HARTFORD LIFE INSURANCE COMPANY SEPARATE ACCOUNT TWO, 497, 1996-09-04

HARTFORD LIFE INSURANCE COMPANY SEPARATE ACCOUNT TWO
497, 1996-09-04

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<PAGE>
HARTFORD LIFE INSURANCE COMPANY
[LOGO]
SEPARATE ACCOUNT TWO
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This Prospectus describes the Director, individual and group tax-deferred
variable annuity Contracts designed for retirement planning purposes.

The Contracts are issued by Hartford Life Insurance Company ("Hartford Life").
Payments for the Contracts will be held in a series of Hartford Life Insurance
Company Separate Account Two (Separate Account Two or the "Separate Account") or
in the Fixed Account of Hartford Life. Allocations to and transfer to and from
the Fixed Account are not permitted in certain states.

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

<TABLE>
<S> <C> <C>
Advisers Fund Sub-Account -- shares of Hartford Advisers Fund, Inc. ("Advisers Fund")
Bond Fund Sub-Account -- shares of Hartford Bond Fund, Inc. ("Bond Fund")
Capital Appreciation Fund, Inc. Sub-Account -- shares of Hartford Capital Appreciation Fund, Inc.
("Hartford Capital Appreciation Fund, Inc.")(formerly
"Hartford Aggressive Growth Fund, Inc.")
Dividend and Growth Fund Sub-Account -- shares of Hartford Dividend and Growth Fund, Inc.
("Dividend and Growth Fund")
Index Fund Sub-Account -- shares of Hartford Index Fund, Inc. ("Index Fund")
International Advisers Fund Sub-Account -- shares of Hartford International Advisers Fund, Inc.
("International Advisers Fund").
International Opportunities Fund Sub-Account -- shares of Hartford International Fund Opportunities Fund,
Inc. ("International Opportunities Fund")
Money Market Fund Sub-Account -- shares of HVA Money Market Fund, Inc. ("Money Market
Fund")
Mortgage Securities Fund Sub-Account -- shares of Hartford Mortgage Securities Account Fund, Inc.
("Mortgage Securities Fund")
Small Company Fund Sub-Account -- shares of Hartford Small Company Fund, Inc. ("Small
Company Fund")
Stock Fund Sub-Account -- shares of Hartford Stock Fund, Inc. ("Stock Fund")
</TABLE>

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This Prospectus sets forth the information concerning the Separate Account and
the Fixed Account that investors should know before investing. This Prospectus
should be kept for future reference. Additional information about the Separate
Account and the Fixed Account has been filed with the Securities and Exchange
Commission and is available without charge upon request. To obtain the Statement
of Additional Information send a written request to Hartford Life Insurance
Company, Attn: Individual Annuity Operations, P.O. Box 5085, Hartford, CT
06102-5085. The Table of Contents for the Statement of Additional Information
may be found on page of this Prospectus. The Statement of Additional
Information is incorporated by reference to this Prospectus.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR
GUARANTEED BY, ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE PROTECTED
BY THE FDIC, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY; THEY ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
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PROSPECTUS DATED: MAY 1, 1996
REVISED EFFECTIVE: AUGUST 9, 1996
STATEMENT OF ADDITIONAL INFORMATION DATED: MAY 1, 1996
<PAGE>
2 HARTFORD LIFE INSURANCE COMPANY
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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GLOSSARY OF SPECIAL TERMS............................................... 3
FEE TABLE............................................................... 5
ACCUMULATION UNIT VALUES................................................ 8
SUMMARY................................................................. 9
PERFORMANCE RELATED INFORMATION......................................... 10
INTRODUCTION............................................................ 11
THE CONTRACT, SEPARATE ACCOUNT TWO AND THE FIXED ACCOUNT................ 11
What are the Contracts?............................................... 11
Who can buy these Contracts?.......................................... 12
What is the Separate Account and how does it operate?................. 12
What is the Fixed Account and how does it operate?.................... 13
May I transfer assets between Sub-Accounts?........................... 13
May I transfer assets between the Fixed Account and the
Sub-Accounts?........................................................ 14
OPERATION OF THE CONTRACT............................................... 14
How is my Premium Payment credited?................................... 14
What size Premium Payments must I make?............................... 14
What if I am not satisfied with my purchase?.......................... 14
May I assign or transfer my Contract?................................. 15
How do I know what my Contract is worth?.............................. 15
How is the Accumulation Unit value determined?........................ 15
How are the underlying Fund shares valued?............................ 15
How is the value of the Fixed Account determined?..................... 15
PAYMENT OF BENEFITS..................................................... 15
What would my Beneficiary receive as a death benefit?................. 15
How can a Contract be redeemed or surrendered?........................ 16
Can payment of a redemption, surrender or death benefit ever be
postponed beyond the seven day period?............................... 17
May I surrender once Annuity payments have started?................... 17
What are my Annuity Benefits?......................................... 17
How are Annuity payments determined?.................................. 18
CHARGES UNDER THE CONTRACTS............................................. 19
How are the sales charges under the Contracts made?................... 19
Is there ever a time when the sales charges do not apply?............. 19
What do the sales charges cover?...................................... 20
What is the mortality and expense risk charge?........................ 20
Are there any administrative charges?................................. 20
How much are the deductions for Premium Taxes?........................ 20
HARTFORD LIFE INSURANCE COMPANY AND THE FUNDS........................... 20
What is Hartford Life?................................................ 20
What are the Funds?................................................... 21
Does Hartford Life have any interest in the Funds?.................... 23
FEDERAL TAX CONSIDERATIONS.............................................. 23
What are some of the federal tax consequences which affect these
Contracts?........................................................... 23
MISCELLANEOUS........................................................... 27
What are my voting rights?............................................ 27
Will other Contracts be participating in the Separate Account?........ 27
How are the Contracts sold?........................................... 27
Who is the custodian of the Separate Account's assets?................ 28
Are there any material legal proceedings affecting the Separate
Account?............................................................. 28
Who has passed on the legal matters affecting the Separate Account?...
Are you relying on any experts as to any portion of this
Prospectus?.......................................................... 28
How may I get additional information?................................. 28
APPENDIX I -- DIRECTOR III.............................................. 29
APPENDIX II -- DIRECTOR II.............................................. 30
APPENDIX III -- INFORMATION REGARDING TAX QUALIFIED PLANS............... 31
TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION............... 34
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY 3
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GLOSSARY OF SPECIAL TERMS

ACCUMULATION UNIT: An accounting unit of measure used to calculate values before
Annuity payments begin.

ANNUITANT: The person or Participant upon whose life the Contract is issued.

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

ANNUITY COMMENCEMENT DATE: The date on which Annuity payments are to commence.
Under group unallocated Contracts, the date for each Participant is determined
by the Contract Owner in accordance with the terms of the Plan.

ANNUITY UNIT: An accounting unit of measure used to calculate the value of
Annuity payments.

BENEFICIARY: The person(s) who receive Contract Values in the event of the
Annuitant's or Contract Owner's death under certain conditions. Under a group
unallocated Contract, the person named by the Participant within the Plan
documents/enrollment forms who is entitled to receive benefits in case of the
death of the Participant.

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

COMMISSION: Securities and Exchange Commission.

CONTINGENT ANNUITANT: The person so designated by the Contract Owner, who upon
the Annuitant's death, prior to the Annuity Commencement Date, becomes the
Annuitant.

CONTRACT ANNIVERSARY: The anniversary of the Contract Date.

CONTRACT OWNER(S): The owner(s) of the Contract, trustee or other entity,
sometimes herein referred to as "you".

CONTRACT VALUE: The aggregate value of any Sub-Account Accumulation Units held
under the Contract plus the value of the Fixed Account.

CONTRACT YEAR: A period of 12 months commencing with the Contract Date or any
anniversary thereof.

FIXED ACCOUNT: Part of the General Account of Hartford Life to which a Contract
Owner may allocate all or a portion of his Premium Payment or Contract Value.

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

FUNDS: The Funds described commencing on page of this Prospectus and any
additional Funds which may be made available from time to time.

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

HARTFORD LIFE: Hartford Life Insurance Company.

HOME OFFICE OF THE COMPANY: Currently located at 200 Hopmeadow Street, Simsbury,
CT. All correspondence concerning this Contract should be sent to P.O. Box 5085,
Hartford, CT 06102-5085, Attn: Individual Annuity Operations.

MINIMUM DEATH BENEFIT: The minimum amount payable upon the death of a Contract
Owner, Annuitant or Participant, in the case of group Contracts, prior to age 85
and before annuity payments have commenced.

NON-QUALIFIED CONTRACT: A Contract which is not classified as a tax-qualified
retirement plan using pre-tax dollars under Internal Revenue Code.

PARTICIPANT: (FOR GROUP UNALLOCATED CONTRACTS ONLY) - Any eligible employee of
an Employer/Contract Owner participating in the Plan.

PLAN: A voluntary Plan of an employer which qualifies for special tax treatment
under a Section of the Internal Revenue Code.

PREMIUM PAYMENT: The payment made to Hartford Life pursuant to the terms of the
Contract.

PREMIUM TAX: A tax on premiums charged by a state or municipality on Premium
Payments or Contract Values.

QUALIFIED CONTRACT: A Contract which qualifies as a tax-qualified retirement
plan using pre-tax dollars under the Internal Revenue Code, such as an employer
sponsored Section401(k) on an Individual Retirement Annuity (IRA).

SEPARATE ACCOUNT: The Hartford Life separate account entitled "Hartford Life
Insurance Company Separate Account Two".

SPECIFIED CONTRACT ANNIVERSARY: Every seventh Contract Anniversary (i.e., the
7th, 14th, 21st, etc. Contract Anniversaries).

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

TERMINATION VALUE: The Contract Value upon termination of the Contract prior to
the Annuity Commencement Date, less any applicable Premium Taxes, the Annual
Maintenance Fee and any applicable contingent deferred sales charges.

UNALLOCATED CONTRACTS: Contracts issued to employers, or other entity, as
Contract Owner under which no allocation of Contract Values is made for a
specific Participant. The Plans will be responsible for the individual
allocations.
<PAGE>
4 HARTFORD LIFE INSURANCE COMPANY
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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 (currently 4:00 p.m. Eastern Time) on such days.

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 of the Separate Account.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 5
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FEE TABLE
SUMMARY

Contract Owner Transaction Expenses
(All Sub-Accounts)

<TABLE>
<S> <C>
Sales Load Imposed on Purchases (as a percentage of premium
payments)...................................................... None
Exchange Fee...................................................... $ 0
Deferred Sales Load (as a percentage of amounts withdrawn)
First Year (1)................................................ 7%
Second Year................................................... 6%
Third Year.................................................... 5%
Fourth Year................................................... 4%
Fifth Year.................................................... 3%
Sixth Year.................................................... 2%
Seventh Year.................................................. 1%
Eighth Year................................................... 0%
Annual Contract Fee (2)........................................... $ 25(2)
Annual Expenses-Separate Account (as percentage of average account
value)
Mortality and Expense Risk.................................... 1.250%
</TABLE>

Annual Fund Operating Expenses
(as percentage of net assets)

<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OTHER OPERATING
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Hartford Bond Fund.............................. 0.497% 0.028% 0.525%
Hartford Stock Fund............................. 0.455% 0.020% 0.475%
HVA Money Market Fund........................... 0.421% 0.025% 0.446%
Hartford Advisers Fund.......................... 0.625% 0.021% 0.646%
Hartford Capital Appreciation Fund.............. 0.655% 0.021% 0.676%
Hartford Mortgage Securities Fund............... 0.425% 0.041% 0.466%
Hartford Index Fund............................. 0.375% 0.014% 0.389%
Hartford International Opportunities Fund....... 0.713% 0.147% 0.860%
Hartford Dividend & Growth Fund................. 0.750% 0.023% 0.773%
Hartford International Advisers Fund (3)........ 0.750% 0.479% 1.229%
Hartford Small Company Fund (4)................. 0.520% 0.150% 0.670%
</TABLE>

EXAMPLE

<TABLE>
<CAPTION>
If you surrender your contract If you annuitize at the end of If you do not surrender your
at the end of the applicable the applicable time period: You contract: You would pay the
time period: You would pay the would pay the following following expenses on a $1,000
following expenses on a $1,000 expenses on a $1,000 investment, assuming a 5%
investment, assuming a 5% investment, assuming a 5% annual return on assets:
annual return on assets: annual return on assets:
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Hartford Bond Fund........... $ 89 $ 108 $ 130 $ 217 $ 18 $ 58 $ 99 $ 216 $ 19 $ 58 $ 100 $ 217
Hartford Stock Fund.......... 88 107 127 211 18 56 97 211 18 57 97 211
HVA Money Market Fund........ 88 106 126 208 17 55 95 207 18 56 96 208
Hartford Advisers Fund....... 90 112 136 230 19 61 106 229 20 62 106 230
Hartford Capital Appreciation
Fund....................... 90 113 138 233 20 62 107 232 20 63 108 233
Hartford Mortgage Securities
Fund....................... 88 106 127 210 18 56 96 210 18 56 97 210
Hartford Index Fund.......... 87 104 123 202 17 53 92 201 17 54 93 202
Hartford International
Opportunities Fund......... 92 119 148 252 22 68 117 252 22 69 118 252
Hartford Dividend & Growth
Fund....................... 91 116 143 243 21 65 112 242 21 66 113 243
Hartford International
Advisers Fund.............. 96 130 167 290 25 79 136 289 26 80 137 290
Hartford Small Company Fund
(5)........................ 81 113 N/A N/A 20 62 N/A N/A 21 83 N/A N/A
</TABLE>

The purpose of this table is to assist the Contract Owner in understanding
various costs and expenses that a Contract Owner will bear directly or
indirectly. The table reflects expenses of the Separate Account and 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.
<PAGE>
6 HARTFORD LIFE INSURANCE COMPANY
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FEE TABLE
SUMMARY

Contract Owner Transaction Expenses

(All Sub-Accounts)

<TABLE>
<S> <C>
Sales Load Imposed on Purchases (as a percentage of premium
payments)...................................................... None
Exchange Fee...................................................... $ 0
Deferred Sales Load (as a percentage of amounts withdrawn)
First Year (1)................................................ 6%
Second Year................................................... 6%
Third Year.................................................... 6%
Fourth Year................................................... 6%
Fifth Year.................................................... 5%
Sixth Year.................................................... 4%
Seventh Year.................................................. 0%
Annual Contract Fee (2)........................................... $ 25(2)
Annual Expenses-Separate Account (as percentage of average account
value)
Mortality and Expense Risk.................................... 1.250%
</TABLE>

Annual Fund Operating Expenses
(as percentage of net assets)

<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OTHER OPERATING
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Hartford Bond Fund.............................. 0.497% 0.028% 0.525%
Hartford Stock Fund............................. 0.455% 0.020% 0.475%
HVA Money Market Fund........................... 0.421% 0.025% 0.446%
Hartford Advisers Fund.......................... 0.625% 0.021% 0.646%
Hartford U.S. Government Money Market Fund...... 0.425% 0.141% 0.566%
Hartford Capital Appreciation Fund.............. 0.655% 0.021% 0.676%
Hartford Mortgage Securities Fund............... 0.425% 0.041% 0.466%
Hartford Index Fund............................. 0.375% 0.014% 0.389%
Hartford International Opportunities Fund....... 0.713% 0.147% 0.860%
Hartford Dividend & Growth Fund................. 0.750% 0.023% 0.773%
Hartford International Advisers Fund (3)........ 0.750% 0.479% 1.229%
Hartford Small Company Fund (4)................. 0.520% 0.150% 0.670%
</TABLE>

EXAMPLE

<TABLE>
<CAPTION>
If you surrender your contract If you annuitize at the end of If you do not surrender your
at the end of the applicable the applicable time period: You contract: You would pay the
time period: You would pay the would pay the following following expenses on a $1,000
following expenses on a $1,000 expenses on a $1,000 investment, assuming a 5%
investment, assuming a 5% investment, assuming a 5% annual return on assets:
annual return on assets: annual return on assets:
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Hartford Bond Fund........... $ 69 $ 98 $ 120 $ 217 $ 18 $ 58 $ 99 $ 216 $ 19 $ 58 $ 100 $ 217
Hartford Stock Fund.......... 68 97 117 211 18 56 97 211 18 57 97 211
HVA Money Market Fund........ 68 96 116 208 17 55 95 207 18 56 96 208
Hartford Advisers Fund....... 70 102 126 230 19 61 106 229 20 62 106 230
Hartford U.S. Government
Money Market Fund.......... 69 99 122 221 19 59 102 220 19 59 102 221
Hartford Capital Appreciation
Fund....................... 70 103 128 233 20 62 107 232 20 63 108 233
Hartford Mortgage Securities
Fund....................... 68 96 117 210 18 56 96 210 18 56 97 210
Hartford Index Fund.......... 67 94 113 202 17 53 92 201 17 54 93 202
Hartford International
Opportunities Fund......... 72 109 138 252 22 68 117 252 22 69 118 252
Hartford Dividend & Growth
Fund....................... 71 106 133 243 21 65 112 242 21 66 113 243
Hartford International
Advisers Fund.............. 76 120 157 290 25 79 136 289 26 80 137 290
Hartford Small Company Fund
(5)........................ 81 113 N/A N/A 20 62 N/A N/A 21 83 N/A N/A
</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.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 7
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FEE TABLE
SUMMARY

Contract Owner Transaction Expenses
(All Sub-Accounts)

<TABLE>
<S> <C>
Sales Load Imposed on Purchases (as a percentage of premium
payments)...................................................... None
Exchange Fee...................................................... $ 0
Deferred Sales Load (as a percentage of amounts withdrawn)
First Year (1)................................................ 5%
Second Year................................................... 5%
Third Year.................................................... 4%
Fourth Year................................................... 3%
Fifth Year.................................................... 2%
Sixth Year.................................................... 0%
Annual Contract Fee (2)........................................... $ 25(2)
Annual Expenses-Separate Account (as percentage of average account
value)
Mortality and Expense Risk.................................... 1.250%
</TABLE>

Annual Fund Operating Expenses
(as percentage of net assets)

<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OTHER OPERATING
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Hartford Bond Fund.............................. 0.497% 0.028% 0.525%
Hartford Stock Fund............................. 0.455% 0.020% 0.475%
HVA Money Market Fund........................... 0.421% 0.025% 0.446%
Hartford Advisers Fund.......................... 0.625% 0.021% 0.646%
Hartford U.S. Government Money Market Fund...... 0.425% 0.141% 0.566%
Hartford Capital Appreciation Fund.............. 0.655% 0.021% 0.676%
Hartford Mortgage Securities Fund............... 0.425% 0.041% 0.466%
Hartford Index Fund............................. 0.375% 0.014% 0.389%
Hartford International Opportunities Fund....... 0.713% 0.147% 0.860%
Hartford Dividend & Growth Fund................. 0.750% 0.023% 0.773%
Hartford International Advisers Fund (3)........ 0.750% 0.479% 1.229%
Hartford Small Company Fund (4)................. 0.520% 0.150% 0.670%
</TABLE>

- ------------------------------
(1) Length of time from premium payment.
(2) The Annual Contract Fee is a single $25 charge on a Contract. It is deducted
proportionally from the investment options in use at the time of the charge.
Pursuant to requirements of the 1940 Act, the Annual Contract Fee has been
reflected in the Examples by a method intended to show the "average" impact
of the Annual Contract Fee on an investment in the Separate Account. The
Annual Contract Fee is deducted only when the accumulated value is $50,000
or less. In the Example, the Annual Contract Fee is approximated as a 0.06%
annual asset charge based on the experience of the Contracts.
(3) In 1995, a portion of the International Advisers Fund management fees were
waived. With this waiver, the 1995 total fund operating expenses ratio was
.650%. Due to asset growth, no management fee waiver is needed in 1996.
(4) The Small Company Fund is a new Fund: operating expenses are based on
annualized estimates of such expenses to be incurred in the current fiscal
year. HIMCO has agreed to waive its fees for the Small Company Fund until
the assets of this Fund (excluding assets contributed by companies
affiliated with HIMCO) first reach $20 million. Without this waiver, the
investment advisory fee would be .575% annually, total operating expense
without the waiver would be .90% annually.
(5) The Securities and Exchange Commission requires only 1 and 3 years since
this is an estimate of expenses incurred.

EXAMPLE

<TABLE>
<CAPTION>
If you surrender your contract If you annuitize at the end of If you do not surrender your
at the end of the applicable the applicable time period: You contract: You would pay the
time period: You would pay the would pay the following following expenses on a $1,000
following expenses on a $1,000 expenses on a $1,000 investment, assuming a 5%
investment, assuming a 5% investment, assuming a 5% annual return on assets:
annual return on assets: annual return on assets:
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Hartford Bond Fund........... $ 79 $ 118 $ 150 $ 217 $ 18 $ 58 $ 99 $ 216 $ 19 $ 58 $ 100 $ 217
Hartford Stock Fund.......... 78 117 147 211 18 56 97 211 18 57 97 211
HVA Money Market Fund........ 78 116 146 208 17 55 95 207 18 56 96 208
Hartford Advisers Fund....... 80 122 156 230 19 61 106 229 20 62 106 230
Hartford U.S. Government
Money Market Fund.......... 79 119 152 221 19 59 102 220 19 59 102 221
Hartford Capital Appreciation
Fund....................... 80 123 158 233 20 62 107 232 20 63 108 233
Hartford Mortgage Securities
Fund....................... 78 116 147 210 18 56 96 210 18 56 97 210
Hartford Index Fund.......... 77 114 143 202 17 53 92 201 17 54 93 202
Hartford International
Opportunities Fund......... 82 129 168 252 22 68 117 252 22 69 118 252
Hartford Dividend & Growth
Fund....................... 81 126 163 243 21 65 112 242 21 66 113 243
Hartford International
Advisers Fund.............. 86 140 187 290 25 79 136 289 26 80 137 290
Hartford Small Company Fund
(5)........................ 81 113 N/A N/A 20 62 N/A N/A 21 83 N/A N/A
</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.
<PAGE>
8 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

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

The following information, insofar as it relates to the period ended
December 31, 1995, has been examined by Arthur Andersen LLP, independent public
accountants, whose report thereon is included in the Statement of Additional
information, which is incorporated by reference to this Prospectus.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991 1990
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
BOND FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.607 $1.694 $1.556 $1.493 $1.298 $1.212
Accumulation unit value at end of period.................. $1.880 $1.607 $1.694 $1.556 $1.493 $1.298
Number accumulation units outstanding at end of period (in
thousands)............................................... 99,377 85,397 79,080 41,204 25,267 14,753
STOCK FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $2.180 $2.250 $1.993 $1.834 $1.490 $1.569
Accumulation unit value at end of period.................. $2.887 $2.180 $2.250 $1.993 $1.834 $1.490
Number accumulation units outstanding at end of period (in
thousands)............................................... 285,640 248,563 203,873 121,100 72,780 31,149
MONEY MARKET FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.462 $1.424 $1.401 $1.369 $1.307 $1.225
Accumulation unit value at end of period.................. $1.528 $1.462 $1.424 $1.401 $1.369 $1.307
Number accumulation units outstanding at end of period (in
thousands)............................................... 102,635 138,396 102,328 78,664 60,774 67,059
ADVISERS FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.991 $2.072 $1.870 $1.748 $1.470 $1.470
Accumulation unit value at end of period.................. $2.523 $1.991 $2.072 $1.870 $1.748 $1.470
Number accumulation units outstanding at end of period (in
thousands)............................................... 888,803 858,014 688,865 295,387 166,408 101,758
U.S. GOVERNMENT MONEY MARKET FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.409 $1.376 $1.357 $1.331 $1.276 $1.202
Accumulation unit value at end of period.................. $1.468 $1.409 $1.376 $1.357 $1.331 $1.276
Number accumulation units outstanding at end of period (in
thousands)............................................... 48 48 52 161 213 243
CAPITAL APPRECIATION FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $2.615 $2.583 $2.165 $1.874 $1.231 $1.400
Accumulation unit value at end of period.................. $3.364 $2.615 $2.583 $2.165 $1.874 $1.231
Number accumulation units outstanding at end of period (in
thousands)............................................... 292,671 220,936 160,934 75,653 39,031 10,501
MORTGAGE SECURITIES FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.637 $1.685 $1.604 $1.552 $1.370 $1.264
Accumulation unit value at end of period.................. $1.878 $1.637 $1.685 $1.604 $1.552 $1.370
Number accumulation units outstanding at end of period (in
thousands)............................................... 101,881 112,417 138,666 98,494 46,464 18,632
INDEX FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.750 $1.755 $1.629 $1.544 $1.207 $1.274
Accumulation unit value at end of period.................. $2.359 $1.750 $1.755 $1.629 $1.544 $1.207
Number accumulation units outstanding at end of period (in
thousands)............................................... 65,954 50,799 46,504 29,723 15,975 10,015
INTERNATIONAL OPPORTUNITIES FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.181 $1.220 $0.924 $0.979 $0.877 $1.000(c)
Accumulation unit value at end of period.................. $1.329 $1.181 $1.220 $0.924 $0.979 $0.877
Number accumulation units outstanding at end of period (in
thousands)............................................... 238,086 246,259 132,795 32,597 13,109 2,892
DIVIDEND & GROWTH FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.009 $1.000(d)
Accumulation unit value at end of period.................. $1.359 $1.009
Number accumulation units outstanding at end of period (in
thousands)............................................... 83,506 29,146
INTERNATIONAL ADVISERS FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1,000(e)
Accumulation unit value at end of period.................. $1.146
Number accumulation units outstanding at end of period (in
thousands)............................................... 6,577

<CAPTION>
1989 1988 1987 1986
------- ------- ------- -------
<S> <C> <C> <C> <C>
BOND FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.095 $1.031 $1.044 $1.000
Accumulation unit value at end of period.................. $1.212 $1.095 $1.031 $1.044
Number accumulation units outstanding at end of period (in
thousands)............................................... 9,267 5,786 3,576 802
STOCK FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.261 $1.073 $1.031 $1.000
Accumulation unit value at end of period.................. $1.569 $1.261 $1.073 $1.031
Number accumulation units outstanding at end of period (in
thousands)............................................... 30,096 9.158 9,229 1,250
MONEY MARKET FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.136 $1.071 $1.019 $1.000
Accumulation unit value at end of period.................. $1.225 $1.136 $1.071 $1.019
Number accumulation units outstanding at end of period (in
thousands)............................................... 28,291 29,043 11,633 243
ADVISERS FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.223 $1.085 $1.036 $1.000
Accumulation unit value at end of period.................. $1.470 $1.223 $1.085 $1.036
Number accumulation units outstanding at end of period (in
thousands)............................................... 79,738 56.584 56,332 9,405
U.S. GOVERNMENT MONEY MARKET FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.122 $1.062 $1.018 $1.000
Accumulation unit value at end of period.................. $1.202 $1.122 $1.062 $1.018
Number accumulation units outstanding at end of period (in
thousands)............................................... 297 281 187 10
CAPITAL APPRECIATION FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.142 $0.916 $0.969 $1.000
Accumulation unit value at end of period.................. $1.400 $1.142 $0.916 $0.969
Number accumulation units outstanding at end of period (in
thousands)............................................... 8,041 3,606 2,989 431
MORTGAGE SECURITIES FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $1.132 $1.057 $1.043 $1.000
Accumulation unit value at end of period.................. $1.264 $1.132 $1.057 $1.043
Number accumulation units outstanding at end of period (in
thousands)............................................... 12,248 11,061 9,397 3,773
INDEX FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ $0.989 $0.862 $1.000(b) --
Accumulation unit value at end of period.................. $1.274 $0.989 $0.862 --
Number accumulation units outstanding at end of period (in
thousands)............................................... 6,306 2,868 1,758 --
INTERNATIONAL OPPORTUNITIES FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............ -- -- -- --
Accumulation unit value at end of period.................. -- -- -- --
Number accumulation units outstanding at end of period (in
thousands)............................................... -- -- -- --
DIVIDEND & GROWTH FUND SUB-ACCOUNT
Accumulation unit value at beginning of period............
Accumulation unit value at end of period..................
Number accumulation units outstanding at end of period (in
thousands)...............................................
INTERNATIONAL ADVISERS FUND SUB-ACCOUNT
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>

(a) Inception date August 1, 1986.

(b) Inception date May 1, 1987.

(d) Inception date March 8, 1994.

(e) Inception date March 1, 1995.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 9
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SUMMARY
A. CONTRACTS OFFERED

Individual and group tax-deferred Variable Annuity Contracts (see "C.
Taxation of Annuities in General," page ). Generally, the Contracts are
purchased by completing an application or an order to purchase a Contract and
submitting it, along with the initial Premium Payment, to Hartford Life for its
approval. A Contract Owner may at any time, within 10 days of delivery of a
Contract sold hereunder, return the Contract to Hartford Life at its Home Office
and the value of the Contract (without deduction for any charges normally
assessed thereunder) will be refunded. The Contract Owner bears the investment
risk during the period prior to the Company's receipt of request for
cancellation except for Contract Owners in Georgia, North Carolina, South
Carolina, Washington, West Virginia, Utah, and other states where required by
law, who will be refunded the premium (see "How is my Premium Payment credited?"
page ).

For a description of Contracts issued from October 15, 1986 through
approximately September 1, 1988 (Director II), see Appendix II on page .

For a description of Contracts issued from September 1, 1988 through May 1,
1990, (Director III) see Appendix I on page .
B. ELIGIBLE PURCHASERS

Any individual, group or trust may purchase the Contracts, including any
trustee or custodian for a retirement plan which qualifies for special federal
tax treatment under the Internal Revenue Code, including individual retirement
annuities. (See "Federal Tax Considerations" commencing on page and Appendix
II commencing on page .)
C. MINIMUM PREMIUM PAYMENTS

The minimum initial Premium Payment is $1,000. Thereafter, the minimum
payment is $500. Certain plans or programs may make smaller periodic premium
payments. (See "What size Premium Payments must I make?" page .)
D. UNDERLYING INVESTMENTS FOR CONTRACTS

Shares of Hartford Advisers Fund, Inc., Hartford Bond Fund, Inc., Hartford
Capital Appreciation Fund, Inc., Hartford Dividend and Growth Fund, Inc.,
Hartford Index Fund, Inc., Hartford International Advisers Fund, Inc., Hartford
International Opportunities Fund, Inc., Hartford Mortgage Securities Fund, Inc.,
Hartford Small Company Fund, Inc., Hartford Stock Fund, Inc., HVA Money Market
Fund, Inc. and such other funds as shall be offered from time to time, and the
Fixed Account, or a combination of the Funds and the Fixed Account. Qualified
Contracts issued prior to May 1, 1987 may also have shares of Hartford U.S.
Government Money Market Fund, Inc.
E. CHARGES UNDER THE CONTRACTS

1. SALES EXPENSES

There is no deduction for sales expenses from Premium Payments when made.
However, a contingent deferred sales charge may be assessed against Contract
Values when they are surrendered. (See "Charges under the Contracts" commencing
on page .)

The length of time from receipt of a Premium Payment to the time of
surrender determines the contingent deferred sales charge. For this purpose,
Premium Payments will be deemed to be surrendered in the order in which they are
received and all surrenders will be first from Premium Payments and then from
other Contract Values. The charge is a percentage of the amount withdrawn (not
to exceed the aggregate amount of the Premium Payments made) and equals:

LENGTH OF TIME
CHARGE FROM PREMIUM PAYMENT
------ ------------------------------------
(NUMBER OF YEARS)
7% 1
6% 2
5% 3
4% 4
3% 5
2% 6
1% 7
0% 8 or more

No contingent deferred sales charge will be assessed in the event of death
of the Annuitant or Contract Owner, or upon the exercise of the withdrawal
privilege or if Contract Values are applied to an Annuity option provided for
under the Contract (except that a surrender out of an Annuity Option Four will
be subject to a contingent deferred sales charge where applicable). (See "Is
there ever a time when the sales charges do not apply?" commencing on page .)

2. WITHDRAWAL PRIVILEGE

Withdrawals of up to 10% per Contract Year, on a noncumulative basis, of the
Premium Payments made to a Contract may be made without the imposition of the
contingent deferred sales charge. (See "Is there ever a time when the sales
charges do not apply?" commencing on page .) Certain plans or programs may
have different withdrawal privileges.
<PAGE>
10 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

3. ANNUAL MAINTENANCE FEE

The Contracts provide for an administrative charge in the amount of $25.00
to be deducted from Contract Values each Contract Year. Contracts with a
Contract Value of $50,000 or more at time of Contract Anniversary will not be
assessed this fee. (See "Are there any administrative charges?" commencing on
page .)

4. MORTALITY AND EXPENSE RISKS

For assuming the mortality and expense risks under the Contracts, Hartford
Life will make a 1.25% per annum charge against all Contract Values held in the
Separate Account, except the Fixed Account. (See "What is the mortality and
expense risk charge?" commencing on page .)

5. PREMIUM TAXES
A deduction will be made for Premium Taxes for Contracts sold in certain
states. (See "How much are the deductions for Premium Taxes?" commencing on page
.)

6. CHARGES BY THE FUNDS

The Funds are subject to certain fees, charges and expenses. (See the
Prospectus for the Funds attached hereto.)
F. LIQUIDITY

Subject to any applicable charges, the Contracts may be surrendered, or
portions of the value of such Contracts may be withdrawn, at any time prior to
the Annuity Commencement Date. However, if less than $500 remains in a Contract
as a result of a withdrawal, Hartford Life may terminate the Contract in its
entirety. (See "How can a Contract be redeemed or surrendered?" commencing on
page .)
G. MINIMUM DEATH BENEFITS

A Minimum Death Benefit is provided in the event of death of the Annuitant
or Contract Owner prior to age 85 and before annuity payments have commenced.
(See "What would my Beneficiary receive as a death benefit?" commencing on page
.)
H. ANNUITY OPTIONS

There are five available Annuity options under the Contract which are
described on page . The Annuity Commencement Date may not be deferred beyond
the Annuitant's 90th birthday, except in certain states where the Annuitant's
Commencement Date may not be deferred beyond the Annuitant's 85th birthday. If a
Contract Owner does not elect otherwise, the Contract Value, less applicable
Premium Taxes, will be applied on the Annuity Commencement Date under the second
option to provide a life annuity with 120 monthly payments certain. (See "What
Annuity Commencement Date and Form of Annuity may I elect?" commencing on page
.)
I. VOTING RIGHTS OF CONTRACT OWNERS

Contract Owners will have the right to vote on matters affecting the
underlying Fund to the extent that proxies are solicited by such Fund. If a
Contract Owner does not vote, Hartford Life shall vote such interest in the same
proportion as shares of the Fund for which instructions have been received by
Hartford Life. (See "What are my voting rights?" commencing on page .)
PERFORMANCE RELATED INFORMATION

The 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.

The Advisers Fund, Bond Fund, Capital Appreciation Fund, Dividend and Growth
Fund, Index Fund, International Advisers Fund, International Opportunities Fund,
Money Market Fund, Mortgage Securities Fund, Small Company Fund, Stock Fund, and
U.S. Government Money Market Fund Sub-Accounts may include total return in
advertisements or other sales material.

When a Sub-Account advertises its standardized total return, it will usually
be calculated for one year, five years, and ten years or some other relevant
periods if the Sub-Account has not been in existence for at least ten years.
Total return is measured by comparing the value of an investment in the
Sub-Account at the beginning of the relevant period to the value of the
investment at the end of the period (assuming the deduction of any contingent
deferred sales charge which would be payable if the investment were redeemed at
the end of the period).

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

The Bond Fund and Mortgage Securities Fund Sub-Accounts may advertise yield
in addition to total return. The yield will be computed in the following manner:
The net
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 11
- --------------------------------------------------------------------------------

investment income per unit earned during a recent one month period is divided by
the unit value on the last day of the period. This figure reflects the recurring
charges at the Separate Account level including the annual maintenance fee.

The Money Market Fund and U.S. Government Money Market Sub-Accounts may
advertise yield and effective yield. The yield of a 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 at the Separate Account level including the Annual
Maintenance Fee.

The Separate Account may also disclose yield, standard total return, and
non-standard total return for periods prior to the date the Separate Account
commenced operations. For periods prior to the date the Separate Account
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.

Hartford Life 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-advantaged 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.
INTRODUCTION

This Prospectus has been designed to provide you with the necessary
information to make a decision on purchasing an individual or group tax-deferred
Variable Annuity Contract offered by Hartford Life in the Fixed Account and/or a
series of Separate Account Two. This Prospectus describes only the elements of
the Contracts pertaining to the Separate Account and the Fixed Account except
where reference to the General Account is specifically made. Please read the
Glossary of Special Terms on pages 2 and 3 prior to reading this Prospectus to
familiarize yourself with the terms being used.
THE CONTRACT,
SEPARATE ACCOUNT TWO,
AND THE FIXED ACCOUNT
WHAT ARE THE CONTRACTS?

The Contract is an individual or group tax-deferred Variable Annuity
Contracts designed for retirement planning purposes. Initially there are no
deductions from your Premium Payments (except for Premium Taxes, if applicable)
so your entire Premium Payment is put to work in the investment Sub-Account(s)
of your choice or the Fixed Account. Currently, there are eleven Sub-Accounts,
each investing in a different underlying Fund with its own distinct investment
objectives. More Sub-Accounts may be made available by Hartford Life at a later
time. You pick the Sub-Account(s) with the investment objectives that meet your
needs. You may select one or more Sub-Accounts and/or the Fixed Account and
determine the percentage of your Premium Payment that is put into a Sub-Account
or the Fixed Account. You may also transfer assets among the Sub-Accounts and
the Fixed Account so that your investment program meets your specific needs over
time. There are some limitations on the amounts in each Sub-Account and the
Fixed Account. These limitations are described later in this Prospectus. In
addition, there are certain other limitations on withdrawals and transfers of
amounts in the Sub-Accounts and the Fixed Account, as described in this
Prospectus. See "Charges Under the Contract" for a description of the charges
for redeeming a Contract and other charges made under the Contract.

Generally, the Contract contains the five optional Annuity forms described
later in this Prospectus. Options 2, 4, and 5 are available to Qualified
Contracts only if the guaranteed payment period is less than the life expectancy
of the Annuitant at the time the option becomes effective. Such life expectancy
shall be computed on the basis of the mortality table prescribed by the IRS, or
if none is prescribed, the mortality table then in use by Hartford Life.

The Contract Owner may select an Annuity Commencement Date and an Annuity
option which may be on a fixed or variable basis, or a combination thereof. The
Annuity Commencement Date may not be deferred beyond the Annuitant's 90th
birthday, except in certain states where the Annuity Commencement Date may not
be deferred beyond the Annuitant's 85th birthday.

The Annuity Commencement Date and/or the Annuity option may be changed from
time to time, but any
<PAGE>
12 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

such change must be made at least 30 days prior to the date on which Annuity
payments are scheduled to begin. If you do not elect otherwise, payments will
begin at the Annuitant's age 90, except in certain states, payments will begin
at the Annuitant's age 85, under Option 2 with 120 monthly payments certain
(Option 1 for Texas Contracts).

When an Annuity is effected under a Contract, unless otherwise specified,
Contract Values held in the Sub-Accounts will be applied to provide a Variable
Annuity based on the pro rata amount in the various Sub-Accounts. Fixed Account
Contract Values will be applied to provide a Fixed Account Annuity. Variable
Annuity payments will vary in accordance with the investment performance of the
Sub-Accounts you have selected. You should consider the question of allocation
of Contract Values among Sub-Accounts of the Separate Account and the General
Account of Hartford Life to make certain that Annuity payments are based on the
investment alternative best suited to your needs for retirement. The Contract
allows the Contract Owner to change the Sub-Accounts on which variable payments
are based after payments have commenced once every three (3) months. Any Fixed
Annuity allocation may not be changed.

Hartford Life reserves the right to modify the Contract, but only if such
modification: (i) is necessary to make the Contract or the Separate Account
comply with any law or regulation issued by a governmental agency to which
Hartford Life is subject; or (ii) is necessary to assure continued qualification
of the Contract under the Code or other federal or state laws relating to
retirement annuities or annuity Contracts; or (iii) is necessary to reflect a
change in the operation of the Separate Account or the Sub-Account(s) or (iv)
provides additional Separate Account options or (v) withdraws Separate Account
options. In the event of any such modification Hartford Life will provide notice
to the Contract Owner or to the payee(s) during the Annuity period. Hartford
Life may also make appropriate endorsement in the Contract to reflect such
modification.
WHO CAN BUY THESE CONTRACTS?

The individual and group Variable Annuity Contracts offered under this
Prospectus may be purchased by any individual, group or trust, including any
trustee or custodian for a retirement plan qualified under Sections 401(a) or
403(a) of the Internal Revenue Code; annuity purchase plans adopted by public
school systems and certain tax-exempt organizations according to Section 403(b)
of the Internal Revenue Code; Individual Retirement Annuities adopted according
to Section 408 of the Internal Revenue Code; employee pension plans established
for employees by a state, a political subdivision of a state, or an agency or
instrumentality of either a state or a political subdivision of a state, and
certain eligible deferred compensation plans as defined in Section 457 of the
Internal Revenue Code ("Qualified Contracts").
WHAT IS THE SEPARATE ACCOUNT
AND HOW DOES IT OPERATE?

The Separate Account was established on June 2, 1986, in accordance with
authorization by the Board of Directors of Hartford Life. It is the Separate
Account in which Hartford Life sets aside and invests the assets attributable to
variable annuity Contracts, including the Contracts sold under this Prospectus.
Although the Separate Account is an integral part of Hartford Life, it is
registered as a unit investment trust under the Investment Company Act of 1940.
This registration does not, however, involve Securities and Exchange Commission
supervision of the management or the investment practices or policies of the
Separate Account or Hartford Life. The Separate Account meets the definition of
"separate account" under federal securities law.

Under Connecticut law, the assets of the Separate Account attributable to
the Contracts offered under this Prospectus are held for the benefit of the
owners of, and the persons entitled to payments under those Contracts. Income,
gains, and losses, whether or not realized, from assets allocated to the
Separate Account, are, in accordance with the Contracts, credited to or charged
against the Separate Account. Also, the assets in the Separate Account are not
chargeable with liabilities arising out of any other business Hartford Life may
conduct. So, Contract Values allocated to the Sub-Accounts will not be affected
by the rate of return of Hartford Life's General Account, nor by the investment
performance of any of Hartford Life's other separate accounts. However, all
obligations arising under the Contracts are general corporate obligations of
Hartford Life.

Your investment in the Separate Account is allocated to one or more
Sub-Accounts as per your specifications. Each Sub-Account is invested
exclusively in the assets of one underlying Fund. Net Premium Payments and
proceeds of transfers between Sub-Accounts are applied to purchase shares in the
appropriate Fund at net asset value determined as of the end of the Valuation
Period during which the payments were received or the transfer made. All
distributions from the Fund are reinvested at net asset value. The value of your
investment will therefore vary in accordance with the net income and fluctuation
in the individual investments within the underlying Fund portfolio or
portfolios. During the Variable Annuity payout period, both your Annuity
payments and reserve values will vary in accordance with these factors.

Hartford Life does not guarantee the investment results of the Sub-Accounts
or any of the underlying investments. There is no assurance that the value of a
Contract during the years prior to retirement or the aggregate
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 13
- --------------------------------------------------------------------------------

amount of the Variable Annuity payments will equal the total of Premium Payments
made under the Contract. Since each underlying Fund has different investment
objectives, each is subject to different risks. These risks are more fully
described in the accompanying Fund Prospectus.

Hartford Life reserves the right, subject to compliance with the law, to
substitute the shares of any other registered investment company for the shares
of any Fund held by the Separate Account. Substitution may occur only if shares
of the Fund(s) become unavailable or if there are changes in applicable law or
interpretations of law. Current law requires notification to you of any such
substitution and approval of the Commission.
The Separate Account may be subject to liabilities arising from a Series of
the Separate Account whose assets are attributable to other variable annuity
Contracts or variable life insurance policies offered by the Separate Account
which are not described in this Prospectus.
WHAT IS THE FIXED ACCOUNT
AND HOW DOES IT OPERATE?

THAT PORTION OF THE CONTRACT RELATING TO THE FIXED ACCOUNT IS NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") AND THE FIXED ACCOUNT IS NOT
REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940
("1940 ACT"). ACCORDINGLY, NEITHER THE FIXED ACCOUNT NOR ANY INTERESTS THEREIN
ARE SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE 1940 ACT,
AND THE DISCLOSURE REGARDING THE FIXED ACCOUNT HAS NOT BEEN REVIEWED BY THE
STAFF OF THE SECURITIES AND EXCHANGE COMMISSION. THE FOLLOWING DISCLOSURE ABOUT
THE FIXED ACCOUNT MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF
THE FEDERAL SECURITIES LAWS REGARDING THE ACCURACY AND COMPLETENESS OF
DISCLOSURE.

Premium Payments and Contract Values allocated to the Fixed Account become a
part of the general assets of Hartford Life. Hartford Life invests the assets of
the General Account in accordance with applicable law governing the investments
of Insurance Company General Accounts.

Currently, Hartford Life guarantees that it will credit interest at a rate
of not less than 3% per year, compounded annually, to amounts allocated to the
Fixed Account under the Contracts. However, Hartford Life reserves the right to
change the rate according to state insurance law. Hartford Life may credit
interest at a rate in excess of 3% per year. There is no specific formula for
the determination of excess interest credits. Some of the factors that the
Company may consider in determining whether to credit excess interest to amounts
allocated to the Fixed Account and the amount thereof, are general economic
trends, rates of return currently available and anticipated on the Company's
investments, regulatory and tax requirements and competitive factors. ANY
INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF 3% PER
YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF THE COMPANY. THE OWNER ASSUMES
THE RISK THAT INTEREST CREDITED TO FIXED ACCOUNT ALLOCATIONS MAY NOT EXCEED THE
MINIMUM GUARANTEE OF 3% FOR ANY GIVEN YEAR.
MAY I TRANSFER ASSETS BETWEEN SUB-ACCOUNTS?

You may transfer the values of your Sub-Account allocations from one or more
Sub-Accounts to another free of charge. However, Hartford Life reserves the
right to limit the number of transfers to twelve (12) per Contract Year, with no
two (2) transfers occurring on consecutive Valuation Days. Transfers by
telephone may be made by calling (800) 862-6668. Telephone transfers may not be
permitted by some states for their residents who purchase variable annuities.

It is the responsibility of the Contract Owner or Participant to verify the
accuracy of all confirmations of transfers and to promptly advise Hartford Life
of any inaccuracies within one business day of receipt of the confirmation.
Hartford Life will send the Contract Owner a confirmation of the transfer within
five (5) days from the date of any instruction.

Hartford Life may permit the Contract Owner to preauthorize transfers among
Sub-Accounts and between Sub-Accounts and the Fixed Account under certain
circumstances. The policy of Hartford Life and its agents and affiliates is that
they will not be responsible for losses resulting from acting upon telephone
requests reasonably believed to be genuine. Hartford Life will employ reasonable
procedures to confirm that instructions communicated by telephone are genuine;
otherwise, Hartford Life may be liable for any losses due to unauthorized or
fraudulent instructions. The procedures Hartford Life follows for transaction
initiated by telephone include requirements that callers on behalf of a Contract
Owner identify themselves and the Contract Owner by name and social security
number. All transfer instructions by telephone are tape recorded.

Subject to the exceptions set forth in the following paragraph, the right to
reallocate Contract Values between the Sub-Accounts is subject to modification
if Hartford Life determines, in its sole opinion, that the exercise of that
right by one or more Contract Owners is, or would be, to the disadvantage of
other 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
<PAGE>
14 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

transfer, not accepting transfer requests of an agent acting under a power of
attorney on behalf of more than one Contract Owner, or limiting the dollar
amount that may be transferred between the Sub-Accounts and the Fixed Account by
a Contract Owner at any one time. Such restrictions may be applied in any manner
reasonably designed to prevent any use of the transfer right which is considered
by Hartford Life to be to the disadvantage of other Contract Owners.

For Contracts issued in the State of New York, the reservation of rights set
forth in the preceding paragraph is limited to (i) requiring up to a maximum of
10 Valuation Days between each transfer: (ii) limiting the amount to be
transferred on any one Valuation Day to no more than $2 million; and (iii) upon
30 days prior written notice, to only accepting transfer instructions from the
Contract owner and not from the Contract owner's representative, agent or person
acting under a power of attorney for the Contract Owner.

Currently, and with respect to Contracts issued in all states, the only
restriction in effect is that Hartford Life will not accept instructions from
agents acting under a power of attorney of multiple Contract Owners whose
accounts aggregate more than $2 million, unless the agent has entered into a
third party transfer services agreement with Hartford Life.

Transfers between the Sub-Accounts may be made both before and after Annuity
payments commence (limited to once a quarter) provided that the minimum
allocation to any Sub-Account may not be less than $500. No minimum balance is
required in any Sub-Account.
MAY I TRANSFER ASSETS BETWEEN THE FIXED ACCOUNT AND THE SUB-ACCOUNTS?

Subject to the restrictions set forth above, transfers from the Fixed
Account into a Sub-Account may be made at any time during the Contract Year. The
maximum amount which may be transferred from the Fixed Account during any
Contract Year is the greater of 30% of the Fixed Account balance as of the last
Contract Anniversary or the greatest amount of any prior transfer from the Fixed
Account. If Hartford Life permits preauthorized transfers from the Fixed Account
to the Sub-Accounts, this restriction is inapplicable. Also, if any interest
rate is renewed at a rate of at least one percentage point less than the
previous rate, the Contract Owner may elect to transfer up to 100% of the funds
receiving the reduced rate within 60 days of notification of the interest rate
decrease. Generally, transfers may not be made from any Sub-Account into the
Fixed Account for the six-month period following any transfer from the Fixed
Account into one or more of the Sub-Accounts. Hartford Life reserves the right
to defer transfers from the Fixed Account for up to six months from the date of
request.
OPERATION OF THE CONTRACT
HOW IS MY PREMIUM PAYMENT CREDITED?

The balance of each initial Premium Payment remaining after the deduction of
any applicable Premium Tax is credited to your Contract within two business days
of receipt of a properly completed application or an order to purchase a
Contract and the initial Premium Payment by Hartford Life at its Home Office,
P.O. Box 5085, Hartford, CT 06102-5085. It will be credited to the
Sub-Account(s) and/or the Fixed Account in accordance with your election. If the
application or other information is incomplete when received, the balance of
each initial Premium Payment, after deduction of any applicable Premium Tax,
will be credited to the Sub-Account(s) or the Fixed Account within five business
days of receipt. If the initial Premium Payment is not credited within five
business days, the Premium Payment will be immediately returned unless you have
been informed of the delay and request that the Premium Payment not be returned.

The number of Accumulation Units in each Sub-Account to be credited to a
Contract will be determined by dividing the portion of the Premium Payment being
credited to each Sub-Account by the value of an Accumulation Unit in that
Sub-Account on that date.

Subsequent Premium Payments are priced on the Valuation Day received by
Hartford Life in its Home Office, or other designated administrative offices.
WHAT SIZE PREMIUM PAYMENTS MUST I MAKE?

The minimum initial Premium Payment is $1,000. Thereafter, the minimum
Premium Payment is $500. Certain plans may make smaller periodic payments. Each
Premium Payment may be split among the various Sub-Accounts and/or the Fixed
Account subject to minimum amounts then in effect.
WHAT IF I AM NOT SATISFIED WITH MY PURCHASE?

If you are not satisfied with your purchase you may surrender the Contract
by returning it within ten days (or longer in some states) after you receive it.
A written request for cancellation must accompany the Contract. In such event,
Hartford Life will, without deduction for any charges normally assessed
thereunder, pay you an amount equal to the sum of (i) the difference between the
Premium Payment and the amounts allocated to the Sub Account(s) and/or the Fixed
Account under the Contract and (ii) the value of the Contract on the date of
surrender attributable to the amounts so allocated. You bear the investment risk
during the period prior to the Company's receipt of request for
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HARTFORD LIFE INSURANCE COMPANY 15
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cancellation. Hartford Life will refund the premium paid only for individual
retirement annuities (if returned within seven days of receipt) and in those
states where required by law.
MAY I ASSIGN OR TRANSFER MY CONTRACT?

Ownership of a Contract described herein is generally assignable. However,
if the Contracts are issued pursuant to some form of Qualified Plan, it is
possible that the ownership of the Contracts may not be transferred or assigned
depending on the type of qualified retirement plan involved. An assignment of a
Non-Qualified Contract may subject the assignment proceeds to income taxes and
certain penalty taxes. (See "Taxation of Annuities in General -- Non-Tax
Qualified Purchasers" commencing on page .)
HOW DO I KNOW WHAT MY CONTRACT IS WORTH?

The value of the Sub-Account investments under your Contract at any time
prior to the commencement of Annuity payments can be determined by multiplying
the total number of Accumulation Units credited to your Contract in each
Sub-Account by the then current Accumulation Unit values for the applicable
Sub-Account. The value of the Fixed Account under your Contract will be the
amount allocated to the Fixed Account plus interest credited. You will be
advised at least semiannually of the number of Accumulation Units credited to
each Sub-Account, the current Accumulation Unit values, the Fixed Account value,
and the total value of your Contract.
HOW IS THE ACCUMULATION UNIT VALUE DETERMINED?

The Accumulation Unit value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
Valuation Day by multiplying the Accumulation Unit value of the particular
Sub-Account on the preceding Valuation Day by a "Net Investment Factor" for that
Sub-Account for the Valuation Period then ended. The "Net Investment Factor" for
each of the Sub-Accounts is equal to the net asset value per share of the
corresponding Fund at the end of the Valuation Period (plus the per share amount
of any dividends or capital gains distributed by that Fund if the ex-dividend
date occurs in the Valuation Period then ended) divided by the net asset value
per share of the corresponding Fund at the beginning of the Valuation Period.
You should refer to the Prospectus for each of the Funds which accompanies this
Prospectus for a description of how the assets of each Fund are valued since
each determination has a direct bearing on the Accumulation Unit value of the
Sub-Account and therefore the value of a Contract. The Accumulation Unit Value
is affected by the performance of the underlying Fund(s), expenses and deduction
of the charges described in this Prospectus.
HOW ARE THE UNDERLYING FUND SHARES VALUED?

The shares of the Fund are valued at net asset value on each Valuation Day.
A complete description of the valuation method used in valuing Fund shares may
be found in the accompanying Prospectus of the Funds.
HOW IS THE VALUE OF THE FIXED ACCOUNT DETERMINED?

Hartford Life will determine the value of the Fixed Account by crediting
interest to amounts allocated to the Fixed Account. The minimum Fixed Account
interest rate is 3%, compounded annually. Hartford Life may credit a lower
minimum interest rate according to state law. Hartford Life also may credit
interest at rates greater than the minimum Fixed Account interest rate.
PAYMENT OF BENEFITS
WHAT WOULD MY BENEFICIARY RECEIVE
AS A DEATH BENEFIT?

The Contracts provide that in the event the Annuitant dies before the
selected Annuity Commencement Date, the Contingent Annuitant will become the
Annuitant. If the Annuitant dies before the Annuity Commencement Date and either
(a) there is no designated Contingent Annuitant, (b) the Contingent Annuitant
predeceases the Annuitant, or (c) if any Contract Owner dies before the Annuity
Commencement Date, the Beneficiary as determined under the Contract Control
Provisions, will receive the Minimum Death Benefit as determined on the date of
receipt of due proof of death by Hartford Life in its Home Office. With regard
to Joint Contract Owners, at the first death of a joint Contract Owner prior to
the Annuity Commencement Date, the Beneficiary will be the surviving Contract
Owner notwithstanding that the beneficiary designation may be different.
However, if upon death prior to the Annuity Commencement Date of the Annuitant
or Contract Owner, as applicable, had not attained his 85th birthday, the
Beneficiary will receive the greatest of (a) the Contract Value determined as of
the day written proof of death of such person is received by Hartford Life, or
(b) 100% of the total Premium Payments made to such Contract, reduced by any
prior surrenders, or (c) the Contract Value on the Specified Contract
Anniversary immediately preceding the date of death, increased by the dollar
amount of any Premium Payments made and reduced by the dollar amount of any
partial terminations since the immediately preceding Specified Contract
Anniversary in all states except North Carolina
<PAGE>
16 HARTFORD LIFE INSURANCE COMPANY
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where the Beneficiary will received the greater of the Contract Value for the
premium payments as set forth in (a) and (b) above.

If the deceased, the Annuitant or Contract Owner, as applicable, had
attained age 85, then the Death Benefit will equal the Contract Value.

Death Benefit proceeds will remain invested in the Separate Account in
accordance with the allocation instructions given by the Certificate Owner until
the proceeds are paid or Hartford Life receives new instructions from the
Beneficiary. The death benefit may be taken in one sum, payable within 7 days
after the date Due Proof of Death is received, or under any of the settlement
options then being offered by the Company provided, however, that: (a) in the
event of the death of any Contract Owner prior to the Annuity Commencement Date,
the entire interest in the Contract will be distributed within 5 years after the
death of the Contract Owner and (b) in the event of the death of any Contract
Owner or Annuitant which occurs on or after the Annuity Commencement Date, any
remaining interest in the Contract will be paid at least as rapidly as under the
method of distribution in effect at the time of death, or, if the benefit is
payable over a period not extending beyond the life expectancy of the
Beneficiary or over the life of the Beneficiary, such distribution must commence
within one year of the date of death. Notwithstanding the foregoing, in the
event of the Contract Owner's death where the sole Beneficiary is the spouse of
the Contract Owner and the Annuitant or Contingent Annuitant is living, such
spouse may elect, in lieu of receiving the death benefit, to be treated as the
Contract Owner. The proceeds due on the death may be applied to provide variable
payments, fixed payments, or a combination of variable and fixed payments.

If the Contract is owned by a corporation or other non-individual, the Death
Benefit payable upon the death of the Annuitant prior to the Annuity
Commencement Date will be payable only as one sum or under the same settlement
options and in the same manner as if an individual Contract Owner died on the
date of the Annuitant's death.
HOW CAN A CONTRACT BE REDEEMED OR SURRENDERED?

At any time prior to the Annuity Commencement Date, you have the right,
subject to any IRS provisions applicable thereto, to surrender the value of the
Contract in whole or in part. Under any of the Annuity options excluding Options
4 and 5, no surrenders are permitted after Annuity payments commence. Only full
surrenders are allowed out of Option 4 and any such surrender will be subject to
contingent deferred sales charges, if applicable. Full or partial withdrawals
may be made from Option 5 at any time and contingent deferred sales charges will
not be applied.

FULL SURRENDERS

At any time prior to the Annuity Commencement Date (and after the Annuity
Commencement Date with respect to values applied to Option 4), the Contract
Owner has the right to terminate the Contract. In such event, the Termination
Value of the Contract may be taken in the form of a lump sum cash settlement.

The Termination Value of the Contract is equal to the Contract Value less
any applicable Premium Taxes, the Annual Maintenance Fee if applicable and any
applicable contingent deferred sales charges. The Termination Value may be more
or less than the amount of the Premium Payments made to a Contract.

PARTIAL SURRENDERS

The Contract Owner may make a partial surrender of Contract Values at any
time prior to the Annuity Commencement Date so long as the amount surrendered is
at least equal to the minimum amount rules then in effect. Additionally, if the
remaining Contract Value following a surrender is less than $500, Hartford Life
may terminate the Contract and pay the Termination Value. For Contracts issued
in Texas, there is an additional requirement that the Contract will not be
terminated when the remaining Contract Value after a surrender is less than $500
unless there were no Premium Payments made during the previous two Contract
Years.

Each Contract Year, on a non-cumulative basis, partial surrenders of
Contract Values of up to 10% of the aggregate Premium Payments made to the
Contract may be made without being subject to the contingent deferred sales
charge. Certain plans or programs may have different withdrawal privileges.
Hartford Life may permit the Contract Owner to preauthorize partial surrenders
subject to certain limitations then in effect.

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

DISTRIBUTIONS DUE TO FINANCIAL HARDSHIP OR SEPARATION FROM SERVICE MAY STILL
BE SUBJECT TO A PENALTY TAX OF 10%.
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HARTFORD LIFE INSURANCE COMPANY 17
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HARTFORD LIFE WILL NOT ASSUME ANY RESPONSIBILITY IN DETERMINING WHETHER A
WITHDRAWAL IS PERMISSIBLE, WITH OR WITHOUT TAX PENALTY, IN ANY PARTICULAR
SITUATION; OR IN MONITORING WITHDRAWAL REQUESTS REGARDING PRE OR POST JANUARY 1,
1989 ACCOUNT VALUES.
ANY SUCH 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. THE CONTRACT OWNER, THEREFORE, SHOULD
CONSULT WITH HIS TAX ADVISER BEFORE UNDERTAKING ANY SUCH SURRENDER. (SEE
"FEDERAL TAX CONSIDERATIONS" COMMENCING ON PAGE .)

Payment on any request for a full or partial surrender from the Sub-Accounts
will be made as soon as possible and in any event no later than seven days after
the written request is received by Hartford Life at its Home Office, Attn:
Individual Annuity Operations, P.O. Box 5085, Hartford, CT 06102-5085. Hartford
Life may defer payment of any amounts from the Fixed Account for up to six
months from the date of the request for surrender. If Hartford Life defers
payment for more than 30 days, Hartford Life will pay interest of at least 3%
per annum on the amount deferred. In requesting a partial withdrawal you should
specify the Sub-Account(s) and/or the Fixed Account from which the partial
withdrawal is to be taken. Otherwise, such withdrawal and any applicable
contingent deferred sales charges will be effected on a pro rata basis according
to the value in the Fixed Account and each Sub-Account under a Contract. Within
this context, the contingent deferred sales charges are taken from the Premium
Payments in the order in which they were received: from the earliest Premium
Payments to the latest Premium Payments (see "How are the charges under these
Contracts made?" page ).
CAN PAYMENT OF A REDEMPTION, SURRENDER OR DEATH BENEFIT EVER BE POSTPONED BEYOND
THE SEVEN DAY PERIOD?

Yes. There may be postponement 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?

No. Surrenders are not permitted after Annuity payments commence EXCEPT that
a full surrender is allowed when payments for a designated period (Option 4 or
5) are selected as the Annuity option.
WHAT ARE MY ANNUITY BENEFITS?

You select an Annuity Commencement Date and an Annuity option which may be
on a fixed or variable basis, or a combination thereof. The Annuity Commencement
Date will not be deferred beyond the Annuitant's 90th birthday except for
certain states where deferral past age 85 is not permitted. The Annuity
Commencement Date and/or the Annuity option may be changed from time to time,
but any change must be made at least 30 days prior to the date on which Annuity
payments are scheduled to begin. The Contract allows the Contract Owner to
change the Sub-Accounts on which variable payments are based after payments have
commenced once every three (3) months. Any Fixed Annuity allocation may not be
changed.

ANNUITY OPTIONS: The Contract contains the five optional Annuity forms
described below. Options 2, 4, and 5 are available to Qualified Contracts only
if the guaranteed payment period is less than the life expectancy of the
Annuitant at the time the option becomes effective. Such life expectancy shall
be computed on the basis of the mortality table prescribed by the IRS, or if
none is prescribed, the mortality table then in use by the Hartford Life. With
respect to Non-Qualified Contracts, if you do not elect otherwise, payments in
most states will automatically begin at the Annuitant's age 90 (with the
exception of states that do not allow deferral past age 85) under Option 2 with
120 monthly payments certain. For Qualified Contracts and Contracts issued in
Texas, if you do not elect otherwise, payments will begin automatically at the
Annuitant's age 90 under Option 1 to provide a life Annuity.

Under any of the Annuity options excluding Options 4 and 5, no surrenders
are permitted after Annuity payments commence. Only full surrenders are allowed
out of Option 4 and any such surrender will be subject to contingent deferred
sales charges, if applicable. Full or partial withdrawals may be made from
Option 5 at any time and contingent deferred sales charges will not be applied.

OPTION 1: LIFE ANNUITY

A life Annuity is an Annuity payable during the lifetime of the Annuitant
and terminating with the last payment preceding the death of the Annuitant. This
option offers the largest payment amount of any of the life Annuity options
since there is no guarantee of a minimum number of payments nor a provision for
a death benefit payable to a Beneficiary.
<PAGE>
18 HARTFORD LIFE INSURANCE COMPANY
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It would be possible under this option for an Annuitant to receive only one
Annuity payment if he died prior to the due date of the second Annuity payment,
two if he died before the due date of the third Annuity payment, etc.

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

This Annuity option is an Annuity payable monthly during the lifetime of an
Annuitant with the provision that payments will be made for a minimum of 120,
180 or 240 months, as elected. If, at the death of the Annuitant, payments have
been made for less than the minimum elected number of months, then the present
value as of the date of the Annuitant's death, of any remaining guaranteed
payments will be paid in one sum to the Beneficiary or Beneficiaries designated
unless other provisions have been made and approved by Hartford Life.

OPTION 3: JOINT AND LAST SURVIVOR ANNUITY

An Annuity payable monthly during the joint lifetime of the Annuitant and a
designated second person, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
Based on the options currently offered by Hartford Life, the Annuitant may elect
that the payment to the survivor be less than the payment made during the joint
lifetime of the Annuitant and a designated second person.

It would be possible under this option for an Annuitant and designated
second person to receive only one payment in the event of the common or
simultaneous death of the parties prior to the due date for the second payment
and so on.

OPTION 4: PAYMENTS FOR A DESIGNATED PERIOD

An amount payable monthly for the number of years selected which may be from
5 to 30 years. Under this option, you may, at any time, surrender the Contract
and receive, within seven days, the Termination Value of the Contract as
determined by Hartford Life.

In the event of the Annuitant's death prior to the end of the designated
period, the present value as of the date of the Annuitant's death, of any
remaining guaranteed payments will be paid in one sum to the Beneficiary or
Beneficiaries designated unless other provisions have been made and approved by
the Hartford Life.

Option 4 is an option that does not involve life contingencies and thus no
mortality guarantee. Charges made for the mortality undertaking under the
Contracts thus provide no real benefit to a Contract Owner.

OPTION 5: DEATH BENEFIT REMAINING WITH HARTFORD LIFE

Proceeds from the Death Benefit may be left with Hartford Life for a period
not to exceed five years from the date of the Contract Owner's death prior to
the Annuity Commencement Date. These proceeds will remain in the Sub-Account(s)
to which they were allocated at the time of death unless the Beneficiary elects
to reallocate them. Full or partial withdrawals may be made at any time. In the
event of withdrawals, the remaining value will equal the Contract Value of the
proceeds left with Hartford Life, minus any withdrawals.

Hartford Life may offer other annuity options from time to time.
HOW ARE ANNUITY PAYMENTS DETERMINED?

The value of the Annuity Unit for each Sub-Account in the Separate Account
for any day is determined by multiplying the value for the preceding day by the
product of (1) the net investment factor (see "How is the Accumulation Unit
value determined?" commencing on page ) for the day for which the Annuity Unit
value is being calculated, and (2) a factor to neutralize the assumed investment
rate of 4.00% per annum discussed below.

When Annuity payments are to commence, the value of the Contract is
determined as the sum of the value of the Fixed Account no earlier than the
close of business on the fifth Valuation Day preceding the date the first
Annuity payment is due plus the product of the value of the Accumulation Unit of
each Sub-Account on that same day, and the number of Accumulation Units credited
to each Sub-Account as of the date the Annuity is to commence.

The Contract contains tables indicating the minimum dollar amount of the
first monthly payment under the optional forms of Annuity for each $1,000 of
value of a Sub-Account under a Contract. The first monthly payment varies
according to the form and type of Annuity selected. The Contract contains
Annuity tables derived from the 1983a Individual Annuity Mortality Table with
ages set back one year and with an assumed investment rate ("A.I.R.") of 4% per
annum. The total first monthly Variable 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.

Fixed Annuity payments are determined at annuitization by multiplying the
values allocated to the Fixed Account (less applicable Premium Taxes) by a rate
to be determined by Hartford Life which is no less than the rate specified in
the Annuity tables in the Contract. The Annuity payment will remain level for
the duration of the Annuity.

The amount of the first monthly Variable Annuity payment, determined as
described above, is divided by the value of an Annuity Unit for the appropriate
Sub-Account no earlier than the close of business on the fifth Valuation Day
preceding the day on which the payment is due in order to determine the number
of Annuity Units represented by
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HARTFORD LIFE INSURANCE COMPANY 19
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the first payment. This number of Annuity Units remains fixed during the Annuity
payment period, and in each subsequent month the dollar amount of the Variable
Annuity payment is determined by multiplying this fixed number of Annuity Units
by the then current Annuity Unit value.

LEVEL VARIABLE ANNUITY PAYMENTS WOULD BE PRODUCED IF THE INVESTMENT RATE
REMAINED CONSTANT AND EQUAL TO THE A.I.R. IN FACT, PAYMENTS WILL VARY UP OR DOWN
AS THE INVESTMENT RATE VARIES UP OR DOWN FROM THE A.I.R.

The Annuity Unit value used in calculating the amount of the Variable
Annuity payments will be based on an Annuity Unit value determined as of the
close of business on a day no earlier than the fifth Valuation Day preceding the
date of the Annuity payment.
CHARGES UNDER THE CONTRACTS
HOW ARE THE SALES CHARGES
UNDER THE CONTRACTS MADE?
There is no deduction for sales expenses from Premium Payments when made.
However, a contingent deferred sales charge may be assessed against Contract
Values when they are surrendered.

LENGTH OF TIME
CHARGE FROM PREMIUM PAYMENT
------ ------------------------------------
(NUMBER OF YEARS)
7% 1
6% 2
5% 3
4% 4
3% 5
2% 6
1% 7
0% 8 or more

No contingent deferred sales charge will be assessed in the event of death
of the Annuitant or Contract Owner, or if Contract Values are applied to an
Annuity option provided for under the Contract (except that a surrender out of
Option 4 will be subject to a contingent deferred sales charge if applicable) or
upon the exercise of the withdrawal privilege. (See "Is there ever a time when
the sales charges do not apply?" commencing on page .)

In the case of a redemption in which you request a certain dollar amount be
withdrawn, the sales charge is deducted from the amount withdrawn and the
balance is paid to you. Example: You request a total withdrawal of $1,000 and
the applicable sales load is 5%. Your Sub-Account(s) and/or the Fixed Account
will be reduced by $1,000 and you will receive $950 (i.e., the $1,000 total
withdrawal less the 5% sales charge). This is the method applicable on a full
surrender of your Contract. In the case of a partial redemption in which you
request to receive a specified amount, the sales charge will be calculated on
the total amount that must be withdrawn from your Sub-Account(s) and/or the
Fixed Account in order to provide you with the amount requested. Example: You
request to receive $1,000 and the applicable sales charge is 5%. Your
Sub-Account(s) and/or the Fixed Account will be reduced by $1,052.63 (i.e., a
total withdrawal of $1,052.63 which results in a $52.63 sales charge ($1,052.63
x 5%) and a net amount paid to you of $1,000 as requested).
IS THERE EVER A TIME
WHEN THE SALES CHARGES DO NOT APPLY?

Yes. During any Contract Year, on a non-cumulative basis, a Contract Owner
may make a partial surrender of Contract Values of up to 10% of the aggregate
Premium Payments made to the Contract (as determined on the date of the
requested withdrawal) without the application of the contingent deferred sales
charge described above. Certain plans or programs may have different withdrawal
privileges. Any such withdrawal will be deemed to be from Contract Values other
than Premium Payments. From time to time, Hartford Life may permit the Contract
Owner to preauthorize partial surrenders subject to certain limitations then in
effect. Additional surrenders or any surrender of the Contract Values in excess
of such amount in any Contract Year during the period when contingent deferred
sales charges are applicable will be subject to the appropriate charge as set
forth above.

No contingent deferred sales charges otherwise applicable will be assessed
in the event of death of the Annuitant, death of the Contract Owner or if
payments are made under an Annuity option provided for under the Contract,
except that in the case of a surrender out of Annuity Option 4, contingent
deferred sales charges will be assessed, if applicable.

Hartford Life may offer certain employer sponsored savings plans, in its
discretion, reduced fees and charges including, but not limited to, the
contingent deferred sales charges, the mortality and expense risk charge and the
maintenance fee for certain sales under circumstances
<PAGE>
20 HARTFORD LIFE INSURANCE COMPANY
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which may result in savings of certain costs and expenses. Reductions in these
fees and charges will not be unfairly discriminatory against any Contract owner.
WHAT DO THE SALES CHARGES COVER?

The contingent deferred sales charges are used to cover expenses relating to
the sale and distribution of the Contracts, including commissions paid to any
distribution organization and its sales personnel, the cost of preparing sales
literature and other promotional activities. To the extent that these charges do
not cover such distribution expenses they will be borne by Hartford Life from
its general assets, including surplus. The surplus might include profits
resulting from unused mortality and expense risk charges.
WHAT IS THE MORTALITY AND EXPENSE RISK CHARGE?

Although Variable Annuity payments made under the Contracts will vary in
accordance with the investment performance of the underlying Fund shares held in
the Sub-Account(s), the payments will not be affected by (a) Hartford Life's
actual mortality experience among Annuitants before or after the Annuity
Commencement Date or (b) Hartford Life's actual expenses, if greater than the
deductions provided for in the Contracts because of the expense and mortality
undertakings by Hartford Life.

For assuming these risks under the Contracts, Hartford Life will make a
daily charge at the rate of 1.25% per annum against all Contract Values held in
the Sub-Accounts during the life of the Contract (estimated at .90% for
mortality and .35% for expense).

The mortality undertakings provided by Hartford Life 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 1983a Individual Annuity
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. Hartford Life also assumes the liability for
payment of a minimum death benefit under the Contract.

The mortality undertakings are based on Hartford Life's determination of
expected mortality rates among all Annuitants. If actual experience among
Annuitants during the Annuity payment period deviates from Hartford Life's
actuarial determination of expected mortality rates among Annuitants because, as
a group, their longevity is longer than anticipated, Hartford Life must provide
amounts from its general funds to fulfill its Contract obligations. In that
event, a loss will fall on Hartford Life. Also, in the event of the death of an
Annuitant or Contract Owner before the commencement of Annuity payments,
whichever is earlier, Hartford Life can, in periods of declining value,
experience a loss resulting from the assumption of the mortality risk relative
to the minimum death benefit.

In providing an expense undertaking, Hartford Life assumes the risk that the
contingent deferred sales charges and the Annual Maintenance Fee for maintaining
the Contracts prior to the Annuity Commencement Date may be insufficient to
cover the actual cost of providing such items.
ARE THERE ANY ADMINISTRATIVE CHARGES?

Each year, on each Contract Anniversary on or before the Annuity
Commencement Date, Hartford Life will deduct an Annual Maintenance Fee, if
applicable, from Contract Values to reimburse it for expenses relating to the
maintenance of the Contract, the Fixed Account, and the Sub-Account(s)
thereunder. If during a Contract Year the Contract is surrendered for its full
value, Hartford Life will deduct the Annual Maintenance Fee at the time of such
surrender. The fee is a flat fee which will be due in the full amount regardless
of the time of the Contract Year that Contract Values are surrendered. The
Annual Maintenance Fee is $25.00 per Contract Year. The deduction will be made
pro rata according to the value in each Sub-Account and the Fixed Account under
a Contract.
HOW MUCH ARE THE DEDUCTIONS FOR PREMIUM TAXES?

A deduction is also made for Premium Tax, if applicable, imposed by a state
or other governmental entity. Certain states impose a Premium Tax, currently
ranging up to 3.5%. Some states assess the tax at the time purchase payments are
made; others assess the tax at the time of annuitization. Hartford Life will pay
Premium Taxes at the time imposed under applicable law. At its sole discretion,
Hartford Life may deduct Premium Taxes at the time Hartford Life pays such taxes
to the applicable taxing authorities, at the time the Contract is surrendered,
or at the time the Contract annuitizes.
HARTFORD LIFE INSURANCE COMPANY AND THE FUNDS
WHAT IS HARTFORD LIFE?

Hartford Life Insurance Company ("Hartford Life") was originally
incorporated under the laws of Massachusetts on June 5, 1902. It was
subsequently redomiciled to Connecticut. It is a stock life insurance company
engaged in the business of writing health and life insurance, both individual
and group, in all states of the United States and the District of Columbia. The
offices of Hartford Life are
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 21
- --------------------------------------------------------------------------------

located in Simsbury, Connecticut; however, its mailing address is P.O. Box 2999,
Hartford, CT 06104-2999.

Hartford Life is ultimately 100% owned by Hartford Fire Insurance Company,
one of the largest multiple lines insurance carriers in the United States. On
December 20, 1995, Hartford Fire Insurance Company became an independent,
publicly traded corporation.

Hartford Life is rated A+ (superior) by A.M. Best and Company, Inc., on the
basis of its financial soundness and operating performance. Hartford Life is
rated AA+ by both Standard & Poor's and Duff and Phelps on the basis of its
claims paying ability.

These ratings do not apply to the performance of the Separate Account.
However, the Contractual obligations under this variable annuity are the general
corporate obligations of Hartford Life. These ratings do apply to Hartford
Life's ability to meet its insurance obligations under the Contract.
WHAT ARE THE FUNDS?

Hartford Stock Fund, Inc. was organized on March 11, 1976. Hartford Advisers
Fund, Inc., Hartford Bond Fund, Inc., Hartford U.S. Government Money Market
Fund, Inc., and HVA Money Market Fund, Inc. were all organized on December 1,
1982. Hartford Capital Appreciation Fund, Inc. was organized on September 20,
1983. Hartford Mortgage Securities Fund, Inc. was organized on October 5, 1984.
Hartford Index Fund, Inc. was organized on May 16, 1983. Hartford International
Opportunities Fund, Inc. was organized on January 25, 1990. Hartford Dividend
and Growth Fund was organized on October 21, 1993. Hartford International
Advisers Fund, Inc. was organized on February 15, 1995. Hartford Small Company
Fund, Inc. was organized on August 9, 1996. All of the Funds were incorporated
under the laws of the State of Maryland and are collectively referred to as the
"Funds." The Funds may not be available in all states.

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

HARTFORD ADVISERS FUND, INC.

To achieve maximum long term total rate of return consistent with prudent
investment risk by investing in common stock and other equity securities, bonds
and other debt securities, and money market instruments. The investment adviser
will vary the investments of the Fund among equity and debt securities and money
market instruments depending upon its analysis of market trends. Total rate of
return consists of current income, including dividends, interest and discount
accruals and capital appreciation.

HARTFORD BOND FUND, INC.

To achieve maximum current income consistent with preservation of capital by
investing primarily in fixed-income securities.

HARTFORD CAPITAL APPRECIATION FUND, INC. (FORMERLY HARTFORD AGGRESSIVE GROWTH
FUND, INC.)

To achieve growth of capital by investing in equity securities and
securities convertible into equity securities selected solely on the basis of
potential for capital appreciation; income, if any, is an incidental
consideration.

HARTFORD DIVIDEND AND GROWTH FUND, INC.

To seek a high level of current income consistent with growth of capital and
reasonable investment risk by investing primarily in equity securities and
securities convertible into equity securities.

HARTFORD INDEX FUND, INC.

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.*

HARTFORD INTERNATIONAL ADVISERS FUND, INC.

To provide maximum long-term total return consistent with prudent investment
risk by investing in a portfolio of equity, debt and money securities.
Securities in which the Fund invests primarily will be denominated in non-U.S.
currencies and will be traded in non-U.S. markets.

HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.

To achieve long-term total return consistent with prudent investment risk
through investment primarily in equity securities issued by foreign companies.

HARTFORD MORTGAGE SECURITIES FUND, INC.

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

HARTFORD SMALL COMPANY FUND, INC. (AVAILABLE EFFECTIVE AUGUST 9, 1996)

To achieve growth of capital by investing primarily in equity securities
selected on the basis of potential for capital appreciation. Under normal market
and economic conditions at least 65% of the Small Company Fund's total assets
are invested in equity securities of companies which have less than $2 billion
in market capitalization.

* "STANDARD & POOR'S-REGISTERED TRADEMARK-", "S&P-REGISTERED TRADEMARK-", "S&P
500-REGISTERED TRADEMARK-", "STANDARD & POOR'S 500", AND "500" ARE TRADEMARKS
OF THE MCGRAW-HILL COMPANIES, INC. AND HAVE BEEN LICENSED FOR USE BY HARTFORD
LIFE INSURANCE COMPANY. THE INDEX FUND IS NOT SPONSORED, ENDORSED, SOLD OR
PROMOTED BY STANDARD & POOR'S ("S&P") AND S&P MAKES NO REPRESENTATION
REGARDING THE ADVISABILITY OF INVESTING IN THE INDEX FUND.
<PAGE>
22 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

HARTFORD STOCK FUND, INC.

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

HVA MONEY MARKET FUND, INC.

To achieve maximum current income consistent with liquidity and preservation
of capital by investing in money market securities.

The following Fund is available only for qualified Contracts issued prior to
May 1, 1987.

HARTFORD U.S. GOVERNMENT MONEY MARKET FUND, INC.

To achieve maximum current income consistent with preservation of capital by
investing in short-term, marketable obligations issued or guaranteed by the
United States Government or by agencies or instrumentalities of the United
States Government whether or not they are guaranteed by the full faith and
credit of the federal government. The Fund was organized on December 1, 1982
under the laws of the state of Maryland.

The Hartford Investment Management Company ("HIMCO") serves as investment
manager or adviser to each of the Funds. In addition, Wellington Management
Company ("Wellington Management") serve as sub-investment adviser to certain of
the Funds.

HIMCO serves as investment manager for Hartford Advisers Fund, Hartford
Capital Appreciation Fund, Hartford Dividend and Growth Fund, Hartford
International Advisers Fund, Hartford International Opportunities Fund, Hartford
Small Company Fund, and Hartford Stock Fund pursuant to an Investment Management
Agreement between each. Wellington management serves as sub-investment adviser
to each of these funds pursuant to a Sub-Investment Advisory Agreement between
Wellington Management and HIMCO on behalf of each fund.

HIMCO serves as the investment adviser to Hartford Bond Fund, Hartford Index
Fund, Hartford Mortgage Securities Fund, and HVA Money Market Fund pursuant to
an Investment Advisory Agreement between these funds and HIMCO.
ALL FUNDS

All of the Funds are sponsored by Hartford Life. The Funds are available
only to serve as the underlying investment for the variable annuity and variable
life insurance Contracts issued by Hartford Life.

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

The Hartford Investment Management Company ("HIMCO") serves as investment
manager or adviser to each of the Funds. In addition, Wellington Management
Company ("Wellington Management") has served as sub-investment adviser to
certain of the Funds since August 1984.

HIMCO serves as investment manager for Hartford Advisers, Hartford Capital
Appreciation Fund, Hartford Dividend and Growth, Hartford International
Advisers, Hartford International Opportunities, Hartford Small Company and
Hartford Stock Funds pursuant to an Investment Management Agreement between
each. Wellington Management serves as sub-investment adviser to each of these
funds pursuant to a Sub-Investment Advisory Agreement between Wellington
Management and HIMCO on behalf of each fund.

HIMCO serves as the investment adviser to Hartford Bond, Hartford Mortgage
Securities, Hartford U.S. Government Money Market and HVA Money Market Funds
pursuant to an Investment Advisory Agreement between these funds and HIMCO.

A full description of the Funds, their investment policies and restrictions,
risks, charges and expenses and all other aspects of their operation is
contained in the accompanying Funds' Prospectus which should be read in
conjunction with this Prospectus before investing and in the Funds' Statement of
Additional Information which may be ordered from Hartford Life.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 23
- --------------------------------------------------------------------------------

DOES HARTFORD LIFE HAVE ANY INTEREST IN THE FUNDS?

At December 31, 1995, certain Hartford Life Insurance Company group pension
Contracts held direct interest in shares as follows:

<TABLE>
<CAPTION>
PERCENT OF
SHARES TOTAL SHARES
------------ ---------------
<S> <C> <C>
Hartford Advisers Fund,
Inc......................... 10,709,364 0.56%
Hartford Capital Appreciation
Fund, Inc................... 5,313,800 1.31%
Hartford Index Fund, Inc..... 9,462,900 9.14%
Hartford International
Opportunities Fund, Inc..... 5,547,408 1.16%
Hartford Mortgage Securities
Fund, Inc................... 16,249,689 5.26%
Hartford Stock Fund, Inc..... 65,899 0.02%
</TABLE>

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

A. GENERAL

SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE CONTRACT OWNER INVOLVED AND THE TYPE OF PLAN UNDER
WHICH THE CONTRACT IS PURCHASED, LEGAL AND TAX ADVICE MAY BE NEEDED BY A PERSON,
TRUSTEE OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A CONTRACT DESCRIBED
HEREIN.

It should be understood that any detailed description of the Federal income
tax consequences regarding the purchase of these Contracts cannot be made in
this Prospectus and that special tax rules may be applicable with respect to
certain purchase situations not discussed herein. In addition, no attempt is
made here to consider any applicable state or other tax laws. For detailed
information, a qualified tax adviser should always be consulted. The discussion
here and in Appendix I, commencing on page , is based on Hartford Life's
understanding of current Federal income tax laws as they are currently
interpreted.
B. TAXATION OF HARTFORD LIFE AND
THE SEPARATE ACCOUNT

The Separate Account is taxed as part of Hartford Life which is taxed as a
life insurance company in accordance with the Internal Revenue Code (the
"Code"). Accordingly, the Separate Account will not be taxed as a "regulated
investment company" under subchapter M of Chapter 1 of the Code. Investment
income and any realized capital gains on the assets of the Separate Account are
reinvested and are taken into account in determining the value of the
Accumulation and Annuity Units (See "Value of Accumulation Units" commencing on
page ). As a result, such investment income and realized capital gains are
automatically applied to increase reserves under the Contract.

No taxes are due on interest, dividends and short-term or long-term capital
gains earned by the Separate Account with respect to Qualified or Non-Qualified
Contracts.
C. TAXATION OF ANNUITIES -- GENERAL
PROVISIONS AFFECTING PURCHASERS OTHER
THAN QUALIFIED RETIREMENT PLANS

Section 72 of the Internal Revenue Code governs the taxation of annuities in
general.

1. NON-NATURAL PERSONS, CORPORATIONS, ETC.

Section 72 contains provisions for Contract Owners which are non-natural
persons. Non-natural persons include corporations, trusts, and partnerships. The
annual net increase in the value of the Contract is currently includable 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 is an exception 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 not an individual, the primary Annuitant shall be
treated as the Contract Owner for purposes of making distributions which are
required to be made upon the death of the Contract Owner. If there is a change
in the primary Annuitant, such change shall be treated as the death of the
Contract Owner.

2. OTHER CONTRACT OWNERS (NATURAL PERSONS).

A Contract Owner is not taxed on increases in the value of the Contract
until an amount is received or deemed received, e.g., in the form of a lump sum
payment (full or partial value of a Contract) or as Annuity payments under the
settlement option elected.
<PAGE>
24 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

The provisions of Section 72 of the Code concerning distributions are
summarized briefly below. Also summarized are special rules affecting
distributions from Contracts obtained in a tax-free exchange for other annuity
contracts or life insurance contracts which were purchased prior to August 14,
1982.

A. DISTRIBUTIONS PRIOR TO THE ANNUITY COMMENCEMENT DATE

i. Total premium payments less amounts received which were not includable
in gross income equal the "investment in the contract" under Section
72 of the Code.

ii. To the extent that the value of the Contract (ignoring any surrender
charges except on a full surrender) exceeds the "investment in the
contract," such excess constitutes the "income on the contract."

iii. Any amount received or deemed received prior to the Annuity
Commencement Date (e.g., upon a partial surrender) is deemed to come
first from any such "income on the contract" and then from
"investment in the contract," and for these purposes such "income on
the contract" shall be computed by reference to any aggregation rule
in subparagraph 2.c. below. As a result, any such amount received or
deemed received (1) shall be includable in gross income to the extent
that such amount does not exceed any such "income on the contract,"
and (2) shall not be includable in gross income to the extent that
such amount does exceed any such "income on the contract." If at the
time that any amount is received or deemed received there is no
"income on the contract" (e.g., because the gross value of the
Contract does not exceed the "investment in the contract" and no
aggregation rule applies), then such amount received or deemed
received will not be includable in gross income, and will simply
reduce the "investment in the contract."

iv. The receipt of any amount as a loan under the Contract or the
assignment or pledge of any portion of the value of the Contract
shall be treated as an amount received for purposes of this
subparagraph a. and the next subparagraph b.

v. In general, the transfer of the Contract, without full and adequate
consideration, will be treated as an amount received for purposes of
this subparagraph a. and the next subparagraph b. This transfer rule
does not apply, however, to certain transfers of property between
spouses or incident to divorce.

B. DISTRIBUTIONS AFTER ANNUITY COMMENCEMENT DATE

Annuity payments made periodically after the Annuity Commencement Date are
includable in gross income to the extent the payments exceed the amount
determined by the application of the ratio of the "investment in the contract"
to the total amount of the payments to be made after the Annuity Commencement
Date (the "exclusion ratio").

i. When the total of amounts excluded from income by application of the
exclusion ratio is equal to the investment in the contract as of the
Annuity Commencement Date, any additional payments (including
surrenders) will be entirely includable in gross income.

ii. If the annuity payments cease by reason of the death of the Annuitant
and, as of the date of death, the amount of annuity payments excluded
from gross income by the exclusion ratio does not exceed the
investment in the contract as of the Annuity Commencement Date, then
the remaining portion of unrecovered investment shall be allowed as a
deduction for the last taxable year of the Annuitant.

iii. Generally, nonperiodic amounts received or deemed received after the
Annuity Commencement Date are not entitled to any exclusion ratio and
shall be fully includable in gross income. However, upon a full
surrender after such date, only the excess of the amount received
(after any surrender charge) over the remaining "investment in the
contract" shall be includable in gross income (except to the extent
that the aggregation rule referred to in the next subparagraph c. may
apply).

C. AGGREGATION OF TWO OR MORE ANNUITY CONTRACTS

Contracts issued after October 21, 1988 by the same insurer (or affiliated
insurer) to the same Contract Owner within the same calendar year (other than
certain contracts held in connection with a tax-qualified retirement
arrangement) will be treated as one annuity Contract for the purpose of
determining the taxation of distributions prior to the Annuity Commencement
Date. An annuity contract received in a tax-free exchange for another annuity
contract or life insurance contract may be treated as a new Contract for this
purpose. Hartford Life believes that for any annuity subject to such
aggregation, the values under the Contracts and the investment in the contracts
will be added together to determine the taxation under subparagraph 2.a., above,
of amounts received or deemed received prior to the Annuity Commencement Date.
Withdrawals will first be
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 25
- --------------------------------------------------------------------------------

treated as withdrawals of income until all of the income from all such Contracts
is withdrawn. As of the date of this Prospectus, there are no regulations
interpreting this provision.

D. 10% PENALTY TAX -- APPLICABLE TO CERTAIN WITHDRAWALS AND ANNUITY PAYMENTS

i. If any amount is received or deemed received on the Contract (before
or after the Annuity Commencement Date), the Code applies a penalty
tax equal to ten percent of the portion of the amount includable in
gross income, unless an exception applies.

ii. The 10% penalty tax will not apply to the following distributions
(exceptions vary based upon the precise plan involved):

1. Distributions made on or after the date the recipient has attained
the age of 59 1/2.

2. Distributions made on or after the death of the holder or where the
holder is not an individual, the death of the primary annuitant.

3. Distributions attributable to a recipient's becoming disabled.

4. A distribution that is part of a scheduled series of substantially
equal periodic payments for the life (or life expectancy) of the
recipient (or the joint lives or life expectancies of the recipient
and the recipient's Beneficiary).

5. Distributions of amounts which are allocable to the "investment in
the contract" prior to August 14, 1982 (see next subparagraph e.).

E. SPECIAL PROVISIONS AFFECTING CONTRACTS OBTAINED THROUGH A TAX-FREE
EXCHANGE OF OTHER ANNUITY OR LIFE INSURANCE CONTRACTS PURCHASED PRIOR TO
AUGUST 14, 1982

If the Contract was obtained by a tax-free exchange of a life insurance or
annuity Contract purchased prior to August 14, 1982, then any amount received or
deemed received prior to the Annuity Commencement Date shall be deemed to come
(1) first from the amount of the "investment in the contract" prior to August
14, 1982 ("pre-8/14/82 investment") carried over from the prior Contract, (2)
then from the portion of the "income on the contract" (carried over to, as well
as accumulating in, the successor Contract) that is attributable to such
pre-8/14/82 investment, (3) then from the remaining "income on the contract" and
(4) last from the remaining "investment in the contract." As a result, to the
extent that such amount received or deemed received does not exceed such
pre-8/14/82 investment, such amount is not includable in gross income., In
addition, to the extent that such amount received or deemed received does not
exceed the sum of (a) such pre-8/14/82 investment and (b) the "income on the
contract" attributable thereto, such amount is not subject to the 10% penalty
tax. In all other respects, amounts received or deemed received from such post-
exchange Contracts are generally subject to the rules described in this
subparagraph 3.

F. REQUIRED DISTRIBUTIONS

i. Death of Contract Owner or Primary Annuitant

Subject to the alternative election or spouse beneficiary provisions in
ii or iii below:

1. If any Contract Owner dies on or after the Annuity Commencement Date
and before the entire interest in the Contract has been distributed,
the remaining portion of such interest shall be distributed at least
as rapidly as under the method of distribution being used as of the
date of such death;

2. If any Contract Owner dies before the Annuity Commencement Date, the
entire interest in the Contract will be distributed within 5 years
after such death; and

3. If the Contract Owner is not an individual, then for purposes of 1.
or 2. above, the primary annuitant under the Contract shall be
treated as the Contract Owner, and any change in the primary
annuitant shall be treated as the death of the Contract Owner. The
primary annuitant is the individual, the events in the life of whom
are of primary importance in affecting the timing or amount of the
payout under the Contract.

ii. Alternative Election to Satisfy Distribution Requirements

If any portion of the interest of a Contract Owner described in i. above
is payable to or for the benefit of a designated beneficiary, such
beneficiary may elect to have the portion distributed over a period that
does not extend beyond the life or life expectancy of the beneficiary. The
election and payments must begin within a year of the death.

iii. Spouse Beneficiary

If any portion of the interest of a Contract Owner is payable to or for
the benefit of his or her spouse, and the Annuitant or Contingent
Annuitant is living, such spouse shall be treated as the Contract Owner of
such portion for purposes of section i. above.
<PAGE>
26 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

3. DIVERSIFICATION REQUIREMENTS

Section 817 of the Code provides that a variable annuity contract will not
be treated as an annuity contract for any period during which the investments
made by the separate account or underlying fund are not adequately diversified
in accordance with regulations prescribed by the Treasury Department. If a
Contract is not treated as an annuity contract, the Contract Owner will be
subject to income tax on the annual increases in cash value.

The Treasury Department has issued diversification regulations which
generally require, among other things, that no more than 55% of the value of the
total assets of the segregated 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 addition, in the case of
government securities, each government agency or instrumentality shall be
treated as a separate issuer.

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

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

4. OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT

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

Further, in the explanation to the temporary Section 817 diversification
regulations, the Treasury Department noted that the temporary regulations "do
not provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor, rather
than the insurance company, to be treated as the owner of the assets in the
account." The explanation further indicates that "the temporary regulations
provide that in appropriate cases a segregated asset account may include
multiple sub-accounts, but do not specify the extent to which policyholders may
direct their investments to particular sub-accounts without being treated as the
owners of the underlying assets. Guidance on this and other issues will be
provided in regulations or revenue rulings under Section 817(d), relating to the
definition of variable contract." The final regulations issued under Section 817
did not provide guidance regarding investor control, and as of the date of this
prospectus, no other such guidance has been issued. Further, Hartford Life does
not know if or in what form such guidance will be issued. In addition, although
regulations are generally issued with prospective effect, it is possible that
regulations may be issued with retroactive effect. Due to the lack of specific
guidance regarding the issue of investor control, there is necessarily some
uncertainty regarding whether a Contract Owner could be considered the owner of
the assets for tax purposes. Hartford Life reserves the right to modify the
contracts, as necessary, to prevent Contract Owners from being considered the
owners of the assets in the separate accounts.
D. FEDERAL INCOME TAX WITHHOLDING

The portion of a distribution which is taxable income to the recipient will
be subject to Federal income tax withholding, pursuant to Section 3405 of the
Code. The application of this provision is summarized below:

1. NON-PERIODIC DISTRIBUTIONS.

The portion of a non-periodic distribution which constitutes taxable income
will be subject to Federal income tax withholding unless the recipient elects
not to have taxes withheld. If an election not to have taxes withheld is not
provided, 10% of the taxable distribution will be withheld as Federal income
tax. Election forms will be provided at the time distributions are requested. If
the necessary election forms are not submitted to Hartford Life, Hartford Life
will automatically withhold 10% of the taxable distribution.

2. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN ONE
YEAR).

The portion of a periodic distribution which constitutes taxable income will
be subject to Federal income tax withholding as if the recipient were married
claiming three exemptions. A recipient may elect not to have income taxes
withheld or have income taxes withheld at a different rate by providing a
completed election form. Election forms will be provided at the time
distributions are requested.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 27
- --------------------------------------------------------------------------------

E. GENERAL PROVISIONS AFFECTING QUALIFIED RETIREMENT PLANS

The Contract may be used for a number of qualified retirement plans. If the
Contract is being purchased with respect to some form of qualified retirement
plan, please refer to Appendix I commencing on page for information relative
to the types of plans for which it may be used and the general explanation of
the tax features of such plans.
F. 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 advisor
regarding U.S., state, and foreign taxation with respect to an annuity purchase.
MISCELLANEOUS
WHAT ARE MY VOTING RIGHTS?

Hartford Life is the legal owner of all Fund shares held in the Separate
Account. As the owner, Hartford Life has the right to vote at the Funds'
shareholder meetings. However, to the extent required by federal securities laws
or regulations, Hartford Life will:

1. Vote all Fund shares attributable to a Contract according to instructions
received from the Contract Owner, and

2. Vote shares attributable to a Contract for which no voting instructions
are received in the same proportion as shares for which instructions are
received.

If any federal securities laws or regulations, or their present
interpretation change to permit Hartford Life to vote Fund shares in its own
right, Hartford Life may elect to do so.

Hartford Life will notify you of any Fund shareholders' meeting if the
shares held for your account may be voted at such meetings. Hartford Life will
also send proxy materials and a form of instruction by means of which you can
instruct Hartford Life with respect to the voting of the Fund shares held for
your account.

In connection with the voting of Fund shares held by it, Hartford Life will
arrange for the handling and tallying of proxies received from Contract Owners.
Hartford Life as such, shall have no right, except as hereinafter provided, to
vote any Fund shares held by it hereunder which may be registered in its name or
the names of its nominees. Hartford Life will, however, vote the Fund shares
held by it in accordance with the instructions received from the Contract Owners
for whose accounts the Fund shares are held. If a Contract Owner desires to
attend any meeting at which shares held for the Contract Owner's benefit may be
voted, the Contract Owner may request Hartford Life to furnish a proxy or
otherwise arrange for the exercise of voting rights with respect to the Fund
shares held for such Contract Owner's account. Hartford Life will vote shares
for which no instructions have been given and shares which are not attributable
to Contract Owners (i.e. shares owned by Hartford Life) in the same proportion
as it votes shares of that Fund for which it has received instructions. During
the Annuity period under a Contract the number of votes will decrease as the
assets held to fund Annuity benefits decrease.
WILL OTHER CONTRACTS BE
PARTICIPATING IN THE
SEPARATE ACCOUNT?

In addition to the Contracts described in this Prospectus, it is
contemplated that other forms of group or individual Variable Annuities may be
sold providing benefits which vary in accordance with the investment experience
of the Separate Account.
HOW ARE THE CONTRACTS SOLD?

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

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

HSD is registered with the Commission under the Securities Exchange Act of
1934 as a Broker-Dealer and is a member of the National Association of
Securities Dealers, Inc.

The securities may also be sold directly to employees of Hartford Life and
Hartford Fire Insurance Company, the ultimate parent of Hartford Life, without
compensation to
<PAGE>
28 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

HSD salespersons. The securities will be credited with an additional 6% of the
employee's premium payment by Hartford Life. This additional percentage of
premium payment in no way affects present or future charges, rights, benefits or
current values of other Contract Owners.
WHO IS THE CUSTODIAN
OF THE SEPARATE
ACCOUNT'S ASSETS?

The assets of the Separate Account are held by Hartford Life under a
safekeeping arrangement.
ARE THERE ANY MATERIAL
LEGAL PROCEEDINGS AFFECTING
THE SEPARATE ACCOUNT?
No.
ARE YOU RELYING ON ANY
EXPERTS AS TO ANY PORTION
OF THIS PROSPECTUS?

The financial statements and schedules 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 on the authority of said firm as experts in accounting and auditing in
giving said report. Reference is made to said report of Hartford Life Insurance
Company (the depositor) which include an explanatory paragraph with respect to
the adoption of a new accounting standard changing the methods of accounting for
debt and equity securities. Reference is made to said report of Hartford Life
Insurance Company (the depositor), which includes an explanatory paragraph with
respect to the adoption of new account standards changing the methods of
accounting for debt and equity securities. The principal business address of
Arthur Andersen LLP is One Financial Plaza, Hartford, Connecticut 06103.
HOW MAY I GET
ADDITIONAL INFORMATION?

Inquiries will be answered by calling your representative or by writing:

Hartford Life Insurance Company
Attn: Individual Annuity Operations
P.O. Box 5085
Hartford, Connecticut 06102-5085
Telephone: (800) 862-6668
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 29
- --------------------------------------------------------------------------------

APPENDIX I

(DIRECTOR III)

The Contract provisions for Contracts issued between September 1, 1988 and May
1, 1990 are the same as the provisions detailed in this Prospectus, except for
the following:

1. PREMIUM PAYMENTS

There is no premium payments below $1,000 for initial payments and $500 for
subsequent payments.

2. SALES EXPENSES

The contingent deferred sales charge is a percentage of the amount withdrawn
not to exceed the aggregate amount of the Premium Payments made) and equals:

<TABLE>
<CAPTION>
LENGTH OF TIME
CHARGE FROM PREMIUM PAYMENT
------ --------------------
(NUMBER OF YEARS)
<S> <C>
6% 1
6% 2
6% 3
6% 4
5% 5
4% 6
0% 7 or more
</TABLE>

3. WITHDRAWAL PRIVILEGES

The withdrawal privilege is limited to withdrawals of up to 10% per year of
the Premium Payments after the first Contract Year.

4. FIXED ACCOUNT

Transfers from the Fixed Account into a Sub-Account may be made only during
the 60 day period immediately following the Contract Anniversary. The maximum
amount which may be transferred from the Fixed Account is the greater of 30% of
the Fixed Account balance at the time of transfer or the greatest amount of any
transfer from the Fixed Accounts. There is no renewal interest rate exception.

5. DEATH BENEFIT

The Specified Contract Anniversary for purposes of determining the Death
Benefit is every sixth Contract Anniversary, I.E. the 6th, 12th, 18th, etc.
Contract Anniversaries, except in North Carolina.

6. HARTFORD INTERNATIONAL OPPORTUNITIES FUND AND HARTFORD DIVIDEND AND GROWTH
FUND

These funds may be available for this Contract upon written request.
- ---------------------------------------------------
<PAGE>
30 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

APPENDIX II

(DIRECTOR II)

The Contract provisions for Contracts issued from October 15, 1986 until
approximately September 1, 1988 are the same as the provisions detailed in this
Prospectus, except for the following.

1. PREMIUM PAYMENTS

The minimum subsequent Premium Payment is $2,000, except for New York
Contracts where the minimum subsequent Premium Payment is $1,000.

2. SALES EXPENSES

The contingent deferred sales charge is a percentage of the amount withdrawn
(not to exceed the aggregate amount of the Premium Payments made) and equals:

<TABLE>
<CAPTION>
LENGTH OF TIME
CHARGE FROM PREMIUM PAYMENT
------ --------------------
(NUMBER OF YEARS)
<S> <C>
5% 1
5% 2
4% 3
3% 4
2% 5
0% 6 or more
</TABLE>

3. DEATH BENEFIT

The specified Contract Anniversary for purposes of determining the Death
Benefit is every fifth year Contract Anniversary, i.e. the 5th, 10th, 15th, etc.
Contract Anniversary.

4. ANNUITY OPTIONS

The following option is available with respect to Qualified Plans only if
the guaranteed period is less than the life expectancy of the Annuitant at the
time the option becomes effective. Such life expectancy shall be computed on the
basis of the mortality table prescribed by the IRS, or if none is prescribed,
the mortality table then in use by Hartford Life.

Unit Refund Life Annuity (Variable Annuities Only)

This Annuity option is an Annuity payable monthly during the lifetime of the
Annuitant provided that, at the death of the Annuitant, the Beneficiary will
receive an additional payment equal to the excess, if any, of (a) over (b) where
(a) is the total amount applied under the option at the Annuity Commencement
Date divided by the Annuity Unit value at the Annuity Commencement Date and (b)
is the number of Annuity Units represented by each monthly Annuity payment made
times the number of Annuity payments made.

The amount of the additional payments will be determined by multiplying such
excess by the Annuity Unit value as of the date that proof of death is received
by Hartford Life.

5. ANNUITY PAYMENTS

When Annuity payments are to commence, the value of the Contract is
determined as the product of the value of the Accumulation Unit of each
Sub-Account as of the close of business on the fifth business day preceding the
date the first Annuity payment is due and the number of Accumulation Units
credited to each Sub-Account as of the date the Annuity is to commence.

The amount of the first monthly Annuity payment, determined as described
above, is divided by the value of an Annuity Unit for the appropriate
Sub-Account as of the close of business on the fifth business day preceding the
day on which the payment is due in order to determine the number of Annuity
Units represented by the first payment.

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

6. THE FIXED ACCOUNT AND RESTRICTIONS ON TRANSFERS

All reference to the Fixed Account, and certain restrictions as to transfers
do not apply except as to third party designees of the Contract owner.

7. HARTFORD INTERNATIONAL OPPORTUNITIES FUND AND HARTFORD DIVIDEND AND GROWTH
FUND

These funds may be available for this Contract upon written request.
- ---------------------------------------------------
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 31
- --------------------------------------------------------------------------------

APPENDIX III

INFORMATION REGARDING TAX-QUALIFIED PLANS

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

Provisions of the Code permit eligible employers to establish pension or
profit sharing plans (described in Section 401(a) and 401(k), if applicable, and
exempt from taxation under Section 501(a) of the Code), and Simplified Employee
Pension Plans (described in Section 408(k)). Such plans are subject to
limitations on the amount that may be contributed, the persons who may be
eligible and the time when distributions must commence. Corporate employers
intending to use these contracts in connection with such plans should seek
competent advice.
B. TAX SHELTERED ANNUITIES UNDER SECTION 403(b)

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

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

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

(2) upon separation from service;

(3) upon death or disability, or

(4) in the case of hardship.

The above restrictions apply to distributions of employee contributions made
after December 31, 1988, earnings on those contributions, and earnings on
amounts attributable to employee contributions held as of December 31, 1988.
They do not apply to distributions of any employer or other after-tax
contributions, employee contributions made on or before December 31, 1988, and
earnings credited to employee contributions before December 31, 1988.
C. DEFERRED COMPENSATION PLANS UNDER SECTION 457

Employees and independent contractors performing services for such employers
may contribute on a before tax basis to the Deferred Compensation Plan of their
employer in accordance with the employer's plan and Section 457 of the Code.
Section 457 places limitations on contributions to Deferred Compensation Plans
maintained by a State ("State" means a State, a political sub-division of a
State, and an agency or instrumentality of a State or political sub-division of
a State) or other tax-exempt organization. Generally, the limitation is 33 1/3%
of includable compensation (25% of gross compensation) or $7,500, whichever is
less. The plan may also provide for additional "catch-up" deferrals during the
three taxable years ending before a Participant attains normal retirement age.

An employee electing to participate in a plan should understand that his
rights and benefits are governed strictly by the terms of the plan, that the
employer is legal owner of any contract issued with respect to the plan and that
deferred amounts will be subject to the claims of the employer's creditors. The
employer as owner of the contract(s) retains all voting and redemption rights
which may accrue to the contract(s) issued with respect to the plan. The
participating employee should look to the terms
<PAGE>
32 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

of his plan for any charges in regard to participating therein other than those
disclosed in this Prospectus.

Distributions from a Section 457 Deferred Compensation Plan are prohibited
unless made after the participating employee attains the age specified in the
plan, separates from service, dies, becomes permanently and totally disabled or
suffers an unforeseeable financial emergency. Present federal tax law does not
allow tax-free transfers or rollovers for amounts accumulated in a Section 457
plan except for transfers to other Section 457 plans in limited cases.
D. INDIVIDUAL RETIREMENT ANNUITIES UNDER SECTION 408

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

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

1. PREMATURE DISTRIBUTION

Distributions from a qualified plan before the Participant attains age
59 1/2 are generally subject to an additional tax equal to 10% of the taxable
portion of the distribution. The 10% penalty does not apply to distributions
made after the employee's death, on account of disability and distributions in
the form of a life annuity and, except in the case of an IRA, certain
distributions after separation from service at or after age 55 and certain
distributions for eligible medical expenses. A life annuity is defined as a
scheduled series of substantially equal periodic payments for the life or life
expectancy of the Participant (or the joint lives or life expectancies of the
Participant and Beneficiary).

2. MINIMUM DISTRIBUTION TAX

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

An individual's interest in a retirement plan must generally be distributed
or begin to be distributed not later than April 1 of the calendar year in which
the individual attains age 70 1/2 ("required beginning date"). The required
beginning date with respect to certain government plans may be further deferred.
The entire interest of the Participant must be distributed beginning no later
than this required beginning date over a period which may not extend beyond a
maximum of the life expectancy of the Participant and a designated Beneficiary.
Each annual distribution must equal or exceed a "minimum distribution amount"
which is determined by dividing the account balance by the applicable life
expectancy. This account balance is generally based upon the account value as of
the close of business on the last day of the previous calendar year. In
addition, minimum distribution incidental benefit rules may require a larger
annual distribution.

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

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

3. EXCESS DISTRIBUTION TAX

If the aggregate distributions from all IRAs and certain other qualified
plans in a calendar year exceed the greater of (i) $150,000, or (ii) $112,500 as
indexed for inflation ($155,000 as of January 1, 1996), a penalty tax of 15% is
generally imposed on the excess portion of the distribution.

4. WITHHOLDING

Periodic distributions from a qualified plan lasting for a period of 10 or
more years are generally subject to voluntary income tax withholding. The
recipient of periodic distributions may generally elect not to have withholding
apply or to have income taxes withheld at a different rate by providing a
completed election form. Otherwise, the amount withheld on such distributions is
determined at the rate applicable to wages as if the recipient were married
claiming three exemptions.

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

Nonperiodic distributions from other qualified plans are generally subject
to mandatory income tax withholding at the flat rate of 20% unless such
distributions are: (a) the
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 33
- --------------------------------------------------------------------------------

non-taxable portion of the distribution; (b) required minimum distributions; (c)
eligible rollover distributions.

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

Any distribution from plans described in Section 457 of the Code is subject
to regular wage withholding rules.
- ---------------------------------------------------

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

TABLE OF CONTENTS
TO
STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
SECTION PAGE
------------------------------------------------------------------------ ----
<S> <C>
INTRODUCTION............................................................
DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY..........................
SAFEKEEPING OF ASSETS...................................................
INDEPENDENT PUBLIC ACCOUNTANTS..........................................
DISTRIBUTION OF CONTRACTS...............................................
ANNUITY PERIOD..........................................................
A. Annuity Payments.................................................
B. Electing the Annuity Commencement Date and Form of Annuity.......
C. Optional Annuity Forms...........................................
Option 1: Life Annuity..........................................
Option 2: Life Annuity With 120, 180 or 240 Monthly Payments
Certain...............................................
Option 3: Joint and Last Survivor Annuity.......................
Option 4: Payments for a Designated Period......................
Option 5: Death Benefit Remaining with the Company..............
D. The Annuity Unit and Valuation....................................
E. Determination of Amount of First Monthly Annuity Payment-Fixed
and Variable.....................................................
F. Amount of Second and Subsequent Monthly Annuity Payments.........
G. Date and Time of Annuity Payments.................................
CALCULATION OF YIELD AND RETURN.........................................
PERFORMANCE COMPARISONS.................................................
FINANCIAL STATEMENTS....................................................
</TABLE>

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

SECTION 403(b)(11) ACKNOWLEDGMENT FORM

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

a. attained age 59 1/2

b. terminated employment

c. died, or

d. become disabled.

Distributions of post December 31, 1988 contributions may also be made if you
have experienced a financial hardship.

Also, there may be a 10% penalty tax for distributions made because of financial
hardship or separation from service.

Also, please be aware that your 403(b) Plan may also offer other financial
alternatives other than the Hartford variable annuity. Please refer to your
Plan.

Please complete the following and return to:

Hartford Life Insurance Company
Individual Annuity Operations
P.O. Box 5085
Hartford, CT 06102-5085

Name of Contract Owner/Participant:
- -------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City or Plan/School District:
- --------------------------------------------------------------------------------
Date:
- --------------------------------------------------------------------------------
Contract No:
- --------------------------------------------------------------------------------
Signature:
- --------------------------------------------------------------------------------
<PAGE>
To Obtain a Statement of Additional Information, please complete the form
below and mail to:

Hartford Life Insurance Company
Attn: Individual Annuity Operations
P.O. Box 5085
Hartford, CT 06102-5085

Please send a Statement of Additional Information for the Director to me at
the following address:

- ----------------------------------------------------
Name

- ------------------------------------------------------------
Address

- ------------------------------------------------------------
City/State Zip
Code
<PAGE>

PART B

STATEMENT OF ADDITIONAL INFORMATION

HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT TWO

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

To obtain a Prospectus, send a written request to Hartford Life Insurance
Company Attn: Annuity Marketing Services, P.O. Box 5085, Hartford, CT
06102-5085.

Date of Prospectus: May 1, 1996

Date of Statement of Additional Information: May 1, 1996

<PAGE>

TABLE OF CONTENTS

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

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

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

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

ANNUITY PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A. Annuity Payments . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Electing the Annuity Commencement Date and Form of Annuity . . . . .
C. Optional Annuity Forms . . . . . . . . . . . . . . . . . . . . . . .
D. The Annuity Unit and Valuation . . . . . . . . . . . . . . . . . . .
E. Determination of Amount of First Monthly Annuity . . . . . . . . . .
F. Amount of Second and Subsequent Monthly Annuity Payments . . . . . .
G. Date and Time of Annuity Payments. . . . . . . . . . . . . . . . . .

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

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

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

<PAGE>

INTRODUCTION

The individual and group tax-deferred variable annuity Contracts described in
the Prospectus are designed to provide Annuity benefits to individuals who have
established or wish to establish retirement programs which may or may not
qualify for special federal income tax treatment. The Annuitant under these
Contracts may receive Annuity benefits in accordance with the Annuity option
selected and the retirement program, if any, under which the Contracts have been
purchased. Annuity payments under a Contract will begin on a particular future
date which may be selected at any time under the Contract or automatically when
the Annuitant reaches age 90 except in certain states where deferral past age 85
is not permitted. There are several alternative annuity payment options
available under the Contract (see "Optional Annuity Forms," commencing on page
).

The Premium Payments under a Contract, less any applicable Premium Taxes, will
be applied to the Separate Account and/or the Fixed Account. Accordingly, the
net Premium Payment under the Contract will be applied to purchase interests in
one or more of the Hartford Bond Fund, Hartford Stock Fund, HVA Money Market
Fund (for qualified Contracts issued prior to May 1, 1987), Hartford Advisers
Fund, Hartford Capital Appreciation Fund, Inc., Hartford Dividend and Growth,
Hartford Index Fund, Hartford International Advisers Fund, Hartford
International Opportunities Fund, Hartford Mortgage Securities Fund, and
Hartford U.S. Government Money Market Fund Sub-Accounts.

Shares of the Funds are purchased by the Separate Account without the imposition
of a sales charge. The value of a Contract depends on the value of the shares
of the Fund held by the Separate Account pursuant to that Contract. As a
result, the Contract Owner bears the investment risk since market value of the
shares may increase or decrease.

There is no assurance that the value of the Contract Owner's Contract at any
time will equal or exceed the Premium Payments made. However, if the Annuitant
or Contract Owner dies before the Annuity Commencement Date, the Contracts
provide that a death benefit equal to the value of the Contract as of the date
due proof of death is received by Hartford Life Insurance Company ("Hartford
Life") shall be payable. This amount is the greater of (a) the Contract Value
on the date of receipt of due proof of death by Hartford Life, or (b) 100% of
the total Premium Payments made to such Contract, reduced by any prior
surrenders, or (c) the Maximum Anniversary Value (See "Death Benefits"
commencing on page _____ of the Prospectus).

DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY

Hartford Life Insurance Company ("Hartford Life") was originally incorporated
under the laws of Massachusetts on June 5, 1902. It was subsequently
redomiciled to Connecticut. It is a stock life insurance company engaged in the
business of writing health and life insurance, both individual and group, in all
states of the United States and the District of Columbia. The offices of
Hartford Life are located in Simsbury, Connecticut; however, its mailing address
is P.O. Box 5085, Hartford, CT 06102-5085.

Hartford Life is ultimately 100% owned by Hartford Fire Insurance Company, one
of the largest multiple lines insurance carriers in the United States. On
December 20, 1995, Hartford Fire

<PAGE>

-2-

Insurance Company became an independent, publicly traded corporation.

These ratings do not apply to the performance of the Separate Account. However,
the Contractual obligations under this variable annuity are the general
corporate obligations of Hartford Life. These ratings do apply to Hartford
Life's ability to meet its insurance obligations under the Contract.

As of December 31, 1995, certain Hartford Life Insurance Company group pension
Contracts held direct interest in shares as follows:

Percent of
Shares Total Shares
------ ------------

Hartford Advisers Fund, Inc. 11,995,216 0.55%
Hartford Capital Appreciation Fund, Inc. 9,760,293 1.58%
Hartford Index Fund, Inc. 12,029,208 7.67%
Hartford International Opportunities Fund, Inc. 5,629,699 1.07%
Hartford Mortgage Securities Fund, Inc. 15,512,929 5.07%
Hartford Stock Fund, Inc. 70,084 0.01%

SAFEKEEPING OF ASSETS

The assets of the Separate Account are held by Hartford Life under a safekeeping
arrangement.

INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen LLP, One Financial Plaza, Hartford, Connecticut 06103,
independent public accountants, will perform an annual audit of the Separate
Account. The financial statements and schedules included in this Statement of
Additional Information and elsewhere in the Registration Statement have been
audited by Arthur Andersen LLP as indicated in their reports with respect
thereto and are included herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said report. Reference is made
to said report of Hartford Life Insurance Company (the depositor), which
includes an explanatory paragraph with respect to the adoption of new
accounting standards changing the methods of accounting for debt and equity
securities.

DISTRIBUTION OF CONTRACTS

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

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

<PAGE>

-3-

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

HSD is registered with the Securities and Exchange Commission under the
Securities and Exchange Act of 1934 as a Broker-Dealer and is a member of the
National Association of Securities Dealers, Inc. ("NASD").

Prior to June 26, 1995, the Principal Underwriter for the Separate Account was
Hartford Equity Sales Company, Inc. an NASD member Broker-Dealer.

The offering of the Separate Account Contracts is continuous.

ANNUITY PERIOD

A. Annuity Payments

Variable Annuity payments are determined on the basis of (1) a mortality table
set forth in the Contracts and the type of Annuity payment option selected, and
(2) the investment performance of the investment medium selected. Fixed Annuity
payments are based on the Annuity tables contained in the Contracts, and will
remain level for the duration of the Annuity.

The amount of the Annuity payments will not be affected by adverse mortality
experience or by an increase in expenses in excess of the expense deduction for
which provision has been made (see "Charges Under the Contracts," commencing on
page ___ of the Prospectus).

For a Variable Annuity the Annuitant will be paid the value of a fixed number of
Annuity Units each month. The value of such units and the amounts of the
monthly Variable Annuity payments will, however, reflect investment income
occurring after retirement, and thus the Variable Annuity payments will vary
with the investment experience of the Fund shares selected.

B. Electing the Annuity Commencement Date and Form of Annuity

The Contract Owner selects an Annuity Commencement Date and an Annuity option
which may be on a fixed or variable basis, or a combination thereof. The
Annuity Commencement Date will not be deferred beyond the Annuitant's 90th
birthday, except in certain states where deferral past age 85 is not permitted.

The Annuity Commencement Date and/or the Annuity option may be changed from time
to time, but any such change must be made at least 30 days prior to the date on
which Annuity payments are scheduled to begin.

The Contract contains the five optional Annuity forms described below. Options
2, 4 and 5 are available with respect to Qualified Contracts only if the
guaranteed payment period is less than the

<PAGE>

-4-

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 Internal Revenue Service, or if none is prescribed, the mortality table
then in use by Hartford Life.

With respect to Non-Qualified Contracts, if you do not elect otherwise, payments
will automatically begin at the Annuitant's age 90 (with the exception of states
that do not allow deferral past age 85) under Option 2 with 120 monthly payments
certain.

For Qualified Contracts and Contracts issued in Texas, if you do not elect
otherwise, payments will begin automatically at the Annuitant's age 90 (with the
exception of states that do not allow deferral past age 85) under Option 1 to
provide a life Annuity.

When an Annuity is effected under a Contract, unless otherwise specified,
variable values will be applied to provide a Variable Annuity based on Contract
Values as they are held in the various Sub-Accounts under the Contracts. Fixed
Account Contract Values will be applied to provide a Fixed Annuity. The
Contract Owner should consider the question of allocation of Contract Values
among Sub-Accounts of the Separate Account and the General Account of Hartford
Life to make certain that Annuity payments are based on the investment
alternative best suited to the Contract Owner's needs for retirement.

If at any time Annuity payments with respect to a Variable or a Fixed Annuity or
a combination of the two are or become less than $50.00 per payment, Hartford
Life has the right to change the frequency of payment to such intervals as will
result in Annuity payments of at least $50.00. For New York Contracts the
minimum payment is $20.00

There may be other annuity options available offered by Hartford Life from time
to time.

C. Optional Annuity Forms

OPTION 1: Life Annuity

A life Annuity is an Annuity payable during the lifetime of the Annuitant and
terminating with the last monthly payment preceding the death of the Annuitant.
This option offers the maximum level of monthly payments of any of the life
Annuity options since there is no guarantee of a minimum number of payments nor
a provision for a death benefit payable to a Beneficiary.

<PAGE>

-5-

OPTION 2: Life Annuity with 120, 180 or 240 Monthly Payments Certain

This Annuity option is an Annuity payable monthly during the lifetime of an
Annuitant with the provision that if, at the death of the Annuitant, payments
have been made for less than 120, 180 or 240 months, as elected, then the
present value as of the date of the Annuitant's death of the current dollar
amount at the date of death, of any remaining guaranteed monthly payments will
be paid in one sum to the Beneficiary or Beneficiaries designated.

Illustration of Annuity Payments
Individual Age 65, Life Annuity
With 120 Payments Certain
-------------------------

1. Net amount applied 13,978.25
2. Initial monthly income per $1,000 of payment applied 6.24
3. Initial monthly payment (1x2 divided by 1,000) 87.22
4. Annuity Unit value .953217
5. Number of monthly Annuity Units (3 divided by 4) 91.501
6. Assume Annuity Unit value for second month equal to .963723
7. Second monthly payment (6x5) 88.18
8. Assume Annuity Unit value for third month equal to .964917
9. Third monthly payment (8x5) 88.29

For the purpose of this illustration, purchase is assumed to have been made on
the fifth business day preceding the first payment date. In determining the
second and subsequent payments, the Annuity Unit value of the fifth business day
preceding the Annuity due date is used.

OPTION 3: Joint and Last Survivor Annuity

It would be possible under this option for an Annuitant and designated second
person in the event of the common or simultaneous death of the parties to
receive only one payment in the event of death prior to the due date for the
second payment and so on.

OPTION 4: Payments for a Designated Period

An amount payable monthly for the number of years selected which may be from 5
to 30 years. Under this option, you may, at any time, surrender the Contract
and receive, within seven days, the Termination Value of the Contract.

In the event of the Annuitant's death prior to the end of the designated period,
the present value as of the date of the Annuitant's death, of the current dollar
amount of any remaining guaranteed monthly payments will be paid in one sum to
the Beneficiary or Beneficiaries designated.

<PAGE>

-6-

OPTION 5: Death Benefit Remaining with the Company

Proceeds from the Death Benefit may be left with the Company for a period not to
exceed five years from the date of the Contract Owner's death prior to the
Annuity Commencement Date. The proceeds will remain in the Sub-Account(s) to
which they were allocated at the time of death unless the Beneficiary elects to
reallocate them. Full or partial withdrawals may be made at any time. In the
event of withdrawals, the remaining value will equal the Contract Value of the
proceeds left with the Company, minus any withdrawals. Contingent Deferred
Sales Charges, if applicable, will also be applied to all withdrawals. For
purposes of determining this charge, the original Contract Date of this Contract
will be used.

- --------------------------------------------------------------------------------
Under any of the Annuity options above, excluding Option 4, no surrenders are
permitted after Annuity payments commence. Only full surrenders are allowed out
of Option 4 and any such surrender will be subject to contingent deferred
charges, if applicable.
- --------------------------------------------------------------------------------

D. The Annuity Unit and Valuation

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 page 11 of the Prospectus) for the
day for which the Annuity Unit value is being calculated, and (2) a factor to
neutralize the assumed investment rate of 5.00% per annum discussed in Section
E. below.

Illustration of Calculation of Annuity Unit Value
-------------------------------------------------

1. Net Investment Factor for period 1.011225
2. Adjustment for 5% Assumed Rate of Investment Return .999892
3. 2x1 1.011116
4. Annuity Unit value, beginning of period .995995
5. Annuity Unit value, end of period (3x4) 1.007066

E. Determination of Amount of First Monthly Annuity Payment-Fixed and Variable

When Annuity payments are to commence, the value of the Contract is determined
as the sum of the value of the Fixed Account no earlier than the close of
business on the fifth Valuation Day preceding the date the first Annuity payment
is due plus the product of the value of the Accumulation Unit of each
Sub-Account on that same day, and the number of Accumulation Units credited to
each Sub-Account as of the date the Annuity is to commence.

<PAGE>

-7-

The Contract contains tables indicating the minimum dollar amount of the first
monthly payment under the optional forms of Annuity for each $1,000 of value of
a Sub-Account under a Contract. The first monthly payment varies according to
the form and type of Annuity selected. The Contracts contains Annuity tables
derived from the 1983a Individual Annuity Mortality table with ages set back one
year with an assumed investment rate ("A.I.R.") of 5% per annum. The total
first monthly Variable 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.

Fixed Annuity payments are determined at annuitization by multiplying the values
allocated to the Fixed Account by a rate to be determined by Hartford Life which
is no less than the rate specified in the Annuity tables in the Contract. The
Annuity payment will remain level for the duration of the Annuity.

F. Amount of Second and Subsequent Monthly Variable Annuity Payments

The amount of the first monthly Variable Annuity payment, determined as
described above, is divided by the value of an Annuity Unit for the appropriate
Sub-Account no earlier than the close of business on the fifth Valuation 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 Variable Annuity payment is determined by multiplying this fixed
number of Annuity Units by the then current Annuity Unit value.

Level Variable Annuity Payments would be produced if the investment rate
remained constant and equal to the A.I.R. In fact, payments will vary up or
down as the investment rate varies up or down from the A.I.R.

G. Date and Time of Annuity Payments

The Annuity payments will be made on the fifteenth day of each month following
selection. The Annuity Unit value used in calculating the amount of the
Variable Annuity payments will be based on an Annuity Unit value determined as
of the close of business on a day no earlier than the fifth Valuation Day
preceding the date of the Annuity payment.

CALCULATION OF YIELD AND RETURN

YIELD OF THE HVA MONEY MARKET FUND AND U.S. GOVERNMENT MONEY MARKET FUND
SUB-ACCOUNTS. As summarized in the Prospectus under the heading "Performance
Related Information," the yield of the HVA Money Market Fund and U.S. Government
Money Market Fund Sub-Accounts for a seven day period (the "base period") will
be computed by determining the "net change in value" (calculated as set forth
below) of a hypothetical account having a balance of one share at the beginning
of the period, dividing the net change in account value by the value of the
account at the beginning of the base period to obtain the base period return,
and

<PAGE>

-8-

multiplying the base period return by 365/7 with the resulting yield figure
carried to the nearest hundredth of one percent. Net changes in value of a
hypothetical account will include net investment income of the account (accrued
daily dividends as declared by the underlying funds, less daily expense 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 HVA Money Market Fund and U.S. Government Money Market Fund Sub-Accounts'
yield and effective yield will vary in response to fluctuations in interest
rates and in the expenses of the two Sub-Accounts.

THE CURRENT YIELD AND EFFECTIVE YIELD REFLECT RECURRING CHARGES ON THE SEPARATE
ACCOUNT LEVEL, INCLUDING THE MAXIMUM ANNUAL POLICY FEE.

HVA Money Market Fund Sub-Account

The yield and effective yield for the seven day period ending December 31, 1995
is as follows:

($30 annual policy fee)

Yield 4.03%
Effective Yield 4.11%

Hartford U.S. Government Money Market Fund Sub-Account

The yield and effective yield for the seven day period ending December 31, 1995
is as follows:

($30 annual policy fee)

Yield 3.72%
Effective Yield 3.79%

YIELDS OF BOND FUND AND MORTGAGE SECURITIES FUND SUB-ACCOUNTS. As summarized in
the Prospectus under the heading "Performance Related Information," yields of
these two Sub-Accounts will be computed by annualizing a recent month's net
investment income, divided by a Fund share's net asset value on the last trading
day of that month. Net changes in the value of a hypothetical account will
assume the change in the underlying mutual 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 Bond Fund and Mortgage
Securities Fund Sub-Accounts' yields will vary from time to time depending upon
market conditions and, the composition of the underlying funds' portfolios.
Yield should also be considered relative to changes in the value of the
Sub-Accounts' shares and to the relative risks associated with the investment
objectives and policies of the Bond Fund and Mortgage Securities Fund.

The yield reflects recurring charges on the Separate Account level, including
the annual policy fee.
BOND FUND SUB-ACCOUNT

<PAGE>

-9-

Yield calculations of the Sub-Account used for illustration purposes reflect the
interest earned by the Sub-Account, less applicable asset charges assessed
against a Contract Owner's account over the base period. The following is the
method used to determine the yield for the 30 day period ended December 31,
1995.

Example:
6
Current Yield Formula for the Sub-Account 2*[((A-B)/(C*D) + 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.

Yield = 5.15%

HARTFORD MORTGAGE SECURITIES FUND SUB-ACCOUNT

Example:
6
Current Yield Formula for the Sub-Account 2*[((A-B)/(C*D) + 1) - 1]

Yield = 5.58%

At any time in the future, yields and total return may be higher or lower than
past yields and there can be no assurance that any historical results will
continue.

The method of calculating yields described above for these Sub-Accounts differs
from the method used by the Sub-Accounts prior to May 1, 1988. The denominator
of the fraction used to calculate yield was previously the average unit value
for the period calculated. That denominator will hereafter be the unit value of
the Sub-Accounts on the last trading day of the period

<PAGE>

-10-

calculated.

CALCULATION OF TOTAL RETURN. As summarized in the Prospectus under the heading
"Performance Related Information", total return is a measure of the change in
value of an investment in a Sub-Account over the period covered. the formula
for total return used herein includes three steps: (1) calculating the value of
the hypothetical initial investment of $1,000 as of the end of the period by
multiplying the total number of units owned at the end of the period by the unit
value per unit on the last trading day of the period 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.

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 to
prospective shareholders. Each Sub-Account may from time to time include its
yield and total return in advertisements or information furnished to present to
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 and Morningstar, Inc. 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 Composite 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 Morgan Stanley Capital International EAFE Index (the "EAFE Index") is an
unmanaged index, which includes over 1,000 companies representing the stock
markets of Europe, Australia,

<PAGE>

-11-

New Zealand, and the Far East. The EAFE Index is weighted by market
capitalization, and therefore, it has a heavy representation in countries with
large stock markets, such as Japan.

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

The manner in which total return and yield will be calculated for public use is
described above.

The following table summarizes the calculation of total return and yield for
each Sub-Account, where applicable, through December 31, 1995.

<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT TWO AND TO THE
OWNERS OF UNITS OF INTEREST THEREIN:

We have audited the accompanying statement of assets & liabilities of Hartford
Life Insurance Company Separate Account Two (the Account) as of December 31,
1995, and the related statement of operations for the year then ended and
statements of changes in net assets for each of the two years in the period
then ended. These financial statements are the responsibility of the Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hartford Life Insurance
Company Separate Account Two as of December 31, 1995, the results of its
operations for the year then ended and the changes in its net assets for each
of the two years in the period then ended in conformity with generally accepted
accounting principles.

Hartford, Connecticut
February 19, 1996 Arthur Andersen LLP

45
<PAGE>
Separate Account Two
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES
DECEMBER 31, 1995

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- ------------- ------------
<S> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 205,553,955
Cost $ 209,932,335
Market Value......... $ 211,362,910 -- --
Hartford Stock Fund,
Inc.
Shares 273,568,580
Cost $ 749,838,526
Market Value......... -- $ 964,881,850 --
HVA Money Market Fund,
Inc.
Shares 188,634,435
Cost $ 188,634,435
Market Value......... -- -- $188,634,435
Hartford Advisers Fund,
Inc.
Shares 1,203,621,268
Cost $1,966,152,609
Market Value......... -- -- --
Hartford U.S.
Government Money
Market Fund, Inc.
Shares 1,541,454
Cost $ 1,541,454
Market Value......... -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 308,044,714
Cost $ 855,351,988
Market Value......... -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 206,683,299
Cost $ 222,736,253
Market Value......... -- -- --
Hartford Index Fund,
Inc.
Shares 81,559,076
Cost $ 121,425,129
Market Value......... -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 251,443,857
Cost $ 282,513,031
Market Value......... -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 87,758,037
Cost $ 98,018,237
Market Value......... -- -- --
Dividends receivable... -- -- --
Due from Hartford Life
Insurance Company..... 14,147,225 3,717,563 28,444
Receivable from fund
shares sold........... 32,125 23,525 26,370,639
--------------- ------------- ------------
Total Assets........... 225,542,260 968,622,938 215,033,518
--------------- ------------- ------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 32,227 23,557 26,365,647
Payable for fund shares
purchased............. 14,147,211 3,717,611 28,449
--------------- ------------- ------------
Total Liabilities...... 14,179,438 3,741,168 26,394,096
--------------- ------------- ------------
Net Assets (variable
annuity contract
liabilities).......... $ 211,362,822 $ 964,881,770 $188,639,422
--------------- ------------- ------------
--------------- ------------- ------------
</TABLE>

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

28
<PAGE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT CAPITAL MORTGAGE
ADVISERS FUND MONEY MARKET FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- -------------------- ------------------ --------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 205,553,955
Cost $ 209,932,335
Market Value......... -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 273,568,580
Cost $ 749,838,526
Market Value......... -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 188,634,435
Cost $ 188,634,435
Market Value......... -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 1,203,621,268
Cost $1,966,152,609
Market Value......... $2,357,220,033 -- -- -- --
Hartford U.S.
Government Money
Market Fund, Inc.
Shares 1,541,454
Cost $ 1,541,454
Market Value......... -- $1,541,454 -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 308,044,714
Cost $ 855,351,988
Market Value......... -- -- $1,074,971,315 -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 206,683,299
Cost $ 222,736,253
Market Value......... -- -- -- $221,411,551 --
Hartford Index Fund,
Inc.
Shares 81,559,076
Cost $ 121,425,129
Market Value......... -- -- -- -- $165,395,281
Hartford International
Opportunities Fund,
Inc.
Shares 251,443,857
Cost $ 282,513,031
Market Value......... -- -- -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 87,758,037
Cost $ 98,018,237
Market Value......... -- -- -- -- --
Dividends receivable... -- -- -- -- --
Due from Hartford Life
Insurance Company..... 2,347,036 71,753 11,230,672 51,950 101,649
Receivable from fund
shares sold........... 4,055 1,399 -- 29,773 324
--------------- ----------- ------------------ --------------- ------------
Total Assets........... 2,359,571,124 1,614,606 1,086,201,987 221,493,274 165,497,254
--------------- ----------- ------------------ --------------- ------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 4,060 1,110 -- 31,313 280
Payable for fund shares
purchased............. 2,349,274 71,620 11,230,335 46,223 101,602
--------------- ----------- ------------------ --------------- ------------
Total Liabilities...... 2,353,334 72,730 11,230,335 77,536 101,882
--------------- ----------- ------------------ --------------- ------------
Net Assets (variable
annuity contract
liabilities).......... $2,357,217,790 $1,541,876 $1,074,971,652 $221,415,738 $165,395,372
--------------- ----------- ------------------ --------------- ------------
--------------- ----------- ------------------ --------------- ------------

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

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

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

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

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

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

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

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

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

Cost
Market Value......... $328,307,731 --
Hartford Dividend and
Growth Fund, Inc.

Cost
Market Value......... -- $115,579,090
Dividends receivable... -- --
Due from Hartford Life
Insurance Company..... 35,397 217,629
Receivable from fund
shares sold........... 75,096 108
----------------- -------------
Total Assets........... 328,418,224 115,796,827
----------------- -------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 74,853 104
Payable for fund shares
purchased............. 35,406 217,519
----------------- -------------
Total Liabilities...... 110,259 217,623
----------------- -------------
Net Assets (variable
annuity contract
liabilities).......... $328,307,965 $115,579,204
----------------- -------------
----------------- -------------
</TABLE>

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

29
<PAGE>
SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES -- (CONTINUED)
DECEMBER 31, 1995

<TABLE>
<CAPTION>
CALVERT
RESPONSIBLY SMITH BARNEY
INVESTED DAILY
BALANCED INTERNATIONAL DIVIDEND
PORTFOLIO ADVISERS FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- ------------- ------------
<S> <C> <C> <C>
ASSETS:
Investments:
Calvert Responsibly
Invested Balanced
Portfolio
Shares 1,035,297
Cost $1,571,868
Market Value......... $ 1,763,111 -- --
Hartford International
Advisers Fund, Inc.
Shares 6,850,619
Cost $7,419,698
Market Value......... -- $ 7,597,541 --
Smith Barney Daily
Dividend Fund, Inc.
Shares 568,219
Cost $ 568,219
Market Value......... -- -- $ 568,219
Smith Barney
Appreciation Fund,
Inc.
Shares 12,475
Cost $ 85,820
Market Value......... -- -- --
Smith Barney Government
and Agencies Fund
Shares 42,393
Cost $ 42,393
Market Value......... -- -- --
TCI Advantage Fund
Shares 7,580
Cost $ 45,726
Market Value......... -- -- --
TCI Growth Fund
Shares 57,488
Cost $ 686,665
Market Value......... -- -- --
Fidelity VIP Overseas
Fund
Shares 10,961
Cost $ 183,433
Market Value......... -- -- --
Fidelity VIP Asset
Manager
Shares 21,487
Cost $ 320,417
Market Value......... -- -- --
Fidelity VIP II
Contrafund Fund
Shares 144,097
Cost $1,968,435
Market Value......... -- -- --
Fidelity VIP Growth
Fund
Shares 75,494
Cost $2,238,863
Market Value......... -- -- --
Dividends receivable... 31,889 126,971 1,128
Receivable from fund
shares sold........... -- 5 1,398
--------------- ------------- ------------
Total Assets........... 1,795,000 7,724,517 570,745
--------------- ------------- ------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- 5 1,398
Payable for fund shares
purchased............. 31,497 126,974 --
--------------- ------------- ------------
Total Liabilities...... 31,497 126,979 1,398
--------------- ------------- ------------
Net Assets (variable
annuity contract
liabilities).......... $ 1,763,503 $ 7,597,538 $ 569,347
--------------- ------------- ------------
--------------- ------------- ------------
</TABLE>

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

30
<PAGE>
<TABLE>
<CAPTION>
SMITH BARNEY SMITH BARNEY FIDELITY VIP
APPRECIATION GOVERNMENT AND TCI TCI OVERSEAS
FUND AGENCIES FUND ADVANTAGE FUND GROWTH FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- -------------------- ------------------ --------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Calvert Responsibly
Invested Balanced
Portfolio
Shares 1,035,297
Cost $1,571,868
Market Value......... -- -- -- -- --
Hartford International
Advisers Fund, Inc.
Shares 6,850,619
Cost $7,419,698
Market Value......... -- -- -- -- --
Smith Barney Daily
Dividend Fund, Inc.
Shares 568,219
Cost $ 568,219
Market Value......... -- -- -- -- --
Smith Barney
Appreciation Fund,
Inc.
Shares 12,475
Cost $ 85,820
Market Value......... $ 148,420 -- -- -- --
Smith Barney Government
and Agencies Fund
Shares 42,393
Cost $ 42,393
Market Value......... -- $ 42,393 -- -- --
TCI Advantage Fund
Shares 7,580
Cost $ 45,726
Market Value......... -- -- $ 46,921 -- --
TCI Growth Fund
Shares 57,488
Cost $ 686,665
Market Value......... -- -- -- $ 693,311 --
Fidelity VIP Overseas
Fund
Shares 10,961
Cost $ 183,433
Market Value......... -- -- -- -- $ 186,893
Fidelity VIP Asset
Manager
Shares 21,487
Cost $ 320,417
Market Value......... -- -- -- -- --
Fidelity VIP II
Contrafund Fund
Shares 144,097
Cost $1,968,435
Market Value......... -- -- -- -- --
Fidelity VIP Growth
Fund
Shares 75,494
Cost $2,238,863
Market Value......... -- -- -- -- --
Dividends receivable... -- 91 5 4,810 20,273
Receivable from fund
shares sold........... 632 85 -- -- --
--------------- ------- ------- --------------- ------------
Total Assets........... 149,052 42,569 46,926 698,121 207,166
--------------- ------- ------- --------------- ------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 618 100 -- -- --
Payable for fund shares
purchased............. -- -- 5 4,699 20,273
--------------- ------- ------- --------------- ------------
Total Liabilities...... 618 100 5 4,699 20,273
--------------- ------- ------- --------------- ------------
Net Assets (variable
annuity contract
liabilities).......... $ 148,434 $ 42,469 $ 46,921 $ 693,422 $ 186,893
--------------- ------- ------- --------------- ------------
--------------- ------- ------- --------------- ------------

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

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

Cost
Market Value......... -- -- --
Smith Barney Daily
Dividend Fund, Inc.

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

Cost
Market Value......... -- -- --
Smith Barney Government
and Agencies Fund

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

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

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

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

Cost
Market Value......... $ 339,277 -- --
Fidelity VIP II
Contrafund Fund

Cost
Market Value......... -- $ 1,985,660 --
Fidelity VIP Growth
Fund

Cost
Market Value......... -- -- $ 2,204,418
Dividends receivable... 323 5,820 14,634
Receivable from fund
shares sold........... -- -- --
-------- ------------- -------------
Total Assets........... 339,600 1,991,480 2,219,052
-------- ------------- -------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- --
Payable for fund shares
purchased............. 322 5,787 14,566
-------- ------------- -------------
Total Liabilities...... 322 5,787 14,566
-------- ------------- -------------
Net Assets (variable
annuity contract
liabilities).......... $ 339,278 $ 1,985,693 $ 2,204,486
-------- ------------- -------------
-------- ------------- -------------
</TABLE>

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

31
<PAGE>
SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES -- (CONTINUED)
DECEMBER 31, 1995

<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
DEFERRED ANNUITY CONTRACTS IN THE ACCUMULATION
PERIOD:
<S> <C> <C> <C>
INDIVIDUAL SUB-ACCOUNTS:
Bond Fund Qualified 1.00%....................... 330,535 $3.614932 $ 1,194,862
Bond Fund Non-Qualified 1.00%................... 2,376,794 3.559970 8,461,314
Bond Fund 1.25%................................. 99,377,458 1.880012 186,830,814
Bond Fund .25%.................................. 166,334 1.239350 206,147
Stock Fund Qualified 1.00%...................... 939,764 5.545871 5,211,810
Stock Fund Non-Qualified 1.00%.................. 4,081,077 5.303060 21,642,195
Stock Fund 1.25%................................ 285,640,499 2.887494 824,785,225
Stock Fund .25%................................. 1,618,784 1.502213 2,431,758
Money Market Fund Qualified 1.00%............... 1,177,896 2.367583 2,788,767
Money Market Fund Non-Qualified 1.00%........... 10,104,811 2.368697 23,935,237
Money Market Fund 1.25%......................... 102,634,648 1.527530 156,777,504
Money Market Fund .25%.......................... 456,402 1.122937 512,510
Advisers Fund Qualified 1.00%................... 4,044,765 3.760737 15,211,298
Advisers Fund Non-Qualified 1.00%............... 13,795,777 3.760737 51,882,290
Advisers Fund 1.25%............................. 888,803,486 2.523174 2,242,605,847
Advisers Fund .25%.............................. 1,771,831 1.393346 2,468,774
U.S. Government Money Market Fund Qualified
1.00%.......................................... 19,616 1.892119 37,114
U.S. Government Money Market Fund 1.25%......... 47,846 1.468327 70,254
Capital Appreciation Fund Qualified 1.00%....... 891,369 5.633469 5,021,500
Capital Appreciation Fund Non-Qualified 1.00%... 3,858,935 5.630910 21,729,315
Capital Appreciation Fund 1.25%................. 292,670,757 3.364100 984,573,694
Capital Appreciation Fund .25%.................. 3,995,733 1.602738 6,404,113
Mortgage Securities Fund Qualified 1.00%........ 1,001,153 2.398054 2,400,819
Mortgage Securities Fund Non-Qualified 1.00%.... 9,957,413 2.398054 23,878,416
Mortgage Securities Fund 1.25%.................. 101,881,342 1.877823 191,315,127
Mortgage Securities Fund .25%................... 135,236 1.202163 162,576
Index Fund 1.25%................................ 65,954,010 2.359499 155,618,421
Index Fund .25%................................. 353,859 1.497118 529,769
International Opportunities Fund Qualified
1.00%.......................................... 403,256 1.347555 543,410
International Opportunities Fund Non-Qualified
1.00%.......................................... 1,764,588 1.347508 2,377,796
International Opportunities Fund 1.25%.......... 238,085,775 1.329133 316,447,660
International Opportunities Fund .25%........... 1,377,623 1.472543 2,028,610
Dividend and Growth Fund Qualified 1.00%........ 61,189 1.365504 83,554
Dividend and Growth Fund Non-Qualified 1.00%.... 665,428 1.365504 908,645
Dividend and Growth Fund 1.25%.................. 83,505,795 1.359330 113,511,933
Dividend and Growth Fund .25%................... 220,038 1.384195 304,576
International Advisers Fund Qualified 1.00%..... 10,000 1.148740 11,487
International Advisers Fund Non-Qualified
1.00%.......................................... 29,725 1.148740 34,146
International Advisers Fund 1.25%............... 6,577,380 1.146332 7,539,861
</TABLE>

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

32
<PAGE>
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
INDIVIDUAL SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
International Advisers Fund .25%................ 10,419 $1.155977 $ 12,044
Smith Barney Daily Dividend, Inc. Qualified
1.00%.......................................... 81,953 2.568390 210,487
Smith Barney Daily Dividend, Inc. Non-Qualified
1.00%.......................................... 135,021 2.657806 358,860
Smith Barney Appreciation Fund, Inc. Qualified
1.00%.......................................... 23,659 6.273870 148,434
Smith Barney Government and Agencies, Inc.
Qualified 1.0%................................. 18,334 2.316404 42,469
--------------
Sub-total Individual Sub-Accounts............... 5,383,251,442
--------------
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP.................... 1,430,095 4.233986 6,055,001
Bond Fund 1.25% DCII............................ 1,368,191 4.095031 5,602,785
Bond Fund .15% DCII............................. 282,400 3.858322 1,089,592
Stock Fund Qualified 1.00% QP................... 3,836,835 9.274144 35,583,358
Stock Fund Qualified .825% QP................... 1,348,097 7.448476 10,041,270
Stock Fund Non-Qualified 1.00% NQ............... 88,666 7.276670 645,195
Stock Fund Non-Qualified .825% NQ............... 834,235 7.461553 6,224,688
Stock Fund 1.25% DCII........................... 4,412,560 8.968113 39,572,332
Stock Fund .15% DCII............................ 824,645 6.963929 5,742,769
Money Market Fund Qualified .375% QP............ 2,294 2.953210 6,776
Money Market Fund 1.25% DCII.................... 988,763 2.623540 2,594,060
Money Market Fund .15% DCII..................... 266,532 2.551494 680,054
Advisers Fund 1.25% DCII........................ 9,212,081 3.646658 33,593,308
Advisers Fund .15% DCII......................... 645,782 4.188043 2,704,563
U.S. Government Money Market Fund 1.25% DCII.... 585,783 1.832902 1,073,683
U.S. Government Money Market Fund .15% DCII..... 42,168 2.111581 89,042
Capital Appreciation Fund 1.25% DCII............ 9,081,481 5.477917 49,747,602
Capital Appreciation Fund .15% DCII............. 737,352 6.223880 4,589,189
Mortgage Securities Fund 1.25% DCII............. 1,149,499 2.333132 2,681,933
Mortgage Securities Fund .15% DCII.............. 76,381 2.631908 201,028
Index Fund 1.25% DCII........................... 3,153,427 2.352860 7,419,573
Index Fund .15% DCII............................ 281,881 2.557622 720,946
International Opportunities Fund 1.25% DCII..... 4,520,023 1.329322 6,008,567
International Opportunities Fund .15% DCII...... 328,735 1.411986 464,169
Dividend and Growth Fund 1.25% DCII............. 557,608 1.222612 681,738
Calvert Responsibly Invested Balanced Portfolio
1.25% DCII..................................... 922,893 1.816735 1,676,653
TCI Advantage Fund 1.25% DCII................... 36,249 1.051440 38,113
TCI Growth Fund 1.25% DCII...................... 633,767 1.080853 685,009
Fidelity VIP Overseas Fund 1.25% DCII........... 181,421 1.030158 186,893
Fidelity VIP II Asset Manager Fund 1.25% DCII... 312,179 1.086805 339,278
Fidelity VIP II Contrafund Fund 1.25% DCII...... 1,807,601 1.098524 1,985,693
</TABLE>

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

33
<PAGE>
SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES -- (CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
GROUP SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
Fidelity VIP Growth Fund 1.25% DCII............. 2,054,903 $1.072793 $ 2,204,486
--------------
Sub-total Group Sub-Accounts.................... 230,929,346
--------------
TOTAL ACCUMULATION PERIOD......................... 5,614,180,788
--------------
ANNUITY CONTRACTS IN THE ANNUITY PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Bond Fund Non-Qualified 1.00%................... 360 3.559970 1,281
Bond Fund 1.25%................................. 146,793 1.880012 275,972
Stock Fund Non-Qualified 1.00%.................. 6,396 5.303060 33,918
Stock Fund 1.25%................................ 338,160 2.887494 976,434
Money Market Fund Qualified 1.00%............... 15,106 2.367583 35,766
Money Market Fund Non-Qualified 1.00%........... 102,049 2.368697 241,724
Money Market Fund 1.25%......................... 384,819 1.527530 587,823
Advisers Fund Qualified 1.00%................... 4,802 3.760737 18,058
Advisers Fund Non-Qualified 1.00%............... 63,789 3.760737 239,894
Advisers Fund 1.25%............................. 864,266 2.523174 2,180,695
U.S. Government Money Market Fund Qualified
1.00%.......................................... 17,575 1.892119 33,254
Capital Appreciation Fund Non-Qualified 1.00%... 4,341 5.630910 24,443
Capital Appreciation Fund 1.25%................. 102,482 3.364100 344,759
Mortgage Securities Fund Non-Qualified 1.00%.... 102,291 2.398054 245,299
Mortgage Securities Fund 1.25%.................. 89,747 1.877823 168,529
Index Fund 1.25%................................ 65,687 2.359499 154,988
International Opportunities Fund 1.25%.......... 177,975 1.329133 236,552
Dividend and Growth Fund 1.25%.................. 17,276 1.359330 23,484
--------------
Sub-total Individual Sub-Accounts............... 5,822,873
--------------
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP.................... 81,632 4.233986 345,630
Bond Fund 1.25% DCII............................ 303,107 4.095031 1,241,231
Bond Fund 1.00% DCII............................ 12,827 4.217255 54,094
Bond Fund .15% DCII............................. 1,062 3.858322 4,099
Stock Fund Qualified 1.00% QP................... 238,834 9.274144 2,214,981
Stock Fund Qualified .825% QP................... 56,135 7.448476 418,124
Stock Fund Non-Qualified 1.00% NQ............... 632 7.276670 4,596
Stock Fund Non-Qualified .825% NQ............... 58,469 7.461553 436,273
Stock Fund 1.25% DCII........................... 985,111 8.968113 8,834,590
Stock Fund 1.00% DCII........................... 4,395 9.245123 40,630
Stock Fund .15% DCII............................ 5,977 6.963929 41,624
Money Market Fund 1.25% DCII.................... 182,654 2.623540 479,201
Advisers Fund 1.25% DCII........................ 1,704,451 3.646658 6,215,551
</TABLE>

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

34
<PAGE>
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
GROUP SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
Advisers Fund .15% DCII......................... 23,283 $4.188043 $ 97,512
U.S. Government Money Market Fund 1.25% DCII.... 130,137 1.832902 238,529
Capital Appreciation Fund 1.25% DCII............ 462,860 5.477917 2,535,508
Capital Appreciation Fund .15% DCII............. 246 6.223880 1,529
Mortgage Securities Fund 1.25% DCII............. 155,161 2.333132 362,011
Index Fund 1.25% DCII........................... 404,476 2.352860 951,675
International Opportunities Fund 1.25% DCII..... 151,356 1.329322 201,201
Dividend and Growth Fund Sub-Account............ 53,389 1.222612 65,274
Calvert Responsibly Invested Balanced Portfolio
1.25% DCII..................................... 47,806 1.816735 86,850
TCI Advantage Fund Sub-Account.................. 8,377 1.051440 8,808
TCI Growth Fund Sub-Account..................... 7,783 1.080853 8,413
--------------
Sub-total Group Sub-Accounts.................... 24,887,934
--------------
TOTAL ANNUITY PERIOD.............................. 30,710,807
--------------
GRAND TOTAL....................................... $5,644,891,595
--------------
--------------
</TABLE>

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

35
<PAGE>
Separate Account Two
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- ------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $11,511,264 $ 17,813,206 $12,163,281
EXPENSES:
Mortality and expense
undertakings.......... (2,154,558) (9,711,073) (2,622,588)
-------------- ------------- ------------
Net investment income
(loss).............. 9,356,706 8,102,133 9,540,693
-------------- ------------- ------------
Capital gains income... -- 26,305,598 --
-------------- ------------- ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 117,877 2,168,121 --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 18,122,724 184,154,644 --
-------------- ------------- ------------
Net gains (losses) on
investments......... 18,240,601 186,322,765 --
-------------- ------------- ------------
Net increase
(decrease) in net
assets resulting
from operations..... $27,597,307 $ 220,730,496 $ 9,540,693
-------------- ------------- ------------
-------------- ------------- ------------
</TABLE>

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

36
<PAGE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT CAPITAL MORTGAGE
ADVISERS FUND MONEY MARKET FUND APPRECIATION FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------------- ----------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 73,528,138 $72,752 $ 8,061,601 $14,206,415
EXPENSES:
Mortality and expense
undertakings.......... (25,531,142) (15,807) (10,434,564) (2,658,370)
-------------- -------- ----------------- ---------------
Net investment income
(loss).............. 47,996,996 56,945 (2,372,963) 11,548,045
-------------- -------- ----------------- ---------------
Capital gains income... 21,614,744 -- 34,687,769 --
-------------- -------- ----------------- ---------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 1,643,658 -- 2,276,572 (490,628)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 410,209,012 -- 168,562,628 18,815,991
-------------- -------- ----------------- ---------------
Net gains (losses) on
investments......... 411,852,670 -- 170,839,200 18,325,363
-------------- -------- ----------------- ---------------
Net increase
(decrease) in net
assets resulting
from operations..... $481,464,410 $56,945 $203,154,006 $29,873,408
-------------- -------- ----------------- ---------------
-------------- -------- ----------------- ---------------

<CAPTION>
INTERNATIONAL DIVIDEND AND
INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ------------------ -------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 3,104,555 $ 4,858,678 $ 1,834,675
EXPENSES:
Mortality and expense
undertakings.......... (1,562,001) (3,752,084) (789,977)
------------- ------------------ -------------
Net investment income
(loss).............. 1,542,554 1,106,594 1,044,698
------------- ------------------ -------------
Capital gains income... 38,706 2,695,768 --
------------- ------------------ -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 969,630 (488,089) 4,933
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 34,721,169 32,521,726 18,047,295
------------- ------------------ -------------
Net gains (losses) on
investments......... 35,690,799 32,033,637 18,052,228
------------- ------------------ -------------
Net increase
(decrease) in net
assets resulting
from operations..... $ 37,272,059 $35,835,999 $19,096,926
------------- ------------------ -------------
------------- ------------------ -------------
</TABLE>

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

37
<PAGE>
SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
CALVERT
RESPONSIBLY SMITH BARNEY
INVESTED DAILY
BALANCED INTERNATIONAL DIVIDEND
PORTFOLIO ADVISERS FUND FUND
SUB-ACCOUNT SUB-ACCOUNT* SUB-ACCOUNT
--------------- ------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 104,255 $ 193,566 $ 32,338
EXPENSES:
Mortality and expense
undertakings.......... (16,809) (29,492) (5,998)
--------------- ------------- ------------
Net investment income
(loss).............. 87,446 164,074 26,340
--------------- ------------- ------------
Capital gains income... 50,438 -- --
--------------- ------------- ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 1,044 6,279 --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 184,034 177,844 --
--------------- ------------- ------------
Net gains (losses) on
investments......... 185,078 184,123 --
--------------- ------------- ------------
Net increase
(decrease) in net
assets resulting
from operations..... $ 322,962 $ 348,197 $ 26,340
--------------- ------------- ------------
--------------- ------------- ------------
</TABLE>

* From Inception, March 1, 1995 to December 31, 1995.
** From Inception, July 1, 1995 to December 31, 1995.

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

38
<PAGE>
<TABLE>
<CAPTION>
SMITH BARNEY
SMITH BARNEY GOVERNMENT AND TCI TCI FIDELITY VIP
APPRECIATION FUND AGENCIES FUND ADVANTAGE FUND GROWTH FUND OVERSEAS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT** SUB-ACCOUNT** SUB-ACCOUNT**
----------------- -------------------- ------------------ --------------- --------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 2,392 $ 2,387 $ 757 $ -- $--
EXPENSES:
Mortality and expense
undertakings.......... (1,351) (449) (208) (2,133) (491)
------- ------ ------ ------- ------
Net investment income
(loss).............. 1,041 1,938 549 (2,133) (491)
------- ------ ------ ------- ------
Capital gains income... 11,468 -- -- -- --
------- ------ ------ ------- ------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 148 -- (90) 938 (240)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 20,104 -- 1,195 6,645 3,459
------- ------ ------ ------- ------
Net gains (losses) on
investments......... 20,252 -- 1,105 7,583 3,219
------- ------ ------ ------- ------
Net increase
(decrease) in net
assets resulting
from operations..... $32,761 $ 1,938 $ 1,654 $ 5,450 $2,728
------- ------ ------ ------- ------
------- ------ ------ ------- ------

<CAPTION>
FIDELITY VIP II
ASSET MANAGER FIDELITY VIP II FIDELITY VIP
FUND CONTRAFUND FUND GROWTH FUND
SUB-ACCOUNT** SUB-ACCOUNT** SUB-ACCOUNT**
----------------- ----------------- -------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ -- $ 25,425 $ --
EXPENSES:
Mortality and expense
undertakings.......... (1,491) (6,192) (6,603)
------- ------- -------------
Net investment income
(loss).............. (1,491) 19,233 (6,603)
------- ------- -------------
Capital gains income... -- -- --
------- ------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 456 (577) (2,056)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 18,860 17,225 (34,445)
------- ------- -------------
Net gains (losses) on
investments......... 19,316 16,648 (36,501)
------- ------- -------------
Net increase
(decrease) in net
assets resulting
from operations..... $ 17,825 $ 35,881 $ (43,104)
------- ------- -------------
------- ------- -------------
</TABLE>

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

39
<PAGE>
SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1995

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

HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1994

MONEY
BOND FUND STOCK FUND MARKET FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ -----------
OPERATIONS:
Net investment income
(loss)................ $ 8,147,222 $ 5,872,155 $6,069,008
Capital gains income... 3,020,067 34,722,942 --
Net realized gain
(loss) on security
transactions.......... (421,917) (203,916) --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (19,519,205) (59,765,259) --
------------ ------------ -----------
Net increase (decrease)
in net assets
resulting from
operations............ (8,773,833) (19,374,078) 6,069,008
------------ ------------ -----------
UNIT TRANSACTIONS:
Purchases.............. 29,721,918 105,127,448 72,433,601
Net transfers.......... (10,176,062) 20,445,965 10,951,538
Surrenders............. (11,477,200) (25,527,779) (33,930,464)
Net annuity
transactions.......... 284,001 1,000,538 596,459
------------ ------------ -----------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 8,352,657 101,046,172 50,051,134
------------ ------------ -----------
Total increase
(decrease) in net
assets................ (421,176) 81,672,094 56,120,142
NET ASSETS:
Beginning of period.... 159,909,323 564,430,371 185,569,101
------------ ------------ -----------
End of period.......... $159,488,147 $646,102,465 $241,689,243
------------ ------------ -----------
------------ ------------ -----------
</TABLE>

* From inception, March 8, 1994, to December 31, 1994.

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

40
<PAGE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT CAPITAL MORTGAGE INTERNATIONAL
ADVISERS FUND MONEY MARKET FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
---------------------------------- ----------------- --------------- ------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 47,996,996 $ 56,945 $ (2,372,963) $ 11,548,045 $ 1,542,554 $ 1,106,594
Capital gains income... 21,614,744 -- 34,687,769 -- 38,706 2,695,768
Net realized gain
(loss) on security
transactions.......... 1,643,658 -- 2,276,572 (490,628) 969,630 (488,089)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 410,209,012 -- 168,562,628 18,815,991 34,721,169 32,521,726
-------------- ----------- ----------------- --------------- ------------- ------------------
Net increase (decrease)
in net assets
resulting from
operations............ 481,464,410 56,945 203,154,006 29,873,408 37,272,059 35,835,999
-------------- ----------- ----------------- --------------- ------------- ------------------
UNIT TRANSACTIONS:
Purchases.............. 189,985,618 247,760 164,142,420 9,787,879 22,856,837 27,669,493
Net transfers.......... (5,608,414 ) 17,612 104,275,366 (15,085,789) 14,885,934 (24,115,834)
Surrenders............. (110,192,361 ) (76,250) (29,551,158) (16,689,694) (4,088,509) (12,086,298)
Net annuity
transactions.......... 487,625 84,208 482,089 13,331 84,999 124,982
-------------- ----------- ----------------- --------------- ------------- ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 74,672,468 273,330 239,348,717 (21,974,273) 33,739,261 (8,407,657)
-------------- ----------- ----------------- --------------- ------------- ------------------
Total increase
(decrease) in net
assets................ 556,136,878 330,275 442,502,723 7,899,135 71,011,320 27,428,342
NET ASSETS:
Beginning of period.... 1,801,080,912 1,211,601 632,468,929 213,516,603 94,384,052 300,879,623
-------------- ----------- ----------------- --------------- ------------- ------------------
End of period.......... $2,357,217,790 $1,541,876 $1,074,971,652 $221,415,738 $ 165,395,372 $328,307,965
-------------- ----------- ----------------- --------------- ------------- ------------------
-------------- ----------- ----------------- --------------- ------------- ------------------

U.S. GOVERNMENT CAPITAL MORTGAGE INTERNATIONAL
ADVISERS FUND MONEY MARKET FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
---------------------------------- ----------------- --------------- ------------- ------------------
OPERATIONS:
Net investment income
(loss)................ $ 36,400,916 $ 28,918 $ (4,596,707) $ 12,903,970 $ 1,155,546 $ 415,635
Capital gains income... 47,447,226 -- 42,093,901 1,176,728 -- --
Net realized gain
(loss) on security
transactions.......... 414,315 -- 316,913 (2,117,604) 177,595 (38,119)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (154,737,742 ) -- (28,599,970) (19,218,450) (1,319,890) (9,418,006)
-------------- ----------- ----------------- --------------- ------------- ------------------
Net increase (decrease)
in net assets
resulting from
operations............ (70,475,285 ) 28,918 9,214,137 (7,255,356) 13,251 (9,040,490)
-------------- ----------- ----------------- --------------- ------------- ------------------
UNIT TRANSACTIONS:
Purchases.............. 419,190,064 205,153 147,740,784 19,118,960 11,954,835 93,762,262
Net transfers.......... 14,104,761 (151,291) 33,684,129 (49,453,490) (438,563) 55,977,196
Surrenders............. (88,886,489 ) (65,287) (18,517,067) (20,146,010) (3,246,522) (7,306,583)
Net annuity
transactions.......... 2,114,613 (29,641) 396,915 137,102 59,473 (104,557)
-------------- ----------- ----------------- --------------- ------------- ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 346,522,949 (41,066) 163,304,761 (50,343,438) 8,329,223 142,328,318
-------------- ----------- ----------------- --------------- ------------- ------------------
Total increase
(decrease) in net
assets................ 276,047,664 (12,148) 172,518,898 (57,598,794) 8,342,474 133,287,828
NET ASSETS:
Beginning of period.... 1,525,033,248 1,223,749 459,950,031 271,115,397 86,041,578 167,591,795
-------------- ----------- ----------------- --------------- ------------- ------------------
End of period.......... $1,801,080,912 $1,211,601 $ 632,468,929 $213,516,603 $ 94,384,052 $300,879,623
-------------- ----------- ----------------- --------------- ------------- ------------------
-------------- ----------- ----------------- --------------- ------------- ------------------

<CAPTION>
DIVIDEND AND
GROWTH FUND
SUB-ACCOUNT
-------------
<S> <C>
OPERATIONS:
Net investment income
(loss)................ $ 1,044,698
Capital gains income... --
Net realized gain
(loss) on security
transactions.......... 4,933
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 18,047,295
-------------
Net increase (decrease)
in net assets
resulting from
operations............ 19,096,926
-------------
UNIT TRANSACTIONS:
Purchases.............. 37,005,986
Net transfers.......... 31,702,670
Surrenders............. (2,159,189)
Net annuity
transactions.......... 77,507
-------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 66,626,974
-------------
Total increase
(decrease) in net
assets................ 85,723,900
NET ASSETS:
Beginning of period.... 29,855,304
-------------
End of period.......... $115,579,204
-------------
-------------
DIVIDEND AND
GROWTH FUND
SUB-ACCOUNT*
-------------
OPERATIONS:
Net investment income
(loss)................ $ 284,164
Capital gains income... --
Net realized gain
(loss) on security
transactions.......... 1,622
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (486,442)
-------------
Net increase (decrease)
in net assets
resulting from
operations............ (200,656)
-------------
UNIT TRANSACTIONS:
Purchases.............. 13,185,613
Net transfers.......... 17,422,326
Surrenders............. (551,979)
Net annuity
transactions.......... --
-------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 30,055,960
-------------
Total increase
(decrease) in net
assets................ 29,855,304
NET ASSETS:
Beginning of period.... --
-------------
End of period.......... $ 29,855,304
-------------
-------------
</TABLE>

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

41
<PAGE>
SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1995

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

HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1994

CALVERT
RESPONSIBLY
INVESTED SMITH BARNEY SMITH BARNEY
BALANCED DAILY APPRECIATION
PORTFOLIO DIVIDEND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- ------------- ------------
OPERATIONS:
Net investment income
(loss)................ $ 20,465 $ 17,386 $ 743
Capital gains income... -- -- 6,550
Net realized gain
(loss) on security
transactions.......... (180) -- (476)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (59,462) -- (9,210)
--------------- ------------- ------------
Net increase (decrease)
in net assets
resulting from
operations............ (39,177) 17,386 (2,393)
--------------- ------------- ------------
UNIT TRANSACTIONS:
Purchases.............. 376,701 -- 50
Net transfers.......... (75,712) (18,624) 2,681
Surrenders............. (19,945) (84,827) (2,515)
Net annuity
transactions.......... 4,610 -- --
--------------- ------------- ------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 285,654 (103,451) 216
--------------- ------------- ------------
Total increase
(decrease) in net
assets................ 246,477 (86,065) (2,177)
NET ASSETS:
Beginning of period.... 777,861 731,981 119,398
--------------- ------------- ------------
End of period.......... $ 1,024,338 $ 645,916 $ 117,221
--------------- ------------- ------------
--------------- ------------- ------------
</TABLE>

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

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

42
<PAGE>
<TABLE>
<CAPTION>
SMITH BARNEY
SMITH BARNEY GOVERNMENT AND TCI TCI FIDELITY VIP
APPRECIATION FUND AGENCIES FUND ADVANTAGE FUND GROWTH FUND OVERSEAS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT** SUB-ACCOUNT** SUB-ACCOUNT**
----------------- -------------------- ------------------ --------------- --------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 1,041 $ 1,938 $ 549 $ (2,133) $ (491)
Capital gains income... 11,468 -- -- -- --
Net realized gain
(loss) on security
transactions.......... 148 -- (90) 938 (240)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 20,104 -- 1,195 6,645 3,459
-------- ------- -------- --------------- --------------
Net increase (decrease)
in net assets
resulting from
operations............ 32,761 1,938 1,654 5,450 2,728
-------- ------- -------- --------------- --------------
UNIT TRANSACTIONS:
Purchases.............. 50 -- 15,135 30,024 21,829
Net transfers.......... -- -- 40,646 669,352 172,761
Surrenders............. (1,598) (7,562) (19,236) (20,127) (10,425)
Net annuity
transactions.......... -- -- 8,722 8,723 --
-------- ------- -------- --------------- --------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (1,548) (7,562) 45,267 687,972 184,165
-------- ------- -------- --------------- --------------
Total increase
(decrease) in net
assets................ 31,213 (5,624) 46,921 693,422 186,893
NET ASSETS:
Beginning of period.... 117,221 48,093 -- -- --
-------- ------- -------- --------------- --------------
End of period.......... $ 148,434 $ 42,469 $ 46,921 $ 693,422 $186,893
-------- ------- -------- --------------- --------------
-------- ------- -------- --------------- --------------

SMITH BARNEY
GOVERNMENT AND
AGENCIES FUND
SUB-ACCOUNT
-----------------
OPERATIONS:
Net investment income
(loss)................ $ 1,269
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............ 1,269
--------
UNIT TRANSACTIONS:
Purchases.............. --
Net transfers.......... --
Surrenders............. (6,354)
Net annuity
transactions.......... --
--------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (6,354)
--------
Total increase
(decrease) in net
assets................ (5,085)
NET ASSETS:
Beginning of period.... 53,178
--------
End of period.......... $ 48,093
--------
--------

<CAPTION>
FIDELITY VIP
II
FIDELITY VIP II CONTRAFUND FIDELITY VIP
ASSET MANAGER FUND FUND GROWTH FUND
SUB-ACCOUNT** SUB-ACCOUNT** SUB-ACCOUNT**
------------------ -------------- -------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ (1,491) $ 19,233 $ (6,603)
Capital gains income... -- -- --
Net realized gain
(loss) on security
transactions.......... 456 (577) (2,056)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 18,860 17,225 (34,445)
-------- -------------- -------------
Net increase (decrease)
in net assets
resulting from
operations............ 17,825 35,881 (43,104)
-------- -------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 32,160 89,641 120,267
Net transfers.......... 300,031 1,871,915 2,148,417
Surrenders............. (10,738) (11,744) (21,094)
Net annuity
transactions.......... -- -- --
-------- -------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 321,453 1,949,812 2,247,590
-------- -------------- -------------
Total increase
(decrease) in net
assets................ 339,278 1,985,693 2,204,486
NET ASSETS:
Beginning of period.... -- -- --
-------- -------------- -------------
End of period.......... $ 339,278 $ 1,985,693 $ 2,204,486
-------- -------------- -------------
-------- -------------- -------------
OPERATIONS:
Net investment income
(loss)................
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............
UNIT TRANSACTIONS:
Purchases..............
Net transfers..........
Surrenders.............
Net annuity
transactions..........
Net increase (decrease)
in net assets
resulting from unit
transactions..........
Total increase
(decrease) in net
assets................
NET ASSETS:
Beginning of period....
End of period..........
</TABLE>

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

43
<PAGE>
SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995

1. ORGANIZATION:

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

2. SIGNIFICANT ACCOUNTING POLICIES:

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

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

b) SECURITY VALUATION--The investment in shares of the Hartford, Smith
Barney, TCI, Fidelity and Calvert Responsibily Invested Series mutual
funds are valued at the closing net asset value per share as determined
by the appropriate Fund as of December 31, 1995.

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

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

3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:

a) MORTALITY AND EXPENSE UNDERTAKINGS--The Company, as issuer of variable
annuity contracts, provides the mortality and expense undertakings and,
with respect to the Account, receives a maximum annual fee of up to 1.25%
of the Account's average daily net assets.

b) DEDUCTION OF ANNUAL MAINTENANCE FEE--Annual maintenance fees are deducted
through termination of units of interest from applicable contract owners'
accounts, in accordance with the terms of the contracts.

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Hartford Life Insurance Company and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Hartford Life
Insurance Company (a Connecticut corporation and wholly-owned subsidiary of
Hartford Life and Accident Insurance Company) and subsidiaries as of December
31, 1995 and 1994, and the related consolidated statements of income,
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 1995. These consolidated financial statements and the
schedules referred to below are the responsibility of Hartford Life Insurance
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated
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
audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Hartford Life Insurance Company and subsidiaries as of December 31, 1995 and
1994, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995 in conformity with generally
accepted accounting principles.

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

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

ARTHUR ANDERSEN LLP

Hartford, Connecticut
January 24, 1996

F-1

<PAGE>

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------
1995 1994 1993
------- ------- ------
<S> <C> <C> <C>
REVENUES
Premiums and other considerations $1,487 $1,100 $747
Net investment income 1,328 1,292 1,051
Net realized (losses) gains (11) 7 16
------ ------ -----
TOTAL REVENUES 2,804 2,399 1,814
------ ------ -----

BENEFITS, CLAIMS AND EXPENSES
Benefits, claims and claim
adjustment expenses 1,422 1,405 1,046
Dividends to policyholders 675 419 227
Amortization of deferred policy
acquisition costs 199 145 113
Other insurance expense 317 227 210
------ ------ -----
TOTAL BENEFITS, CLAIMS AND EXPENSES 2,613 2,196 1,596
------ ------ -----

INCOME BEFORE INCOME TAX EXPENSE 191 203 218

Income tax expense 62 65 75
------ ------ -----
NET INCOME $129 $138 $143
------ ------ -----
------ ------ -----

- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.

F-2

<PAGE>

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
AS OF DECEMBER 31,
------------------
1995 1994
------- --------
ASSETS
<S> <C> <C>
Investments
Fixed maturities
available for sale, at market value
(amortized cost of $14,440 and $14,464) $14,400 $13,429
Equity securities, at market value
(cost of $61 and $76) 63 68
Mortgage loans, at outstanding balance 265 316
Policy loans, at outstanding balance 3,381 2,614
Other investments, at cost 156 107
------- -------
TOTAL INVESTMENTS 18,265 16,534

Cash 46 20
Premiums and amounts receivable 165 160
Reinsurance recoverable 6,221 5,466
Accrued investment income 394 378
Deferred policy acquisition costs 2,188 1,809
Deferred income tax 420 590
Other assets 234 83
Separate account assets 36,264 22,809
------- -------
TOTAL ASSETS $64,197 $47,849
------- -------
------- -------

LIABILITIES
Future policy benefits $2,373 $1,890
Other policyholder funds 22,598 21,328
Other liabilities 1,233 1,000
Separate account liabilities 36,264 22,809
------- -------
TOTAL LIABILITIES 62,468 47,027
------- -------
Commitments and contingencies (Note 9)

STOCKHOLDER'S EQUITY
Common stock
Authorized 1,000 shares, $5,690 par value
Issued and outstanding 1,000 shares 6 6
Additional paid-in capital 1,007 826
Retained earnings 773 644
Unrealized loss on investments, net of tax (57) (654)
------- -------
TOTAL STOCKHOLDER'S EQUITY 1,729 822
------- -------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $64,197 $47,849
------- -------
------- -------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.

F-3

<PAGE>

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(IN MILLIONS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
UNREALIZED LOSS TOTAL
COMMON ADDITIONAL RETAINED ON INVESTMENTS, STOCKHOLDER'S
STOCK PAID-IN-CAPITAL EARNINGS NET OF TAX EQUITY
------ --------------- -------- --------------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1992 $6 $498 $373 $0 $877

Net income - - 143 - 143

Capital contribution - 180 - - 180

Excess of assets over liabilities
on reinsurance assumed from affiliate - (2) - - (2)

Change in unrealized loss on investments, net of tax - - - (5) (5)

------ --------------- -------- --------------- -------------
BALANCE, DECEMBER 31, 1993 6 676 516 (5) 1,193
------ --------------- -------- --------------- -------------

Net income - - 138 - 138

Capital contribution - 150 - - 150

Dividend paid - - (10) - (10)

Change in unrealized loss on investments, net of tax* - - - (649) (649)
------ --------------- -------- --------------- -------------

BALANCE, DECEMBER 31, 1994 6 826 644 (654) 822
------ --------------- -------- --------------- -------------

Net income - - 129 - 129

Capital contribution - 181 - - 181

Change in unrealized loss on investments, net of tax - - - 597 597
------ --------------- -------- --------------- -------------

BALANCE, DECEMBER 31, 1995 $6 $1,007 $773 ($57) $1,729
------ --------------- -------- --------------- -------------
------ --------------- -------- --------------- -------------

- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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

The accompanying Notes are an integral part of these Consolidated Financial
Statements.

F-4

<PAGE>

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------

FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------
1995 1994 1993
------------- -------------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $129 $138 $143
Adjustments to net income:
Net realized (losses) gains 11 (7) (16)
(Decrease) increase in liability to policyholders for realized gains (3) 5 (15)
Net amortization of premium on fixed maturities 21 41 2
Provision for deferred income taxes (172) (128) (121)
Increase in deferred policy acquisition costs (379) (441) (292)
(Increase) decrease in premiums and amounts receivable (81) 10 (28)
Increase in accrued investment income (16) (106) (4)
(Increase) decrease in other assets (177) 101 (36)
(Increase) decrease in reinsurance recoverable (35) 75 (121)
Increase in liability for future policy benefits 483 224 360
Increase in other liabilities 281 191 176
------------- -------------- -------------
CASH PROVIDED BY OPERATING ACTIVITIES 62 103 48
------------- -------------- -------------

INVESTING ACTIVITIES
Purchases of fixed maturities investments (6,228) (9,127) (12,406)
Proceeds from sales of fixed maturities investments 4,848 5,708 8,813
Maturities and principal paydowns of fixed maturities investments 1,741 1,931 2,596
Net purchases of other investments (871) (1,338) (206)
Net (purchases)/sales of short-term investments (24) 135 (564)
------------- -------------- -------------
CASH USED FOR INVESTING ACTIVITIES (534) (2,691) (1,767)
------------- -------------- -------------

FINANCING ACTIVITIES
Net receipts from investment and UL-type contracts credited to
policyholder account balances 498 2,467 1,513
Capital contribution 0 150 180
Dividends paid 0 (10) 0
------------- -------------- -------------
CASH PROVIDED BY FINANCING ACTIVITIES 498 2,607 1,693
------------- -------------- -------------

NET INCREASE (DECREASE) IN CASH 26 19 (26)

Cash at beginning of year 20 1 27
------------- -------------- -------------

CASH AT END OF YEAR $46 $20 $1
------------- -------------- -------------
------------- -------------- -------------

- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying Notes are an integral part of these Consolidated Financial
Statements.

F-5

<PAGE>

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS)

1. SIGNIFICANT ACCOUNTING POLICIES

(A) BASIS OF PRESENTATION
These consolidated financial statements include Hartford Life Insurance Company
and its wholly-owned subsidiaries ("Hartford Life" or the "Company"), ITT
Hartford Life and Annuity Insurance Company ("ILA") and ITT Hartford
International Life Reassurance Corporation ("HLRe"), formerly American Skandia
Life Reinsurance Corporation. Hartford Life is a wholly-owned subsidiary of
Hartford Life and Accident Insurance Company ("HLA"). Hartford Life is
ultimately owned by Hartford Fire Insurance Company ("Hartford Fire"), which is
ultimately owned by ITT Hartford Group, Inc. ("ITT Hartford"), formerly a
subsidiary of ITT Corporation ("ITT"). On December 19, 1995, ITT Corporation
distributed all of the outstanding shares of ITT Hartford Group to ITT
Corporation Shareholders of record in an action known herein as the
"Distribution". As a result of the Distribution, ITT Hartford became an
independent publicly traded company.

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
Company offers life, annuity, pension, and disability insurance products.
These products are distributed and marketed by multiple distribution channels
which include broker-dealers, agents and banks, as well as a captive sales
force. Hartford Life conducts business primarily in the United States and is
licensed to write business in all 50 states. The Company is headquartered in
Simsbury, Connecticut and has 3,045 direct employees.

The consolidated financial statements are prepared in conformity with generally
accepted accounting principles which differ in certain material respects from
the accounting practices prescribed or permitted by various insurance
regulatory authorities.

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

(C) REVENUE RECOGNITION
Revenues for universal life policies and investment products consist of policy
charges for the cost of insurance, policy administration and surrender charges
assessed to policy account balances. Premiums for traditional life insurance
policies are recognized as revenues when they are due from policyholders.
Deferred acquisition costs are amortized using the retrospective deposit method
for universal life and other types of contracts where the payment pattern is
irregular or surrender charges are a significant source of profit and the
prospective deposit method is used where investment margins are the primary
source of profit.

F-6

<PAGE>

(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,
mortality and morbidity assumptions which vary by plan, year of issue and
policy durations and include a provision for adverse deviation. Other
policyholder funds which represent liabilities for universal life insurance and
investment products reflect policy account balances before applicable surrender
charges.

(E) POLICYHOLDER REALIZED GAINS AND LOSSES
Realized gains and losses on security transactions associated with Hartford
Life's immediate participation guaranteed contracts are excluded from
revenues, since under the terms of the contracts the realized gains and losses
will be credited to policyholders in future years as they are entitled to
receive them.

(F) DEFERRED POLICY ACQUISITION COSTS
Policy acquisition costs, including commissions and certain underwriting
expenses associated with acquiring traditional life insurance products, are
deferred and amortized over the lesser of the estimated or actual contract
life. For universal life insurance and investment products, acquisition costs
are being amortized generally in proportion to the present value of expected
gross profits from surrender charges, investment, mortality and expense
margins.

(G) INVESTMENTS
Hartford Life's investments in fixed maturities include bonds, redeemable
preferred stock and commercial paper which are classified as "available-for-
sale" and accordingly are carried at market value with the after-tax difference
from cost reflected as a component of Stockholder's Equity designated
"Unrealized loss on investments, net of tax". Equity securities, which include
common and non-redeemable preferred stocks, are carried at market value with
the after-tax difference from cost reflected in Stockholder's Equity. Realized
investment gains and losses, after deducting life and pension policyholders'
share, are reported as a component of revenue and are determined on a specific
identification basis.

(H) DERIVATIVE FINANCIAL INSTRUMENTS
Hartford Life uses a variety of derivative financial instruments including,
swaps, caps, floors, options, forwards and exchange traded financial futures 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. Hartford
Life does not hold or issue derivative financial instruments for trading
purposes. Hartford Life's accounting for derivative financial instruments used
to manage risk is in accordance with the concepts established in SFAS No. 80,
"Accounting for Futures Contracts," SFAS No. 52 , "Foreign Currency
Translation", American Institute of Certified Public Accountants Statement of
Position 86-2, "Accounting for Options" and various Emerging Issues Task Force
pronouncements. Written options are in all cases used in conjunction with other
assets and derivatives as part of an overall risk management strategy.
Derivative instruments are carried at values consistent with the asset or
liability being hedged. Derivatives used to hedge fixed maturities or equities
are carried at fair value with the after-tax difference from cost reflected in
Stockholder's Equity. Derivatives used to hedge other invested assets or
liabilities are carried at cost.

Derivatives, used as part of a risk management strategy, must be designated at
inception as a hedge and measured for effectiveness both at inception and on an
ongoing basis. Hartford Life's minimum correlation threshold for hedge
designation is 80%. If correlation, which is assessed monthly and measured
based on a rolling three month average, falls below 80%, hedge accounting will
be terminated. Derivatives used to create a synthetic asset must meet synthetic
accounting criteria including designation at inception and consistency of terms
between the synthetic and the instrument being replicated. Synthetic
instrument accounting, consistent with industry practice, provides that the
synthetic asset is accounted for like the financial instrument it is intended
to replicate. Derivatives which fail to meet risk management criteria are
marked to market with the impact reflected in the Consolidated Statements
of Income.

Gains or losses on financial futures contracts entered into in anticipation
of the future receipt of product cash flows are deferred and, at the time of
the ultimate purchase, reflected as a basis adjustment to the purchased
asset. Gains or losses on futures used in invested asset risk management are
deferred and adjusted into the 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 investment income over the remaining asset life.

F-7

<PAGE>

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

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

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

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

(I) RELATED PARTY TRANSACTIONS
Transactions of Hartford Life with its parent and affiliates relate principally
to tax settlements, insurance coverage, rental and service fees and payment of
dividends and capital contributions. In addition, certain affiliated insurance
companies purchased group annuity contracts from Hartford Life to fund pension
costs and claim annuities to settle casualty claims.

On June 30, 1995, the assets of Lyndon Insurance Company ("Lyndon") were
contributed to ILA. As a result, ILA received approximately $365 in fixed
maturities, equity securities and cash, $26 in receivables, $187 of current
tax liability, $20 in deferred tax liability, and $3 of other liabilities.
The excess of assets over liabilities of $181 were recorded as an increase to
paid-in capital.

Substantially all general insurance expenses related to Hartford Life,
including rent expenses, are initially paid by Hartford Fire. Direct expenses
are allocated to Hartford Life using specific identification and indirect
expenses are allocated using other applicable methods.

The rent paid to Hartford Fire for the space occupied by Hartford Life was $3
in 1995, 1994, and 1993 respectively. Hartford Life expects to pay rent of $3
in 1996, 1997, 1998, 1999, and 2000, respectively and $57 thereafter, over the
contract life of the lease.

(J) DIVIDEND TO POLICYHOLDERS
Dividends to policyholders primarily represent those amounts paid to corporate
owned life insurance ("COLI") policyholders. These dividend liabilities, which
appear as other policyholder funds on the Consolidated Balance Sheets, are
recorded when approved by the board of directors.

See Note (4) for the related party coinsurance agreements.

F-8

<PAGE>

2. INVESTMENTS
(a) COMPONENTS OF NET INVESTMENT INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
<S> <C> <C> <C>
1995 1994 1993
------ ------ ------
Interest income $1,338 $1,247 $1,007
Income from other investments 1 54 53
------ ------ ------

GROSS INVESTMENT INCOME 1,339 1,301 1,060

Less: Investment expenses 11 9 9
------ ------ ------
NET INVESTMENT INCOME $1,328 $1,292 $1,051
------ ------ ------
------ ------ ------

(b) UNREALIZED GAINS/(LOSSES) ON EQUITY SECURITIES

As of December 31,
--------------------------
1995 1994 1993
------ ------ ------
Gross unrealized gains $4 $2 $3
Gross unrealized losses (2) (11) (11)
Deferred income tax expenses/(benefit) 1 (3) (3)
------ ------ ------
NET UNREALIZED GAINS (LOSSES) AFTER TAX 1 (6) (5)
Balance at the beginning of the year (6) (5) (0)
------ ------ ------
CHANGE IN NET UNREALIZED GAINS (LOSSES) ON EQUITY SECURITIES $7 ($1) ($5)
------ ------ ------
------ ------ ------

(c) UNREALIZED GAINS/(LOSSES) IN FIXED SECURITIES
As of December 31,
--------------------------
1995 1994 1993
------ ------ ------
Gross unrealized gains $529 $150 $538
Gross unrealized losses (569) (1,185) (290)
Unrealized (losses)/gains credited to policyholder (52) 37 0
Deferred income tax (benefit)/expense (34) (350) 87
------ ------ ------
NET UNREALIZED (LOSSES) GAINS AFTER TAX (58) (648) 161

Balance at the beginning of the year (648) 161 144
------ ------ ------
CHANGE IN NET UNREALIZED GAINS(LOSES)
ON FIXED MATURITIES $590 ($809) $17
------ ------ ------
------ ------ ------

(d) COMPONENTS OF NET REALIZED GAINS/(LOSSES)
Year ended December 31,
--------------------------
1995 1994 1993
------ ------ ------
Fixed maturities $23 ($34) ($12)
Equity securities (6) (11) 0
Real estate and other (25) 47 43
Less: (decrease)/increase in liability to policyholders
for realized gains (3) 5 (15)
------ ------ ------
NET REALIZED (LOSSES) GAINS ($11) $7 $16
------ ------ ------
------ ------ ------
</TABLE>

F-9

<PAGE>

(e) DERIVATIVE INVESTMENTS
A summary of investments, segregated by major category along with the types of
derivatives and their respective notional amounts, are as follows as of
December 31, 1995 :

<TABLE>
<CAPTION>
SUMMARY OF INVESTMENTS
AS OF DECEMBER 31, 1995
(CARRYING AMOUNT)

Caps, Floors & Options Foreign
Carrying ----------------------- Currency
Value Non-Derivative Issued(b) Purchased(c) Futures(d) Swaps(f) Swaps
-------- ----------- -------- ----------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset-backed securities $5,764 $5,752 ($1) $30 $0 ($17) $0
Inverse floaters(a) 711 794 (30) 16 0 (69) 0
Anticipatory(e) 0 0 0 0 0 0 0
-------- ----------- -------- ----------- --------- -------- -------
TOTAL ASSET-BACKED SECURITIES 6,475 6,546 (31) 46 0 (86) 0

Other bonds and notes 7,118 7,165 (1) 0 0 (22) (24)
Short-term investments 807 807 0 0 0 0 0
-------- ----------- -------- ----------- --------- -------- -------
TOTAL FIXED MATURITIES 14,400 14,518 (32) 46 0 (108) (24)
Other investments 3,865 3,865 0 0 0 0 0
-------- ----------- -------- ----------- --------- -------- -------
TOTAL INVESTMENTS $18,265 $18,383 ($32) $46 $0 ($108) ($24)
-------- ----------- -------- ----------- --------- -------- -------
-------- ----------- -------- ----------- --------- -------- -------
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF INVESTMENTS
AS OF DECEMBER 31, 1995
(NOTIONAL AMOUNT)
(EXCLUDING LIABILITY HEDGES)

Caps, Floors & Options Foreign
Notional ---------------------- Currency
Amount Issued(b) Purchased(c) Futures(d) Swaps(f) Swaps
-------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Asset-backed securities $3,863 $118 $3,133 $322 $290 $0
Inverse floaters(a) 1,601 560 354 6 681 0
Anticipatory(e) 238 0 0 213 25 0
-------- --------- --------- ---------- --------- ---------
TOTAL ASSET-BACKED SECURITIES 5,702 678 3,487 541 996 0

Other bonds and notes 1,365 33 66 322 757 187
Short-term investments 0 0 0 0 0 0
-------- --------- --------- ---------- --------- ---------
TOTAL FIXED MATURITIES 7,067 711 3,553 863 1,753 187
Other investments 18 0 0 0 18 0
-------- --------- --------- ---------- --------- ---------
TOTAL INVESTMENTS $7,085 $711 $3,553 $863 $1,771 $187
-------- --------- --------- ---------- --------- ---------
-------- --------- --------- ---------- --------- ---------
</TABLE>

(a) Inverse floaters are variations of CMO's for which the coupon rates
move inversely with an index rate (e.g. 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, Hartford Life uses a variety of
derivative instruments, primarily interest rate swaps and issued floors.

(b) Includes issued caps $475 with a weighted average strike rate of 8.5%
(ranging from 7.0% to 10.4%) and over 85% mature in 2000 through 2004. Issued
floors totaled $236, have a weighted average strike rate of 8.1% (ranging
from 5.3% to 10.9%) and mature through 2007 with 76% maturing by 2004.

(c) Comprised of purchased floors of $1.8 billion and purchased caps of $1.7
billion. The floors have a weighted average strike price of 5.8% (ranging from
3.7% to 6.8%) and over 85% mature in 1997 through 1999. The caps have a
weighted average strike price of 7.5% (ranging from 4.5% and 10.1%) and over
82% mature in 1997 through 1999.

(d) Over 95% of futures contracts expire before December 31, 1996.

(e) Deferred gains and losses on anticipatory transactions are included in the
carrying value of bond investments in the consolidated balance sheets. At the
time of the ultimate purchase, they are reflected as a basis adjustment to the
purchased asset. At December 31, 1995, there were $5.3 in net deferred losses
for futures, interest rate swaps and purchased options.

(f) The following table summarizes the maturities by notional value of interest
rate swaps outstanding at December 31, 1995 and the related weighted average
interest pay rate or receive rate assuming current market conditions:

F-10

<PAGE>

MATURITY OF SWAPS ON INVESTMENTS
AS OF DECEMBER 31, 1995

LAST
1996 1997 1998 1999 2000 THEREAFTER TOTAL MATURITY
---- ---- ---- ---- ---- ---------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INTEREST RATE SWAPS
PAY FIXED/RECEIVE VARIABLE
Notional Value $15 $50 $0 $453 $31 $229 $778 2004
Weighted Average Pay Rate 5.0% 7.2% 0.0% 8.1% 7.1% 7.8% 7.8%
Weighted Average Receive Rate 5.8% 5.9% 0.0% 5.8% 5.7% 5.9% 5.9%

PAY VARIABLE/RECEIVE FIXED
Notional Value $100 $68 $25 $25 $35 $190 $443 2007
Weighted Average Pay Rate 5.9% 8.6% 5.9% 0.0% 5.9% 5.4% 5.4%
Weighted Average Receive Rate 2.4% 7.9% 4.0% 0.0% 6.5% 6.9% 6.9%

PAY VARIABLE/RECEIVE DIFFERENT VARIABLE
Notional Value $50 $18 $36 $12 $200 $234 $550 2004
Weighted Average Pay Rate 5.8% 0.0% 3.7% 3.5% 4.5% 16.3% 5.7%
Weighted Average Receive Rate 5.4% 0.0% 5.6% 5.2% 6.8% 5.9% 6.4%

TOTAL INTEREST RATE SWAPS $165 $136 $61 $490 $266 $653 $1,771 2007
WEIGHTED AVERAGE PAY RATE 5.8% 7.8% 4.6% 7.6% 5.0% 7.3% 6.9%
WEIGHTED AVERAGE RECEIVE RATE 3.6% 7.2% 4.9% 5.4% 6.6% 6.3% 5.8%

</TABLE>
(g) The following table reconciles the derivative notional amounts by derivative
type and by strategy:

BY DERIVATIVE TYPE
----------------------------------------------------------------------
12/31/94 MATURITIES/ 12/31/95
NOTIONAL AMOUNT ADDITIONS TERMINATIONS NOTIONAL AMOUNT
--------------- --------- ------------ ---------------
<S> <C> <C> <C> <C>
Caps $1,861 $2,666 $2,343 $2,184
Floors 2,131 237 188 2,180
Swaps/Collars/Forwards/Options 4,374 1,355 2,163 3,566
Futures 253 6,125 5,515 863
--------------- --------- ------------ ---------------
TOTAL $8,619 $10,383 $10,209 $8,793
--------------- --------- ------------ ---------------
--------------- --------- ------------ ---------------

BY STRATEGY
----------------------------------------------------------------------
12/31/94 MATURITIES/ 12/31/95
NOTIONAL AMOUNT ADDITIONS TERMINATIONS NOTIONAL AMOUNT
--------------- ---------- ------------ ---------------
Liability $1,725 $729 $746 $1,708
Anticipatory 626 1,564 1,952 238
Asset 3,048 3,153 3,217 2,984
Portfolio 3,220 4,937 4,294 3,863
--------------- ---------- ------------ --------------
TOTAL $8,619 $10,383 $10,209 $8,793
--------------- ---------- ------------ --------------
--------------- ---------- ------------ --------------
</TABLE>

In addition to risk management through derivative financial instruments
pertaining to the investment portfolio, interest rate sensitivity related to
certain Company liabilities was altered primarily through interest rate swap
agreements. The notional

F-11

<PAGE>

amount of the liability agreements in which Hartford Life generally pays one
variable rate in exchange for another, was $1.7 billion at December 31, 1995 and
1994 respectively. The weighted average pay rate is 5.9%; the weighted average
receive rate is 6.0% , and these agreements mature at various times through
2001.

(F) CONCENTRATION OF CREDIT RISK
Hartford Life has a reinsurance recoverable of $5.6 billion from Mutual Benefit
Life Assurance Corporation (Mutual Benefit). The risk of Mutual Benefit
becoming insolvent is mitigated by the reinsurance agreement's requirement that
the assets be kept in a security trust with Hartford Life as sole beneficiary.
Excluding investments in U.S. government and agencies, Hartford Life has no
other significant concentrations of credit risk.

Included in fixed maturity investments at December 31, 1995 were $39 of
Orange County, California Pension Obligation Bonds, $17 of which were carried
in the general account and $22 which were included in Hartford Life's
guaranteed separate accounts. During 1995 all interest payments due were
received. While Orange County is currently operating under Protection of
Chapter 9 of the Federal Bankruptcy Laws, Hartford Life believes the bonds
are not impaired other than on a temporary basis.

(G) FIXED MATURITIES
The schedule below details the amortized cost and fair values of Hartford Life's
fixed maturities by component, along with the gross unrealized gains and losses:

AS OF DECEMBER 31,1995
--------------------------------------------------
GROSS UNREALIZED
AMORTIZED --------------------- MARKET
COST GAINS LOSSES VALUE
---------- ------- ------ -----
<S> <C> <C> <C> <C>
U.S. Government and government agencies and
authorities;
Guaranteed and sponsored $502 $4 ($9) $497
Guaranteed and sponsored-asset backed 3,568 210 (387) 3,391

State, municipalities and political subdivisions 201 4 (3) 202
International governments 291 19 (4) 306
Public utilities 949 29 (2) 976
All other corporate-asset backed 3,065 76 (55) 3,086
All other corporate 5,056 187 (109) 5,134
Short-term investments 808 0 0 808
---------- ------- ----- -----
TOTAL INVESTMENTS $14,440 $529 ($569) $14,440
---------- ------- ----- -----
---------- ------- ----- -----

AS OF DECEMBER 31,1994
--------------------------------------------------
GROSS UNREALIZED
AMORTIZED --------------------- MARKET
COST GAINS LOSSES VALUE
---------- ------- ------ -----
U.S. Government and government agencies
and authorities;
Guaranteed and sponsored $1,516 $1 ($87) $1,430
Guaranteed and sponsored-asset backed 4,256 78 (571) 3,763

State, municipalities and political subdivisions 148 1 (12) 137
International governments 189 1 (14) 176
Public utilities 531 1 (32) 500
All other corporate-asset backed 2,442 30 (121) 2,351
All other corporate 3,717 38 (297) 3,458
Short-term investments 1,665 0 (51) 1,614
--------- ------- -------- -------
TOTAL INVESTMENTS $14,464 $150 ($1,185) $13,429
--------- ------- -------- -------
--------- ------- -------- -------
</TABLE>

F-12

<PAGE>

The amortized cost and estimated fair value of fixed maturities at December 31,
1995, by maturity, are shown below. Asset backed securities are distributed to
maturity year based on estimates of the rate of future prepayments of principal
over the remaining life of the securities. Expected maturities differ from
contractual maturities reflecting the borrowers' rights to call or prepay their
obligations.

<TABLE>
<CAPTION>
AMORTIZED MARKET
COST VALUE
---------- ---------
<S> <C> <C>
Due in one year or less $3,146 $3,133
Due after one year through five years 6,373 6,316
Due after five years through ten years 3,609 3,644
Due after ten years 1,312 1,307
---------- ---------
TOTAL $14,440 $14,400
---------- ---------
---------- ---------
</TABLE>

Sales of fixed maturities excluding short-term fixed maturities for the years
ended December 31, 1995, 1994, and 1993 resulted in proceeds of $4,848, $5,708,
and $8,813, respectively, resulting in gross realized gains of $91, $71, and
$192, respectively, and gross realized losses of $72, $100, and $219,
respectively, not including policyholder gains and losses. Sales of equity
securities and other investments for the years ended December 31, 1995, 1994,
and 1993 resulted in proceeds of $64, $159, and $127, respectively, resulting in
gross realized gains of $28, $3, and $0, respectively, and gross realized losses
of $59, $14, $0, respectively, not including policyholder gains and losses.

(H) FAIR VALUE OF FINANCIAL INSTRUMENTS

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1995 AS OF DECEMBER 31, 1994
----------------------- -----------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities $14,400 $14,400 $13,429 $13,429
Equity securities 63 63 68 68
Policy loans 3,381 3,381 2,614 2,614
Mortgage loans 265 265 316 316
Investments in partnerships and trusts 94 97 36 42
Miscellaneous 62 62 67 67

LIABILITIES
Other policy claims and benefits $12,727 $12,767 $13,001 $12,374
</TABLE>

The following methods and assumptions were used to estimate the fair value of
each class of financial instrument: fair value for fixed maturities and equity
securities approximate those quotations published by applicable stock exchanges
or are received from other reliable sources; policy and mortgage loan carrying
amounts approximate fair value; investments in partnerships and trusts are based
on external market valuations from partnership and trust management; and other
policy claims and benefits payable are determined by estimating future cash
flows discounted at the current market rate.

3. INCOME TAX
Hartford Life is included in ITT Hartford Group's consolidated U.S. Federal
income tax return and remits to (receives from) ITT Hartford Group, Inc. a
current income tax provision (benefit) computed in accordance with the tax
sharing arrangements between its insurance subsidiaries. The effective tax
rate was 32% in 1995 and 1994, and approximates the U.S. statutory tax rate
of 35% in 1993.

F-13

<PAGE>

The provision for income taxes was as follows:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
INCOME TAX EXPENSES
Current $211 $185 $190
Deferred (149) (120) (115)
------- ------- -------
TOTAL $62 $65 $75
------- ------- -------
------- ------- -------

INCOME TAX PROVISION
Tax provision at U.S. statutory rate $67 $71 $76
Tax-exempt income (3) (3) 0
Foreign tax credit (4) (1) 0
Other 2 (2) (1)
------- ------- -------
PROVISION FOR INCOME TAX $62 $65 $75
------- ------- -------
------- ------- -------
</TABLE>

Income taxes paid were $162, $244, and $301 in 1995, 1994, and 1993
respectively. The current taxes due from Hartford Fire were $8 and $46 in 1995
and 1994, respectively.

Deferred tax assets(liabilities) include the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1994
--------- ---------
<S> <C> <C>
Tax deferred acquisition costs $410 $284
Book deferred acquisition costs and reserves 138 (134)
Employee benefits 8 7
Unrealized net loss on investments 32 353
Investments and other (168) 80
--------- ---------
TOTAL DEFERRED TAX ASSET $420 $590
--------- ---------
--------- ---------
</TABLE>

Prior to the Tax Reform Act of 1984, the Life Insurance Company Income Tax Act
of 1959 permitted the deferral from taxation of a portion of statutory income
under certain circumstances. In these situations, the deferred income was
accumulated in a "Policyholders' Surplus Account" and will be taxable in the
future only under conditions which management considers to be remote; therefore,
no Federal income taxes have been provided on this deferred income. The balance
for tax return purposes of the Policyholders' Surplus Account as of December 31,
1995 was $37.

4. REINSURANCE
Hartford Life cedes insurance to non-affiliated insurers in order to limit its
maximum loss. Such transfer does not relieve Hartford Life of its primary
liability. Hartford Life also assumes insurance from other insurers. Group
life and accident and health insurance business is substantially reinsured to
affiliated companies.

Life insurance net retained premiums were comprised of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Gross premiums $1,545 $1,316 $1,135
Insurance assumed 591 299 93
Insurance ceded 649 515 481
------- ------- -------
NET RETAINED PREMIUMS $1,487 $1,100 $747
------- ------- -------
------- ------- -------
</TABLE>

F-14

<PAGE>

Life reinsurance recoveries, which reduced death and other benefits, for the
years ended December 31, 1995, 1994 and 1993 approximated $220, $164, and $149,
respectively.

In December 1994, Hartford Life assumed from a third party approximately $500
of corporate owned life insurance reserves on a coinsurance basis. In
December 1995, this block of business was reinsured to HLRe utilizing
modified coinsurance, with the assets and policy liabilities placed in a
separate account. In October 1994, HLRe recaptured approximately $500 of
corporate owned life insurance from a third party reinsurer. Subsequent to
this transaction, Hartford Life and HLRe restructured their coinsurance
agreement from coinsurance to modified coinsurance, with the assets and
policy liabilities placed in the separate account. These transactions did not
have a material impact on consolidated net income.

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

In May 1994, Hartford Life assumed the life insurance policies and the
individual annuities of Pacific Standard with reserves and account values of
approximately $400. Hartford Life received cash and investment grade assets
to support the life insurance and individual annuity contract obligations
assumed.

In November 1993, ILA acquired, through an assumption reinsurance
transaction, substantially all of the individual fixed and variable annuity
business of HLA. As a result of this transaction, the assets and liabilities
of Hartford Life increased approximately $1 billion. The excess of
liabilities assumed over assets received, of $2, was recorded as a decrease
to capital surplus. The remaining $41 in assets and liabilities were
transferred in October 1995. The impact on consolidated net income was not
significant.

In August 1993, Hartford Life received assets of $300 for assuming the group
COLI contract obligations of Mutual Benefit Life Insurance Company, through
an assumption reinsurance transaction. Under the terms of the agreement,
Hartford Life coinsured back 75% of the liabilities to Mutual Benefit Life
Insurance Company. All assets supporting Mutual Benefit's reinsurance
liability to Hartford Life are placed in a "security trust", with Hartford
Life as the sole beneficiary. The impact on 1993 consolidated net income was
not significant.

5. PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS
Hartford Life's employees are included in Hartford Fire's noncontributory
defined benefit pension plans. These plans provide pension benefits that are
based on years of service and the employee's compensation during the last ten
years of employment. Hartford Life'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 and the maximum amount that can be
deducted for Federal income tax purposes. Generally, pension costs are funded
through the purchase of Hartford Life's group pension contracts. The cost to
Hartford Life was approximately $2, $2, and $3 in 1995, 1994 and 1993,
respectively.

Hartford Life provides certain health care and life insurance benefits for
eligible retired employees. A substantial portion of Hartford Life's employees
may become eligible for these benefits upon retirement. Hartford Life'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. Hartford Life 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
Hartford Fire were immaterial for 1995, 1994, and 1993 respectively.

The assumed rate of future increases in the per capita cost of health care (the
health care trend rate) was 10.1% for 1995, decreasing ratably to 6.0% in the
year 2001. Increasing the health care trend rates by one percent per year would
have an immaterial impact on the accumulated postretirement benefit obligation
and the annual expense. To the extent that the actual experience differs from
the inherent assumptions, the effect will be amortized over the average future
service of the covered employees.

F-15

<PAGE>

6. BUSINESS SEGMENT INFORMATION

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
REVENUES
Individual Life and Annuity $797 $691 $595
Asset Management Services 734 789 794
Specialty Insurance Operations 1,273 919 425
------ ------ ------
TOTAL REVENUES $2,804 $2,399 $1,814
------ ------- ------
------ ------- ------

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

YEAR ENDED DECEMBER 31
------------------------
1995 1994 1993
------ ------- -----
INCOME BEFORE INCOME TAX EXPENSE
Individual Life and Annuity $236 $139 $129
Asset Management Services (79) 38 71
Specialty Insurance Operations 34 26 18
------ ------ ------
TOTAL INCOME BEFORE INCOME
TAX EXPENSE $191 $203 $218
------ ------ ------
------ ------ ------

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

YEAR ENDED DECEMBER 31
---------------------------
1995 1994 1993
------- ------- -------
IDENTIFIABLE ASSETS
Individual Life and Annuity $36,741 $26,668 $19,147
Asset Management Services 13,962 13,334 12,416
Specialty Insurance Operations 13,494 7,847 6,723
------- ------- -------
TOTAL IDENTIFIABLE ASSETS $64,197 $47,849 $38,286
------- ------- -------
------- ------- -------
</TABLE>

7. STATUTORY NET INCOME AND SURPLUS
Substantially all of the statutory surplus is permanently reinvested or is
subject to dividend restrictions relating to various state regulations which
limit the payment of dividends without prior approval. Statutory net income
and surplus as of December 31 were:
<TABLE>
<CAPTION>
1995 1994 1993
--------- -------- --------
<S> <C> <C> <C>
Statutory net income $112 $58 $63
Statutory surplus $1,125 $941 $812
</TABLE>

8. SEPARATE ACCOUNTS
Hartford Life maintains separate account assets and liabilities totaling $36.3
billion and $22.8 billion at December 31, 1995 and 1994, respectively which
are reported at fair value. Separate account assets are segregated from other
investments and investment income and gains and losses accrue directly to the
policyholder. Separate accounts reflect two categories of risk assumption:
non-guaranteed separate accounts totaling $25.9 billion and $14.8 billion at
December 31, 1995 and 1994, respectively, wherein the policyholder assumes the
investment risk, and guaranteed separate account assets totaling $10.4 billion
and $8.0 billion at December 31, 1995 and 1994, respectively, wherein Hartford
Life contractually guarantees either a minimum return or account value to the
policyholder. Included in the non-guaranteed category are policy loans
totaling $1.7 billion and $0.5 billion at December 31, 1995 and 1994,
respectively. Investment income (including investment gains and losses) and
interest credited to policyholders on separate account assets are not
reflected in the Consolidated Statements of Income. Separate account
management fees, net of minimum guarantees, were $387, $256, and $189, in
1995, 1994, and 1993, respectively.

F-16

<PAGE>

The guaranteed separate accounts include modified guaranteed individual
annuity, and modified guaranteed life insurance. The average credit interest
rate on these contracts is 6.62%. The assets that support these liabilities
were comprised of $10.4 billion in bonds at December 31, 1995. The portfolios
are segregated from other investments and are managed so as to minimize
liquidity and interest rate risk. In order to minimize the risk of
disintermediation associated with early withdrawals, individual annuity and
modified guaranteed life insurance contracts carry a graded surrender charge
as well as a market value adjustment. Additional investment risk is hedged
using a variety of derivatives which totaled $133 million in carrying value
and $2.7 billion in notional amounts at December 31, 1995.

9. COMMITMENTS AND CONTINGENCIES
In August 1994, Hartford Life renewed a two year note purchase facility
agreement which in certain instances obligates Hartford Life to purchase up to
$100 million in collateralized notes from a third party. Hartford Life is
receiving fees for this commitment. At December 31, 1995, Hartford Life had
not purchased any notes under this agreement.

Under insurance guaranty fund laws in most states, insurers doing business
therein can be assessed up to prescribed limits for policyholder losses
incurred by insolvent companies. The amount of any future assessments on
Hartford Life under these laws cannot be reasonably estimated. Most of these
laws do provide, however, that an assessment may be excused or deferred if it
would threaten an insurer's own financial strength. Additionally, guaranty
fund assessments are used to reduce state premium taxes paid by the Company in
certain states. Hartford Life paid guaranty fund assessments of approximately
$10, $8 and $6 in 1995, 1994, and 1993, respectively.

Hartford Life is involved in various legal actions, some of which involve
claims for substantial amounts. In the opinion of management the ultimate
liability with respect to such lawsuits, as well as other contingencies, is
not considered material in relation to the consolidated financial position of
Hartford Life.

F-17