HARTFORD LIFE INSURANCE CO SEPARATE ACCOUNT TWO DC VAR AC II, 497, 1999-05-05

HARTFORD LIFE INSURANCE CO SEPARATE ACCOUNT TWO DC VAR AC II
497, 1999-05-05

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<PAGE>

HARTFORD
LIFE INSURANCE COMPANY
GROUP VARIABLE ANNUITY CONTRACTS
[LOGO]
ISSUED BY HARTFORD LIFE INSURANCE COMPANY
WITH RESPECT TO DC-I AND DC-II

This Prospectus sets forth information you should know before you purchase
or become a Participant under the group variable annuity contract (the
"Contract" or "Contracts"). Please read it carefully.

Hartford Life Insurance Company issues the Contracts in connection with
Deferred Compensation Plans of tax-exempt and governmental employers. We can
also issue the Contracts in connection with certain Qualified Plans of
employers (generally tax-exempt and non-tax-exempt).

We hold Contributions to Contracts issued in connection with Deferred
Compensation Plans in a Separate Account known as Hartford Life Insurance
Company DC Variable Account - I ("DC-I") during the period before annuity
payments start. When annuity payments start, Contract values are held in our
Separate Account that is known as a series of Hartford Life Insurance Company
Separate Account Two ("DC-II"). The Contracts may also contain additional
separate accounts not described in this Prospectus. These additional separate
accounts are not required to be registered with the Securities and Exchange
Commission.

For Contracts issued in connection with Qualified Plans, we hold
Contributions in DC-II during the period before annuity payments start and
during the period after annuity payments start.

The Contracts may contain a General Account option or a different General
Account contract may be issued in conjunction with the Contracts. The General
Account option or contract may contain restrictions. The General Account
option or contract and these restrictions are not described in this
Prospectus. The General Account option or contract is not required to be
registered with the Securities and Exchange Commission.

We allocate the Contributions to the "Sub-Accounts" as directed by the
Contract Owner or Participant, as applicable. Sub-Accounts are divisions of a
Separate Account. The following Sub-Accounts are available under the
Contracts. Also listed is the name of the underlying Fund for each
Sub-Account.

- Hartford Advisers Sub-Account which purchases shares of Class IA of
Hartford Advisers HLS Fund, Inc.

- Hartford Bond Sub-Account which purchases shares of Class IA of Hartford
Bond HLS Fund, Inc.

- Calvert Social Balanced Sub-Account which purchases shares of Calvert
Social Balanced Portfolio Series of Calvert Variable Series, Inc.

- Hartford Capital Appreciation Sub-Account which purchases shares of
Class IA of Hartford Capital Appreciation HLS Fund, Inc.

- Hartford Dividend and Growth Sub-Account which purchases shares of Class
IA of Hartford Dividend and Growth HLS Fund, Inc.

- Hartford Index Sub-Account which purchases shares of Class IA of
Hartford Index HLS Fund, Inc.

- Hartford International Opportunities Sub-Account which purchases shares
of Class IA of Hartford International Opportunities HLS Fund, Inc.

- Hartford Money Market Sub-Account which purchases shares of Class IA of
Hartford Money Market HLS Fund, Inc.

- Hartford Mortgage Securities Sub-Account which purchases shares of Class
IA of Hartford Mortgage Securities HLS Fund, Inc.

- Hartford Stock Sub-Account which purchases shares of Class IA of
Hartford Stock HLS Fund, Inc.

If you decide to become a Contract Owner or a Participant, you should keep
this Prospectus for your records. You can also call us at 1-800-528-9009 to
get a Statement of Additional Information, free of charge. The Statement of
Additional Information contains more information about the Contract and, like
this Prospectus, is filed with the Securities and Exchange Commission. We have
included a Table of Contents for the Statement of Additional Information at
the end of this Prospectus.

The Commission doesn't approve or disapprove these securities or determine
if the information is truthful or complete. Anyone who represents that the
Securities and Exchange Commission does these things may be guilty of a
criminal offense.

This Prospectus and the Statement of Additional Information can also be
obtained from the Securities and Exchange Commission's website
(HTTP://WWW.SEC.GOV).

This group variable annuity contract IS NOT:

- A bank deposit or obligation

- Federally insured

- Endorsed by any bank or governmental agency
------------------------------------------------------------------------------

Prospectus Dated: May 3, 1999
Statement of Additional Information Dated: May 3, 1999
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION PAGE
------------------------------------------------------------------------ ----
<S> <C>
GLOSSARY OF SPECIAL TERMS............................................... 3
FEE TABLE............................................................... 5
SUMMARY................................................................. 7
ACCUMULATION UNIT VALUES................................................ 9
PERFORMANCE RELATED INFORMATION......................................... 13
HARTFORD LIFE INSURANCE COMPANY......................................... 14
THE SEPARATE ACCOUNTS................................................... 14
THE FUNDS............................................................... 14
GENERAL ACCOUNT OPTION.................................................. 17
ADDITIONAL SEPARATE ACCOUNTS OFFERED UNDER THE CONTRACTS................ 17
CONTRACT CHARGES........................................................ 18
Sales Charge.......................................................... 18
Is there ever a time when the Sales Charge does not apply?............ 19
Mortality, Expense Risk and Administrative Charge..................... 19
HIG Employer Sponsored IRA............................................ 20
Annual Maintenance Fee................................................ 20
Premium Taxes......................................................... 20
Experience Rating under the Contracts................................. 20
Charges of the Funds.................................................. 20
Plan Related Expenses................................................. 20
THE CONTRACTS........................................................... 21
The Contracts Offered................................................. 21
Purchase of a Contract................................................ 21
Contract Rights and Privileges and Assignments........................ 21
Pricing and Crediting of Contributions................................ 21
May I make changes in the amounts of my Contribution?................. 21
May I transfer assets between the Sub-Accounts?....................... 22
Dollar Cost Averaging................................................. 22
How do I know what my Participant Account is worth?................... 23
How are the underlying Fund shares valued?............................ 23
DEATH BENEFITS.......................................................... 23
Determination of the Beneficiary...................................... 23
Death before the Annuity Commencement Date............................ 23
Death on or after the Annuity Commencement Date....................... 24
SETTLEMENT PROVISIONS................................................... 24
Can payment of the Surrender value ever be postponed beyond the
seven-day period?.................................................... 25
May I Surrender once Annuity Payments have started?................... 25
What are Annuity Rights?.............................................. 25
How do I elect an Annuity Commencement Date and Annuity payment
option?.............................................................. 25
What is the minimum amount that I may select for an Annuity
payment?............................................................. 25
How are Contributions made to establish an Annuity Account?........... 26
Can a Contract be suspended by a Contract Owner?...................... 26
Annuity Payment Options............................................... 26
How are Variable Annuity payments determined?......................... 27
FEDERAL TAX CONSIDERATIONS.............................................. 28
A. General............................................................ 28
B. Hartford and DC-I and DC-II........................................ 28
C. Information Regarding Tax-Qualified Retirement Plans............... 28
D. Diversification of the Separate Account............................ 32
E. Ownership of the Assets of the Separate Account.................... 33
F. Contracts Owned by Non-Natural Persons............................. 33
G. Annuity Purchases by Nonresident Aliens and Foreign Corporations... 33
MORE INFORMATION........................................................ 34
Can a Contract be modified?........................................... 34
Can Hartford waive any rights under a Contract?....................... 34
How are the Contracts sold?........................................... 34
Who is the custodian of the Separate Accounts' assets?................ 34
Are there any material legal proceedings affecting the Separate
Accounts?............................................................ 35
Year 2000............................................................. 35
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 start of Annuity payments.

ACCUMULATION UNIT: A unit of measure used to calculate Separate Account values
before we begin to make Annuity payments to you.

ADMINISTRATIVE OFFICE: Located at 200 Hopmeadow Street, Simsbury, CT 06089. The
mailing address for correspondence concerning this Contract is P.O. Box 1583,
Hartford, CT 06144-1583, except for overnight or express mail packages, which
should be sent to: Attention: IPD/Retirement Plan Solutions, 200 Hopmeadow
Street, Simsbury, CT 06089.

ANNUAL MAINTENANCE FEE: An annual charge for establishing and maintaining a
Participant Account.

ANNUITANT: The person on whose life Annuity payments are based.

ANNUITANT'S ACCOUNT: An account established at the beginning of the Annuity
Period for making Annuity payments under the Contracts.

ANNUITY: A series of payments for life or another designated period.

ANNUITY COMMENCEMENT DATE: The date we start to make Annuity payments to you.

ANNUITY PERIOD: The period during which we make Annuity payments to you.

ANNUITY UNIT: A unit of measure in the Separate Account used to calculate the
value of Variable Annuity payments we make to you.

BENEFICIARY: The person or persons 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 beginning with the effective date of the
Contract or with any anniversary of the effective date.

CONTRIBUTION(S): The amount(s) paid or transferred to us by the Contract Owner
on behalf of Participants pursuant to the terms of the Contracts.

DATE OF COVERAGE: The date on which we receive the application on behalf of a
Participant.

DC VARIABLE ACCOUNT I OR DC-I: Our Separate Account, Hartford Life Insurance
Company DC Variable Account-I.

DC VARIABLE ACCOUNT II OR DC-II: Our Separate Account that is a series of
Hartford Life Insurance Company Separate Account Two.

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

EMPLOYER: A governmental or tax-exempt employer maintaining a Deferred
Compensation Plan for its employees or an employer sponsoring 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.

GENERAL ACCOUNT: Our General Account that consists of all of our company assets
other than those allocated to our separate accounts.

HARTFORD, WE OR US: 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 started.

3
<PAGE>
PARTICIPANT: A term used to describe, for record keeping purposes, any employee
or other eligible person electing to participate in the Deferred Compensation
Plan or Qualified Plan of the Employer/Contract Owner.

PARTICIPANT 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.

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

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 retirement plan of an Employer that qualifies for special tax
treatment under section 401, 403 or 408 of the Code.

SURRENDER: Any partial or complete withdrawal of Contract values.

TERMINATION VALUE: The value of a Participant's Account on any Valuation Day
before the Annuity Commencement Date less any applicable Premium Taxes not
already deducted and any applicable contingent deferred sales charges.

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).

VALUATION PERIOD: The period between the close of business on 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:
During the First through Sixth Year........................... 5%
During the Seventh through Eighth Year........................ 4%
During the Ninth through Tenth Year........................... 3%
During the Eleventh through Twelfth Year...................... 2%
During the Thirteenth Year and thereafter..................... 0%
Contracts under which variable account Contributions are held
under Separate Account DC-II during the Accumulation Period:
During the First through Eighth Year.......................... 5%
During the Ninth through Fifteenth Year....................... 3%
During the Sixteenth Year and thereafter...................... 0%
Annual Maintenance Fee (DC-I)..................................... None
Annual Maintenance Fee (DC-II).................................... $25.00
Annual Expenses -- Separate Account (as a percentage of average
account value)
Mortality and Expense Risk (DC-I)(1)
(.50% mortality, .15% expense and .25% administration)....... 0.900%
Mortality and Expense Risk (DC-II)
(.85% mortality, .15% expense and .25% administration)....... 1.25%
</TABLE>

- ---------

(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 under eligible
Contracts that exceed $50 million.

We may eliminate or change the Contingent Deferred Sales Charge and
Mortality and Expense Risk charge. See "Experience Rating under the Contracts."
We may also deduct a charge for Premium Taxes at the time of Surrender.

We have issued a Contract supported by DC-II to Hartford Fire Insurance
Company (a parent of Hartford) for the Hartford Insurance Group Employer
Sponsored Individual Retirement Account ("HIG IRA"). We make no deductions from
the HIG IRA Contract for mortality and expense charges; however, we deduct 0.15%
from the assets of the HIG IRA for certain administrative undertakings. (See
"HIG Employer Sponsored IRA.")

The following table shows annual operating expenses after waiver and
reimbursements for December 31, 1998:

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

<TABLE>
<CAPTION>
TOTAL FUND
OPERATING
EXPENSES
OTHER (AFTER ANY
MANAGEMENT EXPENSES FEE
FEES (AFTER WAIVERS
(AFTER ANY ANY AND
FEE EXPENSE EXPENSE
WAIVERS) REIMBURSEMENT) REIMBURSEMENT)
---------- -------- ----------
<S> <C> <C> <C>
Hartford Bond HLS Fund.......................... 0.482% 0.021% 0.503%
Hartford Stock HLS Fund......................... 0.439% 0.018% 0.457%
Hartford Money Market HLS Fund.................. 0.433% 0.015% 0.448%
Hartford Advisers HLS Fund...................... 0.616% 0.018% 0.634%
Hartford Capital Appreciation HLS Fund.......... 0.623% 0.019% 0.642%
Hartford Mortgage Securities HLS Fund........... 0.432% 0.030% 0.462%
Hartford Index HLS Fund......................... 0.382% 0.019% 0.401%
Hartford International Opportunities HLS Fund... 0.681% 0.090% 0.771%
Calvert Social Balanced Portfolio (1)........... 0.700% 0.180% 0.880%
Hartford Dividend and Growth HLS Fund........... 0.641% 0.018% 0.659%
</TABLE>

- ---------

(1) The figures above for the Calvert Social Balanced Portfolio reflect expenses
for fiscal year 1998, and have been restated to reflect the elimination of
the performance adjustment in the Portfolio. This restatement includes the
addition of 0.01% to the Portfolio. "Other Expenses" reflect an indirect
fee. Net fund operating expenses after reductions for fee paid indirectly
(again, restated) would be 0.86%.

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>
Hartford Bond............ $ 66 $ 100 $ 137 $ 212 $ 14 $ 45 $ 77 $ 169 $ 14 $ 45 $ 77 $ 169
Hartford Stock........... 66 99 134 207 14 43 75 164 14 43 75 164
Hartford Money Market.... 66 99 134 206 14 43 74 163 14 43 74 163
Hartford Advisers........ 67 104 143 226 16 49 84 184 16 49 84 184
Hartford Capital
Appreciation........... 68 104 144 227 16 49 85 185 16 49 85 185
Hartford Mortgage
Securities............. 66 99 135 207 14 43 75 165 14 43 75 165
Hartford Index........... 65 97 132 201 13 41 72 158 13 41 72 158
Hartford International
Opportunities.......... 69 108 150 240 17 53 91 199 17 53 91 199
Calvert Social Balanced
Portfolio.............. 70 111 156 252 18 56 97 211 18 56 97 211
Hartford Dividend and
Growth................. 68 105 145 229 16 50 86 187 16 50 86 187
</TABLE>

The purpose of this table is to assist you in understanding various costs
and expenses that you 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)

<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>
Hartford Bond............ $ 65 $ 96 $ 129 $ 195 $ 13 $ 40 $ 69 $ 152 $ 13 $ 40 $ 69 $ 152
Hartford Stock........... 64 94 127 190 12 39 67 147 12 39 67 147
Hartford Money Market.... 64 94 126 189 12 38 66 146 12 38 66 146
Hartford Advisers........ 66 100 136 210 14 44 76 167 14 44 76 167
Hartford Capital
Appreciation........... 66 100 136 211 14 44 77 168 14 44 77 168
Hartford Mortgage
Securities............. 64 95 127 191 12 39 67 147 12 39 67 147
Hartford Index........... 64 93 124 184 12 37 64 140 12 37 64 140
Hartford International
Opportunities.......... 67 104 143 224 16 48 84 182 16 48 84 182
Calvert Social Balanced
Portfolio.............. 68 107 148 236 17 52 89 194 17 52 89 194
Hartford Dividend and
Growth................. 66 100 137 212 14 45 78 170 14 45 78 170
</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)

<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>
Hartford Bond............ $ 70 $ 113 $ 158 $ 256 $ 18 $ 57 $ 99 $ 215 $ 19 $ 58 $ 99 $ 216
Hartford Stock (1)....... 70 111 156 252 17 56 96 210 18 56 97 211
Hartford Money Market.... 70 111 155 251 17 55 96 209 18 56 97 210
Hartford Advisers (1).... 72 117 164 270 19 61 106 229 20 62 106 230
Hartford Capital
Appreciation (1)....... 72 117 165 271 19 61 106 229 20 62 107 230
Hartford Mortgage
Securities............. 70 111 156 252 18 56 96 210 18 57 97 211
Hartford Index (2)....... 69 110 153 246 17 54 93 203 18 55 94 204
Hartford International
Opportunities.......... 73 121 171 284 21 65 113 243 21 66 113 244
Calvert Social Balanced
Portfolio.............. 74 124 176 295 22 69 118 255 23 70 119 255
Hartford Dividend and
Growth................. 72 117 166 272 20 62 107 231 20 63 108 232
</TABLE>

- ------------
(1) We voluntarily reduce the charge for administrative undertakings in certain
sub-accounts in DC-II. The reduced total for mortality, expense risk and
administrative undertakings in these sub-accounts is as follows: Hartford
Stock, 1.24%; Hartford Advisors, 1.20%; and Hartford Capital Appreciation,
1.21%

(2) We voluntarily limit the applicable charge for mortality, expense risk and
administrative undertakings for the Hartford Index Sub-Account so that when
combined with the expenses of the underlying Fund, the total does not exceed
1.25%.

The purpose of this table is to assist the you in understanding various
costs and expenses that you 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.

6
<PAGE>
SUMMARY

WHAT ARE THE CONTRACTS?

The Contracts are group variable annuity contracts. They are issued in
connection with a Deferred Compensation Plan. We can also issue the Contracts in
connection with certain Qualified Plans. Contract Owners who purchased a prior
series of Contracts can 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 for a description
of the Sales Charges and other expenses applicable to earlier series of
Contracts

WHAT IS THE ACCUMULATION PERIOD?

During the Accumulation Period under the Contracts, the Employer makes
Contributions to the Contracts that are used to purchase variable Separate
Account interests. Contributions allocated to purchase variable interests may,
after the deductions described in this Prospectus, be invested in selected
Sub-Accounts of the Separate Account.

During the Accumulation Period a Contract Owner or a Participant 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?").

WHAT ARE THE SALES CHARGES UNDER THE CONTRACT?

We do not deduct sales charges at the time Contributions are made to the
Contract. We deduct a contingent deferred sales charge ("Sales Charge") from
Surrenders of or from the Contract. The amount of the Sales Charge depends on
the number of Participant's Contract Years completed with respect to a
Participant's Account before the Surrender. It is a percentage of the amount
Surrendered. For Contracts under which contributions are held under Separate
Account DC I, the Sales Charge is as follows:

<TABLE>
<CAPTION>
PARTICIPANT'S CONTRACT YEARS SALES CHARGE
- --------------------------------------------------------------------------------------------------------- -----------------
<S> <C>
During the First through the Sixth Year.................................................................. 5%
During the Seventh through Eighth Year................................................................... 4%
During the Ninth through Tenth Year...................................................................... 3%
During the Eleventh through Twelfth Year................................................................. 2%
Thirteenth Year and thereafter........................................................................... 0%
</TABLE>

For Contracts under which contributions are held under Separate Account DC
II, the Sales Charge is as follows:

<TABLE>
<CAPTION>
PARTICIPANT'S CONTRACT YEARS SALES CHARGE
- --------------------------------------------------------------------------------------------------------- -----------------
<S> <C>
During the First through the Eighth Year................................................................. 5%
During the Ninth through Fifteenth Year.................................................................. 3%
Thirteenth Year and thereafter........................................................................... 0%
</TABLE>

We may reduce the amount or term of the Sales Charge (see "Experience Rating
under the Contracts"). The Sales Charge will never exceed 8.5% of aggregate
Contributions to a Participant's Account.

No deduction for Sales Charges will be made in certain cases. (See "Is there
ever a time when the Sales Charge does not apply?")

WHAT CHARGES WILL I PAY ON AN ANNUAL BASIS?

MORTALITY, EXPENSE RISK AND ADMINISTRATIVE CHARGE: Because we assume certain
risks under the Contract, and we provide certain administrative services, we
deduct a daily charge against all Contract values held in the Separate Accounts
during the life of the Contract. This is the charge for Mortality, Expense Risk
and Administrative Undertakings. The amount of the charge differs between DC-I
and DC-II and, with respect to DC-I, depends on the value of the Contract:

<TABLE>
<CAPTION>
SEPARATE ACCOUNT
--------------------
DC-I DC-II
--------- ---------
<S> <C> <C>
Annual rate
(Contract values of $50,000,000 or less): 0.90% 1.25%
Annual rate
(Contract values in excess of $50,000,000): 0.75% 1.25%
</TABLE>

7
<PAGE>
exceed $50,000,000 on two successive Test Dates. A reduction in the charge for
Mortality, Expense Risk and Administrative Undertakings in DC-I requires a
conversion period following a determination of eligibility. The conversion
period will generally not exceed three months, depending on Contract Owner
cooperation during the conversion period.

ANNUAL MAINTENANCE FEE: We deduct an Annual Maintenance Fee from the value
of each Participant Account under a Contract at the end of a Participant's
Contract Year. The maximum Annual Maintenance Fee is $25 per year and is
currently assessed against any Participant Account value in DC-II. Such fee may
be reduced or waived (see "Experience Rating under the Contracts").

IS THERE A DEDUCTION FOR PREMIUM TAXES?

We deduct during the Accumulation Period and Annuity Period, as appropriate,
for the payment of any Premium Taxes levied against the Contract by a state or
other governmental entity. The range is generally up to 3.50%. (See "Contract
Charges.")

IS THERE A DEATH BENEFIT?

We will pay a Minimum Death Benefit if a Participant dies before the earlier
of (1) the Participant's 65th birthday or (2) the Annuity Commencement Date.
(See "Death Benefits.")

WHAT IS THE ANNUITY PERIOD?

At the end of the Accumulation Period, we will allocate Contract values held
with respect to Participants' Accounts as directed by the Contract Owner to
establish Annuitants' Accounts to provide Fixed and/or Variable Annuities under
the Contracts. If applicable, we will also allocate any additional Contributions
that a Contract Owner elects to make to the Annuitants' Accounts at the
commencement of the Annuity Period, as directed by the Contract Owner.

WHAT ANNUITY PAYMENT OPTIONS ARE AVAILABLE?

When you purchase an Annuity, you may choose one of the following Annuity
payment options, or receive a lump sum payment:

LIFE ANNUITY where we make monthly Annuity payments for as long as the
Annuitant lives.

- - Payments under this option stop upon the death of the Annuitant, even if the
Annuitant dies after one payment.

LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN where we make
monthly payments for the life of the Annuitant with the provision that payments
will be made for a minimum of 120, 180 or 240 months, as elected. If, at the
death of the Annuitant, payments have been made for less than the minimum
elected number of months, then any remaining guaranteed monthly payments will be
paid to the Beneficiary unless other provisions have been made and approved by
us.

UNIT REFUND LIFE ANNUITY where we make monthly payments during the life of
the Annuitant and when the Annuitant dies, we pay any remaining value to the
Beneficiary. See Annuity payment Option 3 for a discussion of how the remaining
value is determined.

JOINT AND LAST SURVIVOR ANNUITY where we make monthly payments during the
joint lifetime of the Annuitant and a designated individual (called the joint
Annuitant) and then throughout the remaining lifetime of the survivor.

- - 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
survivor. It is possible for an Annuitant and joint Annuitant to receive only
one payment

- - in the event of the common or simultaneous death of the Annuitant and joint
Annuitant prior to the due date for the second payment.

PAYMENTS FOR A DESIGNATED PERIOD where we agree to make monthly payments 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 unless other provisions have been made and approved by
us.

- - This option does not involve life contingencies and does not provide any
mortality guarantee.

- - Surrenders are subject to the limitations set forth in the contract and any
applicable contingent deferred sales charges.

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

8
<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 with respect
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,
-------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991
-------- -------- -------- ------- ------- ------- ------- -------
DC-I
<S> <C> <C> <C> <C> <C> <C> <C> <C>
HARTFORD BOND SUB-ACCOUNT
(INCEPTION DATE AUGUST 3, 1982)
Accumulation unit value at beginning of
period................................ $ 4.61 $ 4.201 $ 4.099 $ 3.499 $ 3.689 $ 3.388 $ 3.251 $ 2.827
Accumulation unit value at end of
period................................ $ 4.979 $ 4.641 $ 4.201 $ 4.099 $ 3.499 $ 3.689 $ 3.388 $ 3.251
Number accumulation units outstanding at
end of period (in thousands).......... 10,752 8.821 8,711 8,630 9,090 10,092 10,253 10,201
HARTFORD STOCK SUB-ACCOUNT
(INCEPTION DATE AUGUST 3, 1982)
Accumulation unit value at beginning of
period................................ $ 14.413 $ 11.059 $ 8.979 $ 6.773 $ 6.990 $ 6.190 $ 5.695 $ 4.628
Accumulation unit value at end of
period................................ $ 19.085 $ 14.413 $ 11.059 $ 8.979 $ 6.773 $ 6.990 $ 6.190 $ 5.695
Number accumulation units outstanding at
end of period (in thousands).......... 44,464 44,558 42,224 39,271 39,551 37,542 34,861 32,700
HARTFORD MONEY MARKET SUB-ACCOUNT
(INCEPTION DATE JUNE 14, 1982)
Accumulation unit value at beginning of
period................................ $ 2.861 $ 2.738 $ 2.629 $ 2.515 $ 2.450 $ 2.410 $ 2.354 $ 2.248
Accumulation unit value at end of
period................................ $ 2.987 $ 2.861 $ 2.738 $ 2.629 $ 2.515 $ 2.450 $ 2.410 $ 2.354
Number accumulation units outstanding at
end of period (in thousands).......... 13,525 11,208 9,609 7,884 9,548 9,298 9,999 10,936
HARTFORD ADVISERS SUB-ACCOUNT
(INCEPTION DATE MAY 2, 1983)
Accumulation unit value at beginning of
period................................ $ 5.204 $ 4.213 $ 3.649 $ 2.876 $ 2.993 $ 2.700 $ 2.524 $ 2.123
Accumulation unit value at end of
period................................ $ 6.436 $ 5.204 $ 4.213 $ 3.649 $ 2.876 $ 2.993 $ 2.700 $ 2.524
Number accumulation units outstanding at
end of period (in thousands).......... 140,627 137,947 136,232 128,415 126,437 119,064 105,648 93,981
HARTFORD CAPITAL APPRECIATION
SUB-ACCOUNT
(INCEPTION DATE APRIL 2, 1984)
Accumulation unit value at beginning of
period................................ $ 7.952 $ 6.552 $ 5.482 $ 4.257 $ 4.204 $ 3.524 $ 3.050 $ 2.004
Accumulation unit value at end of
period................................ $ 9.109 $ 7.952 $ 6.552 $ 5.482 $ 4.257 $ 4.204 $ 3.524 $ 3.050
Number accumulation units outstanding at
end of period (in thousands).......... 56,416 62,609 59,279 52,278 46,086 36,598 25,900 19,437

1990 1989
------- -------
DC-I
<S> <C> <C>
HARTFORD BOND SUB-ACCOUNT
(INCEPTION DATE AUGUST 3, 1982)
Accumulation unit value at beginning of
period................................ $ 2.640 $ 2.384
Accumulation unit value at end of
period................................ $ 2.827 $ 2.640
Number accumulation units outstanding at
end of period (in thousands).......... 9,871 9,462
HARTFORD STOCK SUB-ACCOUNT
(INCEPTION DATE AUGUST 3, 1982)
Accumulation unit value at beginning of
period................................ $ 4.875 $ 3.916
Accumulation unit value at end of
period................................ $ 4.628 $ 4.875
Number accumulation units outstanding at
end of period (in thousands).......... 29,962 28,198
HARTFORD MONEY MARKET SUB-ACCOUNT
(INCEPTION DATE JUNE 14, 1982)
Accumulation unit value at beginning of
period................................ $ 2.106 $ 1.954
Accumulation unit value at end of
period................................ $ 2.248 $ 2.106
Number accumulation units outstanding at
end of period (in thousands).......... 11,181 8,871
HARTFORD ADVISERS SUB-ACCOUNT
(INCEPTION DATE MAY 2, 1983)
Accumulation unit value at beginning of
period................................ $ 2.123 $ 1.766
Accumulation unit value at end of
period................................ $ 2.123 $ 2.123
Number accumulation units outstanding at
end of period (in thousands).......... 84,223 74,660
HARTFORD CAPITAL APPRECIATION
SUB-ACCOUNT
(INCEPTION DATE APRIL 2, 1984)
Accumulation unit value at beginning of
period................................ $ 2.278 $ 1.858
Accumulation unit value at end of
period................................ $ 2.004 $ 2.278
Number accumulation units outstanding at
end of period (in thousands).......... 15,293 13,508
</TABLE>

9
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991
-------- -------- -------- ------- ------- ------- ------- -------
HARTFORD MORTGAGE SECURITIES SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(INCEPTION DATE JANUARY 15, 1985)
Accumulation unit value at beginning of
period................................ $ 2.628 $ 2.430 $ 2.335 $ 2.034 $ 2.093 $ 1.993 $ 1.929 $ 1.702
Accumulation unit value at end of
period................................ $ 2.783 $ 2.628 $ 2.430 $ 2.335 $ 2.034 $ 2.093 $ 1.993 $ 1.929
Number accumulation units outstanding at
end of period (in thousands).......... 8,947 9,204 10,597 11,067 10,782 11,722 12,046 11,855
HARTFORD INDEX SUB-ACCOUNT
(INCEPTION DATE JUNE 3, 1987)
Accumulation unit value at beginning of
period................................ $ 1.907 $ 1.520 $ 2.353 $ 1.738 $ 1.735 $ 1.605 $ 1.522 $ 1.190
Accumulation unit value at end of
period................................ $ 2.392 $ 1.907 $ 1.520 $ 2.353 $ 1.738 $ 1.735 $ 1.605 $ 1.522
Number accumulation units outstanding at
end of period (in thousands).......... 81,407 67,788 49,989 19,816 15,356 13,489 11,720 8,519
CALVERT SOCIAL BALANCED PORTFOLIO
SUB-ACCOUNT
(INCEPTION DATE JANUARY 25, 1989)
Accumulation unit value at beginning of
period................................ $ 2.563 $ 2.152 $ 1.929 $ 1.504 $ 1.573 $ 1.475 $ 1.388 $ 1.207
Accumulation unit value at end of
period................................ $ 2.955 $ 2.563 $ 2.152 $ 1.929 $ 1.504 $ 1.573 $ 1.475 $ 1.388
Number accumulation units outstanding at
end of period (in thousands).......... 11,080 10.795 10,160 9,009 7,899 7,199 5,215 3,508
HARTFORD INTERNATIONAL OPPORTUNITIES
SUB-ACCOUNT
(INCEPTION DATE JULY 2, 1990)
Accumulation unit value at beginning of
period................................ $ 1.481 $ 1.488 $ 1.330 $ 1.181 $ 1.220 $ 0.924 $ 0.979 $ 0.877
Accumulation unit value at end of
period................................ $ 1.662 $ 1.459 $ 1.488 $ 1.330 $ 1.181 $ 1.220 $ 0.924 $ 0.979
Number accumulation units outstanding at
end of period (in thousands).......... 32,407 38,369 43,558 35,671 38,270 19,894 8,061 4,663
HARTFORD DIVIDEND AND GROWTH SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1995)
Accumulation unit value at beginning of
period $ 1.949 $ 1.490 $ 1.224 $ 1.000 -- -- -- --
Accumulation unit value at end of
period................................ $ 2.250 $ 1.949 $ 1.490 $ 1.224 -- -- -- --
Number accumulation units outstanding at
end of period (in thousands).......... 36,162 37,647 20,897 6,317 -- -- -- --

1990 1989
------- -------
HARTFORD MORTGAGE SECURITIES SUB-ACCOUNT
<S> <C> <C>
(INCEPTION DATE JANUARY 15, 1985)
Accumulation unit value at beginning of
period................................ $ 1.571 $ 1.406
Accumulation unit value at end of
period................................ $ 1.702 $ 1.571
Number accumulation units outstanding at
end of period (in thousands).......... 10,291 8,919
HARTFORD INDEX SUB-ACCOUNT
(INCEPTION DATE JUNE 3, 1987)
Accumulation unit value at beginning of
period................................ $ 1.255 $ 0.975
Accumulation unit value at end of
period................................ $ 1.190 $ 1.255
Number accumulation units outstanding at
end of period (in thousands).......... 6,350 3,639
CALVERT SOCIAL BALANCED PORTFOLIO
SUB-ACCOUNT
(INCEPTION DATE JANUARY 25, 1989)
Accumulation unit value at beginning of
period................................ $ 1.173 $ 1.000
Accumulation unit value at end of
period................................ $ 1.207 $ 1.173
Number accumulation units outstanding at
end of period (in thousands).......... 2,036 629
HARTFORD INTERNATIONAL OPPORTUNITIES
SUB-ACCOUNT
(INCEPTION DATE JULY 2, 1990)
Accumulation unit value at beginning of
period................................ $ 1.000 --
Accumulation unit value at end of
period................................ $ 0.877 --
Number accumulation units outstanding at
end of period (in thousands).......... 2,564 --
HARTFORD DIVIDEND AND GROWTH 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>

10
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991
-------- -------- -------- ------- ------- ------- ------- -------
DC-II (1.25%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
HARTFORD BOND SUB-ACCOUNT
(INCEPTION DATE AUGUST 25, 1982)
Accumulation unit value at beginning of
period................................ $ 4.604 $ 4.187 $ 4.095 $ 3.500 $ 3.689 $ 3.389 $ 3.251 $ 2.827
Accumulation unit value at end of
period................................ $ 4.917 $ 4.604 $ 4.187 $ 4.095 $ 3.500 $ 3.689 $ 3.389 $ 3.251
Number accumulation units outstanding at
end of period (in thousands).......... 1,804 1,606 1,655 1,368 1,123 992 816 732
HARTFORD STOCK SUB-ACCOUNT
(INCEPTION DATE JUNE 29, 1982)
Accumulation unit value at beginning of
period................................ $ 14.295 $ 11.017 $ 8.968 $ 6.771 $ 6.988 $ 6.188 $ 5.694 $ 4.627
Accumulation unit value at end of
period................................ $ 18.846 $ 14.295 $ 11.017 $ 8.968 $ 6.771 $ 6.988 $ 6.188 $ 5.694
Number accumulation units outstanding at
end of period (in thousands).......... 4,483 5,082 4,885 4,413 3,885 3,181 2,517 1,885
HARTFORD MONEY MARKET SUB-ACCOUNT
(INCEPTION DATE JUNE 29, 1982)
Accumulation unit value at beginning of
period................................ $ 2.834 $ 2.725 $ 2.624 $ 2.512 $ 2.447 $ 2.407 $ 2.351 $ 2.245
Accumulation unit value at end of
period................................ $ 2.947 $ 2.834 $ 2.725 $ 2.624 $ 2.512 $ 2.447 $ 2.407 $ 2.351
Number accumulation units outstanding at
end of period (in thousands).......... 1,567 1,473 1,333 989 905 886 884 929
HARTFORD ADVISERS SUB-ACCOUNT
(INCEPTION DATE MAY 2, 1983)
ccumulation unit value at beginning of
period................................ $ 5.168 $ 4.201 $ 3.647 $ 2.876 $ 2.993 $ 2.700 $ 2.524 $ 2.123
Accumulation unit value at end of
period................................ $ 6.366 $ 5.168 $ 4.201 $ 3.647 $ 2.876 $ 2.993 $ 2.700 $ 2.524
Number accumulation units outstanding at
end of period (in thousands).......... 8,737 10,299 10,505 9,212 8,279 7,023 7,323 6,220
HARTFORD CAPITAL APPRECIATION
SUB-ACCOUNT
(INCEPTION DATE APRIL 2, 1984)
Accumulation unit value at beginning of
period................................ $ 7.896 $ 6.533 $ 5.478 $ 4.257 $ 4.204 $ 3.524 $ 3.050 $ 2.004
Accumulation unit value at end of
period................................ $ 9.001 $ 7.896 $ 6.533 $ 5.478 $ 4.257 $ 4.204 $ 3.524 $ 3.050
Number accumulation units outstanding at
end of period (in thousands).......... 7,529 11,032 10,979 9,081 6,923 4,940 3,276 2,113

1990 1989
------- -------
DC-II (1.25%)
<S> <C> <C>
HARTFORD BOND SUB-ACCOUNT
(INCEPTION DATE AUGUST 25, 1982)
Accumulation unit value at beginning of
period................................ $ 2.641 $ 2.385
Accumulation unit value at end of
period................................ $ 2.827 $ 2.641
Number accumulation units outstanding at
end of period (in thousands).......... 724 594
HARTFORD STOCK SUB-ACCOUNT
(INCEPTION DATE JUNE 29, 1982)
Accumulation unit value at beginning of
period................................ $ 4.874 $ 3.915
Accumulation unit value at end of
period................................ $ 4.627 $ 4.874
Number accumulation units outstanding at
end of period (in thousands).......... 1,467 1,156
HARTFORD MONEY MARKET SUB-ACCOUNT
(INCEPTION DATE JUNE 29, 1982)
Accumulation unit value at beginning of
period................................ $ 2.103 $ 1.951
Accumulation unit value at end of
period................................ $ 2.245 $ 2.103
Number accumulation units outstanding at
end of period (in thousands).......... 881 718
HARTFORD ADVISERS SUB-ACCOUNT
(INCEPTION DATE MAY 2, 1983)
ccumulation unit value at beginning of
period................................ $ 2.123 $ 1.766
Accumulation unit value at end of
period................................ $ 2.123 $ 2.123
Number accumulation units outstanding at
end of period (in thousands).......... 5,565 5,227
HARTFORD CAPITAL APPRECIATION
SUB-ACCOUNT
(INCEPTION DATE APRIL 2, 1984)
Accumulation unit value at beginning of
period................................ $ 2.278 $ 1.858
Accumulation unit value at end of
period................................ $ 2.004 $ 2.278
Number accumulation units outstanding at
end of period (in thousands).......... 1,455 1,037
</TABLE>

11
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991
-------- -------- -------- ------- ------- ------- ------- -------
DC-II
<S> <C> <C> <C> <C> <C> <C> <C> <C>
HARTFORD MORTGAGE SECURITIES SUB-ACCOUNT
(INCEPTION DATE JANUARY 15, 1985)
Accumulation unit value at beginning of
period................................ $ 2.606 $ 2.421 $ 2.333 $ 2.034 $ 2.093 $ 1.993 $ 1.929 $ 1.702
Accumulation unit value at end of
period................................ $ 2.747 $ 2.606 $ 2.421 $ 2.333 $ 2.034 $ 2.093 $ 1.993 $ 1.929
Number accumulation units outstanding at
end of period (in thousands).......... 891 1,035 1,141 1,149 994 942 802 736
HARTFORD INDEX SUB-ACCOUNT
(INCEPTION DATE JUNE 3, 1985)
Accumulation unit value at beginning of
period................................ $ 3.745 $ 2.848 $ 2.353 $ 1.738 $ 1.735 $ 1.605 $ 1.522 $ 1.190
Accumulation unit value at end of
period................................ $ 4.755 $ 3.745 $ 2.848 $ 2.353 $ 1.738 $ 1.735 $ 1.605 $ 1.522
Number accumulation units outstanding at
end of period (in thousands).......... 6,393 5,415 4,378 3,153 2,376 1,862 1,437 871
CALVERT SOCIAL BALANCED PORTFOLIO
SUB-ACCOUNT
(INCEPTION DATE JANUARY 25, 1989)
Accumulation unit value at beginning of
period................................ $ 2.396 $ 2.021 $ 1.817 $ 1.417 $ 1.483 $ 1.391 $ 1.308 $ 1.138
Accumulation unit value at end of
period................................ $ 2.750 $ 2.396 $ 2.021 $ 1.817 $ 1.417 $ 1.483 $ 1.391 $ 1.308
Number accumulation units outstanding at
end of period (in thousands).......... 1,263 1,291 1,193 923 693 498 317 187
HARTFORD INTERNATIONAL OPPORTUNITIES
SUB-ACCOUNT
(INCEPTION DATE JULY 2, 1990)
Accumulation unit value at beginning of
period................................ $ 1.469 $ 1.483 $ 1.329 $ 1.181 $ 1.220 $ 0.924 $ 0.979 $ 0.877
Accumulation unit value at end of
period................................ $ 1.641 $ 1.469 $ 1.483 $ 1.329 $ 1.181 $ 1.220 $ 0.924 $ 0.979
Number accumulation units outstanding at
end of period (in thousands).......... 4,166 5,864 5,996 4,520 3,640 1,495 553 220
HARTFORD DIVIDEND AND GROWTH SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1995)
Accumulation unit value at beginning of
period................................ $ 1.933 $ 1.490 $ 1.223 $ 1.000 -- -- -- --
Accumulation unit value at end of
period................................ $ 2.222 $ 1.933 $ 1.490 $ 1.223 -- -- -- --
Number accumulation units outstanding at
end of period (in thousands).......... 8,150 6,877 3,874 558 -- -- -- --

1990 1989
------- -------
DC-II
<S> <C> <C>
HARTFORD MORTGAGE SECURITIES SUB-ACCOUNT
(INCEPTION DATE JANUARY 15, 1985)
Accumulation unit value at beginning of
period................................ $ 1.571 $ 1.406
Accumulation unit value at end of
period................................ $ 1.702 $ 1.571
Number accumulation units outstanding at
end of period (in thousands).......... 582 845
HARTFORD INDEX SUB-ACCOUNT
(INCEPTION DATE JUNE 3, 1985)
Accumulation unit value at beginning of
period................................ $ 1.255 $ 0.975
Accumulation unit value at end of
period................................ $ 1.190 $ 1.255
Number accumulation units outstanding at
end of period (in thousands).......... 595 275
CALVERT SOCIAL BALANCED PORTFOLIO
SUB-ACCOUNT
(INCEPTION DATE JANUARY 25, 1989)
Accumulation unit value at beginning of
period................................ $ 1.106 $ 1.000
Accumulation unit value at end of
period................................ $ 1.138 $ 1.106
Number accumulation units outstanding at
end of period (in thousands).......... 94 18
HARTFORD INTERNATIONAL OPPORTUNITIES
SUB-ACCOUNT
(INCEPTION DATE JULY 2, 1990)
Accumulation unit value at beginning of
period................................ $ 1.000 --
Accumulation unit value at end of
period................................ $ 0.877 --
Number accumulation units outstanding at
end of period (in thousands).......... 52 --
HARTFORD DIVIDEND AND GROWTH 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>

12
<PAGE>
PERFORMANCE RELATED INFORMATION

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

Hartford Advisers, Hartford Bond, Calvert Social Balanced, Hartford Capital
Appreciation, Hartford Dividend and Growth, Hartford Index, Hartford
International Opportunities, Hartford Money Market, Hartford Mortgage
Securities, and Hartford Stock Sub-Accounts may include total return in
advertisements or other sales material.

When a Sub-Account advertises its STANDARDIZED TOTAL RETURN, it will usually
be calculated for one year, five years, and ten years or some other relevant
periods if the Sub-Account has not been in existence for at least ten years.
Total return is measured by comparing the value of an investment in the
Sub-Account at the beginning of the relevant period to the value of the
investment at the end of the period (assuming the deduction of any contingent
deferred sales charge which would be payable if the investment were redeemed at
the end of the period). Total return figures are net of all Fund level
management fees and charges and the charge for mortality, expense risk and
administrative undertakings.

The Separate Accounts may also advertise NON-STANDARD TOTAL RETURNS THAT
PRE-DATE THE INCEPTION DATE OF THE SEPARATE ACCOUNT. These non-standardized
total returns are calculated by assuming that the Sub-Accounts have been in
existence for the same periods as the underlying Funds and by taking deductions
for charges equal to those currently assessed against the Sub-Accounts. 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 charges and the Annual Maintenance Fee, where applicable, are not
deducted. These non-standardized returns must be accompanied by standardized
total returns.

Hartford Bond and Hartford Mortgage Securities 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 charge for
mortality, expense risk, administrative undertakings and the Annual Maintenance
Fee, where applicable.

Hartford Money Market 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 charge for mortality, expense risk, administrative
undertakings and the Annual Maintenance Fee, where applicable.

The Separate Accounts may disclose yields for periods prior to the date the
Separate Accounts commenced operations. For periods prior to the date the
Separate Accounts commenced operations, performance information for the
Sub-Accounts will be calculated based on the performance of the underlying Funds
and the assumption that the Sub-Accounts were in existence for the same periods
as those of the underlying Funds, with a level of charges equal to those
currently assessed against the Sub-Accounts. No yield disclosure for periods
prior to the date of the Separate Account will be used without yield disclosure
for periods as of the inception of the Separate Accounts.

We may provide information on various topics to Contract Owners and
prospective Contract Owners in advertising, sales literature or other materials.
These topics may include the relationship between sectors of the economy and the
economy as a whole and its effect on various securities markets, investment
strategies and techniques (such as value investing, dollar cost averaging and
asset allocation), the advantages and disadvantages of investing in tax-deferred
and taxable instruments, customer profiles and hypothetical purchase scenarios,
financial management and tax and retirement planning, and other investment
alternatives, including comparisons between the Contracts and the
characteristics of and market for such alternatives.

13
<PAGE>
HARTFORD LIFE INSURANCE COMPANY

Hartford Life Insurance Company 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. We were originally
incorporated under the laws of Massachusetts on June 5, 1902, and subsequently
redomiciled to Connecticut. Our offices are located in Simsbury, Connecticut;
however, our mailing address is P.O. Box 1583, Hartford, CT 06144-1583. We are
ultimately controlled by The Hartford Financial Services Group, Inc., one of the
largest financial service providers in the United States.

HARTFORD'S RATINGS

<TABLE>
<CAPTION>
RATING AGENCY EFFECTIVE DATE OF RATING RATING BASIS OF RATING
- ----------------------------------- ------------------------ ------ ------------------------------
<S> <C> <C> <C>
A.M. Best and Company, Inc. 1/1/99 A+ Financial performance
Standard & Poor's 6/1/98 AA Insurer financial strength
Duff & Phelps 12/21/98 AA+ Claims paying ability
</TABLE>

THE SEPARATE ACCOUNTS

Hartford Life Insurance Company Separate Account DC Variable Account-I
("DC-I") and a series of Hartford Life Insurance Company Separate Account Two
("DC-II") are where we set aside and invest assets of some of our annuity
contracts, including the Contracts. We hold Contributions to Contracts issued in
connection with Deferred Compensation Plans in DC-I during the Accumulation
Period and in DC-II during the Annuity Period. We hold Contributions to
Contracts issued in connection with Qualified Plans in DC-II during both the
Accumulation Period and the Annuity Period. The assets of DC-I and DC-II were
transferred from Hartford Variable Annuity Life Insurance Company Separate
Account DC-I and Separate Account DC-II, respectively, on December 31, 1987.

Each Separate Account is registered as a unit investment trust under the
Investment Company Act of 1940. This registration does not involve supervision
by the Commission of the management or the investment practices of the Separate
Accounts or Hartford.

Each Separate Account meets the definition of "separate account" under
federal securities law. Each Separate Account holds only assets for variable
annuity contracts. Each Separate Account, respectively:

- Holds assets for the benefit of Participants and Contract Owners, and the
persons entitled to the payments described in the Contract.

- Is not subject to the liabilities arising out of any other business
Hartford may conduct.

- Is not affected by the rate of return of Hartford's General Account or by
the investment performance of any of Hartford's other separate accounts.

- May be subject to liabilities from a Sub-Account of the Separate Account
that holds assets of other contracts offered by the Separate Account which
are not described in this Prospectus.

- Is credited with income and gains, and takes losses, whether or not
realized, from the assets it holds.

WE DO NOT GUARANTEE THE INVESTMENT RESULTS OF THE SEPARATE ACCOUNTS. THERE
IS NO ASSURANCE THAT THE VALUE OF YOUR PARTICIPANT ACCOUNT WILL EQUAL THE TOTAL
OF THE CONTRIBUTIONS MADE TO YOUR PARTICIPANT ACCOUNT.

THE FUNDS

We sponsor and administer each Hartford HLS Fund. They are incorporated
under the laws of the State of Maryland. They are each registered with the
Securities and Exchange Commission as an open-end management investment company.
The shares of each Hartford HLS Fund have been divided into Class IA and Class
IB. Only Class IA shares are available in this Contract.

14
<PAGE>
HL Investment Advisors, LLC ("HL Advisors") serves as the investment adviser
to each Hartford HLS Fund. Wellington Management Company, LLP ("Wellington
Management") and The Hartford Investment Management Company, Inc. ("HIMCO"),
serve as sub-investment advisors and provide day to day investment services.

Calvert Asset Management Company serves as investment advisor 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.

We do not guarantee the investment results of any of the underlying Funds.
Since each underlying Fund has different investment objectives, each is subject
to different risks. These risks and the Fund's expenses are more fully described
in the accompanying Fund's prospectuses and Statements of Additional
Information, which may be ordered from us. The Fund's prospectuses should be
read in conjunction with this Prospectus before investing.

THESE FUNDS MAY NOT BE AVAILABLE IN ALL STATES OR IN ALL CONTRACTS.

The investment goals of each of the Funds are as follows:

HARTFORD HLS FUNDS

HARTFORD ADVISERS HLS 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. Sub-advised by Wellington Management.

HARTFORD BOND HLS 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 each of the
Hartford HLS Funds entitled "Hartford Bond HLS Fund, Inc. -- Investment
Policies." Sub-advised by HIMCO.

HARTFORD CAPITAL APPRECIATION HLS FUND

Seeks growth of capital by investing in equity securities selected solely on
the basis of potential for capital appreciation. Sub-advised by Wellington
Management.

HARTFORD DIVIDEND AND GROWTH HLS FUND

Seeks a high level of current income consistent with growth of capital by
investing primarily in divided paying equity securities. Sub-advised by
Wellington Management.

HARTFORD INDEX HLS FUND

Seeks to provide investment results which approximate 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.* Sub-advised by HIMCO.

HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND

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

* "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. HARTFORD INDEX HLS 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.

15
<PAGE>
HARTFORD MORTGAGE SECURITIES HLS 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.
Sub-advised by HIMCO.

HARTFORD STOCK HLS FUND

Seeks long-term growth by investing primarily in equity securities.
Sub-advised by Wellington Management.

HARTFORD MONEY MARKET HLS FUND

Seeks maximum current income consistent with liquidity and preservation of
capital. Sub-advised by HIMCO.

CALVERT FUND

CALVERT SOCIAL BALANCED PORTFOLIO

Seeks to achieve a competitive total return through an actively managed
portfolio of stocks, bonds and money market instruments which offer income and
capital growth opportunity and which satisfy the investment and social criteria.

ALL FUNDS

Hartford Advisers Sub-Account was not available under Contracts issued prior
to May 2, 1983. Hartford Capital Appreciation Sub-Account was not available
under Contracts issued prior to May 1, 1984. Hartford Mortgage Securities
Sub-Account was not available under Contracts issued prior to January 15, 1985.
Hartford Index Sub-Account was not available under Contracts issued prior to May
1, 1987. Hartford Dividend and Growth 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.

MIXED AND SHARED FUNDING: Shares of the Funds are sold to our other separate
accounts and our insurance company affiliates or other unaffiliated insurance
companies to serve as the underlying investment for both variable annuity
contracts and variable life insurance contracts, a practice known as "mixed and
shared funding." As a result, there is a possibility that a material conflict
may arise between the interests of Contract Owners, and of owners of other
contracts whose contract values are allocated to one or more of these other
separate accounts investing in any one of the Funds. In the event of any such
material conflicts, we will consider what action may be appropriate, including
removing the Fund from the Separate Account or replacing the Fund with another
Fund. There are certain risks associated with mixed and shared funding, as
disclosed in the Funds' prospectus.

VOTING RIGHTS: We are the legal owners of all Fund shares held in the
Separate Accounts and we have the right to vote at the Fund's shareholder
meetings. To the extent required by federal securities laws or regulations, we
will:

- Notify the Contract Owner of any Fund shareholders' meeting if the shares
held for the Contract may be voted;

- Send proxy materials and a form of instructions to the Contract Owner that
may be used to tell us how to vote the Fund shares held for the Contract;
arrange for the handling and tallying of proxies received from Contract
Owners;

- Vote all Fund shares attributable to a Contract according to instructions
received from the Contract Owner; and

- Vote all Fund shares for which no voting instructions are received in the
same proportion as shares for which instructions have been received.

16
<PAGE>
If any federal securities laws or regulations, or their present
interpretation, change to permit us to vote Fund shares on our own, we may
decide to do so. Contract Owners may attend any shareholder meeting at which
shares held for their Contract may be voted.

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

SUBSTITUTION, ADDITION OR DELETION OF FUNDS, SEPARATE ACCOUNTS AND/OR
SUB-ACCOUNTS: We reserve the right, subject to any applicable 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
or as we deem appropriate. Current law requires notification to you of any such
substitution and approval of the Securities and Exchange Commission. We also
reserve the right, subject to any applicable law, to offer additional
Sub-Accounts with differing investment objectives, and to make existing
Sub-Account options unavailable under the Contracts in the future.

We 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.

GENERAL ACCOUNT OPTION

IMPORTANT INFORMATION YOU SHOULD KNOW: THE PORTION OF THE CONTRACT RELATING
TO THE GENERAL ACCOUNT OPTION IS NOT REGISTERED UNDER THE SECURITIES ACT OF 1933
("1933 ACT") AND THE GENERAL ACCOUNT OPTION IS NOT REGISTERED AS AN INVESTMENT
COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940 ("1940 ACT"). NEITHER THE
GENERAL ACCOUNT OPTION NOR ANY INTEREST IN THE GENERAL ACCOUNT OPTION IS SUBJECT
TO THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE 1940 ACT, AND THE STAFF
OF THE SECURITIES AND EXCHANGE COMMISSION HAS NOT REVIEWED THE DISCLOSURE
REGARDING THE GENERAL ACCOUNT OPTION.

The General Account option is part of our General Account that includes our
company assets.

DECLARED RATE OF INTEREST -- We credit interest on Contributions made to the
General Account at a rate we declare for the calendar quarter in which they are
received. We determine the declared interest rate for any quarter. We may change
the declared interest rate for any subsequent quarter at our discretion.

We will guarantee the declared interest rate for any quarter to the end of
that calendar year. Any change in the declared interest rate will be declared
before the start of the quarter.

GUARANTEED RATE OF INTEREST -- For each subsequent calendar year, we will
credit each Contribution with interest at a rate guaranteed for the entire year
(the "Guaranteed Interest Rate"). The Guaranteed Interest Rate for a calendar
year will be determined at the end of the preceding calendar year. We may, from
time to time, credit interest at rates in excess of the Guaranteed Interest
Rate.

DISTRIBUTIONS AND TRANSFERS -- We generally process distributions and
transfers from the General Account within a reasonable period of time after we
receive a Participant request at our Administrative Office. However, under
certain conditions, transfers from the General Account may be limited or
deferred. Distributions may be subject to a contingent deferred sales charge and
may be deferred or subject to a market value adjustment.

ADDITIONAL SEPARATE ACCOUNTS OFFERED
UNDER THE CONTRACTS

IMPORTANT INFORMATION YOU SHOULD KNOW: THE CONTRACTS MAY CONTAIN ADDITIONAL
SEPARATE ACCOUNTS. THE PORTION OF THE CONTRACT RELATING TO ADDITIONAL SEPARATE
ACCOUNTS IS NOT REGISTERED UNDER THE 1933 ACT AND THE ADDITIONAL SEPARATE
ACCOUNTS ARE NOT REGISTERED AS INVESTMENT COMPANIES UNDER THE 1940 ACT. NEITHER
THE ADDITIONAL SEPARATE ACCOUNTS NOR ANY INTEREST IN THE ADDITIONAL SEPARATE
ACCOUNTS IS SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE
1940 ACT, AND THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
REVIEWED THE DISCLOSURE REGARDING ANY OF THE ADDITIONAL SEPARATE

17
<PAGE>
ACCOUNTS. THE FOLLOWING DISCLOSURE ABOUT THE ADDITIONAL SEPARATE ACCOUNTS MAY BE
SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES
LAWS REGARDING THE ACCURACY AND COMPLETENESS OF DISCLOSURE.

Additional separate accounts may be offered under the Contracts. These
separate accounts and their sub-accounts are not described in this Prospectus.
Contract fees and charges will generally apply, including contingent deferred
sales charges, mortality expense risk and administrative charges, and other
charges. These charges may be similar to or different from the fees and charges
described in this Prospectus with respect to the Separate Accounts. If
additional separate accounts are available under a Contract, you may allocate
Contract values to sub-accounts within the additional separate accounts, subject
to any restrictions that may apply. Call 1-800-528-9009 for more information on
additional separate accounts.

CONTRACT CHARGES

SALES CHARGE: The purpose of the Sales Charge is to cover expenses relating
to the sale and distribution of the Contracts, including:

- the cost of preparing sales literature,

- commissions and other compensation paid to distributing organizations and
their sales personnel, and

- other distribution related activities.

If the Sales Charge is not sufficient to cover sales and distribution
expenses, we pay those expenses from our general assets, including surplus.
Surplus might include profits resulting from unused mortality and expense risk
charges.

There is no deduction for Sales Charge at the time Contributions are made to
the Contract. The Sales Charge is deducted from Surrenders of or from the
Contract. The amount of the Sales Charge depends on the number of Participant's
Contract Years completed with respect to a Participant's Account before the
Surrender. It is a percentage of the amount Surrendered. For Contracts for which
contributions are held under DC-I during the Accumulation Period, the following
Sales Charges will be deducted as follows:

<TABLE>
<CAPTION>
PARTICIPANT'S CONTRACT YEARS SALES CHARGE
- --------------------------------------------------------------------------------------------------------- -----------------
<S> <C>
During the First through the Sixth Year.................................................................. 5%
During the Seventh through Eighth Year................................................................... 4%
During the Ninth through Tenth Year...................................................................... 3%
During the Eleventh through Twelfth Year................................................................. 2%
During the Thirteenth Year and thereafter................................................................ 0%
</TABLE>

For Contracts for which contributions are held under DC-II during the
Accumulation Period, the following Sales Charges will be deducted as follows:

<TABLE>
<CAPTION>
PARTICIPANT'S CONTRACT YEARS SALES CHARGE
- --------------------------------------------------------------------------------------------------------- -----------------
<S> <C>
During the First through the Eighth Year................................................................. 5%
During the Ninth through Fifteenth Year.................................................................. 3%
During the Sixteenth Year and thereafter................................................................. 0%
</TABLE>

We may reduce the amount or term of the Sales Charge (see "Experience Rating
under the Contracts"). The Sales Charge will never exceed 8.5% of aggregate
Contributions to a Participant's Account.

When you request a full Surrender, the Sales Charge is deducted from the
amount Surrendered and the balance is paid to you.

- - Example: You request a full Surrender when the value of your Participant
Account is $1,000 and the applicable Sales Charge is 5%: Your Sub-Account(s)
will be surrendered by $1,000 and you will receive $950 (i.e., the $1,000
Surrender less the 5% Sales Charge).

If you request a partial Surrender and ask for a specific dollar amount, the
Sales Charge will be calculated on the total amount that must be withdrawn from
your Sub-Account(s) to provide you with the amount requested.

- - Example: You ask for $1,000 when the applicable Sales Charge is 5%: Your
Sub-Account(s) will be reduced by $1,052.63 (i.e., a total withdrawal of
$1,052.63 made up of $52.63 in Sales Charge plus the $1,000 you requested).
The net amount of $1,000 is paid to you.

18
<PAGE>
IS THERE EVER A TIME WHEN THE SALES CHARGE DOES NOT APPLY?

We will waive the Sales Charge for certain Eligible Surrenders. An Eligible
Surrender is a withdrawal that is (1) made because of a Qualifying Event and (2)
payable directly to the Participant, or if applicable, the Beneficiary. A
Qualifying Event is the Participant's:

- death;

- financial hardship, as defined in the Plan;

- separation from service; or

- retirement.

A transfer to a Plan funding vehicle issued by another investment provider
is not an Eligible Surrender. The Sales Charge does not apply to a transfer of
Contract values from this Contract to another group annuity contract issued by
us or one of our affiliates. This waiver may not be available in all States.

No deduction for the Sales Charge will apply to a transfer to a Related
Participant Directed Account Option. A "Related Participant Directed Account
Option" is a Participant directed investment account under the Plan that you
identify and we accept for the purpose of participant-directed transfers of
amounts from the Contract for investment outside of the Contract. The Related
Participant Directed Account Option may not be available in all states.

MORTALITY, EXPENSE RISK AND ADMINISTRATIVE CHARGE: Because we assume certain
risks under the Contract, and we provide certain administrative services, we
deduct a daily charge against all Contract values held in the Separate Accounts
during the life of the Contract. The amount of the charge differs between DC-I
and DC-II and, with respect to DC-I, depends on the value of the Contract:

We will determine eligibility for the lower annual rate in DC-I based on the
value of a Contract on the last day of each calendar quarter, each such day a
"Test Date". To be eligible, the value of the Contract must exceed $50,000,000
on two successive Test Dates. A reduction in the charge for Mortality, Expense
Risk and Administrative Undertakings in DC-I requires a conversion period
following a determination of eligibility. The conversion period will generally
not exceed three months, depending on Contract Owner cooperation during the
conversion period.

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) our actual
mortality experience among Annuitants before or after the Annuity Commencement
Date or (b) our actual expenses, including certain administrative expenses, if
greater than the deductions provided for in the Contracts because of our expense
and mortality undertakings.

There are two types of mortality risks:

- mortality risks during the Accumulation Period

- mortality risks during the Annuity Period

We take a mortality risk in the Accumulation Period because we assume the
mortality risk for the death benefit in event of the death of an Annuitant
before commencement of Annuity payments, in periods of declining value.

We take a mortality risk during the Annuity Period because we agree to make
monthly Annuity payments (determined in accordance with the 1983a Individual
Annuitant Mortality Table and other provisions contained in the Contract) to
Annuitants regardless of how long an Annuitant may live, and regardless of how
long all Annuitants as a group may live. We also assume the liability for
payment of a minimum death benefit under the Contract. These mortality
undertakings are based on our determination of expected mortality rates among
all Annuitants. If actual experience among Annuitants during the Annuity payment
period deviates from our

19
<PAGE>
actuarial determination of expected mortality rates among Annuitants because, as
a group, their longevity is longer than anticipated, we must provide amounts
from our general funds to fulfill our contractual obligations. We will bear the
loss in such a situation.

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

We may reduce the rate charged for the mortality, expense risk and
administrative undertakings under the Contracts (see "Experience Rating under
the Contracts"). The rate charged for the mortality, expense risk, and
administrative undertakings may be periodically increased but will not exceed
2.00% per year, provided, however, that no such increase will occur unless the
Commission first approves such increase.

HIG EMPLOYER SPONSORED IRA: We have issued a Contract to Hartford Fire
Insurance Company (a parent company of Hartford) who acts as custodian for the
Hartford Insurance Group ("HIG") Employer Sponsored Individual Retirement
Account ("HIG IRA"). We do not deduct mortality and expense charges from the
Separate Account's assets in connection in the HIG IRA; however we make a
deduction of 0.15% from the assets of the HIG IRA for certain administration
undertakings. All costs of the mortality and expense undertakings and the
reduction in charges for the administrative undertakings are being assumed by
HIG since this plan is only available to HIG employees and is intended to be an
additional benefit to eligible HIG employees. The HIG IRA is not unfairly
discriminatory against any person, including the affected Contract Owners or
Participants, in that the HIG IRA does not affect present or future charges,
rights, benefits or contract values.

ANNUAL MAINTENANCE FEE: We deduct an Annual Maintenance Fee from the value
of each Participant Account under the Contracts. Currently, there is an Annual
Maintenance Fee of $25 assessed against any Participant's Account value in
Separate Account DC-II. The Annual Maintenance Fee may be reduced or waived (see
"Contract Charges -- Experience Rating Under the Contracts").

PREMIUM TAXES: We deduct a charge for Premium Tax, if applicable, imposed by
state or other governmental entity. Certain states and municipalities impose a
Premium Tax, generally ranging up to 3.50%. In some cases, Premium Taxes are
deducted at the time purchase payments are made; in other cases Premium Tax is
assessed at the time of annuitization. We will pay Premium Taxes at the time
imposed under applicable law. At our sole discretion, we may deduct Premium
Taxes at the time we pay such taxes to the applicable taxing authorities, at the
time the Contract is surrendered, at the time a death benefit is paid, or at the
time a Participant annuitizes.

EXPERIENCE RATING UNDER THE CONTRACTS: We 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' 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 we are the exclusive
annuity contract provider. Experience credits can take the form of a reduction
in the deduction for mortality, expense risk and administrative undertakings, a
reduction in the term or amount of any applicable 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. We may
apply experience credits either prospectively or retrospectively. We may apply
and allocate experience credits in such manner as we deem 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 our sole discretion in the event of a change in applicable
factors.

CHARGES OF THE FUNDS: The investment performance of each Fund reflects the
management fee that the Fund pays to its investment manager as well as other
operating expenses that the Fund incurs. Investment management fees are
generally daily fees computed as a percentage of a Fund's average daily net
assets as an annual rate. Please read the prospectus for each Fund for complete
details.

PLAN RELATED EXPENSES: We can agree with the Contract Owner to be directed
to deduct amounts from the assets under a Contract to pay certain administrative
expenses or other Plan related expenses including, but not limited to, fees to
consultants, auditors and other Plan service providers. We will deduct and pay
such amounts to the Contract Owner or as directed by the Contract Owner. We may
agree to include such amounts as an adjustment to the charge for administrative
undertakings for a Separate Account.

20
<PAGE>
THE CONTRACTS

THE CONTRACTS OFFERED: The Contracts are group variable annuity contracts.
They are designed to fund certain Deferred Compensation Plans established under
section 457 of the Code for employees and other eligible service providers of
states and their political subdivisions and certain other organizations exempt
from taxation. The Contracts may also be issued in connection with certain
Qualified Plans, including annuity purchase plans adopted by public school
systems and certain tax-exempt organizations according to section 403(b) of the
Code.

For Deferred Compensation Plans established under section 457 of the Code
for the benefit of any organization that is exempt from the federal income tax,
other than a governmental unit, all amounts of compensation deferred under the
Plan, all property and rights purchased with such amounts, and all income
attributable to such amounts, property, or rights, remain (until made available
to a Participant or other Beneficiary) solely the property and the rights of the
Contract Owner (without being restricted to the provision of benefits under the
Plan), subject only to the claims of the Contract Owner's general creditors.

For Deferred Compensation Plans that are Plans established under section
457(b) of the Code by a state, a political subdivision of a state, or any agency
or instrumentality of a state or political subdivision of a state after August
20, 1996, the assets and income of the Plan must be held in trust for the
exclusive benefit of the Participants and the Beneficiaries of the Plan. For
this purpose, custodial accounts and certain annuity contracts are treated as
trusts. Such Deferred Compensation Plans that were in existence on August 20,
1996 may be amended to satisfy the trust and exclusive benefit requirements any
time prior to January 1, 1999, and must be amended not later than that date to
continue to receive favorable tax treatment. The requirement of a trust does not
apply to Deferred Compensation Plans under section 457(f) of the Code.

PURCHASE OF A CONTRACT: A single group Contract is issued to the Contract
Owner, covering all present and future participating employees and other
eligible persons providing services to the Employer. The Contracts provide for
variable (Separate Account) Contributions and allocations to the General Account
during the Accumulation Period. The Contract Owner can direct that a Participant
Account be established for each Participant for purposes of determining benefits
payable under the Plan.

CONTRACT RIGHTS AND PRIVILEGES AND ASSIGNMENTS: The Contract belongs to the
Contract Owner. However, under certain Deferred Compensation Plans, the Contract
Owner must hold the Contract for the exclusive benefit of the Plan's
Participants and Beneficiaries. The Contract Owner's rights and privileges may
only be exercised in a manner that is consistent with the written Plan adopted
by the Contract Owner. Under certain circumstances, the Contract Owner's
interest in the Contract may be assigned. However, amounts held under a Contract
on behalf of a Participant are nontransferable and cannot be assigned.

PRICING AND CREDITING OF CONTRIBUTIONS: We credit initial Contributions to
your Participant Account within two business days after we receive your properly
completed application and the initial Contribution at our Administrative Office.

If your application or other necessary information is incomplete when
received, your initial Contribution will be credited to your Participant 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 we inform the Contract Owner of the delay and the Contract Owner tells us
not to return it.

Subsequent Contributions properly designated for your Participant Account
are priced on the Valuation Day that we receive the Contribution at our
Administrative Office.

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 is $30 unless the Employer's Plan provides otherwise. If
the Plan adopted by the Contract Owner so provides, the Contract permits the
allocation of Contributions, in multiples of 10% among the several Sub-Accounts
of the Separate Accounts. 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 us.

21
<PAGE>
MAY I TRANSFER ASSETS BETWEEN SUB-ACCOUNTS?

Yes, you can transfer the values of your Sub-Account allocations from one or
more Sub-Accounts to another during the Accumulation Period. You can make
transfers between Sub-Accounts and changes in Sub-Account allocations by written
request or by calling 1-800-528-9009. Any transfers or changes made in writing
will be effected as of the date we receive the request at our Administrative
Office.

If available under your Employer's Plan, you may also transfer amounts to a
Related Participant Directed Account Option. The Related Participant Directed
Account Option may not be available in all states.

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 Hartford Money Market Sub-Account, or to any money market sub-account
established in the future, are prohibited.

Similarly, transfers of assets presently held in the Hartford Money Market
Sub-Account, or any money market sub-account established in the future, or which
where held in any of these Sub-Accounts during the preceding three months, to
the General Account are prohibited.

We, or our agents and affiliates will not be responsible for losses
resulting from acting upon telephone requests reasonably believed to be genuine.
We will employ reasonable procedures to confirm that instructions communicated
by telephone are genuine. The procedures we follow for transactions initiated by
telephone include requirements that callers provide certain information for
identification purposes. All transfer instructions by telephone are
tape-recorded.

IT IS YOUR RESPONSIBILITY TO VERIFY THE ACCURACY OF ALL CONFIRMATIONS OF
TRANSFERS AND TO PROMPTLY ADVISE US AT OUR ADMINISTRATIVE OFFICE OF ANY
INACCURACIES WITHIN 30 DAYS OF THE DATE YOU RECEIVE YOUR CONFIRMATION.

The right to reallocate Contract values is subject to modification by us if
we determine, in our sole opinion, that the exercise of that right by one or
more Participants or Contract Owners is, or would be, to the disadvantage of
other Participants or Contract Owners. Any modification could be applied to
transfers to or from some or all of the Sub-Accounts and could include, but not
be limited to, the requirement of a minimum time period between each transfer,
not accepting transfer requests of an agent acting under a power of attorney on
behalf of more than one Participant or Contract Owner, or limiting the dollar
amount that may be transferred between the Sub-Accounts by you at any one time.
SUCH RESTRICTIONS MAY BE APPLIED IN ANY MANNER REASONABLY DESIGNED TO PREVENT
ANY USE OF THE TRANSFER RIGHT WHICH WE CONSIDER TO BE TO THE DISADVANTAGE OF
OTHER CONTRACT OWNERS OR PARTICIPANTS.

DOLLAR COST AVERAGING: 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 Hartford Money Market
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 Hartford Money Market
Sub-Account, whichever meets the applicable minimum value, to other Sub-Accounts
of the Separate Account at monthly, quarterly, semi-annual or annual intervals
("transfer 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 we receive 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 that we provide or over our recorded
telephone line. 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 Sub-Account, as applicable, is less than the amount
you have elected to have transferred, your Dollar Cost

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<PAGE>
Averaging program will end. You may cancel your Dollar Cost Averaging election
by sending us a written notice at our Administrative Office or by calling one of
our representatives at 1-800-528-9009 and giving us notice on our recorded
telephone line.

HOW DO I KNOW WHAT MY PARTICIPANT ACCOUNT IS WORTH?

Your Participant Account value reflects the sum of the amounts under your
Participant Account allocated to the General Account option and the
Sub-Accounts.

There are two things that affect your Sub-Account value: (1) the number of
Accumulation Units and (2) the Accumulation Unit value. The Sub-Account value is
determined by multiplying the number of Accumulation Units by the Accumulation
Unit value. Therefore, on any Valuation Day the portion of your Participant
Account allocated to the Sub-Accounts will reflect the investment performance of
the Sub-Accounts and will fluctuate with the performance of the underlying
Funds.

Contributions made or Contract values allocated to a Sub-Account are
converted into Accumulation Units by dividing the amount of the Contribution or
allocation, minus any Premium Taxes, by the Accumulation Unit value for that
Valuation Day. The more Contributions or Contract values allocated to the
Sub-Accounts under your Participant Account, the more Accumulation Units will be
reflected under your Participant Account. You decrease the number of
Accumulation Units in a Sub-Account under your Participant Account by requesting
Surrenders, transferring money out of a Sub-Account, submitting a Death Benefit
claim or by electing an annuity payout from your Participant Account.

To determine the current Accumulation Unit value, we take the prior
Valuation Day's Accumulation Unit value and multiply it by the Net Investment
Factor for the current Valuation Day.

The Net Investment Factor is used to measure the investment performance of a
Sub-Account from one Valuation Day to the next. The Net Investment Factor for
each Sub-Account is calculated by dividing (a) by (b) and subtracting (c) where:

(a) is the net asset value per share of each Fund held in the Sub-Account at the
end of the current Valuation Day.

(b) is the net asset value per share of each Fund held in the Sub-Account at the
end of the prior Valuation Day.

(c) is the daily factor representing the mortality and expense risk charge and
any applicable administration charge deducted from the Sub-Account, adjusted
for the number of days in the Valuation Period, and any other applicable
charge.

We will send you a statement in each calendar quarter, that tells you how
many Accumulation Units you have, their value and your total Participant Account
value. You can also call 1-800-528-9009 to obtain your Participant Account
value.

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.

DEATH BENEFITS

DETERMINATION OF THE BENEFICIARY:

The Beneficiary is the person or persons designated to receive payment of
the death benefit upon the death of the Participant. If no designated
Beneficiary remains living at the death of the Participant, the Participant's
estate is the Beneficiary.

DEATH BEFORE THE ANNUITY COMMENCEMENT DATE:

- Death prior to age 65: If the Participant dies before the Annuity
Commencement Date or the Participant's attainment of age 65 (whichever
comes first) the Minimum Death Benefit is payable to the Beneficiary. The
Minimum Death Benefit is the greater of (a) the Termination Value of your
Participant Account determined as of the day we receive Due Proof of Death
or (b) 100% of the total Contributions made to your Participant Account,
reduced by any prior partial Surrenders. "Termination Value" means

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the value of a Participant's Account on any Valuation Day before the
Annuity Commencement Date less any applicable Premium Taxes not already
deducted and any applicable contingent deferred sales charges.

- DEATH ON OR AFTER AGE 65: If the Participant dies before the Annuity
Commencement Date but on or after the Participant's 65th birthday, the
Beneficiary will receive the Termination Value of your Participant Account
as of the Date we receive Due Proof of Death at our Administrative
Offices.

CALCULATION OF THE DEATH BENEFIT -- If the Participant dies before the
Annuity Commencement Date, the death benefit will be calculated as of the date
we receive Due Proof of Death. THE DEATH BENEFIT REMAINS INVESTED IN THE
SEPARATE ACCOUNT AND/OR GENERAL ACCOUNT OPTION ACCORDING TO YOUR LAST
INSTRUCTIONS UNTIL THE PROCEEDS ARE PAID OR WE RECEIVED NEW SETTLEMENT
INSTRUCTIONS FROM THE BENEFICIARY. DURING THE TIME PERIOD BETWEEN OUR RECEIPT OF
DUE PROOF OF DEATH AND OUR RECEIPT OF THE COMPLETED SETTLEMENT INSTRUCTIONS, THE
CALCULATED DEATH BENEFIT WILL BE SUBJECT TO MARKET FLUCTUATIONS. UPON RECEIPT OF
COMPLETE SETTLEMENT INSTRUCTIONS, WE WILL CALCULATE THE PAYABLE AMOUNT.

If the payable amount is taken in a single sum, payment will normally be
made within seven days of our receipt of completed settlement instructions.

You may apply the death benefit payment to any one of the Annuity payment
options under the Separate Account (see "Annuity payment options") instead of
receiving the death benefit payment in a single sum. An election to receive
payment of death benefits under an Annuity payment option must be made before a
lump sum settlement and within one year after the death by written notice to us
at our Administrative Offices. 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 on either a variable or fixed basis,
or $20 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 Account after retirement
(see "How are Contributions made to establish my Annuity Account?").

DEATH ON OR AFTER THE ANNUITY COMMENCEMENT DATE: If the Annuitant dies on or
after the Annuity Commencement Date, we will make the payments described below
to the Beneficiary under the following Annuity payment options, subject to the
specific terms of those Annuity payment options:

x Life Annuity (Option 1)

x Life Annuity with 120, 180 or 240 Monthly Payments Certain (Option 2)

x Unit Refund Life Annuity (Option 3)

x Joint and Last Survivor Life Annuity (Option 4)

x Payments for a Designated Period (Option 5)

SETTLEMENT PROVISIONS

IMPORTANT TAX INFORMATION: 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) SEPARATED FROM SERVICE, C) DIED, D) BECOME DISABLED OR E) EXPERIENCED
FINANCIAL HARDSHIP (CASH VALUE INCREASES MAY NOT BE DISTRIBUTED FOR HARDSHIPS
PRIOR TO AGE 59 1/2). DISTRIBUTIONS PRIOR TO AGE 59 1/2 DUE TO FINANCIAL
HARDSHIP OR SEPARATION FROM SERVICE MAY STILL BE SUBJECT TO A PENALTY TAX OF
10%. WE WILL NOT ASSUME ANY RESPONSIBILITY FOR 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 CONTRACT
VALUES. ANY FULL OR PARTIAL SURRENDER DESCRIBED ABOVE MAY AFFECT THE CONTINUING
TAX-QUALIFIED STATUS OF SOME CONTRACTS OR PLANS AND MAY RESULT IN ADVERSE TAX
CONSEQUENCES TO THE CONTRACT OWNER AND PARTICIPANTS. THE CONTRACT OWNER AND
PARTICIPANTS, THEREFORE, SHOULD CONSULT WITH A TAX ADVISER BEFORE UNDERTAKING
ANY SUCH SURRENDER. (SEE "FEDERAL TAX CONSIDERATIONS.")

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

1. CONTINUE THE PARTICIPANT'S ACCOUNT UNDER THE CONTRACT. Under this option,
when the selected Annuity Commencement Date arrives, payments will begin
under the selected Annuity payment option. (See "Annuity payment options.")
At any time in the interim, a Contract Owner may surrender the Participant's
Account for a lump sum cash settlement in accordance with 3. below.

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2. TO PROVIDE ANNUITY PAYMENTS IMMEDIATELY. The values in a Participant's
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 payment option under the Contract.
(See "Annuity payment options.")

3. TO SURRENDER THE PARTICIPANT'S ACCOUNT IN A SINGLE SUM. The amount received
will be the net Termination Value next computed after we receive a written
surrender request for complete surrender at our Administrative Offices.
Payment will normally be made within seven days after we receive the written
request.

4. TO REQUEST A PARTIAL SURRENDER OF THE PARTICIPANT'S ACCOUNT. Partial
surrenders are taken from the Sub-Account(s) that you specify. If you do not
specify the Sub-Account(s), we will take the amount out of all applicable
Sub-Account(s) on a pro rata basis. We will deduct any contingent deferred
sales charges from the partial Surrender. (See "Contract Charges.")

CAN PAYMENT OF THE 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 Annuity Payment Option 5 (on a variable basis), once
Annuity payments have commenced for an Annuitant, no Surrender of the Annuity
benefit can be made for the purpose of receiving a partial withdrawal or a lump
sum settlement. Any Surrender out of Option 5 will be subject to a Sales Charge,
if applicable.

WHAT ARE ANNUITY RIGHTS?

Annuity Rights entitle the Contract Owner to have Annuity payments made at
the rates set forth in the Contract at the time of issue. Such rates are
applicable to all amounts held in a Participant Account during the Accumulation
Period which do not exceed a limit of five times the gross Contributions made to
that Participant Account during the Accumulation Period. Any amounts in excess
of this limit may be applied at Annuity rates then being offered by us.

HOW DO I ELECT AN ANNUITY COMMENCEMENT DATE AND ANNUITY PAYMENT OPTION?

The Contract Owner selects an Annuity Commencement Date, usually between a
Participant's 50th and 75th birthdays, and an Annuity payment option. The
Annuity Commencement Date may be the first day of any month before or including
the month of a Participant's 75th birthday, or an earlier date if prescribed by
applicable law. In the absence of a written election to the contrary, the
Annuity Commencement Date will be the first day of the month coinciding with or
next following the Participant's 75th birthday.

The Annuity Commencement Date and/or the Annuity payment 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 or
another mutually agreed upon business day.

The contract contains five Annuity payment options that may be selected on
either a Fixed or Variable Annuity basis, or a combination thereof. If a
Contract Owner does not elect otherwise, we reserve the right to begin Annuity
payments at age 75 under Option 2 with 120 monthly payments certain. However, we
will not assume responsibility in determining or monitoring minimum
distributions beginning at age 70 1/2 (see "Federal Tax Consequences").

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

The minimum Annuity payment is $20. No election may be made which results in
a first payment of less than $20. If at any time Annuity payments are or become
less than $20 we have the right to change the frequency of payment to intervals
that will result in payments of at least $20.

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HOW ARE CONTRIBUTIONS MADE TO ESTABLISH AN 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 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.

For Contracts issued to Deferred Compensation Plans, at the end of the
Accumulation Period there is an automatic transfer of all DC-I values from the
Participant's Account to DC-II to establish an Annuitant's Account with respect
to DC-II. Such a transfer is effected by a transfer of ownership of DC-I
interests in the underlying securities to DC-II. The value of a Participant's
Account that is transferred to DC-II will be without application of any sales
charges or other expenses, with the exception of charges for any applicable
Premium Taxes.

CAN A CONTRACT BE SUSPENDED BY A CONTRACT OWNER?

A Contract may be suspended by the Contract Owner by giving us written
notice at least 90 days before the effective date of the suspension at our
Administrative Office. A Contract will be suspended automatically on its
anniversary if the Contract Owner fails to assent to any modification of a
Contract. (See "Can a Contract be modified?") In this context, such
modifications would have become effective on or before that anniversary.

Upon suspension, we will continue to accept Contributions, subject to the
terms of the Contract, as such terms are applicable to Participant's Accounts
under the Contracts prior to such suspension. However, no Contributions will be
accepted on behalf of any new Participant Accounts. Annuitants at the time of
any suspension will continue to receive their Annuity payments. The suspension
of a Contract will not preclude a Contract Owner form applying existing
Participant's Accounts to the purchase of Fixed or Variable Annuity benefits.

ANNUITY PAYMENT OPTIONS:

OPTION 1: LIFE ANNUITY where we make monthly Annuity payments for as long as
the Annuitant lives.

- - Payments under this option stop with the last monthly payment preceding the
death of the Annuitant, even if the Annuitant dies after one payment. 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.

OPTION 2: LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN where
we make monthly payments for the life of the Annuitant with the provision that
payments will be made for a minimum of 120, 180 or 240 months, as elected. If,
at the death of the Annuitant, payments have been made for less than the minimum
elected number of months, then any remaining guaranteed monthly payments will be
paid to the Beneficiary unless other provisions have been made and approved by
us.

OPTION 3: UNIT REFUND LIFE ANNUITY where we make monthly payments during the
life 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 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 is determined by multiplying the
excess, if any, by the Annuity Unit value as of the date we receive Due Proof of
Death.

OPTION 4: JOINT AND LAST SURVIVOR ANNUITY where we make monthly payments
during the joint lifetime of the Annuitant and a designated individual (called
the joint Annuitant) and then throughout the remaining lifetime of the survivor,
ending with the last payment prior to the death of the survivor.

- - 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
survivor.

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- - Under this Option 4, it would be possible for an Annuitant and joint
Annuitant to receive only one payment in the event of the common or
simultaneous death of the Annuitant and joint Annuitant prior to the due date
for the second payment.

OPTION 5: PAYMENTS FOR A DESIGNATED PERIOD where we agree to make monthly
payments 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 unless other provisions have been made and approved
by us.

- - Option 5 does not involve life contingencies and does not provide any
mortality guarantee.

Surrenders are subject to the limitations set forth in the Contract and any
applicable contingent deferred sales charges. (See "Contract Charges.")

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

OPTIONS 2 AND 5 ARE AVAILABLE ONLY IF THE GUARANTEED ANNUITY 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 US.

WE MAY OFFER OTHER ANNUITY PAYMENT OPTIONS FROM TIME TO TIME.

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?") 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.

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 Annuity payment option
selected. The Contract cites Annuity tables derived from the 1983a Individual
Annuitant Mortality Table with an assumed interest rate ("A.I.R.") of 4.00% per
annum. The total first monthly Annuity payment is determined by multiplying the
value (expressed in thousands of dollars) of a Sub-Account (less any applicable
Premium Taxes) by the amount of the first monthly payment per $1,000 of value
obtained from the tables in the contracts. With respect to Fixed Annuities only,
the current rate will be applied if it is higher than the rate under the tables
in the Contract.

Level Annuity payments would be 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 not later than 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.

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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>
A. Net amount applied........................................ $ 139,782.50
B. Initial monthly income per $1,000 of payment applied...... 6.13
C. Initial monthly payment (A X B DIVIDED BY 1,000)......... $ 856.87
D. Annuity Unit Value........................................ 3.125
E. Number of monthly annuity units (C DIVIDED BY D) 274.198
F. Assume annuity unit value for second month equal to....... 2.897
G. Second monthly payment (F X E)............................ $ 794.35
H. Assume annuity unit value for third month equal to........ 3.415
I. Third month payment (H X E) $ 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.

FEDERAL TAX CONSIDERATIONS

WHAT ARE SOME OF THE FEDERAL TAX CONSEQUENCES WHICH AFFECT THESE CONTRACTS?

A. GENERAL

Since the federal tax law is complex, the tax consequences of purchasing
this contract will vary depending on your situation. You may need tax or legal
advice to help you determine whether purchasing this contract is right for you.

Our general discussion of the tax treatment of this contract is based on our
understanding of federal income tax laws as they are currently interpreted. A
detailed description of all federal income tax consequences regarding the
purchase of this contract cannot be made in the prospectus. We also do not
discuss state, municipal or other tax laws that may apply to this contract. For
detailed information, you should consult with a qualified tax adviser familiar
with your situation.

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 we have 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?") 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

This summary does not attempt to provide more than general information about
the federal income tax rules associated with use of a Contract by a
tax-qualified retirement plan. Because of the complexity of the federal tax
rules, owners, participants and beneficiaries are encouraged to consult their
own tax advisors as to specific tax consequences.

The federal tax rules applicable to owners of Contracts under tax-qualified
retirement plans vary according to the type of plan as well as the terms and
conditions of the plan itself. Contract owners, plan participants

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and beneficiaries are cautioned that the rights and benefits of any person may
be controlled by the terms and conditions of the tax-qualified retirement plan
itself, regardless of the terms and conditions of a Contract. We are not bound
by the terms and conditions of such plans to the extent such terms conflict with
a Contract, unless we specifically consent to be bound.

Some tax-qualified retirement plans are subject to distribution and other
requirements that are not incorporated into our administrative procedures.
Contract owners, participants and beneficiaries are responsible for determining
that contributions, distributions and other transactions comply with applicable
law. Tax penalties may apply to transactions with respect to tax-qualified
retirement plans if applicable federal income tax rules and restrictions are not
carefully observed.

We do not currently offer the Contracts in connection with all of the types
of tax-qualified retirement plans discussed below and may not offer the
Contracts for all types of tax-qualified retirement plans in the future.

1. TAX-QUALIFIED PENSION OR PROFIT-SHARING PLANS

Eligible employers can establish certain tax-qualified pension and
profit-sharing plans under section 401 of the Code. Rules under section 401(k)
of the Code govern certain "cash or deferred arrangements" under such plans.
Rules under section 408(k) govern "simplified employee pensions."
Tax-qualified pension and profit-sharing 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 the Contracts in connection with tax-qualified pension or
profit-sharing plans should seek competent tax and other legal advice.

2. TAX SHELTERED ANNUITIES UNDER SECTION 403(B)

Public schools and certain types of charitable, educational and scientific
organizations, as specified in section 501(c)(3) of the Code, can purchase
tax-sheltered annuity contracts for their employees. Tax-deferred
contributions can be made to tax-sheltered annuity contracts under section
403(b) of the Code, subject to certain limitations. Generally, such
contributions may not exceed the lesser of $10,000 (indexed) or 20% of the
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:

- after the participating employee attains age 59 1/2;

- upon separation from service;

- upon death or disability; or

- 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

A governmental employer or a tax-exempt employer other than a governmental
unit can establish a Deferred Compensation Plan under section 457 of the Code.
For these purposes, a "governmental employer" is a State, a political
subdivision of a State, or an agency or an instrumentality of a State or
political subdivision of a State. Employees and independent contractors
performing services for a governmental or tax-exempt employer can elect to
have contributions made to a Deferred Compensation Plan of their employer in
accordance with the employer's plan and section 457 of the Code.

Deferred Compensation Plans that meet the requirements of section 457(b) of
the Code are called "eligible" Deferred Compensation Plans. Section 457(b)
limits the amount of contributions that can be made to an eligible Deferred
Compensation Plan on behalf of a participant. Generally, the limitation on

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<PAGE>
contributions is 33 1/3% of a participant's includable compensation (typically
25% of gross compensation) or, for 1999, $8,000 (indexed), whichever is less.
The plan may provide for additional "catch-up" contributions during the three
taxable years ending before the year in which the participant attains normal
retirement age.

All of the assets and income of an eligible Deferred Compensation Plan
established by a governmental employer after August 20, 1996, must be held in
trust for the exclusive benefit of participants and their beneficiaries. For
this purpose, custodial accounts and certain annuity contracts are treated as
trusts. Eligible Deferred Compensation Plans that were in existence on August
20, 1996 may be amended to satisfy the trust and exclusive benefit
requirements any time prior to January 1, 1999, and must be amended not later
than that date to continue to receive favorable tax treatment. The requirement
of a trust does not apply to amounts under a Deferred Compensation Plan of a
tax-exempt (non-governmental) employer. In addition, the requirement of a
trust does not apply to amounts under a Deferred Compensation Plan of a
governmental employer if the Deferred Compensation Plan is not an eligible
plan within the meaning of section 457(b) of the Code. In the absence of such
a trust, amounts under the plan will be subject to the claims of the
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 as defined in the Code.

Under present federal tax law, amounts accumulated in a Deferred
Compensation Plan under section 457 of the Code cannot be transferred or
rolled over on a tax-deferred basis except for certain transfers to other
Deferred Compensation Plans under section 457 in limited cases.

4. INDIVIDUAL RETIREMENT ANNUITIES ("IRAS") UNDER SECTION 408

TRADITIONAL IRAS. Eligible individuals can establish individual retirement
programs under section 408 of the Code through the purchase of an IRA. Section
408 imposes limits with respect to IRAs, including limits on the amount that
may be contributed to an IRA, the amount of such contributions that may be
deducted from taxable income, the persons who may be eligible to contribute to
an IRA, and the time when distributions commence from an IRA. Distributions
from certain tax-qualified retirement plans may be "rolled-over" to an IRA on
a tax-deferred basis.

SIMPLE IRAS. Eligible employees may establish SIMPLE IRAs in connection
with a SIMPLE IRA plan of an employer under section 408(p) of the Code.
Special rollover rules apply to SIMPLE IRAs. Amounts can be rolled over from
one SIMPLE IRA to another SIMPLE IRA. However, amounts can be rolled over from
a SIMPLE IRA to a Traditional IRA only after two years have expired since the
employee first commenced participation in the employer's SIMPLE IRA plan.
Amounts cannot be rolled over to a SIMPLE IRA from a qualified plan or a
Traditional IRA. Hartford is a non-designated financial institution for
purposes of the SIMPLE IRA rules.

ROTH IRAS. Eligible individuals may establish Roth IRAs under section 408A
of the Code. Contributions to a Roth IRA are not deductible. Subject to
special limitations, a Traditional IRA may be converted into a Roth IRA or a
distribution from a Traditional IRA may be rolled over to a Roth IRA. However,
a conversion or a rollover from a Traditional 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. FEDERAL TAX PENALTIES AND WITHHOLDING

Distributions from tax-qualified retirement plans are generally taxed as
ordinary income 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 that bears the same ratio as the after-tax
contributions bear to the expected return.

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(A) PENALTY TAX ON EARLY DISTRIBUTIONS

Section 72(t) of the Code imposes an additional penalty tax equal to 10%
of the taxable portion of a distribution from certain tax-qualified
retirement plans. However, the 10% penalty tax does not apply to a
distributions that is:

- Made on or after the date on which the employee reaches age 59 1/2;

- Made to a beneficiary (or to the estate of the employee) on or after the
death of the employee;

- Attributable to the employee's becoming disabled (as defined in the Code);

- Part of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
employee or the joint lives (or joint life expectancies) of the employee
and his or her designated beneficiary;

- Except in the case of an IRA, made to an employee after separation from
service after reaching age 55; or

- Not greater than the amount allowable as a deduction to the employee for
eligible medical expenses during the taxable year.

In addition, the 10% penalty tax does not apply to a distribution from an
IRA that is:

- Made after separation from employment to an unemployed IRA owner for
health insurance premiums, if certain conditions are met;

- Not in excess of the amount of certain qualifying higher education
expenses, as defined by section 72(t)(7) of the Code; or

- A qualified first-time homebuyer distribution meeting the requirements
specified at section 72(t)(8) of the Code.

If you are a participant in a SIMPLE IRA plan, you should be aware that
the 10% penalty tax is increased to 25% with respect to non-exempt early
distributions made from your SIMPLE IRA during the first two years following
the date you first commenced participation in any SIMPLE IRA plan of your
employer.

(B) MINIMUM DISTRIBUTION PENALTY TAX

If the amount distributed is less than the minimum required distribution
for the year, the Participant is subject to a 50% penalty 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 the Required
Beginning Date. Generally, the Required Beginning Date is April 1 of the
calendar year following the later of:

- the calendar year in which the individual attains age 70 1/2; or

- the calendar year in which the individual retires from service with the
employer sponsoring the plan.

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:

- the life of the Participant or the lives of the Participant and the
Participant's designated beneficiary, or

- over a period not extending beyond the life expectancy of the Participant
or the joint life expectancy of the Participant and the Participant's
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

31
<PAGE>
designated beneficiary and distribution is over the life of such 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.

In general, regular wage withholding rules apply to distributions from
IRAs and plans described in section 457 of the Code. 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 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.

Mandatory federal income tax withholding at a flat rate of 20% will
generally apply to other distributions from such other tax-qualified
retirement plans unless such distributions are:

- the non-taxable portion of the distribution;

- required minimum distributions; or

- direct transfer distributions.

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

Certain states require withholding of state taxes when federal income tax
is withheld.

D. DIVERSIFICATION OF THE SEPARATE ACCOUNT

The Code requires that investments supporting your contract be adequately
diversified. Code Section 817 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.
If a contract is not treated as an annuity contract, the contract owner will be
subject to income tax on annual increases in cash value.

The Treasury Department's diversification regulations require, among other
things, that:

- no more than 55% of the value of the total assets of the segregated asset
account underlying a variable contract is represented by any one
investment,

- no more than 70% is represented by any two investments,

- 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 the
case of government securities, each government agency or instrumentality is
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 still 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.

We monitor the diversification of investments in the separate accounts and
test for diversification as required by the Code. We intend to administer all
contracts subject to the diversification requirements in a manner that will
maintain adequate diversification.

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E. OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT

In order for a variable annuity contract to qualify for tax deferral, assets
in the separate accounts supporting the contract must be considered to be owned
by the insurance company and not by the contract owner. It is unclear under what
circumstances an investor is considered to have enough control over the assets
in the separate account to be considered the owner of the assets for tax
purposes.

The IRS has issued several rulings discussing investor control. These
rulings say 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.

In its explanation of the diversification regulations, the Treasury
Department recognized 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, guidance has
yet to be issued. We do not know if additional guidance will be issued. If
guidance is issued, we do not know if it will have a retroactive effect.

Due to the lack of specific guidance on investor control, there is some
uncertainty about when a contract owner is considered the owner of the assets
for tax purposes. We reserve the right to modify the contract, as necessary, to
prevent you from being considered the owner of assets in the separate account.

F. CONTRACTS OWNED BY NON-NATURAL PERSONS

Code Section 72 contains provisions for contract owners which are not
natural persons. Non-natural persons include corporations, trusts, limited
liability companies, partnerships and other types of legal entities. The tax
rules for contracts owned by non-natural persons are different from the rules
for contracts owned by individuals. For example, the annual net increase in the
value of the contract is currently includible in the gross income of a
non-natural person, unless the non-natural person holds the contract as an agent
for a natural person. There are additional exceptions from current inclusion
for:

- certain annuities held by structured settlement companies,

- certain annuities held by an employer with respect to a terminated
qualified retirement plan and

- 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.

If the contract owner is a non-natural person, the primary annuitant is
treated as the contract owner in applying mandatory distribution rules. These
rules require that certain distributions be made upon the death of the contract
owner. A change in the primary annuitant is also treated as the death of the
contract owner.

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.

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MORE INFORMATION

CAN A CONTRACT BE MODIFIED?

Subject to any federal and state regulatory restrictions, we may modify the
Contracts at any time by written agreement between the Contract Owner and us. 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 the
Internal Revenue Service.

On or after the fifth anniversary of any Contract we 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 Account is established under a Contract, will continue
to be applicable.

We reserve the right to modify the Contract at any time 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 we
are 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 we 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.

CAN HARTFORD WAIVE ANY RIGHTS UNDER A CONTRACT?

We may, at our sole discretion, elect not to exercise a right or reservation
specified in this Contract. If we elect not to exercise a right or reservation,
we are not waiving it. We may decide to exercise a right or a reservation that
we previously did not exercise.

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 an affiliate of Hartford. Both HSD and Hartford are ultimately controlled by
The Hartford Financial Services Group, Inc. 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 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.

Commissions will be paid by Hartford and will not be more than 5.0% of
Contributions and 0.25% annually on Participants' Account values. Sales
compensation may be reduced. Hartford may pay or permit other promotional
incentives, in cash or credit or other compensation.

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 charges 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.

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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.

YEAR 2000

IN GENERAL The Year 2000 issue relates to the ability or inability of
computer hardware, software and other information technology (IT) systems, as
well as non-IT systems, such as equipment and machinery with imbedded chips and
microprocessors, to properly process information and data containing or related
to dates beginning with the year 2000 and beyond. The Year 2000 issue exists
because, historically, many IT and non-IT systems that are in use today were
developed years ago when a year was identified using a two-digit date field
rather than a four-digit date field. As information and data containing or
related to the century date are introduced to date sensitive systems, these
systems may recognize the year 2000 as "1900", or not at all, which may result
in systems processing information incorrectly. This, in turn, may significantly
and adversely affect the integrity and reliability of information databases of
IT systems, may cause the malfunctioning of certain non-IT systems, and may
result in a wide variety of adverse consequences to a company. In addition, Year
2000 problems that occur with third parties with which a company does business,
such as suppliers, computer vendors, distributors and others, may also adversely
affect any given company.

The integrity and reliability of Hartford's IT systems, as well as the
reliability of its non-IT systems, are integral aspects of Hartford's business.
Hartford issues insurance policies, annuities, mutual funds and other financial
products to individual and business customers, nearly all of which contain date
sensitive data, such as policy expiration dates, birth dates and premium payment
dates. In addition, various IT systems support communications and other systems
that integrate Hartford's various business segments and field offices. Hartford
also has business relationships with numerous third parties that affect
virtually all aspects of Hartford's business, including, without limitation,
suppliers, computer hardware and software vendors, insurance agents and brokers,
securities broker-dealers and other distributors of financial products, many of
which provide date sensitive data to Hartford, and whose operations are
important to Hartford's business.

INTERNAL YEAR 2000 Efforts and Timetable Beginning in 1990, Hartford began
working on making its IT systems Year 2000 ready, either through installing new
programs or replacing systems. Since January 1998, Hartford's Year 2000 efforts
have focused on the remaining Year 2000 issues related to IT and non-IT systems
in all of Hartford's business segments. These Year 2000 efforts include the
following five main initiatives: (1) identifying and assessing Year 2000 issues;
(2) taking actions to remediate IT and non-IT systems so that they are Year 2000
ready; (3) testing IT and non-IT systems for Year 2000 readiness; (4) deploying
such remediated and tested systems back into their respective production
environments; and (5) conducting internal and external integrated testing of
such systems. As of December 31, 1998, Hartford substantially completed
initiatives (1) through (4) of its internal Year 2000 efforts. Hartford has
begun initiative (5) and management currently anticipates that such activity
will continue into the fourth quarter of 1999.

THIRD PARTY YEAR 2000 EFFORTS AND TIMETABLE Hartford's Year 2000 efforts
include assessing the potential impact on Hartford of third parties' Year 2000
readiness. Hartford's third party Year 2000 efforts include the following three
main initiatives: (1) identifying third parties which have significant business
relationships with Hartford, including, without limitation, insurance agents,
brokers, third party administrators, banks and other distributors and servicers
of financial products, and inquiring of such third parties regarding their Year
2000 readiness; (2) evaluating such third parties' responses to Hartford's
inquiries; and (3) based on the evaluation of third party responses (or a third
party's failure to respond) and the significance of the business relationship,
conducting additional activities with respect to third parties as determined to
be necessary in each case. These activities may include conducting additional
inquiries, more in-depth evaluations of Year 2000 readiness and plans, and
integrated IT systems testing. Hartford has completed the first third party
initiative and, as of early 1999, had substantially completed evaluating third
party responses received. Hartford has begun conducting the additional
activities described in initiative (3) and management currently anticipates that
it will continue to do so through the end of 1999. However, notwithstanding
these third party Year 2000 efforts, Hartford does not have control over these
third parties and, as a result, Hartford cannot currently determine to what
extent future operating results may be adversely affected by the failure of
these third parties to adequately address their Year 2000 issues.

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<PAGE>
YEAR 2000 COSTS The costs of Hartford's Year 2000 program that were
incurred through the year ended December 31, 1997 were not material to
Hartford's financial condition or results of operations. The after-tax costs of
Hartford's Year 2000 efforts for the year ended December 31, 1998 were
approximately $3 million. Management currently estimates that after-tax costs
related to the Year 2000 program to be incurred in 1999 will be less than $10
million. These costs are being expensed as incurred.

RISKS AND CONTINGENCY PLANS If significant Year 2000 problems arise,
including problems arising with third parties, failures of IT and non-IT systems
could occur, which in turn could result in substantial interruptions in
Hartford's business. In addition, Hartford's investing activities are an
important aspect of its business and Hartford may be exposed to the risk that
issuers of investments held by it will be adversely impacted by Year 2000
issues. Given the uncertain nature of Year 2000 problems that may arise,
especially those related to the readiness of third parties discussed above,
management cannot determine at this time whether the consequences of Year 2000
related problems that could arise will have a material impact on Hartford's
financial condition or results of operations.

Hartford is in the process of developing certain contingency plans so that
if, despite its Year 2000 efforts, Year 2000 problems ultimately arise, the
impact of such problems may be avoided or minimized. These contingency plans are
being developed based on, among other things, known or reasonably anticipated
circumstances and potential vulnerabilities. The contingency planning also
includes assessing the dependency of Hartford's business on third parties and
their Year 2000 readiness. Hartford currently anticipates that internal and
external contingency plans will be substantially complete by the end of the
second quarter of 1999. However, in many contexts, Year 2000 issues are dynamic,
and ongoing assessments of business functions, vulnerabilities and risks must be
made. As such, new contingency plans may be needed in the future and/or existing
plans may need to be modified as circumstances warrant.

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

The audited financial statements and financial statement schedules included
in this 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
P.O. Box 1583
Hartford, CT 06144-1583

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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 SUB ACCOUNTS' INVESTED
- ----------------------------------------------------------------------- MINIMUM TOTAL AS %
TOTAL SALES DEATH OF NET
DEDUCTIONS DEDUCTION EXPENSES BENEFIT AMOUNT
----------- ----------- ----------- -----------
PORTION REPRESENTING
<S> <C> <C> <C> <C>
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 Hartford Bond and Hartford
Stock 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.

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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 Hartford Bond, Hartford Stock and Hartford Money
Market 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 each Participant's Contract 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 Hartford Stock Sub-Account of DC-I. If the Hartford Stock
Sub-Account values are insufficient to cover the fee, the fee shall be
deducted from the account values held in the Hartford Bond Sub-Account of
DC-I. The fee is not applicable to the Hartford Money Market 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.

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<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.

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<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>

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This form must be completed for all tax-sheltered annuities.

SECTION 403(b)(11) ACKNOWLEDGMENT FORM

The Hartford Variable Annuity Contract which you have recently purchased is
subject to certain restrictions imposed by the Tax Reform Act of 1986.
Contributions to the Contract after December 31, 1988 and any increases in cash
value after December 31, 1988 may not be distributed to you unless you have:

a. attained age 59 1/2

b. separated from service

c. died, or

d. become disabled.

Distributions of post December 31, 1988 Contributions (excluding any income
thereon) may also be made if you have experienced a financial hardship. Also
there may be a 10% penalty tax for distributions made prior to age 59 1/2
because of financial hardship or separation from service. Also, please be aware
that your 403(b) plan may also offer other financial alternatives other than the
Hartford variable annuity. Please refer to your Plan.

Please complete the following and return to:

Hartford Life Insurance Company
P.O. Box 1583
Hartford, CT 06144-1583
Name of Contractholder/Participant _____________________________________________
Address ________________________________________________________________________
City or Plan/School District ___________________________________________________
Date ___________________________________________________________________________
<PAGE>
To obtain a Statement of Additional
Information, complete the form below and mail to:

Hartford Life Insurance Company
P.O. Box 1583
Hartford, CT 06144-1583

Please send a Statement of Additional
Information for Separate Account DC-I and Separate
Account Two (DC Variable Account II) (Form
HV-1009-30) to me at the following address:
_________________________________________
Name
_________________________________________
Address
_________________________________________
City/State Zip Code
<PAGE>

PART B

<PAGE>

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, P.O. Box 1583, Hartford, CT 061144-1583.

Date of Prospectus: May 3, 1999
Date of Statement of Additional Information: May 3, 1999

33-19949/33-19947
HV-1009
<PAGE>

-2-

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>

-3-

DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY

Hartford Life Insurance Company 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. We were originally
incorporated under the laws of Massachusetts on June 5, 1902, and
subsequently redomiciled to Connecticut. Our offices are located in Simsbury,
Connecticut; however, our mailing address is P.O. Box 1583, Hartford, CT
06144-1583. We are ultimately controlled by The Hartford Financial Services
Group, Inc., one of the largest financial service providers in the United
States.

HARTFORD'S RATINGS

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Rating Agency Effective Rating Basis of Rating
Date of Rating
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
A.M. Best and Company, Inc. 1/1/99 A+ Financial performance
- --------------------------------------------------------------------------------
Standard & Poor's 6/1/98 AA Insurer financial strength
- --------------------------------------------------------------------------------
Duff & Phelps 12/21/98 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 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 an affiliate of Hartford. Both HSD and Hartford are ultimately
controlled by The Hartford Financial Services Group, Inc. The principal
business address of HSD is the same as Hartford.

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

<PAGE>

-4-

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 Contributions and .50% annually on Individual
Participant's Account Values. Sales compensation may be reduced.

Hartford currently pays HSD underwriting commissions for its role as
Principal Underwriter of all variable annuities associated with this Separate
Account. For the past three years, the aggregate dollar amount of
underwriting commissions paid to by HSD in its role as Principal Underwriter
has been: 1998: $4,072,980; 1997: $3,657,643; and 1996: $3,171,354. For
the applicable time periods, HSD has not retained any of these commissions.

The offering of the Separate Account contracts is continuous.

CALCULATION OF YIELD AND RETURN

YIELD OF HARTFORD MONEY MARKET SUB-ACCOUNT. 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:

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

HARTFORD MONEY MARKET 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.

<PAGE>

-5-

The yield and effective yield for the seven day period ending December 31,
1998 is as follows:

DCI (.75% mortality and expense risk charge).

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SUB-ACCOUNT YIELD EFFECTIVE YIELD
- --------------------------------------------------------------------------------
<S> <C> <C>
Hartford Money Market* 4.02% 4.10%
- --------------------------------------------------------------------------------
</TABLE>

*Yield and effective yield for the seven-day period ending December 31, 1998.

DCI (.90% mortality and expense risk charge).

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SUB-ACCOUNT YIELD EFFECTIVE YIELD
- --------------------------------------------------------------------------------
<S> <C> <C>
Hartford Money Market* 3.88% 3.95%
- --------------------------------------------------------------------------------
</TABLE>

*Yield and effective yield for the seven-day period ending December 31, 1998.

DCII (1.25% mortality and expense risk charge).

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SUB-ACCOUNT YIELD EFFECTIVE YIELD
- --------------------------------------------------------------------------------
<S> <C> <C>
Hartford Money Market* 3.52% 3.59%
- --------------------------------------------------------------------------------
</TABLE>

*Yield and effective yield for the seven-day period ending December 31, 1998.

YIELDS OF HARTFORD BOND AND HARTFORD MORTGAGE SECURITIES 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.

<PAGE>

-6-

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:
6
Current Yield Formula for the Sub-Account 2[((A-B)/(CD) + 1) - 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.

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.

DCI (.75% mortality and expense risk charge).

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Sub-Accounts Yield
- --------------------------------------------------------------------------------
<S> <C>
Hartford Bond** 5.13%
- --------------------------------------------------------------------------------
Hartford Mortgage Securities** 5.36%
- --------------------------------------------------------------------------------
</TABLE>

**Yield quotation based on 30-day period ended December 31, 1998.

DCI (.90% mortality and expense risk charge).

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Sub Accounts Yield
- --------------------------------------------------------------------------------
<S> <C>
Hartford Bond** 4.97%
- --------------------------------------------------------------------------------
Hartford Mortgage Securities** 5.20%
- --------------------------------------------------------------------------------
</TABLE>

**Yield quotation based on a 30-day period ended December 31, 1998.

DCII (1.25% mortality and expense risk charge).

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Sub-Accounts Yield
- --------------------------------------------------------------------------------
<S> <C>
Hartford Bond** 4.61%
- --------------------------------------------------------------------------------
Hartford Mortgage Securities** 4.84%
- --------------------------------------------------------------------------------
</TABLE>

**Yield quotation based on a 30-day period ended December 31, 1998.

<PAGE>

-7-

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, 1998:

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FOR YEAR ENDED DECEMBER 31, 1998

DC1 (.75% mortality and expense risk charge).

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SUB-ACCOUNT INCEPTION 1 YEAR 5 YEAR 10-YEAR SINCE
DATE INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Calvert Social
Balanced Portfolio 12/31/88 9.59% 12.42% 11.31% N/A
- --------------------------------------------------------------------------------
Hartford Advisers 3/31/88 17.54% 15.64% 13.55% N/A
- --------------------------------------------------------------------------------
Hartford Bond 3/31/88 1.97% 5.13% 7.33% N/A
- --------------------------------------------------------------------------------
Hartford Capital
Appreciation 3/31/88 8.89% 15.83% 17.04% N/A
- --------------------------------------------------------------------------------
Hartford Dividend and
Growth 3/8/94 9.77% N/A N/A 20.14%
- --------------------------------------------------------------------------------
Hartford Index 3/31/88 20.75% 21.62% 16.99% N/A
- --------------------------------------------------------------------------------
Hartford International
Opportunities 7/2/90 6.70% 5.33% N/A 5.80%
- --------------------------------------------------------------------------------
Hartford Money Market 3/31/88 -0.74% 3.02% 4.03% N/A
- --------------------------------------------------------------------------------
Hartford Mortgage
Securities 3/31/88 0.62% 4.80% 6.75% N/A
- --------------------------------------------------------------------------------
Hartford Stock Fund 3/31/88 25.85% 21.50% 16.97% N/A
- --------------------------------------------------------------------------------
</TABLE>

<PAGE>

-8-

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FOR YEAR ENDED DECEMBER 31, 1998

DCI (.90% mortality and expense risk charge).

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SUB-ACCOUNT INCEPTION 1 YEAR 5 YEAR 10-YEAR SINCE
DATE INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Calvert Social
Balanced Portfolio 12/31/88 9.42% 12.32% 11.27% N/A
- --------------------------------------------------------------------------------
Hartford Advisers 3/31/88 17.36% 15.54% 13.51% N/A
- --------------------------------------------------------------------------------
Hartford Bond 3/31/88 1.82% 5.04% 7.28% N/A
- --------------------------------------------------------------------------------
Hartford Capital
Appreciation 3/31/88 8.72% 15.73% 16.99% N/A
- --------------------------------------------------------------------------------
Hartford Dividend and
Growth 3/8/94 9.61% N/A N/A 20.03%
- --------------------------------------------------------------------------------
Hartford Index 3/31/88 20.57% 21.54% 16.95% N/A
- --------------------------------------------------------------------------------
Hartford International 7/2/90 6.54% 5.24% N/A 5.75%
Opportunities
- --------------------------------------------------------------------------------
Hartford Money Market 3/31/88 -0.89% 2.93% 3.99% N/A
- --------------------------------------------------------------------------------
Hartford Mortgage
Securities 3/31/88 0.47% 4.72% 6.71% N/A
- --------------------------------------------------------------------------------
Hartford Stock 3/31/88 25.66% 21.40% 16.92% N/A
- --------------------------------------------------------------------------------
</TABLE>

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FOR YEAR ENDED DECEMBER 31, 1998

DCII (1.25% mortality and expense risk charge).

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SUB-ACCOUNT INCEPTION 1 YEAR 5 YEAR 10-YEAR SINCE
DATE INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Calvert Social
Balanced Portfolio 12/31/88 6.54% 9.79% 9.34% N/A
- --------------------------------------------------------------------------------
Hartford Advisers 3/31/88 14.51% 13.09% 11.62% N/A
- --------------------------------------------------------------------------------
Hartford Bond 3/31/88 -1.04% 2.40% 5.24% N/A
- --------------------------------------------------------------------------------
Hartford Capital
Appreciation 3/31/88 5.89% 13.41% 15.37% N/A
- --------------------------------------------------------------------------------
Hartford Dividend and
Growth 3/8/94 6.72% N/A N/A 17.74%
- --------------------------------------------------------------------------------
Hartford Index 3/31/88 18.13% 19.51% 15.32% N/A
- --------------------------------------------------------------------------------
Hartford International
Opportunities 7/2/90 3.66% 2.63% N/A 3.14%
- --------------------------------------------------------------------------------
Hartford Money Market 3/31/88 -3.73% 0.28% 1.65% N/A
- --------------------------------------------------------------------------------
Hartford Mortgage
Securities 3/31/88 -2.38% 2.11% 4.65% N/A
- --------------------------------------------------------------------------------
Hartford Stock 3/31/88 22.74% 19.03% 15.10% N/A
- --------------------------------------------------------------------------------
</TABLE>

<PAGE>

-9-

On March 31, 1988, DC Variable Account II was transferred to Separate
Account Two and became a division thereof.

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 and the time periods used to
calculate return are based on the inception date of the underlying Funds.
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, 1998, the
non-standardized annualized total return for the Sub-Accounts listed below
were as follows:

NON-STANDARDIZED ANUALIZED TOTAL RETURN THAT PRE-DATED THE INCEPTION DATE
OF THE SEPARATE ACCOUNT FOR YEAR ENDED
DECEMBER 31, 1998

DCI (.75% mortality and expense risk charge).

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SUB-ACCOUNT INCEPTION 1 YEAR 5 YEAR 10-Year Since
DATE Inception
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Calvert Social
Balanced Portfolio 12/31/88 15.36% 13.46% 11.63% N/A
- --------------------------------------------------------------------------------
Hartford Advisers 3/31/83 23.72% 16.57% 13.82% N/A
- --------------------------------------------------------------------------------
Hartford Bond 8/31/77 7.34% 6.21% 7.66% N/A
- --------------------------------------------------------------------------------
Hartford Capital
Appreciation 4/2/84 14.62% 16.76% 17.25% N/A
- --------------------------------------------------------------------------------
Hartford Dividend and
Growth 3/8/94 15.55% N/A N/A 21.00%
- --------------------------------------------------------------------------------
Hartford Index 5/1/87 27.11% 22.39% 17.19% N/A
- --------------------------------------------------------------------------------
Hartford International
Opportunities 7/2/90 12.32% 6.42% N/A 6.18%
- --------------------------------------------------------------------------------
Hartford Money Market 6/30/80 4.48% 4.08% 4.35% N/A
- --------------------------------------------------------------------------------
Hartford Mortgage
Securities 1/1/85 5.92% 5.88% 7.08% N/A
- --------------------------------------------------------------------------------
Hartford Stock 8/31/77 32.48% 22.27% 17.17% N/A
- --------------------------------------------------------------------------------
</TABLE>

<PAGE>

-10-

NON-STANDARDIZED ANNUALIZED TOTAL RETURN THAT PRE-DATE THE INCEPTION DATE
OF THE SEPARATE ACCOUNT FOR YEAR ENDED
DECEMBER 31, 1998

DCI (.90% mortality and expense risk charge).

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SUB-ACCOUNT INCEPTION 1 YEAR 5 YEAR 10-YEAR SINCE
DATE INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Calvert Social
Balanced Portfolio 12/31/88 15.18% 13.37% 11.59% N/A
- --------------------------------------------------------------------------------
Hartford Advisers 3/31/83 23.54% 16.48% 13.77% N/A
- --------------------------------------------------------------------------------
Hartford Bond 8/31/77 7.18% 6.13% 7.61% N/A
- --------------------------------------------------------------------------------
Hartford Capital
Appreciation 4/2/84 14.44% 16.66% 17.20% N/A
- --------------------------------------------------------------------------------
Hartford Dividend and
Growth 3/8/94 15.38% N/A N/A 20.90%
- --------------------------------------------------------------------------------
Hartford Index 5/1/87 26.92% 22.31% 17.16% N/A
- --------------------------------------------------------------------------------
Hartford International
Opportunities 7/2/90 12.15% 6.33% N/A 6.13%
- --------------------------------------------------------------------------------
Hartford Money Market 6/30/80 4.33% 4.00% 4.31% N/A
- --------------------------------------------------------------------------------
Hartford Mortgage
Securities 1/1/85 5.76% 5.80% 7.03% N/A
- --------------------------------------------------------------------------------
Hartford Stock Fund 8/31/77 32.28% 22.18% 17.13% N/A
- --------------------------------------------------------------------------------
</TABLE>

NON-STANDARDIZED ANNUALIZED TOTAL RETURN THAT PRE-DATE THE INCEPTION DATE
OF THE SEPARATE ACCOUNT FOR YEAR ENDED
DECEMBER 31, 1998

DCII (l.25% mortality and expense risk charge).

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SUB-ACCOUNT INCEPTION 1 YEAR 5 YEAR 10-YEAR SINCE
DATE INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Calvert Social
Balanced Portfolio 12/31/88 14.78% 13.14% 11.48% N/A
- --------------------------------------------------------------------------------
Hartford Advisers 3/31/83 23.17% 16.29% 13.68% N/A
- --------------------------------------------------------------------------------
Hartford Bond 8/31/77 6.80% 5.92% 7.51% N/A
- --------------------------------------------------------------------------------
Hartford Capital
Appreciation 4/2/84 14.09% 16.47% 17.10% N/A
- --------------------------------------------------------------------------------
Hartford Dividend and
Growth 3/8/94 14.97% N/A N/A 20.65%
- --------------------------------------------------------------------------------
Hartford Index Fund 5/1/87 26.98% 22.34% 17.17% N/A
- --------------------------------------------------------------------------------
Hartford International
Opportunities 7/2/90 11.75% 6.12% N/A 6.00%
- --------------------------------------------------------------------------------
Hartford Money Market 6/30/80 3.96% 3.79% 4.21% N/A
- --------------------------------------------------------------------------------
Hartford Mortgage
Securities 1/1/85 5.39% 5.59% 6.93% N/A
- --------------------------------------------------------------------------------
Hartford Stock 8/31/77 31.83% 21.95% 17.02% N/A
- --------------------------------------------------------------------------------
</TABLE>

<PAGE>

-11-

PERFORMANCE COMPARISONS

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

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

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

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

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

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

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-1
- --------------------------------------------------------------------------------
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 statements of assets and liabilities of
Hartford Life Insurance Company DC Variable Account-I (Bond Fund, Stock Fund,
Money Market Fund, Advisers Fund, Capital Appreciation Fund, Mortgage Fund,
Index Fund, International Opportunities Fund, Dividend and Growth Fund, and
Calvert Social Balanced Portfolio) (collectively, the Account) as of December
31, 1998, and the related statements of operations and the statements of changes
in net assets for the periods presented. 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 the Account as of December 31,
1998, and the results of their operations and the changes in their net assets
for the periods presented in conformity with generally accepted accounting
principles.

Hartford, Connecticut
February 16, 1999 ARTHUR ANDERSEN LLP

<PAGE>
SA-2 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
DC VARIABLE ACCOUNT-I
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1998

<TABLE>
<CAPTION>
MONEY MARKET
BOND FUND STOCK FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ -------------
<S> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS
Fund, Inc. - Class
IA
Shares 49,532,107
Cost $50,236,343
Market Value....... $53,527,614 -- --
Hartford Stock HLS
Fund, Inc. - Class
IA
Shares 129,859,437
Cost $448,758,813
Market Value....... -- $852,094,253 --
Hartford Money Market
HLS Fund, Inc. -
Class IA
Shares 40,403,289
Cost $40,403,289
Market Value....... -- -- $40,403,289
Hartford Advisers HLS
Fund, Inc. - Class
IA
Shares 303,169,713
Cost $569,475,241
Market Value....... -- -- --
Hartford Capital
Appreciation HLS
Fund, Inc. - Class
IA
Shares 107,983,546
Cost $337,472,849
Market Value....... -- -- --
Hartford Mortgage
Securities HLS Fund,
Inc. - Class IA
Shares 22,956,057
Cost $24,266,181
Market Value....... -- -- --
Hartford Index HLS
Fund, Inc. - Class
IA
Shares 54,544,920
Cost $120,875,057
Market Value....... -- -- --
Hartford
International
Opportunities HLS
Fund, Inc. - Class
IA
Shares 39,758,218
Cost $48,178,150
Market Value....... -- -- --
Hartford Dividend and
Growth HLS Fund,
Inc. - Class IA
Shares 37,661,352
Cost $57,882,137
Market Value....... -- -- --
Calvert Social
Balanced Portfolio
Shares 15,324,241
Cost $26,214,828
Market Value....... -- -- --
Due from Hartford Life
Insurance Company..... 55,862 68,757 --
Receivable from fund
shares sold........... 125,708 301,380 151,581
----------- ------------ -------------
Total Assets........... 53,709,184 852,464,390 40,554,870
----------- ------------ -------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 125,707 301,459 152,049
Payable for fund shares
purchased............. 55,861 68,818 --
----------- ------------ -------------
Total Liabilities...... 181,568 370,277 152,049
----------- ------------ -------------
Net Assets (variable
annuity contract
liabilities).......... $53,527,616 $852,094,113 $40,402,821
----------- ------------ -------------
----------- ------------ -------------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-3
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL
ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- ------------------ ---------------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS
Fund, Inc. - Class
IA
Shares 49,532,107
Cost $50,236,343
Market Value....... -- -- -- -- --
Hartford Stock HLS
Fund, Inc. - Class
IA
Shares 129,859,437
Cost $448,758,813
Market Value....... -- -- -- -- --
Hartford Money Market
HLS Fund, Inc. -
Class IA
Shares 40,403,289
Cost $40,403,289
Market Value....... -- -- -- -- --
Hartford Advisers HLS
Fund, Inc. - Class
IA
Shares 303,169,713
Cost $569,475,241
Market Value....... $905,038,294 -- -- -- --
Hartford Capital
Appreciation HLS
Fund, Inc. - Class
IA
Shares 107,983,546
Cost $337,472,849
Market Value....... -- $513,902,444 -- -- --
Hartford Mortgage
Securities HLS Fund,
Inc. - Class IA
Shares 22,956,057
Cost $24,266,181
Market Value....... -- -- $24,897,060 -- --
Hartford Index HLS
Fund, Inc. - Class
IA
Shares 54,544,920
Cost $120,875,057
Market Value....... -- -- -- $ 194,750,016 --
Hartford
International
Opportunities HLS
Fund, Inc. - Class
IA
Shares 39,758,218
Cost $48,178,150
Market Value....... -- -- -- -- $53,866,702
Hartford Dividend and
Growth HLS Fund,
Inc. - Class IA
Shares 37,661,352
Cost $57,882,137
Market Value....... -- -- -- -- --
Calvert Social
Balanced Portfolio
Shares 15,324,241
Cost $26,214,828
Market Value....... -- -- -- -- --
Due from Hartford Life
Insurance Company..... -- 7,002 1,506 224,349 --
Receivable from fund
shares sold........... 386,975 982,605 51,692 8,383 192,451
-------------- ------------------ ---------------- -------------- -------------------
Total Assets........... 905,425,269 514,892,051 24,950,258 194,982,748 54,059,153
-------------- ------------------ ---------------- -------------- -------------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 387,411 982,721 51,691 8,375 192,461
Payable for fund shares
purchased............. -- 7,001 1,868 224,966 --
-------------- ------------------ ---------------- -------------- -------------------
Total Liabilities...... 387,411 989,722 53,559 233,341 192,461
-------------- ------------------ ---------------- -------------- -------------------
Net Assets (variable
annuity contract
liabilities).......... $905,037,858 $513,902,329 $24,896,699 $ 194,749,407 $53,866,692
-------------- ------------------ ---------------- -------------- -------------------
-------------- ------------------ ---------------- -------------- -------------------

<CAPTION>
DIVIDEND AND CALVERT SOCIAL
GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------- -------------------
<S> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS
Fund, Inc. - Class
IA
Shares 49,532,107
Cost $50,236,343
Market Value....... -- --
Hartford Stock HLS
Fund, Inc. - Class
IA
Shares 129,859,437
Cost $448,758,813
Market Value....... -- --
Hartford Money Market
HLS Fund, Inc. -
Class IA
Shares 40,403,289
Cost $40,403,289
Market Value....... -- --
Hartford Advisers HLS
Fund, Inc. - Class
IA
Shares 303,169,713
Cost $569,475,241
Market Value....... -- --
Hartford Capital
Appreciation HLS
Fund, Inc. - Class
IA
Shares 107,983,546
Cost $337,472,849
Market Value....... -- --
Hartford Mortgage
Securities HLS Fund,
Inc. - Class IA
Shares 22,956,057
Cost $24,266,181
Market Value....... -- --
Hartford Index HLS
Fund, Inc. - Class
IA
Shares 54,544,920
Cost $120,875,057
Market Value....... -- --
Hartford
International
Opportunities HLS
Fund, Inc. - Class
IA
Shares 39,758,218
Cost $48,178,150
Market Value....... -- --
Hartford Dividend and
Growth HLS Fund,
Inc. - Class IA
Shares 37,661,352
Cost $57,882,137
Market Value....... $81,366,824 --
Calvert Social
Balanced Portfolio
Shares 15,324,241
Cost $26,214,828
Market Value....... -- $32,735,647
Due from Hartford Life
Insurance Company..... 2,979 15,095
Receivable from fund
shares sold........... 75,029 3,162
------------- -------------------
Total Assets........... 81,444,832 32,753,904
------------- -------------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 75,037 --
Payable for fund shares
purchased............. 2,987 14,145
------------- -------------------
Total Liabilities...... 78,024 14,145
------------- -------------------
Net Assets (variable
annuity contract
liabilities).......... $81,366,808 $32,739,759
------------- -------------------
------------- -------------------
</TABLE>

<PAGE>
SA-4 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
DC VARIABLE ACCOUNT-I
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 1998

<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ ----------- ---------------
<S> <C> <C> <C>
DEFERRED ANNUITY CONTRACTS IN THE
ACCUMULATION PERIOD:
GROUP SUB-ACCOUNTS:
Bond Fund .85%................... 6,034,292 $ 4.987836 $ 30,098,062
Bond Fund .90%................... 2,509 4.970485 12,473
Bond Fund .95%................... 337,895 4.985301 1,684,506
Bond Fund 1.25%.................. 4,376,851 4.965345 21,732,575
Stock Fund .85%.................. 28,896,465 19.114468 552,340,557
Stock Fund .90%.................. 1,037 19.047906 19,758
Stock Fund .95%.................. 769,966 19.104818 14,710,051
Stock Fund 1.25%................. 14,978,920 19.028324 285,023,747
Money Market Fund .85%........... 7,268,976 2.993036 21,756,308
Money Market Fund .90%........... 7,498 2.982488 22,362
Money Market Fund .95%........... 421,559 2.991507 1,261,097
Money Market Fund 1.25%.......... 5,827,414 2.979547 17,363,054
Advisers Fund .85%............... 87,082,779 6.445653 561,305,374
Advisers Fund .90%............... 2,644 6.423179 16,982
Advisers Fund .95%............... 6,096,259 6.442384 39,274,442
Advisers Fund 1.25%.............. 47,445,794 6.416608 304,441,060
Capital Appreciation Fund .85%... 32,099,308 9.125416 292,919,541
Capital Appreciation Fund .90%... 1,641 9.093538 14,925
Capital Appreciation Fund .95%... 2,123,542 9.120872 19,368,558
Capital Appreciation Fund
1.25%........................... 11,192,113 9.084277 201,599,305
Mortgage Securities Fund .85%.... 5,733,468 2.786779 15,977,907
Mortgage Securities Fund .90%.... 4,318 2.777046 11,991
Mortgage Securities Fund .95%.... 404,517 2.785363 1,126,726
Mortgage Securities Fund 1.25%... 2,804,402 2.774237 7,780,075
Index Fund .85%.................. 57,815,366 1.763783 101,973,759
Index Fund .90%.................. 10,000 1.758109 17,581
Index Fund .95%.................. 6,449,132 1.763807 11,375,025
Index Fund 1.25%................. 17,132,266 4.750279 81,383,042
International Opportunities Fund
.85%............................ 18,198,263 1.665352 30,306,514
International Opportunities Fund
.90%............................ 6,915 1.659529 11,475
International Opportunities Fund
.95%............................ 718,058 1.664531 1,195,231
International Opportunities Fund
1.25%........................... 13,483,459 1.657844 22,353,472
Dividend and Growth Fund .85%.... 18,854,015 2.254645 42,509,110
Dividend and Growth Fund .90%.... 7,694 2.246741 17,286
Dividend and Growth Fund .95%.... 1,117,696 2.253519 2,518,750
Dividend and Growth Fund 1.25%... 16,182,713 2.244473 36,321,662
Calvert Social Balanced Portfolio
.85%............................ 6,588,859 2.960060 19,503,418
Calvert Social Balanced Portfolio
.90%............................ 5,065 2.949717 14,941
Calvert Social Balanced Portfolio
.95%............................ 358,088 2.985842 1,059,418
Calvert Social Balanced Portfolio
1.25%........................... 4,127,744 2.946399 12,161,982
---------------
GRAND TOTAL........................ $ 2,752,584,102
---------------
---------------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENT.

<PAGE>

[This page intentionally left blank]

<PAGE>
SA-6 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
DC VARIABLE ACCOUNT-I
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
MONEY MARKET
BOND FUND STOCK FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------- -------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 2,559,174 $ 6,465,590 $1,805,865
EXPENSES:
Mortality and expense
undertakings.......... (375,983) (5,965,756) (286,203)
------------ ------------- -------------
Net investment income
(loss).............. 2,183,191 499,834 1,519,662
------------ ------------- -------------
CAPITAL GAINS INCOME..... -- 23,069,120 --
------------ ------------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 2,433 714,355 --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 972,564 183,443,598 --
------------ ------------- -------------
Net gain (loss) on
investments......... 974,997 184,157,953 --
------------ ------------- -------------
Net increase
(decrease) in net
assets resulting
from operations..... $ 3,158,188 $ 207,726,907 $1,519,662
------------ ------------- -------------
------------ ------------- -------------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-7
- --------------------------------------------------------------------------------

<CAPTION>
DIVIDEND AND CALVERT SOCIAL
GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------- -------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 1,323,783 $ 730,489
EXPENSES:
Mortality and expense
undertakings.......... (663,289) (240,440)
------------- -------------------
Net investment income
(loss).............. 660,494 490,049
------------- -------------------
CAPITAL GAINS INCOME..... 2,779,678 1,638,236
------------- -------------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 426,383 48,836
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 7,655,244 2,144,124
------------- -------------------
Net gain (loss) on
investments......... 8,081,627 2,192,960
------------- -------------------
Net increase
(decrease) in net
assets resulting
from operations..... $ 11,521,799 $4,321,245
------------- -------------------
------------- -------------------
</TABLE>

<PAGE>
SA-8 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
DC VARIABLE ACCOUNT-I
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
MONEY MARKET
BOND FUND STOCK FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ -------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 2,183,191 $ 499,834 $ 1,519,662
Capital gains income... -- 23,069,120 --
Net realized gain
(loss) on security
transactions.......... 2,433 714,355 --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 972,564 183,443,598 --
----------- ------------ -------------
Net increase (decrease)
in net assets
resulting from
operations............ 3,158,188 207,726,907 1,519,662
----------- ------------ -------------
UNIT TRANSACTIONS:
Purchases.............. 3,667,032 52,577,965 3,344,933
Net transfers.......... 7,703,221 (30,615,196) 5,386,082
Surrenders for benefit
payments and fees..... (1,938,648) (19,829,778) (1,911,188)
----------- ------------ -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 9,431,605 2,132,991 6,819,827
----------- ------------ -------------
Net increase (decrease)
in net assets......... 12,589,793 209,859,898 8,339,489
NET ASSETS:
Beginning of period.... 40,937,823 642,234,215 32,063,332
----------- ------------ -------------
End of period.......... $53,527,616 $852,094,113 $40,402,821
----------- ------------ -------------
----------- ------------ -------------
</TABLE>

HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
MONEY MARKET
BOND FUND STOCK FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ -------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 1,907,007 $ 1,368,978 $ 1,261,241
Capital gains income... -- 24,157,334 --
Net realized gain
(loss) on security
transactions.......... 124,999 6,578,151 --
----------- ------------ -------------
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 1,560,612 110,766,483 --
----------- ------------ -------------
Net increase (decrease)
in net assets
resulting from
operations............ 3,592,618 142,870,946 1,261,241
----------- ------------ -------------
UNIT TRANSACTIONS:
Purchases.............. 3,466,840 46,154,040 2,966,841
Net transfers.......... 1,331,342 21,237,621 8,653,859
Surrenders for benefit
payments and fees..... (4,053,858) (35,208,472) (7,126,866)
----------- ------------ -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 744,324 32,183,189 4,493,834
----------- ------------ -------------
Net increase (decrease)
in net assets......... 4,336,942 175,054,135 5,755,075
NET ASSETS:
Beginning of period.... 36,600,881 467,180,080 26,308,257
----------- ------------ -------------
End of period.......... $40,937,823 $642,234,215 $32,063,332
----------- ------------ -------------
----------- ------------ -------------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-9
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL
ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- ------------------ ---------------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 11,397,583 $ (1,312,459) $ 1,363,211 $ 264,966 $ 262,775
Capital gains income... 25,313,632 32,040,202 -- 3,422,388 3,515,336
Net realized gain
(loss) on security
transactions.......... 6,494,130 1,681,913 39,785 (58,579) 707,165
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 128,375,353 35,834,365 (24,289) 35,353,337 2,062,833
-------------- ------------------ ---------------- -------------- -------------------
Net increase (decrease)
in net assets
resulting from
operations............ 171,580,698 68,244,021 1,378,707 38,982,112 6,548,109
-------------- ------------------ ---------------- -------------- -------------------
UNIT TRANSACTIONS:
Purchases.............. 63,792,632 57,410,119 1,815,173 21,746,631 8,614,699
Net transfers.......... (25,294,322) (97,300,197) (1,687,207) 9,830,133 (16,662,048)
Surrenders for benefit
payments and fees..... (22,848,470) (12,289,854) (801,083) (5,052,574) (1,450,359)
-------------- ------------------ ---------------- -------------- -------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 15,649,840 (52,179,932) (673,117) 26,524,190 (9,497,708)
-------------- ------------------ ---------------- -------------- -------------------
Net increase (decrease)
in net assets......... 187,230,538 16,064,089 705,590 65,506,302 (2,949,599)
NET ASSETS:
Beginning of period.... 717,807,320 497,838,240 24,191,109 129,243,105 56,816,291
-------------- ------------------ ---------------- -------------- -------------------
End of period.......... $905,037,858 $513,902,329 $24,896,699 $ 194,749,407 $53,866,692
-------------- ------------------ ---------------- -------------- -------------------
-------------- ------------------ ---------------- -------------- -------------------

<CAPTION>
DIVIDEND AND CALVERT SOCIAL
GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------- -------------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 660,494 $ 490,049
Capital gains income... 2,779,678 1,638,236
Net realized gain
(loss) on security
transactions.......... 426,383 48,836
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 7,655,244 2,144,124
------------- -------------------
Net increase (decrease)
in net assets
resulting from
operations............ 11,521,799 4,321,245
------------- -------------------
UNIT TRANSACTIONS:
Purchases.............. 14,599,476 3,592,019
Net transfers.......... (15,975,390) (2,100,831)
Surrenders for benefit
payments and fees..... (2,142,352) (738,890)
------------- -------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (3,518,266) 752,298
------------- -------------------
Net increase (decrease)
in net assets......... 8,003,533 5,073,543
NET ASSETS:
Beginning of period.... 73,363,275 27,666,216
------------- -------------------
End of period.......... $81,366,808 $32,739,759
------------- -------------------
------------- -------------------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL
ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- ------------------ ---------------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 9,886,074 $ (1,196,302) $ 1,248,088 $ 598,239 $ (758)
Capital gains income... 25,268,801 28,766,004 -- 6,533,234 4,696,573
Net realized gain
(loss) on security
transactions.......... 5,071,741 4,496,895 44,928 97,833 888,549
-------------- ------------------ ---------------- -------------- -------------------
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 94,029,565 50,207,429 629,776 20,028,797 (5,282,405)
-------------- ------------------ ---------------- -------------- -------------------
Net increase (decrease)
in net assets
resulting from
operations............ 134,256,181 82,274,026 1,922,792 27,258,103 301,959
-------------- ------------------ ---------------- -------------- -------------------
UNIT TRANSACTIONS:
Purchases.............. 59,152,156 58,909,002 2,223,659 15,649,018 11,237,406
Net transfers.......... (13,045,412) (2,307,551) (2,963,809) 16,985,560 (15,648,256)
Surrenders for benefit
payments and fees..... (36,510,443) (29,434,632) (2,745,277) (6,626,315) (3,880,815)
-------------- ------------------ ---------------- -------------- -------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 9,596,301 27,166,819 (3,485,427) 26,008,263 (8,291,665)
-------------- ------------------ ---------------- -------------- -------------------
Net increase (decrease)
in net assets......... 143,852,482 109,440,845 (1,562,635) 53,266,366 (7,989,706)
NET ASSETS:
Beginning of period.... 573,954,838 388,397,395 25,753,744 75,976,739 64,805,997
-------------- ------------------ ---------------- -------------- -------------------
End of period.......... $717,807,320 $497,838,240 $24,191,109 $ 129,243,105 $56,816,291
-------------- ------------------ ---------------- -------------- -------------------
-------------- ------------------ ---------------- -------------- -------------------

<CAPTION>
U.S. GOVERNMENT
DIVIDEND AND CALVERT SOCIAL MONEY MARKET
GROWTH FUND BALANCED PORTFOLIO FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ------------------- ----------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 582,784 $ 404,341 $ 196,827
Capital gains income... 1,059,984 1,315,449 --
Net realized gain
(loss) on security
transactions.......... (51,874) 69,930 --
------------- ------------------- ----------------
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 11,994,336 2,549,851 --
------------- ------------------- ----------------
Net increase (decrease)
in net assets
resulting from
operations............ 13,585,230 4,339,571 196,827
------------- ------------------- ----------------
UNIT TRANSACTIONS:
Purchases.............. 11,234,389 3,573,694 774,359
Net transfers.......... 19,144,366 (1,447,654) (10,442,791)
Surrenders for benefit
payments and fees..... (1,727,395) (659,872) (668,503)
------------- ------------------- ----------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 28,651,360 1,466,168 (10,336,935)
------------- ------------------- ----------------
Net increase (decrease)
in net assets......... 42,236,590 5,805,739 (10,140,108)
NET ASSETS:
Beginning of period.... 31,126,685 21,860,477 10,140,108
------------- ------------------- ----------------
End of period.......... $73,363,275 $27,666,216 $ --
------------- ------------------- ----------------
------------- ------------------- ----------------
</TABLE>

<PAGE>
SA-10 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
DC VARIABLE ACCOUNT-I
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998

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 is accrued as of the ex-dividend date. Capital gains income
represents those dividends from the Funds which are characterized as
capital gains under tax regulations.

b) SECURITY VALUATION--The investments in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate
Fund as of December 31, 1998.

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

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

3. DEDUCTIONS AND CHARGES:

Certain amounts are deducted from the Contracts, as described below:

a) MORTALITY AND EXPENSE RISK CHARGES--The Company will make deductions at a
maximum annual rate of 1.25% of the Contract's value for the mortality
and expense risks which the Company undertakes.

b) TAX EXPENSE CHARGE--If applicable, the Company will make deductions at a
maximum rate of 3.5% of the Contract's value to meet premium tax
requirements. An additional tax charge based on a percentage of the
Contract's value may be assessed to partial withdrawals or surrenders.
These expenses are included in Surrenders for benefit payments and fees
on the accompanying statements of changes in net assets.

c) ANNUAL MAINTENANCE FEE--An annual maintenance fee up to $18 may be
deducted from the Contract's value each contract year. These expenses are
included in Surrenders for benefit payments and fees on the accompanying
statements of changes in net assets.

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>

HARTFORD LIFE INSURANCE COMPANY SA-1
- --------------------------------------------------------------------------------
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 statements of assets and liabilities of
Hartford Life Insurance Company Separate Account Two (Bond Fund, Stock Fund,
Money Market Fund, Advisers Fund, Capital Appreciation Fund, Mortgage Fund,
Index Fund, International Opportunities Fund, Dividend and Growth Fund, Calvert
Social Balanced Portfolio, American Century VP Advantage Fund, American Century
VP Capital Appreciation Fund, Fidelity VIP II Asset Manager Fund, Fidelity VIP
II Contrafund Fund, and Fidelity VIP Growth Fund) (collectively, the Account) as
of December 31, 1998, and the related statements of operations and the
statements of changes in net assets for the periods presented. 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.

Hartford, Connecticut
February 16, 1999 ARTHUR ANDERSEN LLP

<PAGE>
SA-2 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1998

<TABLE>
<CAPTION>
MONEY MARKET
BOND FUND STOCK FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ -------------
<S> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS
Fund, Inc. - Class
IA
Shares 15,673,742
Cost $16,014,286
Market Value....... $16,938,067 -- --
Hartford Stock HLS
Fund, Inc. - Class
IA
Shares 32,297,176
Cost $81,488,687
Market Value....... -- $211,923,286 --
Hartford Money Market
HLS Fund, Inc. -
Class IA
Shares 6,520,342
Cost $6,520,342
Market Value....... -- -- $6,520,342
Hartford Advisers HLS
Fund, Inc. - Class
IA
Shares 30,578,202
Cost $54,979,808
Market Value....... -- -- --
Hartford Capital
Appreciation HLS
Fund,Inc. - Class IA
Shares 23,506,025
Cost $75,097,507
Market Value....... -- -- --
Hartford Mortgage
Securities HLS Fund,
Inc. - Class IA
Shares 3,204,490
Cost $3,396,725
Market Value....... -- -- --
Hartford Index HLS
Fund, Inc. - Class
IA
Shares 12,031,459
Cost $27,338,683
Market Value....... -- -- --
Hartford
International
Opportunities HLS
Fund, Inc. - Class
IA
Shares 7,577,719
Cost $9,212,311
Market Value....... -- -- --
Hartford Dividend and
Growth HLS Fund,
Inc. - Class IA
Shares 10,228,769
Cost $17,326,588
Market Value....... -- -- --
Calvert Social
Balanced Portfolio
Shares 1,986,127
Cost $3,437,043
Market Value....... -- -- --
Due from Hartford Life
Insurance Company..... 4,451 197,046 5,370
Receivable from fund
shares sold........... 5,825 13,146 2,120
----------- ------------ -------------
Total Assets........... 16,948,343 212,133,478 6,527,832
----------- ------------ -------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 5,830 13,141 2,146
Payable for fund shares
purchased............. 4,480 198,818 5,361
----------- ------------ -------------
Total Liabilities...... 10,310 211,959 7,507
----------- ------------ -------------
Net Assets (variable
annuity contract
liabilities).......... $16,938,033 $211,921,519 $6,520,325
----------- ------------ -------------
----------- ------------ -------------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-3
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL
ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- ------------------ ---------------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS
Fund, Inc. - Class
IA
Shares 15,673,742
Cost $16,014,286
Market Value....... -- -- -- -- --
Hartford Stock HLS
Fund, Inc. - Class
IA
Shares 32,297,176
Cost $81,488,687
Market Value....... -- -- -- -- --
Hartford Money Market
HLS Fund, Inc. -
Class IA
Shares 6,520,342
Cost $6,520,342
Market Value....... -- -- -- -- --
Hartford Advisers HLS
Fund, Inc. - Class
IA
Shares 30,578,202
Cost $54,979,808
Market Value....... $91,283,669 -- -- -- --
Hartford Capital
Appreciation HLS
Fund,Inc. - Class IA
Shares 23,506,025
Cost $75,097,507
Market Value....... -- $111,867,076 -- -- --
Hartford Mortgage
Securities HLS Fund,
Inc. - Class IA
Shares 3,204,490
Cost $3,396,725
Market Value....... -- -- $3,475,440 -- --
Hartford Index HLS
Fund, Inc. - Class
IA
Shares 12,031,459
Cost $27,338,683
Market Value....... -- -- -- $42,957,747 --
Hartford
International
Opportunities HLS
Fund, Inc. - Class
IA
Shares 7,577,719
Cost $9,212,311
Market Value....... -- -- -- -- $10,266,726
Hartford Dividend and
Growth HLS Fund,
Inc. - Class IA
Shares 10,228,769
Cost $17,326,588
Market Value....... -- -- -- -- --
Calvert Social
Balanced Portfolio
Shares 1,986,127
Cost $3,437,043
Market Value....... -- -- -- -- --
Due from Hartford Life
Insurance Company..... 345,858 -- 1,700 17,332 2,319
Receivable from fund
shares sold........... 48 349,343 4 -- 7,360
-------------- ------------------ ---------------- -------------- -------------------
Total Assets........... 91,629,575 112,216,419 3,477,144 42,975,079 10,276,405
-------------- ------------------ ---------------- -------------- -------------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 24 351,720 4 -- 7,426
Payable for fund shares
purchased............. 346,286 -- 1,730 17,325 2,322
-------------- ------------------ ---------------- -------------- -------------------
Total Liabilities...... 346,310 351,720 1,734 17,325 9,748
-------------- ------------------ ---------------- -------------- -------------------
Net Assets (variable
annuity contract
liabilities).......... $91,283,265 $111,864,699 $3,475,410 $42,957,754 $10,266,657
-------------- ------------------ ---------------- -------------- -------------------
-------------- ------------------ ---------------- -------------- -------------------

<CAPTION>
DIVIDEND AND CALVERT SOCIAL
GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------- -------------------
<S> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS
Fund, Inc. - Class
IA
Shares 15,673,742
Cost $16,014,286
Market Value....... -- --
Hartford Stock HLS
Fund, Inc. - Class
IA
Shares 32,297,176
Cost $81,488,687
Market Value....... -- --
Hartford Money Market
HLS Fund, Inc. -
Class IA
Shares 6,520,342
Cost $6,520,342
Market Value....... -- --
Hartford Advisers HLS
Fund, Inc. - Class
IA
Shares 30,578,202
Cost $54,979,808
Market Value....... -- --
Hartford Capital
Appreciation HLS
Fund,Inc. - Class IA
Shares 23,506,025
Cost $75,097,507
Market Value....... -- --
Hartford Mortgage
Securities HLS Fund,
Inc. - Class IA
Shares 3,204,490
Cost $3,396,725
Market Value....... -- --
Hartford Index HLS
Fund, Inc. - Class
IA
Shares 12,031,459
Cost $27,338,683
Market Value....... -- --
Hartford
International
Opportunities HLS
Fund, Inc. - Class
IA
Shares 7,577,719
Cost $9,212,311
Market Value....... -- --
Hartford Dividend and
Growth HLS Fund,
Inc. - Class IA
Shares 10,228,769
Cost $17,326,588
Market Value....... $22,099,113 --
Calvert Social
Balanced Portfolio
Shares 1,986,127
Cost $3,437,043
Market Value....... -- $4,242,767
Due from Hartford Life
Insurance Company..... 12,985 2,421
Receivable from fund
shares sold........... -- 8
------------- -------------------
Total Assets........... 22,112,098 4,245,196
------------- -------------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- 8
Payable for fund shares
purchased............. 12,966 1,840
------------- -------------------
Total Liabilities...... 12,966 1,848
------------- -------------------
Net Assets (variable
annuity contract
liabilities).......... $22,099,132 $4,243,348
------------- -------------------
------------- -------------------
</TABLE>

<PAGE>
SA-4 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 1998

<TABLE>
<CAPTION>
AMERICAN CENTURY VP
ADVANTAGE FUND
SUB-ACCOUNT
--------------------
<S> <C>
ASSETS:
Investments:
American Century VP
Advantage Fund, Inc.
Shares 48,578
Cost $303,893
Market Value....... $337,132
American Century
Capital Appreciation
Fund, Inc.
Shares 130,146
Cost $1,457,565
Market Value....... --
Fidelity VIP Overseas
Fund, Inc.
Shares 123,723
Cost $2,261,738
Market Value....... --
Fidelity VIP II Asset
Manager Fund, Inc.
Shares 259,872
Cost $4,216,553
Market Value....... --
Fidelity VIP II
Contrafund Fund,
Inc.
Shares 731,693
Cost $12,007,783
Market Value....... --
Fidelity VIP Growth
Fund, Inc.
Shares 404,750
Cost $13,016,837
Market Value....... --
Due from Hartford Life
Insurance Company..... 11,666
Receivable from fund
shares sold........... --
--------
Total Assets........... 348,798
--------
LIABILITIES:
Due to Hartford Life
Insurance Company..... --
Payable for fund shares
purchased............. 11,666
--------
Total Liabilities...... 11,666
--------
Net Assets (variable
annuity contract
liabilities).......... $337,132
--------
--------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-5
- --------------------------------------------------------------------------------
<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 48,578
Cost $303,893
Market Value....... -- -- -- -- --
American Century
Capital Appreciation
Fund, Inc.
Shares 130,146
Cost $1,457,565
Market Value....... $1,173,919 -- -- -- --
Fidelity VIP Overseas
Fund, Inc.
Shares 123,723
Cost $2,261,738
Market Value....... -- $2,480,648 -- -- --
Fidelity VIP II Asset
Manager Fund, Inc.
Shares 259,872
Cost $4,216,553
Market Value....... -- -- $4,719,270 -- --
Fidelity VIP II
Contrafund Fund,
Inc.
Shares 731,693
Cost $12,007,783
Market Value....... -- -- -- $17,882,573 --
Fidelity VIP Growth
Fund, Inc.
Shares 404,750
Cost $13,016,837
Market Value....... -- -- -- -- $18,161,134
Due from Hartford Life
Insurance Company..... 1,185 9,010 2,241 5,997 90,854
Receivable from fund
shares sold........... -- 4 1 10 18
----------- -------------- ------------------- ---------------- -------------
Total Assets........... 1,175,104 2,489,662 4,721,512 17,888,580 18,252,006
----------- -------------- ------------------- ---------------- -------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- 4 1 10 18
Payable for fund shares
purchased............. 1,172 9,049 1,834 6,006 90,840
----------- -------------- ------------------- ---------------- -------------
Total Liabilities...... 1,172 9,053 1,835 6,016 90,858
----------- -------------- ------------------- ---------------- -------------
Net Assets (variable
annuity contract
liabilities).......... $1,173,932 $2,480,609 $4,719,677 $17,882,564 $18,161,148
----------- -------------- ------------------- ---------------- -------------
----------- -------------- ------------------- ---------------- -------------
</TABLE>

<PAGE>
SA-6 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS & LIABILITIES -- (CONTINUED)
DECEMBER 31, 1998

<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------- ---------- ------------
<S> <C> <C> <C>
DEFERRED ANNUITY CONTRACTS IN THE
ACCUMULATION PERIOD:
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP..... 679,477 $ 5.122544 $ 3,480,651
Bond Fund Qualified 1.00% QP..... 235,817 4.932315 1,163,124
Bond Fund 1.25% DCII............. 1,804,178 4.917470 8,871,991
Bond Fund .15% DCII.............. 297,449 4.788465 1,424,324
Stock Fund Qualified 1.00% QP.... 2,251,782 19.628315 44,198,686
Stock Fund Qualified .825% QP.... 986,169 15.847197 15,628,014
Stock Fund Non-Qualified 1.00%
NQ.............................. 81,395 15.400295 1,253,508
Stock Fund Non-Qualified .825%
NQ.............................. 729,977 15.874986 11,588,375
Stock Fund....................... 968,365 18.901629 18,303,676
Stock Fund 1.25% DCII............ 4,482,978 18.846281 84,487,465
Stock Fund .15% DCII............. 810,741 15.118979 12,257,575
Money Market Fund Qualified .375%
QP.............................. 2,833 3.405342 9,648
Money Market Fund................ 129,890 2.955661 383,912
Money Market Fund 1.25% DCII..... 1,567,335 2.946758 4,618,557
Money Market Fund................ 280,571 2.961871 831,015
Advisers Fund.................... 2,569,451 6.383214 16,401,355
Advisers Fund 1.25% DCII......... 8,736,505 6.365821 55,615,027
Advisers Fund.................... 673,146 7.544216 5,078,359
Capital Appreciation Fund........ 3,513,920 9.033744 31,743,853
Capital Appreciation Fund 1.25%
DCII............................ 7,528,807 9.008609 67,824,081
Capital Appreciation Fund .15%
DCII............................ 691,998 10.565411 7,311,243
Mortgage Securities Fund......... 83,697 2.755348 230,615
Mortgage Securities Fund 1.25%
DCII............................ 891,097 2.747057 2,447,895
Mortgage Securities Fund .15%
DCII............................ 110,657 3.202689 354,400
Index Fund....................... 1,148,983 4.758917 5,467,915
Index Fund 1.25% DCII............ 6,393,575 4.755246 30,403,021
Index Fund .15% DCII............. 545,174 5.279153 2,878,057
International Opportunities
Fund............................ 1,463,687 1.646914 2,410,568
International Opportunities Fund
1.25% DCII...................... 4,165,700 1.641839 6,839,409
International Opportunities Fund
.15% DCII....................... 304,563 1.802424 548,951
Dividend and Growth Fund
Sub-Account..................... 1,278,124 2.229170 2,849,157
Dividend and Growth Fund
Sub-Account..................... 8,150,600 2.222421 18,114,065
Calvert Social Balanced
Portfolio....................... 159,271 2.758640 439,372
Calvert Social Balanced Portfolio
1.25% DCII...................... 1,262,803 2.750335 3,473,132
American Century VP Advantage
Fund............................ 970 1.467340 1,423
American Century VP Advantage
Fund............................ 222,663 1.462861 325,725
American Century VP Capital
Appreciation Fund............... 17,442 0.945665 16,494
American Century VP Capital
Appreciation Fund............... 1,221,383 0.942751 1,151,460
Fidelity VIP Overseas Fund
Sub-Account..................... 156,643 1.417327 222,014
Fidelity VIP Overseas Fund
Sub-Account..................... 1,598,445 1.412995 2,258,595
Fidelity VIP II Asset Manager
Fund Sub-Account................ 103,309 1.670225 172,549
Fidelity VIP II Asset Manager
Fund Sub-Account................ 2,730,722 1.665174 4,547,128
Fidelity VIP II Contrafund Fund
Sub-Account..................... 497,029 2.077223 1,032,440
Fidelity VIP II Contrafund Fund
Sub-Account..................... 8,135,282 2.071162 16,849,486
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENT.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-7
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------- ---------- ------------
<S> <C> <C> <C>
GROUP SUB-ACCOUNTS -- (CONTINUED)
Fidelity VIP II Growth Fund
Sub-Account..................... 450,918 $ 2.047487 $ 923,249
Fidelity VIP II Growth Fund
Sub-Account..................... 8,441,662 2.041604 17,234,531
------------
TOTAL ACCUMULATION PERIOD........ 513,666,090
------------
ANNUITY CONTRACTS IN THE ANNUITY
PERIOD:
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP..... 62,865 5.122544 322,029
Bond Fund 1.25% DCII............. 328,322 4.917474 1,614,515
Bond Fund 1.00% DCII............. 8,923 5.102432 45,529
Bond Fund .15% DCII.............. 3,314 4.788775 15,870
Stock Fund Qualified 1.00% QP.... 195,185 19.628291 3,831,148
Stock Fund Qualified .825% QP.... 73,506 15.847291 1,164,871
Stock Fund Non-Qualified 1.00%
NQ.............................. 4,677 15.400470 72,028
Stock Fund Non-Qualified .825%
NQ.............................. 41,964 15.874993 666,177
Stock Fund 1.25% DCII............ 970,345 18.846276 18,287,390
Stock Fund 1.00% DCII............ 1,994 19.568205 39,019
Stock Fund .15% DCII............. 9,497 15.119196 143,587
Money Market Fund 1.25% DCII..... 229,809 2.946759 677,193
Advisers Fund 1.25% DCII......... 2,199,363 6.365820 14,000,749
Advisers Fund.................... 24,890 7.544213 187,775
Capital Appreciation Fund 1.25%
DCII............................ 544,445 9.008612 4,904,694
Capital Appreciation Fund .15%
DCII............................ 7,650 10.565752 80,828
Mortgage Securities Fund 1.25%
DCII............................ 161,081 2.747057 442,500
Index Fund 1.25% DCII............ 875,780 4.755246 4,164,549
Index Fund .15% DCII............. 8,375 5.279153 44,212
International Opportunities Fund
1.25% DCII...................... 270,019 1.641839 443,327
International Opportunities Fund
.15% DCII....................... 13,538 1.802424 24,402
Dividend and Growth Fund
Sub-Account..................... 511,114 2.222421 1,135,910
Calvert Social Balanced Portfolio
1.25% DCII...................... 120,292 2.750335 330,844
American Century VP Advantage
Fund Sub-Account................ 6,825 1.462860 9,984
American Century VP Capital
Appreciation Fund Sub-Account... 6,341 0.942751 5,978
Fidelity VIP II Contrafund Fund
Sub-Account..................... 308 2.071162 638
Fidelity VIP II Growth Fund
Sub-Account..................... 1,650 2.041604 3,368
------------
TOTAL ANNUITY PERIOD............. 52,659,114
------------
GRAND TOTAL........................ $566,325,204
------------
------------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENT.

<PAGE>
SA-8 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
MONEY MARKET
BOND FUND STOCK FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ -------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 812,306 $ 1,607,594 $280,242
EXPENSES:
Mortality and expense
undertakings.......... (169,285) (1,928,309) (57,668)
------------ ------------ -------------
Net investment income
(loss).............. 643,021 (320,715) 222,574
------------ ------------ -------------
CAPITAL GAINS INCOME..... -- 5,882,426 --
------------ ------------ -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 62,787 8,889,332 --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 361,946 37,635,810 --
------------ ------------ -------------
Net gain (loss) on
investments......... 424,733 46,525,142 --
------------ ------------ -------------
Net increase
(decrease) in net
assets resulting
from operations..... $ 1,067,754 $ 52,086,853 $222,574
------------ ------------ -------------
------------ ------------ -------------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-9
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL
ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- ------------------ ---------------- ------------ -------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 1,798,715 $ 598,078 $218,316 $ 349,447 $ 134,406
EXPENSES:
Mortality and expense
undertakings.......... (869,102) (1,105,677) (38,655) (276,003) (112,243)
-------------- ------------------ -------- ------------ -------------------
Net investment income
(loss).............. 929,613 (507,599) 179,661 73,444 22,163
-------------- ------------------ -------- ------------ -------------------
CAPITAL GAINS INCOME..... 2,448,343 6,467,014 -- 703,652 644,678
-------------- ------------------ -------- ------------ -------------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 1,582,801 3,648,830 14,296 35,759 55,547
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 11,671,877 4,206,625 (10,512) 7,410,073 384,781
-------------- ------------------ -------- ------------ -------------------
Net gain (loss) on
investments......... 13,254,678 7,855,455 3,784 7,445,832 440,328
-------------- ------------------ -------- ------------ -------------------
Net increase
(decrease) in net
assets resulting
from operations..... $16,632,634 $13,814,870 $183,445 $ 8,222,928 $1,107,169
-------------- ------------------ -------- ------------ -------------------
-------------- ------------------ -------- ------------ -------------------

<CAPTION>
DIVIDEND AND CALVERT SOCIAL
GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------- -------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 348,343 $ 94,476
EXPENSES:
Mortality and expense
undertakings.......... (229,898) (45,190)
------------- --------
Net investment income
(loss).............. 118,445 49,286
------------- --------
CAPITAL GAINS INCOME..... 554,310 211,876
------------- --------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (33,442) 23,262
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 1,893,095 239,801
------------- --------
Net gain (loss) on
investments......... 1,859,653 263,063
------------- --------
Net increase
(decrease) in net
assets resulting
from operations..... $2,532,408 $524,225
------------- --------
------------- --------
</TABLE>

<PAGE>
SA-10 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
AMERICAN CENTURY VP
ADVANTAGE FUND
SUB-ACCOUNT
--------------------
<S> <C>
INVESTMENT INCOME:
Dividends.............. $ 5,900
EXPENSES:
Mortality and expense
undertakings.......... (3,529)
-------
Net investment income
(loss).............. 2,371
-------
CAPITAL GAINS INCOME..... 22,200
-------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 1,198
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 17,601
-------
Net gain (loss) on
investments......... 18,799
-------
Net increase
(decrease) in net
assets resulting
from operations..... $43,370
-------
-------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-11
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN CENTURY VP FIDELITY VIP FIDELITY VIP II FIDELITY VIP II FIDELITY VIP
CAPITAL APPRECIATION FUND OVERSEAS FUND ASSET MANGER FUND CONTRAFUND FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------------------- -------------- ------------------ ---------------- ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ -- $ 38,117 $104,393 $ 84,030 $ 56,895
EXPENSES:
Mortality and expense
undertakings.......... (14,526) (27,992) (49,722) (176,548) (170,272)
-------- -------------- -------- ---------------- ------------
Net investment income
(loss).............. (14,526) 10,125 54,671 (92,518) (113,377)
-------- -------------- -------- ---------------- ------------
CAPITAL GAINS INCOME..... 63,395 112,345 313,180 618,218 1,488,257
-------- -------------- -------- ---------------- ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (16,383) 956 (275) 12,359 13,141
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (61,793) 96,646 146,330 3,177,338 3,253,190
-------- -------------- -------- ---------------- ------------
Net gain (loss) on
investments......... (78,176) 97,602 146,055 3,189,697 3,266,331
-------- -------------- -------- ---------------- ------------
Net increase
(decrease) in net
assets resulting
from operations..... $(29,307) $220,072 $513,906 $3,715,397 $4,641,211
-------- -------------- -------- ---------------- ------------
-------- -------------- -------- ---------------- ------------
</TABLE>

<PAGE>
SA-12 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
MONEY MARKET
BOND FUND STOCK FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ -------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 643,021 $ (320,715) $ 222,574
Capital gains income... -- 5,882,426 --
Net realized gain
(loss) on security
transactions.......... 62,787 8,889,332 --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 361,946 37,635,810 --
----------- ------------ -------------
Net increase (decrease)
in net assets
resulting from
operations............ 1,067,754 52,086,853 222,574
----------- ------------ -------------
UNIT TRANSACTIONS:
Purchases.............. 912,679 6,592,898 495,356
Net transfers.......... 1,735,405 242,331 1,098,990
Surrenders for benefit
payments and fees..... (1,328,850) (11,790,542) (1,154,260)
Net annuity
transactions.......... 118,114 (1,031,092) (75,788)
----------- ------------ -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 1,437,348 (5,986,405) 364,298
----------- ------------ -------------
Net increase (decrease)
in net assets......... 2,505,102 46,100,448 586,872
NET ASSETS:
Beginning of period.... 14,432,931 165,821,071 5,933,453
----------- ------------ -------------
End of period.......... $16,938,033 $211,921,519 $6,520,325
----------- ------------ -------------
----------- ------------ -------------
</TABLE>

STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
MONEY MARKET
BOND FUND STOCK FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ -------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 670,282 $ (45,824) $ 225,599
Capital gains income... -- 7,063,630 18
Net realized gain
(loss) on security
transactions.......... (17,007) 6,112,590 --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 698,032 26,385,702 --
----------- ------------ -------------
Net increase (decrease)
in net assets
resulting from
operation............. 1,351,307 39,516,098 225,617
----------- ------------ -------------
UNIT TRANSACTIONS:
Purchases.............. 832,400 5,392,017 549,395
Net transfers.......... (417,232) 37,450 851,783
Surrenders for benefit
payments and fees..... (2,101,192) (13,048,670) (896,520)
Net annuity
transactions.......... 15,744 (31,189) 270,889
----------- ------------ -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (1,670,280) (7,650,392) 775,547
----------- ------------ -------------
Net increase (decrease)
in net assets......... (318,973) 31,865,706 1,001,164
NET ASSETS:
Beginning of period.... 14,751,904 133,955,365 4,932,289
----------- ------------ -------------
End of period.......... $14,432,931 $165,821,071 $5,933,453
----------- ------------ -------------
----------- ------------ -------------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-13
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL
ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- ------------------ ---------------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 929,613 $ (507,599) $ 179,661 $ 73,444 $ 22,163
Capital gains income... 2,448,343 6,467,014 -- 703,652 644,678
Net realized gain
(loss) on security
transactions.......... 1,582,801 3,648,830 14,296 35,759 55,547
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 11,671,877 4,206,625 (10,512) 7,410,073 384,781
-------------- ------------------ ---------------- -------------- -------------------
Net increase (decrease)
in net assets
resulting from
operations............ 16,632,634 13,814,870 183,445 8,222,928 1,107,169
-------------- ------------------ ---------------- -------------- -------------------
UNIT TRANSACTIONS:
Purchases.............. 5,710,527 10,043,845 290,758 3,542,564 1,295,646
Net transfers.......... 4,672,171 (4,177,559) (134,090) 7,709,937 (908,131)
Surrenders for benefit
payments and fees..... (4,297,456) (6,489,893) (324,882) (2,057,610) (917,114)
Net annuity
transactions.......... 1,069,101 (70,995) 18,035 560,037 (60,468)
-------------- ------------------ ---------------- -------------- -------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 7,154,343 (694,602) (150,179) 9,754,928 (590,067)
-------------- ------------------ ---------------- -------------- -------------------
Net increase (decrease)
in net assets......... 23,786,977 13,120,268 33,266 17,977,856 517,102
NET ASSETS:
Beginning of period.... 67,496,288 98,744,431 3,442,144 24,979,898 9,749,555
-------------- ------------------ ---------------- -------------- -------------------
End of period.......... $91,283,265 $111,864,699 $3,475,410 $ 42,957,754 $10,266,657
-------------- ------------------ ---------------- -------------- -------------------
-------------- ------------------ ---------------- -------------- -------------------

<CAPTION>
DIVIDEND AND CALVERT SOCIAL
GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------- -------------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 118,445 $ 49,286
Capital gains income... 554,310 211,876
Net realized gain
(loss) on security
transactions.......... (33,442) 23,262
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 1,893,095 239,801
------------- -------------------
Net increase (decrease)
in net assets
resulting from
operations............ 2,532,408 524,225
------------- -------------------
UNIT TRANSACTIONS:
Purchases.............. 2,740,504 495,534
Net transfers.......... 3,854,598 26,347
Surrenders for benefit
payments and fees..... (1,314,938) (187,099)
Net annuity
transactions.......... 110,854 20,431
------------- -------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 5,391,018 355,213
------------- -------------------
Net increase (decrease)
in net assets......... 7,923,426 879,438
NET ASSETS:
Beginning of period.... 14,175,706 3,363,910
------------- -------------------
End of period.......... $22,099,132 $4,243,348
------------- -------------------
------------- -------------------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL
ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- ------------------ ---------------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 740,451 $ (524,842) $ 164,703 $ 124,229 $ (29,030)
Capital gains income... 2,516,544 6,234,258 -- 1,272,234 770,963
Net realized gain
(loss) on security
transactions.......... (19,989) (406,564) 4,355 (50,915) (9,826)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 8,870,417 10,345,344 77,114 3,736,267 (815,682)
-------------- ------------------ ---------------- -------------- -------------------
Net increase (decrease)
in net assets
resulting from
operation............. 12,107,423 15,648,196 246,172 5,081,815 (83,575)
-------------- ------------------ ---------------- -------------- -------------------
UNIT TRANSACTIONS:
Purchases.............. 4,595,725 9,347,535 327,685 2,173,282 1,283,578
Net transfers.......... 2,974,576 3,016,003 (254,745) 4,030,613 27,688
Surrenders for benefit
payments and fees..... (7,855,498) (10,608,061) (405,827) (2,241,041) (1,550,593)
Net annuity
transactions.......... 543,432 165,718 (17,654) 1,095,438 118,153
-------------- ------------------ ---------------- -------------- -------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 258,235 1,921,195 (350,541) 5,058,292 (121,174)
-------------- ------------------ ---------------- -------------- -------------------
Net increase (decrease)
in net assets......... 12,365,658 17,569,391 (104,369) 10,140,107 (204,749)
NET ASSETS:
Beginning of period.... 55,130,630 81,175,040 3,546,513 14,839,791 9,954,304
-------------- ------------------ ---------------- -------------- -------------------
End of period.......... $67,496,288 $ 98,744,431 $3,442,144 $ 24,979,898 $9,749,555
-------------- ------------------ ---------------- -------------- -------------------
-------------- ------------------ ---------------- -------------- -------------------

<PAGE>
SA-14 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
AMERICAN CENTURY VP
ADVANTAGE FUND
SUB-ACCOUNT
--------------------
<S> <C>
OPERATIONS:
Net investment income
(loss)................ $ 2,371
Capital gains income... 22,200
Net realized gain
(loss) on security
transactions.......... 1,198
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 17,601
--------
Net increase (decrease)
in net assets
resulting from
operations............ 43,370
--------
UNIT TRANSACTIONS:
Purchases.............. 60,545
Net transfers.......... 13,214
Surrenders for benefit
payments and fees..... (27,765)
Net annuity
transactions.......... (768)
--------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 45,226
--------
Net increase (decrease)
in net assets......... 88,596
NET ASSETS:
Beginning of period.... 248,536
--------
End of period.......... $337,132
--------
--------
</TABLE>

STATEMENTS OF CHANGES IN NET ASSETS
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 gain
(loss) 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 for benefit
payments and fees..... (12,377)
Net annuity
transactions.......... (735)
--------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 55,507
--------
Net increase (decrease)
in net assets......... 75,941
NET ASSETS:
Beginning of period.... 172,595
--------
End of period.......... $248,536
--------
--------
</TABLE>

* 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

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-15
- --------------------------------------------------------------------------------
<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)................ $ (14,526) $ 10,125 $ 54,671 $ (92,518) $ (113,377)
Capital gains income... 63,395 112,345 313,180 618,218 1,488,257
Net realized gain
(loss) on security
transactions.......... (16,383) 956 (275) 12,359 13,141
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (61,793) 96,646 146,330 3,177,338 3,253,190
----------- -------------- ------------------- ---------------- -------------
Net increase (decrease)
in net assets
resulting from
operations............ (29,307) 220,072 513,906 3,715,397 4,641,211
----------- -------------- ------------------- ---------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 294,260 377,694 629,178 2,095,903 1,855,983
Net transfers.......... (521,383) 96,385 731,434 816,733 1,278,624
Surrenders for benefit
payments and fees..... (58,707) (196,825) (338,204) (696,448) (573,796)
Net annuity
transactions.......... (486) -- -- (34) (166)
----------- -------------- ------------------- ---------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (286,316) 277,254 1,022,408 2,216,154 2,560,645
----------- -------------- ------------------- ---------------- -------------
Net increase (decrease)
in net assets......... (315,623) 497,326 1,536,314 5,931,551 7,201,856
NET ASSETS:
Beginning of period.... 1,489,555 1,983,283 3,183,363 11,951,013 10,959,292
----------- -------------- ------------------- ---------------- -------------
End of period.......... $1,173,932 $2,480,609 $4,719,677 $17,882,564 $18,161,148
----------- -------------- ------------------- ---------------- -------------
----------- -------------- ------------------- ---------------- -------------
</TABLE>
<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 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 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 for benefit
payments and fees..... (38,911) (28,174) (138,088) (387,184) (425,385)
Net annuity
transactions.......... (568) -- -- 453 2,237
----------- -------------- ------------------- ---------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 421,217 796,525 937,359 3,391,271 2,271,282
----------- -------------- ------------------- ---------------- -------------
Net increase (decrease)
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
----------- -------------- ------------------- ---------------- -------------
----------- -------------- ------------------- ---------------- -------------

<CAPTION>
U.S. GOVERNMENT
MONEY MARKET
FUND SUB-ACCOUNT
-----------------
<S> <C>
OPERATIONS:
Net investment income
(loss)................ $ 23,610
Capital gains income... --
Net realized gain
(loss) on security
transactions.......... --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ --
-----------------
Net increase (decrease)
in net assets
resulting from
operations............ 23,610
-----------------
UNIT TRANSACTIONS:
Purchases.............. 67,057
Net transfers.......... (1,102,863)
Surrenders for benefit
payments and fees..... (217,863)
Net annuity
transactions.......... (245,098)
-----------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (1,498,767)
-----------------
Net increase (decrease)
in net assets......... (1,475,157)
NET ASSETS:
Beginning of period.... 1,475,157
-----------------
End of period.......... $ --
-----------------
-----------------
</TABLE>

* 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

<PAGE>
SA-16 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998

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 investments in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate
Fund as of December 31, 1998.

3. DEDUCTIONS AND CHARGES

Certain amounts are deducted from the Contracts, as described below:

a) MORTALITY AND EXPENSE RISK CHARGES--The Company will make deductions at a
maximum annual rate of 1.25% of the Contract's value for the mortality
and expense risks which the Company undertakes.

b) TAX EXPENSE CHARGE--If applicable, the Company will make deductions at a
maximum rate of 3.50% of the Contract's value to meet premium tax
requirements. An additional tax charge based on a percentage of the
Contract's value may be assessed to partial withdrawals or surrenders.
These expenses are included in Surrenders for benefit payments and fees
on the accompanying statements of changes in net assets.

c) ANNUAL MAINTENANCE FEE--An annual maintenance fee in the amount of $30
may be deducted from the Contract's value each contract year. However,
this fee is not applicable to contracts with values of $50,000 or more,
as determined on the most recent contract anniversary. These expenses are
included in Surrenders for benefit payments and fees on the accompanying
statements of changes in net assets.

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

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-1
- --------------------------------------------------------------------------------

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Hartford Life Insurance Company:

We have audited the accompanying Consolidated Balance Sheets of Hartford Life
Insurance Company and subsidiaries as of December 31, 1998 and 1997, and the
related Consolidated Statements of Income, Changes in Stockholder's Equity and
Cash Flows for each of the three years in the period ended December 31, 1998.
These Consolidated Financial Statements and the schedules referred to below are
the responsibility of Hartford Life Insurance Company's management. Our
responsibility is to express an opinion on these 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, 1998 and 1997, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1998 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 the 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 26, 1999
<PAGE>
F-2 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
------------------------
1998 1997 1996
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Premiums and other considerations............... $2,218 $1,637 $1,705
Net investment income........................... 1,759 1,368 1,397
Net realized capital (losses) gains............. (2) 4 (213)
------ ------ ------
Total revenues................................ 3,975 3,009 2,889
------ ------ ------
Benefits, claims and expenses
Benefits, claims and claim adjustment
expenses....................................... 1,911 1,379 1,535
Amortization of deferred policy acquisition
costs.......................................... 431 335 234
Dividends to policyholders...................... 329 240 635
Other expenses.................................. 766 586 427
------ ------ ------
Total benefits, claims and expenses........... 3,437 2,540 2,831
------ ------ ------
Income before income tax expense................ 538 469 58
Income tax expense.............................. 188 167 20
------ ------ ------
Net income........................................ $ 350 $ 302 $ 38
------ ------ ------
------ ------ ------
</TABLE>

See Notes to Consolidated Financial Statements.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-3
- --------------------------------------------------------------------------------

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
AS OF DECEMBER
31,
-----------------
1998 1997
------- -------
<S> <C> <C>
(IN MILLIONS,
EXCEPT FOR SHARE
DATA)
Assets
Investments
Fixed maturities, available for sale, at fair
value (amortized cost of $14,505 and
$13,885)....................................... $14,818 $14,176
Equity securities, at fair value................ 31 180
Policy loans, at outstanding balance............ 6,684 3,756
Other investments, at cost...................... 264 47
------- -------
Total investments............................. 21,797 18,159
Cash............................................ 17 54
Premiums receivable and agents' balances........ 17 18
Reinsurance recoverables........................ 1,257 6,114
Deferred policy acquisition costs............... 3,754 3,315
Deferred income tax............................. 464 348
Other assets.................................... 695 682
Separate account assets......................... 90,262 69,055
------- -------
Total assets.................................. $118,263 $97,745
------- -------
------- -------

Liabilities
Future policy benefits.......................... $ 3,595 $ 3,059
Other policyholder funds........................ 19,615 21,034
Other liabilities............................... 2,094 2,254
Separate account liabilities.................... 90,262 69,055
------- -------
Total liabilities............................. 115,566 95,402
------- -------

Stockholder's Equity
Common stock -- 1,000 shares authorized, issued
and outstanding, par value $5,690.............. 6 6
Capital surplus................................. 1,045 1,045
Accumulated other comprehensive income
Net unrealized capital gains on securities,
net of tax................................... 184 179
------- -------
Total accumulated other comprehensive
income....................................... 184 179
------- -------
Retained earnings............................... 1,462 1,113
------- -------
Total stockholder's equity.................... 2,697 2,343
------- -------
Total liabilities and stockholder's equity...... $118,263 $97,745
------- -------
------- -------
</TABLE>

See Notes to Consolidated Financial Statements.
<PAGE>
F-4 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
ACCUMULATED
OTHER
COMPREHENSIVE
INCOME
---------------
NET UNREALIZED
CAPITAL GAINS
(LOSSES) ON TOTAL
COMMON CAPITAL SECURITIES, RETAINED STOCKHOLDER'S
STOCK SURPLUS NET OF TAX EARNINGS EQUITY
------ -------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
(IN MILLIONS)
1998
Balance, December 31, 1997.............. $6 $ 1,045 $179 $1,113 $2,343
Comprehensive income
Net income............................ -- -- -- 350 350
------
Other comprehensive income, net of tax
(1):
Changes in net unrealized capital
gains on securities (2).............. -- -- 5 -- 5
------
Total other comprehensive income........ 5
------
Total comprehensive income 355
------
Dividends............................... -- -- -- (1) (1)
--
------ ----- ----------- ------
Balance, December 31, 1998.......... $6 $ 1,045 $184 $1,462 $2,697
--
------ ----- ----------- ------
1997
Balance, December 31, 1996.............. $6 $ 1,045 $ 30 $ 811 $1,892
Comprehensive income
Net income............................ -- -- -- 302 302
------
Other comprehensive income, net of tax
(1):
Changes in net unrealized capital
gains on securities (2).............. -- -- 149 -- 149
------
Total other comprehensive income........ 149
------
Total comprehensive income 451
--
------ ----- ----------- ------
Balance, December 31, 1997.......... $6 $ 1,045 $179 $1,113 $2,343
--
------ ----- ----------- ------
1996
Balance, December 31, 1995.............. $6 $ 1,007 $(57) $ 773 $1,729
Comprehensive income
Net income............................ -- -- -- 38 38
------
Other comprehensive income, net of tax
(1):
Changes in net unrealized capital
gains on securities (2).............. -- -- 87 -- 87
------
Total other comprehensive income........ 87
------
Total comprehensive income............ 125
------
Capital contribution.................... -- 38 -- -- 38
--
------ ----- ----------- ------
Balance, December 31, 1996.......... $6 $ 1,045 $ 30 $ 811 $1,892
--
--
------ ----- ----------- ------
------ ----- ----------- ------
</TABLE>

- ---------

(1) Net unrealized capital gain on securities is reflected net of tax of $3,
$80 and $47, as of December 31, 1998, 1997 and 1996, respectively.

(2) There was no reclassification adjustment for after-tax gains (losses)
realized in net income for the years ended December 31, 1998 and 1997. December
31, 1996 is net of a $142 reclassification adjustment for after-tax losses
realized in net income.

See Notes to Consolidated Financial Statements.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-5
- --------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER
31,
------------------------------
1998 1997 1996
-------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C>
Operating Activities
Net income............................ $ 350 $ 302 $ 38
Adjustments to reconcile net income to
net cash provided by operating
activities
Depreciation and amortization......... (23) 8 14
Net realized capital losses (gains)... 2 (4) 213
Decrease in premiums receivable and
agents' balances..................... 1 119 10
(Decrease) increase in other
liabilities.......................... (79) 223 577
Change in receivables, payables, and
accruals............................. 83 107 (22)
Increase (decrease) in accrued
taxes................................ 60 126 (91)
(Increase) decrease in deferred income
taxes................................ (118) 40 (102)
Increase in deferred policy
acquisition costs.................... (439) (555) (572)
Increase in future policy benefits.... 536 585 101
(Increase) decrease in reinsurance
recoverables and other related
assets............................... (2) 21 (146)
-------- -------- --------
Net cash provided by operating
activities......................... 371 972 20
-------- -------- --------
Investing Activities
Purchases of investments.............. (6,061) (6,869) (5,854)
Sales of investments.................. 4,901 4,256 3,543
Maturity of investments............... 1,761 2,329 2,693
-------- -------- --------
Net cash provided by (used for)
investing activities............... 601 (284) 382
-------- -------- --------
Financing Activities
Capital contribution.................. -- -- 38
Net disbursements for investment and
universal life-type contracts charged
against policyholder accounts........ (1,009) (677) (443)
-------- -------- --------
Net cash used for financing
activities......................... (1,009) (677) (405)
-------- -------- --------
Net (decrease) increase in cash....... (37) 11 (3)
Cash -- beginning of year............. 54 43 46
-------- -------- --------
Cash -- end of year................... $ 17 $ 54 $ 43
-------- -------- --------
-------- -------- --------
Supplemental Disclosure of Cash Flow
Information:
Net Cash Paid During the Year for:
Income taxes.......................... $ 263 $ 9 $ 189

Noncash Investing Activities:
Due to the recapture of an in force block of business previously ceded
to MBL Life Assurance Co. of New Jersey, reinsurance recoverables of
$4,546 were exchanged for the fair value of assets comprised of
$4,354 in policy loans and $192 in other assets.
</TABLE>

See Notes to Consolidated Financial Statements.
<PAGE>
F-6 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

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 ("Hartford Life Insurance Company" or
the "Company"), Hartford Life and Annuity Insurance Company (ILA) and 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). Pursuant to an initial
public offering (the "IPO") on May 22, 1997, Hartford Life sold 26 million
shares of Class A Common Stock 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 outstanding promissory notes and line of credit with
the remaining $160 contributed by Hartford Life to HLA to support growth in its
core businesses. Hartford Life became a publicly traded company upon the sale of
26 million shares representing approximately 18.6% of the equity ownership in
Hartford Life. 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, HLA, the Company is a leading financial services and
insurance 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 disability insurance
that is directly written by the Company and is substantially ceded to its
parent, HLA, and (d) corporate owned life insurance.

2. SUMMARY OF 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 November 1998, the Emerging Issues Task Force (EITF) reached consensus on
Issue No. 98-15, "Structured Notes Acquired for a Specific Investment Strategy".
This EITF issue requires companies to account for structured notes acquired for
a specific investment strategy, as a unit. Affected companies that entered into
these notes prior to September 25, 1998 are required to either restate prior
period financial statements to conform with the prescribed unit accounting model
or disclose the related impact on earnings for all periods presented and
cumulatively over the life of the instruments had the registrant accounted for
the structure as a unit. Based upon recently prescribed current generally
accepted accounting principles for such types of transactions entered into after
September 24, 1998, there was no additional earnings impact to the Company
related to combined structured note transactions. As of December 31, 1998, the
Company does not hold any combined structured notes.

In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities". The new standard establishes
accounting and reporting guidance for derivative instruments, including certain
derivative instruments embedded in other contracts. The standard requires, among
other things, that all derivatives be carried on the balance sheet at fair
value. The standard also specifies hedge accounting criteria under which a
derivative can qualify for special accounting. In order to receive special
accounting, the derivative instrument must qualify as either
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-7
- --------------------------------------------------------------------------------

a hedge of the fair value or the variability of the cash flow of a qualified
asset or liability. Special accounting for qualifying hedges provides for
matching the timing of gain or loss recognition on the hedging instrument with
the recognition of the corresponding changes in value of the hedged item. SFAS
No. 133 will be effective for fiscal years beginning after June 15, 1999.
Initial application for Hartford Life Insurance Company will begin for the first
quarter of the year 2000. While Hartford Life Insurance Company is currently in
the process of quantifying the impact of SFAS No. 133, the Company is reviewing
its derivative holdings in order to take actions needed to minimize potential
volatility, while at the same time maintaining the economic protection needed to
support the goals of its business.

In March 1998, the American Institute of Certified Public Accountants
(AICPA) issued Statement of Position (SOP) No. 98-1, "Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use". The SOP provides
guidance on accounting for the costs of internal use software and in determining
whether the software is for internal use. The SOP defines internal use software
as software that is acquired, internally developed, or modified solely to meet
internal needs and identifies stages of software development and accounting for
the related costs incurred during the stages. This statement is effective for
fiscal years beginning after December 15, 1998 and is not expected to have a
material impact on the Company's financial condition or results of operations.

Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income", which establishes standards for reporting and display of
comprehensive income and its components in a full set of general purpose
financial statements. The objective of this statement is to report a measure of
all changes in equity of an enterprise that result from transactions and other
economic events of the period other than transactions with owners. Comprehensive
income is the total of net income and all other nonowner changes in equity.
Accordingly, the Company has reported comprehensive income in the Consolidated
Statements of Changes in Stockholder's Equity.

In December 1997, the AICPA issued 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.

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information". The new standard requires public
business enterprises to disclose certain financial and descriptive information
about reportable operating segments in annual financial statements and in
condensed financial statements of interim periods. Operating segments are
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and assessing performance. SFAS No. 131 also
establishes standards for related disclosures about products and services,
geographic areas and major customers. The Company adopted SFAS No. 131 in 1998.
For additional information, see Note 13.

On November 14, 1996, the 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 FASB issued SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities" which is
effective for transfers and servicing of financial 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. Adoption of SFAS No. 125 did not have a material
effect on the Company's financial condition or results of operations.

Effective January 1, 1996, Hartford Life Insurance 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. 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 investment products and universal life-type policies consist of
policy charges for policy administration, cost of insurance and surrender
charges assessed to policy account balances and are recognized in the period in
which services are provided. Premiums for traditional life insurance policies
are recognized as revenues when they are due from policyholders.
<PAGE>
F-8 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

(D) FUTURE POLICY BENEFITS AND OTHER POLICYHOLDER FUNDS

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

(E) INVESTMENTS

Hartford Life Insurance 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 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. 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. Net realized capital gains
and losses, excluding those related to immediate participation guaranteed
contracts, 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 additional impairment, if necessary.

(F) DERIVATIVE INSTRUMENTS

Hartford Life Insurance 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. Hartford Life Insurance 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 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. For a discussion
of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities"
issued in June 1998, see (b) Changes in Accounting Principles.

Derivative instruments must be designated at inception as a hedge and
measured for effectiveness both at inception and on an ongoing basis. Hartford
Life Insurance Company's correlation threshold for hedge designation is 80% to
120%. If correlation, which is assessed monthly and measured based on a rolling
three month average, falls outside the 80% to 120% range, 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
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-9
- --------------------------------------------------------------------------------

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.

(G) SEPARATE ACCOUNTS

Hartford Life Insurance Company maintains separate account assets and
liabilities which are reported at fair value. Separate account assets are
segregated from other investments. Separate accounts reflect two categories of
risk assumption: non-guaranteed separate accounts, wherein the policyholder
assumes the investment risk and rewards, and guaranteed separate account assets,
wherein the Company contractually guarantees either a minimum return or account
value to the policyholder.
(H) 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, usually 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
charges, mortality and expense margins. Actual gross profits can vary from
management's estimates resulting in increases or decreases in the rate of
amortization. Management periodically updates these estimates, when appropriate,
and evaluates the recoverability of the deferred acquisition cost asset. When
appropriate, management revises its assumptions on the estimated gross profits
of these contracts and the cumulative amortization for the books of business are
re-estimated and adjusted by a cumulative charge or credit to income.

Acquisition costs and their related deferral are included in the Company's
other expenses as follows:

<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Commissions.......................... $ 1,069 $ 976 $ 848
Deferred acquisition costs........... (891) (862) (823)
Other................................ 588 472 402
--------- --------- ---------
Total other expenses............. $ 766 $ 586 $ 427
--------- --------- ---------
--------- --------- ---------
</TABLE>

(I) DIVIDENDS TO POLICYHOLDERS

Certain life insurance policies contain dividend payment provisions that
enable the policyholder to participate in the earnings on that participating
block of business. The participating insurance in force accounted for 71%, 55%
and 44% in 1998, 1997 and 1996, respectively, of total insurance in force.

3. INVESTMENTS AND DERIVATIVE INSTRUMENTS

(A) COMPONENTS OF NET INVESTMENT INCOME

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER
31,
-------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Interest income from fixed
maturities......................... $ 952 $ 932 $ 918
Interest income from policy loans... 789 425 477
Income from other investments....... 32 26 15
--------- --------- ---------
Gross investment income............. 1,773 1,383 1,410
Less: Investment expenses........... 14 15 13
--------- --------- ---------
Net investment income............... $ 1,759 $ 1,368 $ 1,397
--------- --------- ---------
--------- --------- ---------
</TABLE>

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

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------
1998 1997 1996
--------- ----- ---------
<S> <C> <C> <C>
Fixed maturities......................... $ (28) $ (7) $ (201)
Equity securities........................ 21 12 2
Real estate and other.................... 5 (1) (4)
Less: Decrease in liability to
policyholders for realized capital
gains................................... -- -- (10)
--------- --- ---------
Net realized capital (losses) gains...... $ (2) $ 4 $ (213)
--------- --- ---------
--------- --- ---------
</TABLE>

<PAGE>
F-10 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------
1998 1997 1996
----- ----- -----
<S> <C> <C> <C>
Gross unrealized capital gains.............. $ 2 $ 14 $ 13
Gross unrealized capital losses............. (1) -- (1)
--- --- ---
Net unrealized capital gains................ 1 14 12
Deferred income tax expense................. -- 5 4
--- --- ---
Net unrealized capital gains, net of tax.... 1 9 8
Balance -- beginning of year................ 9 8 1
--- --- ---
Net change in unrealized capital gains on
equity securities.......................... $ (8) $ 1 $ 7
--- --- ---
--- --- ---
</TABLE>

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

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER
31,
-------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Gross unrealized capital gains.......... $ 421 $ 371 $ 386
Gross unrealized capital losses......... (108) (80) (341)
Unrealized capital gains credited to
policyholders.......................... (32) (30) (11)
--------- --------- ---------
Net unrealized capital gains............ 281 261 34
Deferred income tax expense............. 98 91 12
--------- --------- ---------
Net unrealized capital gains, net of
tax.................................... 183 170 22
Balance -- beginning of year............ 170 22 (58)
--------- --------- ---------
Net change in unrealized capital gains
(losses) on fixed maturities........... $ 13 $ 148 $ 80
--------- --------- ---------
--------- --------- ---------
</TABLE>

(E) FIXED MATURITY INVESTMENTS

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1998
---------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
U. S. Government and Government agencies and authorities
(guaranteed and sponsored)...................................... $ 121 $ 2 $ -- $ 123
U. S. Government and Government agencies and authorities
(guaranteed and sponsored) -- asset backed...................... 1,001 23 (8) 1,016
States, municipalities and political subdivisions................ 165 8 -- 173
International governments........................................ 393 26 (7) 412
Public utilities................................................. 844 33 (3) 874
All other corporate including international...................... 5,469 260 (42) 5,687
All other corporate -- asset backed.............................. 4,155 58 (42) 4,171
Short-term investments........................................... 1,847 -- -- 1,847
Certificates of deposit.......................................... 510 11 (6) 515
---------- ----- ----------- ----------
Total fixed maturities....................................... $14,505 $421 $(108) $14,818
---------- ----- ----------- ----------
---------- ----- ----------- ----------
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
---------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
U. S. Government and Government agencies and authorities
(guaranteed and sponsored)...................................... $ 217 $ 3 $ (1) $ 219
U. S. Government and Government 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>

The amortized cost and estimated fair value of fixed maturity investments as
of December 31, 1998 by estimated maturity year are shown below. Expected
maturities differ from contractual maturities due to call or prepayment
provisions. Asset backed securities, including mortgage backed securities and
collateralized mortgage obligations, are distributed to maturity year based on
the Company's estimates of the rate of future prepayments of principal over the
remaining lives of the securities. These estimates are developed using
prepayment speeds provided in broker
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-11
- --------------------------------------------------------------------------------

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......................... $ 3,047 $ 3,116
Over one year through five years......... 4,796 4,843
Over five years through ten years........ 3,242 3,318
Over ten years........................... 3,420 3,541
----------- -----------
Total................................ $ 14,505 $ 14,818
----------- -----------
----------- -----------
</TABLE>

Sales of fixed maturities, excluding short-term fixed maturities, for the
years ended December 31, 1998, 1997 and 1996 resulted in proceeds of $3.2
billion, $4.2 billion and $3.5 billion, gross realized capital gains of $103,
$169 and $87, gross realized capital losses (including writedowns) of $131, $176
and $298, respectively. In 1996, gross realized capital losses includes an other
than temporary impairment of $137 related to the Company's block of guaranteed
investment contract business written prior to 1995 which could not recover to
amortized cost prior to sale. Sales of equity security investments for the years
ended December 31, 1998, 1997 and 1996 resulted in proceeds of $35, $132 and $74
and gross realized capital gains of $21, $12 and $2, respectively, and no gross
realized capital losses for all periods.

(F) CONCENTRATION OF CREDIT RISK

The Company is not exposed to any significant concentration of credit risk
in fixed maturities of a single issuer greater than 10% of stockholder's equity.

(G) DERIVATIVE INSTRUMENTS

Hartford Life Insurance 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.

Hartford Life Insurance 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.

Hartford Life Insurance Company's derivative program is monitored by an
internal compliance unit and is reviewed by senior management and Hartford
Life's Finance Committee of the Board of Directors. 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 $6.2 billion and $6.5 billion ($3.9 billion and $4.6 billion related to
the Company's investments, $2.3 billion and $1.9 billion on the Company's
liabilities) as of December 31, 1998 and 1997, respectively.

The tables below provide a summary of derivative instruments held by
Hartford Life Insurance Company as of December 31, 1998 and 1997, segregated by
major investment and liability category:

<PAGE>
F-12 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
1998 -- AMOUNT HEDGED (NOTIONAL AMOUNTS)
----------------------------------------------------------------------------------
FOREIGN
TOTAL ISSUED PURCHASED INTEREST CURRENCY TOTAL
CARRYING CAPS & CAPS & FUTURES RATE SWAPS NOTIONAL
ASSETS HEDGED VALUE FLOORS FLOORS (2) SWAPS (3) AMOUNT
- ----------------------------------- -------- -------- ---------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset backed securities (excluding
inverse floaters and
anticipatory)..................... $ 5,163 $ -- $ 188 $ 3 $ 885 $-- $ 1,076
Inverse floaters (1)............... 24 44 55 -- -- -- 99
Anticipatory (4)................... -- -- -- -- 235 -- 235
Other bonds and notes.............. 7,683 461 597 18 1,300 90 2,466
Short-term investments............. 1,948 -- -- -- -- -- --
-------- -------- ---------- --- ---------- --- ----------
Total fixed maturities......... 14,818 505 840 21 2,420 90 3,876
Equity securities, policy loans and
other investments................. 6,979 -- -- -- -- -- --
-------- -------- ---------- --- ---------- --- ----------
Total investments.............. $ 21,797 505 840 21 2,420 90 3,876
Other policyholder funds....... $ 19,615 1,100 50 -- 1,195 -- 2,345
-------- -------- ---------- --- ---------- --- ----------
Total derivative instruments --
notional value................ $ 1,605 $ 890 $ 21 $ 3,615 $90 $ 6,221
-------- -------- ---------- --- ---------- --- ----------
Total derivative instruments --
fair value.................... $ (6) $ 19 $ -- $ 27 $(7) $ 33
-------- -------- ---------- --- ---------- --- ----------
-------- -------- ---------- --- ---------- --- ----------
</TABLE>

<TABLE>
<CAPTION>
1997 -- AMOUNT HEDGED (NOTIONAL AMOUNTS)
--------------------------------------------------------------------------
FOREIGN
TOTAL ISSUED PURCHASED INTEREST CURRENCY TOTAL
CARRYING CAPS & CAPS & RATE SWAPS NOTIONAL
ASSETS HEDGED VALUE FLOORS FLOORS FUTURES (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
Other policyholder funds....... $ 21,034 10 150 -- 1,747 -- 1,907
-------- ------- ------------ --- --------- --- -------
Total derivative instruments --
notional value................ $ 1,019 $ 2,094 $ 50 $ 3,251 $ 91 $6,505
-------- ------- ------------ --- --------- --- -------
Total derivative instruments --
fair value.................... $ (8) $ 23 $ -- $ 19 $ (6 ) $ 28
-------- ------- ------------ --- --------- --- -------
-------- ------- ------------ --- --------- --- -------
</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, 1998 and 1997, approximately 5% and 44% ,
respectively, of the notional futures contracts expire within one year.

(3) As of December 31, 1998 and 1997, approximately 11% and 16%,
respectively, of foreign currency swaps expire within one year.

(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. As of December 31, 1998 and 1997, the Company had no
deferred gains for interest rate swaps. During 1998, $1.5 in deferred gains were
basis adjusted.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-13
- --------------------------------------------------------------------------------

The following is a reconciliation of notional amounts by derivative type and
strategy as of December 31, 1998 and 1997:

<TABLE>
<CAPTION>
DECEMBER 31, 1997 MATURITIES/ DECEMBER 31, 1998
NOTIONAL AMOUNT ADDITIONS TERMINATIONS (1) NOTIONAL AMOUNT
----------------- -------- ----------------- -----------------
<S> <C> <C> <C> <C>
BY DERIVATIVE TYPE
Caps......................................... $1,239 $1,000 $ 327 $1,912
Floors....................................... 1,864 -- 1,281 583
Swaps/Forwards............................... 3,342 1,838 1,475 3,705
Futures...................................... 50 8 37 21
Options...................................... 10 -- 10 --
------- -------- ------- -------
Total.................................... $6,505 $2,846 $3,130 $6,221
------- -------- ------- -------
BY STRATEGY
Liability.................................... $1,907 $1,099 $ 661 $2,345
Anticipatory................................. -- 242 7 235
Asset........................................ 1,805 1,260 667 2,398
Portfolio.................................... 2,793 245 1,795 1,243
------- -------- ------- -------
Total.................................... $6,505 $2,846 $3,130 $6,221
------- -------- ------- -------
------- -------- ------- -------
</TABLE>

- ---------

(1) During 1998, the Company had no significant gains or losses on
terminations of hedge positions using derivative financial instruments.

4. FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS 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. Hartford
Life Insurance Company uses the following methods and assumptions in estimating
the fair value of each class of financial instrument.

Fair value for fixed maturities and marketable equity securities
approximates those quotations published by applicable stock exchanges or
received from other reliable sources.

For policy loans, carrying amounts approximate fair value.

Fair value for other invested assets primarily consist of partnerships and
trusts that are based on external market valuations from partnership and trust
management as well as mortgage loans where carrying amounts approximate fair
value.

Other policyholder funds fair value information is determined by estimating
future cash flows, discounted at the current market rate.

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 periodic comparison to dealer quoted prices.

The carrying amount and fair values of Hartford Life Insurance Company's
financial instruments as of December 31, 1998 and 1997 were as follows:

<TABLE>
<CAPTION>
1998 1997
------------------ ------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
--------- ------- --------- -------
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities..................................... $ 14,818 $14,818 $ 14,176 $14,176
Equity securities.................................... 31 31 180 180
Policy loans......................................... 6,684 6,684 3,756 3,756
Other investments.................................... 264 309 47 91
LIABILITIES
Other policyholder funds (1)......................... $ 11,709 $11,726 $ 11,769 $11,755
</TABLE>

- ---------

(1) Excludes corporate owned life insurance and universal life insurance
contracts.

<PAGE>
F-14 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

5. SEPARATE ACCOUNTS

Hartford Life Insurance Company maintained separate account assets and
liabilities totaling $90.3 billion and $69.1 billion as of December 31, 1998 and
1997, respectively, which are reported at fair value. Separate account assets,
which are segregated from other investments, reflect two categories of risk
assumption: non-guaranteed separate accounts totaling $80.6 billion and $58.6
billion as of December 31, 1998 and 1997, respectively, wherein the policyholder
assumes the investment risk, and guaranteed separate accounts totaling $9.7 and
$10.5 billion as of December 31, 1998 and 1997, respectively, wherein Hartford
Life Insurance Company contractually guarantees either a minimum return or
account value to the policyholder. Included in non-guaranteed separate account
assets were policy loans totaling $1.8 billion and $1.9 billion as of December
31, 1998 and 1997, 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 and other revenues were $908, $699 and $538
in 1998, 1997 and 1996, respectively. The guaranteed separate accounts include
fixed market value adjusted (MVA) individual annuity and modified guaranteed
life insurance. The average credited interest rate on these contracts was 6.6%
and 6.5% as of December 31, 1998 and 1997, respectively. The assets that support
these liabilities were comprised of $9.5 billion and $10.2 billion in fixed
maturities as of December 31, 1998 and 1997, respectively. 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 $40 and $119 in carrying value and $3.5 billion and
$3.0 billion in notional amounts as of December 31, 1998 and 1997, respectively.

6. STATUTORY RESULTS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER
31,
-------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Statutory net income................ $ 211 $ 214 $ 144
--------- --------- ---------
Statutory surplus................... $ 1,676 $ 1,441 $ 1,207
--------- --------- ---------
--------- --------- ---------
</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 1999 is estimated to be $168.

Hartford Life Insurance Company and its domestic insurance subsidiaries
prepare their statutory financial statements in accordance with accounting
practices prescribed by the State of Connecticut. Prescribed statutory
accounting practices include publications of the National Association of
Insurance Commissioners, as well as state laws, regulations, and general
administrative rules.

7. STOCK COMPENSATION PLANS

Hartford Life Insurance Company's employees are included in the 1997
Hartford Life, Inc. Incentive Stock Plan (the "Plan"), which was adopted during
the second quarter of 1997. 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 million
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 Hartford
Life, Inc. 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 121,943 and
54,316 shares under the ESPP in 1998 and 1997, respectively. The weighted
average fair value of the discount under the ESPP was $13.80 per share in 1998
and $9.63 per share in 1997.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-15
- --------------------------------------------------------------------------------

8. POSTRETIREMENT BENEFIT AND SAVINGS PLANS

(A) PENSION PLANS

Hartford Life Insurance 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 $6 in 1998 and $5
in both 1997 and 1996.

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 1998, 1997 and 1996.

The assumed rate in the per capita cost of health care (the health care
trend rate) was 7.8% for 1998, decreasing ratably to 5.0% in the year 2003.
Increasing the health care trend rates by one percent per year would have an
immaterial impact on the accumulated postretirement benefit obligation and the
annual expense. To the extent that the actual experience differs from the
inherent assumptions, the effect will be amortized over the average future
service of 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 Hartford Life Insurance Company for the above-mentioned
plan was approximately $4 and $2 in 1998 and 1997, respectively.

9. REINSURANCE

Hartford Life Insurance 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,
-------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Gross premiums...................... $ 2,722 $ 2,164 $ 2,138
Assumed............................. 150 159 190
Ceded............................... (654) (686) (623)
--------- --------- ---------
Net premiums and other
considerations................... $ 2,218 $ 1,637 $ 1,705
--------- --------- ---------
--------- --------- ---------
</TABLE>

The Company ceded approximately $128, $76 and $100 of group life premium to
HLA in 1998, 1997 and 1996, respectively, representing $38.4 billion, $33.6
billion and $33.3 billion of insurance in force, respectively. The Company ceded
$383, $339 and $318 of accident and health premium to HLA in 1998, 1997 and
1996, respectively. The Company assumed $82, $89 and $101 of premium in 1998,
1997 and 1996, respectively, representing $7.4 billion, $8.2 billion and $8.5
billion of individual life insurance in force, respectively, from HLA.

Life reinsurance recoveries, which reduce death and other benefits,
approximated $97, $158 and $140 for the years ended December 31, 1998, 1997 and
1996, respectively.

Hartford Life Insurance Company has no significant reinsurance-related
concentrations of credit risk.

10. 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 own 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. It is the intention of The
Hartford and its non-life subsidiaries to file a single consolidated Federal
income tax return. The life insurance companies will file a separate
consolidated federal income tax return. The Company's effective tax rate was
35%, 36% and 35% in 1998, 1997 and 1996, respectively.
<PAGE>
F-16 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

Income tax expense is as follows:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER
31,
-------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Current.................................. $ 307 $ 162 $ 118
Deferred................................. (119) 5 (98)
--------- --------- ---------
Income tax expense..................... $ 188 $ 167 $ 20
--------- --------- ---------
--------- --------- ---------
</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,
---------------------------------
1998 1997 1996
--------- --------- -----
<S> <C> <C> <C>
Tax provision at the U.S. Federal
statutory rate........................... $ 188 $ 164 $ 20
Other..................................... -- 3 --
--------- --------- ---
Total................................... $ 188 $ 167 $ 20
--------- --------- ---
--------- --------- ---
</TABLE>

Deferred tax assets (liabilities) include the following as of December 31:

<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
Tax basis deferred policy acquisition costs.... $ 751 $ 639
Financial statement deferred policy acquisition
costs and reserves............................ 103 69
Employee benefits.............................. 4 8
Net unrealized capital gains on securities..... (98) (96)
Investments and other.......................... (296) (272)
--------- ---------
Total........................................ $ 464 $ 348
--------- ---------
--------- ---------
</TABLE>

Hartford Life Insurance Company had a current tax payable of $65 and $64 as
of December 31, 1998 and 1997, respectively.

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, based on current tax law,
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, 1998 was $104.

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, 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 $47, $34 and $40 in 1998, 1997 and 1996,
respectively. Management believes that the methods used are reasonable.

12. COMMITMENTS AND CONTINGENT LIABILITIES

(A) LITIGATION

Hartford Life Insurance 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, at the
present time the Company does not anticipate that the ultimate liability arising
from such pending or threatened litigation, after consideration of provisions
made for potential losses and costs of defense, will have a material adverse
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. Part of the assessments
paid by the Company and its subsidiaries pursuant to these laws may be used as
credits for a portion of the associated premium taxes. The Company paid guaranty
fund assessments of approximately $9, $15 and $11 in 1998, 1997 and 1996,
respectively, of which $4, $4 and $5, respectively, were estimated to be
creditable against premium taxes.

The rent paid to Hartford Fire for space occupied by the Company was $7 in
both 1998 and 1997 and $3 in 1996. Future minimum rental commitments are as
follows:

<TABLE>
<S> <C>
1999............. $ 7
2000............. 12
2001............. 12
2002............. 13
2003............. 13
Thereafter....... 74
---------
Total.......... $ 131
---------
---------
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-17
- --------------------------------------------------------------------------------

Rental expense is recognized on a level basis over the term of the primary
sublease, which expires on December 31, 2009, and amounted to approximately $9
in both 1998 and 1997 and $8 in 1996.

(D) TAX MATTERS

Hartford Life's federal income tax returns are routinely audited by the
Internal Revenue Service. Hartford Life is currently under audit for the years
1993 through 1995, with the audit for the years 1996 through 1997 expected to
begin during early 1999. Management believes that adequate provision has been
made in the financial statements for items that may result from tax examinations
and other tax related matters.

(E) INVESTMENTS

As of December 31, 1998, Hartford Life Insurance Company held $71 of asset
backed securities securitized and serviced by Commercial Financial Services,
Inc. (CFS) of which $50 were included in the Company's general account and $21
in the Company's guaranteed separate account. In October 1998, the Company
became aware of allegations of improper activities at CFS. On December 11, 1998,
CFS filed for protection under Chapter 11 of the Bankruptcy Code. As of December
31, 1998, CFS continues to service the asset backed securities, which remain
current on payments of principal and interest, however, the Company does not
expect to recover all of its principal investment. Based upon information
available in the fourth quarter 1998, the Company recognized a $25, after-tax,
writedown related to its holdings in CFS of which $18 was related to the
Company's general account assets. The ultimate realizable amount depends on the
outcome of the bankruptcy of CFS and these estimates are therefore subject to
material change as new information becomes available. The Company is presently
unable to determine the amount of further potential loss, if any, related to the
securities.

13. SEGMENT INFORMATION

Hartford Life Insurance Company adopted SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information", during the fourth quarter of
1998. This statement replaces SFAS No. 14, "Financial Reporting for Segments of
a Business Enterprise", and establishes new standards for reporting information
about operating segments in annual financial statements and in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about products and services, geographic areas and major customers.
This statement requires that the reportable operating segments be based on the
Company's internal operations. On this basis, Hartford Life Insurance Company's
segments represent strategic operations which offer different products and
services as well as serve different markets.

Hartford Life Insurance Company is organized into three reportable operating
segments which include Investment Products, Individual Life and Corporate Owned
Life Insurance (COLI). Investment Products offers individual variable annuities,
fixed market value adjusted (MVA) annuities and fixed and variable immediate
annuities, mutual funds, deferred compensation and retirement plan services,
structured settlement contracts and other special purpose annuity contracts.
Individual Life sells a variety of life insurance products, including variable
life, universal life, interest-sensitive whole life and term life insurance.
COLI primarily offers variable products used by employers to fund non-qualified
benefits or other post-employment benefit obligations as well as leveraged COLI.
The Company includes in "Other" corporate items not directly allocable to any of
its reportable operating segments as well as certain employee benefit products
including group life and disability insurance that is directly written by the
Company and is substantially ceded to its parent, HLA.

The accounting policies of the reportable operating segments are the same as
those described in the summary of significant accounting policies in Note 2.
Hartford Life Insurance Company evaluates performance of its segments based on
revenues, net income and the segment's return on allocated capital. The Company
charges direct operating expenses to the appropriate segment and allocates the
majority of indirect expenses to the segments based on an intercompany expense
arrangement. Intersegment revenues are not significant and primarily occur
between corporate and the operating segments. These amounts include interest
income on allocated surplus and the amortization of net realized capital gains
and losses through net investment income utilizing the duration of the segment's
investment portfolios. The Company's revenues are primarily derived from
customers within the United States. The Company's long-lived assets primarily
consist of deferred policy acquisition costs and deferred tax assets from within
the United States. The following table outlines summarized financial information
concerning the Company's segments. The information for 1997 and 1996 has been
restated to conform to the 1998 presentation.

<TABLE>
<CAPTION>
INVESTMENT INDIVIDUAL
1998 PRODUCTS LIFE COLI OTHER TOTAL
- ------------------------------------------------------- --------- ------- --------- ------- -------
<S> <C> <C> <C> <C> <C>
Total revenues......................................... $ 1,779 $ 543 $ 1,567 $ 86 $ 3,975
Net investment income.................................. 736 181 793 49 1,759
Amortization of deferred policy acquisition costs...... 326 105 -- -- 431
Income tax expense (benefit)........................... 145 35 12 (4) 188
Net income (loss)...................................... 270 64 24 (8) 350
Assets................................................. 87,207 5,228 22,631 3,197 118,263
</TABLE>

<PAGE>
F-18 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
INVESTMENT INDIVIDUAL
1997 PRODUCTS LIFE COLI OTHER TOTAL
- ------------------------------------------------------- --------- ------- --------- ------- -------
<S> <C> <C> <C> <C> <C>
Total revenues......................................... $ 1,510 $ 487 $ 980 $ 32 $ 3,009
Net investment income.................................. 739 164 429 36 1,368
Amortization of deferred policy acquisition costs...... 250 83 -- 2 335
Income tax expense..................................... 111 30 15 11 167
Net income............................................. 206 55 27 14 302
Assets................................................. 72,288 4,914 17,800 2,743 97,745
</TABLE>

<TABLE>
<CAPTION>
INVESTMENT INDIVIDUAL
1996 PRODUCTS LIFE COLI OTHER TOTAL
- ------------------------------------------------------- --------- ------- --------- ------- -------
<S> <C> <C> <C> <C> <C>
Total revenues......................................... $ 1,002 $ 440 $ 1,360 $ 87 $ 2,889
Net investment income.................................. 684 153 480 80 1,397
Amortization of deferred policy acquisition costs...... 174 60 -- -- 234
Income tax expense (benefit)........................... (42 ) 24 11 27 20
Net income (loss)...................................... (77 ) 44 26 45 38
Assets................................................. 57,410 3,753 14,222 2,377 77,762
</TABLE>

14. QUARTERLY RESULTS FOR 1998 AND 1997 (UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
-------------------- -------------------- -------------------- --------------------
1998 1997 1998 1997 1998 1997 1998 1997
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues........................... $ 915 $ 651 $ 721 $ 645 $ 826 $ 679 $ 1,513 $ 1,034
Benefits, claims and expenses...... 787 550 591 536 688 550 1,371 904
Net income......................... 83 63 85 74 89 81 93 84
</TABLE>
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-19
- --------------------------------------------------------------------------------

SCHEDULE I -- SUMMARY OF INVESTMENTS -- OTHER THAN INVESTMENTS IN AFFILIATES
AS OF DECEMBER 31, 1998
(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. Government and Government agencies
and authorities (guaranteed and
sponsored)................................ $ 121 $ 123 $ 123
U. S. Government and Government agencies
and authorities (guaranteed and sponsored)
-- asset backed........................... 1,001 1,016 1,016
States, municipalities and political
subdivisions.............................. 165 173 173
Foreign governments........................ 393 412 412
Public utilities........................... 844 874 874
All other corporate including
international............................. 5,469 5,687 5,687
All other corporate -- asset backed........ 4,155 4,171 4,171
Short-term investments..................... 1,847 1,847 1,847
Certificates of deposit...................... 510 515 515
------- ------- -------
Total fixed maturities....................... 14,505 14,818 14,818
------- ------- -------
Equity Securities
Common Stocks
Industrial and miscellaneous............... 30 31 31
------- ------- -------
Total equity securities...................... 30 31 31
------- ------- -------
Total fixed maturities and equity
securities.................................. 14,535 14,849 14,849
------- ------- -------
Policy Loans................................. 6,684 6,684 6,684
------- ------- -------
Other Investments
Mortgage loans on real estate.............. 206 207 206
Other invested assets...................... 58 102 58
------- ------- -------
Total other investments...................... 264 309 264
------- ------- -------
Total investments............................ $21,483 $21,842 $21,797
------- ------- -------
------- ------- -------
</TABLE>

<PAGE>
F-20 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(IN MILLIONS)
<TABLE>
<CAPTION>
DEFERRED
POLICY FUTURE OTHER PREMIUMS NET
ACQUISITION POLICY POLICYHOLDER AND OTHER INVESTMENT
SEGMENT COSTS BENEFITS FUNDS CONSIDERATIONS INCOME
- --------------------------------------------- ----------- --------- ---------- --------------- ---------

<S> <C> <C> <C> <C> <C>
1998
Investment Products.......................... $2,823 $2,407 $ 9,194 $1,043 $ 736
Individual Life.............................. 931 466 2,307 363 181
Corporate Owned Life Insurance............... -- 225 8,097 774 793
Other........................................ -- 497 17 38 49
----------- --------- ---------- ------ ---------
Consolidated operations...................... $3,754 $3,595 $19,615 $2,218 $1,759
----------- --------- ---------- ------ ---------
----------- --------- ---------- ------ ---------

1997
Investment Products.......................... $2,478 $2,070 $ 9,620 $ 771 $ 739
Individual Life.............................. 837 392 2,182 323 164
Corporate Owned Life Insurance............... -- 56 9,259 551 429
Other........................................ -- 541 (27) (8) 36
----------- --------- ---------- ------ ---------
Consolidated operations...................... $3,315 $3,059 $21,034 $1,637 $1,368
----------- --------- ---------- ------ ---------
----------- --------- ---------- ------ ---------

1996
Investment Products.......................... $2,030 $1,526 $10,140 $ 537 $ 684
Individual Life.............................. 730 346 2,160 287 153
Corporate Owned Life Insurance............... -- -- 9,823 880 480
Other........................................ -- 602 11 1 80
----------- --------- ---------- ------ ---------
Consolidated operations...................... $2,760 $2,474 $22,134 $1,705 $1,397
----------- --------- ---------- ------ ---------
----------- --------- ---------- ------ ---------

<CAPTION>
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>
1998
Investment Products.......................... $ -- $ 670 $326 $ -- $ 368
Individual Life.............................. (1) 262 105 -- 77
Corporate Owned Life Insurance............... -- 924 -- 329 278
Other........................................ (1) 55 -- -- 43
----------- ----------- ----- ----- -----
Consolidated operations...................... $ (2) $1,911 $431 $329 $ 766
----------- ----------- ----- ----- -----
----------- ----------- ----- ----- -----
1997
Investment Products.......................... $ -- $ 677 $250 $ -- $ 266
Individual Life.............................. -- 242 83 -- 77
Corporate Owned Life Insurance............... -- 439 -- 240 259
Other........................................ 4 21 2 -- (16)
----------- ----------- ----- ----- -----
Consolidated operations...................... $ 4 $1,379 $335 $240 $ 586
----------- ----------- ----- ----- -----
----------- ----------- ----- ----- -----
1996
Investment Products.......................... $(219) $ 744 $175 $ -- $ 203
Individual Life.............................. -- 245 59 -- 68
Corporate Owned Life Insurance............... -- 545 -- 634 144
Other........................................ 6 1 -- 1 12
----------- ----------- ----- ----- -----
Consolidated operations...................... $(213) $1,535 $234 $635 $ 427
----------- ----------- ----- ----- -----
----------- ----------- ----- ----- -----
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-21
- --------------------------------------------------------------------------------

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, 1998
Life insurance in force........................... $326,400 $ 200,782 $ 18,289 $143,907 12.7%
Premiums and other considerations
Life insurance and annuities.................... $ 2,329 $ 271 $ 142 $ 2,200 6.5%
Accident and health insurance................... 393 383 8 18 44.4%
-------- -------------- ------- --------
Total premiums and other considerations........... $ 2,722 $ 654 $ 150 $ 2,218 6.8%
-------- -------------- ------- --------
-------- -------------- ------- --------
For the year ended December 31, 1997
Life insurance in force......................... $245,487 $ 178,771 $ 33,156 $ 99,872 33.2%
Premiums and other considerations
Life insurance and annuities.................... $ 1,818 $ 340 $ 157 $ 1,635 9.6%
Accident and health insurance................... 346 346 2 2 100.0%
-------- -------------- ------- --------
Total premiums and other considerations........... $ 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%
Premiums and other considerations
Life insurance and annuities.................... $ 1,801 $ 298 $ 169 $ 1,672 10.1%
Accident and health insurance................... 337 325 21 33 63.6%
-------- -------------- ------- --------
Total premiums and other considerations........... $ 2,138 $ 623 $ 190 $ 1,705 11.1%
-------- -------------- ------- --------
-------- -------------- ------- --------
</TABLE>