<PAGE>
FILE NO. 33-19946
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
------------------------
FORM N-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PRE-EFFECTIVE AMENDMENT NO. / /
------------------------
POST-EFFECTIVE AMENDMENT NO. 9 /X/
AND/OR
REGISTRATION STATEMENT
UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 9
(check appropriate box or boxes)
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT TWO (DC VARIABLE ACCOUNT-II)
(Exact Name of Registrant)
HARTFORD LIFE INSURANCE COMPANY
(Name of Depositor)
P.O. Box 2999
Hartford, CT 06104-2999
(Address of Depositor's Principal Offices)
Depositor's Telephone Number: (203) 843-8847
RODNEY J. VESSELS, ESQUIRE
P.O. Box 2999
Hartford, CT 06104-2999
(Name and Address of Agent for Service)
------------------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
------------------------
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/X/ on (May 1, 1995) pursuant to paragraph (b)(1)(v) of Rule 485
/ / 60 days after filing pursuant to paragraph (a)(1) of rule 485
/ / on May 1, 1995 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
------------------------
CALCULATION OF REGISTRATION FEE UNDER SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES BEING OFFERING AGGREGATE REGISTRATION
BEING REQUESTED REGISTERED PRICE PER UNIT OFFERING PRICE FEE
<S> <C> <C> <C> <C>
Hartford Life Insurance Pursuant to Regulation 270.24f-2 Paid
Company Separate Account Two under the Investment Company Act
(DC Variable Account-II) of 1940, Registrant has
Units of Interest previously elected to register
an indefinite number of units of
interest in this Separate
Account
</TABLE>
------------------------
THE RULE 24F-2 NOTICE FOR THE REGISTRANT'S MOST RECENT FISCAL YEAR WAS FILED ON
FEBRUARY , 1995.
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<PAGE>
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(A)
<TABLE>
<CAPTION>
N-4 ITEM NO. PROSPECTUS HEADING
- - ---------------------------------------------------------------- -----------------------------------------------------------
<C> <S> <C>
1. Cover Page........................................... Cover Page
2. Definitions.......................................... Glossary of Special Terms
3. Synopsis or Highlights............................... Summary
4. Condensed Financial Information...................... Accumulation Unit Values; Yield Information
5. General Description of Registrant, Depositor, and
Portfolio Companies................................. The DC-I and DC-II Contract and Separate Account DC-I and
Separate Account Two (DC-II); Hartford Life Insurance
Company and the Funds; Miscellaneous
6. Deductions........................................... Charges Under the Contract
7. General Description of Variable Annuity
Contracts........................................... Operation of the Contract Payment of Benefits; Separate
Accounts DC-I and DC-II Contract and Separate Accounts
DC-I and DC-II
8. Annuity Period....................................... Payment of Benefits
9. Death Benefit........................................ Payment of Benefits; Operation of the Contract
10. Purchases and Contract Value......................... Operation of the Contract
11. Redemptions.......................................... Payment of Benefits
12. Taxes................................................ Federal Tax Considerations
13. Legal Proceedings.................................... Miscellaneous--Are there any material legal proceedings
affecting the Separate Accounts?
14. Table of Contents of the Statement of Additional
Information......................................... Table of Contents of the Statement of Additional
Information
</TABLE>
<PAGE>
HARTFORD
LIFE INSURANCE COMPANY
GROUP VARIABLE ANNUITY CONTRACTS
ISSUED BY HARTFORD LIFE INSURANCE COMPANY
WITH RESPECT TO DC-I AND DC-II
[LOGO]
The variable annuity contracts (hereinafter the "contract" or "contracts" or
"Master Contracts") described in this Prospectus are issued by Hartford Life
Insurance Company ("HL"). The contracts provide for both an Accumulation
Period and an Annuity Period.
On contracts issued in conjunction with a Deferred Compensation Plan of an
Employer, variable account Contributions are held in Hartford Life Insurance
Company DC Variable Account-I ("DC-I") during the Accumulation Period and in a
series of Hartford Life Insurance Company Separate Account Two ("DC-II")
during the Annuity Period.
On contracts issued in conjunction with a Qualified Plan of an employer, all
variable account Contributions during both the Accumulation Period and Annuity
Period are held in DC-II.
The contracts to which contributions may be made may contain a General
Account option or a separate General Account contract may be issued in
conjunction with the contracts described herein. The General Account option or
contract may contain restrictions on a Contract Owner's ability to transfer
Participant Account Values to or from such contract or option. The General
Account option or contract and these restrictions, if any, are not described
in this Prospectus.
The contracts are used in conjunction with Deferred Compensation Plans of
tax-exempt and governmental employers as well as with Qualified Plans
established by Employers generally (tax-exempt and non-tax-exempt).
The following Sub-Accounts are available under the contracts. Opposite each
Sub-Account is the name of the underlying investment for that Account.
Advisers Fund -- shares of Hartford Advisers Fund, Inc.
Sub-Account ("Advisers Fund")
Capital Appreciation -- shares of Hartford Capital Appreciation Fund,
Fund Sub-Account Inc. (formerly Hartford Aggressive Growth Fund,
Inc.) ("Capital Appreciation Fund")
Bond Fund Sub-Account -- shares of Hartford Bond Fund, Inc. ("Bond Fund")
Index Fund Sub-Account -- shares of Hartford Index Fund, Inc. ("Index
Fund")
International -- shares of Hartford International Opportunities
Opportunities Fund Fund, Inc. ("International Opportunities Fund")
Sub-Account
Money Market Fund Sub- -- shares of HVA Money Market Fund, Inc. ("Money
Account Market Fund")
Mortgage Securities Fund -- shares of Hartford Mortgage Securities Fund,
Sub-Account Inc. ("Mortgage Securities Fund")
Socially Responsive Fund -- shares of Hartford Socially Responsive Fund,
Sub-Account which is the Calvert Socially Responsible series
of Acacia Capital Corporation ("Socially
Responsive Fund")
Stock Fund Sub-Account -- shares of Hartford Stock Fund, Inc. ("Stock
Fund")
U.S. Government Money -- shares of Hartford U.S. Government Money Market
Market Fund Fund, Inc. ("U.S. Government Money Market Fund")
Sub-Account
This Prospectus sets forth the information concerning the Separate Account
that investors ought to know before investing. This Prospectus should be kept
for future reference. Additional information about the Separate Account has
been filed with the Securities and Exchange Commission and is available
without charge upon request. To obtain the Statement of Additional Information
send a written request to Hartford Life Insurance Company, Attn: RPVA
Administration, P.O. Box 2999, Hartford, CT 06104-2999. The Table of Contents
for the Statement of Additional Information may be found on page of this
Prospectus. The Statement of Additional Information is incorporated by
reference to this Prospectus.
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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.
------------------------------------------------------------------------------
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THIS PROSPECTUS IS NOT VALID UNLESS ATTACHED TO THE CURRENT PROSPECTUS OF THE
APPLICABLE ELIGIBLE FUNDS LISTED ABOVE WHICH CONTAINS A FULL DESCRIPTION OF
THOSE FUNDS. INVESTORS ARE ADVISED TO RETAIN THESE PROSPECTUSES FOR FUTURE
REFERENCE.
------------------------------------------------------------------------------
Prospectus Dated: May 1, 1995
Statement of Additional Information Dated: May 1, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GLOSSARY OF SPECIAL TERMS............................................... 3
SUMMARY (INCLUDING EXPENSE TABLE)....................................... 5
ACCUMULATION UNIT VALUES................................................ 9
PERFORMANCE RELATED INFORMATION......................................... 13
INTRODUCTION............................................................ 14
THE DC-I AND DC-II CONTRACT AND SEPARATE ACCOUNT DC-I AND
SEPARATE ACCOUNT TWO (DC-II)......................................... 14
What are the DC-I and DC-II contracts?................................ 14
Who can buy these contracts?.......................................... 14
What are the Separate Accounts and how do they operate?............... 15
OPERATION OF THE CONTRACT............................................... 16
How are Contributions credited?....................................... 16
May I make changes in the amounts of my Contributions?................ 16
May I transfer assets between Sub-Accounts?........................... 16
What happens if the Contract Owner fails to make Contributions?....... 17
May I assign or transfer the contract?................................ 17
How do I know what my account is worth?............................... 17
How is the Accumulation Unit value determined?........................ 17
How are the underlying Fund shares valued?............................ 18
PAYMENT OF BENEFITS..................................................... 18
What would my Beneficiary receive as death proceeds?.................. 18
How can a contract be redeemed or surrendered?........................ 18
Can payment of the redemption or surrender value ever be postponed
beyond the seven day period?......................................... 19
May I surrender once Annuity payments have started?................... 19
Are there differences in the contract related to the type of plan in
which the Participant is enrolled?................................... 19
Can a contract be suspended by a Contract Owner?...................... 19
How do I elect an Annuity Commencement Date and Form of Annuity?...... 20
What is the minimum amount that I may select for an Annuity
payment?............................................................. 20
How are Contributions made to establish my Annuity account?........... 20
What are the available Annuity options under the contracts?........... 21
How are Variable Annuity payments determined?......................... 22
Can a contract be modified?........................................... 23
CHARGES UNDER THE CONTRACT.............................................. 23
How are the charges under these contracts made?....................... 23
Is there ever a time when the sales charges do not apply?............. 23
What do the sales charges cover?...................................... 24
What is the mortality, expense risk and administrative charge?........ 24
Are there any other administrative charges?........................... 24
Experience Rating of Contracts........................................ 25
How much are the deductions for Premium Taxes on these contracts?..... 25
Are there any other deductions?....................................... 25
HARTFORD LIFE INSURANCE COMPANY AND THE FUNDS........................... 25
What is HL?........................................................... 25
What are the Funds?................................................... 25
Does HL have any interest in the Funds?............................... 28
FEDERAL TAX CONSIDERATIONS.............................................. 28
What are some of the federal tax consequences which affect these
contracts?........................................................... 28
MISCELLANEOUS........................................................... 32
What are my voting rights?............................................ 32
Will other contracts be participating in the Separate Accounts?....... 32
How are the contracts sold?........................................... 32
Who is the custodian of the Separate Accounts' assets?................ 33
Are there any material legal proceedings affecting the Separate
Accounts?............................................................ 33
Are you relying on any experts as to any portion of this
Prospectus?.......................................................... 33
How may I get additional information?................................. 33
APPENDIX................................................................ 34
TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION............... 36
</TABLE>
*** The purpose of the fee tables is to assist Contract Owners in understanding
the various costs and expenses which a Contract Owner will bear. These
tables reflect the expenses of the Separate Account and Portfolio Company
(in underlying mutual funds). Premium tax may also be applicable.
2
<PAGE>
GLOSSARY OF SPECIAL TERMS
ACCUMULATION PERIOD: The period before the commencement of Annuity payments.
ACCUMULATION UNIT: An accounting unit of measure used to calculate values before
Annuity payments begin.
ACTIVE LIFE FUND: A term used to describe the sum of all Participants'
Individual Account value(s) in the Separate Account under a contract during the
Accumulation Period.
ANNUAL CONTRACT FEE: A fee charged for establishing and maintaining a
Participant's Individual Account under a contract.
ANNUITANT: A Participant on whose behalf Annuity payments are to be made under a
contract.
ANNUITANT'S ACCOUNT: An account established at the commencement of the Annuity
Period under which Annuity payments are made under the contracts.
ANNUITY: A series of payments for life, or for life with a minimum number of
payments or a determinable sum guaranteed, or for a joint lifetime and
thereafter during the lifetime of the survivor, or for payments for a designated
period.
ANNUITY COMMENCEMENT DATE: The date on which Annuity payments are to commence.
ANNUITY PERIOD: The period following the commencement of Annuity payments.
ANNUITY RIGHTS: The Contract Owner's right in situations where the contract is
issued in conjunction with a Deferred Compensation Plan to apply up to five
times the gross contributions made to the contract during the Accumulation
Period (in DC-I only), at the Annuity rates set forth in the contract at the
time of issue, at the commencement of the Annuity Period to effect Annuity
payments.
ANNUITY UNIT: An accounting unit of measure in the Separate Account used to
calculate the amount of Variable Annuity payments.
BENEFICIARY: The person(s) designated to receive contract values in the event of
the Participant's or Annuitant's death.
CODE: The Internal Revenue Code of 1986, as amended.
COMMISSION: Securities and Exchange Commission.
CONTRACT OWNER: The Employer or entity owning the contract.
CONTRACT YEAR: A period of 12 months commencing with the effective date of the
contract or with any anniversary thereof.
CONTRIBUTION(S): The amount(s) paid or transferred to HL on behalf of
Participants pursuant to the terms of the contracts.
DATE OF COVERAGE: The date on which the application on behalf of a Participant
is received by HL.
DC VARIABLE ACCOUNT II: A series of Hartford Life Insurance Company Separate
Account Two.
DEFERRED COMPENSATION PLAN: A plan established and maintained in accordance with
the provisions of Section 457 of the Internal Revenue Code and the regulations
issued thereunder.
EMPLOYER: A governmental or tax-exempt Employer maintaining a Deferred
Compensation Plan for its Employees or an Employer establishing a Qualified Plan
for its Employees.
FIXED ANNUITY: An Annuity providing for guaranteed payments which remain fixed
in amount throughout the payment period and which do not vary with the
investment experience of a separate account.
FUNDS: Currently, the Funds described commencing on page of this Prospectus.
GENERAL ACCOUNT: The General Account of HL in which reserves are maintained for
Fixed Annuities during the Annuity Period.
HL: Hartford Life Insurance Company.
MINIMUM DEATH BENEFIT: The minimum amount payable upon the death of Participant
prior to age 65 and before Annuity payments have commenced.
PARTICIPANT: A term used to describe, for recordkeeping purposes only, any
Employee electing to participate in the Deferred Compensation or Qualified Plan
of the Employer/Contract Owner.
PARTICIPANT'S CONTRACT YEAR: A period of twelve (12) months commencing with the
Date of Coverage of a Participant and each successive 12 month period
thereafter.
PARTICIPANT'S INDIVIDUAL ACCOUNT: An account to which the Separate Account
Accumulation Units held by the Contract Owner on behalf of Participant under the
contract are allocated.
PLAN: The unfunded Deferred Compensation Plan or Qualified Plan of an Employer.
3
<PAGE>
PREMIUM TAX: A tax charged by a state or municipality on premiums, purchase
payments or contract values.
QUALIFIED PLAN: A voluntary plan of an Employer which qualifies for special tax
treatment under a section of the Internal Revenue Code.
SEPARATE ACCOUNT: The Account entitled Hartford Life Insurance Company DC
Variable Account-I ("DC-I") and a series of Hartford Life Insurance Company
Separate Account Two ("DC-II").
SUB-ACCOUNT: Accounts established within the Separate Account with respect to a
Fund.
VALUATION DAY: Every day the New York Stock Exchange is open for business
exclusive of the following national and local business holidays: Martin Luther
King Day, Lincoln's Birthday, Columbus Day, Veteran's Day, the day before
Independence Day and the day after Thanksgiving. The value of the Separate
Account is determined at the close of the New York Stock Exchange (currently
4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between successive Valuation Days.
VARIABLE ANNUITY: An Annuity providing for payments varying in amount in
accordance with the investment experience of the assets held in the underlying
securities of the Separate Account.
4
<PAGE>
SUMMARY
Contract Owner Transaction Expense
(All Sub Accounts)
<TABLE>
<S> <C>
Sales Load Imposed on Purchases (as a percentage of premium
payments)....................................................... None
Transfer Fee...................................................... $ 5
Contingent Deferred Sales Charge (as a percentage of amounts
withdrawn)......................................................
First through Sixth Year...................................... 7%
Seventh through Twelfth Year.................................. 5%
Thirteenth Year............................................... 0%
Annual Contract Fee............................................... $ 18(1)
Annual Expenses--Separate Account (as a percentage of average
account value)
Mortality and Expense Risk (DC I)............................. 1.100%
Mortality and Expense Risk (DC II)............................ 1.250%
</TABLE>
The Transfer Fee, Contingent Deferred Sales Charge, Annual Contract Fee and
Mortality and Expense Risk chage may be reduced or eliminated. See "Experience
of Contracts" on page .
Annual Fund Operating Expense
(as a percentage of net assets)
<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OTHER OPERATING
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Hartford Bond Fund.............................. 0.500% 0.047% 0.547%
Hartford Stock Fund............................. 0.462% 0.039% 0.501%
HVA Money Market Fund........................... 0.425% 0.049% 0.474%
Hartford Advisers Fund.......................... 0.615% 0.040% 0.655%
Hartford U.S. Government Fund................... 0.425% 0.157% 0.582%
Hartford Capital Appreciation Fund.............. 0.675% 0.045% 0.720%
Hartford Mortgage Securities Fund............... 0.425% 0.052% 0.477%
Hartford Index Fund............................. 0.375% 0.079% 0.454%
Hartford International Opportunities Fund....... 0.725% 0.126% 0.851%
Calvert Socially Responsive Series.............. 0.700% 0.100% 0.800%
<FN>
(1) The annual contract fee is a single $18 charge on a Contract. It is
deducted proportionally from the investment options in use at the time of
the charge. In the Example, the annual contract fee is approximated as a
0.07% annual asset charge based on the experience of the Contracts.
</TABLE>
EXAMPLE-DCI
<TABLE>
<CAPTION>
If you surrender your contract
at the end of the applicable
time period: You would pay the
following expenses on a $1,000
investment, assuming a 5%
annual return on assets:
If you annuitize at the end of If you do not surrender your
the applicable time period: You contract: You would pay the
would pay the following following expenses on a $1,000
expenses on a $1,000 investment, assuming a 5%
investment, assuming a 5% annual return on assets:
annual return on assets:
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bond Fund................ $ 90 $ 132 $ 176 $ 273 $ 17 $ 54 $ 93 $ 203 $ 18 $ 55 $ 94 $ 204
Stock Fund............... 89 130 174 268 16 52 91 196 17 53 91 199
Money Market Fund........ 89 129 172 265 16 51 89 195 17 52 90 196
Advisers Fund............ 91 135 181 284 18 57 99 215 19 58 100 216
U.S. Government Money
Market Fund............ 90 133 178 276 17 55 95 207 18 56 96 208
Aggressive Growth Fund... 92 137 184 290 19 59 102 222 19 60 103 223
Mortgage Securities
Fund................... 89 130 173 266 16 52 89 195 17 52 90 196
Index Fund(2)............ 86 120 156 231 13 41 72 159 14 42 73 160
International
Opportunities Fund..... 93 140 191 303 20 63 109 236 21 64 110 237
Socially Responsive
Fund................... 92 139 188 296 19 62 106 230 20 62 107 231
</TABLE>
The purpose of this table is to assist the contract owner in understanding
various costs and expenses that a contract owner will bear directly or
indirectly. The table reflects expenses of the Separate Account and underlying
Funds.
(2) For this table, the Index Fund combined expenses are limited to 1.25%.
This EXAMPLE should not be considered a representation of past or future
expenses and actual expenses may be greater or less than those shown.
5
<PAGE>
SUMMARY
A. CONTRACTS OFFERED
Group contracts issued in conjunction with a Deferred Compensation Plan or a
Qualified Plan of an employer are offered.
The Qualified Plan contracts available with respect to DC-II are limited to
plans established and sponsored by Employers for their Employees. Qualified
Plans provide a way for an Employer to establish a funded retirement plan for
its Employees. The contract is normally issued to the Employer or to the trustee
or custodian of the Employer's Plan.
Contract Owners who have purchased a prior series of contracts may continue
to make Contributions to such contracts subject to the terms and provisions of
their contracts. New Participants may be added to existing contracts of the
prior series but no new contracts of that series will be issued. Prior Contract
Owners are referred to the Appendix (commencing on page ) for a description of
the sales charges and other expenses applicable to earlier series of contracts.
B. ACCUMULATION PERIOD UNDER THE CONTRACTS
During the Accumulation Period under the contracts, Contributions made by
the Employer to the contracts are used to purchase variable account interests.
Contributions allocated to purchase variable interests may, after the deductions
described hereafter, be invested in selected Sub-Accounts of DC-I or DC-II, as
appropriate.
C. CONTINGENT DEFERRED SALES CHARGES
No deduction for sales expense is made at the time of allocation of
Contributions to the contracts. A deduction for contingent deferred sales
charges is made if there is any surrender of contract values during the first 12
Participant Contract Years. During the first 6 years thereof, a maximum
deduction of 7% will be made against the full amount of any such surrender.
During the next 6 years thereof, a maximum deduction of 5% will be made against
the full amount of any such surrender. Such charges will in no event exceed
8.50% when applied as a percentage against the sum of all Contributions to a
Participant's Individual Account. The amount or term of the contingent deferred
sales charge may be reduced (see "Experience Rating of Contracts", page ).
No deduction for contingent deferred sales charges will be made in certain
cases. (See "Is there ever a time when the sales charges do not apply?"
commencing on page .)
HL reserves the right to limit any increase in the Contributions made to a
Participant's Individual Account under any contract to no more than three times
the total Contributions made on behalf of such Participant during the initial 12
consecutive months following the Date of Coverage. Increases in excess of those
described will be accepted only with the consent of HL and subject to the then
current deductions being made under the contracts.
D. TRANSFER BETWEEN ACCOUNTS
During the Accumulation Period a Contract Owner may allocate monies held in
the Separate Account among the available Sub-Accounts of the Separate Account.
Each transfer under the contract may be subject to a $5.00 Transfer Fee (see
"Experience Rating of Contracts", page ). However, there may be additional
restrictions under certain circumstances (see "May I transfer assets between
Sub-Accounts?" page ).
E. ANNUITY PERIOD UNDER THE CONTRACTS
Contract values held with respect to Participants' Individual Accounts with
respect to DC-I or DC-II, as appropriate, at the end of the Accumulation Period
(and any additional Contributions that a Deferred Compensation Plan Contract
Owner (DC-I, only) elects to make at the commencement of the Annuity Period)
will, at the direction of the Contract Owner, be allocated to establish
Annuitants' Accounts to provide Fixed and/or Variable Annuities under the
contracts.
6
<PAGE>
Additional Contributions made under the contracts (on Deferred Compensation
Plans written with respect to DC-I only) at the beginning of the Annuity Period,
to effect increased Fixed and/or Variable Annuity payments, will be subject to a
sales charge deduction in the maximum amount of 3.50% of such Contribution. (See
"How are Contributions made to establish my Annuity account?" commencing on page
.)
F. MINIMUM DEATH BENEFITS
A Minimum Death Benefit is provided in the event of death of the Participant
under a Participant's Individual Account prior to the earlier of the
Participant's 65th birthday or the Annuity Commencement Date. (See "What would
my Beneficiary receive as death proceeds?" commencing on page .)
G. ANNUITY OPTIONS
The Annuity Commencement Date will not be deferred beyond the Participant's
75th birthday or such earlier date may be required by applicable law and/or
regulation. If a Contract Owner does not elect otherwise, HL reserves the right
to begin Annuity payments automatically at age 65 under an option providing for
a life Annuity with 120 monthly payments certain. (See "What are the available
Annuity options under the contracts?" commencing on page .) However, HL will
not assume responsibility in determining or monitoring minimum distributions
beginning at age 70 1/2. When an Annuity is purchased by a Contract Owner for an
Annuitant, unless otherwise specified, DC-I or DC-II Accumulation Unit Values
will be applied to provide a Variable Annuity under DC-II.
H. DEDUCTIONS FOR PREMIUM TAXES
Deductions will be made during the Accumulation Period and Annuity Period,
as appropriate, for the payment of any Premium Taxes that may be levied against
the contract. The range is generally between 0% and 4.00%. (See "Charges Under
The Contract" on page .)
I. ASSET CHARGE IN THE SEPARATE ACCOUNT
During both the Accumulation Period and the Annuity Period a charge is made
by HL for providing the expense, mortality and administrative undertakings under
the contracts. With respect to contract values held in DC-I, such charge is an
annual rate of 1.10% (.70% for mortality, .15% for expense and .25% for
administrative undertakings) of the average daily net assets of DC-I. With
respect to contract values held in DC-II such charge is an annual rate of 1.25%
(.85% for mortality, .15% for expense and .25% for administrative undertakings)
of the average daily net assets of DC-II. The rate charged for the expense,
mortality and administrative undertakings under the contracts may be reduced
(see "Experience Rating of Contracts", page ). The rate charged for the
expense, mortality and administrative undertakings may be periodically increased
by HL subject to a maximum annual rate of 2.00%, provided, however, that no such
increase will occur unless the Commission shall have first approved any such
increase. (See "Charges Under The Contract," page .)
J. ANNUAL CONTRACT FEE
An Annual Contract Fee may be charged against the value of each
Participant's Individual Account under a contract at the end of a Participant's
Contract Year. The maximum Annual Contract Fee is $18.00 per year on all
contracts. (See "Charges Under the Contract", page .) The Annual Contract Fee
may be reduced or waived (See "Experience Rating of Contracts", page .)
7
<PAGE>
K. MINIMUM PAYMENT
The minimum Contribution that may be made each month on behalf of a
Participant's Individual Account under a contract is $30.00 unless the
Employer's Plan provides otherwise.
L. PAYMENT ALLOCATION TO DC-I AND DC-II
The contracts permit the allocation of Contributions, in multiples of ten
percent of each Contribution among the several Sub-Accounts of DC-I and DC-II.
The minimum amount that may be allocated to or invested in Accumulation Units of
any Sub-Account in a Separate Account shall not be less than $10.00.
M. VOTING RIGHTS OF CONTRACT OWNERS
Contract Owners and/or vested Participants will have the right to vote on
matters affecting the underlying Fund to the extent that proxies are solicited
by such Fund. If a Contract Owner does not vote, HL shall vote such interest in
the same proportion as shares of the Fund for which instructions have been
received by HL. (See "What are my voting rights?" commencing on page .)
8
<PAGE>
ACCUMULATION UNIT VALUES
(FOR AN ACCUMULATION UNIT OUTSTANDING THROUGHOUT THE PERIOD)
The following information has been examined by Arthur Andersen LLP,
independent public accountants, whose report thereon is included in the
Statement of Additional Information, which is incorporated by reference to this
Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
-------- -------- -------- ---------- ------- ---------- ------- ---------- ------- ----------
DC-I (1.25%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BOND FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period.......... $ 3.689 $ 3.388 $ 3.251 $ 2.827 $ 2.640 $ 2.384 $ 2.244 $ 2.273 $ 2.052 $ 1.722
Accumulation unit
value at end of
period............. $ 3.499 $ 3.689 $ 3.388 $ 3.251 $ 2.827 $ 2.640 $ 2.384 $ 2.244 $ 2.273 $ 2.052
Number of
accumulation units
outstanding at
end of period (in
thousands)......... 9,090 10,092 10,253 10,201 9,871 9,462 9,015 8,461 9,640 8,335
DC-II (1.25%)
BOND FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period.......... $ 3.689 $ 3.389 $ 3.251 $ 2.827 $ 2.641 $ 2.385 $ 2.244 $ 2.273 $ 2.052 $ 1.723
Accumulation unit
value at end of
period............. $ 3.500 $ 3.689 $ 3.389 $ 3.251 $ 2.827 $ 2.641 $ 2.385 $ 2.244 $ 2.273 $ 2.052
Number of
accumulation units
outstanding at
end of period (in
thousands)......... 1,123 992 816 732 724 594 433 320 224 145
DC-I (1.25%)
STOCK FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period.......... $ 6.990 $ 6.190 $ 5.695 $ 4.628 $ 4.875 $ 3.916 $ 3.332 $ 3.201 $ 2.886 $ 2.222
Accumulation unit
value at end of
period............. $ 6.773 $ 6.990 $ 6.190 $ 5.695 $ 4.628 $ 4.875 $ 3.916 $ 3.332 $ 3.201 $ 2.886
Number of
accumulation units
outstanding at
end of period (in
thousands)......... 39,551 37,542 34,861 32,700 29,962 28,198 26,658 25,694 21,622 19,566
DC-II (1.25%)
STOCK FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period.......... $ 6.988 $ 6.188 $ 5.694 $ 4.627 $ 4.874 $ 3.915 $ 3.331 $ 3.200 $ 2.885 $ 2.222
Accumulation unit
value at end of
period............. $ 6.771 $ 6.988 $ 6.188 $ 5.694 $ 4.627 $ 4.874 $ 3.915 $ 3.331 $ 3.200 $ 2.885
Number of
accumulation units
outstanding at
end of period (in
thousands)......... 3,885 3,181 2,517 1,885 1,467 1,156 1,011 951 772 437
DC-I (1.25%)
MONEY MARKET FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period.......... $ 2.450 $ 2.410 $ 2.354 $ 2.248 $ 2.106 $ 1.954 $ 1.842 $ 1.752 $ 1.661 $ 1.550
Accumulation unit
value at end of
period............. $ 2.515 $ 2.450 $ 2.410 $ 2.354 $ 2.248 $ 2.106 $ 1.954 $ 1.842 $ 1.752 $ 1.661
Number of
accumulation units
outstanding at
end of period (in
thousands)......... 9,548 9,298 9,999 10,936 11,181 8,871 8,703 7,521 6,321 7,068
DC-II (1.25%)
MONEY MARKET FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period.......... $ 2.447 $ 2.407 $ 2.351 $ 2.245 $ 2.103 $ 1.951 $ 1.840 $ 1.749 $ 1.659 $ 1.548
Accumulation unit
value at end of
period............. $ 2.512 $ 2.447 $ 2.407 $ 2.351 $ 2.245 $ 2.103 $ 1.951 $ 1.840 $ 1.749 $ 1.659
Number of
accumulation units
outstanding at
end of period (in
thousands)......... 905 886 884 929 881 718 628 389 351 235
<CAPTION>
1984 1983 1982
---------- ---------- ---------
DC-I (1.25%)
<S> <C> <C> <C>
BOND FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period.......... $ 1.541 $ 1.519 $1.318(a)
Accumulation unit
value at end of
period............. $ 1.722 $ 1.541 $1.519
Number of
accumulation units
outstanding at
end of period (in
thousands)......... 8,464 4,693 187
DC-II (1.25%)
BOND FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period.......... $ 1.541 $ 1.519 $1.366(b)
Accumulation unit
value at end of
period............. $ 1.723 $ 1.541 $1.519
Number of
accumulation units
outstanding at
end of period (in
thousands)......... 113 88 28
DC-I (1.25%)
STOCK FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period.......... $ 2.238 $ 1.989 $1.548(a)
Accumulation unit
value at end of
period............. $ 2.222 $ 2.238 $1.989
Number of
accumulation units
outstanding at
end of period (in
thousands)......... 17,831 10,598 332
DC-II (1.25%)
STOCK FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period.......... $ 2.238 $ 1.989 $1.551(c)
Accumulation unit
value at end of
period............. $ 2.222 $ 2.238 $1.989
Number of
accumulation units
outstanding at
end of period (in
thousands)......... 253 141 26
DC-I (1.25%)
MONEY MARKET FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period.......... $ 1.417 $ 1.312 $1.258(d)
Accumulation unit
value at end of
period............. $ 1.550 $ 1.417 $1.312
Number of
accumulation units
outstanding at
end of period (in
thousands)......... 8,416 2,654 2,007
DC-II (1.25%)
MONEY MARKET FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period.......... $ 1.415 $ 1.310 $1.235(c)
Accumulation unit
value at end of
period............. $ 1.548 $ 1.415 $1.310
Number of
accumulation units
outstanding at
end of period (in
thousands)......... 349 67 66
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
-------- -------- -------- ---------- ------- ---------- ------- ---------- ------- ----------
DC-I (1.25%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADVISERS FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 2.993 $ 2.700 $ 2.524 $ 2.123 $ 2.123 $ 1.766 $ 1.566 $ 1.497 $ 1.345 $ 1.074
Accumulation unit
value at end of
period............ $ 2.876 $ 2.993 $ 2.700 $ 2.524 $ 2.123 $ 2.123 $ 1.766 $ 1.566 $ 1.497 $ 1.345
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 126,437 119,064 105,648 93,981 84,223 74,660 62,335 56,502 36,266 22,051
DC-II (1.25%)
ADVISERS FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 2.993 $ 2.700 $ 2.524 $ 2.123 $ 2.123 $ 1.766 $ 1.566 $ 1.497 $ 1.345 $ 1.074
Accumulation unit
value at end of
period............ $ 2.876 $ 2.993 $ 2.700 $ 2.524 $ 2.123 $ 2.123 $ 1.766 $ 1.566 $ 1.497 $ 1.345
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 8,279 7,023 7,323 6,220 5,565 5,227 4,631 4,283 3,357 2,429
DC-I (1.25%)
U.S. GOVERNMENT
MONEY MARKET FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.718 $ 1.694 $ 1.661 $ 1.593 $ 1.500 $ 1.400 $ 1.326 $ 1.269 $ 1.209 $ 1.133
Accumulation unit
value at end of
period............ $ 1.758 $ 1.718 $ 1.694 $ 1.661 $ 1.593 $ 1.500 $ 1.400 $ 1.326 $ 1.269 $ 1.209
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 4,783 4,791 5,498 5,979 5,848 4,576 4,576 3,796 3,172 3,014
DC-II (1.25%)
U.S. GOVERNMENT
MONEY MARKET FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.718 $ 1.694 $ 1.661 $ 1.593 $ 1.500 $ 1.400 $ 1.326 $ 1.269 $ 1.209 $ 1.133
Accumulation unit
value at end of
period............ $ 1.758 $ 1.718 $ 1.694 $ 1.661 $ 1.593 $ 1.500 $ 1.400 $ 1.326 $ 1.269 $ 1.209
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 483 467 382 381 293 212 163 107 102 77
DC-I (1.25%)
CAPITAL APPRECIATION
FUND SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 4.204 $ 3.524 $ 3.050 $ 2.004 $ 2.278 $ 1.858 $ 1.490 $ 1.579 $ 1.467 $ 1.092
Accumulation unit
value at end of
period............ $ 4.257 $ 4.204 $ 3.524 $ 3.050 $ 2.004 $ 2.278 $ 1.858 $ 1.490 $ 1.579 $ 1.467
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 46,086 36,598 25,900 19,437 15,293 13,508 9,970 8,485 6,552 2,485
DC-II (1.25%)
CAPITAL APPRECIATION
FUND SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 4.204 $ 3.524 $ 3.050 $ 2.004 $ 2.278 $ 1.858 $ 1.490 $ 1.579 $ 1.467 $ 1.092
Accumulation unit
value at end of
period............ $ 4.257 $ 4.204 $ 3.524 $ 3.050 $ 2.004 $ 2.278 $ 1.858 $ 1.490 $ 1.579 $ 1.467
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 6,923 4,940 3,276 2,113 1,455 1,037 787 664 462 117
<CAPTION>
1984 1983 1982
---------- ---------- ---------
DC-I (1.25%)
<S> <C> <C> <C>
ADVISERS FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.013 $ 1.000(e) --
Accumulation unit
value at end of
period............ $ 1.074 $ 1.013 --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 14,035 7,971 --
DC-II (1.25%)
ADVISERS FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.013 $ 1.000(e) --
Accumulation unit
value at end of
period............ $ 1.074 $ 1.013 --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 2,266 837 --
DC-I (1.25%)
U.S. GOVERNMENT
MONEY MARKET FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.045 $ 1.000(e) --
Accumulation unit
value at end of
period............ $ 1.133 $ 1.045 --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 2,068 944 --
DC-II (1.25%)
U.S. GOVERNMENT
MONEY MARKET FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.045 $ 1.000(e) --
Accumulation unit
value at end of
period............ $ 1.133 $ 1.045 --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 22 2 --
DC-I (1.25%)
CAPITAL APPRECIATION
FUND SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.000(f) -- --
Accumulation unit
value at end of
period............ $ 1.092 -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 113 -- --
DC-II (1.25%)
CAPITAL APPRECIATION
FUND SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.000(f) -- --
Accumulation unit
value at end of
period............ $ 1.092 -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 5 -- --
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
-------- -------- -------- ---------- ------- ---------- ------- ---------- ------- ----------
DC-I (1.25%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MORTGAGE SECURITIES
FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 2.093 $ 1.993 $ 1.929 $ 1.702 $ 1.571 $ 1.406 $ 1.313 $ 1.296 $ 1.181 $ 1.000(g)
Accumulation unit
value at end of
period............ $ 2.034 $ 2.093 $ 1.993 $ 1.929 $ 1.702 $ 1.571 $ 1.406 $ 1.313 $ 1.296 $ 1.181
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 10,782 11,722 12,046 11,855 10,291 8,919 9,005 8,139 7,902 5,130
DC-II (1.25%)
MORTGAGE SECURITIES
FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 2.093 $ 1.993 $ 1.929 $ 1.702 $ 1.571 $ 1.406 $ 1.313 $ 1.296 $ 1.181 $ 1.000(g)
Accumulation unit
value at end of
period............ $ 2.034 $ 2.093 $ 1.993 $ 1.929 $ 1.702 $ 1.571 $ 1.406 $ 1.313 $ 1.296 $ 1.181
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 994 942 802 736 582 845 764 598 431 247
DC-I (1.25%)
INDEX FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.735 $ 1.605 $ 1.522 $ 1.190 $ 1.255 $ 0.975 $ 0.850 $ 1.000(h) -- --
Accumulation unit
value at end of
period............ $ 1.738 $ 1.735 $ 1.605 $ 1.522 $ 1.190 $ 1.255 $ 0.975 $ 0.850 -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 15,356 13,489 11,720 8,519 6,350 3,639 1,946 1,323 -- --
DC-II (1.25%)
INDEX FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.735 $ 1.605 $ 1.522 $ 1.190 $ 1.255 $ 0.975 $ 0.850 $ 1.000(h) -- --
Accumulation unit
value at end of
period............ $ 1.738 $ 1.735 $ 1.605 $ 1.522 $ 1.190 $ 1.255 $ 0.975 $ 0.850 -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 2,376 1,862 1,437 871 595 275 116 49 -- --
DC-I (1.25%)
SOCIALLY RESPONSIVE
FUND SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.573 $ 1.475 $ 1.388 $ 1.207 $ 1.173 $ 1.000(i) -- -- -- --
Accumulation unit
value at end of
period............ $ 1.504 $ 1.573 $ 1.475 $ 1.388 $ 1.207 $ 1.173 -- -- -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 7,899 7,199 5,215 3,508 2,036 629 -- -- -- --
DC-II (1.25%)
SOCIALLY RESPONSIVE
FUND SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.483 $ 1.391 $ 1.308 $ 1.138 $ 1.106 $ 1.000(i) -- -- -- --
Accumulation unit
value at end of
period............ $ 1.417 $ 1.483 $ 1.391 $ 1.308 $ 1.138 $ 1.106 -- -- -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 693 498 317 187 94 18 -- -- -- --
<CAPTION>
1984 1983 1982
---------- ---------- ---------
DC-I (1.25%)
<S> <C> <C> <C>
MORTGAGE SECURITIES
FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... -- -- --
Accumulation unit
value at end of
period............ -- -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ -- -- --
DC-II (1.25%)
MORTGAGE SECURITIES
FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... -- -- --
Accumulation unit
value at end of
period............ -- -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ -- -- --
DC-I (1.25%)
INDEX FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... -- -- --
Accumulation unit
value at end of
period............ -- -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ -- -- --
DC-II (1.25%)
INDEX FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... -- -- --
Accumulation unit
value at end of
period............ -- -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ -- -- --
DC-I (1.25%)
SOCIALLY RESPONSIVE
FUND SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... -- -- --
Accumulation unit
value at end of
period............ -- -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ -- -- --
DC-II (1.25%)
SOCIALLY RESPONSIVE
FUND SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... -- -- --
Accumulation unit
value at end of
period............ -- -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ -- -- --
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
-------- -------- -------- ---------- ------- ---------- ------- ---------- ------- ----------
DC-I (1.25%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INTERNATIONAL
OPPORTUNITIES FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.220 $ 0.924 $ 0.979 $ 0.877 $ 1.000(j) -- -- -- -- --
Accumulation unit
value at end of
period............ $ 1.181 $ 1.220 $ 0.924 $ 0.979 $ 0.877 -- -- -- -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 38,270 19,894 8,061 4,663 2,564 -- -- -- -- --
DC-II (1.25%)
INTERNATIONAL
OPPORTUNITIES FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... $ 1.220 $ 0.924 $ 0.979 $ 0.877 $ 1.000(j) -- -- -- -- --
Accumulation unit
value at end of
period............ $ 1.181 $ 1.220 $ 0.924 $ 0.979 $ 0.877 -- -- -- -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ 3,640 1,495 553 220 52 -- -- -- -- --
<CAPTION>
1984 1983 1982
---------- ---------- ---------
DC-I (1.25%)
<S> <C> <C> <C>
INTERNATIONAL
OPPORTUNITIES FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... -- -- --
Accumulation unit
value at end of
period............ -- -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ -- -- --
DC-II (1.25%)
INTERNATIONAL
OPPORTUNITIES FUND
SUB-ACCOUNT
Accumulation unit
value at beginning
of period......... -- -- --
Accumulation unit
value at end of
period............ -- -- --
Number of
accumulation units
outstanding at
end of period (in
thousands)........ -- -- --
</TABLE>
12
<PAGE>
PERFORMANCE RELATED INFORMATION
The Separate Account may advertise certain performance related information
concerning its Sub-Accounts. Performance information about the Sub-Account is
based on the Sub-Account's past performance only and is no indication of future
performance.
The Advisers Fund, Capital Appreciation Fund, Bond Fund, Index Fund,
International Opportunities Fund, Money Market Fund, Mortgage Securities Fund,
Socially Responsive Fund, Stock Fund and U.S. Government Money Market Fund
Sub-Accounts may include total return in advertisements or other sales material.
When the Sub-Account advertises its total return, it will usually be
calculated for one year, five years, and ten years or some other relevant
periods if the Sub-Account has not been in existence for at least ten years.
Total return is measured by comparing the value of an investment in the
Sub-Account at the beginning of the relevant period to the value of the
investment at the end of the period (assuming the deduction of any contingent
deferred sales charge which would be payable if the investment were redeemed at
the end of the period).
The Bond Fund and Mortgage Securities Fund Sub-Accounts may advertise yield
in addition to total return. The yield will be computed in the following manner:
The net investment income per unit earned during a recent one month period is
divided by the unit value on the last day of the period. This figure reflects
the recurring charges on the Separate Account level including the Annual
Contract Fee.
The Money Market Fund and U.S. Government Money Market Fund Sub-Accounts may
advertise yield and effective yield. The yield of the Sub-Account is based upon
the income earned by the Sub-Account 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 Sub-Account units and thus
compounded in the course of a 52-week period. Yield and effective yield reflect
the recurring charges on the Separate Account level including the Annual
Contract Fee.
Total return at the Separate Account level includes all contract charges:
sales charges, mortality and expense risk charges, and the Annual Contract Fee
and is therefore lower than total return at the Fund level, with no comparable
charges. Likewise, yield at the Separate Account level includes all recurring
charges (except sales charges), and is therefore lower than yield at the Fund
level, with no comparable charges.
13
<PAGE>
INTRODUCTION
This Prospectus has been designed to provide you with the necessary
information to make a decision on purchasing contracts issued in conjunction
with a Deferred Compensation Plan or Qualified Plan of an Employer offered by HL
in Separate Account DC-I or DC-II. This Prospectus describes only the elements
of the contracts pertaining to the variable portion of the contract. The
contracts may contain a General Account option which is not described in this
Prospectus. Please read the Glossary of Special Terms on pages and prior to
reading this Prospectus to familiarize yourself with the terms being used.
THE DC-I AND DC-II CONTRACT AND
SEPARATE ACCOUNT DC-I AND
SEPARATE ACCOUNT TWO (DC-II)
WHAT ARE THE DC-I AND DC-II CONTRACTS?
On contracts issued in conjunction with a Deferred Compensation Plan of an
Employer, variable account Contributions are held in Hartford Life Insurance
Company DC Variable Account-I ("DC-I") during the Accumulation Period and in a
series of Hartford Life Insurance Company Separate Account Two ("DC-II")
during the Annuity Period.
On contracts issued in conjunction with a Qualified Plan of an Employer,
Contributions are held in DC-II during both the Accumulation Period and
Annuity Period.
The Qualified Plan contracts available with respect to DC-II are limited to
voluntary plans established and sponsored by Employers for their Employees.
Qualified Plans provide a way for an Employer to establish a funded retirement
plan for its Employees. The contract is normally issued to the Employer or to
the trustee or custodian of the Employer's Plan.
Deferred Compensation Plans provide a way for an Employer and its Employees
to arrange for eligible employees to defer a certain portion of their income
("Deferred Compensation") to a determinable future date and thereby defer
current federal income taxes on such deferred compensation until actually
received by the Employee according to the terms of the Employer's Plan. An
Employer contemplating the offering of such a Plan should consult with its
legal counsel with respect to any securities aspects of interest in such
Plans. At all times, the Employer is the sole and exclusive owner of the
contract issued with respect to the Plan. An Employee electing to participate
in the Employer's Plan is, at all times, a general creditor of the Employer
establishing the Plan.
Contract Owners who have purchased a prior series of contracts may continue
to make Contributions to such contracts subject to the terms and provisions of
their contracts. New Participants may be added to existing contracts of the
prior series but no new contracts of that series will be issued. Prior
Contract Owners are referred to the Appendix (commencing on page ) for a
description of the sales charges and other expenses applicable to earlier
series of contracts.
During the Accumulation Period under the contracts, Contributions made by
the Employer to the contracts are used to purchase variable account interests.
Contributions allocated to purchase variable interests may, after the
deductions described hereafter, be invested in selected Sub-Accounts of DC-I
or DC-II, as appropriate.
WHO CAN BUY THESE CONTRACTS?
The group variable annuity contracts offered under this Prospectus are
offered for use in connection with plans qualified under Sections 401(a) or
403(a) of the Internal Revenue Code, including annuity purchase plans adopted
by public school systems and certain tax-exempt organizations according to
Section 403(b) of the Internal Revenue Code; annuity purchase plans adopted
according to Section 408 of the Internal Revenue Code, including employee
pension plans established for employees by a state, a political subdivision of
a state, or an agency or instrumentality of either a state or a political
subdivision of a state, and certain eligible deferred compensation plans as
defined in Section 457 of the Internal Revenue Code; and pension or
profit-sharing plans described in Section 401(a) and 401(k) ("Qualified
Contracts").
14
<PAGE>
WHAT ARE THE SEPARATE ACCOUNTS AND HOW DO THEY OPERATE?
Provision has been made for two different Separate Accounts (DC-I and a
series of Separate Account Two ("DC-II")), to be operative during the life of
the contracts which are issued in conjunction with Deferred Compensation
Plans. This arrangement provides for tax treatment of DC-I which may provide
tax advantages to Deferred Compensation Plan Contract Owners. (See "Federal
Tax Considerations," commencing on page .) Provision has been made for DC-II
only, to be operative during the life of a contract issued in conjunction with
a Qualified Plan. DC-I and a series of Separate Account Two (DC-II) have been
organized as unit investment trust types of investment companies and have been
registered as such with the Commission under the Investment Company Act of
1940, as amended. The Separate Accounts meet the definition of "separate
account" under federal securities law.
Registration of the Separate Accounts with the Commission does not involve
supervision of the management or investment practices or policies of the
Separate Account or of HL by the Commission. However, HL and the Separate
Accounts are subject to supervision and regulation by the Department of
Insurance of the State of Connecticut.
Under Connecticut law, the assets of the Separate Accounts attributable to
the contracts offered under this Prospectus are held for the benefit of the
owners of, and the persons entitled to payments under, those contracts. Also,
in accordance with the contracts, the assets in the Separate Accounts
attributable to contracts participating in the Separate Accounts are not
chargeable with liabilities arising out of any other business HL may conduct.
So, you will not be affected by the rate of return of HL's general account,
nor by the investment performance of any of HL's other separate accounts.
Your investment is allocated to one or more Sub-Accounts of the Separate
Account. Each Sub-Account is invested exclusively in the assets of one
underlying Fund. Net Purchase Payments and proceeds of transfers between
Sub-Accounts are applied to purchase shares in the appropriate Fund at net
asset value determined as of the end of the Valuation Period during which the
payments were received or the transfer made. All distributions from the Fund
are reinvested at net asset value. The value of your investment during the
Accumulation Period will therefore vary in accordance with the net income and
fluctuation in the individual investments within the underlying Fund portfolio
or portfolios. During the Variable Annuity payout period, both your annuity
payments and reserve values will vary in accordance with these factors.
HL DOES NOT GUARANTEE THE INVESTMENT RESULTS OF THE SUB-ACCOUNTS OR ANY OF
THE UNDERLYING INVESTMENTS. THERE IS NO ASSURANCE THAT THE VALUE OF A CONTRACT
DURING THE YEARS PRIOR TO RETIREMENT OR THE AGGREGATE AMOUNT OF THE VARIABLE
ANNUITY PAYMENTS WILL EQUAL THE TOTAL OF PURCHASE PAYMENTS MADE UNDER THE
CONTRACT. SINCE EACH UNDERLYING FUND HAS DIFFERENT INVESTMENT OBJECTIVES, EACH
IS SUBJECT TO DIFFERENT RISKS. THESE RISKS ARE MORE FULLY DESCRIBED IN THE
ACCOMPANYING FUND PROSPECTUS.
HL reserves the right, subject to compliance with the law, to substitute the
shares of any other registered investment company for the shares of any Fund
held by the Separate Account. Substitution may occur if shares of the Fund(s)
become unavailable or due to changes in applicable law or interpretations of
law. Current law requires notification to you of any such substitution and
approval of the Securities and Exchange Commission.
HL also reserves the right, subject to compliance with the law to offer
additional Sub-Accounts with differing investment objectives.
The Separate Account may be subject to liabilities arising from series whose
assets are attributable to other variable annuity contracts or variable life
insurance policies offered by the Separate Account which are not described in
this Prospectus.
HL may offer additional Separate Account options from time to time under
these contracts. Such new options will be subject to the then in effect
charges, fees, and or transfer restrictions for the contracts for such
additional separate accounts.
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<PAGE>
OPERATION OF THE CONTRACT
HOW ARE CONTRIBUTIONS CREDITED?
A Master Contract is issued to an association, Employer or Employer group
designated entity. Employers participating in the Master Contract will do so
by executing a Joinder Agreement through which they agree to participate in
the Master Contract. The provisions in the Master Contract are fully
applicable severally to each joining Employer and to Participant's Individual
Accounts thereunder. The variable contracts of prior series are no longer
issued, however, Contract Owners may continue to make Contributions to those
contracts. Such Contract Owners should refer to the Appendix, page for a
description of the sales charges and other expenses applicable to such
contracts.
The net Contributions to a Participant's Individual Account under a contract
are applied to purchase Accumulation Units in the selected Sub-Accounts. In
order to reflect such Contributions on behalf of a Participant, except with
respect to an initial Contribution, there is credited to each Participant's
Individual Account under a contract such Sub-Account Accumulation Units with
respect to DC-I or DC-II, as appropriate, determined by dividing the net
Contribution by the appropriate Accumulation Unit value next computed
following receipt of the payment by HL at its home office, P.O. Box 2999,
Hartford, Connecticut 06104-2999. With respect to an initial Contribution, the
net Contribution is credited to the Participant's Individual Account within
two business days of receipt of a properly completed application and the
initial Contribution. If an application or any other information is incomplete
when received, the net Contribution will be credited to the Participant's
Individual Account within five business days. If an initial Contribution is
not credited within five business days, it will be immediately returned unless
you have been informed of the delay and request that the Contribution not be
returned. Subsequent payments cannot be credited on the same day of receipt
unless they are accompanied by adequate instructions.
The number of Sub-Account Accumulation Units will not change because of a
subsequent change in an Accumulation Unit's value, but the dollar value of an
Accumulation Unit will vary to reflect the investment experience of the
appropriate Fund shares that serve as the underlying investment for the
Sub-Account.
MAY I MAKE CHANGES IN THE AMOUNTS OF MY CONTRIBUTION?
Yes, however the minimum Contribution that may be made at any one time on
behalf of a Participant during the Accumulation Period under a contract is $30
unless the Employer's Plan provides otherwise. If the Plan adopted by the
Contract Owner so provides, the contract permits the allocation of
Contributions, in multiples of 10% among the several Sub-Accounts of DC-I and
DC-II. The minimum amount that may be allocated to any Sub-Account in a
Separate Account shall not be less than $10. Such changes must be requested in
writing and will be effected as of the date the request is received by HL at
its home office, P.O. Box 2999, Hartford, Connecticut 06104-2999.
MAY I TRANSFER ASSETS BETWEEN SUB-ACCOUNTS?
Yes, during the Accumulation Period you may transfer the values of your
Sub-Account allocations from one or more Sub-Accounts to another.
The following transfer restrictions apply to contracts issued or amended on
or after May 1, 1992.
Transfers of assets presently held in the General Account, or which were
held in the General Account at any time during the preceding 3 months, to the
Money Market Fund Sub-Account or to the U.S. Government Money Market
Sub-Account are prohibited.
Similarly, transfers of assets presently held in the Money Market Fund
Sub-Account or U.S. Government Money Market Sub-Account, or which were held in
either of these two Sub-Accounts or the General Account during the preceding 3
months, to the General Account are prohibited.
Such transfers must be requested in writing and will be effected as of the
date the request is received by HL at its home office, P.O. Box 2999,
Hartford, Connecticut 06104-2999. Each transfer may be subject to a $5.00
transfer fee (see "Experience Rating of Contracts", page ).
In addition, the right, with respect to a Participant's Individual Account,
to transfer monies between Sub-Accounts is subject to modification if HL
determines, in its sole opinion, that the exercise of that right by the
Contract Owner/Participant is, or would be, to the disadvantage of other
Contract Owners/Participants. Any
16
<PAGE>
modification could be applied to transfers to or from the same or all of the
Accounts and could include, but not be limited to, the requirement of a
minimum time period between each transfer, not accepting transfer requests of
an agent acting under a power of attorney on behalf of more than one
Participant or Contract Owner, or limiting the dollar amount that may be
transferred between Sub-Accounts by a Contract Owner/ Participant at any one
time. Such restrictions may be applied in any manner reasonably designed to
prevent any use of the transfer right which is considered by HL to be to the
disadvantage of other Contract Owners/ Participants.
WHAT HAPPENS IF THE CONTRACT OWNER FAILS TO MAKE CONTRIBUTIONS?
A contract will be deemed paid-up within 30 days after any anniversary date
of the contract if the Contract Owner has not remitted a Contribution to HL
during the preceding 12 month period. Effective with a change of the contract
to paid-up status, no further Contributions will be accepted by HL and each
Participant's Individual Account will be considered an inactive account until
the commencement of Annuity payments or until the value of the Participant's
Individual Account is disbursed or applied in accordance with the termination
provisions (see "How can a contract be redeemed or surrendered?" page .) Once
a contract has been placed on a paid-up status it may not be reinstated.
Persons receiving Annuity payments at the time of any change to paid-up status
will continue to receive their payments.
MAY I ASSIGN OR TRANSFER THE CONTRACT?
The group contracts issued with respect to Deferred Compensation Plans may
be assigned by the Contract Owner. Some forms of Qualified Plans prohibit the
assignment of a contract or any interest therein. No assignment will be
effective until a copy has been filed at the offices of HL at Hartford,
Connecticut, prior to settlement for HL's liability under the contract. HL
assumes no responsibility for the validity of any such assignments.
Participants may not assign their individual account interests.
HOW DO I KNOW WHAT MY ACCOUNT IS WORTH?
The value of the Accumulation Units in DC-I or DC-II representing an
interest in the appropriate Fund shares that are held under the contract were
initially established on the date that Contributions were first contributed to
the appropriate Sub-Account of the Separate Account. The value of the
respective Accumulation Units for any subsequent day is determined by
multiplying the Accumulation Unit value for the preceding day by the net
investment factor of the appropriate Sub-Accounts, as appropriate. (See "How
is the Accumulation Unit value determined?" below.)
The value of a Participant's Individual Account under a contract at any time
prior to the commencement of Annuity payments can be determined by multiplying
the total number of Sub-Account Accumulation Units credited to a Participant's
Individual Account by the current Accumulation Unit value for the respective
Sub-Account. There is no assurance that the value in the Sub-Accounts will
equal or exceed the Contributions made by the Contract Owner to such
Sub-Accounts.
HOW IS THE ACCUMULATION UNIT VALUE DETERMINED?
The Accumulation Unit value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
"Valuation Day" by multiplying the Accumulation Unit value of the particular
Sub-Account on the preceding Valuation Day by a "Net Investment Factor" for
that Sub-Account for the Valuation Period then ended. The Net Investment
Factor for each of the Sub-Accounts is equal to the net asset value per share
of the corresponding Fund at the end of the Valuation Period (plus the per
share amount of any dividends or capital gains by that Fund if the ex-dividend
date occurs in the Valuation Period then ended) divided by the net asset value
per share of the corresponding Fund at the beginning of the Valuation Period
and subtracting from that amount the amount of any charges assessed during the
Valuation Period then ending. You should refer to the Prospectuses for each of
the Funds which accompany this Prospectus for a description of how the assets
of each Fund are valued since each determination has a direct bearing on the
Accumulation Unit value of the Sub-Account and therefore the value of a
contract.
17
<PAGE>
HOW ARE THE UNDERLYING FUND SHARES VALUED?
The shares of the Fund are valued at net asset value on a daily basis. A
complete description of the valuation method used in valuing Fund shares may
be found in the accompanying Prospectus of each Fund.
PAYMENT OF BENEFITS
WHAT WOULD MY BENEFICIARY RECEIVE AS DEATH PROCEEDS?
The contracts provide that in the event the Participant dies before the
selected Annuity Commencement Date or the Participant's age 65 (whichever
occurs first) the Minimum Death Benefit payable on such contract will be the
greater of (a) the value of the Participant's Individual Account determined as
of the day written proof of death of such person is received by HL, or (b)
100% of the total Contributions made to such Account, reduced by any prior
partial surrenders.
The benefit may be taken by the Contract Owner in a single sum, in which
case payment will be made within seven days of receipt of proof of death by
HL, unless subject to postponement as explained below. In lieu of payment in
one sum, a Contract Owner may elect that the amount be applied, subject to the
suspension provisions described below, under any one of the optional Annuity
forms provided under DC-II (see "What are the available Annuity options under
the contracts?" commencing on page ) to provide Annuity payments to the
Beneficiary.
An election to receive death benefits under a form of Annuity must be made
prior to a lump sum settlement with HL and within one year after the death by
written notice to HL at its offices in Hartford, Connecticut. Benefit proceeds
due on death may be applied to provide variable payments, fixed payments, or a
combination of variable and fixed payments. No election to provide Annuity
payments will become operative unless the initial Annuity payment is at least
$20.00 on either a variable or fixed basis, or $20.00 on each basis when a
combination benefit is elected. The manner in which the Annuity payments are
determined and in which they may vary from month to month are the same as
applicable to a Participant's Individual Account after retirement. (See "How
are contributions made to establish my Annuity account?" page .)
HOW CAN A CONTRACT BE REDEEMED OR SURRENDERED?
THERE ARE CERTAIN RESTRICTIONS ON SECTION 403(B) TAX-SHELTERED ANNUITIES. AS
OF DECEMBER 31, 1988, ALL SECTION 403(B) ANNUITIES HAVE LIMITS ON FULL AND
PARTIAL SURRENDERS. CONTRIBUTIONS TO THE CONTRACT MADE AFTER DECEMBER 31, 1988
AND ANY INCREASES IN CASH VALUE AFTER DECEMBER 31, 1988 MAY NOT BE DISTRIBUTED
UNLESS THE CONTRACT OWNER/EMPLOYEE HAS (A) ATTAINED AGE 59 1/2, (B) TERMINATED
EMPLOYMENT, (C) DIED, (D) BECOME DISABLED OR (E) EXPERIENCED FINANCIAL
HARDSHIP.
DISTRIBUTIONS DUE TO FINANCIAL HARDSHIP OR SEPARATION FROM SERVICE MAY STILL
BE SUBJECT TO A PENALTY TAX OF 10%.
HL WILL NOT ASSUME ANY RESPONSIBILITY IN DETERMINING WHETHER A WITHDRAWAL IS
PERMISSIBLE, WITH OR WITHOUT TAX PENALTY, IN ANY PARTICULAR SITUATION; OR IN
MONITORING WITHDRAWAL REQUESTS REGARDING PRE OR POST JANUARY 1, 1989 ACCOUNT
VALUES.
On termination of Contributions to a contract by the Contract Owner on
behalf of a Participant prior to the selected Annuity Commencement Date for
such Participant, the Contract Owner will have the following options:
1.To continue a Participant's Individual Account in force under the
contract. Under this option, when the selected Annuity Commencement Date
arrives, the Contract Owner will begin to receive Annuity payments under the
selected Annuity option under the contract. (See "What are the available
Annuity options under the contracts?" commencing on page .) At any time in
the interim, a Contract Owner may surrender a Participant's Individual
Account for a lump sum cash settlement in accordance with 3. below.
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<PAGE>
2.To provide Annuity payments immediately. The values in a Participant's
Individual Account may be applied, subject to contractual provisions, to
provide for Fixed or Variable Annuity payments, or a combination thereof,
commencing immediately, under the selected Annuity option under the
contract. (See "What are the available Annuity options under the contracts?"
commencing on page .)
3.To surrender a Participant's Individual Account under the contract for a
lump sum cash settlement, in which event the Annual Contract Fee and any
applicable contingent deferred sales charges will be deducted. (See "How are
the charges under these contracts made?" commencing on page .) The amount
received will be the net termination value next computed after receipt by HL
at its home office, P. O. Box 2999, Hartford, CT 06104-2999, of a written
surrender request for complete surrender. Payment will normally be made as
soon as possible but not later than seven days after the written request is
received by HL.
4.In the case of a partial surrender the amount requested is either taken
out of the specified Sub-Account(s) or if no Sub-Account(s) are
specified, the requested amount is taken out of all applicable Sub-
Account(s) on a pro rata basis. Within this context, the contingent deferred
sales charges are taken as a percentage of the amount withdrawn. (See "How
are the charges under these contracts made?" page .) If the contingent
deferred sales charges have been experience rated (see "How are the charges
under these contracts made?" page ), any amounts not subject to the
contingent deferred sales charge will be deemed to be surrendered last.
CAN PAYMENT OF THE REDEMPTION OR SURRENDER VALUE EVER BE POSTPONED BEYOND THE
SEVEN DAY PERIOD?
Yes. It may be postponed whenever (a) the New York Stock Exchange is closed,
except for holidays or weekends, or trading on the New York Stock Exchange is
restricted as determined by the Securities and Exchange Commission; (b) the
Securities and Exchange Commission permits postponement and so orders; or (c)
the Securities and Exchange Commission determines that an emergency exists
making valuation of the amounts or disposal of securities not reasonably
practicable.
MAY I SURRENDER ONCE ANNUITY PAYMENTS HAVE STARTED?
Except with respect to Option 5 (on a variable payout), once Annuity
payments have commenced for an Annuitant, no surrender of a life Annuity
benefit can be made for the purpose of receiving a partial withdrawal or a
lump sum settlement in lieu thereof. Any surrender out of Option 5 will be
subject to contingent deferred sales charges, if applicable.
ARE THERE DIFFERENCES IN THE CONTRACT RELATED TO THE TYPE OF PLAN IN WHICH THE
PARTICIPANT IS ENROLLED?
Annuity Rights are provided under contracts issued only in conjunction with
Deferred Compensation Plans, with respect to DC-I only, entitling the Contract
Owner to have Annuity payments at the rates set forth in the contract at the
time of issue. Such rates will be made applicable to all amounts held in a
Participant's Individual Account during the Annuity Period under such contract
which do not exceed five times the gross Contributions made during the
Accumulation Period with respect to such Participant's Individual Account
thereunder. To the extent that the value of a Participant's Individual Account
at the end of the Accumulation Period is insufficient to fund the Annuity
Rights provided, the Contract Owner shall have the right to apply additional
Contributions to the values held in a Participant's Individual Account in
order to exercise all of the Annuity Rights provided. Any amounts in excess
thereto may be applied by HL at Annuity rates then being offered by HL.
CAN A CONTRACT BE SUSPENDED BY A CONTRACT OWNER?
A contract may be suspended by the Contract Owner by giving written notice
at least 90 days prior to the effective date of such suspension to HL at its
home office, P. O. Box 2999, Hartford, Connecticut 06104-2999. A contract will
be suspended automatically on its anniversary if the Contract Owner fails to
assent to any modification of a contract, as described under the caption "Can
a contract be modified?" which modifications would have become effective on or
before that anniversary. Upon suspension, Contributions will continue to be
accepted by HL under the contract, and subject to the terms thereof, as they
are applicable to Participant's Individual Accounts under the contracts prior
to such suspension, but no
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<PAGE>
Contributions will be accepted on behalf of any new Participant's Individual
Accounts. Annuitants at the time of any suspension will continue to receive
their Annuity payments. The suspension of a contract will not preclude the
Contract Owner's applying existing Participant's Individual Accounts under
DC-I or DC-II, as appropriate, to the purchase of Fixed or Variable Annuity
benefits.
HOW DO I ELECT AN ANNUITY COMMENCEMENT DATE AND FORM OF ANNUITY?
The Contract Owner selects an Annuity Commencement Date, usually between a
Participant's 50th and 75th birthdays, and an Annuity Option. The Annuity
Commencement Date may not be deferred beyond a Participant's 75th birthday or
such earlier date as may be required by applicable law and/or regulation. The
Annuity Commencement Date and/or the Annuity option may be changed from time
to time, but any such change must be made at least 30 days prior to the date
on which Annuity payments are scheduled to begin. Annuity payments will
normally be made on the first business day of each month.
The contract contains five optional annuity forms which may be selected on
either a Fixed or Variable Annuity basis, or a combination thereof. If a
Contract Owner does not elect otherwise, HL reserves the right to begin
Annuity payments at age 65 under Option 2 with 120 monthly payments certain.
However, HL will not assume responsibility in determining or monitoring
minimum distributions beginning at age 70 1/2.
When an Annuity is purchased by a Contract Owner for an Annuitant, unless
otherwise specified, DC-I or DC-II Accumulation Unit values will be applied to
provide a Variable Annuity under DC-II.
WHAT IS THE MINIMUM AMOUNT THAT I MAY SELECT FOR AN ANNUITY PAYMENT?
The minimum Annuity payment is $20.00. No election may be made which results
in a first payment of less than $20.00. If at any time Annuity payments are or
become less than $20.00, HL has the right to change the frequency of payment
to intervals that will result in payments of at least $20.00.
HOW ARE CONTRIBUTIONS MADE TO ESTABLISH MY ANNUITY ACCOUNT?
During the Annuity Period, contract values and any allowable additional
Contributions made by the Contract Owner for the purpose of effecting Annuity
payments under the contract (Deferred Compensation Plans Only) are, based upon
the information received from the Contract Owner, applied to establish
Annuitant's Accounts under the contracts to provide Fixed or Variable Annuity
payments.
At the end of the Accumulation Period with respect to a Participant's
Individual Account there is an automatic transfer of all DC-I values to DC-II
which are used to establish Annuitant's Accounts with respect to DC-II. Such
transfer will be effected by a transfer of ownership of DC-I interests in the
underlying securities to DC-II. The value of a Participant's Individual
Account that is transferred to DC-II hereunder will be without application of
any sales charges or other expenses, with the exception of any applicable
Premium Taxes. DC-II values held during the Accumulation Period under a
contract are retained in DC-II.
In addition to having the right to allocate the value of a Participant's
Individual Account held in the Separate Account during the Accumulation Period
to establish an Annuitant's Account during the Annuity Period, a Deferred
Compensation Plan Contract Owner (with respect to DC-I, only) may make
additional Contributions at the beginning of the Annuity Period for the
purpose of effecting increased Annuity payments for Participants. All such
additional Contributions shall be subject to a deduction for sales expenses,
as well as any applicable Premium Taxes as follows:
<TABLE>
<CAPTION>
TOTAL
ADDITIONAL CONTRIBUTION TO AN ANNUITANT'S ACCOUNT DEDUCTION
------------------------------------------------------------ ----------
<S> <C>
On the first $50,000.................................... .50 %
On the next $50,000..................................... 2.00 %
On the excess over $100,000............................. 1.00 %
</TABLE>
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<PAGE>
WHAT ARE THE AVAILABLE ANNUITY OPTIONS UNDER THE CONTRACTS?
OPTION 1: LIFE ANNUITY
A Life Annuity is an Annuity payable during the lifetime of the Annuitant
and terminating with the last monthly payment preceding the death of the
Annuitant. Life Annuity Options (Options 1-4) offer the maximum level of
monthly payments of any of the options since there is no guarantee of a
minimum number of payments nor a provision for a death benefit payable to a
Beneficiary.
It would be possible under this option for an Annuitant to receive only one
Annuity payment if he died prior to the due date of the second Annuity
payment, two if he died before the due date of the third Annuity payment, etc.
*OPTION 2: LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN
This Annuity option is an Annuity payable monthly during the lifetime of an
Annuitant with the provision that if, at the death of the Annuitant, payments
have been made for less than 120, 180 or 240 months, as elected, then the
present value as of the date of the Participant's death at the current dollar
amount at the date of death of any remaining guaranteed monthly payments will
be paid in one sum to the Beneficiary or Beneficiaries designated unless other
provisions will have been made and approved by HL.
*OPTION 3: UNIT REFUND LIFE ANNUITY
This Annuity option is an Annuity payable monthly during the lifetime of the
Annuitant terminating with the last payment due prior to the death of the
Annuitant except that an additional payment will be made to the Beneficiary or
Beneficiaries if (a) below exceeds (b) below:
total amount applied under the option
(a) = at the Annuity Commencement Date
--------------------------------------------------------------------
Annuity Unit value at the Annuity Commencement Date
number of Annuity Units represented number of monthly
(b) = by each monthly Annuity payment made X Annuity payments made
The amount of the additional payments will be determined by multiplying such
excess by the Annuity Unit value as of the date that proof of death is
received by HL.
OPTION 4: JOINT AND LAST SURVIVOR ANNUITY
An Annuity payable monthly during the joint lifetime of the Annuitant and a
designated second person, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
It would be possible under this Option for an Annuitant and designated
second person in the event of the common or simultaneous death of the parties
to receive only one payment in the event of death prior to the due date for
the second payment and so on.
*OPTION 5: PAYMENTS FOR A DESIGNATED PERIOD
An amount payable monthly for the number of years selected. Under the
contracts the minimum number of years is five.
In the event of the Annuitant's death prior to the end of the designated
period, any then remaining balance of proceeds will be paid in one sum to the
Beneficiary or Beneficiaries designated unless other provisions will have been
made and approved by HL. Option 5 is an option that does not involve life
contingencies and thus no mortality guarantee.
Surrenders are subject to the limitations set forth in the contract and any
applicable contingent deferred sales charges. (See "How are charges under
these contracts made?" page .)
* ON QUALIFIED PLANS, OPTIONS 2, 3 AND 5 ARE AVAILABLE ONLY IF THE GUARANTEED
PAYMENT PERIOD IS LESS THAN THE LIFE EXPECTANCY OF THE ANNUITANT AT THE TIME
THE OPTION BECOMES EFFECTIVE. SUCH LIFE EXPECTANCY SHALL BE COMPUTED ON THE
BASIS OF THE MORTALITY TABLE PRESCRIBED BY THE IRS, OR IF NONE IS PRESCRIBED,
THE MORTALITY TABLE THEN IN USE BY HL.
- - --------------------------------------------------------------------------------
UNDER ANY OF THE ANNUITY OPTIONS ABOVE, EXCEPT OPTION 5 (ON A VARIABLE BASIS),
NO SURRENDERS ARE PERMITTED AFTER ANNUITY PAYMENTS COMMENCE.
- - --------------------------------------------------------------------------------
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HOW ARE VARIABLE ANNUITY PAYMENTS DETERMINED?
The value of the Annuity Unit for each Sub-Account in the Separate Account
for any day is determined by multiplying the value for the preceding day by
the product of (1) the net investment factor (see "How is the Accumulation
Unit value determined?" commencing on page ) for the day for which the
Annuity Unit value is being calculated, and (2) a factor to neutralize the
assumed net investment rate discussed below.
When Annuity payments are to commence, the value of the contract is
determined as the product of the value of the Accumulation Unit credited to
each Sub-Account as of the close of business on the fifth business day
preceding the date the first Annuity payment is due and the number of
Accumulation Units credited to each Sub-Account as of the date the Annuity is
to commence.
The contract contains tables indicating the dollar amount of the first
monthly payment under the optional forms of Annuity for each $1,000 of value
of a Sub-Account under a contract. The first monthly payment varies according
to the form of Annuity selected. The contract contains Annuity tables derived
from the 1983a Individual Annuity Mortality Table with an assumed interest
rate ("A.I.R.") of 4.00% or 5.00% per annum. The total first monthly Annuity
payment is determined by multiplying the value (expressed in thousands of
dollars) of a Sub-Account (less any applicable Premium Taxes) by the amount of
the first monthly payment per $1,000 of value obtained from the tables in the
contracts. With respect to fixed annuities only, the current rate will be
applied if it is higher than the rate under the tables in the contracts.
Level Annuity payments would be provided if the net investment rate remained
constant and equal to the A.I.R. In fact, payments will vary up or down in the
proportion that the net investment rate varies up or down from the A.I.R. A
higher assumed interest rate may produce a higher initial payment but more
slowly rising and more rapidly falling subsequent payments than would a lower
interest rate assumption.
The amount of the first monthly Annuity payment, determined as described
above, is divided by the value of an Annuity Unit for the appropriate
Sub-Account as of the close of business on the fifth business day preceding
the day on which the payment is due in order to determine the number of
Annuity Units represented by the first payment. This number of Annuity Units
remains fixed during the Annuity Period, and in each subsequent month the
dollar amount of the Annuity payment is determined by multiplying this fixed
number of Annuity Units by the then current Annuity Unit value.
The Annuity payments will be made on the date selected. The Annuity Unit
value used in calculating the amount of the Annuity payments will be based on
an Annuity Unit value determined as of the close of business on a day not more
than the fifth business day preceding the date of the Annuity payment.
In order to comply with the requirements of the Supreme Court decision dated
July 6, 1983, in the case of Norris vs. Arizona Governing Committee, HL will,
with respect to all contracts which have been issued with sex distinct rates,
increase the guaranteed Annuity rates provided for females under the contracts
to the guaranteed Annuity rate provided for males. Thus, there will no longer
be any sex distinct Annuity rates with respect to those contracts. With
respect to new contracts, Annuity rates will be based on a guaranteed Annuity
rate table which is identical for both males and females.
Here is an example of how a variable annuity is determined:
ILLUSTRATION OF ANNUITY PAYMENTS:
(UNISEX) AGE 65, LIFE ANNUITY WITH 120 PAYMENTS CERTAIN
<TABLE>
<C> <S> <C>
1. Net amount applied........................................ $ 139,782.50
2. Initial monthly income per $1,000 of payment applied...... 6.13
3. Initial monthly payment (1 x 2 DIVIDED BY 1,000)......... 856.87
4. Annuity Unit Value........................................ 3.125
5. Number of monthly annuity units (3 DIVIDED BY 4)......... 274.198
6. Assume annuity unit value of second month equal to........ 2.897
7. Second monthly payment (6 X 5)............................ 794.35
8. Assume annuity unit value for third month equal to........ 3.415
9. Third month payment (8 X 5)............................... 936.39
</TABLE>
The above figures are simply to illustrate the calculation of a variable
annuity and have no bearing on the actual historical record of any Separate
Account.
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<PAGE>
CAN A CONTRACT BE MODIFIED?
The contracts may, subject to any federal and state regulatory restrictions,
be modified at any time by written agreement between the Contract Owner and
HL. No modification will affect the amount or term of any Annuities begun
prior to the effective date of the modification, unless it is required to
conform the contract to, or give the Contract Owner the benefit of, any
federal or state statutes or any rule or regulation of the U.S. Treasury
Department or Internal Revenue Service.
On or after the fifth anniversary of any contract HL may change, from time
to time, any or all of the terms of the contracts by giving 90 days advance
written notice to the Contract Owner, except that the Annuity tables,
guaranteed interest rates and the contingent deferred sales charges which are
applicable at the time a Participant's Individual Account is established under
a contract, will continue to be applicable. In addition, the limitations on
the deductions for the Mortality, Expense Risks and Administrative
Undertakings and the Annual Contract Fee will continue to apply in all
Contract Years.
HL reserves the right to modify the contract, but only if such modification:
(i) is necessary to make the contract or the Separate Account comply with any
law or regulation issued by a governmental agency to which HL is subject; or
(ii) is necessary to assure continued qualification of the contract under the
Code or other federal or state laws relating to retirement annuities or
annuity contracts; or (iii) is necessary to reflect a change in the operation
of the Separate Account or the Sub-Account(s); or (iv) provides additional
Separate Account options; or (v) withdraws Separate Account options. In the
event of any such modification HL will provide notice to the Contract Owner or
to the payee(s) during the Annuity period. HL may also make appropriate
endorsement in the contract to reflect such modification.
CHARGES UNDER THE CONTRACT
HOW ARE THE CHARGES UNDER THESE CONTRACTS MADE?
No deduction for sales expense is made at the time of allocation of
Contributions to the contracts. A deduction for contingent deferred sales
charges is made if there is any surrender of contract values during the first
12 Participant Contract Years. During the first 6 years thereof, a maximum
deduction of 7% will be made against the full amount of any such surrender.
During the next 6 years thereof, a maximum deduction of 5% will be made
against the full amount of any such surrender. Such charges will in no event
ever exceed 8.50% when applied as a percentage against the sum of all
Contributions to a Participant's Individual Account. The amount or term of the
contingent deferred sales charge may be reduced (see "Experience Rating of
Contracts", page ).
In the case of a redemption in which you request a certain dollar amount be
withdrawn, the sales charge is deducted from the amount withdrawn and the
balance is paid to you. Example: You request a total withdrawal, your account
value is $1,000 and the applicable sales load is 5%. Your Sub-Account(s) will
be surrendered and you will receive $950 (i.e., the $1,000 total withdrawal
less the 5% sales charge). This is the method applicable on a full surrender
of your contract. In the case of a partial redemption in which you request to
receive a specified amount, the sales charge will be calculated on the total
amount that must be withdrawn from your Sub-Account(s) in order to provide you
with the amount requested. Example: You request to receive $1,000 and the
applicable sales load is 5%. Your Sub-Account(s) will be reduced by $1,052.63
(i.e., a total withdrawal of $1,052.63 which results in a $52.63 sales charge
($1,052.63 x 5%) and a net amount paid to you of $1,000 as requested).
HL reserves the right to limit any increase in the Contributions made to a
Participant's Individual Account under any contract to not more than three
times the total Contributions made on behalf of such Participant during the
initial 12 consecutive months following the Date of Coverage. Increases in
excess of those described will be accepted only with the consent of HL and
subject to the then current deductions being made under the contracts.
IS THERE EVER A TIME WHEN THE SALES CHARGES DO NOT APPLY?
No deduction for contingent deferred sales charges will be made on
contracts: (1) in the event of death of a Participant, (2) if the value of a
Participant's Individual Account is paid out under one of the available
Annuity options under the contracts (except that a surrender out of Annuity
Option 5 is subject to sales charges, if applicable) or (3) if on Public
Employee Deferred Compensation Plans only, a Participant in a
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Plan makes a financial hardship withdrawal as defined in the Regulations
issued by the IRS with respect to the IRC Section 457 governmental deferred
compensation plans. The Plan of the Employer must also provide for such
hardship withdrawals. Participants with a Date of Coverage prior to October
15, 1986 may withdraw up to 10% of the value of their Individual Account on a
non-cumulative basis each Participant's Contract Year, after the first,
without application of contingent deferred sales charges. Participant's with a
Date of Coverage on or after October 15, 1986 do not have this 10% withdrawal
privilege.
WHAT DO THE SALES CHARGES COVER?
The contingent deferred sales charges, when applicable, will be used to
cover expenses relating to the sale and distribution of the contracts,
including commissions paid to any distribution organization and its sales
personnel, the cost of preparing sales literature and other promotional
activities. It is anticipated that gross commissions paid on the sale of the
contracts will not exceed 5% of a Contribution. To the extent that these
charges do not cover such distribution expenses they will be borne by HL from
its general assets, including surplus or possible profit from mortality and
expense risk charges.
WHAT IS THE MORTALITY, EXPENSE RISK AND ADMINISTRATIVE CHARGE?
Although Variable Annuity payments made under the contracts will vary in
accordance with the investment performance of the underlying Fund shares held
in the Sub-Account(s), the payments will not be affected by (a) HL's actual
mortality experience among Annuitants before or after retirement or (b) HL's
actual expenses, including certain administrative expenses, if greater than
the deductions provided for in the contracts because of the expense and
mortality undertakings by HL.
In providing an expense undertaking with respect to both DC-I and DC-II, HL
assumes the risk that the deductions for contingent deferred sales charges,
and the Annual Contract Fee under the contracts may be insufficient to cover
the actual future costs.
The mortality undertaking provided by HL under the contracts, assuming the
selection of one of the forms of life annuities, is to make monthly Annuity
payments (determined in accordance with the annuity tables and other
provisions contained in the contract) to Contract Owners on Annuitants'
Accounts regardless of how long all Annuitants may live and regardless of how
long all Annuitants as a group may live. This undertaking assures a Contract
Owner that neither the longevity of an Annuitant nor an improvement in life
expectancy will have any adverse effect on the monthly Annuity payments the
Employee will receive under the contract. It thus relieves the Contract Owner
from the risk that Participants in the Plan will outlive the funds
accumulated. The mortality undertaking is based on HL's present actuarial
determination of expected mortality rates among all Annuitants.
If actual experience among Annuitants deviates from HL's actuarial
determination of expected mortality rates among Annuitants because, as a
group, their longevity is longer than anticipated, HL must provide amounts
from its general funds to fulfill its contract obligations. In that event, a
loss will fall on HL. Conversely, if longevity among Annuitants is lower than
anticipated, a gain will result to HL. HL also assumes the liability for
payment of the Minimum Death Benefit provided under the contract.
The administrative undertaking provided by HL assures the Contract Owner
that administration will be provided throughout the entire life of the
contract.
For assuming these risks HL presently charges 1.10% (.70% for mortality,
.15% for expense and .25% for administrative undertakings) of the average
daily net assets of DC-I and 1.25% (.85% for mortality, .15% for expense and
.25% for administrative undertakings) of the average daily net assets of
DC-II, as appropriate. The rate charged for the expense, mortality and
administrative undertakings under the contracts may be reduced (see
"Experience Rating of Contracts", page .) The rate charged for the expense,
mortality and administrative undertakings may be periodically increased by HL
subject to a maximum annual rate of 2.00%, provided, however, that no such
increase will occur unless the Commission shall have first approved such
increase.
ARE THERE ANY OTHER ADMINISTRATIVE CHARGES?
There may be an Annual Contract Fee deduction from the value of each
Participant's Individual Account under the contracts. The maximum Annual
Contract Fee is $18 per year but may be reduced or waived (see "Experience
Rating of Contracts", page .)
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The Annual Contract Fee will be deducted from the value of each such Account
on the last business day of each Participant's Contract Year provided,
however, that if the value of a Participant's Individual Account is redeemed
in full at any time before the last business day of the Participant's Contract
Year, then the Annual Contract Fee charge will be deducted from the proceeds
of such redemption. No deduction for the Annual Contract Fee will be made
during the Annuity Period under the contracts.
In the event that the contract contains a General Account option or the
contract is issued in conjunction with a separate HL General Account contract,
the Annual Contract Fee as described above will be charged against DC-I or
DC-II (as applicable) and the General Account contract or option on a pro rata
basis.
EXPERIENCE RATING OF CONTRACTS
Certain of the charges and fees described in this Prospectus may be reduced
("experience rated") for contracts depending on the total number of
Participants, the total of all Participants' Individual Accounts and/or
anticipated present or future expense levels. HL, in its discretion, may
experience rate a contract (either prospectively or retrospectively) by: (1)
reducing the amount or term of any applicable contingent deferred sales
charge, (2) reducing the amount of, or waiving the Annual Contract Fee, (3)
reducing the Transfer Fee, (4) reducing the mortality and expense risk charge,
or (5) by any combination of the above. Reductions in these charges will not
be unfairly discriminatory against any person, including the affected Contract
Owners/Participants funded by the Separate Account. Experience rating credits
have been given on certain cases.
HOW MUCH ARE THE DEDUCTIONS FOR PREMIUM TAXES ON THESE CONTRACTS?
A deduction is also made for Premium Taxes, if applicable imposed by a state
or other governmental entity. Certain states impose a Premium Tax, ranging up
to 4.0%. On any contract subject to a Premium Taxes, HL will pay the taxes
imposed by the applicable taxing authorities. HL, at its sole discretion, will
deduct the taxes from Contributions when received, from the proceeds at
surrender, or from the amount applied to effect an Annuity at the time Annuity
payments commence.
ARE THERE ANY OTHER DEDUCTIONS?
Reallocation of monies between or among Sub-Accounts under the contracts may
be subject to a $5.00 charge for each such transfer (see "Experience Rating of
Contracts", page ).
HARTFORD LIFE INSURANCE COMPANY
AND THE FUNDS
WHAT IS HL?
HL was originally incorporated under the laws of Massachusetts on June 5,
1902. It was subsequently redomiciled to Connecticut. It is a stock life
insurance company engaged in the business of writing health and life
insurance, both ordinary and group, in all states of the United States and the
District of Columbia. The offices of HL are located in Simsbury, Connecticut;
however, its mailing address is P.O. Box 2999, Hartford, CT 06104-2999. HL is
ultimately 100% owned by Hartford Fire Insurance Company, one of the largest
multiple lines insurance carriers in the United States. Hartford Fire
Insurance Company is a subsidiary of ITT Corporation. HL has an A++ (superior)
rating from A.M. Best and Company, Inc. on the basis of its financial
soundness and operating performance, the highest ratings provided by this
service. HL has an AA+ rating from Standard & Poor's and Duff and Phelps
highest rating (AAA) on the basis of its claims paying ability.
These ratings do not apply to the performance of the Separate Account.
However, the contractual obligations under this variable annuity are the
general corporate obligations of HL. These ratings do apply to HL's ability to
meet its insurance obligations under the contracts.
WHAT ARE THE FUNDS?
Hartford Stock Fund, Inc. was organized on March 11, 1976. The Hartford
Socially Responsive Fund (Calvert Socially Responsible Series) is a series of
the Acacia Capital Corporation, which was incorporated
25
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on September 27, 1982. Hartford Advisers Fund, Inc., Hartford Bond Fund, Inc.,
Hartford U.S. Government Money Market Fund, Inc., and HVA Money Market Fund,
Inc. were all organized on December 1, 1982. Hartford Index Fund, Inc. was
organized on May 16, 1983. Hartford Capital Appreciation Fund, Inc. was
organized on September 20, 1983. Hartford Mortgage Securities Fund, Inc. was
organized on October 5, 1984. Hartford International Opportunities Fund, Inc.
was organized on January 25, 1990. All of the Funds were incorporated under
the laws of the State of Maryland and are collectively referred to as the
"Funds."
The investment objectives of each of the Funds are as follows:
HARTFORD ADVISERS FUND, INC.
To achieve 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. The investment
adviser will vary the investments of the Fund among equity and debt securities
and money market instruments depending upon its analysis of market trends.
Total rate of return consists of current income, including dividends, interest
and discount accruals and capital appreciation.
HARTFORD CAPITAL APPRECIATION FUND, INC.
To achieve growth of capital by investing in securities selected solely on
the basis of potential for capital appreciation; income, if any, is an
incidental consideration.
HARTFORD BOND FUND, INC.
To achieve maximum current income consistent with preservation of capital by
investing primarily in fixed-income securities.
HARTFORD INDEX FUND, INC.
To provide investment results that correspond to the price and yield
performance of publicly-traded common stocks in the aggregate, as represented
by the Standard & Poor's 500 Composite Stock Price Index (the "Index"). The
Fund is neither sponsored by, nor affiliated with, Standard & Poor's
Corporation.
HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.
To achieve long-term total return consistent with prudent investment risk
through investment primarily in equity securities issued by foreign companies.
HARTFORD MORTGAGE SECURITIES FUND, INC.
To achieve 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 ("GNMA").
HARTFORD SOCIALLY RESPONSIVE FUND, INC. (CALVERT SOCIALLY RESPONSIBLE
SERIES, ACACIA CAPITAL CORPORATION)
To seek growth of capital through investments in enterprises which make a
significant contribution to society through products and services and through
the way they do business.
HARTFORD STOCK FUND, INC.
To achieve long-term capital growth primarily through capital appreciation,
with income a secondary consideration, by investing in equity-type securities.
HARTFORD U.S. GOVERNMENT MONEY MARKET FUND, INC.
To achieve maximum current income consistent with preservation of capital by
investing in short-term, marketable obligations issued or guaranteed by the
United States Government or by agencies or instrumentalities of the United
States Government whether or not they are guaranteed by the full faith and
credit of the federal government.
HVA MONEY MARKET FUND, INC.
To achieve maximum current income consistent with liquidity and preservation
of capital by investing in money market securities.
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ALL FUNDS
The Funds are available only to serve as the underlying investment for the
variable annuity and variable life insurance contracts issued by HL.
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 HL and the Funds do not currently
foresee any such disadvantages either to variable annuity Contract Owners or to
variable life insurance Policy Owners, the Funds' 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 the Funds were to conclude
that separate funds should be established for variable life and variable annuity
separate accounts, the variable annuity Contract Owners would not bear any
expenses attendant to the establishment of such separate funds, but variable
annuity Contract Owners and variable life insurance Policy Owners would no
longer have the economics of scale resulting from a larger combined fund.
Shares of Hartford Socially Responsive Fund, a series of Acacia Capital
Corporation which is unaffiliated with HL, are offered to other unaffiliated
separate accounts. HL and the Board of Trustees of Acacia Capital Corporation
intend to monitor events to identify any material irreconcilable conflicts which
may arise and to determine what action, if any, should be taken in response
thereto.
HL reserves the right, subject to compliance with the law, to substitute the
shares of any other registered investment company for the shares of any Fund
held by the Separate Account. Substitution may occur if shares of the Fund(s)
become unavailable or due to changes in applicable law or interpretations of
law. Current law requires notification to you of any such substitution and
approval of the Securities and Exchange Commission. HL also reserves the right,
subject to compliance with the law to offer additional Funds with differing
investment objectives.
The U.S. Government Money Market Fund and Advisers Fund Sub-Accounts were
not available under contracts issued prior to May 2, 1983. The Capital
Appreciation Fund Sub-Account was not available under contracts issued prior to
May 1, 1984. The Mortgage Securities Fund Sub-Account was not available under
contracts issued prior to January 15, 1985. The Index Fund Sub-Account was not
available under contracts issued prior to May 1, 1987. Funds not available prior
to the issue date of a contract may be requested in writing by the Contract
Owner.
The Hartford Investment Management Company ("HIMCO") has been serving as
investment manager or adviser to each of the Funds. In addition, Wellington
Management Company ("Wellington") has served as sub-investment adviser to
certain of the Funds since August 1984.
HIMCO serves as investment manager for Hartford Advisers, Hartford Capital
Appreciation, Hartford International Opportunities and Hartford Stock Funds
pursuant to an Investment Management Agreement between each. Wellington serves
as sub-investment adviser to each of these funds pursuant to a Sub-Investment
Advisory Agreement between Wellington and HIMCO on behalf of each fund.
HIMCO serves as the investment adviser to Hartford Bond, Hartford Index,
Hartford Mortgage Securities, Hartford U.S. Government Money Market and HVA
Money Market Funds pursuant to an Investment Advisory Agreement between these
funds and HIMCO.
The Calvert Asset Management Company serves as investment adviser and United
States Trust Company of Boston serves as sub-investment adviser to Hartford
Socially Responsive Fund.
A full description of the Funds, their investment policies and restrictions,
risks, charges and expenses and all other aspects of their operations is
contained in the accompanying Funds' Prospectus which should be read in
conjunction with this Prospectus before investing, and in the Funds' Statement
of Additional Information which may be ordered from HL.
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<PAGE>
DOES HL HAVE ANY INTEREST IN THE FUNDS?
At December 31, 1994, certain HL group pension contracts held direct
interest in shares as follows:
<TABLE>
<CAPTION>
PERCENT OF
SHARES TOTAL SHARES
---------- ------------
<S> <C> <C>
Hartford Advisers Fund, Inc....................... 10,709,364 0.56%
Hartford Capital Appreciation Fund, Inc........... 5,313,800 1.31%
Hartford Index Fund, Inc.......................... 9,462,900 9.14%
Hartford International Opportunities Fund, Inc.... 5,547,408 1.16%
Hartford Mortgage Securities Fund, Inc............ 16,249,689 5.26%
Hartford Stock Fund, Inc.......................... 65,899 0.02%
</TABLE>
FEDERAL TAX CONSIDERATIONS
WHAT ARE SOME OF THE FEDERAL TAX CONSEQUENCES WHICH AFFECT THESE CONTRACTS?
A. GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE CONTRACT OWNER INVOLVED AND THE TYPE OF PLAN UNDER
WHICH THE CONTRACT IS PURCHASED, LEGAL AND TAX ADVICE MAY BE NEEDED BY A
PERSON, EMPLOYER OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A CONTRACT
DESCRIBED HEREIN.
It should be understood that any detailed description of the federal income
tax consequences regarding the purchase of these contracts cannot be made in
this Prospectus and that special tax rules may be applicable with respect to
certain purchase situations not discussed herein. For detailed information, a
qualified tax adviser should always be consulted. This discussion is based on
HL's understanding of current federal income tax laws as they are currently
interpreted.
B. HL AND DC-I AND DC-II
DC-I is not taxed as a part of HL. The taxation of DC-I is governed by
Subchapter M of Chapter 1 of the Internal Revenue Code pursuant to an IRS
Private Letter Ruling issued with respect to DC-I. By distributing
substantially all of the net income and realized capital gains of DC-I to
Contract Owners no federal income tax liability will be incurred by DC-I on
the income and gain so distributed. While HL has no reason to believe that the
above referenced Private Letter Ruling will ever be withdrawn by the IRS, in
the event that it is the taxation of DC-I and DC-II would be identical from
the effective date of any such withdrawal.
DC-II is taxed as part of HL which is taxed as a life insurance company in
accordance with the Internal Revenue Code. Accordingly, DC-II will not be
taxed as a "regulated investment company" under Subchapter M of the Code.
Investment income and any realized capital gains on the assets of DC-II are
reinvested and are taken into account in determining the value of the
Accumulation and Annuity Units. (See "How is the Accumulation Unit value
determined?" commencing on page .) As a result, such investment income and
realized capital gains are automatically applied to increase reserves under
the contract.
No taxes are due on interest, dividends and short-term or long-term capital
gains earned by DC-II with respect to qualified or non-qualified contracts.
C. INFORMATION REGARDING TAX QUALIFIED PLANS
THE TAX REFORM ACT OF 1986 AND THE TECHNICAL AND MISCELLANEOUS REVENUE ACT
OF 1988 HAVE MADE SUBSTANTIAL CHANGES TO QUALIFIED PLANS. YOU SHOULD CONSULT
YOUR TAX ADVISER TO FULLY ADDRESS ALL CHANGES OCCURRING AS A RESULT OF THE TAX
REFORM ACT AND THEIR EFFECT ON QUALIFIED PLANS.
1. CONTRIBUTIONS
A. PENSION, PROFIT-SHARING AND SIMPLIFIED EMPLOYEE PENSION PLANS
Contributions to pension or profit-sharing plans (described in Section
401(a) and 401(k), if applicable, and exempt from taxation under Section
501(a) of the Code), and Simplified Employee Pension Plans
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(described in Section 408(k)), which do not exceed certain limitations
prescribed in the Code are fully tax-deductible to the employer. Such
contributions are not currently taxable to the covered employees, and
increases in the value of contracts purchased with such contributions are not
subject to taxation until received by the covered employees or their
Beneficiaries in the form of Annuity payments or other distributions.
B. TAX-DEFERRED ANNUITY PLANS FOR PUBLIC SCHOOL TEACHERS AND EMPLOYERS AND
EMPLOYEES OF CERTAIN TAX-EXEMPT ORGANIZATIONS
Contributions to tax-deferred annuity plans (described in Section 403(a) and
403(b) of the Code) by employers are not includable within the employee's
income to the extent those contributions do not exceed the lesser of $9,500 or
the exclusion allowance. Generally, the exclusion allowance is equal to 20% of
the employee's includable compensation for his most recent full year of
employment multiplied by the number of years of his service, less the
aggregate amount contributed by the employer for Annuity contracts which were
not included within the gross income of the employee for any prior taxable
year. There are special provisions which may allow an employee of an
educational institution, a hospital or a home health service agency to elect
an overall limitation different from the limitation described above.
C. DEFERRED COMPENSATION PLANS FOR TAX-EXEMPT ORGANIZATIONS AND STATE AND
LOCAL GOVERNMENTS
Employees may contribute on a before tax basis to the Deferred Compensation
Plan of their employer in accordance with the employer's Plan and Section 457
of the Code. Section 457 places limitations on contributions to Deferred
Compensation Plans maintained by a State ("State" means a State, a political
sub-division of a State, and an agency or instrumentality of a State or
political sub-division of a State) or other tax-exempt organization.
Generally, the limitation is 33 1/3% of includable compensation (25% of gross
compensation) or $7,500, whichever is less. The plan may also provide for
additional contributions during the three taxable years ending before normal
retirement age of a Participant for a total of up to $15,000 per year for such
three years.
An employee electing to participate in a plan should understand that his
rights and benefits are governed strictly by the terms of the plan, that he is
in fact a general creditor of the employer under the terms of the plan, that
the employer is legal owner of any contract issued with respect to the plan
and that the employer as owner of the contract(s) retains all voting and
redemption rights which may accrue to the contract(s) issued with respect to
the plan. The participating employee should look to the terms of his plan for
any charges in regard to participating therein other than those disclosed in
his Prospectus.
D. INDIVIDUAL RETIREMENT ANNUITIES ("IRA'S")
Individuals may contribute and deduct the lesser of $2,000 or 100 percent of
their compensation to an IRA. In the case of a spousal IRA, the maximum
deduction is the lesser of $2,250 or 100 percent of compensation. The
deduction for contributions is phased out between $40,000 and $50,000 of
adjusted gross income (AGI) for a married individual (and between $25,000 and
$35,000 for single individuals) if either the individual or his or her spouse
is an active Participant in any Section 401(a), 403(a), 403(b) or 408(k) plan
regardless of whether the individual's interest is vested.
To the extent deductible contributions are not allowed, individuals may make
designated non-deductible contributions to an IRA, subject to the above
limits.
2. DISTRIBUTIONS
A. PENSION AND PROFIT-SHARING PLANS, TAX-SHELTERED ANNUITIES, INDIVIDUAL
RETIREMENT ANNUITIES
Annuity payments made under the contracts are taxable under Section 72 of
the Code as ordinary income, in the year of receipt, to the extent that they
exceed the "excludable amount." The investment in the contract is normally the
aggregate amount of the contributions made by or on behalf of an employee
which were included as a part of his taxable income and not deducted. Thus,
annual contributions for an IRA are not included in the investment in the
contract. The employee's investment in the contract is divided by the expected
number of payments to be made under the contract. The amount so computed
constitutes the "excludable amount," which is the amount of each annuity
payment considered a return of investment in each year and, therefore, not
taxable. Once the employee's investment in the contract is recouped, the full
amount of each payment will be fully taxable. If the employee dies prior to
recouping his or her investment in the contract, a deduction is allowed for
the last taxable year. The rules for determining the excludable amount are
contained in Section 72 of the Code.
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<PAGE>
Generally, distributions or withdrawals prior to age 59 1/2 may be subject
to an additional income tax of 10% of the amount includable in income. This
additional tax does not apply to distributions made after the employee's
death, on account of disability and distributions in the form of a life
annuity and, except in the case of an IRA, certain distributions after
separation from service at or after age 55 and certain distributions for
eligible medical expenses. A life annuity is defined as a scheduled series of
substantially equal periodic payments for the life or life expectancy of the
Participant (or the joint lives or life expectancies of the Participant and
Beneficiary).
The taxation of withdrawals and other distributions varies depending on the
type of distribution and the type of plan from which the distribution is made.
With respect to tax-deferred annuity contracts under Section 403(b),
contributions to the contract made after December 31, 1988 and any increases
in cash value after that date may not be distributed prior to attaining age
59 1/2, separation from service, death or disability. Contributions (but not
earnings) made after December 31, 1988 may also be distributed by reason of
financial hardship.
Generally, in order to avoid a penalty tax, annuity payments, periodic
payments or annual distributions must commence by April 1 of the calendar year
following the year in which the Participant attains age 70 1/2. The entire
interest of the Participant must be distributed beginning no later than this
required beginning date over a period which may not extend beyond a maximum of
the lives or life expectancies of the Participant and a designated
Beneficiary. Each annual distribution must equal or exceed a "minimum
distribution amount" which is determined by dividing the account balance by
the applicable life expectancy. With respect to a Section 403(b) plan, this
account balance is based on earnings and contributions after December 31,
1986. In addition, minimum distribution incidental benefit rules may require a
larger annual distribution based upon dividing the entire account balance as
of the close of business on the last day of the previous calendar year by a
factor promulgated by the Internal Revenue Service which ranges from 26.2 (at
age 70) to 1.8 (at age 115). Special rules apply to require that distributions
be made to Beneficiaries after the death of the Participant. A penalty tax of
up to 50% of the amount which should be distributed may be imposed by the
Internal Revenue Service for failure to make such distribution.
B. DEFERRED COMPENSATION PLANS FOR TAX-EXEMPT ORGANIZATIONS AND STATE AND
LOCAL GOVERNMENTS
Generally, in order to avoid a penalty tax, annuity payments, periodic
payments or annual distributions must commence by April 1 of the calendar year
following the year in which the Participant attains age 70 1/2. Minimum
distributions under Section 457 Deferred Compensation Plan may be further
deferred if the Participant remains employed. The entire interest of the
Participant must be distributed beginning no later than this required
beginning date over a period which may not extend beyond a maximum of the life
expectancy of the Participant and a designated Beneficiary. Each annual
distribution must equal or exceed a "minimum distribution amount" which is
determined by dividing the account balance by the applicable life expectancy.
This account balance is generally based upon the account value as of the close
of business on the last day of the previous calendar year. In addition,
minimum distribution incidental benefit rules may require a larger annual
distribution based upon dividing the account balance by a factor promulgated
by the Internal Revenue Service which ranges from 26.2 (at age 70) to 1.8 (at
age 115). Special rules apply to require that distributions be made to
Beneficiaries after the death of the Participant. A penalty tax of up to 50%
of the amount which should be distributed may be imposed by the Internal
Revenue Service for failure to make a distribution.
If the Contract Owner is a Section 457 plan, certain distributions are
required to be made upon the death of a Participant. In the event of the death
of a Participant prior to the Annuity Commencement Date, the entire interest
in the Participant's contract must be distributed within 5 years after the
Participant's death and in the event of the Participant's death which occurs
on or after the Annuity Commencement Date, any remaining interest in the
Contract must be paid at least as rapidly as under the method of distribution
in effect at the time of death; except that if the benefit is payable over a
period not extending beyond the life expectancy of the Beneficiary or over the
life of the Beneficiary, such distribution must commence within one year of
the date of death.
Upon receipt of any monies pursuant to the terms of a Deferred Compensation
Plan for a tax-exempt organization, state or local government under Section
457 of the Code, such monies are taxable to such employee as ordinary income
in the year in which it is received.
30
<PAGE>
D. FEDERAL INCOME TAX WITHHOLDING
The portion of a distribution which is taxable income to the recipient will
be subject to federal income tax withholding, pursuant to Section 3405 of the
Internal Revenue Code. The application of this provision is summarized below:
1. ELIGIBLE ROLLOVER DISTRIBUTIONS
a. The Unemployment Compensation Amendments Act of 1992 requires that
federal income taxes be withheld from certain distributions from
tax-qualified retirement plans and from tax-sheltered annuities under
Section 403(b). These provisions DO NOT APPLY to distributions from
individual retirement annuities under section 408(b) or from deferred
compensation programs under section 457.
b. If any portion of a distribution is an "eligible rollover distribution",
the law requires that 20% of that amount be withheld. This amount is sent
to the IRS as withheld income taxes. The following types of payments DO
NOT constitute an eligible rollover distribution (and, therefore, the
mandatory withholding rules will not apply):
-- the non-taxable portion of the distribution;
-- distributions which are part of a series of equal (or substantially
equal) payments made at least annually for your lifetime (or your life
expectancy), or your lifetime and your Beneficiary's lifetime (or life
expectancies), or for a period of ten years or more.
-- required minimum distributions made pursuant to section 401(a)(9) of
the IRC;
c. However, these mandatory withholding requirements do not apply in the
event of all or a portion of any eligible rollover distribution is paid
in a "direct rollover". A direct rollover is the direct payment of an
eligible rollover distribution or portion thereof to an individual
retirement arrangement or annuity (IRA) or to another qualified employer
plan. IF A DIRECT ROLLOVER IS ELECTED, NO INCOME TAX WILL BE WITHHELD.
d. If any portion of a distribution is not an eligible rollover distribution
but is taxable, the mandatory withholding rules described above do not
apply. In this case, the voluntary withholding rules described below
apply.
2. NON-ELIGIBLE ROLLOVER DISTRIBUTIONS
A. NON-PERIODIC DISTRIBUTIONS
The portion of a non-periodic distribution which constitutes taxable income
will be subject to federal income tax withholding unless the recipient elects
not to have taxes withheld. If an election not to have taxes withheld is not
provided, 10% of the taxable distribution will be withheld as federal income
tax. Election forms will be provided at the time distributions are requested.
B. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN
ONE YEAR)
The portion of a periodic distribution which constitutes taxable income will
be subject to federal income tax withholding as if the recipient were married
claiming three exemptions. A recipient may elect not to have income taxes
withheld or have income taxes withheld at a different rate by providing a
completed election form. Election forms will be provided at the time
distributions are requested.
E. ANY DISTRIBUTION FROM PLANS DESCRIBED IN SECTION 457 OF THE INTERNAL REVENUE
CODE IS SUBJECT TO THE REGULAR WAGE WITHHOLDING RULES.
F. DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable annuity contract (other
than a pension plan contract) will not be treated as an annuity for any period
during which the investments made by the separate account or underlying fund
are not adequately diversified in accordance with regulations prescribed by
the Treasury. If a contract is not treated as an annuity, the Contract Owner
will be subject to income tax on the annual increases in cash value. The
Treasury has issued diversification regulations which, among other things,
require that no more than 55% of the assets of mutual funds (such as the HL
mutual funds) underlying a variable annuity contract, be invested in any one
investment. In determining whether the diversification standards are met, each
United States Government Agency or instrumentality shall be treated as a
separate issuer. If the diversification standards are not met, non-pension
Contract Owners will be subject to current tax on the increase in cash value
in the contract.
31
<PAGE>
G. NON-NATURAL PERSONS, CORPORATIONS
The annual increase in the value of the contract is currently includable in
gross income of a non-natural person. There is an exception for annuities held
by structured settlement companies and annuities held by an employer with
respect to a terminated pension plan. A non-natural person which is a tax-exempt
entity for federal tax purposes will not be subject to income tax as a result of
this provision.
MISCELLANEOUS
WHAT ARE MY VOTING RIGHTS?
HL shall notify the Contract Owner of any Fund shareholders' meeting if the
shares held for the Contract Owner's accounts may be voted at such meetings.
HL shall also send proxy materials and a form of instruction by means of which
the Contract Owner can instruct HL with respect to the voting of the Fund
shares held for the Contract Owner's account. In connection with the voting of
Fund shares held by it, HL shall arrange for the handling and tallying of
proxies received from Contract Owners. HL as such, shall have no right, except
as hereinafter provided, to vote any Fund shares held by it hereunder which
may be registered in its name or the names of its nominees. HL will, however,
vote the Fund shares held by it in accordance with the instructions received
from the Contract Owners for whose accounts the Fund shares are held. If a
Contract Owner desires to attend any meeting at which shares held for the
Contract Owner's benefit may be voted, the Contract Owner may request HL to
furnish a proxy or otherwise arrange for the exercise of voting rights with
respect to the Fund shares held for such Contract Owner's account. In the
event that the Contract Owner gives no instructions or leaves the manner of
voting discretionary, HL will vote such shares of the appropriate Fund,
including any of its own shares in the same proportion as shares of that Fund
for which instructions have been received.
Every Participant under a contract issued with respect to DC-II who has a
full (100%) vested interest under a group contract, shall receive proxy
material and a form of instruction by means of which Participants may instruct
the Contract Owner with respect to the number of votes attributable to his
individual participation under a group contract.
A Contract Owner or Participant, as appropriate, is entitled to one full or
fractional vote for each full or fractional Accumulation or Annuity Unit
owned. The Contract Owner has voting rights throughout the life of the
contract. The vested Participant has voting rights for as long as
participation in the contract continues. Voting rights attach only to Separate
Account interests.
During the Annuity period under a contract the number of votes will decrease
as the assets held to fund Annuity benefits decrease.
WILL OTHER CONTRACTS BE PARTICIPATING IN THE SEPARATE ACCOUNTS?
In addition to the contracts described in this Prospectus, it is
contemplated that other forms of group or individual annuities may be sold
providing benefits which vary in accordance with the investment experience of
the Separate Accounts.
HOW ARE THE CONTRACTS SOLD?
Hartford Equity Sales Company, Inc. ("HESCO") currently serves as Principal
Underwriter for the securities issued with respect to the Separate Account.
Hartford Securities Distribution Company, Inc. ("HSD") will replace HESCO as
principal underwriter upon approval by the Commission, the National
Association of Securities Dealers, Inc. ("NASD") and applicable state
regulatory authorities.
Both HESCO and HSD are wholly-owned subsidiaries of Hartford Life Insurance
Company. The principal business address of HESCO and HSD is the same as
Hartford Life Insurance Company.
The securities will be sold by salespersons of HESCO, and subsequently HSD,
who represent HL as insurance and Variable Annuity agents and who are
registered representatives or Broker-Dealers who have entered into
distribution agreements with HESCO, and subsequently HSD.
32
<PAGE>
HESCO is registered with the Commission under the Securities Exchange Act of
1934 as a Broker-Dealer and is a member of the NASD. HSD will be registered
with the Commission under the Securities Exchange Act of 1934 as a
Broker-Dealer and will become a member of the NASD.
Compensation will be paid by HL to registered representatives for the sale
of contracts up to a maximum of 5% of initial Contributions and .50% of all
subsequent Contributions. Sales compensation may be reduced.
WHO IS THE CUSTODIAN OF THE SEPARATE ACCOUNTS' ASSETS?
HL is the custodian of the Separate Accounts' assets.
ARE THERE ANY MATERIAL LEGAL PROCEEDINGS AFFECTING THE SEPARATE ACCOUNTS?
No.
ARE YOU RELYING ON ANY EXPERTS AS TO ANY PORTION OF THIS PROSPECTUS?
The financial statements and schedules included in this prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with
respect thereto, and are included herein in reliance upon the authority of
said firm as experts in accounting and auditing.
HOW MAY I GET ADDITIONAL INFORMATION?
Inquiries will be answered by calling your representative or by writing:
Hartford Life Insurance Company
Attn: RPVA Administration
P.O. Box 2999
Hartford, CT 06104-2999
33
<PAGE>
APPENDIX
ACCUMULATION PERIOD UNDER PRIOR GROUP CONTRACTS
Such contracts are no longer being issued. Contract Owners may continue to
make Contributions to the contracts subject to the following charges.
A. DEDUCTIONS UNDER THE PRIOR GROUP CONTRACTS FOR SALES EXPENSES, THE MINIMUM
DEATH BENEFIT GUARANTEE AND ANY APPLICABLE PREMIUM TAXES.
Contributions made to a Participant's Individual Account pursuant to the
terms of contracts issued after December 7, 1981 and prior to May 2, 1983 are
subject to the following:
No deductions for sales expenses is made at the time of allocation of
Contributions to the contracts. A deduction of six percent (6%) is made from
the amount surrendered from any Participant's Individual Account under a
Master Contract during the first ten (10) Participant's Contract Years and
five percent (5%) thereafter prior to the Annuity Commencement Date.
The full value of a surrender is subject to such changes with the provision
that such charges will in no event ever exceed 8.50% when applied as a
percentage against the sum of all Contributions to a Participant's Individual
Account.
No deduction for contingent deferred sales charges will be made: (1) in the
event of death of a Participant; or (2) if the value of a Participant's
Individual Account is paid out under one of the available annuity options
under the contracts; or, (3) if, on Public Employee Deferred Compensation
Plans only, a Participant in a Plan makes a financial hardship withdrawal as
defined in the Regulations issued by the IRS with respect to the IRC Section
457 governmental deferred compensation plans. The Plan of the Employer must
also provide for such hardship withdrawals.
HL reserves the right to limit any increase in the Contributions made to a
Participant's Individual Account to not more than three times the total
Contributions made on behalf of such Participant during the initial 12
consecutive months of the Account's existence under the contract of the
present guaranteed deduction rates. Increases in excess of those described
will be accepted only with the consent of HL and subject to the then current
deductions being made for sales charges, the Minimum Death Benefit guarantee
and mortality and expense undertaking.
Each contract provides for experience rating of the deduction for sales
expenses and/or the Annual Contract Fee. In order to experience rate a
contract, actual sales costs applicable to a particular contract are
determined. If the costs exceed the amounts deducted for such expenses, no
additional deduction will be made. If however, the amounts deducted for such
expenses exceed actual costs, HL, in its discretion, may allocate all, a
portion, or none of such excess as an experience rating credit. If such an
allocation is made, the experience credit will be made as considered
appropriate: (1) by a reduction in the amount deducted from subsequent
contributions for sales expenses; (2) by the crediting of a number of
additional Accumulation Units or by Annuity Units, as applicable, without
deduction of any sales or other expenses therefrom; (3) or by waiver of the
Annual Contract Fees or by a combination of the above. To date experience
rating credits have been provided on certain cases.
B. DEDUCTIONS FOR MORTALITY AND EXPENSE ADMINISTRATIVE UNDERTAKINGS,
ANNUAL CONTRACT FEE AND PREMIUM TAXES.
1. MORTALITY AND EXPENSE UNDERTAKINGS
Although variable annuity payments made under the contracts will vary in
accordance with the investment performance of the Fund shares, the payments
will not be affected by (a) HL's actual expenses, if greater than the
deductions provided for in the contracts, or (b) HL's actual mortality
experience among Annuitants after retirement because of the expense and
mortality undertakings by HL.
In providing an expense undertaking, HL assumes the risk that the deductions
for sales expenses, the Annual Contract Fee and the Minimum Death Benefit
during the Accumulation Period may be insufficient to cover the actual costs
of providing such items.
34
<PAGE>
The mortality undertaking provided by HL under the contracts, assuming the
selection of one of the forms of life annuities, is to make monthly annuity
payments (determined in accordance with the annuity tables and other
provisions contained in the contract) to Contract Owners or Annuitant's
Accounts regardless of how long an Annuitant may live and regardless of how
long all Annuitants as a group may live. This undertaking assures a Contract
Owner that neither the longevity of an Annuitant nor an improvement in life
expectancy will have any adverse effect on the monthly annuity payments the
Employees will receive under the contract. It thus relieves the Contract Owner
from the risk that Participants in the Plan will outlive the funds
accumulated.
The mortality undertaking is based on HL's actuarial determination of
expected mortality rates among all Annuitants. If actual experience among
Annuitants deviates from HL's actuarial determination of expected mortality
rates among Annuitants because, as a group, their longevity is longer than
anticipated, HL must provide amounts from its general funds to fulfill its
contract obligations. In that event, a loss will fall on HL. Conversely, if
longevity among Annuitants is lower than anticipated, a gain will result to
HL.
For assuming these risks HL makes a minimum daily charge against the value
of the average daily assets held under DC-I and DC-II, as appropriate, of
1.25% with respect to the Bond Fund and Money Market Fund Sub-Accounts where
available, on an annual basis. This rate may be periodically increased by HL
subject to a maximum annual rate of 2.00%. However, no increase will occur
unless the Securities and Exchange Commission first approves the increase.
2. ANNUAL CONTRACT FEE
There will be an Annual Contract Fee deduction in the amount of $10.00 from
the value of each such Participant's Individual Account under the contracts,
except as set forth below.
This fee will be deducted from the value of each such account on the last
business day of each calendar year; provided, however, that if the value of a
Participant's Individual Account is redeemed in full at any time before the
last business day of the year, then the Annual Contract Fee charge will be
deducted from the proceeds of such redemption. No contract fee deduction will
be made during the Annuity Payment period under the contracts.
In the event that the Contributions made on behalf of a Participant are
allocated partially to the fixed annuity portion of the Participant's
Individual Account and partially to the variable annuity portion of the
Participant's Individual Account, then the Annual Contract Fee will be
deducted first from the value of the fixed annuity portion of the
Participant's Individual Account. If the value of the fixed annuity portion of
the Participant's Individual Account is insufficient to pay the fee, then any
deficit will be deducted from the value of the variable annuity portion of the
Participant's Individual Account in the following manner: if there are no
accumulation units in the General Account or if their value is less than
$10.00, the General Account portion of an account will be made against values
held in the Stock Fund Sub-Account of DC-I. If the Stock Fund Sub-Account
values are insufficient to cover the fee, the fee shall be deducted from the
account values held in the Bond Fund Sub-Account of DC-I. In the event that
the Contributions made on behalf of a Participant are allocated partially to
the General Account and partially to the Separate Account, the Annual Contract
Fee will be charged against the Separate Account and General Account on a pro
rata basis.
3. PREMIUM TAXES
A deduction is also made for Premium Taxes, if applicable. On any contract
subject to Premium Taxes, the tax will be deducted from the Contributions when
received, from the proceeds at surrender, or from the amount applied to effect
an annuity at the time annuity payments commence.
35
<PAGE>
This form must be completed for all tax-sheltered annuities.
SECTION 403(B)(11) ACKNOWLEDGMENT FORM
The Hartford variable annuity contract which you have recently purchased is
subject to certain restrictions imposed by the Tax Reform Act of 1986.
Contributions to the contract after December 31, 1988 and any increases in cash
value after December 31, 1988 may not be distributed to you unless you have:
a. attained age 59 1/2
b. terminated employment
c. died, or
d. become disabled.
Distributions of post December 31, 1988 contributions may also be made if you
have experienced a financial hardship. Also there may be a 10% penalty tax for
distributions made because of financial hardship or separation from service.
Also, please be aware that your 403(b) Plan may also offer other financial
alternatives other than the Hartford variable annuity. Please refer to your
Plan.
Please complete the following and return to:
Hartford Life Insurance Company
Attn: RPVA Administration
P.O. Box 2999
Hartford, CT 06104-2999
Name of Contract Owner/Participant: ____________________________________________
Address: _______________________________________________________________________
City or Plan/School District: __________________________________________________
Date: __________________________________________________________________________
Participant No: ________________________________________________________________
Signature: _____________________________________________________________________
<PAGE>
To obtain a Statement of Additional
Information, complete the form below and mail to:
Hartford Life Companies
Attn: RPVA Administration
P.O. Box 2999
Hartford, CT 06104-2999
Please send a Statement of Additional
Information for Separate Account DC-I and Separate
Account Two (DC-II)(Form HV-1879-10) to me at the
following address.
_________________________________________
(name)
_________________________________________
(street)
_________________________________________
(city/state) (zip code)
<PAGE>
TABLE OF CONTENTS
FOR
STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
SECTION PAGE
- - ----------------------------------------------------------------------------------------------------------------- -----
<S> <C>
DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY...................................................................
SAFEKEEPING OF ASSETS............................................................................................
INDEPENDENT PUBLIC ACCOUNTANTS...................................................................................
DISTRIBUTION OF CONTRACTS........................................................................................
ANNUITY PERIOD...................................................................................................
A. Annuity Payments...........................................................................................
B. Electing the Annuity Commencement Date and Form of Annuity.................................................
C. Optional Annuity Forms.....................................................................................
Option 1: Life Annuity...................................................................................
Option 2: Life Annuity With 120, 180 or 240 Monthly Payments Certain.....................................
Option 3: Unit Refund Life Annuity.......................................................................
Option 4: Joint and Last Survivor Annuity................................................................
Option 5: Payments for a Designated Period...............................................................
CALCULATION OF YIELD AND RETURN..................................................................................
PERFORMANCE COMPARISONS..........................................................................................
FINANCIAL STATEMENTS.............................................................................................
</TABLE>
36
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT DC-I AND
SEPARATE ACCOUNT TWO (DC-II)
Group Variable Annuity Contracts Issued by
Hartford Life Insurance Company
With Respect to DC-I and DC-II
This Statement of Additional Information is not a Prospectus. The
information contained herein should be read in conjunction with the Prospectus.
To obtain a Prospectus, send a written request to Hartford Life Insurance
Company, Attn: RPVA Administration, P.O. Box 2999, Hartford, CT 06104-2999.
Date of Prospectus: May 1, 1995
Date of Statement of Additional Information: May 1, 1995
37
<PAGE>
THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY
<PAGE>
DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY
Hartford Life Insurance Company ("HL") was originally incorporated under the
laws of Massachusetts on June 5, 1902. It was subsequently redomiciled to
Connecticut. It is a stock life insurance company engaged in the business of
writing health and life insurance, both ordinary and group, in all states of the
United States and the District of Columbia. The offices of HL are located in
Simsbury, Connecticut; however its mailing address is P.O. Box 2999, Hartford,
Connecticut 06104-2999. HL is ultimately 100% owned by Hartford Fire Insurance
Company, one of the largest multiple lines insurance carriers in the United
States. Hartford Fire Insurance Company is a subsidiary of ITT Corporation.
At December 31, 1994, certain HL group pension contracts held direct
interest in shares as follows:
<TABLE>
<CAPTION>
PERCENT OF
SHARES TOTAL SHARES
---------- ------------
<S> <C> <C>
Hartford Advisers Fund, Inc....................... 10,709,364 0.56%
Hartford Capital Appreciation Fund, Inc........... 5,313,800 1.31%
Hartford Index Fund, Inc.......................... 9,462,900 9.14%
Hartford International Opportunities Fund, Inc.... 5,547,408 1.16%
Hartford Mortgage Securities Fund, Inc............ 16,249,689 5.26%
Hartford Stock Fund, Inc.......................... 65,899 0.02%
</TABLE>
SAFEKEEPING OF ASSETS
HL holds the assets of the Separate Account in its custody for safekeeping
and performs those services normally performed by a custodian.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, independent public accountants, periodically audits the
Separate Account and annually certifies all of the financial statements of the
Separate Account. The financial statements included in this Statement of
Additional Information have been audited by Arthur Andersen LLP as indicated in
their report with respect thereto, and are included herein in reliance upon the
report of said firm as experts in accounting and auditing.
DISTRIBUTION OF CONTRACTS
Hartford Equity Sales Company, Inc. ("HESCO") currently serves as Principal
Underwriter for the securities issued with respect to the Separate Account.
Hartford Securities Distribution Company, Inc. ("HSD") will replace HESCO as
principal underwriter upon approval by the Commission, the National Association
of Securities Dealers, Inc. ("NASD") and applicable state regulatory
authorities.
Both HESCO and HSD are wholly-owned subsidiaries of Hartford Life Insurance
Company. The principal business address of HESCO and HSD is the same as Hartford
Life Insurance Company.
The securities will be sold by salespersons of HESCO, and subsequently HSD,
who represent HL as insurance and Variable Annuity agents and who are registered
representatives or Broker-Dealers who have entered into distribution agreements
with HESCO, and subsequently HSD.
HESCO is registered with the Commission under the Securities Exchange Act of
1934 as a Broker-Dealer and is a member of the NASD. HSD will be registered with
the Commission under the Securities Exchange Act of 1934 as a Broker-Dealer and
will become a member of the NASD.
Compensation will be paid by HL to registered representatives for the sale
of contracts up to a maximum of 5% on initial Contributions and .50% on all
subsequent Contributions. Sales compensation may be reduced.
<PAGE>
THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY..........................
SAFEKEEPING OF ASSETS...................................................
INDEPENDENT PUBLIC ACCOUNTANTS..........................................
DISTRIBUTION OF CONTRACTS...............................................
ANNUITY PERIOD.......................................................... 3
A. Annuity Payments.................................................. 3
B. Electing the Annuity Commencement Date and Form of Annuity........ 3
C. Optional Annuity Forms............................................ 3
Option 1: Life Annuity.......................................... 3
Option 2: Life Annuity With 120, 180 or 240 Monthly Payments
Certain.......................................................... 3
Option 3: Unit Refund Life Annuity.............................. 4
Option 4: Joint and Last Survivor Annuity....................... 4
Option 5: Payments for a Designated Period...................... 4
CALCULATION OF YIELD AND RETURN......................................... 5
PERFORMANCE COMPARISONS................................................. 7
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS................................ 8
FINANCIAL STATEMENTS.................................................... 9
</TABLE>
2
<PAGE>
ANNUITY PERIOD
A. ANNUITY PAYMENTS
Variable Annuity payments are determined on the basis of (1) a mortality
table set forth in the contracts which reflects the age of the Annuitant and
the type of Annuity payment option selected, and (2) the investment
performance of the investment medium selected. Fixed Annuity payments will be
no less than those calculated at rates based on the annuity tables contained
in the contracts.
The amount of the Annuity payments will not be affected by adverse mortality
experience or by an increase in expenses in excess of the expense deduction
for which provision has been made (see "Charges Under the Contracts," in the
Prospectus).
The Annuitant will be paid the value of a fixed number of Annuity Units each
month. The value of such units and the amounts of the monthly Variable Annuity
payments will, however, reflect investment income occurring after retirement,
and thus the payments will vary with the investment experience of the Fund
shares selected.
<TABLE>
<C> <S> <C>
ILLUSTRATION OF CALCULATION OF ANNUITY UNIT VALUE
1. Net Investment Factor for period.............................. .000498
2. Adjustment for 4% Assumed Rate of Net Investment Return....... .999892
3. 2 x (1 + 1.000000)............................................ 1.000390
4. Annuity Unit value, beginning of period....................... .995995
5. Annuity Unit value, end of period (3 x 4)..................... .996383
</TABLE>
B. ELECTING THE ANNUITY COMMENCEMENT DATE AND FORM OF ANNUITY
Depending on the Contract involved, the Contract Owner or Participant
selects an Annuity Commencement Date, usually between a Participant's 50th and
75th birthdays, and an Annuity option. The Annuity Commencement Date may not
be deferred beyond the Participant's 75th birthday. The Annuity Commencement
Date and/or the Annuity option may be changed from time to time, but any such
change must be made at least 30 days prior to the date on which Annuity
payments are scheduled to begin. Annuity payments will be made on the first
business day of each month.
The contracts contain the five optional Annuity forms described below, which
may be selected on either a Fixed or Variable Annuity basis, or a combination
thereof. If a Contract Owner does not elect otherwise, HL reserves the right
to begin Annuity payments at age 65 under Option 2 with 120 monthly payments
certain.
When an Annuity is purchased for an Annuitant, unless otherwise specified,
DC-I or DC-II Accumulation Unit values will be applied to provide a Variable
Annuity under DC-II.
The minimum Annuity payment is $20. No election may be made which results in
a first payment of less than $20. If at any time Annuity payments are or
become less than $20.00, HL has the right to change the frequency of payment
to such intervals as will result in payments of at least $20.00.
C. OPTIONAL ANNUITY FORMS
OPTION 1: LIFE ANNUITY
A life Annuity is an Annuity payable during the lifetime of the Annuitant
and terminating with the last monthly payment preceding the death of the
Annuitant. Life Annuity Options (Options 1-4) offers the maximum level of
monthly payments of any of the options since there is no guarantee of a
minimum number of payments nor a provision for a death benefit payable to a
Beneficiary.
It would be possible under this option for an Annuitant to receive only one
Annuity payment if he died prior to the due date of the second Annuity
payment, two if he died before the due date of the third Annuity payment, etc.
*OPTION 2: LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN
This Annuity option is an Annuity payable monthly during the lifetime of an
Annuitant with the provision that if, at the death of the Annuitant, payments
have been made for less than 120, 180 or 240 months, as
3
<PAGE>
elected, then the present value as of the date of the Participant's death at
the current dollar amount at the date of death of any remaining guaranteed
monthly payments will be paid in one sum to the Beneficiary or Beneficiaries
designated unless other provisions will have been made and approved by HL.
<TABLE>
<C> <S> <C>
ILLUSTRATION OF ANNUITY PAYMENTS:
INDIVIDUAL AGE 65, LIFE ANNUITY WITH 120 PAYMENTS CERTAIN
1. Net amount applied...................................... $13,978.25
2. Initial monthly income per $1,000 of payment applied.... 5.93
3. Initial monthly payment (1 x 2 DIVIDED BY 1,000)....... 82.89
4. Annuity Unit value...................................... .953217
5. Number of monthly Annuity Units (3 DIVIDED BY 4)....... 86.959
6. Assume Annuity Unit value for second month equal to..... .963723
7. Second monthly payment (6 x 5).......................... 83.80
8. Assume Annuity Unit value for third month equal to...... .964917
9. Third month payment (8 x 5)............................. 83.91
</TABLE>
For the purpose of this illustration, purchase is assumed to have been made
on the 5th business day preceding the first payment date. In determining the
second and subsequent payments the annuity unit value of the 5th business day
preceding the annuity due date is used.
*OPTION 3: UNIT REFUND LIFE ANNUITY
This Annuity option is an Annuity payable monthly during the lifetime of the
Annuitant terminating with the last payment due prior to the death of the
Annuitant except that an additional payment will be made to the Beneficiary or
Beneficiaries if (a) below exceeds (b) below:
total amount applied under the option
(a) = at the Annuity Commencement Date
--------------------------------------------------------------
Annuity Unit value at the Annuity Commencement Date
number of Annuity Units represented number of monthly
(b) = by each monthly Annuity payment made X Annuity payments made
The amount of the additional payments will be determined by multiplying such
excess by the Annuity Unit value as of the date that proof of death is
received by HL.
For example, if $20,000 were applied to the purchase of an Annuity under
this option, the value of an Annuity Unit was $1.25 on the Annuity
Commencement Date, the number of Annuity Units represented by each monthly
payment was 91.68 (the number applicable to an individual electing this option
to commence at age 65), 60 monthly Annuity payments were made prior to the
date of death, and the value of an Annuity Unit on the date of receipt of
proof of an Annuitant's death was $1.50, the amount paid to the Beneficiary
would be $15,748.80, computed as follows:
$20,000
------- - (91.68 x 60) = 10,499.200
$1.25
or
16,000.000 - 5,500.800 = 10,499.200
10,499.200 x $1.50 = $15,748.80
OPTION 4: JOINT AND LAST SURVIVOR ANNUITY
An Annuity payable monthly during the joint lifetime of the Annuitant and a
designated second person, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
It would be possible under this Option for an Annuitant and designated
second person in the event of the common or simultaneous death of the parties
to receive only one payment in the event of death prior to the due date for
the second payment and so on.
*OPTION 5: PAYMENTS FOR A DESIGNATED PERIOD
An amount payable monthly for the number of years. Under most group
contracts, the minimum number of years is three. Under the Master Contracts
sold by Gardner & White, the minimum number of years is five.
4
<PAGE>
In the event of the Annuitant's death prior to the end of the designated
period, any then remaining balance of proceeds will be paid in one sum to the
Beneficiary or Beneficiaries designated unless other provisions will have been
made and approved by HL.
Option 5 is an option that does not involve life contingencies and thus no
mortality guarantee.
Surrenders under Option 5 will be subject to the limitations set forth in
the Contract and any applicable contingent deferred sales charges (see "How do
I select an Annuity Commencement Date and Form of Annuity?" in the
Prospectus).
* ON QUALIFIED PLANS, OPTIONS 2, 3 AND 5 ARE AVAILABLE ONLY IF THE GUARANTEED
PAYMENT PERIOD IS LESS THAN THE LIFE EXPECTANCY OF THE ANNUITANT AT THE TIME
THE OPTION BECOMES EFFECTIVE. SUCH LIFE EXPECTANCY SHALL BE COMPUTED ON THE
BASIS OF THE MORTALITY TABLE PRESCRIBED BY THE IRS, OR IF NONE IS PRESCRIBED,
THE MORTALITY TABLE THEN IN USE BY HL.
CALCULATION OF YIELD AND RETURN
YIELD OF THE HVA MONEY MARKET FUND AND U.S. GOVERNMENT MONEY MARKET FUND
SUB-ACCOUNTS. As summarized in the Prospectus under the heading "Performance
Related Information," the yield of the Money Market Fund and U.S. Government
Money Market Fund Sub-Accounts for a seven-day period (the "base period") will
be computed by determining the "net change in value" (calculated as set forth
below) of a hypothetical account having a balance of one share at the beginning
of the period, dividing the net change in account value by the value of the
account at the beginning of the base period to obtain the base period return,
and multiplying the base period return by 365/7 with the resulting yield figure
carried to the nearest hundredth of one percent. Net changes in value of a
hypothetical account will include net investment income of the account (accrued
daily dividends as declared by the underlying funds, less daily expense and
contract charges of the account) for the period, but will not include realized
gains or losses or unrealized appreciation or depreciation on the underlying
fund shares.
The Money Market Fund and U.S. Government Money Market Fund Sub-Accounts
yield and effective yield will vary in response to fluctuations in interest
rates and in the expenses of the two Sub-Accounts.
The current yield and effective yield reflect recurring charges on the
Separate Account level, including the maximum Annual Contract Fee.
MONEY MARKET FUND SUB-ACCOUNT
The yield and effective yield for the seven day period ending December 31,
1994 is as follows:
<TABLE>
<CAPTION>
($18 ANNUAL CONTRACT FEE)
<S> <C>
Yield 3.97%
Effective Yield 4.05%
</TABLE>
U.S. GOVERNMENT MONEY MARKET FUND SUB-ACCOUNT
The yield and effective yield for the sub-account for the seven day period
ending December 31, 1994 is as follows:
<TABLE>
<CAPTION>
($18 ANNUAL CONTRACT FEE)
<S> <C>
Yield 3.67%
Effective Yield 3.74%
</TABLE>
YIELDS OF HARTFORD BOND FUND AND HARTFORD MORTGAGE SECURITIES FUND
SUB-ACCOUNTS. As summarized in the Prospectus under the heading "Performance
Related Information," yields of these two Sub-Accounts will be computed by
annualizing a recent month's net investment income, divided by a Fund share's
net asset value on the last trading day of that month. Net changes in the value
of a hypothetical account will assume the change in the underlying mutual funds
"net asset value per share" for the same period in addition to the daily expense
charged assessed, at the sub-account level for the respective period. The Bond
Fund and Mortgage Securities Fund Sub-Accounts' yields will vary from time to
time depending upon market conditions and, the composition of the underlying
funds' portfolios. Yield should also be considered relative to changes in the
value of the Sub-Accounts' shares and to the relative risks associated with the
investment objectives and policies of the Bond Fund and Mortgage Securities
Fund.
5
<PAGE>
The yield reflects recurring charges on the Separate Account level,
including the Annual Contract Fee.
The Bond Fund and Mortgage Securities Fund Sub-Accounts' yield will vary
from time to time depending upon market conditions and the composition of the
underlying funds' portfolios. Yield should also be considered relative to
changes in the value of the Sub-Accounts' shares and to the relative risks
associated with the investment objectives and policies of the Funds.
BOND FUND SUB-ACCOUNT
Yield calculations of the Sub-Account used for illustration purposes reflect
the interest earned by the Sub-Account, less applicable asset charges assessed
against a Contract Owner's contract over the base period. The following is the
method used to determine the yield for the 30 day period ended December 31,
1994.
EXAMPLE:
Current Yield Formula for the Sub-Account 2*[((A - B)/(C*D) + 1)(6) - 1]
Where A = Dividends and interest earned during the period.
B = Expenses accrued for the period (net of reimbursements).
C = The average daily number of units outstanding during the period that
were entitled to
receive dividends.
D = The maximum offering price per unit on the last day of the period.
Yield = 5.87%
MORTGAGE SECURITIES FUND SUB-ACCOUNT
Yield calculations of the Sub-Account used for illustration purposes reflect
the interest earned by the Sub-Account, less applicable asset charges assessed
against a Contract Owner's account over the base period. The following is the
method used to determine the yield for the 30 day period ended December 31,
1994.
EXAMPLE:
Current Yield Formula for the Sub-Account 2*[((A - B)/(C*D) + 1)(6) - 1]
Where A = Dividends and interest earned during the period.
B = Expenses accrued for the period (net of reimbursements).
C = The average daily number of units outstanding during the period that
were entitled to
receive dividends.
D = The maximum offering price per unit on the last day of the period.
Yield = 6.51%
At any time in the future, yields and total return may be higher or lower
than past yields and there can be no assurance that any historical results will
continue.
The method of calculating yields described above for these Sub-Accounts
differs from the method used by the Sub-Accounts prior to May 1, 1988. The
denominator of the fraction used to calculate yield was previously the average
unit value for the period calculated. That denominator will hereafter be the
unit value of the Sub-Accounts on the last trading day of the period calculated.
CALCULATION OF TOTAL RETURN. As summarized in the Prospectus under the
heading "Performance Related Information", total return is a measure of the
change in value of an investment in a Sub-Account over the period covered. The
formula for total return used herein includes three steps: (1) calculating the
value of the hypothetical initial investment of $1,000 as of the end of the
period by multiplying the total number of units owned at the end of the period
by the unit value per unit on the last trading day of the period; (2) assuming
redemption at the end of the period and deducting any applicable contingent
deferred sales charge; and (3) dividing this account value for the hypothetical
investor by the initial $1,000 investment and annualizing the result for periods
of less than one year. Total return will be calculated for one year, five years
and ten years or some other relevant periods if a Sub-Account has not been in
existence for at least ten years.
6
<PAGE>
PERFORMANCE COMPARISONS
YIELD AND TOTAL RETURN. Each Sub-Account may from time to time include its
total return in advertisements or in information furnished to present or
prospective shareholders. Each Sub-Account may from time to time include its
yield and total return in advertisements or information furnished to present or
prospective shareholders. Each Sub-Account may from time to time include in
advertisements its total return (and yield in the case of certain Sub-Accounts)
the ranking of those performance figures relative to such figures for groups of
other annuities analyzed by Lipper Analytical Services as having the same
investment objectives.
The total return and yield may also be used to compare the performance of
the Sub-Accounts against certain widely acknowledged outside standards or
indices for stock and bond market performance. The Standard & Poor's Composite
Index of 500 Stocks (the "S&P 500") is a market value-weighted and unmanaged
index showing the changes in the aggregate market value of 500 stocks relative
to the base period 1941-43. The S&P 500 is composed almost entirely of common
stocks of companies listed on the New York Stock Exchange, although the common
stocks of a few companies listed on the American Stock Exchange or traded
over-the-counter are included. The 500 companies represented include 400
industrial, 60 transportation and 40 financial services concerns. The S&P 500
represents about 80% of the market value of all issues traded on the New York
Stock Exchange.
The NASDAQ-OTC Price Index (the "NASDAQ Index") is a market value-weighted
and unmanaged index showing the changes in the aggregate market value of
approximately 3,500 stocks relative to the base measure of 100.00 on February 5,
1971. The NASDAQ Index is composed entirely of common stocks of companies traded
over-the-counter and often through the National Association of Securities
Dealers Automated Quotations ("NASDAQ") system. Only those over-the-counter
stocks having only one market maker or traded on exchanges are excluded.
The Shearson Lehman Government Bond Index (the "SL Government 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, flower bonds and foreign targeted issues
are not included in the SL Government Index.
The Shearson Lehman Government/Corporate Bond Index (the "SL
Government/Corporate 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 SL 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.
The manner in which total return and yield will be calculated for public use
is described above. The following table summarizes the calculation of total
return and yield for each Sub-Account, where applicable, through December 31,
1994.
7
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life Insurance Company
Separate Account Two and to the
Owners of Units of Interest therein:
We have audited the accompanying statement of assets and liabilities of
Hartford Life Insurance Company Separate Account Two as of December 31, 1994,
and the related statement of operations for the year then ended and statement of
changes in net assets for each of the two years in the period then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Hartford Life Insurance
Company Separate Account Two as of December 31, 1994, the results of its
operations for the year then ended and the changes in its net assets for each of
the two years in the period then ended in conformity with generally accepted
accounting principles.
Hartford, Connecticut
February 10, 1995 Arthur Andersen LLP
8
<PAGE>
SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES
DECEMBER 31, 1994
<TABLE>
<CAPTION>
MONEY U.S. GOVERNMENT
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND MONEY MARKET FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ ------------ -------------- --------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund, Inc.
Shares 172,229,725
Cost $ 176,180,319
Market Value........................................ $159,488,170 -- -- -- --
Hartford Stock Fund, Inc.
Shares 230,631,116
Cost $ 615,215,162
Market Value........................................ -- $646,103,848 -- -- --
HVA Money Market Fund, Inc.
Shares 241,684,272
Cost $ 241,684,272
Market Value........................................ -- -- $241,684,272 -- --
Hartford Advisers Fund, Inc.
Shares 1,125,337,358
Cost $1,820,221,520
Market Value........................................ -- -- -- $1,801,079,934 --
Hartford U.S. Government Money Market Fund, Inc.
Shares 1,211,232
Cost $ 1,211,232
Market Value........................................ -- -- -- -- $1,211,232
Hartford Aggressive Growth Fund, Inc.
Shares 221,151,687
Cost $ 581,410,587
Market Value........................................ -- -- -- -- --
Hartford Mortgage Securities Fund, Inc.
Shares 216,900,409
Cost $ 233,653,118
Market Value........................................ -- -- -- -- --
Hartford Index Fund, Inc.
Shares 62,005,461
Cost $ 85,135,111
Market Value........................................ -- -- -- -- --
Hartford International Opportunities Fund, Inc.
Shares 255,913,841
Cost $ 287,607,489
Market Value........................................ -- -- -- -- --
Hartford Dividend and Growth Fund, Inc.
Shares 30,033,209
Cost $ 30,342,155
Market Value........................................ -- -- -- -- --
Calvert Socially Responsive Series, Inc.
Shares 688,923
Cost $ 985,530
Market Value........................................ -- -- -- -- --
Smith Barney Shearson Daily Dividend Fund, Inc.
Shares 645,916
Cost $ 645,916
Market Value........................................ -- -- -- -- --
Smith Barney Shearson Appreciation Fund, Inc.
Shares 11,551
Cost $ 74,714
Market Value........................................ -- -- -- -- --
Smith Barney Shearson Government and Agencies Fund
Shares 48,101
Cost $ 48,101
Market Value........................................ -- -- -- -- --
Dividends Receivable.................................. -- -- -- -- --
Due from Hartford Life Insurance Company.............. 67,001 493,463 -- 694,443 9,658
Receivable from fund shares sold...................... -- -- 416,033 -- --
------------ ------------ ------------ -------------- -----------
Total Assets.......................................... 159,555,171 646,597,311 242,100,305 1,801,774,377 1,220,890
------------ ------------ ------------ -------------- -----------
LIABILITIES:
Due to Hartford Life Insurance Company................ -- -- 411,062 -- --
Payable for fund shares purchased..................... 67,024 494,846 -- 693,465 9,289
------------ ------------ ------------ -------------- -----------
Total Liabilities..................................... 67,024 494,846 411,062 693,465 9,289
------------ ------------ ------------ -------------- -----------
Net Assets (variable annuity contract liabilities).... $159,488,147 $646,102,465 $241,689,243 $1,801,080,912 $1,211,601
------------ ------------ ------------ -------------- -----------
------------ ------------ ------------ -------------- -----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
9
<PAGE>
<TABLE>
<CAPTION>
SMITH
BARNEY
SHEARSON
SMITH BARNEY SMITH BARNEY GOVERNMENT
DIVIDEND SHEARSON SHEARSON AND
AGGRESSIVE MORTGAGE INTERNATIONAL AND GROWTH SOCIALLY DAILY DIVIDEND APPRECIATION AGENCIES
GROWTH FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND FUND RESPONSIVE FUND FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ --------------- ----------- ------------------ ----------- --------------- -------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
$632,467,289 -- -- -- -- -- -- -- --
-- $213,512,425 -- -- -- -- -- -- --
-- -- $94,384,095 -- -- -- -- -- --
-- -- -- $300,880,462 -- -- -- -- --
-- -- -- -- $29,855,712 -- -- -- --
-- -- -- -- -- $ 992,739 -- -- --
-- -- -- -- -- -- $ 645,916 -- --
-- -- -- -- -- -- -- $117,210 --
-- -- -- -- -- -- -- -- $48,101
-- -- -- -- -- 31,623 -- -- 8
670,264 -- -- 34,067 169,314 7,760 -- -- --
-- 72,115 122,769 -- -- -- 1,130 30 195
------------ --------------- ----------- ------------------ ----------- --------------- -------------- -------------- -----------
633,137,553 213,584,540 94,506,864 300,914,529 30,025,026 1,032,122 647,046 117,240 48,304
------------ --------------- ----------- ------------------ ----------- --------------- -------------- -------------- -----------
-- 67,937 122,812 -- -- -- 1,130 19 211
668,624 -- -- 34,906 169,722 7,784 -- -- --
------------ --------------- ----------- ------------------ ----------- --------------- -------------- -------------- -----------
668,624 67,937 122,812 34,906 169,722 7,784 1,130 19 211
------------ --------------- ----------- ------------------ ----------- --------------- -------------- -------------- -----------
$632,468,929 $213,516,603 $94,384,052 $300,879,623 $29,855,304 $1,024,338 $ 645,916 $117,221 $48,093
------------ --------------- ----------- ------------------ ----------- --------------- -------------- -------------- -----------
------------ --------------- ----------- ------------------ ----------- --------------- -------------- -------------- -----------
</TABLE>
10
<PAGE>
SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES -- (CONTINUED)
DECEMBER 31, 1994
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ ---------- ---------------
<S> <C> <C> <C>
DEFERRED ANNUITY CONTRACTS IN THE ACCUMULATION PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Bond Fund Qualified 1.00%............................................................. 386,894 $ 3.081636 $ 1,192,266
Bond Fund Non-Qualified 1.00%......................................................... 2,747,334 3.034781 8,337,557
Bond Fund 1.25%....................................................................... 85,397,157 1.606681 137,205,990
Bond Fund .25%........................................................................ 130,046 1.048603 136,367
Stock Fund Qualified 1.00%............................................................ 1,015,114 4.177385 4,240,521
Stock Fund Non-Qualified 1.00%........................................................ 3,743,893 3.994491 14,954,948
Stock Fund 1.25%...................................................................... 248,563,344 2.180436 541,976,464
Stock Fund .25%....................................................................... 1,226,382 1.123066 1,377,308
Money Market Fund Qualified 1.00%..................................................... 1,193,859 2.261057 2,699,383
Money Market Fund Non-Qualified 1.00%................................................. 14,166,909 2.262124 32,047,305
Money Market Fund 1.25%............................................................... 138,396,161 1.462471 202,400,371
Money Market Fund .25%................................................................ 186,512 1.064380 198,520
Advisers Fund Qualified 1.00%......................................................... 4,660,625 2.959828 13,794,648
Advisers Fund Non-Qualified 1.00%..................................................... 15,416,951 2.959828 45,631,522
Advisers Fund 1.25%................................................................... 858,013,683 1.990804 1,708,137,073
Advisers Fund .25%.................................................................... 1,344,430 1.088404 1,463,283
U.S. Government Money Market Fund Qualified 1.00%..................................... 20,769 1.810814 37,609
U.S. Government Money Market Fund 1.25%............................................... 48,432 1.408971 68,240
Aggressive Growth Fund Qualified 1.00%................................................ 938,226 4.368563 4,098,699
Aggressive Growth Fund Non-Qualified 1.00%............................................ 2,983,029 4.366578 13,025,628
Aggressive Growth Fund 1.25%.......................................................... 220,935,895 2.615288 577,810,995
Aggressive Growth Fund .25%........................................................... 2,691,355 1.233577 3,319,994
Mortgage Securities Fund Qualified 1.00%.............................................. 1,431,871 2.084988 2,985,434
Mortgage Securities Fund Non-Qualified 1.00%.......................................... 11,296,904 2.084988 23,553,908
Mortgage Securities Fund 1.25%........................................................ 112,417,272 1.636791 184,003,579
Mortgage Securities Fund .25%......................................................... 105,417 1.037405 109,360
Index Fund 1.25%...................................................................... 50,799,238 1.749714 88,884,138
Index Fund .25%....................................................................... 205,039 1.099141 225,367
International Opportunities Fund Qualified 1.00%...................................... 556,691 1.194697 665,077
International Opportunities Fund Non-Qualified 1.00%.................................. 2,439,349 1.194654 2,914,179
International Opportunities Fund 1.25%................................................ 246,259,349 1.181321 290,911,341
International Opportunities Fund .25%................................................. 1,080,735 1.295734 1,400,346
Dividend and Growth Fund Qualified 1.00%.............................................. 36,668 1.011382 37,085
Dividend and Growth Fund Non-Qualified 1.00%.......................................... 335,338 1.011382 339,155
Dividend and Growth Fund 1.25%........................................................ 29,145,963 1.009335 29,418,040
Dividend and Growth Fund .25%......................................................... 59,971 1.017552 61,024
Smith Barney Shearson Daily Dividend, Inc. Qualified 1.00%............................ 96,101 2.458044 236,221
Smith Barney Shearson Daily Dividend, Inc. Non-Qualified 1.00%........................ 161,059 2.543759 409,695
Smith Barney Shearson Appreciation Fund, Inc. Qualified 1.00%......................... 23,909 4.902844 117,221
Smith Barney Shearson Government and Agencies, Inc. Qualified 1.00%................... 21,677 2.218682 48,093
---------------
Sub-total Individual Sub-Accounts..................................................... 3,940,473,954
---------------
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP.......................................................... 1,668,221 3.609357 6,021,205
Bond Fund 1.25% DCII.................................................................. 1,122,768 3.499674 3,929,323
Bond Fund .15% DCII................................................................... 305,816 3.261226 997,336
Stock Fund Qualified 1.00% QP......................................................... 4,283,748 6.985679 29,924,886
Stock Fund Qualified .825% QP......................................................... 1,435,480 5.600682 8,039,665
Stock Fund Non-Qualified 1.00% NQ..................................................... 88,837 5.481096 486,923
Stock Fund Non-Qualified .825% NQ..................................................... 890,205 5.610519 4,994,510
Stock Fund 1.25% DCII................................................................. 3,884,750 6.771260 26,304,653
Stock Fund .15% DCII.................................................................. 858,147 5.201059 4,463,271
Money Market Fund Qualified .375% QP.................................................. 2,095 2.802645 5,871
Money Market Fund 1.25% DCII.......................................................... 905,063 2.511791 2,273,329
Money Market Fund .15% DCII........................................................... 265,801 2.416025 642,182
Advisers Fund 1.25% DCII.............................................................. 8,279,212 2.875723 23,808,720
Advisers Fund .15% DCII............................................................... 528,996 3.268187 1,728,857
U.S. Government Money Market Fund 1.25% DCII.......................................... 483,107 1.758459 849,524
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
11
<PAGE>
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ ---------- ---------------
GROUP SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
U.S. Government Money Market Fund .15% DCII........................................... 37,301 $ 2.003628 $ 74,738
Aggressive Growth Fund 1.25% DCII..................................................... 6,922,578 4.256870 29,468,515
Aggressive Growth Fund .15% DCII...................................................... 599,956 4.785486 2,871,082
Mortgage Securities Fund 1.25% DCII................................................... 993,777 2.033647 2,020,991
Mortgage Securities Fund .15% DCII.................................................... 78,285 2.268923 177,623
Index Fund 1.25% DCII................................................................. 2,375,877 1.737856 4,128,933
Index Fund .15% DCII.................................................................. 216,621 1.875849 406,348
International Opportunities Fund 1.25% DCII........................................... 3,640,068 1.181488 4,300,697
International Opportunities Fund .15% DCII............................................ 333,919 1.241199 414,460
Socially Responsive Fund 1.25% DCII................................................... 692,817 1.417414 982,008
---------------
Sub-total Group Sub-Accounts.......................................................... 159,315,650
---------------
TOTAL ACCUMULATION PERIOD............................................................... 4,099,789,604
---------------
ANNUITY CONTRACTS IN THE ANNUITY PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Bond Fund Non-Qualified 1.00%......................................................... 704 3.034781 2,138
Bond Fund 1.25%....................................................................... 129,039 1.606681 207,325
Stock Fund Non-Qualified 1.00%........................................................ 7,925 3.994491 31,657
Stock Fund 1.25%...................................................................... 191,847 2.180436 418,310
Money Market Fund Qualified 1.00%..................................................... 20,342 2.261057 45,994
Money Market Fund Non-Qualified 1.00%................................................. 129,600 2.262124 293,172
Money Market Fund 1.25%............................................................... 434,331 1.462471 635,196
Advisers Fund Qualified 1.00%......................................................... 5,523 2.959828 16,347
Advisers Fund Non-Qualified 1.00%..................................................... 75,862 2.959828 224,538
Advisers Fund 1.25%................................................................... 786,775 1.990804 1,566,314
U.S. Government Money Market Fund Qualified 1.00%..................................... 25,034 1.810814 45,331
Aggressive Growth Fund Non-Qualified 1.00%............................................ 5,273 4.366578 23,026
Aggressive Growth Fund 1.25%.......................................................... 53,426 2.615288 139,725
Mortgage Securities Fund Qualified 1.00%.............................................. 8,740 2.084988 18,223
Mortgage Securities Fund Non-Qualified 1.00%.......................................... 118,956 2.084988 248,021
Mortgage Securities Fund 1.25%........................................................ 82,741 1.636791 135,429
Index Fund 1.25%...................................................................... 26,043 1.749714 45,568
International Opportunities Fund 1.25%................................................ 132,984 1.181321 157,097
---------------
Sub-total Individual Sub-Accounts..................................................... 4,253,411
---------------
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP.......................................................... 91,006 3.609357 328,473
Bond Fund 1.25% DCII.................................................................. 308,096 3.499674 1,078,236
Bond Fund 1.00% DCII.................................................................. 14,445 3.595086 51,932
Stock Fund Qualified 1.00% QP......................................................... 233,773 6.985679 1,633,062
Stock Fund Qualified .825% QP......................................................... 54,011 5.600682 302,500
Stock Fund Non-Qualified 1.00% NQ..................................................... 728 5.481096 3,988
Stock Fund Non-Qualified .825% NQ..................................................... 65,133 5.610519 365,428
Stock Fund 1.25% DCII................................................................. 964,557 6.771260 6,531,268
Stock Fund 1.00% DCII................................................................. 4,948 6.963798 34,458
Stock Fund .15% DCII.................................................................. 3,585 5.201059 18,646
Money Market Fund 1.25% DCII.......................................................... 178,327 2.511791 447,919
Advisers Fund 1.25% DCII.............................................................. 1,609,483 2.875723 4,628,427
Advisers Fund .15% DCII............................................................... 24,841 3.268187 81,184
U.S. Government Money Market Fund 1.25% DCII.......................................... 77,431 1.758459 136,159
Aggressive Growth Fund 1.25% DCII..................................................... 402,001 4.256870 1,711,264
Mortgage Securities Fund 1.25% DCII................................................... 129,833 2.033647 264,035
Index Fund 1.25% DCII................................................................. 399,168 1.737856 693,697
International Opportunities Fund 1.25% DCII........................................... 98,542 1.181488 116,426
Socially Responsive Fund 1.25% DCII................................................... 29,864 1.417414 42,330
---------------
Sub-total Group Sub-Accounts.......................................................... 18,469,432
---------------
TOTAL ANNUITY PERIOD.................................................................... 22,722,843
---------------
GRAND TOTAL............................................................................. $ 4,122,512,447
---------------
---------------
</TABLE>
12
<PAGE>
SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
MONEY U.S. GOVERNMENT
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND MONEY MARKET FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ------------- ------------ -------------- -----------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends............................. $ 10,129,126 $ 13,298,486 $ 8,730,379 $ 57,979,079 $ 42,603
EXPENSES:
Mortality and expense undertakings.... (1,981,904) (7,426,331) (2,661,371) (21,578,163) (13,685)
------------- ------------- ------------ -------------- --------
Net investment income (loss)........ 8,147,222 5,872,155 6,069,008 36,400,916 28,918
------------- ------------- ------------ -------------- --------
Capital gains income.................. 3,020,067 34,722,942 -- 47,447,226 --
------------- ------------- ------------ -------------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on security
transactions......................... (421,917) (203,916) -- 414,315 --
Net unrealized appreciation
(depreciation) of investments during
the period........................... (19,519,205) (59,765,259) -- (154,737,742) --
------------- ------------- ------------ -------------- --------
Net gains (losses) on investments... (19,941,122) (59,969,175) -- (154,323,427) --
------------- ------------- ------------ -------------- --------
Net increase (decrease) in net
assets resulting from operations... $ (8,773,833) $(19,374,078) $ 6,069,008 $ (70,475,285) $ 28,918
------------- ------------- ------------ -------------- --------
------------- ------------- ------------ -------------- --------
<FN>
* From Inception, March 8, 1994, to December 31, 1994.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
13
<PAGE>
<TABLE>
<CAPTION>
SMITH
SMITH BARNEY
BARNEY SMITH SHEARSON
SHEARSON BARNEY GOVERNMENT
INTERNATIONAL DIVIDEND SOCIALLY DAILY SHEARSON AND
AGGRESSIVE MORTGAGE OPPORTUNITIES AND GROWTH RESPONSIVE DIVIDEND APPRECIATION AGENCIES
GROWTH FUND SECURITIES FUND INDEX FUND FUND FUND FUND FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT* SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- ------------- --------------- ----------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 2,216,268 $ 15,801,876 $ 2,259,862 $ 3,567,586 $ 419,546 $ 31,623 $24,231 $ 1,969 $1,757
(6,812,975) (2,897,906) (1,104,316) (3,151,951) (135,382) (11,158) (6,845) (1,226) (488)
------------- --------------- ------------- --------------- ----------- ---------- --------- ---------- ---------
(4,596,707) 12,903,970 1,155,546 415,635 284,164 20,465 17,386 743 1,269
------------- --------------- ------------- --------------- ----------- ---------- --------- ---------- ---------
42,093,901 1,176,728 -- -- -- -- -- 6,550 --
------------- --------------- ------------- --------------- ----------- ---------- --------- ---------- ---------
316,913 (2,117,604) 177,595 (38,119) 1,622 (180) -- (476) --
(28,599,970) (19,218,450) (1,319,890) (9,418,006) (486,442) (59,462) -- (9,210) --
------------- --------------- ------------- --------------- ----------- ---------- --------- ---------- ---------
(28,283,057) (21,336,054) (1,142,295) (9,456,125) (484,820) (59,642) -- (9,686) --
------------- --------------- ------------- --------------- ----------- ---------- --------- ---------- ---------
$ 9,214,137 $ (7,255,356) $ 13,251 $(9,040,490) $(200,656) $(39,177) $17,386 $(2,393) $1,269
------------- --------------- ------------- --------------- ----------- ---------- --------- ---------- ---------
------------- --------------- ------------- --------------- ----------- ---------- --------- ---------- ---------
</TABLE>
14
<PAGE>
SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
U.S.
GOVERNMENT
MONEY MONEY MARKET
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ------------- ------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 8,147,222 $ 5,872,155 $ 6,069,008 $ 36,400,916 $ 28,918
Capital gains income.................. 3,020,067 34,722,942 -- 47,447,226 --
Net realized gain (loss) on security
transactions......................... (421,917) (203,916) -- 414,315 --
Net unrealized appreciation
(depreciation) of investments during
the period........................... (19,519,205) (59,765,259) -- (154,737,742) --
------------- ------------- ------------- --------------- --------------
Net increase (decrease) in net assets
resulting from operations............ (8,773,833) (19,374,078) 6,069,008 (70,475,285) 28,918
------------- ------------- ------------- --------------- --------------
UNIT TRANSACTIONS:
Purchases............................. 29,721,918 105,127,448 72,433,601 419,190,064 205,153
Net transfers......................... (10,176,062) 20,445,965 10,951,538 14,104,761 (151,291)
Surrenders............................ (11,477,200) (25,527,779) (33,930,464) (88,886,489) (65,287)
Net annuity transactions.............. 284,001 1,000,538 596,459 2,114,613 (29,641)
------------- ------------- ------------- --------------- --------------
Net increase (decrease) in net assets
resulting from unit transactions..... 8,352,657 101,046,172 50,051,134 346,522,949 (41,066)
------------- ------------- ------------- --------------- --------------
Total increase (decrease) in net
assets............................... (421,176) 81,672,094 56,120,142 276,047,664 (12,148)
NET ASSETS:
Beginning of period................... 159,909,323 564,430,371 185,569,101 1,525,033,248 1,223,749
------------- ------------- ------------- --------------- --------------
End of period......................... $159,488,147 $646,102,465 $241,689,243 $1,801,080,912 $1,211,601
------------- ------------- ------------- --------------- --------------
------------- ------------- ------------- --------------- --------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1993
<CAPTION>
U.S.
GOVERNMENT
MONEY MONEY MARKET
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ------------- ------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 7,572,358 $ 8,308,344 $ 2,813,416 $ 25,701,741 $ 18,672
Capital gains income.................. 99,084 18,638,665 -- 20,817,465 --
Net realized gain (loss) on security
transactions......................... 215,618 447,050 -- 182,805 --
Net unrealized appreciation
(depreciation) of investments during
the period........................... 1,690,700 30,785,479 -- 65,119,250 --
------------- ------------- ------------- --------------- --------------
Net increase (decrease) in net assets
resulting from operations............ 9,577,760 58,179,538 2,813,416 111,821,261 18,672
------------- ------------- ------------- --------------- --------------
UNIT TRANSACTIONS:
Purchases............................. 64,035,095 163,937,277 83,799,945 714,972,050 194,811
Net transfers......................... 4,924,354 25,227,185 (35,854,970) 105,616,425 (65,248)
Surrenders............................ (6,989,348) (15,906,440) (25,784,152) (50,149,218) (212,373)
Net annuity transactions.............. 343,986 669,968 118,488 968,114 72,905
------------- ------------- ------------- --------------- --------------
Net increase (decrease) in net assets
resulting from unit transactions..... 62,314,087 173,927,990 22,279,311 771,407,371 (9,905)
------------- ------------- ------------- --------------- --------------
Total increase (decrease) in net
assets............................... 71,891,847 232,107,528 25,092,727 883,228,632 8,767
NET ASSETS:
Beginning of period................... 88,017,476 332,322,843 160,476,376 641,804,616 1,214,982
------------- ------------- ------------- --------------- --------------
End of period......................... $159,909,323 $564,430,371 $185,569,101 $1,525,033,248 $1,223,749
------------- ------------- ------------- --------------- --------------
------------- ------------- ------------- --------------- --------------
<FN>
* From Inception, March 8, 1994, to December 31, 1994.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
15
<PAGE>
<TABLE>
<CAPTION>
SMITH
BARNEY
SMITH BARNEY SMITH SHEARSON
SHEARSON BARNEY GOVERNMENT
INTERNATIONAL SOCIALLY DAILY SHEARSON AND
AGGRESSIVE MORTGAGE OPPORTUNITIES DIVIDEND AND RESPONSIVE DIVIDEND APPRECIATION AGENCIES
GROWTH FUND SECURITIES FUND INDEX FUND FUND GROWTH FUND FUND FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT* SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ (4,596,707) $ 12,903,970 $ 1,155,546 $ 415,635 $ 284,164 $ 20,465 $ 17,386 $ 743 $ 1,269
42,093,901 1,176,728 -- -- -- -- -- 6,550 --
316,913 (2,117,604) 177,595 (38,119) 1,622 (180) -- (476) --
(28,599,970) (19,218,450) (1,319,890) (9,418,006) (486,442) (59,462) -- (9,210) --
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
9,214,137 (7,255,356) 13,251 (9,040,490) (200,656) (39,177) 17,386 (2,393) 1,269
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
147,740,784 19,118,960 11,954,835 93,762,262 13,185,613 376,701 -- 50 --
33,684,129 (49,453,490) (438,563) 55,977,196 17,422,326 (75,712) (18,624) 2,681 --
(18,517,067) (20,146,010) (3,246,522) (7,306,583) (551,979) (19,945) (84,827) (2,515) (6,354)
396,915 137,102 59,473 (104,557) -- 4,610 -- -- --
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
163,304,761 (50,343,438) 8,329,223 142,328,318 30,055,960 285,654 (103,451) 216 (6,354)
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
172,518,898 (57,598,794) 8,342,474 133,287,828 29,855,304 246,477 (86,065) (2,177) (5,085)
459,950,031 271,115,397 86,041,578 167,591,795 -- 777,861 731,981 119,398 53,178
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
$632,468,929 $213,516,603 $94,384,052 $300,879,623 $29,855,304 $1,024,338 $ 645,916 $117,221 $48,093
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
<CAPTION>
SMITH
BARNEY
SMITH SHEARSON
SMITH BARNEY SMITH BARNEY BARNEY GOVERNMENT
INTERNATIONAL SOCIALLY SHEARSON SHEARSON SHEARSON AND
AGGRESSIVE MORTGAGE OPPORTUNITIES RESPONSIVE DAILY APPRECIATION HIGH INCOME AGENCIES
GROWTH FUND SECURITIES FUND INDEX FUND FUND FUND DIVIDEND FUND FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1,600,110 $ 12,652,275 $ 799,021 $ (291,109) $ 14,203 $ 13,390 $ 459 $ 1,816 $ 901
3,197,599 -- -- -- -- -- 3,734 -- --
1,188,667 109,955 25,192 (11,820) (75) -- 234 (1,362) --
49,594,313 (1,569,545) 4,591,529 23,588,342 26,706 -- 3,565 4,504 --
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
55,580,689 11,192,685 5,415,742 23,285,413 40,834 13,390 7,992 4,958 901
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
195,275,139 95,499,459 30,471,477 67,601,208 302,593 -- 50 -- --
22,666,403 (19,922,573) 879,825 46,857,348 1,511 (89,601) -- -- --
(8,251,678) (18,992,076) (2,314,111) (1,636,768) (44,747) (5,845) (1,830) (55,563) (4,573)
576,660 (52,421) 30,208 268,086 4,631 -- -- -- --
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
210,266,524 56,532,389 29,067,399 113,089,874 263,988 (95,446) (1,780) (55,563) (4,573)
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
265,847,213 67,725,074 34,483,141 136,375,287 304,822 (82,056) 6,212 (50,605) (3,672)
194,102,818 203,390,323 51,558,437 31,216,508 473,039 814,037 113,186 50,605 56,850
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
$459,950,031 $271,115,397 $86,041,578 $167,591,795 $ 777,861 $ 731,981 $ 119,398 $ -- $53,178
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
------------- --------------- ------------- --------------- ------------ ------------- ------------ ----------- ----------
</TABLE>
16
<PAGE>
SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
1. ORGANIZATION:
Separate Account Two (the Account) is a separate investment account within
Hartford Life Insurance Company (the Company) and is registered with the
Securities and Exchange Commission (SEC) as a unit investment trust under the
Investment Company Act of 1940, as amended. Both the Company and the Account are
subject to supervision and regulation by the Department of Insurance of the
State of Connecticut and the SEC.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting principles
in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date.
b) SECURITY VALUATION--The investment in shares of the Hartford, Shearson
and Calvert Socially Responsive Series mutual funds are valued at the
closing net asset value per share as determined by the appropriate Fund
as of December 31, 1994.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as an
insurance company under the Internal Revenue Code. Under current law, no
federal income taxes are payable with respect to the operations of the
Account.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
a) MORTALITY AND EXPENSE UNDERTAKINGS--The Company, as issuer of variable
annuity contracts, provides the mortality and expense undertakings and,
with respect to the Account, receives a maximum annual fee of 1.25% of
the Account's average daily net assets.
b) DEDUCTION OF ANNUAL MAINTENANCE FEE--Annual maintenance fees are
deducted through termination of units of interest from applicable
contract owners' accounts, in accordance with the terms of the contracts.
17
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) All financial statements are included in Part A and Part B of the
Registration Statement.
(b) (1) Resolution authorizing the establishment of the Separate Account is
filed herewith.
(2) Not applicable. HL maintains custody of all assets pursuant to an
exemptive order granted on December 1, 1981.
(3) Principal Underwriting Agreement is filed herewith.
(4) Form of Variable Annuity Contract to be filed by amendment.
(5) Form of Application to be filed by amendment.
(6) (a) Restated Certificate of Incorporation of Hartford Life Insurance
Company is filed herewith.
(b) Bylaws of Hartford Life Insurance Company are filed herewith.
(7) Not applicable.
(8) Not applicable.
(9) Not applicable.
(10) Consent of Arthur Andersen LLP is filed herewith.
(11) Not applicable.
(12) Not applicable.
(13) Schedule of Performance Data is filed herewith.
(14) Fund Participation Agreement is filed herewith.
18
<PAGE>
ITEM 25. Directors and Officers of the Depositor
Louis J. Abdou Vice President
David H. Annis Vice President
Paul J. Boldischar, Jr. Vice President
Wendell J. Bossen Vice President
Peter W. Cummins Vice President
Juliana B. Dalton Vice President
Ann M. deRaismes Vice President
Allen Douma, M.D. Medical Director
Donald R. Frahm Chairman & CEO
Bruce D. Gardner General Counsel & Secretary
Joseph H. Gareau Executive Vice President & Chief Investment
Officer
Richard J. Garrett Vice President & Treasurer
John P. Ginnetti Executive Vice President and Director Asset
Management Services
Lynda Godkin Assistant General Counsel & Secretary
Lois W. Grady Vice President
David A. Hall Senior Vice President & Actuary
Joseph Kanarek Vice President
Kevin J. Kirk Vice President
Andrew W. Kohnke Vice President
Stephen M. Maher Vice President & Actuary
William B. Malchodi, Jr. Vice President & Director of Taxes
Thomas M. Marra Senior Vice President & Actuary and Director
Individual Life and Annuity Division
David J. McDonald Senior Vice President
Kevin A. North Vice President
Joseph J. Noto Vice President
Leonard E. Odell, Jr. Senior Vice President
Michael C. O'Halloran Vice President & Senior Associate General Counsel
Craig R. Raymond Vice President & Chief Actuary
Lowndes A. Smith President & Chief Operating Officer
Edward J. Sweeney Vice President
James E. Trimble Vice President & Actuary
Raymond P. Welnicki Senior Vice President
James T. Westervelt Senior Vice President & Group Comptroller
Lizabeth H. Zlatkus Vice President
Donald J. Znamierowski Vice President
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 01604-2999.
ITEM 26. Persons Controlled By or Under Common Control with the Depositor or
Registrant
See Exhibit 26.
ITEM 27. Number of Contract Owners
As of December 31, 1994, there were Contract Owners of qualified
Contracts and Contract Owners of non-qualified Contracts.
19
<PAGE>
ITEM 28. Indemnification
Under Section 33-320a of the Connecticut General Statutes, the Registrant
must indemnify a director or officer against judgments, fines, penalties,
amounts paid in settlement and reasonable expenses, including attorneys'
fees, for actions brought or threatened to be brought against him in his
capacity as a director or officer when it is determined by certain
disinterested parties that he acted in good faith and in a manner he
reasonably believed to be in the best interests of the Registrant. In any
criminal action or proceeding, it also must be determined that the director
or officer had no reason to believe his conduct was unlawful. The director
or officer must also be indemnified when he is successful on the merits in
the defense of a proceeding or in circumstances where a court determines
that he is fairly and reasonably entitled to be indemnified, and the court
approves the amount. In shareholder derivative suits, the director or
officer must be finally adjudged not to have breached his duty to the
Registrant or a court must determine that he is fairly and reasonably
entitled to be indemnified and must approve the amount. In a claim based
upon the director's or officer's purchase or sale of the Registrant's
securities, the director of officer may obtain indemnification only if a
court determines that, in view of all the circumstances, he is fairly and
reasonably entitled to be indemnified, and then for such amount as the court
shall determine.
The foregoing statements are specifically made subject to the detailed
provisions of Section 33-320a.
The directors and officers of HL and HESCO are covered under a directors and
officers liability insurance policy issued to ITT Corporation and its
subsidiaries. Such policy will reimburse the Registrant for any payments
that it shall make to directors and officers pursuant to law and will,
subject to certain exclusions contained in the policy, further pay any other
costs, charges and expenses and settlements and judgments arising from any
proceeding involving any director or officer of the Registrant in his past
or present capacity as such, and for which he may be liable, except as to
any liabilities arising from acts that are deemed to be uninsurable.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, 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 of
the Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question 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 29. Principal Underwriters
(a) HESCO acts as principal underwriter for the following 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 (NQ Variable
Account)
Hartford Life Insurance Company - Separate Account Two (QP Variable
Account)
Hartford Life Insurance Company - Separate Account One
Hartford Life Insurance Company - Separate Account Two (Director)
Hartford Life Insurance Company - Putnam Capital Manager Trust Separate
Account
Hartford Money Market Fund, Inc.
Hartford Life Insurance Company - Separate Account Three
ITT Hartford Life and Annuity Insurance Company - Separate Account Three
Hartford Life Insurance Company - Separate Account Five
20
<PAGE>
ITT Hartford Life and Annuity Insurance Company - Separate Account Five
ITT Hartford Life and Annuity Insurance Company - Separate Account Six
Hartford Life Insurance Company Separate Account VL I
(b) Directors and Officers of HESCO
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER
------------------------- ----------------------
Donald E. Waggaman, Jr. Treasurer
Bruce D. Gardner Secretary
George R. Jay Controller
Lowndes A. Smith President
ITEM 30. Location of Accounts and Records
Accounts and records are maintained by HL.
ITEM 31. Management Services
None
ITEM 32. Undertakings
(a) The Registrant hereby undertakes to file a post-effective amendment to
this registration statement as frequently as is necessary to ensure that
the audited financial statements in the registration statement are never
more than 16 months old so long as payments under the variable annuity
Contracts may be accepted.
(b) The Registrant hereby undertakes to include either (1) as part of any
application to purchase a Contract offered by the Prospectus, a space
that an applicant can check to request a Statement of Additional
Information, or (2) a post card or similar written communication affixed
to or included in the Prospectus that the applicant can remove to send
for a Statement of Additional Information.
(c) The Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available
under this Form promptly upon written or oral request.
The Registrant is relying on the no-action letter issued by the Division of
Investment Management to American Council of Life Insurance, Ref. No. IP-6-88,
November 28, 1988. The Registrant has complied with the four provisions of the
no-action letter.
21
<PAGE>
HARTFORD LIFE INSURANCE COMPANY, INC.
AND
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, INC.
POWER OF ATTORNEY
Donald R. Frahm
Bruce D. Gardner
Joseph H. Gareau
John P. Ginnetti
Thomas M. Marra
Leonard E. Odell, Jr.
Lowndes A. Smith
Raymond P. Welnicki
Lizabeth H. Zlatkus
Donald J. Znamierowski
do hereby jointly and severally authorize Bruce D. Gardner and/or Rodney J.
Vessels to sign as their agent, any Registration Statement, pre-effective
amendment, and any post-effective amendment of the Hartford Life Insurance
Company, Inc. and Hartford Life and Accident Insurance Company, Inc. under the
Securities Act of 1933 and/or the Investment Company Act of 1940.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
/s/ DONALD R. FRAHM Dated:
----------------------------------- -----------------------------------
Donald R. Frahm
/s/ BRUCE D. GARDNER Dated:
----------------------------------- -----------------------------------
Bruce D. Gardner
/s/ JOHN P. GINNETTI Dated:
----------------------------------- -----------------------------------
John P. Ginnetti
/s/ THOMAS M. MARRA Dated: December 9, 1994
----------------------------------- -----------------------------------
Thomas M. Marra
/s/ LEONARD E. ODELL, JR. Dated: December 2, 1994
----------------------------------- -----------------------------------
Leonard E. Odell, Jr.
/s/ LOWNDES A. SMITH Dated:
----------------------------------- -----------------------------------
Lowndes A. Smith
/s/ RAYMOND P. WELNICKI Dated:
----------------------------------- -----------------------------------
Raymond P. Welnicki
/s/ LIZABETH H. ZLATKUS Dated:
----------------------------------- -----------------------------------
Lizabeth H. Zlatkus
/s/ DONALD J. ZNAMIEROWSKI Dated: December 8, 1994
----------------------------------- -----------------------------------
Donald J. Znamierowski
22
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485(a) for effectiveness of this Registration Statement and has caused this
Registration Statement to be signed on its behalf, in the City of Hartford, and
State of Connecticut on this 27th day of February, 1995.
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT TWO-
(DC VARIABLE ACCOUNT II)
(Registrant)
*By: *By:
----------------------------------- -----------------------------------
John P. Ginnetti, Rodney J. Vessels
Senior Vice President Attorney-in-Fact
HARTFORD LIFE INSURANCE COMPANY
(Depositor)
*By:
-----------------------------------
John P. Ginnetti,
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons and in the
capacity and on the date indicated.
Donald R. Frahm, Chairman and Chief
Executive Officer, Director*
Bruce D. Gardner, General Counsel
Corporate Secretary, Director*
Joseph H. Gareau, Executive Vice
President and Chief Investment
Officer, Director*
John P. Ginnetti, Senior Vice
President, Director*
Thomas M. Marra, Senior Vice *By:
President, Director* -----------------------------------
Rodney J. Vessels
Attorney-In-Fact
Leonard E. Odell, Jr., Senior Vice
President,
Director*
Lowndes A. Smith, President, Chief Dated: February 27, 1995
Operating Officer, Director* -----------------------------------
Raymond P. Welnicki, Senior Vice
President, Director*
Lizabeth H. Zlatkus, Vice President
Director*
Donald J. Znamierowski, Vice
President Comptroller, Director*
23
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE I -- SUMMARY OF INVESTMENTS -- OTHER THAN INVESTMENTS IN AFFILIATES
December 31, 1994
(in millions)
<TABLE>
<CAPTION>
AMOUNT
SHOWN ON
BALANCE
TYPE OF INVESTMENT COST FAIR VALUE SHEET
- - ------------------------------------------------------------------------------------ --------- ----------- -----------
<S> <C> <C> <C>
FIXED MATURITIES
Bonds
US Government and government agencies and authorities:
-- guaranteed and sponsored $ 1,516 $ 1,429 $ 1,429
-- guaranteed and sponsored -- asset backed 4,256 3,763 3,763
States, municipalities and political subdivisions 148 137 137
International governments 189 176 176
Public utilities 531 500 500
All other corporate 3,717 3,458 3,458
All other corporate -- asset backed 2,442 2,350 2,350
Short-term investments 1,665 1,616 1,616
--------- ----------- -----------
TOTAL FIXED MATURITIES 14,464 13,429 13,429
EQUITY SECURITIES
Common Stocks -- industrial, miscellaneous and all other 76 68 68
--------- ----------- -----------
TOTAL FIXED MATURITIES AND EQUITY SECURITIES 14,540 13,497 13,497
Policy loans 2,614 2,614 2,614
Mortgage loans 316 316 316
Other investments 103 109 107
--------- ----------- -----------
TOTAL INVESTMENTS $ 17,573 $ 16,536 $ 16,534
--------- ----------- -----------
--------- ----------- -----------
<FN>
- - ------------------------
Note: Fair values for stocks and bonds approximate those quotations published by
applicable stock exchanges or are received from other reliable sources.
The fair value for short-term investments approximates cost.
Policy and mortgage loan carrying amounts approximate fair value.
</TABLE>
S-1
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION
December 31, 1994
(in millions)
<TABLE>
<CAPTION>
BENEFITS,
OTHER CLAIMS AND AMORTIZATION
DEFERRED FUTURE POLICY- NET CLAIM OF DEFERRED OTHER
POLICY POLICY HOLDER PREMIUMS AND INVESTMENT ADJUSTMENT POLICY INSURANCE
ACQUISITION BENEFITS FUNDS OTHER INCOME EXPENSES ACQUISITION EXPENSES
SEGMENT COSTS * * CONSIDERATIONS (1) (2) COSTS (3)
- - --------------------------- ----------- -------- ------- -------------- ---------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31,
1994
ILAD $1,708 $ 582 $ 4,257 $ 492 $ 199 $ 334 $137 $ 80
AMS 101 845 10,160 39 750 695 8 48
SPECIALTY 0 463 6,911 569 350 376 0 518
----------- -------- ------- ------- ---------- ---------- ----- ---------
$1,809 $1,890 $21,328 $ 1,100 $1,299 $1,405 $ 145 $646
----------- -------- ------- ------- ---------- ---------- ----- ---------
----------- -------- ------- ------- ---------- ---------- ----- ---------
YEAR ENDED DECEMBER 31,
1993
ILAD $1,237 $ 428 $ 3,535 $ 423 $ 172 $ 249 $ 97 $120
AMS 97 703 9,026 35 759 662 16 45
SPECIALTY 0 528 5,673 289 136 135 0 272
----------- -------- ------- ------- ---------- ---------- ----- ---------
$1,334 $1,659 $18,234 $ 747 $1,067 $1,046 $ 113 $437
----------- -------- ------- ------- ---------- ---------- ----- ---------
----------- -------- ------- ------- ---------- ---------- ----- ---------
YEAR ENDED DECEMBER 31,
1992
ILAD $ 698 $1,115 $ 1,004 $ 178 $ 127 $ 104 $ 49 $ 79
AMS 101 583 8,256 27 743 657 6 51
SPECIALTY 0 46 5,822 54 42 36 0 55
----------- -------- ------- ------- ---------- ---------- ----- ---------
$ 799 $1,744 $15,082 $ 259 $ 912 $ 797 $ 55 $185
----------- -------- ------- ------- ---------- ---------- ----- ---------
----------- -------- ------- ------- ---------- ---------- ----- ---------
<FN>
- - ------------------------------
(*) As Restated
(1) Investment income is allocated to the segments based on each segment's
share of investable funds or on a direct basis, where applicable, including
realized capital gains and losses.
(2) Benefits, claims and claim adjustment expenses includes the increase in
liability for future policy benefits and death, disability and other
contract benefit payments.
(3) Other insurance expenses are allocated to the segments based on specific
identification, where possible, and related activities, including dividends
to policyholders.
</TABLE>
S-2
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE IV -- REINSURANCE
(in millions)
<TABLE>
<CAPTION>
ASSUMED PERCENTAGE
CEDED TO FROM OF AMOUNT
GROSS OTHER OTHER NET ASSUMED TO
AMOUNT COMPANIES COMPANIES AMOUNT NET
-------- --------- --------- ------- ----------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1994
LIFE INSURANCE IN FORCE $136,929 $87,553 $35,016 $84,382 41.5%
-------- --------- --------- -------
Premiums and other considerations
ILAD $ 448 $ 71 $ 106 $ 483 22.0%
AMS 39 0 0 39 0.0%
Specialty 521 140 188 569 33.0%
Accident and Health 308 304 5 9 55.6%
-------- --------- --------- -------
TOTAL $ 1,316 $ 615 $ 299 $ 1,100 27.2%
-------- --------- --------- -------
-------- --------- --------- -------
YEAR ENDED DECEMBER 31, 1993
LIFE INSURANCE IN FORCE $ 93,099 $71,415 $27,057 $48,751 55.5%
-------- --------- --------- -------
Premiums and other considerations
ILAD $ 417 $ 85 $ 91 $ 423 21.5%
AMS 25 0 0 25 0.0%
Specialty 386 97 0 289 0.0%
Accident and Health 307 299 2 10 20.0%
-------- --------- --------- -------
TOTAL $ 1,135 $ 481 $ 93 $ 747 12.4%
-------- --------- --------- -------
-------- --------- --------- -------
YEAR ENDED DECEMBER 31, 1992
LIFE INSURANCE IN FORCE $ 44,661 $64,207 $51,430 $31,884 161.3%
--------- -------
Premiums and other considerations
ILAD $ 208 $ 71 $ 27 $ 164 16.5%
AMS 27 0 0 27 0.0%
Specialty 153 99 0 54 0.0%
Accident and Health 292 281 3 14 21.4%
-------- --------- --------- -------
TOTAL $ 680 $ 451 $ 30 $ 259 37.9%
-------- --------- --------- -------
-------- --------- --------- -------
</TABLE>
S-3
<PAGE>
CERTIFICATION
I, John F. Ginnetti, Secretary of Hartford Life Insurance Company, hereby
certify that the attached is a true copy of a resolution adopted by the
Board of Directors of said Company on June 2, 1986.
/s/ John F. Ginnetti
---------------------------------------
June 13, 1986
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
CONSENT
The undersigned, being all of the Directors of Hartford Life Insurance
Company, hereby consent to the following resolution, such action to have the
same force and effect as if taken at a meeting duly called and held for such
purpose:
RESOLVED, That Hartford Life Insurance Company is hereby authorized to
establish a new separate account to be designated "Separate Account
Two" (the "Account") and to issue variable annuity contracts with
reserves for such contracts being segregated in such Account.
FURTHER RESOLVED, That the officers of Hartford Life Insurance Company
are hereby authorized and directed to take all actions necessary to:
(1) Comply with applicable state and federal laws and regulations
applicable to the establishment and operation of the Account;
(2) Establish, from time to time, the terms and conditions pursuant
to which interests in the Account will be sold to contract owners;
(3) Establish all procedures, standards and arrangements necessary or
appropriate for the operation of the Account including, but not
limited to, the establishment of the investment policies of the
Account; and
(4) Transfer funds to the Account, up to a maximum of $100,000 to
provide for its efficient operation, all on such terms and for
such periods as said officers deem to be necessary or appropriate.
/s/ Edward N. Bennett /s/ R. Fred Richardson
- - ------------------------------------- -------------------------------------
/s/ Joel P. Brightman /s/ Lowndes A. Smith
- - ------------------------------------- -------------------------------------
/s/ Larry A. Lance /s/ Donald R. Sondergeld
- - ------------------------------------- -------------------------------------
/s/ Leroy C. Thomas
------------------------------------
Dated: June 2, 1986
<PAGE>
EXHIBIT 3
PRINCIPAL UNDERWRITER AGREEMENT
THIS AGREEMENT, dated as of the 1st day of April, 1988, made by and between
HARTFORD LIFE INSURANCE COMPANY ("the Hartford"), a corporation organized and
existing under the laws of the State of Connecticut, and HARTFORD EQUITY SALES
COMPANY, INC. ("HESCO"), a corporation organized and existing under the laws
of the State of Connecticut,
WITNESSETH:
WHEREAS, the Board of Directors of the Hartford has made provision for the
establishment of separate accounts within the Hartford in accordance with the
laws of the State of Connecticut, which separate accounts were organized and are
established and registered as unit investment trust investment companies with
the Securities and Exchange Commission under the Investment Company Act of 1940,
as amended, and which are designated 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) and Hartford Life Insurance Company Separate Account Two (NQ Variable
Account), (referred to collectively as the "Separate Accounts"); and
WHEREAS, HESCO offers to the public certain Individual and Group Annuity
Contracts (the "Contracts") issued by the Hartford with respect to the Separate
Accounts and which are registered under the Securities Act of 1933, as amended;
and
WHEREAS, the Contracts authorize the Contract Owners of such Contracts to
direct that part or all of the net purchase payments to their Contract shall be
invested in shares of one or more of the underlying mutual funds which are
sponsored by the Hartford ("the Fund or Funds"). The Funds are registered as
open-end, diversified, management investment companies under the Investment
Company Act of 1940, as amended; and
WHEREAS, HESCO has previously agreed to act as distributor in connection
with offers and sales of the Contracts under the terms and conditions set forth
in this Distribution Agreement.
NOW THEREFORE, in consideration of the mutual agreements made herein, the
Hartford and HESCO agree as follows:
I.
HESCO'S DUTIES
1. HESCO, as principal underwriter for the Contracts, will use its best
efforts to effect offers and sales of the Contracts through broker-dealers that
are members of the National Association of Securities Dealers, Inc. and whose
registered representatives are duly licensed as insurance agents of the
Hartford. HESCO is responsible for compliance with all applicable requirements
of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934,
as amended, and the Investment Company Act of 1940, as
<PAGE>
amended, and the rules
and regulations thereunder, and all other applicable laws, rules and regulations
thereunder, and all other applicable laws, rules and regulations relating to the
sales and distribution of the Contracts, the need for which arises out of its
duties as principal underwriter of said Contracts and relating to the creation
of the Separate Accounts.
2. HESCO agrees that it will not use any prospectus, sales literature, or
any other printed matter or material or offer for sale or sell any Contract if
any of the foregoing in any way represent the duties, obligations, or
liabilities of the Hartford as being greater than, or different from, such
duties, obligations and liabilities as are set forth in this Agreement, as it
may be amended from time to time.
3. HESCO agrees that it will utilize the then currently effective
prospectuses relating to the Separate Accounts' variable annuity contracts in
connection with its selling efforts.
As to the other types of sales materials, HESCO agrees that it will use only
sales materials which conform to the requirements of federal and state insurance
laws and regulations and which have been filed, where necessary, with the
appropriate regulatory authorities.
4. HESCO agrees that it or its duly designated agent shall maintain records
of the name and address of, and the securities issued by the Separate Accounts
and held by, every holder of any security issued pursuant to this Agreement, as
required by Section 26(a)(4) of the Investment Company Act of 1940, as amended.
5. HESCO's services pursuant to this Agreement shall not be deemed to be
exclusive, and it may render similar services and act as an underwriter,
distributor, or dealer for other investment companies in the offering of their
shares.
6. In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations and duties hereunder on the part of HESCO,
HESCO shall not be subject to liability to the Separate Accounts or to any
Contract Owner or party in interest under a Contract for any act or omission in
the course, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
II.
1. The Separate Accounts reserve the right at any time to suspend or limit
the public offering of variable annuity contracts upon thirty days' written
notice to HESCO, except where the notice period may be shortened because of
legal action taken by any regulatory agency.
2. The Separate Accounts agree to advise HESCO immediately:
(a) Of any request by the Securities and Exchange Commission for
amendment of its Securities Act registration statements or for additional
information;
<PAGE>
(b) Of the issuance by the Securities and Exchange Commission of any
stop order suspending the effectiveness of the Securities Act registration
statement relating to the Separate Accounts or of the initiation of any
proceedings for that purpose;
(c) Of the happening of any material event, if known, which makes untrue
any statement in said Securities Act registration statements or which
requires change therein in order to make any statement therein not
misleading.
The Separate Accounts will furnish to HESCO such information with respect to
the Separate Accounts and the variable annuity contracts in such form and signed
by such of its officers and directors of the Separate Accounts as HESCO may
reasonably request and will warrant that the statements therein contained when
so signed will be true and correct. The Separate Accounts will also furnish,
from time to time, such additional information regarding the Separate Accounts'
financial condition as HESCO may reasonably request.
III.
COMPENSATION
For providing the principal underwriting functions on behalf of the Separate
Accounts, HESCO shall be entitled to receive compensation as agreed upon from
time to time by the Hartford and HESCO.
IV.
RESIGNATION AND REMOVAL OF
PRINCIPAL UNDERWRITER
HESCO may resign as Principal Underwriter hereunder, upon 120 days' prior
written notice to the Hartford. However, such resignation shall not become
effective until either the Separate Accounts have been completely liquidated and
the proceeds of the liquidation distributed through the Separate Accounts to the
Contract Owners or a successor Principal Underwriter has been designated and has
accepted its duties.
V.
MISCELLANEOUS
1. This Agreement may not be assigned by any of the parties hereto without
the written consent of the other party.
2. All notices and other communications provided for hereunder shall be in
writing and shall be delivered by hand or mailed first class, postage pre-paid,
addressed as follows:
(a) If to the Hartford -- Hartford Life Insurance Company, P.O. Box
2999, Hartford, Connecticut 06104-2999
(b) If to HESCO -- Hartford Equity Sales Company, Inc., Hartford,
Connecticut 06104-2999
or to such other address as HESCO, or the Hartford shall designate by written
notice to the other.
<PAGE>
3. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which shall be deemed one
instrument, and an executed copy of this Agreement and all amendments hereto
shall be kept on file by the Hartford and shall be open to inspection at any
time during the business hours of the Hartford.
4. This Agreement shall inure to the benefit of and be binding upon the
successor of the parties hereto.
5. This Agreement shall be construed and governed by and according to the
laws of the State of Connecticut.
6. This Agreement may be amended from time to time by the mutual agreement
and consent of the parties hereto.
7. This Amended and Restated Agreement shall supersede all prior agreements
among the parties hereto relating to the same subject matter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
(SEAL) HARTFORD LIFE INSURANCE COMPANY
Attest:
- - ------------------------------------ By----------------------------------
Vice President
(SEAL) HARTFORD EQUITY SALES COMPANY, INC.
Attest:
- - ------------------------------------ By----------------------------------
Vice President
<PAGE>
EXHIBIT 6(A)
RESTATED CERTIFICATE OF INCORPORATION
HARTFORD LIFE INSURANCE COMPANY
This Restated Certificate of Incorporation gives effect to the amendment of
the Certificate of Incorporation of the corporation and otherwise purports
merely to restate all those provisions already in effect. This Restated
Certificate of Incorporation has been adopted by the Board of Directors and by
the sole shareholder.
Section 1. The name of the corporation is Hartford Life Insurance
Company and it shall have all the powers granted by the general
statutes, as now enacted or hereinafter amended to corporations formed
under the Stock Corporation Act.
Section 2. The corporation shall have the purposes and powers to write
any and all forms of insurance which any other corporation now or
hereafter chartered by Connecticut and empowered to do an insurance
business may now or hereafter may lawfully do; to accept and to cede
reinsurance; to issue policies and contracts for any kind or
combinations of kinds of insurance; to issue policies or contracts
either with or without participation in profits; to acquire and hold any
or all of the shares or other securities of any insurance corporation;
and to engage in any lawful act or activity for which corporations may
be formed under the Stock Corporation Act. The corporation is authorized
to exercise the powers herein granted in any state, territory or
jurisdiction of the United States or in any foreign country.
Section 3. The capital with which the corporation shall commence
business shall be an amount not less than one thousand dollars. the
authorized capital shall be two million five hundred thousand dollars
divided into one thousand shares of common capital stock with a par
value of twenty-five hundred dollars each.
We hereby declare, under the penalties of false statement that the
statements made in the foregoing Certificate are true.
Dated: February 10, 1982 HARTFORD LIFE INSURANCE COMPANY
By:-------------------------------
Attest:
- - --------------------------------------
<PAGE>
EXHIBIT 6(B)
By-Laws
of the
HARTFORD LIFE INSURANCE COMPANY
As passed and effective
February 13, 1978
and amended on
July 13, 1978
January 5, 1979
and
February 29, 1984
<PAGE>
-1-
ARTICLE I
Name - Home Office
Section 1. This corporation shall be named HARTFORD LIFE INSURANCE COMPANY.
Section 2. The principal place of business and Home Office shall be in
the City of Hartford, Connecticut.
ARTICLE II
Stockholders' Meetings - Notice - Quorum - Right to Vote
Section 1. All meetings of the Stockholders shall be held at the
principal business office of the Company unless the Directors shall otherwise
provide and direct.
Section 2. The annual meeting of the Stockholders shall be held on such
day and at such hour as the Board of Directors may decide. For cause the
Board of Directors may postpone or adjourn such annual meeting to any other
time during the year.
Section 3. Special meetings of the Stockholders may be called by the Board
of Directors, the Executive Committee, the Chairman of the Board, the
President or any Vice President.
Section 4. Notice of Stockholders' meetings shall be mailed to each
Stockholder, at his address as it appears on the records of the Company, at
least seven days prior to the meeting. The notice shall state the place, date
and time of the meeting and shall specify all matters proposed to be acted
upon at the meeting.
Section 5. At each annual meeting the Stockholders shall choose Directors
as hereinafter provided.
Section 6. Each Stockholder shall be entitled to one vote for each share
of stock held by him at all meetings of the Company. Proxies may be
authorized by written power of attorney.
Section 7. Holders of one-half of the whole amount of the stock issued and
outstanding shall constitute a quorum.
<PAGE>
-2-
Section 8. Each Stockholder shall be entitled to a certificate of stock
which shall be signed by the President or a Vice President, and either the
Treasurer or an Assistant Treasurer of the Company, and shall bear the seal of
the Company, but such signatures and seal may be facsimile if permitted by
the laws of the State of Connecticut.
ARTICLE III
Directors - Meetings - Quorum
Section 1. The property, business and affairs of the Company shall be
managed by a board of not less than three nor more than twenty Directors, who
shall be chosen by ballot at each annual meeting. Vacancies occurring between
annual meetings may be filled by the Board of Directors by election. Each
Director shall hold office until the next annual meeting of Stockholders and
until his successor is chosen and qualified.
Section 2. Meetings of the Board of Directors may be called by the
direction of the Chairman of the Board, the President, or any three Directors.
Section 3. Three days' notice of meetings of the Board of Directors shall
be given to each Director, either personally or by mail or telegraph, at his
residence or usual place of business, but notice may be waived, at any time,
in writing.
Section 4. One third of the number of existing directorships, but not
less than two Directors, shall constitute a quorum.
ARTICLE IV
Election of Officers - Duties of Board of
Directors and Executive Committee
Section 1. The President shall be elected by the Board of Directors. The
Board of Directors may also elect one of its members to serve as Chairman of
the Board of Directors. The Chairman of the Board, or an individual appointed
by him, shall have authority to appoint all other officers, except as stated
herein, including one or more Vice Presidents and Assistant Vice Presidents,
the Treasurer
<PAGE>
-3-
and one or more Associate or Assistant Treasurers, one or more Secretaries
and Assistant Secretaries and such other Officers as the Chairman of the
Board may from time to time designate. All Officers of the Company shall hold
office during the pleasure of the Board of Directors. The Directors may
require any Officer of the Company to give security for the faithful
performance of his duties.
Section 2. The Directors may fill any vacancy among the officers by
election for the unexpired term.
Section 3. The Board of Directors may appoint from its own number an
Executive Committee of not less than five Directors. The Executive Committee
may exercise all powers vested in and conferred upon the Board of Directors
at any time when the Board is not in session. A majority of the members of
said Committee shall constitute a quorum.
Section 4. Meetings of the Executive Committee shall be called whenever
the Chairman of the Board, the President or a majority of its members shall
request. Forty-eight hours' notice shall be given of meetings but notice may
be waived, at any time, in writing.
Section 5. The Board of Directors shall annually appoint from its own
number a Finance Committee of not less than three Directors, whose duties
shall be as hereinafter provided.
Section 6. The Board of Directors may, at any time, appoint such other
Committees, not necessarily from its own number, as it may deem necessary for
the proper conduct of the business of the Company, which Committees shall have
only such powers and duties as are specifically assigned to them by the Board
of Directors or the Executive Committee.
Section 7. The Board of Directors may make contributions, in such amounts
as it determines to be reasonable, for public welfare or for charitable,
scientific or educational purposes, subject to the limits and restrictions
imposed by law and to such rules and regulations consistent with law as it
makes.
ARTICLE V
Officers
Chairman of the Board
Section 1. The Chairman of the Board shall preside at the meetings of the
Board of Directors and the Executive Committee and, in the absence of the
Chairman of the Finance Committee, at the meetings of the Finance Committee.
In the absence or inability of the Chairman of the Board to so preside, the
President shall preside in his place.
<PAGE>
-4-
President
Section 2. The President, under the supervision and control of the
Chairman of the Board, shall have general charge and oversight of the
business and affairs of the Company. The President shall preside at the
meetings of the Stockholders. He shall be a member of and shall preside at
all meetings of all Committees not referred to in Section 1 of this ARTICLE
except that he may designate a Chairman for each such other Committee.
Section 3. In the absence or inability of the President to perform his
duties, the Chairman of the Board may designate a Vice President to exercise
the powers and perform the duties of the President during such absence or
inability.
Secretary
Section 4. The Secretary of the Corporation shall keep a record of all
the meetings of the Company, of the Board of Directors and of the Executive
Committee, and he shall discharge all other duties specifically required of
the Secretary by law. The other Secretaries and Assistant Secretaries shall
perform such duties as may be assigned to them by the Board of Directors or
by their senior officers and any Secretary or Assistant Secretary may affix
the seal of the Company and attest it and the signature of any officer to any
and all instruments.
Treasurer
Section 5. The Treasurer shall keep, or cause to be kept, full and
accurate accounts of the Company. He shall see that the funds of the Company
are disbursed as may be ordered by the Board of Directors or the Finance
Committee. He shall have charge of all moneys paid to the Company and on
deposit to the credit of the Company or in any other properly authorized
name, in such banks or depositories as may be designated in a manner provided
by these by-laws. He shall also discharge all other duties that may be
required of him by law.
Other Officers
Section 6. The other officers shall perform such duties as may be
assigned to them by the President or the Board of Directors.
<PAGE>
-5-
ARTICLE VI
Finance Committee
Section 1. If a Finance Committee is established it shall be the duty of
that committee to supervise the investment of the funds of the Company in
securities in which insurance companies are permitted by law to invest, and
all other matters connected with the management of investments. If no Finance
Committee is established this duty shall be performed by the Board of
Directors.
Section 2. All loans or purchases for the investment and reinvestment of
the funds of the Company shall be submitted for approval to the Finance
Committee, if not specifically approved by the Board of Directors.
Section 3. Sale or transfer of any stocks or bonds shall be made upon
authorization of the Finance Committee unless specifically authorized by the
Board of Directors.
Section 4. Transfers of stock and registered bonds, deeds, leases,
releases, sales, mortgages chattel or real, assignments or partial releases
of mortgages chattel or real, and in general all instruments of defeasance
of property and all agreements or contracts affecting the same, except
discharges of mortgages and entries to foreclose the same as hereinafter
provided, shall be authorized by the Finance Committee or the Board of
Directors, and be executed jointly for the Company by two persons, to wit:
The Chairman of the Board, the President or a Vice President, and a
Secretary, the Treasurer or an Assistant Treasurer, but may be acknowledged
and delivered by either one of those executing the instrument; provided,
however, that either a Secretary, the Treasurer, or an Assistant Treasurer
alone, when authorized as aforesaid, or any person specially authorized by
the Finance Committee as attorney for the Company, may make entry to
foreclose any mortgage, and a Secretary, the Treasurer or an Assistant
Treasurer alone is authorized, without the necessity of further authority, to
discharge by deed or otherwise any mortgage on payment to the Company of the
principal, interest and all charges due.
Section 5. The Finance Committee may fix times and places for regular
meetings. No notice of regular meetings shall be necessary. Reasonable notice
shall be given of special meetings but the action of a majority of the
Finance Committee at any meeting shall be valid notwithstanding any defect in
the notice of such meeting.
<PAGE>
-6-
Section 6. In the absence of specific authorization from the Board of
Directors or the Finance Committee, the Chairman of the Board, the President,
a Vice President or the Treasurer shall have the power to vote or execute
proxies for voting any shares held by the Company.
ARTICLE VII
Funds
Section 1. All monies belonging to the Company shall be deposited to the
credit of the Company, or in such other name as the Finance Committee, the
Chairman of the Finance Committee or such executive officers as are
designated by the Board of Directors shall direct, in such bank or banks as
may be designated from time to time by the Finance Committee, the Chairman of
the Finance Committee, or by such executive officers as are designated by the
Board of Directors. Such monies shall be drawn only on checks or drafts
signed by any two executive officers of the Company, provided that the Board
of Directors may authorize the withdrawal of such monies by check or draft
signed with the facsimile signature of any one or more executive officers,
and provided further, that the Finance Committee may authorize such
alternative methods of withdrawals as it deems proper.
The Board of Directors, the President, the Chairman of the Finance
Committee, a Vice President, or such executive officers as are designated by
the Board of Directors may authorize withdrawal of funds by checks or drafts
drawn at offices of the Company to be signed by Managers, General Agents or
employees of the Company, provided that all such checks or drafts shall be
signed by two such authorized persons, except checks or drafts used for the
payment of claims or losses which need be signed by only one such
authorized person, and provided further that the Board of Directors of the
Company or executive officers designated by the Board of Directors may impose
such limitations or restrictions upon the withdrawal of such funds as it
deems proper.
<PAGE>
-7-
ARTICLE VIII
Indemnity of Directors and Officers
Section 1. The Company shall indemnify and hold harmless each Director
and officer now or hereafter serving the Company, whether or not then in
office, from and against any and all claims and liabilities to which he may
be or become subject by reason of his being or having been a Director or
officer of the Company, or of any other company which he serves as a Director
or officer at the request of the Company, to the extent such is consistent
with the statutory provisions pertaining to indemnification, and shall
provide such further indemnification for legal and/or all other expenses
reasonably incurred in connection with defending against such claims and
liabilities as is consistent with statutory requirements.
ARTICLE IX
Amendment of ByLaws
Section 1. The Directors shall have power to adopt, amend and repeal such
bylaws as may be deemed necessary or appropriate for the management of the
property and affairs of the Company.
Section 2. The Stockholders at any annual or special meeting may amend or
repeal these bylaws or adopt new ones if the notice of such meeting contains
a statement of the proposed alteration, amendment, repeal or adoption, or the
substance thereof.
<PAGE>
2
ARTICLE I
Name - Home Office
Section 1. This corporation shall be named Hartford Life Insurance
Company.
Section 2. The principal place of business and Home Office shall be in
the City of Hartford, Connecticut.
ARTICLE II
Stockholders' Meetings - Notice- Quorum - Right to Vote
Section 1. All meetings of the Stockholders shall be held at the
principal business office of the Company unless the Directors shall otherwise
provide and direct.
Section 2. The annual meeting of the Stockholders shall be held on such
day and at such hour as the Board of Directors may decide. For cause the
Board of Directors may postpone or adjourn such annual meeting to any other
time during the year.
Section 3. Special meetings of the Stockholders may be called by the
Board of Directors, the Executive Committee, the Chairman of the Board, the
President or any Vice President.
Section 4. Notice of Stockholders' meetings shall be mailed to each
Stockholder, at his address as it appears on the records of the Company, at
least seven days prior to the meeting. The notice shall state the place, date
and time of the meeting and shall specify all matters proposed to be acted
upon at the meeting.
Section 5. At each annual meeting the Stockholders shall choose Directors
as hereinafter provided.
Section 6. Each Stockholder shall be entitled to one vote for each share
of stock held by him at all meetings of the Company. Proxies may be
authorized by written power of attorney.
Section 7. Holders of one-half of the whole amount of the stock issued
and outstanding shall constitute a quorum.
<PAGE>
3
Section 8. Each Stockholder shall be entitled to a certificate of stock
which shall be signed by the President or a Vice President, and either the
Treasurer or an Assistant Treasurer of the Company, and shall bear the seal
of the Company, but such signatures and seal may be facsimile if permitted by
the laws of the State of Connecticut.
ARTICLE III
Directors - Meetings - Quorum
Section 1. The property, business and affairs of the Company shall be
managed by a board of not less than three nor more than twenty Directors, who
shall be chosen by ballot at each annual meeting. Vacancies occurring between
annual meetings may be filled by the Board of Directors by election. Each
Director shall hold office until the next annual meeting of Stockholders and
until his successor is chosen and qualified.
Section 2. Meetings of the Board of Directors may be called by the
direction of the Chairman of the Board, the President, or any three Directors.
Section 3. Three days' notice of meetings of the Board of Directors shall
be given to each Director, either personally or by mail or telegraph, at his
residence or usual place of business, but notice may be waived, at any time,
in writing.
Section 4. One third of the number of existing directorships, but not
less than two Directors, shall constitute a quorum.
ARTICLE IV
Election of Officers - Duties of Board of
Directors and Executive Committee
Section 1. The Board of Directors shall annually elect a Chairman of the
Board, a President, a Secretary of the Corporation and a Treasurer. It may
elect such Vice Presidents, other Secretaries, Assistant Secretaries,
Assistant Treasurers and such other officers as it may determine. All
officers of the Company shall hold office during the pleasure of the Board of
Directors.
<PAGE>
4
Section 2. The Directors may fill any vacancy among the officers by
election for the unexpired term.
Section 3. The Board of Directors may appoint from its own number an
Executive Committee of not less than five Directors. The Executive Committee
may exercise all powers vested in and conferred upon the Board of Directors
at any time when the Board is not in session. A majority of the members of
said Committee shall constitute a quorum.
Section 4. Meetings of the Executive Committee shall be called
whenever the Chairman of the Board, the President or a majority of its
members shall request. Forty-eight hours' notice shall be given of meetings
but notice may be waived, at any time, in writing.
Section 5. The Board of Directors may annually appoint from its own number
a Finance Committee of not less than three Directors, whose duties shall be
as hereinafter provided.
Section 6. The Board of Directors may, at any time, appoint such other
Committees, not necessarily from its own number, as it may deem necessary for
the proper conduct of the business of the Company, which Committees shall
have only such powers and duties as are specifically assigned to them by the
Board of Directors or the Executive Committee.
Section 7. the Board of Directors may make contributions, in such amounts
as it determines to be reasonable, for public welfare or for charitable,
scientific or educational purposes, subject to the limits and restrictions
imposed by law and to such rules and regulations consistent with law as it
makes.
ARTICLE V
Officers
Chairman of the Board
Section 1. The Chairman of the Board shall preside at the meetings of the
Board of Directors and the Executive Committee and, in the
<PAGE>
5
absence of the Chairman of the Finance Committee, at the meetings of the
Finance Committee. In the absence or inability of the Chairman of the Board
to so preside, the President shall preside in his place.
President
Section 2. The President, under the supervision and control of the Chairman
of the Board, shall have general charge and oversight of the business and
affairs of the Company. The President shall preside at the meetings of the
Stockholders. He shall be a member of and shall preside at all meetings of
all Committees not referred to in Section 2 of this ARTICLE except that he
may designate a Chairman for each such other Committee.
Section 3. In the absence or inability of the President to perform his
duties, the Chairman of the Board may designate a Vice President to exercise
the powers and perform the duties of the President during such absence or
inability.
Secretary
Section 4. The Secretary of the Corporation shall keep a record of all the
meetings of the Company, of the Board of Directors and of the Executive
Committee, and he shall discharge all other duties specifically required of
the Secretary by law. The other Secretaries and the Assistant Secretaries
shall perform such duties as may be assigned to them by the Board of
Directors or by their senior officers and any Secretary or Assistant Secretary
may affix the seal of the Company and attest it and the signature of any
officer to any and all instruments.
Treasurer
Section 5. The Treasurer shall keep, or cause to be kept, full and accurate
accounts of the Company. He shall see that the funds of the Company are
disbursed as may be ordered by the Board of Directors or the Finance
Committee. He shall have charge of all moneys paid to the Company and on
deposit to the credit of the Company or in any other properly authorized
name, in such banks or depositories as may be designated in a manner provided
by these bylaws. He shall also discharge all other duties that may be required
of him by law.
<PAGE>
6
Other Officers
Section 6. The other officers shall perform such duties as may be assigned
to them by the President or the Board of Directors.
ARTICLE VI
Finance Committee
Section 1. If a Finance Committee is established it shall be the duty of the
committee to supervise the investment of the funds of the Company in
securities in which insurance companies are permitted by law to invest, and
all other matters connected with the management of investments. If no Finance
Committee is established, this duty shall be performed by the Board of
Directors.
Section 2. All loans or purchases for the investment and reinvestment
of the funds of the Company shall be submitted for approval to the Finance
Committee, if not specifically approved by the Board of Directors.
Section 3. Sale or transfer of any stocks or bonds shall be made upon
authorization of the Finance Committee unless specifically authorized by the
Board of Directors.
Section 4. Transfers of stock and registered bonds, deeds, leases, releases,
sales, mortgages chattel or real, assignments or partial releases of
mortgages chattel or real, and in general all instruments of defeasance of
property and all agreements or contracts affecting the same, except
discharges of mortgages and entries to foreclose the same as hereinafter
provided, shall be authorized by the Finance Committee or the Board of
Directors, and be executed jointly for the Company by two persons, to wit:
the Chairman of the Board, the President or a Vice President, and a
Secretary, the Treasurer or an Assistant Treasurer, but may be acknowledged
and delivered by either one of those executing the instrument; provided,
however, that either a Secretary, the Treasurer, or an Assistant Treasurer
alone, when authorized as aforesaid, or any person specifically authorized by
the Finance Committee as attorney for the Company, may make entry to
foreclose any mortgage, and a Secretary, the Treasurer or an Assistant
Treasurer alone is authorized, without the necessity of further authority, to
discharge by deed or otherwise any mortgage on payment to the Company of the
principal, interest and all charges due.
<PAGE>
7
Section 5. The Finance Committee may fix times and places for regular
meetings. No notice of regular meetings shall be necessary. Reasonable notice
shall be given of special meetings but the action of a majority of the
Finance Committee at any meeting shall be valid notwithstanding any defect in
the notice of such meeting.
Section 6. In the absence of specific authorization from the Board of
Directors or the Finance Committee, the Chairman of the Board, the
President, a Vice President or the Treasurer shall have the power to vote or
execute proxies for voting any shares held by the Company.
ARTICLE VII
Funds
Section 1. All monies belonging to the Company shall be deposited to the
credit of the Company, or in such other name as the Finance Committee, the
Chairman of the Finance Committee or such executive officers as are
designated by the Board of Directors shall direct, in such bank or banks as
may be designated from time to time by the Finance Committee, the Chairman of
the Finance Committee or by such executive officers as are designated by the
Board of Directors. Such monies shall be drawn only on checks or drafts
signed by any two executive officers of the Company, provided that the Board
of Directors may authorize the withdrawal of such monies by check or draft
signed with the facsimile signature of any one or more executive officers,
and provided further, that the Finance Committee may authorize such
alternative methods of withdrawal as it deems proper.
The Board of Directors, the President, the Chairman of the Finance Committee,
a Vice President, or such executive officers as are designated by the Board
of Directors may authorize withdrawal of funds by checks or drafts drawn at
offices of the Company to be signed by Managers, General Agents or employees
of the Company, provided that all such checks or drafts shall be signed by
two such authorized persons, except checks or drafts used for the payment of
claims or losses which need be signed by only one such authorized person, and
provided further that the Board of Directors of the Company or executive
officers designated by the Board of Directors may impose such limitations or
restrictions upon the withdrawal of such funds as it deems proper.
<PAGE>
8
ARTICLE VIII
Indemnity of Directors and Officers
Section 1. The Company shall indemnify and hold harmless each Director and
officer now or hereafter serving the Company, whether or not then in office,
from and against any and all claims and liabilities to which he may be or
become subject by reason of his being or having been a director or officer of
the Company, or of any other company which he serves as a director or officer
at the request of the Company, to the extent such is consistent with
statutory provisions pertaining to indemnification, and shall provide such
further indemnification for legal and/or all other expenses reasonably
incurred in connection with defending against such claims and liabilities as
is consistent with statutory requirements.
ARTICLE IX
Amendment of Bylaws
Section 1. The Directors shall have power to adopt, amend and repeal such
bylaws as may be deemed necessary or appropriate for the management of the
property and affairs of the Company.
Section 2. The Stockholders at any annual or special meeting may amend or
repeal these bylaws or adopt new ones if the notice of such meeting contains
a statement of the proposed alteration, amendment, repeal or adoption, or
the substance thereof.
<PAGE>
1.0 FUND PARTICIPATION AGREEMENT
1.1 This Agreement, effective January 1, 1989, by and among Hartford
Life Insurance Company, a Connecticut stock life insurance
corporation with principal offices at 200 Mopmeadow Street,
Simsbury, Connecticut 06089 ("Hartford"). Acacia Capital
Corporation, a registered investment company with principal
offices at 51 Louisiana Avenue, N.W., Washington, D.C. 20001, (the
"Fund"), and Calvert Asset Management Company, Inc., registered
investment advisor to the Fund, with principal offices at 4550
Montgomery Avenue, Bethesda, Maryland 20814 ("Calvert").
1.2 In consideration of the promises, representations, warranties,
covenants, agreements and conditions contained herein, and in
order to set forth the terms and conditions of the transactions
contemplated hereby and the mode of carrying the same into effect;
and intending to be legally bound, the parties hereto agree to
the provisions set forth below.
2.0 THE VARIABLE ANNUITY CONTRACT AND THE SEPARATE ACCOUNT
2.1 Hartford shall maintain a variable annuity contract (the
"Contract") designed to provide, under current law, the benefits
of a tax-deferred accumulation of income for retirement and other
purposes.
2.2 Purchase payments for the Contracts shall be invested by Hartford
in a separate account or accounts. Such payments will constitute
the assets of the separate account and shall be invested, as
directed by purchasers, in certain open-end diversified
management companies registered under the Investment Company Act
of 1940 ("1940 Act").
2.3 One of the open-end diversified management companies is the Fund,
an open-end diversified management investment company with eight
separate series, registered under the 1940 Act. Each series is a
separate investment portfolio with distinct investment objectives.
2.4 Hartford will offer one or more of the series of the Fund,
including the Calvert Socially Responsible Series (the "Series"),
through the separate account
<PAGE>
to its Contract Owners, except that Hartford agrees not to offer
any series of the Fund until the exemptive order referenced in
Section 3.2.3 of this Agreement has been granted by the Securities
and Exchange Commission ("SEC"). Hartford will determine in its
discretion what separate account or accounts will offer the Series.
2.5 Hartford will use the name "Hartford Socially Responsive Fund" in
its marketing and sales literature when referring to the Series,
and agrees to indicate in such literature that "the investment
adviser of the Fund is Calvert Asset Management Company, Inc."
2.5.1 Hartford will use its best efforts to market and promote
the Series for its Contracts, and will market and promote
the Series in all of its markets, if the plan permits this
type of fund.
2.5.2 In marketing its Contracts, Hartford will comply with all
applicable State and Federal laws. Hartford and its agents
shall make no representations or warranties concerning the
Fund or Series shares except those contained in the then
current prospectuses of the Fund and in the Fund's current
printed sales literature. Copies of all advertising and
sales literature describing or concerning the Fund which
is prepared by Hartford or its agents for use in marketing
its Contracts (except those for internal or broker/dealer
use only) will be sent to Calvert when such material is
released to the public, agents or brokers or is submitted to
the Securities and Exchange Commission ("SEC"), National
Association of Securities Dealer, Inc. ("NASD"), or other
regulatory body for review. Hartford shall be responsible
for compliance with any state or federal filing or review
requirements concerning advertising and sales literature.
2.5.3 Hartford and its agents will not oppose voting
recommendations from Calvert or the Fund's Board of
Directors or interfere with the solicitation of proxies for
the Fund shares held for Hartford Contract Owners, unless
Hartford deems such recommendations detrimental to it or to
its Contract Owners. Hartford agrees to provide pass-through
voting privileges to all Hartford Contract Owners and to
assure that each of its separate accounts
<PAGE>
participating in the Fund calculates voting privileges in a
manner consistent with all other separate accounts of any
insurance company investing in the Fund, as required by the
exemptive order referenced in Section 3.2.3 of this
Agreement.
2.5.4 Hartford will responsible for reporting to the Fund's
Board of Directors any potential or existing conflicts
among the interests of the contract owners of all separate
accounts investing in the Fund, and to assist the Board by
providing it with all information reasonably necessary for
the Board to consider any issues raised. The Fund's Board of
Directors is responsible for monitoring any conflict of
interest situation. Hartford and the other relevant
insurance companies will be responsible for taking remedial
action in the event of a Board determination of an
irreconcilable material conflict and to bear the cost of
such remedial action and these responsibilities will be
carried out with a view only to the interests of contract
owners. For purposes of this Section 2.5.4, a majority of
the disinterested members of the Fund's Board shall
determine whether or not any proposed action adequately
remedies any irreconcilable material conflict, but in no
event will the Fund or Calvert be required to establish a
new funding medium for any variable contract. Hartford shall
not be required by this section to establish a new funding
medium for any variable contract if an offer to do so has
been declined by vote of a majority of contract owners
materially adversely affected by the irreconcilable material
conflict.
2.6 Hartford will bear the costs of, and have the primary
responsibility for:
2.6.1 Registering the Contracts and the separate account with the
SEC, including any Application for Exemptive Relief
necessary for the separate account to buy Fund shares;
2.6.2 Developing all policy forms, application forms,
confirmations and other administrative forms or documents
and filing such of these as are necessary to comply with the
requirements of all insurance laws and regulations in each
state in which the contracts are offered;
<PAGE>
2.6.3 Administration of the Contracts and the separate account,
including all policyholder service and communication
activities;
2.6.4 Preparing and approving all marketing and sales literature
involving the sale of Fund shares to the Hartford's separate
account;
2.6.5 Printing and distributing to Hartford Contract Owners
copies of the current prospectuses, statements of additional
information (as requested by Contract Owners) and periodic
reports for the separate account and the Fund;
2.6.6 Preparing and filing any reports or other filings as may be
required under state insurance laws or regulations with
respect to the contracts or the separate account; and
2.6.7 Reimbursing the Fund up to $1500 for the cost of obtaining
a separate audit opinion for the 1988 fiscal year for the
Series, distinct from the other seven series; and further,
Hartford agrees that for every year thereafter, it will
engage in good faith negotiations with Calvert and the Fund
regarding such reimbursement by Hartford.
3.0 THE SERIES
3.1 The Fund and Calvert shall make available shares of the Series as
the underlying investment media for Hartford Contract Owners.
3.2 Calvert shall bear the costs of, and subject to review by
Hartford, shall have, or shall cause the Fund and the Series to
assume, the primary responsibility for:
3.2.1 Registering the Fund with the SEC including a separate
prospectus for the Series which does not reference the other
seven series of the Fund. The costs of printing and
distributing such prospectus to Hartford Contract Owners
shall be borne by Hartford as provided in Section 2.6.5
above.
3.2.2 Preparing, producing and maintaining the effectiveness of
such registration statements for the Fund as are required
under federal and state securities laws, and clearing such
registration statements through the SEC and pursuant to the
securities laws and regulations in each state in which the
contracts are offered;
<PAGE>
3.2.3 Preparing and filing an Application for Exemptive Relief
requesting appropriate exemptive relief from the relevant
provisions of the 1940 Act ("Application") and clearing such
Application through the SEC, thereby permitting Hartford
contracts to use the Fund as an underlying investment
alternative for its variable annuity contracts.
3.2.4 Operating and maintaining the Fund in accordance with
applicable law, including the diversification standards of
the Internal Revenue Code of 1986 applicable to variable
annuity contracts;
3.2.5 Preparing and filing any reports or other filings as may be
required with respect to the Fund under federal or state
securities laws;
3.2.6 Providing Hartford with the daily net asset values of the
Fund by 6:00 p.m. E.S.T. on each day the New York Stock
Exchange is open.
3.2.7 Providing Hartford with camera-ready copy necessary for the
printing of the periodic shareholder reports for the Fund.
3.3 The Fund or Calvert shall maintain records in accordance with the
Investment Company Act of 1940 or other statutes, rules and
regulations applicable to the Fund's operation in connection with
the performance of its duties. Hartford shall have the right to
access such records, upon reasonable notice and during business
hours, in order to respond to regulatory requirements, inquiries,
complaints or judicial proceedings. Records of all transactions
with respect to the Contracts shall be retained for a period of
not less than six (6) years from each transaction.
3.4 The parties or their duly authorized independent auditors have
the right under this Agreement to perform on-site audits of
records pertaining to the Contracts and the Fund, at such
frequencies as each shall determine, upon reasonable notice and
during normal business hours. At the request of the other, each
will make available to the other's auditors and/or representatives
of the appropriate regulatory agencies, all requested records,
data, and access to operating procedures.
4.0 INDEMNIFICATION
4.1 Hartford shall indemnify and hold the Fund and Calvert and each
of their respective directors,
<PAGE>
officers, employees and agents harmless from any liability or
expense (including reasonable attorneys' fees) arising from any
failure of Hartford or the separate account to fulfill its
respective obligations under this Agreement.
4.2 The Fund and Calvert shall indemnify and hold Hartford and its
directors, officers, employees and agents harmless from all
liabilities or expenses (including reasonable attorneys' fees)
arising from any failure of the Fund or Calvert to fulfill its
respective obligations under this Agreement and Calvert shall
indemnify and hold such parties harmless from a failure of the
Fund's investment adviser to manage the Fund in compliance with
the diversification requirements of the Internal Revenue Code of
1986, as amended, or any regulations thereunder.
5.0 COST AND EXPENSES
5.1 Except for costs and expenses for which indemnification is
required pursuant to section 4.0 or as otherwise agreed by the
parties in specific instances or, as set forth herein, the
parties shall each pay their respective costs and expenses
incurred by them in connection with this Agreement.
6.0 TERM OF AGREEMENT
6.1 The term of this Agreement shall be indefinite unless terminated
pursuant to Section 7 of this Agreement.
7.0 TERMINATION
7.1 This Agreement will terminate:
7.1.1 At the option of any party upon six months' prior written
notice to the other parties, but no party may terminate
this Agreement prior to January 1, 1990. If a party
notifies the other parties that it intends to terminate
this Agreement, the affected parties shall immediately
file with the SEC such documents, if any, as are necessary
to permit the offering of shares of the Series to Hartford
Contract Owners to be discontinued; or
7.1.2 Upon assignment of this Agreement unless the assignment is
made with the written consent of the other party.
<PAGE>
7.1.3 In the event of termination of this Agreement pursuant to
this Section 7.0, the provisions of Sections 4.0, 5.0, and
8.0 shall survive such termination.
8.0 GENERAL PROVISIONS
8.1 This Agreement is the complete and exclusive statement of the
agreement between the parties as to the subject matter hereof
which supersedes all proposals or agreements, oral or written,
and all other communications between the parties related to the
subject matter of this Agreement.
8.2 This Agreement can only be modified by a written agreement duly
signed by the persons authorized to sign agreements on behalf of
the respective party.
8.3 If any provision or provisions of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any
way be affected of be impaired thereby.
8.4 This Agreement and the rights, duties and obligations of the
parties hereto shall not be assignable by either party hereto
without the prior written consent of the other.
8.5 Any controversy relating to this Agreement shall be determined
by arbitration in Washington, D.C. in accordance with the
Commercial Arbitration rules of the American Arbitration
Association using arbitrators who will follow substantive rules
of law. The dispute shall be determined by an arbitrator
acceptable to both parties who shall be selected within seven
(7) days of filing of notices of intention to arbitrate.
Otherwise, the dispute shall be determined by a panel of three
arbitrators selected as follows: Within seven (7) days of filing
notice of intention to arbitrate, each party will appoint one
arbitrator. These two arbitrators will then name a third
arbitrator, who shall be an attorney admitted before the bar of
any state of the United State, to preside over the panel. If
either party fails to appoint an arbitrator, or if the two
arbitrators do not name a third arbitrator within seven (7)
days, either party may request the American Arbitration
Association to appoint the necessary arbitrator(s) pursuant to
Rule 13 of the Commercial Arbitration Rules. Each party will pay
its own cost and expenses. All testimony shall be transcribed.
The award of the panel shall be accompanied by findings of fact
and a statement of
<PAGE>
reasons for the decision. All parties agree to be bound by the
results of this arbitration; judgment upon the award so rendered
may be entered and enforced in any court of competent
jurisdiction. To the extent reasonably practicable, both parties
agree to continue performing their respective obligations under
this Agreement while the dispute is being resolved. Nothing
contained in this subsection shall prohibit either party from
seeking equitable relief without resorting to arbitration under
such circumstances as said party reasonably believes that its
interests hereunder and in its property may be compromised. All
matters relating to such arbitration shall be maintained in
confidence.
8.6 No waiver by either party of any default by the other in the
performance of any promise, term or condition of this Agreement
shall be construed to be a waiver by such party of any other or
subsequent default in performance of the same or any other
covenant, promise, term or condition of this Agreement. No prior
transactions or dealings between the parties shall be deemed to
establish any custom or usage waiving or modifying any provision
hereof.
8.7 No liability shall result to any party, nor shall any party be
deemed to be in default hereunder, as the result of delay in its
performance or from its non-performance hereunder caused by
circumstances beyond its control, including but not limited to:
act of God, act or war, riot, epidemic; fire; flood or other
disaster; or act of government. Nevertheless, the party shall be
required to be diligent in attempting to remove such cause or
causes.
8.8 Each of the parties will act as an independent contractor under
the terms of this Agreement and neither is now, or in the
future, an agent or a legal representative of the other for any
purpose. Neither party has any right or authority to supervise
or control the activities of the other party's employees in
connection with the performance of this Agreement or to assign
or create any application of any kind, express or implied, on
behalf of the other party or to bind it in any way, to accept
any service of process upon it or to receive any notice of any
nature whatsoever on its behalf.
8.9 This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Connecticut.
<PAGE>
8.10 Nothing herein shall prevent either party from participating in
any proceeding before any regulatory authority having
jurisdiction over any matter relating to this Agreement, the
Contracts, the separate account or the Fund which may affect the
parties to it. The parties shall each give the others prompt
notice of any such proceeding.
8.11 In all matters relating to the preparation, review, prior
approval and filing of documents, the parties shall cooperate in
good faith. Neither party shall unreasonably withhold its
consent with respect to the filing of any document with any
federal or state regulatory authority having jurisdiction over
the Contracts, the separate account or the Fund.
8.12 Captions contained in this Agreement are for reference purposes
only and do not constitute part of this Agreement.
8.13 All notices which are required to be given or submitted pursuant
to this Agreement shall be in writing and shall be sent by
registered or certified mail, return receipt requested, to the
addresses set forth below:
President Secretary
Hartford Life Acacia Capital Corporation
Insurance Company 4550 Montgomery Avenue
200 Hopmeadow Street Suite 1000 N
Simsbury, CT 06089 Bethesda, MD 20814
or to such other address as the parties may from time to time
designate. Any notice of one party refused by the other shall be
deemed received as of the date of said refusal.
8.14 Each party hereto shall promptly notify the other in writing of
any claims, demands or actions having any bearing on this
Agreement.
8.15 Each party agrees to perform its obligations hereunder in
accordance with all applicable laws, rules and regulations now
or hereafter in effect.
8.16 In the event of a material breach by either party of any of the
provisions of this Agreement, the injured party, in addition to
any other remedies available to it under law, shall be entitled
to seek an injunction restraining the other party from the
performance of acts which constitute a breach of this Agreement,
and such other party agrees not to raise adequacy of legal
remedies as a defense thereof.
<PAGE>
8.17 If this Agreement is terminated for other than default, it is
specifically agreed that neither party shall be entitled to
compensation of any kind except as specifically set forth herein.
8.18 In any litigation or arbitration between the parties, the
prevailing party shall be entitled to reasonable attorneys' fees
and all costs of proceedings incurred in enforcing this
Agreement.
8.19 This Agreement shall be binding upon and inure to the benefit of
the parties hereto, their successors and permitted assigns.
8.20 Each party represents that it has full power and authority to
enter into and perform this Agreement, and the person signing
this Agreement on behalf of it has been properly authorized and
empowered to enter into this Agreement. Each party further
acknowledges that it has read this Agreement, understands it,
and agrees to be bound by it.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
ACACIA CAPITAL CORPORATION HARTFORD LIFE INSURANCE COMPANY
BY: /s/ Clifton S. Sorrell, Jr. BY: /s/ Charles A. Clinton
---------------------------- -----------------------
Clifton S. Sorrell, Jr. Charles A. Clinton
President Vice President
CALVERT ASSET MANAGEMENT
COMPANY, INC.
BY: /s/ Reno J. Martini
---------------------
Reno J. Martini
Vice President
swb6.5
<PAGE>
Exhibit (b)(10)
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
Registration Statement File No. 33-19948 on Form N-4 for Hartford Life
Insurance Company.
Hartford, Connecticut
April 21, 1995
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<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
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<INVESTMENTS-AT-VALUE> 4,122,471,405
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<ASSETS-OTHER> 0
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<TOTAL-ASSETS> 4,125,261,278
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