HARTFORD LIFE INSURANCE CO SEPARATE ACCOUNT TWO DC VAR AC II, 485BPOS, 1997-04-17

HARTFORD LIFE INSURANCE CO SEPARATE ACCOUNT TWO DC VAR AC II
485BPOS, 1997-04-17

Previous: HARTFORD LIFE INSURANCE CO SEPARATE ACCOUNT TWO DC VAR AC II, 485BPOS, 1997-04-16

Next: IMAGING DIAGNOSTIC SYSTEMS INC /FL/, 8-K, 1997-04-17

<PAGE>

As filed with the Securities and Exchange Commission on April 17, 1997.

File No. 33-59541

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 2 [X]

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 77 [X]

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)

(860) 843-6733
(Depositor's Telephone Number, Including Area Code)

MARIANNE O'DOHERTY, ESQ.
HARTFORD LIFE INSURANCE COMPANIES
P.O. BOX 2999

HARTFORD, CT 06104-2999
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

_____ immediately upon filing pursuant to paragraph (b) of Rule 485

__X__ on May 1, 1997 pursuant to paragraph (b) of Rule 485

_____ 60 days after filing pursuant to paragraph (a)(1) of Rule 485

_____ on May 1, 1997 pursuant to paragraph (a)(1) of Rule 485

_____ this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

PURSUANT TO RULE 24F-2(a)(1) UNDER THE INVESTMENT COMPANY ACT OF 1940, THE
REGISTRANT HAS REGISTERED AN INDEFINITE AMOUNT OF SECURITIES. THE RULE 24F-2
NOTICE FOR THE REGISTRANT'S MOST RECENT FISCAL YEAR WAS FILED ON OR ABOUT
FEBRUARY 28, 1997.

<PAGE>
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(a)

<TABLE>
<CAPTION>
N-4 Item No. Prospectus Heading
------------ ------------------
<S> <C> <C>
1. Cover Page Cover Page

2. Definitions Glossary of Special Terms

3. Synopsis or Highlights Summary

4. Condensed Financial Information Accumulation Unit Values

5. General Description of Registrant, The Contracts and Separate Account Two;
Portfolio Companies Hartford Life Insurance Company and the Funds;
Miscellaneous

6. Deductions Charges Under the Contract

7. General Description of Variable Operation of the Contract; Payment of Benefits;
Annuity Contracts The Contracts and Separate Account Two

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 Account?
14. Table of Contents of the Table of Contents of the Statement of Additional
Statement of Additional Information Information

15. Cover Page Part B; Statement of Additional Information

16. Table of Contents Tables of Contents

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
**1 N-4 Item No. Prospectus Heading
---------------- ------------------
<S> <C> <C>
17. General Information and Description of Hartford Life Insurance
History Company

18. Services None

19. Purchase of Securities Distribution of Contracts
being Offered

20. Underwriters Distribution of Contracts

21. Calculation of Performance Calculation of Yield and
Data Return

22. Annuity Payments Annuity Period

23. Financial Statements Financial Statements

24. Financial Statements and Financial Statements and
Exhibits Exhibits

25. Directors and Officers of the Directors and Officers of the
Depositor Depositor

26. Persons Controlled by or Under Persons Controlled by or Under
Common Control with the Depositor Common Control with the Depositor
or Registrant or Registrant

27. Number of Contract Owners Number of Contract Owners

28. Indemnification Indemnification

29. Principal Underwriters Principal Underwriters

30. Location of Accounts and Records Location of Accounts and Records

31. Management Services Management Services

32. Undertakings Undertakings

</TABLE>

<PAGE>

HARTFORD
LIFE INSURANCE COMPANY
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT TWO (DC-II)

[LOGO]

The group variable annuity contracts (hereinafter the "Contract" or
"Contracts") described in this Prospectus are issued by Hartford Life
Insurance Company ("Hartford"). The Contracts provide for both an Accumulation
Period and an Annuity Period. Contributions are held in a division of Hartford
Life Insurance Company Separate Account Two ("DC-II") during the Accumulation
Period and during the Annuity Period. The Contracts may contain a General
Account option which allows Participants to allocate contributions to the
General Account of Hartford. The General Account option, if applicable, is not
described in this Prospectus.

The Contracts are offered for use in annuity purchase plans adopted
according to Section 403(b) of the Internal Revenue Code ("Code") as adopted
by public school systems, certain tax-exempt organizations described in
Section 501(c)(3) of the Code and 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, as
well as for Individual Retirement Annuity plans adopted according to Section
408 of the Code.

The following Sub-Accounts are available under the Contracts. Opposite each
Sub-Account is the name of the underlying investment ("Fund") for that
Sub-Account.

Advisers Fund -- shares of Hartford Advisers Fund, Inc.
Sub-Account ("Advisers Fund")
Bond Fund Sub-Account -- shares of Hartford Bond Fund, Inc. ("Bond Fund")
Capital Appreciation -- shares of Hartford Capital Appreciation Fund,
Fund Sub-Account Inc. ("Capital Appreciation Fund")
Dividend and Growth Fund -- shares of Hartford Dividend and Growth Fund,
Sub-Account Inc. ("Dividend and Growth 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 -- shares of HVA Money Market Fund, Inc. ("Money
Sub-Account Market Fund")
Mortgage Securities Fund -- shares of Hartford Mortgage Securities Fund,
Sub-Account Inc. ("Mortgage Securities Fund")
Calvert Responsibly -- shares of Calvert Responsibly Invested Balanced
Invested Balanced Fund Series of Acacia Capital Corporation
Portfolio Sub-Account ("Calvert Responsibly Invested Balanced
Portfolio")
Stock Fund Sub-Account -- shares of Hartford Stock Fund, Inc. ("Stock
Fund")
AMS/American Century VP -- shares of American Century Variable Portfolios,
Advantage Fund Inc. American Century VP Advantage
Sub-Account ("AMS/American Century VP Advantage Fund")
AMS/American Century VP -- shares of American Century Variable Portfolios,
Capital Appreciation Inc. American Century VP Capital Appreciation
Fund Sub-Account ("AMS/American Century VP Capital Appreciation
Fund")
AMS/Fidelity VIP II -- shares of Fidelity Investments Variable
Asset Manager Fund Insurance Products II Asset Manager
Sub-Account ("AMS/Fidelity VIP II Asset Manager Fund")
AMS/Fidelity VIP II -- shares of Fidelity Investments Variable
Contrafund Fund Insurance Products II Contrafund Fund
Sub-Account ("AMS/Fidelity VIP II Contrafund Fund")
AMS/Fidelity VIP Growth -- shares of Fidelity Investments Variable
Fund Sub-Account Insurance Products Growth Fund ("AMS/ Fidelity
VIP Growth Fund")
AMS/Fidelity VIP -- shares of Fidelity Investments Variable
Overseas Fund Insurance Products Overseas Fund ("AMS/ Fidelity
Sub-Account VIP Overseas Fund")

This Prospectus sets forth the information concerning DC-II that investors
ought to know before investing. This Prospectus should be kept for future
reference. Additional information about DC-II 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 37 of this Prospectus. The
Statement of Additional Information is incorporated by reference to this
Prospectus.

------------------------------------------------------------------------------
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.
------------------------------------------------------------------------------
------------------------------------------------------------------------------

THIS PROSPECTUS IS NOT VALID UNLESS ATTACHED TO THE CURRENT PROSPECTUSES OF
THE APPLICABLE ELIGIBLE FUNDS LISTED ABOVE WHICH CONTAIN A FULL DESCRIPTION OF
THOSE FUNDS. INVESTORS ARE ADVISED TO RETAIN THESE PROSPECTUSES FOR FUTURE
REFERENCE.

------------------------------------------------------------------------------

Prospectus Dated: May 1, 1997
Statement of Additional Information Dated: May 1, 1997

<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION PAGE
------------------------------------------------------------------------ ----
<S> <C>
GLOSSARY OF SPECIAL TERMS............................................... 3
FEE TABLE............................................................... 5
SUMMARY................................................................. 7
ACCUMULATION UNIT VALUES................................................ 9
PERFORMANCE RELATED INFORMATION......................................... 13
INTRODUCTION............................................................ 14
THE CONTRACTS AND THE SEPARATE ACCOUNT.................................. 14
What are the Contracts?............................................... 14
Who can buy these Contracts?.......................................... 14
What is the Separate Account and how does it operate?................. 14
OPERATION OF THE CONTRACT............................................... 15
How are Contributions credited?....................................... 15
May I change the amount of my Contributions?.......................... 15
May I make changes in my Sub-Account allocations?..................... 16
May I transfer assets between Sub-Accounts/the General Account?....... 16
How do I transfer assets between Sub-Accounts or change my
Sub-Account allocations?........................................ 16
May I systematically transfer assets to the Sub-Accounts?............. 16
What happens if the Contractholder fails to make Contributions?....... 17
May I assign or transfer the Contract?................................ 17
May I request a loan from my Individual Account?...................... 17
How do I know what my account is worth?............................... 18
How is the Accumulation Unit value determined?........................ 18
How are the underlying Fund shares valued?............................ 18
PAYMENT OF BENEFITS..................................................... 19
What would my Beneficiary receive as death proceeds?.................. 19
How can a Contract be redeemed or surrendered?........................ 19
Can payment of the redemption or surrender value ever be postponed
beyond the seven day period?......................................... 20
May I surrender once Annuity payments have started?................... 20
Can a Contract be suspended by a Contractholder?...................... 20
How do I elect an Annuity Commencement Date and Form of Annuity?...... 20
What is the minimum amount that I may select as an Annuity payment?... 21
How are Contributions made to establish my Annuity account?........... 21
What are the available Annuity Options under the Contracts?........... 21
Systematic Withdrawal Option.......................................... 22
How are Variable Annuity payments determined?......................... 23
Can a Contract be modified?........................................... 24
CHARGES UNDER THE CONTRACT.............................................. 24
How are the charges under these Contracts made?....................... 24
What do the sales charges cover?...................................... 25
What is the mortality, expense and administrative risk charge?........ 25
Are there any other administrative charges?........................... 25
Experience Rating of Contracts........................................ 26
How much are the deductions for Premium Taxes on these Contracts?..... 26
What charges are made by the Funds?................................... 26
Are there any other deductions?....................................... 26
HARTFORD LIFE INSURANCE COMPANY AND THE FUNDS........................... 27
What is Hartford?..................................................... 27
What are the Funds?................................................... 27
Does Hartford have any interest in the Funds?......................... 30
FEDERAL TAX CONSIDERATIONS.............................................. 31
What are some of the federal tax consequences which affect these
Contracts?........................................................... 31
MISCELLANEOUS........................................................... 35
What are my voting rights?............................................ 35
Will other Contracts be participating in the Separate Account?........ 36
How are the Contracts sold?........................................... 36
Who is the custodian of the Separate Account's assets?................ 36
Are there any material legal proceedings affecting the Separate
Account?............................................................. 36
Are you relying on any experts as to any portion of this
Prospectus?.......................................................... 36
How may I get additional information?................................. 36
TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION............... 37
</TABLE>

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.

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.

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 UNIT: An accounting unit of measure in DC-II 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.

CONTRACTHOLDER: 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 Hartford by the
Contractholder 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 Hartford.

DC-II: A division of Hartford Life Insurance Company Separate Account Two.

EMPLOYER: An employer who establishes a Tax Sheltered Annuity Plan or an
Individual Retirement Annuity 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 DC-II.
FUNDS: The Funds described commencing on page 27 of this Prospectus.

GENERAL ACCOUNT: The General Account of Hartford which consists of all assets of
Hartford other than those allocated to the separate accounts of Hartford.

HARTFORD: Hartford Life Insurance Company.

INDIVIDUAL RETIREMENT ANNUITY: An annuity contract purchased by an Employer on
behalf of its employees and which provides for special tax treatment under
Section 408 of the Code.

IRS: Internal Revenue Service.

MINIMUM DEATH BENEFIT: The minimum amount payable upon the death of a
Participant prior to age 65 and before Annuity payments have commenced.

PARTICIPANT: Any employee of an Employer/Contractholder electing to participate
in the Contract. The term "Participant" includes a Participant Owner under an
Individual Retirement Annuity under Section 408 of the Code.

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.

3
<PAGE>

PARTICIPANT'S INDIVIDUAL ACCOUNT: An account to which the General Account values
and DC-II Accumulation Units are allocated on behalf of a Participant under the
Contract.

PREMIUM TAX: A tax charged by a state or municipality on premiums, purchase
payments or contract values.

TAX SHELTERED ANNUITY (ALSO COMMONLY REFERRED TO AS "TAX DEFERRED ANNUITY): An
annuity Contract purchased by an Employer on behalf of its employees and which
qualifies for special tax treatment under Sections 403(b) of the Code.

SEPARATE ACCOUNT: Hartford Life Insurance Company Separate Account Two.

SUB-ACCOUNT: Accounts established within DC-II with respect to a Fund.

VALUATION DAY: Every day the New York Stock Exchange is open for trading. The
value of DC-II 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 DC-II.

4
<PAGE>

FEE TABLE
SUMMARY
Contract Owner Transaction Expenses
(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 Year through Fifth Year (1)............................. 5%
Sixth Year.................................................... 4%
Seventh Year.................................................. 3%
Eighth Year................................................... 2%
Ninth Year.................................................... 1%
Tenth Year.................................................... 0%
Annual Contract Fee............................................... $30.00(2)
Annual Expenses-Separate Account (as a percentage of average
account value)
Mortality and Expense Risk (DC II)............................ 1.250%
</TABLE>

- ------------

(1) Length of time from contribution.

(2) The annual contract fee is a single $30.00 charge on a Contract. It is
deducted proportionally from the investment options in use at the time of
the charge. Pursuant to requirements of the 1940 Act, the policy fees has
been reflected in the Examples by a method intended to show the "average"
impact of the policy fee on an investment in the Separate Account. In the
Example, the annual contract fee is approximated as a 0.11% annual asset
charge based on the experience of the Contracts.

The Transfer Fee, Contingent Deferred Sales Charge, Annual Contract Fee and
Mortality and Expenses Risk charge may be reduced or eliminated. See "Charges
Under the Contract -- Experience Rating of Contracts," page 26.

Annual Fund Operating Expenses
(as a percentage of net assets)

<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OTHER OPERATING
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Hartford Bond Fund.............................. 0.490% 0.030% 0.520%
Hartford Stock Fund............................. 0.441% 0.016% 0.457%
HVA Money Market Fund........................... 0.423% 0.021% 0.444%
Hartford Advisers Fund.......................... 0.615% 0.017% 0.632%
Hartford Capital Appreciation Fund.............. 0.629% 0.017% 0.646%
Hartford Mortgage Securities Fund............... 0.424% 0.029% 0.453%
Hartford Index Fund............................. 0.374% 0.019% 0.393%
Hartford International Opportunities Fund....... 0.691% 0.095% 0.786%
Calvert Responsibly Invested Balanced Portfolio
(1)........................................... 0.710% 0.130% 0.840%
Hartford Dividend & Growth Fund................. 0.709% 0.017% 0.726%
American Century VP Advantage Fund.............. 1.000% 0.000% 1.000%
American Century VP Capital Appreciation Fund... 1.000% 0.000% 1.000%
AMS/Fidelity VIP Growth Fund (2)................ 0.610% 0.080% 0.690%
AMS/Fidelity VIP Overseas Fund (2).............. 0.760% 0.170% 0.930%
AMS/Fidelity VIP II Contrafund (2).............. 0.610% 0.130% 0.740%
AMS/Fidelity VIP II Asset Manager (2)........... 0.640% 0.100% 0.740%
</TABLE>

- ------------

(1) The figures shown above for the Calvert Responsibly Invested Balanced
Portfoli reflect anticipated expenses for fiscal year 1997 and reflect a
proposed increase in transfer agency fees. Actual total operating expenses
in 1996 were 0.81%.

(2) A portion of the brokerage commissions that certain funds pay was used to
reduce Fidelity fund expenses. In addition, certain funds have entered into
arrangements with their custodian and transfer agent whereby interest earned
on uninvested cash balances was used to reduce custodian and transfer agent
whereby interest earned on uninvested cash balances was used to reduce
custodian and transfer agent expenses. Including these reductions, the total
operating expenses presented in the table would have been 0. 67% for Growth
Portfolio, 0.92% for Overseas Portfolio, 0.73% for Asset Manager Portfolio,
0.71% for Contrafund Portfolio.

5
<PAGE>

EXAMPLE-DCII

<TABLE>
<CAPTION>
If you surrender your Contract If you annuitize your Contract If you do not surrender your
at the end of the applicable at the end of the applicable Contract, you would pay the
time period, you would pay the time period, you would pay the following expenses on a $1,000
following expenses on a $1,000 following expenses on a $1,000 investment, assuming a 5%
investment, assuming a 5% investment, assuming a 5% annual return on assets:
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>
Hartford Bond Fund....... 71 114 161 222 18 58 101 220 19 60 102 222
Hartford Stock Fund...... 70 112 158 215 17 56 98 213 19 58 99 215
HVA Money Market Fund.... 70 112 157 213 17 56 97 212 18 57 98 213
Hartford Advisers Fund... 72 118 166 234 19 62 107 232 20 63 108 234
Hartford Capital
Appreciation Fund...... 72 118 167 235 19 62 108 234 21 64 109 235
Hartford Mortgage
Securities Fund........ 70 112 157 214 17 56 98 213 19 58 99 214
Hartford Index Fund
(1).................... 65 96 129 152 13 40 69 152 13 40 69 152
Hartford International
Opportunities Fund..... 73 122 174 250 21 67 115 248 22 68 116 250
Calvert Responsibly
Invested Balanced
Portfolio.............. 74 124 176 255 21 68 118 254 23 70 119 255
Hartford Dividend &
Growth Fund............ 73 120 171 244 20 65 112 242 21 66 113 244
American Century VP
Advantage Fund......... 75 128 184 272 23 73 126 271 24 74 127 272
American Century VP
Growth Fund............ 75 128 184 272 23 73 126 271 24 74 127 272
AMS/Fidelity VIP Growth
Fund................... 72 119 169 240 20 64 110 238 21 65 111 240
AMS/Fidelity VIP Overseas
Fund................... 75 126 181 265 22 71 123 263 23 72 124 265
AMS/Fidelity VIP II
Contrafund............. 73 121 171 245 20 65 113 244 22 66 114 245
AMS/Fidelity VIP II Asset
Manager................ 72 118 166 233 20 63 108 233 20 63 108 233
</TABLE>

(1) For this table, the Index Fund combined expenses are limited to 1.25%.

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. Premium taxes may also be applicable.

This EXAMPLE should not be considered a representation of past or future
expenses and actual expenses may be greater or less than those shown.

6
<PAGE>
SUMMARY

A. CONTRACTS OFFERED

Group variable annuity contracts are offered for issuance to Employers to
allow employee participation and special tax treatment under Section 403(b) and
Section 408 of the Code.

The Contracts are limited to plans established and sponsored by Employers
for their employees. The Contract is normally issued to the Employer or to the
trustee or custodian of the Employer's plan.

B. ACCUMULATION PERIOD UNDER THE CONTRACTS

During the Accumulation Period under the Contracts, Contributions submitted
by the Contractholder are used to purchase variable account interests.
Contributions allocated to purchase variable account interests may, after the
deductions described hereafter, be invested in selected Sub-Accounts of DC-II.
The Contract may contain a General Account option which allows Participants to
allocate contributions to the General Account of Hartford. The General Account
option, if applicable, is not described in this Prospectus.

C. CONTINGENT DEFERRED SALES CHARGES

There is no deduction for sales expenses at the time Contributions are
allocated to the Contracts. However, a contingent deferred sales charge may be
assessed against a Participant's Individual Account when it is withdrawn. The
number of Participant Contract Years completed prior to withdrawal will
determine the amount of the contingent deferred sales charge. The amount or term
of the contingent deferred sales charge may be reduced (see "Charges Under the
Contract -- Experience Rating of Contracts," page 26). 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 charge is a percentage of the amount surrendered and equals:

<TABLE>
<CAPTION>
CONTRACT YEAR
OF WITHDRAWAL MAXIMUM CHARGE
- ----------------------------------------------------------------- ---------------------
<S> <C>
1-5............................................................. 5%
6............................................................... 4%
7............................................................... 3%
8............................................................... 2%
9............................................................... 1%
10 or more....................................................... 0%
</TABLE>

No deduction for contingent deferred sales charges will be made in certain
cases. (See "Charges Under the Contract -- Experience Rating of Contracts," page
26.)

D. TRANSFER BETWEEN ACCOUNTS

During the Accumulation Period a Participant may allocate monies held in
DC-II among the available Sub-Accounts of DC-II. Currently, there is no charge
for up to 12 transfers per Participant Contract Year. A fee of $5.00 may be
assessed for each transfer made in excess of 12 per Participant Contract Year.
No two (2) transfers may occur on consecutive Valuation Days. There may be
additional restrictions under certain circumstances. (See "May I transfer assets
between Sub-Accounts?" commencing on page 16.)

E. ANNUITY PERIOD UNDER THE CONTRACTS

At the end of the Accumulation Period, Contract values held with respect to
a Participant's Individual Account may, at the direction of the Participant, be
allocated to provide Fixed and/or Variable Annuities under the Contracts. (See
"How are contributions made to establish my Annuity account?" commencing on page
21.) However, Hartford will not assume responsibility in determining or
monitoring minimum distributions beginning at age 70 1/2.

F. MINIMUM DEATH BENEFITS

A Minimum Death Benefit is provided in the event of death of the Participant
prior to the earlier of Participant's 65th birthday or the Annuity Commencement
Date (see "What would my Beneficiary receive as death proceeds?" commencing on
page 19).

7
<PAGE>
G. ANNUITY OPTIONS

The Annuity Commencement Date will not be deferred beyond the date
Participants become age 70 1/2 or such earlier date as may be required by
applicable law and/or regulation. If a Participant does not elect otherwise,
Hartford 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 21).

H. DEDUCTIONS FOR PREMIUM TAXES

Deductions will be made for the payment of any Premium Taxes that may be
levied against the Contract at the time imposed under applicable law (see
"Charges Under The Contract," page 24). Currently, the range is 0% to 3.5%.

I. ASSET CHARGE IN THE SEPARATE ACCOUNT

During both the Accumulation Period and the Annuity Period a charge is made
by Hartford for providing the mortality, expense and administrative undertakings
under the Contracts. Such charge is an annual rate of 1.25% (estimated at .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 mortality, expense
and administrative undertakings under the Contracts may be reduced (see "Charges
Under the Contract -- Experience Rating of Contracts," page 26) and may be
periodically increased beyond a rate of 1.25%, subject to a maximum annual rate
of 2.00%. However, no increase will occur unless the Commission shall have first
approved any such increase. (See "Charges Under the Contract ," page 24.)

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 $30.00 per year on each
Participant's Individual Account. (See "Charges Under The Contract, " page 24.)
The Annual Contract Fee may be reduced or waived (see "Charges Under the
Contract -- Experience Rating of Contracts," page 26).

K. MINIMUM PAYMENT

There is no minimum amount for initial Contributions or subsequent
Contributions that may be made on behalf of a Participant's Individual Account
under a Contract.

L. INDIVIDUAL ACCOUNT LOANS

Participants may request a loan from Participant's Individual Account
subject to a single $25.00 non-refundable loan processing fee (except as
otherwise required by statute). Loans are subject to a minimum of $1,000 and may
not exceed the lesser of (1) 50% of the Participant's Individual Account value,
or (2) $50,000, reduced by the highest outstanding balance of any loan to such
Participant during the twelve-month period ending on the day before the loan is
made. (See "May I request a loan from my Individual Account?" commencing on page
17.) Individual Account loans may not be available in all states or may be
subject to restrictions.

M. FUND FEES AND CHARGES

The Funds are subject to certain fees, charges and expenses. See the
accompanying prospectuses for the Funds.

N. PAYMENT ALLOCATION TO DC-II

The Contracts permit the allocation of Contributions, in multiples of 10% of
each Contribution, among the fifteen (15) Sub-Accounts of DC-II. There is no
minimum amount that may be allocated to any Sub-Account.

O. VOTING RIGHTS OF CONTRACTHOLDERS

Contractholders 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 Contractholder does not vote, Hartford shall vote such
interest in the same proportion as shares of the Fund for which instructions
have been received by Hartford (see "What are my voting rights?" commencing on
page 35).

8
<PAGE>

ACCUMULATION UNIT VALUES
(FOR AN ACCUMULATION UNIT OUTSTANDING THROUGHOUT THE PERIOD)

The following information, insofar as it relates to the period ended
December 31, 1996, 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,
-----------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
DC-II
HARTFORD BOND FUND SUB-ACCOUNT
Accumulation unit value at beginning of period........................... $ 4.095 $ 3.500 $ 3.689 $ 3.389 $ 3.251
Accumulation unit value at end of period $ 4.187 $ 4.095 $ 3.500 $ 3.689 $ 3.389
Number of accumulation units outstanding at end of period
(in thousands) 1,655 1,368 1,123 992 816
HARTFORD STOCK FUND SUB-ACCOUNT
Accumulation unit value at beginning of period........................... $ 8.968 $ 6.771 $ 6.988 $ 6.188 $ 5.694
Accumulation unit value at end of period................................. $ 11.017 $ 8.968 $ 6.771 $ 6.988 $ 6.188
Number of accumulation units outstanding at end of period
(in thousands)......................................................... 4,885 4,413 3,885 3,181 2,517
HARTFORD MONEY MARKET FUND SUB-ACCOUNT
Accumulation unit value at beginning of period........................... $ 2.624 $ 2.512 $ 2.447 $ 2.407 $ 2.351
Accumulation unit value at end of period................................. $ 2.725 $ 2.624 $ 2.512 $ 2.447 $ 2.407
Number of accumulation units outstanding at end of period
(in thousands)......................................................... 1,333 989 905 886 884
HARTFORD ADVISERS FUND SUB-ACCOUNT
Accumulation unit value at beginning of period........................... $ 3.647 $ 2.876 $ 2.993 $ 2.700 $ 2.524
Accumulation unit value at end of period................................. $ 4.201 $ 3.647 $ 2.876 $ 2.993 $ 2.700
Number of accumulation units outstanding at end of period
(in thousands)......................................................... 10,505 9,212 8,279 7,023 7,323
HARTFORD CAPITAL APPRECIATION FUND SUB-ACCOUNT
Accumulation unit value at beginning of period........................... $ 5.478 $ 4.257 $ 4.204 $ 3.524 $ 3.050
Accumulation unit value at end of period................................. $ 6.533 $ 5.478 $ 4.257 $ 4.204 $ 3.524
Number of accumulation units outstanding at end of period
(in thousands)......................................................... 10,979 9,081 6,923 4,940 3,276
HARTFORD MORTGAGE SECURITIES FUND SUB-ACCOUNT
Accumulation unit value at beginning of period........................... $ 2.333 $ 2.034 $ 2.093 $ 1.993 $ 1.929
Accumulation unit value at end of period................................. $ 2.421 $ 2.333 $ 2.034 $ 2.093 $ 1.993
Number of accumulation units outstanding at end of period
(in thousands)......................................................... 1,141 1,149 994 942 802

1991 1990 1989 1988 1987

--------- --------- --------- --------- -----------

<S> <C> <C> <C> <C> <C>
DC-II
HARTFORD BOND FUND SUB-ACCOUNT
Accumulation unit value at beginning of period........................... $ 2.827 $ 2.641 $ 2.385 $ 2.244 $ 2.273(h)

Accumulation unit value at end of period $ 3.251 $ 2.827 $ 2.641 $ 2.385 $ 2.244

Number of accumulation units outstanding at end of period
(in thousands) 732 724 594 433 320

HARTFORD STOCK FUND SUB-ACCOUNT
Accumulation unit value at beginning of period........................... $ 4.627 $ 4.874 $ 3.915 $ 3.331 $ 3.200(i)

Accumulation unit value at end of period................................. $ 5.694 $ 4.627 $ 4.874 $ 3.915 $ 3.331

Number of accumulation units outstanding at end of period
(in thousands)......................................................... 1,885 1,467 1,156 1,011 951

HARTFORD MONEY MARKET FUND SUB-ACCOUNT
Accumulation unit value at beginning of period........................... $ 2.245 $ 2.103 $ 1.951 $ 1.840 $ 1.749(i)

Accumulation unit value at end of period................................. $ 2.351 $ 2.245 $ 2.103 $ 1.951 $ 1.840

Number of accumulation units outstanding at end of period
(in thousands)......................................................... 929 881 718 628 389

HARTFORD ADVISERS FUND SUB-ACCOUNT
Accumulation unit value at beginning of period........................... $ 2.123 $ 2.123 $ 1.766 $ 1.566 $ 1.497(a)

Accumulation unit value at end of period................................. $ 2.524 $ 2.123 $ 2.123 $ 1.766 $ 1.566

Number of accumulation units outstanding at end of period
(in thousands)......................................................... 6,220 5,565 5,227 4,631 4,283

HARTFORD CAPITAL APPRECIATION FUND SUB-ACCOUNT
Accumulation unit value at beginning of period........................... $ 2.004 $ 2.278 $ 1.858 $ 1.490 $ 1.579(b)

Accumulation unit value at end of period................................. $ 3.050 $ 2.004 $ 2.278 $ 1.858 $ 1.490

Number of accumulation units outstanding at end of period
(in thousands)......................................................... 2,113 1,455 1,037 787 664

HARTFORD MORTGAGE SECURITIES FUND SUB-ACCOUNT
Accumulation unit value at beginning of period........................... $ 1.702 $ 1.571 $ 1.406 $ 1.313 $ 1.296(c)

Accumulation unit value at end of period................................. $ 1.929 $ 1.702 $ 1.571 $ 1.406 $ 1.313

Number of accumulation units outstanding at end of period
(in thousands)......................................................... 736 582 845 764 598

</TABLE>

9
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1996 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
DC-II
HARTFORD INDEX FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... $ 2.353 $ 1.738 $ 1.735 $ 1.605 $ 1.522 $ 1.190
Accumulation unit value at end of period......................... $ 2.848 $ 2.353 $ 1.738 $ 1.735 $ 1.605 $ 1.522
Number of accumulation units outstanding at end of period (in
thousands)...................................................... 4,378 3,153 2,376 1,862 1,437 871
CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO SUB-ACCOUNT
Accumulation unit value at beginning of period................... $ 1.817 $ 1.417 $ 1.483 $ 1.391 $ 1.308 $ 1.138
Accumulation unit value at end of period......................... $ 2.021 $ 1.817 $ 1.417 $ 1.483 $ 1.391 $ 1.308
Number of accumulation units outstanding at end of period (in
thousands)...................................................... 1,193 923 693 498 317 187
HARTFORD INTERNATIONAL OPPORTUNITIES FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... $ 1.329 $ 1.181 $ 1.220 $ 0.924 $ 0.979 $ 0.877
Accumulation unit value at end of period......................... $ 1.483 $ 1.329 $ 1.181 $ 1.220 $ 0.924 $ 0.979
Number of accumulation units outstanding at end of period (in
thousands)...................................................... 5,996 4,520 3,640 1,495 553 220
HARTFORD DIVIDEND & GROWTH FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... $ 1.223 -- -- -- -- --
Accumulation unit value at end of period......................... $ 1.490 $ 1.223 -- -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... 3,874 558 -- -- -- --
AMERICAN CENTURY VP ADVANTAGE FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... $ 1.051 $ 1.000 -- -- -- --
Accumulation unit value at end of period......................... $ 1.134 $ 1.051 -- -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... 144 36 -- -- -- --
AMERICAN CENTURY VP CAPITAL APPRECIATION FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... $ 1.081 $ 1.000 -- -- -- --
Accumulation unit value at end of period......................... $ 1.021 $ 1.081 -- -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... 1,108 634 -- -- -- --
AMS/FIDELITY VIP OVERSEAS FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... $ 1.030 $ 1.000 -- -- -- --
Accumulation unit value at end of period......................... $ 1.152 $ 1.030 -- -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... 921 181 -- -- -- --
AMS/FIDELITY VIP II ASSET MANAGER FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... $ 1.087 $ 1.000 -- -- -- --
Accumulation unit value at end of period......................... $ 1.230 $ 1.087 -- -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... 1,491 312 -- -- -- --
AMS/FIDELITY VIP II CONTRAFUND FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... $ 1.099 $ 1.000 -- -- -- --
Accumulation unit value at end of period......................... $ 1.316 $ 1.099 -- -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... 5,069 1,808 -- -- -- --

1990 1989 1988 1987
--------- --------- --------- -----------
<S> <C> <C> <C> <C>
DC-II
HARTFORD INDEX FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... $ 1.255 $ 0.975 $ 0.850 $ 1.000(d)
Accumulation unit value at end of period......................... $ 1.190 $ 1.255 $ 0.975 $ 0.850
Number of accumulation units outstanding at end of period (in
thousands)...................................................... 595 275 116 49
CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO SUB-ACCOUNT
Accumulation unit value at beginning of period................... $ 1.106 $ 1.000 -- --(e)
Accumulation unit value at end of period......................... $ 1.138 $ 1.106 $ 1.000 --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... 94 18 -- --
HARTFORD INTERNATIONAL OPPORTUNITIES FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... $ 1.000 -- -- --(f)
Accumulation unit value at end of period......................... $ 0.877 -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... 52 -- -- --
HARTFORD DIVIDEND & GROWTH FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... -- -- -- --(g)
Accumulation unit value at end of period......................... -- -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... -- -- -- --
AMERICAN CENTURY VP ADVANTAGE FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... -- -- -- --(j)
Accumulation unit value at end of period......................... -- -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... -- -- -- --
AMERICAN CENTURY VP CAPITAL APPRECIATION FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... -- -- -- --(j)
Accumulation unit value at end of period......................... -- -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... -- -- -- --
AMS/FIDELITY VIP OVERSEAS FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... -- -- -- --(j)
Accumulation unit value at end of period......................... -- -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... -- -- -- --
AMS/FIDELITY VIP II ASSET MANAGER FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... -- -- -- --(j)
Accumulation unit value at end of period......................... -- -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... -- -- -- --
AMS/FIDELITY VIP II CONTRAFUND FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... -- -- -- --(j)
Accumulation unit value at end of period......................... -- -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... -- -- -- --
</TABLE>

10
<PAGE>

1990 1989 1988 1987
--------- --------- --------- -----------
<S> <C> <C> <C> <C>
DC-II
AMS/FIDELITY VIP GROWTH FUND SUB-ACCOUNT
Accumulation unit value at beginning of period................... -- -- -- --(j)
Accumulation unit value at end of period......................... -- -- -- --
Number of accumulation units outstanding at end of period (in
thousands)...................................................... -- -- -- --
</TABLE>

- ----------

(a) Inception date May 2, 1983.

(b) Inception date April 2, 1984.

(d) Inception date June 3, 1987

(e) Inception date January 25, 1989.

(f) Inception date July 2, 1990.

(g) Inception date May 1, 1995.

(h) Inception date August 25, 1982

(i) Inception date June 29, 1982.

(j) Inception date May 1, 1995.

11
<PAGE>
PERFORMANCE RELATED INFORMATION

DC-II 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, Bond Fund, Calvert Responsibly Invested Balanced
Portfolio, Capital Appreciation Fund, Dividend and Growth Fund, Index Fund,
International Opportunities Fund, Money Market Fund, Mortgage Securities Fund,
Stock Fund, AMS/American Century VP Advantage Fund, AMS/American Century VP
Capital Appreciation Fund, AMS/Fidelity VIP II Asset Manager Fund, AMS/Fidelity
VIP Growth Fund, AMS/ Fidelity VIP II Contrafund Fund, and AMS/Fidelity VIP
Overseas Fund Sub-Accounts may include total return in advertisements or other
sales material.

When a Sub-Account advertises its standardized 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). Total return figures are net of all Fund level
management fees and charges, the mortality and expense risk charge and the
Annual Contract Fee.

The Bond Fund, Mortgage Securities Fund and American Century VP Advantage
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 and the mortality and expense
risk charge.

The Money Market Fund 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 and the mortality and expense risk charge.

Total return at the Separate Account level includes all Contract charges:
contingent deferred 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 contingent deferred 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 a Contract offered by Hartford in
DC-II, or an interest therein, issued in conjunction with a Tax Sheltered
Annuity plan or an Individual Retirement Annuity plan of an Employer. 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 page 3 prior to reading this Prospectus to familiarize yourself
with the terms being used.

THE CONTRACTS AND THE SEPARATE ACCOUNT

WHAT ARE THE CONTRACTS?

The Contracts are group variable annuity contracts under which variable
account Contributions are held in a division of Hartford Life Insurance
Company Separate Account Two ("DC-II") during both the Accumulation Period and
the Annuity Period. The Contracts may contain a General Account option. The
Contracts are issued to Employers or to a trustee or custodian of the
Employer's plan to allow their employees to participate in a Tax Sheltered
Annuity as described under Section 403(b) of the Code or an Individual
Retirement Annuity as described under Section 408 of the Code.

During the Accumulation Period under the Contracts, Contributions submitted
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-II.

WHO CAN BUY THESE CONTRACTS?

The group variable annuity Contracts offered under this Prospectus are
offered for use in annuity purchase plans adopted according to Section 403(b)
of the Code as adopted by public school systems, certain tax-exempt
organizations described in Section 501(c)(3) of the Code and 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, as well as for Individual Retirement Annuity
plans adopted according to Section 408 of the Code. A group Contract is issued
to an Employer or to a trustee or custodian of the Employer's plan to provide
a Tax Sheltered Annuity or Individual Retirement Annuity plan for its
employees.

WHAT IS THE SEPARATE ACCOUNT AND HOW DOES IT OPERATE?

Separate Account Two is organized as a unit investment trust type of
investment company and has been registered as such with the Commission under
the Investment Company Act of 1940, as amended. (On March 31, 1988, DC
Variable Account II was transferred to Separate Account Two and became a
division thereof). Registration of the Separate Account with the Commission
does not involve supervision of the management or investment practices or
policies of the Separate Account or of Hartford by the Commission. However,
Hartford and the Separate Account are subject to supervision and regulation by
the Department of Insurance of the State of Connecticut. The Separate Account
meets the definition of "separate account" under federal securities law.

Under Connecticut law, the assets of the Separate Account 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 Account
attributable to Contracts participating in the Separate Account are not
chargeable with liabilities arising out of any other business Hartford may
conduct. So, you will not be affected by the rate of return of Hartford's
general account, nor by the investment performance of any of Hartford's other
separate accounts.

Contributions are allocated to one or more Sub-Accounts of the Separate
Account. Each Sub-Account is invested exclusively in the assets of one
underlying Fund. Contributions 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
Contributions were received or the transfer made. All distributions from the
Fund are reinvested at net asset value. The value of a Participant's
Individual Account

14
<PAGE>
will therefore vary during the Accumulation Perio. 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,
Annuity payments and reserve values will vary in accordance with these
factors.

HARTFORD 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 SUM OF PARTICIPANT CONTRIBUTIONS 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 PROSPECTUSES.

Hartford 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 Participants
of any such substitution and approval of the Commission. Hartford also
reserves the right, subject to compliance with the law to offer additional
Sub-Accounts with differing investment objectives, and to make existing
Sub-Account options unavailable under the contracts in the future. The
Separate Account may be subject to liabilities arising from another division
of the Separate Account 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.

Hartford 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.

OPERATION OF THE CONTRACT

HOW ARE CONTRIBUTIONS CREDITED?

The Contract will cover present and future employees of the Employer who
elect to participate in the Contract. Contributions to a Participant's
Individual Account under a Contract are applied to purchase General Account
values and/or Accumulation Units in the selected Sub-Accounts. The number of
Accumulation Units purchased is determined by dividing the Contribution by the
appropriate Accumulation Unit Value on the date the Contribution is credited
to the Participant's Individual Account. Initial Contributions are credited to
a Participant's Individual Account within two business days of receipt of a
properly completed application and the initial Contribution. Subsequent
Contributions are credited to a Participant's Individual Account on the date
following receipt of the Contribution by Hartford at its home office, P. O.
Box 2999, Hartford, C. 06104-2999 (or other address as directed).

If an application or any other information is incomplete when received, the
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
Contributions 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 DC-II.

There is no minimum amount for initial Contributions or subsequent
Contributions that may be made on behalf of a Participant's Individual Account
under a Contract.

MAY I CHANGE THE AMOUNT OF MY CONTRIBUTIONS?

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 the
Separate Account. 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 the form and manner prescribed by Hartford.

15
<PAGE>
MAY I MAKE CHANGES IN MY SUB-ACCOUNT ALLOCATIONS?

The Contract permits the allocation of Contributions, in multiples of 10%,
among the sixteen (16) Sub-Accounts of DC-II. There is no minimum amount that
may be allocated to any Sub-Account. Such changes must be requested in the
form and manner prescribed by Hartford.

MAY I TRANSFER ASSETS BETWEEN SUB-ACCOUNTS/THE GENERAL ACCOUNT?

During the Accumulation Period a Participant may transfer the value of
Participant's Individual Account allocations from one or more Sub-Accounts or
the General Account to any another Sub-Account, the General Account or to any
combination thereof.

Amounts allocated to the General Account, or amounts previously allocated to
the General Account during the three month period immediately preceding the
date such transfer is requested, may not be transferred to any Sub-Account
which Hartford considers to be a competing fixed income Sub-Account. Hartford
reserves the right to limit the maximum amount transferred from the General
Account during a Contract Year to 20% of the Participant's Individual Account
in any one Participant Contract Year.

Currently there is no charge for up to 12 transfers per Participant Contract
Year. A fee of $5.00 may be assessed for each transfer made in excess of 12
per Participant Contract Year. No two (2) transfers may occur on consecutive
Valuation Days.

In addition, the right, with respect to a Participant's Individual Account,
to transfer monies between Sub-Accounts is subject to modification if Hartford
determines, in its sole opinion, that the exercise of that right by the
Contractholder/Participant is, or would be, to the disadvantage of other
Contractholders/Participants. Any modification could be applied to transfers
to or from the same or all of the Sub-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 Contractholder, or limiting the
dollar amount that may be transferred between Sub-Accounts by a
Contractholder/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 Hartford to be to the disadvantage of other
Contractholders/Participants.

HOW DO I TRANSFER ASSETS BETWEEN SUB-ACCOUNTS OR CHANGE MY SUB-ACCOUNT
ALLOCATIONS?

Transfers between Sub-Accounts and changes in Sub-Account allocations may be
made by written request or by calling toll free 1-800-771-3051. Any transfers
or changes made in writing will be effected as of the date the request is
received by Hartford at its home office, P.O. Box 2999, Hartford, CT
06104-2999. Telephone transfer changes may not be permitted in some states.
The policy of Hartford and its agents and affiliates is that they will not be
responsible for losses resulting from acting upon telephone requests
reasonably believed to be genuine. Hartford will employ reasonable procedures
to confirm that instructions communicated by telephone are genuine; otherwise,
Hartford may be liable for any losses due to unauthorized or fraudulent
instructions. The procedures Hartford follows for transactions initiated by
telephone include requirements that Participants identify themselves by their
group number, participant number and social security number. All transfer
instructions by telephone are recorded.

MAY I SYSTEMATICALLY TRANSFER ASSETS TO THE SUB-ACCOUNTS?

If, during the Accumulation Period, the portion of your contract values held
under the General Account option is at least $5,000, or the value of your
Accumulation Units held under the Money Market Fund Sub-Account is at least
$5,000, you may choose to have a specified dollar amount transferred from
either the General Account option or the Money Market Fund Sub-Account,
whichever meets the applicable minimum value, to other Sub-Accounts of the
Separate Account at monthly, quarterly, semi-annual or annual intervals. This
is known as Dollar Cost Averaging. The main objective of a Dollar Cost
Averaging program is to minimize the impact of short term price fluctuations.
Since the same dollar amount is transferred to other Sub-Accounts at set
intervals, more units are purchased in a Sub-Account if the value per unit is
low and less units are purchased if the value per unit is high. Therefore, a
lower average cost per unit may be achieved over the long term. A Dollar Cost
Averaging program allows investors to take advantage of market fluctuations.
However, it is important to understand that Dollar Cost Averaging does not
assure a profit or protect against a loss in declining markets.

16
<PAGE>

The minimum amount that may be transferred to any one Sub-Account at a
transfer interval is $100. The transfer date will be the monthly, quarterly,
semi-annual or annual anniversary, as applicable, of your first transfer under
your initial Dollar Cost Averaging election. The first transfer will commence
within five business days after Hartford receives your initial election,
either on an appropriate election form in good order or by telephone subject
to the telephone transfer procedures detailed above. The dollar amount will be
allocated to the Sub-Accounts that you specify, in the proportions that you
specify on the appropriate election form provided by Hartford or over our
recorded telephone line. You may specify a maximum of five Sub-Accounts. If,
on any transfer date, your General Account value or the value of your
Accumulation Units under the Money Market Fund Sub-Account, as applicable, is
less than the amount you have elected to have transferred, your Dollar Cost
Averaging program will end. You may cancel your Dollar Cost Averaging election
by notice to Hartford in writing or by calling 1-800-528-9009 and giving
notice to a Hartford representative on our recorded telephone line.

WHAT HAPPENS IF THE CONTRACTHOLDER FAILS TO MAKE CONTRIBUTIONS?

A Contract will be deemed paid-up within 30 days after any anniversary date
of the Contract if the Contractholder has not remitted a Contribution to
Hartford during the preceding 12 month period. Effective with a change of the
Contract to paid-up status, no further Contributions will be accepted by
Hartford 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?" commencing on page 19).

MAY I ASSIGN OR TRANSFER THE CONTRACT?

The Contracts and a Participant's interest therein may not be assigned,
transferred or pledged.

MAY I REQUEST A LOAN FROM MY INDIVIDUAL ACCOUNT?

During the Accumulation Period, a Participant under a Tax Sheltered Annuity
plan may request a loan from his or her Individual Account subject to a single
$25.00 non-refundable loan processing fee (except as otherwise required by
statute). The loan proceeds and the loan processing fee will be deducted from
the Participant's Individual Account on a pro rata basis from the applicable
Sub-Accounts on the date that the loan proceeds are disbursed. Individual
Account loans may not be available in all states or may be subject to
restrictions. Loans are not available to Participants under an Individual
Retirement Annuity plan.

The loan amount may not exceed the lesser of (1) 50% of the value of a
Participant's Individual Account, or (2) $50,000, reduced by the highest
outstanding balance of any loan to such Participant during the 12-month period
ending on the day before the loan is made. The minimum loan amount is $1,000.

At the beginning of each calendar quarter, Hartford shall determine the
interest rate to be charged on all loans issued during such quarter. The
interest rate shall reflect current market interest rates and the prevailing
interest rate levels under the Contract. The maximum interest rate shall not
exceed the current guaranteed interest rate for the General Account plus 2%.
Monthly loan payments (except for the initial payment) are due and payable at
the Home Office of Hartford on the last business day of each month. The
initial monthly loan payment is due and payable during the month in which the
loan proceeds are disbursed from the Participant's Individual Account.
Participant's Individual Account will be credited with the amount of monthly
loan payments (both principal and interest) minus a monthly loan balance
charge of .166% of the then outstanding loan balance. The monthly loan balance
charge will be retained by Hartford.

Prepayment of the outstanding loan balance is prohibited during the first 12
months following disbursement of the loan proceeds, except upon termination of
employment. Following the twelfth month, a Participant may prepay all or any
portion of the outstanding principal balance on the loan and any unpaid
interest accrued as of the date of the payment made by the Participant.
Participants may select a repayment term of 1 to 5 years (in 12 month
increments) from the last business day of the first month in which the loan
amount is distributed from the Contract. Loan balances which remain unpaid
after a specified period will be treated as a distribution subject to
taxation. See "Federal Tax Considerations," page 31, for a discussion of the
tax implications of a distribution.

17
<PAGE>
Loans will have a permanent effect on the Participant's Individual Account
because the investment results of each Sub-Account will apply only to the
amount remaining in such Sub-Account. The longer a loan is outstanding, the
greater the impact is likely to be. Also, if not repaid, the outstanding loan
balance will reduce the death benefit otherwise payable to a Beneficiary.

HOW DO I KNOW WHAT MY ACCOUNT IS WORTH?

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 Contractholder to such
Sub-Accounts.

The value of the Accumulation Units in 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 credited to the appropriate
Sub-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 (see "How is
the Accumulation Unit value determined?" below).

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.

Participants should refer to the prospectuses for 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 Participant's Individual
Account. The Accumulation Unit value is affected by the performance of the
underlying Fund(s), expenses and deduction of the charges described in this
Prospectus.

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 for each Fund.

18
<PAGE>
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 date the Participant attains 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
Hartford, or (b) 100% of the total Contributions made to such Contract,
reduced by any prior partial withdrawals or outstanding loan indebtedness.

The benefit may be taken by the Beneficiary in a single fixed sum, in which
case payment will be made within seven days of receipt of proof of death by
Hartford, unless subject to postponement as explained below. In lieu of
payment in one sum, a Beneficiary may elect that the amount be applied under
any annuity option available in Hartford's variable annuities then being
issued provided any such option must provide that a death benefit will be
distributed within five years of the Participant's death; or, 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 benefit must commence
within one year of the date of the Participant's death. The Contract further
provides that if the Beneficiary is the spouse of the Participant, such spouse
may elect, in lieu of the death benefit, to be treated as the Participant.

An election to receive death benefits under a form of Annuity must be made
prior to a lump sum settlement with Hartford and within one year after the
death by written notice to Hartford 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. If a
Beneficiary elects to receive variable payments, the amount of each Annuity
payment will vary to reflect fluctuations in the returns of the underlying
investments. 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?" commencing on page 21).

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) TAX-SHELTERED 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 HARDSHIPS.

DISTRIBUTIONS DUE TO FINANCIAL HARDSHIP OR SEPARATION FROM SERVICE MAY STILL
BE SUBJECT TO A PENALTY TAX OF 10%.

HARTFORD 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 Contractholder on
behalf of a Participant prior to the selected Annuity Commencement Date for
such Participant, the Participant will have the following options, subject to
the restrictions above:

1. To continue a Participant's Individual Account in force under the
Contract. Under this option, on the selected Annuity Commencement Date, the
Participant 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 21.) At any time in the
interim, a Participant may surrender the Participant's Individual Account
for a lump sum cash settlement in accordance with item 3. below.

2. To elect Annuity payments immediately. The values in the Participant's
Individual Account may be applied, subject to Contract 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 21).

19
<PAGE>

3. To surrender the 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 24). The
amount received will be the net termination value next computed after
receipt of a written request for complete withdrawal by Hartford at its home
office, P.O. Box 2999, Hartford, CT 06104-2999. Payment will normally be
made as soon as possible but not later than seven days after the written
request is received by Hartford.

4. In the case of a partial withdrawal, the amount requested is withdrawn
from the specified Sub-Account(s) or, if no Sub-Account(s) are specified,
all applicable Sub-Account(s) on a pro rata basis. The contingent deferred
sales charge, if any, is deducted as a percentage of the amount withdrawn
(see "How are the charges under these Contracts made?" commencing on page
24). If the contingent deferred sales charge has been experience rated (see
"Charges Under the Contract -- Experience Rating of Contracts," page 26),
any amounts not subject to the contingent deferred sales charge will be
deemed to be withdrawn last.

5. To begin making monthly, quarterly, semi-annual or annual withdrawals
while allowing the Participant's Individual Account to remain in the
Accumulation Period under the Contract. Participant's Individual Account
remains subject to the Annual Contract Fee and any fluctuations in the
investment results of the Sub-Accounts or any of the underlying investments.
A Participant may transfer the values of Participant's Individual Account
allocations from one or more Sub-Accounts or the General Account to any
other Sub-Account, the General Account or to any combination thereof,
subject to the restrictions described under "Operation of the Contract,"
page 15. "Systematic Withdrawal Option," page 22, for a complete description
of the restrictions and limitations of this option.

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 Commission; (b) the Commission permits
postponement and so orders; or (c) the 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, 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.

CAN A CONTRACT BE SUSPENDED BY A CONTRACTHOLDER?

A Contract may be suspended by the Contractholder by giving written notice
at least 90 days prior to the effective date of such suspension to Hartford at
its home office, P.O. Box 2999, Hartford, CT 06104-2999. A Contract will be
suspended automatically on its anniversary if the Contractholder fails to
assent to any modification of a Contract, as described under the caption "Can
a Contract be modified?" (commencing on page 24) which modifications would
have become effective on or before that anniversary. Upon suspension,
Contributions to Participant's Individual Accounts will continue to be
accepted on behalf of existing Participants, subject to the Contract terms in
effect prior to suspension. Contributions will not be accepted on behalf of
any new Participants.

Annuitants at the time of any suspension will continue to receive their
Annuity payments. The suspension of a Contract will not preclude a Participant
from applying an existing Participant's Individual Accounts under DC-II to the
purchase of Fixed or Variable Annuity benefits.

HOW DO I ELECT AN ANNUITY COMMENCEMENT DATE AND FORM OF ANNUITY?

Participants select an Annuity Commencement Date, usually between their 50th
birthday and the date they become age 70 1/2, and an Annuity option. The
Annuity Commencement Date may not be deferred beyond the date a Participant
becomes age 70 1/2 or such earlier date as may be required by applicable law

20
<PAGE>
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
Participant does not elect otherwise, Hartford reserves the right to begin
Annuity payments at age 65 under Option 2 with 120 monthly payments certain.
However, Hartford will not assure responsibility in determining or monitoring
minimum distributions beginning at age 70 1/2.

When an annuity is purchased, unless otherwise specified, Accumulation Unit
values will be applied to provide a Variable Annuity under DC-II.

WHAT IS THE MINIMUM AMOUNT THAT I MAY SELECT AS 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, Hartford reserves 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 are applied to establish a Fixed
and/or Variable Annuity.

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. This option offers the maximum level of monthly payments of any of
the other life options (Options 2-4) 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 or she dies prior to the due date of the second Annuity
payment, two if he or she dies prior to 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 payments will be made for a minimum of 120,
180 or 240 months, as elected. If, at the death of the Annuitant, payments
have been made for less than the minimum elected number of months, then any
remaining guaranteed monthly payments will be paid to the Beneficiary or
Beneficiaries designated unless other provisions will have been made and
approved by Hartford.

*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:

<TABLE>
<CAPTION>
total amount applied under the option
at the Annuity Commencement Date
<S> <C>
(a) =
------------------------------------------------------------
Annuity Unit value at the Annuity Commencement Date
(b) = number of Annuity Units represented number of
monthly
by each monthly Annuity payment made X Annuity payments made
</TABLE>

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 Hartford.

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. At
the Annuitant's death, payments will continue to be made to the contingent
annuitant, if

21
<PAGE>
living, for the remainder of the contingent annuitant's life. When the Annuity
is purchased, the Annuitant elects what percentage (50%, 66 2/8% or 100%) of
the monthly Annuity payment will continue to be paid to the contingent
annuitant.

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: DESIGNATED (FIXED) PERIOD ANNUITY

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 payments will be paid to the Beneficiary or
Beneficiaries designated unless other provisions will have been made and
approved by Hartford. 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 the charges under
these Contracts made?" commencing on page 24).

Other Annuity options may be made available from time to time.

*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 Hartford.

- --------------------------------------------------------------------------------
Under any of the Annuity options above, except Option 5 (on a variable
basis), no surrenders are permitted after Annuity payments commence.
- --------------------------------------------------------------------------------

SYSTEMATIC WITHDRAWAL OPTION ("SWO")

If permitted by IRS regulations and the terms of the Employer's plan,
Participants can make withdrawals while allowing Participant's Individual
Account to remain in the Accumulation Period under the Contract. Eligibility
under this provision is limited to Participants who have terminated their
employment with the Employer and have a minimum Individual Account balance of
$10,000 at the time they elect the SWO. The maximum payment amount is 1.5%
monthly, 4.5% quarterly, 9.0% semi-annually or 18.0% annually of Participant's
Individual Account at the time they elect the SWO. Payments are limited to
18.0% of Participant's Individual Account annually. The minimum payment amount
is $100. SWO payments are generally taxable as ordinary income and, if made
prior to age 59 1/2, an IRS tax penalty may apply. The contingent deferred
sales charge, if any would apply to a withdrawal, is waived on SWO payments.

Participants elect the specific dollar amount to be withdrawn, the frequency
of payments (monthly, quarterly, semi-annually or annually) and the duration
of payments (either a fixed number of payments or until the Participant's
Individual Account is depleted). The duration of payments may not extend
beyond the Participant's life expectancy as of the beginning date of SWO
payments or the joint and last survivor life expectancy of the Participant and
the Participant's Beneficiary. Participants may not elect the SWO if they have
an outstanding loan amount.

Participants can change the terms of their SWO as often as four times in
each calendar year. Participants can terminate their SWO at any time and elect
one of the five available Annuity options or a partial or full lump sum
withdrawal. If Participants elect a partial or full lump sum withdrawal within
12 months of a SWO payment, the contingent deferred sales charge that was
previously waived, if any, will be deducted from Participant's Individual
Account upon withdrawal. SWO payments will be deducted from Participant's
Individual Account pro rata from each Sub-Account and the General Account in
which Participant's Individual Account is allocated.

Hartford is not responsible for determining a withdrawal amount that
satisfies the Minimum Distribution Requirements. Participants may be required
to change their SWO payment amount to comply with the Minimum Distribution
Requirements. Participants should consult their tax adviser to determine
whether the

22
<PAGE>
amount of their SWO payments meet IRS Minimum Distribution Requirements. See
"Federal Tax Considerations," page 31, for a discussion of the Minimum
Distribution Requirements applicable to Participants over age 70 1/2.

The SWO may only be elected pursuant to an election on a form provided by
Hartford. Election of the SWO does not affect any of Participant's other
rights under the Contracts.

HOW ARE VARIABLE ANNUITY PAYMENTS DETERMINED?

The value of the Annuity Unit for each Sub-Account in DC-II 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 18) 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 Participant's
Individual Account is determined as the product of the value of the
Accumulation Unit credited to each Sub-Account no earlier than 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 first monthly payment varies according to the form of Annuity selected.
The Contract cites Annuity tables derived from the 1983a Individual Annuity
Mortality Table with ages set back one year and with an assumed interest rate
("A.I.R.") of 4.00% 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 Contract.

Level Annuity payments would be produced 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 A.I.R. 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.

Annuity payments will be made on the first day of each month following
selection. 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.

Here is an example of how a Variable Annuity payment is determined:

ILLUSTRATION OF ANNUITY PAYMENTS:
(UNISEX) AGE 65, LIFE ANNUITY WITH 120 PAYMENTS CERTAIN

<TABLE>
<S> <C> <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 for 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 illustrate the calculation of a Variable Annuity and have
no bearing on the actual record of DC-II.

23
<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 Contractholder and
Hartford. 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 Contractholder the benefit of, any
federal or state statutes or any rule or regulation of the U.S. Treasury
Department or the IRS.

On or after the fifth anniversary of any Contract Hartford may change, from
time to time, any or all of the terms of the Contracts by giving 90 days
advance written notice to the Contractholder, 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.

At any time Hartford reserves the right to modify the Contract, if such
modification: (i) is necessary to make the Contract or DC-II comply with any
law or regulation issued by a governmental agency to which Hartford 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 DC-II or the Sub-Account(s); (iv) provides additional
Separate Account options; or (v) withdraws Separate Account options. In the
event of any such modification Hartford will provide notice to the
Contractholder or to the payee(s) during the Annuity period. Hartford may also
make appropriate endorsement in the Contract to reflect such modification.

CHARGES UNDER THE CONTRACT

HOW ARE THE CHARGES UNDER THESE CONTRACTS MADE?

There is no deduction for sales expenses at the time Contributions are
allocated to the Participant's Individual Accounts. However, a contingent
deferred sales charge may be assessed against a Participant's Individual
Account when it is withdrawn. The number of Participant Contract Years
completed prior to withdrawal will determine the amount of the contingent
deferred sales charge. The amount or term of the contingent deferred sales
charge may be reduced (see " -- Experience Rating of Contracts," page 26).
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 charge is a percentage of the amount surrendered and equals:

<TABLE>
<CAPTION>
CONTRACT YEAR
OF WITHDRAWAL MAXIMUM CHARGE
- ------------------------------------------------------------- ---------------------
<S> <C>
1-5.......................................................... 5%
6............................................................ 4%
7............................................................ 3%
8............................................................ 2%
9............................................................ 1%
10 or more................................................... 0%
</TABLE>

In the case of a withdrawal 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-Accounts will be
surrendered by $1,000 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 withdrawal 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).

24
<PAGE>
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 direct commissions paid on the sale of the
Contracts will not exceed 5.0% of a Contribution. To the extent that these
charges do not cover such distribution expenses they will be borne by Hartford
from its general assets, including surplus or possible profit from mortality
and expense risk charges.

WHAT IS THE MORTALITY, EXPENSE AND ADMINISTRATIVE RISK 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) Hartford's
actual mortality experience among Annuitants before or after retirement or (b)
Hartford'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 Hartford.

In providing an expense undertaking, Hartford 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 Hartford 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) regardless of how long all Annuitants
may live and regardless of how long all Annuitants as a group may live. This
undertaking assures that neither the longevity of an Annuitant nor an
improvement in life expectancy will have any adverse effect on the monthly
Annuity payments the Annuitant will receive under the Contract. It thus
relieves the Participant from the risk that they will outlive the funds
accumulated.

The mortality undertaking is based on Hartford's present actuarial
determination of expected mortality rates among all Annuitants. If actual
experience among Annuitants deviates from Hartford's actuarial determination
of expected mortality rates among Annuitants because, as a group, their
longevity is longer than anticipated, Hartford must provide amounts from its
general funds to fulfill its Contract obligations. In that event, a loss will
fall on Hartford. Conversely, if longevity among Annuitants is lower than
anticipated, a gain will result to Hartford . Hartford also assumes the
liability for payment of the Minimum Death Benefit provided under the
Contract.

The administrative undertaking provided by Hartford assures the
Contractholder that administration will be provided throughout the entire life
of the Contract.

For assuming these risks Hartford presently charges 1.25% (estimated at .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 mortality,
expense and administrative undertakings under the Contracts may be reduced
(see "-- Experience Rating of Contracts," page 26) and may be periodically
increased beyond a rate of 1.25%, subject to a maximum annual rate of 2.00%.
However, no increase will occur unless the Commission shall have first
approved such increase.

ARE THERE ANY OTHER ADMINISTRATIVE CHARGES?

An Annual Contract Fee will be deducted from the value of each Participant's
Individual Account under the Contracts. The maximum Annual Contract Fee is
$30.00 per year but may be reduced or waived (see " -- Experience Rating of
Contracts," page 26).

The Annual Contract Fee will be deducted 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. The Annual Contract Fee will be deducted from the value of a
Participant's Individual Account on a pro rata basis from the Sub-Account(s)
chosen.

25
<PAGE>
IS THERE EVER A TIME WHEN THE SALES CHARGES OR ANNUAL CONTRACT FEE DOES NOT
APPLY?

The contingent deferred sales charge and Annual Contract Fee will not be
deducted on Contracts in the event of: (1) death of a Participant, (2)
disability, within the meaning of Code section 72(m)(7) (provided that such
disability would entitle the Participant to receive social security disability
benefits), (3) confinement in a nursing home, provided the Participant is
confined immediately following at least 90 days of continuous confinement in a
hospital or long term care facility, (4) separation from service on or after
the 5th Participant Contract Year for Participants age 59 1/2 or older, (5)
financial hardship (E.G., an immediate and heavy financial need of the
Participant other than purchase of a principal residence or payment for post
secondary education) or (6) if the value of a Participant's Individual Account
is paid out under one of the available Annuity options under the Contracts or
under the Systematic Withdrawal Option (except that a surrender out of Annuity
Option 5 is subject to sales charges, if applicable). Some of the above events
may not apply to Individual Retirement Annuity Participants.

If otherwise eligible to make a withdrawal under the terms of the Employer's
plan, a Participant may withdraw up to 10% of the value of their Individual
Account on a non-cumulative basis each Participant Contract Year, after the
first, without application of a contingent deferred sales charge. The minimum
amount that can be withdrawn under this provision is $250.00.

EXPERIENCE RATING OF CONTRACTS

Certain of the charges and fees described in this Prospectus may be reduced
("experience rated") for Contracts depending on some or all of the following
factors. the total number of Participants, the sum of all Participants'
Individual Account values, the sum of all Participants' Individual Account
values which are allocated to funds managed by affiliates of Hartford,
anticipated present or future expense levels, anticipated present or future
commission levels, and whether or not Hartford is an exclusive annuity
Contract provider. Experience rating of a contract may be discontinued in the
event of a change in the applicable factors, Hartford, 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 amount of, or waiving, the Transfer Fee, (4) reducing the
mortality, expense and administrative 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 Contractholders/Participants funded
by the Separate Account. Experience rating credits have been given on certain
cases. Participants in contracts receiving experience rating credits will
receive notification regarding any reduction in charges or fees.

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 3.50%. On any Contract subject to a Premium Taxes, Hartford will
pay the taxes when imposed by the applicable taxing authorities. Hartford, 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.

WHAT CHARGES ARE MADE BY THE FUNDS?

Deductions are made from the assets of the Funds to pay for management fees
and the operating expenses of the Funds. A full description of the Funds,
their investment policies and restrictions, risks charges and expenses and all
other aspects of their operation is contained in the accompanying prospectuses
for the Funds.

ARE THERE ANY OTHER DEDUCTIONS?

Participants may transfer monies between or among Sub-Accounts up to 12
times per Participant Contract Year. Such transfers may be subject to charge
of $5.00 for each transfer made in excess of 12 per Participant Contract Year.

26
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
AND THE FUNDS

WHAT IS HARTFORD?

Hartford Life Insurance Company ("Hartford") is a stock life insurance
company engaged in the business of writing health and life insurance, both
individual and group, in all states of the United States and the District of
Columbia. Hartford was originally incorporated under the laws of Massachusetts
on June 5, 1902, and was subsequently redomiciled to Connecticut. Its offices
are located in Simsbury, Connecticut; however, its mailing address is P.O. Box
2999, Hartford, C. 06104-2999. Hartford is a subsidiary of Hartford Fire
Insurance Company, one of the largest multiple lines insurance carriers in the
United States. Hartford is ultimately owned by ITT Hartford Group, Inc., a
Delaware corporation. Subject to shareholder approval on May 2, 1997, the name
of ITT Hartford Group, Inc. will change to The Hartford Financial Services
Group, Inc.

Hartford is rated A+ (superior) by A.M. Best and Company, Inc., on the basis
of its financial soundness and operating performance. Hartford is rated AA by
Standard & Poor's and AA+ by Duff and Phelps, on the basis of its claims
paying ability. These ratings do not apply to the investment performance of
the Sub-Accounts of the Separate Account. The ratings apply to Hartford's
ability to meet its insurance obligations, including those described in this
Prospectus.

WHAT ARE THE FUNDS?

The assets of each Sub-Account of the Separate Account are invested
exclusively in one of the Funds. The investment objectives of each of the
Funds are summarized below. There is no guarantee that any of the Funds will
achieve its stated objectives.

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' prospectuses which should be read in
conjunction with this Prospectus before investing, and in the Funds' Statement
of Additional Information which may be ordered from Hartford.

HARTFORD FUNDS

HARTFORD ADVISERS FUND, INC.

Seeks maximum long-term total rate of return consistent with prudent
investment risk by investing in common stock and other equity securities,
bonds and other debt securities, and money market instruments.

HARTFORD BOND FUND, INC.

Seeks maximum current income consistent with preservation of capital by
investing primarily in fixed-income securities. Up to 20% of the total assets
of this Fund may be invested in debt securities rated in the highest category
below investment grade ("Ba" by Moody's Investor Services, Inc. or "BB" by
Standard & Poor's) or, if unrated, are determined to be of comparable quality
by the Fund's investment adviser. Securities rated below investment grade are
commonly referred to as "high yield-high risk securities" or "junk bonds." For
more information concerning the risks associated with investing in such
securities, please refer to the section in the accompanying prospectus for the
Hartford Funds entitled "Hartford Bond Fund, Inc. -- Investment Policies."

HARTFORD CAPITAL APPRECIATION FUND, INC.

Seeks growth of capital by investing in securities selected solely on the
basis of potential for capital appreciation; income, if any, is an incidental
consideration.

HARTFORD DIVIDEND AND GROWTH FUND, INC.

Seeks a high level of current income consistent with growth of capital and
reasonable investment risk.

27
<PAGE>
HARTFORD INDEX FUND, INC.

Seeks 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"). *

HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.

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

HARTFORD MORTGAGE SECURITIES FUND, INC.

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

HARTFORD STOCK FUND, INC.

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

HVA MONEY MARKET FUND, INC.

Seeks maximum current income consistent with liquidity and preservation of
capital.

* "Standard & Poor's-Registered Trademark-", "S&P-Registered Trademark-",
"S&P 500-Registered Trademark-", "Standard & Poor's 500", and "500" are
trademarks of The McGraw-Hill Companies, Inc. and have been licensed for
use by Hartford Life Insurance Company and affiliates. The Hartford Index
Fund, Inc. ("Index Fund") is not sponsored, endorsed, sold or promoted by
Standard & Poor's and Standard & Poor's makes no representation regarding
the advisability of investing in the Index Fund.

CALVERT FUND

CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO

Seeks to achieve a total return above the rate of inflation through an
actively managed, nondiversified portfolio of common and preferred stocks,
bonds, and money market instruments which offer income and capital growth
opportunity and which satisfy the social criteria established for the
Portfolio.

AMERICAN CENTURY VP FUNDS

AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. AMERICAN CENTURY VP ADVANTAGE

Seeks capital growth over time by investing primarily in common stocks that
are considered by the investment manager to have better-than-average prospects
for appreciation.

AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. AMERICAN CENTURY VP CAPITAL
APPRECIATION

Seeks to provide reasonable share price stability through its holdings of
money market securities and bonds an. competitive rates of current income with
government-backed securities, and to offer the potential for long-term returns
higher than those of fixed income investments through its use of common
stocks.

28
<PAGE>

FIDELITY FUNDS

AMS/FIDELITY INVESTMENTS VIP II ASSET MANAGER PORTFOLIO

Seeks high total return with reduced risk over the long term by allocating
its assets among stocks, bonds, and short-term fixed-income instruments.

AMS/FIDELITY INVESTMENTS VIP GROWTH PORTFOLIO

Seeks capital appreciation primarily through purchase of common stocks,
although its investments are not restricted to any one type of security.

AMS/FIDELITY INVESTMENTS VIP II CONTRAFUND PORTFOLIO

Seeks long term capital appreciation through purchase of equity securities
of domestic or foreign companies that are undervalued or due to an overly
pessimistic appraisal by the public.

AMS/FIDELITY INVESTMENTS VIP OVERSEAS PORTFOLIO

Seeks long term capital appreciation by investing primarily in foreign
securities whose principal business activities are outside of the United
States.

The Hartford Funds are organized as corporations under the laws of Maryland
and are registered as diversified open-end management companies under the
Investment Company Act of 1940. The Calvert Responsibly Invested Balanced
Portfolio is a series of Acacia Capital Corporation, which is an open-end
management investment company. The American Century VP Advantage and American
Century VP Capital Appreciation Funds ("American Century VP Funds") are separate
series of shares issued by American Century Variable Portfolios, Inc. ("ACVP"),
a corporation organized under the laws of the state of Maryland. ACVP is a
registered, diversified, open-ended investment management company under the
Investment Company Act of 1940. The Fidelity Funds involve two diversified
open-end management investment companies, each with multiple portfolios and
organized as a Massachusetts business trust. The VIP Growth Portfolio and VIP
Overseas Portfolio are portfolios of the Variable Insurance Products Fund. The
VIP II Asset Manager Portfolio and VIP II Contrafund Portfolio are portfolios of
the Variable Insurance Products Fund II. Each Fund continually issues an
unlimited number of full and fractional shares of beneficial interest in the
Fund.

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 Hartford 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 Calvert Responsibly Invested Balanced Portfolio, a series of
Acacia Capital Corporation which is unaffiliated with Hartford, are offered to
other unaffiliated separate accounts. Hartford 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.

Shares of the American Century VP Funds and the Fidelity Funds are offered
to other unaffiliated separate accounts.

29
<PAGE>

The Advisers Fund Sub-Account was 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.

INVESTMENT ADVISERS

HARTFORD FUNDS

HL Investment Advisors, Inc. ("HL Advisors") serves as the investment
adviser to each of the Hartford Funds.

Wellington Management Company, L.L.P. serves as sub-investment adviser for
Hartford Advisers Fund, Hartford Capital Appreciation Fund, Hartford Dividend
and Growth Fund, Hartford International Opportunities Fund and Hartford Stock
Fund.

In addition, HL Advisors has entered an investment services agreement with
Hartford Investment Management Company, Inc., ("HIMCO"), pursuant to which
HIMCO will provide certain investment services to Hartford Bond Fund, Hartford
Index Fund, Hartford Mortgage Securities Fund and HVA Money Market Fund.

CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO

Calvert Asset Management Company serves as investment adviser and manages
the fixed-income portion of the Calvert Responsibly Invested Balanced
Portfolio. The sub-advisor to the Portfolio is NCM Capital Management Group,
Inc. ("NCM"). NCM manages the equity portion of the Portfolio.

AMERICAN CENTURY VP FUNDS

The American Century VP Funds are managed by American Century Investment
Management, Inc., whose principal business address is American Century Towers,
4500 Main Street, Kansas City, MO 64111.

FIDELITY FUNDS

The Fidelity Funds are managed by Fidelity Management & Research Company
("Fidelity Management"), whose principal business address is 82 Devonshire
Street, Boston, Massachusetts. Fidelity Management is one of America's largest
investment management organizations. It is composed of a number of different
companies, which provide a variety of financial services and products.
Fidelity Management is the original Fidelity company, founded in 1946. It
provides a number of mutual funds and other clients with investment research
and portfolio management services. Various Fidelity companies perform certain
activities required to operate Variable Insurance Products Fund and Variable
Insurance Products Fund II.

DOES HARTFORD HAVE ANY INTEREST IN THE FUNDS?

At December 31, 1996, certain Hartford group pension contracts held direct
interest in shares as follows:

<TABLE>
<CAPTION>
PERCENT OF
SHARES TOTAL SHARES
------------- -------------
<S> <C> <C>
Hartford Advisers Fund, Inc............................................................... 18,752,510 0.69%
Hartford Bond Fund, Inc................................................................... 47,060 0.01%
Hartford Capital Appreciation Fund, Inc................................................... 15,519,596 1.79%
Hartford Dividend and Growth Fund, Inc.................................................... 443,556 0.08%
Hartford Index Fund, Inc.................................................................. 16,432,999 6.30%
Hartford International Opportunities Fund, Inc............................................ 7,835,802 1.11%
Hartford Mortgage Securities Fund, Inc.................................................... 17,408,850 5.65%
Hartford Stock Fund, Inc.................................................................. 92,167 0.01%
HVA Money Market Fund, Inc................................................................ 31,633 0.01%
</TABLE>

30
<PAGE>
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
Hartford's understanding of existing federal income tax laws as they are
currently interpreted.

B. HARTFORD AND SEPARATE ACCOUNT TWO

Separate Account Two is taxed as part of Hartford which is taxed as a life
insurance company in accordance with the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, Separate Account Two 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 Separate Account Two
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 18.) 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 Separate Account Two with respect to qualified or
non-qualified contracts.

C. INFORMATION REGARDING TAX QUALIFIED PLANS

The tax rules applicable to tax qualified contract owners, including
restrictions on contributions and distributions, taxation of distributions and
tax penalties, vary according to the type of plan as well as the terms and
conditions of the plan itself. Various tax penalties may apply to
contributions in excess of specified limits, to distributions in excess of
specified limits, distributions which do not satisfy certain requirements and
certain other transactions with respect to qualified plans. Accordingly, this
summary provides only general information about the tax rules associated with
use of the Contract by a qualified plan. Contract owners, plan participants
and beneficiaries are cautioned that the rights and benefits of any person to
benefits are controlled by the terms and conditions of the plan regardless of
the terms and conditions of the Contract. Some qualified plans are subject to
distribution and other requirements which are not incorporated into Hartford's
administrative procedures. Owners, participants and beneficiaries are
responsible for determining that contributions, distributions and other
transactions comply with applicable law. Because of the complexity of these
rules, owners, participants and beneficiaries are encouraged to consult their
own tax advisers as to specific tax consequences.

1. QUALIFIED PENSION PLANS

Provisions of the Code permit eligible employers to establish 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 (described in Section 408(k)). Such plans are subject
to limitations on the amount that may be contributed, the persons who may be
eligible and the time when distributions must commence. Corporate employers
intending to use these contracts in connection with such plans should seek
competent advice.

31
<PAGE>
2. TAX SHELTERED ANNUITIES UNDER SECTION 403(B)

Section 403(b) of the Code permits public school employees and employees of
certain types of charitable, educational and scientific organizations
specified in Section 501(c)(3) of the Code to purchase annuity contracts, and,
subject to certain limitations, exclude such contributions from gross income.
Generally, such contributions may not exceed the lesser of $9,500 or 20% of
the employees "includable compensation" for his most recent full year of
employment, subject to other adjustments. Special provisions may allow
some employees to elect a different overall limitation.

Tax-sheltered annuity programs under Section 403(b) are subject to a
PROHIBITION AGAINST DISTRIBUTIONS FROM THE CONTRACT ATTRIBUTABLE TO
CONTRIBUTIONS MADE PURSUANT TO A SALARY REDUCTION AGREEMENT unless such
distribution is made:

(a) after the participating employee attains age 59 1/2;

(b) upon separation from service;

(d) in the case of hardship.

The above restrictions apply to distributions of employee contributions made
after December 31, 1988, earnings on those contributions, and earnings on
amounts attributable to employee contributions held as of December 31, 1988.
They do not apply to distributions of any employer or other after-tax
contributions, employee contributions made on or before December 31, 1988, and
earnings credited to employee contributions before December 31, 1988.

3. DEFERRED COMPENSATION PLANS UNDER SECTION 457

Employees and independent contractors performing services for such employers
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 (typically 25% of gross
compensation) or $7,500 (indexed), whichever is less. The plan may also
provide for additional "catch-up" deferrals during the three taxable years
ending before a Participant attains normal retirement age.

An employee electing to participate in a Deferred Compensation Plan should
understand that his or her rights and benefits are governed strictly by the
terms of the plan and that the employer is the legal owner of any contract
issued with respect to the plan. 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 or her plan for any charges in regard to participating therein
other than those disclosed in this Prospectus. Participants should also be
aware that effective August 20, 1996, the Small Business Job Protection Act of
1996 requires that all assets and income of an eligible Deferred Compensation
Plan established by a governmental employer which is a State, a political
subdivision of a State, or any agency or instrumentality of a State or
political subdivision of a State, must be held in trust (or under certain
specified annuity contracts or custodial accounts) for the exclusive benefit
of Participants and their Beneficiaries. Special transition rules apply to
such governmental Deferred Compensation Plans already in existence on August
20, 1996, and provide that such plans need not establish a trust before
January 1, 1999. However, this requirement does not apply to amounts under a
Deferred Compensation Plan of a tax-exempt (non-governmental) organization and
such amounts will be subject to the claims of such tax-exempt employer's
general creditors.

In general, distributions from a Section 457 Deferred Compensation Plan are
prohibited unless made after the participating employee attains the age
specified in the plan, separates from service, dies, or suffers an
unforeseeable financial emergency. Present federal tax law does not allow
tax-free transfers or rollovers for amounts accumulated in a Section 457 plan
except for transfers to other Section 457 plans in limited cases.

32
<PAGE>
4. INDIVIDUAL RETIREMENT ANNUITIES UNDER SECTION 408

Section 408 of the Code permits eligible individuals to establish individual
retirement programs through the purchase of Individual Retirement Annuities
("IRAs"). IRAs are subject to limitations on the amount that may be
contributed, the contributions that may be deducted from taxable income, the
persons who may be eligible and the time when distributions may commence.
Also, distributions from certain qualified plans may be "rolled-over" on a
tax-deferred basis into an IRA.

5. TAX PENALTIES

Distributions from retirement plans are generally taxed under Section 72 of
the Code. Under these rules, a portion of each distribution may be excludable
from income. The excludable amount is the portion of the distribution which
bears the same ratio as the after-tax contributions bear to the expected
return.

A. PREMATURE DISTRIBUTION

Distributions from a qualified plan before the Participant attains age
59 1/2 are generally subject to an additional tax equal to 10% of the taxable
portion of the distribution. The 10% penalty does not apply to distributions
made after the employee's death, on account of disability, for eligible
medical expenses 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. 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).

B. MINIMUM DISTRIBUTION TAX

If the amount distributed is less than the minimum required distribution for
the year, the Participant is subject to a 50% tax on the amount that was not
properly distributed.

An individual's interest in a retirement plan must generally be distributed,
or begin to be distributed, not later than April 1 of the calendar year
following the later of (i) the calendar year in which the individual attains
age 70 1/2 or (ii) the calendar year in which the individual retires from
service with the employer sponsoring the plan ("required beginning date").
However, the required beginning date for an individual who is a five (5)
percent owner (as defined in the Code), or who is the owner of an IRA, is
April 1 of the calendar year following the calendar year in which the
individual 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 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.

If an individual dies before reaching his or her required beginning date,
the individual's entire interest must generally be distributed within five
years of the individual's death. However, this rule will be deemed satisfied,
if distributions begin before the close of the calendar year following the
individual's death to a designated Beneficiary (or over a period not extending
beyond the life expectancy of the beneficiary). If the Beneficiary is the
individual's surviving spouse, distributions may be delayed until the
individual would have attained age 70 1/2.

If an individual dies after reaching his or her required beginning date or
after distributions have commenced, the individual's interest must generally
be distributed at least as rapidly as under the method of distribution in
effect at the time of the individual's death.
C. EXCESS DISTRIBUTION TAX

If the aggregate distributions from all IRAs and certain other qualified
plans in a calendar year exceed the greater of (i) $150,000, or (ii) $112,500
as indexed for inflation, a penalty tax of 15% is generally imposed on the
excess portion of the distribution.

D. WITHHOLDING

Periodic distributions from a qualified plan lasting for a period of 10 or
more years are generally subject to voluntary income tax withholding. The
recipient of periodic distributions may generally elect not to have

33
<PAGE>
withholding apply or to have income taxes withheld at a different rate by
providing a completed election form. Otherwise, the amount withheld on such
distributions is determined at the rate applicable to wages as if the
recipient were married claiming three exemptions.

Nonperiodic distributions from an IRA are subject to income tax withholding
at a flat 10% rate. The recipient may elect not to have withholding apply.

Nonperiodic distributions from other qualified plans are generally subject
to mandatory income tax withholding at the flat rate of 20% unless such
distributions are:

(1) the non-taxable portion of the distribution;

(2) required minimum distributions;

(3) eligible rollover distributions.

Eligible rollover distributions are direct payments to an IRA or to another
qualified employer plan.

In general, distributions from plans described in Section 457 of the Code
are subject to regular wage withholding rules.

D. DIVERSIFICATION REQUIREMENTS

Section 817 of the Code provides that a variable annuity contract will not
be treated as an annuity contract 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 Department. If a
Contract is not treated as an annuity contract, the Contract Owner will be
subject to income tax on the annual increases in cash value.

The Treasury Department has issued diversification regulations which
generally require, among other things, that no more than 55% of the value of the
total assets of the segregated assets account underlying a variable contract is
represented by any one investment, no more than 70% is represented by any two
investment, no more than 80% is represented by any three investments, and no
more than 90% is represented by any four investments. In determining whether the
diversification standards are met, all securities of the same issuer, all
interests in the same real property project, and all interests in the same
commodity are each treated as a single investment. In addition, in the case of
government securities, each government agency or instrumentality shall be
treated as a separate issuer.

A separate account must be in compliance with the diversification standards
on the last day of each calendar quarter or within 30 days after the quarter
ends. If an insurance company inadvertently fails to meet the diversification
requirements, the company may comply within a reasonable period and avoid the
taxation of contract income on an ongoing basis. However, either the company or
the Contract Owner must agree to pay the tax due for the period during which the
diversification requirements were not met.

Hartford monitors the diversification of investments in the separate
accounts and tests for diversification as required by the Code. Hartford intends
to administer all contracts subject to the diversification requirements in a
manner that will maintain adequate diversification.

E. OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT

In order for a variable annuity contract to qualify for tax deferral, assets
in the segregated asset accounts supporting the variable contract must be
considered to be owned by the insurance company and not by the variable contract
owner. The Internal Revenue Service ("IRS") has issued several rulings which
discuss investor control. The IRS has ruled that incidents of ownership by the
contract owner, such as the ability to select and control investments in a
separate account, will cause the contract owner to be treated as the owner of
the assets for tax purposes.

Further, in the explanation to the temporary Section 817 diversification
regulations, the Treasury Department noted that the temporary regulations "do
not provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor, rather
than the insurance company, to be treated as the owner of the assets in the
account." The explanation further indicates that "the temporary regulations
provide that in appropriate cases a segregated asset account may include
multiple sub-accounts, but do not specify the extent to which policyholders may
direct their investments to particular sub-accounts without being treated as the
owners of the underlying assets. Guidance on this and

34
<PAGE>

other issues will be provided in regulations or revenue rulings under Section
817(d), relating to the definition of variable contract." The final regulations
issued under Section 817 did not provide guidance regarding investor control,
and as of the date of this Prospectus, no other such guidance has been issued.
Further, Hartford does not know if or in what form such guidance will be issued.
In addition, although regulations are generally issued with prospective effect,
it is possible that regulations may be issued with retroactive effect. Due to
the lack of specific guidance regarding the issue of investor control, there is
necessarily some uncertainty regarding whether a Contract Owner could be
considered the owner of the assets for tax purposes. Hartford reserves the right
to modify the contracts, as necessary, to prevent Contract Owners from being
considered the owners of the assets in the separate accounts.

F. 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.
G. ANNUITY PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS

The discussion above provides general information regarding U.S. federal
income tax consequences to annuity purchasers that are U.S. citizens or
residents. Purchasers that are not U.S. citizens or residents will generally be
subject to U.S. federal income tax and withholding on annuity distributions at a
30% rate, unless a lower treaty rate applies. In addition, purchasers may be
subject to state premium tax, other state and/or municipal taxes, and taxes that
may be imposed by the purchaser's country of citizenship or residence.
Prospective purchasers are advised to consult with a qualified tax adviser
regarding U.S., state, and foreign taxation with respect to an annuity purchase.

MISCELLANEOUS

WHAT ARE MY VOTING RIGHTS?

Hartford shall notify the Contractholder of any Fund shareholders' meeting
if the shares held for the Contractholder's accounts may be voted at such
meetings. Hartford shall also send proxy materials and a form of instruction
by means of which the Contractholder can instruct Hartford with respect to the
voting of the Fund shares held for the Contractholder's account. In connection
with the voting of Fund shares held by it, Hartford shall arrange for the
handling and tallying of proxies received from Contractholders. Hartford 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. Hartford will, however, vote the Fund shares held by it in
accordance with the instructions received from the Contractholders for whose
accounts the Fund shares are held. If a Contractholder desires to attend any
meeting at which shares held for the Contractholder's benefit may be voted,
the Contractholder may request Hartford to furnish a proxy or otherwise
arrange for the exercise of voting rights with respect to the Fund shares held
for such Contractholder's account. In the event that the Contractholder gives
no instructions or leaves the manner of voting discretionary, Hartford 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 which Participants may instruct the
Contractholder with respect to the number of votes attributable to his
individual participation under a group Contract.

A Contractholder or Participant, as appropriate, is entitled to one full or
fractional vote for each full or fractional Accumulation or Annuity Unit
owned. The Contractholder 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
interests under DC-II.

During the Annuity period under a Contract the number of votes will decrease
as the assets held to fund Annuity benefits decrease.

35
<PAGE>
WILL OTHER CONTRACTS BE PARTICIPATING IN THE SEPARATE ACCOUNT?

In addition to the Contracts described in this Prospectus, other forms of
group annuities are sold providing benefits which vary in accordance with the
investment experience of the Separate Account.

HOW ARE THE CONTRACTS SOLD?

Hartford Securities Distribution Company, Inc. ("HSD") serves as Principal
Underwriter for the securities issued with respect to the Separate Account.

HSD is a wholly-owned subsidiary of Hartford. The principal business address
of HSD is the same as that of Hartford.

The securities will be sold by salespersons of HSD who represent Hartfordas
insurance and Variable Annuity agents and who are registered representatives
of Broker-Dealers who have entered into distribution agreements with HSD.

HSD is registered with the Commission under the Securities Exchange Act of
1934 as a Broker-Dealer and is a member of the NASD.

Compensation will be paid by Hartford to registered representatives for the
sale of contracts up to a maximum of 5% of Contributions and 0.25% annually on
Participants' Individual Account Values. Sales compensation may be reduced.

WHO IS THE CUSTODIAN OF THE SEPARATE ACCOUNTS' ASSETS?

Hartford is the custodian of the Separate Accounts' assets.

ARE THERE ANY MATERIAL LEGAL PROCEEDINGS AFFECTING THE SEPARATE ACCOUNT?

There are no material legal proceedings pending to which the Separate
Account is a party. Counsel with respect to federal laws and regulations
applicable to the issue and sale of the contracts and with respect to
Connecticut law is Lynda Godkin, General Counsel, Hartford Life Insurance
Companies, P.O. Box 2999, Hartford, CT 06104-2999.

ARE YOU RELYING ON ANY EXPERTS AS TO ANY PORTION OF THIS PROSPECTUS?

The audited consolidated financial statements and financial statement
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
giving said reports. Reference is made to said report on the consolidated
financial statements of Hartford Life Insurance Company (the Depositor), which
includes an explanatory paragraph with respect to the change in method of
accounting for debt and equity securities as of January 1, 1994, as discussed
in Note 2 of Notes to Consolidated Financial Statements. The principal
business address of Arthur Andersen LLP is One Financial Plaza, Hartford,
Connecticut 06103.

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

36
<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...................................
CALCULATION OF YIELD AND RETURN.............................
PERFORMANCE COMPARISONS.....................................
FINANCIAL STATEMENTS........................................
</TABLE>

37
<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 Contractholder/Participant _____________________________________________
Address ________________________________________________________________________
City or Plan/School District ___________________________________________________
Date ___________________________________________________________________________
<PAGE>
To obtain a Statement of Additional
Information, complete the form below and mail to:

Hartford Life Insurance Company
Attn: RPVA Administration
P.O. Box 2999
Hartford, CT 06104-2999

Please send a Statement of Additional
Information for Separate Account Two (DC Variable
Account II) to me at the following address:
_________________________________________
Name
_________________________________________
Address
_________________________________________
City/State Zip Code
<PAGE>

PART B

STATEMENT OF ADDITIONAL INFORMATION

HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT TWO (DC VARIABLE ACCOUNT II)

Group Variable Annuity Contracts Issued by
Hartford Life Insurance Company
With Respect to 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, 1997
Date of Statement of Additional Information: May 1, 1997

<PAGE>

TABLE OF CONTENTS

SECTION PAGE
- ------- ----

DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY. . . . . . . . . . . . . . .

SAFEKEEPING OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . .

INDEPENDENT PUBLIC ACCOUNTANTS. . . . . . . . . . . . . . . . . . . . . . .

DISTRIBUTION OF CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . .

CALCULATION OF YIELD AND RETURN . . . . . . . . . . . . . . . . . . . . . .

PERFORMANCE COMPARISONS . . . . . . . . . . . . . . . . . . . . . . . . . .

FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .

<PAGE>

DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY

Hartford Life Insurance Company ("Hartford") is a stock life insurance company
engaged in the business of writing health and life insurance, both individual
and group, in all states of the United States and the District of Columbia.
Hartford was originally incorporated under the laws of Massachusetts on June 5,
1902, and was subsequently redomiciled to Connecticut. Its offices are
located in Simsbury, Connecticut; however, its mailing address is P.O. Box
2999, Hartford, CT 06104-2999. Hartford is a subsidiary of Hartford Fire
Insurance Company, one of the largest multiple lines insurance carriers in the
United States. Hartford is ultimately owned by ITT Hartford Group, Inc., a
Delaware corporation. Subject to shareholder approval on May 2, 1997, the name
of ITT Hartford Group, Inc. will change to The Hartford Financial Services
Group, Inc.

Hartford is rated A+ (superior) by A.M. Best and Company, Inc., on the basis of
its financial soundness and operating performance. Hartford is rated AA by
Standard & Poor's and AA+ by Duff and Phelps on the basis of its claims paying
ability. These ratings do not apply to the investment performance of the
Sub-Accounts of the Separate Account. The ratings apply to Hartford's ability
to meet its insurance obligations, including those described in this Prospectus.

As of December 31, 1996, certain Hartford group pension contracts held direct
interest in shares as follows:

Percent of
Shares Total Shares
-------- ------------
Hartford Advisers Fund, Inc. . . . . . . . . . . 18,752,510 0.69%
Hartford Bond Fund, Inc. . . . . . . . . . . . . 47,060 0.01%
Hartford Capital Appreciation Fund, Inc. . . . . 15,519,596 1.79%
Hartford Dividend and Growth Fund, Inc . . . . . 443,556 0.08%
Hartford Index Fund, Inc . . . . . . . . . . . . 16,432,999 6.30%
Hartford International Opportunities Fund, Inc . 7,835,802 1.11%
Hartford Mortgage Securities Fund, Inc . . . . . 17,408,850 5.65%
Hartford Stock Fund, Inc . . . . . . . . . . . . 92,167 0.01%
HVA Money Market Fund, Inc . . . . . . . . . . . 31,633 0.01%

SAFEKEEPING OF ASSETS

Title to the assets of the Separate Account is held by Hartford. These assets
are kept physically segregated and are held separate and apart from Hartford's
general corporate assets. Records are maintained of all purchases and
redemptions of Fund shares held in each of the Sub-Accounts.

INDEPENDENT PUBLIC ACCOUNTANTS

The audited consolidated financial statements and financial statement
schedules included in this Statement of Additional Information and elsewhere
in the registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their

<PAGE>

-2-

reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports. Reference is made
to said report on the consolidated financial statements of Hartford Life
Insurance Company (the Depositor), which includes an explanatory paragraph
with respect to the change in method of accounting for debt and equity
securities as of January 1, 1994, as discussed in Note 2 of Notes to
Consolidated Financial Statements. The principal business address of Arthur
Andersen LLP is One Financial Plaza, Hartford, Connecticut 06103.

DISTRIBUTION OF CONTRACTS

Hartford Securities Distribution Company, Inc. ("HSD") serves as Principal
Underwriter for the securities issued with respect to the Separate Account.
HSD is a wholly-owned subsidiary of Hartford. The principal business address
of HSD is the same as that of Hartford.

The securities will be sold by salespersons of HSD who represent Hartford as
insurance and Variable Annuity agents and who are registered representatives of
Broker-Dealers who have entered into distribution agreements with HSD.

HSD is registered with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 as a Broker-Dealer and is a member of the
National Association of Securities Dealers, Inc. ("NASD"). Compensation will
be paid by Hartford to registered representatives for the sale of Contracts up
to a maximum of 5.0% on Contributions and .25% annually on Participants'
Individual Account Values. Sales compensation may be reduced.

The offering of the Separate Account contracts is continuous.

CALCULATION OF YIELD AND RETURN

YIELD OF THE HVA MONEY MARKET FUND SUB-ACCOUNT. As summarized in the
Prospectus under the heading "Performance Related Information," the yield of
the Money Market Fund Sub-Account 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.

<PAGE>

-3-

The Money Market Fund Sub-Account yield and effective yield will vary in
response to fluctuations in interest rates and in the expenses of the
Sub-Account.

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, 1996
is as follows:

($30 Annual Contract Fee)

Yield = 3.85%
Effective Yield = 3.93%

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.

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,
1996:

<PAGE>

-4-

Example:

Current Yield Formula for the Sub-Account 2X[((A-B)/(CXD) + 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 = 4.94%

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 days period ended December 31,
1996:

Example:

Current Yield Formula for the Sub-Account 2X[((A-B)/(CXD) + 1)(6) - 1]

Yield = 5.35%

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
<PAGE>

-5-

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.

For the fiscal year ended December 31, 1996, the standardized average annual
total return quotations for the Sub-Accounts listed were as follows:

Since
Sub-Accounts Inception 1 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
Hartford Advisers Fund 9.13% 6.44% 6.85% 8.64%

Hartford Bond Fund 6.33% (5.87)% 1.22% 3.68%

Hartford Capital Appreciation Fund 14.42% 10.29% 13.01% 13.15%

Hartford Dividend and Growth Fund 14.27% 12.32% n/a n/a

Hartford Index Fund 9.07% 11.99% 9.43% n/a

Hartford International Opportunities Fund 2.46% 2.95% 4.75% n/a

Hartford Mortgage Securities Fund 5.60% (4.42)% 0.62% 3.91%

Hartford Stock Fund 13.06% 13.70% 10.31% 11.02%

Calvert Responsibly Invested Balanced Fund 7.59% 2.66% 5.13% n/a

AMS/TCI Advantage Fund 2.59% (0.51)% 0.27% n/a

AMS/TCI Growth Fund 6.97% (13.24)% 0.81% n/a

AMS/Fidelity VIP II Asset Manager Fund 7.37% 4.52% 6.12% n/a

AMS/Fidelity VIP II Contrafund Fund 22.68% 10.81% n/a n/a

AMS/Fidelity VIP Growth Fund 11.22% 4.62% 10.01% 11.62%

AMS/Fidelity VIP Overseas Fund 3.76% 3.22% 3.79% n/a

<PAGE>

-6-

For the fiscal year ended December 31, 1996, non-standardized annualized total
return quotations for the Sub-Accounts listed were as follows:

Since
Sub-Accounts Inception 1 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
Hartford Advisers Fund 11.07% 15.20% 10.73% 10.87%

Hartford Bond Fund 8.30% 2.24% 5.19% 6.30%

Hartford Capital Appreciation Fund 15.97% 19.25% 16.46% 15.26%

Hartford Dividend and Growth Fund 19.32% 21.39% n/a n/a

Hartford Index Fund 11.60% 21.04% 13.35% n/a

Hartford International Opportunities Fund 6.25% 11.53% 8.66% n/a

Hartford Mortgage Securities Fund 7.73% 3.77% 4.65% 6.45%

Hartford Stock Fund 14.46% 22.84% 14.11% 13.16%

Calvert Responsibly Invested Balanced Fund 10.22% 11.22% 9.08% n/a

AMS/TCI Advantage Fund 6.54% 7.89% 4.48% n/a

AMS/TCI Growth Fund 9.37% (5.52)% 4.85% n/a

AMS/Fidelity VIP II Asset Manager Fund 10.29% 13.18% 9.87% n/a

AMS/Fidelity VIP II Contrafund Fund 28.52% 19.80% n/a n/a

AMS/Fidelity VIP Growth Fund 13.37% 13.28% 13.73% 13.72%

AMS/Fidelity VIP Overseas Fund 6.56% 11.81% 7.79% n/a

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

<PAGE>

-7-

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.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Hartford Life Insurance Company and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Hartford Life
Insurance Company (a Connecticut corporation and wholly-owned subsidiary of
Hartford Life and Accident Insurance Company) and subsidiaries as of December
31, 1996 and 1995, and the related consolidated statements of income,
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 1996. These consolidated financial statements and the
schedules referred to below are the responsibility of Hartford Life Insurance
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and schedules 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Hartford Life Insurance Company and subsidiaries as of December 31, 1996 and
1995, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996 in conformity with generally
accepted accounting principles.

As discussed in Note 2 of Notes to Consolidated Financial Statements, Hartford
Life Insurance Company adopted a new accounting standard promulgated by the
Financial Accounting Standards Board, changing its method of accounting, as of
January 1, 1994, for debt and equity securities.

Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedules listed in the
Index to Consolidated Financial Statements and Schedules are presented for
purposes of complying with the Securities and Exchange Commission's rules and
are not a required part of the basic consolidated financial statements. These
schedules have been subjected to the auditing procedures applied in the audits
of the basic consolidated financial statements and, in our opinion, fairly state
in all material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Hartford, Connecticut
February 10, 1997

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
------------------------
1996 1995 1994
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Premiums and other considerations............... $1,705 $1,487 $1,100
Net investment income........................... 1,397 1,328 1,292
Net realized capital (losses) gains............. (213) (11) 7
------ ------ ------
Total Revenues................................ 2,889 2,804 2,399
------ ------ ------
Benefits, Claims and Expenses
Benefits, claims and claim adjustment
expenses....................................... 1,535 1,422 1,405
Amortization of deferred policy acquisition
costs.......................................... 234 199 145
Dividends to policyholders...................... 635 675 419
Other insurance expenses........................ 427 317 227
------ ------ ------
Total Benefits, Claims and Expenses........... 2,831 2,613 2,196
------ ------ ------
Income before income tax expense................ 58 191 203
Income tax expense.............................. 20 62 65
------ ------ ------
Net income........................................ $ 38 $ 129 $ 138
------ ------ ------
------ ------ ------
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of the above statements.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
AS OF DECEMBER
31,
-----------------
1996 1995
------- -------
<S> <C> <C>
(IN MILLIONS
EXCEPT SHARE
DATA)
Assets
Investments
Fixed maturities, available for sale, at fair
value (amortized cost $13,579 and $14,440)..... $13,624 $14,400
Equity securities, available for sale, at fair
value.......................................... 119 63
Policy loans, at outstanding balance............ 3,836 3,381
Mortgage loans, at outstanding balance.......... 2 265
Other investments, at cost...................... 54 156
------- -------
Total investments............................. 17,635 18,265
Cash............................................ 43 46
Premiums and amounts receivable................. 137 165
Accrued investment income....................... 407 394
Reinsurance recoverable......................... 6,066 6,221
Deferred policy acquisition costs............... 2,760 2,188
Deferred income tax............................. 474 420
Other assets.................................... 357 234
Separate account assets......................... 49,690 36,264
------- -------
Total assets.................................. $77,569 $64,197
------- -------
------- -------
Liabilities
Future policy benefits.......................... $ 2,281 $ 2,373
Other policyholder funds........................ 22,134 22,598
Other liabilities............................... 1,572 1,233
Separate account liabilities.................... 49,690 36,264
------- -------
Total liabilities............................. 75,677 62,468
------- -------
Stockholder's Equity
Common stock, $5,690 par value, 1,000 shares
authorized, issued and outstanding............. 6 6
Capital surplus................................. 1,045 1,007
Net unrealized capital gain (loss) on
investments, net of tax........................ 30 (57)
Retained earnings............................... 811 773
------- -------
Total stockholder's equity.................... 1,892 1,729
------- -------
Total liabilities and stockholder's equity...... $77,569 $64,197
------- -------
------- -------
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of the above statements.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
NET UNREALIZED
CAPITAL GAIN
(LOSS) ON TOTAL
COMMON CAPITAL INVESTMENTS, RETAINED STOCKHOLDER'S
STOCK SURPLUS NET OF TAX EARNINGS EQUITY
------ -------------- -------------- -------- -------------
<S> <C> <C> <C> <C> <C>
(IN MILLIONS)
Balance, December 31, 1993.............. $6 $ 676 $ (5) $516 $1,193
Net income............................ -- -- -- 138 138
Dividends declared on common stock.... -- -- -- (10) (10)
Capital contribution.................. -- 150 -- -- 150
Change in net unrealized capital loss
on investments, net of tax(1)........ -- -- (649) -- (649)
--
------ ------ -------- ------
Balance, December 31, 1994.............. 6 826 (654) 644 822
Net income............................ -- -- -- 129 129
Capital contribution.................. -- 181 -- -- 181
Change in net unrealized capital gain
on investments, net of tax........... -- -- 597 -- 597
--
------ ------ -------- ------
Balance, December 31, 1995.............. 6 1,007 (57) 773 1,729
Net income............................ -- -- -- 38 38
Capital contribution.................. -- 38 -- -- 38
Change in net unrealized capital gain
on investments, net of tax........... -- -- 87 -- 87
--
------ ------ -------- ------
Balance, December 31, 1996.............. $6 $1,045 $ 30 $811 $1,892
--
--
------ ------ -------- ------
------ ------ -------- ------
</TABLE>

- ------------------------

(1) The 1994 change in net unrealized capital loss on investments, net of tax,
includes a gain of $91 due to the adoption of SFAS No. 115 as discussed in
Note 2(b) of Notes to Consolidated Financial Statements.

The accompanying notes to consolidated financial statements are an integral part
of the above statements.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
(IN MILLIONS)
Operating Activities
Net income............................ $ 38 $ 129 $ 138
Adjustments to net income:
Net realized capital losses (gains) on
sale of investments.................. 213 11 (7)
Net amortization of premium on fixed
maturities........................... 14 21 41
Increase in deferred income taxes..... (102) (172) (128)
Increase in deferred policy
acquisition costs.................... (572) (379) (441)
Decrease (increase) in premiums and
amounts receivable................... 10 (81) 10
Increase in accrued investment
income............................... (13) (16) (106)
(Increase) decrease in other assets... (132) (177) 101
Decrease (increase) in reinsurance
recoverable.......................... 179 (35) 75
(Decrease) increase in liability for
future policy benefits............... (92) 483 224
Increase in other liabilities......... 477 281 191
-------- -------- --------
Cash provided by operating
activities......................... 20 65 98
-------- -------- --------
Investing Activities
Purchases of fixed maturity
investments.......................... (5,747) (6,228) (9,127)
Sales of fixed maturity investments... 3,459 4,845 5,713
Maturities and principal paydowns of
fixed maturity investments........... 2,693 1,741 1,931
Net purchase of other investments..... (107) (871) (1,338)
Net sales (purchases) of short-term
investments.......................... 84 (24) 135
-------- -------- --------
Cash provided by (used for)
investing activities............... 382 (537) (2,686)
-------- -------- --------
Financing Activities
Capital contribution.................. 38 -- 150
Dividends paid........................ -- -- (10)
Net (disbursements for) receipts from
investment and universal life-type
contracts (charged from) credited to
policyholder accounts................ (443) 498 2,467
-------- -------- --------
Cash (used for) provided by
financing activities............... (405) 498 2,607
-------- -------- --------
Net (decrease) increase in cash....... (3) 26 19
Cash--beginning of year............... 46 20 1
-------- -------- --------
Cash--end of year....................... $ 43 $ 46 $ 20
-------- -------- --------
-------- -------- --------
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of the above statements.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
(IN MILLIONS)

- ---------------------------------------------------

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

These consolidated financial statements include Hartford Life Insurance
Company and its wholly-owned subsidiaries (the "Company"), ITT Hartford Life and
Annuity Insurance Company ("ILA") and ITT Hartford International Life
Reassurance Corporation ("HLRe"), formerly American Skandia Life Reinsurance
Corporation. The Company is a wholly-owned subsidiary of Hartford Life and
Accident Insurance Company ("HLA"), a wholly-owned subsidiary of Hartford Life,
Inc. ("Hartford Life"), a direct subsidiary of Hartford Accident and Indemnity
Company, an indirect subsidiary of ITT Hartford Group, Inc. ("The Hartford").
Hartford Life was formed on December 13, 1996 and capitalized on December 16,
1996 with the contribution of all the outstanding common stock of HLA. On
February 10, 1997, The Hartford, the ultimate parent of Hartford Life, announced
its intention to sell up to 20% of Hartford Life during the second quarter of
1997. Management believes that this transaction will not have a material impact
on the operations of the Company (See Note 11).

On December 19, 1995, ITT Industries, Inc. (formerly ITT Corporation)("ITT")
distributed all the outstanding shares of capital stock of The Hartford to ITT
stockholders of record on such date (the transactions relating to such
distribution are referred to herein as the "ITT Spin-off"). As a result of the
ITT Spin-off, The Hartford became an independent, publicly traded company.

The Company is a leading insurance and financial services company which
provides: (a) investment products such as individual variable annuities and
fixed market value adjusted annuities, deferred compensation plan services and
mutual funds for savings and retirement needs; (b) life insurance for income
protection and estate planning; and (c) employee benefits products such as
corporate owned life insurance.

- ---------------------------------------------------

2. SIGNIFICANT ACCOUNTING POLICIES

(A) BASIS OF PRESENTATION

These financial statements present the financial position, results of
operations and cash flows of the Company, and all material intercompany
transactions and balances between Hartford Life Insurance Company and its
subsidiaries have been eliminated. The consolidated financial statements are
prepared on a basis of generally accepted accounting principles which differ
materially from the statutory accounting prescribed by various insurance
regulatory authorities.

The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

(B) CHANGES IN ACCOUNTING PRINCIPLES

On November 14, 1996, the Emerging Issues Task Force ("EITF") reached a
consensus on Issue No. 96-12, "Recognition of Interest Income and Balance Sheet
Classification of Structured Notes". This Issue requires companies to record
income on certain structured securities on a retrospective interest method. The
Company adopted EITF No. 96-12 for structured securities acquired after November
14, 1996. Adoption of EITF No. 96-12 did not have a material effect on the
Company's financial condition or results of operations.

In June 1996, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of Liabilities".
This statement established criteria for determining whether transferred assets
should be accounted for as sales or secured borrowings. Subsequently, in
December 1996, the FASB issued SFAS No. 127, "Deferral of Effective Date of
Certain Provisions of FASB Statement No. 125", which defers the effective date
of certain provisions of SFAS No. 125 for one year. Adoption of SFAS No. 125 is
not expected to have a material effect on the Company's financial condition or
results of operations.

In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation", which is effective in 1996. As permitted by SFAS No. 123, the
Company continues to measure compensation costs of employee stock option plans
(relating to options on common stock of The Hartford) using the intrinsic value
method prescribed by Accounting Principles Board Opinion No. 25. As of February
10, 1997, the Company had not adopted an employee stock compensation plan.
Certain officers of the Company participate in The Hartford's stock option plan.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

Compensation costs allocated by The Hartford to the Company, as well as pro
forma compensation costs as determined under SFAS No. 123, were immaterial to
the results of operations for 1996 and 1995.

Effective January 1, 1994, the Company adopted SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities". The new standard requires,
among other things, that securities be classified as "held-to-maturity",
"available-for-sale" or "trading" based on the Company's intentions with respect
to the ultimate disposition of the security and its ability to effect those
intentions. The classification determines the appropriate accounting carrying
value (cost basis or fair value) and, in the case of fair value, whether the
fair value difference from cost, net of tax, impacts stockholder's equity
directly or is reflected in the Consolidated Statements of Income. Investments
in equity securities had previously been and continue to be recorded at fair
value with the corresponding after-tax impact included in stockholder's equity.
Under SFAS No. 115, the Company's fixed maturity investments are classified as
"available-for-sale" and, accordingly, these investments are reflected at fair
value with the corresponding impact included as a component of stockholder's
equity designated as "Net unrealized capital gain (loss) on investments, net of
tax." As with the underlying investment security, unrealized capital gains and
losses on derivative financial instruments are considered in determining the
fair value of the portfolios. The impact of adoption was an increase to
stockholder's equity of $91 million. The Company's cash flows were not impacted
by this change in accounting principle.

Revenues for universal life policies and investment products consist of
policy charges for the cost of insurance, policy administration and surrender
charges assessed to policy account balances and are recognized in the period in
which services are provided. Premiums for traditional life insurance policies
are recognized as revenues when they are due from policyholders.

(D) FUTURE POLICY BENEFITS AND OTHER POLICYHOLDER FUNDS

Liabilities for future policy benefits are computed by the net level premium
method using interest rate assumptions varying from 3% to 11% and withdrawal and
mortality assumptions appropriate at the time the policies were issued.
Liabilities for universal life-type and investment contracts are stated at
policyholder account values before surrender charges.

(E) DEFERRED POLICY ACQUISITION COSTS

Policy acquisition costs, including commissions and certain underwriting
expenses associated with acquiring business, are deferred and amortized over the
estimated lives of the contracts, generally 20 years. Generally, acquisition
costs are deferred and amortized using the retrospective deposit method. Under
the retrospective deposit method, acquisition costs are amortized in proportion
to the present value of expected gross profits from surrender charges,
investment, mortality and expense margins. Actual gross profits can vary from
management's estimates resulting in increases or decreases in the rate of
amortization. Management periodically updates these estimates, when appropriate,
and evaluates the recoverability of the deferred acquisition cost asset. When
appropriate, management revises its assumptions on the estimated gross profits
of these contracts and the cumulative amortization for the books of business are
reestimated and readjusted by a cumulative charge or credit to income.

(F) POLICYHOLDER REALIZED CAPITAL GAINS AND LOSSES

Realized capital gains and losses on security transactions associated with
the Company's immediate participation guaranteed contracts are excluded from
revenues and deferred, since under the terms of the contracts the realized gains
and losses will be credited to policyholders in future years as they are
entitled to receive them.

(G) FOREIGN CURRENCY TRANSLATION

Foreign currency translation gains and losses are reflected in stockholder's
equity. Balance sheet accounts are translated at the exchange rates in effect at
each year end and income statement accounts are translated at the average rates
of exchange prevailing during the year. The national currencies of international
operations are generally their functional currencies.

(H) INVESTMENTS

The Company's investments in fixed maturities include bonds, redeemable
preferred stock and commercial paper which are classified as
"available-for-sale" and accordingly are carried at fair value with the
after-tax difference from cost reflected as a component of stockholder's equity
designated as "Net unrealized capital gain (loss) on investments, net of tax".
Equity securities, which include common and non-redeemable preferred stocks, are
carried at fair value with the after-tax difference from cost reflected in
stockholder's equity. Policy and mortgage loans are each carried at their
outstanding balance which approximates fair value. Investments in partnerships
and trusts are carried at cost. Net realized capital gains (losses), after
deducting the policyholders' share, are reported as a component of revenue and
are determined on a specific identification basis.

The Company's accounting policy for impairment recognition requires
recognition of an other than temporary impairment charge on a security if it is
determined that the Company is unable to recover all amounts due under the
contractual obligations of the security. In addition, the Company has
established specific criteria to be used in the

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

impairment evaluation of an individual portfolio of assets. Specifically, if the
asset portfolio is supporting a runoff operation, is forced to be liquidated
prior to maturity to meet liability commitments, and has fair value below
amortized cost, which will not materially fluctuate as a result of future
interest rate changes, then an other than temporary impairment condition has
been determined to have occurred. Each individual security within that portfolio
is evaluated to determine whether or not it is impaired. Once an impairment
charge has been recorded, the Company then continues to review the individual
impaired securities for appropriate valuation on an ongoing basis.

During 1996, it was determined that certain individual securities within the
investment portfolio supporting the Company's closed block of guaranteed rate
contracts ("Closed Book GRC") were impaired. With the initiation of certain
hedge transactions, which eliminated the possibility that the fair value of the
Closed Book GRC investments would recover to their current amortized cost, an
other than temporary impairment loss of $88 after tax was determined to have
occurred and was recorded.

(I) DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses a variety of derivative financial instruments including
swaps, caps, floors, forwards and exchange traded financial futures and options
as part of an overall risk management strategy. These instruments are used as a
means of hedging exposure to price, foreign currency and/or interest rate risk
on anticipated investment purchases or existing assets and liabilities. The
Company does not hold or issue derivative financial instruments for trading
purposes. The Company's accounting for derivative financial instruments used to
manage risk is in accordance with the concepts established in SFAS No. 80,
"Accounting for Futures Contracts," SFAS No. 52, "Foreign Currency Translation",
American Institute of Certified Public Accountants Statement of Position 86-2,
"Accounting for Options", and various EITF pronouncements. Written options are,
in all cases, used in conjunction with other assets and derivatives as part of
the Company's asset/liability management strategies. Derivative instruments are
carried at values consistent with the asset or liability being hedged.
Derivatives used to hedge fixed maturities or equities are carried at fair value
with the after-tax difference from cost reflected in stockholder's equity.
Derivatives used to hedge other invested assets or liabilities are carried at
cost.

Derivatives must be designated at inception as a hedge and measured for
effectiveness both at inception and on an ongoing basis. The Company's minimum
correlation threshold for hedge designation is 80%. If correlation, which is
assessed monthly and measured based on a rolling three month average, falls
below 80%, hedge accounting will be terminated. Derivatives used to create a
synthetic asset must meet synthetic accounting criteria including designation at
inception and consistency of terms between the synthetic and the instrument
being replicated. Interest rate swaps are the primary type of derivatives used
to convert London interbank offered quotations for U.S. dollar deposits
("LIBOR") based variable rate instruments to fixed rate instruments. Synthetic
instrument accounting, consistent with industry practice, provides that the
synthetic asset is accounted for like the financial instrument it is intended to
replicate. Derivatives which fail to meet risk management criteria are marked to
market with the impact reflected in the Consolidated Statements of Income.

Gains or losses on financial futures contracts entered into in anticipation
of the future receipt of product cash flows are deferred and, at the time of the
ultimate purchase, reflected as an adjustment to the cost basis of the purchased
asset. Gains or losses on futures used in invested asset risk management are
deferred and adjusted into the cost basis of the hedged asset when the futures
contracts are closed, except for futures used in duration hedging which are
deferred and are adjusted into the cost basis on a quarterly basis. The
adjustments to the cost basis are amortized into investment income over the
remaining asset life.

Open forward commitment contracts are marked to market through stockholder's
equity. Such contracts are recorded at settlement by recording the purchase of
the specified securities at the previously committed price. Gains or losses
resulting from the termination of the forward commitment contracts before the
delivery of the securities are recognized immediately in the Consolidated
Statements of Income as a component of net investment income.

The cost of purchased options and/or premiums received on covered written
options, entered into as part of an asset/liability management strategy, is/are
adjusted into the cost basis of the underlying asset or liability and amortized
over the remaining life of the hedge. Gains or losses on expiration or
termination of the hedge are adjusted into the basis of the underlying asset or
liability and amortized over the remaining asset life. The Company had no
written options as of December 31, 1996 and 1995.

Interest rate swaps involve the periodic exchange of payments without the
exchange of underlying principal or notional amounts. Net receipts or payments
are accrued and recognized over the life of the swap agreement as an adjustment
to income. Should the swap be terminated, the gain or loss is adjusted into the
basis of the asset or liability and amortized over the remaining life. Should
the hedged asset be sold or liability terminated without terminating the swap
position, any swap gains or losses are immediately recognized in earnings.
Interest rate swaps purchased in anticipation of an asset purchase (an
"anticipatory transaction") are recognized consistent with the underlying asset
components such that the settlement component is recognized in the Consolidated
Statements of Income while the change in market value is recognized as an
unrealized gain or loss.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

Premiums paid on purchased floor or cap agreements and the premium received
on issued floor or cap agreements (used for risk management) are adjusted into
the basis of the applicable asset and amortized over the asset life. Gains or
losses on termination of such positions are adjusted into the basis of the asset
or liability and amortized over the remaining asset life. Net payments are
recognized as an adjustment to income or basis adjusted and amortized depending
on the specific hedge strategy.

Forward exchange contracts and foreign currency swaps are accounted for in
accordance with SFAS No. 52.

(J) RELATED PARTY TRANSACTIONS

Transactions of the Company with HLA and its affiliates relate principally
to tax settlements, reinsurance, insurance coverage, rental and service fees and
payment of dividends and capital contributions. In addition, certain affiliated
insurance companies purchased group annuity contracts from the Company to fund
pension costs and claim annuities to settle casualty claims. Substantially all
general insurance expenses related to the Company, including rent and employee
benefit plan expenses, are initially paid by Hartford Fire Insurance Company, an
indirect subsidiary of The Hartford ("Hartford Fire"). Direct expenses are
allocated to the Company using specific identification, and indirect expenses
are allocated using other applicable methods. Indirect expenses include those
for corporate areas which, depending on the type, are allocated based on either
a percentage of direct expenses or on utilization. Indirect expenses allocated
to the Company by Hartford Fire were $40, $45 and $41 in 1996, 1995 and 1994,
respectively. Management of the Company believes that the methods used are
reasonable. In addition, the Company was charged its share of costs allocated to
The Hartford by ITT prior to the ITT Spin-off, which were immaterial in 1995 and
1994. The Company had a receivable from The Hartford of $1 and a payable to The
Hartford of $2 at December 31, 1996 and 1995, respectively.

In 1996, the Company ceded approximately $33.3 billion of group life
insurance in force and $318 million of disability premium to HLA and assumed
$8.5 billion of individual life insurance in force from HLA.

On June 30, 1995, the ownership of ITT Lyndon Insurance Company was
transferred to the Company via a capital contribution of $181 million,
representing the net assets of the company. Also, in 1996, the Company received
a capital contribution of $37.5 million from its parent HLA.

(K) DIVIDENDS TO POLICYHOLDERS

Certain life insurance policies contain dividend payment provisions that
enable the policyholder to participate in the earnings of the life insurance
subsidiaries of the Company. The participating insurance in force accounted for
44%, 41%, and 43% in 1996, 1995, and 1994, respectively, of total life insurance
in force.

- ---------------------------------------------------

3. INVESTMENTS

(A) COMPONENTS OF NET INVESTMENT INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Interest income................ $ 1,452 $ 1,338 $ 1,247
(Losses) income from other
investments................... (42) 1 54
--------- --------- ---------
Gross investment income........ 1,410 1,339 1,301
Less: Investment expenses...... 13 11 9
--------- --------- ---------
Net investment income.......... $ 1,397 $ 1,328 $ 1,292
--------- --------- ---------
--------- --------- ---------
</TABLE>

(B) COMPONENTS OF NET REALIZED CAPITAL GAINS (LOSSES)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Fixed maturities............... $ (201) $ 23 $ (34)
Equity securities.............. 2 (6) (11)
Real estate and other.......... (4) (25) 47
Less: (Increase) decrease in
liability to policyholders for
realized capital gains
(losses)...................... (10) (3) 5
--------- --------- ---------
Net realized capital (losses)
gains......................... $ (213) $ (11) $ 7
--------- --------- ---------
--------- --------- ---------
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1996 1995 1994
----- ----- ---------
<S> <C> <C> <C>
Gross unrealized gains........... $ 13 $ 4 $ 2
Gross unrealized losses.......... (1) (2) (11)
--- --- ---------
Net unrealized capital gains
(losses)........................ 12 2 (9)
Deferred income tax liability
(asset)......................... 4 1 (3)
--- --- ---------
Net unrealized capital gains
(losses), after tax............. 8 1 (6)
Balance beginning of year........ 1 (6) (5)
--- --- ---------
Change in net unrealized capital
gains (losses) on investments... $ 7 $ 7 $ (1)
--- --- ---------
--- --- ---------
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

(D) NET UNREALIZED CAPITAL GAINS (LOSSES) ON FIXED MATURITIES

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
Gross unrealized gains..................................................................................... $ 386 $ 529
Gross unrealized losses.................................................................................... (341) (569)
Unrealized (gains) losses credited to policyholders........................................................ (11) (52)
--------- ---------
Net unrealized capital gains (losses)...................................................................... 34 (92)
Deferred income tax liability (asset)...................................................................... 12 (34)
--------- ---------
Net unrealized capital gains (losses), after tax........................................................... 22 (58)
Balance beginning of year.................................................................................. (58) (648)
--------- ---------
Change in net unrealized capital gains (losses) on investments............................................. $ 80 $ 590
--------- ---------
--------- ---------

1994
---------
<S> <C>
Gross unrealized gains..................................................................................... $ 150
Gross unrealized losses.................................................................................... (1,185)
Unrealized (gains) losses credited to policyholders........................................................ 37
---------
Net unrealized capital gains (losses)...................................................................... (998)
Deferred income tax liability (asset)...................................................................... (350)
---------
Net unrealized capital gains (losses), after tax........................................................... (648)
Balance beginning of year.................................................................................. 161
---------
Change in net unrealized capital gains (losses) on investments............................................. $ (809)
---------
---------
</TABLE>

(E) COMPONENTS OF FIXED MATURITIES INVESTMENTS

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
---------------------------------
GROSS UNREALIZED
AMORTIZED --------------------
COST GAINS LOSSES
----------- --------- ---------
<S> <C> <C> <C>
U.S. government and government agencies and authorities (guaranteed and sponsored)............ $ 166 $ 12 $ (3)
U.S. government and government agencies and authorities (guaranteed and
sponsored)--asset-backed..................................................................... 1,970 161 (128)
States, municipalities and political subdivisions............................................. 373 6 (11)
International governments..................................................................... 281 12 (4)
Public utilities.............................................................................. 877 12 (8)
All other corporate including international................................................... 4,656 120 (107)
All other corporate--asset-backed............................................................. 3,601 49 (59)
Short-term investments........................................................................ 1,655 14 (21)
----------- --------- ---------
Total fixed maturities.................................................................... $ 13,579 $ 386 $ (341)
----------- --------- ---------
----------- --------- ---------

AS OF DECEMBER 31, 1995
---------------------------------
GROSS UNREALIZED
AMORTIZED --------------------
COST GAINS LOSSES
----------- --------- ---------
<S> <C> <C> <C>
U.S. government and government agencies and authorities (guaranteed and sponsored)............ $ 502 $ 4 $ (9)
U.S. government and government agencies and authorities (guaranteed and
sponsored)--asset-backed..................................................................... 3,568 210 (387)
States, municipalities and political subdivisions............................................. 201 4 (3)
International governments..................................................................... 291 19 (4)
Public utilities.............................................................................. 949 29 (2)
All other corporate including international................................................... 3,065 76 (55)
All other corporate--asset-backed............................................................. 5,056 187 (109)
Short-term investments........................................................................ 808 -- --
----------- --------- ---------
Total fixed maturities.................................................................... $ 14,440 $ 529 $ (569)
----------- --------- ---------
----------- --------- ---------

FAIR
VALUE
---------
<S> <C>
U.S. government and government agencies and authorities (guaranteed and sponsored)............ $ 175
U.S. government and government agencies and authorities (guaranteed and
sponsored)--asset-backed..................................................................... 2,003
States, municipalities and political subdivisions............................................. 368
International governments..................................................................... 289
Public utilities.............................................................................. 881
All other corporate including international................................................... 4,669
All other corporate--asset-backed............................................................. 3,591
Short-term investments........................................................................ 1,648
---------
Total fixed maturities.................................................................... $ 13,624
---------
---------

FAIR
VALUE
---------
<S> <C>
U.S. government and government agencies and authorities (guaranteed and sponsored)............ $ 497
U.S. government and government agencies and authorities (guaranteed and
sponsored)--asset-backed..................................................................... 3,391
States, municipalities and political subdivisions............................................. 202
International governments..................................................................... 306
Public utilities.............................................................................. 976
All other corporate including international................................................... 3,086
All other corporate--asset-backed............................................................. 5,134
Short-term investments........................................................................ 808
---------
Total fixed maturities.................................................................... $ 14,400
---------
---------
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

The amortized cost and fair value of fixed maturities at December 31, 1996,
by maturity, are shown below. Asset-backed securities, including mortgage-backed
securities and collateralized mortgage obligations, are distributed to maturity
year based on the Company's estimates of the rate of future prepayments of
principal over the remaining lives of such securities. These estimates are
developed using prepayment speeds reported in broker consensus data and can be
expected to vary from actual experience. Expected maturities differ from
contractual maturities due to call or prepayment provisions.

<TABLE>
<CAPTION>
MATURITY AMORTIZED COST FAIR VALUE
- -------------------------- -------------- -----------
<S> <C> <C>
One year or less.......... $ 2,632 $ 2,642
Over one year through five
years.................... 5,871 5,928
Over five years through
ten years................ 3,320 3,311
Over ten years............ 1,756 1,743
------- -----------
Total................. $ 13,579 $ 13,624
------- -----------
------- -----------
</TABLE>

Sales of fixed maturities excluding short-term fixed maturities for the
years ended December 31, 1996, 1995 and 1994 resulted in proceeds of $3,459,
$4,848 and $5,708, respectively, resulting in gross realized capital gains of
$87, $91 and $71, respectively, and gross realized capital losses (including
investment writedowns) of $298, $72 and $100, respectively, not including
policyholder gains and losses. Sales of equity securities for the years ended
December 31, 1996, 1995 and 1994 resulted in proceeds of $74, $64 and $159,
respectively, resulting in gross realized capital gains of $2, $28 and $3,
respectively, and gross realized capital losses of $0, $59 and $14,
respectively, not including policyholder gains and losses.

(F) CONCENTRATION OF CREDIT RISK

As of December 31, 1996, the Company had a reinsurance recoverable of $3.8
billion from Mutual Benefit Life Assurance Corporation ("Mutual Benefit"),
supported by assets in a security trust of $3.8 billion (including policy loans
of $3.3 billion). The risk of Mutual Benefit becoming insolvent is mitigated by
the reinsurance agreement's requirement that the assets be kept in a security
trust with the Company as sole beneficiary. Excluding investments in U.S.
government and agencies, the Company has no other significant concentrations of
credit risk in fixed maturities.

(G) DERIVATIVE INVESTMENTS

Derivatives play an important role in facilitating the management of
interest rate risk, creating opportunities to fund product obligations hedging
against indexation risks that affect the value of certain liabilities and
adjusting broad investment risk characteristics when dictated by significant
changes in market risks. As an end user of derivatives, the Company uses a
variety of derivative financial instruments, including swaps, caps, floors,
forwards and exchange traded financial futures and options in order to hedge
exposure to price, foreign currency and/or interest rate risk on anticipated
investment purchases or existing assets and liabilities. The notional amounts of
derivative contracts represent the basis upon which pay and receive amounts are
calculated and are not reflective of credit risk for derivative contracts.
Credit risk for derivative contracts is limited to the amounts calculated to be
due to the Company on such contracts. The Company believes it maintains prudent
policies regarding the financial stability and credit standing of its major
counterparties and typically requires credit enhancement provisions to further
limit its credit risk. Many of these derivative contracts are bilateral
agreements that are not assignable without the consent of the relevant
counterparty. Notional amounts pertaining to derivative financial instruments
totaled $9.9 billion and $8.8 billion at December 31, 1996 and 1995,
respectively ($7.4 billion and $7.1 billion related to life insurance
investments and $2.5 billion and $1.7 billion related to life insurance
liabilities at December 31, 1996 and 1995, respectively).

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

The following table summarizes the Company's derivatives, segregated by
major categories, as of December 31, 1996 and 1995:

<TABLE>
<CAPTION>
AMOUNTS HEDGED (NOTIONAL AMOUNTS) (EXCLUDING
LIABILITY HEDGES)
--------------------------------------------------
PURCHASED
TOTAL ISSUED CAPS OPTIONS,
CARRYING & CAPS &
1996 VALUE FLOORS(C) FLOORS(D) FUTURES(E)
- ------------------------------------------------------------------------ --------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Asset-backed securities (excluding inverse floaters and anticipatory)... $ 5,242 $ 500 $ 2,454 $ --
Inverse floaters(a)..................................................... 352 98 856 --
Anticipatory(g)......................................................... -- -- -- 132
Other bonds and notes................................................... 7,369 425 440 5
Short-term investments.................................................. 661 -- -- --
--------- ----------- ----------- -----
Total fixed maturities.............................................. 13,624 1,023 3,750 137
Equity securities, policy loans and other investments................... 4,011 -- -- --
--------- ----------- ----------- -----
Total investments................................................... $ 17,635 $ 1,023 $ 3,750 $ 137
--------- ----------- ----------- -----
--------- ----------- ----------- -----
Total derivatives-fair value(b)..................................... $ (10) $ 35 $ --
----------- ----------- -----
----------- ----------- -----

AMOUNTS HEDGED (NOTIONAL AMOUNTS) (EXCLUDING
LIABILITY HEDGES)
--------------------------------------------------
PURCHASED
TOTAL ISSUED CAPS OPTIONS,
CARRYING & CAPS &
1995 VALUE FLOORS(C) FLOORS(D) FUTURES(E)
- ------------------------------------------------------------------------ --------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Asset-backed securities (excluding inverse floaters and anticipatory)... $ 5,764 $ 118 $ 3,133 $ 322
Inverse floaters(a)..................................................... 711 560 354 6
Anticipatory(g)......................................................... -- -- -- 213
Other bonds and notes................................................... 7,118 33 66 322
Short-term investments.................................................. 807 -- -- --
--------- ----------- ----------- -----
Total fixed maturities.............................................. 14,400 711 3,553 863
Equity securities, policy loans and other investments................... 3,865 -- -- --
--------- ----------- ----------- -----
Total investments................................................... $ 18,265 $ 711 $ 3,553 $ 863
--------- ----------- ----------- -----
--------- ----------- ----------- -----
Total derivatives-fair value(b)..................................... $ (32) $ 46 $ --
----------- ----------- -----
----------- ----------- -----

INTEREST FOREIGN TOTAL
RATE CURRENCY NOTIONAL
1996 SWAPS(H) SWAPS(F) AMOUNT
- ------------------------------------------------------------------------ ----------- ----------- -----------
<S> <C> <C> <C>
Asset-backed securities (excluding inverse floaters and anticipatory)... $ 941 $ -- $ 3,895
Inverse floaters(a)..................................................... 346 -- 1,300
Anticipatory(g)......................................................... -- -- 132
Other bonds and notes................................................... 1,079 125 2,074
Short-term investments.................................................. -- -- --
----------- ----- -----------
Total fixed maturities.............................................. 2,366 125 7,401
Equity securities, policy loans and other investments................... 19 -- 19
----------- ----- -----------
Total investments................................................... $ 2,385 $ 125 $ 7,420
----------- ----- -----------
----------- ----- -----------
Total derivatives-fair value(b)..................................... $ (25) $ (9) $ (9)
----------- ----- -----------
----------- ----- -----------

INTEREST FOREIGN TOTAL
RATE CURRENCY NOTIONAL
1995 SWAPS(H) SWAPS(F) AMOUNT
- ------------------------------------------------------------------------ ----------- ----------- -----------
<S> <C> <C> <C>
Asset-backed securities (excluding inverse floaters and anticipatory)... $ 290 $ -- $ 3,863
Inverse floaters(a)..................................................... 681 -- 1,601
Anticipatory(g)......................................................... 25 -- 238
Other bonds and notes................................................... 757 187 1,365
Short-term investments.................................................. -- -- --
----------- ----- -----------
Total fixed maturities.............................................. 1,753 187 7,067
Equity securities, policy loans and other investments................... 18 -- 18
----------- ----- -----------
Total investments................................................... $ 1,771 $ 187 $ 7,085
----------- ----- -----------
----------- ----- -----------
Total derivatives-fair value(b)..................................... $ (108) $ (24) $ (118)
----------- ----- -----------
----------- ----- -----------
</TABLE>

- ------------------------

(a) Inverse floaters are variations of collateralized mortgage obligations
("CMOs") for which the coupon rates move inversely with an index rate such
as LIBOR. The risk to principal is considered negligible as the underlying
collateral for the securities is guaranteed or sponsored by government
agencies. To address the volatility risk created by the coupon variability,
the Company uses a variety of derivative instruments, primarily interest
rate swaps and purchased caps and floors.

(b) The fair value of derivative instruments including swaps, caps, floors,
futures, options and forward commitments, was determined using a pricing
model which is validated through quarterly comparison to dealer quoted
market prices, for 1996 and dealer quoted prices for 1995.

(c) The 1996 data includes issued caps of $433 with a weighted average strike
rate of 8.21% (ranging from 7.0% to 9.5%) and over 93% maturing in 2000
through 2005. In addition, issued floors totaled $590, had a weighted
average strike rate of 5.17% (ranging from 5.00% to 7.85%) with all of them
maturing by the end of 2005. The 1995 data includes issued caps of $475 with
a weighted average strike rate of 8.5% (ranging from 7.0% to 10.4%) and over
85% maturing in 2000 through 2004. In addition, issued floors totaled $236,
had a weighted average strike rate of 8.1% (ranging from 5.3% to 10.9%) and
mature through 2007, with 76% maturing by 2004.

(d) The 1996 data includes purchased floors of $2.4 billion and purchased caps
of $1.3 billion. The floors had a weighted average strike rate of 5.84%
(ranging from 3.70% to 7.85%) and over 87% mature in 1997 through 1999. The
options mature in 1997. The caps had a weighted average strike rate of 7.59%
(ranging from 4.40% to 10.125%) and over 76% mature in 1997 through 2001.
The 1995 data includes purchased floors of $1.8 billion and purchased caps
of $1.7 billion. The floors had a weighted average strike price of 5.8%
(ranging from 3.7% to 6.8%) and over 85% mature in 1997 through 1999. The
caps had a weighted average strike price of 7.5% (ranging from 4.5% and
10.1%) and over 82% mature in 1997 through 1999.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

(e) As of December 31, 1996 and 1995, over 39% and 95%, respectively, of the
notional futures contracts, expire within one year.

(f) As of December 31, 1996 and 1995, over 42% and 25%, respectively, of the
Company's foreign currency swaps, expire within one year; the balance mature
over the succeeding 4 to 5 years.

(g) Deferred gains and losses on anticipatory transactions are included in the
carrying value of bond investments in the Consolidated Balance Sheets. At
the time of the ultimate purchase, they are reflected as a basis adjustment
to the purchased asset. At December 31, 1996, the Company had $1 million in
net deferred gains for futures, interest rate swaps and purchased options.
The Company expects to basis adjust $1 million of the deferred gains in
1997. At December 31, 1995, the Company had $5.3 million in net deferred
gains for futures, interest rate swaps and purchased options.

(h) The following table summarizes the maturities by notional value of interest
rate swaps outstanding at December 31, 1996 and 1995, and the related
weighted average interest pay rate or receive rate. The variable rates
represent spot rates (primarily 90 day LIBOR), as of December 31, 1996 and
1995. Such variable rates have been calculated assuming that the spot rates
remain unchanged throughout the life of the interest rate swaps.

<TABLE>
<CAPTION>
1996 1997 1998 1999 2000 2001
- ------------------------------------------------------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
PAY FIXED/RECEIVE VARIABLE
Notional Value $-- $50 $125 $35 $125
Weighted Average Pay Rate -- 5.7 % 5.9 % 5.5 % 5.5%
Weighted Average Receive Rate -- 3.2 % -- 6.5 % 6.4%
PAY VARIABLE/RECEIVE FIXED
Notional Value $86 $25 $486 $74 $582
Weighted Average Pay Rate 7.5 % -- 6.4 % 6.7 % 7.0%
Weighted Average Receive Rate 5.6 % -- 5.6 % 5.7 % 6.2%
PAY VARIABLE/RECEIVE DIFFERENT VARIABLE
Notional Value $19 $15 $-- $200 $--
Weighted Average Pay Rate 5.9 % 5.7 % -- 6.4 % --
Weighted Average Receive Rate 3.7 % 5.5 % -- 5.0 % --
Total Interest Rate Swaps $105 $90 $611 $309 $707
Total Weighted Average Pay Rate 7.2 % 5.7 % 6.3 % 6.4 % 6.7%
Total Weighted Average Receive Rate 5.2 % 3.8 % 4.3 % 5.4 % 6.3%

1995 1996 1997 1998 1999 2000
- ------------------------------------------------------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
PAY FIXED/RECEIVE VARIABLE
Notional Value $15 $50 $-- $453 $31
Weighted Average Pay Rate 5.0 % 7.2 % -- 8.1 % 7.1%
Weighted Average Receive Rate 5.8 % 5.9 % -- 5.8 % 5.7%
PAY VARIABLE/RECEIVE FIXED
Notional Value $100 $68 $25 $25 $35
Weighted Average Pay Rate 5.9 % 8.6 % 5.9 % -- 5.9%
Weighted Average Receive Rate 2.4 % 7.9 % 4.0 % -- 6.5%
PAY VARIABLE/RECEIVE DIFFERENT VARIABLE
Notional Value $50 $18 $36 $12 $200
Weighted Average Pay Rate 5.8 % -- 3.7 % 3.5 % 4.5%
Weighted Average Receive Rate 5.4 % -- 5.6 % 5.2 % 6.8%
Total Interest Rate Swaps $165 $136 $61 $490 $266
Total Weighted Average Pay Rate 5.8 % 7.8 % 4.6 % 7.6 % 5.0%
Total Weighted Average Receive Rate 3.6 % 7.2 % 4.9 % 5.4 % 6.6%

<CAPTION>
LATEST
1996 THEREAFTER TOTAL MATURITY
- ------------------------------------------------------------ ------------- ----------- -----------
<S> <C> <C> <C>
PAY FIXED/RECEIVE VARIABLE
Notional Value $170 $505 2003
Weighted Average Pay Rate 5.7 % 5.7 %
Weighted Average Receive Rate 6.9 % 4.7 %
PAY VARIABLE/RECEIVE FIXED
Notional Value $349 $1,602 2007
Weighted Average Pay Rate 6.9 % 6.8 %
Weighted Average Receive Rate 5.9 % 5.9 %
PAY VARIABLE/RECEIVE DIFFERENT VARIABLE
Notional Value $44 $278 2003
Weighted Average Pay Rate 12.9 % 7.4 %
Weighted Average Receive Rate 6.4 % 5.2 %
Total Interest Rate Swaps $563 $2,385 2007
Total Weighted Average Pay Rate 7.0 % 6.6 %
Total Weighted Average Receive Rate 6.3 % 5.5 %
LATEST
1995 THEREAFTER TOTAL MATURITY
- ------------------------------------------------------------ ------------- ----------- -----------
<S> <C> <C> <C>
PAY FIXED/RECEIVE VARIABLE
Notional Value $229 $778 2004
Weighted Average Pay Rate 7.8 % 7.8 %
Weighted Average Receive Rate 5.9 % 5.9 %
PAY VARIABLE/RECEIVE FIXED
Notional Value $190 $443 2007
Weighted Average Pay Rate 5.4 % 5.4 %
Weighted Average Receive Rate 6.9 % 6.9 %
PAY VARIABLE/RECEIVE DIFFERENT VARIABLE
Notional Value $234 $550 2004
Weighted Average Pay Rate 16.3 % 5.7 %
Weighted Average Receive Rate 5.9 % 6.4 %
Total Interest Rate Swaps $653 $1,771 2007
Total Weighted Average Pay Rate 7.3 % 6.9 %
Total Weighted Average Receive Rate 6.3 % 5.8 %
</TABLE>

In addition, interest rate sensitivity related to certain Company insurance
liabilities was altered primarily through interest rate swap agreements. The
notional amount of the liability agreements in which the Company generally pays
one variable rate in exchange for another was $2.4 billion and $1.7 billion at
December 31, 1996 and 1995, respectively. As of December 31, 1996, the weighted
average pay rate was 5.6% and the weighted average receive rate was 6.5%. These
agreements mature at various times through 2001.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

A reconciliation between notional amounts at December 31, 1995 and 1996 by
derivative type and strategy is as follows:

<TABLE>
<CAPTION>
BY DERIVATIVE TYPE
---------------------------------------------
12/31/95 MATURITIES/
NOTIONAL AMOUNT ADDITIONS TERMINATIONS
----------------- ----------- -------------
<S> <C> <C> <C>
Caps..................................................................... $ 2,184 $ 1,286 $ 1,715
Floors................................................................... 2,180 2,053 1,065
Options.................................................................. -- 10 --
Swaps/Forwards........................................................... 3,566 3,989 2,694
Futures.................................................................. 863 2,092 2,818
------ ----------- ------
Total................................................................ $ 8,793 $ 9,430 $ 8,292
------ ----------- ------
------ ----------- ------

BY STRATEGY
---------------------------------------------
12/31/95 MATURITIES/
NOTIONAL AMOUNT ADDITIONS TERMINATIONS
----------------- ----------- -------------
<S> <C> <C> <C>
Liability................................................................ $ 1,708 $ 1,940 $ 1,137
Anticipatory............................................................. 238 516 622
Asset.................................................................... 2,984 1,265 2,137
Portfolio................................................................ 3,863 5,709 4,396
------ ----------- ------
Total................................................................ $ 8,793 $ 9,430 $ 8,292
------ ----------- ------
------ ----------- ------

12/31/96
NOTIONAL AMOUNT
-----------------
<S> <C>
Caps..................................................................... $ 1,755
Floors................................................................... 3,168
Options.................................................................. 10
Swaps/Forwards........................................................... 4,861
Futures.................................................................. 137
------
Total................................................................ $ 9,931
------
------

12/31/96
NOTIONAL AMOUNT
-----------------
<S> <C>
Liability................................................................ $ 2,511
Anticipatory............................................................. 132
Asset.................................................................... 2,112
Portfolio................................................................ 5,176
------
Total................................................................ $ 9,931
------
------
</TABLE>

(H) FAIR VALUE OF FINANCIAL INSTRUMENTS

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF DECEMBER 31,
1996 1995
-------------------- --------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities............................................................. $ 13,624 $ 13,624 $ 14,400 $ 14,400
Equity securities............................................................ 119 119 63 63
Policy loans................................................................. 3,836 3,836 3,381 3,381
Mortgage loans............................................................... 2 2 265 265
Investments in partnerships and trust........................................ 48 48 94 97
Other........................................................................ 6 56 62 62
LIABILITIES
Other policy benefits........................................................ $ 11,707 $ 11,469 $ 12,727 $ 12,767
</TABLE>

The following methods and assumptions were used to estimate the fair value
of each class of financial instrument: fair value for fixed maturities and
equity securities approximate those quotations published by applicable stock
exchanges or received from other reliable sources; policy and mortgage loan
carrying amounts approximate fair value; investments in partnerships and trusts
are based on external market valuations from partnership and trust managements;
fair value of derivative instruments, including swaps, caps, floors, futures,
and forward commitments, is determined by using a pricing model which is
validated through quarterly comparison to dealer quoted market prices; and other
policy benefits payable for investment type contracts are determined by
estimating future cash flows discounted at the year end market rate.

- ---------------------------------------------------

4. INCOME TAX

Hartford Life and The Hartford have entered into a tax sharing agreement
under which each member, including the Company, in the consolidated U.S. federal
income tax return will make payments between them such that, with respect to any
period, the amount of taxes to be paid by Hartford Life for the Company, subject
to certain adjustments, generally will be determined as though the Company were
to file separate federal, state and local income tax returns.

As long as The Hartford continues to beneficially own, directly or
indirectly, at least 80% of the combined voting power and 80% of the value of
the outstanding capital stock of Hartford Life, the Company will be included for
federal income tax purposes in the consolidated group of which The Hartford is
the common parent. It is the current intention of The Hartford and its
subsidiaries to continue to file a consolidated federal income tax return. The
Company will continue to remit to (receive from) The Hartford a current income
tax provision (benefit) computed in accordance with such tax sharing agreement.
The Company's effective tax rate was 35%, 32% and 32% in 1996, 1995 and 1994,
respectively.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

Income tax expense was as follows:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER
31,
-------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Current............................. $ 122 $ 211 $ 185
Deferred........................... (102) (149) (120)
--------- --------- ---------
Total............................ $ 20 $ 62 $ 65
--------- --------- ---------
--------- --------- ---------
</TABLE>

A reconciliation of the tax provision at the U.S. federal statutory rate to
the provision for income taxes was as follows:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER
31,
-------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Tax provision at U.S. statutory
rate............................... $ 20 $ 67 $ 71
Tax-exempt income.................. -- (3) (3)
Foreign tax credit................. -- (4) (1)
Other.............................. -- 2 (2)
--------- --------- ---------
Total............................ $ 20 $ 62 $ 65
--------- --------- ---------
--------- --------- ---------
</TABLE>

Income taxes paid were $189, $162 and $244 in 1996, 1995 and 1994,
respectively. The current tax refund due from The Hartford to the Company was
$72 and $8 as of December 31, 1996 and 1995, respectively.

Deferred tax assets (liabilities) included the following:

<TABLE>
<CAPTION>
AS OF
DECEMBER 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
Tax return deferred acquisition costs......... $ 514 $ 410
Financial statement deferred acquisition costs
and reserves................................. (242) 138
Employee benefits............................. 8 8
Unrealized (gain) loss on investments......... (16) 32
Investments and other......................... 210 (168)
--------- ---------
Total..................................... $ 474 $ 420
--------- ---------
--------- ---------
</TABLE>

Prior to the Tax Reform Act of 1984, the Life Insurance Company Income Tax
Act of 1959 permitted the deferral from taxation of a portion of statutory
income under certain circumstances. In such circumstances, the deferred income
was accumulated in a "Policyholders' Surplus Account" and will be taxable in the
future only under conditions which management considers to be remote; therefore,
no Federal income taxes have been provided on this deferred income. The balance
for tax return purposes of the Policyholders' Surplus Account as of December 31,
1996 was $37.

- ---------------------------------------------------

5. REINSURANCE

The Company cedes insurance to non-affiliated insurers in order to limit its
maximum loss. Such transfer does not relieve the Company of its primary
liability. The Company also assumes insurance from other insurers.

Life insurance net retained premiums were comprised of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Gross premiums..................... $ 1,834 $ 1,545 $ 1,316
Insurance assumed.................. 173 591 299
Insurance ceded.................... (302) (649) (515)
--------- --------- ---------
Total.......................... $ 1,705 $ 1,487 $ 1,100
--------- --------- ---------
--------- --------- ---------
</TABLE>

Life reinsurance recoveries, which reduced death and other benefits, for the
years ended December 31, 1996, 1995 and 1994 approximated $140, $220 and $164,
respectively.

In December 1994, the Company ceded to a third party $1.0 billion in
individual fixed and variable annuities on a modified coinsurance basis. In
December 1995, the Company ceded approximately $1.2 billion in individual
variable annuities on a modified coinsurance basis to a third party. These
transactions did not have a material impact on consolidated net income.

In May 1994, the Company assumed the life insurance policies and the
individual annuities of Pacific Standard with reserves and account values of
approximately $434 million. The Company received cash and investment grade
assets to support the life insurance and individual annuity contract obligations
assumed.

- ---------------------------------------------------

6.PENSION PLANS AND OTHER POSTRETIREMENT
BENEFITS

The Company's employees are included in Hartford Fire's noncontributory
defined benefit pension plans. These plans provide pension benefits that are
based on years of service and the employee's compensation during the last ten
years of employment. The Company's funding policy is to contribute annually an
amount between the minimum funding requirements set forth in the Employee
Retirement Income Security Act of 1974, as amended, and the maximum amount that
can be deducted for Federal income tax purposes. Generally, pension costs are
funded through the purchase of the Company's group pension contracts. The cost
to the Company was approximately $5, $2 and $2 in 1996, 1995 and 1994,
respectively.

The Company also provides, through Hartford Fire, certain health care and
life insurance benefits for eligible retired employees. A substantial portion of
the Company's employees may become eligible for these benefits upon retirement.
The Company's contribution for health care benefits will depend on the retiree's
date of retirement and years of service. In addition, the plan has a defined
dollar cap which limits average Company contributions. The Company has prefunded
a portion of the health care and life insurance obligations through trust funds
where such prefunding can be accomplished on a tax effective basis.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

Postretirement health care and life insurance benefits expense, allocated by The
Hartford, was immaterial for 1996, 1995 and 1994, respectively.

The assumed rate of future increases in the per capita cost of health care
(the health care trend rate) was 9.3% for 1996, decreasing ratably to 6.0% in
the year 2001. Increasing the health care trend rates by one percent per year
would have an immaterial impact on the accumulated postretirement benefit
obligation and the annual expense. To the extent that the actual experience
differs from the inherent assumptions, the effect will be amortized over the
average future service of the covered employees.

- ---------------------------------------------------

7. BUSINESS SEGMENT INFORMATION

The Company sells financial products such as fixed and variable annuities,
retirement plan services, and life insurance on both an individual and a group
basis. The Company divides its core businesses into three segments: Investment
Products, Individual Life Insurance and Employee Benefits. In addition, the
Company also maintains a corporate operation and also classifies certain of its
business as Runoff operations. The Investment Products segment offers individual
variable annuities and fixed market value adjusted annuities, deferred
compensation and retirement plan services, mutual funds, investment management
services and other financial products. The Individual Life Insurance segment
sells a variety of individual life insurance products, including variable life,
universal life, and interest-sensitive whole life policies. The Employee
Benefits segment sells corporate owned life insurance. Through its corporate
operation, the Company reports net investment income on assets representing
surplus not assigned to any of its business segments and certain other revenues
and expenses not specifically allocable to any of its business segments. The
Company's Runoff operations are comprised of Closed Book GRC. With the exception
of Closed Book GRC, net realized capital gains and losses are recognized in the
period of realization but are allocated to the segments utilizing durations of
the segment portfolios.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
REVENUES
Investment Products............... $ 1,013 $ 759 $ 594
Individual Life Insurance......... 440 383 375
Employee Benefits................. 1,366 1,273 919
Corporate Operations.............. 81 52 30
Runoff Operations................. (11) 337 481
--------- --------- ---------
Total Revenues.................. $ 2,889 $ 2,804 $ 2,399
--------- --------- ---------
--------- --------- ---------

YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
INCOME BEFORE INCOME TAX EXPENSE
Investment Products............... $ 230 $ 172 $ 127
Individual Life Insurance......... 68 56 39
Employee Benefits................. 43 37 27
Corporate Operations.............. 65 16 8
Runoff Operations................. (348) (90) 2
--------- --------- ---------
Income Before Income Tax
Expense........................ $ 58 $ 191 $ 203
--------- --------- ---------
--------- --------- ---------
<CAPTION>

YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
ASSETS
Investment Products............... $ 53,743 $ 40,624 $ 29,115
Individual Life Insurance......... 3,753 3,173 2,808
Employee Benefits................. 14,515 13,494 7,847
Corporate Operations.............. 1,891 1,729 822
Runoff Operations................. 3,667 5,177 7,257
--------- --------- ---------
Total Assets.................... $ 77,569 $ 64,197 $ 47,849
--------- --------- ---------
--------- --------- ---------
</TABLE>

- ---------------------------------------------------

8. STATUTORY NET INCOME AND SURPLUS

A significant percentage of the consolidated statutory surplus is
permanently reinvested or is subject to various state regulatory restrictions
which limit the payment of dividends without prior approval. The total amount of
statutory dividends which may be paid by the insurance subsidiaries of the
Company in 1997, without prior approval, is estimated to be $121 million.
Statutory net income and surplus as of and for the years ended December 31 were:

<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Statutory net income...... $ 144 $ 112 $ 58
Statutory surplus......... $ 1,207 $ 1,125 $ 941
</TABLE>

The insurance subsidiaries of the Company prepare their statutory financial
statements in accordance with accounting practices prescribed by the State of
Connecticut Insurance Department. Prescribed statutory accounting practices
include publications of the National Association of Insurance Commissioners
("NAIC"), as well as state laws, regulations, and general administrative rules.

- ---------------------------------------------------

9. SEPARATE ACCOUNTS

The Company maintained separate account assets and liabilities totaling
$49.7 billion and $36.3 billion at December 31, 1996 and 1995, respectively,
which are reported at fair value. Separate account assets are segregated from
other investments, and investment income and gains and losses accrue directly to
the policyholder. Separate accounts reflect two categories of risk assumption:
non-guaranteed separate accounts totaling $39.4 billion and $25.9 billion at
December 31, 1996 and 1995, respectively, wherein the policyholder assumes the
investment risk, and

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

guaranteed separate account assets totaling $10.3 billion at December 31, 1996
and 1995, wherein the Company contractually guarantees either a minimum return
or account value to the policyholder. Included in the non-guaranteed category
are policy loans totaling $2.0 billion and $1.7 billion at December 31, 1996 and
1995, respectively. Investment income (including investment gains and losses)
and interest credited to policyholders on separate account assets are not
reflected in the Consolidated Statements of Income. Separate account management
fees, net of minimum guarantees, were $538, $387 and $256 in 1996, 1995 and
1994, respectively.

The guaranteed separate accounts include modified guaranteed individual
annuity and modified guaranteed life insurance. The average credited interest
rate on these contracts was 6.53% at December 31, 1996. The assets that support
these liabilities were comprised of $10.2 billion in fixed maturities at
December 31, 1996. The portfolios are segregated from other investments and are
managed so as to minimize liquidity and interest rate risk. To minimize the risk
of disintermediation associated with early withdrawals, individual annuity and
modified guaranteed life insurance contracts carry a graded surrender charge as
well as a market value adjustment. Additional investment risk is hedged using a
variety of derivatives which totaled $0.1 billion in carrying value and $2.4
billion in notional amounts at December 31, 1996.

- ---------------------------------------------------

10. COMMITMENTS AND CONTINGENCIES

Under insurance guaranty fund laws existing in each state, the District of
Columbia and Puerto Rico, insurers licensed to do business can be assessed by
state insurance guaranty associations for certain obligations of insolvent
insurance companies to policyholders and claimants. Recent regulatory actions
against certain large life insurers encountering financial difficulty have
prompted various state insurance guaranty associations to begin assessing life
insurance companies for the deemed losses. Most of these laws do provide,
however, that an assessment may be excused or deferred if it would threaten an
insurer's solvency and further provide annual limits on such assessments. A
large part of the assessments paid by the Company's insurance subsidiaries
pursuant to these laws may be used as credits for a portion of the Company's
insurance subsidiaries' premium taxes. The Company paid guaranty fund
assessments of approximately $11, $10 and $8 in 1996, 1995 and 1994,
respectively, of which $5, $6 and $4 were estimated to be creditable against
premium taxes.

The Company is a defendant in various lawsuits arising in the ordinary
course of business. In the opinion of management, the resolution of these
matters is not expected to have a material adverse effect on the Company's
business, financial position, or results of operations.

The rent paid to Hartford Fire for the space occupied by the Company was $3
in 1996, 1995, and 1994. The Company expects to pay annual rent of $7 in 1997,
1998, and 1999, respectively, $12 in 2000 and 2001, and $96 thereafter, over the
remaining term of the sublease, which expires on December 31, 2009. Rental
expense is recognized on a level basis over the term of the sublease and
amounted to approximately $8 in 1996, 1995 and 1994.

- ---------------------------------------------------

11. SUBSEQUENT EVENTS

On February 10, 1997, Hartford Life filed a registration statement with the
Securities and Exchange Commission relating to the U.S. and international
offerings of shares of Class A common stock (the "Equity Offerings")
representing up to 20% ownership of Hartford Life. After completion of the
Equity Offerings, The Hartford would own all of the shares of Class B Common
Stock (after reclassification of Hartford Life's common stock into Class B
Common Stock prior to March 31, 1997). Hartford Life intends to use the
estimated net proceeds of the Equity Offerings to make a capital contribution to
its insurance subsidiaries, to reduce its third-party indebtedness and for other
general corporate purposes.

The Hartford has advised the Company that its current intent is to continue
to beneficially own at least 80% of Hartford Life, but it is under no
contractual obligation to do so, except for a limited period. Provided that The
Hartford continues to beneficially own at least 80% of the combined voting power
or the value of the outstanding capital stock of Hartford Life, Hartford Life
will be included for federal income tax purposes in the controlled group of
which The Hartford is the common parent. Each member of a controlled group is
jointly and severally liable for pension funding and pension termination
liabilities of each other member of the controlled group, as well as certain
benefit plan taxes. Accordingly, the Company could be liable for pension
funding, pension termination liabilities and certain other pension related
excise taxes as well as other taxes of another member of The Hartford controlled
group in the event any such liability is incurred, and not discharged, by such
other member.

In connection with the proposed Equity Offerings, Hartford Life plans to
enter into formal agreements, including a master intercompany agreement,
investment management agreements and a new tax sharing agreement, with The
Hartford covering such matters as corporate services, approval of certain
corporate activities, registration rights, owned and leased space, allocation of
expenses, taxes and liabilities, investment advisory services, use of trademarks
and certain other corporate matters. As part of the master intercompany
agreement, Hartford Life would agree to remit to The Hartford 30% of any shared
liabilities for which The Hartford is responsible in respect of the ITT
Spin-off, 30% of any taxes which may be assessed to The

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

Hartford relating to the ITT Spin-off and will indemnify The Hartford for
certain other tax liabilities. As of December 31, 1996 there was no known
liability associated with the ITT Spin-off. Such agreements are meant to
maintain the relationship between Hartford Life and The Hartford in a manner
consistent in all material respects with past practice. As a result, management
believes these agreements should not have a material impact on the results of
operations of the Company.

In addition, under insurance company holding laws, agreements between
Hartford Life's insurance subsidiaries and The Hartford must be fair and
reasonable and may be subject to the approval of applicable insurance
commissioners. The agreements will be intended to maintain the relationship
between Hartford Life and The Hartford in a manner generally consistent with
past practices. However, none of these arrangements will result from
arm's-length negotiations and, therefore, the prices charged to Hartford Life
and its subsidiaries for services provided under these arrangements may be
higher or lower than prices that may be charged by third parties.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE I -- SUMMARY OF INVESTMENTS (OTHER THAN INVESTMENTS IN AFFILIATES)
AS OF DECEMBER 31, 1996
(IN MILLIONS)

<TABLE>
<CAPTION>
ESTIMATED
FAIR
TYPE OF INVESTMENT COST VALUE
- ------------------------------------------------------------------------------------------------- --------- -----------
<S> <C> <C>
Fixed Maturities
Bonds and Notes
U.S. Government and government agencies and authorities
(guaranteed sponsored)........................................................................ $ 166 $ 175
U.S. Government and government agencies and authorities
(guaranteed sponsored)--asset-backed.......................................................... 1,970 2,003
States, municipalities and political subdivisions................................................ 373 368
International governments........................................................................ 281 289
Public utilities................................................................................. 877 881
All other corporate including international...................................................... 4,656 4,669
All other corporate--asset-backed................................................................ 3,601 3,591
Short-term investments........................................................................... 1,655 1,648
--------- -----------
Total Fixed Maturities........................................................................... $ 13,579 $ 13,624
Equity Securities
Common Stocks--industrial, miscellaneous, and all other.......................................... 110 119
Total Fixed Maturities and Equity Securities..................................................... $ 13,689 $ 13,743
Other Investments
Policy Loans..................................................................................... 3,836 3,836
Mortgage Loans................................................................................... 2 2
Investments in partnerships and trusts........................................................... 48 48
Futures, options, and miscellaneous.............................................................. 6 56
Total Other Investments.......................................................................... 3,892 3,942
--------- -----------
Total Investments................................................................................ $ 17,581 $ 17,685
--------- -----------
--------- -----------

<CAPTION>
AMOUNT AT
WHICH SHOWN
ON
TYPE OF INVESTMENT BALANCE SHEET
- ------------------------------------------------------------------------------------------------- -------------
<S> <C>
Fixed Maturities
Bonds and Notes
U.S. Government and government agencies and authorities
(guaranteed sponsored)........................................................................ $ 175
U.S. Government and government agencies and authorities
(guaranteed sponsored)--asset-backed.......................................................... 2,003
States, municipalities and political subdivisions................................................ 368
International governments........................................................................ 289
Public utilities................................................................................. 881
All other corporate including international...................................................... 4,669
All other corporate--asset-backed................................................................ 3,591
Short-term investments........................................................................... 1,648
-------------
Total Fixed Maturities........................................................................... $ 13,624
Equity Securities
Common Stocks--industrial, miscellaneous, and all other.......................................... 119
Total Fixed Maturities and Equity Securities..................................................... $ 13,743
Other Investments
Policy Loans..................................................................................... 3,836
Mortgage Loans................................................................................... 2
Investments in partnerships and trusts........................................................... 48
Futures, options, and miscellaneous.............................................................. 6
Total Other Investments.......................................................................... 3,892
-------------
Total Investments................................................................................ $ 17,635
-------------
-------------
</TABLE>

Note: The fair values for short-term investments approximate cost.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(IN MILLIONS)

<TABLE>
<CAPTION>
FUTURE POLICY
BENEFITS, UNPAID OTHER POLICY
CLAIMS AND CLAIMS AND
DEFERRED POLICY CLAIM ADJUSTMENT BENEFITS
SEGMENT ACQUISITION COSTS EXPENSES PAYABLE
- ---------------------------------------------------------------- ----------------- ------------------- ---------------
<S> <C> <C> <C>
1996
Investment Products............................................. $ 2,030 $ 1,554 $ 6,599
Individual Life Insurance....................................... 730 346 2,160
Employee Benefits............................................... -- 381 9,834
Corporate Operations............................................ -- -- --
Runoff Operations............................................... -- -- 3,541
------ ------ -------
Consolidated Operations......................................... $ 2,760 $ 2,281 $ 22,134
------ ------ -------
------ ------ -------

1995
Investment Products............................................. $ 1,561 $ 1,314 $ 6,204
Individual Life Insurance....................................... 615 706 1,932
Employee Benefits............................................... 12 325 9,285
Corporate Operations............................................ -- -- --
Runoff Operations............................................... -- 28 5,177
------ ------ -------
Consolidated Operations......................................... $ 2,188 $ 2,373 $ 22,598
------ ------ -------
------ ------ -------

1994
Investment Products............................................. $ 1,244 $ 895 $ 4,617
Individual Life Insurance....................................... 565 582 2,543
Employee Benefits............................................... -- 369 6,911
Corporate Operations............................................ -- -- --
Runoff Operations............................................... -- 44 7,257
------ ------ -------
Consolidated Operations......................................... $ 1,809 $ 1,890 $ 21,328
------ ------ -------
------ ------ -------

BENEFITS CLAIMS, AMORTIZATION OF
NET REALIZED AND CLAIM DEFERRED POLICY
CAPITAL (LOSSES) ADJUSTMENT ACQUISITION
SEGMENT GAINS EXPENSES COSTS
- ---------------------------------------------------------------- ----------------- ------------------- ---------------
<S> <C> <C> <C>
1996
Investment Products............................................. $ -- $ 451 $ 175
Individual Life Insurance....................................... -- 245 59
Employee Benefits............................................... -- 546 --
Corporate Operations............................................ 6 -- --
Runoff Operations............................................... (219) 293 --
------ ------ -------
Consolidated Operations......................................... $ (213) $ 1,535 $ 234
------ ------ -------
------ ------ -------

1995
Investment Products............................................. $ -- $ 349 $ 117
Individual Life Insurance....................................... -- 127 70
Employee Benefits............................................... -- 496 --
Corporate Operations............................................ (11) 33 --
Runoff Operations............................................... -- 417 12
------ ------ -------
Consolidated Operations......................................... $ (11) $ 1,422 $ 199
------ ------ -------
------ ------ -------

1994
Investment Products............................................. $ -- $ 383 $ 90
Individual Life Insurance....................................... -- 179 51
Employee Benefits............................................... -- 376 --
Corporate Operations............................................ 7 -- --
Runoff Operations............................................... -- 467 4
------ ------ -------
Consolidated Operations......................................... $ 7 $ 1,405 $ 145
------ ------ -------
------ ------ -------

PREMIUMS AND NET
OTHER INVESTMENT
SEGMENT CONSIDERATIONS INCOME
- ---------------------------------------------------------------- --------------- -----------
<S> <C> <C>
1996
Investment Products............................................. $ 536 $ 477
Individual Life Insurance....................................... 287 153
Employee Benefits............................................... 881 485
Corporate Operations............................................ -- 75
Runoff Operations............................................... 1 207
------ -----------
Consolidated Operations......................................... $ 1,705 $ 1,397
------ -----------
------ -----------
1995
Investment Products............................................. $ 319 $ 436
Individual Life Insurance....................................... 246 137
Employee Benefits............................................... 922 351
Corporate Operations............................................ -- 67
Runoff Operations............................................... -- 337
------ -----------
Consolidated Operations......................................... $ 1,487 $ 1,328
------ -----------
------ -----------
1994
Investment Products............................................. $ 263 $ 330
Individual Life Insurance....................................... 268 108
Employee Benefits............................................... 569 350
Corporate Operations............................................ -- 23
Runoff Operations............................................... -- 481
------ -----------
Consolidated Operations......................................... $ 1,100 $ 1,292
------ -----------
------ -----------

DIVIDENDS TO OTHER
SEGMENT POLICYHOLDERS EXPENSES
- ---------------------------------------------------------------- --------------- -----------
<S> <C> <C>
1996
Investment Products............................................. $ -- $ 156
Individual Life Insurance....................................... -- 68
Employee Benefits............................................... 635 143
Corporate Operations............................................ -- 16
Runoff Operations............................................... -- 44
------ -----------
Consolidated Operations......................................... $ 635 $ 427
------ -----------
------ -----------
1995
Investment Products............................................. $ -- $ 115
Individual Life Insurance....................................... -- 55
Employee Benefits............................................... 675 138
Corporate Operations............................................ -- 11
Runoff Operations............................................... -- (2)
------ -----------
Consolidated Operations......................................... $ 675 $ 317
------ -----------
------ -----------
1994
Investment Products............................................. $ -- $ (31)
Individual Life Insurance....................................... -- 107
Employee Benefits............................................... 419 100
Corporate Operations............................................ -- 43
Runoff Operations............................................... -- 8
------ -----------
Consolidated Operations......................................... $ 419 $ 227
------ -----------
------ -----------
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE IV -- REINSURANCE
(IN MILLIONS)

<TABLE>
<CAPTION>
GROSS CEDED TO ASSUMED FROM NET
AMOUNT OTHER COMPANIES OTHER COMPANIES AMOUNT
---------- ---------------- ---------------- ----------
<S> <C> <C> <C> <C>
Year Ended December 31, 1996
Life Insurance in Force............................... $ 177,094 $ 106,146 $ 31,957 $ 102,905
---------- -------- ------- ----------
Insurance Revenues
Life Insurance and Annuities........................ $ 1,801 $ 298 $ 169 $ 1,672
Accident and Health Insurance....................... 33 4 4 33
---------- -------- ------- ----------
Total................................................. $ 1,834 $ 302 $ 173 $ 1,705
---------- -------- ------- ----------
---------- -------- ------- ----------
For the Year Ended December 31, 1995
Life Insurance in Force............................... $ 182,716 $ 112,774 $ 26,996 $ 96,938
---------- -------- ------- ----------
Insurance Revenues
Life Insurance and Annuities........................ $ 1,232 $ 325 $ 574 $ 1,481
Accident and Health Insurance....................... 313 324 17 6
---------- -------- ------- ----------
Total................................................. $ 1,545 $ 649 $ 591 $ 1,487
---------- -------- ------- ----------
---------- -------- ------- ----------
For the Year Ended December 31, 1994
Life Insurance in Force............................... $ 136,929 $ 87,553 $ 35,016 $ 84,392
---------- -------- ------- ----------
Insurance Revenues
Life Insurance and Annuities........................ $ 1,008 $ 211 $ 294 $ 1,091
Accident and Health Insurance....................... 308 304 5 9
---------- -------- ------- ----------
Total................................................. $ 1,316 $ 515 $ 299 $ 1,100
---------- -------- ------- ----------
---------- -------- ------- ----------

<CAPTION>
PERCENTAGE OF
AMOUNT ASSUMED
TO NET
-----------------
<S> <C>
Year Ended December 31, 1996
Life Insurance in Force............................... 31.1%
Insurance Revenues
Life Insurance and Annuities........................ 10.1%
Accident and Health Insurance....................... 12.1%
Total................................................. 10.1%
For the Year Ended December 31, 1995
Life Insurance in Force............................... 27.8%
Insurance Revenues
Life Insurance and Annuities........................ 38.8%
Accident and Health Insurance....................... 283.3%
Total................................................. 39.7%
For the Year Ended December 31, 1994
Life Insurance in Force............................... 41.5%
Insurance Revenues
Life Insurance and Annuities........................ 26.9%
Accident and Health Insurance....................... 55.6%
Total................................................. 27.2%
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

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 (the Account) as of December 31,
1996, and the related statement of operations for the year then ended and
statements of changes in net assets for each of the two years in the period then
ended. These financial statements are the responsibility of the Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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, 1996, 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.

ARTHUR ANDERSEN LLP

Hartford, Connecticut
February 14, 1997

<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

Separate Account Two

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- ------------
<S> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 209,901,213
Cost $213,818,503
Market Value......... $209,731,192 -- --
Hartford Stock Fund,
Inc.
Shares 325,077,171
Cost $942,043,980
Market Value......... -- $1,346,700,441 --
HVA Money Market Fund,
Inc.
Shares 282,828,485
Cost $282,828,485
Market Value......... -- -- $282,828,485
Hartford Advisers Fund,
Inc.
Shares 1,337,021,547
Cost $2,233,276,156
Market Value......... -- -- --
Hartford U.S.
Government Money
Market Fund, Inc.
Shares 1,592,137
Cost $1,592,137
Market Value......... -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 366,806,192
Cost $1,062,106,327
Market Value......... -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 189,233,708
Cost $203,956,416
Market Value......... -- -- --
Hartford Index Fund,
Inc.
Shares 111,179,449
Cost $184,665,755
Market Value......... -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 291,990,802
Cost $336,561,408
Market Value......... -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 209,596,491
Cost $268,301,179
Market Value......... -- -- --
Due from Hartford Life
Insurance Company..... 389,971 -- 1,275,023
Receivable from fund
shares sold........... -- 1,214,364 --
------------ -------------- ------------
Total Assets........... 210,121,163 1,347,914,805 284,103,508
------------ -------------- ------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- 1,203,942 --
Payable for fund shares
purchased............. 391,131 -- 1,269,939
------------ -------------- ------------
Total Liabilities...... 391,131 1,203,942 1,269,939
------------ -------------- ------------
Net Assets (variable
annuity contract
liabilities).......... $209,730,032 $1,346,710,863 $282,833,569
------------ -------------- ------------
------------ -------------- ------------
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
MORTGAGE INTERNATIONAL
U.S. GOVERNMENT CAPITAL SECURITIES OPPORTUNITIES
ADVISERS FUND MONEY MARKET FUND APPRECIATION FUND FUND INDEX FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- ------------------- ----------------- ------------- ------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 209,901,213
Cost $213,818,503
Market Value......... -- -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 325,077,171
Cost $942,043,980
Market Value......... -- -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 282,828,485
Cost $282,828,485
Market Value......... -- -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 1,337,021,547
Cost $2,233,276,156
Market Value......... $2,900,708,354 -- -- -- -- --
Hartford U.S.
Government Money
Market Fund, Inc.
Shares 1,592,137
Cost $1,592,137
Market Value......... -- $1,592,137 -- -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 366,806,192
Cost $1,062,106,327
Market Value......... -- -- $1,435,800,482 -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 189,233,708
Cost $203,956,416
Market Value......... -- -- -- $199,787,272 -- --
Hartford Index Fund,
Inc.
Shares 111,179,449
Cost $184,665,755
Market Value......... -- -- -- -- $264,803,879 --
Hartford International
Opportunities Fund,
Inc.
Shares 291,990,802
Cost $336,561,408
Market Value......... -- -- -- -- -- $410,796,017
Hartford Dividend and
Growth Fund, Inc.
Shares 209,596,491
Cost $268,301,179
Market Value......... -- -- -- -- -- --
Due from Hartford Life
Insurance Company..... -- -- -- -- -- --
Receivable from fund
shares sold........... 7,791 3,686 505,615 6,461 195,459 294,275
--------------- ------------------- ----------------- ------------- ------------ -----------------
Total Assets........... 2,900,716,145 1,595,823 1,436,306,097 199,793,733 264,999,338 411,090,292
--------------- ------------------- ----------------- ------------- ------------ -----------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 9,064 3,303 505,676 2,327 196,318 294,299
Payable for fund shares
purchased............. -- -- -- -- -- --
--------------- ------------------- ----------------- ------------- ------------ -----------------
Total Liabilities...... 9,064 3,303 505,676 2,327 196,318 294,299
--------------- ------------------- ----------------- ------------- ------------ -----------------
Net Assets (variable
annuity contract
liabilities).......... $2,900,707,081 $1,592,520 $1,435,800,421 $199,791,406 $264,803,020 $410,795,993
--------------- ------------------- ----------------- ------------- ------------ -----------------
--------------- ------------------- ----------------- ------------- ------------ -----------------

DIVIDEND AND
GROWTH FUND
SUB-ACCOUNT
------------
<S> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.

Cost
Market Value......... --
Hartford Stock Fund,
Inc.

Cost
Market Value......... --
HVA Money Market Fund,
Inc.

Cost
Market Value......... --
Hartford Advisers Fund,
Inc.

Cost
Market Value......... --
Hartford U.S.
Government Money
Market Fund, Inc.

Cost
Market Value......... --
Hartford Capital
Appreciation Fund,
Inc.

Cost
Market Value......... --
Hartford Mortgage
Securities Fund, Inc.

Cost
Market Value......... --
Hartford Index Fund,
Inc.

Cost
Market Value......... --
Hartford International
Opportunities Fund,
Inc.

Cost
Market Value......... --
Hartford Dividend and
Growth Fund, Inc.

Cost
Market Value......... $324,333,800
Due from Hartford Life
Insurance Company..... 278,410
Receivable from fund
shares sold........... --
------------
Total Assets........... 324,612,210
------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... --
Payable for fund shares
purchased............. 278,289
------------
Total Liabilities...... 278,289
------------
Net Assets (variable
annuity contract
liabilities).......... $324,333,921
------------
------------
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

SEPARATE ACCOUNT TWO

STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 1996

<TABLE>
<CAPTION>
CALVERT
RESPONSIBLY
INVESTED
BALANCED INTERNATIONAL SMALL SMITH BARNEY
PORTFOLIO ADVISERS FUND COMPANY FUND CASH PORTFOLIO CLASS A
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- ------------- ------------- ----------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Calvert Responsibly
Invested Balanced
Portfolio
Shares 1,499,952
Cost $ 2,391,011
Market Value......... $2,660,914 -- -- --
Hartford International
Advisers Fund, Inc.
Shares 25,549,431
Cost $28,919,492
Market Value......... -- $29,805,457 -- --
Hartford Small Company
Fund, Inc.
Shares 12,669,842
Cost $13,471,629
Market Value......... -- -- $13,546,087 --
Smith Barney Cash
Portfolio Class A
Shares 580,242
Cost $ 580,242
Market Value......... -- -- -- $580,243
Smith Barney
Appreciation Fund,
Inc.
Shares 13,454
Cost $ 98,474
Market Value......... -- -- -- --
Smith Barney Government
Portfolio Class A
Shares 39,801
Cost $ 39,801
Market Value......... -- -- -- --
TCI Advantage Fund
Shares 27,440
Cost $ 166,872
Market Value......... -- -- -- --
TCI Growth Fund
Shares 111,230
Cost $ 1,287,905
Market Value......... -- -- -- --
Fidelity VIP Overseas
Portfolio
Shares 56,298
Cost $ 979,269
Market Value......... -- -- -- --
Fidelity VIP II Asset
Manager Portfolio
Shares 108,305
Cost $ 1,688,636
Market Value......... -- -- -- --
Fidelity VIP II
Contrafund Portfolio
Shares 402,873
Cost $ 5,743,454
Market Value......... -- -- -- --
Fidelity VIP Growth
Portfolio
Shares 225,301
Cost $ 6,630,047
Market Value......... -- -- -- --
Dividends receivable... -- -- -- 689
Due from Hartford Life
Insurance Company..... 20,342 233,723 306,594 --
Receivable from fund
shares sold........... -- -- -- 1,097
--------------- ------------- ------------- --------
Total Assets........... 2,681,256 30,039,180 13,852,681 582,029
--------------- ------------- ------------- --------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- -- -- 1,098
Payable for fund shares
purchased............. 20,027 230,006 306,589 --
--------------- ------------- ------------- --------
Total Liabilities...... 20,027 230,006 306,589 1,098
--------------- ------------- ------------- --------
Net Assets (variable
annuity contract
liabilities).......... $2,661,229 $29,809,174 $13,546,092 $580,931
--------------- ------------- ------------- --------
--------------- ------------- ------------- --------
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SMITH BARNEY SMITH BARNEY FIDELITY VIP
APPRECIATION GOVERNMENT PORTFOLIO TCI TCI OVERSEAS
FUND CLASS A ADVANTAGE FUND GROWTH FUND PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- -------------------- ------------------ --------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Calvert Responsibly
Invested Balanced
Portfolio
Shares 1,499,952
Cost $ 2,391,011
Market Value......... -- -- -- -- --
Hartford International
Advisers Fund, Inc.
Shares 25,549,431
Cost $28,919,492
Market Value......... -- -- -- -- --
Hartford Small Company
Fund, Inc.
Shares 12,669,842
Cost $13,471,629
Market Value......... -- -- -- -- --
Smith Barney Cash
Portfolio Class A
Shares 580,242
Cost $ 580,242
Market Value......... -- -- -- -- --
Smith Barney
Appreciation Fund,
Inc.
Shares 13,454
Cost $ 98,474
Market Value......... $ 172,850 -- -- -- --
Smith Barney Government
Portfolio Class A
Shares 39,801
Cost $ 39,801
Market Value......... -- $ 39,801 -- -- --
TCI Advantage Fund
Shares 27,440
Cost $ 166,872
Market Value......... -- -- $ 172,596 -- --
TCI Growth Fund
Shares 111,230
Cost $ 1,287,905
Market Value......... -- -- -- $ 1,138,990 --
Fidelity VIP Overseas
Portfolio
Shares 56,298
Cost $ 979,269
Market Value......... -- -- -- -- $1,060,645
Fidelity VIP II Asset
Manager Portfolio
Shares 108,305
Cost $ 1,688,636
Market Value......... -- -- -- -- --
Fidelity VIP II
Contrafund Portfolio
Shares 402,873
Cost $ 5,743,454
Market Value......... -- -- -- -- --
Fidelity VIP Growth
Portfolio
Shares 225,301
Cost $ 6,630,047
Market Value......... -- -- -- -- --
Dividends receivable... -- 56 -- -- --
Due from Hartford Life
Insurance Company..... -- -- 113 1,084 318
Receivable from fund
shares sold........... 123 17 -- -- --
--------------- ------- -------- --------------- ------------
Total Assets........... 172,973 39,874 172,709 1,140,074 1,060,963
--------------- ------- -------- --------------- ------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 112 32 -- -- --
Payable for fund shares
purchased............. -- -- 114 1,084 374
--------------- ------- -------- --------------- ------------
Total Liabilities...... 112 32 114 1,084 374
--------------- ------- -------- --------------- ------------
Net Assets (variable
annuity contract
liabilities).......... $ 172,861 $ 39,842 $ 172,595 $ 1,138,990 $1,060,589
--------------- ------- -------- --------------- ------------
--------------- ------- -------- --------------- ------------

<CAPTION>
FIDELITY VIP
FIDELITY VIP II II FIDELITY VIP
ASSET MANAGER CONTRAFUND GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- ------------- -------------
<S> <C> <C> <C>
ASSETS:
Investments:
Calvert Responsibly
Invested Balanced
Portfolio

Cost
Market Value......... -- -- --
Hartford International
Advisers Fund, Inc.

Cost
Market Value......... -- -- --
Hartford Small Company
Fund, Inc.

Cost
Market Value......... -- -- --
Smith Barney Cash
Portfolio Class A

Cost
Market Value......... -- -- --
Smith Barney
Appreciation Fund,
Inc.

Cost
Market Value......... -- -- --
Smith Barney Government
Portfolio Class A

Cost
Market Value......... -- -- --
TCI Advantage Fund

Cost
Market Value......... -- -- --
TCI Growth Fund

Cost
Market Value......... -- -- --
Fidelity VIP Overseas
Portfolio

Cost
Market Value......... -- -- --
Fidelity VIP II Asset
Manager Portfolio

Cost
Market Value......... $ 1,833,607 -- --
Fidelity VIP II
Contrafund Portfolio

Cost
Market Value......... -- $ 6,671,576 --
Fidelity VIP Growth
Portfolio

Cost
Market Value......... -- -- $ 7,015,865
Dividends receivable... -- -- --
Due from Hartford Life
Insurance Company..... 1,331 7,363 5,867
Receivable from fund
shares sold........... -- -- --
----------------- ------------- -------------
Total Assets........... 1,834,938 6,678,939 7,021,732
----------------- ------------- -------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- -- --
Payable for fund shares
purchased............. 923 7,344 5,867
----------------- ------------- -------------
Total Liabilities...... 923 7,344 5,867
----------------- ------------- -------------
Net Assets (variable
annuity contract
liabilities).......... $ 1,834,015 $ 6,671,595 $ 7,015,865
----------------- ------------- -------------
----------------- ------------- -------------
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

Separate Account Two

STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 1996

<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
DEFERRED ANNUITY CONTRACTS IN THE ACCUMULATION
PERIOD:
<S> <C> <C> <C>
INDIVIDUAL SUB-ACCOUNTS:
Bond Fund Qualified 1.00%....................... 286,137 $3.705223 $ 1,060,201
Bond Fund Non-Qualified 1.00%................... 2,004,675 3.648889 7,314,837
Bond Fund 1.25%................................. 96,857,176 1.922173 186,176,248
Bond Fund .25%.................................. 58,462 1.279841 74,822
Stock Fund Qualified 1.00%...................... 829,845 6.828860 5,666,897
Stock Fund Non-Qualified 1.00%.................. 3,406,617 6.529899 22,244,866
Stock Fund 1.25%................................ 333,175,709 3.546656 1,181,659,627
Stock Fund .25%................................. 1,094,565 1.863616 2,039,847
Money Market Fund Qualified 1.00%............... 1,361,999 2.465145 3,357,527
Money Market Fund Non-Qualified 1.00%........... 13,210,943 2.466312 32,582,307
Money Market Fund 1.25%......................... 151,978,017 1.586516 241,115,556
Money Market Fund .25%.......................... 107,272 1.177980 126,364
Advisers Fund Qualified 1.00%................... 3,530,743 4.341094 15,327,287
Advisers Fund Non-Qualified 1.00%............... 12,468,636 4.341094 54,127,522
Advisers Fund 1.25%............................. 953,997,531 2.905301 2,771,649,980
Advisers Fund .25%.............................. 1,035,316 1.620437 1,677,664
U.S. Government Money Market Fund Qualified
1.00%.......................................... 13,096 1.964748 25,730
U.S. Government Money Market Fund 1.25%......... 46,108 1.520714 70,117
Capital Appreciation Fund Qualified 1.00%....... 887,736 6.732095 5,976,324
Capital Appreciation Fund Non-Qualified 1.00%... 2,634,097 6.728893 17,724,557
Capital Appreciation Fund 1.25%................. 330,579,796 4.010163 1,325,678,867
Capital Appreciation Growth Fund .25%........... 2,393,968 1.929665 4,619,555
Mortgage Securities Fund Qualified 1.00%........ 754,527 2.494635 1,882,270
Mortgage Securities Fund Non-Qualified 1.00%.... 8,165,242 2.494635 20,369,299
Mortgage Securities Fund 1.25%.................. 89,097,727 1.948580 173,614,049
Mortgage Securities Fund .25%................... 16,088 1.259955 20,270
Index Fund 1.00%................................ 38,885 1.121353 43,604
Index Fund Non-Qualified 1.00%.................. 105,698 1.121353 118,525
Index Fund 1.25%................................ 87,611,122 2.845170 249,268,537
Index Fund .25%................................. 208,930 1.823336 380,949
International Opportunities Fund Qualified
1.00%.......................................... 374,127 1.506694 563,694
International Opportunities Fund Non-Qualified
1.00%.......................................... 1,951,162 1.506641 2,939,701
International Opportunities Fund 1.25%.......... 266,961,904 1.482397 395,743,525
International Opportunities Fund .25%........... 796,396 1.658799 1,321,061
Dividend and Growth Fund Qualified 1.00%........ 291,489 1.661695 484,366
Dividend and Growth Fund Non-Qualified 1.00%.... 1,241,381 1.661695 2,062,797
Dividend and Growth Fund 1.25%.................. 190,957,704 1.650056 315,090,906
Dividend and Growth Fund .25%................... 278,866 1.697062 473,253
International Advisers Fund 1.00%............... 18,539 1.271482 23,572
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
INDIVIDUAL SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
International Advisers Fund Non-Qualified
1.00%.......................................... 347,573 $1.271482 $ 441,933
International Advisers Fund 1.25%............... 23,174,203 1.265665 29,330,778
International Advisers Fund .25%................ 10,000 1.289112 12,891
Hartford Small Company Fund 1.00%............... 10,000 1.067381 10,674
Hartford Small Company Fund Non-Qualified
1.00%.......................................... 109,746 1.067381 117,140
Hartford Small Company Fund 1.25%............... 12,562,718 1.066345 13,396,192
Hartford Small Company Fund .25%................ 20,632 1.070487 22,086
Smith Barney Cash Portfolio Class A Qualified
1.00%.......................................... 78,105 2.668734 208,440
Smith Barney Cash Portfolio Class A
Non-Qualified 1.00%............................ 134,883 2.761578 372,491
Smith Barney Appreciation Fund, Inc. Qualified
1.00%.......................................... 23,313 7.414916 172,861
Smith Barney Government Portfolio Class A
Qualified 1.00%................................ 16,556 2.406571 39,842
--------------
Sub-total Individual Sub-Accounts............... 7,088,822,408
--------------
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP.................... 1,156,525 4.339730 5,019,007
Bond Fund 1.25% DCII............................ 1,655,052 4.186875 6,929,497
Bond Fund .15% DCII............................. 305,789 3.988350 1,219,594
Stock Fund Qualified 1.00% QP................... 3,371,997 11.419696 38,507,182
Stock Fund Qualified .825% QP................... 1,236,665 9.187655 11,362,056
Stock Fund Non-Qualified 1.00% NQ............... 84,854 8.960086 760,298
Stock Fund Non-Qualified .825% NQ............... 789,689 9.203794 7,268,133
Stock Fund 1.25% DCII........................... 4,885,027 11.016763 53,817,180
Stock Fund .15% DCII............................ 873,948 8.647926 7,557,838
Money Market Fund Qualified .375% QP............ 2,493 3.094168 7,714
Money Market Fund 1.25% DCII.................... 1,332,772 2.724852 3,631,605
Money Market Fund .15% DCII..................... 321,329 2.679247 860,920
Advisers Fund 1.25% DCII........................ 10,504,581 4.201072 44,130,500
Advisers Fund .15% DCII......................... 603,382 4.875465 2,941,770
U.S. Government Money Market Fund 1.25% DCII.... 586,557 1.898594 1,113,633
U.S. Government Money Market Fund .15% DCII..... 54,540 2.211389 120,609
Capital Appreciation Fund 1.25% DCII............ 10,979,149 6.532522 71,721,533
Capital Appreciation Fund .15% DCII............. 783,105 7.500897 5,873,989
Mortgage Securities Fund 1.25% DCII............. 1,140,765 2.421049 2,761,848
Mortgage Securities Fund .15% DCII.............. 143,045 2.761199 394,976
Index Fund 1.25% DCII........................... 4,377,886 2.848016 12,468,289
Index Fund .15% DCII............................ 354,223 3.118020 1,104,474
International Opportunities Fund 1.25% DCII..... 5,995,783 1.482607 8,889,390
International Opportunities Fund .15% DCII...... 437,734 1.592168 696,947
Dividend and Growth Fund........................ 3,874,337 1.484086 5,749,849
Calvert Responsibly Invested Balanced Portfolio
1.25% DCII..................................... 1,192,706 2.020652 2,410,043
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

SEPARATE ACCOUNT TWO

STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 1996

<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
GROUP SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
TCI Advantage Portfolio......................... 144,148 $1.134354 $ 163,515
TCI Growth Fund Portfolio....................... 1,107,888 1.021217 1,131,394
Fidelity VIP Overseas Portfolio................. 920,778 1.151840 1,060,589
Fidelity VIP II Asset Manager Portfolio......... 1,491,046 1.230019 1,834,015
Fidelity VIP II Contrafund Portfolio............ 5,069,393 1.316054 6,671,595
Fidelity VIP II Growth Portfolio................ 5,773,053 1.215278 7,015,865
--------------
Sub-total Group Sub-Accounts.................... 315,195,847
--------------
TOTAL ACCUMULATION PERIOD......................... 7,404,018,255
--------------
ANNUITY CONTRACTS IN THE ANNUITY PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Bond Fund Non-Qualified 1.00%................... 27 3.648889 99
Bond Fund 1.25%................................. 183,085 1.922173 351,921
Stock Fund Non-Qualified 1.00%.................. 9,504 6.529899 62,059
Stock Fund 1.25%................................ 305,133 3.546656 1,082,200
Money Market Fund Qualified 1.00%............... 12,037 2.465145 29,672
Money Market Fund Non-Qualified 1.00%........... 90,874 2.466312 224,124
Money Market Fund 1.25%......................... 293,556 1.586516 465,731
Advisers Fund Qualified 1.00%................... 4,038 4.341094 17,529
Advisers Fund Non-Qualified 1.00%............... 61,575 4.341094 267,305
Advisers Fund 1.25%............................. 863,489 2.905301 2,508,695
U.S. Government Money Market Fund Qualified
1.00%.......................................... 10,951 1.964748 21,515
Capital Appreciation Fund Non-Qualified 1.00%... 3,442 6.728893 23,158
Capital Appreciation Fund 1.25%................. 150,348 4.010163 602,921
Mortgage Securities Fund Non-Qualified 1.00%.... 80,072 2.494635 199,751
Mortgage Securities Fund 1.25%.................. 81,728 1.948580 159,253
Index Fund 1.25%................................ 53,288 2.845170 151,614
International Opportunities Fund 1.25%.......... 184,639 1.482397 273,708
Dividend and Growth Fund 1.25%.................. 120,079 1.650056 198,136
--------------
Sub-total Individual Sub-Accounts............... 6,639,391
--------------
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP.................... 68,667 4.339730 297,996
Bond Fund 1.25% DCII............................ 290,717 4.186875 1,217,195
Bond Fund 1.00% DCII............................ 11,681 4.322597 50,493
Bond Fund .15% DCII............................. 4,544 3.988350 18,122
Stock Fund Qualified 1.00% QP................... 228,666 11.419696 2,611,302
Stock Fund Qualified .825% QP................... 50,529 9.187655 464,243
Stock Fund Non-Qualified 1.00% NQ............... 569 8.960086 5,099
Stock Fund Non-Qualified .825% NQ............... 50,740 9.203794 467,004
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
GROUP SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
Stock Fund 1.25% DCII........................... 997,034 $11.016763 $ 10,984,089
Stock Fund 1.00% DCII........................... 3,994 11.383947 45,472
Stock Fund .15% DCII............................ 12,196 8.647926 105,471
Money Market Fund 1.25% DCII.................... 158,559 2.724852 432,049
Advisers Fund 1.25% DCII........................ 1,889,915 4.201072 7,939,668
Advisers Fund .15% DCII......................... 24,441 4.875465 119,161
U.S. Government Money Market Fund 1.25% DCII.... 126,892 1.898594 240,916
Capital Appreciation Fund 1.25% DCII............ 537,157 6.532522 3,508,989
Capital Appreciation Fund .15% DCII............. 9,403 7.500897 70,528
Mortgage Securities Fund 1.25% DCII............. 160,959 2.421049 389,689
Index Fund 1.25% DCII........................... 440,396 2.848016 1,254,255
Index Fund .15% DCII............................ 4,097 3.118020 12,773
International Opportunities Fund 1.25% DCII..... 227,628 1.482607 337,483
International Opportunities Fund .15% DCII...... 19,146 1.592168 30,484
Dividend and Growth Fund........................ 185,039 1.484086 274,614
Calvert Responsibly Invested Balanced Portfolio
1.25% DCII..................................... 124,309 2.020652 251,186
TCI Advantage Fund.............................. 8,005 1.134354 9,080
TCI Growth Fund................................. 7,438 1.021217 7,596
--------------
Sub-total Group Sub-Accounts.................... 31,144,957
--------------
TOTAL ANNUITY PERIOD.............................. 37,784,348
--------------
GRAND TOTAL....................................... $7,441,802,603
--------------
--------------
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

Separate Account Two

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 12,893,843 $ 18,086,005 $12,430,899
EXPENSES:
Mortality and expense
undertakings.......... (2,481,229) (13,978,363) (2,990,459)
------------ ------------ -----------
Net investment income
(loss).............. 10,412,614 4,107,642 9,440,440
------------ ------------ -----------
CAPITAL GAINS INCOME..... -- 41,100,004 --
------------ ------------ -----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (262,277) 3,161,056 --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (5,517,884) 189,613,138 --
------------ ------------ -----------
Net realized and
unrealized gain
(loss) on
investments......... (5,780,161) 192,774,194 --
------------ ------------ -----------
Net increase
(decrease) in net
assets resulting
from operations..... $ 4,632,453 $237,981,840 $ 9,440,440
------------ ------------ -----------
------------ ------------ -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
U.S. GOVERNMENT CAPITAL MORTGAGE
ADVISERS FUND MONEY MARKET FUND APPRECIATION FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- -------------------- ----------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 75,797,664 $ 73,159 $ 8,578,529 $13,309,238
EXPENSES:
Mortality and expense
undertakings.......... (32,375,755) (17,750) (15,329,687) (2,542,139)
------------- -------- ----------------- ---------------
Net investment income
(loss).............. 43,421,909 55,409 (6,751,158) 10,767,099
------------- -------- ----------------- ---------------
CAPITAL GAINS INCOME..... 53,115,059 -- 70,324,118 --
------------- -------- ----------------- ---------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 1,874,522 -- 2,065,427 (435,741)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 276,364,776 -- 154,074,827 (2,844,443)
------------- -------- ----------------- ---------------
Net realized and
unrealized gain
(loss) on
investments......... 278,239,298 -- 156,140,254 (3,280,184)
------------- -------- ----------------- ---------------
Net increase
(decrease) in net
assets resulting
from operations..... $ 374,776,266 $ 55,409 $219,713,214 $ 7,486,915
------------- -------- ----------------- ---------------
------------- -------- ----------------- ---------------

<CAPTION>
INTERNATIONAL DIVIDEND AND
INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------------ ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 4,491,244 $ 7,252,292 $ 5,391,238
EXPENSES:
Mortality and expense
undertakings.......... (2,695,725) (4,681,021) (2,723,447)
------------ ------------------ ------------
Net investment income
(loss).............. 1,795,519 2,571,271 2,667,791
------------ ------------------ ------------
CAPITAL GAINS INCOME..... 3,292,866 9,589,596 2,810,352
------------ ------------------ ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 140,503 91,466 (3,931)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 36,167,970 28,439,913 38,471,770
------------ ------------------ ------------
Net realized and
unrealized gain
(loss) on
investments......... 36,308,473 28,531,379 38,467,839
------------ ------------------ ------------
Net increase
(decrease) in net
assets resulting
from operations..... $ 41,396,858 $40,692,246 $ 43,945,982
------------ ------------------ ------------
------------ ------------------ ------------
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

SEPARATE ACCOUNT TWO

STATEMENT OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
CALVERT SMITH BARNEY
RESPONSIBLY INVESTED INTERNATIONAL SMALL CASH PORTFOLIO
BALANCED PORTFOLIO ADVISERS FUND COMPANY FUND CLASS A
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT* SUB-ACCOUNT
-------------------- ------------- ------------------ -------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 57,279 $ 879,182 $ 9,954 $27,809
EXPENSES:
Mortality and expense
undertakings.......... (27,872) (234,636) (27,632) (5,756)
-------- ------------- ------- -------
Net investment income
(loss).............. 29,407 644,546 (17,678) 22,053
-------- ------------- ------- -------
CAPITAL GAINS INCOME..... 140,994 595,787 -- --
-------- ------------- ------- -------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 6,518 (3,562) 922 --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 78,661 708,119 74,459 --
-------- ------------- ------- -------
Net realized and
unrealized gain
(loss) on
investments......... 85,179 704,557 75,381 --
-------- ------------- ------- -------
Net increase
(decrease) in net
assets resulting
from operations..... $255,580 $1,944,890 $57,703 $22,053
-------- ------------- ------- -------
-------- ------------- ------- -------
</TABLE>

* From inception, August 9, 1996, to December 31, 1996.

The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SMITH BARNEY
GOVERNMENT FIDELITY VIP FIDELITY VIP II
SMITH BARNEY PORTFOLIO TCI TCI OVERSEAS ASSET MANAGER
APPRECIATION FUND CLASS A ADVANTAGE FUND GROWTH FUND PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- -------------- -------------- ----------- ------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $16,634 $2,077 $6,903 $ 100,570 $ 3,709 $ 27,849
EXPENSES:
Mortality and expense
undertakings.......... (1,599) (431) (1,529) (13,692) (8,486) (13,608)
------- ------ ------ ----------- ------------- --------
Net investment income
(loss).............. 15,035 1,646 5,374 86,878 (4,777) 14,241
------- ------ ------ ----------- ------------- --------
CAPITAL GAINS INCOME..... -- -- -- -- 4,080 --
------- ------ ------ ----------- ------------- --------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 174 -- (110) 527 985 (71)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 11,776 -- 4,528 (155,560) 77,918 126,112
------- ------ ------ ----------- ------------- --------
Net realized and
unrealized gain
(loss) on
investments......... 11,950 -- 4,418 (155,033) 78,903 126,041
------- ------ ------ ----------- ------------- --------
Net increase
(decrease) in net
assets resulting
from operations..... $26,985 $1,646 $9,792 $ (68,155) $78,206 $140,282
------- ------ ------ ----------- ------------- --------
------- ------ ------ ----------- ------------- --------

<CAPTION>
FIDELITY
FIDELITY VIP II VIP
CONTRAFUND GROWTH
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
--------------- -----------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 21,249 $ 73,883
EXPENSES:
Mortality and expense
undertakings.......... (56,903) (63,705)
--------------- -----------
Net investment income
(loss).............. (35,654) 10,178
--------------- -----------
CAPITAL GAINS INCOME..... -- 115,329
--------------- -----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (377) (6,795)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 910,896 420,263
--------------- -----------
Net realized and
unrealized gain
(loss) on
investments......... 910,519 413,468
--------------- -----------
Net increase
(decrease) in net
assets resulting
from operations..... $874,865 $538,975
--------------- -----------
--------------- -----------
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

Separate Account Two

STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- -------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 10,412,614 $ 4,107,642 $ 9,440,440
Capital gains income... -- 41,100,004 --
Net realized gain
(loss) on security
transactions.......... (262,277) 3,161,056 --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (5,517,884) 189,613,138 --
------------ -------------- -------------
Net increase (decrease)
in net assets
resulting from
operations............ 4,632,453 237,981,840 9,440,440
------------ -------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 27,446,873 174,128,189 70,557,174
Net transfers.......... (16,819,459) 27,816,288 67,229,895
Surrenders............. (16,860,465) (57,921,128) (52,794,253)
Net annuity
transactions.......... (32,192) (176,096) (239,109)
------------ -------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (6,265,243) 143,847,253 84,753,707
------------ -------------- -------------
Total increase
(decrease) in net
assets................ (1,632,790) 381,829,093 94,194,147
NET ASSETS:
Beginning of period.... 211,362,822 964,881,770 188,639,422
------------ -------------- -------------
End of period.......... $209,730,032 $1,346,710,863 $ 282,833,569
------------ -------------- -------------
------------ -------------- -------------

STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1995

MONEY
BOND FUND STOCK FUND MARKET FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- -------------
OPERATIONS:
Net investment income
(loss)................ $ 9,356,706 $ 8,102,133 $ 9,540,693
Capital gains income... -- 26,305,598 --
Net realized gain
(loss) on security
transactions.......... 117,877 2,168,121 --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 18,122,724 184,154,644 --
------------ -------------- -------------
Net increase (decrease)
in net assets
resulting from
operations............ 27,597,307 220,730,496 9,540,693
------------ -------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 18,860,293 101,236,958 48,515,026
Net transfers.......... 17,461,966 34,337,542 (83,703,644)
Surrenders............. (12,010,919) (38,089,217) (27,263,647)
Net annuity
transactions.......... (33,972) 563,526 (138,249)
------------ -------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 24,277,368 98,048,809 (62,590,514)
------------ -------------- -------------
Total increase
(decrease) in net
assets................ 51,874,675 318,779,305 (53,049,821)
NET ASSETS:
Beginning of period.... 159,488,147 646,102,465 241,689,243
------------ -------------- -------------
End of period.......... $211,362,822 $ 964,881,770 $ 188,639,422
------------ -------------- -------------
------------ -------------- -------------
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
U.S. GOVERNMENT CAPITAL MORTGAGE INTERNATIONAL
ADVISERS FUND MONEY MARKET FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- -------------------- ----------------- --------------- ------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 43,421,909 $ 55,409 $ (6,751,158) $ 10,767,099 $ 1,795,519 $ 2,571,271
Capital gains income... 53,115,059 -- 70,324,118 -- 3,292,866 9,589,596
Net realized gain
(loss) on security
transactions.......... 1,874,522 -- 2,065,427 (435,741) 140,503 91,466
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 276,364,776 -- 154,074,827 (2,844,443) 36,167,970 28,439,913
--------------- ----------- ----------------- --------------- ------------- ------------------
Net increase (decrease)
in net assets
resulting from
operations............ 374,776,266 55,409 219,713,214 7,486,915 41,396,858 40,692,246
--------------- ----------- ----------------- --------------- ------------- ------------------
UNIT TRANSACTIONS:
Purchases.............. 322,583,889 216,658 200,411,434 9,051,920 47,675,352 43,044,896
Net transfers.......... (3,947,049) (124,960) 495,679 (19,016,015) 21,152,822 20,223,935
Surrenders............. (150,653,853) (77,729) (60,449,676) (19,091,976) (10,892,469) (21,614,763)
Net annuity
transactions.......... 730,038 (18,734) 658,118 (55,176) 75,085 141,714
--------------- ----------- ----------------- --------------- ------------- ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 168,713,025 (4,765) 141,115,555 (29,111,247) 58,010,790 41,795,782
--------------- ----------- ----------------- --------------- ------------- ------------------
Total increase
(decrease) in net
assets................ 543,489,291 50,644 360,828,769 (21,624,332) 99,407,648 82,488,028
NET ASSETS:
Beginning of period.... 2,357,217,790 1,541,876 1,074,971,652 221,415,738 165,395,372 328,307,965
--------------- ----------- ----------------- --------------- ------------- ------------------
End of period.......... $ 2,900,707,081 $1,592,520 $1,435,800,421 $199,791,406 $ 264,803,020 $410,795,993
--------------- ----------- ----------------- --------------- ------------- ------------------
--------------- ----------- ----------------- --------------- ------------- ------------------

U.S. GOVERNMENT CAPITAL MORTGAGE INTERNATIONAL
ADVISERS FUND MONEY MARKET FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- -------------------- ----------------- --------------- ------------- ------------------
OPERATIONS:
Net investment income
(loss)................ $ 47,996,996 $ 56,945 $ (2,372,963) $ 11,548,045 $ 1,542,554 $ 1,106,594
Capital gains income... 21,614,744 -- 34,687,769 -- 38,706 2,695,768
Net realized gain
(loss) on security
transactions.......... 1,643,658 -- 2,276,572 (490,628) 969,630 (488,089)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 410,209,012 -- 168,562,628 18,815,991 34,721,169 32,521,726
--------------- ----------- ----------------- --------------- ------------- ------------------
Net increase (decrease)
in net assets
resulting from
operations............ 481,464,410 56,945 203,154,006 29,873,408 37,272,059 35,835,999
--------------- ----------- ----------------- --------------- ------------- ------------------
UNIT TRANSACTIONS:
Purchases.............. 189,985,618 247,760 164,142,420 9,787,879 22,856,837 27,669,493
Net transfers.......... (5,608,414) 17,612 104,275,366 (15,085,789) 14,885,934 (24,115,834)
Surrenders............. (110,192,361) (76,250) (29,551,158) (16,689,694) (4,088,509) (12,086,298)
Net annuity
transactions.......... 487,625 84,208 482,089 13,331 84,999 124,982
--------------- ----------- ----------------- --------------- ------------- ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 74,672,468 273,330 239,348,717 (21,974,273) 33,739,261 (8,407,657)
--------------- ----------- ----------------- --------------- ------------- ------------------
Total increase
(decrease) in net
assets................ 556,136,878 330,275 442,502,723 7,899,135 71,011,320 27,428,342
NET ASSETS:
Beginning of period.... 1,801,080,912 1,211,601 632,468,929 213,516,603 94,384,052 300,879,623
--------------- ----------- ----------------- --------------- ------------- ------------------
End of period.......... $ 2,357,217,790 $1,541,876 $1,074,971,652 $221,415,738 $ 165,395,372 $328,307,965
--------------- ----------- ----------------- --------------- ------------- ------------------
--------------- ----------- ----------------- --------------- ------------- ------------------

<CAPTION>
DIVIDEND AND
GROWTH FUND
SUB-ACCOUNT
-------------
<S> <C>
OPERATIONS:
Net investment income
(loss)................ $ 2,667,791
Capital gains income... 2,810,352
Net realized gain
(loss) on security
transactions.......... (3,931)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 38,471,770
-------------
Net increase (decrease)
in net assets
resulting from
operations............ 43,945,982
-------------
UNIT TRANSACTIONS:
Purchases.............. 99,649,393
Net transfers.......... 73,409,821
Surrenders............. (8,580,693)
Net annuity
transactions.......... 330,214
-------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 164,808,735
-------------
Total increase
(decrease) in net
assets................ 208,754,717
NET ASSETS:
Beginning of period.... 115,579,204
-------------
End of period.......... $324,333,921
-------------
-------------
DIVIDEND AND
GROWTH FUND
SUB-ACCOUNT
-------------
OPERATIONS:
Net investment income
(loss)................ $ 1,044,698
Capital gains income... --
Net realized gain
(loss) on security
transactions.......... 4,933
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 18,047,295
-------------
Net increase (decrease)
in net assets
resulting from
operations............ 19,096,926
-------------
UNIT TRANSACTIONS:
Purchases.............. 37,005,986
Net transfers.......... 31,702,670
Surrenders............. (2,159,189)
Net annuity
transactions.......... 77,507
-------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 66,626,974
-------------
Total increase
(decrease) in net
assets................ 85,723,900
NET ASSETS:
Beginning of period.... 29,855,304
-------------
End of period.......... $115,579,204
-------------
-------------
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

SEPARATE ACCOUNT TWO

STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
CALVERT
RESPONSIBLY
INVESTED
BALANCED INTERNATIONAL SMALL SMITH BARNEY
PORTFOLIO ADVISERS FUND COMPANY FUND DAILY DIVIDEND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT*** SUB-ACCOUNT
--------------- ------------- ------------------ -------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 29,407 $ 644,546 $ (17,678) $ 22,053
Capital gains income... 140,994 595,787 -- --
Net realized gain
(loss) on security
transactions.......... 6,518 (3,562) 922 --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 78,661 708,119 74,459 --
--------------- ------------- ------------------ --------
Net increase (decrease)
in net assets
resulting from
operations............ 255,580 1,944,890 57,703 22,053
--------------- ------------- ------------------ --------
UNIT TRANSACTIONS:
Purchases.............. 501,957 10,618,419 4,333,960 25
Net transfers.......... 86,346 10,257,798 9,203,248 --
Surrenders............. (81,242) (609,471) (48,819) (10,494)
Net annuity
transactions.......... 135,085 -- -- --
--------------- ------------- ------------------ --------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 642,146 20,266,746 13,488,389 (10,469)
--------------- ------------- ------------------ --------
Total increase
(decrease) in net
assets................ 897,726 22,211,636 13,546,092 11,584
NET ASSETS:
Beginning of period.... 1,763,503 7,597,538 -- 569,347
--------------- ------------- ------------------ --------
End of period.......... $ 2,661,229 $ 29,809,174 $13,546,092 $580,931
--------------- ------------- ------------------ --------
--------------- ------------- ------------------ --------

STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1995

CALVERT
RESPONSIBLY
INVESTED SMITH BARNEY
BALANCED INTERNATIONAL CASH PORTFOLIO SMITH BARNEY
PORTFOLIO ADVISERS FUND CLASS A APPRECIATION FUND
SUB-ACCOUNT SUB-ACCOUNT* SUB-ACCOUNT SUB-ACCOUNT
--------------- ------------- ------------------ -------------------
OPERATIONS:
Net investment income
(loss)................ $ 87,446 $ 164,074 $ 26,340 $ 1,041
Capital gains income... 50,438 -- -- 11,468
Net realized gain
(loss) on security
transactions.......... 1,044 6,279 -- 148
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 184,034 177,844 -- 20,104
--------------- ------------- ------------------ --------
Net increase (decrease)
in net assets
resulting from
operations............ 322,962 348,197 26,340 32,761
--------------- ------------- ------------------ --------
UNIT TRANSACTIONS:
Purchases.............. 394,157 2,632,312 -- 50
Net transfers.......... 19,199 4,663,681 (10,709) --
Surrenders............. (28,010) (46,652) (92,200) (1,598)
Net annuity
transactions.......... 30,857 -- -- --
--------------- ------------- ------------------ --------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 416,203 7,249,341 (102,909) (1,548)
--------------- ------------- ------------------ --------
Total increase
(decrease) in net
assets................ 739,165 7,597,538 (76,569) 31,213
NET ASSETS:
Beginning of period.... 1,024,338 -- 645,916 117,221
--------------- ------------- ------------------ --------
End of period.......... $ 1,763,503 $ 7,597,538 $ 569,347 $148,434
--------------- ------------- ------------------ --------
--------------- ------------- ------------------ --------
</TABLE>

* From inception, March 31, 1995, to December 31, 1995.

** From inception, July 1, 1995, to December 31, 1995.

*** From inception, August 9, 1996, to December 31, 1996.

The accompanying notes are an integral part of these financial statements.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SMITH BARNEY
GOVERNMENT TCI FIDELITY VIP FIDELITY VIP II
SMITH BARNEY PORTFOLIO ADVANTAGE TCI OVERSEAS ASSET MANAGER
APPRECIATION FUND CLASS A FUND GROWTH FUND PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- -------------- -------------- ----------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 15,035 $ 1,646 $ 5,374 $ 86,878 $ (4,777) $ 14,241
Capital gains income... -- -- -- -- 4,080 --
Net realized gain
(loss) on security
transactions.......... 174 -- (110) 527 985 (71)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 11,776 -- 4,528 (155,560) 77,918 126,112
-------- ------- -------------- ----------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from
operations............ 26,985 1,646 9,792 (68,155) 78,206 140,282
-------- ------- -------------- ----------- ------------------ ------------------
UNIT TRANSACTIONS:
Purchases.............. -- -- 52,991 278,606 196,292 268,755
Net transfers.......... -- -- 63,519 248,714 626,400 1,181,511
Surrenders............. (2,558) (4,273) (218) (13,223) (27,202) (95,811)
Net annuity
transactions.......... -- -- (410) (374) -- --
-------- ------- -------------- ----------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (2,558) (4,273) 115,882 513,723 795,490 1,354,455
-------- ------- -------------- ----------- ------------------ ------------------
Total increase
(decrease) in net
assets................ 24,427 (2,627) 125,674 445,568 873,696 1,494,737
NET ASSETS:
Beginning of period.... 148,434 42,469 46,921 693,422 186,893 339,278
-------- ------- -------------- ----------- ------------------ ------------------
End of period.......... $172,861 $39,842 $172,595 $1,138,990 $1,060,589 $1,834,015
-------- ------- -------------- ----------- ------------------ ------------------
-------- ------- -------------- ----------- ------------------ ------------------

SMITH BARNEY FIDELITY
GOVERNMENT VIP FIDELITY VIP II FIDELITY VIP II
PORTFOLIO TCI TCI OVERSEAS ASSET MANAGER CONTRAFUND
CLASS A ADVANTAGE FUND GROWTH FUND PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT** SUB-ACCOUNT** SUB- ACCOUNT** SUB- ACCOUNT**
----------------- -------------- -------------- ----------- ------------------ ------------------
OPERATIONS:
Net investment income
(loss)................ $ 1,938 $ 549 $ (2,133) $ (491) $ (1,491) $ 19,233
Capital gains income... -- -- -- -- -- --
Net realized gain
(loss) on security
transactions.......... -- (90) 938 (240) 456 (577)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ -- 1,195 6,645 3,459 18,860 17,225
-------- ------- -------------- ----------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from
operations............ 1,938 1,654 5,450 2,728 17,825 35,881
-------- ------- -------------- ----------- ------------------ ------------------
UNIT TRANSACTIONS:
Purchases.............. -- 15,135 30,024 21,829 32,160 89,641
Net transfers.......... -- 40,646 669,352 172,761 300,031 1,871,915
Surrenders............. (7,562) (19,236) (20,127) (10,425) (10,738) (11,744)
Net annuity
transactions.......... -- 8,722 8,723 -- -- --
-------- ------- -------------- ----------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (7,562) 45,267 687,972 184,165 321,453 1,949,812
-------- ------- -------------- ----------- ------------------ ------------------
Total increase
(decrease) in net
assets................ (5,624) 46,921 693,422 186,893 339,278 1,985,693
NET ASSETS:
Beginning of period.... 48,093 -- -- -- -- --
-------- ------- -------------- ----------- ------------------ ------------------
End of period.......... $ 42,469 $46,921 $693,422 $ 186,893 $ 339,278 $1,985,693
-------- ------- -------------- ----------- ------------------ ------------------
-------- ------- -------------- ----------- ------------------ ------------------

<CAPTION>
FIDELITY
FIDELITY VIP II VIP
CONTRAFUND GROWTH
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
--------------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ (35,654) $ 10,178
Capital gains income... -- 115,329
Net realized gain
(loss) on security
transactions.......... (377) (6,795)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 910,896 420,263
--------------- -----------
Net increase (decrease)
in net assets
resulting from
operations............ 874,865 538,975
--------------- -----------
UNIT TRANSACTIONS:
Purchases.............. 928,554 1,249,738
Net transfers.......... 3,162,455 3,357,091
Surrenders............. (279,972) (334,425)
Net annuity
transactions.......... -- --
--------------- -----------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 3,811,037 4,272,404
--------------- -----------
Total increase
(decrease) in net
assets................ 4,685,902 4,811,379
NET ASSETS:
Beginning of period.... 1,985,693 2,204,486
--------------- -----------
End of period.......... $6,671,595 $7,015,865
--------------- -----------
--------------- -----------

FIDELITY VIP
GROWTH
PORTFOLIO
SUB-ACCOUNT**
---------------
OPERATIONS:
Net investment income
(loss)................ $ (6,603)
Capital gains income... --
Net realized gain
(loss) on security
transactions.......... (2,056)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (34,445)
---------------
Net increase (decrease)
in net assets
resulting from
operations............ (43,104)
---------------
UNIT TRANSACTIONS:
Purchases.............. 120,267
Net transfers.......... 2,148,417
Surrenders............. (21,094)
Net annuity
transactions.......... --
---------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 2,247,590
---------------
Total increase
(decrease) in net
assets................ 2,204,486
NET ASSETS:
Beginning of period.... --
---------------
End of period.......... $2,204,486
---------------
---------------
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

SEPARATE ACCOUNT TWO
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996

- ---------------------------------------------------

1. ORGANIZATION:

Separate Account Two (the Account) is a separate investment account within
Hartford Life Insurance Company (the Company) and is registered with the
Securities and Exchange Commission (SEC) as a unit investment trust under the
Investment Company Act of 1940, as amended. Both the Company and the Account are
subject to supervision and regulation by the Department of Insurance of the
State of Connecticut and the SEC. The Account invests deposits by variable
annuity contractholders of the Company in various mutual funds (the Funds) as
directed by the contractholders.

- ---------------------------------------------------

2. SIGNIFICANT ACCOUNTING POLICIES:

The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting principles
in the investment company industry:

a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividends and
capital gains income are accrued as of the ex-dividend date. Capital
gains income represents dividends from the Funds which are characterized
as capital gains under tax regulations.

b) SECURITY VALUATION--The investment in shares of the Hartford, Smith
Barney, TCI, Fidelity and Calvert Responsibily Invested Series mutual
funds are valued at the closing net asset value per share as determined
by the appropriate Fund as of December 31, 1996.

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.

d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of income and expenses during the period. Operating
results in the future could vary from the amounts derived from
management's estimates.

- ---------------------------------------------------

3.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 up to
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.

<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 of the board of directors of Hartford Life Insurance
Company ("Hartford") authorizing the establishment of the Separate
Account. (1)

(2) Not applicable.

(3)(a) Principal Underwriting Agreement. (2)

(3)(b) Form of Sales Agreement. (2)

(4) Form of Group Variable Annuity Contract. (1)

(5) Form of the Application. (1)

(6)(a) Articles of Incorporation of Hartford.

(b) Bylaws of Hartford. (1)

(7) Not applicable.

(8) Participation Agreement. (1)

(9) Opinion and Consent of Lynda Godkin, General Counsel.

(10) Consent of Arthur Andersen LLP, Independent Public Accountants.

(11) No financial statements are omitted.

(12) Not applicable.

(13) Not applicable.

- -------------------------

(1) Incorporated by reference to Pre-Effective Amendment No. 2, to the
Registration Statement File No. 33-59541, filed on December 29, 1995.

(2) Incorporated by reference to Post Effective Amendment No. 1, to the
Registration Statement File No. 33-59541, dated May 1, 1996.

<PAGE>
-2-

(14) Not applicable.

(15) Copy of Power of Attorney.

(16) Organizational Chart.

Item 25. Directors and Officers of the Depositor

NAME POSITION WITH HARTFORD
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------

Wendell J. Bossen Vice President

Gregory A. Boyko Vice President and Controller

Peter W. Cummins Vice President

Ann M. deRaismes Vice President

Timothy M. Fitch Vice President and Actuary

Bruce D. Gardner Vice President, Director*

Joseph H. Gareau Executive Vice President and Chief Investment
Officer, Director*

J. Richard Garrett Vice President and Treasurer

John P. Ginnetti Executive Vice President and Director, Asset
Management Services, Director*

Lynda Godkin General Counsel, and Corporate Secretary

Lois W. Grady Vice President

David A. Hall Senior Vice President and Actuary,

Robert A. Kerzner Vice President

Andrew W. Kohnke Vice President

Steven M. Maher Vice President and Actuary

William B. Malchodi, Jr. Vice President and Director of Taxes

Thomas M. Marra Executive Vice President and Director Individual
Life and Annuity Division, Director*

Robert F. Nolan Vice President

<PAGE>

-3-

NAME POSITION WITH HARTFORD
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------

Joseph J. Noto Vice President

Leonard E. Odell, Jr. Senior Vice President, Director*

Craig D. Raymond Vice President and Chief Actuary

Lowndes A. Smith President and Chief Operating Officer, Director*

Edward J. Sweeney Vice President

Raymond P. Welnicki Senior Vice President and Director, Employee Benefit
Division, Director*

Walter C. Welsh Vice President

James J. Westervelt Senior Vice President and Group Controller

Lizabeth H. Zlatkus Vice President, Director*

- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------

Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.

*Denotes Board of Directors.

Item 26. Persons Controlled By or Under Common Control with the Depositor
or Registrant

See Exhibit 16.

Item 27. Number of Contract Owners

As of March 31, 1997, there were 4,768 Contract Owners.

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

<PAGE>
-4-

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 Hartford and Hartford Securities
Distribution Company, Inc. ("HSD") are covered under a
directors and officers liability insurance policy issued to
ITT Hartford Insurance Group, Inc. 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.

<PAGE>

-5-

Item 29. Principal Underwriters

(a) HESCO acts as principal underwriter for the following investment
companies:

Hartford Life Insurance Company - Separate Account One
Hartford Life Insurance Company - Separate Account Two
Hartford Life Insurance Company - Separate Account Two
(DC Variable Account I)
Hartford Life Insurance Company - Separate Account Two
(DC Variable Account II)
Hartford Life Insurance Company - Separate Account Two
(QP Variable Account)
Hartford Life Insurance Company - Separate Account Two
(Variable Account "A")
Hartford Life Insurance Company - Separate Account Two
(NQ Variable Account)
Hartford Life Insurance Company - Putnam Capital Manager
Trust Separate Account
Hartford Life Insurance Company - Separate Account Three
Hartford Life Insurance Company - Separate Account Five
ITT Hartford Life and Annuity Insurance Company - Separate
Account One
ITT Hartford Life and Annuity Insurance Company - Putnam Capital
Manager Trust Separate Account Two
ITT Hartford Life and Annuity Insurance Company - Separate
Account Three
ITT Hartford Life and Annuity Insurance Company - Separate
Account Five
ITT Hartford Life and Annuity Insurance Company - Separate
Account Six

American Maturity Life Insurance - Separate Account AMLVA

(b) Directors and Officers of HSD

Name and Principal Positions and Offices
Business Address With Underwriter
------------------ ----------------------

Lowndes A. Smith President, Director
John P. Ginnetti Executive Vice President, Director
Thomas M. Marra Executive Vice President, Director
George R. Jay Controller
Peter W. Cummins Vice President
Donald E. Waggaman, Jr. Treasurer
Lynda Godkin Secretary
Michael Wilder Director

Item 30. Location of Accounts and Records

All of the accounts, books, records or other documents
required to be kept by Section 31(a) of the Investment Company
Act of 1940 and rules thereunder, are maintained by the
Hartford at 200 Hopmeadow Street, Simsbury, Connecticut 06089.

<PAGE>

-6-

Item 31. Management Services

All management contracts are discussed in Part A and Part B of
this registration statement.

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.

(d) Hartford hereby represents that the aggregate fees and
charges under the Contract are reasonable in relation to the
services rendered, the expenses expected to be incurred, and
the risks assumed by Hartford.

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.

<PAGE>

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets all the requirements for
effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and duly caused this Registration Statement to be
signed on its behalf, in the City of Hartford, and State of Connecticut on
this 10th day of April, 1997.

HARTFORD LIFE INSURANCE COMPANY -
SEPARATE ACCOUNT TWO (DC VARIABLE ACCOUNT II)
(Registrant)

*By: /s/ John P. Ginnetti *By: /s/ Lynda Godkin
------------------------------------------- ---------------------
John P. Ginnetti, Executive Vice President Lynda Godkin
Attorney-in-Fact

HARTFORD LIFE INSURANCE COMPANY
(Depositor)

*By: /s/ John P. Ginnetti
--------------------------------------------
John P. Ginnetti, Executive 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.

Bruce D. Gardner, Vice President,
Director *
Joseph H. Gareau, Executive Vice
President and Chief Investment
Officer, Director *
John P. Ginnetti, Executive Vice
President, Director *
Thomas M. Marra, Executive Vice *By: /s/ Lynda Godkin
President, Director * -------------------------------
Leonard E. Odell, Jr., Senior Lynda Godkin
Vice President, Director * Attorney-In-Fact
Lowndes A. Smith, President,
Chief Operating Officer, Director *

Dated: April 10, 1997

Raymond P. Welnicki, Senior Vice
President, Director *
Lizabeth H. Zlatkus, Vice President
Director*

33-59541

<PAGE>

EXHIBIT INDEX

6.(a) Articles of Incorporation of Hartford

9. Opinion and Consent of Lynda Godkin, General Counsel

10. Consent of Arthur Andersen LLP, Independent Public Accountants

15. Copy of Power of Attorney

16. Organizational Chart

<PAGE>

FILING #0001681565 PG 04 OF 05 VOL B-00105
FILED 12/31/1996 10:21 AM PAGE 00680
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE

HARTFORD LIFE INSURANCE COMPANY

CERTIFICATE AMENDING
RESTATED CERTIFICATE OF INCORPORATION
BY ACTIONS OF THE BOARD OF DIRECTORS AND THE SOLE SHAREHOLDER

1. The name of the Corporation is HARTFORD LIFE INSURANCE COMPANY.

2. The Restated Certificate of Incorporation of the Corporation is amended by
the following resolution of each of the Board of Directors and the Sole
Shareholder:

RESOLVED, that the Restated Certificate of Incorporation of the
Company, as supplemented and amended to date, is hereby further
amended by and adding the following Sections 4 and 5. All other
sections of the Restated Certificate of Incorporation shall
remain unchanged and continue in full force and effect.

"Section 4. The Board of Directors may, at any time, appoint
from among its own members such committees as it
may deem necessary for the proper conduct of the
business of the Company. The Board of Directors
shall be unrestricted as to the powers it may
confer upon such committees."

"Section 5. So much of the charter of said corporation, as
amended, as is inconsistent herewith is repealed,
provided that such repeal shall not invalidate or
otherwise affect any action taken pursuant to the
charter of the corporation, in accordance with its
terms, prior to the effective date of such
repeal."

3. The above resolutions were consented to by the Board of Directors and the
Sole Shareholder of the Corporation. The number of shares of the
Corporation's common capital stock entitled to vote thereon was 1,000 and
the vote required for adoption was 660 shares. The vote favoring adoption
was 1,000 shares, which was the greatest vote required to pass the
resolution.

<PAGE>

Dated at Simsbury, Connecticut this 30th day of December, 1996.

We hereby declare, under penalty of false statement, that the statements made in
the foregoing Certificate are true.

HARTFORD LIFE INSURANCE COMPANY

/s/ John P. Ginnetti
---------------------------------
John P. Ginnetti, Executive Vice
President

/s/ Lynda Godkin
---------------------------------
Lynda Godkin, Associate General Counsel
& Secretary

<PAGE>

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 issue cede
reinsurance; to issue policies and contracts for any kind
or combination of kinds of insurance; to 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.
<PAGE>

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 /s/ ROBERT B. GOODE, JR.
----------------------------
Attest:

/s/ WM. A. MCMAHON
- ----------------------

7342D

<PAGE>

EXHIBIT 9

THE [LOGO]
HARTFORD

April 10, 1997

Lynda Godkin
General Counsel & Secretary
Law Department
Board of Directors
Hartford Life Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089

RE: SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
FILE NO. 33-59541

Dear Sir/Madam:

I have acted as General Counsel to Hartford Life Insurance Company (the
"Company"), a Connecticut insurance company, and Hartford Life Insurance
Company Separate Account Two (the "Account") in connection with the
registration of an indefinite amount of securities in the form of variable
annuity contracts (the "Contracts") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended. I have examined
such documents (including the Form N-4 Registration Statement) and reviewed
such questions of law as I considered necessary and appropriate, and on the
basis of such examination and review, it is my opinion that:

1. The Company is a corporation duly organized and validly existing as a
stock life insurance company under the laws of the State of Connecticut and
is duly authorized by the Insurance Department of the State of Connecticut
to issue the Contracts.

2. The Account is a duly authorized and validly existing separate account
established pursuant to the provisions of Section 38a-433 of the
Connecticut Statutes.

3. To the extent so provided under the Contracts, that portion of the assets
of the Account equal to the reserves and other contract liabilities with
respect to the Account will not be chargeable with liabilities arising out
of any other business that the Company may conduct.

Hartford Life Insurance Companies
200 Hopmeadow Street
Simsbury, CT 06089
860 843 3153
860 843 8665 Fax

Mailing Address: P.O. Box 2999
Hartford, CT 06104-2999

<PAGE>

Board of Directors
Hartford Life Insurance Company
April 10, 1997
Page 2

4. The Contracts, when issued as contemplated by the Form N-4 Registration
Statement, will constitute legal, validly issued and binding obligations
of the Company.

I hereby consent to the filing of this opinion as an exhibit to the Form N-4
Registration Statement for the Contracts and the Account.

Sincerely,

/s/ Lynda Godkin

Lynda Godkin

<PAGE>

EXHIBIT 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. 33-59541 for Hartford Life Insurance
Company Separate Account Two (DC Variable Account-II) on Form N-4.

/s/Arthur Andersen LLP

Hartford, Connecticut
April 14, 1997

<PAGE>

HARTFORD LIFE INSURANCE COMPANY
AND
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY

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

do hereby jointly and severally authorize Lynda Godkin, Marianne O'Doherty,
and Margaret E. Hankard to sign as their agent, any Registration Statement,
pre-effective amendment, post-effective amendment and any application for
exemptive relief of the Hartford Life Insurance Company and Hartford Life and
Accident Insurance Company 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 /s/Leonard E. Odell, Jr.
- --------------------------------------- ----------------------------------
Donald R. Frahm Leonard E. Odell, Jr.

/s/Bruce D. Gardner /s/Lowndes A. Smith
- --------------------------------------- ----------------------------------
Bruce D. Gardner Lowndes A. Smith

/s/Joseph H. Gareau /s/Raymond P. Welnicki
- --------------------------------------- ----------------------------------
Joseph H. Gareau Raymond P. Welnicki

/s/John P. Ginetti /s/Lizabeth H. Zlatkus
- --------------------------------------- ----------------------------------
John P. Ginnetti Lizabeth H. Zlatkus

/s/Thomas M. Marra
- ---------------------------------------
Thomas M. Marra

Dated: December 3, 1996
-------------------

<PAGE>
EXHIBIT 16

<S><C>
ITT Hartford Group, Inc..
(Delaware)
|
- ----------------------------------------------------------------------------------------------------
Nutmeg Insurance Company The Hartford Investment
(Connecticut) Management Company
| (Delaware)
|
Hartford Fire Insurance Company
(Connecticut)
|
Hartford Accident and Indemnity Company
(Connecticut)
|
Hartford Life, Inc.
(Delaware)
|
Hartford Life and Accident Insurance Company
(Connecticut)
|
|
|
- -------------------------------------------------------------------------------------------------------------------
Alpine Life Hartford Financial Hartford Life American Maturity ITT Hartford Canada
Insurance Company Services Life Insurance Company Life Insurance Holdings, Inc.
(New Jersey) Insurance Co. (Connecticut) Company (Canada)
(Connecticut) | (Connecticut) |
| |
| |
| ITT Hartford Life
| Insurance Company
| of Canada
| (Canada)
|
|
- ------------------------------------------------------------------------------------------------------------------
ITT Hartford Life and Annuity ITT Hartford International Hartford Financial Services
Insurance Company Life Reassurance Corporation Corporation
(Connecticut) (Connecticut) (Delaware)
| |
| |
| |
ITT Hartford Life, Ltd. |
(Bermuda) |
|
|
- -----------------------------------------------------------------------------------------------------------------
MS Fund HL Funding HL Investment Hartford Hartford Securities ITT Comp. Emp.
America, Inc. Company, Inc. Advisors, Inc. Equity Sales Distribution Benefits Service
(Delaware) (Connecticut) (Connecticut) Company, Inc. Company, Inc. Company
(Connecticut) (Connecticut) (Connecticut)
</TABLE>