HARTFORD LIFE INSURANCE COMPANY SEPARATE ACCOUNT TWO, N-4/A, 1997-11-03

HARTFORD LIFE INSURANCE COMPANY SEPARATE ACCOUNT TWO
N-4/A, 1997-11-03

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<PAGE>

As filed with the Securities and Exchange Commission on November 3, 1997

File No. 333-19605
File No. 811-4372
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. __2__ [X]
Post-Effective Amendment No. ____ [ ]

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. __23__ [X]

HARTFORD LIFE INSURANCE COMPANY SEPARATE ACCOUNT TWO
(Exact Name of Registrant)

HARTFORD LIFE INSURANCE COMPANY
(Name of Depositor)

200 Hopmeadow Street
Simsbury, Connecticut 06089
(Address of Depositor's Principal Offices)

(860) 843-6731
(Depositor's Telephone Number, Including Area Code)

Leslie T. Soler, Esquire
200 Hopmeadow Street
Simsbury, Connecticut 06089
(Name and Address of Agent for Service)

Copy to:

David S. Goldstein, Esquire
Sutherland, Asbill & Brennan
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404

Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of the registration statement.

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the registrant
hereby elects to register an indefinite amount of securities being offered.

The registrant hereby amends this registrant statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration shall become effective on such
date as the Commission, acting pursuant to Section 8(a), may determine.

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

<TABLE>

<CAPTION>
N-4 ITEM NO. PROSPECTUS HEADING
------------ ------------------
<S> <C>
1. Cover Page Hartford Life Insurance Company,
Separate Account Two

2. Definitions Definitions

3. Condensed Financial Information None

4. Synopsis or Highlights Summary

5. General Description of Hartford, the Separate Account
Registrant and the Funds

6. Deductions Contract Fees and Charges

7. General Description of Annuity Description of the Contracts, Contract
Contracts Information Fees and Charges and Additional
Contract Information

8. Annuity Period Selecting an Annuity Payment Option

9. Death Benefit Description of the Contracts

10. Purchases and Contract Value Description of the Contracts

11. Redemptions Surrenders

12. Taxes Federal Tax Considerations

13. Legal Proceedings Legal Proceedings

14. Table of Contents of the Statement Table of Contents to Statement
Additional Information of Additional Information

15. Cover Page Part B; Statement of Additional
Information

16. Table of Contents Table of Contents

17. General Information and History Description of Hartford Life
Insurance Company

</TABLE>

<PAGE>

<TABLE>

<S> <C>
18. Services None

19. Purchase of Securities Distribution of the Contracts
being Offered

20. Underwriters Distribution of the Contracts

21. Calculation of Performance Data Calculation of Yield and Return

22. Annuity Payments Payments Under the Contract,
Selecting an Annuity Payment Option

23. Financial Statements Financial Statements

24. Financial Statements and Exhibits Financial Statements and Exhibits

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

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

27. Number of Contract Owners Number of Contract Owners

28. Indemnification Indemnification

29. Principal Underwriters Principal Underwriters

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

31. Management Services Management Services

32. Undertakings Undertakings

</TABLE>

<PAGE>

INDIVIDUAL SINGLE PREMIUM PAYMENT
IMMEDIATE VARIABLE ANNUITY CONTRACT

HARTFORD LIFE INSURANCE COMPANY
200 HOPMEADOW STREET
SIMSBURY, CONNECTICUT 06070
1-800-862-6668 (CONTRACT OWNERS)
[LOGO] 1-800-862-7155 (INVESTMENT REPRESENTATIVES)

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

This prospectus ("Prospectus") describes the individual variable immediate
annuity contract (the "Contract") offered by Hartford Life Insurance Company
("Hartford"). The Contract may be sold to or issued in connection with
retirement plans, including plans that qualify for special federal income tax
treatment under the Internal Revenue Code.

Contract Owner(s) may allocate the Premium Payment and transfer Contract Value
to one or more Sub-Accounts of Hartford Life Insurance Company Separate Account
Two (the "Separate Account"). The assets of each Sub-Account are invested solely
in a corresponding mutual fund (the "Funds"). The Funds are:

<TABLE>
<S> <C>
Hartford Advisers Fund, Inc. Hartford Bond Fund, Inc.
Hartford Dividend and Growth Fund,
Hartford Capital Appreciation Fund, Inc. Inc.
Hartford International Advisers Fund,
Hartford Index Fund, Inc. Inc.
Hartford International Opportunities Fund,
Inc. Hartford MidCap Fund, Inc.
Hartford Mortgage Securities Fund,
HVA Money Market Fund, Inc. Inc.
Hartford Small Company Fund, Inc. Hartford Stock Fund, Inc.
</TABLE>

Under the Contract, Hartford makes periodic Annuity Payments to the Contract
Owner(s) (or other designated Payee). The dollar amount of each Annuity Payment
varies according to the investment performance of the Funds in which the
selected Sub-Accounts are invested. The Contract Owner(s) bear the investment
risk of amounts invested in the Separate Account.

This Prospectus sets forth the basic information regarding the Contract and the
Separate Account that a prospective investor should know before purchasing a
Contract. The prospectus for the Funds, which provides information regarding
investment objectives and policies of each Fund, should be read in conjunction
with this Prospectus. A Statement of Additional Information providing additional
information about the Contract and the Separate Account has been filed with the
Securities and Exchange Commission and is incorporated herein by reference. The
table of contents for the Statement of Additional Information ("Statement") is
on page 41 of this Prospectus. Call 1-800-862-6668, or write Hartford at its
Home Office to obtain a free copy of the Statement.

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

PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. THIS
PROSPECTUS MUST BE ACCOMPANIED BY THE CURRENT PROSPECTUS FOR EACH OF THE FUNDS.
- --------------------------------------------------------------------------------

AN INVESTMENT IN A CONTRACT IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, NOR IS THE CONTRACT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN A
CONTRACT INVOLVES CERTAIN RISKS, INCLUDING THE RISK OF LOSS OF THE PREMIUM
PAYMENT (PRINCIPAL).
- --------------------------------------------------------------------------------

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

PROSPECTUS DATED: NOVEMBER 10, 1997

STATEMENT OF ADDITIONAL INFORMATION DATED: NOVEMBER 10, 1997

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
DEFINITIONS........................................................... 3
FEE AND EXPENSE TABLES................................................ 5
SUMMARY............................................................... 7
HARTFORD, THE SEPARATE ACCOUNT AND THE FUNDS.......................... 8
Hartford Life Insurance Company..................................... 8
Separate Account.................................................... 8
The Funds........................................................... 9
PERFORMANCE RELATED INFORMATION....................................... 10
DESCRIPTION OF THE CONTRACTS.......................................... 10
Purchasing a Contract............................................... 10
Right to Examine the Contract....................................... 11
Crediting and Allocating the Premium Payment........................ 11
Contract Value -- Before Income Start Date.......................... 11
The Net Investment Factor........................................... 11
Sub-Account Value Transfers Before and After Income Start Date...... 12
Surrenders.......................................................... 12
Death Before Income Start Date...................................... 13
Death On or After the Income Start Date............................. 13
Determination of the Death Benefit.................................. 13
Distribution Requirements: Prior to the Income Start Date........... 13
Payments Under the Contract......................................... 14
SELECTING AN ANNUITY PAYMENT OPTION................................... 14
Annuity Payment Options............................................. 14
Annuity Calculation Date and Income Start Date...................... 15
Income Payment Dates................................................ 15
Variable Annuity Payments........................................... 15
CONTRACT FEES AND CHARGES............................................. 16
Contingent Deferred Sales Charge.................................... 16
Premium Tax Charge.................................................. 17
Mortality and Expense Risk Charge................................... 17
Fund Expenses....................................................... 17
ADDITIONAL CONTRACT INFORMATION....................................... 17
Contract Ownership.................................................. 17
Changing the Contract Owner or Beneficiary.......................... 17
Misstatement of Age or Sex.......................................... 18
Change of Contract Terms............................................ 18
Reports to Contract Owners.......................................... 18
Miscellaneous....................................................... 18
Voting Privileges................................................... 18
FEDERAL TAX CONSIDERATIONS............................................ 19
General............................................................. 19
Taxation of Hartford and the Separate Account....................... 19
Taxation of Purchasers of Non-Qualified Contracts................... 19
Taxation of Purchasers of Qualified Contracts....................... 20
Federal Income Tax Withholding...................................... 23
Contract Owners That Are Nonresident Aliens or Foreign
Corporations....................................................... 23
Other Tax Consequences.............................................. 23
OTHER INFORMATION..................................................... 23
Distribution of the Contracts....................................... 23
Legal Proceedings................................................... 24
FINANCIAL STATEMENTS.................................................. 24
ILLUSTRATIONS OF ANNUITY PAYMENTS ASSUMING HYPOTHETICAL RATES OF
RETURN.............................................................. 25
ILLUSTRATIONS OF ANNUITY PAYMENTS USING HISTORIC RATES OF RETURN...... 28
TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION............. 41
</TABLE>

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

DEFINITIONS

ACCUMULATION UNIT: An accounting unit of measure used to calculate Sub-Account
Value prior to the Annuity Calculation Date.

ANNIVERSARY VALUE: The Commuted Value calculated as of a Contract Anniversary.

ANNUITANT: The person (or persons) whose life (or lives) determines the Annuity
Payments payable under the Contract and whose death determines the Death Benefit
after the Income Start Date. With regard to joint and last survivor Annuity
Payment Options, the maximum number of joint Annuitants is two and provisions
referring to the death of an Annuitant mean the death of the last surviving
Annuitant. Provisions relating to an action by the Annuitant mean, in case of
joint Annuitants, both Annuitants acting jointly. Unless otherwise specified,
the Contract Owner is the Annuitant.

ANNUITY CALCULATION DATE: The date as of which the first Annuity Payment will be
calculated. It will be no more than five days prior to the Income Start Date.
Values calculated prior to the Income Start Date but after the Annuity
Calculation Date will equal values as of the Annuity Calculation Date.

ANNUITY PAYMENT: One of several periodic payments made by Hartford to the Payee
under an Annuity Payment Option.

ANNUITY PAYMENT OPTION: The form of Annuity Payments selected by the Contract
Owner. The Annuity Payment Option is shown on the Contract specifications page
as the "Annuity Benefit."

ANNUITY UNIT: An accounting unit of measure used to calculate the amount of
Variable Annuity Payments.

ANNUITY UNIT FACTOR: The factor applied in computing Annuity Unit values to
neutralize the effect of the Assumed Investment Return.

ASSUMED INVESTMENT RETURN (AIR): The annual rate of return shown on the
specification page of the Contract. This rate is used to determine the degree of
fluctuation in the amount of Variable Annuity Payments in response to
fluctuations in the net investment return of selected Sub-Accounts by assuming
(among other things) that the assets in the Sub-Accounts supporting the Contract
will have a net annual return over the anticipated Annuity Payment period equal
to that rate of return. If the actual performance of the selected Sub-Accounts
is equal to the AIR, the payment will be constant. If the actual performance is
greater than the AIR, the payment will increase. If the actual performance is
less than the AIR, the Variable Annuity Payment amount will be lower.

BENEFICIARY: The person(s) entitled to receive the Contract Value upon the death
of the Contract Owner or Annuitant prior to the Income Start Date or, the Death
Benefit upon the death of the Annuitant after the Income Start Date available
under some Annuity Payment Options.

CANCELLATION PERIOD: The "Right to Examine" period described on the cover page
of the Contract during which the Contract Owner may return the Contract.

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

COMMISSION: U.S. Securities and Exchange Commission.

COMMUTED VALUE: The present value of the remaining guaranteed Annuity Payments
under an Annuity Payment Option having Annuity Payments guaranteed for a
specified number of years, computed using the Assumed Investment Return for the
Contract and the Annuity Unit Value(s) calculated as of the date that Hartford
receives a fully completed request for surrender, or Due Proof of Death of the
Annuitant.

CONTRACT ANNIVERSARY: The same date in each Contract Year as the Contract Issue
Date.

CONTRACT ISSUE DATE: The date on which Hartford issues the Contract and on which
the Contract becomes effective. The Contract Issue Date is shown on the
specifications page of the Contract and is used to determine Contract Years and
Contract Anniversaries.

CONTRACT OWNER(S): The person (or persons) who owns (or own) the Contract and
who is (are) entitled to exercise all rights and privileges provided in the
Contract. The maximum number of joint Contract Owners is two. Provisions
relating to action by the Contract Owner mean, in the case of joint Contract
Owners, both Contract Owners acting jointly.

CONTRACT VALUE: The sum of the Sub-Account Values under the Contract prior to
the Annuity Calculation Date.

CONTRACT YEAR: A 12-month period beginning on the Contract Issue Date or on a
Contract Anniversary.

DEATH BENEFIT: The amount payable by Hartford based upon the death of the
Contract Owner or Annuitant prior to the Income Start Date, or upon the death of
Annuitant on or after the Income Start Date. The Death Benefit is calculated as
of the date that Due Proof of Death is received at Hartford.

DUE PROOF OF DEATH: A certified copy of a death certificate, an order of a court
of competent jurisdiction, a statement from a physician who attended the
deceased or any other proof acceptable to Hartford.

FUND: Any open-end management investment company (or investment portfolio
thereof) or unit investment trust (or series thereof) in which a Sub-Account
invests.

HARTFORD: Hartford Life Insurance Company.
<PAGE>
4 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

HOME OFFICE: Hartford's offices at 200 Hopmeadow Street, Simsbury, CT 06070
(mailing address: P.O. Box 5085, Hartford, CT 06102-5085, Attn: Individual
Annuity Services).

INCOME PAYMENT DATE: The date each month, quarter, semi-annual period, or year
as of which Hartford computes the Annuity Payments.

INCOME START DATE: The date as of which the Annuity Payments are to begin. It is
the first Income Payment Date and is shown on the specifications page of the
Contract.

IRA: An "individual retirement annuity" as described in Section 408 of the Code.

JOINT ANNUITANT: A person, other than the primary Annuitant, whose life
determines the Annuity Payments payable. The Contract will have a Joint
Annuitant only if a joint life Annuity Payment Option is elected.

MAXIMUM ANNIVERSARY VALUE: The greatest Anniversary Value under the Contract
while the Annuitant is alive prior to his or her 81st birthday reduced by the
dollar amount of Annuity Payments made since that anniversary.

NET ASSET VALUE PER SHARE: The value per share of any Fund on any Valuation Day.
The method of computing the Net Asset Value Per Share is described in the
prospectus for each Fund.

NET INVESTMENT FACTOR: The Net Investment Factor for each of the Sub-Accounts,
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.

NON-QUALIFIED CONTRACT: A Contract that is not a Qualified Contract.

PAYEE: The person or party designated by the Contract Owner to receive Annuity
Payments. Unless otherwise specified the Annuitant is the Payee.

PAYMENT FACTOR: The factor used on the Annuity Calculation Date to calculate the
first Annuity Payment.

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

PREMIUM TAX: The amount of tax charged by a state or municipality on the Premium
Payment or Contract Value.

QUALIFIED CONTRACT: A Contract that is issued in connection with a retirement
plan that qualifies for special federal income tax treatment under Section 408
or Section 457 of the Code.

SEPARATE ACCOUNT: Hartford Life Insurance Company Separate Account Two.

SUB-ACCOUNT: A subdivision of the Separate Account, the assets of which are
invested in a corresponding Fund.

SUB-ACCOUNT VALUE: On or before the Annuity Calculation Date, the amount is
determined on any day by multiplying the number of Accumulation Units
attributable to the Contract in that Sub-Account by the Accumulation Unit value
for that Sub-Account.

SURRENDER VALUE: The Contract Value less any applicable Premium Tax prior to the
Annuity Calculation Date, or the Commuted Value less applicable contingent
deferred sales charges on or after the Annuity Calculation Date.

VALUATION DAY: Every day that the New York Stock Exchange is open for trading.

VALUATION PERIOD: The period that starts at the close of regular trading on the
New York Stock Exchange on any Valuation Day and ends at the close of regular
trading on the next succeeding Valuation Day.

VARIABLE ANNUITY PAYMENT: An Annuity Payment that may vary in amount from one
Income Payment Date to the next as a function of the investment performance of
one or more Sub-Accounts selected by the Contract Owner to support Annuity
Payments.

WRITTEN NOTICE: A notice or request submitted in writing in a form satisfactory
to Hartford that is manually signed by the Contract Owner(s) and received at the
Home Office.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 5
- --------------------------------------------------------------------------------

FEE AND EXPENSE TABLES

Contract Owner Transaction Expenses

<TABLE>
<S> <C>
Sales Charge imposed on Premium Payment........................... None
Contingent Deferred Sales Charge (as a percentage of Commuted
Value)*
First Year.................................................... 6%
Second Year................................................... 6%
Third Year.................................................... 5%
Fourth Year................................................... 5%
Fifth Year.................................................... 4%
Sixth Year.................................................... 3%
Seventh Year.................................................. 2%
Eighth Year................................................... 0%
Exchange Fee...................................................... None
</TABLE>

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

* Only applies to PAYMENTS GUARANTEED FOR A SPECIFIED NUMBER OF YEARS Annuity
Payment Option, after the Income Start Date.

Annual Separate Account Expenses
(as a percentage of average annual net assets)

<TABLE>
<S> <C>
Mortality and Expense Risk Charge................................. 1.25%
Other Charges..................................................... None
Total Separate Account Expenses................................... 1.25%
</TABLE>

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

<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OTHER OPERATING
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Hartford Advisers Fund.......................... 0.615% 0.017% 0.632%
Hartford Bond Fund.............................. 0.490% 0.030% 0.520%
Hartford Capital Appreciation Fund.............. 0.629% 0.017% 0.646%
Hartford Dividend & Growth Fund................. 0.709% 0.017% 0.726%
Hartford Index Fund............................. 0.374% 0.019% 0.393%
Hartford International Advisers Fund............ 0.746% 0.214% 0.960%
Hartford International Opportunities Fund....... 0.691% 0.095% 0.786%
Hartford MidCap Fund (1)........................ 0.520% 0.150% 0.670%
HVA Money Market Fund........................... 0.423% 0.021% 0.444%
Hartford Mortgage Securities Fund............... 0.424% 0.029% 0.453%
Hartford Small Company Fund..................... 0.750% 0.040% 0.790%
Hartford Stock Fund............................. 0.441% 0.016% 0.457%
</TABLE>

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

(1) Hartford MidCap Fund is a new Fund: Operating expenses are based on
annualized estimates of such expenses to be incurred in the current fiscal
year. HL Investment Advisors, Inc. has agreed to waive its fees for the
Hartford MidCap Fund until the assets of the Fund (excluding assets
contributed by companies affiliated with HL Investment Advisors, Inc.) first
reach $20 million. Absent this waiver, the investment advisory fee would be
0.575% annually and the total fund operating expense ratio would be 0.900%
(annualized).

Premium Taxes, currently ranging from 0% to 4 % may be applicable, depending
upon the laws of various jurisdictions.

The above tables are intended to assist the Contract Owner in understanding
the costs and expenses that he or she will bear directly or indirectly. The
table reflects the current management fees, other expenses and total expenses
for each Fund. For a more complete description of the various costs and
expenses, see "Charges and Deductions" and the prospectus for the Funds which
accompanies this Prospectus.

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

EXAMPLES

A Contract Owner will pay the following expenses on a $1,000 investment,
assuming a 5% annual return on assets and an Annuitant age 65 with a 5% Assumed
Investment Return:

1. If the LIFE Annuity Payment Option is selected and you do not surrender your
Contract:

<TABLE>
<CAPTION>
SUB-ACCOUNT 1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Hartford Advisers Fund....... $ 19 $ 60
Hartford Bond Fund........... 18 56
Hartford Capital Appreciation
Fund....................... 19 60
Hartford Dividend and Growth
Fund....................... 20 63
Hartford Index Fund.......... 17 52
Hartford International
Advisers Fund.............. 23 70
Hartford International
Opportunities Fund......... 21 64
Hartford MidCap Fund......... 19 61
HVA Money Market Fund........ 17 54
Hartford Mortgage Securities
Fund....................... 17 54
Hartford Small Company
Fund....................... 21 64
Hartford Stock Fund.......... 17 54
</TABLE>

2. If the PAYMENTS GUARANTEED FOR 20 YEARS Annuity Payment Option is selected
and you do not surrender your Contract:

3. If the GUARANTEED PAYMENTS FOR 20 YEARS Annuity Payment Option is selected
and you surrender your Contract:

<TABLE>
<CAPTION>
SUB-ACCOUNT 1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Hartford Advisers Fund....... $ 79 $ 110
Hartford Bond Fund........... 78 106
Hartford Capital Appreciation
Fund....................... 79 110
Hartford Dividend and Growth
Fund....................... 80 113
Hartford Index Fund.......... 77 102
Hartford International
Advisers Fund.............. 83 120
Hartford International
Opportunities Fund......... 81 114
Hartford MidCap Fund......... 79 111
HVA Money Market Fund........ 77 104
Hartford Mortgage Securities
Fund....................... 77 104
Hartford Small Company
Fund....................... 81 114
Hartford Stock Fund.......... 77 104
</TABLE>

These examples should not be considered representations of past or future
performance or expenses. The actual expenses paid or performance achieved may be
greater or less than those shown.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 7
- --------------------------------------------------------------------------------

SUMMARY
GENERAL DESCRIPTION

This Prospectus is designed to provide prospective Contract Owners with
information necessary to decide whether or not to purchase a Contract. This
summary provides a concise description of the more significant aspects of the
Contract. Further detail is provided in this Prospectus, the related Statement
of Additional Information, the Contract, and the prospectus for the Funds. For
further information, contact Hartford at its Home Office or your registered
representative.

PURCHASING A CONTRACT

A prospective Contract Owner may purchase a Contract by completing and
submitting an application or an order request along with a single Premium
Payment to Hartford at its Home Office. The minimum Premium Payment for a
Contract is $25,000 and the maximum Premium Payment generally is $1,000,000 (See
"Purchasing a Contract"), unless approved by Hartford.

Subject to certain minimum allocation requirements that may be in effect
from time to time, the Premium Payment is allocated to each Sub-Account as
specified on the application or order request. All percentage allocations must
be in whole numbers. (See "Crediting an Allocating Premium Payments.")

RIGHT TO EXAMINE THE CONTRACT

Contract Owners may cancel the Contract during the Cancellation Period and
receive a refund equal to the Contract Value. The Cancellation Period is a
ten-day period of time beginning when the Contract is received by a Contract
Owner. Some states require a longer Cancellation Period and return of the
Premium Payment. (See "Right to Examine the Contract.")

TRANSFERS

Prior to the Annuity Calculation Date, a Contract Owner may transfer all or
part of any Sub-Account Value to another available Sub-Account(s), subject to
certain restrictions. (See "Sub-Account Value Transfers.") Similar transfers may
be made after the Income Start Date, subject to certain restrictions. (See
"Variable Annuity Payments.")

ANNUITY PAYMENT OPTIONS

The following Annuity Payment Options are available under the Contract: Life
Annuity; Life Annuity with Cash Refund; Life Annuity with Payments Guaranteed
For a Specified Number of Years; Joint and Last Survivor; Joint and Last
Survivor Life Annuity With Payments Guaranteed For a Specified Number of Years;
and Payments Guaranteed For a Specified Number of Years.

DEATH BENEFITS

The Contract provides for a Death Benefit, under certain Annuity Payment
Options, in the event the Annuitant or Contract Owner(s) die(s) prior to the
Income Start Date and if the Annuitant dies after the Income Start Date. (See
"Payment Upon the Death of Any Contract Owner or the Annuitant.") Certain
Annuity Payment Options do not provide a Death Benefit.

SURRENDERS

Upon Written Notice prior to the Annuity Calculation Date, a Contract Owner
may surrender the Contract and receive the Contract Value. On or after the
Income Start Date under a PAYMENTS GUARANTEED FOR A SPECIFIED NUMBER OF YEARS
Annuity Payment Option, a Contract Owner also may surrender the Contract for the
Surrender Value. (See "Surrenders.") Surrenders may have adverse federal income
tax consequences including the possibility of being subject to a penalty tax.
(See "Federal Tax Considerations.")

CHARGES AND FEES

The following charges and fees are assessed under the Contracts:

CONTINGENT DEFERRED SALES CHARGE. Hartford deducts a contingent deferred
sales charge if the Contract is surrendered after the Income Start Date under
PAYMENTS GUARANTEED FOR A SPECIFIED NUMBER OF YEARS Annuity Payment Option. The
contingent deferred sales charge is 6% of the Commuted Value (less any
applicable Premium Tax charge) if surrendered during the first two Contract
Years; 5% of the Commuted Value (less any applicable Premium Tax charge) if
surrendered during the third or fourth contract years; and decreases 1% each
Contract Year up to and including the seventh Contract Year. The contingent
deferred sales charge is 0% if the Contract is surrendered after the seventh
Contract Year. No contingent deferred sales charge is assessed upon the death of
the Annuitant after the Income Start Date.

MORTALITY AND EXPENSE RISK CHARGE. Hartford makes a daily charge of
0.003446% (approximately equivalent to an effective annual rate of 1.25%) of the
Separate Account's net assets to compensate it for assuming certain mortality
and expense risks. (See "Mortality and Expense Risk Charge.")
<PAGE>
8 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

PREMIUM TAX CHARGE. Generally, taxes on Premium Payments, if any, are
incurred as of the Annuity Calculation Date, and a Premium Tax Charge is
Deducted from the Contract Value as of that date. These taxes currently range
from 0% to 4.0% of Premium Payments. (See "Premium Tax Charge.")

EXPENSES OF THE FUNDS. The investment experience of each Sub-Account
reflects that of the Fund whose shares it holds. The investment experience of
each Fund, in turn, reflects its fees and other operating expenses. Please read
the prospectus for each of the Funds for details.

HARTFORD, THE SEPARATE ACCOUNT AND THE FUNDS
HARTFORD LIFE INSURANCE COMPANY

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

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

SEPARATE ACCOUNT

The Separate Account is a separate investment account of Hartford
established under Connecticut law on June 2, 1986. Hartford owns the assets of
the Separate Account. These assets are held separate from Hartford's general
account and its other separate accounts. That portion of the Separate Account's
assets that is equal to the reserves and other Contract liabilities of the
Separate Account is not chargeable with liabilities arising out of any other
business Hartford may conduct.

The Separate Account is registered with the Commission under the Investment
Company Act of 1940 (the "1940 Act") as a unit investment trust and meets the
definition of a "separate account" under the federal securities laws. Such
registration does not involve any supervision by the Commission of the
management of the Separate Account or of Hartford. The Separate Account is also
governed by the laws of Connecticut, Hartford's state of domicile, and may also
be governed by laws of other states in which Hartford does business.

The investment in the Separate Account is allocated to one or more
Sub-Accounts as per the Contract Owner's specifications. Each Sub-Account is
invested exclusively in the assets of one underlying Fund. The Separate Account
has 12 Sub-Accounts, each of which invests in shares of a corresponding Fund.
Income, gains and losses, realized or unrealized, from assets allocated to a
Sub-Account are credited to or charged against that Sub-Account without regard
to other income, gains or losses of Hartford.

CHANGES TO THE SEPARATE ACCOUNT. Where permitted by applicable law, Hartford
may make the following changes to the Separate Account:

1. Any changes required by the 1940 Act or other applicable law or
regulation;

2. combine separate accounts, including the Separate Account;

3. add new Sub-Accounts to or remove existing Sub-Accounts from the Separate
Account or combine Sub-Accounts;

4. make Sub-Accounts (including new Sub-Accounts) available to such classes
of Contracts as Hartford may determine;

5. add new Funds or remove existing Funds;

6. substitute new Funds for any existing Fund if shares of the Fund are no
longer available for investment or if Hartford determines that investment in a
Fund is no longer appropriate in light of the purposes of the Separate Account;

7. de-register the Separate Account under the 1940 Act if such registration
is no longer required; and

8. operate the Separate Account as a management investment company under the
1940 Act or as any other form permitted by law.

No such changes will be made without any necessary approval of the
Commission and applicable state insurance departments. Contract Owners will be
notified of any changes.
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HARTFORD LIFE INSURANCE COMPANY 9
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THE FUNDS

Each Sub-Account invests in a corresponding Fund. Each of the Funds is an
open-end diversified management investment company managed by HL Investment
Advisors, Inc. ("HL Advisors"), a registered investment adviser. HL Advisors has
retained Wellington Management Company to act as investment sub-adviser to the
Funds indicated by an asterisk. In addition, HL Advisors has entered into an
investment services agreement with Hartford Investment Management Company
("HIMCO"), for the provision of investment services to the remaining Funds. The
Funds, as well as a brief description of their investment objectives, are
provided below:

HARTFORD ADVISERS FUND, INC.

Seeks 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.

HARTFORD BOND FUND, INC.

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

HARTFORD CAPITAL APPRECIATION FUND, INC.

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

HARTFORD DIVIDEND AND GROWTH FUND, INC.

Seeks a high level of current income consistent with growth of capital and
reasonable investment risk. The Fund invests primarily in equity securities and
securities convertible into equity securities.

HARTFORD INDEX FUND, INC.

Seeks to provide investment results which approximate the price and yield
performance of publicly-traded common stocks in the aggregate, as represented by
the Standard & Poor's 500 Composite Stock Price Index.*

HARTFORD INTERNATIONAL ADVISERS FUND, INC.

Seeks to provide maximum long-term total return consistent with prudent
investment risk. The Fund assets will be diversified among at least five
countries and will be allocated among equity and debt securities and money
market instruments.

HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.

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

HARTFORD MIDCAP FUND, INC.

Seeks to achieve long-term capital growth through capital appreciation by
investing primarily in equity securities.

HARTFORD MORTGAGE SECURITIES FUND, INC.

Seeks 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.

HARTFORD SMALL COMPANY FUND, INC.

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

HARTFORD STOCK FUND, INC.

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

HVA MONEY MARKET FUND, INC.

Seeks to achieve maximum current income consistent with liquidity and
preservation of capital. The Fund invests in short-term money market securities.

NO ONE CAN ASSURE THAT ANY FUND WILL ACHIEVE ITS STATED OBJECTIVES AND
POLICIES. SINCE EACH UNDERLYING FUND HAS DIFFERENT INVESTMENT OBJECTIVES, EACH
IS SUBJECT TO DIFFERENT RISKS. More detailed information concerning the
investment objectives, policies and restrictions of the Funds, the expenses of
the Funds, the risks attendant to investing in the Funds and other aspects of
their operations can be found in the current prospectus for each Fund which
accompanies this Prospectus and the current statement of additional information
for the Funds. THE FUNDS' PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION CAN
ALSO BE OBTAINED BY CALLING 1-800-862-6668. The Funds' prospectus should be read
carefully before any decision is made concerning the allocation of the Premium
Payment or transfers of Contract Value among the Sub-Accounts.

Hartford cannot guarantee that each Fund will always be available under the
Contracts, but in the unlikely event that a Fund is not available, Hartford will
take reasonable steps to secure the availability of a comparable fund. Shares of
each Fund are purchased and redeemed at net asset value, without a sales charge.

Shares of the Funds are sold to separate accounts of Hartford and its
insurance company affiliates other than the Separate Account to serve as the
underlying investment for both variable annuity contracts and variable life

insurance

* "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>
10 HARTFORD LIFE INSURANCE COMPANY
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contracts, a practice known as "mixed funding." As a result, there is a
possibility that a material conflict may arise between the interests of Contract
Owners, and of owners of other contracts whose contract values are allocated to
one or more of these other separate accounts investing in any one of the Funds.
In the event of any such material conflicts, Hartford will consider what action
may be appropriate, including removing the Fund from the Separate Account or
replacing the Fund with another Fund. There are certain risks associated with
mixed funding, as disclosed in the Funds' prospectus.

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 Hartford Advisers Fund, Hartford Bond Fund, Hartford Capital
Appreciation Fund, Inc., Hartford Dividend and Growth Fund, Hartford Index Fund,
Hartford International Advisers Fund, Hartford International Opportunities Fund,
Hartford MidCap Fund, Hartford Mortgage Securities Fund, Hartford Small Company
Fund, Hartford Stock Fund, and HVA 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 Hartford Bond Fund and Hartford Mortgage Securities Fund Sub-Accounts
may advertise yield in addition to total return. The yield will be computed in
the following manner: The net investment income per unit earned during a recent
one month period, 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 HVA Money Market Fund Sub-Account 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 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.

DESCRIPTION OF THE CONTRACTS
PURCHASING A CONTRACT

A prospective Contract Owner may purchase a Contract by completing and
submitting an application or an order request. The maximum age for Annuitants on
the Contract Issue Date is 90. A single Premium Payment must be delivered to the
Home Office along with the Contract Owner's application or an order request. The
minimum Premium Payment is $25,000 unless Hartford specifically consents to a
lower Premium Payment. No additional Premium Payments may be made under the
Contracts. Unless Hartford gives its prior approval, it will not accept a
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 11
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Premium Payment in excess of $1,000,000. Hartford will send Contract Owners a
confirmation notice upon receipt and acceptance of the Contract Owner's Premium
Payment.

RIGHT TO EXAMINE THE CONTRACT

Contract Owners may cancel the Contract during the Cancellation Period,
which is the 10-day period beginning on the day the Contract Owner receives the
Contract. Some states may require a longer Cancellation Period. To cancel the
Contract, the Contract Owner must mail or deliver within 10 days, a written
request for cancellation accompanied by the Contract to the Home Office of
Hartford.

Hartford will refund the Contract Value as of the date of receipt of the
request for cancellation. The Contract Owner bears the investment risk during
the period prior to Hartford's receipt of the request for cancellation. Hartford
will refund the Premium Payment where required by law.

CREDITING AND ALLOCATING
THE PREMIUM PAYMENT

If the application or an order request for a Contract is properly completed
and is accompanied by any additional information necessary to process it, the
Premium Payment will be allocated, as designated by the Contract Owner, to one
or more of the Sub-Accounts within two business days of receipt. If the
application, order request, or other required information is incomplete when
received, Hartford reserves the right to retain the Premium Payment for up to
five business days while it attempts to complete the information. If the
information cannot be made complete within five business days, the applicant
will be informed of the reasons for the delay and the Premium Payment will be
returned unless the applicant specifically consents to Hartford retaining the
Premium Payment until the information is made complete. The Premium Payment will
then be allocated within two business days after receipt of the complete
information.

Contract Owners may allocate the Premium Payment among any or all available
Sub-Accounts subject to minimum amounts then in effect. Currently, amounts
allocated to any one Sub-Account must equal at least 1% of the net Premium
Payment. All percentage allocations must be in whole numbers.

CONTRACT VALUE -- BEFORE INCOME START DATE

SUB-ACCOUNT VALUE. The Contract Value is the sum of all Sub-Account Values
and therefore reflects the investment performance of the Sub-Accounts to which
it is allocated. The Sub-Account Value for any Sub-Account as of the Contract
Issue Date is equal to the amount of the Premium Payment allocated to that
Sub-Account. The Sub-Account Value for a Contract is determined on any given day
by the multiplying the number of Accumulation Units attributable to the Contract
in that Sub-Account by the Accumulation Unit value for that Sub-Account.
Therefore, on any Valuation Day the Contract Owner's Sub-Account Value reflects
any variation of the interest income, dividends, net capital gains or losses,
realized or unrealized, and any amounts transferred into or out of that
Sub-Account.

ACCUMULATION UNITS. The portions of the Premium Payment allocated to a
Sub-Account or amounts of Contract Value transferred to a Sub-Account are
converted into Accumulation Units. For any Contract, the number of Accumulation
Units credited to a Sub-Account is determined by dividing the dollar amount
directed to the Sub-Account by the value of the Accumulation Unit for that Sub-
Account for the Valuation Day as of which the portion of the Premium Payment or
transferred Contract Value is invested in the Sub-Account. Transferred Contract
Value is invested in a Sub-Account as of the end of the Valuation Period during
which the transfer request was received. Therefore, a Premium Payment or portion
thereof allocated to or amounts transferred to a Sub-Account under a Contract
increase the number of Accumulation Units of that Sub-Account credited to the
Contract.

Surrenders, transfers out of a Sub-Account, the death of any Contract Owner
or the Annuitant before the Income Start Date, and the application of Contract
Value less Premium Tax to an Annuity Payment Option on the Annuity Calculation
Date all result in a decrease in the number of Accumulation Units of one or more
Sub-Accounts. Accumulation Units are valued as of the end of the Valuation
Period.

The Accumulation Unit value for each Sub-Account was arbitrarily set
initially at $1 when the Sub-Account began operations. Thereafter, the
Accumulation Unit value at the end of every Valuation Day equals the
Accumulation Unit value at the end of the preceding Valuation Day multiplied by
the Net Investment Factor (described below).

THE NET INVESTMENT FACTOR (BEFORE AND
AFTER INCOME START DATE)

The Net Investment Factor is an index applied to measure the investment
performance of a Sub-Account from one Valuation Period to the next. For each
Sub-Account, the Net Investment Factor reflects the investment performance of
the Fund in which that Sub-Account invests and the charges assessed against that
Sub-Account for a Valuation Period. The Net Investment Factor is calculated by
dividing (1) by (2) and subtracting (3) from the result, where:

(1) is the result of:
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12 HARTFORD LIFE INSURANCE COMPANY
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a. the Net Asset Value Per Share of the Fund held in the Sub-Account,
determined at the end of the current Valuation Period; plus

b. the per share amount of any dividend or capital gain distributions
made by the Fund held in the Sub-Account.

(2) is the Net Asset Value Per Share of the Fund held in the Sub-Account,
determined at the beginning of the Valuation Period.

(3) is a daily factor representing the mortality and expense risk charge
deducted from the Sub-Account, adjusted for the number of days in the
Valuation Period.

SUB-ACCOUNT VALUE TRANSFERS BEFORE AND
AFTER INCOME START DATE

The Contract Owner may transfer the values of the Sub-Accounts allocations
from one or more Sub-Accounts to another free of charges. However, Hartford
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 a Contract Owner or by the
attorney-in-fact pursuant to a power of attorney by calling (800) 862-6668 or by
the agent of record by calling (800) 862-7155. Telephone transfers may not be
permitted by some states for their residents who purchase variable annuities.

The policy of Hartford and its agents and affiliates is that they will not
be responsible for losses resulting from acting upon telephone requests
reasonably believed to be genuine. Hartford will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine; otherwise,
Hartford may be liable for any losses due to unauthorized or fraudulent
instructions. The procedures Hartford follows for transactions initiated by
telephone include requirements that the callers provide certain information for
identification purposes. All transfer instructions by telephone are tape
recorded.

Transfers between Sub-Accounts may be made both before and after the Income
Start Date provided that the minimum allocation to any Sub-Account may not be
less than the minimum then in effect. All percentage (%) allocations must be in
whole numbers (e.g., 1%).

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

Subject to exceptions set forth in the following paragraph, the right to
reallocate Contract Values is subject to modification if Hartford 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 would not be limited to, the requirements of a minimum time
period between each transfer, not accepting transfer requests of an agent acting
under power of attorney on behalf of more than one Contract Owner, or limiting
the dollar amount that may be transferred between the Sub-Accounts 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 to be to the disadvantage of other Contract Owners. Some states may
have certain limitations.

Currently, and with respect to Contracts issued in all states, the only
restriction in effect is that Hartford 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.

SURRENDERS

ON OR BEFORE THE INCOME START DATE. A Contract Owner may surrender the
Contract for its Surrender Value at any time on or before the Income Start Date.
A Contract's Surrender Value fluctuates daily as a function of the investment
performance of the Sub-Accounts in which a Contract Owner is invested. Hartford
does not guarantee any minimum Surrender Value. The Surrender Value will be
determined as of the date Hartford receives the Written Notice for surrender at
the Home Office.

AFTER THE INCOME START DATE. A Contract Owner may surrender the Contract on
or after the Income Start Date only if the Payments Guaranteed for a Specified
Number of Years Annuity Payment Option is in effect. Upon such a surrender
Hartford pays the Contract Owner the Commuted Value less any applicable
contingent deferred sales charges. This surrender charge is computed as of the
date Hartford receives the Written Notice for surrender at the Home Office.

CONTRACT OWNERS SHOULD CONSULT THEIR TAX ADVISER REGARDING THE TAX
CONSEQUENCES OF A SURRENDER. A surrender made before age 59 1/2 may result in
adverse tax consequences, including the imposition of a penalty tax of 10% of
the taxable portion of the Surrender Value. See "Federal Tax Considerations" for
more details.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 13
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DEATH BEFORE INCOME START DATE

If the Contract Owner or the Annuitant dies before the Income Start Date,
Hartford will pay the Death Benefit.
The Death Benefit is an amount equal to the Contract Value. The Contract
Value may be taken in one sum or under any of the settlement options then being
offered by Hartford.

IF THE CONTRACT OWNER DIES before the Income Start Date, any surviving joint
Contract Owner becomes the Beneficiary. If there is no surviving joint Contract
Owner, the designated Beneficiary will be the Beneficiary. If the Contract
Owner's spouse is the sole Beneficiary and the Annuitant is living, the spouse
may elect, in lieu of receiving the Contract Value, to be treated as the
Contract Owner. If no Beneficiary designation is in effect or if the Beneficiary
has predeceased the Contract Owner, the Contract Owner's estate will be the
Beneficiary.

IF THE ANNUITANT DIES prior to the Income Start Date and the Contract Owner
is living, the Contract Owner shall be the Beneficiary. In that case, the rights
of any designated Beneficiary shall be voided.

DEATH ON OR AFTER THE INCOME START DATE

If the Annuitant dies on or after the Income Start Date, Hartford will pay
the Death Benefit under the Annuity Payment Option in effect as of the
Annuitant's death. Under some Annuity Payment Options, there is no Death
Benefit.

The Death Benefit on or after the Income Start Date, under the Payments
Guaranteed for a Specified Number of Years Annuity Payment Option, is the
greatest of:

a) the Commuted Value;

b) 100% of the Premium Payment reduced by the aggregate dollar amount of
all Annuity Payments made since the Income Start Date; and

c) the Maximum Anniversary Value (the greatest Anniversary Value under the
Contract while the Annuitant is alive prior to his or her 81st birthday reduced
by the dollar amount of Annuity Payments made since that anniversary).

IF THE ANNUITANT DIES on or after the Income Start Date, the Beneficiary
will have the option of having payments continue to the Beneficiary for the
remainder of the period or taking the Death Benefit in one sum.

IF A CONTRACT OWNER WHO IS NOT THE ANNUITANT, DIES on or after the Income
Start Date, any surviving joint Contract Owner becomes the sole Contract Owner.
If there is no surviving Contract Owner, the Payee becomes the new Contract
Owner. If any Contract Owner dies, the remaining Annuity Payments will be
distributed at least as rapidly as under the method of distribution being used
as of the date of such death.

DETERMINATION OF THE DEATH BENEFIT

The Death Benefit will be calculated as of the date Hartford receives
Written Notice of Due Proof of Death. Any Annuity Payments made on or after the
date of death, but before receipt of Written Notice of Due Proof of Death will
be recovered by Hartford from the Payee.

PRIOR TO THE INCOME START DATE, in the absence of complete instructions to
either pay the Death Benefit in one sum or under one of the settlement options
being offered, the Contract Value will be moved to the Money Market Fund.

ON OR AFTER THE INCOME START DATE, in the absence of complete instructions
to either pay the Death Benefit in one sum or continue payments, the present
value of the guaranteed remaining payments will be moved to the Money Market
Fund.

Upon receipt of complete instructions, Hartford will proceed as follows: If
the instructions are to resume payments, Hartford will make any payments that
went unpaid since the date Hartford received Written Notice of Due Proof of
Death. Hartford will then reallocate the remaining balance in the Money Market
Fund according to the instructions and resume payments. If the instructions are
to pay the Death Benefit in one sum, Hartford will pay the Death Benefit.

DISTRIBUTION REQUIREMENTS: PRIOR TO
THE INCOME START DATE

The Contract Value will be distributed based on the Contract Owner's or
Annuitant's date of death and the Beneficiary's election:

1) in a single lump sum within five years;

2) under an Annuity Payment Option provided that :

a) Annuity Payments begin within one year of the date of death, and

b) Annuity Payments are made in substantially equal installments over the
life of the Beneficiary, or

c) Annuity Payments are made in substantially equal installments over a
period not greater than the life expectancy of the Beneficiary;

3) if the sole Beneficiary is the spouse of the deceased Contract Owner, he
or she may by Written Notice
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14 HARTFORD LIFE INSURANCE COMPANY
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within one year of the Contract Owner's death, elect to continue the
Contract as the new Contract Owner. If the spouse so elects, all of his
or her rights as Beneficiary cease and if the deceased Contract Owner was
also the sole Annuitant and appointed no contingent Annuitant, he or she
will become the Annuitant; or

4) if the Contract Owner is not an individual, then the "primary Annuitant"
shall be treated as the Contract Owner under 1) and 2) above. For this
purpose, the "primary Annuitant" means 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.

PAYMENTS UNDER THE CONTRACT

Hartford generally makes payments of surrenders, Death Benefits, or any
Annuity Payments within seven days of receipt of all applicable Written Notices
and/or Due Proofs of Death. However, Hartford may postpone such payments for any
of the following reasons:

1. when the New York Stock Exchange ("NYSE") is closed for trading other
than customary holiday or weekend closing, or trading on the NYSE is
restricted, as determined by the Commission; or

2. when the Commission by order permits a postponement for the protection of
Contract Owners; or

3. when the Commission determines that an emergency exists that would make
the disposal of securities held in the Separate Account or the
determination of their value not reasonably practicable.

If a recent check or draft has been submitted, Hartford has the right to
defer payment of surrenders, payments upon the death of the Contract Owner or
Annuitant before the Income Start Date, Death Benefits, or Annuity Payments
until the check or draft has been honored.

SELECTING AN ANNUITY
PAYMENT OPTION

The Annuity Payment Option specifies the type of annuity to be paid and
determines how long the annuity will be paid, the frequency of payment, and the
amount of each Annuity Payment. The Contract Owner must select the Annuity
Payment Option when applying for the Contract. This election is irrevocable once
the Contract is issued. The Contract Owner must select the Sub-Accounts to which
Contract Value less applicable Premium Tax will be applied. Unless otherwise
directed, Sub-Account values, as they exist on the Annuity Calculation Date, are
used to calculate the first Annuity Payment.

ANNUITY PAYMENT OPTIONS

LIFE ANNUITY. Hartford makes Annuity Payments to the Payee for as long as
the Annuitant lives. UNDER THIS OPTION, A PAYEE WOULD RECEIVE ONLY ONE ANNUITY
PAYMENT IF THE ANNUITANT DIES AFTER THE FIRST ANNUITY PAYMENT, TWO ANNUITY
PAYMENTS IF THE ANNUITANT DIES AFTER THE SECOND ANNUITY PAYMENT, ETC.

LIFE ANNUITY WITH CASH REFUND. Hartford makes Annuity Payments to the Payee
as long as the Annuitant lives. If the Annuitant dies and the sum of all Annuity
Payments made are less than the Contract Value less Premium Tax used to purchase
Annuity Units on the Annuity Calculation Date, the Beneficiary is entitled to a
Death Benefit. The Death Benefit equals the Contract Value less Premium Tax used
to purchase Annuity Units on the Annuity Calculation Date minus the sum of all
Annuity Payments made. This Option is only available using the 5% A.I.R

LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR A SPECIFIED NUMBER OF
YEARS. Hartford makes Annuity Payments to the Payee for as long as the Annuitant
lives. At the time this Option is selected, the Contract Owner must select a
specific number of years (a minimum of five years and maximum of: a) 100 minus
the Annuitant's age or b) 40 years, whichever is less). If the Annuitant dies
before the specified number of years has passed, the Beneficiary will have the
option of either having the payments continue to the Beneficiary for the
remainder of the period or receiving the Commuted Value in one sum. Some
restrictions apply to Qualified Contracts with regards to the specified number
of years for which payments are guaranteed.

JOINT AND LAST SURVIVOR LIFE ANNUITY. Hartford makes Annuity Payments to the
Payee while both Annuitants are living. After the death of either Annuitant,
Annuity Payments continue to the Payee for as long as the other Annuitant lives.
UNDER THIS OPTION, A PAYEE WOULD RECEIVE ONLY ONE ANNUITY PAYMENT IF BOTH
ANNUITANTS DIE AFTER THE FIRST ANNUITY PAYMENT, ETC. At the time of purchase the
Contract Owner must elect to have Annuity Payments after the death of the first
Annuitant made in amounts equal to 100%, 66.67% or 50% of the amount that would
otherwise be paid.

JOINT AND LAST SURVIVOR LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR A
SPECIFIED NUMBER OF YEARS. Hartford makes Annuity Payments to the Payee while
both Annuitants are living. After the death of either Annuitant, Annuity
Payments continue to the Payee for as long as the other Annuitant lives. At the
time of purchase, the Contract Owner must elect to have Annuity Payments after
the death of the first Annuitant made in amounts equal to 100%, 66.67% or 50% of
the amount that would otherwise be paid. At the time this Option is selected,
the Contract Owner must select a specific number of years (a minimum of five
years
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 15
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and maximum of 100 minus the younger Annuitant's age). If the Annuitants die
before the specified number of years has passed, the Beneficiary will have the
option of either having the payments continue to the Beneficiary for the
remainder of the period or receiving the Commuted Value in one sum. Some
restrictions apply to Qualified Contracts with regards to the specified number
of years for which payments are guaranteed.

PAYMENTS GUARANTEED FOR A SPECIFIED NUMBER OF YEARS. Hartford makes Annuity
Payments to the Payee for the number of years (a minimum of five years and
maximum of 100 minus the Annuitant's age) selected by the Contract Owner. If the
Annuitant dies before the specified number of years has passed, payments to the
Beneficiary will continue until the specified number of years has elapsed. After
the death of the Annuitant, the Beneficiary will have the option of either
having the payments continue to the Beneficiary for the remainder of the period
or receiving the Commuted Value in one sum. Some restrictions apply to Qualified
Contracts with regards to the specified number of years for which payments are
guaranteed.

Prior to the death of the Annuitant, the Contract Owner may elect to receive
the Commuted Value. If the Contract Owner makes this election, Hartford will
deduct the contingent deferred sales charge from the Commuted Value before
paying it to the Contract Owner.

ANNUITY CALCULATION DATE AND
INCOME START DATE

The Contract Owner selects the Income Start Date in the application or order
request. The Annuity Calculation Date will be no more than five Valuation Days
before the Income Start Date. The Contract Value less any applicable Premium Tax
is applied to purchase Annuity Units of the Sub-Accounts selected by the
Contract Owner as of the Annuity Calculation Date. The first Annuity Payment is
computed using the value of such Annuity Units as of the Annuity Calculation
Date.

INCOME PAYMENT DATES

All Annuity Payments after the first Annuity Payment are computed and
payable as of the Income Payment Dates. These dates are the same day of the
month as the Income Start Date based on the Annuity Payment frequency selected
by the Contract Owner and shown on the specification page of the Contract.
Available Annuity Payment frequency includes monthly, quarterly, semi-annual and
annual. The Annuity Payment Frequency may not be changed once selected by the
Contract Owner.

In the event that the Contract Owner does not select a payment frequency,
Annuity Payments will be made monthly.

VARIABLE ANNUITY PAYMENTS

THE FIRST VARIABLE ANNUITY PAYMENT. Variable Annuity Payments are periodic
payments from Hartford to the designated Payee, the amount of which varies from
one Income Payment Date to the next as a function of the net investment
performance of the Sub-Accounts selected by the Contract Owner to support such
Annuity Payments. The dollar amount of the first Variable Annuity Payment
depends on the Annuity Payment Option chosen, the age of the Annuitant, the
gender of the Annuitant (if applicable), the amount of Contract Value applied to
purchase the Annuity Payments, and the applicable annuity purchase rates based
on the 1983a Individual Annuity Mortality table using projection scale G
projected to the year 2000 and an Assumed Investment Return of not less than
3.0%.

The dollar amount of the first Variable Annuity Payment attributable to each
Sub-Account is determined by dividing the dollar amount of the Contract Value
less applicable Premium Tax applied to that Sub-Account on the Annuity
Calculation Date by $1,000 and multiplying the result by the Payment Factor in
the Contract for the selected Annuity Payment Option. The dollar value of the
first Variable Annuity Payment is the sum of the first Variable Annuity Payments
attributable to each Sub-Account.

ANNUITY UNITS. The number of Annuity Units attributable to a Sub-Account is
derived by dividing the first Variable Annuity Payment attributable to that
Sub-Account by the Annuity Unit Value for that Sub-Account for the Valuation
Period ending on the Annuity Calculation Date or during which the Annuity
Calculation Date falls if the Valuation Period does not end on such date. The
number of Annuity Units attributable to each Sub-Account under a Contract
remains fixed unless there is a transfer of Annuity Units between Sub-Accounts.

SUBSEQUENT VARIABLE ANNUITY PAYMENTS. The dollar amount of each subsequent
Variable Annuity Payment attributable to each Sub-Account is determined by
multiplying the number of Annuity Units of that Sub-Account credited under the
Contract by the Annuity Unit Value (described below) for that Sub-Account for
the Valuation Period ending on the Income Payment Date, or during which the
Annuity Payment Date falls if the Valuation Period does not end on such date.
The dollar value of each subsequent Variable Annuity Payment is the sum of the
subsequent Variable Annuity Payments attributable to each Sub-Account.
Notwithstanding the foregoing, when an Income Payment Date would fall on a day
that is not a Valuation Day, the Income Payment is computed as of the Valuation
Day immediately preceding what would have been the Income Payment Date.
<PAGE>
16 HARTFORD LIFE INSURANCE COMPANY
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The Annuity Unit Value of each Sub-Account for any Valuation Period is equal
to (a) multiplied by (b) divided by (c) where:

(a) is the Net Investment Factor for the Valuation Period for which the
Annuity Unit Value is being calculated;

(b) is the Annuity Unit Value for the preceding Valuation Period; and

(c) is a daily Assumed Investment Return factor (for the 3%, 5% or 6%
Assumed Investment Return) adjusted for the number of days in the Valuation
Period.

The Annuity Unit Factor is equal to one plus the applicable Assumed
Investment Return percentage. Therefore, for 3%, it is 1.03, for 5% it is 1.05
and for 6% it is 1.06. The annual factors can be translated into daily factor of
1.00008098, 1.00013368, and 1.00015965, respectively.

THE ASSUMED INVESTMENT RETURN. The Annuity Unit value will increase or
decrease from one Income Payment Date to the next in direct proportion to the
net investment return of the Sub-Account or Sub-Accounts supporting the Variable
Annuity Payments, less an adjustment to neutralize the selected Assumed
Investment Return. Dividing what would otherwise be the Annuity Unit value by
the Assumed Investment Return factor is necessary in order to adjust the change
in the Annuity Unit value (resulting from the Net Investment Factor) so that the
Annuity Unit value only changes to the extent that the Net Investment Factor
represents a rate of return greater than or less than the Assumed Investment
Return selected by the Contract Owner. Without this adjustment, the Net
Investment Factor would decrease the Annuity Unit value to the extent that such
value represented an annualized rate of return of less than 0.0% and increase
the Annuity Unit value to the extent that such value represented an annualized
rate of return of greater than 0.0%.

The Contract permits Contract Owners to select one of three Assumed
Investment Returns: 3%, 5% or 6%. A higher Assumed Investment Return will result
in a higher initial payment, a more slowly rising series of subsequent payments
when actual investment performance (minus any deductions and expenses) exceeds
the Assumed Investment Return, and a more rapid drop in subsequent payments when
actual investment performance (minus any deductions and expenses) is less than
the Assumed Investment Return. The following examples may help clarify the
impact of selecting one Assumed Investment Return over another:

1. If a Contract Owner selects a 3% ASSUMED INVESTMENT RETURN and if the
net investment return of the Sub-Account for an Annuity Payment period is equal
to the pro-rated portion of the 3% Assumed Investment Return, the Variable
Annuity Payment attributable to that Sub-Account for that period will equal the
Annuity Payment for the prior period. To the extent that such net investment
return exceeds an annualized rate of return of 3% for a payment period, the
Annuity Payment for that period will be greater than the Annuity Payment for the
prior period and to the extent that such return for a period falls short of an
annualized rate of 3%, the Annuity Payment for that period will be less than the
Annuity Payment for the prior period.

2. If a Contract Owner selects a 5% ASSUMED INVESTMENT RETURN and if the
net investment return of the Sub-Account for an Annuity Payment period is equal
to the pro-rated portion of the 5% Assumed Investment Return, the Variable
Annuity Payment attributable to that Sub-Account for that period will equal the
Annuity Payment for the prior period. To the extent that such net investment
return exceeds an annualized rate of return of 5% for a payment period, the
Annuity Payment for that period will be greater than the Annuity Payment for the
prior period and to the extent that such return for a period falls short of an
annualized rate of 5%, the Annuity Payment for that period will be less than the
Annuity Payment for the prior period.

3. If a Contract Owner selects a 6% ASSUMED INVESTMENT RETURN and if the
net investment return of the Sub-Account for an Annuity Payment period is equal
to the pro-rated portion of the 6% Assumed Investment Return, the Variable
Annuity Payment attributable to that Sub-Account for that period will equal the
Annuity Payment for the prior period. To the extent that such net investment
return exceeds an annualized rate of return of 6% for a payment period, the
Annuity Payment for that period will be greater than the Annuity Payment for the
prior period and to the extent that such return for a period falls short of an
annualized rate of 6%, the Annuity Payment for that period will be less than the
Annuity Payment for the prior period.

EXCHANGE ("TRANSFER") OF ANNUITY UNITS. After the Annuity Calculation Date,
the Contract Owner may exchange (i.e., "transfer") the dollar value of a
designated number of Annuity Units of a particular Sub-Account for an equivalent
dollar amount of Annuity Units of another Sub-Account. On the date of the
transfer, the dollar amount of a Variable Annuity Payment generated from the
Annuity Units of either Sub-Account would be the same. Transfers are executed as
of the day Hartford receives Written Notice requesting transfer. For guidelines
refer to "Sub-Account Value Transfers" on page 12.

CONTRACT FEES AND CHARGES
CONTINGENT DEFERRED SALES CHARGE

No sales charge is deducted from the Premium Payment at the time that the
Payment is made. However, a contingent deferred sales charge is deducted when a
Contract Owner elects to receive the Commuted Value under the PAYMENTS
GUARANTEED FOR A SPECIFIED NUMBER OF YEARS ANNUITY PAYMENT OPTION.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 17
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In the event that surrender charges from the Contracts are not sufficient to
cover the expenses of selling the Contracts, Hartford will bear such expenses.
Conversely, if the revenue from such charges exceeds such expenses, the excess
of revenues from such charges over expenses will be retained by Hartford.

The surrender charge is equal to a percentage of the Commuted Value (not to
exceed the Premium Payment) and is deducted from those values prior to their
being paid.

<TABLE>
<CAPTION>
SURRENDER CHARGE AS A PERCENTAGE
CONTRACT YEAR OF COMMUTED VALUE
- -------------------------- -----------------------------------
<S> <C>
1 6%
2 6%
3 5%
4 5%
5 4%
6 3%
7 2%
8 or more 0%
</TABLE>

PREMIUM TAX CHARGE

Certain states and municipalities impose a tax on Hartford in connection
with the receipt of Premium Payments or Contract Value. This tax can range from
0% to 4% of either the Premium Payment or the Contract Value and is generally
based on the Contract Owner's state of residence. Taxes are generally incurred
by Hartford as of the Annuity Calculation Date. Hartford deducts the charge for
taxes from the Contract Value on the Annuity Calculation Date. Some
jurisdictions impose a tax on Premium Payments at the time the Premium Payment
is received. In those jurisdictions, Hartford's current practice is to pay the
tax on Premium Payments and then deduct the charge for these taxes from the
Contract Value on a surrender prior to Annuity Calculation Date, or on the
Annuity Commencement Date.

MORTALITY AND EXPENSE RISK CHARGE

Hartford deducts a daily charge from the assets of the Separate Account to
compensate Hartford for mortality and expense risks that Hartford assumes under
the Contracts. The daily charge is at the rate of 0.003446% (approximately
equivalent to an effective annual rate of 1.25%) of the net assets of the
Separate Account. Approximately .90% of this annual charge is for the assumption
of mortality risk and .35% is for the assumption of expense risk.

The mortality risk that Hartford assumes (for life contingency based Annuity
Payment Options) is the risk that Annuitants, as a group, will live for a longer
period of time than Hartford estimated when it established the annuity purchase
rates in the Contract. Because of these guarantees, each Contract Owner is
assured that the Annuitant's longevity will not have an adverse effect on the
Annuity Payments that the Payee receives under Annuity Payment Options based on
life contingencies. Hartford also assumes a mortality risk because the Contracts
guarantee a "death benefit" if the Contract Owner or Annuitant dies before the
Income Start Date.

FUND EXPENSES

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

ADDITIONAL CONTRACT INFORMATION
CONTRACT OWNERSHIP

The Contract belongs to the Contract Owner. A Contract Owner may exercise
all of the rights and options described in the Contract. Only the Annuitant may
be the owner of an IRA Contract.

The Contract Owner's rights include the right to: (1) select or change the
Contract Owner, (2) select or change any Beneficiary or contingent Beneficiary,
(3) select or change the Payee while the Annuitant is still alive, (4) allocate
the Premium Payment among and between the Sub-Accounts, (5) transfer Contract
Value among and between the Sub-Accounts, and (6) exchange or transfer Annuity
Units between Sub-Accounts on which Variable Annuity Payments are based.

The rights of owners of Qualified Contracts may be restricted by the terms
of a related employee benefit plan. For example, such plans may require an owner
of a Qualified Contract to obtain the consent of his or her spouse before
exercising certain ownership rights or may restrict withdrawals. See "Federal
Tax Considerations" for more details.

Selection of an Annuitant or Payee who is not the Contract Owner may have
adverse tax consequences. See "Federal Tax Considerations" for more details.

CHANGING THE CONTRACT OWNER OR BENEFICIARY

At any time, after the Cancellation Period, an Contract Owner may transfer
ownership of the Contract subject to Hartford's policies and procedures at the
time of the change.

At any time prior to the death of the Annuitant, the Contract Owner may name
a new Beneficiary by Written
<PAGE>
18 HARTFORD LIFE INSURANCE COMPANY
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Notice unless an irrevocable Beneficiary has previously been named. When an
irrevocable Beneficiary has been designated, the Contract Owner must provide the
irrevocable Beneficiary's written consent to Hartford before a new Beneficiary
is designated.

These changes take effect as of the day the Written Notice was signed and
dated. Hartford is not liable for any payments made under the Contract prior to
the effectiveness of any change. For possible tax consequences of these changes,
see "Federal Tax Considerations."

MISSTATEMENT OF AGE OR SEX
If an age or sex of the Annuitant given to Hartford (in the application or
otherwise) is misstated, Hartford will adjust the benefits it pays under the
Contract to the amount that would have been payable at the correct age or sex.
If Hartford made any underpayments because of any such misstatement, it shall
pay the amount of such underpayment to the Payee or Beneficiary in one sum. If
Hartford makes any overpayments because of a misstatement of age or sex, it
shall deduct from current or future payments due under the Contract, the amount
of such overpayment.

CHANGE OF CONTRACT TERMS

Upon notice to the Contract Owner, Hartford may modify the Contract to:

1. conform the Contract or the operations of Hartford or of the Separate
Account to the requirements of any law to which the Contract, Hartford or the
Separate Account is subject;

2. assure continued qualification of the Contract as an annuity contract or
a Qualified Contract under the Code;

3. reflect a change (as permitted in the Contract) in the operation of the
Separate Account.

In the event of any such modification, Hartford will make appropriate
endorsements to the Contract.

No modification of this Contract shall be made except over the signature of
the President, a Vice President, an Assistant Vice President or a Secretary of
Hartford. Any modification or waiver must be in writing. No agent may bind
Hartford by making any promise not contained in the Contract.

REPORTS TO CONTRACT OWNERS

Hartford sends each Contract Owner a report at least annually, or more often
as required by law, indicating: the number of Accumulation or Annuity Units and
the dollar value of such units; the Contract Value prior to the Annuity
Calculation Date; the Premium Payment; or surrenders made before the Annuity
Calculation Date; Annuity Payments on or after the Income Start Date; and any
other information required by law.

The reports, which are mailed to Contract Owners at their last known
address, include any information that may be required by the Commission or the
insurance supervisory official of the jurisdiction in which the Contract is
issued.

Hartford also sends any other reports, notices or documents required by law
to be furnished to Owners.

MISCELLANEOUS

NON-PARTICIPATING. The Contract does not participate in the surplus or
profits of Hartford and Hartford does not pay dividends on the Contract.

PROOF OF AGE AND SURVIVAL. Hartford reserves the right to require proof of
the Annuitant's age and gender prior to the Annuity Calculation Date. In
addition, Hartford reserves the right to require proof that the Annuitant is
living before any Income Payment Date.

CONTRACT APPLICATION OR ORDER REQUEST. Hartford issues the Contract in
consideration of the Contract Owner's application or order request and payment
of the Premium. The entire Contract is made up of the Contract and any attached
endorsements or riders. In the absence of fraud, Hartford considers statements
made in the application or order request to be representations and not
warranties. Hartford will not use any statement in defense of a claim or to void
the Contract unless it is contained in the application or order request.
Hartford will not contest the Contract.

VOTING PRIVILEGES

In accordance with current interpretations of applicable law, Hartford votes
Fund shares held in the Separate Account at regular and special shareholder
meetings of the Funds in accordance with instructions received from persons
having voting interests in the corresponding Sub-Accounts.

The number of votes that a Contract Owner has the right to instruct are
calculated separately for each Sub-Account, and may include fractional votes.
Prior to the Annuity Calculation Date, the Contract Owner holds a voting
interest in each Sub-Account to which Variable Contract Value is allocated.
After the Annuity Calculation Date, the Contract Owner has a voting interest in
each Sub-Account from which Variable Annuity Payments are made.

For each Contract Owner prior to the Annuity Calculation Date, the number of
votes attributable to a Sub-Account will be determined by dividing the Contract
Owner's Sub-Account Value by the Net Asset Value Per Share of the Fund
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 19
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in which that Sub-Account invests. For each Contract Owner after the Annuity
Calculation Date, the number of votes attributable to a Sub-Account is
determined by dividing the liability for future Variable Annuity Payments to be
paid from that Sub-Account by the Net Asset Value Per Share of the Fund in which
that Sub-Account invests. This liability for future payments is calculated on
the basis of the mortality assumptions, the selected Assumed Investment Return
and the Annuity Unit Value of that Sub-Account. As Variable Annuity Payments are
made to the Payee, the liability for future payments decreases as does the
number of votes.

The number of votes available to a Contract Owner are determined as of the
date coinciding with the date established by the Fund for determining
shareholders eligible to vote at the relevant meeting of the Fund's
shareholders. Voting instructions are solicited by written communication prior
to such meeting in accordance with procedures established for the Fund. Each
Contract Owner or Payee having a voting interest in a Sub-Account will receive
proxy materials and reports relating to any meeting of shareholders of the Funds
in which that Sub-Account invests.

Fund shares as to which no timely instructions are received and shares held
by Hartford in a Sub-Account as to which no Owner or Payee has a beneficial
interest are voted in proportion to the voting instructions that are received
with respect to all Contracts participating in that Sub-Account. Voting
instructions to abstain on any item to be voted upon are applied to reduce the
total number of votes eligible to be cast on a matter.

FEDERAL TAX CONSIDERATIONS
GENERAL

TAX LAW IS COMPLEX AND TAX CONSEQUENCES WILL VARY ACCORDING TO THE ACTUAL
STATUS OF THE CONTRACT OWNER AND, IF APPLICABLE, THE TYPE OF RETIREMENT PROGRAM
FOR WHICH THE CONTRACT IS PURCHASED. THEREFORE, A PERSON, TRUSTEE OR OTHER
ENTITY CONTEMPLATING THE PURCHASE OF A CONTRACT MAY NEED LEGAL AND TAX ADVICE.

This Prospectus does not provide a detailed description of the federal
income tax consequences of purchasing a Contract. Special tax rules may apply 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 prospective purchaser should always consult a qualified tax
adviser. This discussion is based on Hartford's understanding of current federal
income tax laws as they are currently interpreted.

TAXATION OF HARTFORD AND
THE SEPARATE ACCOUNT

The Separate Account is taxed as part of Hartford which is taxed as a life
insurance company under Subchapter L of Chapter 1 of the Code. Accordingly, the
Separate Account is not separately taxed as a "regulated investment company"
under subchapter M. 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. 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.

TAXATION OF PURCHASERS OF
NON-QUALIFIED CONTRACTS

CORPORATIONS, TRUSTS AND OTHER NON-NATURAL PERSONS. Section 72 of the Code
governs the taxation of annuity contracts and contains provisions relating to
non-natural Contract Owners. Non-natural persons include, among others,
corporations, trusts, and partnerships. In general, unless the non-natural
person holds a Contract as agent for a natural person, the annual net increase
in the value of the Contract is includable in the non-natural person's gross
income for the tax period in which the net increase occurs. There is, however,
an exception to this general rule for certain annuity contracts held by
structured settlement companies, certain annuity contracts held by an employer
with respect to a terminated qualified retirement plan and certain immediate
annuity contracts. For this purpose, an immediate annuity means an annuity that
is purchased with a single premium payment, that has an annuity start date
commencing no later than one year from the date of purchase, and that provides
for a series of substantially equal periodic payments to be made not less
frequently than annually during the annuity period. A non-natural person which
is a tax-exempt entity for federal income tax purposes is not subject to income
tax as a result of Section 72 of the Code.

NATURAL PERSONS. Section 72 generally provides that a Contract Owner is not
taxed on increases in the value of the Contract until an amount distributed from
the Contract is received (or deemed received) by the Contract Owner, either in
the form of Annuity Payments, as contemplated by the Contract, or in some other
form (i.e., surrender or Death Benefit). However, this tax deferral generally
applies only if: (1) the investments in the Separate Account are "adequately
diversified" in accordance with Treasury Department regulations, (2) Hartford,
rather than the Contract Owner, is considered the owner of such assets for
<PAGE>
20 HARTFORD LIFE INSURANCE COMPANY
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federal income tax purposes, and (3) certain distribution requirements are met
in the event that the Contract Owner dies. These requirements are discussed
further under the caption "Tax Status of the Contract" below.

DISTRIBUTIONS PRIOR TO THE INCOME START DATE. The Contract does not permit
partial withdrawals or partial surrenders or loans. If, however, a Contract is
surrendered prior to the Income Start Date, amounts received by the Contract
Owner are includable in his or her income to the extent that such amounts exceed
the "investment in the contract." For this purpose, the investment in the
contract at any time equals the Premium Payment (to the extent that such Payment
was neither deductible when made nor excludable from income as, for example, in
the case of certain contributions to Qualified Contracts), less any amounts
previously received from the Contract which were not includable in income. Also,
the Surrender Value may be subject to a penalty tax, described below. In
general, an assignment of the Contract (or other change of ownership) without
full and adequate consideration will be treated as a distribution from the
Contract and taxed in the same manner as a surrender (except where the Contract
is transferred between spouses or incident to a divorce).

The Contract provides that upon the death of Contract Owner, Annuitant or
Joint Annuitant, the Beneficiary will receive the Contract Value. This
distribution is includable in the Beneficiary's income as follows: (1) if
distributed in a lump sum, it is taxed in the same manner as a surrender, (2) if
it is distributed in the form of Annuity Payments, it is taxed in the same
manner as Annuity Payments (see below).

DISTRIBUTIONS AFTER THE INCOME START DATE. The portion of each Annuity
Payment taxable as ordinary income is equal to the excess of the Annuity Payment
over the "exclusion amount." The "exclusion amount" is the investment in the
Contract (described above), adjusted for any guaranteed period, divided by the
number of Annuity Payments expected to be made (determined by Treasury
Department regulations that take into account the Annuitant's life expectancy
and the Annuity Payment Option elected). After the dollar amount of the
investment in the Contract, adjusted for any guaranteed period, is deemed to be
recovered, the entire amount of each Annuity Payment is fully includable in
income. Nonetheless, should the Annuity Payments cease before the adjusted
investment in the Contract is fully recovered, a deduction is allowed for the
unrecovered amount of the adjusted investment in the Contract. Where a
guaranteed period of Annuity Payments is selected and the Annuitant does not
live to the end of that period, the Annuity Payments for the remainder of the
period are includable in income as follows: (1) if distributed in a lump sum,
they are included in income to the extent that they exceed the unrecovered
investment in the Contract at that time, or (2) if received as Annuity Payments,
they are fully excluded from income until the remaining investment in the
Contract is deemed to be recovered. All Annuity Payments thereafter are fully
includable in income.

PENALTY TAX ON CERTAIN DISTRIBUTIONS. Distributions received (or deemed
received) from a Contract (before or after the Income Start Date) may be subject
to a penalty tax equal to 10% of the amount treated as taxable income. In
general, however, there is no penalty tax on distributions:

1. made on or after a taxpayer reaches age 59 1/2;

2. made on or after the death of the Contract Owner;

3. attributable to a taxpayer's becoming disabled;

4. that are part of a series of substantially equal periodic payments (not
less frequently than annually) for the life (or the life expectancy) of the
taxpayer or the joint lives (or joint life expectancies) of the taxpayer and his
or her designated beneficiary;

5. made under certain annuities issued in connection with structured
settlement agreements; and

6. made under an annuity contract that is purchased with a single premium
payment when the annuity date is no later than a year from purchase and
substantially equal periodic payments are made, not less frequently than
annually, during the annuity payment period.

AGGREGATION OF TWO OR MORE CONTRACTS. All non-qualified deferred annuity
contracts that are issued by Hartford (or its affiliates) to the same owner
during any calendar year are treated as one annuity contract for purposes of
determining the amount includable in gross income under Section 72(e) of the
Code. The effects of this rule are not yet clear; however, it could affect the
time when income is taxable and the amount that might be subject to the 10%
penalty tax described above. In addition, the Treasury Department has specific
authority to issue regulations that prevent the avoidance of Section 72(e) of
the Code through the serial purchase of annuity contracts or otherwise. There
may also be other situations in which the Treasury Department may conclude that
it would be appropriate to aggregate two or more deferred or immediate annuity
contracts purchased by the same owner. Accordingly, a Contract Owner should
consult a competent tax adviser before purchasing more than one annuity contract
in a calendar year.

POSSIBLE CHANGES IN TAXATION. In past years, legislation has been proposed
that would have adversely modified the federal taxation of certain annuity
contracts. For example, one such proposal would have changed the tax treatment
of non-qualified annuities that did not have "substantial life contingencies" by
taxing income as it is credited to the annuity contract. Although as of the date
of this Prospectus Congress is not considering any legislation regarding
taxation of annuity contracts, there is always the possibility that the tax
treatment of annuities could change by legislation or other means (such as IRS
regulations, revenue rulings, judicial decisions, etc.). Moreover, it is also
possible that any
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 21
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change could be retroactive (that is, effective prior to the date of the
change).

CONTRACTS OBTAINED THROUGH A TAX-FREE EXCHANGE OF OTHER ANNUITY OR LIFE
INSURANCE CONTRACTS. Section 1035 of the Code generally provides that no gain or
loss shall be recognized on the exchange of one annuity contract for another. If
the surrendered contract was issued prior to August 14, 1982, the tax rules
formerly provided that the surrender was taxable only to the extent the amount
received exceeds the owner's investment in the contract will and continue to
apply to amounts allocable to investments in that contract prior to August 14,
1982. In contrast, contracts issued after January 19, 1985 in a Code Section
1035 exchange are treated as new contracts for purposes of the penalty and
distribution-at-death rules. Special rules and procedures apply to Section 1035
transactions. Prospective Contract Owners wishing to take advantage of Section
1035 should consult their tax adviser.

TAX STATUS OF THE CONTRACTS. The foregoing discussion assumes that the
Contracts qualify as "annuity contracts" for federal income tax purposes under
the Code.

DIVERSIFICATION REQUIREMENTS. Section 817(h) of the Code provides that
separate account investments underlying a contract must be "adequately
diversified" in accordance with Treasury Department regulations in order for the
contract to qualify as an annuity contract under Section 72 of the Code. The
Separate Account, through each underlying Fund, intends to comply with the
diversification requirements prescribed in regulations under Section 817(h) of
the Code, which affect how the assets in the various Sub-Accounts may be
invested. Although Hartford does not have direct control over the Funds in which
the Separate Account invests, Hartford believes that each Fund will meet the
diversification requirements, and therefore, the Contract will be treated as an
annuity contract under the Code.

The Treasury Department has issued diversification regulations which
generally require, in effect, among other things, that no more than 55% of the
value of the total assets of each Fund 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.

In certain circumstances, owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of the
separate account used to support their contracts. In those circumstances, income
and gains from the separate account assets would be includable in the variable
annuity contract owner's gross income. The IRS has stated in published rulings
that a variable contract owner will be considered the owner of separate account
assets if the contract owner possesses incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. The Treasury
Department has also announced, in connection with the issuance of regulations
concerning investment diversification, that those regulations "do not provide
guidance concerning the circumstances in which investor control of the
investments of a segregated asset account may cause the investor (i.e., the
contract owner), rather than the insurance company, to be treated as the owner
of the assets in the account." This announcement also states that guidance would
be issued by way of regulations or rulings on the "extent to which policyholders
may direct their investments to particular Sub-Accounts without being treated as
owners of the underlying assets." As of the date of this Prospectus, no such
guidance has been issued.

The ownership rights under the Contracts are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that contract owners were not owners of separate account assets. For
example, the Contract Owner has the choice of several Sub-Accounts in which to
allocate the Premium Payment and Contract Value, and may be able to transfer
Contract Value among Sub-Accounts more frequently than in such rulings. In
addition, the Contract provides for more Sub-Accounts than did the variable
contracts that were the subject of the such rulings. These differences could
result in a Contract Owner being treated as the owner of the assets of the
Separate Account. In addition, Hartford does not know what standards will be set
forth, if any, in the regulations or rulings which the Treasury Department has
stated it expects to issue. Hartford therefore reserves the right to modify the
Contract as necessary to attempt to prevent the Contact Owner from being
considered the owner of the Separate Account's assets.

REQUIRED DISTRIBUTIONS. In order to be treated as an annuity contract for
federal income tax purposes, Section 72(s) of the Code requires any
Non-Qualified Contract to provide that: (a) if any Contract Owner dies on or
after the Income Start Date but prior to the time the entire interest in the
Contract has been distributed, the remaining portion of such interest will be
distributed at least as rapidly as under the method of distribution being used
as of the date of that Contract Owner's death; and (b) if any Contract Owner
dies prior to the Income Start Date, the entire interest in the Contract will be
distributed within five years after the date of the Contract Owner's death.
These requirements will be considered satisfied as to any portion of the
Contract Owner's interest that is payable to or for the benefit of a "designated
beneficiary," and that is distributed over the life of such Beneficiary or over
a period not extending beyond the life expectancy of that Beneficiary, provided
that such

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

distributions begin within one year of that Contract Owner's death. The Contract
Owner's "designated beneficiary" is the person designated by such Contract Owner
as a Beneficiary and must be a natural person. However, if the Contract Owner's
sole designated beneficiary is the surviving spouse of the Contract Owner, the
Contract may be continued with the surviving spouse as the new Contract Owner.
The requirements further provide that if the Contract Owner is not an
individual, the primary Annuitant shall be treated as the Contract Owner for
purposes of making distributions that 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. The Contract does not
permit a change of the Annuitants, however.

Non-Qualified Contracts contain provisions that are intended to comply with
the requirements of Section 72(s) of the Code, although no regulations
interpreting these requirements have yet been issued. Hartford will review such
provisions and modify them if necessary to assure that they comply with the
requirements of Code Section 72(s) when clarified by regulation or otherwise.

TAXATION OF PURCHASERS OF QUALIFIED CONTRACTS

The Contracts are designed for use as Individual Retirement Annuities
("IRAs") or in connection with Deferred Compensation Plans established and
maintained by state or local governments or tax-exempt organizations. Important
differences exist between the tax rules which are applicable to IRAs and
Deferred Compensation Plans. These rules are complex and may vary depending on
individual circumstances. Adverse tax consequences may result from distributions
prior to age 59 1/2 (subject to certain exceptions); distributions that do not
conform to applicable commencement and minimum distribution rules; aggregate
distributions in excess of a specified annual amount; and in other
circumstances. Therefore, no attempt is made to provide more than general
information about the use of the Contracts as IRAs or when owned by eligible
employers in connection with Deferred Compensation Plans. Contract Owners,
Annuitants, and Beneficiaries are cautioned that the rights of any person to any
benefits under a Deferred Compensation Plan may be subject to the terms and
conditions of the plan itself, regardless of the terms and conditions of the
Contract, but that Hartford is not bound by the terms and conditions of such
plans to the extent such terms conflict with the Contract, unless Hartford
specifically consents to be bound. A brief description of some of the federal
income tax rules which apply to IRAs and Deferred Compensation Plans is set
forth below. Hartford may amend the Contract as necessary to conform it to the
requirements of applicable law.

INDIVIDUAL RETIREMENT ANNUITIES. The Contract is designed for use as an IRA
purchased through a tax-deferred rollover contribution from another IRA, a
retirement plan qualified under Section 401 or Section 403(a) of the Code or tax
sheltered annuity contract under Section 403(b) of the Code. Amounts held under
a Deferred Compensation Plan under Section 457 of the Code CANNOT be rolled over
or transferred to an IRA.

DISTRIBUTIONS FROM AN IRA. In general, payments from an IRA which are not
rolled over must be included in gross income as ordinary taxable income in the
year in which they are received. Required minimum distributions must begin by
April 1 of the calendar year following the calendar year in which the IRA owner
attains the age of 70 1/2. Certain other mandatory distribution rules apply upon
the death of the IRA owner.

TEN PERCENT PENALTY TAX ON EARLY DISTRIBUTIONS. Distributions received (or
deemed received) from an IRA may be subject to a penalty tax equal to ten
percent (10%) of the amount treated as taxable income. In general, however,
there is no such penalty tax on distributions:

1. made on or after the date on which the taxpayer reaches age 59 1/2,

2. made to a beneficiary (or to the estate of the taxpayer) on or after the
death of the taxpayer,

3. attributable to the taxpayer's becoming disabled, or

4. which are part of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life expectancy) of the
taxpayer or the joint lives (or joint life expectancies) of the taxpayer and his
or her designated beneficiary.

In addition, effective for distributions from an IRA made after December 31,
1996, there is no such penalty tax on distributions:

5. made to the taxpayer to the extent such distributions do not exceed the
amount allowable as a deduction for federal income tax purposes allowed to the
taxpayer for amounts paid during the taxable year for medical care, or

6. if certain conditions are met, made to an unemployed taxpayer after
separation from employment, for health insurance premiums.

CODE SECTION 457 DEFERRED COMPENSATION PLANS. The Contract may be purchased
by a state or local government or tax-exempt organization that is an employer
sponsoring a Deferred Compensation Plan under Section 457 of the Code in order
to effect distribution of plan benefits to participants under the plan. In
general, distributions from a Deferred Compensation Plan are prohibited unless
made after the participant attains the age specified in the plan, separates from
service, dies, or suffers an unforeseeable financial emergency. Distributions
under plans that meet the requirements of Section 457 of the Code are taxable as

<PAGE>
HARTFORD LIFE INSURANCE COMPANY 23
- --------------------------------------------------------------------------------

ordinary income in the year paid or made available to the participant or
beneficiary.

Generally, required minimum distributions must begin by April 1 of the
calendar year following the calendar year in which the participating employee
attains the age of 70 1/2. Certain other mandatory distribution rules apply upon
the death of the participating employee.

Amounts held under a Deferred Compensation Plan under Section 457 of the
Code CANNOT be rolled over or transferred to an IRA.

FEDERAL INCOME TAX WITHHOLDING

The portion of a distribution from a Contract that is taxable income to the
recipient is generally subject to withholding for the recipient's federal income
tax liability at rates that vary according to the type of distribution and the
recipient's tax status. Section 3405 of the Code governs withholding and is
summarized below:

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, Hartford will automatically withhold 10% of the taxable
distribution.

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.

DEFERRED COMPENSATION PLANS. Distributions from a non-qualified deferred
compensation plan meeting the requirements of Section 457 of the Code are
generally subject to regular wage withholding rules.

Certain states also require withholding of state income tax whenever federal
income tax is withheld.

CONTRACT OWNERS THAT ARE NONRESIDENT
ALIENS OR FOREIGN CORPORATIONS

The discussion above provides general information regarding U.S. federal
income tax consequences to Contract Owners 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 and any required tax forms are submitted to
Hartford. In addition, purchasers may be subject to state premium tax, other
state and/or municipal taxes, and taxes that may be imposed by the purchaser's
country of citizenship or residence. Prospective purchasers are advised to
consult with a qualified tax adviser regarding U.S., state, and foreign taxation
with respect to the purchase of a Contract.

OTHER TAX CONSEQUENCES

As noted above, the foregoing comments about the federal tax consequences
under these Contracts are not exhaustive, and special rules may apply to other
tax situations not discussed in this Prospectus. Further, the federal income tax
consequences discussed herein reflect Hartford's understanding of current law
and the law may change. Federal estate and state and local estate, inheritance
and other tax consequences of ownership or receipt of distributions under a
Contract depend on the individual circumstances of each Contract Owner or
recipient of the distribution. In particular, gift and/or estate tax
consequences may result in situations where the Contract Owner is not also the
Annuitant, Payee, and Beneficiary. A competent tax adviser should be consulted
for further information.

OTHER INFORMATION
DISTRIBUTION OF THE CONTRACTS

Hartford Securities Distribution Company, Inc. ("HSD"), which is located at
200 Hopmeadow Street, Simsbury, CT 06070, is principal underwriter and
distributor of the Contracts. HSD is an affiliate of Hartford, is registered
with the Commission as a broker-dealer, and is a member of the National
Association of Securities Dealers, Inc. Hartford pays HSD for acting as
principal underwriter under a distribution agreement. The Contracts are offered
on a continuous basis and Hartford does not anticipate discontinuing the offer.

Applications for Contracts are solicited by agents who are licensed by
applicable state insurance authorities to sell Hartford's insurance contracts
and who are also registered representatives of a broker-dealer having a selling
agreement with HSD. Such broker-dealers will generally receive commissions based
on a percent of Premium Payments made (up to a maximum of 6%). The writing agent
will receive a percentage of these commissions from the respective
broker-dealer, depending on the practice of that broker-dealer. Contract Owners
do not pay these commissions.

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

LEGAL PROCEEDINGS

There are no legal proceedings to which the Separate Account is a party or
to which the assets of the Separate Account are subject.

FINANCIAL STATEMENTS

The audited financial statements and financial statement schedules included
in this Prospectus and elsewhere in the registration statement have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports. Reference is made to
said report on the financial statements of Hartford Life Insurance Company,
which includes an explanatory paragraph with respect to the change in method of
accounting for debt and equity securities as of January 1, 1994, as discussed in
Note 2 of Notes to Consolidated Financial Statements. The principal business
address of Arthur Andersen LLP is One Financial Plaza, Hartford, Connecticut
06103.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY 25
- --------------------------------------------------------------------------------

ILLUSTRATIONS OF ANNUITY PAYMENTS
ASSUMING HYPOTHETICAL RATES OF RETURN

The following graph has been prepared to show how investment performance
could affect Variable Annuity Payments over time. The graph illustrates the
"performance" of a Non-Qualified Contract under which monthly Variable Annuity
Payments are paid under three hypothetical rate of return scenarios. Of course,
the illustrations merely represent what Variable Annuity Payments might be paid
under a HYPOTHETICAL Non-Qualified Contract.

WHAT THE GRAPHS ILLUSTRATE. Each curve plotted on the graph illustrates the
"performance" of a hypothetical Non-Qualified Contract (described in more detail
below) assuming a different hypothetical rate of return for a single Sub-Account
supporting the Contract by plotting one point for each contract year. Each such
annual point on the graph represents the average of twelve monthly Variable
Annuity Payments made in that contract year under the hypothetical Contract
(hereinafter, an "Average Monthly Payment"). Each curve on the graph assumes
that the initial Variable Annuity Payment under the hypothetical Contract is
$1,000 (discussed in more detail below).

HYPOTHETICAL RATES OF RETURN. The Variable Annuity Payments reflect three
different assumptions for a constant investment return before fees and expenses:
0%, 6% and 12%. Net of all expenses, these constant returns are: -1.85%, 4.15%
and 10.15%. Average Monthly Payments reflect the assumed investment return net
of all expenses of the illustrated Sub-Account (and the Funds) over the periods
shown in each graph. Fund management fees and operating expenses are assumed to
be at an annual rate of 0.60% of their average daily net assets. This is the
weighted average of Fund expenses shown in the fee table on page 5. The
mortality and expense risk charge is assumed to be at an annual rate of 1.25% of
the illustrated Sub-Account's average daily net assets.

Nevertheless, THE AVERAGE MONTHLY PAYMENTS DEPICTED IN THE GRAPH ARE BASED
ON HYPOTHETICAL CONTRACTS AND HYPOTHETICAL INVESTMENT RESULTS AND ARE NOT
PROJECTIONS OR INDICATIONS OF FUTURE RESULTS. HARTFORD DOES NOT GUARANTEE OR
EVER SUGGEST THAT ANY SUB-ACCOUNT OR CONTRACT ISSUED BY IT WOULD GENERATE THESE
OR SIMILAR AVERAGE MONTHLY PAYMENTS FOR ANY PERIOD OF TIME. THE GRAPHS ARE FOR
ILLUSTRATION PURPOSES ONLY AND DO NOT REPRESENT FUTURE VARIABLE ANNUITY PAYMENTS
OR FUTURE INVESTMENT RETURNS. Variable Annuity Payments under a real Contract
may be more or less than those forming the basis for the Average Monthly
Payments shown in these illustrations if the actual returns of the Sub-Accounts
selected by a Contract Owner are different from the hypothetical returns.
Because it is very likely that a Sub-Account's investment return will fluctuate
over time, one can expect Variable Annuity Payments under a real Contract to
fluctuate. Moreover, under a real Contract, the total amount of Variable Annuity
Payments ultimately received by a Payee depends upon which Annuity Payment
Option the Contract Owner selects and, for life contingent annuity payment
options, how long the Annuitant lives. See "Selecting An Annuity Payment Option"
on page 14.

For a discussion of how a Contract Owner may elect to receive monthly,
quarterly, semi-annual or annual Variable Annuity Payments, see "Income Payment
Dates" on page 15.

ASSUMED INVESTMENT RETURN. Among the most important factors that determines
that amount of Variable Annuity Payments is the Assumed Investment Return
selected by the Contract Owner. The hypothetical Contract has an Assumed
Investment Return of 5%. A Contract Owner may, however, select a 3%, 5% or 6%
Assumed Investment Return under a real Contract. Generally, Variable Annuity
Payments will increase in size from one Income Payment Date to the next if the
annualized net rate of return during that time is greater than the Assumed
Investment Return, and will decrease if the annualized net rate of return over
this period is less than the Assumed Investment Return. (The Assumed Investment
Return is an important component of the Payment Factor.) For a detailed
discussion of Assumed Investment Returns, see "Variable Annuity Payments" on
page 15.

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

Option selected by the Contract Owner, the amount of Contract Value applied to
purchase the Variable Annuity Payments, the annuity purchase rates in the
Contract at the time it is purchased (I.E., the Payment Factor), the age of the
Annuitant, and, in most cases (E.G., Non-Qualified Contracts), the sex of the
Annuitant. For each of the illustrations, the entire Contract Value under the
hypothetical Contract is allocated to a Sub-Account having a constant investment
return before fees and expenses of 0%, 6%, or 12%. However, for a real Contract,
Contract Value is often allocated among several Sub-Accounts prior to the
Annuity Calculation Date. The dollar amount of the first Variable Annuity
Payment attributable to each Sub-Account is determined under a real Contract by
dividing the dollar amount of Contract Value (less applicable Premium Tax)
applied to that Sub-Account on the Annuity Calculation Date by $1,000, and
multiplying the result by the annuity Payment Factor in the Contract for the
selected Annuity Payment Option. The dollar value of the first Variable Annuity
Payment is the sum of the first Variable Annuity Payments attributable to each
Sub-Account. For a detailed discussion of how the first Variable Annuity Payment
is determined, see "Variable Annuity Payments" on page 15.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY 27
- --------------------------------------------------------------------------------

HYPOTHETICAL ILLUSTRATIONS

<TABLE>
<CAPTION>
HYPOTHETICAL 0% GROSS RATE HYPOTHETICAL 6% GROSS RATE HYPOTHETICAL 12% GROSS RATE
AVERAGE MONTHLY PAYMENT AVERAGE MONTHLY PAYMENT AVERAGE MONTHLY PAYMENT
FOR EACH YEAR SHOWN FOR EACH YEAR SHOWN FOR EACH YEAR SHOWN
$1,000 INITIAL PAYMENT; 5% AIR $1,000 INITIAL PAYMENT; 5% AIR $1,000 INITIAL PAYMENT; 5% AIR
- ---------------------------------- ---------------------------------- ----------------------------------
AVERAGE ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL
CONTRACT MONTHLY PERCENTAGE CONTRACT MONTHLY PERCENTAGE CONTRACT MONTHLY PERCENTAGE
YEAR PAYMENT CHANGE YEAR PAYMENT CHANGE YEAR PAYMENT CHANGE
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 970 1 996 1 1,022
2 906 -6.52% 2 988 -0.81% 2 1,072 4.90%
3 847 -6.52% 3 980 -0.81% 3 1,125 4.90%
4 792 -6.52% 4 972 -0.81% 4 1,180 4.90%
5 740 -6.52% 5 964 -0.81% 5 1,238 4.90%
6 692 -6.52% 6 957 -0.81% 6 1,299 4.90%
7 647 -6.52% 7 949 -0.81% 7 1,363 4.90%
8 605 -6.52% 8 941 -0.81% 8 1,429 4.90%
9 565 -6.52% 9 934 -0.81% 9 1,499 4.90%
10 528 -6.52% 10 926 -0.81% 10 1,573 4.90%
11 494 -6.52% 11 919 -0.81% 11 1,650 4.90%
12 462 -6.52% 12 911 -0.81% 12 1,731 4.90%
13 432 -6.52% 13 904 -0.81% 13 1,816 4.90%
14 403 -6.52% 14 896 -0.81% 14 1,905 4.90%
15 377 -6.52% 15 889 -0.81% 15 1,999 4.90%
16 353 -6.52% 16 882 -0.81% 16 2,097 4.90%
17 330 -6.52% 17 875 -0.81% 17 2,199 4.90%
18 308 -6.52% 18 868 -0.81% 18 2,307 4.90%
19 288 -6.52% 19 861 -0.81% 19 2,420 4.90%
20 269 -6.52% 20 854 -0.81% 20 2,539 4.90%
</TABLE>

[GRAPH]

[Line graph with number of contract years (one through twenty) as the horizontal
axis and dollar amounts ($0 through $5000 in $1000 increments) as the vertical
axis, depicting three lines, each representing average monthly payments for one
of the three available Assumed Investment Returns (0% rate, 6% rate and 12%
rate).]

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

ILLUSTRATIONS OF ANNUITY PAYMENTS
USING HISTORIC RATES OF RETURN

The following graphs have been prepared to show how investment performance
affects Variable Annuity Payments over time. These graphs illustrate the
"performance" of a Non-Qualified Contract under which Variable Annuity Payments
begin at the end of the month that the Contract was issued which is the same
month that each Sub-Account illustrated began operations. Of course, Hartford
did not sell Contracts prior to the date of this Prospectus (I.E., during any of
the time periods shown) and therefore the illustrations merely represent what
Variable Annuity Payments might have been under a HYPOTHETICAL Non-Qualified
Contract had one existed during the years shown.

WHAT THE GRAPHS ILLUSTRATE. Each graph illustrates the "performance" of a
particular Sub-Account based on hypothetical Non-Qualified Contract (described
in more detail below) by plotting one point for each calendar year since the
Sub-Account began operations. Each such annual point on the graph represents the
average of twelve monthly Variable Annuity Payments made in that year under the
hypothetical Contract. Each graph assumes that the initial Variable Annuity
Payment under the hypothetical Contract is $1,000 (discussed in more detail
below). All of the graphs end on July 31, 1997 and the point plotted for 1997
represents the average of the seven monthly Variable Annuity Payments made under
the hypothetical Contract up to that time in 1997. Likewise, where a Sub-Account
began operations in mid-year, the point for the first year represents the
average of monthly Variable Annuity Payments made (which is fewer than 12) under
the hypothetical Contract during that year. The points therefore represent, in
each case, the average monthly Variable Annuity Payment (hereinafter, an
"Average Monthly Payment").

Average Monthly Payments reflect the actual PAST investment return after all
expenses of the Sub-Accounts over the periods shown in each graph. Nevertheless,
THE AVERAGE MONTHLY PAYMENTS DEPICTED IN THE GRAPHS ARE BASED ON HYPOTHETICAL
CONTRACTS AND PAST INVESTMENT RESULTS AND ARE NOT PROJECTIONS OR INDICATIONS OF
FUTURE RESULTS. HARTFORD DOES NOT GUARANTEE OR EVEN SUGGEST THAT ANY CONTRACT
ISSUED BY IT WOULD GENERATE THESE OR SIMILAR VARIABLE ANNUITY PAYMENTS FOR ANY
PERIOD OF TIME. THE GRAPHS ARE FOR ILLUSTRATION PURPOSES ONLY AND DO NOT
REPRESENT FUTURE VARIABLE ANNUITY PAYMENTS OR FUTURE INVESTMENT RETURNS.
Variable Annuity Payments under a real Contract may be more or less than those
forming the basis for the Average Monthly Payments shown in these illustrations
if the actual returns of the Sub-Accounts selected by a Contract Owner are
different from the past returns of the Sub-Accounts. Because it is very likely
that a Sub-Account's investment return will fluctuate over time, one can expect
Variable Annuity Payments under a real Contract to fluctuate. Moreover, under a
real Contract, the total amount of Variable Annuity Payments ultimately received
by a Payee depends upon which Annuity Payment Option the Contract Owner selects
and, for life contingent annuity options, how long the Annuitant lives. See
"Selecting An Annuity Payment Option" on page 14.

ASSUMPTIONS ON WHICH THE HYPOTHETICAL CONTRACT IS BASED. In order to
illustrate a hypothetical Contract, Hartford had to make several assumptions
about the Contract. These assumptions are that: (1) the hypothetical Contract is
a Non-Qualified Contract, (2) the entire Contract Value of the hypothetical
Contract is allocated (on the Annuity Calculation Date) to the Sub-Account being
illustrated, (3) the Contract Owner selected an Assumed Investment Return of 5%,
(4) the Contract Owner elects to receive monthly Variable Annuity Payments and
elects an Income Start Date that is the last day of the month in which the
Contract was issued, (5) the Contract Value (less any applicable premium tax)
applied to the purchase of Annuity Units on the Annuity Calculation Date under
the Annuity Payment Option selected results in an initial Variable Annuity
Payment of $1,000, and (6) the Income Start Date is the last day of the month
that the Sub-Account illustrated began operations. TO THE EXTENT THAT A REAL
CONTRACT IS ISSUED BY HARTFORD ON A BASIS DIFFERENT FROM THE FOREGOING
ASSUMPTIONS, THAT REAL CONTRACT WOULD HAVE HAD AVERAGE MONTHLY PAYMENTS
DIFFERENT FROM THOSE ILLUSTRATED EVEN DURING THE PERIODS ILLUSTRATED.

For a discussion of how a Contract Owner may elect to receive monthly,
quarterly, semi-annual or annual Variable Annuity Payments, see "Income Payment
Dates" on page 15.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY 29
- --------------------------------------------------------------------------------

Annual Percentage Change column reflect the performance of the Sub-Account being
illustrated without adjustment for an Assumed Investment Return.

THE $1,000 INITIAL ANNUITY PAYMENT. The hypothetical Contract has an
initial Variable Annuity Payment of $1,000. The dollar amount of the first
Variable Annuity Payment under a real Contract generally depends upon the
Annuity Payment Option selected by the Contract Owner, the amount of Contract
Value applied to purchase the Variable Annuity Payments, the annuity purchase
rates in the Contract at the time it is purchased (I.E., the Payment Factor),
the age of the Annuitant, and, in most cases (E.G., Non-Qualified Contracts),
the sex of the Annuitant. For each of the illustrations, the entire Contract
Value under the hypothetical Contract is allocated to the Sub-Account shown in
the illustrations. However, for a real Contract, Contract Value is often
allocated among several Sub-Accounts prior to the Annuity Calculation Date. The
dollar amount of the first Variable Annuity Payment attributable to each
Sub-Account is determined under a real Contract by dividing the dollar amount of
Contract Value (less applicable Premium Tax) applied to that Sub-Account on the
Annuity Calculation Date by $1,000, and multiplying the result by the annuity
Payment Factor in the Contract for the selected Annuity Payment Option. The
dollar value of the first Variable Annuity Payment is the sum of the first
Variable Annuity Payments attributable to each Sub-Account. For a detailed
discussion of how the first Variable Annuity Payment is determined, see
"Variable Annuity Payments" on page 15.

Historical rates of return illustrations for the Hartford MidCap Fund are
unavailable because the Fund's inception date was on July 1997, the month on
which the graphs end.

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

HARTFORD ADVISERS FUND SUB-ACCOUNT

<TABLE>
<CAPTION>
AVERAGE MONTHLY PAYMENT FOR EACH YEAR OR PARTIAL
YEAR SHOWN
$1,000 INITIAL PAYMENT: 5% AIR
- --------------------------------------------------
AVERAGE ANNUAL
CALENDAR MONTHLY SUB-ACCOUNT
YEAR PAYMENT RETURN
- ---------- ---------- ----------
<S> <C> <C>
1977
1978
1979
1980
1981
1982
1983 * 990 1.26%
1984 948 6.05%
1985 1,078 25.26%
1986 1,253 11.27%
1987 1,337 4.66%
1988 1,322 12.71%
1989 1,479 20.24%
1990 1,459 0.01%
1991 1,584 18.88%
1992 1,630 6.96%
1993 1,731 10.86%
1994 1,688 -3.94%
1995 1,821 26.74%
1996 2,042 15.14%
1997 ** 2,313 22.32%
</TABLE>

<TABLE>
<CAPTION>
NON-STANDARDIZED AVERAGE ANNUAL TOTAL
RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ------------------------------------------
<S> <C>
1 Year 36.09%
5 Year 14.77%
10 Year 11.45%
Since Inception 12.16%
</TABLE>

<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL
RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- -------------------------------------
<S> <C>
1 Year 30.09%
5 Year 14.30%
10 Year 11.45%
Since Inception 12.16%
</TABLE>

[GRAPH]

[Line graph with number of calendar years (1977-1997) as the horizontal axis and
dollar amounts ($0 through $5000 in $1000 increments) as the vertical axis,
depicting one line, representing the average monthly payments based on the
historic performance of the Hartford Advisers Fund Sub-Account.]

* Fund inception was 4/83. Therefore, the Average Monthly Payment represents the
average monthly payment from April 1983 to December 1983. The Annual Sub-Account
Return is based on the period from April 1983 to December 1983.

** Fund performance is through 7/97. Therefore, the 1997 Average Monthly Payment
represents the average monthly payment from January 1997 to July 1997. The
Annual Sub-Account Return is based on the period from January 1997 to July 1997.

*** Standardized Average Annual Total Returns differ from Non-Standardized
Average Annual Total Returns in that the former reflect a deduction for the
Contingent Deferred Sales Charge where the latter do not.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY 31
- --------------------------------------------------------------------------------

HARTFORD CAPITAL APPRECIATION FUND SUB-ACCOUNT

<TABLE>
<CAPTION>
AVERAGE MONTHLY PAYMENT FOR EACH YEAR OR PARTIAL
YEAR SHOWN
$1,000 INITIAL PAYMENT: 5% AIR
- --------------------------------------------------
AVERAGE ANNUAL
CALENDAR MONTHLY SUB-ACCOUNT
YEAR PAYMENT RETURN
- ---------- ---------- ----------
<S> <C> <C>
1977
1978
1979
1980
1981
1982
1983
1984 * 1,038 9.16%
1985 1,237 34.37%
1986 1,485 7.65%
1987 1,496 -5.55%
1988 1,451 24.67%
1989 1,694 22.60%
1990 1,550 -12.02%
1991 1,852 52.16%
1992 2,100 15.55%
1993 2,492 19.30%
1994 2,562 1.26%
1995 2,897 28.63%
1996 3,328 19.20%
1997 ** 3,688 23.15%
</TABLE>

<TABLE>
<CAPTION>
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 43.05%
5 Year 21.75%
10 Year 15.45%
Since Inception 17.04%
</TABLE>

<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 37.05%
5 Year 21.38%
10 Year 15.45%
Since Inception 17.04%
</TABLE>

[GRAPHS]

* Fund inception was 4/84. Therefore, the Average Monthly Payment represents the
average monthly payment from April 1984 to December 1984. The Annual Sub-Account
Return is based on the period from April 1984 to December 1984.

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

HARTFORD INDEX FUND SUB-ACCOUNT

<TABLE>
<CAPTION>
AVERAGE MONTHLY PAYMENT FOR EACH YEAR OR PARTIAL
YEAR SHOWN
$1,000 INITIAL PAYMENT: 5% AIR
- --------------------------------------------------
AVERAGE ANNUAL
CALENDAR MONTHLY SUB-ACCOUNT
YEAR PAYMENT RETURN
- ---------- ---------- ----------
<S> <C> <C>
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987 * 978 -14.02%
1988 890 14.75%
1989 1,049 28.73%
1990 1,035 -5.24%
1991 1,145 27.93%
1992 1,205 5.49%
1993 1,256 7.76%
1994 1,228 -0.31%
1995 1,401 34.85%
1996 1,653 20.58%
1997 ** 1,962 28.80%
</TABLE>

<TABLE>
<CAPTION>
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 49.28%
5 Year 18.37%
10 Year 12.77%
Since Inception 13.51%
</TABLE>

<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 43.28%
5 Year 17.96%
10 Year 12.77%
Since Inception 13.51%
</TABLE>

[GRAPH]

* Fund inception was 5/87. Therefore, the Average Monthly Payment represents the
average monthly payment from May 1987 to December 1987. The Annual Sub-Account
Return is based on the period from May 1987 to December 1987.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY 33
- --------------------------------------------------------------------------------

HARTFORD INTERNATIONAL OPPORTUNITIES SUB-ACCOUNT

<TABLE>
<CAPTION>
AVERAGE MONTHLY PAYMENT FOR EACH YEAR OR PARTIAL
YEAR SHOWN
$1,000 INITIAL PAYMENT: 5% AIR
- --------------------------------------------------
AVERAGE ANNUAL
CALENDAR MONTHLY SUB-ACCOUNT
YEAR PAYMENT RETURN
- ---------- ---------- ----------
<S> <C> <C>
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990 * 900 -12.18%
1991 890 11.60%
1992 869 -5.62%
1993 911 32.07%
1994 999 -3.15%
1995 967 12.51%
1996 1,056 11.53%
1997 ** 1,103 12.71%
</TABLE>

<TABLE>
<CAPTION>
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 21.68%
5 Year 11.59%
10 Year --
Since Inception 7.52%
</TABLE>

<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 15.68%
5 Year 11.08%
10 Year --
Since Inception 7.52%
</TABLE>

[GRAPH]

* Fund inception was 7/90. Therefore, the Average Monthly Payment represents the
average monthly payment from July 1990 to December 1990. The Annual Sub-Account
Return is based on the period from July 1990 to December 1990.

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

HVA MONEY MARKET FUND SUB-ACCOUNT

<TABLE>
<CAPTION>
AVERAGE MONTHLY PAYMENT FOR EACH YEAR OR PARTIAL
YEAR SHOWN
$1,000 INITIAL PAYMENT: 5% AIR
- --------------------------------------------------
AVERAGE ANNUAL
CALENDAR MONTHLY SUB-ACCOUNT
YEAR PAYMENT RETURN
- ---------- ---------- ----------
<S> <C> <C>
1977
1978
1979
1980 * 1,009 5.09%
1981 1,074 14.29%
1982 1,162 12.39%
1983 1,212 8.01%
1984 1,254 9.35%
1985 1,296 7.19%
1986 1,313 5.45%
1987 1,311 5.17%
1988 1,319 6.06%
1989 1,347 7.77%
1990 1,375 6.76%
1991 1,386 4.72%
1992 1,364 2.35%
1993 1,324 1.66%
1994 1,286 2.67%
1995 1,272 4.45%
1996 1,261 3.86%
1997 ** 1,251 2.29%
</TABLE>

<TABLE>
<CAPTION>
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 3.96%
5 Year 3.14%
10 Year 4.48%
Since Inception 6.37%
</TABLE>

<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year -2.04%
5 Year 2.43%
10 Year 4.48%
Since Inception 6.37%
</TABLE>

[GRAPH]

* Fund inception was 6/80. Therefore, the Average Monthly Payment represents the
average monthly payment from June 1980 to December 1980. The Annual Sub-Account
Return is based on the period from June 1980 to December 1980.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY 35
- --------------------------------------------------------------------------------

HARTFORD SMALL COMPANY FUND SUB-ACCOUNT

<TABLE>
<CAPTION>
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year --
5 Year --
10 Year --
Since Inception 21.95%****
</TABLE>

<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year --
5 Year --
10 Year --
Since Inception 15.95%****
</TABLE>

[GRAPH]

* Fund inception was 8/96. Therefore, the Average Monthly Payment represents the
average monthly payment from August 1996 to December 1996. The Annual
Sub-Account Return is based on the period from August 1996 to December 1996.

**** Since this fund is less than 1 year old, this figure represents Cumulative
Total Net Return.

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

HARTFORD BOND FUND SUB-ACCOUNT

<TABLE>
<CAPTION>
AVERAGE MONTHLY PAYMENT FOR EACH YEAR OR PARTIAL
YEAR SHOWN
$1,000 INITIAL PAYMENT: 5% AIR
- --------------------------------------------------
AVERAGE ANNUAL
CALENDAR MONTHLY SUB-ACCOUNT
YEAR PAYMENT RETURN
- ---------- ---------- ----------
<S> <C> <C>
1977 * 998 1.00%
1978 979 1.34%
1979 959 1.63%
1980 929 4.91%
1981 932 9.12%
1982 1,045 26.16%
1983 1,132 1.48%
1984 1,121 11.78%
1985 1,262 19.11%
1986 1,396 10.78%
1987 1,360 -1.26%
1988 1,364 6.25%
1989 1,397 10.73%
1990 1,416 7.06%
1991 1,506 15.02%
1992 1,579 4.23%
1993 1,645 8.86%
1994 1,541 -5.14%
1995 1,585 17.01%
1996 1,596 2.24%
1997 ** 1,615 6.44%
</TABLE>

<TABLE>
<CAPTION>
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 11.40%
5 Year 5.75%
10 Year 7.28%
Since Inception 7.73%
</TABLE>

<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 5.40%
5 Year 5.10%
10 Year 7.28%
Since Inception 7.73%
</TABLE>

[GRAPH]

* Fund inception was 8/77. Therefore, the Average Monthly Payment represents the
average monthly payment from August 1977 to December 1977. The Annual
Sub-Account Return is based on the period from August 1977 to December 1977.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY 37
- --------------------------------------------------------------------------------

HARTFORD DIVIDEND AND GROWTH FUND SUB-ACCOUNT

<TABLE>
<CAPTION>
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 43.24%
5 Year --
10 Year --
Since Inception 23.81%
</TABLE>

<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 37.24%
5 Year --
10 Year --
Since Inception 23.08%
</TABLE>

[GRAPH]

* Fund inception was 3/94. Therefore, the Average Monthly Payment represents the
average monthly payment from March 1994 to December 1994. The Annual Sub-Account
Return is based on the period from March 1994 to December 1994.

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

HARTFORD INTERNATIONAL ADVISERS FUND SUB-ACCOUNT

<TABLE>
<CAPTION>
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 17.79%
5 Year --
10 Year --
Since Inception 14.60%
</TABLE>

<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 11.79%
5 Year --
10 Year --
Since Inception 12.86%
</TABLE>

[GRAPH]

* Fund inception was 3/95. Therefore, the Average Monthly Payment represents the
average monthly payment from March 1995 to December 1995. The Annual Sub-Account
Return is based on the period from March 1995 to December 1995.

<PAGE>
HARTFORD LIFE INSURANCE COMPANY 39
- --------------------------------------------------------------------------------

HARTFORD MORTGAGE FUND SUB-ACCOUNT

<TABLE>
<CAPTION>
AVERAGE MONTHLY PAYMENT FOR EACH YEAR OR PARTIAL
YEAR SHOWN
$1,000 INITIAL PAYMENT: 5% AIR
- --------------------------------------------------
AVERAGE ANNUAL
CALENDAR MONTHLY SUB-ACCOUNT
YEAR PAYMENT RETURN
- ---------- ---------- ----------
<S> <C> <C>
1977
1978
1979
1980
1981
1982
1983
1984 * 1,000
1985 1,064 19.13%
1986 1,162 9.75%
1987 1,151 1.36%
1988 1,170 7.03%
1989 1,205 11.74%
1990 1,239 8.35%
1991 1,324 13.31%
1992 1,365 3.35%
1993 1,372 4.99%
1994 1,297 -2.83%
1995 1,336 14.73%
1996 1,348 3.77%
1997 ** 1,361 4.81%
</TABLE>

<TABLE>
<CAPTION>
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 9.17%
5 Year 4.97%
10 Year 6.99%
Since Inception 7.76%
</TABLE>

<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 3.17%
5 Year 4.31%
10 Year 6.99%
Since Inception 7.76%
</TABLE>

[GRAPH]

* Fund inception was 12/84. Therefore, the Average Monthly Payment for December
1984.

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

HARTFORD STOCK FUND SUB-ACCOUNT

<TABLE>
<CAPTION>
AVERAGE MONTHLY PAYMENT FOR EACH YEAR OR PARTIAL
YEAR SHOWN
$1,000 INITIAL PAYMENT: 5% AIR
- --------------------------------------------------
AVERAGE ANNUAL
CALENDAR MONTHLY SUB-ACCOUNT
YEAR PAYMENT RETURN
- ---------- ---------- ----------
<S> <C> <C>
1977 * 999 1.72%
1978 992 3.55%
1979 1,044 21.10%
1980 1,228 29.61%
1981 1,349 -0.64%
1982 1,311 19.81%
1983 1,652 12.50%
1984 1,500 -0.70%
1985 1,718 29.85%
1986 2,052 10.93%
1987 2,305 4.09%
1988 2,172 17.51%
1989 2,536 24.49%
1990 2,450 -5.07%
1991 2,701 23.07%
1992 2,758 8.68%
1993 2,982 12.92%
1994 2,980 -3.11%
1995 3,306 32.43%
1996 3,937 22.83%
1997 ** 4,713 29.97%
</TABLE>

<TABLE>
<CAPTION>
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 48.84%
5 Year 19.98%
10 Year 13.08%
Since Inception 14.23%
</TABLE>

<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 7/31/1997***
- ---------------------------------------------
<S> <C>
1 Year 42.84%
5 Year 19.59%
10 Year 13.08%
Since Inception 14.23%
</TABLE>

[GRAPH]

<PAGE>
HARTFORD LIFE INSURANCE COMPANY 41
- --------------------------------------------------------------------------------

TABLE OF CONTENTS
FOR
STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY........................
CALCULATION OF YIELD AND RETURN.......................................
Yield of the HVA Money Market Fund Sub-Account......................
Yield of the Hartford Bond Fund and Hartford Mortgage Securities
Fund Sub-Accounts..................................................
Calculation of Total Return.........................................
PERFORMANCE COMPARISONS...............................................
Yield and Total Return
VARIABLE ANNUITY PAYMENTS.............................................
Annuity Unit Value..................................................
Illustration of Calculation of Annuity Unit Value...................
Illustration of Variable Annuity Payments...........................
OTHER INFORMATION.....................................................
</TABLE>

<PAGE>

PART B

STATEMENT OF ADDITIONAL INFORMATION

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

Individual Single Premium Payment Immediate Variable Annuity Contract

Issued by

Hartford Life Insurance Company
and
Hartford Life Insurance Company Separate Account Two

THIS STATEMENT OF ADDITIONAL INFORMATION, DATED NOVEMBER 10, 1997, IS NOT A
PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ IN
CONJUNCTION WITH THE PROSPECTUS DATED NOVEMBER 10, 1997 FOR HARTFORD LIFE
INSURANCE COMPANY ("HARTFORD") SINGLE PURCHASE PAYMENT IMMEDIATE VARIABLE
ANNUITY CONTRACT WHICH IS REFERRED TO HEREIN.

THE PROSPECTUS SETS FORTH INFORMATION THAT A PROSPECTIVE INVESTOR SHOULD KNOW
BEFORE PURCHASING A CONTRACT. FOR A COPY OF THE PROSPECTUS, SEND A WRITTEN
REQUEST TO THE HOME OFFICE AT 200 HOPMEADOW STREET, SIMSBURY, CONNECTICUT
06070, OR TELEPHONE 1-800-862-6668.

<PAGE>

TABLE OF CONTENTS

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

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

Yield of the HVA Money Market Fund Sub-Account..................

Yield of the Hartford Bond Fund and Hartford Mortgage
Securities Fund Sub-Accounts..................................

Calculation of Total Return.....................................

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

Yield and Total Return..........................................

VARIABLE ANNUITY PAYMENTS............................................

Annuity Unit Value..............................................

Illustration of Calculation of Annuity Unit Value...............

Illustration of Variable Annuity Payments.......................

OTHER INFORMATION....................................................

<PAGE>

DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY

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

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

CALCULATION OF YIELD AND RETURN

YIELD OF THE HVA MONEY MARKET FUND SUB-ACCOUNT

As summarized in the Prospectus under the heading "Performance Related
Information," the yield of the HVA Money Market Fund Sub-Account for a seven
day period (the "base period") will be computed by determining the "net
change in value" (calculated as set forth below) of a hypothetical account
having a balance of one accumulation unit of the Sub-Account at the beginning
of the period, subtracting a hypothetical charge reflecting deductions from
Contract Owner accounts, and dividing the difference by the value of the
account at the beginning of the base period to obtain the base period return,
and then 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 effective yield is calculated by compounding the base period return by
adding 1, raising the sum to a power equal to 365/7 and subtracting 1 from
the result, according to the following formula:

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

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

THE CURRENT YIELD AND EFFECTIVE YIELD REFLECT RECURRING CHARGES ON THE
SEPARATE ACCOUNT LEVEL.

HVA MONEY MARKET FUND SUB-ACCOUNT

The yield and effective yield for the seven day period ending September 30,
1997 for the HVA Money Market Fund Sub-Account was as follows:

Yield 3.86%
Effective Yield 3.94%

<PAGE>

YIELDS OF THE HARTFORD BOND FUND AND HARTFORD MORTGAGE SECURITIES FUND
SUB-ACCOUNTS

As summarized in the Prospectus under the heading "Performance Related
Information," yields of these two Sub-Accounts will be computed by
annualizing a recent month's net investment income, divided by a Fund share's
net asset value on the last trading day of that month. Net changes in the
value of a hypothetical account will assume the change in the underlying
mutual 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 Hartford Bond Fund and Hartford 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 Hartford Bond Fund and Hartford Mortgage
Securities Fund.

THE YIELD REFLECTS RECURRING CHARGES ON THE SEPARATE ACCOUNT LEVEL.

HARTFORD BOND FUND AND
HARTFORD MORTGAGE SECURITIES FUND SUB-ACCOUNTS

Yield calculations of the Sub-Accounts used for illustration purposes reflect
the interest earned by the Sub-Accounts, less applicable asset charges
assessed against a Contract Owner's account over the base period. Yield
quotations based on a 30 day period ended September 30, 1997 were computed by
dividing the dividends and interests earned during the period by the maximum
offering price per unit on the last day of the period, according to the
following formula:

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

Where A = Dividends and interest earned during the period.
B = Expenses accrued for the period (net of reimbursements).
C = The average daily number of units outstanding during the period that
were entitled to receive dividends.
D = The maximum offering price per unit on the last day of the period.

Hartford Bond Fund
Yield = 4.87%

Hartford Mortgage Securities Fund
Yield = 5.21%

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.

CALCULATION OF TOTAL RETURN

As summarized in the Prospectus under the heading "Performance Related
Information," total return is a measure of the change in value of an
investment in a Sub-Account over the period covered. The formula for total
return used herein includes three steps: (1) calculating the value of the
hypothetical initial investment of $1,000 as of the end of the period by
multiplying the total number of units owned at the end of the period by the
unit value per unit on the last trading day of the period; (2) assuming
redemption at the end of the period and deducting any applicable

<PAGE>

contingent deferred sales charge and (3) dividing this account value for the
hypothetical investor by the initial $1,000 investment and annualizing the
result for periods of less than one year. Total return will be calculated
for one year, five years and ten years or some other relevant periods if a
Sub-Account has not been in existence for at least ten years.

The following are the standardized average annual total return quotations for
the Sub-Accounts for the period ended September 30, 1997.

Sub-Accounts Since Inception 1 Year 5 Year 10 Year
- -------------------------------------------------------------------------------
Hartford Advisers Fund 10.01% 19.05% 11.34% 9.07%
Hartford Bond Fund 5.65% 1.25% 1.77% 5.39%
Hartford Capital Appreciation Fund 15.73% 26.25% 20.50% 13.59%
Hartford Dividend and Growth Fund 19.13% 27.11% n/a n/a
Hartford Index Fund 10.71% 28.90% 15.44% 9.92%
Hartford International Advisers Fund 8.45% 5.17% n/a n/a
Hartford International Opportunities Fund 3.69% 7.20% 8.26% n/a
Hartford MidCap Fund (3.12)% n/a n/a n/a
HVA Money Market Fund 4.36% (5.02)% (0.57)% 1.77%
Hartford Mortgage Securities Fund 5.59% (.59)% 1.35% 5.08%
Hartford Small Company Fund 20.40% 17.36% n/a n/a
Hartford Stock Fund 12.63% 28.03% 16.89% 10.23%

<PAGE>

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 following are the non-standardized annualized total return quotations for
the Sub-Accounts for the period ended September 30, 1997.

Sub-Accounts Since Inception 1 Year 5 Year 10 Year
- -------------------------------------------------------------------------------
Hartford Advisers Fund 11.92% 28.05% 14.49% 11.46%
Hartford Bond Fund 7.68% 10.25% 5.44% 7.71%
Hartford Capital Appreciation Fund 17.25% 35.25% 23.02% 15.91%
Hartford Dividend and Growth Fund 22.87% 36.11% n/a n/a
Hartford Index Fund 13.20% 37.90% 18.49% 12.57%
Hartford International Advisers Fund 13.32% 14.17% n/a n/a
Hartford International Opportunities Fund 6.96% 16.20% 11.39% n/a
Hartford MidCap Fund 5.88% 8.41% 5.06% 7.41%
HVA Money Market Fund 6.35% 3.98% 3.21% 4.46%
Hartford Mortgage Securities Fund 7.72% 8.41% 5.06% 7.41%
Hartford Small Company Fund 30.60% 26.36% n/a n/a
Hartford Stock Fund 14.02% 37.03% 19.78% 12.82%

PERFORMANCE COMPARISONS

YIELD AND TOTAL RETURN

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

5
<PAGE>

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, 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
issues are not included in the SL Government Index.

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

The Composite Index for Hartford Advisers 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%).

VARIABLE ANNUITY PAYMENTS

ANNUITY UNIT VALUE

The value of an Annuity Unit is calculated at the same time that the value of
an Accumulation Unit is calculated and is based on the same values for Fund
shares and other assets and liabilities. (See "Annuity Payments" in the
Prospectus.) The Annuity Unit Value for each Sub-Account's first Valuation
Period was set at $10. The Annuity Unit Value of each Sub-Account for any
subsequent Valuation Period is equal to (a) multiplied by (b) divided by (c)
where:

(a) is the Net Investment Factor for the Valuation Period for which the
Annuity Unit Value is being calculated;

(b) is the Annuity Unit Value for the preceding Valuation Period; and

(c) is a daily Assumed Investment Return factor (for the 3%, 5% or 6%
Assumed Investment Return) adjusted for the number of days in the
Valuation Period.

The Assumed Investment Return factor is equal to one plus the applicable
percentage. Therefore, for 3%, it is 1.03, for 4% it is 1.04 and for 6% it
is 1.06. The annual factors can be translated into daily factor of
1.000080986, 1.00010746, and 1.000159654, respectively.

<PAGE>

If a Contract Owner selects a 5% Assumed Investment Return rate and if the
net investment return of the Sub-Account for an Annuity Payment period is
equal to the pro-rated portion of the 5% Assumed Investment Return, the
Variable Annuity Payment attributable to that Sub-Account for that period
will equal the Payment for the prior period. To the extent that such net
investment return exceeds an annualized rate of return of 5% for a Payment
period, the Payment for that period will be greater than the Payment for the
prior period and to the extent that such return for a period falls short of
an annualized rate of 5%, the Payment for that period will be less than the
Payment for the prior period.

The following illustrations show, by use of hypothetical examples, the method
of determining the Annuity Unit Value and the amount of several Variable
Annuity Payments based on one Sub-Account.

ILLUSTRATION OF CALCULATION OF ANNUITY UNIT VALUE

1. Annuity Unit Value for immediately preceding
Valuation Period 10.00000000
2. Net Investment Factor 1.00036164
3. Daily factor to compensate for Assumed Investment Return of 5% 1.00013368
4. Adjusted Net Investment Factor (2)/(3) 1.00028063
5. Annuity Unit Value for current Valuation Period (4)x(1) 10.00280630

ILLUSTRATION OF VARIABLE ANNUITY PAYMENTS
(assuming no premium tax is applicable)

1. Number of Accumulation Units at Annuity Date 1,000.00
2. Accumulation Unit Value 12.55548000
3. Adjusted Contract Value (1)x(2) $12,555.48
4. First monthly Annuity Payment per $1,000 of
adjusted Contract Value $9.63
5. First monthly Annuity Payment (3)x(4)/1,000 $120.91
6. Annuity Unit Value 10.00280630
7. Number of Annuity Units (5)/(6) 12.08760785
8. Assume Annuity Unit value for second month equal to 10.04000000
9. Second Monthly Annuity Payment (7)X(8) $121.36
10. Assume Annuity Unit value for third month equal to 10.05000000
11. Third Monthly Annuity Payment (7)X(10) $121.48

OTHER INFORMATION

A registration statement has been filed with the Securities and Exchange
Commission ("SEC") under the Securities Act of 1933, as amended, with respect
to the Contracts discussed in this Statement of Additional Information. Not
all the information set forth in the registration statement, amendments and
exhibits thereto has been included in this Statement of Additional
Information. Statements contained in this Statement of Additional
Information concerning the content of the Contracts and other legal
instruments are summaries. For a complete statement of the terms of these
documents, reference should be made to the instruments filed with the SEC.

<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

The following unaudited financial statements, reflect, in the opinion of
management, all adjustments which are of normal recurring nature necessary to
present fairly the financial position, the results of operations and the cash
flows for the periods presented. Certain reclassifications of prior year
results were made to conform to current presentation. Interim results are not
indicative of the results which may be expected for any other interim period
or the full year. Statements contained in this discussion, other than
statements of historical fact, are forward-looking statements. These
statements are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. The forward-looking statements are
made based upon management's expectations and beliefs concerning future
developments and their potential effect on Hartford Life Insurance Company
("the Company"). There can be no assurance that future developments will be
in accordance with management's expectations or that the effect of these
future developments on the Company will be those anticipated by management.
Actual results could differ materially from those expected by the Company,
depending on the outcome of certain factors, including those described with
the forward-looking statements. For a description of accounting policies, see
Note 1 to Consolidated Financial Statements in the 1996 Form 10-K. The
Company is an indirect subsidiary of Hartford Life, Inc. ("HLI"). Accordingly,
the financial statements presented below are a partial disclosure of HLI's
financials. For a full disclosure of HLI's operations, refer to the HLI 10Q,
as filed with the Securities and Exchange Commission as of June 30, 1997.

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions)

QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- ----------------------
1997 1996 1997 1996
--------- --------- ----------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenues
Premiums and other considerations........................................... $ 323 $ 299 $ 633 $ 943
Net investment income....................................................... 322 318 659 651
Net realized capital gains(losses).......................................... 0 (1) 4 (1)
--------- --------- ----------- ---------
Total revenues.......................................................... 645 616 1,296 1,593
--------- --------- ----------- ---------
Benefits, claims and expenses
Benefits, claims and claim adjustment expenses.............................. 310 392 652 788
Amortization of deferred policy acquisition costs........................... 91 63 172 129
Dividends to policyholders.................................................. 18 61 72 347
Other insurance expenses.................................................... 117 34 190 198
--------- --------- ----------- ---------
Total benefits, claims and expenses..................................... 536 550 1,086 1,462
--------- --------- ----------- ---------
Income before income tax expense............................................ 109 66 210 131
Income tax expense.......................................................... 35 23 73 45
--------- --------- ----------- ---------
Net income.................................................................. $ 74 $ 43 $ 137 $ 86
--------- --------- ----------- ---------
--------- --------- ----------- ---------
</TABLE>

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities, available for sale, at fair value (amortized cost $13,797
and $13,579)................................................................ $ 13,844 $ 13,624
Equity securities, available for sale, at fair value.......................... 137 119
Mortgage loans, at outstanding balance........................................ -- 2
Policy loans, at outstanding balance.......................................... 3,754 3,836
Other investments, at cost.................................................... 50 54
---------- ----------
Total investments............................................................. 17,785 17,635

Cash............................................................................ 77 43
Premiums and amounts receivable................................................. 58 137
Reinsurance recoverable......................................................... 6,362 6,259
Accrued investment income....................................................... 359 407
Deferred policy acquisition costs............................................... 2,989 2,760
Deferred income tax............................................................. 466 474
Other assets.................................................................... 308 357
Separate account assets......................................................... 58,970 49,690
---------- ----------
Total assets.................................................................. $ 87,374 $ 77,762
---------- ----------
---------- ----------
Liabilities and Stockholders' Equity
Future policy benefits.......................................................... $ 2,889 $ 2,474
Other policyholder funds........................................................ 21,279 22,134
Other liabilities............................................................... 2,204 1,572
Separate account liabilities.................................................... 58,970 49,690
---------- ----------
Total liabilities............................................................. 85,342 75,870
---------- ----------
Common stock--authorized 1,000 shares, $5,690 par value, issued and outstanding
1,000 shares.................................................................. 6 6
Additional paid-in capital...................................................... 1,045 1,045
Unrealized gain on investments, net of tax...................................... 33 30
Retained earnings............................................................... 948 811
---------- ----------
Total stockholders' equity.................................................... 2,032 1,892
---------- ----------
Total liabilities and stockholders' equity.................................. $ 87,374 $ 77,762
---------- ----------
---------- ----------
</TABLE>

4
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN MILLIONS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
--------------------
1997 1996
--------- ---------
(UNAUDITED)
<S> <C> <C>
Operating Activities:
Net income..................................................................................... $ 137 $ 86
Adjustments to net income:
Net realized capital (gains) losses on sale of investments................................... (4) 1
Net increase in deferred policy acquisition costs............................................ (229) (300)
Net amortization of premium on fixed maturities.............................................. 0 7
Decrease (increase) in deferred income tax benefit........................................... 9 (88)
Decrease in premiums and amounts receivable.................................................. 92 20
Decrease in other assets..................................................................... 50 26
Increase in reinsurance recoverable.......................................................... (251) (264)
Increase in liability for future policy benefits............................................. 415 304
Increase in other liabilities................................................................ 146 150
Decrease (increase) in accrued investment income............................................. 48 (5)
--------- ---------
Cash provided by (used for) operating activities............................................... 413 (63)
--------- ---------
Investing Activities:
Purchases of fixed maturities investments...................................................... (3,801) (2,717)
Sales of fixed maturities investments.......................................................... 2,274 1,348
Maturities and principal paydowns of fixed maturities investments.............................. 1,343 1,469
Net sales (purchases) of other investments..................................................... 110 (120)
Net sales of short-term investments............................................................ 138 232
--------- ---------
Cash provided by investing activities.......................................................... 64 212
--------- ---------
Financing Activities:
Net disbursements for investment and universal life-type contracts charged from policyholder
accounts..................................................................................... (443) (187)
Capital Contribution........................................................................... -- 38
--------- ---------
Cash used for financing activities............................................................. (443) (149)
--------- ---------
Net increase in cash........................................................................... 34 0
Cash at beginning of period.................................................................... 43 46
--------- ---------
Cash at end of period.......................................................................... $ 77 $ 46
--------- ---------
--------- ---------
</TABLE>

<PAGE>

Item 2. MANAGEMENT'S NARRATIVE ANALYSIS OF
RESULTS OF OPERATIONS
(in millions)

Quarter and Six Months Ended June 30, 1997 and 1996

SEGMENT RESULTS

SIX
QUARTER MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
------------- ---------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Annuity........................................................... $ 49 $ 37 $ 92 $ 70
Individual Life Insurance......................................... 12 10 23 19
Employee Benefits................................................. 9 6 15 14
Guaranteed Investment Contracts................................... -- (15) -- (30)
Corporate Operation............................................... 4 5 7 13
--- --- ------- ----
Net Income........................................................ $ 74 $ 43 $ 137 $ 86
--- --- ------- ----
--- --- ------- ----

</TABLE>

Net income increased $31, or 72%, and $51, or 59%, for the second quarter
and six months ended June 30, 1997, respectively, over prior year. This increase
is reflective of continued, solid growth in both the Annuity and Individual Life
Insurance segments. Net income in the Annuity segment increased due to higher
fee income on growing account values as well as strong new business sales. Net
income in the Individual Life Insurance segment increased due to cost of
insurance charges and other fee income on a growing block of life insurance
in-force, as well as favorable mortality results. Guaranteed Investment
Contracts reported no net income in the second quarter of 1997 consistent with
management's expectations that net income subsequent to 1996 will be immaterial.

ANNUITY

<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues.......................................................................... $ 308 $ 232 $ 588 $ 466
Expenses.......................................................................... 259 195 496 396
--------- --------- --------- ---------
Net Income........................................................................ $ 49 $ 37 $ 92 $ 70
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>

Revenues, which are primarily comprised of investment income and management
and maintenance fees, grew $76, or 33%, to $308 in the second quarter of 1997
and $122, or 26%, to $588 for the six months ended June 30, 1997. This growth
resulted from an increase in the average account value, primarily driven by
individual variable annuities, of $14.2 billion, or 35%, to $55.2 billion as of
June 30, 1997 from $41.0 billion as of June 30, 1996. This is a result of
approximately $10 billion in new sales of individual annuities over the last
twelve months and market appreciation. Additionally, new individual annuity
sales were approximately $2.5 billion and $5.1 billion for the second quarter
and six months ended June 30, 1997, respectively, similar to sales of $2.7
billion and $4.9 billion, respectively, for the same periods of 1996. Growth in
the assets under management by this segment also resulted in increased expenses
related to other insurance expenses, amortization of deferred policy acquisition
costs and taxes. Expenses increased $64, or 33%, to $259 in the second quarter
of 1997 and $100, or 25%, to $496 for the six months ended June 30, 1997. Net
income increased $12, or 32%, to $49 in the second quarter of 1997 and $22, or
31%, to $92 for the six months ended June 30, 1997.

6
<PAGE>

INDIVIDUAL LIFE INSURANCE

<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues.......................................................................... $ 125 $ 101 $ 236 $ 216
Expenses.......................................................................... 113 91 213 197
--------- --------- --------- ---------
Net Income........................................................................ $ 12 $ 10 $ 23 $ 19
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>

Revenues increased $24, or 24%, to $125 in the second quarter of 1997 and
$20, or 9%, to $236 for the six months ended June 30, 1997. In the first quarter
of 1996, a block of business was assumed from Investors Equity which increased
revenues by $9. Excluding this transaction, year to date revenues increased $29,
or 14% over prior year. This growth was driven by increased cost of insurance
charges and other fee income earned on this growing block of business. Life
insurance in-force grew approximately $3.3 billion, or 6%, as of June 30, 1997
over the prior period, primarily due to sales of variable life products.
Expenses in this segment increased $22, or 24%, to $113 and $16, or 8%, in the
second quarter of 1997 and for the six months ended June 30, 1997, respectively,
over the same period last year, consistent with a growing block of business. As
a result, net income increased $2, or 20%, to $12 in the second quarter of 1997
and $4, or 21%, to $23 for the six months ended June 30, 1997.

EMPLOYEE BENEFITS

<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues.......................................................................... $ 142 $ 210 $ 321 $ 753
Expenses.......................................................................... 133 204 306 739
--------- --------- --------- ---------
Net Income........................................................................ $ 9 $ 6 $ 15 $ 14
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>

Revenues declined $68, or 32%, to $142 in the second quarter of 1997 and
$432, or 57%, for the six months ended June 30, 1997 over the same period last
year. This decline is mainly related to the passage of the Health Insurance
Portability and Accountability Act of 1996, which effectively eliminated all
future sales of leveraged COLI. Expenses declined $71, or 35%, in the second
quarter of 1997 and $433, or 59%, for the six months ended June 30, 1997, over
the same period last year. Significant declines in benefits, claims and claim
adjustment expenses and policyholder dividends are the result of the decline of
the block of COLI business. As a result, net income increased $3, or 50%, in the
second quarter of 1997 and $1, or 7%, for the six months ended June 30, 1997.

GUARANTEED INVESTMENT CONTRACTS

<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- --------------------
1997 1996 1997 1996
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues............................................................................ $ 62 $ 67 $ 134 $ 140
Expenses............................................................................ 62 82 134 170
---------- --------- --------- ---------
Net Income.......................................................................... $ -- $ (15) $ -- $ (30)
---------- --------- --------- ---------
---------- --------- --------- ---------

</TABLE>

This segment had no net income for the three and six months ended June 30,
1997, as compared to losses of $15 and $30 for the same periods last year. These
results are consistent with management's expectations that net income (loss)
from Closed Book GRC in the years subsequent to 1996 will be immaterial based on
the

<PAGE>

Company's current projections for the performance of the assets and
liabilities associated with Closed Book GRC due to actions taken in the third
quarter of 1996.

HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS

HARTFORD LIFE INC. INITIAL PUBLIC OFFERING

On February 10, 1997, HLI, an indirect parent of the Company, filed a
registration statement with the Securities and Exchange Commission, as
amended, relating to an Initial Public Offering ("IPO") of up to 20% of HLI's
Class A common stock. Pursuant to the IPO on May 22, 1997, HLI sold to the
public 26 million shares at $28.25 per share and received net proceeds of
$687. Of the proceeds, $527 was used to retire debt related to HLI's
promissory notes outstanding and the line of credit discussed in the note
below with the remaining $160 contributed to HLI's insurance subsidiaries to
be used for working capital and other general corporate purposes.

The 26 million shares sold from the IPO represent approximately 18.6% of the
equity ownership in HLI and approximately 4.4% of the combined voting power of
HLI's Class A and Class B Common Stock. The Hartford Financial Services Group,
Inc. ("The Hartford"), an indirect parent of HLI, owns all of the 114 million
outstanding shares of Class B Common Stock of HLI, representing 81.4% of the
equity ownership in HLI and approximately 95.6% of the combined voting power of
HLI's Class A and Class B Common Stock. Holders of Class A Common Stock
generally have identical rights to the holders of Class B Common Stock except
that the holders of Class A Common Stock are entitled to one vote per share
while holders of Class B Common Stock are entitled to five votes per share on
all matters submitted to a vote of the HLI stockholders.

HARTFORD LIFE INC. DEBT OFFERING

On February 7, 1997, HLI declared a dividend of $1,184 payable to its direct
parent, Hartford Accident and Indemnity Company ("HA&I"). As a result, HLI
borrowed $1,084 on February 18, 1997, pursuant to a $1,300 line of credit, with
interest payable at the two-month Eurodollar rate plus 15 basis points, which,
together with a promissory note in the amount of $100, was paid as a dividend to
HA&I on February 20, 1997. Of the $1,184 dividend, $893 constituted a repayment
of the portion of HLI's third party indebtedness internally allocated, for
financial reporting purposes, to HLI's insurance subsidiaries (the "Allocated
Advances"). In addition, on April 4, 1997, HLI declared and paid a dividend of
$25 to its parent in the form of a promissory note. Subsequently, $12 of this
note was forgiven in the form of a capital contribution from HA&I.

On February 14, 1997, HLI filed a shelf registration statement for the
issuance and sale of up to $1.0 billion in the aggregate of senior debt
securities, subordinated debt securities and preferred stock. On June 17, 1997,
HLI issued $650 of unsecured redeemable long-term debt in the form of notes and
debentures. Of this amount, $200 was in the form of 6.90% notes due June 15,
2004, $200 of 7.10% notes due June 15, 2007, and $250 of 7.65% debentures due
June 15, 2027. Interest on each of the notes and debentures is payable
semi-annually on June 15 and December 15, of each year, commencing December 15,
1997. HLI also issued $50 of short-term debt in the form of commercial paper. Of
the proceeds from this issuance, $670 was used to retire the remaining balance
on the $1,300 line of credit with the remainder being used for working capital
and other general corporate purposes. Subsequently, HLI reduced the capacity of
the line of credit from $1,300 to $250, which will be primarily used to support
the commercial paper program.

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

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Hartford Life Insurance Company and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Hartford Life
Insurance Company (a Connecticut corporation and wholly-owned subsidiary of
Hartford Life and Accident Insurance Company) and subsidiaries as of December
31, 1996 and 1995, and the related consolidated statements of income,
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 1996. These consolidated financial statements and the
schedules referred to below are the responsibility of Hartford Life Insurance
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and schedules based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Hartford Life Insurance Company and subsidiaries as of December 31, 1996 and
1995, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996 in conformity with generally
accepted accounting principles.

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

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

ARTHUR ANDERSEN LLP

Hartford, Connecticut
February 10, 1997

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

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

CONSOLIDATED STATEMENTS OF INCOME

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

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

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

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

CONSOLIDATED BALANCE SHEETS

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

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

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

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

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

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

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

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

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

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

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

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

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

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

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

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

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

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

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

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

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

2. SIGNIFICANT ACCOUNTING POLICIES

(A) BASIS OF PRESENTATION

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

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

(B) CHANGES IN ACCOUNTING PRINCIPLES

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

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

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

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

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

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

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

(D) FUTURE POLICY BENEFITS AND OTHER POLICYHOLDER FUNDS

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

(E) DEFERRED POLICY ACQUISITION COSTS

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

(F) POLICYHOLDER REALIZED CAPITAL GAINS AND LOSSES

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

(G) FOREIGN CURRENCY TRANSLATION

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

(H) INVESTMENTS

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

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

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

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

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

(I) DERIVATIVE FINANCIAL INSTRUMENTS

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

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

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

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

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

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

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

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

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

(J) RELATED PARTY TRANSACTIONS

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

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

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

(K) DIVIDENDS TO POLICYHOLDERS

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

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

3. INVESTMENTS

(A) COMPONENTS OF NET INVESTMENT INCOME

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

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

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

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

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

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

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

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

(E) COMPONENTS OF FIXED MATURITIES INVESTMENTS

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

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

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

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

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

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

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

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

(F) CONCENTRATION OF CREDIT RISK

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

(G) DERIVATIVE INVESTMENTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(H) FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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

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

4. INCOME TAX

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

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

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

Income tax expense was as follows:

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

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

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

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

Deferred tax assets (liabilities) included the following:

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

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

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

5. REINSURANCE

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

Life insurance net retained premiums were comprised of the following:

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

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

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

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

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

6.PENSION PLANS AND OTHER POSTRETIREMENT
BENEFITS

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

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

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

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

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

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

7. BUSINESS SEGMENT INFORMATION

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

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

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

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

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

8. STATUTORY NET INCOME AND SURPLUS

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

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

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

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

9. SEPARATE ACCOUNTS

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

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

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

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

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

10. COMMITMENTS AND CONTINGENCIES

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

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

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

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

11. SUBSEQUENT EVENTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[STAG]
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 217,428,760
Cost $ 221,257,731
Market Value......... $220,277,511 -- -- --
Hartford Stock Fund,
Inc.
Shares 360,511,041
Cost $1,095,089,340
Market Value......... -- $1,727,199,388 -- --
HVA Money Market Fund,
Inc.
Shares 280,864,766
Cost $ 280,864,766
Market Value......... -- -- $280,864,766 --
Hartford Advisers Fund,
Inc.
Shares 1,439,652,483
Cost $2,459,139,610
Market Value......... -- -- -- $3,438,998,662
Hartford Capital
Appreciation Fund,
Inc.
Shares 397,889,201
Cost $1,178,316,710
Market Value......... -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 181,339,786
Cost $ 195,501,188
Market Value......... -- -- -- --
Hartford Index Fund,
Inc.
Shares 138,137,660
Cost $ 249,632,280
Market Value......... -- -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 314,608,569
Cost $ 366,204,454
Market Value......... -- -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 286,270,239
Cost $ 393,365,481
Market Value......... -- -- -- --
Hartford International
Advisers Fund, Inc.
Shares 38,845,852
Cost $ 44,310,166
Market Value......... -- -- -- --
Hartford Small Company
Fund, Inc.
Shares 29,408,756
Cost $ 31,218,685
Market Value......... -- -- -- --
Due from Hartford Life
Insurance Company.... 50,337 1,115,575 231,455 727,173
Receivable from fund
shares sold.......... 119,456 209,028 2,535,392 131,002
------------ -------------- ------------ --------------
Total Assets........... 220,447,304 1,728,523,991 283,631,613 3,439,856,837
------------ -------------- ------------ --------------
LIABILITIES
Due to Hartford Life
Insurance Company.... 119,428 208,724 2,530,346 130,886
Payable for fund shares
purchased............ 50,138 1,113,974 231,370 726,479
------------ -------------- ------------ --------------
Total Liabilities...... 169,566 1,322,698 2,761,716 857,365
------------ -------------- ------------ --------------
Net Assets (variable
annuity contract
liabilities)......... $220,277,738 $1,727,201,293 $280,869,897 $3,438,999,472
------------ -------------- ------------ --------------
------------ -------------- ------------ --------------
</TABLE>

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

18
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ------------ ------------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 217,428,760
Cost $ 221,257,731
Market Value......... -- -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 360,511,041
Cost $1,095,089,340
Market Value......... -- -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 280,864,766
Cost $ 280,864,766
Market Value......... -- -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 1,439,652,483
Cost $2,459,139,610
Market Value......... -- -- -- -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 397,889,201
Cost $1,178,316,710
Market Value......... $1,648,278,297 -- -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 181,339,786
Cost $ 195,501,188
Market Value......... -- $193,970,646 -- -- -- --
Hartford Index Fund,
Inc.
Shares 138,137,660
Cost $ 249,632,280
Market Value......... -- -- $363,305,496 -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 314,608,569
Cost $ 366,204,454
Market Value......... -- -- -- $451,300,645 -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 286,270,239
Cost $ 393,365,481
Market Value......... -- -- -- -- $511,635,053 --
Hartford International
Advisers Fund, Inc.
Shares 38,845,852
Cost $ 44,310,166
Market Value......... -- -- -- -- -- $46,699,668
Hartford Small Company
Fund, Inc.
Shares 29,408,756
Cost $ 31,218,685
Market Value......... -- -- -- -- -- --
Due from Hartford Life
Insurance Company.... 2,502,290 8,476 383,101 471 1,225,901 217,616
Receivable from fund
shares sold.......... 1,715 141,113 3,680 163,361 173 17
----------------- --------------- ------------ ------------------ ------------ -------------
Total Assets........... 1,650,782,302 194,120,235 363,692,277 451,464,477 512,861,127 46,917,301
----------------- --------------- ------------ ------------------ ------------ -------------
LIABILITIES
Due to Hartford Life
Insurance Company.... 1,715 136,900 3,594 163,115 145 16
Payable for fund shares
purchased............ 2,500,799 8,477 383,149 471 1,225,670 217,630
----------------- --------------- ------------ ------------------ ------------ -------------
Total Liabilities...... 2,502,514 145,377 386,743 163,586 1,225,815 217,646
----------------- --------------- ------------ ------------------ ------------ -------------
Net Assets (variable
annuity contract
liabilities)......... $1,648,279,788 $193,974,858 $363,305,534 $451,300,891 $511,635,312 $46,699,655
----------------- --------------- ------------ ------------------ ------------ -------------
----------------- --------------- ------------ ------------------ ------------ -------------

<CAPTION>
SMALL
COMPANY FUND
SUB-ACCOUNT
------------
<S> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.

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

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

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

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

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

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

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

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

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

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

Cost
Market Value......... $34,569,551
Due from Hartford Life
Insurance Company.... 343,240
Receivable from fund
shares sold.......... 8
------------
Total Assets........... 34,912,799
------------
LIABILITIES
Due to Hartford Life
Insurance Company.... 12
Payable for fund shares
purchased............ 343,242
------------
Total Liabilities...... 343,254
------------
Net Assets (variable
annuity contract
liabilities)......... $34,569,545
------------
------------
</TABLE>

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

19
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)

<TABLE>
<CAPTION>
CALVERT SMITH BARNEY SMITH BARNEY
RESPONSIBLY INVESTED CASH PORTFOLIO SMITH BARNEY GOVERNMENT PORTFOLIO
BALANCED PORTFOLIO CLASS A APPRECIATION FUND CLASS A
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------------- -------------- ----------------- --------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Calvert Responsibly
Invested Balanced
Portfolio
Shares 1,484,734
Cost $2,367,631
Market Value......... $2,910,078 -- -- --
Smith Barney Cash
Portfolio Class A
Shares 529,564
Cost $ 529,564
Market Value......... -- $529,565 -- --
Smith Barney
Appreciation Fund,
Inc.
Shares 10,725
Cost $ 66,329
Market Value......... -- -- $160,824 --
Smith Barney Government
Portfolio Class A
Shares 40,588
Cost $ 40,588
Market Value......... -- -- -- $40,588
TCI Advantage Fund
Shares 30,981
Cost $ 189,042
Market Value......... -- -- -- --
TCI Growth Fund
Shares 133,728
Cost $1,497,887
Market Value......... -- -- -- --
Fidelity VIP Overseas
Fund
Shares 84,336
Cost $1,487,983
Market Value......... -- -- -- --
Fidelity VIP II Asset
Manager Fund
Shares 144,420
Cost $2,261,497
Market Value......... -- -- -- --
Fidelity VIP II
Contrafund Fund
Shares 526,916
Cost $7,805,893
Market Value......... -- -- -- --
Fidelity VIP Growth
Fund
Shares 257,023
Cost $7,645,599
Market Value......... -- -- -- --
BB&T Growth and Income
Fund
Shares 57,851
Cost $ 604,979
Market Value......... -- -- -- --
Dividends receivable... -- 1,106 -- 91
Due from Hartford Life
Insurance Company.... 1,036 -- -- --
Receivable from fund
shares sold.......... -- -- 14 7
----------- -------------- -------- -------
Total Assets........... 2,911,114 530,671 160,838 40,686
----------- -------------- -------- -------
LIABILITIES
Due to Hartford Life
Insurance Company.... -- 236 209 68
Payable for fund shares
purchased............ 457 27,259 -- --
----------- -------------- -------- -------
Total Liabilities...... 457 27,495 209 68
----------- -------------- -------- -------
Net Assets (variable
annuity contract
liabilities)......... $2,910,657 $503,176 $160,629 $40,618
----------- -------------- -------- -------
----------- -------------- -------- -------
</TABLE>

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

20
<PAGE>
<TABLE>
<CAPTION>
TCI TCI FIDELITY VIP FIDELITY VIP II FIDELITY VIP II FIDELITY VIP
ADVANTAGE FUND GROWTH FUND OVERSEAS FUND ASSET MANAGER FUND CONTRAFUND FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- ------------- --------------- ------------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Calvert Responsibly
Invested Balanced
Portfolio
Shares 1,484,734
Cost $2,367,631
Market Value......... -- -- -- -- -- --
Smith Barney Cash
Portfolio Class A
Shares 529,564
Cost $ 529,564
Market Value......... -- -- -- -- -- --
Smith Barney
Appreciation Fund,
Inc.
Shares 10,725
Cost $ 66,329
Market Value......... -- -- -- -- -- --
Smith Barney Government
Portfolio Class A
Shares 40,588
Cost $ 40,588
Market Value......... -- -- -- -- -- --
TCI Advantage Fund
Shares 30,981
Cost $ 189,042
Market Value......... $193,320 -- -- -- -- --
TCI Growth Fund
Shares 133,728
Cost $1,497,887
Market Value......... -- $1,291,815 -- -- -- --
Fidelity VIP Overseas
Fund
Shares 84,336
Cost $1,487,983
Market Value......... -- -- $1,690,088 -- -- --
Fidelity VIP II Asset
Manager Fund
Shares 144,420
Cost $2,261,497
Market Value......... -- -- -- $2,397,374 -- --
Fidelity VIP II
Contrafund Fund
Shares 526,916
Cost $7,805,893
Market Value......... -- -- -- -- $9,447,608 --
Fidelity VIP Growth
Fund
Shares 257,023
Cost $7,645,599
Market Value......... -- -- -- -- -- $8,790,195
BB&T Growth and Income
Fund
Shares 57,851
Cost $ 604,979
Market Value......... -- -- -- -- -- --
Dividends receivable... -- -- -- -- -- --
Due from Hartford Life
Insurance Company.... 84 472 1,000 4,178 1,990 288
Receivable from fund
shares sold.......... -- -- -- -- -- --
-------- ------------- --------------- ------------------ --------------- ------------
Total Assets........... 193,404 1,292,287 1,691,088 2,401,552 9,449,598 8,790,483
-------- ------------- --------------- ------------------ --------------- ------------
LIABILITIES
Due to Hartford Life
Insurance Company.... -- -- -- -- -- --
Payable for fund shares
purchased............ 84 472 1,038 3,768 1,988 276
-------- ------------- --------------- ------------------ --------------- ------------
Total Liabilities...... 84 472 1,038 3,768 1,988 276
-------- ------------- --------------- ------------------ --------------- ------------
Net Assets (variable
annuity contract
liabilities)......... $193,320 $1,291,815 $1,690,050 $2,397,784 $9,447,610 $8,790,207
-------- ------------- --------------- ------------------ --------------- ------------
-------- ------------- --------------- ------------------ --------------- ------------

<CAPTION>
BB&T
GROWTH AND
INCOME FUND
SUB-ACCOUNT
------------
<S> <C>
ASSETS:
Investments:
Calvert Responsibly
Invested Balanced
Portfolio

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

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

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

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

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

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

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

Cost
Market Value......... --
Fidelity VIP II
Contrafund Fund

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

Cost
Market Value......... --
BB&T Growth and Income
Fund

Cost
Market Value......... $602,230
Dividends receivable... --
Due from Hartford Life
Insurance Company.... 99,497
Receivable from fund
shares sold.......... --
------------
Total Assets........... 701,727
------------
LIABILITIES
Due to Hartford Life
Insurance Company.... --
Payable for fund shares
purchased............ 99,497
------------
Total Liabilities...... 99,497
------------
Net Assets (variable
annuity contract
liabilities)......... $602,230
------------
------------
</TABLE>

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

21
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)

<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%....................... 282,016 $3.823736 $ 1,078,353
Bond Fund Non-Qualified 1.00%................... 1,962,165 3.765599 7,388,728
Bond Fund 1.25%................................. 99,520,198 1.981198 197,169,218
Bond Fund .25%.................................. 57,355 1.325698 76,035
Stock Fund Qualified 1.00%...................... 849,258 8.293869 7,043,631
Stock Fund Non-Qualified 1.00%.................. 3,295,779 7.930835 26,138,276
Stock Fund 1.25%................................ 355,507,099 4.302210 1,529,466,197
Stock Fund .25%................................. 1,059,065 2.271850 2,406,038
Money Market Fund Qualified 1.00%............... 1,244,554 2.516081 3,131,399
Money Market Fund Non-Qualified 1.00%........... 11,579,583 2.517273 29,148,972
Money Market Fund 1.25%......................... 149,215,806 1.617289 241,325,081
Money Market Fund .25%.......................... 354,760 1.206801 428,125
Advisers Fund Qualified 1.00%................... 3,437,846 5.010795 17,226,341
Advisers Fund Non-Qualified 1.00%............... 11,749,222 5.010795 58,872,945
Advisers Fund 1.25%............................. 984,615,801 3.349354 3,297,826,871
Advisers Fund .25%.............................. 1,055,878 1.877385 1,982,290
Capital Appreciation Fund Qualified 1.00%....... 863,992 7.674485 6,630,696
Capital Appreciation Fund Non-Qualified 1.00%... 2,603,742 7.670864 19,972,948
Capital Appreciation Fund 1.25%................. 334,697,221 4.565863 1,528,181,657
Capital Appreciation Fund .25%.................. 2,331,449 2.207977 5,147,786
Mortgage Securities Fund Qualified 1.00%........ 713,776 2.571320 1,835,346
Mortgage Securities Fund Non-Qualified 1.00%.... 7,471,227 2.571320 19,210,917
Mortgage Securities Fund 1.25%.................. 84,418,872 2.005984 169,342,907
Mortgage Securities Fund .25%................... 15,220 1.303519 19,840
Index Fund Qualified 1.00%...................... 54,922 1.341433 73,674
Index Fund Non-Qualified 1.00%.................. 440,438 1.341433 590,818
Index Fund 1.25%................................ 100,718,425 3.399356 342,377,781
Index Fund .25%................................. 211,954 2.189301 464,032
International Opportunities Fund Qualified
1.00%......................................... 354,863 1.653239 586,673
International Opportunities Fund Non-Qualified
1.00%......................................... 1,885,546 1.653181 3,117,148
International Opportunities Fund 1.25%.......... 267,926,998 1.624565 435,264,823
International Opportunities Fund .25%........... 746,247 1.826915 1,363,331
Dividend and Growth Fund Qualified 1.00%........ 332,050 1.976585 656,324
Dividend and Growth Fund Non-Qualified 1.00%.... 1,599,924 1.976585 3,162,385
Dividend and Growth Fund 1.25%.................. 253,696,757 1.960310 497,324,290
Dividend and Growth Fund .25%................... 267,095 2.026162 541,178
International Advisers Fund 1.00%............... 21,058 1.366085 28,767
International Advisers Fund Non-Qualified
1.00%......................................... 420,078 1.366085 573,863
International Advisers Fund 1.25%............... 33,895,106 1.358144 46,034,434
</TABLE>

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

22
<PAGE>
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
INDIVIDUAL SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
International Advisers Fund .25%................ 39,807 $1.390172 $ 55,339
Hartford Small Company 1.00%.................... 24,280 1.173269 28,486
Hartford Small Company Non-Qualified 1.00%...... 223,230 1.173269 261,909
Hartford Small Company 1.25%.................... 29,232,195 1.170679 34,221,517
Hartford Small Company .25%..................... 48,797 1.181087 57,633
Smith Barney Cash Portfolio Class A Qualified
1.00%......................................... 55,174 2.721193 150,138
Smith Barney Cash Portfolio Class A
Non-Qualified 1.00%........................... 125,371 2.815956 353,038
Smith Barney Appreciation Fund, Inc. Qualified
1.00%......................................... 18,647 8.614250 160,629
Smith Barney Government Portfolio Class A
Qualified 1.00%............................... 16,556 2.453452 40,618
BB&T Growth and Income Fund..................... 578,917 1.040270 602,230
--------------
Sub-total Individual Sub-Accounts............... 8,539,141,655
--------------
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP.................... 1,010,478 4.478533 4,525,460
Bond Fund 1.25% DCII............................ 1,539,128 4.315438 6,642,010
Bond Fund .15% DCII............................. 262,875 4.133299 1,086,541
Stock Fund Qualified 1.00% QP................... 3,263,756 13.869595 45,266,975
Stock Fund Qualified .825% QP................... 1,192,908 11.168396 13,322,865
Stock Fund Non-Qualified 1.00% NQ............... 87,765 10.882066 955,059
Stock Fund Non-Qualified .825% NQ............... 789,550 11.188011 8,833,493
Stock Fund 1.25% DCII........................... 4,821,873 13.364492 64,441,881
Stock Fund .15% DCII............................ 867,989 10.547521 9,155,127
Money Market Fund Qualified .375% QP............ 2,595 3.168032 8,221
Money Market Fund 1.25% DCII.................... 1,587,734 2.777708 4,410,263
Money Market Fund .15% DCII..................... 335,745 2.746154 922,008
Advisers Fund 1.25% DCII........................ 9,600,641 4.844391 46,509,261
Advisers Fund .15% DCII......................... 601,118 5.651353 3,397,129
Capital Appreciation Fund 1.25% DCII............ 10,312,433 7.439230 76,716,558
Capital Appreciation Fund .15% DCII............. 777,582 8.587008 6,677,100
Mortgage Securities Fund 1.25% DCII............. 1,015,955 2.492375 2,532,140
Mortgage Securities Fund .15% DCII.............. 104,151 2.858087 297,674
Index Fund 1.25% DCII........................... 4,693,759 3.409650 16,004,076
Index Fund .15% DCII............................ 441,901 3.745710 1,655,232
International Opportunities Fund 1.25% DCII..... 5,740,984 1.624795 9,327,922
International Opportunities Fund .15% DCII...... 461,592 1.754402 809,817
Dividend and Growth Fund........................ 5,053,208 1.763131 8,909,468
Calvert Responsibly Invested Balanced Portfolio
1.25% DCII.................................... 1,197,410 2.218681 2,656,671
TCI Advantage Fund.............................. 153,021 1.202568 184,018
TCI Growth Fund................................. 1,311,253 0.979806 1,284,774
Fidelity VIP Overseas Fund...................... 1,267,972 1.332876 1,690,050
</TABLE>

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

23
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
GROUP SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
Fidelity VIP II Asset Manager Fund.............. 1,763,898 $1.359367 $ 2,397,784
Fidelity VIP II Contrafund Fund................. 6,470,610 1.460006 9,447,129
Fidelity VIP Growth Fund........................ 6,392,047 1.374794 8,787,748
--------------
Sub-total Group Sub-Accounts.................... 358,854,454
--------------
TOTAL ACCUMULATION PERIOD......................... 8,897,996,109
--------------
ANNUITY CONTRACTS IN THE ANNUITY PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Bond Fund Non-Qualified 1.00%................... 15,732 3.765599 59,240
Bond Fund 1.25%................................. 334,625 1.981198 662,959
Stock Fund Non-Qualified 1.00%.................. 12,681 7.930835 100,569
Stock Fund 1.25%................................ 442,231 4.302210 1,902,570
Money Market Fund Qualified 1.00%............... 10,589 2.516081 26,644
Money Market Fund Non-Qualified 1.00%........... 84,262 2.517273 212,111
Money Market Fund 1.25%......................... 313,546 1.617289 507,094
Advisers Fund Qualified 1.00%................... 3,665 5.010795 18,366
Advisers Fund Non-Qualified 1.00%............... 62,660 5.010795 313,974
Advisers Fund 1.25%............................. 946,421 3.349354 3,169,899
Capital Appreciation Fund Non-Qualified 1.00%... 3,004 7.670864 23,045
Capital Appreciation Fund 1.25%................. 201,258 4.565863 918,915
Mortgage Securities Fund Non-Qualified 1.00%.... 79,761 2.571320 205,091
Mortgage Securities Fund 1.25%.................. 78,406 2.005984 157,281
Index Fund 1.25%................................ 78,209 3.399356 265,859
International Opportunities Fund 1.25%.......... 192,082 1.624565 312,050
Dividend and Growth Fund 1.25%.................. 246,744 1.960310 483,695
International Advisers Fund 1.25%............... 5,339 1.358144 7,252
--------------
Sub-total Individual Sub-Accounts............... 9,346,614
--------------
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP.................... 77,205 4.478533 345,765
Bond Fund 1.25% DCII............................ 272,608 4.315438 1,176,422
Bond Fund 1.00% DCII............................ 11,537 4.460860 51,465
Bond Fund .15% DCII............................. 3,760 4.133299 15,542
Stock Fund Qualified 1.00% QP................... 227,367 13.869595 3,153,489
Stock Fund Qualified .825% QP................... 49,128 11.168396 548,679
Stock Fund Non-Qualified 1.00% NQ............... 4,982 10.882066 54,218
Stock Fund Non-Qualified .825% NQ............... 50,126 11.188011 560,815
Stock Fund 1.25% DCII........................... 1,025,168 13.364492 13,700,854
Stock Fund 1.00% DCII........................... 2,741 13.826485 37,893
Stock Fund .15% DCII............................ 10,681 10.547521 112,662
</TABLE>

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

24
<PAGE>
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
GROUP SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
Money Market Fund 1.25% DCII.................... 269,999 $2.777708 $ 749,980
Advisers Fund 1.25% DCII........................ 1,971,182 4.844391 9,549,174
Advisers Fund .15% DCII......................... 23,573 5.651353 133,222
Capital Appreciation Fund 1.25% DCII............ 529,931 7.439230 3,942,277
Capital Appreciation Fund .15% DCII............. 8,013 8.587008 68,807
Mortgage Securities Fund 1.25% DCII............. 149,923 2.492375 373,663
Index Fund 1.25% DCII........................... 545,483 3.409650 1,859,905
Index Fund .15% DCII............................ 3,780 3.745710 14,157
International Opportunities Fund 1.25% DCII..... 303,002 1.624795 492,315
International Opportunities Fund .15% DCII...... 15,282 1.754402 26,811
Dividend and Growth Fund........................ 316,466 1.763131 557,972
Calvert Responsibly Invested Balanced Portfolio
1.25% DCII.................................... 114,476 2.218681 253,986
TCI Advantage Fund.............................. 7,735 1.202568 9,302
TCI Growth Fund................................. 7,186 0.979806 7,041
Fidelity VIP II Contrafund Fund................. 329 1.460006 481
Fidelity VIP Growth Fund........................ 1,789 1.374794 2,460
--------------
Sub-total Group Sub-Accounts.................... 37,799,357
--------------
TOTAL ANNUITY PERIOD.............................. 47,145,971
--------------
GRAND TOTAL....................................... $8,945,142,080
--------------
--------------
</TABLE>

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

25
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 4,733,036 $ 5,097,873 $ 7,021,833 $ 24,496,593
EXPENSES:
Mortality and expense
undertakings......... (1,289,997) (9,164,246) (1,664,430) (19,249,295)
------------ ------------ ----------- -------------
Net investment income
(loss)............. 3,443,039 (4,066,373) 5,357,403 5,247,298
------------ ------------ ----------- -------------
CAPITAL GAINS INCOME..... -- 71,973,235 -- 132,116,765
------------ ------------ ----------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (31,900) 607,278 -- 628,567
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 3,107,089 227,453,579 -- 312,426,850
------------ ------------ ----------- -------------
Net gain (losses) on
investments........ 3,075,189 228,060,857 -- 313,055,417
------------ ------------ ----------- -------------
Net increase
(decrease) in net
assets resulting
from operations.... $ 6,518,228 $295,967,719 $ 5,357,403 $ 450,419,480
------------ ------------ ----------- -------------
------------ ------------ ----------- -------------
</TABLE>

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

26
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 3,128,343 $ 4,303,677 $ 1,474,092 $ 395,895
EXPENSES:
Mortality and expense
undertakings......... (9,136,111) (1,178,522) (1,900,362) (2,561,363)
----------------- --------------- ----------- ------------------
Net investment income
(loss)............. (6,007,768) 3,125,155 (426,270) (2,165,468)
----------------- --------------- ----------- ------------------
CAPITAL GAINS INCOME..... 109,478,655 -- 22,884,800 30,519,853
----------------- --------------- ----------- ------------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (1,005,233) (112,444) (164,015) 8,425
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 96,267,429 2,638,602 33,535,096 10,861,580
----------------- --------------- ----------- ------------------
Net gain (losses) on
investments........ 95,262,196 2,526,158 33,371,081 10,870,005
----------------- --------------- ----------- ------------------
Net increase
(decrease) in net
assets resulting
from operations.... $198,733,083 $ 5,651,313 $55,829,611 $39,224,390
----------------- --------------- ----------- ------------------
----------------- --------------- ----------- ------------------

<CAPTION>
DIVIDEND AND INTERNATIONAL SMALL
GROWTH FUND ADVISERS FUND COMPANY FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 2,857,912 $1,605,717 $ 262
EXPENSES:
Mortality and expense
undertakings......... (2,515,630) (231,637) (141,128)
------------ ------------- ------------
Net investment income
(loss)............. 342,282 1,374,080 (140,866)
------------ ------------- ------------
CAPITAL GAINS INCOME..... 10,150,532 110,732 91,483
------------ ------------- ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (6,495) 690 (1,668)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 62,236,952 1,503,538 3,276,408
------------ ------------- ------------
Net gain (losses) on
investments........ 62,230,457 1,504,228 3,274,740
------------ ------------- ------------
Net increase
(decrease) in net
assets resulting
from operations.... $ 72,723,271 $2,989,040 $3,225,357
------------ ------------- ------------
------------ ------------- ------------
</TABLE>

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

27
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS -- (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)

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

28
<PAGE>
<TABLE>
<CAPTION>
TCI TCI FIDELITY VIP FIDELITY VIP II FIDELITY VIP II FIDELITY VIP
ADVANTAGE FUND GROWTH FUND OVERSEAS FUND ASSET MANAGER FUND CONTRAFUND FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- ----------- ------------- ------------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 2,818 $ -- $ 21,186 $ 65,855 $ 60,821 $ 48,646
EXPENSES:
Mortality and expense
undertakings......... (1,136) (6,761) (8,464) (12,831) (49,399) (48,202)
------- ----------- ------------- -------- --------------- ------------
Net investment income
(loss).............. 1,682 (6,761) 12,722 53,024 11,422 444
------- ----------- ------------- -------- --------------- ------------
CAPITAL GAINS INCOME..... 10,139 22,619 84,101 165,196 160,741 217,749
------- ----------- ------------- -------- --------------- ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 89 (3,791) 683 435 154 5,699
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (1,445) (57,157) 120,729 (9,093) 713,593 758,779
------- ----------- ------------- -------- --------------- ------------
Net gain (losses) on
investments......... (1,356) (60,948) 121,412 (8,658) 713,747 764,478
------- ----------- ------------- -------- --------------- ------------
Net increase
(decrease) in net
assets resulting
from operations..... $10,465 $(45,090) $218,235 $209,562 $885,910 $982,671
------- ----------- ------------- -------- --------------- ------------
------- ----------- ------------- -------- --------------- ------------

<CAPTION>
BB&T
GROWTH AND
INCOME FUND
SUB-ACCOUNT
-----------
<S> <C>
INVESTMENT INCOME:
Dividends.............. $ 579
EXPENSES:
Mortality and expense
undertakings......... (118)
-----------
Net investment income
(loss).............. 461
-----------
CAPITAL GAINS INCOME..... --
-----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (2,749)
-----------
Net gain (losses) on
investments......... (2,749)
-----------
Net increase
(decrease) in net
assets resulting
from operations..... $(2,288)
-----------
-----------
</TABLE>

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

29
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)

<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- ------------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 3,443,039 $ (4,066,373) $ 5,357,403 $ 5,247,298
Capital gains income... -- 71,973,235 -- 132,116,765
Net realized gain
(loss) on security
transactions......... (31,900) 607,278 -- 628,567
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 3,107,089 227,453,579 -- 312,426,850
------------ -------------- ------------- ---------------
Net increase (decrease)
in net assets
resulting from
operations........... 6,518,228 295,967,719 5,357,403 450,419,480
------------ -------------- ------------- ---------------
UNIT TRANSACTIONS:
Purchases.............. 13,847,694 104,846,284 34,668,657 186,510,446
Net transfers.......... (245,632) 27,946,859 (4,020,407) 3,559,095
Surrenders............. (9,879,067) (49,109,143) (38,289,911) (102,806,646)
Net annuity
transactions......... 306,483 838,711 320,586 610,016
------------ -------------- ------------- ---------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 4,029,478 84,522,711 (7,321,075) 87,872,911
------------ -------------- ------------- ---------------
Total increase
(decrease) in net
assets............... 10,547,706 380,490,430 (1,963,672) 538,292,391
NET ASSETS:
Beginning of period.... 209,730,032 1,346,710,863 282,833,569 2,900,707,081
------------ -------------- ------------- ---------------
End of period.......... $220,277,738 $1,727,201,293 $280,869,897 $3,438,999,472
------------ -------------- ------------- ---------------
------------ -------------- ------------- ---------------

HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996

MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- ------------- ---------------
OPERATIONS:
Net investment income
(loss)............... $ 10,412,614 $ 4,107,642 $ 9,440,440 $ 43,421,909
Capital gains income... -- 41,100,004 -- 53,115,059
Net realized gain
(loss) on security
transactions......... (262,277) 3,161,056 -- 1,874,522
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (5,517,884) 189,613,138 -- 276,364,776
------------ -------------- ------------- ---------------
Net increase (decrease)
in net assets
resulting from
operations........... 4,632,453 237,981,840 9,440,440 374,776,266
------------ -------------- ------------- ---------------
UNIT TRANSACTIONS:
Purchases.............. 27,446,873 174,128,189 70,557,174 322,583,889
Net transfers.......... (16,819,459) 27,816,288 67,229,895 (3,947,049)
Surrenders............. (16,860,465) (57,921,128) (52,794,253) (150,653,853)
Net annuity
transactions......... (32,192) (176,096) (239,109) 730,038
------------ -------------- ------------- ---------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... (6,265,243) 143,847,253 84,753,707 168,713,025
------------ -------------- ------------- ---------------
Total increase
(decrease) in net
assets............... (1,632,790) 381,829,093 94,194,147 543,489,291
NET ASSETS:
Beginning of period.... 211,362,822 964,881,770 188,639,422 2,357,217,790
------------ -------------- ------------- ---------------
End of period.......... $209,730,032 $1,346,710,863 $282,833,569 $2,900,707,081
------------ -------------- ------------- ---------------
------------ -------------- ------------- ---------------
</TABLE>

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

30
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- ----------------- --------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ (6,007,768) $ 3,125,155 $ (426,270) $ (2,165,468) $ 342,282
Capital gains income... 109,478,655 -- 22,884,800 30,519,853 10,150,532
Net realized gain
(loss) on security
transactions......... (1,005,233) (112,444) (164,015) 8,425 (6,495)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 96,267,429 2,638,602 33,535,096 10,861,580 62,236,952
----------------- ----------------- --------------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from
operations........... 198,733,083 5,651,313 55,829,611 39,224,390 72,723,271
----------------- ----------------- --------------- ------------------ ------------------
UNIT TRANSACTIONS:
Purchases.............. 94,710,759 4,456,981 33,356,421 19,944,432 73,472,726
Net transfers.......... (32,148,945) (6,866,387) 17,734,047 (3,150,956) 50,011,728
Surrenders............. (48,963,567) (9,023,857) (8,818,246) (15,631,474) (9,343,116)
Net annuity
transactions......... 148,037 (34,598) 400,681 118,506 436,782
----------------- ----------------- --------------- ------------------ ------------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 13,746,284 (11,467,861) 42,672,903 1,280,508 114,578,120
----------------- ----------------- --------------- ------------------ ------------------
Total increase
(decrease) in net
assets............... 212,479,367 (5,816,548) 98,502,514 40,504,898 187,301,391
NET ASSETS:
Beginning of period.... 1,435,800,421 199,791,406 264,803,020 410,795,993 324,333,921
----------------- ----------------- --------------- ------------------ ------------------
End of period.......... $1,648,279,788 $ 193,974,858 $363,305,534 $451,300,891 $511,635,312
----------------- ----------------- --------------- ------------------ ------------------
----------------- ----------------- --------------- ------------------ ------------------

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

<CAPTION>
INTERNATIONAL SMALL
ADVISERS FUND COMPANY FUND
SUB-ACCOUNT SUB-ACCOUNT
------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 1,374,080 $ (140,866)
Capital gains income... 110,732 91,483
Net realized gain
(loss) on security
transactions......... 690 (1,668)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 1,503,538 3,276,408
------------- ------------
Net increase (decrease)
in net assets
resulting from
operations........... 2,989,040 3,225,357
------------- ------------
UNIT TRANSACTIONS:
Purchases.............. 9,098,402 9,385,772
Net transfers.......... 5,883,485 8,744,488
Surrenders............. (1,087,154) (332,164)
Net annuity
transactions......... 6,708 --
------------- ------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 13,901,441 17,798,096
------------- ------------
Total increase
(decrease) in net
assets............... 16,890,481 21,023,453
NET ASSETS:
Beginning of period.... 29,809,174 13,546,092
------------- ------------
End of period.......... $ 46,699,655 $34,569,545
------------- ------------
------------- ------------
DIVIDEND AND
GROWTH FUND
SUB-ACCOUNT
-------------
OPERATIONS:
Net investment income
(loss)............... $ 2,667,791
Capital gains income... 2,810,352
Net realized gain
(loss) on security
transactions......... (3,931)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 38,471,770
-------------
Net increase (decrease)
in net assets
resulting from
operations........... 43,945,982
-------------
UNIT TRANSACTIONS:
Purchases.............. 99,649,393
Net transfers.......... 73,409,821
Surrenders............. (8,580,693)
Net annuity
transactions......... 330,214
-------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 164,808,735
-------------
Total increase
(decrease) in net
assets............... 208,754,717
NET ASSETS:
Beginning of period.... 115,579,204
-------------
End of period.......... $324,333,921
-------------
-------------
</TABLE>

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

31
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)

<TABLE>
<CAPTION>
CALVERT SMITH BARNEY SMITH BARNEY
RESPONSIBLY INVESTED CASH PORTFOLIO SMITH BARNEY GOVERNMENT PORTFOLIO
BALANCED PORTFOLIO CLASS A APPRECIATION FUND CLASS A
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------------- -------------- ----------------- --------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ (16,825) $ 11,018 $ (862) $ 777
Capital gains income... -- -- -- --
Net realized gain
(loss) on security
transactions......... (1,967) -- 6,535 --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 272,543 -- 20,119 --
----------- -------------- ----------------- -----------
Net increase (decrease)
in net assets
resulting from
operations........... 253,751 11,018 25,792 777
----------- -------------- ----------------- -----------
UNIT TRANSACTIONS:
Purchases.............. 213,063 -- -- --
Net transfers.......... 8,344 -- -- --
Surrenders............. (205,358) (88,773) (38,024) (1)
Net annuity
transactions......... (20,372) -- -- --
----------- -------------- ----------------- -----------
Total increase
(decrease) in net
assets resulting from
unit transactions.... (4,323) (88,773) (38,024) (1)
----------- -------------- ----------------- -----------
Total increase
(decrease) in net
assets............... 249,428 (77,755) (12,232) 776
NET ASSETS:
Beginning of period.... 2,661,229 580,931 172,861 39,842
----------- -------------- ----------------- -----------
End of period.......... $2,910,657 $ 503,176 $ 160,629 $ 40,618
----------- -------------- ----------------- -----------
----------- -------------- ----------------- -----------

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

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

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

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

32
<PAGE>
<TABLE>
<CAPTION>
TCI TCI FIDELITY VIP FIDELITY VIP II FIDELITY VIP II
ADVANTAGE FUND GROWTH FUND OVERSEAS FUND ASSET MANAGER FUND CONTRAFUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- -------------------- -------------- ------------------ ---------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 1,682 $ (6,761) $ 12,722 $ 53,024 $ 11,422
Capital gains income... 10,139 22,619 84,101 165,196 160,741
Net realized gain
(loss) on security
transactions......... 89 (3,791) 683 435 154
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (1,445) (57,157) 120,729 (9,093) 713,593
-------- ----------- -------------- ------------------ ---------------
Net increase (decrease)
in net assets
resulting from
operations........... 10,465 (45,090) 218,235 209,562 885,910
-------- ----------- -------------- ------------------ ---------------
UNIT TRANSACTIONS:
Purchases.............. 29,516 144,253 113,306 196,494 711,643
Net transfers.......... (7,598) 76,466 308,695 221,417 1,313,568
Surrenders............. (11,350) (22,569) (10,775) (63,704) (135,559)
Net annuity
transactions......... (308) (235) -- -- 453
-------- ----------- -------------- ------------------ ---------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 10,260 197,915 411,226 354,207 1,890,105
-------- ----------- -------------- ------------------ ---------------
Total increase
(decrease) in net
assets............... 20,725 152,825 629,461 563,769 2,776,015
NET ASSETS:
Beginning of period.... 172,595 1,138,990 1,060,589 1,834,015 6,671,595
-------- ----------- -------------- ------------------ ---------------
End of period.......... $193,320 $1,291,815 $1,690,050 $2,397,784 $9,447,610
-------- ----------- -------------- ------------------ ---------------
-------- ----------- -------------- ------------------ ---------------

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

<CAPTION>
BB&T
FIDELITY VIP GROWTH AND
GROWTH FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT
------------------ ---------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 444 $ 461
Capital gains income... 217,749 --
Net realized gain
(loss) on security
transactions......... 5,699 --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 758,779 (2,749)
------------------ ---------------
Net increase (decrease)
in net assets
resulting from
operations........... 982,671 (2,288)
------------------ ---------------
UNIT TRANSACTIONS:
Purchases.............. 759,175 604,518
Net transfers.......... 299,499 --
Surrenders............. (269,298) --
Net annuity
transactions......... 2,295 --
------------------ ---------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 791,671 604,518
------------------ ---------------
Total increase
(decrease) in net
assets............... 1,774,342 602,230
NET ASSETS:
Beginning of period.... 7,015,865 --
------------------ ---------------
End of period.......... $8,790,207 $ 602,230
------------------ ---------------
------------------ ---------------

FIDELITY VIP II FIDELITY VIP II FIDELITY VIP
ASSET MANAGER FUND CONTRAFUND FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ --------------- ------------
OPERATIONS:
Net investment income
(loss)............... $ 14,241 $ (35,654) $ 10,178
Capital gains income... -- -- 115,329
Net realized gain
(loss) on security
transactions......... (71) (377) (6,795)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 126,112 910,896 420,263
------------------ --------------- ------------
Net increase (decrease)
in net assets
resulting from
operations........... 140,282 874,865 538,975
------------------ --------------- ------------
UNIT TRANSACTIONS:
Purchases.............. 268,755 928,554 1,249,738
Net transfers.......... 1,181,511 3,162,455 3,357,091
Surrenders............. (95,811) (279,972) (334,425)
Net annuity
transactions......... -- -- --
------------------ --------------- ------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 1,354,455 3,811,037 4,272,404
------------------ --------------- ------------
Total increase
(decrease) in net
assets............... 1,494,737 4,685,902 4,811,379
NET ASSETS:
Beginning of period.... 339,278 1,985,693 2,204,486
------------------ --------------- ------------
End of period.......... $1,834,015 $6,671,595 $7,015,865
------------------ --------------- ------------
------------------ --------------- ------------
</TABLE>

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

33
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------

HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)

1. ORGANIZATION:

Separate Account Two (the Account) is a separate investment account with
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 contract owners of the Company in various
mutual funds (the Funds) as directed by the contract owners.

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 June 30, 1997.

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

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.

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

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

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

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

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

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hartford Life Insurance Company
Separate Account Two as of December 31, 1996, the results of its operations for
the year then ended and the changes in its net assets for each of the two years
in the period then ended in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Hartford, Connecticut
February 14, 1997

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

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

Separate Account Two

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SEPARATE ACCOUNT TWO

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Separate Account Two

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

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

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

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

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

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

SEPARATE ACCOUNT TWO

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

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

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

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

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

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

Separate Account Two

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996

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

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

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

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

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

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

SEPARATE ACCOUNT TWO

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

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

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

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

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

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

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

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

Separate Account Two

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

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

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

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

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

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

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

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

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

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

SEPARATE ACCOUNT TWO

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SEPARATE ACCOUNT TWO
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996

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

1. ORGANIZATION:

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

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

2. SIGNIFICANT ACCOUNTING POLICIES:

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

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

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

3.ADMINISTRATION OF THE ACCOUNT AND
RELATED CHARGES:

<PAGE>

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) All financial statements are included in Part A and Part B of the
Registration Statement.

(b) (1) Resolution of the Board of Directors of Hartford Life Insurance
Company ("Hartford") authorizing the establishment of the
Separate Account.(1)

(2) Not applicable.

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

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

(4) Form of Individual Single Premium Immediate Variable Annuity
Contract.(3)

(5) Form of Application.(3)

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

(6) (b) Bylaws of Hartford.(2)

(7) Not applicable.

(8) Not applicable.

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

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

(11) No financial statements are omitted.

______________________

(1) Incorporated by reference to Post-Effective Amendment No. 2, to the
Registration Statement File No. 33-73570, dated May 1, 1995.

(2) Incorporated by reference to Post-Effective Amendment No. 3, to
the Registration Statement File No. 33-73570, dated April 29,
1996.

(3) Incorporated by reference to Pre-Effective Amendment No.1, to the
Registration Statement File No. 333-19605, filed May 9, 1997.

<PAGE>

(12) Not applicable.

(13) Not applicable.

(14) Not applicable.

(15) Copy of Power of Attorney.

(16) Organizational Chart.

Item 25. Directors and Officers of the Depositor
<TABLE>
<CAPTION>

NAME POSITION WITH HARTFORD
- ---- ----------------------
<S> <C>
Wendell J. Bossen Vice President
Gregory A. Boyko Senior Vice President, Chief Financial Officer, and Treasurer, Director*
Peter W. Cummins Senior Vice President
Ann M. de Raismes Senior Vice President
Timothy M. Fitch Vice President and Actuary
Bruce D. Gardner Vice President
J. Richard Garrett Vice President and Assistant Treasurer
John P. Ginnetti Executive Vice President & Director of Asset
Management Services, Director*
William A. Godfrey, III Senior Vice President
Lynda Godkin Senior Vice President, General Counsel and Corporate
Secretary, Director*
Lois W. Grady Vice President
Christopher Graham Vice President
David A. Hall Vice President and Actuary
Stephen T. Joyce Vice President
Robert A. Kerzner Vice President
Steven M. Maher Vice President and Actuary
William B. Malchodi, Jr. Vice President and Director of Taxes

</TABLE>

<PAGE>

NAME POSITION WITH HARTFORD
- ---- ----------------------
<S> <C>
Thomas M. Marra Executive Vice President and Director, Individual Life and
Annuity Division, Director*
Robert F. Nolan Senior Vice President
Joseph J. Noto Vice President
Michael C. O'Halloran Vice President
Craig R. Raymond Senior Vice President and Chief Actuary
Donald A. Salama Vice President
Timothy P. Schiltz Vice President
Lowndes A. Smith President and Chief Executive Officer, Director*
Edward A. Sweeney Vice President
Raymond P. Welnicki Senior Vice President and Director, Employee Benefit
Division, Director*
Walter C. Welsh Senior Vice President
Lizabeth H. Zlatkus Senior Vice President, Director*
David M. Znamierowski Senior Vice President

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

*Denotes Board of Directors.

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

Filed herewith as Exhibit 16.

Item 27. Number of Contract Owners

As of October 29, 1997, there were no Contract Owners.

Item 28. Indemnification

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

<PAGE>

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

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

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

Additionally, the directors and officers of Hartford and
Hartford Securities Distribution Company, Inc. ("HSD") are
covered under a directors and officers liability insurance
policy issued to The Hartford Financial Services Group, Inc.
and its subsidiaries. Such policy will reimburse the
Registrant for any payments that it shall make to directors
and officers pursuant to law and will, subject to certain
exclusions contained in the policy, further pay any other
costs, charges and expenses and settlements and judgments
arising from any proceeding involving any director or
officer of the Registrant in his past or present capacity as
such, and for which he may be liable, except as to any
liabilities arising from acts that are deemed to be
uninsurable.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant
to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being

<PAGE>

registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.

Item 29. Principal Underwriters

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

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

(b) Directors and Officers of HSD
<TABLE>

<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER
---------------- ----------------
<S> <C>
Lowndes A. Smith President and Chief Executive Officer, Director
John P. Ginnetti Executive Vice President, Director
Thomas M. Marra Executive Vice President, Director
Peter W. Cummins Senior Vice President
Lynda Godkin Senior Vice President, General Counsel and
Corporate Secretary
Donald E. Waggaman, Jr. Treasurer
George R. Jay Controller
Paul E. Olson Supervising Registered Principal
James Cubanski Assistant Secretary
Stephen T. Joyce Assistant Secretary
Glen J. Kvadus Assistant Secretary
Edward M. Ryan, Jr. Assistant Secretary

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

<PAGE>

Item 30. Location of Accounts and Records

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

Item 31. Management Services

All management contracts are discussed in Part A and Part B of
this Registration Statement.

Item 32. Undertakings

(a) The Registrant hereby undertakes to file a post-effective
amendment to this Registration Statement as frequently as
is necessary to ensure that the audited financial
statements in the Registration Statement are never more
than 16 months old so long as payments under the variable
annuity Contracts may be accepted.

(b) The Registrant hereby undertakes to include either (1) as
part of any application to purchase a Contract offered by
the Prospectus, a space that an applicant can check to
request a Statement of Additional Information, or (2) a
post card or similar written communication affixed to or
included in the Prospectus that the applicant can remove
to send for a Statement of Additional Information.

(c) The Registrant hereby undertakes to deliver any Statement
of Additional Information and any financial statements
required to be made available under this Form promptly
upon written or oral request.

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

The Registrant is relying on the no-action letter issued by
the Division of Investment Management to American Counsel of
Life Insurance, Ref. No. IP-6-88, November 28, 1988. The
Registrant has complied with conditions one through four of
the no-action letter.

<PAGE>

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has caused this Registration Statement to be signed on
its behalf, in the City of Hartford, and State of Connecticut on this 30th
day of October, 1997.

HARTFORD LIFE INSURANCE COMPANY -
SEPARATE ACCOUNT TWO
(Registrant)

*By: /s/ Thomas M. Marra *By: /s/ Leslie T. Soler
---------------------------------------- --------------------
Thomas M. Marra, Executive Vice President Leslie T.Soler
and Director, Individual Life and Annuity Attorney-in-Fact
Division, Director

HARTFORD LIFE INSURANCE COMPANY
(Depositor)

*By: /s/ Thomas M. Marra
-----------------------------------------
Thomas M. Marra, Executive Vice President
and Director, Individual Life and Annuity
Division, Director

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons and in
the capacity and on the date indicated.

Gregory A. Boyko, Senior Vice President,
Chief Financial Officer, and Treasurer,
Director * *By: /s/Leslie T. Soler
-------------------
John P. Ginnetti, Executive Vice Leslie T. Soler
President and Director, Asset Management Attorney-in-Fact
Services, Director * Dated: October 30, 1997
Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary, Director*
Thomas M. Marra, Executive Vice
President and Director, Individual Life and
Annuity Division, Director *
Lowndes A. Smith, President and
Chief Executive Officer, Director*
Raymond P. Welnicki, Senior Vice
President and Director, Employee Benefit
Division, Director *
Lizabeth H. Zlatkus, Senior Vice President,
Director *

<PAGE>
EXHIBIT INDEX

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

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

(15) Copy of Power of Attorney.

(16) Organizational Chart.

<PAGE>

Exhibit 9

October 30, 1997 LYNDA GODKIN
Senior Vice President, General Counsel &
Corporate Secretary

Board of Directors
Hartford Life Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089

RE: Hartford Life Insurance Company Separate Account Two
Immediate Variable Annuity

Dear Sir/Madam:

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

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

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

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

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

<PAGE>

Board of Directors
October 30, 1997
Page 2

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

Sincerely yours,

/s/ Lynda Godkin

Lynda Godkin

<PAGE>

Exhibit 10

ARTHUR ANDERSEN LLP

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
(and to all references to our Firm) included in or made a part of this
Registration Statement File No. 333-19605 for Hartford Life Insurance Company
Separate Account Two on Form N-4.

/s/ Arthur Andersen LLP

Hartford, Connecticut
October 30, 1997

<PAGE>

Exhibit 15

HARTFORD LIFE INSURANCE COMPANY
AND
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY

POWER OF ATTORNEY

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

do hereby jointly and severally authorize Lynda Godkin, Marianne O'Doherty
and Leslie T. Soler to sign as their agent, any Registration Statement,
pre-effective amendment, post-effective amendment and any application for
exemptive relief of the Hartford Life Insurance Company and Hartford Life and
Accident Insurance Company under the Securities Act of 1933 and/or the
Investment Company Act of 1940.

IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.

/s/ JOHN P. GINNETTI Dated: 10/9/97
- ---------------------------------
John P. Ginnetti

/s/ LYNDA GODKIN Dated: 10/9/97
- ---------------------------------
Lynda Godkin

/s/ THOMAS M. MARRA Dated: 10/9/97
- ---------------------------------
Thomas M. Marra

/s/ LOWNDES A. SMITH Dated: 10/1/97
- ---------------------------------
Lowndes A. Smith

/s/ RAYMOND P. WELNICKI Dated: 10/9/97
- ---------------------------------
Raymond P. Welnicki

/s/ LIZABETH H. ZLATKUS Dated: 10/9/97
- ---------------------------------
Lizabeth H. Zlatkus

<PAGE>

Exhibit 16

<TABLE>
<S> <C> <C> <C> <C>
THE HARTFORD

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

</TABLE>