HARTFORD LIFE INSURANCE CO SEPARATE ACCOUNT TWO DC VAR AC II, 485BPOS, 1998-04-14

HARTFORD LIFE INSURANCE CO SEPARATE ACCOUNT TWO DC VAR AC II
485BPOS, 1998-04-14

Previous: INLAND STEEL INDUSTRIES INC /DE/, PRER14A, 1998-04-14

Next: HARTFORD LIFE INSURANCE CO SEPARATE ACCOUNT TWO DC VAR AC II, 485BPOS, 1998-04-14

<PAGE>

As filed with the Securities and Exchange Commission on April 14, 1998
File No. 33-19949
811-4372

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. 12 [X]
-----

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 90 [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 INC.
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, 1998 pursuant to paragraph (b) of Rule 485
-----
60 days after filing pursuant to paragraph (a)(1) of Rule 485
-----
on May 1, 1998 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.

<PAGE>

CROSS REFERENCE SHEET
PURSUANT TO RULE 495(a)

(PART A)

N-4 ITEM NO. PROSPECTUS HEADING
------------ -------------------

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 the Separate
Portfolio Companies Accounts; Hartford Life
Insurance Company and the Funds;
Miscellaneous

6. Deductions Charges Under the Contract

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

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 Statement Table of Contents of the
Additional Information Statement of Additional
Information

(PART B)

15. Cover Page Cover Page

16. Table of Contents Table of Contents

17. General Information and History Introduction

18. Services None

<PAGE>

19. Purchase of Securities being
Offered Distribution of Contracts

20. Underwriters Distribution of Contracts

21. Calculation of Performance Data Calculation of Yield and Return

22. Annuity Payments Annuity Benefits

23. Financial Statements Financial Statements

24. Financial Statements and Exhibits Financial Statements and
Exhibits

(PART C)

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
or Registrant Depositor 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

<PAGE>

HARTFORD
LIFE INSURANCE COMPANY

[LOGO]
MASTER GROUP VARIABLE ANNUITY CONTRACTS
WITH RESPECT TO DC-I AND DC-II

The variable annuity contracts (hereinafter the "contract" or "contracts" or
"Master 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.

On contracts issued in conjunction with a Deferred Compensation Plan of an
Employer, variable account Contributions are held in Hartford Life Insurance
Company DC Variable Account-I ("DC-I") during the Accumulation Period and in a
series of Hartford Life Insurance Company Separate Account Two ("DC-II")
during the Annuity Period. The contracts issued in connection with Deferred
Compensation Plans may contain additional separate accounts not described in
this Prospectus.

On contracts issued in conjunction with a Qualified Plan of an employer, all
variable account Contributions during both the Accumulation Period and Annuity
Period are held in DC-II.

The contracts to which contributions may be made may contain a General
Account option or a separate General Account contract may be issued in
conjunction with the contracts described herein. The General Account option or
contract may contain restrictions on a Contract Owner's ability to transfer
Participant Account Values to or from such contract or option. The General
Account option or contract and these restrictions, if any, are not described
in this Prospectus.

The contracts are used in conjunction with Deferred Compensation Plans of
tax-exempt and governmental employers as well as with Qualified Plans
established by Employers generally (tax-exempt and non-tax-exempt).

The following Sub-Accounts are available under the contracts. Opposite each
Sub-Account is the name of the underlying investment for that Account.

Advisers Fund -- shares of Class IA of Hartford Advisers HLS
Sub-Account Fund, Inc. ("Hartford Advisers Fund")
Bond Fund Sub-Account -- shares of Class IA of Hartford Bond HLS Fund,
Inc. ("Hartford Bond Fund")
Calvert Social Balanced -- shares of the Calvert Social Balanced Portfolio
Portfolio of Calvert Variable Series, Inc. ("Calvert
Sub-Account Social Balanced Portfolio")
Capital Appreciation -- shares of Class IA of Hartford Capital
Fund Sub-Account Appreciation HLS Fund, Inc., ("Hartford Capital
Appreciation Fund")
Dividend and Growth Fund -- shares of Class IA of Hartford Dividend and
Sub-Account Growth HLS Fund, Inc. ("Dividend and Growth
Fund")
Index Fund Sub-Account -- shares of Class IA of Hartford Index HLS Fund,
Inc. ("Hartford Index Fund")
International -- shares of Class IA of Hartford International
Opportunities Fund Opportunities HLS Fund, Inc. ("International
Sub-Account Opportunities Fund")
Money Market Fund -- shares of Class IA of Hartford Money Market MLS
Sub-Account Fund, Inc. ("Hartford Money Market Fund")
Mortgage Securities Fund -- shares of Class IA of Hartford Mortgage
Sub-Account Securities HLS Fund, Inc. ("Hartford Mortgage
Securities Fund")
Stock Fund Sub-Account -- shares of Class IA of Hartford Stock HLS Fund,
Inc. ("Hartford Stock Fund")

This Prospectus sets forth the information concerning the Separate Accounts
that investors ought to know before investing. This Prospectus should be kept
for future reference. Additional information about the Separate Accounts has
been filed with the Securities and Exchange Commission ("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:
AMS Service Center Administration, P.O. Box 2999, Hartford, CT 06104-2999. The
Table of Contents for the Statement of Additional Information may be found on
page 40 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.
------------------------------------------------------------------------------

THE CONTRACT IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR ENDORSED BY
ANY BANK. IT IS NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY GOVERNMENT AGENCY. INVESTMENT
IN A CONTRACT INVOLVES RISK, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT
INVESTED.

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

Prospectus Dated: May 1, 1998
Statement of Additional Information Dated: May 1, 1998

<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION PAGE
------------------------------------------------------------------------ ----
<S> <C>
GLOSSARY OF SPECIAL TERMS............................................... 3
FEE TABLE............................................................... 5
SUMMARY................................................................. 7
ACCUMULATION UNIT VALUES................................................ 10
PERFORMANCE RELATED INFORMATION......................................... 15
INTRODUCTION............................................................ 16
THE CONTRACTS AND THE SEPARATE ACCOUNTS ................................ 16
What are the contracts?.............................................. 16
Who can buy these contracts?......................................... 16
What are the Separate Accounts and how do they operate?.............. 17
OPERATION OF THE CONTRACT............................................... 18
How are Contributions credited?...................................... 18
May I make changes in the amounts of my Contributions?............... 18
May I transfer assets between Sub-Accounts?.......................... 18
May I systematically transfer assets to the Sub-Accounts?............ 19
What happens if the Contract Owner fails to make Contributions?...... 19
May I assign or transfer the contract?............................... 19
How do I know what my account is worth?.............................. 20
How is the Accumulation Unit value determined?....................... 20
How are the underlying Fund shares valued?........................... 20
PAYMENT OF BENEFITS..................................................... 20
What would my Beneficiary receive as death proceeds?................. 20
How can a contract be redeemed or surrendered?....................... 21
Can payment of the redemption or surrender value ever be postponed
beyond the seven day period?...................................... 21
May I surrender once Annuity payments have started?.................. 21
What are Annuity Rights?............................................. 22
Can a contract be suspended by a Contract Owner?..................... 22
How do I elect an Annuity Commencement Date and Form of Annuity?..... 22
What is the minimum amount that I may select for an Annuity
payment?.......................................................... 22
How are Contributions made to establish my Annuity account?.......... 22
What are the available Annuity options under the contracts?.......... 23
How are Variable Annuity payments determined?........................ 24
Can a contract be modified?.......................................... 25
CHARGES UNDER THE CONTRACT.............................................. 25
How are the charges under these contracts made?...................... 25
Is there ever a time when the sales charges do not apply?............ 26
What do the sales charges cover?..................................... 26
What is the mortality, expense risk and administrative charge?....... 26
Are there any other administrative charges?.......................... 27
Experience Rating of Contracts....................................... 27
How much are the deductions for Premium Taxes on these contracts?.... 28
What charges are made by the Funds?.................................. 28
Are there any other deductions?...................................... 28
HARTFORD LIFE INSURANCE COMPANY AND THE FUNDS........................... 28
What is Hartford?.................................................... 28
What are the Funds?.................................................. 28
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 Accounts?...... 36
How are the contracts sold?.......................................... 36
Who is the custodian of the Separate Accounts' assets?............... 36
Are there any material legal proceedings affecting the Separate
Accounts?......................................................... 36
Are you relying on any experts as to any portion of this
Prospectus?....................................................... 36
How may I get additional information?................................ 36
APPENDIX -- ACCUMULATION PERIOD UNDER PRIOR GROUP CONTRACTS............. 37
TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION............... 40
</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.

ADMINISTRATIVE OFFICE OF HARTFORD: Currently located at 200 Hopmeadow Street,
Simsbury, CT. All correspondence concerning this Contract should be sent to P.O.
Box 2999, Hartford, CT 06104-2999 Attn: AMS Service Center Administration,
except for overnight or express mail packages, which should be sent to: 200
Hopmeadow Street, Simsbury, CT.

ANNUAL MAINTENANCE FEE: An annual $25 charge on a Contract having a Contract
value of less than $50,000, as determined on the most recent Contract
Anniversary or upon full surrender of the Contract. The charge is deducted
proportionately from the investment options in use at the time of such
deduction.

ANNUITANT: A Participant on whose behalf Annuity payments are to be made under a
contract.

ANNUITANT'S ACCOUNT: An account established at the commencement of the Annuity
Period under which Annuity payments are made under the contracts.

ANNUITY: A series of payments for life, or for life with a minimum number of
payments or a determinable sum guaranteed, or for a joint lifetime and
thereafter during the lifetime of the survivor, or for payments for a designated
period.

ANNUITY COMMENCEMENT DATE: The date on which Annuity payments are to commence.

ANNUITY PERIOD: The period following the commencement of Annuity payments.

ANNUITY RIGHTS: The Contract Owner's right in situations where the contract is
issued in conjunction with a Deferred Compensation Plan to apply up to five
times the gross contributions made to the contract during the Accumulation
Period (in DC-I only), at the Annuity rates set forth in the contract at the
time of issue, at the commencement of the Annuity Period to effect Annuity
payments.

ANNUITY UNIT: An accounting unit of measure in the Separate Account used to
calculate the amount of Variable Annuity payments.

BENEFICIARY: The person(s) designated to receive contract values in the event of
the Participant's or Annuitant's death.

CODE: The Internal Revenue Code of 1986, as amended.

COMMISSION: Securities and Exchange Commission.

CONTRACT OWNER: The Employer or entity owning the contract.

CONTRACT YEAR: A period of 12 months commencing with the effective date of the
contract or with any anniversary thereof.

CONTRIBUTION(S): The amount(s) paid or transferred to Hartford, by the Contract
Owner 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.

DEFERRED COMPENSATION PLAN: A plan established and maintained in accordance with
the provisions of Section 457 of the Internal Revenue Code and the regulations
issued thereunder.

DC VARIABLE ACCOUNT I: Hartford Life Insurance Company DC Variable Account I.

DC VARIABLE ACCOUNT II: A series of Hartford Life Insurance Company Separate
Account Two.

EMPLOYER: A governmental or tax-exempt Employer maintaining a Deferred
Compensation Plan for its Employees or an Employer establishing a Qualified Plan
for its Employees.

FIXED ANNUITY: An Annuity providing for guaranteed payments which remain fixed
in amount throughout the payment period and which do not vary with the
investment experience of a separate account.

FUNDS: Currently, the Funds described commencing on page 29 of this Prospectus.

3
<PAGE>
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.

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

PARTICIPANT: A term used to describe, for recordkeeping purposes only, any
Employee electing to participate in the Deferred Compensation or Qualified Plan
of the Employer/Contract Owner.

PARTICIPANT'S CONTRACT YEAR: A period of twelve (12) months commencing with the
Date of Coverage of a Participant and each successive 12 month period
thereafter.

PARTICIPANT'S INDIVIDUAL ACCOUNT: An account to which the General Account values
and the Separate Account Accumulation Units held by the Contract Owner on behalf
of Participant under the contract are allocated.

PLAN: The Deferred Compensation Plan or Qualified Plan of an Employer.

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

QUALIFIED PLAN: A voluntary plan of an Employer which qualifies for special tax
treatment under a particular section of the Internal Revenue Code.

SEPARATE ACCOUNT: The separate accounts entitled Hartford Life Insurance Company
DC Variable Account-I ("DC-I") and a series of Hartford Life Insurance Company
Separate Account Two ("DC-II").

SUB-ACCOUNT: Accounts established within the Separate Accounts with respect to a
Fund.

VALUATION DAY: Every day the New York Stock Exchange is open for trading. The
value of the Separate Account is determined at the close of the New York Stock
Exchange (generally 4:00 p.m. Eastern Time) on such days.

VALUATION PERIOD: The period between successive Valuation Days.

VARIABLE ANNUITY: An Annuity providing for payments varying in amount in
accordance with the investment experience of the assets held in the underlying
securities of the Separate Account.

4
<PAGE>

FEE TABLE
SUMMARY
Contract Owner Transaction Expenses
(All Sub-Accounts)

<TABLE>
<S> <C>
Sales Charge on Purchases (as a percentage of premium payments)... None
Transfer Fee...................................................... $ 0
Contingent Deferred Sales Charge (as a percentage of amounts
withdrawn)......................................................
Contracts under which variable account Contributions are held
under Separate Account DC-I during the Accumulation Period:
First through Sixth Year...................................... 5%
Seventh and Eighth Year....................................... 4%
Ninth and Tenth Year.......................................... 3%
Eleventh and Twelfth Year..................................... 2%
Thirteenth Year............................................... 0%
Contracts under which variable account Contributions are held
under Separate Account DC-II during the Accumulation Period:
First through Eighth Year..................................... 5%
Ninth through Fifteenth Year.................................. 3%
Sixteenth Year................................................ 0%
Annual Contract Fee (DC-I)........................................ None
Annual Contract Fee (DC-II)....................................... $25.00
Annual Expenses-Separate Account (as a percentage of average
account value)..................................................
Mortality and Expense Risk (DC-I) (1)......................... 0.900%
Mortality and Expense Risk (DC-II)............................ 1.250%
</TABLE>

The Transfer Fee, Contingent Deferred Sales Charge, and Annual Contract Fee
and Mortality and Expense Risk charge may be reduced or eliminated. See
"Experience Rating of Contracts," page 27 .

- ---------

(1) The Mortality and Expense Risk charge under Separate Account DC-I is 0.750%
of the average daily net assets of DC-I for contract values which exceed $50
million.

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF NET ASSETS)

<TABLE>
<CAPTION>
TOTAL FUND
OPERATING
MANAGEMENT OTHER EXPENSES
FEES EXPENSES (AFTER ANY
(AFTER ANY (AFTER FEE WAIVERS
FEE ANY EXPENSE AND EXPENSE
WAIVERS) REIMBURSEMENT) REIMBURSEMENTS)
---------- -------------- ---------------
<S> <C> <C> <C>
Hartford Bond Fund.............................. 0.490% 0.020% 0.510%
Hartford Stock Fund............................. 0.430% 0.020% 0.450%
Hartford Money Market Fund...................... 0.425% 0.015% 0.440%
Hartford Advisers Fund.......................... 0.610% 0.020% 0.630%
Hartford Capital Appreciation Fund.............. 0.620% 0.020% 0.640%
Hartford Mortgage Securities Fund............... 0.425% 0.025% 0.450%
Hartford Index Fund............................. 0.375% 0.015% 0.390%
Hartford International Opportunities Fund....... 0.680% 0.090% 0.770%
Calvert Social Balanced Portfolio (1)........... 0.690% 0.120% 0.810%
Hartford Dividend & Growth Fund................. 0.660% 0.020% 0.680%
</TABLE>

- ---------

(1) The figures above for the Calvert Social Balanced Portfolio reflect expenses
for fiscal year 1997, and have been restated to reflect an increase in
transfer agency expenses of 0.01% for the Portfolio expected to be incurred
in 1998. Management and Advisory Expenses includes a performance adjustment,
which depending on performance, could cause the fee to be as high as 0.85%
or as low as 0.55%. "Other Expenses" reflect an indirect fee. Net fund
operating expenses after reductions for fees paid indirectly (again,
restated) would be 0.78%.

5
<PAGE>

EXAMPLE-DC-I (0.900% MORTALITY AND EXPENSE RISK CHARGE)

<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 the assets:

SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bond Fund................ $ 66 $ 100 $ 137 $ 213 $ 14 $ 45 $ 78 $ 170 $ 14 $ 45 $ 78 $ 170
Stock Fund............... 66 100 137 213 14 43 74 163 14 43 74 163
Money Market Fund........ 66 98 134 205 14 43 74 162 14 43 74 162
Advisers Fund............ 67 104 143 225 16 49 84 183 16 49 84 183
Capital Appreciation
Fund................... 67 104 144 227 16 49 85 185 16 49 85 185
Mortgage Securities
Fund................... 66 99 134 206 14 43 74 163 14 43 74 163
Index Fund............... 65 97 131 199 13 41 71 156 13 41 71 156
International
Opportunities Fund..... 69 108 150 240 17 53 91 199 17 53 91 199
Calvert Social Balanced
Portfolio.............. 69 109 152 245 18 54 94 203 18 54 94 203
Dividend & Growth Fund... 68 105 146 231 16 50 87 189 16 50 87 189
</TABLE>

The purpose of this table is to assist the Contract Owner in understanding
various costs and expenses that a Contract Owner will bear directly or
indirectly. This 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.

EXAMPLE-DC-I (0.75% MORTALITY AND EXPENSE RISK CHARGE)

SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bond Fund................ $ 65 $ 96 $ 130 $ 196 $ 13 $ 40 $ 70 $ 153 $ 13 $ 40 $ 70 $ 153
Stock Fund............... 64 94 126 190 12 38 66 146 12 38 66 146
Money Market Fund........ 64 94 126 188 12 38 66 145 12 38 66 145
Advisers Fund............ 66 100 136 209 14 44 76 167 14 44 76 167
Capital Appreciation
Fund................... 66 100 136 210 14 44 77 168 14 44 77 168
Mortgage Securities
Fund................... 64 94 126 190 12 38 66 146 12 38 66 146
Index Fund............... 64 92 123 183 12 36 63 139 12 36 63 139
International
Opportunities Fund..... 67 104 143 224 16 48 83 182 16 48 83 182
Calvert Social Balanced
Portfolio.............. 68 105 145 229 16 50 86 187 16 50 86 187
Dividend & Growth Fund... 66 101 138 215 15 46 79 172 15 46 79 172
</TABLE>

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

EXAMPLE-DC-II (1.25% MORTALITY AND EXPENSE RISK CHARGE)

SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bond Fund................ $ 70 $ 113 $ 158 $ 257 $ 18 $ 57 $ 99 $ 215 $ 19 $ 58 $ 100 $ 216
Stock Fund............... 70 111 155 251 17 55 96 209 18 56 97 210
Money Market Fund........ 70 111 155 250 17 55 95 208 18 56 96 209
Advisers Fund............ 71 116 164 269 19 61 105 228 20 62 106 229
Capital Appreciation
Fund................... 72 117 165 270 19 61 106 229 20 62 107 230
Mortgage Securities
Fund................... 70 111 155 251 17 55 96 209 18 56 97 210
Index Fund (1)........... 69 109 152 245 17 54 93 202 18 54 94 203
International
Opportunities Fund..... 73 121 171 284 21 65 113 243 21 66 113 244
Calvert Social Balanced
Portfolio.............. 73 122 173 288 21 67 115 247 22 67 115 248
Dividend & Growth Fund... 72 118 167 275 20 63 108 234 21 63 109 234
</TABLE>

- ---------

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

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

6
<PAGE>
SUMMARY

A. CONTRACTS OFFERED

Group contracts issued in conjunction with a Deferred Compensation Plan or a
Qualified Plan of an employer are offered.

The Qualified Plan contracts available with respect to DC-II are limited to
plans established and sponsored by Employers for their Employees. Qualified
Plans provide a way for an Employer to establish a funded retirement plan for
its Employees. The contract is normally issued to the Employer or to the trustee
or custodian of the Employer's Plan.

Contract Owners who have purchased a prior series of contracts may continue
to make Contributions to such contracts subject to the terms and provisions of
their contracts. New Participants may be added to existing contracts of the
prior series but no new contracts of that series will be issued. Prior Contract
Owners are referred to the Appendix (commencing on page 37) for a description of
the sales charges and other expenses applicable to earlier series of contracts.

B. ACCUMULATION PERIOD UNDER THE CONTRACTS

During the Accumulation Period under the contracts, Contributions made by
the Employer to the contracts are used to purchase variable account interests.
Contributions allocated to purchase variable interests may, after the deductions
described hereafter, be invested in selected Sub-Accounts of the Separate
Account, as appropriate.

C. CONTINGENT DEFERRED SALES CHARGES

No deduction for sales expense is made at the time of allocation of
Contributions to the contracts. For Contracts under which variable account
Contributions are held under Separate Account DC-I during the Accumulation
Period, a deduction for contingent deferred sales charges is made if there is
any surrender of contract values during the first 12 Participant's Contract
Years. During the first six years thereof, a maximum deduction of 5% will be
made against the full amount of any such surrender. During the next two years
thereof, a maximum deduction of 4% will be made against the full amount of any
such surrender. During the next two years thereof, a maximum deduction of 3%
will be made against the full amount of any such surrender. During the next two
years thereof, a maximum deduction of 2% will be made against the full amount of
any such surrender. For Contracts under which variable account Contributions are
held under Separate Account DC-II during the Accumulation Period, a deduction
for contingent deferred sales charges is made if there is any surrender of
contract values during the first 15 Participant Contract Years. During the first
8 years thereof, a maximum deduction of 5% will be made against the full amount
of any such surrender. During the next 7 years thereof, a maximum deduction of
3% will be made against the full amount of any such Contributions to a
Participant's Individual Account. The amount or term of the contingent deferred
sales charge may be reduced (see "Charges Under the Contract -- Experience
Rating of Contracts," page 27).

No deduction for contingent deferred sales charges will be made in certain
cases. (See "Is there ever a time when the sales charges do not apply?"
commencing on page 26.)

Hartford reserves the right to limit any increase in the Contributions made
to a Participant's Individual Account under any contract to no more than three
times the total Contributions made on behalf of such Participant during the
initial 12 consecutive months following the Date of Coverage. Increases in
excess of those described will be accepted only with the consent of Hartford and
subject to the then current deductions being made under the contracts.

D. TRANSFER BETWEEN ACCOUNTS

During the Accumulation Period a Contract Owner may allocate monies held in
the Separate Account among the available Sub-Accounts of the Separate Account.
There may be restrictions under certain circumstances (see "May I transfer
assets between Sub-Accounts?" commencing on page 18).

E. ANNUITY PERIOD UNDER THE CONTRACTS

Contract values held with respect to Participants' Individual Accounts with
respect to DC-I or DC-II, as appropriate, at the end of the Accumulation Period
(and any additional Contributions that a Deferred Compensation Plan Contract
Owner (DC-I, only) elects to make at the commencement of the Annuity Period)
will, at the direction of the Contract Owner, be allocated to establish
Annuitants' Accounts to provide Fixed and/or Variable Annuities under the
contracts.

7
<PAGE>
Additional Contributions made under the contracts (on Deferred Compensation
Plans written with respect to DC-I only) at the beginning of the Annuity Period,
to effect increased Fixed and/or Variable Annuity payments, will be subject to a
sales charge deduction in the maximum amount of 3.50% of such Contribution. (See
"How are Contributions made to establish my Annuity account?" commencing on page
22.)

F. MINIMUM DEATH BENEFITS

A Minimum Death Benefit is provided in the event of death of the Participant
under a Participant's Individual Account prior to the earlier of the
Participant's 65th birthday or the Annuity Commencement Date. (See "What would
my Beneficiary receive as death proceeds?" commencing on page 20.)

G. ANNUITY OPTIONS

The Annuity Commencement Date will not be deferred beyond the Participant's
75th birthday or such earlier date as may be required by applicable law and/or
regulation. If a Contract Owner 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 23.)
However, Hartford will not assume responsibility in determining or monitoring
minimum distributions beginning at age 70 1/2. When an Annuity is purchased by a
Contract Owner for an Annuitant, unless otherwise specified, DC-I or DC-II
Accumulation Unit Values will be applied to provide a Variable Annuity under
DC-II.

H. DEDUCTIONS FOR PREMIUM TAXES

Deductions will be made during the Accumulation Period and Annuity Period,
as appropriate, for the payment of any Premium Taxes that may be levied against
the contract by a state or other governmental entity. The range is generally
between 0% and 3.50%. (See "Charges Under the Contract," page 25.)

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. With respect to contract values held in DC-I,
such charge is an annual rate of .90% (.50% for mortality, .15% for expense and
..25% for administrative undertakings) of the average daily net assets of DC-I;
however, where contract values exceed fifty million dollars ($50,000,000.00),
such charge is an annual rate of .75% (.50% for mortality, .10% for expense and
..15% for administrative undertakings) of the average daily net assets of DC-I.
With respect to contract values held in DC-II, such charge is an annual rate of
1.25% (.85% for mortality, .15% for expense and .25% for administrative
undertakings) of the average daily net assets of DC-II. The rate charged for the
mortality, expense and administrative undertakings under the contracts maybe
reduced (see "Charges Under the Contract -- Experience Rating of Contracts,"
page 27). The rate charged for the expense, mortality and administrative
undertakings may be periodically increased by Hartford subject to a maximum
annual rate of 2.00%, provided, however, that no such increase will occur unless
the Commission shall have first approved any such increase. (See "Charges Under
the Contract," page 25.)

J. ANNUAL MAINTENANCE FEE

An Annual Maintenance 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. Currently, there is an Annual Maintenance Fee of $25.00 assessed
against any Participant's Individual Account value in Separate Account DC-II.
Hartford reserves the right to reduce or waive the Annual Maintenance Fee under
certain conditions (see "Charges Under the Contract -- Experience Rating of
Contracts," page 27).

K. FUND FEES AND CHARGES

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

L. MINIMUM PAYMENT

The minimum Contribution that may be made each month on behalf of a
Participant's Individual Account under a contract is $30.00, unless the
Employer's Plan provides otherwise.

8
<PAGE>

M. PAYMENT ALLOCATION TO THE SEPARATE ACCOUNTS

The contracts permit the allocation of Contributions, in multiples of ten
percent of each Contribution among the several Sub-Accounts of DC-I and DC-II.
The minimum amount that may be allocated to or invested in Accumulation Units of
any Sub-Account in a Separate Account shall not be less than $10.00.

N. VOTING RIGHTS OF CONTRACT OWNERS

Contract Owners and/or vested Participants will have the right to vote on
matters affecting the underlying Fund to the extent that proxies are solicited
by such Fund. If a Contract Owner does not vote, 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.)

9
<PAGE>
ACCUMULATION UNIT VALUES
(FOR AN ACCUMULATION UNIT OUTSTANDING THROUGHOUT THE PERIOD)

The following information has been derived from the audited financial
statements of the Separate Accounts, which have been audited by Arthur Andersen,
LLP, independent public accountants, as indicated in their reports thereto, and
should be read in conjunction with those statements which are included in the
Statement of Additional Information, which is incorporated by reference in this
Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990
-------- -------- -------- ------- ------- ------- ------- -------
DC-I
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BOND FUND SUB-ACCOUNT
(INCEPTION DATE AUGUST 3, 1982)
Accumulation unit value at beginning of
period................................. $ 4.201 $ 4.099 $ 3.499 $ 3.689 $ 3.388 $ 3.251 $ 2.827 $ 2.640
Accumulation unit value at end of
period................................. $ 4.641 $ 4.201 $ 4.099 $ 3.499 $ 3.689 $ 3.388 $ 3.251 $ 2.827
Number accumulation units outstanding at
end of period
(in thousands)......................... 8,821 8,711 8,630 9,090 10,092 10,253 10,201 9,871
DC-I
STOCK FUND SUB-ACCOUNT
(INCEPTION DATE AUGUST 3, 1982)
Accumulation unit value at beginning of
period................................. $ 11.059 $ 8.979 $ 6.773 $ 6.990 $ 6.190 $ 5.695 $ 4.628 $ 4.875
Accumulation unit value at end of
period................................. $ 14.413 $ 11.059 $ 8.979 $ 6.773 $ 6.990 $ 6.190 $ 5.695 $ 4.628
Number accumulation units outstanding at
end of period
(in thousands)......................... 44,558 42,224 39,271 39,551 37,542 34,861 32,700 29,962
DC-I
MONEY MARKET FUND SUB-ACCOUNT
(INCEPTION DATE JUNE 14, 1982)
Accumulation unit value at beginning of
period................................. $ 2.738 $ 2.629 $ 2.515 $ 2.450 $ 2.410 $ 2.354 $ 2.248 $ 2.106
Accumulation unit value at end of
period................................. $ 2.861 $ 2.738 $ 2.629 $ 2.515 $ 2.450 $ 2.410 $ 2.354 $ 2.248
Number accumulation units outstanding at
end of period
(in thousands)......................... 11,208 9,609 7,884 9,548 9,298 9,999 10,936 11,181
DC-I
ADVISERS FUND SUB-ACCOUNT
(INCEPTION DATE MAY 2, 1983)
Accumulation unit value at beginning of
period................................. $ 4.213 $ 3.649 $ 2.876 $ 2.993 $ 2.700 $ 2.524 $ 2.123 $ 2.123
Accumulation unit value at end of
period................................. $ 5.204 $ 4.213 $ 3.649 $ 2.876 $ 2.993 $ 2.700 $ 2.524 $ 2.123
Number accumulation units outstanding at
end of period
(in thousands)......................... 137,947 136,232 128,415 126,437 119,064 105,648 93,981 84,223
DC-I
CAPITAL APPRECIATION FUND SUB-ACCOUNT
(INCEPTION DATE APRIL 2, 1984)
Accumulation unit value at beginning of
period................................. $ 6.552 $ 5.482 $ 4.257 $ 4.204 $ 3.524 $ 3.050 $ 2.004 $ 2.278
Accumulation unit value at end of
period................................. $ 7.952 $ 6.552 $ 5.482 $ 4.257 $ 4.204 $ 3.524 $ 3.050 $ 2.004
Number accumulation units outstanding at
end of period
(in thousands)......................... 62,609 59,279 52,278 46,086 36,598 25,900 19,437 15,293
DC-I
MORTGAGE SECURITIES FUND SUB-ACCOUNT
(INCEPTION DATE JANUARY 15, 1985)
Accumulation unit value at beginning of
period................................. $ 2.430 $ 2.335 $ 2.034 $ 2.093 $ 1.993 $ 1.929 $ 1.702 $ 1.571
Accumulation unit value at end of
period................................. $ 2.628 $ 2.430 $ 2.335 $ 2.034 $ 2.093 $ 1.993 $ 1.929 $ 1.702
Number accumulation units outstanding at
end of period
(in thousands)......................... 9,204 10,597 11,067 10,782 11,722 12,046 11,855 10,291

1989 1988
------- -------
DC-I
<S> <C> <C>
BOND FUND SUB-ACCOUNT
(INCEPTION DATE AUGUST 3, 1982)
Accumulation unit value at beginning of
period................................. $ 2.384 $ 2.244
Accumulation unit value at end of
period................................. $ 2.640 $ 2.384
Number accumulation units outstanding at
end of period
(in thousands)......................... 9,462 9,015
DC-I
STOCK FUND SUB-ACCOUNT
(INCEPTION DATE AUGUST 3, 1982)
Accumulation unit value at beginning of
period................................. $ 3.916 $ 3.332
Accumulation unit value at end of
period................................. $ 4.875 $ 3.916
Number accumulation units outstanding at
end of period
(in thousands)......................... 28,198 25,658
DC-I
MONEY MARKET FUND SUB-ACCOUNT
(INCEPTION DATE JUNE 14, 1982)
Accumulation unit value at beginning of
period................................. $ 1.954 $ 1.842
Accumulation unit value at end of
period................................. $ 2.106 $ 1.954
Number accumulation units outstanding at
end of period
(in thousands)......................... 8,871 8,703
DC-I
ADVISERS FUND SUB-ACCOUNT
(INCEPTION DATE MAY 2, 1983)
Accumulation unit value at beginning of
period................................. $ 1.766 $ 1.566
Accumulation unit value at end of
period................................. $ 2.123 $ 1.766
Number accumulation units outstanding at
end of period
(in thousands)......................... 74,660 62,335
DC-I
CAPITAL APPRECIATION FUND SUB-ACCOUNT
(INCEPTION DATE APRIL 2, 1984)
Accumulation unit value at beginning of
period................................. $ 1.858 $ 1.490
Accumulation unit value at end of
period................................. $ 2.278 $ 1.858
Number accumulation units outstanding at
end of period
(in thousands)......................... 13,508 9,970
DC-I
MORTGAGE SECURITIES FUND SUB-ACCOUNT
(INCEPTION DATE JANUARY 15, 1985)
Accumulation unit value at beginning of
period................................. $ 1.406 $ 1.313
Accumulation unit value at end of
period................................. $ 1.571 $ 1.406
Number accumulation units outstanding at
end of period
(in thousands)......................... 8,919 9,005
</TABLE>

10
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990
-------- -------- -------- ------- ------- ------- ------- -------
DC-I
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INDEX FUND SUB-ACCOUNT
(INCEPTION DATE JUNE 3, 1987)
Accumulation unit value at beginning of
period................................. $ 1.520 $ 2.353 $ 1.738 $ 1.735 $ 1.605 $ 1.522 $ 1.190 $ 1.255
Accumulation unit value at end of
period................................. $ 1.907 $ 1.520 $ 2.353 $ 1.738 $ 1.735 $ 1.605 $ 1.522 $ 1.190
Number accumulation units outstanding at
end of period
(in thousands)......................... 67,788 49,989 19,816 15,356 13,489 11,720 8,519 6,350
DC-I
CALVERT SOCIAL BALANCED PORTFOLIO
SUB-ACCOUNT
(INCEPTION DATE JANUARY 25, 1989)
Accumulation unit value at beginning of
period................................. $ 2.152 $ 1.929 $ 1.504 $ 1.573 $ 1.475 $ 1.388 $ 1.207 $ 1.173
Accumulation unit value at end of
period................................. $ 2.563 $ 2.152 $ 1.929 $ 1.504 $ 1.573 $ 1.475 $ 1.388 $ 1.207
Number accumulation units outstanding at
end of period
(in thousands)......................... 10,795 10,160 9,009 7,899 7,199 5,215 3,508 2,036
DC-I
INTERNATIONAL OPPORTUNITIES FUND
SUB-ACCOUNT
(INCEPTION DATE JULY 2, 1990)
Accumulation unit value at beginning of
period................................. $ 1.488 $ 1.330 $ 1.181 $ 1.220 $ 0.924 $ 0.979 $ 0.877 $ 1.000
Accumulation unit value at end of
period................................. $ 1.459 $ 1.488 $ 1.330 $ 1.181 $ 1.220 $ 0.924 $ 0.979 $ 0.877
Number accumulation units outstanding at
end of period
(in thousands)......................... 38,369 43,558 35,671 38,270 19,894 8,061 4,663 2,564
DC-I
DIVIDEND & GROWTH FUND SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1995)
Accumulation unit value at beginning of
period................................. $ 1.490 $ 1.224 $ 1.000 -- -- -- -- --
Accumulation unit value at end of
period................................. $ 1.949 $ 1.490 $ 1.224 -- -- -- -- --
Number accumulation units outstanding at
end of period
(in thousands)......................... 37,647 20,897 6,317 -- -- -- -- --
DC-II (1.25%)
BOND FUND SUB-ACCOUNT
(INCEPTION DATE AUGUST 25, 1982)
Accumulation unit value at beginning of
period................................. $ 4.187 $ 4.095 $ 3.500 $ 3.689 $ 3.389 $ 3.251 $ 2.827 $ 2.641
Accumulation unit value at end of
period................................. $ 4.604 $ 4.187 $ 4.095 $ 3.500 $ 3.689 $ 3.389 $ 3.251 $ 2.827
Number accumulation units outstanding at
end of period
(in thousands)......................... 1,606 1,655 1,368 1,123 992 816 732 724
DC-II (1.25%)
STOCK FUND SUB-ACCOUNT
(INCEPTION DATE JUNE 29, 1982)
Accumulation unit value at beginning of
period................................. $ 11.017 $ 8.968 $ 6.771 $ 6.988 $ 6.188 $ 5.694 $ 4.627 $ 4.874
Accumulation unit value at end of
period................................. $ 14.295 $ 11.017 $ 8.968 $ 6.771 $ 6.988 $ 6.188 $ 5.694 $ 4.627
Number accumulation units outstanding at
end of period
(in thousands)......................... 5,082 4,885 4,413 3,885 3,181 2,517 1,885 1,467
DC-II (1.25%)
MONEY MARKET FUND SUB-ACCOUNT
(INCEPTION DATE JUNE 29, 1982)
Accumulation unit value at beginning of
period................................. $ 2.725 $ 2.624 $ 2.512 $ 2.447 $ 2.407 $ 2.351 $ 2.245 $ 2.103
Accumulation unit value at end of
period................................. $ 2.834 $ 2.725 $ 2.624 $ 2.512 $ 2.447 $ 2.407 $ 2.351 $ 2.245
Number accumulation units outstanding at
end of period
(in thousands)......................... 1,473 1,333 989 905 886 884 929 881

1989 1988
------- -------
DC-I
<S> <C> <C>
INDEX FUND SUB-ACCOUNT
(INCEPTION DATE JUNE 3, 1987)
Accumulation unit value at beginning of
period................................. $ 0.975 $ 0.850
Accumulation unit value at end of
period................................. $ 1.255 $ 0.975
Number accumulation units outstanding at
end of period
(in thousands)......................... 3,639 1,946
DC-I
CALVERT SOCIAL BALANCED PORTFOLIO
SUB-ACCOUNT
(INCEPTION DATE JANUARY 25, 1989)
Accumulation unit value at beginning of
period................................. $ 1.000 --
Accumulation unit value at end of
period................................. $ 1.173 --
Number accumulation units outstanding at
end of period
(in thousands)......................... 629 --
DC-I
INTERNATIONAL OPPORTUNITIES FUND
SUB-ACCOUNT
(INCEPTION DATE JULY 2, 1990)
Accumulation unit value at beginning of
period................................. -- --
Accumulation unit value at end of
period................................. -- --
Number accumulation units outstanding at
end of period
(in thousands)......................... -- --
DC-I
DIVIDEND & GROWTH FUND SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1995)
Accumulation unit value at beginning of
period................................. -- --
Accumulation unit value at end of
period................................. -- --
Number accumulation units outstanding at
end of period
(in thousands)......................... -- --
DC-II (1.25%)
BOND FUND SUB-ACCOUNT
(INCEPTION DATE AUGUST 25, 1982)
Accumulation unit value at beginning of
period................................. $ 2.385 $ 2.244
Accumulation unit value at end of
period................................. $ 2.641 $ 2.385
Number accumulation units outstanding at
end of period
(in thousands)......................... 594 433
DC-II (1.25%)
STOCK FUND SUB-ACCOUNT
(INCEPTION DATE JUNE 29, 1982)
Accumulation unit value at beginning of
period................................. $ 3.915 $ 3.331
Accumulation unit value at end of
period................................. $ 4.874 $ 3.915
Number accumulation units outstanding at
end of period
(in thousands)......................... 1,156 1,011
DC-II (1.25%)
MONEY MARKET FUND SUB-ACCOUNT
(INCEPTION DATE JUNE 29, 1982)
Accumulation unit value at beginning of
period................................. $ 1.951 $ 1.840
Accumulation unit value at end of
period................................. $ 2.103 $ 1.951
Number accumulation units outstanding at
end of period
(in thousands)......................... 718 628
</TABLE>

11
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990
-------- -------- -------- ------- ------- ------- ------- -------
DC-II (1.25%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADVISERS FUND SUB-ACCOUNT
(INCEPTION DATE MAY 2, 1983)
Accumulation unit value at beginning of
period................................. $ 4.201 $ 3.647 $ 2.876 $ 2.993 $ 2.700 $ 2.524 $ 2.123 $ 2.123
Accumulation unit value at end of
period................................. $ 5.168 $ 4.201 $ 3.647 $ 2.876 $ 2.993 $ 2.700 $ 2.524 $ 2.123
Number accumulation units outstanding at
end of period
(in thousands)......................... 10,299 10,505 9,212 8,279 7,023 7,323 6,220 5,565
DC-II (1.25%)
CAPITAL APPRECIATION FUND SUB-ACCOUNT
(INCEPTION DATE APRIL 2, 1984)
Accumulation unit value at beginning of
period................................. $ 6.533 $ 5.478 $ 4.257 $ 4.204 $ 3.524 $ 3.050 $ 2.004 $ 2.278
Accumulation unit value at end of
period................................. $ 7.896 $ 6.533 $ 5.478 $ 4.257 $ 4.204 $ 3.524 $ 3.050 $ 2.004
Number accumulation units outstanding at
end of period
(in thousands)......................... 11,032 10,979 9,081 6,923 4,940 3,276 2,113 1,455
DC-II (1.25%)
MORTGAGE SECURITIES FUND SUB-ACCOUNT
(INCEPTION DATE JANUARY 15, 1985)
Accumulation unit value at beginning of
period................................. $ 2.421 $ 2.333 $ 2.034 $ 2.093 $ 1.993 $ 1.929 $ 1.702 $ 1.571
Accumulation unit value at end of
period................................. $ 2.606 $ 2.421 $ 2.333 $ 2.034 $ 2.093 $ 1.993 $ 1.929 $ 1.702
Number accumulation units outstanding at
end of period
(in thousands)......................... 1,035 1,141 1,149 994 942 802 736 582
DC-II (1.25%)
INDEX FUND SUB-ACCOUNT
(INCEPTION DATE JUNE 3, 1987)
Accumulation unit value at beginning of
period................................. $ 2.848 $ 2.353 $ 1.738 $ 1.735 $ 1.605 $ 1.522 $ 1.190 $ 1.255
Accumulation unit value at end of
period................................. $ 3.745 $ 2.848 $ 2.353 $ 1.738 $ 1.735 $ 1.605 $ 1.522 $ 1.190
Number accumulation units outstanding at
end of period
(in thousands)......................... 5,415 4,378 3,153 2,376 1,862 1,437 871 595
DC-II (1.25%)
CALVERT SOCIAL BALANCED PORTFOLIO
SUB-ACCOUNT
(INCEPTION DATE JANUARY 25, 1989)
Accumulation unit value at beginning of
period................................. $ 2.021 $ 1.817 $ 1.417 $ 1.483 $ 1.391 $ 1.308 $ 1.138 $ 1.106
Accumulation unit value at end of
period................................. $ 2.396 $ 2.021 $ 1.817 $ 1.417 $ 1.483 $ 1.391 $ 1.308 $ 1.138
Number accumulation units outstanding at
end of period
(in thousands)......................... 1,291 1,193 923 693 498 317 187 94
DC-II (1.25%)
INTERNATIONAL OPPORTUNITIES FUND
SUB-ACCOUNT
(INCEPTION DATE JULY 2, 1990)
Accumulation unit value at beginning of
period................................. $ 1.483 $ 1.329 $ 1.181 $ 1.220 $ 0.924 $ 0.979 $ 0.877 $ 1.000
Accumulation unit value at end of
period................................. $ 1.469 $ 1.483 $ 1.329 $ 1.181 $ 1.220 $ 0.924 $ 0.979 $ 0.877
Number accumulation units outstanding at
end of period
(in thousands)......................... 5,864 5,996 4,520 3,640 1,495 553 220 52

1989 1988
------- -------
DC-II (1.25%)
<S> <C> <C>
ADVISERS FUND SUB-ACCOUNT
(INCEPTION DATE MAY 2, 1983)
Accumulation unit value at beginning of
period................................. $ 1.766 $ 1.566
Accumulation unit value at end of
period................................. $ 2.123 $ 1.766
Number accumulation units outstanding at
end of period
(in thousands)......................... 5,227 4,631
DC-II (1.25%)
CAPITAL APPRECIATION FUND SUB-ACCOUNT
(INCEPTION DATE APRIL 2, 1984)
Accumulation unit value at beginning of
period................................. $ 1.858 $ 1.490
Accumulation unit value at end of
period................................. $ 2.278 $ 1.858
Number accumulation units outstanding at
end of period
(in thousands)......................... 1,037 787
DC-II (1.25%)
MORTGAGE SECURITIES FUND SUB-ACCOUNT
(INCEPTION DATE JANUARY 15, 1985)
Accumulation unit value at beginning of
period................................. $ 1.406 $ 1.313
Accumulation unit value at end of
period................................. $ 1.571 $ 1.406
Number accumulation units outstanding at
end of period
(in thousands)......................... 845 764
DC-II (1.25%)
INDEX FUND SUB-ACCOUNT
(INCEPTION DATE JUNE 3, 1987)
Accumulation unit value at beginning of
period................................. $ 0.975 $ 0.850
Accumulation unit value at end of
period................................. $ 1.255 $ 0.975
Number accumulation units outstanding at
end of period
(in thousands)......................... 275 116
DC-II (1.25%)
CALVERT SOCIAL BALANCED PORTFOLIO
SUB-ACCOUNT
(INCEPTION DATE JANUARY 25, 1989)
Accumulation unit value at beginning of
period................................. $ 1.000 --
Accumulation unit value at end of
period................................. $ 1.106 --
Number accumulation units outstanding at
end of period
(in thousands)......................... 18 --
DC-II (1.25%)
INTERNATIONAL OPPORTUNITIES FUND
SUB-ACCOUNT
(INCEPTION DATE JULY 2, 1990)
Accumulation unit value at beginning of
period................................. -- --
Accumulation unit value at end of
period................................. -- --
Number accumulation units outstanding at
end of period
(in thousands)......................... -- --
</TABLE>

12
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990
-------- -------- -------- ------- ------- ------- ------- -------
DC-II (1.25%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DIVIDEND & GROWTH FUND SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1995)
Accumulation unit value at beginning of
period................................. $ 1.490 $ 1.223 $ 1.000 -- -- -- -- --
Accumulation unit value at end of
period................................. $ 1.933 $ 1.490 $ 1.223 -- -- -- -- --
Number accumulation units outstanding at
end of period
(in thousands)......................... 6,877 3,874 558 -- -- -- -- --
DC-II (0.150%)
BOND FUND SUB-ACCOUNT
(INCEPTION DATE MARCH 15, 1982)
Accumulation unit value at beginning of
period................................. $ 3.988 $ 3.858 $ 3.261 $ 3.400 $ 3.089 $ 2.932 $ 2.521 $ 2.329
Accumulation unit value at end of
period................................. $ 4.434 $ 3.988 $ 3.858 $ 3.261 $ 3.400 $ 3.089 $ 2.932 $ 2.521
Number accumulation units outstanding at
end of period
(in thousands)......................... 276 306 282 306 313 329 324 328
DC-II (0.150%)
STOCK FUND SUB-ACCOUNT
(INCEPTION DATE MARCH 15, 1982)
Accumulation unit value at beginning of
period................................. $ 8.648 $ 6.964 $ 5.200 $ 5.309 $ 4.651 $ 4.232 $ 3.401 $ 3.544
Accumulation unit value at end of
period................................. $ 11.344 $ 8.648 $ 6.964 $ 5.200 $ 5.309 $ 4.651 $ 4.232 $ 3.401
Number accumulation units outstanding at
end of period
(in thousands)......................... 870 874 825 858 859 865 877 870
DC-II (0.150%)
MONEY MARKET FUND SUB-ACCOUNT
(INCEPTION DATE MARCH 15, 1982)
Accumulation unit value at beginning of
period................................. $ 2.679 $ 2.551 $ 2.416 $ 2.328 $ 2.265 $ 2.188 $ 2.067 $ 1.915
Accumulation unit value at end of
period................................. $ 2.818 $ 2.679 $ 2.551 $ 2.416 $ 2.328 $ 2.265 $ 2.188 $ 2.067
Number accumulation units outstanding at
end of period
(in thousands)......................... 363 321 267 266 278 300 304 324
DC-II (0.150%)
ADVISERS FUND SUB-ACCOUNT
(INCEPTION DATE MAY 2, 1983)
Accumulation unit value at beginning of
period................................. $ 4.875 $ 4.188 $ 3.268 $ 3.365 $ 3.002 $ 2.776 $ 2.310 $ 2.284
Accumulation unit value at end of
period................................. $ 6.061 $ 4.875 $ 4.188 $ 3.268 $ 3.365 $ 3.002 $ 2.776 $ 2.310
Number accumulation units outstanding at
end of period
(in thousands)......................... 617 603 646 529 547 517 477 462

1989 1988
------- -------
DC-II (1.25%)
<S> <C> <C>
DIVIDEND & GROWTH FUND SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1995)
Accumulation unit value at beginning of
period................................. -- --
Accumulation unit value at end of
period................................. -- --
Number accumulation units outstanding at
end of period
(in thousands)......................... -- --
DC-II (0.150%)
BOND FUND SUB-ACCOUNT
(INCEPTION DATE MARCH 15, 1982)
Accumulation unit value at beginning of
period................................. $ 2.080 $ 1.937
Accumulation unit value at end of
period................................. $ 2.329 $ 2.080
Number accumulation units outstanding at
end of period
(in thousands)......................... 359 381
DC-II (0.150%)
STOCK FUND SUB-ACCOUNT
(INCEPTION DATE MARCH 15, 1982)
Accumulation unit value at beginning of
period................................. $ 2.815 $ 2.370
Accumulation unit value at end of
period................................. $ 3.544 $ 2.815
Number accumulation units outstanding at
end of period
(in thousands)......................... 892 943
DC-II (0.150%)
MONEY MARKET FUND SUB-ACCOUNT
(INCEPTION DATE MARCH 15, 1982)
Accumulation unit value at beginning of
period................................. $ 1.757 $ 1.639
Accumulation unit value at end of
period................................. $ 1.915 $ 1.757
Number accumulation units outstanding at
end of period
(in thousands)......................... 332 342
DC-II (0.150%)
ADVISERS FUND SUB-ACCOUNT
(INCEPTION DATE MAY 2, 1983)
Accumulation unit value at beginning of
period................................. $ 1.879 $ 1.646
Accumulation unit value at end of
period................................. $ 2.284 $ 1.879
Number accumulation units outstanding at
end of period
(in thousands)......................... 453 498
</TABLE>

13
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990
-------- -------- -------- ------- ------- ------- ------- -------
DC-II (0.150%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CAPITAL APPRECIATION FUND SUB-ACCOUNT
(INCEPTION DATE APRIL 2, 1984)
Accumulation unit value at beginning of
period................................. $ 7.501 $ 6.224 $ 4.785 $ 4.676 $ 3.876 $ 3.318 $ 2.157 $ 2.425
Accumulation unit value at end of
period................................. $ 9.163 $ 7.501 $ 6.224 $ 4.785 $ 4.676 $ 3.876 $ 3.318 $ 2.157
Number accumulation units outstanding at
end of period
(in thousands)......................... 782 783 737 600 502 335 255 246
DC-II (0.150%)
MORTGAGE SECURITIES FUND SUB-ACCOUNT
(INCEPTION DATE JANUARY 15, 1985)
Accumulation unit value at beginning of
period................................. $ 2.761 $ 2.632 $ 2.269 $ 2.310 $ 2.176 $ 2.082 $ 1.817 $ 1.659
Accumulation unit value at end of
period................................. $ 3.006 $ 2.761 $ 2.632 $ 2.269 $ 2.310 $ 2.176 $ 2.082 $ 1.817
Number accumulation units outstanding at
end of period
(in thousands)......................... 114 143 76 78 111 132 108 85
DC-II (0.150%)
INDEX FUND SUB-ACCOUNT
(INCEPTION DATE MAY 12, 1987)
Accumulation unit value at beginning of
period................................. $ 3.118 $ 2.558 $ 1.876 $ 1.861 $ 1.708 $ 1.602 $ 1.238 $ 1.292
Accumulation unit value at end of
period................................. $ 4.129 $ 3.118 $ 2.558 $ 1.876 $ 1.861 $ 1.708 $ 1.602 $ 1.238
Number accumulation units outstanding at
end of period
(in thousands)......................... 453 354 282 217 183 144 90 72
DC-II (0.150%)
INTERNATIONAL OPPORTUNITIES FUND
SUB-ACCOUNT
(INCEPTION DATE JULY 2, 1990)
Accumulation unit value at beginning of
period................................. $ 1.592 $ 1.412 $ 1.241 $ 1.268 $ 0.949 $ 0.995 $ 0.882 $ 1.000
Accumulation unit value at end of
period................................. $ 1.595 $ 1.592 $ 1.412 $ 1.241 $ 1.268 $ 0.949 $ 0.995 $ 0.882
Number accumulation units outstanding at
end of period
(in thousands)......................... 411 438 329 334 154 131 96 96
DC-II (0.150%)
DIVIDEND & GROWTH FUND SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1995)
Accumulation unit value at beginning of
period................................. $ 1.484 $ 1.223 $ 1.000 -- -- -- -- --
Accumulation unit value at end of
period................................. $ 1.933 $ 1.484 $ 1.223 -- -- -- -- --
Number accumulation units outstanding at
end of period
(in thousands)......................... 6,877 3,874 558 -- -- -- -- --

1989 1988
------- -------
DC-II (0.150%)
<S> <C> <C>
CAPITAL APPRECIATION FUND SUB-ACCOUNT
(INCEPTION DATE APRIL 2, 1984)
Accumulation unit value at beginning of
period................................. $ 1.956 $ 1.552
Accumulation unit value at end of
period................................. $ 2.425 $ 1.956
Number accumulation units outstanding at
end of period
(in thousands)......................... 242 234
DC-II (0.150%)
MORTGAGE SECURITIES FUND SUB-ACCOUNT
(INCEPTION DATE JANUARY 15, 1985)
Accumulation unit value at beginning of
period................................. $ 1.468 $ 1.357
Accumulation unit value at end of
period................................. $ 1.659 $ 1.468
Number accumulation units outstanding at
end of period
(in thousands)......................... 91 95
DC-II (0.150%)
INDEX FUND SUB-ACCOUNT
(INCEPTION DATE MAY 12, 1987)
Accumulation unit value at beginning of
period................................. $ 0.993 $ 0.856
Accumulation unit value at end of
period................................. $ 1.292 $ 0.993
Number accumulation units outstanding at
end of period
(in thousands)......................... 49 40
DC-II (0.150%)
INTERNATIONAL OPPORTUNITIES FUND
SUB-ACCOUNT
(INCEPTION DATE JULY 2, 1990)
Accumulation unit value at beginning of
period................................. -- --
Accumulation unit value at end of
period................................. -- --
Number accumulation units outstanding at
end of period
(in thousands)......................... -- --
DC-II (0.150%)
DIVIDEND & GROWTH FUND SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1995)
Accumulation unit value at beginning of
period................................. -- --
Accumulation unit value at end of
period................................. -- --
Number accumulation units outstanding at
end of period
(in thousands)......................... -- --
</TABLE>

14
<PAGE>
PERFORMANCE RELATED INFORMATION

Each Separate Account may advertise certain performance related information
concerning its Sub-Accounts. Performance information about the Sub-Account is
based on the Sub-Account's past performance only and is no indication of future
performance.

The Advisers Fund, Bond Fund, Calvert Social Balanced Portfolio, Capital
Appreciation Fund, Dividend and Growth Fund, Index Fund, International
Opportunities Fund, Money Market Fund, Mortgage Securities Fund, and Stock 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 changes, the mortality and expense risk charge and the
Annual Maintenance Fee.

The Bond Fund and Mortgage Securities Fund Sub-Accounts may advertise yield
in addition to total return. The yield will be computed in the following manner:
The net investment income per unit earned during a recent 30 day 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
Maintenance Fee and the mortality and expense risk change.

The Money Market Fund Sub-Account 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 Maintenance 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 Maintenance Fee and is therefore lower than total return at the Fund
level, with no comparable charges. Likewise, yield at the Separate Account level
includes all recurring charges (except sales charges), and is therefore lower
than yield at the Fund level, with no comparable charges.

15
<PAGE>
INTRODUCTION

This Prospectus has been designed to provide you with the necessary
information to make a decision on purchasing contracts issued in conjunction
with a Deferred Compensation Plan or Qualified Plan of an Employer offered by
Hartford in Separate Account DC-I or DC-II. This Prospectus describes only the
elements of the contracts pertaining to the variable portion of the contract
supported by Separate Accounts DC Variable Account I and DC Variable Account II.
The contracts may contain additional separate accounts and a General Account
option which are not described in this Prospectus. Please read the Glossary of
Special Terms on pages 3 and 4 prior to reading this Prospectus to familiarize
yourself with the terms being used.

THE CONTRACTS AND THE SEPARATE ACCOUNTS

WHAT ARE THE CONTRACTS?

On contracts issued in conjunction with a Qualified Plan of an Employer,
Contributions are held in DC-II during both the Accumulation Period and Annuity
Period.

The Qualified Plan contracts available with respect to DC-II are limited to
voluntary plans established and sponsored by Employers for their Employees.
Qualified Plans provide a way for an Employer to establish a funded retirement
plan for its Employees. The contract is normally issued to the Employer or to
the trustee or custodian of the Employer's Plan.

Deferred Compensation Plans provide a way for an Employer and its Employees
to arrange for eligible employees to defer a certain portion of their income
("Deferred Compensation") to a determinable future date and thereby defer
current federal income taxes on such deferred compensation until actually
received by the Employee according to the terms of the Employer's Plan. An
Employer contemplating the offering of such a Plan should consult with its legal
counsel with respect to any securities aspects of interest in such Plans. At all
times, the Employer is the sole and exclusive owner of the contract issued with
respect to the Plan. An Employee electing to participate in the Employer's Plan
is, at all times, a general creditor of the Employer establishing the Plan. The
Small Business Job Protection Act of 1996, effective August 20, 1996, requires
that all assets and income of an eligible Deferred Compensation Plan which is
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 custodial accounts
or annuity contracts) 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.

WHO CAN BUY THESE CONTRACTS?

The group variable annuity contracts offered under this Prospectus are
offered for use in connection with plans qualified under Sections 401(a) or
403(a) of the Internal Revenue Code, including annuity purchase plans adopted by
public school systems and certain tax-exempt organizations according to Section
403(b) of the Internal Revenue Code; annuity purchase plans adopted according to
Section 408 of the Internal Revenue Code, including employee pension plans
established for employees by a state, a political subdivision of a

16
<PAGE>
state, or an agency or instrumentality of either a state or a political
subdivision of a state, and certain eligible deferred compensation plans as
defined in Section 457 of the Internal Revenue Code; and pension or profit-
sharing plans described in Section 401(a) and 401(k) ("Qualified Contracts").

WHAT ARE THE SEPARATE ACCOUNTS AND HOW DO THEY OPERATE?

Provision has been made for two different Separate Accounts (DC-I and
DC-II), to be operative during the life of the contracts which are issued in
conjunction with Deferred Compensation Plans. This arrangement provides for tax
treatment of DC-I which may provide tax advantages to Deferred Compensation Plan
Contract Owners. (See "Federal Tax Considerations," page 31.) Provision has been
made for DC-II only, to be operative during the life of a contract issued in
conjunction with a Qualified Plan. DC-I and DC-II have been organized as unit
investment trust types of investment companies and have been registered as such
with the Commission under the Investment Company Act of 1940, as amended. The
Separate Accounts meet the definition of "separate account" under federal
securities law.

Registration of the Separate Accounts with the Commission does not involve
supervision of the management or investment practices or policies of the
Separate Account or of Hartford by the Commission. However, Hartford and the
Separate Accounts are subject to supervision and regulation by the Department of
Insurance of the State of Connecticut.

Under Connecticut law, the assets of the Separate Accounts attributable to
the contracts offered under this Prospectus are held for the benefit of the
owners of, and the persons entitled to payments under, those contracts. Also, in
accordance with the contracts, the assets in the Separate Accounts attributable
to contracts participating in the Separate Accounts are not chargeable with
liabilities arising out of any other business 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.

Your 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 payments were
received or the transfer made. All distributions from the Fund are reinvested at
net asset value. The value of your investment during the Accumulation Period
will therefore vary in accordance with the net income and fluctuation in the
individual investments within the underlying Fund portfolio or portfolios.
During the Variable Annuity payout period, both your annuity payments and
reserve values will vary in accordance with these factors.

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 ALL 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 FUNDS' 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 you of any such
substitution and approval of the Securities and Exchange 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 Accounts may be subject to liabilities arising from series
whose assets are attributable to other variable annuity contracts or variable
life insurance policies offered by the Separate Account which are not described
in this Prospectus.

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.

17
<PAGE>
OPERATION OF THE CONTRACT

HOW ARE CONTRIBUTIONS CREDITED?

A Master Contract is issued to an association, Employer or Employer group
designated entity. Employers participating in the Master Contract will do so by
executing a Joinder Agreement through which they agree to participate in the
Master Contract. The provisions in the Master Contract are fully and separately
applicable to each joining Employer and to Participant's Individual Accounts
thereunder. The variable contracts of prior series are no longer issued,
however, Contract Owners may continue to make Contributions to those contracts.
Such Contract Owners should refer to the Appendix, page 37, for a description of
the sales charges and other expenses applicable to such contracts.

A group contract is issued to an Employer adopting a Plan and will cover all
present and future Participants in the Employer's Plan. Contracts provide for
variable (Separate Account) Contributions and allocations to the General Account
during the Accumulation Period.

The number of Accumulation Units in each Sub-Account to be credited to a
Participant's Individual Account will be determined by dividing the portion of
the Contribution being credited to each Sub-Account by the value of an
Accumulation Unit in that Sub-Account on the applicable Valuation Day.

Initial Contributions are priced for crediting to a Participant's Individual
Account within two business days after receipt of a properly completed
application and the initial Contribution by Hartford at its Administrative
Office. If an application or any other necessary information (collectively,
"application") is incomplete when received, the initial Contribution will be
credited to the Participant's Individual Account not later than two business
days after the application is made complete. However, if an incomplete
application is not made complete within five business days of its initial
receipt, the Contribution will be immediately returned unless you have been
informed of the delay and request that the Contribution not be returned.

Subsequent Contributions properly designated for a Participant's Individual
Account are priced for crediting to such Participant's Individual Account on the
Valuation Day that the Contribution is received by Hartford at its
Administrative Office, or other designated location.

The number of Sub-Account Accumulation Units will not change because of a
subsequent change in an Accumulation Unit's value, but the dollar value of an
Accumulation Unit will vary to reflect the investment experience of the
appropriate Fund shares that serve as the underlying investment for the
Sub-Account.

MAY I MAKE CHANGES IN THE AMOUNTS OF MY CONTRIBUTION?

Yes, however the minimum Contribution that may be made at any one time on
behalf of a Participant during the Accumulation Period under a contract is $30
unless the Employer's Plan provides otherwise. If the Plan adopted by the
Contract Owner so provides, the contract permits the allocation of
Contributions, in multiples of 10% among the several Sub-Accounts of DC-I and
DC-II. The minimum amount that may be allocated to any Sub-Account in a Separate
Account shall not be less than $10. Such changes must be requested in the form
and manner prescribed by Hartford.

MAY I TRANSFER ASSETS BETWEEN SUB-ACCOUNTS?

Yes, during the Accumulation Period you may transfer the values of your
Sub-Account allocations from one or more Sub-Accounts to another.

The following transfer restrictions apply to contracts issued or amended on
or after May 1, 1992.

Transfers of assets presently held in the General Account, or which were
held in the General Account at any time during the preceding three months, to
the Money Market Fund Sub-Account are prohibited.

Similarly, transfers of assets presently held in the Money Market Fund
Sub-Account, or which were held in the Money Market Fund Sub-Account or the
General Account during the preceding three months, to the General Account are
prohibited.

Transfers between Sub-Accounts and changes in Sub-Account allocations may be
made by written request or by calling 1-800-528-9009. Any transfers or changes
made in writing will be effected as of the date the request is received by
Hartford at its Administrative Office. 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

18
<PAGE>
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
provide certain identifying information. All transfer instructions by telephone
are recorded.

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 Contract
Owner/Participant is, or would be, to the disadvantage of other Contract
Owners/Participants. Any modification could be applied to transfers to or from
the same or all of the Accounts and could include, but not be limited to, the
requirement of a minimum time period between each transfer, not accepting
transfer requests of an agent acting under a power of attorney on behalf of more
than one Participant or Contract Owner, or limiting the dollar amount that may
be transferred between Sub -Accounts by a Contract Owner/ Participant at any one
time. Such restrictions may be applied in any manner reasonably designed to
prevent any use of the transfer right which is considered by Hartford to be the
disadvantage of other Contract Owners/ Participants.

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.

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 (5) 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. You may specify a
maximum of five (5) 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 CONTRACT OWNER FAILS TO MAKE CONTRIBUTIONS?

A contract will be deemed paid-up within 30 days after any anniversary date
of the contract if the Contract Owner has not remitted a Contribution to
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 21). Once a contract has been placed on a
paid-up status it may not be reinstated. Persons receiving Annuity payments at
the time of any change to paid-up status will continue to receive their
payments.

MAY I ASSIGN OR TRANSFER THE CONTRACT?

Qualified Plans and Deferred Compensation Plans generally prohibit the
assignment of a contract or any interest therein. No assignment will be
effective until a copy has been filed at the offices of Hartford at Hartford,
Connecticut, prior to settlement for Hartford's liability under the contract.
Hartford assumes no responsibility for the validity of any such assignments.
Participants may not assign their individual account interests.

19
<PAGE>
HOW DO I KNOW WHAT MY ACCOUNT IS WORTH?

The value of the Accumulation Units in a Separate Account representing an
interest in the appropriate Fund shares that are held under the contract were
initially established on the date that Contributions were first contributed to
the appropriate Sub-Account of the Separate Account. The value of the respective
Accumulation Units for any subsequent day is determined by multiplying the
Accumulation Unit value for the preceding day by the net investment factor of
the appropriate Sub-Accounts, as appropriate. (See "How is the Accumulation Unit
value determined?" below.)

The value of a Participant's Individual Account under a contract at any time
prior to the commencement of Annuity payments can be determined by multiplying
the total number of Sub-Account Accumulation Units credited to a Participant's
Individual Account by the current Accumulation Unit value for the respective
Sub-Account. There is no assurance that the value in the Sub-Accounts will equal
or exceed the Contributions made by the Contract Owner to such Sub-Accounts.

HOW IS THE ACCUMULATION UNIT VALUE DETERMINED?

The Accumulation Unit value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
"Valuation Day" by multiplying the Accumulation Unit value of the particular
Sub-Account on the preceding Valuation Day by a "Net Investment Factor" for that
Sub-Account for the Valuation Period then ended. The Net Investment Factor for
each of the Sub-Accounts is equal to the net asset value per share of the
corresponding Fund at the end of the Valuation Period (plus the per share amount
of any dividends or capital gains by that Fund if the ex-dividend date occurs in
the Valuation Period then ended) divided by the net asset value per share of the
corresponding Fund at the beginning of the Valuation Period and subtracting from
that amount the amount of any charges assessed during the Valuation Period then
ending. You should refer to the prospectuses for the Funds which accompany this
Prospectus for a description of how the assets of each Fund are valued since
each determination has a direct bearing on the Accumulation Unit value of the
Sub-Account and therefore the value of a contract.

HOW ARE THE UNDERLYING FUND SHARES VALUED?

The shares of the Fund are valued at net asset value on a daily basis. A
complete description of the valuation method used in valuing Fund shares may be
found in the accompanying prospectus of each Fund.

PAYMENT OF BENEFITS

WHAT WOULD MY BENEFICIARY RECEIVE AS DEATH PROCEEDS?

The contracts provide that in the event the Participant dies before the
selected Annuity Commencement Date or the Participant's age 65 (whichever occurs
first) the Minimum Death Benefit payable on such contract will be the greater of
(a) the value of the Participant's Individual Account determined as of the day
written proof of death of such person is received by Hartford, or (b) 100% of
the total Contributions made to such Account, reduced by any prior partial
surrenders.

The benefit may be taken by the Contract Owner in a single sum, in which
case payment will be made within seven days of receipt of proof of death by
Hartford, unless subject to postponement as explained below. In lieu of payment
in one sum, a Contract Owner may elect that the amount be applied, subject to
the suspension provisions described below, under any one of the optional Annuity
forms provided under DC-II (see "What are the available Annuity options under
the contracts?" commencing on page 23) to provide Annuity payments to the
Beneficiary.

An election to receive death benefits under a form of Annuity must be made
prior to a lump sum settlement with 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. 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 22.)

20
<PAGE>
HOW CAN A CONTRACT BE REDEEMED OR SURRENDERED?

THERE ARE CERTAIN RESTRICTIONS ON SECTION 403(B) TAX-SHELTERED ANNUITIES. AS
OF DECEMBER 31, 1988, ALL SECTION 403(B) ANNUITIES HAVE LIMITS ON FULL AND
PARTIAL SURRENDERS. CONTRIBUTIONS TO THE CONTRACT MADE AFTER DECEMBER 31, 1988
AND ANY INCREASES IN CASH VALUE AFTER DECEMBER 31, 1988 MAY NOT BE DISTRIBUTED
UNLESS THE CONTRACT OWNER/EMPLOYEE HAS (A) ATTAINED AGE 59 1/2, (B) TERMINATED
EMPLOYMENT, (C) DIED, (D) BECOME DISABLED, OR (E) EXPERIENCED FINANCIAL
HARDSHIP. DISTRIBUTIONS DUE TO FINANCIAL HARDSHIP OR SEPARATION FROM SERVICE MAY
STILL BE SUBJECT TO A PENALTY TAX OF 10%.

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 Contract Owner on
behalf of a Participant prior to the selected Annuity Commencement Date for such
Participant, the Contract Owner will have the following options:

1. To continue a Participant's Individual Account in force under the
contract. Under this option, when the selected Annuity Commencement Date
arrives, the Contract Owner will begin to receive Annuity payments under the
selected Annuity option under the contract. (See "What are the available Annuity
options under the contracts?" commencing on page 23.) At any time in the
interim, a Contract Owner may surrender a Participant's Individual Account for a
lump sum cash settlement in accordance with 3. below.

2. To provide Annuity payments immediately. The values in a Participant's
Individual Account may be applied, subject to contractual provisions, to provide
for Fixed or Variable Annuity payments, or a combination thereof, commencing
immediately, under the selected Annuity option under the contract. (See "What
are the available Annuity options under the contracts?" commencing on page 23.)

3. To surrender a Participant's Individual Account under the contract for a
lump sum cash settlement, in which event the Annual Maintenance Fee and any
applicable contingent deferred sales charges will be deducted. (See "How are the
charges under these contracts made?" commencing on page 25.) The amount received
will be the net termination value next computed after receipt by Hartford at its
Administrative Office of a written surrender request for complete surrender.
Payment will normally be made as soon as possible but not later than seven days
after the written request is received by Hartford.

4. In the case of a partial surrender the amount requested is either taken
out of the specified Sub-Account(s) or if no Sub-Account(s) are specified, the
requested amount is taken out of all applicable Sub-Account(s) on a pro rata
basis. Within this context, the contingent deferred sales charges are taken as a
percentage of the amount withdrawn. (See "How are the charges under these
contracts made?" commencing on page 25.) If the contingent deferred sales
charges have been experience rated (see "How are the charges under these
contracts made?" commencing on page 25), any amounts not subject to the
contingent deferred sales charge will be deemed to be surrendered last.

CAN PAYMENT OF THE REDEMPTION OR SURRENDER VALUE EVER BE POSTPONED BEYOND THE
SEVEN DAY PERIOD?

Yes. It may be postponed whenever (a) the New York Stock Exchange is closed,
except for holidays or weekends, or trading on the New York Stock Exchange is
restricted as determined by the Securities and Exchange Commission; (b) the
Securities and Exchange Commission permits postponement and so orders; or (c)
the Securities and Exchange Commission determines that an emergency exists
making valuation of the amounts or disposal of securities not reasonably
practicable.

MAY I SURRENDER ONCE ANNUITY PAYMENTS HAVE STARTED?

Except with respect to Option 5 (on a variable payout), once Annuity
payments have commenced for an Annuitant, no surrender of a life Annuity benefit
can be made for the purpose of receiving a partial withdrawal or a lump sum
settlement in lieu thereof. Any surrender out of Option 5 will be subject to
contingent deferred sales charges, if applicable.

21
<PAGE>

WHAT ARE ANNUITY RIGHTS?

Annuity Rights are provided under contracts issued only in conjunction with
Deferred Compensation Plans, with respect to DC-I only, entitling the Contract
Owner to have Annuity payments at the rates set forth in the contract at the
time of issue. Such rates will be made applicable to all amounts held in a
Participant's Individual Account during the Annuity Period under such contract
which do not exceed five times the gross Contributions made during the
Accumulation Period with respect to such Participant's Individual Account
thereunder. To the extent that the value of a Participant's Individual Account
at the end of the Accumulation Period is insufficient to fund the Annuity Rights
provided, the Contract Owner shall have the right to apply additional
Contributions to the values held in a Participant's Individual Account in order
to exercise all of the Annuity Rights provided. Any amounts in excess thereto
may be applied by Hartford at Annuity rates then being offered by Hartford.

CAN A CONTRACT BE SUSPENDED BY A CONTRACT OWNER?

A contract may be suspended by the Contract Owner by giving written notice
at least 90 days prior to the effective date of such suspension to Hartford at
its Administrative Office. A contract will be suspended automatically on its
anniversary if the Contract Owner fails to assent to any modification of a
contract, as described under the caption "Can a contract be modified?" which
modifications would have become effective on or before that anniversary. Upon
suspension, Contributions will continue to be accepted by Hartford under the
contract, and subject to the terms thereof, as they are applicable to
Participant's Individual Accounts under the contracts prior to such suspension,
but no Contributions will be accepted on behalf of any new Participant's
Individual Accounts. Annuitants at the time of any suspension will continue to
receive their Annuity payments. The suspension of a contract will not preclude
the Contract Owner's applying existing Participant's Individual Accounts under
DC-I or DC-II, as appropriate, to the purchase of Fixed or Variable Annuity
benefits.

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

The Contract Owner selects an Annuity Commencement Date, usually between a
Participant's 50th and 75th birthdays, and an Annuity Option. The Annuity
Commencement Date may not be deferred beyond a Participant's 75th birthday or
such earlier date as may be required by applicable law and/or regulation. The
Annuity Commencement Date and/or the Annuity option may be changed from time to
time, but any such change must be made at least 30 days prior to the date on
which Annuity payments are scheduled to begin. Annuity payments will normally be
made on the first business day of each month.

The contract contains five optional annuity forms which may be selected on
either a Fixed or Variable Annuity basis, or a combination thereof. If a
Contract Owner does not elect otherwise, Hartford reserves the right to begin
Annuity payments at age 65 under Option 2 with 120 monthly payments certain.
However, Hartford will not assume responsibility in determining or monitoring
minimum distributions beginning at age 70 1/2.

When an Annuity is purchased by a Contract Owner for an Annuitant, unless
otherwise specified, DC-I or DC-II Accumulation Unit values will be applied to
provide a Variable Annuity under DC-II.

WHAT IS THE MINIMUM AMOUNT THAT I MAY SELECT FOR AN ANNUITY PAYMENT?

The minimum Annuity payment is $20.00. No election may be made which results
in a first payment of less than $20.00. If at any time Annuity payments are or
become less than $20.00, Hartford has the right to change the frequency of
payment to intervals that will result in payments of at least $20.00.

HOW ARE CONTRIBUTIONS MADE TO ESTABLISH MY ANNUITY ACCOUNT?

During the Annuity Period, contract values and any allowable additional
Contributions made by the Contract Owner for the purpose of effecting Annuity
payments under the contract (Deferred Compensation Plans Only) are, based upon
the information received from the Contract Owner, applied to establish
Annuitant's Accounts under the contracts to provide Fixed or Variable Annuity
payments.

At the end of the Accumulation Period with respect to a Participant's
Individual Account there is an automatic transfer of all DC-I values to DC-II
which are used to establish Annuitant's Accounts with respect to DC-II. Such
transfer will be effected by a transfer of ownership of DC-I interests in the
underlying securities to DC-II. The value of a Participant's Individual Account
that is transferred to DC-II hereunder will be without application of any sales
charges or other expenses, with the exception of any applicable Premium Taxes.
DC-II values held during the Accumulation Period under a contract are retained
in DC-II.

22
<PAGE>
In addition to having the right to allocate the value of a Participant's
Individual Account held in the Separate Account during the Accumulation Period
to establish an Annuitant's Account during the Annuity Period, a Deferred
Compensation Plan Contract Owner (with respect to DC-I, only) may make
additional Contributions at the beginning of the Annuity Period for the purpose
of effecting increased Annuity payments for Participants. All such additional
Contributions shall be subject to a deduction for sales expenses, as well as any
applicable Premium Taxes as follows:

<TABLE>
<CAPTION>
ADDITIONAL CONTRIBUTION TO AN ANNUITANT'S ACCOUNT TOTAL DEDUCTION
- ------------------------------------------------------------------------------------------------------- ---------------
<S> <C>
On the first $50,000............................................................................... 3.50%
On the next $50,000................................................................................ 2.00%
On the excess over $100,000........................................................................ 1.00%
</TABLE>

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 annuity 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 died prior to the due date of the second Annuity payment,
two if he died before the due date of the third Annuity payment, etc.

*OPTION 2: LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN

This Annuity option is an Annuity payable monthly during the lifetime of an
Annuitant with the provision that 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 in one sum 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:

total amount applied under the option
(a) = at the Annuity Commencement Date
--------------------------------------------------------------------
Annuity Unit value at the Annuity Commencement Date

number of Annuity Units represented by number of monthly
(b) = each monthly Annuity payment made x Annuity payments made

The amount of the additional payments will be determined by multiplying such
excess by the Annuity Unit value as of the date that proof of death is received
by 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 living for the remainder of the contingent annuitant's
life. When the Annuity is purchased, the Annuitant elects what percentage (50%,
66 2/3% 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 payment in the event of death prior to the due date for the second
payment and so on.

23
<PAGE>
*OPTION 5: PAYMENTS FOR A DESIGNATED PERIOD

An amount payable monthly for the number of years selected. Under the
contracts the minimum number of years is five.

In the event of the Annuitant's death prior to the end of the designated
period, any then remaining balance of proceeds will be paid in one sum to the
Beneficiary or Beneficiaries designated unless other provisions will have been
made and approved by 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 25).

* ON QUALIFIED PLANS, OPTIONS 2, 3 AND 5 ARE AVAILABLE ONLY IF THE GUARANTEED
PAYMENT PERIOD IS LESS THAN THE LIFE EXPECTANCY OF THE ANNUITANT AT THE TIME
THE OPTION BECOMES EFFECTIVE. SUCH LIFE EXPECTANCY SHALL BE COMPUTED ON THE
BASIS OF THE MORTALITY TABLE PRESCRIBED BY THE IRS, OR IF NONE IS PRESCRIBED,
THE MORTALITY TABLE THEN IN USE BY HARTFORD.
- --------------------------------------------------------------------------------

UNDER ANY OF THE ANNUITY OPTIONS ABOVE, EXCEPT OPTION 5 (ON A VARIABLE BASIS),
NO SURRENDERS ARE PERMITTED AFTER ANNUITY PAYMENTS COMMENCE.
- --------------------------------------------------------------------------------

HOW ARE VARIABLE ANNUITY PAYMENTS DETERMINED?

The value of the Annuity Unit for each Sub-Account in the Separate Account
for any day is determined by multiplying the value for the preceding day by the
product of (1) the net investment factor (see "How is the Accumulation Unit
value determined?" commencing on page 20) for the day for which the Annuity Unit
value is being calculated, and (2) a factor to neutralize the assumed net
investment rate discussed below.

When Annuity payments are to commence, the value of the contract is
determined as the product of the value of the Accumulation Unit credited to each
Sub-Account 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 an assumed interest rate ("A.I.R.") of 4.00% or 5.00% per
annum. The total first monthly Annuity payment is determined by multiplying the
value (expressed in thousands of dollars) of a Sub-Account (less any applicable
Premium Taxes) by the amount of the first monthly payment per $1,000 of value
obtained from the tables in the contracts. With respect to fixed annuities only,
the current rate will be applied if it is higher than the rate under the tables
in the contract.

Level Annuity payments would be provided if the net investment rate remained
constant and equal to the A.I.R. In fact, payments will vary up or down in the
proportion that the net investment rate varies up or down from the A.I.R. A
higher 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.

The Annuity payments will be made on the date selected. The Annuity Unit
value used in calculating the amount of the Annuity payments will be based on an
Annuity Unit value determined as of the close of business on a day not more than
the fifth business day preceding the date of the Annuity payment.

24
<PAGE>
Here is an example of how a variable annuity is determined.

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

<TABLE>
<C> <S> <C>
1. Net amount applied........................................ $ 139,782.50
2. Initial monthly income per $1,000 of payment applied...... 6.13
3. Initial monthly payment (1 x 2 DIVIDED BY 1,000)......... $ 856.87
4. Annuity Unit Value........................................ 3.125
5. Number of monthly annuity units (3 DIVIDED BY 4)......... 274.198
6. Assume annuity unit value of second month equal to........ 2.897
7. Second month payment (6 x 5).............................. $ 794.35
8. Assume annuity unit value for third month equal to........ 3.415
9. Third month payment (8 x 5)............................... $ 936.39
</TABLE>

The above figures are simply to illustrate the calculation of a variable
annuity and have no bearing on the actual historical record of any Separate
Account.

CAN A CONTRACT BE MODIFIED?

The contracts may, subject to any federal and state regulatory restrictions,
be modified at any time by written agreement between the Contract Owner and
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 Contract Owner the benefit of, any federal
or state statutes or any rule or regulation of the U.S. Treasury Department or
Internal Revenue Service.

On or after the fifth anniversary of any contract 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 Contract Owner, except that the Annuity tables, guaranteed
interest rates and the contingent deferred sales charges which are applicable at
the time a Participant's Individual Account is established under a contract,
will continue to be applicable. In addition, the limitations on the deductions
for the Mortality, Expense Risks and Administrative Undertakings and the Annual
Maintenance 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 the Separate Account
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 the Separate Account or the Sub-Account(s); or (iv)
provides additional Separate Account options; or (v) withdraws Separate Account
options. In the event of any such modification Hartford will provide notice to
the Contract Owner 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?

25
<PAGE>

deferred sales charges will never exceed 8.5% of aggregate Contributions to a
Participant's Individual Account. The amount or term of the contingent deferred
sales charge may be reduced (see "Charges Under the Contract -- Experience
Rating of Contracts," page 27).

In the case of a redemption in which you request a certain dollar amount be
withdrawn, the sales charge is deducted from the amount withdrawn and the
balance is paid to you. Example: You request a total withdrawal your account
value is $1,000 and the applicable sales load is 5%. Your Sub-Account(s) will be
surrendered 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 redemption in which you
request to receive a specified amount, the sales charge will be calculated on
the total amount that must be withdrawn from your Sub-Account(s) in order to
provide you with the amount requested. Example: You request to receive $1,000
and the applicable sales load is 5%. Your Sub-Account(s) will be reduced by
$1,052.63 (i.e., a total withdrawal of $1,052.63 which results in a $52.63 sales
charge ($1,052.63 x 5%) and a net amount paid to you of $1,000 as requested).

Hartford reserves the right to limit any increase in the Contributions made
to a Participant's Individual Account under any contract to not more than three
times the total Contributions made on behalf of such Participant during the
initial 12 consecutive months following the Date of Coverage. Increases in
excess of those described will be accepted only with the consent of Hartford and
subject to the then current deductions being made under the contracts.

IS THERE EVER A TIME WHEN THE SALES CHARGES DO NOT APPLY?

No deduction for contingent deferred sales charges will apply to an Eligible
Surrender. An Eligible Surrender is a withdrawal, including a withdrawal applied
under one of the available Annuity Options, where such withdrawal is (1) made on
account of a Qualifying Event and (2) payable directly to the Participant, or,
if applicable, to the Participant's beneficiary. For these purposes, a
Qualifying Event is: (i) the death of the Participant, (ii) financial hardship,
as defined in the Plan, (iii) the Participant's separation from service, or (iv)
the Participant's retirement. An amount withdrawn for transfer to the Plan
funding vehicle of another investment provider for the Plan, or to the Plan of
another employer, shall not be considered payable directly to the Participant
and shall not constitute an Eligible Surrender. The contingent deferred sales
charges shall not apply to a transfer of Contract values from this Contract to
another contract issued by Hartford or an affiliate of Hartford.

WHAT DO THE SALES CHARGES COVER?

The contingent deferred sales charges, when applicable, will be used to
cover expenses relating to the sale and distribution of the contracts, including
commissions paid to any distribution organization and its sales personnel, the
cost of preparing sales literature and other promotional activities. It is
anticipated that gross commissions paid on the sale of the contracts will not
exceed 5% of a Contribution. To the extent that these charges do not cover such
distribution expenses they will be borne by Hartford from its general assets,
including surplus or possible profit from mortality and expense risk charges.

WHAT IS THE MORTALITY, EXPENSE RISK AND ADMINISTRATIVE CHARGE?

Although Variable Annuity payments made under the contracts will vary in
accordance with the investment performance of the underlying Fund shares held in
the Sub-Account(s), the payments will not be affected by (a) 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
mortality and expense undertakings by Hartford.

In providing an expense undertaking with respect to both DC-I and DC-II,
Hartford assumes the risk that the deductions for contingent deferred sales
charges, and the Annual Maintenance 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) to Contract Owners on Annuitants' Accounts regardless
of how long all Annuitants may live and regardless of how long all Annuitants as
a group may live. This undertaking assures a Contract Owner that neither the
longevity of an Annuitant nor an improvement in life expectancy will have any
adverse effect on the monthly Annuity payments the Employee will receive under
the

26
<PAGE>
contract. It thus relieves the Contract Owner from the risk that Participants in
the Plan will outlive the funds accumulated. The mortality undertaking is based
on 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 Contract
Owner that administration will be provided throughout the entire life of the
contract.

For assuming these risks Hartford presently charges .90% (.50% for
mortality, .15% for expense and .25% for administrative undertakings) of the
average daily net assets of DC-I; however, where contract values exceed fifty
million dollars ($50,000,000.00), such charge is an annual rate of .75% (.50%
for mortality, .10% for expense and .15% for administrative undertakings) of the
average daily net assets of DC-I. With respect to the contract values in DC-II,
such charge is an annual rate of 1.25% (.85% for mortality, .15% for expense and
..25% for administrative undertakings) of the average daily net assets of DC-II,
as appropriate. The rate charged for the expense, mortality and administrative
undertakings under the contracts may be reduced (see "Charges Under the Contract
- -- Experience Rating of Contracts," page 27). The rate charged for the expense,
mortality and administrative undertakings may be periodically increased by
Hartford subject to a maximum annual rate of 2.00%, provided, however, that no
such increase will occur unless the Commission shall have first approved such
increase.

Under a Contract issued to Hartford Fire Insurance Company (a parent company
of Hartford) as custodian for the Hartford Insurance Group ("HIG") Employer
Sponsored Individual Retirement Account, no deduction for mortality and expense
charges are made against the assets of the Separate Account. A deduction of
0.15% is made under this Contract for administrative undertakings. All costs of
the mortality and expense undertakings and the reduction in charges for the
administrative undertakings are being assumed by HIG since the plan is limited
to employees of HIG and is in the nature of an additional employee benefit for
its Employees. In calculating the Accumulation and Annuity Unit prices with
respect to DC-II, no deduction will be made for such mortality and expense
undertakings on this Contract but the deduction of 0.15% for administrative
undertakings will be made. Separate Accumulation and Annuity Unit prices are
maintained with respect to HIG and non-HIG contracts. The expense of maintaining
separate unit prices is borne solely by HIG. Provision of this benefit for HIG
employees in no way affects present or future charges, rights, benefits or
contract values of other Contract Owners.

ARE THERE ANY OTHER ADMINISTRATIVE CHARGES?

There may be an Annual Maintenance Fee deduction from the value of each
Participant's Individual Account under the contracts. Currently, there is an
Annual Maintenance Fee of $25.00 assessed against any Participant's Individual
Account value in Separate Account DC-II. The Annual Maintenance Fee may be
reduced or waived (see "Charges Under the Contract -- Experience Rating of
Contracts," page 27).

The Annual Maintenance Fee will be deducted from the value of each such
Account on the last business day of each Participant's Contract Year provided,
however, that if the value of a Participant's Individual Account is redeemed in
full at any time before the last business day of the Participant's Contract
Year, then the Annual Maintenance Fee charge will be deducted from the proceeds
of such redemption. No deduction for the Annual Maintenance Fee will be made
during the Annuity Period under the contracts.

In the event that the contract contains a General Account option or the
contract is issued in conjunction with a separate Hartford General Account
contract, the Annual Maintenance Fee as described above will be charged against
DC-I or DC-II (as applicable) and the General Account contract or option on a
pro rata basis.

EXPERIENCE RATING OF CONTRACTS

Hartford may apply experience credits under a Contract based on investment,
administrative, mortality or other factors, including, but not limited to (1)
the total number of Participants, (2) the sum of all Participants' Individual
Account values, (3) the allocation of Contract values between the General
Account and the Separate Accounts under the Contract, (4) present or anticipated
levels of Contributions, distributions, transfers, administrative expenses or
commissions, and (5) whether Hartford is the exclusive annuity Contract

27
<PAGE>

provider. Experience credits may be applied, either prospectively or
retrospectively, as a reduction in the deduction for mortality, expense risk and
administrative undertakings, a reduction in the term or amount of any applicable
contingent deferred sales charges, an increase in the rate of interest credited
under the Contract, a payment to be allocated as directed by the Contract Owner,
or any combination of the foregoing. Hartford may apply and allocate experience
credits in such manner as Hartford deems appropriate. Any such credit will not
be unfairly discriminatory against any person, including the affected Contract
Owners or Participants. Experience credits have been given in certain cases.
Participants in contracts receiving experience credits will receive notification
regarding such credits. Experience credits may be discontinued at Hartford's
sole discretion in the event of a change in applicable factors.

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 Premium Taxes, Hartford will pay the
taxes when imposed by the applicable taxing authorities. Hartford, as 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 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?

Reallocation of monies between or among Sub-Accounts under the contracts may
be subject to a $5.00 charge for each such transfer (see "Charges Under the
Contract -- Experience Rating of Contracts," page 27). Currently there is no
transfer charge.

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 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 ultimately controlled by The Hartford Financial
Services Group, Inc., one of the largest financial service providers in the
United States.

HARTFORD RATINGS

<TABLE>
<CAPTION>
EFFECTIVE
RATING AGENCY DATE OF RATING RATING BASIS OF RATING
- --------------------------------------------------------------------- --------------- ----------- -----------------------
<S> <C> <C> <C>
Financial soundness and
A.M. Best and Company, Inc. 9/9/97 A+ operating performance.
Standard & Poor's.................................................... 1/23/98 AA Claims paying ability
Duff & Phelps........................................................ 1/23/98 AA+ Claims paying ability
</TABLE>

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 Fund will achieve its
stated objectives.

28
<PAGE>

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 Statement of Additional Information, which may be order from
Hartford, and the prospectuses for the Funds accompanying this Prospectus. All
such prospectuses should be read in conjunction with this Prospectus before
investing.

THESE FUNDS MAY NOT BE AVAILABLE IN ALL STATES.

HARTFORD FUNDS

HARTFORD ADVISERS FUND

Seeks maximum long term total rate of return by investing in common stocks
and other equity securities, bonds and other debt securities, and money market
instruments.

HARTFORD BOND FUND

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

Seeks growth of capital by investing in equity securities selected solely on
the basis of potential for capital appreciation.

HARTFORD DIVIDEND AND GROWTH FUND

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

HARTFORD INDEX FUND

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.*

HARTFORD INTERNATIONAL OPPORTUNITIES FUND

Seeks growth of capital by investing primarily in equity securities issued
by non-U.S. companies.

HARTFORD MORTGAGE SECURITIES FUND

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

HARTFORD STOCK FUND

Seeks long-term growth of capital by investing primarily in equity
securities.

HARTFORD MONEY MARKET FUND

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.

29
<PAGE>

CALVERT FUND

CALVERT SOCIAL BALANCED PORTFOLIO

Seeks 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 opportunities and
which satisfy the social criteria established for the Portfolio.

ALL FUNDS

The Hartford Funds are available only to serve as the underlying investment
for the variable annuity and variable life insurance contracts issued by
Hartford.

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 Social Balanced Portfolio, a portfolio of Calvert Variable
Series, Inc. which is unaffiliated with Hartford, are offered to other
unaffiliated separate accounts. Hartford and the Board of Trustees of Calvert
Variable Series, Inc. 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.

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. The Dividend and Growth Fund Sub-Account was not available under
contracts issued prior to May 1, 1995. Funds not available prior to the issue
date of a contract may be requested in writing by the Contract Owner.

INVESTMENT ADVISERS

All of the Funds are sponsored by Hartford and are incorporated under the
laws of the State of Maryland. HL Investment Advisors, Inc. ("HL Advisors")
serves as the investment adviser to each of the Hartford Funds.

Wellington Management Company, LLP 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.

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

In addition, HL Advisors has entered an investment services agreement with
The 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 Hartford Money Market Fund.

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 DC-I AND DC-II

DC-I is not taxed as a part of Hartford. The taxation of DC-I is governed by
Subchapter M of Chapter 1 of the Internal Revenue Code of 1986, as amended (the
"Code"). By distributing substantially all of the net income and realized
capital gains of DC-I to Contract Owners, no federal income tax liability will
be incurred by DC-I on the income and gain so distributed. While Hartford has no
reason to believe that DC-I will be taxed other than as described above, in the
event that it is, the taxation of DC-I and DC-II would be identical.

DC-II is taxed as part of Hartford which is taxed as a life insurance
company in accordance with the Code. Accordingly, DC-II will not be taxed as a
"regulated investment company" under Subchapter M of the Code. Investment income
and any realized capital gains on the assets of DC- II are reinvested and are
taken into account in determining the value of the Accumulation and Annuity
Units. (See "How is the Accumulation Unit value determined?" commencing on page
20.) As a result, such investment income and realized capital gains are
automatically applied to increase reserves under the contract.

No taxes are due on interest, dividends and short-term or long-term capital
gains earned by DC-II with respect to qualified or non-qualified contracts.

C. INFORMATION REGARDING TAX-QUALIFIED RETIREMENT 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 applicable limits, distributions prior to age 59 1/2 (subject to
certain exceptions), distributions which do not conform to applicable
commencement and minimum distribution rules, and certain other transactions with
respect to tax-qualified plans. Therefore, this summary does not attempt to
provide more than general information about the tax rules associated with use of
a Contract by a tax-qualified retirement plan. Contract owners, plan
participants and beneficiaries are cautioned that the rights and benefits of any
person to benefits may be controlled by the terms and conditions of the
tax-qualified retirement plan itself, regardless of the terms and conditions of
a Contract, but that Hartford is not bound by the terms and conditions of such
plans to the extent such terms conflict with a Contract, unless Hartford
specifically consents to be bound. Additionally, some tax-qualified retirement
plans are subject to distribution and other requirements which are not
incorporated into Hartford's administrative procedures. Contract 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 advisors as to specific tax
consequences.

1. TAX-QUALIFIED PENSION OR PROFIT-SHARING PLANS

Provisions of the Code permit eligible employers to establish tax-qualified
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 to participate and the time when distributions must
commence. Employers intending to use these contracts in connection with
tax-qualified pension or profit-sharing plans should seek competent tax and
other legal 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, as
specified in Section 501(c)(3) of the Code, to purchase annuity contracts,
and, subject to certain limitations, to exclude such contributions from gross
income. Generally, such contributions may not exceed the lesser of $10,000
(indexed) or 20% of an employee's "includable compensation" for such
employee's most recent full year of employment, subject to other adjustments.
Special provisions under the Code 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 (and in the case of hardship, any income
attributable to such contributions may not be distributed).

Generally, the above restrictions do not apply to distributions attributable
to cash values or other amounts held under a Section 403(b) contract as of
December 31, 1988.

3. DEFERRED COMPENSATION PLANS UNDER SECTION 457

Employees and independent contractors performing services for eligible
employers may have contributions made to an Eligible 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 Eligible
Deferred Compensation Plans maintained by a State or other tax-exempt
organization. For these purposes, the term "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. Generally, the limitation is 33 1/3% of
includable compensation (typically 25% of gross compensation) or , for 1998,
$8,000 (indexed), whichever is less. Such a 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 an Eligible 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 Eligible 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
of a trust does not apply to amounts under an Eligible 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 an Eligible Deferred Compensation Plan are
prohibited under Section 457 of the Code unless made after the participating
employee attains age 70 1/2, 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.

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

32
<PAGE>

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.

Certain Contracts may be offered as Roth IRAs under Section 408A of the
Code. Contributions to a Roth IRA are not deductible. Subject to special
limitations, a regular IRA may be converted into a Roth IRA or a distribution
from a regular IRA may be rolled over to a Roth IRA. However, a conversion or
a rollover from a regular IRA to a Roth IRA is not excludable from gross
income. If certain conditions are met, qualified distributions from a Roth IRA
are tax- free.

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 tax-qualified plan before the Participant attains age
59 1/2 are generally subject to an additional penalty 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 after age 55. For these purposes, a life annuity means 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).

In addition, effective for distributions made from an IRA after December
31, 1997, there is no such penalty tax on distributions that do not exceed
the amount of certain qualifying higher education expenses, as defined by
Section 72(t)(7) of the Code, or which are qualified first-time homebuyer
distributions meeting the requirements of Section 72(t)(8) of the Code.

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 tax-qualified retirement plan generally must
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 the
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. WITHHOLDING.

In general, distributions from IRAs and plans described in Section 457 of
the Code are subject to regular wage withholding rules. Periodic
distributions from other tax-qualified retirement plans that are made for a
specified period of 10 or more years or for the life or life expectancy of
the participant (or the joint lives or life expectancies of the participant
and beneficiary) are generally subject to federal income

33
<PAGE>

tax withholding as if the recipient were married claiming three exemptions.
The recipient of periodic distributions may generally elect not to have
withholding apply or to have income taxes withheld at a different rate by
providing a completed election form.

Other distributions from such other tax-qualified retirement 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; or

3) direct transfer distributions.

Direct transfer distributions are direct payments to an IRA or to another
eligible retirement plan under Code section 401(a)(31).

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 IRS has issued several rulings which discuss investor control. The
IRS has ruled that certain 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 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

34
<PAGE>
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
the gross income of a non-natural person, unless the non-natural person is
holding as an agent for a natural person. There are additional exceptions to
this general rule of inclusion for (i) certain annuities held by a structured
settlement company, (ii) certain annuities held by an employer with respect to a
terminated pension plan and (iii) certain immediate annuities. 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 Contract Owner of any Fund shareholders' meeting
if the shares held for the Contract Owner's accounts may be voted at such
meetings. Hartford shall also send proxy materials and a form of instruction by
means of which the Contract Owner can instruct Hartford with respect to the
voting of the Fund shares held for the Contract Owner's account. In connection
with the voting of Fund shares held by it, Hartford shall arrange for the
handling and tallying of proxies received from Contract Owners. 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 Contract Owners for whose
accounts the Fund shares are held. If a Contract Owner desires to attend any
meeting at which shares held for the Contract Owner's benefit may be voted, the
Contract Owner may request Hartford to furnish a proxy or otherwise arrange for
the exercise of voting rights with respect to the Fund shares held for such
Contract Owner's account. In the event that the Contract Owner gives no
instructions or leaves the manner of voting discretionary, Hartford will vote
such shares, including any of its own shares, of the appropriate Fund in the
same proportion as shares of that Fund for which instructions have been
received.

Every Participant under a contract issued with respect to DC-II who has a
full (100%) vested interest under a group contract, shall receive proxy material
and a form of instruction by means of which Participants may instruct the
Contract Owner with respect to the number of votes attributable to his
individual participation under a group contract.

A Contract Owner or Participant, as appropriate, is entitled to one full or
fractional vote for each full or fractional Accumulation or Annuity Unit owned.
The Contract Owner has voting rights throughout the life of the contract. The
vested Participant has voting rights for as long as participation in the
contract continues. Voting rights attach only to Separate Account interests.

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

WILL OTHER CONTRACTS BE PARTICIPATING IN THE SEPARATE ACCOUNTS?

In addition to the contracts described in this Prospectus, it is
contemplated that other forms of group or individual annuities may be sold
providing benefits which vary in accordance with the investment experience of
the Separate Accounts.

35
<PAGE>

CAN HARTFORD WAIVE ANY RIGHTS UNDER THE CONTRACT?

Hartford may, at its sole discretion, elect not to exercise a right or
reservation specified in this Contract. Such election shall not constitute a
waiver of the right to exercise such right or reservation at any subsequent
time.

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 200 Hopmeadow Street, Simsbury, CT 06089.

The securities will be sold by salespersons of HSD who represent Hartford as
insurance and Variable Annuity agents and who are registered representatives or
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 National Association of
Securities Dealers, Inc.

Compensation will be paid by Hartford to registered representatives for the
sale of contracts up to a maximum of 5.0% of Contributions and .25% annually on
Participants' Individual Account Values. Sales compensation may be reduced.

Broker-dealers or financial institutions are compensated according to a
schedule set forth by HSD and any applicable rules or regulations for variable
insurance compensation. Compensation is generally based on premium payments made
by policyholders or contract owners. This compensation is usually paid from the
sales charge described in this Prospectus.

In addition, a broker-dealer or financial institution may also receive
additional compensation for, among other things, training, marketing or other
services provided. HSD, its affiliates or Hartford may also make compensation
arrangements with certain broker-dealers or financial institutions based on
total sales by the broker-dealer or financial institution of insurance products.
These payments, which may be different for different broker-dealers or financial
institutions, will be made by HSD, its affiliates or Hartford out of their own
assets and will not effect the amounts paid by the policyholders or contract
owners to purchase, hold or surrender variable insurance products.

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 ACCOUNTS?

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

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

The audited 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. 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 1-800-528-9009 or your sales
representative or by writing to:

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

36
<PAGE>
APPENDIX
ACCUMULATION PERIOD UNDER PRIOR
GROUP CONTRACTS

Such contracts are no longer being issued. Contract Owners may continue to
make Contributions to the contracts subject to the following charges.

A. DEDUCTIONS UNDER THE PRIOR GROUP CONTRACTS FOR SALES EXPENSES, THE MINIMUM
DEATH BENEFIT GUARANTEE AND ANY APPLICABLE PREMIUM TAXES.

Contributions made to a Participant's Individual Account pursuant to the
terms of the prior contracts are subject to the following deductions:

<TABLE>
<CAPTION>
AGGREGATE CONTRIBUTION
AMOUNTS TO THE MINIMUM TOTAL AS %
SUB ACCOUNTS' INVESTED TOTAL SALES DEATH OF NET
DEDUCTIONS DEDUCTION EXPENSES BENEFIT AMOUNT
- ----------------------------------------------------------------------- ------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
PORTION REPRESENTING
--------------------------
On the first $2,500.................................................... 7.00% 6.25% .75% 7.53%
On the next $47,500.................................................... 3.50% 2.75% .75% 3.63%
On the next $50,000.................................................... 2.00% 1.25% .75% 2.04%
On the excess over $100,000............................................ 1.00% .25% .75% 1.01%
</TABLE>

* This illustration does not assume the payment of any Premium Taxes.

Under the schedule of deductions shown above, all amounts contributed on
behalf of a Participants Individual Account to the Bond Fund and Stock Fund
Sub-Accounts are aggregated to determine if a particular level of deductions has
been reached. Thus, if a Contribution has been made on behalf of a Participant's
Account in the amount of $100 and total Contributions of $2,450 have already
been made on his or her behalf, the first $50 of the payment will be subject to
a deduction of 7.00% and the remainder to a percentage of 3.50%.

Notwithstanding the above, on variable only contracts and on combination
fixed and/or variable contracts where the annualized stipulated purchase
payments or Contributions with respect to all Participants shall equal or
approximate $250,000 at the end of the second anniversary of the contract, the
sales and minimum death benefits deduction on the aggregate Contributions up to
and including $2,500 with respect to each Participant shall be at the rate of 5%
rather than 7%.

Hartford reserves the right to limit any increase in the Contributions made
to a Participant's Individual Account to not more than three times the total
Contributions made on behalf of such Participant during the initial 12
consecutive months of the Account's existence under the contract of the present
guaranteed deduction rates. Increases in excess of those described will be
accepted only with the consent of Hartford and subject to the then current
deductions being made for sales charges, the Minimum Death Benefit guarantee and
mortality and expense undertaking.

Each contract provides for experience rating of the deduction for sales
expenses and/or the Annual Maintenance Fee. In order to experience rate a
contract, actual sales costs applicable to a particular contract are determined.
If the costs exceed the amounts deducted for such expenses, no additional
deduction will be made. If, however, the amounts deducted for such expenses
exceed actual costs, Hartford, in its discretion, may allocate all, a portion,
or none of such excess as an experience rating credit. If such an allocation is
made, the experience credit will be made as considered appropriate: (1) by a
reduction in the amount deducted from subsequent contributions for sales
expenses; (2) by the crediting of a number of additional Accumulation Units or
by Annuity Units, as applicable, without deduction of any sales or other
expenses therefrom; (3) or by waiver of the Annual Maintenance Fees or by a
combination of the above. To date experience rating credits have been provided
on certain cases.

37
<PAGE>

B. DEDUCTIONS FOR MORTALITY AND EXPENSE ADMINISTRATIVE UNDERTAKINGS, ANNUAL
CONTRACT FEE AND PREMIUM TAXES

1. MORTALITY AND EXPENSE UNDERTAKINGS

Although variable annuity payments made under the contracts will vary in
accordance with the investment performance of the Fund shares, the payments
will not be affected by (a) Hartford's actual expenses, if greater than the
deductions provided for in the contracts, or (b) Hartford's actual mortality
experience among Annuitants after retirement because of the expense and
mortality undertakings by Hartford.

In providing an expense undertaking, Hartford assumes the risk that the
deductions for sales expenses, the Annual Maintenance Fee and the Minimum
Death Benefit during the Accumulation Period may be insufficient to cover the
actual costs of providing such items.

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) to Contract Owners or Annuitant's
Accounts regardless of how long an Annuitant may live and regardless of how
long all Annuitants as a group may live. This undertaking assures a Contract
Owner that neither the longevity of an Annuitant nor an improvement in life
expectancy will have any adverse effect on the monthly annuity payments the
Employees will receive under the contract. It thus relieves the Contract Owner
from the risk that Participants in the Plan will outlive the funds
accumulated.

The mortality undertaking is based on Hartford's 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.

For assuming these risks Hartford makes a minimum daily charge against the
value of the average daily assets held under DC-I and DC-II, as appropriate,
of 1.25% with respect to the Bond Fund, Stock Fund and Money Market Fund
Sub-Accounts where available, on an annual basis. This rate may be
periodically increased by Hartford subject to a maximum annual rate of 2.00%.
However, no increase will occur unless the Securities and Exchange Commission
first approves this increase.

2. ANNUAL MAINTENANCE FEE

There will be an Annual Maintenance Fee deduction in the amount of $10.00
from the value of each such Participant's Individual Account under the
contracts, except as set forth below.

This fee will be deducted from the value of each such account on the last
business day of each calendar year; provided, however, that if the value of a
Participant's Individual Account is redeemed in full at any time before the
last business day of the year, then the Annual Maintenance Fee charge will be
deducted from the proceeds of such redemption. No contract fee deduction will
be made during the Annuity Payment period under the contracts.

In the event that the Contributions made on behalf of a Participant are
allocated partially to the fixed annuity portion of the Participant's
Individual Account and partially to the variable annuity portion of the
Participant's Individual Account, then the Annual Maintenance Fee will be
deducted first from the value of the fixed annuity portion of the
Participant's Individual Account. If the value of the fixed annuity portion of
the Participant's Individual Account is insufficient to pay the fee, then any
deficit will be deducted from the value of the variable annuity portion of the
Participant's Individual Account in the following manner: if there are no
accumulation units in the General Account or if their value is less than
$10.00, the General Account portion of an account will be made against values
held in the Stock Fund Sub-Account of DC-I. If the Stock Fund Sub-Account
values are insufficient to cover the fee, the fee shall be deducted from the
account values held in the Bond Fund Sub-Account of DC-I. The fee is not
applicable to the Money Market Fund Sub-Account where available. In the even
that the Contributions made on behalf of a Participant are allocated partially
to the General Account and partially to the Separate Account, the Annual
Maintenance Fee will be charged against the Separate Account and General
Account on a pro rata basis.

38
<PAGE>
3. PREMIUM TAXES

A deduction is also made for Premium Taxes, if applicable. On any contract
subject to Premium Taxes, the tax will be deducted from Contributions when
received, from the proceeds at surrender, or from the amount applied to effect
an annuity at the time annuity payments commence.

39
<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>

40
<PAGE>
-2-

PART B

STATEMENT OF ADDITIONAL INFORMATION

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

Group Variable Annuity Contracts Issued by
Hartford Life Insurance Company
With Respect to DC-I and DC-II

This Statement of Additional Information is not a Prospectus. The information
contained herein should be read in conjunction with the Prospectus.

To obtain a Prospectus, send a written request to Hartford Life Insurance
Company, Attn: RPVA Administration, P.O. Box 2999, Hartford, CT 06104-2999.

Date of Prospectus: May 1, 1998
Date of Statement of Additional Information: May 1, 1998

<PAGE>
-3-

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 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 ultimately controlled by The Hartford Financial
Services Group, Inc., one of the largest financial service providers in the
United States.

HARTFORD RATINGS

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
RATING AGENCY EFFECTIVE RATING BASIS OF RATING
DATE OF RATING
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
A.M. Best and Company, Inc. 9/9/97 A+ Financial soundness and
operating performance.
- -------------------------------------------------------------------------------
Standard & Poor's 1/23/98 AA Claims paying ability
- -------------------------------------------------------------------------------
Duff & Phelps 1/23/98 AA+ Claims paying ability
- -------------------------------------------------------------------------------
</TABLE>

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 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. 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

<PAGE>

-5-

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% on initial Contributions and .50% 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 MONEY MARKET FUND SUB-ACCOUNTS. As summarized in the Prospectus
under the heading "Performance Related Information," the yield of the
Sub-Account for a seven day period (the "base period") will be computed by
determining the "net change in value" of a hypothetical account having a balance
of one unit 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 dividends as declared by the underlying funds, less expense
and Contract charges of the account) for the period, but will not include
realized gains or losses or unrealized appreciation or depreciation on the
underlying fund shares.

The effective yield is calculated by compounding the base period return by
adding 1, raising the sum to a power equal to 365/7 and subtracting 1 from the
result, according to the following formula:

Effective Yield = [(Base Period Return + 1) to the power of 365/7] - 1

THE MONEY MARKET FUND SUB-ACCOUNT'S 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 MAINTENANCE FEE.

The yield and effective yield for the seven day period ending December 31, 1997
is as follows:

DC I
- -------------------------------------------------------
SUB-ACCOUNTS YIELD EFFECTIVE YIELD
<S> <C> <C>
- -------------------------------------------------------
Money Market Fund* 4.46% 4.56%
- -------------------------------------------------------
</TABLE>

<PAGE>
-6-

* Yield and effective yield for the seven day period ending December 31, 1997.

DC II
- -------------------------------------------------------
SUB-ACCOUNTS YIELD EFFECTIVE YIELD
<S> <C> <C>
- -------------------------------------------------------
Money Market Fund* 4.11 4.20
- -------------------------------------------------------
</TABLE>

* Yield and effective yield for the seven day period ending December 31, 1997.

YIELDS OF BOND FUND AND MORTGAGE SECURITIES FUND SUB-ACCOUNTS. As summarized in
the Prospectus under the heading "Performance Related Information," yields of
the above 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 fund's "net asset value per share"
for the same period in addition to the daily expense charge assessed, at the
sub-account level for the respective period. The 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 underlying Fund.

THE YIELD REFLECTS RECURRING CHARGES ON THE SEPARATE ACCOUNT LEVEL, INCLUDING
THE ANNUAL MAINTENANCE FEE.

Yield calculations of the Sub-Accounts used for illustration purposes reflect
the interest earned by the Sub-Accounts, less applicable asset charges assessed
against a Contract Owner's account over the base period. Yield quotations based
on a 30 day period were computed by dividing the dividends and interests earned
during the period by the maximum offering price per unit on the last day of the
period, according to the following formula:

Example:

Current Yield Formula for the Sub-Account 2 [((A-B)/(CD) + 1) to the power
of 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.

<PAGE>
-7-

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.

DC I
- -----------------------------------------------------------------
SUB-ACCOUNTS YIELD
<S> <C>
- -----------------------------------------------------------------
Bond Fund** 5.39%
- -----------------------------------------------------------------
Mortgage Securities Fund** 5.71%
- -----------------------------------------------------------------
</TABLE>

** Yield quotation based on a 30 day period ended December 31, 1997.

DC II
- -----------------------------------------------------------------
SUB-ACCOUNTS YIELD
<S> <C>
- -----------------------------------------------------------------
Bond Fund** 5.02%
- -----------------------------------------------------------------
Mortgage Securities Fund** 5.34%
- -----------------------------------------------------------------
</TABLE>

** Yield quotation based on a 30 day period ended December 31, 1997.

CALCULATION OF TOTAL RETURN. As summarized in the Prospectus under the heading
"Performance Related Information", total return is a measure of the change in
value of an investment in a Sub-Account over the period covered. The formula
for total return used herein includes three steps: (1) calculating the value of
the hypothetical initial investment of $1,000 as of the end of the period by
multiplying the total number of units owned at the end of the period by the unit
value per unit on the last trading day of the period; (2) assuming redemption at
the end of the period and deducting any applicable contingent deferred sales
charge and (3) dividing this account value for the hypothetical investor by the
initial $1,000 investment and annualizing the result for periods of less than
one year. Total return will be calculated for one year, five years and ten
years or some other relevant periods if a Sub-Account has not been in existence
for at least ten years.

The following are the standardized average annual total return quotations for
the Sub-Accounts for the 1, 5, and 10 Year periods ended December 31, 1997:

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FOR YEAR ENDED DECEMBER 31, 1997

DC I

<PAGE>
-8-

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
SUB-ACCOUNTS INCEPTION DATE 1 YEAR 5 YEAR 10 YEAR OR SINCE
INCEPTION*
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Advisers Fund 3/31/83 17.22% 12.95% 12.45%
- -----------------------------------------------------------------------------------------------------
Bond Fund 8/31/77 4.83% 5.37% 7.19%
- -----------------------------------------------------------------------------------------------------
Capital Appreciation Fund 4/2/84 15.19% 16.74% 18.02%
- -----------------------------------------------------------------------------------------------------
Dividend & Growth Fund 3/8/94 24.17% na 21.09%
- -----------------------------------------------------------------------------------------------------
Index Fund 5/1/87 24.85% 17.57% 15.75%
- -----------------------------------------------------------------------------------------------------
International Opportunities Fund 7/2/90 -5.53% 8.67% 4.78%
- -----------------------------------------------------------------------------------------------------
Mortgage Securities Fund 1/1/85 2.64% 4.56% 6.83%
- -----------------------------------------------------------------------------------------------------
Stock Fund 8/31/77 23.69% 17.49% 15.52%
- -----------------------------------------------------------------------------------------------------
Money Market Fund 6/30/80 -.83% 2.40% 4.16%
- -----------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio 12/31/88 13.04% 10.52% 10.78%
- -----------------------------------------------------------------------------------------------------
</TABLE>

*Figures represent performance since inception for Sub-Accounts in existence for
less than 10 years, or performance for 10 years for Sub-Accounts in existence
for more than 10 years.

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FOR YEAR ENDED DECEMBER 31, 1997

DC II

<PAGE>

-9-

- -----------------------------------------------------------------------------------------------------
Capital Appreciation Fund 4/2/84 14.83% 16.60% 17.95%
- -----------------------------------------------------------------------------------------------------
Dividend & Growth Fund 3/8/94 23.74% na 20.88%
- -----------------------------------------------------------------------------------------------------
Index Fund 5/1/87 24.92% 17.58% 15.76%
- -----------------------------------------------------------------------------------------------------
International Opportunities Fund 7/2/90 -5.86% 8.53% 4.69%
- -----------------------------------------------------------------------------------------------------
Mortgage Securities Fund 1/1/85 2.28% 4.43% 6.76%
- -----------------------------------------------------------------------------------------------------
Stock Fund 8/31/77 23.27% 17.35% 15.45%
- -----------------------------------------------------------------------------------------------------
Money Market Fund 6/30/80 -1.18% 2.28% 4.10%
- -----------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio 12/31/88 12.65% 10.38% 10.70%
- -----------------------------------------------------------------------------------------------------
</TABLE>

*Figures represent performance since inception for Sub-Accounts in existence for
less than 10 years, or performance for 10 years for Sub-Accounts in existence
for more than 10 years.

In addition to the standardized total return, the Sub-Account may advertise a
non-standardized total return. This figure will usually be calculated for one
year, five years, and ten years or other periods. Non-standardized total return
is measured in the same manner as the standardized total return described above,
except that the contingent deferred sales charge and the Annual Maintenance Fee
are not deducted. Therefore, non-standardized total return for a Sub-Account is
higher than standardized total return for a Sub-Account.

For the fiscal year ended December 31, 1997, the non-standardized annualized
total return for the Sub-Accounts listed below were as follows:

NON-STANDARDIZED ANNUALIZED TOTAL RETURN FOR YEAR ENDED DECEMBER 31, 1997

DC I

<PAGE>
-10-

- -----------------------------------------------------------------------------------------------------
Capital Appreciation Fund 4/2/84 21.25% 17.64% 18.21%
- -----------------------------------------------------------------------------------------------------
Dividend & Growth Fund 3/8/94 30.70% na 22.28%
- -----------------------------------------------------------------------------------------------------
Index Fund 5/1/87 31.42% 18.45% 15.98%
- -----------------------------------------------------------------------------------------------------
International Opportunities Fund 7/2/90 -.56% 9.86% 5.35%
- -----------------------------------------------------------------------------------------------------
Mortgage Securities Fund 1/1/85 8.04% 5.64% 7.16%
- -----------------------------------------------------------------------------------------------------
Stock Fund 8/31/77 30.20% 18.37% 15.75%
- -----------------------------------------------------------------------------------------------------
Money Market Fund 6/30/80 4.39% 3.46% 4.48%
- -----------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio 12/31/88 18.99% 11.64% 11.20%
- -----------------------------------------------------------------------------------------------------
</TABLE>

*Figures represent performance since inception for Sub-Accounts in existence for
less than 10 years, or performance for 10 years for Sub-Accounts in existence
for more than 10 years.

NON-STANDARDIZED ANNUALIZED TOTAL RETURN FOR YEAR ENDED DECEMBER 31, 1997

DC II

<PAGE>
-11-

- -----------------------------------------------------------------------------------------------------
Mortgage Securities Fund 1/1/85 7.66% 5.51% 7.09%
- -----------------------------------------------------------------------------------------------------
Stock Fund 8/31/77 29.76% 18.23% 15.68%
- -----------------------------------------------------------------------------------------------------
Money Market Fund 6/30/80 4.02% 3.33% 4.42%
- -----------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio 12/31/88 18.58% 11.50% 11.12%
- -----------------------------------------------------------------------------------------------------
</TABLE>

*Figures represent performance since inception for Sub-Accounts in existence for
less than 10 years, or performance for 10 years for Sub-Accounts in existence
for more than 10 years.

PERFORMANCE COMPARISONS

YIELD AND TOTAL RETURN. Each Sub-Account may from time to time include its
total return in advertisements or in information furnished to present or
prospective shareholders. Each Sub-Account may from time to time include its
yield and total return in advertisements or information furnished to present or
prospective shareholders. Each Sub-Account may from time to time include in
advertisements its total return (and yield in the case of certain Sub-Accounts)
the ranking of those performance figures relative to such figures for groups of
other annuities analyzed by Lipper Analytical Services as having the same
investment objectives.

The total return and yield may also be used to compare the performance of the
Sub-Accounts against certain widely acknowledged outside standards or indices
for stock and bond market performance. The Standard & Poor's Composite Index of
500 Stocks (the "S&P 500") is a market value-weighted and unmanaged index
showing the changes in the aggregate market value of 500 stocks relative to the
base period 1941-43. The S&P 500 is composed almost entirely of common stocks
of companies listed on the New York Stock Exchange, although the common stocks
of a few companies listed on the American Stock Exchange or traded
over-the-counter are included. The 500 companies represented include 400
industrial, 60 transportation and 40 financial services concerns. The S&P 500
represents about 80% of the market value of all issues traded on the New York
Stock Exchange.

The NASDAQ-OTC Price Index (the "NASDAQ Index") is a market value-weighted and
unmanaged index showing the changes in the aggregate market value of
approximately 3,500 stocks relative to the base measure of 100.00 on February 5,
1971. The NASDAQ Index is composed entirely of common stocks of companies
traded over-the-counter and often through the National Association of Securities
Dealers Automated Quotations ("NASDAQ") system. Only those over-the-counter
stocks having only one market maker or traded on exchanges are excluded.

<PAGE>
-12-

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>

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

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Hartford Life Insurance Company
DC Variable Account-I and to the
Owners of Units of Interest Therein:

We have audited the accompanying statement of assets and liabilities of Hartford
Life Insurance Company DC Variable Account-I (the Account) as of December 31,
1997, 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.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hartford Life Insurance Company
DC Variable Account-I as of December 31, 1997, 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 16, 1998
<PAGE>
This page intentionally left blank.
<PAGE>

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

DC VARIABLE ACCOUNT-I
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund, Inc.
Shares 38,997,454
Cost $ 38,619,025
Market Value............................. $40,937,732 -- -- --
Hartford Stock Fund, Inc.
Shares 125,354,881
Cost $422,342,202
Market Value............................. -- $642,234,044 -- --
HVA Money Market Fund, Inc.
Shares 32,063,775
Cost $ 32,063,775
Market Value............................. -- -- $32,063,775 --
Hartford Advisers Fund, Inc.
Shares 284,086,027
Cost $510,625,533
Market Value............................. -- -- -- $717,813,232
Hartford Capital Appreciation Fund, Inc.
Shares 112,894,691
Cost $357,238,406
Market Value............................. -- -- -- --
Hartford Mortgage Securities Fund, Inc.
Shares 22,321,348
Cost $ 23,536,285
Market Value............................. -- -- -- --
Hartford Index Fund, Inc.
Shares 44,911,330
Cost $ 90,720,114
Market Value............................. -- -- -- --
Hartford International Opportunities Fund,
Inc.
Shares 43,891,996
Cost $ 53,190,584
Market Value............................. -- -- -- --
Hartford Dividend and Growth Fund, Inc.
Shares 37,577,039
Cost $ 57,533,262
Market Value............................. -- -- -- --
Calvert Responsibly Invested Balanced Fund
Shares 13,956,637
Cost $ 23,285,360
Market Value............................. -- -- -- --
Due from Hartford Life Insurance Company... 148,607 48,320 131,601 --
Receivable from fund shares sold........... -- 222,749 54,084 372,223
----------- ------------ ----------- -------------
Total Assets............................... 41,086,339 642,505,113 32,249,460 718,185,455
----------- ------------ ----------- -------------
LIABILITIES:
Due to Hartford Life Insurance Company..... -- 222,850 54,084 378,135
Payable for fund shares purchased.......... 148,516 48,048 132,044 --
----------- ------------ ----------- -------------
Total Liabilities.......................... 148,516 270,898 186,128 378,135
----------- ------------ ----------- -------------
Net Assets (variable annuity contract
liabilities).............................. $40,937,823 $642,234,215 $32,063,332 $717,807,320
----------- ------------ ----------- -------------
----------- ------------ ----------- -------------
Units Owned by Participants................ 8,821,471 44,558,473 11,207,569 137,946,626
Unit Values*............................... $ 4.640703 $ 14.413290 $ 2.860864 $ 5.203515
</TABLE>

* Unit values amounts represent an average of individual unit values, which
differ within each sub-account.

The accompanying notes are an integral part of these financial statements.
<PAGE>

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund, Inc.
Shares 38,997,454
Cost $ 38,619,025
Market Value............................. -- -- -- -- --
Hartford Stock Fund, Inc.
Shares 125,354,881
Cost $422,342,202
Market Value............................. -- -- -- -- --
HVA Money Market Fund, Inc.
Shares 32,063,775
Cost $ 32,063,775
Market Value............................. -- -- -- -- --
Hartford Advisers Fund, Inc.
Shares 284,086,027
Cost $510,625,533
Market Value............................. -- -- -- -- --
Hartford Capital Appreciation Fund, Inc.
Shares 112,894,691
Cost $357,238,406
Market Value............................. $497,833,638 -- -- -- --
Hartford Mortgage Securities Fund, Inc.
Shares 22,321,348
Cost $ 23,536,285
Market Value............................. -- $24,191,452 -- -- --
Hartford Index Fund, Inc.
Shares 44,911,330
Cost $ 90,720,114
Market Value............................. -- -- $129,241,737 -- --
Hartford International Opportunities Fund,
Inc.
Shares 43,891,996
Cost $ 53,190,584
Market Value............................. -- -- -- $56,816,301 --
Hartford Dividend and Growth Fund, Inc.
Shares 37,577,039
Cost $ 57,533,262
Market Value............................. -- -- -- -- $73,362,706
Calvert Responsibly Invested Balanced Fund
Shares 13,956,637
Cost $ 23,285,360
Market Value............................. -- -- -- -- --
Due from Hartford Life Insurance Company... 144,157 5,756 259,950 11,466 39,789
Receivable from fund shares sold........... 10,557 19,695 -- 15,167 161,586
----------------- --------------- ----------- ------------------ -------------
Total Assets............................... 497,988,352 24,216,903 129,501,687 56,842,934 73,564,081
----------------- --------------- ----------- ------------------ -------------
LIABILITIES:
Due to Hartford Life Insurance Company..... 10,297 19,697 -- 15,177 161,494
Payable for fund shares purchased.......... 139,815 6,097 258,582 11,466 39,312
----------------- --------------- ----------- ------------------ -------------
Total Liabilities.......................... 150,112 25,794 258,582 26,643 200,806
----------------- --------------- ----------- ------------------ -------------
Net Assets (variable annuity contract
liabilities).............................. $497,838,240 $24,191,109 $129,243,105 $56,816,291 $73,363,275
----------------- --------------- ----------- ------------------ -------------
----------------- --------------- ----------- ------------------ -------------
Units Owned by Participants................ 62,608,548 9,203,522 67,787,648 38,368,527 37,647,253
Unit Values*............................... $ 7.951602 $ 2.628462 $ 1.906588 $ 1.458805 $ 1.948702

<CAPTION>
CALVERT
RESPONSIBLY INVESTED
BALANCED PORTFOLIO
SUB-ACCOUNT
--------------------
<S> <C>
ASSETS:
Investments:
Hartford Bond Fund, Inc.
Shares 38,997,454
Cost $ 38,619,025
Market Value............................. --
Hartford Stock Fund, Inc.
Shares 125,354,881
Cost $422,342,202
Market Value............................. --
HVA Money Market Fund, Inc.
Shares 32,063,775
Cost $ 32,063,775
Market Value............................. --
Hartford Advisers Fund, Inc.
Shares 284,086,027
Cost $510,625,533
Market Value............................. --
Hartford Capital Appreciation Fund, Inc.
Shares 112,894,691
Cost $357,238,406
Market Value............................. --
Hartford Mortgage Securities Fund, Inc.
Shares 22,321,348
Cost $ 23,536,285
Market Value............................. --
Hartford Index Fund, Inc.
Shares 44,911,330
Cost $ 90,720,114
Market Value............................. --
Hartford International Opportunities Fund,
Inc.
Shares 43,891,996
Cost $ 53,190,584
Market Value............................. --
Hartford Dividend and Growth Fund, Inc.
Shares 37,577,039
Cost $ 57,533,262
Market Value............................. --
Calvert Responsibly Invested Balanced Fund
Shares 13,956,637
Cost $ 23,285,360
Market Value............................. $27,662,055
Due from Hartford Life Insurance Company... 38,260
Receivable from fund shares sold........... 4,175
--------------------
Total Assets............................... 27,704,490
--------------------
LIABILITIES:
Due to Hartford Life Insurance Company..... 3,357
Payable for fund shares purchased.......... 34,917
--------------------
Total Liabilities.......................... 38,274
--------------------
Net Assets (variable annuity contract
liabilities).............................. $27,666,216
--------------------
--------------------
Units Owned by Participants................ 10,795,214
Unit Values*............................... $ 2.562822
</TABLE>

<PAGE>

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

DC VARIABLE ACCOUNT-I
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.................................. $ 2,197,796 $ 5,889,481 $ 1,496,124 $ 15,133,711
EXPENSES:
Mortality and expense undertakings......... (290,789) (4,520,503) (234,883) (5,247,637)
----------- ------------ ----------- -------------
Net investment income (loss)............. 1,907,007 1,368,978 1,261,241 9,886,074
----------- ------------ ----------- -------------
CAPITAL GAINS INCOME......................... -- 24,157,334 -- 25,268,801
----------- ------------ ----------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on security
transactions.............................. 124,999 6,578,151 -- 5,071,741
Net unrealized appreciation (depreciation)
of investments during the period.......... 1,560,612 110,766,483 -- 94,029,565
----------- ------------ ----------- -------------
Net gain (loss) on investments........... 1,685,611 117,344,634 -- 99,101,306
----------- ------------ ----------- -------------
Net increase in net assets resulting from
operations.............................. $ 3,592,618 $142,870,946 $ 1,261,241 $ 134,256,181
----------- ------------ ----------- -------------
----------- ------------ ----------- -------------
</TABLE>

<PAGE>

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT
MONEY CAPITAL MORTGAGE
MARKET FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- ----------------- --------------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.................................. $235,572 $ 2,427,129 $1,442,619 $ 1,455,174
EXPENSES:
Mortality and expense undertakings......... (38,745) (3,623,431) (194,531) (856,935)
--------------- ----------------- --------------- -----------
Net investment income (loss)............. 196,827 (1,196,302) 1,248,088 598,239
--------------- ----------------- --------------- -----------
CAPITAL GAINS INCOME......................... -- 28,766,004 -- 6,533,234
--------------- ----------------- --------------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on security
transactions.............................. -- 4,496,895 44,928 97,833
Net unrealized appreciation (depreciation)
of investments during the period.......... -- 50,207,429 629,776 20,028,797
--------------- ----------------- --------------- -----------
Net gain (loss) on investments........... -- 54,704,324 674,704 20,126,630
--------------- ----------------- --------------- -----------
Net increase in net assets resulting from
operations.............................. $196,827 $82,274,026 $1,922,792 $27,258,103
--------------- ----------------- --------------- -----------
--------------- ----------------- --------------- -----------

<CAPTION>
CALVERT
INTERNATIONAL DIVIDEND AND RESPONSIBLY INVESTED
OPPORTUNITIES FUND GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ ------------ --------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.................................. $ 534,888 $ 1,023,628 $ 606,422
EXPENSES:
Mortality and expense undertakings......... (535,646) (440,844) (202,081)
------------------ ------------ -----------
Net investment income (loss)............. (758) 582,784 404,341
------------------ ------------ -----------
CAPITAL GAINS INCOME......................... 4,696,573 1,059,984 1,315,449
------------------ ------------ -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on security
transactions.............................. 888,549 (51,874) 69,930
Net unrealized appreciation (depreciation)
of investments during the period.......... (5,282,405) 11,994,336 2,549,851
------------------ ------------ -----------
Net gain (loss) on investments........... (4,393,856) 11,942,462 2,619,781
------------------ ------------ -----------
Net increase in net assets resulting from
operations.............................. $ 301,959 $ 13,585,230 $4,339,571
------------------ ------------ -----------
------------------ ------------ -----------
</TABLE>
<PAGE>

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

DC VARIABLE ACCOUNT-I
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............... $ 1,907,007 $ 1,368,978 $ 1,261,241 $ 9,886,074
Capital gains income....................... -- 24,157,334 -- 25,268,801
Net realized gain (loss) on security
transactions.............................. 124,999 6,578,151 -- 5,071,741
Net unrealized appreciation (depreciation)
of investments during the period.......... 1,560,612 110,766,483 -- 94,029,565
----------- ------------ ------------ -------------
Net increase in net assets resulting from
operations................................ 3,592,618 142,870,946 1,261,241 134,256,181
----------- ------------ ------------ -------------
UNIT TRANSACTIONS:
Purchases.................................. 3,466,840 46,154,040 2,966,841 59,152,156
Net transfers.............................. 1,331,342 21,237,621 8,653,859 (13,045,412)
Surrenders................................. (4,053,858) (35,208,472) (7,126,866) (36,510,443)
----------- ------------ ------------ -------------
Net increase (decrease) in net assets
resulting from unit transactions.......... 744,324 32,183,189 4,493,834 9,596,301
----------- ------------ ------------ -------------
Total increase (decrease) in net assets.... 4,336,942 175,054,135 5,755,075 143,852,482
NET ASSETS:
Beginning of period........................ 36,600,881 467,180,080 26,308,257 573,954,838
----------- ------------ ------------ -------------
End of period.............................. $40,937,823 $642,234,215 $ 32,063,332 $ 717,807,320
----------- ------------ ------------ -------------
----------- ------------ ------------ -------------

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

MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------ -------------
OPERATIONS:
Net investment income (loss)............... $ 1,878,877 $ 2,263,596 $ 898,475 $ 9,658,681
Capital gains income....................... -- 14,883,740 -- 10,564,590
Net realized gain (loss) on security
transactions.............................. 166,958 66,841,431 -- 58,999,565
Net unrealized (depreciation) appreciation
of investments during the period.......... (1,199,667) 1,283,218 -- (4,260,635)
----------- ------------ ------------ -------------
Net increase in net assets resulting from
operations................................ 846,168 85,271,985 898,475 74,962,201
----------- ------------ ------------ -------------
UNIT TRANSACTIONS:
Purchases.................................. 3,515,268 37,974,254 2,412,011 55,548,282
Net transfers.............................. (2,237,323) 448,728 3,187,090 (13,204,076)
Surrenders................................. (892,123) (9,114,856) (918,482) (11,940,914)
----------- ------------ ------------ -------------
Net increase (decrease) in net assets
resulting from unit transactions.......... 385,822 29,308,126 4,680,619 30,403,292
----------- ------------ ------------ -------------
Total increase (decrease) in net assets.... 1,231,990 114,580,111 5,579,094 105,365,493
NET ASSETS:
Beginning of period........................ 35,368,891 352,599,969 20,729,163 468,589,345
----------- ------------ ------------ -------------
End of period.............................. $36,600,881 $467,180,080 $ 26,308,257 $ 573,954,838
----------- ------------ ------------ -------------
----------- ------------ ------------ -------------
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT CAPITAL MORTGAGE
MONEY MARKET FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------- ----------------- --------------- ------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............... $ 196,827 $ (1,196,302) $ 1,248,088 $ 598,239
Capital gains income....................... -- 28,766,004 -- 6,533,234
Net realized gain (loss) on security
transactions.............................. -- 4,496,895 44,928 97,833
Net unrealized appreciation (depreciation)
of investments during the period.......... -- 50,207,429 629,776 20,028,797
------------------- ----------------- --------------- ------------------
Net increase in net assets resulting from
operations................................ 196,827 82,274,026 1,922,792 27,258,103
------------------- ----------------- --------------- ------------------
UNIT TRANSACTIONS:
Purchases.................................. 774,359 58,909,002 2,223,659 15,649,018
Net transfers.............................. (10,442,791) (2,307,551) (2,963,809) 16,985,560
Surrenders................................. (668,503) (29,434,632) (2,745,277) (6,626,315)
------------------- ----------------- --------------- ------------------
Net increase (decrease) in net assets
resulting from unit transactions.......... (10,336,935) 27,166,819 (3,485,427) 26,008,263
------------------- ----------------- --------------- ------------------
Total increase (decrease) in net assets.... (10,140,108) 109,440,845 (1,562,635) 53,266,366
NET ASSETS:
Beginning of period........................ 10,140,108 388,397,395 25,753,744 75,976,739
------------------- ----------------- --------------- ------------------
End of period.............................. $ -- $497,838,240 $24,191,109 $129,243,105
------------------- ----------------- --------------- ------------------
------------------- ----------------- --------------- ------------------

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

U.S. GOVERNMENT CAPITAL MORTGAGE
MONEY MARKET FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------- ----------------- --------------- ------------------
OPERATIONS:
Net investment income (loss)............... $ 343,436 $ (1,092,104) $ 1,355,014 $ 728,190
Capital gains income....................... -- 18,716,143 -- 935,734
Net realized gain (loss) on security
transactions.............................. -- 29,382,290 (18,537) 5,514,280
Net unrealized (depreciation) appreciation
of investments during the period.......... -- 12,195,355 (351,685) 4,693,033
------------------- ----------------- --------------- ------------------
Net increase in net assets resulting from
operations................................ 343,436 59,201,684 984,792 11,871,237
------------------- ----------------- --------------- ------------------
UNIT TRANSACTIONS:
Purchases.................................. 1,337,245 53,044,599 2,661,238 10,324,537
Net transfers.............................. 259,211 (3,808,589) (3,090,374) 8,456,897
Surrenders................................. (330,706) (6,625,610) (648,434) (1,299,479)
------------------- ----------------- --------------- ------------------
Net increase (decrease) in net assets
resulting from unit transactions.......... 1,265,750 42,610,400 (1,077,570) 17,481,955
------------------- ----------------- --------------- ------------------
Total increase (decrease) in net assets.... 1,609,186 101,812,084 (92,778) 29,353,192
NET ASSETS:
Beginning of period........................ 8,530,922 286,585,311 25,846,522 46,623,547
------------------- ----------------- --------------- ------------------
End of period.............................. $10,140,108 $388,397,395 $25,753,744 $75,976,739
------------------- ----------------- --------------- ------------------
------------------- ----------------- --------------- ------------------

<CAPTION>
CALVERT
INTERNATIONAL DIVIDEND AND RESPONSIBLY INVESTED
OPPORTUNITIES FUND GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ -------------------- --------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............... $ (758) $ 582,784 $ 404,341
Capital gains income....................... 4,696,573 1,059,984 1,315,449
Net realized gain (loss) on security
transactions.............................. 888,549 (51,874) 69,930
Net unrealized appreciation (depreciation)
of investments during the period.......... (5,282,405) 11,994,336 2,549,851
------------------ -------------------- --------------------
Net increase in net assets resulting from
operations................................ 301,959 13,585,230 4,339,571
------------------ -------------------- --------------------
UNIT TRANSACTIONS:
Purchases.................................. 11,237,406 11,234,389 3,573,694
Net transfers.............................. (15,648,256) 19,144,366 (1,447,654)
Surrenders................................. (3,880,815) (1,727,395) (659,872)
------------------ -------------------- --------------------
Net increase (decrease) in net assets
resulting from unit transactions.......... (8,291,665) 28,651,360 1,466,168
------------------ -------------------- --------------------
Total increase (decrease) in net assets.... (7,989,706) 42,236,590 5,805,739
NET ASSETS:
Beginning of period........................ 64,805,997 31,126,685 21,860,477
------------------ -------------------- --------------------
End of period.............................. $56,816,291 $73,363,275 $27,666,216
------------------ -------------------- --------------------
------------------ -------------------- --------------------
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
CALVERT
INTERNATIONAL DIVIDEND AND RESPONSIBLY INVESTED
OPPORTUNITIES FUND GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ -------------------- --------------------
OPERATIONS:
Net investment income (loss)............... $ 537,463 $ 299,029 $ 279,479
Capital gains income....................... 1,423,334 208,419 1,166,308
Net realized gain (loss) on security
transactions.............................. 2,372,529 289,777 1,416,934
Net unrealized (depreciation) appreciation
of investments during the period.......... 2,008,357 3,206,970 (711,714)
------------------ -------------------- --------------------
Net increase in net assets resulting from
operations................................ 6,341,683 4,004,195 2,151,007
------------------ -------------------- --------------------
UNIT TRANSACTIONS:
Purchases.................................. 10,623,622 4,720,731 3,423,700
Net transfers.............................. 1,472,637 15,166,440 (640,735)
Surrenders................................. (1,089,816) (496,007) (453,414)
------------------ -------------------- --------------------
Net increase (decrease) in net assets
resulting from unit transactions.......... 11,006,443 19,391,164 2,329,551
------------------ -------------------- --------------------
Total increase (decrease) in net assets.... 17,348,126 23,395,359 4,480,558
NET ASSETS:
Beginning of period........................ 47,457,871 7,731,326 17,379,919
------------------ -------------------- --------------------
End of period.............................. $64,805,997 $31,126,685 $21,860,477
------------------ -------------------- --------------------
------------------ -------------------- --------------------
</TABLE>

<PAGE>

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

DC VARIABLE ACCOUNT-I
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997

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

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

a) SECURITY TRANSACTIONS -- Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments sold is
determined on the basis of identified cost. Dividend and capital gains income
are accrued as of the ex-dividend date. 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 and
Calvert Responsibly Invested Series mutual funds are valued at the closing net
asset value per share as determined by the appropriate Fund as of December 31,
1997.

c) FEDERAL INCOME TAXES -- For Federal income tax purposes, the Account
intends to qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code by distributing substantially all of its taxable income to
variable annuity contract owners and otherwise complying with the requirements
for regulated investment companies. Accordingly, no provision for Federal income
taxes has been made. For purposes of determining net realized taxable gains to
be distributed, the capital gains and losses of each Sub-Account within the
Account are combined. Distribution of any net realized capital gains so
determined will be made to the contract owners of the Sub-Account having net
realized capital gains. The cumulative realized losses used to offset realized
capital gains in each Sub-Account will be considered in the determination of
future distributions of realized capital gains to each Sub-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 .90% 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.

4. HARTFORD U.S. GOVERNMENT MONEY
MARKET FUND:

On June 27, 1997, the Hartford U.S. Government Money Market Fund was merged
with the HVA Money Market Fund. Accordingly, all contractholder account values
held in the Hartford U.S. Government Money Market Fund were exchanged for
equivalent account values of HVA Money Market Fund on June 27, 1997.
<PAGE>

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

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Hartford Life Insurance Company
Separate Account Two and to the
Owners of Units of Interest Therein:

We have audited the accompanying statement of assets and liabilities of Hartford
Life Insurance Company Separate Account Two (the Account) as of December 31,
1997, 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, 1997, 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 16, 1998
<PAGE>
This page intentionally left blank.
<PAGE>

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

SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund, Inc.
Shares 13,748,867
Cost $13,871,095
Market Value................... $14,432,928 -- -- --
Hartford Stock Fund, Inc.
Shares 32,365,883
Cost $73,022,218
Market Value................... -- $165,821,003 -- --
HVA Money Market Fund, Inc.
Shares 5,933,485
Cost $ 5,933,485
Market Value................... -- -- $5,933,485 --
Hartford Advisers Fund, Inc.
Shares 26,712,645
Cost $42,864,084
Market Value................... -- -- -- $ 67,496,067
Hartford Capital Appreciation
Fund, Inc.
Shares 22,392,292
Cost $66,180,725
Market Value................... -- -- -- --
Hartford Mortgage Securities
Fund, Inc.
Shares 3,176,077
Cost $ 3,352,946
Market Value................... -- -- -- --
Hartford Index Fund, Inc.
Shares 8,680,791
Cost $16,771,797
Market Value................... -- -- -- --
Hartford International
Opportunities Fund, Inc.
Shares 7,531,794
Cost $ 9,079,949
Market Value................... -- -- -- --
Hartford Dividend and Growth
Fund, Inc.
Shares 7,260,907
Cost $11,296,243
Market Value................... -- -- -- --
Calvert Responsibly Invested
Balanced Fund
Shares 1,696,915
Cost $ 2,797,362
Market Value................... -- -- -- --
Due from Hartford Life Insurance
Company......................... 9,130 108,971 1,579 223,631
Receivable from fund shares
sold............................ 1,746 141,748 -- --
----------- ------------ ----------- -------------
Total Assets..................... 14,443,804 166,071,722 5,935,064 67,719,698
----------- ------------ ----------- -------------
LIABILITIES:
Due to Hartford Life Insurance
Company......................... 1,746 141,744 -- --
Payable for fund shares
purchased....................... 9,127 108,907 1,611 223,410
----------- ------------ ----------- -------------
Total Liabilities................ 10,873 250,651 1,611 223,410
----------- ------------ ----------- -------------
Net Assets (variable annuity
contract liabilities)........... $14,432,931 $165,821,071 $5,933,453 $ 67,496,288
----------- ------------ ----------- -------------
----------- ------------ ----------- -------------
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund, Inc.
Shares 13,748,867
Cost $13,871,095
Market Value................... -- -- -- -- --
Hartford Stock Fund, Inc.
Shares 32,365,883
Cost $73,022,218
Market Value................... -- -- -- -- --
HVA Money Market Fund, Inc.
Shares 5,933,485
Cost $ 5,933,485
Market Value................... -- -- -- -- --
Hartford Advisers Fund, Inc.
Shares 26,712,645
Cost $42,864,084
Market Value................... -- -- -- -- --
Hartford Capital Appreciation
Fund, Inc.
Shares 22,392,292
Cost $66,180,725
Market Value................... $ 98,743,668 -- -- -- --
Hartford Mortgage Securities
Fund, Inc.
Shares 3,176,077
Cost $ 3,352,946
Market Value................... -- $ 3,442,171 -- -- --
Hartford Index Fund, Inc.
Shares 8,680,791
Cost $16,771,797
Market Value................... -- -- $24,980,790 -- --
Hartford International
Opportunities Fund, Inc.
Shares 7,531,794
Cost $ 9,079,949
Market Value................... -- -- -- $ 9,749,584 --
Hartford Dividend and Growth
Fund, Inc.
Shares 7,260,907
Cost $11,296,243
Market Value................... -- -- -- -- $14,175,673
Calvert Responsibly Invested
Balanced Fund
Shares 1,696,915
Cost $ 2,797,362
Market Value................... -- -- -- -- --
Due from Hartford Life Insurance
Company......................... 117,836 248 51,061 30,907 33,601
Receivable from fund shares
sold............................ -- -- 21,199 -- --
----------------- --------------- ----------- ------------------ -------------
Total Assets..................... 98,861,504 3,442,419 25,053,050 9,780,491 14,209,274
----------------- --------------- ----------- ------------------ -------------
LIABILITIES:
Due to Hartford Life Insurance
Company......................... -- -- 22,120 -- --
Payable for fund shares
purchased....................... 117,073 275 51,032 30,936 33,568
----------------- --------------- ----------- ------------------ -------------
Total Liabilities................ 117,073 275 73,152 30,936 33,568
----------------- --------------- ----------- ------------------ -------------
Net Assets (variable annuity
contract liabilities)........... $ 98,744,431 $ 3,442,144 $24,979,898 $ 9,749,555 $14,175,706
----------------- --------------- ----------- ------------------ -------------
----------------- --------------- ----------- ------------------ -------------

<CAPTION>
CALVERT
RESPONSIBLY INVESTED
BALANCED PORTFOLIO
SUB-ACCOUNT
--------------------
<S> <C>
ASSETS:
Investments:
Hartford Bond Fund, Inc.
Shares 13,748,867
Cost $13,871,095
Market Value................... --
Hartford Stock Fund, Inc.
Shares 32,365,883
Cost $73,022,218
Market Value................... --
HVA Money Market Fund, Inc.
Shares 5,933,485
Cost $ 5,933,485
Market Value................... --
Hartford Advisers Fund, Inc.
Shares 26,712,645
Cost $42,864,084
Market Value................... --
Hartford Capital Appreciation
Fund, Inc.
Shares 22,392,292
Cost $66,180,725
Market Value................... --
Hartford Mortgage Securities
Fund, Inc.
Shares 3,176,077
Cost $ 3,352,946
Market Value................... --
Hartford Index Fund, Inc.
Shares 8,680,791
Cost $16,771,797
Market Value................... --
Hartford International
Opportunities Fund, Inc.
Shares 7,531,794
Cost $ 9,079,949
Market Value................... --
Hartford Dividend and Growth
Fund, Inc.
Shares 7,260,907
Cost $11,296,243
Market Value................... --
Calvert Responsibly Invested
Balanced Fund
Shares 1,696,915
Cost $ 2,797,362
Market Value................... $ 3,363,286
Due from Hartford Life Insurance
Company......................... 2,763
Receivable from fund shares
sold............................ --
-----------
Total Assets..................... 3,366,049
-----------
LIABILITIES:
Due to Hartford Life Insurance
Company......................... --
Payable for fund shares
purchased....................... 2,139
-----------
Total Liabilities................ 2,139
-----------
Net Assets (variable annuity
contract liabilities)........... $ 3,363,910
-----------
-----------
</TABLE>

<PAGE>

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

SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 1997

<TABLE>
<CAPTION>
AMERICAN CENTURY VP
ADVANTAGE FUND
SUB-ACCOUNT
-------------------
<S> <C>
ASSETS:
Investments:
American Century VP Advantage
Fund, Inc.
Shares 37,657
Cost $ 232,898
Market Value................... $248,536
American Century VP Capital
Appreciation Fund, Inc.
Shares 153,878
Cost $1,711,391
Market Value................... --
Fidelity VIP Overseas Fund, Inc.
Shares 103,298
Cost $1,861,058
Market Value................... --
Fidelity VIP II Asset Manager
Fund
Shares 176,732
Cost $2,826,562
Market Value................... --
Fidelity VIP II Contrafund Fund
Shares 599,344
Cost $9,253,467
Market Value................... --
Fidelity VIP Growth Fund
Shares 295,397
Cost $9,068,124
Market Value................... --
Dividends........................ --
Due from Hartford Life Insurance
Company......................... 283
Receivable from fund shares
sold............................ --
--------
Total Assets..................... 248,819
--------
LIABILITIES:
Due to Hartford Life Insurance
Company......................... --
Payable for fund shares
purchased....................... 283
--------
Total Liabilities................ 283
--------
Net Assets (variable annuity
contract liabilities)........... $248,536
--------
--------
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>

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

<TABLE>
<CAPTION>
AMERICAN CENTURY VP FIDELITY VIP FIDELITY VIP II FIDELITY VIP II FIDELITY VIP
CAPITAL APPRECIATION FUND OVERSEAS FUND ASSET MANAGER FUND CONTRAFUND FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------- --------------- ------------------ --------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
American Century VP Advantage
Fund, Inc.
Shares 37,657
Cost $ 232,898
Market Value................... -- -- -- -- --
American Century VP Capital
Appreciation Fund, Inc.
Shares 153,878
Cost $1,711,391
Market Value................... $1,489,538 -- -- -- --
Fidelity VIP Overseas Fund, Inc.
Shares 103,298
Cost $1,861,058
Market Value................... -- $ 1,983,322 -- -- --
Fidelity VIP II Asset Manager
Fund
Shares 176,732
Cost $2,826,562
Market Value................... -- -- $3,182,950 -- --
Fidelity VIP II Contrafund Fund
Shares 599,344
Cost $9,253,467
Market Value................... -- -- -- $11,950,919 --
Fidelity VIP Growth Fund
Shares 295,397
Cost $9,068,124
Market Value................... -- -- -- -- $10,959,230
Dividends........................ -- -- -- -- --
Due from Hartford Life Insurance
Company......................... -- 22,788 7,523 57,573 3,133
Receivable from fund shares
sold............................ 1,383 -- -- -- --
----------- --------------- ------------------ --------------- ------------
Total Assets..................... 1,490,921 2,006,110 3,190,473 12,008,492 10,962,363
----------- --------------- ------------------ --------------- ------------
LIABILITIES:
Due to Hartford Life Insurance
Company......................... 1,366 -- -- -- --
Payable for fund shares
purchased....................... -- 22,827 7,110 57,479 3,071
----------- --------------- ------------------ --------------- ------------
Total Liabilities................ 1,366 22,827 7,110 57,479 3,071
----------- --------------- ------------------ --------------- ------------
Net Assets (variable annuity
contract liabilities)........... $1,489,555 $ 1,983,283 $3,183,363 $11,951,013 $10,959,292
----------- --------------- ------------------ --------------- ------------
----------- --------------- ------------------ --------------- ------------
</TABLE>
<PAGE>

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

SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 1997

<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
DEFERRED ANNUITY CONTRACTS IN THE ACCUMULATION
PERIOD:
<S> <C> <C> <C>
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP...................... 847,977 $4.784200 $ 4,056,892
Bond Fund 1.25% DCII.............................. 1,605,816 4.604170 7,393,450
Bond Fund .15% DCII............................... 276,215 4.434356 1,224,836
Stock Fund Qualified 1.00% QP..................... 2,708,229 14.853569 40,226,866
Stock Fund Qualified .825% QP..................... 1,145,365 11.971280 13,711,485
Stock Fund Non-Qualified 1.00% NP................. 87,464 11.654109 1,019,315
Stock Fund Non-Qualified .825% NQ................. 767,810 11.992187 9,207,721
Stock Fund 1.25% DCII............................. 5,081,931 14.295490 72,648,694
Stock Fund .15% DCII.............................. 870,050 11.344329 9,870,133
Money Market Fund Qualified .375% QP.............. 2,682 3.246956 8,708
Money Market Fund 1.25% DCII...................... 1,473,053 2.834423 4,175,255
Money Market Fund .15% DCII....................... 362,821 2.817806 1,022,359
Advisers Fund 1.25% DCII.......................... 10,298,634 5.168279 53,226,214
Advisers Fund .15% DCII........................... 617,065 6.061165 3,740,133
Capital Appreciation Fund 1.25% DCII.............. 11,032,011 7.896085 87,109,697
Capital Appreciation Fund .15% DCII............... 782,485 9.163200 7,170,067
Mortgage Securities Fund 1.25% DCII............... 1,035,472 2.606495 2,698,953
Mortgage Securities Fund .15% DCII................ 114,174 3.005567 343,158
Index Fund 1.25% DCII............................. 5,414,986 3.744823 20,278,164
Index Fund .15% DCII.............................. 453,462 4.128555 1,872,143
International Opportunities Fund 1.25% DCII....... 5,863,904 1.469173 8,615,089
International Opportunities Fund .15% DCII........ 410,998 1.595199 655,624
Dividend and Growth Fund Sub-Account.............. 6,877,177 1.932989 13,293,507
Calvert Responsibly Invested Balanced Fund 1.25%
DCII............................................. 1,290,611 2.396114 3,092,451
American Century VP Advantage Fund Sub-Account.... 189,239 1.263961 239,191
American Century VP Capital Appreciation Fund
Sub-Account...................................... 1,519,844 0.975662 1,482,854
Fidelity VIP Overseas Fund Sub-Account............ 1,562,891 1.268984 1,983,283
Fidelity VIP II Asset Manager Fund Sub-Account.... 2,172,118 1.465557 3,183,363
Fidelity VIP II Contrafund Fund Sub-Account....... 7,406,641 1.613482 11,950,482
Fidelity VIP II Growth Fund Sub-Account........... 7,393,150 1.482007 10,956,700
--------------
TOTAL ACCUMULATION PERIOD......................... 396,456,787
--------------
ANNUITY CONTRACTS IN THE ANNUITY PERIOD:
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP...................... 77,211 4.784200 369,393
Bond Fund 1.25% DCII.............................. 286,987 4.604170 1,321,337
Bond Fund 1.00% DCII.............................. 10,642 4.765312 50,712
Bond Fund .15% DCII............................... 3,678 4.434356 16,311
Stock Fund Qualified 1.00% QP..................... 224,506 14.853569 3,334,715
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>

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

<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
GROUP SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
Stock Fund Qualified .825% QP..................... 45,882 $11.971280 $ 549,261
Stock Fund Non-Qualified 1.00% NP................. 5,113 11.654109 59,587
Stock Fund Non-Qualified .825% NQ................. 47,752 11.992187 572,651
Stock Fund 1.25% DCII............................. 1,011,885 14.295490 14,465,392
Stock Fund 1.00% DCII............................. 2,520 14.807393 37,315
Stock Fund .15% DCII.............................. 10,396 11.344329 117,936
Money Market Fund 1.25% DCII...................... 256,535 2.834423 727,131
Advisers Fund 1.25% DCII.......................... 2,010,738 5.168279 10,392,055
Advisers Fund .15% DCII........................... 22,749 6.061165 137,886
Capital Appreciation Fund 1.25% DCII.............. 556,519 7.896085 4,394,321
Capital Appreciation Fund .15% DCII............... 7,677 9.163200 70,346
Mortgage Securities Fund 1.25% DCII............... 153,475 2.606495 400,033
Index Fund 1.25% DCII............................. 751,604 3.744823 2,814,612
Index Fund .15% DCII.............................. 3,628 4.128555 14,979
International Opportunities Fund 1.25% DCII....... 309,523 1.469173 454,743
International Opportunities Fund .15% DCII........ 15,107 1.595199 24,099
Dividend and Growth Fund Sub-Account.............. 456,391 1.932989 882,199
Calvert Responsibly Invested Balanced Fund 1.25%
DCII............................................. 113,291 2.396114 271,459
American Century VP Advantage Fund Sub-Account.... 7,393 1.263961 9,345
American Century VP Capital Appreciation Fund
Sub-Account...................................... 6,869 0.975662 6,701
Fidelity VIP II Contrafund Fund Sub-Account....... 329 1.613482 531
Fidelity VIP II Growth Fund Sub-Account........... 1,750 1.482007 2,592
--------------
TOTAL ANNUITY PERIOD.............................. 41,497,642
--------------
GRAND TOTAL....................................... $ 437,954,429
--------------
--------------
</TABLE>

<PAGE>

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

SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends........................ $ 821,210 $ 1,572,574 $ 283,695 $ 1,427,145
EXPENSES:
Mortality and expense
undertakings.................... (150,928) (1,618,398) (58,096) (686,694)
----------- ------------ ----------- -------------
Net investment income (loss)... 670,282 (45,824) 225,599 740,451
----------- ------------ ----------- -------------
CAPITAL GAINS INCOME............... -- 7,063,630 18 2,516,544
----------- ------------ ----------- -------------
NET REALIZED AND UNREALIZED (LOSS)
GAIN ON INVESTMENTS:
Net realized (loss) gain on
security transactions........... (17,007) 6,112,590 -- (19,989)
Net unrealized appreciation
(depreciation) of investments
during the period............... 698,032 26,385,702 -- 8,870,417
----------- ------------ ----------- -------------
Net gain (loss) on
investments................... 681,025 32,498,292 -- 8,850,428
----------- ------------ ----------- -------------
Net increase (decrease) in net
assets resulting from
operations.................... $ 1,351,307 $ 39,516,098 $ 225,617 $ 12,107,423
----------- ------------ ----------- -------------
----------- ------------ ----------- -------------
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT
MONEY CAPITAL MORTGAGE INTERNATIONAL
MARKET FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- ----------------- --------------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends........................ $ 30,990 $ 485,988 $ 202,606 $ 281,733 $ 90,257
EXPENSES:
Mortality and expense
undertakings.................... (7,380) (1,010,830) (37,903) (157,504) (119,287)
------- ----------------- --------------- ----------- ----------
Net investment income (loss)... 23,610 (524,842) 164,703 124,229 (29,030)
------- ----------------- --------------- ----------- ----------
CAPITAL GAINS INCOME............... -- 6,234,258 -- 1,272,234 770,963
------- ----------------- --------------- ----------- ----------
NET REALIZED AND UNREALIZED (LOSS)
GAIN ON INVESTMENTS:
Net realized (loss) gain on
security transactions........... -- (406,564) 4,355 (50,915) (9,826)
Net unrealized appreciation
(depreciation) of investments
during the period............... -- 10,345,344 77,114 3,736,267 (815,682)
------- ----------------- --------------- ----------- ----------
Net gain (loss) on
investments................... -- 9,938,780 81,469 3,685,352 (825,508)
------- ----------------- --------------- ----------- ----------
Net increase (decrease) in net
assets resulting from
operations.................... $ 23,610 $15,648,196 $ 246,172 $ 5,081,815 $ (83,575)
------- ----------------- --------------- ----------- ----------
------- ----------------- --------------- ----------- ----------

<CAPTION>
CALVERT
DIVIDEND AND RESPONSIBLY INVESTED
GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------ --------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends........................ $ 193,436 $ 73,766
EXPENSES:
Mortality and expense
undertakings.................... (122,434) (37,000)
------------ --------
Net investment income (loss)... 71,002 36,766
------------ --------
CAPITAL GAINS INCOME............... 191,362 160,014
------------ --------
NET REALIZED AND UNREALIZED (LOSS)
GAIN ON INVESTMENTS:
Net realized (loss) gain on
security transactions........... (5,106) (2,131)
Net unrealized appreciation
(depreciation) of investments
during the period............... 2,164,090 296,021
------------ --------
Net gain (loss) on
investments................... 2,158,984 293,890
------------ --------
Net increase (decrease) in net
assets resulting from
operations.................... $ 2,421,348 $ 490,670
------------ --------
------------ --------
</TABLE>

<PAGE>

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

SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
AMERICAN CENTURY VP
ADVANTAGE FUND
SUB-ACCOUNT
-------------------
<S> <C>
INVESTMENT INCOME:
Dividends........................ $ 2,818
EXPENSES:
Mortality and expense
undertakings.................... (2,524)
-------
Net investment income (loss)... 294
-------
CAPITAL GAINS INCOME............... 10,139
-------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
security transactions........... 86
Net unrealized appreciation
(depreciation) of investments
during the period............... 9,915
-------
Net gain (loss) on
investments................... 10,001
-------
Net increase (decrease) in net
assets resulting from
operations.................... $ 20,434
-------
-------
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>

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

<TABLE>
<CAPTION>
AMERICAN CENTURY VP FIDELITY VIP FIDELITY VIP II FIDELITY VIP II FIDELITY VIP
CAPITAL APPRECIATION FUND OVERSEAS FUND ASSET MANAGER FUND CONTRAFUND FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------------------- --------------- ------------------ --------------- ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends........................ $-- $ 21,186 $ 65,855 $ 60,821 $ 48,646
EXPENSES:
Mortality and expense
undertakings.................... (16,454) (19,993 ) (30,524) (117,285) (110,429)
-------- --------------- -------- --------------- ------------
Net investment income (loss)... (16,454) 1,193 35,331 (56,464) (61,783)
-------- --------------- -------- --------------- ------------
CAPITAL GAINS INCOME............... 22,619 84,101 165,196 160,741 217,749
-------- --------------- -------- --------------- ------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
security transactions........... (3,879) (12 ) 45 14,539 10,890
Net unrealized appreciation
(depreciation) of investments
during the period............... (72,938) 40,887 211,417 1,769,331 1,505,289
-------- --------------- -------- --------------- ------------
Net gain (loss) on
investments................... (76,817) 40,875 211,462 1,783,870 1,516,179
-------- --------------- -------- --------------- ------------
Net increase (decrease) in net
assets resulting from
operations.................... $ (70,652) $ 126,169 $ 411,989 $1,888,147 $1,672,145
-------- --------------- -------- --------------- ------------
-------- --------------- -------- --------------- ------------
</TABLE>
<PAGE>

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

SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 670,282 $ (45,824) $ 225,599 $ 740,451
Capital gains income............. -- 7,063,630 18 2,516,544
Net realized (loss) gain on
security transactions........... (17,007) 6,112,590 -- (19,989)
Net unrealized appreciation
(depreciation) of investments
during the period............... 698,032 26,385,702 -- 8,870,417
----------- ------------ ------------ -------------
Net increase (decrease) in net
assets resulting from
operations...................... 1,351,307 39,516,098 225,617 12,107,423
----------- ------------ ------------ -------------
UNIT TRANSACTIONS:
Purchases........................ 832,400 5,392,017 549,395 4,595,725
Net transfers.................... (417,232) 37,450 851,783 2,974,576
Surrenders....................... (2,101,192) (13,048,670) (896,520) (7,855,498)
Net annuity transactions......... 15,744 (31,189) 270,889 543,432
----------- ------------ ------------ -------------
Net (decrease) increase in net
assets resulting from unit
transactions.................... (1,670,280) (7,650,392) 775,547 258,235
----------- ------------ ------------ -------------
Total (decrease) increase in net
assets.......................... (318,973) 31,865,706 1,001,164 12,365,658
NET ASSETS:
Beginning of period.............. 14,751,904 133,955,365 4,932,289 55,130,630
----------- ------------ ------------ -------------
End of period.................... $14,432,931 $165,821,071 $ 5,933,453 $ 67,496,288
----------- ------------ ------------ -------------
----------- ------------ ------------ -------------

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

MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------ -------------
OPERATIONS:
Net investment income (loss)..... $ 766,825 $ 649,296 $ 180,280 $ 856,731
Capital gains income............. -- 4,599,796 -- 964,295
Net realized (loss) gain on
security transactions........... (40,872) 1,939,739 -- 35,540
Net unrealized (depreciation)
appreciation of investments
during the period............... (357,142) 18,075,624 -- 5,165,238
----------- ------------ ------------ -------------
Net increase (decrease) in net
assets resulting from
operations...................... 368,811 25,264,455 180,280 7,021,804
----------- ------------ ------------ -------------
UNIT TRANSACTIONS:
Purchases........................ 1,706,289 6,927,393 618,119 5,334,298
Net transfers.................... (122,846) (602,947) 628,335 1,428,268
Surrenders....................... (1,497,113) (7,342,209) (190,537) (2,001,572)
Net annuity transactions......... (95,669) (91,756) (64,000) 737,366
----------- ------------ ------------ -------------
Net (decrease) increase in net
assets resulting from unit
transactions.................... (9,339) (1,109,519) 991,917 5,498,360
----------- ------------ ------------ -------------
Total increase in net assets..... 359,472 24,154,936 1,172,197 12,520,164
NET ASSETS:
Beginning of period.............. 14,392,432 109,800,429 3,760,092 42,610,466
----------- ------------ ------------ -------------
End of period.................... $14,751,904 $133,955,365 $ 4,932,289 $ 55,130,630
----------- ------------ ------------ -------------
----------- ------------ ------------ -------------
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT CAPITAL MORTGAGE INTERNATIONAL
MONEY MARKET FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------- ----------------- --------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 23,610 $ (524,842) $ 164,703 $ 124,229 $ (29,030)
Capital gains income............. -- 6,234,258 -- 1,272,234 770,963
Net realized (loss) gain on
security transactions........... -- (406,564) 4,355 (50,915) (9,826)
Net unrealized appreciation
(depreciation) of investments
during the period............... -- 10,345,344 77,114 3,736,267 (815,682)
------------------- ----------------- --------------- ------------------ ------------------
Net increase (decrease) in net
assets resulting from
operations...................... 23,610 15,648,196 246,172 5,081,815 (83,575)
------------------- ----------------- --------------- ------------------ ------------------
UNIT TRANSACTIONS:
Purchases........................ 67,057 9,347,535 327,685 2,173,282 1,283,578
Net transfers.................... (1,102,863) 3,016,003 (254,745) 4,030,613 27,688
Surrenders....................... (217,863) (10,608,061) (405,827) (2,241,041) (1,550,593)
Net annuity transactions......... (245,098) 165,718 (17,654) 1,095,438 118,153
------------------- ----------------- --------------- ------------------ ------------------
Net (decrease) increase in net
assets resulting from unit
transactions.................... (1,498,767) 1,921,195 (350,541) 5,058,292 (121,174)
------------------- ----------------- --------------- ------------------ ------------------
Total (decrease) increase in net
assets.......................... (1,475,157) 17,569,391 (104,369) 10,140,107 (204,749)
NET ASSETS:
Beginning of period.............. 1,475,157 81,175,040 3,546,513 14,839,791 9,954,304
------------------- ----------------- --------------- ------------------ ------------------
End of period.................... $ -- $ 98,744,431 $ 3,442,144 $24,979,898 $ 9,749,555
------------------- ----------------- --------------- ------------------ ------------------
------------------- ----------------- --------------- ------------------ ------------------

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

U.S. GOVERNMENT CAPITAL MORTGAGE INTERNATIONAL
MONEY MARKET FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------- ----------------- --------------- ------------------ ------------------
OPERATIONS:
Net investment income (loss)..... $ 50,583 $ (303,100) $ 175,269 $ 148,270 $ 66,800
Capital gains income............. -- 3,808,440 -- 180,979 198,374
Net realized (loss) gain on
security transactions........... -- (9,432) (420) 4,403 78
Net unrealized (depreciation)
appreciation of investments
during the period............... -- 8,758,734 (42,001) 1,978,751 660,732
------------------- ----------------- --------------- ------------------ ------------------
Net increase (decrease) in net
assets resulting from
operations...................... 50,583 12,254,642 132,848 2,312,403 925,984
------------------- ----------------- --------------- ------------------ ------------------
UNIT TRANSACTIONS:
Purchases........................ 216,658 10,943,734 580,508 1,926,754 1,813,741
Net transfers.................... (114,911) 3,516,516 (284,121) 1,743,671 890,028
Surrenders....................... (72,481) (2,911,982) (140,986) (341,818) (482,530)
Net annuity transactions......... (5,945) 498,302 13,292 106,587 133,144
------------------- ----------------- --------------- ------------------ ------------------
Net (decrease) increase in net
assets resulting from unit
transactions.................... 23,321 12,046,570 168,693 3,435,194 2,354,383
------------------- ----------------- --------------- ------------------ ------------------
Total increase in net assets..... 73,904 24,301,212 301,541 5,747,597 3,280,367
NET ASSETS:
Beginning of period.............. 1,401,253 56,873,828 3,244,972 9,092,194 6,673,937
------------------- ----------------- --------------- ------------------ ------------------
End of period.................... $ 1,475,157 $ 81,175,040 $ 3,546,513 $14,839,791 $ 9,954,304
------------------- ----------------- --------------- ------------------ ------------------
------------------- ----------------- --------------- ------------------ ------------------

<CAPTION>
CALVERT
DIVIDEND AND RESPONSIBLY INVESTED
GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
-------------------- --------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 71,002 $ 36,766
Capital gains income............. 191,362 160,014
Net realized (loss) gain on
security transactions........... (5,106) (2,131)
Net unrealized appreciation
(depreciation) of investments
during the period............... 2,164,090 296,021
-------------------- --------------------
Net increase (decrease) in net
assets resulting from
operations...................... 2,421,348 490,670
-------------------- --------------------
UNIT TRANSACTIONS:
Purchases........................ 1,566,382 470,443
Net transfers.................... 4,575,985 39,186
Surrenders....................... (872,615) (273,570)
Net annuity transactions......... 460,142 (24,048)
-------------------- --------------------
Net (decrease) increase in net
assets resulting from unit
transactions.................... 5,729,894 212,011
-------------------- --------------------
Total (decrease) increase in net
assets.......................... 8,151,242 702,681
NET ASSETS:
Beginning of period.............. 6,024,464 2,661,229
-------------------- --------------------
End of period.................... $14,175,706 $ 3,363,910
-------------------- --------------------
-------------------- --------------------
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 199
CALVERT
DIVIDEND AND RESPONSIBLY INVESTED
GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
-------------------- --------------------
OPERATIONS:
Net investment income (loss)..... $ 45,397 $ 29,407
Capital gains income............. 27,195 140,994
Net realized (loss) gain on
security transactions........... 923 6,518
Net unrealized (depreciation)
appreciation of investments
during the period............... 667,057 78,661
-------------------- --------------------
Net increase (decrease) in net
assets resulting from
operations...................... 740,572 255,580
-------------------- --------------------
UNIT TRANSACTIONS:
Purchases........................ 929,631 501,957
Net transfers.................... 3,564,656 86,346
Surrenders....................... (134,182) (81,242)
Net annuity transactions......... 176,775 135,085
-------------------- --------------------
Net (decrease) increase in net
assets resulting from unit
transactions.................... 4,536,880 642,146
-------------------- --------------------
Total increase in net assets..... 5,277,452 897,726
NET ASSETS:
Beginning of period.............. 747,012 1,763,503
-------------------- --------------------
End of period.................... $ 6,024,464 $ 2,661,229
-------------------- --------------------
-------------------- --------------------
</TABLE>
<PAGE>

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

SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
AMERICAN CENTURY VP
ADVANTAGE FUND
SUB-ACCOUNT*
-------------------
<S> <C>
OPERATIONS:
Net investment income (loss)..... $ 294
Capital gains income............. 10,139
Net realized (loss) gain on
security transactions........... 86
Net unrealized appreciation
(depreciation) of investments
during the period............... 9,915
--------
Net increase (decrease) in net
assets resulting from
operations...................... 20,434
--------
UNIT TRANSACTIONS:
Purchases........................ 58,062
Net transfers.................... 10,557
Surrenders....................... (12,377)
Net annuity transactions......... (735)
--------
Net (decrease) increase in net
assets resulting from unit
transactions.................... 55,507
--------
Total (decrease) increase in net
assets.......................... 75,941
NET ASSETS:
Beginning of period.............. 172,595
--------
End of period.................... $248,536
--------
--------
* Effective May 1, 1997, TCI
Advantage Fund was re-named
American Century VP Advantage
Fund.
** Effective May 1, 1997, TCI
Growth Fund was re-named American
Century VP Capital Appreciation
Fund.

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

TCI
ADVANTAGE FUND
SUB-ACCOUNT
-------------------
OPERATIONS:
Net investment income (loss)..... $ 5,374
Capital gains income............. --
Net realized (loss) gain on
security transactions........... (110)
Net unrealized (depreciation)
appreciation of investments
during the period............... 4,528
--------
Net increase (decrease) in net
assets resulting from
operations...................... 9,792
--------
UNIT TRANSACTIONS:
Purchases........................ 52,991
Net transfers.................... 63,519
Surrenders....................... (218)
Net annuity transactions......... (410)
--------
Net increase (decrease) in net
assets resulting from unit
transactions.................... 115,882
--------
Total increase in net assets..... 125,674
NET ASSETS:
Beginning of period.............. 46,921
--------
End of period.................... $172,595
--------
--------
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>

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

<TABLE>
<CAPTION>
AMERICAN CENTURY VP FIDELITY VIP FIDELITY VIP II FIDELITY VIP II FIDELITY VIP
CAPITAL APPRECIATION FUND OVERSEAS FUND ASSET MANAGER FUND CONTRAFUND FUND GROWTH FUND
SUB-ACCOUNT** SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------- --------------- ------------------ --------------- ------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ (16,454) $ 1,193 $ 35,331 $ (56,464) $ (61,783)
Capital gains income............. 22,619 84,101 165,196 160,741 217,749
Net realized (loss) gain on
security transactions........... (3,879) (12 ) 45 14,539 10,890
Net unrealized appreciation
(depreciation) of investments
during the period............... (72,938) 40,887 211,417 1,769,331 1,505,289
----------- --------------- ------------------ --------------- ------------
Net increase (decrease) in net
assets resulting from
operations...................... (70,652) 126,169 411,989 1,888,147 1,672,145
----------- --------------- ------------------ --------------- ------------
UNIT TRANSACTIONS:
Purchases........................ 288,639 250,279 414,106 1,500,382 1,531,624
Net transfers.................... 172,057 574,420 661,341 2,277,620 1,162,806
Surrenders....................... (38,911) (28,174 ) (138,088) (387,184) (425,385)
Net annuity transactions......... (568) -- -- 453 2,237
----------- --------------- ------------------ --------------- ------------
Net (decrease) increase in net
assets resulting from unit
transactions.................... 421,217 796,525 937,359 3,391,271 2,271,282
----------- --------------- ------------------ --------------- ------------
Total (decrease) increase in net
assets.......................... 350,565 922,694 1,349,348 5,279,418 3,943,427
NET ASSETS:
Beginning of period.............. 1,138,990 1,060,589 1,834,015 6,671,595 7,015,865
----------- --------------- ------------------ --------------- ------------
End of period.................... $1,489,555 $ 1,983,283 $3,183,363 $11,951,013 $10,959,292
----------- --------------- ------------------ --------------- ------------
----------- --------------- ------------------ --------------- ------------
* Effective May 1, 1997, TCI
Advantage Fund was re-named
American Century VP Advantage
Fund.
** Effective May 1, 1997, TCI
Growth Fund was re-named American
Century VP Capital Appreciation
Fund.

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

TCI FIDELITY VIP FIDELITY VIP II FIDELITY VIP II FIDELITY VIP
GROWTH FUND OVERSEAS FUND ASSET MANAGER FUND CONTRAFUND FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------- --------------- ------------------ --------------- ------------
OPERATIONS:
Net investment income (loss)..... $ 86,878 $ (4,777 ) $ 14,241 $ (35,654) $ 10,178
Capital gains income............. -- 4,080 -- -- 115,329
Net realized (loss) gain on
security transactions........... 527 985 (71) (377) (6,795)
Net unrealized (depreciation)
appreciation of investments
during the period............... (155,560) 77,918 126,112 910,896 420,263
----------- --------------- ------------------ --------------- ------------
Net increase (decrease) in net
assets resulting from
operations...................... (68,155) 78,206 140,282 874,865 538,975
----------- --------------- ------------------ --------------- ------------
UNIT TRANSACTIONS:
Purchases........................ 278,606 196,292 268,755 928,554 1,249,738
Net transfers.................... 248,714 626,400 1,181,511 3,162,455 3,357,091
Surrenders....................... (13,223) (27,202 ) (95,811) (279,972) (334,425)
Net annuity transactions......... (374) -- -- -- --
----------- --------------- ------------------ --------------- ------------
Net increase (decrease) in net
assets resulting from unit
transactions.................... 513,723 795,490 1,354,455 3,811,037 4,272,404
----------- --------------- ------------------ --------------- ------------
Total increase in net assets..... 445,568 873,696 1,494,737 4,685,902 4,811,379
NET ASSETS:
Beginning of period.............. 693,422 186,893 339,278 1,985,693 2,204,486
----------- --------------- ------------------ --------------- ------------
End of period.................... $1,138,990 $ 1,060,589 $1,834,015 $6,671,595 $ 7,015,865
----------- --------------- ------------------ --------------- ------------
----------- --------------- ------------------ --------------- ------------
</TABLE>
<PAGE>

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

SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997

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:

b) SECURITY VALUATION -- The investment in shares of the Hartford, Smith
Barney, TCI, Fidelity and Calvert Responsibly Invested Series mutual funds are
valued at the closing net asset value per share as determined by the appropriate
Fund as of December 31, 1997.

c) FEDERAL INCOME TAXES -- The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as an
insurance company under the Internal Revenue Code. Under current law, no federal
income taxes are payable with respect to the operations of the Account.

3. ADMINISTRATION OF THE ACCOUNT
AND RELATED CHARGES:

4. HARTFORD U.S. GOVERNMENT MONEY
MARKET FUND:

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

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Hartford Life Insurance Company:

We have audited the accompanying Consolidated Balance Sheets of Hartford Life
Insurance Company (the "Company") and subsidiaries as of December 31, 1997 and
1996, 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,
1997. These consolidated financial statements and the schedules referred to
below are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements and schedules based on our
audits.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Hartford Life
Insurance Company and subsidiaries as of December 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1997, in conformity with generally accepted
accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in Index to
Consolidated Financial Statements and Schedules are presented for the purpose of
complying with the Securities and Exchange Commission's rules and are not part
of the basic financial statements. These schedules have been subjected to the
auditing procedures applied in the audits of the basic 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 financial statements
taken as a whole.

ARTHUR ANDERSEN LLP

Hartford, Connecticut
January 27, 1998
<PAGE>

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

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
------------------------
1997 1996 1995
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Premiums and other considerations............... $1,637 $1,705 $1,487
Net investment income........................... 1,368 1,397 1,328
Net realized capital gains (losses)............. 4 (213) (11)
------ ------ ------
Total revenues................................ 3,009 2,889 2,804
------ ------ ------
Benefits, claims and expenses
Benefits, claims and claim adjustment
expenses....................................... 1,379 1,535 1,422
Amortization of deferred policy acquisition
costs.......................................... 335 234 199
Dividends to policyholders...................... 240 635 675
Other expenses.................................. 586 427 317
------ ------ ------
Total benefits, claims and expenses........... 2,540 2,831 2,613
------ ------ ------
Income before income tax expense................ 469 58 191
Income tax expense.............................. 167 20 62
------ ------ ------
Net income........................................ $ 302 $ 38 $ 129
------ ------ ------
------ ------ ------
</TABLE>

See Notes to Consolidated Financial Statements.
<PAGE>

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

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
AS OF DECEMBER
31,
-----------------
1997 1996
------- -------
<S> <C> <C>
(IN MILLIONS,
EXCEPT FOR SHARE
DATA)
Assets
Investments
Fixed maturities, available for sale, at fair
value (amortized cost of $13,885 and
$13,579)....................................... $14,176 $13,624
Equity securities, at fair value................ 180 119
Policy loans, at outstanding balance............ 3,756 3,836
Other investments, at cost...................... 47 56
------- -------
Total investments............................. 18,159 17,635
Cash............................................ 54 43
Premiums receivable and agents' balances........ 18 137
Accrued investment income....................... 330 407
Reinsurance recoverables........................ 6,325 6,259
Deferred policy acquisition costs............... 3,315 2,760
Deferred income tax............................. 348 474
Other assets.................................... 352 357
Separate account assets......................... 69,055 49,690
------- -------
Total assets.................................. $97,956 $77,762
------- -------
------- -------

Liabilities
Future policy benefits.......................... $ 3,270 $ 2,474
Other policyholder funds........................ 21,034 22,134
Other liabilities............................... 2,254 1,572
Separate account liabilities.................... 69,055 49,690
------- -------
Total liabilities............................. 95,613 75,870
------- -------

Stockholder's Equity
Common stock -- 1,000 shares authorized, issued
and outstanding, par value $5,690.............. 6 6
Additional paid in capital...................... 1,045 1,045
Net unrealized capital gains on securities, net
of tax......................................... 179 30
Retained earnings............................... 1,113 811
------- -------
Total stockholder's equity.................... 2,343 1,892
------- -------
Total liabilities and stockholder's equity...... $97,956 $77,762
------- -------
------- -------
</TABLE>

See Notes to Consolidated Financial Statements.
<PAGE>

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

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
NET UNREALIZED
CAPITAL GAINS
ADDITIONAL (LOSSES) ON TOTAL
COMMON PAID IN SECURITIES, RETAINED STOCKHOLDER'S
STOCK CAPITAL NET OF TAX EARNINGS EQUITY
------ -------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
(IN MILLIONS)
Balance, December 31, 1994.............. $6 $ 826 $(654) $ 644 $ 822
Net income............................ -- -- -- 129 129
Capital contribution.................. -- 181 -- -- 181
Change in net unrealized capital gains
(losses) on securities, 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 gains
(losses) on securities, net of tax... -- -- 87 -- 87
--
------ ------ ----------- ------
Balance, December 31, 1996.............. 6 1,045 30 811 1,892
Net income............................ -- -- -- 302 302
Change in net unrealized capital gains
(losses) on securities, net of tax... -- -- 149 -- 149
--
------ ------ ----------- ------
Balance, December 31, 1997.............. $6 $1,045 $179 $1,113 $2,343
--
--
------ ------ ----------- ------
------ ------ ----------- ------
</TABLE>

See Notes to Consolidated Financial Statements.
<PAGE>

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

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER
31,
------------------------------
1997 1996 1995
-------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C>
Operating Activities
Net income............................ $ 302 $ 38 $ 129
Adjustments to reconcile net income to
cash provided by operating activities
Depreciation and amortization......... 8 14 21
Net realized capital (gains) losses... (4) 213 11
Decrease (increase) in deferred income
taxes................................ 40 (102) (172)
Increase in deferred policy
acquisition costs.................... (555) (572) (379)
Decrease (increase) in premiums
receivable and agents' balances...... 119 10 (81)
Decrease (increase) in accrued
investment income.................... 77 (13) (16)
Decrease (increase) in other assets... 52 (132) (177)
(Increase) decrease in reinsurance
recoverables......................... (416) 179 (35)
Increase (decrease) in liabilities for
future policy benefits............... 796 (92) 483
Increase in other liabilities......... 379 477 281
-------- -------- --------
Cash provided by operating
activities......................... 798 20 65
-------- -------- --------
Investing Activities
Purchases of fixed maturity
investments.......................... (6,231) (5,747) (6,228)
Sales of fixed maturity investments... 4,232 3,459 4,845
Maturities and principal paydowns of
fixed maturity investments........... 2,329 2,693 1,741
Net sales (purchases) of other
investments.......................... 24 (107) (871)
Net (purchases) sales of short-term
investments.......................... (638) 84 (24)
-------- -------- --------
Cash (used for) provided by
investing activities............... (284) 382 (537)
-------- -------- --------
Financing Activities
Capital contribution.................. -- 38 --
Net (disbursements for) receipts from
investment and universal life-type
contracts (charged against) credited
to policyholder accounts............. (503) (443) 498
-------- -------- --------
Cash (used for) provided by
financing activities............... (503) (405) 498
-------- -------- --------
Increase (decrease) in cash........... 11 (3) 26
Cash -- beginning of year............. 43 46 20
-------- -------- --------
Cash -- end of year................... $ 54 $ 43 $ 46
-------- -------- --------
-------- -------- --------
Supplemental Disclosure of Cash Flow
Information:
Net Cash Paid During the Year for:
Income taxes.......................... $ 9 $ 189 $ 162

Noncash Financing Activities:
Capital contribution.................. $ -- $ -- $ 181
-------- -------- --------
-------- -------- --------
</TABLE>

See Notes to Consolidated Financial Statements.
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA UNLESS OTHERWISE STATED)

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"). Hartford Life is a direct subsidiary of Hartford
Accident and Indemnity Company ("HA&I"), an indirect subsidiary of The Hartford
Financial Services Group, Inc. ("The Hartford"). On February 10, 1997, Hartford
Life filed a registration statement, as amended, with the Securities and
Exchange Commission relating to an Initial Public Offering ("IPO") of the
Hartford Life's Class A Common Stock. Pursuant to the IPO on May 22, 1997,
Hartford Life sold to the public 26 million shares at $28.25 per share and
received net proceeds of $687. Of the proceeds, $527 was used to retire debt
related to Hartford Life's outstanding promissory notes and line of credit with
the remaining $160 contributed by Hartford Life to HLA to support growth in its
core businesses.

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. As a result, The Hartford became an
independent, publicly traded company.

Along with its parent, 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 and retirement 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 group life and group disability
insurance and corporate owned life insurance.

2. SIGNIFICANT ACCOUNTING POLICIES

(A) BASIS OF PRESENTATION

These consolidated financial statements present the financial position,
results of operations and cash flows of the Company. All material intercompany
transactions and balances between the Company, its subsidiaries and affiliates
have been eliminated. The consolidated financial statements are prepared on the
basis of generally accepted accounting principles which differ materially from
the statutory accounting practices 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. The most
significant estimates include those used in determining deferred policy
acquisition costs and the liability for future policy benefits and other
policyholder funds. Although some variability is inherent in these estimates,
management believes the amounts provided are adequate.

Certain reclassifications have been made to prior year financial information
to conform to the current year presentation.

(B) CHANGES IN ACCOUNTING PRINCIPLES

In December 1997, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") No. 97-3 "Accounting by Insurance
and Other Enterprises for Insurance Related Assessments". This SOP provides
guidance on accounting by insurance and other enterprises for assessments
related to insurance activities. Specifically, the SOP provides guidance on when
a guaranty fund or other assessment should be recognized, how to measure the
liability, and what information should be disclosed. This SOP will be effective
for fiscal years beginning after December 15, 1998. Adoption of SOP 97-3 is not
expected to have a material impact on the Company's financial condition or
results of operations.

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 EITF 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"
which is effective for transfers and servicing of financial
<PAGE>

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

assets and extinguishments of liabilities occurring after December 31, 1996.
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.

Effective January 1, 1996, the Company adopted SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of". This statement establishes accounting standards for the impairment of
long-lived assets, certain identifiable intangibles, and goodwill related to
those assets to be held and used and for long-lived assets and certain
identifiable intangibles to be disposed of. Adoption of SFAS No. 121 did not
have a material effect on the Company's financial condition or results of
operations.

The Company's cash flows were not impacted by these changes in accounting
principles.

Revenues for universal life-type 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 and
disability 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. Health
reserves, which are the result of sales of group long-term and short-term
disability, stop loss, Medicare Supplement and individual disability products,
are stated at amounts determined by estimates on individual cases and estimates
of unreported claims based on past experience. Liabilities for universal
life-type and investment contracts are stated at policyholder account values
before surrender charges.

(E) 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 over the expected maturity of the securities, 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.

(F) INVESTMENTS

The Company's investments in fixed maturities include bonds and commercial
paper which are considered "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 "Net unrealized capital gains (losses) on
securities, net of tax". Equity securities, which include common and
non-redeemable preferred stocks, are carried at fair values with the after-tax
difference from cost reflected in Stockholder's Equity. Policy loans are carried
at outstanding balance which approximates fair value. Net realized capital gains
and losses, after deducting pension policyholders' share, are reported as a
component of revenue and are determined on a specific identification basis.

The Company's accounting policy for impairment 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, for securities expected to be sold, an
other than temporary impairment charge is recognized if the Company does not
expect the fair value of a security to recover to cost or amortized cost prior
to the expected date of sale. Once an impairment charge has been recorded, the
Company then continues to review the other than temporarily impaired securities
for appropriate valuation on an on-going basis.

During 1996, it was determined that certain individual securities within the
investment portfolio supporting the Company's block of guaranteed rate contract
business written prior to 1995 ("Closed Book GRC") could not recover to
amortized cost prior to sale. Therefore, an other than temporary impairment loss
of $88, after-tax, was recorded.

(G) DERIVATIVE INSTRUMENTS

The Company uses a variety of derivative 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
planned investment purchases or existing assets and liabilities. The Company
does not hold or issue derivative instruments for trading purposes. The
Company's accounting for derivative 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", AICPA SOP 86-2,
"Accounting for Options" and various EITF pronouncements. Written options are
used, in all cases in conjunction with other assets and derivatives, as part of
the Company's asset and liability management strategy. Derivative instruments
are carried at values consistent with the asset or liability being hedged.
Derivative instruments used to hedge fixed maturities or equity securities are
carried at fair value
<PAGE>

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

with the after-tax difference from cost reflected in Stockholder's Equity.
Derivative instruments used to hedge other invested assets or liabilities are
carried at cost.

Derivative instruments must be designated at inception as a hedge and
measured for effectiveness both at inception and on an on-going 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. Derivative
instruments 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. Consistent with industry
practice, synthetic instruments are accounted for like the financial instrument
it is intended to replicate. Derivative instruments which fail to meet risk
management criteria, subsequent to acquisition, 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 investment of future receipt of product cash flows are deferred and, at
the time of the ultimate investment 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 contract futures are closed, except for futures used in
duration hedging which are deferred and basis adjusted on a quarterly basis. The
basis adjustments are amortized into net investment income over the remaining
asset life.

Open forward commitment contracts are marked to market through Stockholder's
Equity. Such contracts are accounted for at settlement by recording the purchase
of the specified securities at the previously committed price. Gains or losses
resulting from the termination of 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 options entered into as part of a risk management strategy are
basis adjusted to the underlying asset or liability and amortized over the
remaining life of the option. Gains or losses on expiration or termination are
adjusted into the basis of the underlying asset or liability and amortized over
the remaining asset life.

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 investment 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 net investment income. Interest rate swaps purchased in
anticipation of an asset purchase ("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 capital gain or loss.

Premiums paid on purchased floor or cap agreements and the premium received
on issued cap or floor 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. Changes in the spot rate of instruments designated
as hedges of the net investment in a foreign subsidiary are reflected in the
cumulative translation adjustments component of Stockholder's Equity. Cash flows
from futures, options, and swaps, accounted for as hedges, are included with the
cash flows of the item being hedged.

(H) SEPARATE ACCOUNTS

The Company maintains separate account assets and liabilities 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
policyholders. Separate accounts reflect two categories of risk assumption:
non-guaranteed separate accounts, wherein the policyholder assumes the
investment risk, and guaranteed separate account assets, wherein the Company
contractually guarantees either a minimum return or account value to the
policyholder.

(I) DEFERRED POLICY ACQUISITION COSTS

Policy acquisition costs, which include 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
<PAGE>

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

for the books of business are reestimated and adjusted by a cumulative charge or
credit to income.

The Company's other expenses include the following:

<TABLE>
<CAPTION>
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Commissions........................... $ 976 $ 848 $ 619
Deferred acquisition costs............ (862) (823) (618)
Other................................. 472 402 316
--------- --------- ---------
Total other expenses.............. $ 586 $ 427 $ 317
--------- --------- ---------
--------- --------- ---------
</TABLE>

(J) 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
55%, 44%, and 41% in 1997, 1996, and 1995, respectively, of total insurance in
force.

3. INITIAL PUBLIC OFFERING

On February 10, 1997, Hartford Life filed a registration statement, as
amended, with the Securities and Exchange Commission, relating to the IPO of
Hartford Life's Class A Common Stock. Pursuant to the IPO on May 22, 1997,
Hartford Life sold to the public 26 million shares at $28.25 per share and
received proceeds, net of offering expenses, of $687. Of the proceeds, $527 was
used to retire debt related to Hartford Life's promissory notes outstanding and
line of credit. The remaining $160 was contributed by Hartford Life to HLA to
support growth in its core businesses. The 26 million shares sold in the
Offering represent approximately 18.6% of the equity ownership in Hartford Life
and approximately 4.4% of the combined voting power of Hartford Life's Class A
and Class B Common Stock. The Hartford owns all of the 114 million outstanding
shares of Class B Common Stock of Hartford Life, representing approximately
81.4% of the equity ownership in Hartford Life and approximately 95.6% of the
combined voting power of Hartford Life's Class A and Class B Common Stock.
Holders of Class A Common Stock generally have identical rights to the holders
of Class B Common Stock except that the holders of Class A Common Stock are
entitled to one vote per share while holders of Class B Common Stock are
entitled to five votes per share on all matters submitted to a vote of Hartford
Life's stockholders.

4. INVESTMENTS AND DERIVATIVE INSTRUMENTS

(A) COMPONENTS OF NET INVESTMENT INCOME

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Interest income from fixed
maturities......................... $ 932 $ 918 $ 996
Interest income from policy loans... 425 477 342
Income from other investments....... 26 15 1
--------- --------- ---------
Gross investment income............. 1,383 1,410 1,339
Less: Investment expenses........... 15 13 11
--------- --------- ---------
Net investment income............... $ 1,368 $ 1,397 $ 1,328
--------- --------- ---------
--------- --------- ---------
</TABLE>

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

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
---------------------------------
1997 1996 1995
----- --------- ---------
<S> <C> <C> <C>
Fixed maturities......................... $ (7) $ (201) $ 23
Equity securities........................ 12 2 (6)
Real estate and other.................... (1) (4) (25)
Less: Increase in liability to
policyholders for realized capital
gains................................... -- (10) (3)
--- --------- ---------
Net realized capital gains (losses) $ 4 $ (213) $ (11)
--- --------- ---------
--- --------- ---------
</TABLE>

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-------------------------------------
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Gross unrealized capital gains.............. $ 14 $ 13 $ 4
Gross unrealized capital losses............. -- (1) (2)
--- --- ---
Net unrealized capital gains................ 14 12 2
Deferred income tax expense................. 5 4 1
--- --- ---
Net unrealized capital gains, net of tax.... 9 8 1
Balance -- beginning of year................ 8 1 (6)
--- --- ---
Net change in unrealized capital gains
(losses) on equity securities.............. $ 1 $ 7 $ 7
--- --- ---
--- --- ---
</TABLE>

<PAGE>

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

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

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
---------------------
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Gross unrealized capital gains................................... $ 371 $ 386 $ 529
Gross unrealized capital losses.................................. (80) (341) (569)
Unrealized capital (gains) losses credited to policyholders...... (30) (11) (52)
----- ----- -----
Net unrealized capital gains (losses)............................ 261 34 (92)
Deferred income tax expense (benefit)............................ 91 12 (34)
----- ----- -----
Net unrealized capital gains (losses), net of tax................ 170 22 (58)
Balance -- beginning of year..................................... 22 (58) (648)
----- ----- -----
Net change in unrealized capital gains (losses) on fixed
maturities...................................................... $ 148 $ 80 $ 590
----- ----- -----
----- ----- -----
</TABLE>

(E) FIXED MATURITY INVESTMENTS

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
---------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
U.S. gov't and gov't agencies and authorities
(guaranteed and sponsored)...................................... $ 217 $ 3 $ (1) $ 219
U.S. gov't and gov't agencies and authorities
(guaranteed and sponsored) -- asset backed...................... 1,175 64 (35) 1,204
States, municipalities and political subdivisions................ 211 7 (1) 217
International governments........................................ 376 20 (3) 393
Public utilities................................................. 871 26 (3) 894
All other corporate including international...................... 5,033 200 (25) 5,208
All other corporate -- asset backed.............................. 4,091 41 (8) 4,124
Short-term investments........................................... 1,318 -- -- 1,318
Certificates of deposit.......................................... 593 10 (4) 599
---------- ----- ----- ----------
Total fixed maturities....................................... $13,885 $371 $(80) $14,176
---------- ----- ----- ----------
---------- ----- ----- ----------
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
---------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
U.S. gov't and gov't agencies and authorities
(guaranteed and sponsored)...................................... $ 166 $ 12 $ (3) $ 175
U.S. gov't and gov't agencies and authorities
(guaranteed and sponsored) -- asset backed...................... 1,970 161 (128) 2,003
States, municipalities and political subdivisions................ 373 6 (11) 368
International governments........................................ 281 12 (4) 289
Public utilities................................................. 877 12 (8) 881
All other corporate including international...................... 4,656 120 (107) 4,669
All other corporate -- asset backed.............................. 3,601 49 (59) 3,591
Short-term investments........................................... 1,655 14 (21) 1,648
---------- ----- ----------- ----------
Total fixed maturities....................................... $13,579 $386 $(341) $13,624
---------- ----- ----------- ----------
---------- ----- ----------- ----------
</TABLE>

The amortized cost and estimated fair value of fixed maturity investments at
December 31, 1997 by estimated maturity year are shown below. Expected
maturities differ from contractual maturities due to call or prepayment
provisions. Asset backed securities, including MBS and CMO's, are distributed to
maturity year based on the Company's estimates of the rate of future prepayments
of principal over the remaining lives of the securities. These estimates are
developed using prepayment speeds provided in broker consensus data. Such
estimates are derived from prepayment speeds experienced at the interest rate
levels projected for the applicable underlying collateral and can be expected to
vary from actual experience.

MATURITY

<TABLE>
<CAPTION>
AMORTIZED
COST FAIR VALUE
----------- -----------
<S> <C> <C>
One year or less......................... $ 2,838 $ 2,867
Over one year through five years......... 5,528 5,595
Over five years through ten years........ 3,094 3,156
Over ten years........................... 2,425 2,558
----------- -----------
Total................................ $ 13,885 $ 14,176
----------- -----------
----------- -----------
</TABLE>

<PAGE>

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

Sales of fixed maturities, excluding short-term fixed maturities, for the
years ended December 31, 1997, 1996 and 1995 resulted in proceeds of $4.2
billion, $3.5 billion and $4.8 billion, gross realized capital gains of $169,
$87 and $91, gross realized capital losses (including writedowns) of $176, $298
and $72, respectively. Sales of equity security investments for the years ended
December 31, 1997, 1996 and 1995 resulted in proceeds of $132, $74 and $64,
gross realized capital gains of $12, $2 and $28 and gross realized capital
losses of $0, $0 and $59, respectively.

(F) CONCENTRATION OF CREDIT RISK

Excluding investments in U.S. government and agencies, the Company has not
invested in the securities of a single issuer in amounts greater than 10% of
stockholder's equity at December 31, 1997.

(G) DERIVATIVE INSTRUMENTS

The Company utilizes a variety of derivative instruments, including swaps,
caps, floors, forwards and exchange traded futures and options, in accordance
with Company policy and in order to achieve one of three Company approved
objectives: to hedge risk arising from interest rate, price or currency exchange
rate volatility; to manage liquidity; or, to control transactions costs. The
Company utilizes derivative instruments to manage market risk through four
principal risk management strategies: hedging anticipated transactions, hedging
liability instruments, hedging invested assets and hedging portfolios of assets
and/or liabilities. The Company does not trade in these instruments for the
express purpose of earning trading profits.
The Company maintains a derivatives counterparty exposure policy which
establishes market-based credit limits, favors long-term financial stability and
creditworthiness, and typically requires credit enhancement/credit risk reducing
agreements. Credit risk is measured as the amount owed to the Company based on
current market conditions and potential payment obligations between the Company
and its counterparties. Credit exposures are quantified weekly and netted, and
collateral is pledged to or held by the Company to the extent the current value
of derivatives exceed exposure policy thresholds.

The Company's derivative program is monitored by an internal compliance unit
and is reviewed by senior management and Hartford Life's Finance Committee.
Notional amounts, which represent the basis upon which pay or receive amounts
are calculated and are not reflective of credit risk, pertaining to derivative
financial instruments (excluding the Company's guaranteed separate account
derivative investments), totaled $6.5 billion and $9.9 billion ($4.6 billion and
$7.4 billion related to the Company's investments, $1.9 billion and $2.5 billion
on the Company's liabilities) at December 31, 1997 and 1996, respectively.

The table below provides a summary of derivative instruments held by the
Company at December 31, 1997 and 1996, segregated by major investment and
liability category:

<TABLE>
<CAPTION>
1997 -- AMOUNT HEDGED (NOTIONAL AMOUNTS)
----------------------------------------------------------------------------------
PURCHASED
CAPS, FOREIGN
TOTAL ISSUED FLOORS INTEREST CURRENCY TOTAL
CARRYING CAPS & AND FUTURES RATE SWAPS NOTIONAL
ASSETS HEDGED VALUE FLOORS OPTIONS (2) SWAPS (3) AMOUNT
- ----------------------------------- -------- -------- ---------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset backed securities (excluding
inverse floaters and
anticipatory)..................... $ 5,253 $ 500 $ 1,404 $ 28 $ 221 $-- $ 2,153
Inverse floaters (1)............... 75 47 80 -- 25 -- 152
Anticipatory (4)................... -- -- -- -- -- -- --
Other bonds and notes.............. 7,531 462 460 22 1,258 91 2,293
Short-term investments............. 1,317 -- -- -- -- -- --
-------- -------- ---------- --- ---------- --- ----------
Total fixed maturities......... 14,176 1,009 1,944 50 1,504 91 4,598
Equity securities, policy loans and
other investments................. 3,983 -- -- -- -- -- --
-------- -------- ---------- --- ---------- --- ----------
Total investments.............. $ 18,159 $ 1,009 $ 1,944 $ 50 $ 1,504 $91 $ 4,598
Long term debt................. -- -- -- -- -- -- --
Other policy claims............ -- 10 150 -- 1,747 -- 1,907
-------- -------- ---------- --- ---------- --- ----------
Total derivatives -- notional
value........................... $ 1,019 $ 2,094 $ 50 $ 3,251 $91 $ 6,505
-------- -------- ---------- --- ---------- --- ----------
Total derivatives -- fair value.... $ (8) $ 23 $ -- $ 19 $(6) $ 28
-------- -------- ---------- --- ---------- --- ----------
-------- -------- ---------- --- ---------- --- ----------
</TABLE>

<PAGE>

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

<TABLE>
<CAPTION>
1996 --AMOUNT HEDGED (NOTIONAL AMOUNTS)
--------------------------------------------------------------------------
FOREIGN
TOTAL ISSUED PURCHASED INTEREST CURRENCY TOTAL
CARRYING CAPS & CAPS, FLOORS RATE SWAPS NOTIONAL
ASSETS HEDGED VALUE FLOORS AND OPTIONS FUTURES (2) SWAPS (3) AMOUNT
- ----------------------------------- -------- ------- ------------ ----------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset backed securities (excluding
inverse floaters and
anticipatory)..................... $ 5,242 $ 500 $ 2,454 $ -- $ 941 $ -- $3,895
Inverse floaters (1)............... 352 98 856 -- 346 -- 1,300
Anticipatory (4)................... -- -- -- 132 -- -- 132
Other bonds and notes.............. 7,369 425 440 5 1,079 125 2,074
Short-term investments............. 661 -- -- -- -- -- --
-------- ------- ------------ ----- --------- -------- -------
Total fixed maturities......... 13,624 1,023 3,750 137 2,366 125 7,401
Equity securities, policy loans and
other investments................. 4,011 -- -- -- 19 -- 19
-------- ------- ------------ ----- --------- -------- -------
Total investments.............. $ 17,635 $ 1,023 $ 3,750 $ 137 $ 2,385 $ 125 $7,420
Long term debt................. -- -- -- -- -- -- --
Other policy claims............ -- 10 150 -- 2,351 -- 2,511
-------- ------- ------------ ----- --------- -------- -------
Total derivatives -- notional
value......................... $ 1,033 $ 3,900 $ 137 $ 4,736 $ 125 $9,931
-------- ------- ------------ ----- --------- -------- -------
Total derivatives -- fair
value......................... $ (10) $ 38 $ -- $ 2 $ (9 ) $ 21
-------- ------- ------------ ----- --------- -------- -------
-------- ------- ------------ ----- --------- -------- -------
</TABLE>

- ---------

(1) Inverse floaters are variations of collateralized mortgage obligations
("CMO's") for which the coupon rates move inversely with an index rate such as
the London interbank offered rate ("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, caps and floors.

(2) As of December 31, 1997 and 1996, over 44% and 39% , respectively, of
the notional futures contracts expire within one year.

(3) As of December 31, 1997 and 1996, over 16% and 42%, respectively, of
foreign currency swaps expire within one year; the balance matures over the
succeeding 9 years.

(4) Deferred gains and losses on anticipatory transactions are included in
the carrying value of fixed maturities 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, 1997, the Company had $0 deferred gains and
losses. At December 31, 1996, the Company had $0.9 in net deferred gains for
futures, interest rate swaps and purchased options of which $2.0 was basis
adjusted in 1997.

The following is a reconciliation of notional amounts by derivative type and
strategy as of December 31, 1997 and 1996:

<TABLE>
<CAPTION>
DECEMBER 31, 1996 MATURITIES/ DECEMBER 31, 1997
NOTIONAL AMOUNT ADDITIONS TERMINATIONS (1) NOTIONAL AMOUNT
----------------- -------- ----------------- -----------------
<S> <C> <C> <C> <C>
BY DERIVATIVE TYPE
Caps......................................... $1,755 $ 14 $ 530 $1,239
Floors....................................... 3,168 28 1,332 1,864
Swaps/Forwards............................... 4,861 941 2,460 3,342
Futures...................................... 137 131 218 50
Options...................................... 10 -- -- 10
------- -------- ------- -------
Total.................................... $9,931 $1,114 $4,540 $6,505
------- -------- ------- -------
BY STRATEGY
Liability.................................... $2,511 $ 191 $ 795 $1,907
Anticipatory................................. 132 4 136 --
Asset........................................ 2,112 739 1,046 1,805
Portfolio.................................... 5,176 180 2,563 2,793
------- -------- ------- -------
Total.................................... $9,931 $1,114 $4,540 $6,505
------- -------- ------- -------
------- -------- ------- -------
</TABLE>

- ---------

(1) During 1997, the Company had no significant gains or losses on terminations
of hedge positions using derivative financial instruments.
<PAGE>

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

5. FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107 "Disclosure about Fair
Value of Financial Instruments" requires disclosure of fair value information of
financial instruments. For certain financial instruments where quoted market
prices are not available, other independent valuation techniques and assumptions
are used. Because considerable judgment is used, these estimates are not
necessarily indicative of amounts that could be realized in a current market
exchange. SFAS No. 107 excludes certain financial instruments from disclosure,
including insurance contracts.

For cash, short-term investments, accounts receivable, policy loans,
mortgage loans and other liabilities, carrying amounts on the Consolidated
Balance Sheets approximate fair value.

Fair value for fixed maturities and marketable equity securities are based
upon quoted market prices. Fair value for securities that are not publicly
traded are analytically determined. These amounts are disclosed in Note 4 of
Notes to Consolidated Financial Statements.

The fair value of derivative financial instruments, including swaps, caps,
floors, futures, options and forward commitments, is determined using a pricing
model which is validated through quarterly comparison to dealer quoted prices.
Amounts are disclosed in Note 4 of Notes to Consolidated Financial Statements.

Fair value for partnerships and trusts are based on external market
valuations from partnership and trust management.

Other policy claims and benefits payable fair value information is
determined by estimating future cash flows, discounted at the current market
rate.

The carrying amount and fair values of the Company's financial instruments
at December 31, 1997 and 1996 were as follows:

<TABLE>
<CAPTION>
1997 1996
------------------ ------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
--------- ------- --------- -------
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities..................................... $ 14,176 $14,176 $ 13,624 $13,624
Equity securities.................................... 180 180 119 119
Policy loans......................................... 3,756 3,756 3,836 3,836
Mortgage loans....................................... -- -- 2 2
Investments in partnerships, trusts and other........ 47 91 54 104
LIABILITIES
Other policy benefits................................ $ 11,769 $11,755 $ 11,707 $11,469
</TABLE>

6. SEPARATE ACCOUNTS

The Company maintained separate account assets and liabilities totaling
$69.1 billion and $49.7 billion at December 31, 1997 and 1996, respectively,
which are reported at fair value. Separate account assets are segregated from
other investments and net investment income and net realized capital gains and
losses accrue directly to the policyholder. Separate accounts reflect two
categories of risk assumption: non-guaranteed separate accounts totaling $58.6
billion and $39.4 billion at December 31, 1997 and 1996, respectively, wherein
the policyholder assumes the investment risk, and guaranteed separate accounts
totaling $10.5 and $10.3 billion at December 31, 1997 and 1996, respectively,
wherein the Company contractually guarantees either a minimum return or account
value to the policyholder. Included in the non-guaranteed category were policy
loans totaling $1.9 billion and $2.0 billion at December 31, 1997 and 1996,
respectively. Net investment income (including net realized capital 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 were $699, $538 and $387 in 1997, 1996 and
1995, respectively. The guaranteed separate accounts include fixed market value
adjusted individual annuity and modified guaranteed life insurance. The average
credited interest rate on these contracts was 6.52% at December 31, 1997. The
assets that support these liabilities were comprised of $10.2 billion in fixed
maturities as of December 31, 1997. The portfolios are segregated from other
investments and are managed to minimize liquidity and interest rate risk. In
order to minimize the risk of disintermediation associated with early
withdrawals, fixed MVA 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 $119 in
carrying value and $3.0 billion in notional amounts as of December 31, 1997.
<PAGE>

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

7. INCOME TAX

Hartford Life and The Hartford have entered into a tax sharing agreement
under which each member 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 the Company, subject to certain adjustments, generally will
be determined as though the Company were filing 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 affiliated group of which The Hartford is the
common parent. To the extent allowed by law, it is the intention of The Hartford
and its subsidiaries to continue to file a single consolidated Federal income
tax return. The Company will continue to remit (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 36%, 35% and 32% in
1997, 1996 and 1995, respectively.

Income tax expense is as follows:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-------------------------
1997 1996 1995
---- ------ ------
<S> <C> <C> <C>
Current...................................... $119 $ 122 $ 211
Deferred..................................... 48 (102) (149)
---- ------ ------
Income tax expense......................... $167 $ 20 $ 62
---- ------ ------
---- ------ ------
</TABLE>

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

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
1997 1996 1995
--------- ----- -----
<S> <C> <C> <C>
Tax provision at the U.S. Federal statutory
rate...................................... $ 164 $ 20 $ 67
Tax-exempt income.......................... -- -- (3)
Foreign tax credit......................... -- -- (4)
Other...................................... 3 -- 2
--------- --- ---
Total.................................... $ 167 $ 20 $ 62
--------- --- ---
--------- --- ---
</TABLE>

Deferred tax assets include the following at December 31:

<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Tax return deferred acquisition costs............ $ 639 $ 514
Financial statement deferred acquisition costs
and reserves.................................... (366) (242)
Employee benefits................................ 5 8
Net unrealized capital gains on securities....... (96) (16)
Investments and other............................ 166 210
--------- ---------
Total.......................................... $ 348 $ 474
--------- ---------
--------- ---------
</TABLE>

Income taxes paid were $9, $189 and $162 in 1997, 1996 and 1995,
respectively. The Company had a current tax payment of $27 due to The Hartford
at December 31, 1997 and a tax refund due from The Hartford of $72 at December
31, 1996.

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 these situations, 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,
1997 was $37.

8. POSTRETIREMENT BENEFIT AND SAVINGS PLANS

(A) PENSION PLANS

The Company's employees are included in The Hartford'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 U.S. 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, $5 and $2 in 1997, 1996 and 1995,
respectively.

The Company also provides, through The Hartford, 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.
Postretirement health care and life insurance benefits expense, allocated by The
Hartford, was immaterial to the results of operations for 1997, 1996 and 1995,
respectively.

The assumed rate in the per capita cost of health care (the health care
trend rate) was 8.5% for 1997, 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,
<PAGE>

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

the effect will be amortized over the average future service of covered
employees.

(B) INVESTMENT AND SAVINGS PLAN
Substantially all employees of the Company are eligible to participate in The
Hartford's Investment and Savings Plan. Under this plan, designated
contributions, which may be invested in Class A Common Stock of Hartford Life or
certain other investments, are matched, up to 3% of compensation, by the
Company. The cost to the Company for the above-mentioned plans was approximately
$2 in 1997.

9. STOCK COMPENSATION PLANS

During the second quarter of 1997, Hartford Life adopted the 1997 HLI
Incentive Stock Plan (the "Plan"). Under the Plan, options granted may be either
non-qualified options or incentive stock options qualifying under Section 422A
of the Internal Revenue Code. The aggregate number of shares of Class A Common
Stock which may be awarded in any one year shall be subject to an annual limit.
The maximum number of shares of Class A Common Stock which may be granted under
the Plan in each year shall be 1.5% of the total issued and outstanding shares
of Hartford Life Class A Common Stock and treasury stock as reported in the
Annual Report on Hartford Life's Form 10-K for the preceding year plus unused
portions of such limit from prior years. In addition, no more than 5,000,000
shares of Class A Common Stock shall be cumulatively available for awards of
incentive stock options under the Plan, and no more than 20% of the total number
of shares on a cumulative basis shall be available for restricted stock and
performance shares.

All options granted have an exercise price equal to the market price of
Hartford Life's stock on the date of grant and an option's maximum term is ten
years. Certain nonperformance based options become exercisable upon the
attainment of specified market price appreciation of Hartford Life's common
shares or at seven years after the date of grant, while the remaining
nonperformance based options become exercisable over a three year period
commencing with the date of grant.

Also included in the Plan are long term performance awards which become
payable upon the attainment of specific performance goals achieved over a three
year period.

During the second quarter of 1997, Hartford Life established the HLI
Employee Stock Purchase Plan ("ESPP"). Under this plan, eligible employees of
Hartford Life and the Company may purchase Class A Common Stock of Hartford Life
at a 15% discount from the lower of the market price at the beginning or end of
the quarterly offering period. Hartford Life may sell up to 2,700,000 shares of
stock to eligible employees. Hartford Life sold 54,316 shares under the ESPP in
1997.

10. REINSURANCE

The Company cedes insurance to other insurers, including its parent HLA, 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.
Failure of reinsurers to honor their obligations could result in losses to the
Company. The Company evaluates the financial condition of its reinsurers and
monitors concentration of credit risk.

Net premiums and other considerations were comprised of the following:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Gross premiums............................... $ 2,164 $ 2,138 $ 1,545
Assumed...................................... 159 190 591
Ceded........................................ (686) (623) (649)
--------- --------- ---------
Net premiums and other considerations...... $ 1,637 $ 1,705 $ 1,487
--------- --------- ---------
--------- --------- ---------
</TABLE>

The Company ceded approximately $76, $100 and $101 of group life premium in
1997, 1996 and 1995, respectively, representing $33.6 billion, $33.3 billion and
$32.3 billion of insurance in force, respectively. The Company ceded $339, $318
and $320 of accident and health premium to HLA in 1997, 1996 and 1995,
respectively. The Company assumed $89, $101 and $103 of premium in 1997, 1996
and 1995, respectively, representing $8.2 billion, $8.5 billion and $8.5 billion
of individual life insurance in force, respectively, from HLA.

Life reinsurance recoveries, which reduce death and other benefits,
approximated $158, $140 and $220 for the years ended December 31, 1997, 1996 and
1995, respectively.

As of December 31, 1997, the Company had reinsurance recoverables of $5.0
billion from Mutual Benefit Life Assurance Corporation ("Mutual Benefit"),
supported by assets in a security trust of $5.0 billion (including policy loans
and accrued interest of $4.5 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. The
Company has no other significant reinsurance-related concentrations of credit
risk.

11. RELATED PARTY TRANSACTIONS

Transactions of the Company with HA&I and its affiliates relate principally
to tax settlements, reinsurance, insurance coverage, rental and service fees,
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 The Hartford. 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,
<PAGE>

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

depending on type, are allocated based on either a percentage of direct expenses
or on utilization. Indirect expenses allocated to the Company by The Hartford
were $34, $40, and $45 in 1997, 1996 and 1995, respectively. Management believes
that the methods used are reasonable.

The rent paid to Hartford Fire for space occupied by the Company was $7 in
1997, and $3 in 1996 and 1995. The Company expects to pay annual rent of $7 in
1998 and 1999, respectively, $12 in 2000 and 2001, respectively, $13 in 2002 and
$87 thereafter, over the remaining term of the sublease, which expires on
December 31, 2009. Rental expense is recognized over a level basis over the term
of the sublease and amounted to approximately $9 in 1997 and $8 in 1996 and
1995.

12. STATUTORY RESULTS

The domestic insurance subsidiaries of Hartford Life 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.

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
--------------------------
1997 1996 1995
------ ------ ------
<S> <C> <C> <C>
Statutory net income......................... $ 214 $ 144 $ 112
------ ------ ------
Statutory surplus............................ $1,441 $1,207 $1,125
------ ------ ------
------ ------ ------
</TABLE>

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 1998 is estimated to be $144.

13. COMMITMENTS AND CONTINGENT LIABILITIES

(A) LITIGATION

The Company is involved in pending and threatened litigation in the normal
course of its business in which claims for monetary and punitive damages have
been asserted. Although there can be no assurances, management, at the present
time, does not anticipate that the ultimate liability arising from such pending
or threatened litigation will have a material effect on the financial condition
or operating results of the Company.

(B) GUARANTY FUNDS

Under insurance guaranty fund laws 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 $15,
$11 and $10 in 1997, 1996 and 1995, respectively, of which $4, $5, and $6 were
estimated to be creditable against premium taxes.

14. BUSINESS SEGMENT INFORMATION

The Company, along with its parent, sells financial products such as fixed
and variable annuities, retirement plan services, and life and disability
insurance on both an individual and a group basis. The Company divides its core
businesses into three segments: Annuity, Individual Life Insurance, and Employee
Benefits. The Company also maintains a Guaranteed Investment Contracts segment,
which is primarily comprised of guaranteed rate contract business written prior
to 1995 and a Corporate Operation. The Annuity 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, interest-sensitive whole life, and term life policies. The
Employee Benefits segment sells group insurance products, including group life,
group short and long-term disability and corporate owned life insurance, and
engages in certain international operations. The Guaranteed Investment Contracts
segment sells a limited amount of guaranteed investment contracts and contains
Closed Book GRC. Through its Corporate Operation, the Company reports items that
are not directly allocable to any of its business segments. Included in the
Corporate Operation are unallocated income and expense and certain other items
not directly allocable to any segment. 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.
<PAGE>

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

The following table outlines revenues, operating income and assets by
business segment:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
REVENUES
Annuity.............................................. $ 1,269 $ 968 $ 759
Individual Life Insurance............................ 487 440 383
Employee Benefits.................................... 972 1,366 1,273
Guaranteed Investment Contracts...................... 241 34 337
Corporate Operation.................................. 40 81 52
-------- -------- --------
Total revenues..................................... $ 3,009 $ 2,889 $ 2,804
-------- -------- --------
-------- -------- --------
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)
Annuity.............................................. $ 317 $ 226 $ 171
Individual Life Insurance............................ 85 68 56
Employee Benefits.................................... 53 44 37
Guaranteed Investment Contracts...................... -- (346) (103)
Corporate Operation.................................. 14 66 30
-------- -------- --------
Total income before income tax expense............. $ 469 $ 58 $ 191
-------- -------- --------
-------- -------- --------
ASSETS
Annuity $ 69,152 $ 52,877 $ 39,732
Individual Life Insurance............................ 4,918 3,753 3,173
Employee Benefits.................................... 18,196 14,708 13,494
Guaranteed Investment Contracts...................... 3,347 4,533 6,069
Corporate Operation.................................. 2,343 1,891 1,729
-------- -------- --------
Total assets....................................... $ 97,956 $ 77,762 $ 64,197
-------- -------- --------
-------- -------- --------
</TABLE>

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

SCHEDULE I -- SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN AFFILIATES
AS OF DECEMBER 31, 1997
(IN MILLIONS)

<TABLE>
<CAPTION>
AMOUNT AT
WHICH
FAIR SHOWN ON
TYPE OF INVESTMENT COST VALUE BALANCE SHEET
- --------------------------------------------- ------- ------- --------------
<S> <C> <C> <C>
Fixed Maturities
Bonds and Notes
U. S. gov't and gov't agencies and
authorities (guaranteed and sponsored) $ 217 $ 219 $ 219
U. S. gov't and gov't agencies and
authorities (guaranteed and sponsored) --
asset-backed.............................. 1,175 1,204 1,204
States, municipalities and political
subdivisions.............................. 211 217 217
International governments.................. 376 393 393
Public utilities........................... 871 894 894
All other corporate including
international............................. 5,033 5,208 5,208
All other corporate -- asset-backed........ 4,091 4,124 4,124
Short-term investments..................... 1,318 1,318 1,318
Certificates of deposit...................... 593 599 599
------- ------- -------
Total fixed maturities....................... 13,885 14,176 14,176
------- ------- -------
Equity Securities
Common Stocks
Public utilities........................... -- -- --
Banks, trusts and insurance companies...... -- -- --
Industrial and miscellaneous............... 166 180 180
Nonredeemable preferred stocks............. -- -- --
------- ------- -------
Total equity securities...................... 166 180 180
------- ------- -------
Total fixed maturities and equity
securities.................................. 14,051 14,356 14,356
------- ------- -------
Real Estate.................................. -- -- --
Other Investments
Mortgage loans on real estate.............. -- -- --
Policy loans............................... 3,756 3,756 3,756
Investments in partnerships, trusts and
other..................................... 47 91 47
------- ------- -------
Total other investments...................... 3,803 3,847 3,803
------- ------- -------
Total investments............................ $17,854 $18,203 $18,159
------- ------- -------
------- ------- -------
</TABLE>

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

SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(IN MILLIONS)
<TABLE>
<CAPTION>
FUTURE
POLICY
BENEFITS,
UNPAID OTHER
DEFERRED CLAIMS POLICY
POLICY AND CLAIM CLAIMS AND PREMIUMS NET
ACQUISITION ADJUSTMENT BENEFITS AND OTHER INVESTMENT
SEGMENT COSTS EXPENSES PAYABLE CONSIDERATIONS INCOME
- --------------------------------------------- ----------- --------- ---------- --------------- ---------

<S> <C> <C> <C> <C> <C>
1997
Annuity...................................... $2,478 $2,070 $ 6,838 $ 769 $ 500
Individual Life Insurance.................... 837 392 2,182 323 164
Employee Benefits............................ -- 780 9,232 541 431
Guaranteed Investment Contracts.............. -- -- 2,782 2 239
Corporate Operation.......................... -- 28 -- 2 34
----------- --------- ---------- ------ ---------
Consolidated operations...................... $3,315 $3,270 $21,034 $1,637 $1,368
----------- --------- ---------- ------ ---------
----------- --------- ---------- ------ ---------

1996
Annuity...................................... $2,030 $1,526 $ 6,016 $ 535 $ 433
Individual Life Insurance.................... 730 346 2,160 287 153
Employee Benefits............................ -- 574 9,834 881 485
Guaranteed Investment Contracts.............. -- -- 4,124 2 251
Corporate Operation.......................... -- 28 -- -- 75
----------- --------- ---------- ------ ---------
Consolidated operations...................... $2,760 $2,474 $22,134 $1,705 $1,397
----------- --------- ---------- ------ ---------
----------- --------- ---------- ------ ---------

1995
Annuity...................................... $1,561 $1,314 $ 5,661 $ 319 $ 400
Individual Life Insurance.................... 615 706 1,932 246 137
Employee Benefits............................ 12 325 9,285 922 351
Guaranteed Investment Contracts.............. -- 28 5,720 -- 377
Corporate Operation.......................... -- -- -- -- 63
----------- --------- ---------- ------ ---------
Consolidated operations...................... $2,188 $2,373 $22,598 $1,487 $1,328
----------- --------- ---------- ------ ---------
----------- --------- ---------- ------ ---------

NET BENEFITS, AMORTIZATION
REALIZED CLAIMS AND OF DEFERRED
CAPITAL CLAIM POLICY
GAINS ADJUSTMENT ACQUISITION DIVIDENDS TO OTHER
SEGMENT (LOSSES) EXPENSES COSTS POLICYHOLDERS EXPENSES
- --------------------------------------------- ----------- ----------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
1997
Annuity...................................... $ -- $ 445 $250 $ -- $ 257
Individual Life Insurance.................... -- 242 83 -- 77
Employee Benefits............................ -- 425 2 240 252
Guaranteed Investment Contracts.............. -- 232 -- -- 9
Corporate Operation.......................... 4 35 -- -- (9)
----------- ----------- ----- ----- -----
Consolidated operations...................... $ 4 $1,379 $335 $240 $ 586
----------- ----------- ----- ----- -----
----------- ----------- ----- ----- -----
1996
Annuity...................................... $ -- $ 412 $174 $ -- $ 156
Individual Life Insurance.................... -- 245 59 -- 68
Employee Benefits............................ -- 546 -- 635 141
Guaranteed Investment Contracts.............. (219) 332 1 -- 47
Corporate Operation.......................... 6 -- -- -- 15
----------- ----------- ----- ----- -----
Consolidated operations...................... $(213) $1,535 $234 $635 $ 427
----------- ----------- ----- ----- -----
----------- ----------- ----- ----- -----
1995
Annuity...................................... $ -- $ 317 $117 $ -- $ 114
Individual Life Insurance.................... -- 203 70 -- 54
Employee Benefits............................ -- 424 -- 675 137
Guaranteed Investment Contracts.............. -- 453 12 -- 15
Corporate Operation.......................... (11) 25 -- -- (3)
----------- ----------- ----- ----- -----
Consolidated operations...................... $ (11) $1,422 $199 $675 $ 317
----------- ----------- ----- ----- -----
----------- ----------- ----- ----- -----
</TABLE>

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

SCHEDULE IV -- REINSURANCE
(IN MILLIONS)

<TABLE>
<CAPTION>
CEDED TO ASSUMED FROM PERCENTAGE
GROSS OTHER OTHER NET OF AMOUNT
AMOUNT COMPANIES COMPANIES AMOUNT ASSUMED TO NET
-------- -------------- -------------- -------- ---------------
<S> <C> <C> <C> <C> <C>
For the year ended December 31, 1997
Life insurance in force........................... $245,487 $ 178,771 $ 33,156 $ 99,872 33.2%
Insurance revenues
Life insurance and annuities.................... 1,818 340 157 1,635 9.6%
Accident and health insurance................... 346 346 2 2 100.0%
-------- -------------- ------- --------
Total insurance revenues.......................... $ 2,164 $ 686 $ 159 $ 1,637 9.7%
-------- -------------- ------- --------
-------- -------------- ------- --------
For the year ended December 31, 1996
Life insurance in force......................... $177,094 $ 106,146 $ 31,957 $102,905 31.1%
Insurance revenues
Life insurance and annuities.................... 1,801 298 169 1,672 10.1%
Accident and health insurance................... 337 325 21 33 63.6%
-------- -------------- ------- --------
Total insurance revenues.......................... $ 2,138 $ 623 $ 190 $ 1,705 11.1%
-------- -------------- ------- --------
-------- -------------- ------- --------
For the year ended December 31, 1995
Life insurance in force......................... $182,716 $ 112,774 $ 26,996 $ 96,938 27.8%
Insurance revenues
Life insurance and annuities.................... 1,232 325 574 1,481 38.8%
Accident and health insurance................... 313 324 17 6 283.3%
-------- -------------- ------- --------
Total insurance revenues.......................... $ 1,545 $ 649 $ 591 $ 1,487 39.7%
-------- -------------- ------- --------
-------- -------------- ------- --------
</TABLE>
<PAGE>

PART C

<PAGE>

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 ("Company") authorizing the establishment of the
Separate Account. (1)

(2) Not applicable. Hartford Life maintains custody of all assets.

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

(b) Form of Dealer Agreement. (2)

(4) Form of the variable annuity contract. (2)

(5) The form of the application. (2)

(6) (a) Articles of Incorporation of Hartford.(3)

(b) Bylaws of Hartford. (1)

(7) Not applicable.

(8) Participation Agreement. (1)

(9) Opinion and Consent of Lynda Godkin, Senior Vice President,
General Counsel and Corporate Secretary.

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

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

(1) Incorporated herein by reference to the Post Effective Amendment No. 9, to
the Registration Statement File No. 33-19949, dated May 1, 1995.

(2) Incorporated herein by reference to the Post Effective Amendment No. 10, to
the Registration Statement File No. 33-19949, dated May 1, 1996.

(3) Incorporated herein by reference to the Post Effective Amendment No. 11, to
the Registration Statement File No. 33-19949, filed on April 16, 1997.

<PAGE>

(11) No financial statements are omitted.

(12) Not applicable.

(13) Not applicable.

(14) Not applicable.

(15) Copy of Power of Attorney.

(16) Organizational Chart.

Item 25. Directors and Officers of the Depositor

<PAGE>

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NAME POSITION WITH HARTFORD
- --------------------------------------------------------------------------------
<S> <C>
Stephen T. Joyce Vice President
- --------------------------------------------------------------------------------
Michael D. Keeler Vice President
- --------------------------------------------------------------------------------
Robert A. Kerzner Senior Vice President
- --------------------------------------------------------------------------------
David N. Levenson Vice President
- --------------------------------------------------------------------------------
Steven M. Maher Vice President and Actuary
- --------------------------------------------------------------------------------
William B. Malchodi, Jr. Vice President
- --------------------------------------------------------------------------------
Raymond J. Marra Vice President
- --------------------------------------------------------------------------------
Thomas M. Marra Executive Vice President and Director Individual
Life and Annuity Division, Director*
- --------------------------------------------------------------------------------
Robert F. Nolan Senior Vice President
- --------------------------------------------------------------------------------
Joseph J. Noto Vice President
- --------------------------------------------------------------------------------
Michael C. O'Halloran Vice President
- --------------------------------------------------------------------------------
Lawrence M. O'Rourke Vice President
- --------------------------------------------------------------------------------
Daniel E. O'Sullivan Vice President
- --------------------------------------------------------------------------------
Craig D. Raymond Senior Vice President and Chief Actuary
Mary P. Robinson Vice President
- --------------------------------------------------------------------------------
Donald A. Salama Vice President
- --------------------------------------------------------------------------------
Timothy P. Schiltz Vice President
- --------------------------------------------------------------------------------
Lowndes A. Smith President and Chief Operating Officer, Director*
- --------------------------------------------------------------------------------
Keith A. Stevenson Vice President
- --------------------------------------------------------------------------------
Edward A. Sweeney Vice President
- --------------------------------------------------------------------------------
Judith V. Tilbor Vice President
- --------------------------------------------------------------------------------
Raymond P. Welnicki Senior Vice President and Director, Employee
Benefit Division, Director*
- --------------------------------------------------------------------------------
Walter C. Welsh Senior Vice President
- --------------------------------------------------------------------------------
Lizabeth H. Zlatkus Senior Vice President, Director*
- --------------------------------------------------------------------------------
David M. Znamierowski Senior Vice President, Director*
- --------------------------------------------------------------------------------
</TABLE>

Unless otherwise indicated, the principal business address of each the above
individuals is P.O.

<PAGE>

Box 2999, Hartford, CT 06104-2999.

*Denotes Board of Directors.

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

Filed herewith as Exhibit 16.

Item 27. Number of Contract Owners

As of March 9, 1998, 1998 there were 4,080 Contract Owners.

Item 28. Indemnification

Under Section 33-772 of the Connecticut General Statutes, unless
limited by its certificate of incorporation, the Registrant must
indemnify a director who was wholly successful, on the merits or
otherwise, in the defense of any proceeding to which he was a party
because he is or was a director of the corporation against reasonable
expenses incurred by him in connection with the proceeding.

The Registrant may indemnify an individual made a party to a
proceeding because he is or was a director against liability incurred
in the proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the Registrant, and, with respect to any criminal proceeding, had no
reason to believe his conduct was unlawful. Conn. Gen. Stat. Section
33-771(a). Additionally, pursuant to Conn. Gen. Stat. Section 33-776,
the Registrant may indemnify officers and employees or agents for
liability incurred and for any expenses to which they becomes subject
by reason of being or having been an employees or officers of the
Registrant. Connecticut law does not prescribe standards for the
indemnification of officers, employees and agents and expressly states
that their indemnification may be broader than the right of
indemnification granted to directors.

The foregoing statements are specifically made subject to the detailed
provisions of Section 33-770 et seq.

Notwithstanding the fact that Connecticut law obligates the Registrant
to indemnify a only a director that was successful on the merits in a
suit, under Article VIII, Section 1 of the Registrant's bylaws, the
Registrant must indemnify both directors and officers of the
Registrant for (1) any claims and liabilities to which they become
subject by reason of being or having been a directors or officers of
the company and legal and (2) other expenses incurred in defending
against such claims, in each case, to the extent such is consistent
with statutory provisions.

Additionally, 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 The
Hartford Financial Services 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

<PAGE>

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, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.

Item 29. Principal Underwriters

(a) HSD 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
Hartford Life and Annuity Insurance Company - Separate Account One
Hartford Life and Annuity Insurance Company - Putnam Capital Manager
Trust Separate Account Two
Hartford Life and Annuity Insurance Company - Separate Account Three
Hartford Life and Annuity Insurance Company - Separate Account Five
Hartford Life and Annuity Insurance Company - Separate Account Six
American Maturity Life Insurance Company - Separate Account AMLVA

(b) Directors and Officers of HSD

<PAGE>

<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address With Underwriter
------------------ ---------------------
<S> <C>
Lowndes A. Smith President and Chief Executive Officer, Director
John P. Ginnetti Executive Vice President & Director
Thomas M. Marra Executive Vice President & Director
Peter W. Cummins Senior Vice President
Lynda Godkin Senior Vice President, General Counsel and
Corporate Secretary
Donald E. Waggaman, Jr. Treasurer
George R. Jay Controller
</TABLE>

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

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 Hartford at 200 Hopmeadow Street,
Simsbury, Connecticut 06089.

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.

<PAGE>

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 conditions one through four
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 the requirements of Securities Act
Rule 485(b) for effectiveness of this Registration Statement and has caused this
Registration Statement to be signed on its behalf, in the City of Hartford, and
State of Connecticut on this 10th day of April, 1998.

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

*By: /s/ John P. Ginnnetti *By: /s/ Lynda Godkin
------------------------------------------- ---------------------
John P. Ginnetti, Executive Vice President Lynda Godkin
Attorney-in-Fact
HARTFORD LIFE INSURANCE COMPANY
(Depositor)

*By: /s/ John P. Ginnnetti
-------------------------------------------
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.

Gregory A. Boyko, Senior Vice President,
Chief Financial Officer & Treasurer, Director*
John P. Ginnetti, Executive Vice
President, Director*
Lynda Godkin, Senior Vice President,
General Counsel & Corporate Secretary, Director*
Thomas M. Marra, Executive Vice *By: /s/ Lynda Godkin
President, Director* ---------------------
Lowndes A. Smith, President & Lynda Godkin
Chief Operating Officer, Director* Attorney-In-Fact
Raymond P. Welnicki, Senior Vice
President, Director* Dated: April 10, 1998
Lizabeth H. Zlatkus, Senior Vice President,
Director*
David M. Znamierowski, Senior Vice
President, Director*

<PAGE>

EXHIBIT INDEX

(9) Opinion and Consent of Lynda Godkin, Senior Vice President, General Counsel
and Corporate Secretary

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

(15) Copy of Power of Attorney

(16) Organizational Chart

<PAGE>

EXHIBIT 9

[LOGO]
HARTFORD LIFE

April 10, 1998
Lynda Godkin
Senior Vice President, General
Counsel & Corporate Secretary
Law Department
Board of Directors
Hartford Life Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089

RE: SEPARATE ACCOUNT TWO (DC VARIABLE ACCOUNT II)
HARTFORD LIFE INSURANCE COMPANY
FILE NO. 33-19949

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.

<PAGE>

Board of Directors
Hartford Life Insurance Company
April 10, 1998
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. 33-19949 for Hartford Life Insurance Company
Separate Account Two (DC Variable Account-II) on Form N-4.

/s/ Arthur Andersen LLP
Hartford, Connecticut
April 13, 1998

<PAGE>

HARTFORD LIFE INSURANCE COMPANY

POWER OF ATTORNEY
-----------------

Gregory A. Boyko
John P. Ginnetti
Lynda Godkin
Thomas M. Marra
Lowndes A. Smith
Raymond P. Welnicki
Lizabeth H. Zlatkus
David M. Znamierowski

do hereby jointly and severally authorize Lynda Godkin, Marianne O'Doherty,
and Leslie T. Soler 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/ Gregory A. Boyko Dated as of March 16, 1998
- --------------------------------------- --------------------------
Gregory A. Boyko

/s/ John P. Ginnetti Dated as of March 16, 1998
- --------------------------------------- --------------------------
John P. Ginnetti

/s/ Lynda Godkin Dated as of March 16, 1998
- --------------------------------------- --------------------------
Lynda Godkin

/s/ Thomas M. Marra Dated as of March 16, 1998
- --------------------------------------- --------------------------
Thomas M. Marra

/s/ Lowndes A. Smith Dated as of March 16, 1998
- --------------------------------------- --------------------------
Lowndes A. Smith

/s/ Raymond P. Welnicki Dated as of March 16, 1998
- --------------------------------------- --------------------------
Raymond P. Welnicki

/s/ Lizabeth H. Zlatkus Dated as of March 16, 1998
- --------------------------------------- --------------------------
Lizabeth H. Zlatkus

/s/ David M. Znamierowski Dated as of March 16, 1998
- --------------------------------------- --------------------------
David M. Znamierowski

<PAGE>

<S> <C>
THE HARTFORD
The Hartford Financial Services Group, Inc.
(Delaware)
|
- -------------------------------------------------------------------------------------------------------------
Nutmeg Insurance Company The Hartford Investment
(Connecticut) Management Company
| (Delaware)
Hartford Fire Insurance Company |
(Connecticut) Hartford Investment
| Services, Inc.
Hartford Accident and Indemnity Company (Connecticut)
(Connecticut)
|
Hartford Life, Inc.
(Delaware)
|
Hartford Life and Accident Insurance Company
(Connecticut)
|
|
|
- -------------------------------------------------------------------------------------------------------------
Alpine Life Hartford Financial Hartford Life American Maturity ITT Hartford Canada
Insurance Services Life Insurance Company Life Insurance Holdings, Inc.
Company Insurance Co. (Connecticut) Company (Canada)
(New Jersey) (Connecticut) | (Connecticut) |
| | |
| AML Financial, Inc. |
| (Connecticut) Hartford Life
| Insurance Company
| of Canada
| (Canada)
|
|
- -------------------------------------------------------------------------------------------------------------
Hartford Life and Annuity ITT Hartford International Hartford Financial Services Royal Life
Insurance Company Life Reassurance Corporation Corporation Insurance
(Connecticut) (Connecticut) (Delaware) Company of
| | America
| | (Connecticut)
| |
ITT Hartford Life, Ltd. |
(Bermuda) |
|
|
- -------------------------------------------------------------------------------------------------------------
MS Fund HL Funding HL Investment Hartford Hartford Securities Hartford-Comp. Emp.
America Company, Inc. Advisors, Inc. Equity Sales Distribution Benefit Service
1993-K, Inc. (Connecticut) (Connecticut) Company, Inc. Company, Inc. Company
(Delaware) | (Connecticut) (Connecticut) (Connecticut)
|
Hartford Investment
Financial Services
Company
(Delaware)
</TABLE>