J. Kvadus Asst. Secretary None
Thomas M. Marra Exec. Vice-Pres. Vice President
Paul Eugene Olson Supv. Registered None
Principal
Edward M. Ryan, Jr. Asst. Secretary None
Lowndes A. Smith President Chairman
Donald W. Waggaman, Jr. Treasurer None

* Principal business address is P.O. Box 2999, Hartford, CT 01604-2999

Item 30. LOCATION OF ACCOUNTS AND RECORDS

The Hartford Life Insurance Company
P.O. Box 2999
Hartford, CT 06104-2999

AND

State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110

Item 31. MANAGEMENT SERVICES

Not Applicable

<PAGE>

Item 32. UNDERTAKING

1) The Registrant undertakes to furnish to each person to whom a
prospectus has been delivered a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.

2) The Registrant undertakes that it will file a post-effective
amendment, using financial statements which need not be
certified, within four to six months from the effective date of
the Registrant's 1933 Act Registration Statement.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hartford, State of Connecticut, on the 17th day of
November, 1997.

HARTFORD ADVISERS FUND, INC.

By: *
----------------------------------------------------
Joseph H. Gareau
Its: President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.

SIGNATURE TITLE DATE
- --------- ----- ----

__________*__________ President November 17, 1997
Joseph H. Gareau (Chief Executive Officer
& Director)

__________*__________ Controller & Treasurer November 17, 1997
George R. Jay (Chief Accounting Officer &
Chief Financial Officer)

__________*__________ Director November 17, 1997
Joseph A. Biernat

__________*__________ Director November 17, 1997
Winifred E. Coleman

__________*__________ Director November 17, 1997
William A. O'Neill

<PAGE>

__________*__________ Director November 17, 1997
Millard H. Pryor, Jr.

__________*__________ Director November 17, 1997
Lowndes A. Smith

__________*__________ Director November 17, 1997
John K. Springer

/s/ Kevin J. Carr November 17, 1997
- -----------------------
* By Kevin J. Carr
Attorney-in-fact

<PAGE>

EXHIBIT INDEX

EXHIBIT NO. PAGE NO.
- ----------- --------

6 Form of Principal Underwriting Agreement

15 Form of Rule 12b-1 Distribution Plan

18 Form of Multi-Class Plan Pursuant to Rule 18f-3

<PAGE>
EXHIBIT 6

PRINCIPAL UNDERWRITING AGREEMENT

Hartford Advisers Fund, Inc. (the "Company")

January __, 1998

Hartford Securities Distribution Company, Inc.
200 Hopmeadow Street
Simsbury, CT 06089

Re: PRINCIPAL UNDERWRITING AGREEMENT

Ladies and Gentlemen:

The Company is a Maryland corporation registered as an investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"). The
Company has two classes of shares available for purchase: Class IA shares and
Class IB shares (individually the "Class IA shares" and "Class IB shares" and
collectively, the "Shares") representing interests in the Company. The Shares
are registered under the Securities Act of 1933, as amended (the "1933 Act") and
securities acts of various states and jurisdictions, where appropriate.

You have informed us that your company, Hartford Securities Distribution
Company, Inc. ("HSD"), is registered as a broker-dealer under the provisions of
the Securities Exchange Act of 1934 (the "1934 Act") and that HSD is a member in
good standing of the National Association of Securities Dealers, Inc. You have
indicated your desire to become the exclusive selling agent and principal
underwriter for the Company for the sale of Shares to insurance company separate
accounts ("Separate Accounts") and other accounts as agreed to between the
parties. We have been authorized to execute and deliver this Agreement to you,
which Agreement has been approved by a vote of a majority of the company's
directors (the "Directors") who are not parties to such Agreement or "interested
persons" of any party thereto, cast in person at a meeting called for the
purpose of voting on the approval of this Agreement.

1. APPOINTMENT OF UNDERWRITER. Upon the execution of this Agreement
and in consideration of the agreements on your part herein expressed and upon
the terms and conditions set forth herein, we hereby appoint you as the
exclusive sales agent for distribution of the Shares and agree that we will
deliver to you such shares as you may sell. You agree to use your best efforts
to promote the sale of the Shares, but you are not obligated to sell any
specific number of the Shares.

2. INDEPENDENT CONTRACTOR. You will undertake and discharge your
obligations hereunder as an independent contractor and shall have no authority
or power to obligate or bind the Company by your actions, conduct, or contracts,
except that you are authorized to accept orders for the purchase or repurchase
of the Shares as our agent. You may appoint sub-agents or distribute the Shares
through dealers (or otherwise) as you may determine necessary or desirable from
time to time. This Agreement shall not, however, be construed as

<PAGE>

authorizing any dealer or other person to accept orders for sale or
repurchase on our behalf or to otherwise act as our agent for any purpose.

3. OFFERING PRICE. Shares shall be offered for sale at a price
equivalent to their net asset value as determined pursuant to the Company's
Prospectus for the Shares, as amended from time to time. On each business day
on which the New York Stock Exchange is open for business, we will furnish you
with the net asset value of the Shares, which shall be determined and become
effective as of the close of business of the New York Stock Exchange on that
day. The net asset value so determined shall apply to all orders for the
purchase of the Shares received by purchasers prior to such determination, and
you are authorized in your capacity as our agent to accept orders and confirm
sales at such net asset value. To the extent that our Shareholder Servicing and
Transfer Agent (collectively "Agent") and the Custodian(s) for any pension,
profit-sharing, employer or self-employed plan receive payments on behalf of the
investors, such Agent and Custodian(s) shall be required to record the time of
such receipt with respect to each payment, and the applicable net asset value
shall be that which is next determined and effective after the time of receipt
by them. In all events, you shall forthwith notify all of the dealers
comprising your selling group and the Agent and Custodian(s) of the effective
net asset value as received from us. Should we at any time calculate our net
asset value more frequently than once each business day, you and we will follow
procedures with respect to such additional price or prices comparable to those
set forth above in this Section 3.

4. COMPENSATION.

(a) SALES COMMISSIONS. You shall not be entitled to charge a sales
commission on the sale of Shares of the Company.

(b) RULE 12B-1 FEES. In accordance with the distribution plan
adopted pursuant to Rule 12b-1 under the 1940 Act (the "Distribution Plan") for
the Class IB shares, you will be entitled to be paid a distribution fee of up to
.25% of the average daily net assets of the Class IB shares.

5. PAYMENT FOR SHARES. At or prior to the time of delivery of any
of our Shares you will pay or cause to be paid to the Custodian, for our
account, an amount in cash equal to the net asset value of such Shares. In the
event that you pay for shares sold by you prior to your receipt of payment from
purchasers, you are authorized to reimburse yourself for the net asset value of
such Shares from the offering price of such Shares when received by you.

6. REGISTRATION OF SHARES. No Shares shall be registered on our
books until (i) receipt by us of your written request therefor; (ii) receipt by
the Custodian and Agent of a certificate signed by an officer of the Company
stating the amount to be received therefor; and (iii) receipt of payment of that
amount by the Custodian. We will provide for the recording of all Shares
purchased in unissued form in "book accounts," unless a request in writing for
certificates (if available) is received by the Agent, in which case certificates
for Shares in such names and

<PAGE>

amounts as is specified in such writing will be delivered by the Agent, as
soon as practicable after registration thereof on the books.

7. PURCHASES FOR YOUR OWN ACCOUNT. You shall not purchase Shares
for your own account for purposes of resale to the Separate Accounts, but you
may purchase Shares for your own investment account upon your written assurance
that the purchase is for investment purposes only and that the Shares will not
be resold except through redemption by us.

8. ALLOCATION OF EXPENSES. (a) We will pay the following expenses
in connection with the sales and distribution of Shares of the Company:

(i) expenses pertaining to the preparation of our audited and
certified financial statements to be included in any amendments
("Amendments") to our Registration Statements under the 1933 Act,
including the Prospectuses and Statements of Additional
Information included therein;

(ii) expenses pertaining to the preparation (including legal
fees) and printing of all Amendments or supplements filed with
the Securities and Exchange Commission, including the copies of
the Prospectuses and Statements of Additional Information
included in the Amendments and the first ten (10) copies of the
definitive Prospectuses and Statements of Additional Information
or supplements thereto, other than those necessitated by or
related to your (including your "Parent") activities where such
amendments or supplements result in expenses which we would not
otherwise have incurred;

(iii) expenses pertaining to the preparation, printing, and
distribution of any reports or communications, including
Prospectuses and Statements of Additional Information, which are
sent to our existing shareholders;

(iv) filing and other fees to federal and state securities
regulatory authorities necessary to register and maintain
registration of the Shares; and

(v) expenses of the Agent, including all costs and expenses in
connection with the issuance, transfer and registration of the
Shares, including but not limited to any taxes and other
governmental charges in connection therewith.

(b) Except to the extent that you are entitled to reimbursement under
the provisions of any of the Distribution Plans for the Company, you will pay
the following expenses:

3
<PAGE>

(i) expenses of printing additional copies of the Prospectuses
and Statement of Additional Information and any amendments or
supplements thereto which are necessary to continue to offer our
shares to the public;

(ii) expenses pertaining to the preparation (excluding legal
fees) and printing of all amendments and supplements to our
Registration Statements if the Amendment or supplement arises
from or is necessitated by or related to your (including your
"Parent") activities where those expenses would not otherwise
have been incurred by us; and

(iii) expenses pertaining to the printing of additional
copies, for use by you as sales literature, of reports or other
communications which have been prepared for distribution to our
existing shareholders or incurred by you in advertising,
promoting and selling our Shares to the public.

9. FURNISHING OF INFORMATION. We will furnish to you such
information with respect to our Company and its Shares, in such form and signed
by such of our officers as you may reasonably request, and we warrant that the
statements therein contained when so signed will be true and correct. We will
also furnish you with such information and will take such action as you may
reasonably request in order to qualify our Shares for sale in jurisdictions in
which you may wish to offer them. We will furnish you at least annually with
audited financial statements of our books and accounts certified by independent
public accountants, and with such additional information regarding our financial
condition, as you may reasonably request from time to time.

10. CONDUCT OF BUSINESS. Other than currently effective Prospectuses
and Statements of Additional Information, you will not issue any sales material
or statements except literature or advertising which conforms to the
requirements of federal and state securities laws and regulations and which have
been filed, where necessary, with the appropriate regulatory authorities. You
will furnish us with copies of all such material prior to their use and no such
material shall be published if we shall reasonably and promptly object.

You shall comply with the applicable federal and state laws and
regulations where our Shares are offered for sale and conduct your affairs with
us and with dealers, brokers, or investors in accordance with the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.

11. OTHER ACTIVITIES. Your services pursuant to this Agreement shall
not be deemed to be exclusive, and you may render similar services and act as an
underwriter, distributor or dealer for other investment companies in the
offering of their shares.

12. TERM OF AGREEMENT. This Agreement shall become effective on the
date of its execution and shall remain in effect for a period of two (2) years
from the date of this

<PAGE>

Agreement. This Agreement shall continue annually thereafter for successive
one (1) year periods if approved at least annually (i) by a vote of a
majority of the outstanding voting securities of the Company or by a vote of
the Directors of the Company, and (ii) by a vote of a majority of the
Directors of the Company who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose
of voting on this Agreement.

13. TERMINATION. This Agreement: (i) may be terminated at any time
without the payment of any penalty, either by vote of the Directors of the
Company or by a vote of a majority of the outstanding voting securities of the
Company, on sixty (60) days' written notice to you; (ii) shall terminate
immediately in the event of its assignment; and (iii) may be terminated by you
on sixty (60) days' written notice to us.

14. SUSPENSION OF SALES. We reserve the right at all times to
suspend or limit the offering of the Shares to the Separate Accounts upon
written notice to you, and to reject any order in whole or in part.

15. MISCELLANEOUS. This Agreement shall be subject to the laws of
the State of Connecticut and shall be interpreted and construed to further and
promote the operation of the Company as an open-end investment company. As used
herein, the terms "Net Asset Value," "Offering Price," "Investment Company,"
"Open-End Investment Company," "Assignment," "Principal Underwriter,"
"Interested Person," and "Majority of the Outstanding Voting Securities," shall
have the meanings set forth in the 1933 Act and the 1940 Act, as applicable, and
the rules and regulations promulgated thereunder.

16. LIABILITY. Nothing contained herein shall be deemed to protect
you against any liability to us or to our shareholders to which you would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of your duties hereunder, or by reason of your
reckless disregard of your obligations and duties hereunder.

If the foregoing meets with your approval, please acknowledge your
acceptance by signing below whereupon this shall constitute a binding agreement
as of the date first above written.

Very truly yours,

Hartford Advisers Fund, Inc.
By:_________________________________
Print Name:_________________________
Its:________________________________
Agreed to and Accepted:
Hartford Securities Distribution Company, Inc.
By:__________________________
Print Name:__________________
Its:_________________________
Date:________________________

<PAGE>

EXHIBIT 15

HARTFORD ADVISERS FUND, INC.

DISTRIBUTION PLAN

CLASS IB SHARES

_______________, 1998

ARTICLE I. THE PLAN

This Distribution Plan (the "Plan") sets forth the terms and conditions on
which Hartford Advisers Fund, Inc. (the "Company") will, after the effective
date hereof, pay certain amounts to Hartford Securities Distribution Company,
Inc. (the "Distributor") in connection with the provision by the Distributor, of
certain services to the Funds and their Class IB shareholders, as set forth
herein. Certain of such payments by the Company may, under Rule 12b-1 (the
"Rule") under the Investment Company Act of 1940, as amended (the "Act"), be
deemed to constitute the financing of distribution by the Company of its Class
IB shares. This Plan describes all material aspects of such financing as
contemplated by the Rule and shall be administered and interpreted, and
implemented and continued, in a manner consistent with the Rule.

ARTICLE II. DISTRIBUTION AND SERVICE EXPENSES

The Company shall pay to the Distributor a fee in the amount specified in
Article III hereof. Such fee may be spent by the Distributor on any activities
or expenses primarily intended to result in the sale of Class IB shares of the
Company, including, but not limited to:

(a) compensation to and expenses, including overhead and telephone
expenses, of employees of Distributor engaged in the distribution of
the Class IB shares;

(b) printing and mailing of prospectuses, statements of additional
information, and reports for prospective purchasers of variable
annuity or variable life insurance contracts ("Variable Contracts")
investing indirectly in Class IB shares;

(c) compensation to financial intermediaries and broker-dealers to pay or
reimburse them for their services or expenses in connection with the
distribution of Variable Contracts investing indirectly in Class IB
shares;

(d) expenses relating to the development, preparation, printing, and
mailing of Company advertisements, sales literature, and other
promotional materials describing and/or relating to the Company;

<PAGE>

(e) expenses of holding seminars and sales meetings designed to promote
the distribution of the Class IB shares;

(f) expenses of obtaining information and providing explanations to
Variable Contract owners regarding Company investment objectives and
policies and other information about the Company, including
performance;

(g) expenses of training sales personnel regarding the Company;

(h) expenses of compensating sales personnel in connection with the
allocation of cash values and premiums of the Variable Contracts to
the Company; and

(i) expenses of personal services and/or maintenance of Variable Contract
accounts with respect to Class IB shares attributable to such
accounts.

ARTICLE III. MAXIMUM EXPENDITURES

The expenditures to be made by the Company pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Company, and in no event shall such expenditures exceed 0.25% of the average
daily net asset value of the Class IB shares of the Company (determined in
accordance with the Company's prospectus as from time to time in effect) on an
annual basis to cover distribution expenses. All such expenditures shall be
calculated and accrued daily and paid monthly or at such other intervals as the
Board of Directors shall determine.

ARTICLE IV. EXPENSES BORNE BY THE COMPANY

Notwithstanding any other provision of this Plan, the Company may bear the
respective expenses under any administrative services agreement, as from time to
time in effect under the Company's current prospectus. Except as otherwise
contemplated by this Plan, the Company shall not, directly or indirectly, engage
in financing any activity which is primarily intended to or should reasonably
result in the sale of shares of the Company.

To the extent that any investment management and administration fees paid
by the Company might be considered as indirectly financing any activity which is
primarily intended to result in the sale of the Fund's shares, the payment by
that Fund of such fees hereby is authorized under this Plan.

<PAGE>

ARTICLE V. APPROVAL BY BOARD OF DIRECTORS, SHAREHOLDERS

This Plan shall not take effect until: (a) it has been approved by the
vote of the majority of the outstanding voting Class IB shares; and (b) it has
been approved, together with any related agreements, by votes cast in person at
a meeting called for the purpose of voting on this Plan and any such related
agreements, of a majority of both (i) the Directors of the Company and (ii)
those directors who are not "interested persons" of the Company and have no
direct of indirect financial interest in the operation of this Plan or any
agreements related to it (the "Independent Directors").

ARTICLE VI. CONTINUANCE

This Plan and any related agreement shall continue in effect for a period
of more than one year after it takes effect only for so long as such continuance
is specifically approved at least annually in the manner provided for in Article
V.

ARTICLE VII. INFORMATION

The Distributor shall provide the Board of Directors and the Board of
Directors, and, in particular, the Independent Directors, shall review, in the
exercise of their fiduciary duties, at least quarterly, a written report of the
amounts expended with respect to the Class IB shares of the Company by the
Distributor under this Plan and the Principal Underwriting Agreement and the
purposes for which such expenditures were made.

ARTICLE VIII. TERMINATION

This Plan may be terminated (a) at any time by vote of a majority of the
Independent Directors, or a majority of the Company's outstanding voting Class
IB shares, or (b) by the Distributor on 60 days' notice in writing to the
Company.

ARTICLE IX. AGREEMENTS

Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:

(a) That such agreement may be terminated at any time, without payment of
any penalty, by vote of a majority of the Independent Directors or by
vote of a majority of the Company's then outstanding voting Class IB
shares.

(b) That such agreement shall terminate automatically in the event of its
assignment.

ARTICLE X. AMENDMENTS

This Plan may not be amended to increase materially the maximum amount of
the fees payable by the Company hereunder without the approval of a majority of
the outstanding voting

<PAGE>

Class IB shares of the Company. No material amendment to the Plan shall, in
any event, be effective unless it is approved by the Board of Directors in
the same manner as is provided for in Article V.

ARTICLE XI. PRESERVATION OF DOCUMENTS

The Company shall preserve copies of this Plan (including any amendments
thereto) and any related agreements and all reports made to the Board for a
period of not less than six years from the date of this Plan, the first two
years in an easily accessible place.

ARTICLE XII. SELECTION OF DIRECTORS

While this Plan is in effect, the selection and nomination of Directors who
are not interested persons of the Company shall be committed to the discretion
of the Board of Directors who are not interested persons of the Company.

ARTICLE XIII. DEFINED TERMS

As used in this Plan, the terms "majority of the outstanding voting Class
IB shares" shall have the same meaning as the phrase "majority of the
outstanding voting securities" has in the Act, and the phrase "interested
person" and "assignment" shall have the same meaning as that phrase has in the
Act.

IN WITNESS WHEREOF, the Company has executed this Distribution Plan
effective as of the ___ day of ______________________________________,
1998 in Hartford, Connecticut.

Hartford Advisers Fund, Inc.

By:_________________________________
Print Name:
Title:

Hartford Securities Distribution Company, Inc.

By:__________________________________
Print Name:
Title:

<PAGE>

EXHIBIT 18

HARTFORD ADVISERS FUND, INC.

PLAN PURSUANT TO RULE 18F-3 UNDER
THE INVESTMENT COMPANY ACT OF 1940

This Plan (the "Plan") is adopted by the Hartford Advisers Fund, Inc. (the
"Fund") pursuant to Rule 18f-3 under the Investment Company Act of 1940, as
amended (the "Act"), and sets forth the general characteristics of, and the
general conditions under which the Fund may offer multiple classes of shares.
This Plan is intended to allow the Fund to offer multiple classes of shares to
the full extent and in the manner permitted by Rule 18f-3 under the Act (the
"Rule"), subject to the requirements and conditions imposed by the Rule. This
Plan may be revised or amended from time to time as provided below.

CLASS DESIGNATIONS

The Fund may from time to time issue one or more of the following classes
of shares: Class IA shares and Class IB shares. Each of the two classes of
shares will represent interests in the same portfolio of investments of the Fund
and, except as described herein, shall have the same rights and obligations as
each other class. Each class shall be subject to such investment minimums and
other conditions of eligibility as are set forth in the Fund's prospectus or
statement of additional information as from time to time in effect (the
"Prospectus").

CLASS CHARACTERISTICS

Class IA shares are offered at a public offering price that is equal to
their net asset value ("NAV") without an initial sales charge or a contingent
deferred sales charge ("CDSC").

Class IB shares are offered at their NAV, without an initial sales charge
or a CDSC, but may be subject to a fee imposed in accordance with Rule 12b-1
under the Act ("Rule 12b-1 fees"), which may include a service fee, as described
in the Prospectus.

The Class IA shares and Class IB shares may subsequently be offered
pursuant to an initial sales charge and/or CDSC (each of which may be subject to
reduction or waiver) as permitted by the Act, and as described in the
Prospectus.

<PAGE>

ALLOCATIONS TO EACH CLASS

EXPENSE ALLOCATIONS

The following expenses shall be allocated, to the extent practicable, on a
class-by-class basis: (i) Rule 12b-1 fees payable by the Fund to the distributor
of the Fund's Class IB shares(1). Subject to the approval of a majority of the
Fund's Board of Directors, including a majority of the Independent Directors (as
defined in the Distribution Plan), the following "Class Expenses" may, to the
extent not required to be borne by HL Investment Advisors, Inc. (the "Manager")
or an affiliate, pursuant to the Fund's Investment Advisory Agreement or
Administrative Agreement, be allocated on a class-by-class basis: (a) printing
and postage expenses related to preparing and distributing materials such as
shareholder reports, Prospectuses and proxy statements to current shareholders
of a specific class; (b) SEC registration fees incurred with respect to a
specific class; (c) state blue sky and foreign registration fees and expenses
incurred with respect to a specific class; (d) the expenses of administrative
personnel and services required to support shareholders of a specific class; (e)
litigation and other legal expenses relating to a specific class; (f) Directors'
fees or expenses incurred as a result of issues relating to a specific class of
shares; (g) accounting and consulting expenses relating to a specific class; (h)
any fees imposed pursuant to a non-Rule 12b-1 shareholder services plan that
relate to a specific class; and (i) any additional expenses, not including
management fees, investment advisory fees, custodial fees or other expenses
relating to the management of the Fund's assets, if such expenses are actually
incurred in a different amount with respect to a class that are of a different
kind or to a different degree than with respect to one or more other classes.

All expenses not hereafter designated as Class Expenses will be allocated
to each class on the basis of the net asset value of that class in relation to
the net asset value of the Fund ("Fund Expenses").

However, notwithstanding the above, the Fund may allocate all expenses
other than Class Expenses on the basis of the relative net assets (settled
shares) of each class, as permitted by Rule 18f-3(c)(2) under the Act.

WAIVERS AND REIMBURSEMENTS

The Manager or Distributor may choose to waive or reimburse Rule 12b-1 fees
or any Class Expenses on a voluntary basis. Such waiver or reimbursement may be
applicable to some or all of the classes and may be in different amounts for one
or more classes.

______________________________________

(1)As of the date of this Plan, the Fund has adopted a Distribution Plan
pursuant to Rule 12b-1 under the Act only for the Class IB shares (the
"Distribution Plan"). Hartford Securities Distribution Company, Inc. serves
as distributor for both the Class IA shares and Class IB shares (the
"Distributor").

<PAGE>

INCOME, GAINS AND LOSSES

Income and realized and unrealized capital gains and losses shall be
allocated to each class on the basis of the net asset value of that class in
relation to the net asset value of the Fund.

The Fund may allocate income and realized and unrealized capital gains and
losses to each share based on relative net assets (settled shares) of each
class, as permitted by Rule 18f-3(c)(2) under the Act.

CONVERSION AND EXCHANGE

The Class IA shares and Class IB shares shall not convert into another
class. Subsequent classes of shares (each a "Converting Class") may
automatically convert into another class of shares (the "Conversion Class"),
subject to such terms as may be approved by the Directors.

In the event of any material increase in payments authorized under the
Distribution Plan (or, if presented to shareholders, any material increase in
payments authorized by a non-Rule 12b-1 shareholder services plan) applicable to
any Conversion Class, existing Converting Class shares will not be permitted to
convert into Conversion Class shares unless the Converting Class shareholders,
voting separately as a class, approve the material increase in such payments.
Pending approval of such increase, or if such increase is not approved, the
Directors shall take such action as is necessary to ensure that existing
Converting Class shares are exchanged or converted into a new class of shares
("New Conversion Class") identical in all material respects to the Conversion
Class shares as they existed prior to the implementation of the material
increase in payments, no later than the time such shares were scheduled to
convert to the Conversion Class shares. Converting Class shares sold after the
implementation of the fee increase may convert into Conversion Class shares
subject to the higher maximum payment, provided that the material features of
the Conversion Class plan and the relationship of such plan to the Converting
Class shares were disclosed in an effective registration statement.

EXCHANGE FEATURES

Shares of each class generally will be permitted to be exchanged only for
shares of a class with similar characteristics in another Fund managed by the
Manager; Class IA shares may be exchanged for Class IA shares of another Fund;
Class IB shares may be exchanged for Class IB shares of another Fund. All
exchange features applicable to each class will be described in the Prospectus.

DIVIDENDS

Dividends paid by the Fund with respect to its Class IA shares and Class IB
shares, to the extent any dividends are paid, will be calculated in the same
manner, at the same time and

<PAGE>

will be in the same amount, except that any Rule 12b-1 fee payments relating
to a class of shares will be borne exclusively by that class and any
incremental transfer agency costs or, if applicable, Class Expenses relating
to a class shall be borne exclusively by that class.

VOTING RIGHTS

Each share of the Fund entitles the shareholder of record to one vote. Each
class of shares of the Fund will vote separately as a class with respect to any
Distribution Plan, as defined herein, applicable to that class and on other
matters for which class voting is required under applicable law. Class IB
shareholders will vote separately as a class to approve any material increase in
payments authorized under the Distribution Plan applicable to Class IB shares.

RESPONSIBILITIES OF THE DIRECTORS

On an ongoing basis, the Directors will monitor the Fund for the existence
of any material conflicts among the interests of the two classes of shares. The
Directors shall further monitor on an ongoing basis the use of waivers or
reimbursement by the Manager and the Distributor of expenses to guard against
cross-subsidization between classes. The Directors, including a majority of the
Independent Directors, shall take such action as is reasonably necessary to
eliminate any such conflict that may develop. If a conflict arises, the Manager
and Distributor (which also distributes the Class IA shares) at their own cost,
will remedy such conflict up to and including establishing one or more new
registered management investment companies.

REPORTS TO THE DIRECTORS

The Manager and the Distributor will be responsible for reporting any
potential or existing conflicts among the two classes of shares to the
Directors. In addition, the Directors will receive quarterly and annual
statements concerning expenditures complying with paragraph (b)(3)(ii) of Rule
12b-1. In the statements, only expenditures properly attributable to the direct
or indirect sale or servicing of a particular class of shares shall be used to
justify any distribution fee charged to that class. The statements, including
the allocations upon which they are based, will be subject to the review of the
Independent Directors in the exercise of their fiduciary duties.

AMENDMENTS

The Plan may be amended from time to time in accordance with the provisions
and Requirements of Rule 18f-3 under the Act.

Adopted this _________________ day of __________________________________, 1998.