HARTFORD LIFE INSURANCE COMPANY SEPARATE ACCOUNT TWO, 485BPOS, 1999-09-03

HARTFORD LIFE INSURANCE COMPANY SEPARATE ACCOUNT TWO
485BPOS, 1999-09-03

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<PAGE>

As filed with the Securities and Exchange Commission on September 3, 1999.

File No. 333-69485
811-4732

SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 1 [X]

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 123 [X]

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

HARTFORD LIFE INSURANCE COMPANY
(Name of Depositor)

P. O. Box 2999
Hartford, CT 06104-2999
(Address of Depositor's Principal Offices)

(860) 843-6733

(Depositor's Telephone Number, Including Area Code)

Marianne O'Doherty
Hartford Life Insurance Company
P. O. Box 2999
Hartford, CT 06104-2999
(Name and Address of Agent for Service)

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

It is proposed that this filing will become effective:

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

__X__ on September 15, 1999 pursuant to paragraph (b) of Rule 485

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

_____ on ___________ , 1999 pursuant to paragraph (a)(1) of Rule 485

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

PURSUANT TO 24F-2(a) UNDER THE INVESTMENT COMPANY ACT OF 1940, THE REGISTRANT
HAS REGISTERED AN INDEFINITE AMOUNT OF SECURITIES.

The purpose of this post-effective amendment no. 1 to the registration
statement on Form N-4 (File No. 333-69485) is to add the attached prospectus
which describes the NatCity individual or group tax deferred variable annuity
contract to the registration statement. This post-effective amendment no. 1
does not supercede pre-effective amendment no. 1 filed with the Securities
and Exchange Commission on April 12, 1999.

<PAGE>

CROSS REFERENCE SHEET
Pursuant To Rule 495(A)

N-4 Item No. Prospectus Heading
- ----------------------------------------------------------------------------------
<S> <C>
1. Cover Page Hartford Life Insurance Company -
Separate Account Two

2. Definitions Glossary of Special Terms

3. Synopsis or Highlights Summary

4. Condensed Financial Information Yield Information

5. General Description of Registrant Hartford Life Insurance Company, The Separate
Account, The Fixed Accounts, and The Funds

6. Deductions Contract Charges

7. General Description of The Contract, The Separate Account, The Fixed
Annuity Contracts Accounts, and Surrenders

8. Annuity Period Settlement Provisions

9. Death Benefit Death Benefits

10. Purchases and Contract Value The Contract, and Contract Value

11. Redemptions Surrenders

12. Taxes Federal Tax Considerations

13. Legal Proceedings Legal Matters and Experts

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

15. Cover Page Part B; Statement of Additional Information

16. Table of Contents Table of Contents

17. General Information and History Summary

<PAGE>

18. Services None

19. Purchase of Securities being Distribution of Contracts
Offered

20. Underwriters Distribution of Contracts

21. Calculation of Performance Data Calculation of Yield and Return

22. Annuity Payments Settlement Provisions

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 Records Location of Accounts and Records

31. Management Services Management Services

32. Undertakings Undertakings

</TABLE>

<PAGE>

Part A

<PAGE>

NATCITY DIRECTOR VARIABLE ANNUITY
SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
P.O. BOX 5085
HARTFORD, CONNECTICUT 06102-5085
TELEPHONE: 1-800-862-6668 (CONTRACT OWNERS)
1-800-862-7155 (INVESTMENT REPRESENTATIVES) [LOGO]

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

This prospectus describes information you should know before you purchase the
NatCity Director variable annuity. Please read it carefully.

The NatCity Director variable annuity is a Contract between you and Hartford
Life Insurance Company where you agree to make at least one payment to us and we
agree to make a series of annuity payments to you at a later date. This annuity
is a flexible premium, tax-deferred, variable annuity offered to both
individuals and groups. It is:

X Flexible, because you may add premium payments at any time.

X Tax-deferred, which means you don't pay taxes until you take money out or
until we start to make annuity payments to you.

X Variable, because the value of your annuity will fluctuate with the
performance of the underlying funds.
- --------------------------------------------------------------------------------

At purchase, you allocate your premium payment, which is any purchase payment
less any Premium Taxes, to "Sub-Accounts". These are subdivisions of our
Separate Account, an account that keeps your annuity assets separate from our
company assets. The Sub-Accounts then purchase shares of mutual funds set up
exclusively for variable annuity or variable life insurance products. These
funds are not the same mutual funds that you buy through your stockbroker or
through a retail mutual fund. They may have similar investment strategies and
the same portfolio managers as retail mutual funds. This annuity offers you
funds with investment strategies ranging from conservative to aggressive and you
may pick those funds that meet your investment goals and risk tolerance. The
Sub-Accounts and the funds are listed below:

- - Armada Advantage Equity Growth Fund Sub-Account which purchases shares of
Class IA of Armada Advantage Equity Growth Fund

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

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

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

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

- - Global Leaders Sub-Account which purchases shares of Class IA of Hartford
Global Leaders HLS Fund

- - Growth and Income Sub-Account which purchases shares of Class IA of Hartford
Growth and Income HLS Fund

- - High Yield Sub-Account which purchases shares of class IA of Hartford High
Yield HLS Fund

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

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

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

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

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

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

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

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

You may also allocate some or all of your premium payment to one of the "Fixed
Accumulation Features", which pays an interest rate guaranteed for a certain
time period from the time the payment is made. Premium payments put in a Fixed
Accumulation Feature are not segregated from our company assets like the assets
of the Separate Account.

If you decide to buy this annuity, you should keep this prospectus for your
records. You can also call us at 1-800-862-6668 to get a Statement of Additional
Information, free of charge. The Statement of Additional Information contains
more information about this
<PAGE>
annuity and, like this prospectus, is filed with the Securities and Exchange
Commission. We have included the Table of Contents for the Statement of
Additional Information at the end of this prospectus.

Although we file the prospectus and the Statement of Additional Information with
the Securities and Exchange Commission, the Commission doesn't approve or
disapprove these securities or determine if the information is truthful or
complete. Anyone who represents that the Securities and Exchange Commission does
these things may be guilty of a criminal offense.

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

This annuity IS NOT:

- A bank deposit or obligation

- Federally insured

- Endorsed by any bank or governmental agency

This annuity may not be available for sale in all states.
- --------------------------------------------------------------------------------

PROSPECTUS DATED: SEPTEMBER 15, 1999

STATEMENT OF ADDITIONAL INFORMATION DATED: SEPTEMBER 15, 1999

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

Table of Contents

<TABLE>
<CAPTION>
Page
<S> <C>
----------------------------------------------------------------------------
Glossary of Special Terms 4
----------------------------------------------------------------------------
Fee Table Summary 5
----------------------------------------------------------------------------
Summary 9
----------------------------------------------------------------------------
Hartford Life Insurance Company 11
----------------------------------------------------------------------------
The Separate Account 11
----------------------------------------------------------------------------
The Funds 11
----------------------------------------------------------------------------
Performance Related Information 13
----------------------------------------------------------------------------
The Fixed Accumulation Features 14
----------------------------------------------------------------------------
The Contract 15
----------------------------------------------------------------------------
Contract Value -- Before the Annuity Commencement Date 15
----------------------------------------------------------------------------
Contract Value Transfers Before and After the Annuity Commencement
Date 16
----------------------------------------------------------------------------
Surrenders 17
----------------------------------------------------------------------------
Contract Charges 18
----------------------------------------------------------------------------
Death Benefits 19
----------------------------------------------------------------------------
Settlement Provisions 20
----------------------------------------------------------------------------
Annuity Payments 21
----------------------------------------------------------------------------
Other Information 23
----------------------------------------------------------------------------
Federal Tax Considerations 23
----------------------------------------------------------------------------
Miscellaneous 27
----------------------------------------------------------------------------
How Contracts Are Sold 27
----------------------------------------------------------------------------
Year 2000 27
----------------------------------------------------------------------------
Legal Matters 28
----------------------------------------------------------------------------
Experts 28
----------------------------------------------------------------------------
More Information 28
----------------------------------------------------------------------------
Appendix I -- Information Regarding Tax-Qualified Retirement Plans 29
----------------------------------------------------------------------------
Appendix II -- Optional Death Benefit -- Examples 32
----------------------------------------------------------------------------
Table of Contents to Statement of Additional Information 33
----------------------------------------------------------------------------
</TABLE>

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

Glossary of Special Terms

Account: Any of the Sub-Accounts or Fixed Accumulation Features.

Accumulation Unit: A unit of measure we use to calculate values before we begin
to make annuity payments to you.

Administrative Office: Located at 200 Hopmeadow Street, Simsbury, CT 06089. The
mailing address is Post Office Box 5085, Hartford, CT 06102-5085.

Anniversary Value: The value equal to the Contract Value as of a Contract
Anniversary, increased by the dollar amount of any premium payments made since
that anniversary and reduced by the dollar amount of any partial Surrenders
since that anniversary.

Annual Maintenance Fee: An annual $30 charge for annuities having a value of
less than $50,000 on the most recent Contract Anniversary or when the annuity is
Surrendered in full. The charge is deducted proportionately from the funds in
use at the time.

Annuitant: The person on whose life the Contract is based. The Annuitant may not
be changed.

Annuity: A Contract issued by us that provides, in exchange for premium
payments, a series of annuity payments.

Annuity Calculation Date: The date we calculate your first annuity payment.

Annuity Commencement Date: The date we start to make annuity payments to you.

Annuity Unit: A unit of measure we use to calculate the value of the annuity
payments we make to you.

Assumed Investment Return ("AIR"): The investment return, either 3%, 5% or 6%,
which we base your variable dollar amount payments on. You select the AIR before
we start to make annuity payments.

Beneficiary: The person or persons you designate to receive payment of the death
benefit upon the death of the Contract Owner.

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

Contingent Annuitant: The person you may designate to become the Annuitant if
the original Annuitant dies before we begin making annuity payments.

Contract: The contract is the individual Annuity contract and any endorsements
or riders. If you have a group annuity, you will receive a certificate rather
than a contract.

Contract Anniversary: The annual anniversary of the date we issued your annuity.
If your contract anniversary falls on a day that is not a Valuation Day, then
the next Valuation Day will be your Contract Anniversary for that year.

Contract Owner(s) or you: The owner(s) or holder(s) of this Annuity.

Contract Value: The total value of your Annuity that we get by adding up the
value of each of your Sub-Accounts and Fixed Accumulation Features on any
Valuation Day.

Contract Year: The 12 months following the date you purchased your annuity and
from any Contract Anniversary.

Dollar Cost Averaging ("DCA"): Systematic transfers from one Account to another.

DCA Program Fixed Accumulation Features: Fixed Accumulation Features we
establish to use for dollar cost averaging programs. These are part of our
General Account.

Death Benefit: The amount we pay when the Contract Owner or the Annuitant dies.

Due Proof of Death: A certified copy of a death certificate, an order of a court
of competent jurisdiction, or any other proof acceptable to us.

Fixed Accumulation Feature: This is an account that is part of our General
Account. You may allocate all or a portion of your premium payments or transfer
of Contract Value to this account.

Funds: The Funds described in this prospectus or any supplements to the
prospectus.

General Account: Our General Account that includes our company assets and your
annuity assets allocated to any of the Fixed Accumulation Features or DCA
Program Fixed Accumulation Features.

Hartford or we: Hartford Life Insurance Company.

Interest Accumulation Value: This is the amount which we use for the purpose of
calculating the optional interest accumulation death benefit.

Maximum Anniversary Value: This is the highest Anniversary Value prior the
deceased's 81st birthday or the date of death, if earlier.

Payee: The person or party designated by you to receive annuity payments.

Premium Tax: A tax charged by a state or municipality on premium payments.

Separate Account: An account that we establish to separate the assets for your
annuity Sub-Accounts from our company assets. Hartford Life Insurance Company
Separate Account Two.

Sub-Account: Divisions established within the Separate Account.

Surrender: A complete or partial withdrawal or distribution from your annuity.

Surrender Value: What we pay you if you terminate your annuity before we begin
to make annuity payments.

Valuation Day: Every day the New York Stock Exchange is open for trading. The
value of the Separate Account is determined as of the close of the New York
Stock Exchange (generally 4:00 p.m. Eastern Time).

Valuation Period: The period between the close of business on successive
Valuation Days.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 5
- --------------------------------------------------------------------------------

Fee Table Summary
Contract Owner Transaction Expenses
(All Sub-Accounts)

<TABLE>
<S> <C>
Sales Load Imposed on Purchases (as a percentage of premium
payments) None
-----------------------------------------------------------------------------
Exchange Fee $0
-----------------------------------------------------------------------------
Contingent Deferred Sales Charge (as a percentage of amounts
Surrendered)(1)
-----------------------------------------------------------------------------
First Year (2) 7%
-----------------------------------------------------------------------------
Second Year 6%
-----------------------------------------------------------------------------
Third Year 6%
-----------------------------------------------------------------------------
Fourth Year 5%
-----------------------------------------------------------------------------
Fifth Year 4%
-----------------------------------------------------------------------------
Sixth Year 3%
-----------------------------------------------------------------------------
Seventh Year 2%
-----------------------------------------------------------------------------
Eighth Year 0%
-----------------------------------------------------------------------------
Annual Maintenance Fee (3) $30
-----------------------------------------------------------------------------
Annual Expenses -- Separate Account (as a percentage of daily
Sub-Account value)
Mortality and Expense Risk 1.25%
-----------------------------------------------------------------------------
Optional Charges
Optional Interest Accumulation Death Benefit (as a percentage
of daily Sub-Account value) .15%
-----------------------------------------------------------------------------
</TABLE>

(1) The Contingent Deferred Sales Charge is not assessed on partial Surrenders
which do not exceed 15% of premium payments each Contract year, on a
non-cumulative basis.

(2) Length of time from each premium payment.

(3) The Annual Maintenance Fee is a single $30 charge deducted on each Contract
Anniversary or upon Surrender if the Contract Value is less than $50,000. It
is deducted proportionally from the investment options in use at the time of
the charge.
The purpose of this table is to assist you in understanding various costs and
expenses that you will bear directly or indirectly. The table reflects expenses
of the Separate Account and underlying Funds. We will deduct any Premium Taxes
that apply.
<PAGE>
6 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

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

<TABLE>
<CAPTION>
Total Fund
Management Operating
Fees Expenses
(including Other (including
waivers) Expenses waivers)
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------
Armada Advantage Equity Growth Fund (1) 0.75% 0.87% 1.62%
-----------------------------------------------------------------------------------------
Hartford Bond HLS Fund 0.48% 0.02% 0.50%
-----------------------------------------------------------------------------------------
Hartford Stock HLS Fund 0.44% 0.02% 0.46%
-----------------------------------------------------------------------------------------
Hartford Money Market HLS Fund 0.43% 0.02% 0.45%
-----------------------------------------------------------------------------------------
Hartford Advisers HLS Fund 0.62% 0.02% 0.63%
-----------------------------------------------------------------------------------------
Hartford Capital Appreciation HLS Fund 0.62% 0.02% 0.64%
-----------------------------------------------------------------------------------------
Hartford Mortgage Securities HLS Fund 0.43% 0.03% 0.46%
-----------------------------------------------------------------------------------------
Hartford Index HLS Fund 0.38% 0.02% 0.40%
-----------------------------------------------------------------------------------------
Hartford International Opportunities HLS Fund 0.68% 0.09% 0.77%
-----------------------------------------------------------------------------------------
Hartford Dividend & Growth HLS Fund 0.64% 0.02% 0.66%
-----------------------------------------------------------------------------------------
Hartford International Advisers HLS Fund 0.76% 0.11% 0.86%
-----------------------------------------------------------------------------------------
Hartford MidCap HLS Fund 0.76% 0.03% 0.79%
-----------------------------------------------------------------------------------------
Hartford Small Company HLS Fund 0.75% 0.02% 0.77%
-----------------------------------------------------------------------------------------
Hartford Growth and Income HLS Fund 0.77% 0.04% 0.81%
-----------------------------------------------------------------------------------------
Hartford Global Leaders HLS Fund (2) 0.49% 0.12% 0.61%
-----------------------------------------------------------------------------------------
Hartford High Yield HLS Fund (2) 0.49% 0.04% 0.52%
-----------------------------------------------------------------------------------------
</TABLE>

(1) The Advisor plans to waive all advisory fees for the first three months of
operation. The Advisor plans to charge a reduced advisory fee of 0.25% for
the Fund for the next three months, .50% for the Fund for the following
three months and .75% after nine months for the Fund.

(2) Hartford Global Leaders HLS Fund and Hartford High Yield HLS Fund are new
Funds. "Total Fund Operating Expenses" are based on annualized estimates of
such expenses to be incurred in the current fiscal year. HL Investment
Advisors, LLC has agreed to waive its fees for these until the assets of the
Funds (excluding assets contributed by companies affiliated with HL
Investment Advisors, LLC) reach $20 million. Absent this waiver, the
Management Fees and Total Fund Operating Expenses would be:

<TABLE>
<CAPTION>
Total Fund
Other Operating
Management Fees Expenses Expenses
<S> <C> <C> <C>
---------------------------------------------------------------------------------------
Hartford Global Leaders HLS Fund 0.78% 0.12% 0.90%
---------------------------------------------------------------------------------------
Hartford High Yield HLS Fund 0.78% 0.04% 0.81%
---------------------------------------------------------------------------------------
</TABLE>

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

EXAMPLE

The following table assumes that the Optional Interest Accumulation Death
Benefit was elected:

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
If you surrender your Contract If you annuitize your Contract If you do not surrender your
at the end of the applicable at the end of the applicable Contract, you would pay the
time period you would pay the time period you would pay the following expenses on a $1,000
following expenses on a $1,000 following expenses on a $1,000 investment, assuming a 5%
investment, assuming a 5% investment, assuming a 5% annual return on assets:
annual return on assets: annual return on assets:

Sub-Account 1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Armada Advantage Equity
Growth Fund $ 95 $ 150 $ 200 $ 343 $ 31 $ 96 $ 163 $ 342 $ 32 $ 96 $ 164 $ 343
---------------------------------------------------------------------------------------------------------------------------------
Hartford Bond HLS Fund $ 83 $ 116 $ 143 $ 231 $ 20 $ 62 $ 106 $ 230 $ 20 $ 62 $ 107 $ 231
---------------------------------------------------------------------------------------------------------------------------------
Hartford Stock HLS Fund $ 83 $ 115 $ 140 $ 226 $ 19 $ 60 $ 104 $ 225 $ 20 $ 61 $ 104 $ 226
---------------------------------------------------------------------------------------------------------------------------------
Hartford Money Market HLS
Fund $ 83 $ 114 $ 140 $ 225 $ 19 $ 60 $ 103 $ 224 $ 20 $ 60 $ 104 $ 225
---------------------------------------------------------------------------------------------------------------------------------
Hartford Advisers HLS Fund $ 84 $ 120 $ 150 $ 224 $ 21 $ 66 $ 113 $ 244 $ 21 $ 66 $ 114 $ 244
---------------------------------------------------------------------------------------------------------------------------------
Hartford Capital Appreciation
HLS Fund $ 85 $ 120 $ 150 $ 245 $ 21 $ 66 $ 113 $ 244 $ 22 $ 66 $ 114 $ 245
---------------------------------------------------------------------------------------------------------------------------------
Hartford Mortgage Securities
HLS Fund $ 83 $ 115 $ 141 $ 226 $ 19 $ 60 $ 104 $ 225 $ 20 $ 61 $ 105 $ 226
---------------------------------------------------------------------------------------------------------------------------------
Hartford Index HLS Fund $ 82 $ 113 $ 137 $ 220 $ 18 $ 58 $ 101 $ 219 $ 19 $ 59 $ 101 $ 220
---------------------------------------------------------------------------------------------------------------------------------
Hartford International
Opportunities HLS Fund $ 86 $ 124 $ 157 $ 259 $ 22 $ 70 $ 120 $ 258 $ 23 $ 70 $ 121 $ 259
---------------------------------------------------------------------------------------------------------------------------------
Hartford Dividend & Growth
HLS Fund $ 85 $ 121 $ 151 $ 247 $ 21 $ 66 $ 114 $ 246 $ 22 $ 67 $ 115 $ 247
---------------------------------------------------------------------------------------------------------------------------------
Hartford International
Advisers HLS Fund $ 87 $ 127 $ 161 $ 268 $ 23 $ 73 $ 125 $ 267 $ 24 $ 73 $ 125 $ 268
---------------------------------------------------------------------------------------------------------------------------------
Hartford MidCap HLS Fund $ 86 $ 125 $ 158 $ 261 $ 22 $ 71 $ 121 $ 260 $ 23 $ 71 $ 122 $ 261
---------------------------------------------------------------------------------------------------------------------------------
Hartford Small Company HLS
Fund $ 86 $ 125 $ 157 $ 259 $ 22 $ 70 $ 120 $ 258 $ 23 $ 71 $ 121 $ 259
---------------------------------------------------------------------------------------------------------------------------------
Hartford Growth and Income
HLS Fund $ 86 $ 126 $ 159 $ 262 $ 23 $ 71 $ 122 $ 262 $ 23 $ 72 $ 123 $ 262
---------------------------------------------------------------------------------------------------------------------------------
Hartford High Yield HLS Fund $ 83 $ 117 N/A N/A $ 20 $ 62 N/A N/A $ 20 $ 63 N/A N/A
---------------------------------------------------------------------------------------------------------------------------------
Hartford Global Leaders HLS
Fund $ 84 $ 119 N/A N/A $ 21 $ 65 N/A N/A $ 21 $ 65 N/A N/A
------------------------------------------------------------------------------------------------------------
</TABLE>

In the Example, the Annual Maintenance Fee is approximately a 0.06% annual asset
charge based on the experience of the Contracts. This Example should not be
considered a representation of past or future expenses and actual expenses may
be greater or less than those shown.

Pursuant to requirements of the Investment Company Act of 1940, the Annual
Maintenance Fee has been reflected in the Examples by a method intended to show
the "average" impact of the Annual Maintenance Fee on an investment in the
Separate Account.
<PAGE>
8 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

The following table assumes that the Optional Interest Accumulation Death
Benefit was not elected:

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
If you Surrender your Contract If you annuitize your Contract If you do not Surrender your
at the end of the applicable at the end of the applicable Contract, you would pay the
time period you would pay the time period you would pay the following expenses on a $1,000
following expenses on a $1,000 following expenses on a $1,000 investment, assuming a 5%
investment, assuming a 5% investment, assuming a 5% annual return on assets:
annual return on assets: annual return on assets:

<CAPTION>
Sub-Account 1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Armada Advantage Equity
Growth Fund $ 93 $ 146 $ 192 $ 329 $ 29 $ 91 $ 156 $ 328 $ 30 $ 92 $ 156 $ 329
---------------------------------------------------------------------------------------------------------------------------------
Hartford Bond HLS Fund $ 82 $ 112 $ 135 $ 214 $ 18 $ 57 $ 98 $ 214 $ 19 $ 58 $ 99 $ 214
---------------------------------------------------------------------------------------------------------------------------------
Hartford Stock HLS Fund $ 81 $ 110 $ 133 $ 209 $ 17 $ 55 $ 96 $ 209 $ 18 $ 56 $ 97 $ 209
---------------------------------------------------------------------------------------------------------------------------------
Hartford Money Market HLS
Fund $ 81 $ 110 $ 132 $ 208 $ 17 $ 55 $ 95 $ 208 $ 18 $ 56 $ 96 $ 208
---------------------------------------------------------------------------------------------------------------------------------
Hartford Advisers HLS Fund $ 83 $ 116 $ 142 $ 229 $ 19 $ 61 $ 105 $ 228 $ 20 $ 62 $ 106 $ 229
---------------------------------------------------------------------------------------------------------------------------------
Hartford Capital Appreciation
HLS Fund $ 83 $ 116 $ 142 $ 229 $ 19 $ 61 $ 106 $ 229 $ 20 $ 62 $ 106 $ 229
---------------------------------------------------------------------------------------------------------------------------------
Hartford Mortgage Securities
HLS Fund $ 81 $ 110 $ 133 $ 210 $ 18 $ 56 $ 96 $ 209 $ 18 $ 56 $ 97 $ 210
---------------------------------------------------------------------------------------------------------------------------------
Hartford Index HLS Fund $ 81 $ 108 $ 130 $ 203 $ 17 $ 54 $ 93 $ 203 $ 18 $ 54 $ 94 $ 203
---------------------------------------------------------------------------------------------------------------------------------
Hartford International
Opportunities HLS Fund $ 84 $ 120 $ 149 $ 243 $ 21 $ 65 $ 112 $ 242 $ 21 $ 66 $ 113 $ 243
---------------------------------------------------------------------------------------------------------------------------------
Hartford Dividend & Growth
HLS Fund $ 83 $ 116 $ 143 $ 231 $ 20 $ 62 $ 106 $ 230 $ 20 $ 62 $ 107 $ 231
---------------------------------------------------------------------------------------------------------------------------------
Hartford International
Advisers HLS Fund $ 85 $ 123 $ 154 $ 253 $ 22 $ 68 $ 117 $ 252 $ 22 $ 69 $ 118 $ 253
---------------------------------------------------------------------------------------------------------------------------------
Hartford MidCap HLS Fund $ 85 $ 121 $ 150 $ 245 $ 21 $ 66 $ 113 $ 245 $ 22 $ 67 $ 114 $ 245
---------------------------------------------------------------------------------------------------------------------------------
Hartford Small Company HLS
Fund $ 84 $ 120 $ 149 $ 243 $ 21 $ 65 $ 112 $ 242 $ 21 $ 66 $ 113 $ 243
---------------------------------------------------------------------------------------------------------------------------------
Hartford Growth and Income
HLS Fund $ 85 $ 121 $ 151 $ 247 $ 21 $ 66 $ 114 $ 246 $ 22 $ 67 $ 115 $ 247
---------------------------------------------------------------------------------------------------------------------------------
Hartford High Yield HLS Fund $ 82 $ 112 N/A N/A $ 18 $ 57 N/A N/A $ 19 $ 58 N/A N/A
---------------------------------------------------------------------------------------------------------------------------------
Hartford Global Leaders HLS
Fund $ 83 $ 115 N/A N/A $ 19 $ 60 N/A N/A $ 20 $ 61 N/A N/A
------------------------------------------------------------------------------------------------------------
</TABLE>

Pursuant to requirements of the Investment Company Act of 1940, the Annual
Maintenance Fee has been reflected in the Examples by a method intended to show
the "average" impact of the Annual Maintenance Fee on an investment in the
Separate Account.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 9
- --------------------------------------------------------------------------------

Summary

How do I purchase this annuity?

You must complete our application or order request and submit it to us for
approval with your first premium payment. Your first premium payment must be at
least $1,000 and subsequent premium payments must be at least $500. The minimum
premium payment requirements may differ if you are participating in our
automatic investing ("InvestEase-Registered Trademark-") program.

- For a limited time, usually within ten days after you receive your annuity,
you may cancel your annuity without paying a Contingent Deferred Sales
Charge. You bear the investment risk for your premium payment prior to our
receipt of your request for cancellation.

What type of sales charge will I pay?

Contingent Deferred Sales Charge ("CDSC")

The CDSC covers expenses relating to the sale and distribution of the Contracts,
including commissions paid to distributing organizations and the cost of
preparing sales literature and other promotional activities.

We assess a CDSC when you request a full or partial Surrender. The percentage of
the CDSC is based on how long each premium payment has been in the Contract.
Each premium payment has its own CDSC schedule. Premium payments are Surrendered
in the order that they were received. The longer you leave your premium payment
in the Contract, the lower the CDSC will be when you Surrender.

The CDSC is a percentage of the amount Surrendered (not to exceed the total
amount of the premium payments made) and equals:

<TABLE>
<CAPTION>
Length of
Time from
Premium CDSC
Payment Charge
<S> <C>
----------------------
1 year 7%
----------------------
2 years 6%
----------------------
3 years 6%
----------------------
4 years 5%
----------------------
5 years 4%
----------------------
6 years 3%
----------------------
7 years 2%
----------------------
8 years
or more 0%
----------------------
</TABLE>

Is there an Annual Maintenance Fee?

Yes. We deduct this $30 fee each year on your Contract Anniversary or when you
completely Surrender your annuity, if, on either of those dates, the value of
your annuity is less than $50,000.

What charges will I pay on an annual basis?

In addition to the Annual Maintenance Fee, you pay two different types of
charges each year. The first type of charge is the fee you pay for insurance.
This charge is:

A mortality and expense risk charge that is subtracted daily and is equal to an
annual charge of 1.25% of your Contract Value invested in the Funds.

The second type of charge is the fee you pay for the Funds.

Currently, total fund operating expenses with waivers range from 0.401% to
0.863% of the average daily value of the amount you have invested in the fund.
See the Annual Operation Expense Table for more complete information and the
funds' prospectuses attached to this prospectus.

If you elect the Optional Death Benefit, we will deduct an additional charge
daily from your Contract Value and is equal to 0.15% per year of your Contract
Value invested in the Funds.

Can I take out any of my money?

You can partially or fully Surrender your Contract subject to a Contingent
Deferred Sales Charge (CDSC). You can partially Surrender your Contract without
any CDSC applied to the Surrender under the following conditions:

- - Surrenders which don't exceed 15% of premium payments per Contract Year
(Annual Withdrawal Amount);

- - Surrenders made from premium payments invested more than seven years;

- - 100% Surrender of earnings after the seventh Contract Year;

- - Surrenders under the nursing home waiver (described as Eligible Confinement in
the Contract); or

- - Surrenders eligible for disability waiver under a group qualified plan.

Will Hartford pay a death benefit?

Your Contract has a Death Benefit and we offer an Optional Interest Accumulation
Death Benefit ("Optional Death Benefit") that you can elect for an additional
fee. There is a Death Benefit if the Contract Owner, joint owner or Annuitant,
die before we begin to make annuity payments. The Death Benefit will remain
invested in the Sub-Accounts according to your last instructions (unless
otherwise mutually specified by your Beneficiaries) and will be subject to
market fluctuations.

If you do not elect the Optional Death Benefit, the Death Benefit, which we will
calculate as of the date we receive Due Proof of Death, will be the greater of:

- - 100% of the total premium payments you have made to us reduced by any
subsequent Surrenders;

- - The Contract Value of your annuity, or

- - Your Maximum Anniversary Value, which is described below.

The Maximum Anniversary Value is based on a series of calculations on Contract
Anniversaries, of Contract Values, premium payments and partial Surrenders. We
will calculate an Anniversary Value for each Contract Anniversary prior to the
deceased's 81st birthday or date of death. The Anniversary Value is equal to the
Contract Value as of a Contract Anniversary, increased by the
<PAGE>
10 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
dollar amount of any premium payments made since that anniversary and reduced by
the dollar amount of any partial Surrenders since that anniversary. The Maximum
Anniversary Value is equal to the greatest Anniversary Value attained from this
series of calculations.
If you elect the Optional Death Benefit, the Death Benefit, which we will
calculate as of the date we receive Due Proof of Death, will be the greater of:

- - 100% of the total premium payments you have made to us reduced by any
subsequent Surrenders;

- - The Contract Value of your annuity;

- - Your Maximum Anniversary Value, which is the highest Anniversary Value before
the deceased's 81st birthday or date of death; or

- - Your Interest Accumulation Value.

The Interest Accumulation Value is calculated by accumulating interest on your
premium payments at a rate of 5% per year up to the deceased's 81st birthday or
date of death, assuming you have not taken any Surrenders. If you have taken any
Surrenders, the 5% will be accumulated on your premium payments, but there will
be an adjustment for any of the Surrenders. This adjustment will reduce the
Optional Death Benefit proportionally for the Surrenders. The Optional Death
Benefit is limited to a maximum of 200% of premium payments, less proportional
adjustments for any Surrenders. For examples on how the Optional Death Benefit
is calculated see "Appendix II". If you elect the Optional Death Benefit, we
will deduct an additional charge daily from your Contract Value equal to .15%
per year of the Sub-Account value.

Spousal Contract Continuation -- If the Beneficiary is the Contract Owner's
spouse, the Contract will continue with the spouse as Contract Owner, unless the
spouse elects to receive the Death Benefit as a lump sum payment. If the
Contract continues with the spouse as Contract Owner, we will adjust the
Contract Value to the amount that we would have paid as the Death Benefit
payment, had the spouse elected to receive the Death Benefit as a lump sum
payment or as an annuity payment option. This provision will only apply one time
for each Contract.

What annuity payment options are available?

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

Life Annuity where we make scheduled payments for the Annuitant's life.
- Payments under this option stop upon the death of the Annuitant, even if the
Annuitant dies after one payment.

Life Annuity with Cash Refund where we make payments during the life of the
Annuitant and when the Annuitant dies, we pay the remaining value to the
Beneficiary. The remaining value is calculated at the time we receive Due Proof
of Death by subtracting the annuity payments already made from the Contract
Value, less any applicable Premium Taxes, applied to this annuity payment
option.

- This option is only available if you select a variable dollar amount payment
with the 5% AIR or fixed dollar amount annuity payments.

Life Annuity with Payments for a Period Certain where we make payments for the
life of the Annuitant but you are at least guaranteed payments for a time period
you select which is a minimum of 5 years and a maximum of 100 years minus your
annuitant's age.

- If the Annuitant dies prior to the end of the period selected, we will pay
the value of the remaining payments to your Beneficiary, either in a lump
sum or we will continue payments until the end of the period selected.

Joint and Last Survivor Annuity where we make payments during the lifetimes of
the Annuitant and another designated individual called the Joint Annuitant. At
the time of electing this annuity payment option, the Contract Owner may elect
reduced payments over the remaining lifetime of the survivor.

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

Joint and Last Survivor Life Annuity with Payments for a Period Certain where we
make payments during the lifetime of the Annuitant and a Joint Annuitant, and we
guarantee that those payments for a time period you select which is a minimum of
5 years and a maximum 100 years minus the younger Annuitant's age. At the time
of electing this Annuity Option, the Contract Owner may elect reduced payments
over the remaining lifetime of the survivor.

- If the Annuitant and the Joint Annuitant die prior to the end of the period
selected, we will pay the value of the remaining payments to your
Beneficiary, either in a lump sum or we will continue payments until the end
of the period selected.

Payments for a Period Certain where we agree to make payments for a specified
time. The minimum period that you can select is 10 years during the first two
Contract Years and 5 years after the second Contract Anniversary. The maximum
period that you can select is 100 years minus your Annuitant's age.

- If you select this option under a variable dollar amount payment, you may
Surrender your Annuity after annuity payments have started and we will give
you the present value of the remaining payments less any applicable
Contingent Deferred Sales Charge.

You must begin to take payments before the Annuitant's 90th birthday or the end
of the 10th Contract Year, which ever comes later, unless you elect a later date
to begin receiving payments
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
subject to the laws and regulations then in effect and our approval. If you do
not tell us what annuity payment option you want before that time, we will pay
you under the Life Annuity with a 10 year period certain. You and Hartford can
agree to start payments at a later date if the laws in effect allow us to defer
payment and we agree to allow you to defer. The Annuity Commencement Date in New
York may be different. Please consult your Registered Representative or call us.

Hartford Life Insurance Company
- --------------------------------------------------------------------------------

Hartford Life Insurance Company is a stock life insurance company engaged in the
business of writing life insurance, both individual and group, in all states of
the United States as well as the District of Columbia. We were originally
incorporated under the laws of Massachusetts on June 5, 1902, and subsequently
redomiciled to Connecticut. Our offices are located in Simsbury, Connecticut;
however, our mailing address is P.O. Box 5085, Hartford, CT 06102-5085. We are
ultimately controlled by The Hartford Financial Services Group, Inc., one of the
largest financial service providers in the United States.

Hartford's Ratings

<TABLE>
<CAPTION>
Effective Date
Rating Agency of Rating Rating Basis of Rating
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
A.M. Best and Company, Inc. 1/1/99 A+ Financial performance
- -------------------------------------------------------------------------------------------------
Standard & Poor's 6/1/98 AA Insurer financial strength
- -------------------------------------------------------------------------------------------------
Duff & Phelps 12/21/98 AA+ Claims paying ability
- ----------------------------------------------------------------
</TABLE>

The Separate Account
- --------------------------------------------------------------------------------

The Separate Account is where we set aside and invest the assets of some of our
annuity contracts, including this Contract. The Separate Account was established
on June 2, 1986 and is registered as a unit investment trust under the
Investment Company Act of 1940. This registration does not involve supervision
by the Commission of the management or the investment practices of the Separate
Account or Hartford. The Separate Account meets the definition of "Separate
Account" under federal securities law. This Separate Account holds only assets
for variable annuity contracts. The Separate Account:

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

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

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

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

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

We do not guarantee the investment results of the Separate Account. There is no
assurance that the value of your Annuity will equal the total of the payments
you make to us.

The Funds
- --------------------------------------------------------------------------------

The Armada Advantage Equity Fund is part of the Parkstone Advantage Fund (the
"Trust"), an open-end management company which offers six separate and
diversified investment portfolios, each with a different investment objective.
The Trust was organized in the Commonwealth of Massachusetts on May 19, 1993.
The Trust is established exclusively for the purpose of providing an investment
vehicle for variable annuity contracts and variable life insurance policies
offered by the separate accounts of various life insurance companies. Shares of
the Trust are not offered to the general public but solely to such separate
accounts.

The National City Investment Management ("IMC") provides investment advisory
services for the Armada Advantage Equity Growth Fund. IMC is an Ohio company
which is a registered investment advisor and an indirectly wholly-owned
subsidiary of National City Corporation ("NCC"), a publicly-held bank holding
company.

All of the Hartford Funds are sponsored and administered by Hartford Life
Insurance Company. HL Investment Advisors, LLC ("HL Advisors") serves as the
investment adviser to each of the Funds. Wellington Management Company, LLP
("Wellington Management") and The Hartford Investment Management Company
("HIMCO") serve as sub-investment advisers and provide day to day investment
services.

Each Hartford Fund, except for the Hartford Global Leaders HLS Fund, the
Hartford Growth and Income HLS Fund and the Hartford High Yield HLS Fund, is a
separate Maryland corporation registered with the Securities and Exchange
Commission as an open-end management investment company. The Hartford Global
Leaders HLS Fund, the Hartford Growth and Income HLS Fund and the Hartford High
Yield HLS Fund are diversified series

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

of Hartford Series Fund, Inc., a Maryland corporation, also registered with the
Securities and Exchange Commission as an open-end management investment company.
The shares of each Hartford Fund have been divided into Class IA and Class IB.
Only Class IA shares are available in this Annuity.

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

The Funds may not be available in all states.

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

Armada Advantage Equity Growth Fund -- Seeks to provide capital appreciation by
investing in a diversified portfolio of publicly traded larger cap equity
securities. Managed by National City Investment Management ("IMC").

Hartford Advisers HLS Fund -- Seeks maximum long-term total rate of return by
investing in common stocks and other equity securities, bonds and other debt
securities, and money market instruments. Sub-advised by Wellington Management.

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

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

Hartford Dividend and Growth HLS Fund -- Seeks a high level of current income
consistent with growth of capital by investing primarily in dividend paying
equity securities. Sub-advised by Wellington Management.

Hartford Global Leaders HLS Fund -- Seeks growth of capital by investing
primarily in equity securities issued by U.S. companies and non-U.S. high
quality growth companies worldwide that, in the opinion of Wellington
Management, are leaders within their respective industries as indicated by an
established market presence and strong competitive position on a global,
regional or country basis. Sub-advised by Wellington Management.

Hartford High Yield HLS Fund -- Seeks high current income by investing in
non-investment grade fixed-income securities. Growth of capital is a secondary
objective. Securities rated below investment grade are commonly referred to as
"high yield-high risk securities" or "junk bonds." For more information
concerning the risks associated with investing in such securities, please refer
to the section in the accompanying prospectus for the Funds entitled "Hartford
High Yield HLS Fund." Sub-advised by HIMCO.

Hartford Growth and Income HLS Fund -- Seeks growth of capital and current
income by investing primarily in equity securities with earnings growth
potential and steady or rising dividends. Sub-advised by Wellington Management.

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

Hartford International Advisers HLS Fund -- Seeks maximum long-term total return
by investing in a portfolio of equity, debt and money market securities.
Securities in which the Fund invests primarily will be denominated in non-U.S.
currencies and will be traded in non-U.S. markets. Sub-advised by Wellington
Management.

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

Hartford MidCap HLS Fund -- Seeks to achieve long-term capital growth through
capital appreciation by investing primarily in equity securities of companies
with market capitalizations within the range represented by the Standard &
Poor's Mid-Cap 400 Index. Sub-advised by Wellington Management.

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

Hartford Small Company HLS Fund -- Seeks growth of capital by investing
primarily in equity securities within the range represented by the Russell 2000
Index selected on the basis of potential for capital appreciation. Sub-advised
by Wellington Management.

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

Hartford Money Market HLS Fund -- Seeks maximum current income consistent with
liquidity and preservation of capital. Sub-advised by HIMCO.

Mixed and Shared Funding -- Shares of the Funds are sold to our other Separate
Accounts and our insurance company

* "Standard & Poor's," "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.
The Index Fund is not sponsored, endorsed, sold or promoted by Standard &
Poor's and Standard & Poor's makes no representation regarding the
advisability of investing in the Index Fund.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
affiliates or other unaffiliated insurance companies to serve as the underlying
investment for both variable annuity contracts and variable life insurance
contracts, a practice known as "mixed and shared funding." As a result, there is
a possibility that a material
conflict may arise between the interests of Contract Owners, and of owners of
other contracts whose contract values are allocated to one or more of these
other Separate Accounts investing in any one of the Funds. In the event of any
such material conflicts, we will consider what action may be appropriate,
including removing the Fund from the Separate Account or replacing the Fund with
another Fund. There are certain risks associated with mixed and shared funding,
as disclosed in the funds' prospectus.

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

- - Notify you of any Fund shareholders' meeting if the shares held for your
Contract may be voted.

- - Send proxy materials and a form of instructions that you can use to tell us
how to vote the Fund shares held for your Contract.

- - Arrange for the handling and tallying of proxies received from Contract
Owners.

- - Vote all Fund shares attributable to your Contract according to instructions
received from you, and

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

If any federal securities laws or regulations, or their present interpretation,
change to permit us to vote Fund shares on our own, we may decide to do so. You
may attend any Shareholder Meeting at which shares held for your Contract may be
voted. After we begin to make Annuity Payments to you, the number of votes you
have will decrease.

Substitutions, Additions, or Deletions of Funds -- We reserve the right, subject
to any applicable law, to make certain changes to the Funds offered under your
Contract. We may, in our sole discretion, establish new Funds. New Funds will be
made available to existing Contract Owners as we determined appropriate. We may
also close one or more Funds to additional payments or transfers from existing
Sub-Accounts.

We reserve the right to eliminate the shares of any of the Funds for any reason
and to substitute shares of another registered investment company for the shares
of any Fund already purchased or to be purchased in the future by the Separate
Account. To the extent required by the 1940 Act, substitutions of shares
attributable to your interest in a Fund will not be made until we have the
approval of the Commission and we have notified you of the change.

In the event of any substitution or change, We may, by appropriate endorsement,
make such changes in the Contract as may be necessary or appropriate to reflect
such substitution or change. If we decide that it is in the best interest of the
Contract Owners, the Separate Account may be operated as a management company
under the 1940 Act or any other form permitted by law, may be de-registered
under the 1940 Act in the event such registration is no longer required, or may
be combined with one or more other Separate Accounts.

Performance Related Information
- --------------------------------------------------------------------------------

The Separate Account may advertise certain performance-related information
concerning the 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.

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 and assumes that the Optional Death Benefit
has not been elected.

The Separate Account may also advertise non-standard total returns that pre-date
the inception date of the Separate Account. These non-standardized total returns
are calculated by assuming that the Sub-Accounts have been in existence for the
same periods as the underlying Funds and by taking deductions for charges equal
to those currently assessed against the Sub-Accounts. These non-standardized
returns must be accompanied by standardized total returns.

If applicable, the 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 Hartford Money Market HLS 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 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
<PAGE>
14 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
calculated based on the performance of the underlying Funds and the assumption
that the Sub-Accounts were in existence for the same periods as those of the
underlying Funds, with a level of charges equal to those currently assessed
against the Sub-Accounts. No yield disclosure for periods prior to the date of
the Separate Account will be used without the yield disclosure for periods as of
the inception of the Separate Account.

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

The Fixed Accumulation Features
- --------------------------------------------------------------------------------

Important information you should know -- This portion of the Contract relating
to the Fixed Accumulation Features is not registered under the Securities Act of
1933 ("1933 Act") and the Fixed Accumulation Features are not registered as
investment companies under the Investment Company Act of 1940 ("1940 Act"). None
of the Fixed Accumulation Features or any of their interests are subject to the
provisions or restrictions of the 1933 Act or the 1940 Act, and the staff of the
Securities and Exchange Commission has not reviewed the disclosure regarding the
Fixed Accumulation Features. The following disclosure about the Fixed
Accumulation Features may be subject to certain generally applicable provisions
of the federal securities laws regarding the accuracy and completeness of
disclosure.

Payments and Contract Values allocated to a Fixed Accumulation Feature become a
part of our general assets. We invest the assets of the General Account in
accordance with applicable law governing the investments of insurance company
General Accounts. We have more than one Fixed Accumulation Feature. The standard
Fixed Accumulation Feature (the "Fixed Accumulation Feature") and then a number
of DCA Program Fixed Accumulation Features, which we collectively refer to as
the "Fixed Accumulation Features".

Currently, we guarantee that we will credit interest at a rate of not less than
3% per year, compounded annually, to amounts you allocate to the Fixed
Accumulation Feature. We reserve the right, in our sole discretion, to credit
interest at a rate in excess of 3% per year. You assume the risk that interest
credited to the Fixed Accumulation Feature may not exceed the minimum guarantee
of 3% for any given year.

We will periodically publish the Fixed Accumulation Feature interest rates
currently in effect. There is no specific formula for the determination of
interest rates. Some of the factors that we may consider in determining whether
to credit excess interest are: general economic trends, rates of return
currently available and anticipated on our investments, regulatory and tax
requirements and competitive factors. We will account for any deductions,
Surrenders or transfers from the Fixed Accumulation Feature on a "first-in",
"first-out" basis. For Contracts issued in the State of New York, Fixed
Accumulation Feature interest rates may vary from other states.

From time to time, we may credit increased interest rates to Contract Owners
under certain programs established at our sole discretion.

Dollar Cost Averaging Plus ("DCA Plus") Program -- These programs will use
designated DCA Program Fixed Accumulation Features. Currently, Contract Owners
may enroll in a special pre-authorized transfer program known as our Dollar Cost
Averaging Plus Program (the "Program"). Under this Program, Contract Owners who
enroll may allocate a minimum of $5,000 of their payment into the appropriate
DCA Program Fixed Accumulation Feature (we may allow a lower minimum premium
payment for qualified plan transfers or rollovers, including IRAs) and
pre-authorize transfers to any of the Sub-Accounts under either the 6 Month
Transfer Program or 12 Month Transfer Program. The 6-Month Transfer Program and
the 12-Month Transfer Program will generally have different credited interest
rates. Under the 6 Month Transfer Program, the interest rate can accrue up to 6
months and all payments and accrued interest must be transferred from the DCA
Program Fixed Accumulation Feature in use to the selected Sub-Accounts in 3 to 6
months. Under the 12-Month Transfer Program, the interest rate can accrue up to
12 months and all payments and accrued interest must be transferred to the
selected Sub-Accounts in 7 to 12 months. This will be accomplished by monthly
transfers for the period selected and a final transfer of the entire amount
remaining in the Program, which will generally be less than the prior monthly
transfer amounts.

The pre-authorized transfers will begin within 15 days after we receive the
initial Program payment and complete enrollment instructions. If We do not
receive complete Program enrollment instructions within 15 days of receipt of
the initial Program payment, the Program will be voided and the entire balance
in the Program will be transferred to the Accounts designated by you. If you do
not designate an Account, we will transfer any remaining amounts to the Fixed
Accumulation Feature and you will receive the Fixed Accumulation Feature's
current effective interest rate. Any subsequent payments we receive within the
Program period selected will be allocated to the Sub-Accounts over the remainder
of that Program transfer period, unless otherwise directed by You.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 15
- --------------------------------------------------------------------------------

You may only have one dollar cost averaging program in place at one time, this
means one standard dollar cost averaging plan or one Dollar Cost Averaging Plus
Program.

You may elect to terminate the pre-authorized transfers by calling or writing us
of your intent to cancel enrollment in the Program. Upon cancellation of
enrollment in the Program, you will no longer receive the increased interest
rate and unless we receive instructions to the contrary, the amounts remaining
in the DCA Program Fixed Accumulation Feature may be transferred to the Fixed
Accumulation Feature and accrue the interest rate currently in effect.

We reserve the right to discontinue, modify or amend the Program or any other
interest rate program established by Hartford. Any change to the Program will
not affect Contract Owners currently enrolled in the Program. This Program may
not be available in all states; please contact us to determine if it is
available in your state.

The Contract
- --------------------------------------------------------------------------------

The Contract Offered -- The Contracts are individual or group tax-deferred
variable annuity contracts. They are designed for retirement planning purposes
and may be purchased by any individual, group or trust, including; (a) any
trustee or custodian for a retirement plan qualified under Sections 401(a), or
403(a) of the Internal Revenue Code (which includes Section 401(k)); (b) annuity
purchase plans adopted by public school systems and certain tax-exempt
organizations according to Section 403(b) of the Code; (c) Individual Retirement
Annuities adopted according to Section 408 of the Code; (d) employee pension
plans established for employees by a state, a political subdivision of a state,
or an agency or instrumentality of either a state or a political subdivision of
a state, and (e) certain eligible deferred compensation plans as defined in
Section 457 of the Code ("Qualified Contracts").

Purchasing a Contract -- A prospective Contract Owner may purchase a Contract by
completing and submitting an application or an order request along with an
initial premium payment to the Administrative Office of the Company. The maximum
age for Annuitant, Owner and Joint Owner on the Contract Issue Date is 85.
Generally, the minimum premium payment is $1,000. The minimum subsequent premium
payment is $500. Certain plans may be allowed to make smaller periodic premium
payments. Unless we give our prior approval, we will not accept a premium
payment in excess of $1,000,000. Each premium payment, which is your premium
payment after the deduction of any applicable Premium Taxes, may be split among
the various Accounts subject to minimum amounts then in effect. We will send you
a confirmation notice upon receipt and acceptance of your premium payment.

Right to Examine the Contract -- If you are not satisfied with your purchase,
you may cancel the Contract by returning it within 10 days (or longer in some
states) after you receive it. You must send a written request for cancellation
along with the Contract. We will, without deduction for any CDSC normally
assessed, pay you an amount equal to the Contract Value. You bear the investment
risk during the period prior to our receipt of your request for cancellation. We
will refund the premium paid only for Individual Retirement Annuities, if
returned within seven days of receipt, and in those states where required by
law.

Crediting and Valuation -- Your premium payment, which is the balance remaining
after the deduction of any Premium Tax, is credited to your Contract within two
business days of receipt by us at our Administrative Office of a properly
completed application or an order to purchase a Contract and the premium
payment. The payment will be credited to the Accounts according to the
instructions we receive from you.

If your application or other information is incomplete when received, your
payment will be credited to the Accounts within five business days of receipt of
complete information. If the payment is not credited within five business days,
it will be immediately returned to you unless you have been informed of the
delay and tell us not to return it.

Subsequent premium payments are priced on the Valuation Day we receive the
payment in our Administrative Office, provided it is received before the New
York Stock Exchange closes. Unless otherwise specified, We will allocate any
subsequent payments to Accounts according to your most recent instructions.

Contract Value -- Before the Annuity
Commencement Date

Your Contract Value reflects interest rate credited any amounts allocated to the
Fixed Accumulation Features and the investment performance of the Sub-Accounts
where you have payments allocated.

Sub-Account Values -- Your Sub-Account Values on the date we issue your Contract
is the amount of your premium payment allocated to any Sub-Account. After that,
we determine your Sub-Account value by determining the Accumulation Unit value
for each Sub-Account, and then multiplying that value by the number of those
units. 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.
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16 HARTFORD LIFE INSURANCE COMPANY
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Accumulation Units -- When Premium Payments are credited to your Sub-Accounts,
they are converted into accumulation Units by dividing the amount of your
Premium Payments, minus any Premium Taxes, by the Accumulation Unit Value for
that day. The more Premium Payments you put into your Contract, the more
Accumulation Units you will own. You decrease the number of Accumulation Units
you have by requesting Surrenders, transferring money out of an Account,
settling a Death Benefit claim or by annuitizing your Contract.

Accumulation Unit Value -- The Accumulation Unit value for each Sub-Account was
arbitrarily set initially at $1 when the Sub-Account began operations. After
that, the Accumulation Unit value for each Sub-Account will equal (a) the
Accumulation Unit value at the end of the preceding Valuation Day multiplied by
(b) the Net Investment Factor (see the definition below) for the Valuation Day
for which the Accumulation Unit value is being calculated.

You will be advised, at least semiannually, of the number of Accumulation Units
credited to each Sub-Account, the current Accumulation Unit values, and the
total value of your Contract.

The Net Investment Factor (Before and After the Annuity Commencement
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 (a) by (b) and subtracting (c) from the result, where:

(a) Is the Net Asset Value of the Fund held in that Sub-Account, determined at
the end of the current Valuation Period (plus the per share amount of any
dividends or capital gains distributions made by that Fund);

(b) Is the Net Asset Value of the Fund held in the Sub-Account, determined at
the beginning of the Valuation Period;

(c) Is a daily factor representing the mortality and expense risk charge and any
optional charges deducted from the Sub-Account, adjusted for the number of
days in the Valuation Period.

Contract Value Transfers Before and After the Annuity Commencement Date

You may transfer your Contract Values from one or more Accounts to another
Account free of charge. We reserve the right to limit the number of transfers to
12 per Contract Year, with no 2 transfers occurring on consecutive Valuation
Days. Transfers by telephone may be made by you or by your attorney-in-fact
pursuant to a power of attorney by calling us at 1-800-862-6668 or by the agent
of record by calling 1-800-862-7155. Telephone transfers may not be permitted by
some states. There may be limitations on transfers to and from the Fixed
Accumulation Features that are described in your Contract. Some states may allow
us to limit the dollar amount transferred.

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

We may permit you to pre-authorize transfers under certain circumstances.
Transfers between the Accounts may be made both before and after the Annuity
Commencement Date. Generally, the minimum allocation to any Sub-Account may not
be less than $500. All percentage (%) allocations must be in whole numbers
(e.g., 1%). No minimum balance is presently required in any Account.

It is your responsibility to verify the accuracy of all confirmations of
transfers and to promptly advise us in our Administrative Offices of any
inaccuracies within 30 days of the date you receive your confirmation.

The right to reallocate Contract Values is subject to modification if we
determine, in our 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
Accounts and could include, but not be limited to, the requirement of a minimum
time period between each transfer, not accepting transfer requests of an agent
acting under a power of attorney on behalf of more than one Contract Owner, or
limiting the dollar amount that may be transferred between the Sub-Accounts by
you at any one time. Such restrictions may be applied in any manner reasonably
designed to prevent any use of the transfer right which we consider to be to the
disadvantage of other Contract Owners.

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

Currently, we 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 us.

Transfers made under a Dollar Cost Averaging Program do not count towards the
twelve transfers each Contract Year that we allow without charge and are not
subject to our rule that prohibits any two transfers from occurring on
Consecutive Valuation Days.
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HARTFORD LIFE INSURANCE COMPANY 17
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Surrenders

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 a penalty tax of 10% of the taxable portion of the Surrender
Value. (See "Federal Tax Considerations")

Payment of Surrender Amounts -- Payment of any request for a full or partial
Surrender from the Accounts will be made as soon as possible and in any event no
later than seven days after we receive the request at our Administrative Office.

There may be postponement in the payment of Surrender Amounts whenever (a) the
New York Stock Exchange is closed; (b) trading on the New York Stock Exchange is
restricted as determined by the Commission; (c) the Commission permits
postponement and so orders; or (d) the Commission determines that an emergency
exists making valuation of the amounts or disposal of securities not reasonably
practicable.

Full Surrenders Prior to the Annuity Commencement Date -- At any time prior to
the Annuity Commencement Date, you have the right to fully Surrender the
Contract. In such event, the Surrender Value of the Contract may be taken in the
form of a lump sum cash payment.

The Surrender Value of the Contract is equal to the Contract Value less any
Premium Taxes, the Annual Maintenance Fee and any Contingent Deferred Sales
Charge, if applicable. The Surrender Value may be more or less than the amount
of the payments made to your Contract.

Partial Surrenders Prior to the Annuity Commencement Date -- You may make a
partial Surrender of your Contract Value at any time prior to the Annuity
Commencement Date so long as the amount Surrendered is at least equal to our
minimum amount rules then in effect. Additionally, if the remaining Contract
Value following a Surrender is less than $500, we may terminate the Contract and
pay the Surrender Value. For Contracts issued in Texas, the Contract will not be
terminated when the remaining Contract Value after a Surrender is less than $500
unless there were no payments made during the previous 2 Contract Years.

When requesting a partial Surrender, you should specify the Account(s) from
which the partial Surrender will be taken; otherwise, the Surrender will be
taken on a pro rata basis according to the value in each active Account.

We may permit you to pre-authorize partial Surrenders subject to certain
limitations then in effect. We permit partial Surrenders by telephone subject to
dollar amount limitations in effect at the time you request the Surrender. To
request partial Surrenders by telephone, you must have completed and returned to
us a Telephone Redemption Program Enrollment Form authorizing telephone
Surrenders. If there are joint Contract Owners, both must authorize us to accept
telephone instructions and agree that We may accept telephone instructions for
partial Surrenders from either Contract Owner. Partial Surrender requests will
not be honored until we receive all required documents in proper form.

Telephone authorization will remain valid until (a) we receive written notice of
revocation by you, or, in the case of joint Contract Owners, written notice from
either Contract Owner; (b) we discontinue the privilege; or (c) we have reason
to believe that you have entered into a market timing agreement with an
investment adviser and/or broker/dealer.

We may record any telephone calls to verify data concerning transactions and may
adopt other procedures to confirm that telephone instructions are genuine. We
will not be liable for losses or expenses arising out of telephone instructions
reasonably believed to be genuine.

In order to obtain that day's unit values on Surrender, We must receive
telephone Surrender instructions prior to the close of trading on the New York
Stock Exchange (generally 4:00 p.m.).

We may modify, suspend, or terminate telephone transaction privileges at any
time.

Surrenders after the Annuity Commencement Date -- You may fully Surrender your
Contract on or after the Annuity Commencement Date if you elect the Payment For
a Period Certain Settlement Option. We pay you the commuted value that is equal
to the present value of the remaining payments we are scheduled to make less any
applicable Contingent Deferred Sales Charge. The commuted value is determined as
of the date we receive your written request for Surrender at our Administrative
Office.

Partial Surrenders are permitted after the Annuity Commencement Date if you
elect the Payment for a Period Certain Settlement Option, but check with your
tax advisor because there may be adverse tax consequences.

Important Tax Information -- There are certain restrictions on section 403(b)
tax-sheltered annuities. As of December 31, 1988, all section 403(b) annuities
have limits on full and partial Surrenders. Contributions to the Contract made
after December 31, 1988 and any increases in cash value after December 31, 1988
may not be distributed unless the Contract Owner/employee has a) attained age
59 1/2, b) separated from service, c) died, d) become disabled or e) experienced
financial hardship (cash value increases may not be distributed for hardships
prior to age 59 1/2). Distributions prior to age 59 1/2 due to financial
hardship or separation from service may still be subject to a penalty tax of
10%. We will not assume any responsibility for determining whether a surrender
is permissible, with or without tax penalty, in any particular situation; or in
monitoring Surrender requests regarding pre or post January 1, 1989 Contract
Values. Any full or partial Surrender described above may affect the continuing
tax-qualified status of some Contracts or plans and may result in adverse tax
consequences to the Contract Owner. The Contract Owner, therefore, should
consult with a tax advisor before undertaking any such Surrender. (See "Federal
Tax Considerations")

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18 HARTFORD LIFE INSURANCE COMPANY
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Contract Charges

Contingent Deferred Sales Charge ("CDSC")

The CDSC is a percentage of the amount Surrendered (not to exceed the total
amount of the premium payments made) and equals:

Payments Not Subject to CDSC

Annual Withdrawal Amount -- During the first seven Contract years, you may make
a partial Surrender of Contract Values of up to 15% of the premium payments each
Contract Year on a non-cumulative basis, as determined on the date of the
requested Surrender, without the application of the CDSC. After the seventh
Contract Year, you may make a partial Surrender each Contract Year of 15% of
premium payments made during the seven years prior to the Surrender and 100% of
the Contract Value less the premium payments made during the seven years prior
to the Surrender. These amounts are different for group unallocated contracts
and contracts issued to a Charitable Remainder Trust.

Extended Surrender Privilege -- This privilege allows Annuitants who attain age
70 1/2 with a Contract held under an Individual Retirement Account or 403(b)
plan to Surrender an amount equal to the required minimum distribution for the
stated Contract without incurring any CDSC.

Waivers of CDSC

Confinement in a Nursing Home, Hospital or Long Term Care Facility -- (described
as Eligible Confinement in the Contract) -- We will waive any CDSC applicable to
a partial or full Surrender if the Annuitant, Contract Owner or joint annuitant
is confined, at the recommendation of a physician for medically necessary
reasons, for at least 180 calendar days to: a hospital recognized as a general
hospital by the proper authority of the state in which it is located; or a
hospital recognized as a general hospital by the Joint Commission on the
Accreditation of Hospitals; or a facility certified as a hospital or long-term
care facility; or a nursing home licensed by the state in which it is located
and offers the services of a registered nurse 24 hours a day.

The Annuitant, Contract Owner or joint annuitant cannot be confined at the time
the Contract is purchased in order to receive this waiver and the Contract
Owner(s) must have been the Contract Owner(s) continuously since the Contract
issue date. You must provide written proof of confinement satisfactory to
Hartford and you must request the partial or full Surrender within 91 calendar
days of the last day of confinement.

This waiver may not be available in all states. Please contact your registered
representative or contact Us to determine availability.

Death of the Annuitant or Contract Owner or Payments Under an Annuity
Option -- No CDSC otherwise applicable will be assessed in the event of death of
the Annuitant, death of the Contract Owner or if payments are made under an
Annuity option (other than a Surrender of variable payments for a Period Certain
Annuity option) provided for under the Contract.

Other Plans or Programs -- Certain plans or programs established by us from time
to time may have different Surrender privileges.

Mortality and Expense Risk Charge -- For assuming risks under the Contract, We
deduct a daily charge at the rate of 1.25% per year against all Contract Values
held in the Accounts during the life of the Contract. Although variable annuity
payments made under the Contracts will vary in accordance with the investment
performance of the underlying Fund shares held in the Sub-Account(s), the
payments will not be affected by (a) our actual mortality experience among
Annuitants before or after the Annuity Commencement Date or (b) our actual
expenses, if greater than the deductions provided for in the Contracts because
of the expense and mortality undertakings by us.

There are two types of mortality risks: those made during the accumulation or
deferral phase and those made during the annuity payout phase. The mortality
risk we take in the accumulation phase is that we may experience a loss
resulting from the assumption of the mortality risk relative to the death
benefit in event of the death of an Annuitant or Contract Owner before
commencement of Annuity payments, in periods of declining value. The mortality
risk we take during the annuity payout phase is to make monthly Annuity payments
(determined in accordance with the 1983a Individual Annuity Mortality Table and
other provisions contained in the Contract) to Annuitants regardless of how long
an Annuitant may live, and regardless of how long all Annuitants as a group may
live. These mortality undertakings are based on our determination of expected
mortality rates among all Annuitants. If actual experience among Annuitants
during the Annuity payment period deviates from our actuarial determination of
expected mortality rates among Annuitants because, as a group, their longevity
is longer than anticipated, we must provide amounts from our general funds to
fulfill
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HARTFORD LIFE INSURANCE COMPANY 19
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our contractual obligations. We will bear the loss in such a situation.

During the accumulation phase, we also provide an expense undertaking. We assume
the risk that the Annual Maintenance Fee for maintaining the Contracts prior to
the Annuity Commencement Date may be insufficient to cover the actual cost of
providing such items.

Annual Maintenance Fee -- Each year, on each Contract Anniversary on or before
the Annuity Commencement Date, we will deduct an Annual Maintenance Fee, if
applicable, from Contract Values to reimburse us for expenses relating to the
maintenance of the Contract and Accounts. If during a Contract Year the Contract
is Surrendered for its full value, we will deduct the Annual Maintenance Fee at
the time of such Surrender. The fee is a flat fee that will be due in the full
amount regardless of the time of the Contract Year that Contract Values are
Surrendered. The Annual Maintenance Fee is $30 per Contract Year for Contracts
with less than $50,000 Contract Value on the Contract Anniversary. Fees will be
deducted on a pro rata basis according to the value in each Account under a
Contract.

Waivers of the Annual Maintenance Fee -- Annual Maintenance Fees are waived for
Contracts with Contract Value equal to or greater than $50,000. In addition, we
will waive one Annual Maintenance Fee for Contract Owners who own one or more
Contracts with a combined Contract Value of $50,000 up to $100,000. If you have
multiple Contracts with a combined Contract Value of $100,000 or greater, we
will waive the Annual Maintenance Fee on all Contracts. However, we reserve the
right to limit the number of Annual Maintenance Fee waivers to a total of six
Contracts. We reserve the right to waive the Annual Maintenance Fee under other
conditions.

Premium Taxes -- Charges are also deducted for Premium Tax, if applicable,
imposed by state or other governmental entity. Certain states impose a Premium
Tax, currently ranging up to 3.5%. Some states assess the tax at the time
purchase payments are made; others assess the tax at the time of annuitization.
We will pay Premium Taxes at the time imposed under applicable law. At our sole
discretion, we may deduct Premium Taxes at the time we pay such taxes to the
applicable taxing authorities, at the time the Contract is Surrendered, at the
time a death benefit is paid, or at the time the Contract annuitizes.

Optional Death Benefit Fee -- If you elect the Optional Death Benefit, we will
deduct daily from your Contract Value an additional charge which equals .15% per
year of the Sub-Account value.

Exceptions to Charges Under the Contract -- We may offer, at our discretion,
reduced fees and charges including, but not limited to, CDSC, the mortality and
expense risk charge, administration charges, optional charges and the Annual
Maintenance Fee for certain sales (including employer sponsored savings plans)
under circumstances which may result in savings of certain costs and expenses.
Reductions in these fees and charges will not be unfairly discriminatory against
any Contract Owner.

Death Benefits

Death Before the Annuity Commencement Date

Determination of the Beneficiary -- If the Contract Owner or the Annuitant dies
before the Annuity Commencement Date, we will pay a Death Benefit to the
Beneficiary.

- If the Contract Owner dies before the Annuity Commencement 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, the
spouse may elect, in lieu of receiving the Contract Value, to be treated as
the Contract Owner. If the Annuitant is not living and there is no
Contingent Annuitant, the spouse will be presumed to be the Contingent
Annuitant. 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 before the Annuity Commencement Date, the Contingent
Annuitant will become the Annuitant. If either (a) there is no Contingent
Annuitant, (b) the Contingent Annuitant predeceases the Annuitant, or (c) if
any sole Contract Owner dies before the Annuity Commencement Date, the
Beneficiary, as determined under the Contract control provisions, will
receive the Death Benefit. However, if the Annuitant dies prior to the
Annuity Commencement 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 void.

Determination of the Death Benefit

If you did not elect the Optional Death Benefit, Your Death Benefit, which we
will calculate as of the date we receive Due Proof of Death, will be calculated
as follows:

If the deceased had not reached their 81st birthday, the Death Benefit is the
greater of:

- - 100% of the total premium payments made to the Contract, reduced by any
subsequent Surrenders, or

- - The Contract Value of your annuity, or

- - Your Maximum Anniversary Value, which is described below.

The Maximum Anniversary Value is based on a series of calculations on Contract
Anniversaries of Contract Values, premium payments and partial Surrenders. We
will calculate an Anniversary Value for each Contract Anniversary prior to the
deceased's 81st birthday or date of death. The Anniversary Value is equal to the
Contract Value as of a Contract Anniversary, increased by the dollar amount of
any premium payments made since that anniversary and reduced by the dollar
amount of any partial Surrenders since that anniversary. The Maximum Anniversary
Value is equal to the greatest Anniversary Value attained from this series of
calculations.
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20 HARTFORD LIFE INSURANCE COMPANY
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If the deceased reached their 81st birthday, then the Death Benefit is the
greater of:

- - 100% of the total premium payments made to us, reduced by any subsequent
Surrenders, or

- - The Contract Value of your annuity, or

- - The Maximum Anniversary Value.

If you did elect the Optional Death Benefit, the Death Benefit, which we will
calculate as of the date we receive Due Proof of Death, will be the greater of:

- - 100% of the total premium payments made to us, reduced by any subsequent
Surrenders;

- - The Contract Value of your annuity;

- - The Maximum Anniversary Value; or

- - The Interest Accumulation Value, which is described below.

The Interest Accumulation Value is calculated by accumulating interest on your
premium payments at a rate of 5% per year up to the deceased's 81st birthday or
date of death, assuming you have not taken any Surrenders. If you have taken any
Surrenders, the 5% will be accumulated on your premium payments, but there will
be an adjustment for any of the Surrenders. This adjustment will reduce the
Optional Death Benefit proportionally for the Surrenders. We stop compounding
interest on the deceased's 81st birthday or date of death. After that date, the
Interest Accumulation Value will be adjusted by adding any subsequent payments
and subtracting proportional adjustments for any partial Surrenders. The
Optional Death Benefit is limited to a maximum of 200% of premium payments, less
proportional adjustments for any Surrenders. For examples on how the Optional
Death Benefit is calculated see "Appendix II".

Spousal Contract Continuation -- If the Death Benefit beneficiary is the
Contract Owner's spouse, the Contract will continue with the spouse as Contract
Owner, unless the spouse elects to receive the Death Benefit as a lump sum
payment or as an annuity payment option. If the Contract continues with the
spouse as Contract Owner, we will adjust the Contract Value to the amount that
we would have paid as the Death Benefit payment, had the spouse elected to
receive the Death Benefit as a lump sum payment. This provision will only apply
one time for each Contract.

Calculation of the Death Benefit -- If the Contract Owner or Annuitant dies
before the Annuity Commencement Date and a Death Benefit is payable to the
Beneficiary, the Death Benefit will be calculated as of the date we receive
written notification of Due Proof of Death. The Death Benefit remains invested
in the Separate Account according to your last instructions until the proceeds
are paid or we receive new settlement instructions from the Beneficiary. During
the time period between our receipt of written notification of Due Proof of
Death and our receipt of the complete settlement instructions, the calculated
Death Benefit will be subject to market fluctuations. Upon receipt of complete
settlement instructions, we will calculate the payable amount.

Any Annuity payments made on or after the date of death, but before receipt of
written notification of Due Proof of Death will be recovered by us from the
Payee.

Death On or After the Annuity Commencement Date

If, on or after the Annuity Commencement Date, the Contract Owner dies and the
Annuitant is living, the Beneficiary becomes the Contract Owner. If the
Annuitant dies and the Contract Owner is living, the Contract Owner becomes the
Beneficiary.

If the Annuitant dies on or after the Annuity Commencement Date, a Death Benefit
may be paid or payments may continue under the following annuity payment
options:

- - Life Annuity with Cash Refund

- - Life Annuity with payments for a Period Certain

- - Joint and Last Survivor Life Annuity with payments for a Period Certain and

- - payments for a Period Certain.

Proceeds from the Death Benefit may be left with us for at least 5 years from
the date of the Contract Owner's death if the death occurs prior to the Annuity
Commencement Date. These proceeds will remain in the Account(s) to which they
were allocated at the time of death unless the Beneficiary elects to reallocate
them. Full or partial Surrenders may be made at any time. In the event of a
complete Surrender, the remaining value will equal the Contract Value of the
proceeds left with us, minus any partial Surrenders. This option may not be
available under certain Contracts issued in connection with Qualified Plans.

Settlement Provisions
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You select an Annuity Commencement Date which will not be deferred beyond the
Valuation Day immediately following the later of the Annuitant's 90th birthday
or the end of the tenth Contract Year. You may elect a later Annuity
Commencement Date if we allow and subject to the laws and regulations then in
effect. The Annuity Commencement Date may be changed from time to time, but any
change must be within 30 days prior to the date on which Annuity payments are
scheduled to begin.

You also elect in writing an annuity payment option, which may be any of the
options described below or any annuity payment option then being offered by us.
The annuity payment option may not be changed on or after the Annuity
Commencement Date. The Contract contains the six annuity payment options
described below and the Annuity Proceeds Settlement Option.

For Qualified Contracts, the following annuity payment options are only
available if the guaranteed payment period is less than the life expectancy of
the Annuitant at the time the option
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HARTFORD LIFE INSURANCE COMPANY 21
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becomes effective. The Annuity Proceeds Settlement option is available for
Qualified Contracts only if the guaranteed payment period is less than the life
expectancy of the Beneficiary at the time the option becomes effective. Such
life expectancies are computed on the basis of the mortality table prescribed by
the IRS, or if none is prescribed, the mortality table in use by us. If you do
not elect otherwise, fixed dollar amount annuity payments will begin
automatically on the Annuity Commencement Date, under the Life Annuity Payment
Option.

For Non-Qualified Contracts, if you do not elect otherwise, fixed dollar amount
annuity payments will automatically begin on the Annuity Commencement Date under
the annuity payment option Life Annuity with payments for a Period Certain of 10
years. For Qualified Contracts and Contracts issued in Texas, if you do not
elect otherwise, fixed dollar amount annuity payments will begin automatically
on the Annuity Commencement Date, under the Life Annuity Payment Option.

With the exception of the option Payments for a Period Certain, if the variable
dollar amount payment is selected, no Surrenders are permitted after annuity
payments begin.

Annuity Payment Options
Option 1 -- Life Annuity

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

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

Option 2 -- Life Annuity with Cash Refund

where we make payments during the life of the Annuitant and when the Annuitant
dies, we pay the remaining value to the Beneficiary. The remaining value is
calculated at the time we receive Due Proof of Death by subtracting the annuity
payments already made from the Contract Value less any applicable Premium Taxes
applied to this annuity payment option.
- This option is only available if you select payments using a variable dollar
amount payment option with the 5% AIR or fixed dollar amount annuity
payments.

Option 3 -- Life Annuity with Payments for a Period Certain

where we make payments to you for the life of the Annuitant but you are at least
guaranteed payments for a time period you select which is a minimum of 5 years
and a maximum of 100 years minus your Annuitant's age.

- If the Annuitant dies prior to the end of the period selected, we will pay
your Beneficiary the present value of the remaining payments, either in a
lump sum payment or we will continue payments until the end of the period
selected.

Option 4 -- Joint and Last Survivor Annuity

where we make payments during the lifetimes of the Annuitant and another
designated individual called the Joint Annuitant. At the time of electing this
Annuity Option, the Contract Owner may elect reduced payments over the remaining
lifetime of the survivor.

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

Option 5 -- Joint and Last Survivor Life Annuity with Payments for a Period
Certain

where we make payments during the lifetime of the Annuitant and a Joint
Annuitant, and we guarantee that those payments for a time period you select
which is not less than 5 years and no more than 100 years minus the younger
Annuitant's age. At the time of electing this Annuity Option, the Contract Owner
may elect reduced payments over the remaining lifetime of the survivor.

- If the Annuitant and Joint Annuity die prior to the end of the period
selected, we will pay your Beneficiary the present value of the remaining
payments, either in a lump sum payment or We will continue payments until
the end of the period selected.

Option 6 -- Payments for a Period Certain

where we agree to make payments for a specified time. The minimum period that
you can select is 10 years during the first two Contract years and 5 years after
the second Contract Anniversary. The maximum period that you can select is 100
years minus your Annuitant's age.

We may offer other annuity payment options from time to time.

Annuity Payments

When you decide to begin to take payments, we calculate your Contract Value
minus any Premium Tax which we must pay and, unless you instruct us otherwise,
we apply that amount to a variable annuity with the same Sub-Account values. You
may however, choose to have your Contract Value applied to a fixed annuity
instead.

Important: You should consider the question of allocation of Contract Values
(less applicable Premium Taxes) among Accounts to make certain that annuity
payments are based on the investment alternative best suited to your needs for
retirement.

Annuity Payments -- The minimum Annuity payment is $50. No election may be made
which results in a first payment of less than $50. If at any time Annuity
payments are or become less
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22 HARTFORD LIFE INSURANCE COMPANY
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than $50, we have the right to change the frequency of payment to intervals so
that payments will at least be $50. For Contracts issued in the State of New
York, the minimum monthly Annuity payment is $20. If any amount due is less than
the minimum amount per year, we make such other settlement as may be equitable
to the Payee.

All Annuity payments under any option will occur the same day of the month as
the Annuity Commencement Date, based on the payment frequency selected by you.
Available payment frequencies include monthly, quarterly, semi-annual and
annual. The payment frequency may be changed within 30 days prior to the
anniversary of your Annuity Commencement Date.

Annuity Commencement Date -- You select the Annuity Commencement Date in your
application or order request. The Annuity Calculation Date will be no more than
five Valuation Days before the Annuity Commencement Date.

Annuity Calculation Date -- On the Annuity Calculation Date, your Contract Value
less any applicable Premium Tax is applied to purchase Annuity Units of the
Sub-Accounts selected by you. The first Annuity payment is computed using the
value of these 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 Annuity Commencement Date, based on the Annuity payment
frequency selected by you. They are also shown on the specification page of your
Contract. You may choose from monthly, quarterly, semi-annual and annual
payments. The Annuity payment frequency may not be changed once selected by you.

In the event that You do 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 we pay to your 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 you. 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 less applicable Premium Tax 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 AIR
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 calculated on the
Income Payment Date. It is determined by multiplying (a) by (b), where:

(a) is the number of Annuity Units of each Sub-Account credited under the
Contract and

(b) is the Annuity Unit value (described below) for that Sub-Account.

The total subsequent Variable Annuity payments equal the sum of the amounts
attributable to each Sub-Account.

When an Income Payment Date falls on a day that is not a Valuation Day, the
Income Payment is computed as of the prior Valuation Day. If the date of the
month elected does not occur in a given month, i.e., the 29th, 30th, or 31st of
a month, the payment will be computed as of the last Valuation Day of the month.

The Annuity Unit value of each Sub-Account for any Valuation Period is equal to
(a) multiplied by (b) multiplied 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

The Annuity Unit Factor neutralizes the AIR percentage (3%, 5%, or 6%). The
daily Annuity Unit Factor corresponding to the AIR percentages of 3%, 5%, and 6%
are 0.999919, 0.999866, and 0.999840, respectively

The Assumed Investment Return (AIR) -- 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(s) supporting the Variable Annuity
payments, less an adjustment to neutralize the selected AIR. Dividing what would
otherwise be the Annuity Unit value by the AIR 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 AIR
selected by you. 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%.
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HARTFORD LIFE INSURANCE COMPANY 23
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The Contract permits Contract Owners to select one of three AIRs: 3%, 5% or 6%.
A higher AIR 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 AIR, and a more rapid drop in subsequent
payments when actual investment performance (minus any deductions and expenses)
is less than the AIR. The following examples may help clarify the impact of
selecting one AIR over another:

- - If you select a 3% AIR 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% AIR, 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.

- - If you select a 5% AIR 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% AIR, 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.

- - If you select a 6% AIR 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% AIR, 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.

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

Exchange (Transfer) of Annuity Units -- After the Annuity Calculation Date, you
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 a written request for a transfer. For guidelines refer to Sub-Account
Value Transfers Before and After the Annuity Commencement Date.

Fixed Dollar Annuity -- Fixed Annuity payments are determined at annuitization
by multiplying the Contract Value (less applicable Premium Taxes) by a rate to
be determined by Hartford which is no less than the rate specified in the Fixed
Annuity option tables in the Contract. The Annuity payment will remain level for
the duration of the Annuity. Any Fixed Annuity allocation may not be changed.

Other Information

Assignment -- Ownership of this Contract is generally assignable. However, if
the Contracts are issued pursuant to some form of Qualified Plan, it is possible
that the ownership of the Contracts may not be transferred or assigned depending
on the type of tax-qualified retirement plan involved. An assignment of a
Non-Qualified Contract may subject the Contract Values or assignment proceeds to
income taxes and certain penalty taxes.

Contract Modification -- The Annuitant may not be changed; however, the
Contingent Annuitant may be changed at any time prior to the Annuity
Commencement Date by sending us written notice. We may modify the Contract, but
no modification will effect the amount or term of any Contract unless a
modification is required to conform the Contract to applicable Federal or State
law. No modification will effect the method by which Contract Values are
determined.

Federal Tax Considerations
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What are some of the federal tax consequences which affect these Contracts?

A. General

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

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

B. Taxation of Hartford and the Separate Account

The Separate Account is taxed as part of Hartford which is taxed as a life
insurance company in accordance with the Internal
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24 HARTFORD LIFE INSURANCE COMPANY
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Revenue Code of 1986, as amended (the "Code"). Accordingly, the Separate Account
will not be taxed as a "regulated investment company" under subchapter M of
Chapter 1 of the Code. Investment income and any realized capital gains on the
assets of the Separate Account are reinvested and are taken into account in
determining the value of the Accumulation and Annuity Units (See "Value of
Accumulation Units"). As a result, such investment income and realized capital
gains are automatically applied to increase reserves under the Contract.

No taxes are due on interest, dividends and short-term or long-term capital
gains earned by the Separate Account with respect to Qualified or Non-Qualified
Contracts.

C. Taxation of Annuities -- General Provisions Affecting Purchasers Other than
Qualified Retirement Plans

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

1. Non-Natural Persons, Corporations, Etc.

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

- - certain annuities held by structured settlement companies,

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

- - certain immediate annuities.

A non-natural person which is a tax-exempt entity for federal tax purposes will
not be subject to income tax as a result of this provision.

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

2. Other Contract Owners (Natural Persons).

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

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

a. Distributions Prior to the Annuity Commencement Date.

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

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

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

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

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

b. Distributions After Annuity Commencement Date.

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

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

ii. If the annuity payments cease by reason of the death of the Annuitant and,
as of the date of death, the amount of annuity payments excluded from gross
income by the exclusion ratio does not exceed the investment in the
contract as of
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 25
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the Annuity Commencement Date, then the remaining portion of unrecovered
investment shall be allowed as a deduction for the last taxable year of the
Annuitant.

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

c. Aggregation of Two or More Annuity Contracts.

Contracts issued after October 21, 1988 by the same insurer (or affiliated
insurer) to the same Contract Owner within the same calendar year (other than
certain contracts held in connection with a tax-qualified retirement
arrangement) will be treated as one annuity Contract for the purpose of
determining the taxation of distributions prior to the Annuity Commencement
Date. An annuity contract received in a tax-free exchange for another annuity
contract or life insurance contract may be treated as a new Contract for this
purpose. Hartford believes that for any annuity subject to such aggregation, the
values under the Contracts and the investment in the contracts will be added
together to determine the taxation under subparagraph 2.a., above, of amounts
received or deemed received prior to the Annuity Commencement Date. Withdrawals
will first be treated as withdrawals of income until all of the income from all
such Contracts is withdrawn. As of the date of this Prospectus, there are no
regulations interpreting this provision.

d. 10% Penalty Tax -- Applicable to Certain Withdrawals and Annuity
Payments.

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

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

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

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

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

4. A distribution that is part of a scheduled series of substantially equal
periodic payments (not less frequently than annually) for the life (or
life expectancy) of the recipient (or the joint lives or life
expectancies of the recipient and the recipient's designated
Beneficiary).

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

e. Special Provisions Affecting Contracts Obtained through a Tax-Free
Exchange of Other Annuity or Life Insurance Contracts Purchased Prior to
August 14, 1982.

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

f. Required Distributions.

i. Death of Contract Owner or Primary Annuitant

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

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

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

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

ii. Alternative Election to Satisfy Distribution Requirements

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

iii. Spouse Beneficiary
If any portion of the interest of a Contract Owner is payable to or for the
benefit of his or her spouse, and the Annuitant or Contingent Annuitant is
living, such spouse shall be treated as the Contract Owner of such portion
for purposes of section i. above. This spousal continuation shall apply only
once for this contract.

3. Diversification Requirements.

The Code requires that investments supporting your contract be adequately
diversified. Code Section 817 provides that a variable annuity contract will not
be treated as an annuity contract for any period during which the investments
made by the separate account or underlying fund are not adequately diversified.
If a contract is not treated as an annuity contract, the contract owner will be
subject to income tax on annual increases in cash value.

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

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

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

- - no more than 80% is represented by any three investments and

- - no more than 90% is represented by any four investments.

In determining whether the diversification standards are met, all securities of
the same issuer, all interests in the same real property project, and all
interests in the same commodity are each treated as a single investment. In the
case of government securities, each government agency or instrumentality is
treated as a separate issuer.

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

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

4. Ownership of the Assets in the Separate Account.

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

The IRS has issued several rulings discussing investor control. These rulings
say that certain incidents of ownership by the contract owner, such as the
ability to select and control investments in a separate account, will cause the
contract owner to be treated as the owner of the assets for tax purposes.

In its explanation of the diversification regulations, the Treasury Department
recognized that the temporary regulations "do not provide guidance concerning
the circumstances in which investor control of the investments of a segregated
asset account may cause the investor, rather than the insurance company, to be
treated as the owner of the assets in the account." The explanation further
indicates that "the temporary regulations provide that in appropriate cases a
segregated asset account may include multiple sub-accounts, but do not specify
the extent to which policyholders may direct their investments to particular
sub-accounts without being treated as the owners of the underlying assets.
Guidance on this and other issues will be provided in regulations or revenue
rulings under Section 817(d), relating to the definition of variable contract."

The final regulations issued under Section 817 did not provide guidance
regarding investor control, and as of the date of this prospectus, guidance has
yet to be issued. We do not know if additional guidance will be issued. If
guidance is issued, we do not know if it will have a retroactive effect.

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

D. Federal Income Tax Withholding

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

1. Non-Periodic Distributions.

The portion of a non-periodic distribution which constitutes taxable income will
be subject to federal income tax withholding unless the recipient elects not to
have taxes withheld. If there is no election to waive withholding, 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.

2. Periodic Distributions (distributions payable over a period greater than one
year).

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

E. General Provisions Affecting Qualified Retirement Plans

The Contract may be used for a number of qualified retirement plans. If the
Contract is being purchased with respect to some form of qualified retirement
plan, please refer to Appendix I for information relative to the types of plans
for which it may be used and the general explanation of the tax features of such
plans.

F. Annuity Purchases By Nonresident Aliens and Foreign Corporations

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

Miscellaneous
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How Contracts Are Sold

Hartford Securities Distribution Company, Inc. ("HSD") serves as Principal
Underwriter for the securities issued with respect to the Separate Account. HSD
is an affiliate of Hartford. Both HSD and Hartford are ultimately controlled by
The Hartford Financial Services Group, Inc. The principal business address of
HSD is the same as that of Hartford.

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

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

Commissions will be paid by Hartford and will not be more than 6% of premium
payments. From time to time, Hartford may pay or permit other promotional
incentives, in cash or credit or other compensation.

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

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

Year 2000

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

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

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

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

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

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

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

Legal Matters

There are no material legal proceedings pending to which the Separate Account is
a party.

Counsel with respect to federal laws and regulations applicable to the issue and
sale of the Contracts and with respect to Connecticut law is Lynda Godkin,
Senior Vice President, General Counsel and Corporate Secretary, Hartford Life
Insurance Company, P.O. Box 2999, Hartford, Connecticut 06104-2999.

Experts

The audited financial statements and financial statement schedules included in
this registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports. The principal business address of Arthur
Andersen LLP is One Financial Plaza, Hartford, Connecticut 06103.

More Information

You may call your Representative if you have any questions or write or call us
at the address below:

Hartford Life Insurance Company
Attn: IPS
P.O. Box 5085
Hartford, Connecticut 06102-5085
Telephone: 1-800-862-6668 (Contract Owners)
1-800-862-7155 (Investment Representatives)
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 29
- --------------------------------------------------------------------------------

Appendix I -- Information Regarding Tax-Qualified Retirement Plans

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

The federal tax rules applicable to owners of Contracts under tax-qualified
retirement plans vary according to the type of plan as well as the terms and
conditions of the plan itself. Contract owners, plan participants and
beneficiaries are cautioned that the rights and benefits of any person may be
controlled by the terms and conditions of the tax-qualified retirement plan
itself, regardless of the terms and conditions of a Contract. We are not bound
by the terms and conditions of such plans to the extent such terms conflict with
a Contract, unless we specifically consent to be bound.

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

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

1. Tax-Qualified Pension or Profit-Sharing Plans -- Eligible employers can
establish certain tax-qualified pension and profit-sharing plans under section
401 of the Code. Rules under section 401(k) of the Code govern certain "cash or
deferred arrangements" under such plans. Rules under section 408(k) govern
"simplified employee pensions". Tax-qualified pension and profit-sharing plans
are subject to limitations on the amount that may be contributed, the persons
who may be eligible to participate and the time when distributions must
commence. Employers intending to use the Contracts in connection with
tax-qualified pension or profit-sharing plans should seek competent tax and
other legal advice.

2. Tax Sheltered Annuities Under Section 403(b) -- Public schools and certain
types of charitable, educational and scientific organizations, as specified in
section 501(c)(3) of the Code, can purchase tax-sheltered annuity contracts for
their employees. Tax-deferred contributions can be made to tax-sheltered annuity
contracts under section 403(b) of the Code, subject to certain limitations.
Generally, such contributions may not exceed the lesser of $10,000 (indexed) or
20% of the employee's "includable compensation" for such employee's most recent
full year of employment, subject to other adjustments. Special provisions under
the Code may allow some employees to elect a different overall limitation.

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

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

- - upon separation from service;

- - upon death or disability; or

- - in the case of hardship (and in the case of hardship, any income attributable
to such contributions may not be distributed).

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

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

Deferred Compensation Plans that meet the requirements of section 457(b) of the
Code are called "eligible" Deferred Compensation Plans. Section 457(b) limits
the amount of contributions that can be made to an eligible Deferred
Compensation Plan on behalf of a participant. Generally, the limitation on
contributions is 33 1/3% of a participant's includable compensation (typically
25% of gross compensation) or, for 1999, $8,000 (indexed), whichever is less.
The plan may provide for additional "catch-up" contributions during the three
taxable years ending before the year in which the participant attains normal
retirement age.

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

In general, distributions from an eligible Deferred Compensation Plan are
prohibited under section 457 of the Code unless made after the participating
employee:

- - attains age 70 1/2,

- - separates from service,

- - dies, or

- - suffers an unforeseeable financial emergency as defined in the Code.

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

4. Individual Retirement Annuities ("IRAs") Under Section 408

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

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

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

5. Federal Tax Penalties and Withholding -- Distributions from tax-qualified
retirement plans are generally taxed as ordinary income under section 72 of the
Code. Under these rules, a portion of each distribution may be excludable from
income. The excludable amount is the portion of the distribution that bears the
same ratio as the after-tax contributions bear to the expected return.

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

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

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

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

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

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

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

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

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

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

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

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

(b) Minimum Distribution Penalty Tax If the amount distributed is less than the
minimum required distribution for the year, the Participant is subject to a
50% penalty tax on the amount that was not properly distributed.

An individual's interest in a tax-qualified retirement plan generally must be
distributed, or begin to be distributed, not later than
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 31
- --------------------------------------------------------------------------------
the Required Beginning Date. Generally, the Required Beginning Date is April 1
of the calendar year following the later of:

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

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

The Required Beginning Date for an individual who is a five (5) percent owner
(as defined in the Code), or who is the owner of an IRA, is April 1 of the
calendar year following the calendar year in which the individual attains age
70 1/2.

The entire interest of the Participant must be distributed beginning no later
than the Required Beginning Date over:

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

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

Each annual distribution must equal or exceed a "minimum distribution amount"
which is determined by dividing the account balance by the applicable life
expectancy. This account balance is generally based upon the account value as of
the close of business on the last day of the previous calendar year. In
addition, minimum distribution incidental benefit rules may require a larger
annual distribution.

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

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

(c) Withholding In general, regular wage withholding rules apply to
distributions from IRAs and plans described in section 457 of the Code.
Periodic distributions from other tax-qualified retirement plans that are
made for a specified period of 10 or more years or for the life or life
expectancy of the participant (or the joint lives or life expectancies of
the participant and beneficiary) are generally subject to federal income tax
withholding as if the recipient were married claiming three exemptions. The
recipient of periodic distributions may generally elect not to have
withholding apply or to have income taxes withheld at a different rate by
providing a completed election form.

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

- - the non-taxable portion of the distribution;

- - required minimum distributions; or

- - direct transfer distributions.

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

(Certain states require withholding of state taxes when federal income tax is
withheld.
<PAGE>
32 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

Appendix II -- Optional Death Benefit -- Examples

Example 1
Assume that you deposited a premium payment of $100,000 on January 1, 1998. If
you made no Surrenders during the year, your Interest Accumulation Value on
January 1, 1999 would be $105,000, calculated as follows:

<TABLE>
<C> <S>
$100,000 Premium deposited on January 1, 1998
5,000 Interest accumulated at 5% per year on premiums
- --------
$105,000 Interest Accumulation Value on January 1, 1999.
</TABLE>

If you elected the Optional Death Benefit, you would be guaranteed a Death
Benefit payment equal to at least $105,000.

Example 2
Assume that you deposited a premium payment of $100,000 on January 1, 1998. If
you Surrendered $10,000 on January 1, 1999 and your Contract Value immediately
prior to the partial Surrender was $100,000, your Interest Accumulation Value on
January 1, 1999 would be $94,500, calculated as follows:

<TABLE>
<C> <S>
$100,000 Premium deposited on January 1, 1998
5,000 Interest accumulated at 5% per year on premiums
($10,500) Adjustment for partial Surrender*
- ---------
$94,500 Interest Accumulation Value on January 1, 1999.
</TABLE>

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

* The Adjustment for the partial Surrender reduces the Interest Accumulation
Value by an amount equal to the proportion of the partial Surrender to the
Contract Value prior to the partial Surrender. Therefore, in this example, the
$10,500 reduction to the Interest Accumulation Value is calculated by dividing
the amount of the Surrender, $10,000, by the Contract Value paid prior to the
Surrender, $100,000. This ratio (Surrender DIVIDED BY Contract Value prior to
Surrender) is multiplied by the Interest Accumulation Value prior to
Surrenders and results in the adjustment for the partial Surrender.

<TABLE>
<S> <C>
Interest Accumulation Value prior to Surrenders $105,000
- -----------------------------------------------------------------
Multiplied by ratio of Surrenders DIVIDED BY Contract
Value prior to Surrenders ($10,000 DIVIDED BY 100,000) X .10
- -----------------------------------------------------------------
Adjustment for the partial Surrender $ 10,500
- -----------------------------------------------------------------
</TABLE>

The Surrender reduced the Interest Accumulation Value by $10,500 ($105,000 -
94,500).
- --------------------------------------------------------------------------------
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 33
- --------------------------------------------------------------------------------

Table of Contents to Statement of Additional Information

<TABLE>
<CAPTION>
Section
<S> <C>
------------------------------------------------------------------------------
Description of Hartford Life Insurance Company
------------------------------------------------------------------------------
Safekeeping of Assets
------------------------------------------------------------------------------
Independent Public Accountants
------------------------------------------------------------------------------
Distribution of Contracts
------------------------------------------------------------------------------
Calculation of Yield and Return
------------------------------------------------------------------------------
Performance Comparisons
------------------------------------------------------------------------------
Financial Statements
------------------------------------------------------------------------------
</TABLE>

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

SECTION 403(b)(11) ACKNOWLEDGMENT FORM

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

- - attained age 59 1/2,

- - separated from service,

- - died, or

- - become disabled.

Distributions of post December 31, 1988 contributions (excluding any income
thereon) may also be made if you have experienced a financial hardship.

Also, there may be a 10% penalty tax for distributions made prior to age 59 1/2
because of financial hardship or separation from service.

Also, please be aware that your 403(b) Plan may also offer other financial
alternatives other than the NatCity Director Variable Annuity. Please refer to
your Plan.

Please complete the following and return to:

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

Name of Contract Owner/Participant
----------------------------------------------------------------------------

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

City or Plan/School District
- --------------------------------------------------------------------------------

Date:
- --------------------------------------------------------------------------------

Contract No:
- --------------------------------------------------------------------------------

Signature:
- --------------------------------------------------------------------------------
<PAGE>
To obtain a Statement of Additional Information, please complete the form below
and mail to:

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

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

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

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

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

PART B

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT TWO
NATCITY DIRECTOR VARIABLE ANNUITY

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

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

Date of Prospectus: September 15, 1999

Date of Statement of Additional Information: September 15, 1999

333-69485

<PAGE>

-2-

TABLE OF CONTENTS

SECTION PAGE
- ------- ----
DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY . . . . . . . . . . . . 3

SAFEKEEPING OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . 3

INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . 3

DISTRIBUTION OF CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . 3

CALCULATION OF YIELD AND RETURN . . . . . . . . . . . . . . . . . . . . 4

PERFORMANCE COMPARISONS . . . . . . . . . . . . . . . . . . . . . . . . 9

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

<PAGE>
-3-

DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY

Hartford Life Insurance Company is a stock life insurance company engaged in
the business of writing life insurance, both individual and group, in all
states of the United States and the District of Columbia. We were originally
incorporated under the laws of Massachusetts on June 5, 1902, and
subsequently redomiciled to Connecticut. Our offices are located in
Simsbury, Connecticut; however, our mailing address is P.O. Box 2999,
Hartford, CT 06104-2999. We are ultimately controlled by The Hartford
Financial Services Group, Inc., one of the largest financial service
providers in the United States.

HARTFORD'S RATINGS

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

SAFEKEEPING OF ASSETS

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

INDEPENDENT PUBLIC ACCOUNTANTS

The audited financial statements and financial statement schedules included
in this registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm
as experts in giving said reports. The principal business address of Arthur
Andersen LLP is One Financial Plaza, Hartford, Connecticut 06103.

DISTRIBUTION OF CONTRACTS

Hartford Securities Distribution Company, Inc. ("HSD") serves as Principal
Underwriter for the securities issued with respect to the Separate Account.
HSD is an affiliate of Hartford. Both HSD and Hartford are ultimately
controlled by The Hartford Financial Services Group, Inc. The principal
business address of HSD is the same as that of Hartford.

<PAGE>

-4-

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

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

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

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

Hartford currently pays HSD underwriting commissions for its role as
Principal Underwriter of all variable annuities associated with this Separate
Account. For the past three years, the aggregate dollar amount of
underwriting commissions paid to HSD in its role as Principal Underwriter has
been: 1998: $61,629,500, 1997: $64,851,026 and 1996: $59,896,541. HSD has
retained none of these commissions.

CALCULATION OF YIELD AND RETURN

YIELD OF THE HARTFORD MONEY MARKET HLS FUND SUB-ACCOUNT. As summarized in
the prospectus under the heading "Performance Related Information," the yield
of the Hartford Money Market HLS 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.

<PAGE>

-5-

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 HARTFORD MONEY MARKET HLS FUND SUB-ACCOUNT'S YIELD AND EFFECTIVE YIELD
WILL VARY IN RESPONSE TO FLUCTUATIONS IN INTEREST RATES AND IN THE EXPENSES
OF THE SUB-ACCOUNT. THE CURRENT YIELD AND EFFECTIVE YIELD REFLECT RECURRING
CHARGES ON THE SEPARATE ACCOUNT LEVEL, INCLUDING THE MAXIMUM ANNUAL
MAINTENANCE FEE.

The yield and effective yield for the seven-day period ending December 31,
1998 for the Hartford Money Market HLS Fund Sub-Account was as follows ($30
Annual Maintenance Fee):

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

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

YIELDS OF HARTFORD BOND HLS FUND, HARTFORD HIGH YIELD HLS FUND, AND HARTFORD
MORTGAGE SECURITIES HLS FUND SUB-ACCOUNTS. As summarized in the prospectus
under the heading "Performance Related Information," yields of the above
Sub-Accounts will be computed by annualizing a recent month's net investment
income, divided by a Fund share's net asset value on the last trading day of
that month. Net changes in the value of a hypothetical account will assume
the change in the underlying mutual fund's "net asset value per share" for
the same period in addition to the daily expense charge assessed, at the
sub-account level for the respective period. The Sub-Accounts' yields will
vary from time-to-time depending upon market conditions and, the composition
of the underlying funds' portfolios. Yield should also be considered relative
to changes in the value of the Sub-Accounts' shares and to the relative risks
associated with the investment objectives and policies of the underlying Fund.

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

<PAGE>

-6-

Yield calculations of the Sub-Accounts used for illustration purposes reflect
the interest earned by the Sub-Accounts, less applicable asset charges
assessed against a Contract Owner's account over the base period. Yield
quotations based on a 30-day period were computed by dividing the dividends
and interest 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.

<TABLE>
<CAPTION>
SUB-ACCOUNTS YIELD
- ------------ -----
<S> <C>
Hartford Bond HLS Fund** 4.61%
Hartford High Yield HLS Fund** 7.56%
Hartford Mortgage Securities HLS Fund** 4.84%

</TABLE>

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

The method of calculating yields described above for these Sub-Accounts
differs from the method used by the Sub-Accounts prior to May 1, 1989. The
denominator of the fraction used to calculate yield was previously the
average unit value for the period calculated. That denominator will
hereafter be the unit value of the Sub-Accounts on the last trading day of
the period calculated.

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

<PAGE>

-7-

The following are the standardized average annual total return quotations for
the Sub-Accounts for the fiscal year ended December 31, 1998. No information
is included for Armada Advantage Equity Growth Sub-Account because as of
December 31, 1998, the Sub-Account had not commenced operation.

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

<TABLE>
<CAPTION>
INCEPTION SINCE
SUB-ACCOUNT DATE 1 YEAR 5 YEAR 10 YEAR INCEPTION
- ----------- --------- ------ ------ ------- ---------
<S> <C> <C> <C> <C> <C>
Hartford Advisers HLS Fund 6/2/86 13.11% 13.11% 11.53% N/A
Hartford Bond HLS Fund 6/2/86 -3.20% 2.25% 5.13% N/A
Hartford Capital Appreciation HLS Fund 6/2/86 4.04% 13.47% 15.27% N/A
Hartford Dividend & Growth HLS Fund 3/8/94 4.97% N/A N/A 17.82%
Hartford Global Leaders HLS Fund 9/30/98 N/A N/A N/A 21.47%
Hartford Growth and Income HLS Fund 5/29/98 N/A N/A N/A 8.18%
Hartford High Yield HLS Fund 9/30/98 N/A N/A N/A -6.51%
Hartford Index HLS Fund 5/1/87 16.47% 19.00% 14.92% N/A
Hartford International Advisers HLS Fund 3/1/95 1.94% N/A N/A 6.90%
Hartford International HLS Fund 7/2/90 1.72% 2.48% N/A 2.96%
Hartford Opportunities HLS Fund
Hartford MidCap HLS Fund 7/30/97 15.00% N/A N/A 16.89%
Hartford Money Market HLS Fund 6/2/86 -6.04% 0.04% 1.46% N/A
Hartford Mortgage Securities HLS Fund 6/2/86 -4.61% 1.94% 4.53% N/A
Hartford Small Company HLS Fund 8/9/96 0.23% N/A N/A 8.61%
Hartford Stock HLS Fund 6/2/86 21.82% 19.02% 14.97% N/A
</TABLE>

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FOR YEAR ENDED DECEMBER 31, 1998
WITH 15 BPS DEATH OPTION

<TABLE>
<CAPTION>
INCEPTION SINCE
SUB-ACCOUNT DATE 1 YEAR 5 YEAR 10 YEAR INCEPTION
- ----------- --------- ------ ------ ------- ---------
<S> <C> <C> <C> <C> <C>
Hartford Advisers HLS Fund 6/2/86 12.92% 12.92% 11.44% N/A
Hartford Bond HLS Fund 6/2/86 -3.36% 2.07% 4.84% N/A
Hartford Capital Appreciation HLS Fund 6/2/86 3.87% 13.29% 15.08% N/A
Hartford Dividend & Growth HLS Fund 3/8/94 4.80% N/A N/A 17.64%
Hartford Global Leaders HLS Fund 9/30/98 N/A N/A N/A 21.42%
Hartford Growth and Income HLS Fund 5/29/98 N/A N/A N/A 8.07%
Hartford High Yield HLS Fund 9/30/98 N/A N/A N/A -6.55%
Hartford Index HLS Fund 5/1/87 16.28% 18.81% 14.72% N/A
Hartford International Advisers HLS Fund 3/1/95 1.77% N/A N/A 6.72%
Hartford International Opportunities HLS Fund 7/2/90 1.56% 2.30% N/A 2.75%
Hartford MidCap HLS Fund 7/30/97 14.82% N/A N/A 16.70%
Hartford Money Market HLS Fund 6/2/86 -6.19% -0.13% 1.43% N/A
Hartford Mortgage Securities HLS Fund 6/2/86 -4.77% 1.77% 4.16% N/A
Hartford Small Company HLS Fund 8/9/96 0.07% N/A N/A 8.43%
Hartford Stock HLS Fund 6/2/86 21.62% 18.83% 14.78% N/A
</TABLE>

<PAGE>

-8-

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

The following are the non-standardized annualized total return
quotations for the Sub-Accounts for the fiscal year ended December 31, 1998.
No information is included for Armada Advantage Equity Growth Sub-Account
because as of December 31, 1998, the Sub-Account had not commenced operation.

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

<TABLE>
<CAPTION>
INCEPTION SINCE
SUB-ACCOUNT DATE 1 YEAR 5 YEAR 10 YEAR INCEPTION
- ----------- --------- ------ ------ ------- ---------
<S> <C> <C> <C> <C> <C>
Hartford Advisers HLS Fund 3/31/83 23.11% 16.24% 13.66% N/A
Hartford Bond HLS Fund 8/31/77 6.80% 5.92% 7.51% N/A
Hartford Capital Appreciation HLS Fund 4/2/84 14.04% 16.43% 17.08% N/A
Hartford Dividend & Growth HLS Fund 3/8/94 14.97% N/A N/A 20.65%
Hartford Global Leaders HLS Fund 9/30/98 N/A N/A N/A 31.47%
Hartford Growth and Income HLS Fund 5/29/98 N/A N/A N/A 18.18%
Hartford High Yield HLS Fund 9/30/98 N/A N/A N/A 3.49%
Hartford Index HLS Fund 5/1/87 26.47% 21.84% 16.89% N/A
Hartford International Advisers HLS Fund 3/1/95 11.94% N/A N/A 10.68%
Hartford International Opportunities HLS Fund 7/2/90 11.72% 6.12% N/A 6.00%
Hartford MidCap HLS Fund 7/30/97 25.00% N/A N/A 24.85%
Hartford Money Market HLS Fund 6/30/80 3.96% 3.79% 4.21% N/A
Hartford Mortgage Securities HLS Fund 1/1/85 5.39% 5.59% 6.93% N/A
Hartford Small Company HLS Fund 8/9/96 10.23% N/A N/A 14.20%
Hartford Stock HLS Fund 8/31/77 31.82% 21.93% 17.01% N/A
</TABLE>

NON-STANDARDIZED ANNUALIZED TOTAL RETURN THAT PRE-DATE THE INCEPTION DATE OF
THE SEPARATE ACCOUNT FOR YEAR ENDED DECEMBER 31, 1998
WITH 15 BPS DEATH OPTION

<TABLE>
<CAPTION>
INCEPTION SINCE
SUB-ACCOUNT DATE 1 YEAR 5 YEAR 10 YEAR INCEPTION
- ----------- --------- ------ ------ ------- ---------
<S> <C> <C> <C> <C> <C>
Hartford Advisers HLS Fund 3/31/83 22.92% 16.06% 13.49% N/A
Hartford Bond HLS Fund 8/31/77 6.64% 5.76% 7.34% N/A
Hartford Capital Appreciation HLS Fund 4/2/84 13.87% 16.25% 16.91% N/A
Hartford Dividend & Growth HLS Fund 3/8/94 14.80% N/A N/A 20.48%
Hartford Global Leaders HLS Fund 9/30/98 N/A N/A N/A 31.42%
Hartford Growth and Income HLS Fund 5/29/98 N/A N/A N/A 18.07%
Hartford High Yield HLS Fund 9/30/98 N/A N/A N/A 3.45%
Hartford Index HLS Fund 5/1/87 26.28% 21.66% 16.72% N/A
Hartford International Advisers HLS Fund 3/1/95 11.77% N/A N/A 10.52%
Hartford International Opportunities HLS Fund 7/2/90 11.56% 5.96% N/A 5.84%
Hartford MidCap HLS Fund 7/30/97 24.82% N/A N/A 24.66%
Hartford Money Market HLS Fund 6/30/80 3.81% 3.64% 4.05% N/A
Hartford Mortgage Securities HLS Fund 1/1/85 5.23% 5.43% 6.77% N/A
Hartford Small Company HLS Fund 8/9/96 10.07% N/A N/A 14.03%
Hartford Stock HLS Fund 8/31/77 31.62% 21.75% 16.84% N/A
</TABLE>

<PAGE>

-9-

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

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-1
- --------------------------------------------------------------------------------

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

We have audited the accompanying statements of assets and liabilities of
Hartford Life Insurance Company Separate Account Two (Bond Fund, Stock Fund,
Money Market Fund, Advisers Fund, Capital Appreciation Fund, Mortgage Securities
Fund, Index Fund, International Opportunities Fund, Dividend and Growth Fund,
International Advisers Fund, Small Company Fund, MidCap Fund, Smith Barney Cash
Portfolio, Smith Barney Appreciation Fund, Smith Barney Government Portfolio,
BB&T Growth & Income Fund, AmSouth Equity Income Fund, Mentor VIP Capital Growth
Fund, Mentor VIP Perpetual International Fund, and Mentor VIP Growth Fund)
(collectively, the Account) as of December 31, 1998, and the related statements
of operations and the statements of changes in net assets for the periods
presented. These financial statements are the responsibility of the Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Account as of December 31,
1998, and the results of their operations and the changes in their net assets
for the periods presented in conformity with generally accepted accounting
principles.

Hartford, Connecticut

February 16, 1999 ARTHUR ANDERSEN LLP

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

<TABLE>
<CAPTION>
BOND FUND STOCK FUND
SUB-ACCOUNT SUB-ACCOUNT
------------ --------------
<S> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS
Fund, Inc. - Class
IA
Shares 349,618,159
Cost $365,928,024
Market Value....... $377,820,108 --
Hartford Stock HLS
Fund, Inc. - Class
IA
Shares 380,740,509
Cost $1,321,699,321
Market Value....... -- $2,498,292,052
Hartford Money Market
HLS Fund, Inc. -
Class IA
Shares 342,816,331
Cost $342,816,331
Market Value....... -- --
Hartford Advisers HLS
Fund, Inc. - Class
IA
Shares
1,646,987,741
Cost $3,054,571,935
Market Value....... -- --
Hartford Capital
Appreciation HLS
Fund, Inc. - Class
IA
Shares 417,240,558
Cost $1,302,905,756
Market Value....... -- --
Hartford Mortgage
Securities HLS Fund,
Inc. - Class IA
Shares 175,411,395
Cost $189,578,583
Market Value....... -- --
Hartford Index HLS
Fund, Inc. - Class
IA
Shares 174,516,110
Cost $371,361,315
Market Value....... -- --
Hartford
International
Opportunities HLS
Fund, Inc. - Class
IA
Shares 294,203,798
Cost $340,518,189
Market Value....... -- --
Hartford Dividend and
Growth HLS Fund,
Inc. - Class IA
Shares 451,028,566
Cost $725,280,325
Market Value....... -- --
Due from Hartford Life
Insurance Company..... 204,248 389,733
Receivable from fund
shares sold........... -- --
------------ --------------
Total Assets........... 378,024,356 2,498,681,785
------------ --------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- --
Payable for fund shares
purchased............. 204,309 389,945
------------ --------------
Total Liabilities...... 204,309 389,945
------------ --------------
Net Assets (variable
annuity contract
liabilities).......... $377,820,047 $2,498,291,840
------------ --------------
------------ --------------
</TABLE>

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

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-3
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY CAPITAL MORTGAGE
MARKET FUND ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- ------------------ ---------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS
Fund, Inc. - Class
IA
Shares 349,618,159
Cost $365,928,024
Market Value....... -- -- -- -- --
Hartford Stock HLS
Fund, Inc. - Class
IA
Shares 380,740,509
Cost $1,321,699,321
Market Value....... -- -- -- -- --
Hartford Money Market
HLS Fund, Inc. -
Class IA
Shares 342,816,331
Cost $342,816,331
Market Value....... $342,816,331 -- -- -- --
Hartford Advisers HLS
Fund, Inc. - Class
IA
Shares
1,646,987,741
Cost $3,054,571,935
Market Value....... -- $4,916,675,095 -- -- --
Hartford Capital
Appreciation HLS
Fund, Inc. - Class
IA
Shares 417,240,558
Cost $1,302,905,756
Market Value....... -- -- $1,985,681,614 -- --
Hartford Mortgage
Securities HLS Fund,
Inc. - Class IA
Shares 175,411,395
Cost $189,578,583
Market Value....... -- -- -- $190,242,955 --
Hartford Index HLS
Fund, Inc. - Class
IA
Shares 174,516,110
Cost $371,361,315
Market Value....... -- -- -- -- $ 623,101,394
Hartford
International
Opportunities HLS
Fund, Inc. - Class
IA
Shares 294,203,798
Cost $340,518,189
Market Value....... -- -- -- -- --
Hartford Dividend and
Growth HLS Fund,
Inc. - Class IA
Shares 451,028,566
Cost $725,280,325
Market Value....... -- -- -- -- --
Due from Hartford Life
Insurance Company..... -- 662,986 10,643,121 -- 267,176
Receivable from fund
shares sold........... 19,488,693 -- -- 412,430 --
------------ -------------- ------------------ ---------------- --------------
Total Assets........... 362,305,024 4,917,338,081 1,996,324,735 190,655,385 623,368,570
------------ -------------- ------------------ ---------------- --------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 19,483,630 -- -- 408,162 --
Payable for fund shares
purchased............. -- 664,510 10,643,361 -- 267,984
------------ -------------- ------------------ ---------------- --------------
Total Liabilities...... 19,483,630 664,510 10,643,361 408,162 267,984
------------ -------------- ------------------ ---------------- --------------
Net Assets (variable
annuity contract
liabilities).......... $342,821,394 $4,916,673,571 $1,985,681,374 $190,247,223 $ 623,100,586
------------ -------------- ------------------ ---------------- --------------
------------ -------------- ------------------ ---------------- --------------

<CAPTION>
INTERNATIONAL DIVIDEND AND
OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT
------------------- ---------------
<S> <C> <C>
ASSETS:
Investments:
Hartford Bond HLS
Fund, Inc. - Class
IA
Shares 349,618,159
Cost $365,928,024
Market Value....... -- --
Hartford Stock HLS
Fund, Inc. - Class
IA
Shares 380,740,509
Cost $1,321,699,321
Market Value....... -- --
Hartford Money Market
HLS Fund, Inc. -
Class IA
Shares 342,816,331
Cost $342,816,331
Market Value....... -- --
Hartford Advisers HLS
Fund, Inc. - Class
IA
Shares
1,646,987,741
Cost $3,054,571,935
Market Value....... -- --
Hartford Capital
Appreciation HLS
Fund, Inc. - Class
IA
Shares 417,240,558
Cost $1,302,905,756
Market Value....... -- --
Hartford Mortgage
Securities HLS Fund,
Inc. - Class IA
Shares 175,411,395
Cost $189,578,583
Market Value....... -- --
Hartford Index HLS
Fund, Inc. - Class
IA
Shares 174,516,110
Cost $371,361,315
Market Value....... -- --
Hartford
International
Opportunities HLS
Fund, Inc. - Class
IA
Shares 294,203,798
Cost $340,518,189
Market Value....... $398,604,075 --
Hartford Dividend and
Growth HLS Fund,
Inc. - Class IA
Shares 451,028,566
Cost $725,280,325
Market Value....... -- $974,440,901
Due from Hartford Life
Insurance Company..... -- 122,495
Receivable from fund
shares sold........... 364,279 --
------------------- ---------------
Total Assets........... 398,968,354 974,563,396
------------------- ---------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 364,240 --
Payable for fund shares
purchased............. -- 122,730
------------------- ---------------
Total Liabilities...... 364,240 122,730
------------------- ---------------
Net Assets (variable
annuity contract
liabilities).......... $398,604,114 $974,440,666
------------------- ---------------
------------------- ---------------
</TABLE>

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

<TABLE>
<CAPTION>
INTERNATIONAL SMALL MIDCAP SMITH BARNEY
ADVISERS FUND COMPANY FUND FUND CASH PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
International
Advisers HLS Fund,
Inc. - Class IA
Shares 65,678,237
Cost $75,055,437
Market Value....... $75,837,939 -- -- --
Small Company HLS
Fund, Inc. - Class
IA
Shares 93,203,695
Cost $112,102,718
Market Value....... -- $123,132,800 -- --
MidCap HLS Fund, Inc.
- Class IA
Shares 32,171,652
Cost $39,368,682
Market Value....... -- -- $46,303,243 --
Smith Barney Cash
Portfolio
Shares 486,806
Cost $486,806
Market Value....... -- -- -- $486,808
Smith Barney
Appreciation Fund
Shares 13,052
Cost $99,509
Market Value....... -- -- -- --
Smith Barney
Government Portfolio
Shares 34,357
Cost $34,357
Market Value....... -- -- -- --
BB&T Growth & Income
Fund
Shares 1,782,787
Cost $21,373,783
Market Value....... -- -- -- --
AmSouth Equity Income
Fund
Shares 1,999,203
Cost $21,507,113
Market Value....... -- -- -- --
Mentor VIP Capital
Growth Portfolio
Shares 1,375,385
Cost $16,981,499
Market Value....... -- -- -- --
Mentor VIP Perpetual
International
Portfolio
Shares 771,760
Cost $10,211,028
Market Value....... -- -- -- --
Mentor VIP Growth
Portfolio
Shares 913,633
Cost $9,860,193
Market Value....... -- -- -- --
Due from Hartford Life
Insurance Company..... 37,942 8,326,029 197,604 26,345
Receivable from fund
shares sold........... -- -- -- --
-------------- ------------- ------------ ---------------
Total Assets........... 75,875,881 131,458,829 46,500,847 513,153
-------------- ------------- ------------ ---------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- -- -- --
Payable for fund shares
purchased............. 37,943 8,325,756 198,464 26,450
-------------- ------------- ------------ ---------------
Total Liabilities...... 37,943 8,325,756 198,464 26,450
-------------- ------------- ------------ ---------------
Net Assets (variable
annuity contract
liabilities).......... $75,837,938 $123,133,073 $46,302,383 $486,703
-------------- ------------- ------------ ---------------
-------------- ------------- ------------ ---------------
</TABLE>

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

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-5
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY SMITH BARNEY BB&T GROWTH & AMSOUTH EQUITY MENTOR
APPRECIATION FUND GOVERNMENT PORTFOLIO INCOME FUND INCOME FUND CAPITAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ --------------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
International
Advisers HLS Fund,
Inc. - Class IA
Shares 65,678,237
Cost $75,055,437
Market Value....... -- -- -- -- --
Small Company HLS
Fund, Inc. - Class
IA
Shares 93,203,695
Cost $112,102,718
Market Value....... -- -- -- -- --
MidCap HLS Fund, Inc.
- Class IA
Shares 32,171,652
Cost $39,368,682
Market Value....... -- -- -- -- --
Smith Barney Cash
Portfolio
Shares 486,806
Cost $486,806
Market Value....... -- -- -- -- --
Smith Barney
Appreciation Fund
Shares 13,052
Cost $99,509
Market Value....... $199,776 -- -- -- --
Smith Barney
Government Portfolio
Shares 34,357
Cost $34,357
Market Value....... -- $34,356 -- -- --
BB&T Growth & Income
Fund
Shares 1,782,787
Cost $21,373,783
Market Value....... -- -- $23,711,070 -- --
AmSouth Equity Income
Fund
Shares 1,999,203
Cost $21,507,113
Market Value....... -- -- -- $22,511,025 --
Mentor VIP Capital
Growth Portfolio
Shares 1,375,385
Cost $16,981,499
Market Value....... -- -- -- -- $18,677,728
Mentor VIP Perpetual
International
Portfolio
Shares 771,760
Cost $10,211,028
Market Value....... -- -- -- -- --
Mentor VIP Growth
Portfolio
Shares 913,633
Cost $9,860,193
Market Value....... -- -- -- -- --
Due from Hartford Life
Insurance Company..... -- -- 29,049 -- 11,902
Receivable from fund
shares sold........... 117 31 -- 30,849 --
-------- ------- ----------------- --------------- ---------------
Total Assets........... 199,893 34,387 23,740,119 22,541,874 18,689,630
-------- ------- ----------------- --------------- ---------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 106 30 -- 30,853 --
Payable for fund shares
purchased............. -- -- 29,053 -- 11,898
-------- ------- ----------------- --------------- ---------------
Total Liabilities...... 106 30 29,053 30,853 11,898
-------- ------- ----------------- --------------- ---------------
Net Assets (variable
annuity contract
liabilities).......... $199,787 $34,357 $23,711,066 $22,511,021 $18,677,732
-------- ------- ----------------- --------------- ---------------
-------- ------- ----------------- --------------- ---------------

<CAPTION>
MENTOR PERPETUAL MENTOR
INTERNATIONAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------
<S> <C> <C>
ASSETS:
Investments:
International
Advisers HLS Fund,
Inc. - Class IA
Shares 65,678,237
Cost $75,055,437
Market Value....... -- --
Small Company HLS
Fund, Inc. - Class
IA
Shares 93,203,695
Cost $112,102,718
Market Value....... -- --
MidCap HLS Fund, Inc.
- Class IA
Shares 32,171,652
Cost $39,368,682
Market Value....... -- --
Smith Barney Cash
Portfolio
Shares 486,806
Cost $486,806
Market Value....... -- --
Smith Barney
Appreciation Fund
Shares 13,052
Cost $99,509
Market Value....... -- --
Smith Barney
Government Portfolio
Shares 34,357
Cost $34,357
Market Value....... -- --
BB&T Growth & Income
Fund
Shares 1,782,787
Cost $21,373,783
Market Value....... -- --
AmSouth Equity Income
Fund
Shares 1,999,203
Cost $21,507,113
Market Value....... -- --
Mentor VIP Capital
Growth Portfolio
Shares 1,375,385
Cost $16,981,499
Market Value....... -- --
Mentor VIP Perpetual
International
Portfolio
Shares 771,760
Cost $10,211,028
Market Value....... $10,812,357 --
Mentor VIP Growth
Portfolio
Shares 913,633
Cost $9,860,193
Market Value....... -- $10,470,235
Due from Hartford Life
Insurance Company..... 15,306 67,722
Receivable from fund
shares sold........... -- --
----------------- --------------
Total Assets........... 10,827,663 10,537,957
----------------- --------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- --
Payable for fund shares
purchased............. 15,308 67,727
----------------- --------------
Total Liabilities...... 15,308 67,727
----------------- --------------
Net Assets (variable
annuity contract
liabilities).......... $10,812,355 $10,470,230
----------------- --------------
----------------- --------------
</TABLE>

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

<TABLE>
<CAPTION>
GROWTH AND
INCOME FUND
SUB-ACCOUNT
------------
<S> <C>
ASSETS:
Investments:
Hartford Growth and
Income HLS Fund -
Class IA
Shares 5,269,425
Cost $5,509,163
Market Value....... $6,249,337
Hartford High Yield
HLS Fund - Class IA
Shares 1,911,536
Cost $1,953,422
Market Value....... --
Hartford Global
Leaders HLS Fund -
Class IA
Shares 466,167
Cost $588,674
Market Value....... --
Mitchell Hutchins
Growth & Income
Portfolio
Shares 673
Cost $9,994
Market Value....... --
Mitchell Hutchins
Strategic Income
Portfolio
Shares 808
Cost $9,994
Market Value....... --
Mitchell Hutchins
Tactical Allocation
Portfolio
Shares 705
Cost $9,995
Market Value....... --
Investment Income
Receivable............ --
Due from Hartford Life
Insurance Company..... --
Receivable from fund
shares sold........... 67,470
------------
Total Assets........... 6,316,807
------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 67,470
Payable for fund shares
purchased............. --
------------
Total Liabilities...... 67,470
------------
Net Assets (variable
annuity contract
liabilities).......... $6,249,337
------------
------------
</TABLE>

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

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-7
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH GLOBAL MITCHELL HUTCHINS GROWTH MITCHELL HUTCHINS STRATEGIC
YIELD FUND LEADERS FUND AND INCOME PORTFOLIO INCOME PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Growth and
Income HLS Fund -
Class IA
Shares 5,269,425
Cost $5,509,163
Market Value....... -- -- -- --
Hartford High Yield
HLS Fund - Class IA
Shares 1,911,536
Cost $1,953,422
Market Value....... $1,943,548 -- -- --
Hartford Global
Leaders HLS Fund -
Class IA
Shares 466,167
Cost $588,674
Market Value....... -- $599,110 -- --
Mitchell Hutchins
Growth & Income
Portfolio
Shares 673
Cost $9,994
Market Value....... -- -- $ 9,973 --
Mitchell Hutchins
Strategic Income
Portfolio
Shares 808
Cost $9,994
Market Value....... -- -- -- $9,849
Mitchell Hutchins
Tactical Allocation
Portfolio
Shares 705
Cost $9,995
Market Value....... -- -- -- --
Investment Income
Receivable............ -- -- 746 122
Due from Hartford Life
Insurance Company..... 47,113 -- -- --
Receivable from fund
shares sold........... -- 73,610 6 5
------------ ------------- ------- ------
Total Assets........... 1,990,661 672,720 10,725 9,976
------------ ------------- ------- ------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- 73,610 6 5
Payable for fund shares
purchased............. 47,114 -- -- --
------------ ------------- ------- ------
Total Liabilities...... 47,114 73,610 6 5
------------ ------------- ------- ------
Net Assets (variable
annuity contract
liabilities).......... $1,943,547 $599,110 $10,719 $9,971
------------ ------------- ------- ------
------------ ------------- ------- ------

<CAPTION>
MITCHELL HUTCHINS TACTICAL
ALLOCATION PORTFOLIO
SUB-ACCOUNT
---------------------------
<S> <C>
ASSETS:
Investments:
Hartford Growth and
Income HLS Fund -
Class IA
Shares 5,269,425
Cost $5,509,163
Market Value....... --
Hartford High Yield
HLS Fund - Class IA
Shares 1,911,536
Cost $1,953,422
Market Value....... --
Hartford Global
Leaders HLS Fund -
Class IA
Shares 466,167
Cost $588,674
Market Value....... --
Mitchell Hutchins
Growth & Income
Portfolio
Shares 673
Cost $9,994
Market Value....... --
Mitchell Hutchins
Strategic Income
Portfolio
Shares 808
Cost $9,994
Market Value....... --
Mitchell Hutchins
Tactical Allocation
Portfolio
Shares 705
Cost $9,995
Market Value....... $10,502
Investment Income
Receivable............ 69
Due from Hartford Life
Insurance Company..... --
Receivable from fund
shares sold........... 6
-------
Total Assets........... 10,577
-------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 6
Payable for fund shares
purchased............. --
-------
Total Liabilities...... 6
-------
Net Assets (variable
annuity contract
liabilities).......... $10,571
-------
-------
</TABLE>

<PAGE>
SA-8 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 1998

<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------- ---------- ---------------
<S> <C> <C> <C>
DEFERRED ANNUITY CONTRACTS IN THE
ACCUMULATION PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Bond Fund Qualified 1.00%........ 232,939 $ 4.373600 $ 1,018,782
Bond Fund Non-Qualified 1.00%.... 1,961,849 4.307093 8,449,866
Bond Fund 1.25%.................. 162,500,684 2.257591 366,860,082
Bond Fund .25%................... 55,518 1.533539 85,139
Bond Fund........................ 306,878 1.030758 316,317
Stock Fund Qualified 1.00%....... 802,936 11.737647 9,424,579
Stock Fund Non-Qualified 1.00%... 2,912,842 11.223740 32,692,982
Stock Fund 1.25%................. 403,629,126 6.065754 2,448,314,988
Stock Fund .25%.................. 1,056,753 3.251658 3,436,199
Stock Fund....................... 849,480 1.036706 880,661
Money Market Fund Qualified
1.00%........................... 612,050 2.679268 1,639,846
Money Market Fund Non-Qualified
1.00%........................... 9,019,394 2.680536 24,176,811
Money Market Fund 1.25%.......... 183,614,324 1.715714 315,029,666
Money Market Fund .25%........... 373,199 1.299644 485,026
Money Market Fund................ 725,403 1.016497 737,370
Advisers Fund Qualified 1.00%.... 3,191,360 6.604239 21,076,505
Advisers Fund Non-Qualified
1.00%........................... 9,942,207 6.604240 65,660,718
Advisers Fund 1.25%.............. 1,095,048,448 4.397886 4,815,898,238
Advisers Fund .25%............... 1,220,271 2.502440 3,053,655
Advisers Fund.................... 1,915,141 1.035292 1,982,730
Capital Appreciation Fund
Qualified 1.00%................. 774,553 9.322862 7,221,051
Capital Appreciation Fund
Non-Qualified 1.00%............. 2,433,361 9.318523 22,675,331
Capital Appreciation Fund
1.25%........................... 352,482,012 5.525767 1,947,733,468
Capital Appreciation Fund .25%... 2,264,988 2.712640 6,144,097
Capital Appreciation Fund........ 271,922 0.984021 267,577
Mortgage Securities Fund
Qualified 1.00%................. 484,096 2.844764 1,377,139
Mortgage Securities Fund
Non-Qualified 1.00%............. 5,584,466 2.844767 15,886,504
Mortgage Securities Fund 1.25%... 78,025,873 2.210954 172,511,615
Mortgage Securities Fund .25%.... 14,431 1.458457 21,047
Mortgage Securities Fund......... 10,000 1.022300 10,223
Index Fund 1.00%................. 146,209 1.866581 272,911
Index Fund Non-Qualified 1.00%... 569,781 1.866580 1,063,542
Index Fund 1.25%................. 131,578,849 4.712432 620,056,376
Index Fund .25%.................. 212,284 3.080896 654,025
Index Fund....................... 249,634 1.044934 260,851
International Opportunities Fund
Qualified 1.00%................. 197,097 1.676915 330,515
International Opportunities Fund
Non-Qualified 1.00%............. 1,314,169 1.676023 2,202,578
International Opportunities Fund
1.25%........................... 240,089,691 1.641190 394,032,800
International Opportunities Fund
.25%............................ 681,620 1.874113 1,277,433
International Opportunities
Fund............................ 140,095 0.924280 129,487
Dividend and Growth Fund
Qualified 1.00%................. 417,549 2.500875 1,044,238
Dividend and Growth Fund
Non-Qualified 1.00%............. 1,616,066 2.500878 4,041,584
Dividend and Growth Fund 1.25%... 391,151,359 2.470981 966,527,576
Dividend and Growth Fund .25%.... 250,697 2.592664 649,973
Dividend and Growth Fund......... 523,054 1.008273 527,381
International Advisers Fund
Sub-Account 1.00%............... 23,172 1.490549 34,539
International Advisers Fund
Non-Qualified 1.00%............. 201,485 1.490538 300,321
International Advisers Fund
1.25%........................... 50,971,459 1.476317 75,250,031
International Advisers Fund
.25%............................ 39,807 1.534052 61,066
International Advisers Fund...... 80,466 0.971292 78,156
Small Company Fund 1.00%......... 227,701 1.382431 314,781
Small Company Fund Non-Qualified
1.00%........................... 3,669,917 1.382433 5,073,414
Small Company Fund 1.25%......... 85,431,351 1.374218 117,401,300
Small Company Fund .25%.......... 61,838 1.407436 87,033
Small Company Fund............... 100,223 0.975195 97,737
MidCap Fund Sub-Account 1.00%
Qualified....................... 89,724 1.375964 123,457
MidCap Fund Sub-Account 1.00%
Non-Qualified................... 242,882 1.375969 334,198
</TABLE>

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

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-9
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------- ---------- ---------------
<S> <C> <C> <C>
INDIVIDUAL SUB-ACCOUNTS --
(CONTINUED)
MidCap Fund 1.25%................ 33,348,056 $ 1.371074 $ 45,722,653
MidCap Fund 1.00% Qualified...... 29,907 1.390711 41,592
MidCap Fund...................... 79,150 1.016841 80,483
Smith Barney Cash Portfolio
Qualified 1.00%................. 52,115 2.889398 150,581
Smith Barney Cash Portfolio
Non-Qualified 1.00%............. 112,418 2.989930 336,122
Smith Barney Appreciation
Qualified 1.00%................. 18,002 11.098045 199,787
Smith Barney Government Portfolio
Qualified 1.00%................. 13,202 2.602409 34,357
BB&T Growth and Income Fund...... 17,799,083 1.332151 23,711,066
AMSouth Equity Income Fund 1.00%
Qualified....................... 19,801,638 1.135502 22,484,800
Mentor Capital Growth Fund....... 17,370,611 1.075249 18,677,732
Mentor Perpetual International
Fund............................ 9,747,833 1.109206 10,812,355
Mentor Growth Fund............... 11,540,088 0.907292 10,470,230
Growth and Income Fund........... 181,057 1.183528 214,286
Growth and Income Fund........... 10,000 1.183500 11,835
Growth and Income Fund........... 4,982,306 1.181798 5,888,079
Growth and Income Fund........... 16,550 1.188761 19,674
Growth and Income Fund........... 105,902 1.090282 115,463
High Yield Fund.................. 15,798 1.035511 16,359
High Yield Fund.................. 10,000 1.035500 10,355
High Yield Fund.................. 1,832,207 1.034881 1,896,116
High Yield Fund.................. 10,000 1.037462 10,375
High Yield Fund.................. 10,000 1.034245 10,342
Global Leaders Fund.............. 10,000 1.315500 13,155
Global Leaders Fund.............. 10,000 1.315500 13,155
Global Leaders Fund.............. 415,660 1.314733 546,482
Global Leaders Fund.............. 10,000 1.317944 13,179
Global Leaders Fund.............. 10,000 1.313892 13,139
Mitchell Hutchins Growth and
Income Portfolio................ 10,000 1.071942 10,719
Mitchell Hutchins Strategic
Income Portfolio................ 10,000 0.997127 9,971
Mitchell Hutchins Tactical
Allocation Portfolio............ 10,000 1.057099 10,571
---------------
SUB-TOTAL INDIVIDUAL
SUB-ACCOUNTS.................... 12,628,840,528
---------------
ANNUITY CONTRACTS IN THE ANNUITY
PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Bond Fund Non-Qualified 1.00%.... 19,762 4.307092 85,115
Bond Fund 1.25%.................. 445,052 2.257591 1,004,746
Stock Fund Non-Qualified 1.00%... 25,544 11.223888 286,703
Stock Fund 1.25%................. 536,739 6.065754 3,255,728
Money Market Fund Qualified
1.00%........................... 648 2.679268 1,736
Money Market Fund Non-Qualified
1.00%........................... 85,788 2.680536 229,959
Money Market Fund 1.25%.......... 303,652 1.715714 520,980
Advisers Fund Qualified 1.00%.... 2,600 6.604240 17,172
Advisers Fund Non-Qualified
1.00%........................... 74,716 6.604240 493,441
Advisers Fund 1.25%.............. 1,930,726 4.397886 8,491,112
Capital Appreciation Fund
Non-Qualified 1.00%............. 18,217 9.318439 169,754
Capital Appreciation Fund
1.25%........................... 266,044 5.525767 1,470,096
Mortgage Securities Fund
Non-Qualified 1.00%............. 58,753 2.844767 167,139
Mortgage Securities Fund 1.25%... 123,728 2.210954 273,556
Index Fund 1.25%................. 168,253 4.712432 792,881
International Opportunities Fund
Non-Qualified 1.00%............. 6,240 1.676024 10,459
International Opportunities Fund
1.25%........................... 378,288 1.641190 620,842
Dividend and Growth Fund 1.25%... 667,716 2.470981 1,649,914
International Advisers Fund
1.25%........................... 77,101 1.476317 113,825
Small Company Fund 1.25%......... 115,562 1.374218 158,808
AMSouth Equity Income Fund....... 23,092 1.135502 26,221
---------------
SUB-TOTAL INDIVIDUAL
SUB-ACCOUNTS.................... 19,840,187
---------------
GRAND TOTAL........................ $12,648,680,715
---------------
---------------
</TABLE>

<PAGE>
SA-10 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------

SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
BOND FUND STOCK FUND
SUB-ACCOUNT SUB-ACCOUNT
----------- ------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $17,912,357 $ 18,915,114
EXPENSES:
Mortality and expense
undertakings.......... (3,795,666) (26,197,986)
----------- ------------
Net investment income
(loss).............. 14,116,691 (7,282,872)
----------- ------------
CAPITAL GAINS INCOME..... -- 63,980,079
----------- ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (17,730) (1,720,391)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 5,723,478 522,612,064
----------- ------------
Net gain (loss) on
investments......... 5,705,748 520,891,673
----------- ------------
Net increase
(decrease) in net
assets resulting
from operations..... $19,822,439 $577,588,880
----------- ------------
----------- ------------
</TABLE>

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

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-11
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
MONEY CAPITAL MORTGAGE
MARKET FUND ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- -------------- ------------------ ---------------- --------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $15,550,709 $ 97,214,065 $ 10,528,844 $11,949,822 $ 5,084,024
EXPENSES:
Mortality and expense
undertakings.......... (3,714,561) (53,193,739) (22,767,506) (2,304,989) (6,407,798)
----------- -------------- ------------------ ---------------- --------------
Net investment income
(loss).............. 11,836,148 44,020,326 (12,238,662) 9,644,833 (1,323,774)
----------- -------------- ------------------ ---------------- --------------
CAPITAL GAINS INCOME..... -- 130,914,844 114,733,928 -- 10,662,058
----------- -------------- ------------------ ---------------- --------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... -- 1,826,471 (4,786,085) 473,273 (704,518)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ -- 709,363,622 140,386,292 (228,914) 110,953,813
----------- -------------- ------------------ ---------------- --------------
Net gain (loss) on
investments......... -- 711,190,093 135,600,207 244,359 110,249,295
----------- -------------- ------------------ ---------------- --------------
Net increase
(decrease) in net
assets resulting
from operations..... $11,836,148 $ 886,125,263 $238,095,473 $ 9,889,192 $ 119,587,579
----------- -------------- ------------------ ---------------- --------------
----------- -------------- ------------------ ---------------- --------------

<CAPTION>
INTERNATIONAL DIVIDEND AND
OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT
------------------- ----------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 5,223,310 $ 15,429,535
EXPENSES:
Mortality and expense
undertakings.......... (5,034,289) (10,513,724)
------------------- ----------------
Net investment income
(loss).............. 189,021 4,915,811
------------------- ----------------
CAPITAL GAINS INCOME..... 25,347,181 25,624,259
------------------- ----------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 1,455,876 (465,941)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 17,463,831 82,775,505
------------------- ----------------
Net gain (loss) on
investments......... 18,919,707 82,309,564
------------------- ----------------
Net increase
(decrease) in net
assets resulting
from operations..... $44,455,909 $ 112,849,634
------------------- ----------------
------------------- ----------------
</TABLE>

<PAGE>
SA-12 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
INTERNATIONAL SMALL MIDCAP SMITH BARNEY
ADVISERS FUND COMPANY FUND FUND CASH PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $6,551,901 $ -- $ 330 $24,990
EXPENSES:
Mortality and expense
undertakings.......... (840,602) (1,090,110) (320,350) (5,044)
-------------- ------------- ------------ -------
Net investment income
(loss).............. 5,711,299 (1,090,110) (320,020) 19,946
-------------- ------------- ------------ -------
CAPITAL GAINS INCOME..... 1,559,601 1,255,431 -- --
-------------- ------------- ------------ -------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (62,176) 1,445,433 (3,698) --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (222,372) 9,623,019 6,597,665 --
-------------- ------------- ------------ -------
Net gain (loss) on
investments......... (284,548) 11,068,452 6,593,967 --
-------------- ------------- ------------ -------
Net increase
(decrease) in net
assets resulting
from operations..... $6,986,352 $11,233,773 $ 6,273,947 $19,946
-------------- ------------- ------------ -------
-------------- ------------- ------------ -------
</TABLE>

* From inception, March 2, 1998 to December 31, 1998.

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

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

<TABLE>
<CAPTION>
SMITH BARNEY SMITH BARNEY BB&T GROWTH & AMSOUTH EQUITY MENTOR
APPRECIATION FUND GOVERNMENT PORTFOLIO INCOME FUND INCOME FUND CAPITAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT*
------------------ --------------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 2,368 $1,842 $ 218,179 $ 313,398 $ --
EXPENSES:
Mortality and expense
undertakings.......... (1,842) (377) (189,383) (178,806) (85,499)
------- ------ ----------------- --------------- ---------------
Net investment income
(loss).............. 526 1,465 28,796 134,592 (85,499)
------- ------ ----------------- --------------- ---------------
CAPITAL GAINS INCOME..... 15,116 -- -- -- --
------- ------ ----------------- --------------- ---------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 51 -- 1,013 4,124 (4,500)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 17,076 -- 1,927,801 971,715 1,696,228
------- ------ ----------------- --------------- ---------------
Net gain (loss) on
investments......... 17,127 -- 1,928,814 975,839 1,691,728
------- ------ ----------------- --------------- ---------------
Net increase
(decrease) in net
assets resulting
from operations..... $32,769 $1,465 $1,957,610 $1,110,431 $1,606,229
------- ------ ----------------- --------------- ---------------
------- ------ ----------------- --------------- ---------------

<CAPTION>
MENTOR PERPETUAL MENTOR
INTERNATIONAL GROWTH
SUB-ACCOUNT* SUB-ACCOUNT*
----------------- -------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $-- $--
EXPENSES:
Mortality and expense
undertakings.......... (51,799) (44,785)
-------- -------------
Net investment income
(loss).............. (51,799) (44,785)
-------- -------------
CAPITAL GAINS INCOME..... -- --
-------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 1,684 (1,365)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 601,328 610,042
-------- -------------
Net gain (loss) on
investments......... 603,012 608,677
-------- -------------
Net increase
(decrease) in net
assets resulting
from operations..... $551,213 $563,892
-------- -------------
-------- -------------
</TABLE>

* From inception, March 2, 1998 to December 31, 1998.

<PAGE>
SA-14 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
GROWTH AND
INCOME FUND
SUB-ACCOUNT**
--------------
<S> <C>
INVESTMENT INCOME:
Dividends.............. $ 23,830
EXPENSES:
Mortality and expense
undertakings.......... (17,863)
--------------
Net investment income
(loss).............. 5,967
--------------
CAPITAL GAINS INCOME..... --
--------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (2,267)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 740,175
--------------
Net gain (loss) on
investments......... 737,908
--------------
Net increase
(decrease) in net
assets resulting
from operations..... $743,875
--------------
--------------
</TABLE>

** From inception, June 1, 1998 to December 31, 1998.
*** From inception, September 30, 1998 to December 31, 1998.
**** From inception, December 16, 1998 to December 31, 1998.

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

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-15
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH GLOBAL MITCHELL HUTCHINS GROWTH MITCHELL HUTCHINS STRATEGIC
YIELD FUND LEADERS FUND AND INCOME PORTFOLIO INCOME PORTFOLIO
SUB-ACCOUNT*** SUB-ACCOUNT*** SUB-ACCOUNT**** SUB-ACCOUNT****
--------------- --------------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 34,816 $ 789 $ 44 $ 116
EXPENSES:
Mortality and expense
undertakings.......... (2,794) (317) (6) (5)
--------------- ------- ----- -----
Net investment income
(loss).............. 32,022 472 38 111
--------------- ------- ----- -----
CAPITAL GAINS INCOME..... -- 16,340 702 6
--------------- ------- ----- -----
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (287) 1,084 -- --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (9,874) 10,436 (20) (145)
--------------- ------- ----- -----
Net gain (loss) on
investments......... (10,161) 11,520 (20) (145)
--------------- ------- ----- -----
Net increase
(decrease) in net
assets resulting
from operations..... $ 21,861 $28,332 $720 $ (28)
--------------- ------- ----- -----
--------------- ------- ----- -----

<CAPTION>
MITCHELL HUTCHINS TACTICAL
ALLOCATION PORTFOLIO
SUB-ACCOUNT****
---------------------------
<S> <C>
INVESTMENT INCOME:
Dividends.............. $ 13
EXPENSES:
Mortality and expense
undertakings.......... (6)
-----
Net investment income
(loss).............. 7
-----
CAPITAL GAINS INCOME..... 56
-----
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 507
-----
Net gain (loss) on
investments......... 507
-----
Net increase
(decrease) in net
assets resulting
from operations..... $570
-----
-----
</TABLE>

** From inception, June 1, 1998 to December 31, 1998.
*** From inception, September 30, 1998 to December 31, 1998.
**** From inception, December 16, 1998 to December 31, 1998.

<PAGE>
SA-16 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
BOND FUND STOCK FUND
SUB-ACCOUNT SUB-ACCOUNT
------------ --------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 14,116,691 $ (7,282,872)
Capital gains income... -- 63,980,079
Net realized gain
(loss) on security
transactions.......... (17,730) (1,720,391)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 5,723,478 522,612,064
------------ --------------
Net increase (decrease)
in net assets
resulting from
operations............ 19,822,439 577,588,880
------------ --------------
UNIT TRANSACTIONS:
Purchases.............. 41,906,997 201,628,213
Net transfers.......... 95,280,889 107,789,657
Surrenders for benefit
payments and fees..... (24,892,187) (143,970,482)
Net annuity
transactions.......... 321,142 560,255
------------ --------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 112,616,841 166,007,643
------------ --------------
Net increase (decrease)
in net assets......... 132,439,280 743,596,523
NET ASSETS:
Beginning of period.... 245,380,767 1,754,695,317
------------ --------------
End of period.......... $377,820,047 $2,498,291,840
------------ --------------
------------ --------------
</TABLE>

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

<TABLE>
<CAPTION>
BOND FUND STOCK FUND
SUB-ACCOUNT SUB-ACCOUNT
------------ --------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 10,349,134 $ (2,890,041)
Capital gains income... -- 64,909,605
Net realized gain
(loss) on security
transactions.......... 17,262 1,176,996
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 10,119,718 315,737,284
------------ --------------
Net increase (decrease)
in net assets
resulting from
operations............ 20,486,114 378,933,844
------------ --------------
UNIT TRANSACTIONS:
Purchases.............. 28,788,526 208,829,884
Net transfers.......... 19,102,654 45,780,800
Surrenders for benefit
payments and fees..... (18,300,042) (92,238,226)
Net annuity
transactions.......... 325,387 633,517
------------ --------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 29,916,525 163,005,975
------------ --------------
Net increase (decrease)
in net assets......... 50,402,639 541,939,819
NET ASSETS:
Beginning of period.... 194,978,128 1,212,755,498
------------ --------------
End of period.......... $245,380,767 $1,754,695,317
------------ --------------
------------ --------------
</TABLE>

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

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-17
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY CAPITAL MORTGAGE
MARKET FUND ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- ------------------ ---------------- --------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 11,836,148 $ 44,020,326 $ (12,238,662) $ 9,644,833 $ (1,323,774)
Capital gains income... -- 130,914,844 114,733,928 -- 10,662,058
Net realized gain
(loss) on security
transactions.......... -- 1,826,471 (4,786,085) 473,273 (704,518)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ -- 709,363,622 140,386,292 (228,914) 110,953,813
------------ -------------- ------------------ ---------------- --------------
Net increase (decrease)
in net assets
resulting from
operations............ 11,836,148 886,125,263 238,095,473 9,889,192 119,587,579
------------ -------------- ------------------ ---------------- --------------
UNIT TRANSACTIONS:
Purchases.............. 34,983,693 374,759,005 143,597,572 9,146,977 67,409,255
Net transfers.......... 123,126,442 280,406,929 (12,597,119) 8,722,639 58,996,655
Surrenders for benefit
payments and fees..... (94,130,526) (329,416,389) (117,626,736) (28,665,195) (34,320,175)
Net annuity
transactions.......... (32,392) 3,527,169 304,016 39,959 271,456
------------ -------------- ------------------ ---------------- --------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 63,947,217 329,276,714 13,677,733 (10,755,620) 92,357,191
------------ -------------- ------------------ ---------------- --------------
Net increase (decrease)
in net assets......... 75,783,365 1,215,401,977 251,773,206 (866,428) 211,944,770
NET ASSETS:
Beginning of period.... 267,038,029 3,701,271,594 1,733,908,168 191,113,651 411,155,816
------------ -------------- ------------------ ---------------- --------------
End of period.......... $342,821,394 $4,916,673,571 $1,985,681,374 $190,247,223 $ 623,100,586
------------ -------------- ------------------ ---------------- --------------
------------ -------------- ------------------ ---------------- --------------

<CAPTION>
INTERNATIONAL DIVIDEND AND
OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT
------------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 189,021 $ 4,915,811
Capital gains income... 25,347,181 25,624,259
Net realized gain
(loss) on security
transactions.......... 1,455,876 (465,941)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 17,463,831 82,775,505
------------------- ---------------
Net increase (decrease)
in net assets
resulting from
operations............ 44,455,909 112,849,634
------------------- ---------------
UNIT TRANSACTIONS:
Purchases.............. 16,804,591 141,279,121
Net transfers.......... (27,399,853) 99,305,048
Surrenders for benefit
payments and fees..... (28,546,428) (49,052,200)
Net annuity
transactions.......... 244,437 835,197
------------------- ---------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (38,897,253) 192,367,166
------------------- ---------------
Net increase (decrease)
in net assets......... 5,558,656 305,216,800
NET ASSETS:
Beginning of period.... 393,045,458 669,223,866
------------------- ---------------
End of period.......... $398,604,114 $ 974,440,666
------------------- ---------------
------------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
MONEY CAPITAL MORTGAGE
MARKET FUND ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- ------------------ ---------------- --------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 10,558,627 $ 36,403,121 $ (10,930,508) $ 9,013,463 $ 492,907
Capital gains income... 792 129,600,221 103,244,397 -- 21,612,566
Net realized gain
(loss) on security
transactions.......... -- 2,159,454 413,746 28,917 243,148
Net unrealized
appreciation
(depreciation) of
investments during the
period................ -- 501,068,905 190,913,008 5,074,541 65,120,869
------------ -------------- ------------------ ---------------- --------------
Net increase (decrease)
in net assets
resulting from
operations............ 10,559,419 669,231,701 283,640,643 14,116,921 87,469,490
------------ -------------- ------------------ ---------------- --------------
UNIT TRANSACTIONS:
Purchases.............. 56,766,167 364,832,050 194,562,087 7,925,304 65,766,703
Net transfers.......... (9,782,834) 27,406,992 (11,521,643) (9,594,437) 26,458,731
Surrenders for benefit
payments and fees..... (68,418,264) (206,501,208) (87,759,430) (17,575,723) (18,692,668)
Net annuity
transactions.......... 12,261 725,608 361,130 (3,307) 190,331
------------ -------------- ------------------ ---------------- --------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (21,422,670) 186,463,442 95,642,144 (19,248,163) 73,723,097
------------ -------------- ------------------ ---------------- --------------
Net increase (decrease)
in net assets......... (10,863,251) 855,695,143 379,282,787 (5,131,242) 161,192,587
NET ASSETS:
Beginning of period.... 277,901,280 2,845,576,451 1,354,625,381 196,244,893 249,963,229
------------ -------------- ------------------ ---------------- --------------
End of period.......... $267,038,029 $3,701,271,594 $1,733,908,168 $191,113,651 $ 411,155,816
------------ -------------- ------------------ ---------------- --------------
------------ -------------- ------------------ ---------------- --------------

<PAGE>
SA-18 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
INTERNATIONAL SMALL MIDCAP SMITH BARNEY
ADVISERS FUND COMPANY FUND FUND CASH PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 5,711,299 $ (1,090,110) $ (320,020) $ 19,946
Capital gains income... 1,559,601 1,255,431 -- --
Net realized gain
(loss) on security
transactions.......... (62,176) 1,445,433 (3,698) --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (222,372) 9,623,019 6,597,665 --
-------------- ------------- ------------ ---------------
Net increase (decrease)
in net assets
resulting from
operations............ 6,986,352 11,233,773 6,273,947 19,946
-------------- ------------- ------------ ---------------
UNIT TRANSACTIONS:
Purchases.............. 9,244,144 17,606,410 13,468,482 --
Net transfers.......... 5,996,311 27,369,558 18,368,378 --
Surrenders for benefit
payments and fees..... (3,894,672) (4,568,343) (982,314) (42,255)
Net annuity
transactions.......... 83,430 98,040 -- --
-------------- ------------- ------------ ---------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 11,429,213 40,505,665 30,854,546 (42,255)
-------------- ------------- ------------ ---------------
Net increase (decrease)
in net assets......... 18,415,565 51,739,438 37,128,493 (22,309)
NET ASSETS:
Beginning of period.... 57,422,373 71,393,635 9,173,890 509,012
-------------- ------------- ------------ ---------------
End of period.......... $75,837,938 $123,133,073 $ 46,302,383 $486,703
-------------- ------------- ------------ ---------------
-------------- ------------- ------------ ---------------
</TABLE>

* From inception, March 2, 1998 to December 31, 1998.

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

<TABLE>
<CAPTION>
INTERNATIONAL SMALL MIDCAP SMITH BARNEY
ADVISERS FUND COMPANY FUND FUND CASH PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT* SUB-ACCOUNT
-------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 1,035,994 $ (457,120) $ (12,661) $ 21,390
Capital gains income... 110,732 3,307,195 -- --
Net realized gain
(loss) on security
transactions.......... 13,808 (36,223) (2,185) --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 118,913 1,332,603 336,895 --
-------------- ------------- ------------- ---------------
Net increase (decrease)
in net assets
resulting from
operations............ 1,279,447 4,146,455 322,049 21,390
-------------- ------------- ------------- ---------------
UNIT TRANSACTIONS:
Purchases.............. 18,887,741 24,742,079 2,088,623 --
Net transfers.......... 9,531,179 30,544,670 6,774,154 --
Surrenders for benefit
payments and fees..... (2,110,213) (1,630,264) (10,936) (93,309)
Net annuity
transactions.......... 25,045 44,603 -- --
-------------- ------------- ------------- ---------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 26,333,752 53,701,088 8,851,841 (93,309)
-------------- ------------- ------------- ---------------
Net increase (decrease)
in net assets......... 27,613,199 57,847,543 9,173,890 (71,919)
NET ASSETS:
Beginning of period.... 29,809,174 13,546,092 -- 580,931
-------------- ------------- ------------- ---------------
End of period.......... $57,422,373 $71,393,635 $ 9,173,890 $509,012
-------------- ------------- ------------- ---------------
-------------- ------------- ------------- ---------------
</TABLE>

* From inception, July 15, 1997 to December 31, 1997.
** From inception, June 3, 1997 to December 31, 1997.
*** From inception, October 23, 1997 to December 31, 1997.

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

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-19
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SMITH BARNEY SMITH BARNEY BB&T GROWTH & AMSOUTH EQUITY MENTOR
APPRECIATION FUND GOVERNMENT PORTFOLIO INCOME FUND INCOME FUND CAPITAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT*
------------------ --------------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 526 $ 1,465 $ 28,796 $ 134,592 $ (85,499)
Capital gains income... 15,116 -- -- -- --
Net realized gain
(loss) on security
transactions.......... 51 -- 1,013 4,124 (4,500)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 17,076 -- 1,927,801 971,715 1,696,228
-------- ------- ----------------- --------------- ---------------
Net increase (decrease)
in net assets
resulting from
operations............ 32,769 1,465 1,957,610 1,110,431 1,606,229
-------- ------- ----------------- --------------- ---------------
UNIT TRANSACTIONS:
Purchases.............. -- -- 9,760,778 14,622,450 11,672,774
Net transfers.......... -- -- 6,090,057 5,094,816 5,647,677
Surrenders for benefit
payments and fees..... (3,555) (4,272) (574,799) (733,985) (248,948)
Net annuity
transactions.......... -- -- -- 25,393 --
-------- ------- ----------------- --------------- ---------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (3,555) (4,272) 15,276,036 19,008,674 17,071,503
-------- ------- ----------------- --------------- ---------------
Net increase (decrease)
in net assets......... 29,214 (2,807) 17,233,646 20,119,105 18,677,732
NET ASSETS:
Beginning of period.... 170,573 37,164 6,477,420 2,391,916 --
-------- ------- ----------------- --------------- ---------------
End of period.......... $199,787 $34,357 $23,711,066 $22,511,021 $18,677,732
-------- ------- ----------------- --------------- ---------------
-------- ------- ----------------- --------------- ---------------

<CAPTION>
MENTOR PERPETUAL MENTOR
INTERNATIONAL GROWTH
SUB-ACCOUNT* SUB-ACCOUNT*
----------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ (51,799) $ (44,785)
Capital gains income... -- --
Net realized gain
(loss) on security
transactions.......... 1,684 (1,365)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 601,328 610,042
----------------- -------------
Net increase (decrease)
in net assets
resulting from
operations............ 551,213 563,892
----------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 6,236,230 6,771,031
Net transfers.......... 4,185,922 3,215,967
Surrenders for benefit
payments and fees..... (161,010) (80,660)
Net annuity
transactions.......... -- --
----------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 10,261,142 9,906,338
----------------- -------------
Net increase (decrease)
in net assets......... 10,812,355 10,470,230
NET ASSETS:
Beginning of period.... -- --
----------------- -------------
End of period.......... $10,812,355 $10,470,230
----------------- -------------
----------------- -------------
</TABLE>

<TABLE>
<CAPTION>
SMITH BARNEY SMITH BARNEY BB&T GROWTH & AMSOUTH EQUITY U.S. GOVERNMENT
APPRECIATION FUND GOVERNMENT PORTFOLIO INCOME FUND INCOME FUND MONEY MARKET FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT** SUB-ACCOUNT*** SUB-ACCOUNT
------------------ --------------------- ----------------- --------------- ------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 687 $ 1,594 $ 22,704 $ 1,732 $ 2,019
Capital gains income... 22,341 -- 662 -- --
Net realized gain
(loss) on security
transactions.......... 6,810 -- -- -- --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 8,816 -- 409,485 32,195 --
-------- ------- ----------------- --------------- ----------
Net increase (decrease)
in net assets
resulting from
operations............ 38,654 1,594 432,851 33,927 2,019
-------- ------- ----------------- --------------- ----------
UNIT TRANSACTIONS:
Purchases.............. -- -- 5,104,417 2,100,608 --
Net transfers.......... -- -- 1,006,220 259,438 (88,379)
Surrenders for benefit
payments and fees..... (40,942) (4,272) (66,068) (2,057) (9,133)
Net annuity
transactions.......... -- -- -- -- (21,870)
-------- ------- ----------------- --------------- ----------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (40,942) (4,272) 6,044,569 2,357,989 (119,382)
-------- ------- ----------------- --------------- ----------
Net increase (decrease)
in net assets......... (2,288) (2,678) 6,477,420 2,391,916 (117,363)
NET ASSETS:
Beginning of period.... 172,861 39,842 -- -- 117,363
-------- ------- ----------------- --------------- ----------
End of period.......... $170,573 $37,164 $ 6,477,420 $ 2,391,916 $--
-------- ------- ----------------- --------------- ----------
-------- ------- ----------------- --------------- ----------
</TABLE>

* From inception, July 15, 1997 to December 31, 1997.
** From inception, June 3, 1997 to December 31, 1997.
*** From inception, October 23, 1997 to December 31, 1997.

<PAGE>
SA-20 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
GROWTH AND
INCOME FUND
SUB-ACCOUNT**
--------------
<S> <C>
OPERATIONS:
Net investment income
(loss)................ $ 5,967
Capital gains income... --
Net realized gain
(loss) on security
transactions.......... (2,267)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 740,175
--------------
Net increase (decrease)
in net assets
resulting from
operations............ 743,875
--------------
UNIT TRANSACTIONS:
Purchases.............. 1,325,581
Net transfers.......... 4,236,085
Surrenders for benefit
payments and fees..... (56,204)
Net annuity
transactions.......... --
--------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 5,505,462
--------------
Net increase (decrease)
in net assets......... 6,249,337
NET ASSETS:
Beginning of period.... --
--------------
End of period.......... $6,249,337
--------------
--------------
</TABLE>

** From inception, June 1, 1998 to December 31, 1998.
*** From inception, September 30, 1998 to December 31, 1998.
**** From inception, December 16, 1998 to December 31, 1998.

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

<PAGE>
HARTFORD LIFE INSURANCE COMPANY SA-21
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
HIGH GLOBAL MITCHELL HUTCHINS GROWTH MITCHELL HUTCHINS STRATEGIC
YIELD FUND LEADERS FUND AND INCOME PORTFOLIO INCOME PORTFOLIO
SUB-ACCOUNT*** SUB-ACCOUNT*** SUB-ACCOUNT**** SUB-ACCOUNT****
--------------- --------------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 32,022 $ 472 $ 38 $ 111
Capital gains income... -- 16,340 702 6
Net realized gain
(loss) on security
transactions.......... (287) 1,084 -- --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (9,874) 10,436 (20) (145)
--------------- --------------- ------- ------
Net increase (decrease)
in net assets
resulting from
operations............ 21,861 28,332 720 (28)
--------------- --------------- ------- ------
UNIT TRANSACTIONS:
Purchases.............. 226,463 114,768 10,000 10,000
Net transfers.......... 1,697,571 456,296 -- --
Surrenders for benefit
payments and fees..... (2,348) (286) (1) (1)
Net annuity
transactions.......... -- -- -- --
--------------- --------------- ------- ------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 1,921,686 570,778 9,999 9,999
--------------- --------------- ------- ------
Net increase (decrease)
in net assets......... 1,943,547 599,110 10,719 9,971
NET ASSETS:
Beginning of period.... -- -- -- --
--------------- --------------- ------- ------
End of period.......... $1,943,547 $599,110 $10,719 $9,971
--------------- --------------- ------- ------
--------------- --------------- ------- ------

<CAPTION>
MITCHELL HUTCHINS TACTICAL
ALLOCATION PORTFOLIO
SUB-ACCOUNT****
---------------------------
<S> <C>
OPERATIONS:
Net investment income
(loss)................ $ 7
Capital gains income... 56
Net realized gain
(loss) on security
transactions.......... --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 507
-------
Net increase (decrease)
in net assets
resulting from
operations............ 570
-------
UNIT TRANSACTIONS:
Purchases.............. 10,000
Net transfers.......... --
Surrenders for benefit
payments and fees..... 1
Net annuity
transactions.......... --
-------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 10,001
-------
Net increase (decrease)
in net assets......... 10,571
NET ASSETS:
Beginning of period.... --
-------
End of period.......... $10,571
-------
-------
</TABLE>

** From inception, June 1, 1998 to December 31, 1998.
*** From inception, September 30, 1998 to December 31, 1998.
**** From inception, December 16, 1998 to December 31, 1998.

<PAGE>

SA-22 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998

1. ORGANIZATION:

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

2. SIGNIFICANT ACCOUNTING POLICIES:

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

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 those dividends from the Funds which are characterized as
capital gains under tax regulations.

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

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

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

3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
Deduction and Charges -- Certain amounts are deducted from the Contracts, as
described below:

a) MORTALITY AND EXPENSE RISK CHARGES--The Company will make deductions at a
maximum annual rate of 1.50% of the Contract's value for the mortality
and expense risks which the Company undertakes.

b) TAX EXPENSE CHARGE--If applicable, the Company will make deductions at a
maximum rate of 4.0% of the Contract's value to meet premium tax
requirements. An additional tax charge based on a percentage of the
Contract's value may be assessed to partial withdrawals or surrenders.
These expenses are reflected in surrenders for benefit payments and fees
on the accompanying statements of changes in net assets.

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

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

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

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

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Hartford Life Insurance Company:

We have audited the accompanying Consolidated Balance Sheets of Hartford Life
Insurance Company and subsidiaries as of December 31, 1998 and 1997, and the
related Consolidated Statements of Income, Changes in Stockholder's Equity and
Cash Flows for each of the three years in the period ended December 31, 1998.
These Consolidated Financial Statements and the schedules referred to below are
the responsibility of Hartford Life Insurance Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.

In our opinion, the Consolidated Financial Statements referred to above present
fairly, in all material respects, the financial position of Hartford Life
Insurance Company and subsidiaries as of December 31, 1998 and 1997, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1998 in conformity with generally accepted
accounting principles.

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

ARTHUR ANDERSEN LLP

Hartford, Connecticut
January 26, 1999
<PAGE>
F-2 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF INCOME

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

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

CONSOLIDATED BALANCE SHEETS

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

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

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

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

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY

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

- ---------

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

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

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

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

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

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

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

These Consolidated Financial Statements include Hartford Life Insurance
Company and its wholly-owned subsidiaries ("Hartford Life Insurance Company" or
the "Company"), Hartford Life and Annuity Insurance Company (ILA) and Hartford
International Life Reassurance Corporation (HLRe), formerly American Skandia
Life Reinsurance Corporation. The Company is a wholly-owned subsidiary of
Hartford Life and Accident Insurance Company (HLA), a wholly-owned subsidiary of
Hartford Life, Inc. (Hartford Life). Hartford Life is a direct subsidiary of
Hartford Accident and Indemnity Company (HA&I), an indirect subsidiary of The
Hartford Financial Services Group, Inc. (The Hartford). Pursuant to an initial
public offering (the "IPO") on May 22, 1997, Hartford Life sold 26 million
shares of Class A Common Stock at $28.25 per share and received proceeds, net of
offering expenses, of $687. Of the proceeds, $527 was used to retire debt
related to Hartford Life's outstanding promissory notes and line of credit with
the remaining $160 contributed by Hartford Life to HLA to support growth in its
core businesses. Hartford Life became a publicly traded company upon the sale of
26 million shares representing approximately 18.6% of the equity ownership in
Hartford Life. On December 19, 1995, ITT Industries, Inc. (formerly ITT
Corporation) (ITT) distributed all the outstanding shares of capital stock of
The Hartford to ITT stockholders of record on such date. As a result, The
Hartford became an independent, publicly traded company.

Along with its parent, HLA, the Company is a leading financial services and
insurance company which provides (a) investment products such as individual
variable annuities and fixed market value adjusted annuities, deferred
compensation and retirement plan services and mutual funds for savings and
retirement needs; (b) life insurance for income protection and estate planning;
and (c) employee benefits products such as group life and disability insurance
that is directly written by the Company and is substantially ceded to its
parent, HLA, and (d) corporate owned life insurance.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) BASIS OF PRESENTATION

These Consolidated Financial Statements present the financial position,
results of operations and cash flows of the Company. All material intercompany
transactions and balances between the Company, its subsidiaries and affiliates
have been eliminated. The Consolidated Financial Statements are prepared on the
basis of generally accepted accounting principles which differ materially from
the statutory accounting practices prescribed by various insurance regulatory
authorities.

The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The most
significant estimates include those used in determining deferred policy
acquisition costs and the liability for future policy benefits and other
policyholder funds. Although some variability is inherent in these estimates,
management believes the amounts provided are adequate.

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

(b) CHANGES IN ACCOUNTING PRINCIPLES

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

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

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

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

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

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

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

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

In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities" which is
effective for transfers and servicing of financial assets and extinguishments of
liabilities occurring after December 31, 1996. This statement established
criteria for determining whether transferred assets should be accounted for as
sales or secured borrowings. Adoption of SFAS No. 125 did not have a material
effect on the Company's financial condition or results of operations.

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

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

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

(d) FUTURE POLICY BENEFITS AND OTHER POLICYHOLDER FUNDS

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

(e) INVESTMENTS

Hartford Life Insurance Company's investments in fixed maturities include
bonds and commercial paper which are considered "available for sale" and
accordingly are carried at fair value with the after-tax difference from cost
reflected as a component of stockholder's equity designated "net unrealized
capital gains on securities, net of tax". Equity securities, which include
common and non-redeemable preferred stocks, are carried at fair values with the
after-tax difference from cost reflected in stockholder's equity. Policy loans
are carried at outstanding balance which approximates fair value. Realized
capital gains and losses on security transactions associated with the Company's
immediate participation guaranteed contracts are excluded from revenues and
deferred over the expected maturity of the securities, since under the terms of
the contracts the realized gains and losses will be credited to policyholders in
future years as they are entitled to receive them. Net realized capital gains
and losses, excluding those related to immediate participation guaranteed
contracts, are reported as a component of revenue and are determined on a
specific identification basis.

The Company's accounting policy for impairment requires recognition of an
other than temporary impairment charge on a security if it is determined that
the Company is unable to recover all amounts due under the contractual
obligations of the security. In addition, for securities expected to be sold, an
other than temporary impairment charge is recognized if the Company does not
expect the fair value of a security to recover to cost or amortized cost prior
to the expected date of sale. Once an impairment charge has been recorded, the
Company then continues to review the other than temporarily impaired securities
for additional impairment, if necessary.

(f) DERIVATIVE INSTRUMENTS

Hartford Life Insurance Company uses a variety of derivative instruments
including swaps, caps, floors, forwards and exchange traded financial futures
and options as part of an overall risk management strategy. These instruments
are used as a means of hedging exposure to price, foreign currency and/or
interest rate risk on planned investment purchases or existing assets and
liabilities. The Company does not hold or issue derivative instruments for
trading purposes. Hartford Life Insurance Company's accounting for derivative
instruments used to manage risk is in accordance with the concepts established
in SFAS No. 80, "Accounting for Futures Contracts", SFAS No. 52, "Foreign
Currency Translation", AICPA SOP 86-2, "Accounting for Options" and various EITF
pronouncements. Written options are used, in all cases in conjunction with other
assets and derivatives, as part of the Company's asset and liability management
strategy. Derivative instruments are carried at values consistent with the asset
or liability being hedged. Derivative instruments used to hedge fixed maturities
or equity securities are carried at fair value with the after-tax difference
from cost reflected in Stockholder's Equity. Derivative instruments used to
hedge other invested assets or liabilities are carried at cost. For a discussion
of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities"
issued in June 1998, see (b) Changes in Accounting Principles.

Derivative instruments must be designated at inception as a hedge and
measured for effectiveness both at inception and on an ongoing basis. Hartford
Life Insurance Company's correlation threshold for hedge designation is 80% to
120%. If correlation, which is assessed monthly and measured based on a rolling
three month average, falls outside the 80% to 120% range, hedge accounting will
be terminated. Derivative instruments used to create a synthetic asset must meet
synthetic accounting criteria including designation at inception and consistency
of terms between the synthetic and the instrument being replicated. Consistent
with industry practice, synthetic instruments are accounted for like the
financial instrument it is intended to replicate. Derivative instruments which
fail to meet risk management criteria, subsequent to acquisition, are marked to
market with the impact reflected in the Consolidated Statements of Income.

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

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

The cost of options entered into as part of a risk management strategy are
basis adjusted to the underlying asset or liability and amortized over the
remaining life of the
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-9
- --------------------------------------------------------------------------------

option. Gains or losses on expiration or termination are adjusted into the basis
of the underlying asset or liability and amortized over the remaining asset
life.

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

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

Forward exchange contracts and foreign currency swaps are accounted for in
accordance with SFAS No. 52. Changes in the spot rate of instruments designated
as hedges of the net investment in a foreign subsidiary are reflected in the
cumulative translation adjustments component of stockholder's equity. Cash flows
from futures, options, and swaps, accounted for as hedges, are included with the
cash flows of the item being hedged.
(g) SEPARATE ACCOUNTS

Hartford Life Insurance Company maintains separate account assets and
liabilities which are reported at fair value. Separate account assets are
segregated from other investments. Separate accounts reflect two categories of
risk assumption: non-guaranteed separate accounts, wherein the policyholder
assumes the investment risk and rewards, and guaranteed separate account assets,
wherein the Company contractually guarantees either a minimum return or account
value to the policyholder.

(h) DEFERRED POLICY ACQUISITION COSTS

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

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

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

(i) DIVIDENDS TO POLICYHOLDERS

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

3. INVESTMENTS AND DERIVATIVE INSTRUMENTS

(a) COMPONENTS OF NET INVESTMENT INCOME

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

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

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

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

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

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

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

(e) FIXED MATURITY INVESTMENTS

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

<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-11
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
---------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
U. S. Government and Government agencies and authorities
(guaranteed and sponsored)...................................... $ 217 $ 3 $ (1) $ 219
U. S. Government and Government agencies and authorities
(guaranteed and sponsored) -- asset backed...................... 1,175 64 (35) 1,204
States, municipalities and political subdivisions................ 211 7 (1) 217
International governments........................................ 376 20 (3) 393
Public utilities................................................. 871 26 (3) 894
All other corporate including international...................... 5,033 200 (25) 5,208
All other corporate -- asset backed.............................. 4,091 41 (8) 4,124
Short-term investments........................................... 1,318 -- -- 1,318
Certificates of deposit.......................................... 593 10 (4) 599
---------- ----- ----- ----------
Total fixed maturities....................................... $13,885 $371 $(80) $14,176
---------- ----- ----- ----------
---------- ----- ----- ----------
</TABLE>

The amortized cost and estimated fair value of fixed maturity investments as
of December 31, 1998 by estimated maturity year are shown below. Expected
maturities differ from contractual maturities due to call or prepayment
provisions. Asset backed securities, including mortgage backed securities and
collateralized mortgage obligations, are distributed to maturity year based on
the Company's estimates of the rate of future prepayments of principal over the
remaining lives of the securities. These estimates are developed using
prepayment speeds provided in broker consensus data. Such estimates are derived
from prepayment speeds experienced at the interest rate levels projected for the
applicable underlying collateral and can be expected to vary from actual
experience.

MATURITY

<TABLE>
<CAPTION>
AMORTIZED
COST FAIR VALUE
----------- -----------
<S> <C> <C>
One year or less......................... $ 3,047 $ 3,116
Over one year through five years......... 4,796 4,843
Over five years through ten years........ 3,242 3,318
Over ten years........................... 3,420 3,541
----------- -----------
Total................................ $ 14,505 $ 14,818
----------- -----------
----------- -----------
</TABLE>

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

(f) CONCENTRATION OF CREDIT RISK

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

(g) DERIVATIVE INSTRUMENTS

Hartford Life Insurance Company utilizes a variety of derivative
instruments, including swaps, caps, floors, forwards and exchange traded futures
and options, in accordance with Company policy and in order to achieve one of
three Company approved objectives: to hedge risk arising from interest rate,
price or currency exchange rate volatility; to manage liquidity; or, to control
transactions costs. The Company utilizes derivative instruments to manage market
risk through four principal risk management strategies: hedging anticipated
transactions, hedging liability instruments, hedging invested assets and hedging
portfolios of assets and/or liabilities. The Company does not trade in these
instruments for the express purpose of earning trading profits.

Hartford Life Insurance Company maintains a derivatives counterparty
exposure policy which establishes market-based credit limits, favors long-term
financial stability and creditworthiness, and typically requires credit
enhancement/credit risk reducing agreements. Credit risk is measured as the
amount owed to the Company based on current market conditions and potential
payment obligations between the Company and its counterparties. Credit exposures
are quantified weekly and netted, and collateral is pledged to or held by the
Company to the extent the current value of derivatives exceed exposure policy
thresholds.

Hartford Life Insurance Company's derivative program is monitored by an
internal compliance unit and is reviewed by senior management and Hartford
Life's Finance Committee of the Board of Directors. Notional amounts, which
represent the basis upon which pay or receive amounts are calculated and are not
reflective of credit risk, pertaining to derivative financial instruments
(excluding
<PAGE>
F-12 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

the Company's guaranteed separate account derivative investments), totaled $6.2
billion and $6.5 billion ($3.9 billion and $4.6 billion related to the Company's
investments, $2.3 billion and $1.9 billion on the Company's liabilities) as of
December 31, 1998 and 1997, respectively.

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

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

<TABLE>
<CAPTION>
1997 -- AMOUNT HEDGED (NOTIONAL AMOUNTS)
----------------------------------------------------------------------------------
FOREIGN
TOTAL ISSUED PURCHASED INTEREST CURRENCY TOTAL
CARRYING CAPS & CAPS & FUTURES RATE SWAPS NOTIONAL
ASSETS HEDGED VALUE FLOORS FLOORS (2) SWAPS (3) AMOUNT
- ----------------------------------- -------- -------- ---------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset backed securities
(excluding inverse floaters and
anticipatory)..................... $ 5,253 $ 500 $ 1,404 $ 28 $ 221 $-- $ 2,153
Inverse floaters (1)............... 75 47 80 -- 25 -- 152
Anticipatory (4)................... -- -- -- -- -- -- --
Other bonds and notes.............. 7,531 462 460 22 1,258 91 2,293
Short-term investments............. 1,317 -- -- -- -- -- --
-------- -------- ---------- ---------- ---------- --- ----------
Total fixed maturities......... 14,176 1,009 1,944 50 1,504 91 4,598
Equity securities, policy loans and
other investments................. 3,983 -- -- -- -- -- --
-------- -------- ---------- ---------- ---------- --- ----------
Total investments.............. $ 18,159 1,009 1,944 50 1,504 91 4,598
Other policyholder funds....... $ 21,034 10 150 -- 1,747 -- 1,907
-------- -------- ---------- ---------- ---------- --- ----------
Total derivative instruments --
notional value................ $ 1,019 $ 2,094 $ 50 $ 3,251 $91 $ 6,505
-------- -------- ---------- ---------- ---------- --- ----------
Total derivative instruments --
fair value.................... $ (8) $ 23 $ -- $ 19 $(6) $ 28
-------- -------- ---------- ---------- ---------- --- ----------
-------- -------- ---------- ---------- ---------- --- ----------
</TABLE>

- ---------

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

(2) As of December 31, 1998 and 1997, approximately 5% and 44% ,
respectively, of the notional futures contracts expire within one year.

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

(4) Deferred gains and losses on anticipatory transactions are included in
the carrying value of fixed maturities in the Consolidated Balance Sheets. At
the time of the ultimate purchase, they are reflected as a basis adjustment to
the purchased asset. As of December 31, 1998 and 1997, the Company had no
deferred gains for interest rate swaps. During 1998, $1.5 in deferred gains were
basis adjusted.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-13
- --------------------------------------------------------------------------------

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

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

- ---------

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

4. FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107 "Disclosure about Fair Value of Financial Instruments" requires
disclosure of fair value information of financial instruments. For certain
financial instruments where quoted market prices are not available, other
independent valuation techniques and assumptions are used. Because considerable
judgment is used, these estimates are not necessarily indicative of amounts that
could be realized in a current market exchange. SFAS No. 107 excludes certain
financial instruments from disclosure, including insurance contracts. Hartford
Life Insurance Company uses the following methods and assumptions in estimating
the fair value of each class of financial instrument.

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

For policy loans, carrying amounts approximate fair value.

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

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

The fair value of derivative financial instruments, including swaps, caps,
floors, futures, options and forward commitments, is determined using a pricing
model which is validated through periodic comparison to dealer quoted prices.

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

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

- ---------

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

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

5. SEPARATE ACCOUNTS

Hartford Life Insurance Company maintained separate account assets and
liabilities totaling $90.3 billion and $69.1 billion as of December 31, 1998 and
1997, respectively, which are reported at fair value. Separate account assets,
which are segregated from other investments, reflect two categories of risk
assumption: non-guaranteed separate accounts totaling $80.6 billion and $58.6
billion as of December 31, 1998 and 1997, respectively, wherein the policyholder
assumes the investment risk, and guaranteed separate accounts totaling $9.7 and
$10.5 billion as of December 31, 1998 and 1997, respectively, wherein Hartford
Life Insurance Company contractually guarantees either a minimum return or
account value to the policyholder. Included in non-guaranteed separate account
assets were policy loans totaling $1.8 billion and $1.9 billion as of December
31, 1998 and 1997, respectively. Net investment income (including net realized
capital gains and losses) and interest credited to policyholders on separate
account assets are not reflected in the Consolidated Statements of Income.

Separate account management fees and other revenues were $908, $699 and $538
in 1998, 1997 and 1996, respectively. The guaranteed separate accounts include
fixed market value adjusted (MVA) individual annuity and modified guaranteed
life insurance. The average credited interest rate on these contracts was 6.6%
and 6.5% as of December 31, 1998 and 1997, respectively. The assets that support
these liabilities were comprised of $9.5 billion and $10.2 billion in fixed
maturities as of December 31, 1998 and 1997, respectively. The portfolios are
segregated from other investments and are managed to minimize liquidity and
interest rate risk. In order to minimize the risk of disintermediation
associated with early withdrawals, fixed MVA annuity and modified guaranteed
life insurance contracts carry a graded surrender charge as well as a market
value adjustment. Additional investment risk is hedged using a variety of
derivatives which totaled $40 and $119 in carrying value and $3.5 billion and
$3.0 billion in notional amounts as of December 31, 1998 and 1997, respectively.

6. STATUTORY RESULTS

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

A significant percentage of the consolidated statutory surplus is
permanently reinvested or is subject to various state regulatory restrictions
which limit the payment of dividends without prior approval. The total amount of
statutory dividends which may be paid by the insurance subsidiaries of the
Company in 1999 is estimated to be $168.

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

7. STOCK COMPENSATION PLANS

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

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

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

During the second quarter of 1997, Hartford Life established the Hartford
Life, Inc. Employee Stock Purchase Plan (ESPP). Under this plan, eligible
employees of Hartford Life and the Company may purchase Class A Common Stock of
Hartford Life at a 15% discount from the lower of the market price at the
beginning or end of the quarterly offering period. Hartford Life may sell up to
2,700,000 shares of stock to eligible employees. Hartford Life sold 121,943 and
54,316 shares under the ESPP in 1998 and 1997, respectively. The weighted
average fair value of the discount under the ESPP was $13.80 per share in 1998
and $9.63 per share in 1997.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES F-15
- --------------------------------------------------------------------------------

8. POSTRETIREMENT BENEFIT AND SAVINGS PLANS

(a) PENSION PLANS

Hartford Life Insurance Company's employees are included in The Hartford's
noncontributory defined benefit pension plans. These plans provide pension
benefits that are based on years of service and the employee's compensation
during the last ten years of employment. The Company's funding policy is to
contribute annually an amount between the minimum funding requirements set forth
in the Employee Retirement Income Security Act of 1974, as amended, and the
maximum amount that can be deducted for U.S. Federal income tax purposes.
Generally, pension costs are funded through the purchase of the Company's group
pension contracts. The cost to the Company was approximately $6 in 1998 and $5
in both 1997 and 1996.

The Company also provides, through The Hartford, certain health care and
life insurance benefits for eligible retired employees. A substantial portion of
the Company's employees may become eligible for these benefits upon retirement.
The Company's contribution for health care benefits will depend on the retiree's
date of retirement and years of service. In addition, the plan has a defined
dollar cap which limits average Company contributions. The Company has prefunded
a portion of the health care and life insurance obligations through trust funds
where such prefunding can be accomplished on a tax effective basis.
Postretirement health care and life insurance benefits expense, allocated by The
Hartford, was immaterial to the results of operations for 1998, 1997 and 1996.

The assumed rate in the per capita cost of health care (the health care
trend rate) was 7.8% for 1998, decreasing ratably to 5.0% in the year 2003.
Increasing the health care trend rates by one percent per year would have an
immaterial impact on the accumulated postretirement benefit obligation and the
annual expense. To the extent that the actual experience differs from the
inherent assumptions, the effect will be amortized over the average future
service of covered employees.

(b) INVESTMENT AND SAVINGS PLAN

Substantially all employees of the Company are eligible to participate in
The Hartford's Investment and Savings Plan. Under this plan, designated
contributions, which may be invested in Class A Common Stock of Hartford Life or
certain other investments, are matched, up to 3% of compensation, by the
Company. The cost to Hartford Life Insurance Company for the above-mentioned
plan was approximately $4 and $2 in 1998 and 1997, respectively.

9. REINSURANCE

Hartford Life Insurance Company cedes insurance to other insurers, including
its parent, HLA, in order to limit its maximum loss. Such transfer does not
relieve the Company of its primary liability. The Company also assumes insurance
from other insurers. Failure of reinsurers to honor their obligations could
result in losses to the Company. The Company evaluates the financial condition
of its reinsurers and monitors concentration of credit risk.

Net premiums and other considerations were comprised of the following:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Gross premiums...................... $ 2,722 $ 2,164 $ 2,138
Assumed............................. 150 159 190
Ceded............................... (654) (686) (623)
--------- --------- ---------
Net premiums and other
considerations................... $ 2,218 $ 1,637 $ 1,705
--------- --------- ---------
--------- --------- ---------
</TABLE>

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

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

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

10. INCOME TAX

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

As long as The Hartford continues to own at least 80% of the combined voting
power and 80% of the value of the outstanding capital stock of Hartford Life,
the Company will be included for Federal income tax purposes in the affiliated
group of which The Hartford is the common parent. It is the intention of The
Hartford and its non-life subsidiaries to file a single consolidated Federal
income tax return. The life insurance companies will file a separate
consolidated federal income tax return. The Company's effective tax rate was
35%, 36% and 35% in 1998, 1997 and 1996, respectively.
<PAGE>
F-16 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------

Income tax expense is as follows:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Current.................................. $ 307 $ 162 $ 118
Deferred................................. (119) 5 (98)
--------- --------- ---------
Income tax expense..................... $ 188 $ 167 $ 20
--------- --------- ---------
--------- --------- ---------
</TABLE>

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

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
---------------------------------
1998 1997 1996
--------- --------- -----
<S> <C> <C> <C>
Tax provision at the U.S. Federal
statutory rate........................... $ 188 $ 164 $ 20
Other..................................... -- 3 --
--------- --------- ---
Total................................... $ 188 $ 167 $ 20
--------- --------- ---
--------- --------- ---
</TABLE>

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

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

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

Prior to the Tax Reform Act of 1984, the Life Insurance Company Income Tax
Act of 1959 permitted the deferral from taxation of a portion of statutory
income under certain circumstances. In these situations, the deferred income was
accumulated in a "Policyholders' Surplus Account" and, based on current tax law,
will be taxable in the future only under conditions which management considers
to be remote; therefore, no Federal income taxes have been provided on this
deferred income. The balance for tax return purposes of the Policyholders'
Surplus Account as of December 31, 1998 was $104.

11. RELATED PARTY TRANSACTIONS

Transactions of the Company with HA&I and its affiliates relate principally
to tax settlements, reinsurance, insurance coverage, rental and service fees,
payment of dividends and capital contributions. In addition, certain affiliated
insurance companies purchased group annuity contracts from the Company to fund
pension costs and claim annuities to settle casualty claims. Substantially all
general insurance expenses related to the Company, including rent and employee
benefit plan expenses, are initially paid by The Hartford. Direct expenses are
allocated to the Company using specific identification, and indirect expenses
are allocated using other applicable methods. Indirect expenses include those
for corporate areas which, depending on type, are allocated based on either a
percentage of direct expenses or on utilization. Indirect expenses allocated to
the Company by The Hartford were $47, $34 and $40 in 1998, 1997 and 1996,
respectively. Management believes that the methods used are reasonable.

12. COMMITMENTS AND CONTINGENT LIABILITIES

(a) LITIGATION

Hartford Life Insurance Company is involved in pending and threatened
litigation in the normal course of its business in which claims for monetary and
punitive damages have been asserted. Although there can be no assurances, at the
present time the Company does not anticipate that the ultimate liability arising
from such pending or threatened litigation, after consideration of provisions
made for potential losses and costs of defense, will have a material adverse
effect on the financial condition or operating results of the Company.

(b) GUARANTY FUNDS

Under insurance guaranty fund laws in each state, the District of Columbia
and Puerto Rico, insurers licensed to do business can be assessed by state
insurance guaranty associations for certain obligations of insolvent insurance
companies to policyholders and claimants. Recent regulatory actions against
certain large life insurers encountering financial difficulty have prompted
various state insurance guaranty associations to begin assessing life insurance
companies for the deemed losses. Most of these laws do provide, however, that an
assessment may be excused or deferred if it would threaten an insurer's solvency
and further provide annual limits on such assessments. Part of the assessments
paid by the Company and its subsidiaries pursuant to these laws may be used as
credits for a portion of the associated premium taxes. The Company paid guaranty
fund assessments of approximately $9, $15 and $11 in 1998, 1997 and 1996,
respectively, of which $4, $4 and $5, respectively, were estimated to be
creditable against premium taxes.

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

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

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

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

(d) TAX MATTERS

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

(e) INVESTMENTS

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

13. SEGMENT INFORMATION

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

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

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

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

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

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

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

14. QUARTERLY RESULTS FOR 1998 AND 1997 (UNAUDITED)

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

SCHEDULE I -- SUMMARY OF INVESTMENTS -- OTHER THAN INVESTMENTS IN AFFILIATES
AS OF DECEMBER 31, 1998
(IN MILLIONS)

<TABLE>
<CAPTION>
AMOUNT AT
WHICH
FAIR SHOWN ON
TYPE OF INVESTMENT COST VALUE BALANCE SHEET
- --------------------------------------------- ------- ------- --------------
<S> <C> <C> <C>
Fixed Maturities
Bonds and Notes
U. S. Government and Government agencies
and authorities (guaranteed and
sponsored)................................ $ 121 $ 123 $ 123
U. S. Government and Government agencies
and authorities (guaranteed and sponsored)
-- asset backed........................... 1,001 1,016 1,016
States, municipalities and political
subdivisions.............................. 165 173 173
Foreign governments........................ 393 412 412
Public utilities........................... 844 874 874
All other corporate including
international............................. 5,469 5,687 5,687
All other corporate -- asset backed........ 4,155 4,171 4,171
Short-term investments..................... 1,847 1,847 1,847
Certificates of deposit...................... 510 515 515
------- ------- -------
Total fixed maturities....................... 14,505 14,818 14,818
------- ------- -------
Equity Securities
Common Stocks
Industrial and miscellaneous............... 30 31 31
------- ------- -------
Total equity securities...................... 30 31 31
------- ------- -------
Total fixed maturities and equity
securities.................................. 14,535 14,849 14,849
------- ------- -------
Policy Loans................................. 6,684 6,684 6,684
------- ------- -------
Other Investments
Mortgage loans on real estate.............. 206 207 206
Other invested assets...................... 58 102 58
------- ------- -------
Total other investments...................... 264 309 264
------- ------- -------
Total investments............................ $21,483 $21,842 $21,797
------- ------- -------
------- ------- -------
</TABLE>

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

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

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

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

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

<CAPTION>
NET BENEFITS, AMORTIZATION
REALIZED CLAIMS AND OF DEFERRED
CAPITAL CLAIM POLICY
GAINS ADJUSTMENT ACQUISITION DIVIDENDS TO OTHER
SEGMENT (LOSSES) EXPENSES COSTS POLICYHOLDERS EXPENSES
- --------------------------------------------- ----------- ----------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
1998
Investment Products.......................... $ -- $ 670 $326 $ -- $ 368
Individual Life.............................. (1) 262 105 -- 77
Corporate Owned Life Insurance............... -- 924 -- 329 278
Other........................................ (1) 55 -- -- 43
----------- ----------- ----- ----- -----
Consolidated operations...................... $ (2) $1,911 $431 $329 $ 766
----------- ----------- ----- ----- -----
----------- ----------- ----- ----- -----
1997
Investment Products.......................... $ -- $ 677 $250 $ -- $ 266
Individual Life.............................. -- 242 83 -- 77
Corporate Owned Life Insurance............... -- 439 -- 240 259
Other........................................ 4 21 2 -- (16)
----------- ----------- ----- ----- -----
Consolidated operations...................... $ 4 $1,379 $335 $240 $ 586
----------- ----------- ----- ----- -----
----------- ----------- ----- ----- -----
1996
Investment Products.......................... $(219) $ 744 $175 $ -- $ 203
Individual Life.............................. -- 245 59 -- 68
Corporate Owned Life Insurance............... -- 545 -- 634 144
Other........................................ 6 1 -- 1 12
----------- ----------- ----- ----- -----
Consolidated operations...................... $(213) $1,535 $234 $635 $ 427
----------- ----------- ----- ----- -----
----------- ----------- ----- ----- -----
</TABLE>

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

SCHEDULE IV -- REINSURANCE
(IN MILLIONS)

<TABLE>
<CAPTION>
CEDED TO ASSUMED FROM PERCENTAGE
GROSS OTHER OTHER NET OF AMOUNT
AMOUNT COMPANIES COMPANIES AMOUNT ASSUMED TO NET
-------- -------------- -------------- -------- ---------------
<S> <C> <C> <C> <C> <C>
For the year ended December 31, 1998
Life insurance in force........................... $326,400 $ 200,782 $ 18,289 $143,907 12.7%
Premiums and other considerations
Life insurance and annuities.................... $ 2,329 $ 271 $ 142 $ 2,200 6.5%
Accident and health insurance................... 393 383 8 18 44.4%
-------- -------------- ------- --------
Total premiums and other considerations........... $ 2,722 $ 654 $ 150 $ 2,218 6.8%
-------- -------------- ------- --------
-------- -------------- ------- --------
For the year ended December 31, 1997
Life insurance in force......................... $245,487 $ 178,771 $ 33,156 $ 99,872 33.2%
Premiums and other considerations
Life insurance and annuities.................... $ 1,818 $ 340 $ 157 $ 1,635 9.6%
Accident and health insurance................... 346 346 2 2 100.0%
-------- -------------- ------- --------
Total premiums and other considerations........... $ 2,164 $ 686 $ 159 $ 1,637 9.7%
-------- -------------- ------- --------
-------- -------------- ------- --------
For the year ended December 31, 1996
Life insurance in force......................... $177,094 $ 106,146 $ 31,957 $102,905 31.1%
Premiums and other considerations
Life insurance and annuities.................... $ 1,801 $ 298 $ 169 $ 1,672 10.1%
Accident and health insurance................... 337 325 21 33 63.6%
-------- -------------- ------- --------
Total premiums and other considerations........... $ 2,138 $ 623 $ 190 $ 1,705 11.1%
-------- -------------- ------- --------
-------- -------------- ------- --------
</TABLE>
<PAGE>

PART C

<PAGE>

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) All financial statements are included in Part A and Part B of the
Registration Statement.

(b) (1) Resolution of the Board of Directors of Hartford Life Insurance
Company ("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 Flexible Premium Variable Annuity
Contract.(3)

(5) Form of Application.(3)

(6) (a) Articles of Incorporation of Hartford.(4)

(6) (b) Bylaws of Hartford.(1)

(7) Not applicable.

(8) Form of Participation Agreement.

(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.

(12) Not applicable.

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

(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 the initial filing to the Registration
Statement File No. 333-69485, dated December 22, 1998.

(4) Incorporated by reference to Post-Effective Amendment No. 19, to
the Registration Statement File No. 33-73570, dated April 14, 1997.

<PAGE>

(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, Director*
- ------------------------------------------------------------------------------
Peter W. Cummins Senior Vice President
- ------------------------------------------------------------------------------
Timothy M. Fitch Vice President
- ------------------------------------------------------------------------------
Mary Jane B. Fortin Vice President & Chief Accounting Officer
- ------------------------------------------------------------------------------
David T. Foy Senior Vice President & Treasurer
- ------------------------------------------------------------------------------
Lynda Godkin Senior Vice President, General Counsel and Corporate
Secretary, Director*
- ------------------------------------------------------------------------------
Lois W. Grady Senior Vice President
- ------------------------------------------------------------------------------
Stephen T. Joyce Vice President
- ------------------------------------------------------------------------------
Michael D. Keeler Vice President
- ------------------------------------------------------------------------------
Robert A. Kerzner Senior Vice President
- ------------------------------------------------------------------------------
Thomas M. Marra Executive Vice President, Director*
- ------------------------------------------------------------------------------
Joseph J. Noto Vice President
- ------------------------------------------------------------------------------
Craig R. Raymond Senior Vice President and Chief Actuary
- ------------------------------------------------------------------------------
Donald A. Salama Vice President
- ------------------------------------------------------------------------------
Lowndes A. Smith President and Chief Executive Officer, Director*
- ------------------------------------------------------------------------------
David M. Znamierowski Senior Vice President, Director*
- ------------------------------------------------------------------------------
</TABLE>

Unless otherwise indicated, the principal business address of each of 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.

<PAGE>

Item 27. Number of Contract Owners

As of July 31, 1999, there were 232,098 Contract Owners.

Item 28. Indemnification

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

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

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

Notwithstanding the fact that Connecticut law obligates the
Registrant to indemnify a only a director that was successful on
the merits in a suit, under Article VIII, Section 1 of the
Registrant's bylaws, the Registrant must indemnify both directors
and officers of the Registrant for (1) any claims and liabilities
to which they become subject by reason of being or having been a
director or officer 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,

<PAGE>

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 registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.

Item 29. Principal Underwriters

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

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

<PAGE>

Hartford Life and Annuity Insurance Company - Separate Account
Three
Hartford Life and Annuity Insurance Company - Separate Account
Five
Hartford Life and Annuity Insurance Company - Separate Account
Six
Alpine Life Insurance Company - Separate Account One
Alpine Life Insurance Company - Separate Account Two
American Maturity Life Insurance Company - Separate Account
AMLVA
Royal Life Insurance Company - Separate Account One
Royal Life Insurance Company - Separate Account Two

(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
Thomas M. Marra Executive Vice President, Director
Peter W. Cummins Senior Vice President
Lynda Godkin Senior Vice President, General Counsel
and Corporate Secretary
David T. Foy Treasurer
George R. Jay Controller
</TABLE>

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

Item 30. Location of Accounts and Records

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

Item 31. Management Services

All management contracts are discussed in Part A and Part B of this
Registration Statement.

Item 32. Undertakings

(a) The Registrant hereby undertakes to file a post-effective
amendment to this Registration Statement as frequently as is
necessary to ensure that the audited financial statements in the
Registration Statement are never more than 16 months old so long
as payments under the variable annuity Contracts may be
accepted.

<PAGE>

(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 3rd day
of September, 1999.

HARTFORD LIFE INSURANCE COMPANY -
SEPARATE ACCOUNT TWO
(Registrant)

By: Thomas M. Marra *By: /s/ Marianne O'Doherty
----------------------------------------- ----------------------
Thomas M. Marra, Executive Vice President Marianne O'Doherty
Attorney-in-Fact
HARTFORD LIFE INSURANCE COMPANY
(Depositor)

*By: Thomas M. Marra
-----------------------------------------
Thomas M. Marra, Executive Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons and in
the capacity and on the date indicated.

Gregory A. Boyko, Senior Vice President,
Director *
Lynda Godkin, Senior Vice President,
General Counsel & Corporate Secretary,
Director*
Thomas M. Marra, Executive Vice *By: /s/ Marianne O'Doherty
President, Director * ----------------------
Lowndes A. Smith, President & Marianne O'Doherty
Chief Executive Officer, Director * Attorney-In-Fact
David M. Znamierowski, Senior Vice President,
Director* Dated: September 3, 1999

<PAGE>

EXHIBIT INDEX

(8) Form of Participation Agreement.

(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) Power of Attorney.

(16) Organizational Chart.

<PAGE>

FUND PARTICIPATION AGREEMENT

Among

[FUND],

[ADVISER],

[DISTRIBUTOR],

And

HARTFORD LIFE INSURANCE COMPANY

<PAGE>

TABLE OF CONTENTS

Page

ARTICLE I. Fund Shares

ARTICLE II. Representations and Warranties

ARTICLE III. Prospectuses, Reports to Shareholders and Proxy
Statements; Voting

ARTICLE IV. Sales Material and Information

ARTICLE V. Diversification

ARTICLE VI. Potential Conflicts

ARTICLE VII. Indemnification

ARTICLE VIII. Applicable Law

ARTICLE IX. Termination

ARTICLE X. Notices

ARTICLE XI. Miscellaneous

SCHEDULE A Separate Accounts and Contracts

SCHEDULE B Participating Life Investment Trust Funds

<PAGE>

FUND PARTICIPATION AGREEMENT

THIS AGREEMENT, made as of this ___ day of ____________, 1999 by and
among Hartford Life Insurance Company ("Hartford"); a Connecticut
corporation, on its behalf and on behalf of each separate account set forth
on SCHEDULE A attached as it may be amended from time to time (the "Separate
Accounts"); [Fund], a __________ corporation (the "Fund"); [Distributor], a
_______________ corporation (the "Distributor") and [Adviser], a ___________
corporation (the "Adviser").

WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established by insurance companies for life insurance
policies and annuity contracts; and

WHEREAS, the Distributor is registered as a broker/dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD") and serves as principal underwriter of the shares of the Fund; and

WHEREAS, the Adviser is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended, and any applicable state
securities laws and serves as the investment advisor to the Fund; and

WHEREAS, the Fund intends to make available shares of the Fund set
forth on SCHEDULE B, as it may be amended from time to time by mutual
agreement of the parties, to the Separate Accounts of Hartford; and

WHEREAS, Hartford is an insurance company which has registered or
will register the variable annuities and/or variable life insurance policies
listed in Schedule A under the Securities Act of 1933 (the "1933 Act") and
the Investment Company Act of 1940 (the "1940 Act") to be issued by them for
distribution (the "Contracts"); and

NOW, THEREFORE, in consideration of their mutual promises, Hartford,
the Fund, the Distributor and the Adviser agree as follows:

ARTICLE I. FUND SHARES

1.1 The Fund and the Distributor agree to make shares of the Fund available
for purchase on each Business Day by the Separate Accounts. The Fund will
execute orders placed for each Separate Account on a daily basis at the net
asset value next computed after receipt by the Fund or its designee of such
order.

<PAGE>

A. For purposes of this Agreement, Hartford shall be the designee of
the Fund and Distributor for receipt of orders from each Separate Account and
receipt by Hartford constitutes receipt by the Fund, provided that the Fund
receives notice of orders by 9:30 a.m. (Eastern time) on the next following
Business Day.

B. For purposes of this Agreement, "Business Day" shall mean any day
on which the New York Stock Exchange is open for trading and on which the
Fund calculates its net asset value pursuant to the rules of the Securities
and Exchange Commission ("SEC"), as set forth in the Fund's prospectus.

1.2 The Board of Trustees of the Fund (the "Board"), acting in good faith and
in the exercise of its fiduciary responsibilities, may refuse to permit the
Fund to sell shares of any Fund to any person, or suspend or terminate the
offering of shares of any Fund if such action is required by law or by
regulatory authorities having jurisdiction over the sale of shares.

1.3 The Fund and the Distributor agree that shares of the Fund will be sold
only to insurance companies for use in conjunction with variable life
insurance policies or variable annuities. No shares of the Fund will be sold
to the general public.

1.4 The Fund and the Distributor agree to redeem for cash, at Hartford's
request, any full or fractional shares of the Fund held by the Separate
Accounts, on a daily basis at the net asset value next computed after receipt
by the Fund or its designee of the request for redemption.

A. For the purposes of this Agreement, Hartford shall be the
designee of the Fund for receipt of redemption requests from each Separate
Account and receipt by Hartford constitutes receipt by the Fund, provided
that the Distributor receives notice of the redemption request by 9:30 a.m.
(Eastern time) on the next following Business Day.

1.5 Hartford agrees that purchases and redemptions of Fund shares offered by
the then current prospectus of the Fund shall be made in accordance with the
provisions of the prospectus.

A. Hartford will place separate orders to purchase or redeem shares
of each Fund. Each order shall describe the net amount of shares and dollar
amount of each Fund to be purchase or redeemed.

B. In the event of net purchases, Hartford will pay for shares
before 3:00 p.m. (Eastern time) on the next Business Day after receipt of an
order to purchase shares.

<PAGE>

C. In the event of net redemptions, the Fund shall pay the
redemption proceeds in federal funds transmitted by wire before 3:00 p.m.
(Eastern time) on the next Business Day after an order to redeem Fund shares
is made.

1.6 Issuance and transfer of the Fund's shares will be by book entry only.
Share certificates will not be issued to Hartford or any Separate Account.
Shares purchased will be recorded in an appropriate title for each Separate
Account or the appropriate sub-account of each Separate Account. The Fund
shall furnish to Hartford the CUSIP number assigned to each portfolio of the
Fund identified in Schedule B attached as may be amended from time to time.

1.7 The Distributor shall notify Hartford in advance of any dividends or
capital gain distributions payable on the Fund's shares, but by no later than
same day notice by 6:00 p.m. Eastern time (by wire or telephone, followed by
written confirmation). Hartford elects to receive all such dividends and
capital gain distributions in additional shares of that Fund. The Fund shall
notify Hartford of the number of shares issued as payment of dividends and
distributions. Hartford reserves the right to revoke this election and to
receive all such dividends and capital gain distributions in cash.

1.8 The Distributor shall make the net asset value per share of each Fund
available to Hartford on a daily basis as soon as reasonably practical after
the net asset value per share is calculated. The Fund shall use its best
efforts to make such net asset value per share available by 6:00 p.m. Eastern
time.

A. If the Distributor provides materially incorrect share net asset
value information through no fault of Hartford, the Separate Accounts shall
be entitled to an adjustment with respect to the Fund shares purchased or
redeemed to reflect the correct net asset value per share.

B. The determination of the materiality of any net asset value
pricing error and its correction shall be based on the SEC's recommended
guidelines regarding these errors. Any material error in the calculation or
reporting of net asset value per share, dividend or capital gain information
shall be reported promptly to Hartford upon discovery. The Fund and/or its
agents shall indemnify and hold harmless Hartford against any amount Hartford
is legally required to pay qualified plans ("Plans") or Contract owners, and
which amount is due to the Fund's or its agents' material miscalculation
and/or incorrect reporting of the daily net asset value, dividend rate or
capital gains distribution rate. Hartford shall submit an invoice to the Fund
or its agents for such losses incurred as a result of the above which shall
be payable within sixty (60) days of receipt. Should a miscalculation by the
Fund or its agents result in a gain to Hartford, Hartford shall immediately
reimburse the Fund or its agents for any material

<PAGE>

losses incurred by the Fund or its agents as a result of the incorrect
calculation. Should a material miscalculation by the Fund or its agents
result in a gain to the Plans or Contract owners, Hartford will consult with
the Fund or its designee as to what reasonable efforts shall be made to
recover the money and repay the Fund or its agents. Hartford shall then make
such reasonable effort, at the expense of the Fund or its agents, to recover
the money and repay the Fund or its agents; but Hartford shall not be
obligated to take legal action against the Plans or Contract owners.

With respect to the material errors or omissions described above, this
section shall control over other indemnification provisions in this Agreement.

ARTICLE II. REPRESENTATIONS AND WARRANTIES

2.1 Hartford represents and warrants that:

A. The Contracts are or will be registered under the 1933 Act unless
exempt and that the registrations will be maintained to the extent required
by law;

B. The Contracts will be issued in compliance with all applicable
federal and state laws and regulations.

C. Hartford is duly organized and in good standing under applicable
law.

D. Hartford has legally and validly established each Separate
Account prior to any issuance or sale as a segregated asset account under the
Connecticut Insurance Code and has registered or, prior to any issuance or
sale of the Contracts, will register and will maintain the registration of
each Separate Account as a unit investment trust in accordance with the 1940
Act.

2.2 The Fund and the Distributor represent and warrant that:

A. Fund shares sold pursuant to this Agreement shall be registered
under the 1933 Act and the regulations thereunder to the extent required.

B. Fund shares shall be duly authorized for issuance in accordance
with the laws of each jurisdiction in which shares will be offered.

C. Fund shares shall be sold in compliance with all applicable
federal and state securities laws and regulations.

D. The Fund is and shall remain registered under the 1940 Act and
the regulations thereunder to the extent required.

<PAGE>

E. The Fund shall amend the registration statement for Fund shares
under the 1933 Act and the 1940 Act, from time to time, as required in order
to effect the continuous offering of its shares.

2.3 The Fund and the Adviser represent and warrant that:

A. The Fund is currently qualified as a Regulated Investment Company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). The Fund and Adviser will make every effort to maintain such
qualification and that both will notify Hartford immediately in writing upon
having a reasonable basis for believing that the Fund has ceased to qualify
or that the Fund might not qualify in the future.

B. The Fund is duly organized and validly existing under the laws
of the state of its incorporation.

C. The Fund does and will comply in all material respects with the
1940 Act.

D. If the Fund determines that it is necessary, the Fund has
obtained or will obtain prior to sale or issuance of the Contracts, an order
from the SEC, granting participating insurance companies and variable
insurance product separate accounts exemptions from the provisions of the
1940 Act, as amended, and the rules thereunder, to the extent necessary to
permit shares of the Fund to be sold to and held by variable insurance
product separate accounts of both affiliated and unaffiliated life insurance
companies.

2.4 The Distributor represents and warrants that:

A. It is and shall remain duly registered under all applicable
federal and state laws and regulations and that it will perform its
obligations for the Fund and Hartford in compliance with the laws and
regulations and any applicable state and federal laws and regulations.

ARTICLE III. PROSPECTUSES; REPORTS TO SHAREHOLDERS AND PROXY
STATEMENTS; VOTING

3.1 The Fund, at its expense, will print and provide Hartford with as many
copies of the Fund's current prospectus and statement of additional
information as Hartford may reasonably request to deliver to existing
Contract owners. At Hartford's request, the Fund will provide, in lieu of the
printed prospectuses, camera-ready film or computer diskettes containing the
Fund's prospectus and statement of additional information for printing by
Hartford at the Fund's expense. Hartford will deliver, at the Fund's expense,

<PAGE>

the Fund prospectus and statement of additional information to existing
Contract owners.

A. Hartford may elect to print the Fund's prospectus and/or its
statement of additional information in combination with other fund companies'
prospectuses and statements of additional information.

3.2 Hartford, at its expense, will print the Contract prospectus for use with
prospective owners of Contracts. However, if Hartford chooses to receive
camera-ready film or computer diskettes in lieu of receiving printed copies
of the Fund's prospectus and statement of additional information, the Fund
shall bear the cost of providing the information in that format.

3.3 The Fund, at its expense, will provide Hartford with copies of its
reports to shareholders, and other communications to shareholders in such
quantity as Hartford shall reasonably require for distributing, at the Fund's
expense, to Contract owners.

3.4 The Fund will provide Hartford with copies of its proxy solicitations.
Hartford, at the Fund's expense, will, to the extent required by law, (a)
distribute proxy materials to eligible Contract owners, (b) solicit voting
instructions from eligible Contract owners, (c) vote the Fund shares in
accordance with instructions received from Contract owners; and (d) if
required by law, vote Fund shares for which no instructions have been
received in the same proportion as shares of the Fund for which instructions
have been received.

A. To the extent permitted by applicable laws, Hartford reserves the
right to vote Fund shares held in any Separate Account in its own right.

3.5 Unregistered separate accounts subject to the Employee Retirement Income
Security Act of 1974 ("ERISA") will refrain from voting shares for which no
instructions are received if such shares are held subject to the provisions
of ERISA.

3.6 The Fund will comply with all provisions of the 1940 Act and the rules
thereunder requiring voting by shareholders.

ARTICLE IV. SALES MATERIAL AND INFORMATION

4.1 Hartford shall furnish, or shall cause to be furnished, to the Fund prior
to use, each piece of sales literature or advertising prepared by Hartford in
which the Fund, the Adviser or the Distributor is described. No sales
literature or advertising will be used if the Fund, the Adviser, or the
Distributor reasonably objects to its use within ten (10) Business Days.

<PAGE>

4.2 Hartford will not, without the permission of the Fund, make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the advertising or sale of the Contracts, other than
information or representations contained in: (a) the registration statement
or Fund prospectus, (b) reports to shareholders, (c) proxy statements for the
Fund, or, (d) sales literature or other promotional material approved by the
Fund.

4.3 The Fund shall furnish, or shall cause to be furnished, to Hartford or
its designee, each piece of sales literature or advertising prepared by the
Fund in which Hartford, the Contracts or Separate Accounts, are described. No
sales literature or advertising will be used if Hartford reasonably objects
to its use within ten (10) Business Days.

4.4 Neither the Fund nor the Distributor will, without the permission of
Hartford, make any representations or statements on behalf of Hartford, the
Contracts, or the Separate Accounts or concerning Hartford, the Contracts or
the Separate Account, in connection with the advertising or sale of the
Contracts, other than the information or representations contained in: (a)
the registration statement or prospectus for the Contracts, (b) reports to
shareholders, (c) in sales literature or other promotional material approved
by Hartford.

4.5. The Fund will provide to Hartford at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports to shareholders, proxy statements, solicitations for voting
instructions, sales literature and other promotional materials, applications
for exemptions and requests for no-action letters, and all amendments, that
relate to the Fund or its shares.

4.6 Hartford will provide to the Fund, upon the Fund's request, at least one
complete copy of all registration statements, prospectuses, statements of
additional information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions, and
requests for no action letters, and all amendments, that relate to the
Contracts.

ARTICLE V. DIVERSIFICATION

5.1 The Fund and the Adviser represent and warrant that, at all times, the
Fund will comply with Section 817 of the Code, the regulations promulgated
thereunder, and any Internal Revenue Service guidance relating to the
diversification requirements for variable annuity, endowment, or life
insurance contracts and any amendments or other modifications to such
statutory, regulatory, or administrative authority. In the event the Fund
ceases to so qualify, it will immediately take all steps necessary (a) to
notify Hartford of such event and (b) to adequately diversify the Fund so as
to achieve compliance within the period afforded by Treasury Regulation 817-5.

<PAGE>

ARTICLE VI. POTENTIAL CONFLICTS

6.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund.

A. The Board shall promptly inform Hartford if it determines that an
irreconcilable material conflict exists and the implications thereof.

6.2 Hartford will report any potential or existing material irreconcilable
conflict of which it is aware to the Board. This includes, but is not limited
to, an obligation by Hartford to inform the Board whenever Contract owner
voting instructions are disregarded.

6.3 If it is determined by a majority of the Board, or a majority of its
disinterested trustees, that a material irreconcilable conflict exists due to
issues relating to the Contracts, Hartford will, at its expense and to the
extent reasonably practicable, take whatever steps it can which are necessary
to remedy or eliminate the irreconcilable material conflict, including,
without limitation, withdrawal of the affected Separate Account's investment
in the Fund. No charge or penalty will be imposed as a result of such
withdrawal.

6.4 Hartford, at the request of the Adviser will, at least annually, submit
to the Board such reports, materials or data as the Board may reasonably
request so that the Board may fully carry out the obligations imposed upon
them. All reports received by the Board of potential or existing conflicts,
and all Board action with regard to determining the existence of a conflict,
and determining whether any proposed action adequately remedies a conflict,
shall be properly recorded in the minutes of the Board or other appropriate
records, and such minutes or other records shall be made available to the
Securities and Exchange Commission upon request.

ARTICLE VII. INDEMNIFICATION

7.1 Indemnification by Hartford

A. Hartford agrees to indemnify and hold harmless the Distributor,
the Adviser, the Fund and each of its officers, employees and agents and each
person, if any, who controls the Fund within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" and individually, the
"Indemnified Party" for purposes of this Section 7.1) against any and all
losses, claims, damages, liabilities

<PAGE>

(including amounts paid in settlement with the written consent of Hartford,
which consent shall not be unreasonably withheld) or expenses (including the
reasonable costs of investigating or defending any alleged loss, claim,
damage, liability or expense and reasonable legal counsel fees incurred in
connection therewith) (collectively, "Losses"), to which the Indemnified
Parties may become subject under any statute or regulation, or at common law
or otherwise, insofar as such Losses are related to the sale or acquisition
of Fund shares or the Contracts and:

1. Arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in a disclosure
document for the Contracts or in the Contracts themselves or in sales
literature generated or approved by Hartford on behalf of the Contracts or
Separate Accounts (or any amendment or supplement to any of the foregoing)
(collectively, "Company Documents" for the purposes of this Section 7.1), or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this indemnity shall not
apply as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and was accurately
derived from written information furnished to Hartford by or on behalf of the
Fund for use in Company Documents or otherwise for use in connection with the
sale of the Contracts or Fund shares; or

2. Arise out of or result from statements or
representations (other than statements or representations contained in and
accurately derived from Fund Documents as defined in Section 7.2 (A)(1)) or
wrongful conduct of Hartford or persons under its control, with respect to
the sale or acquisition of the Contracts or Fund shares; or

3. Arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in Fund Documents as
defined in Section 7.2(A)(1) or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading if such statement or omission was made
in reliance upon and accurately derived from written information furnished to
the Fund by or on behalf of Hartford; or

4. Arise out of or result from any failure by Hartford to
provide the services or furnish the materials required under the terms of
this Agreement; or

5. Arise out of or result from any material breach of any
representation and/or warranty made by Hartford in this Agreement or arise
out of or result from any other material breach of this Agreement by Hartford.

<PAGE>

B. Hartford shall not be liable under this indemnification provision
with respect to any Losses to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such Indemnified Party's duties or
by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to the Fund or Distributor, whichever is
applicable.

C. Hartford shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified Hartford in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or
after such Indemnified Party shall have received notice of such service on
any designated agent), but failure to notify Hartford of any such claim shall
not relieve Hartford from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, Hartford shall be entitled to participate, at its own
expense, in the defense of such action. Hartford also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in
the action. After notice from Hartford to such party of Hartford's election
to assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and Hartford will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.

D. The Indemnified Parties will promptly notify Hartford of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund shares or the Contracts or the operation of
the Fund.

7.2 Indemnification by the Distributor, the Adviser, and the Fund

A. The Distributor, the Adviser, and the Fund agree to indemnify and
hold harmless Hartford and each of its directors, officers, employees and
agents and each person, if any, who controls Hartford within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" and
individually, an "Indemnified Party" for purposes of this Section 7.2)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Distributor, the Adviser,
and the Fund, which consent shall not be unreasonably withheld) or expenses
(including the reasonable costs of investigating or defending any losses,
claims, damages, liabilities or expenses and reasonable legal counsel fees
incurred in connection therewith (collectively, "Losses") to which the
Indemnified Parties may become subject under any statute or regulation, at
common law or otherwise, insofar

<PAGE>

as such Losses are related to the sale or acquisition of the Fund's shares
or the Contracts and:

1. Arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, prospectus or sales literature of the Fund (or any amendment or
supplement to any of the foregoing) (collectively, the "Fund Documents") or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or
omission of such alleged statement or omission was made in reliance upon and
in conformity with information furnished to the Distributor, the Adviser, or
Fund by or on behalf of Hartford for use in the Registration Statement or
prospectus for the Fund or in sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of the Contracts
or Fund shares; or

2. Arise out of or as a result of statements or
representations (other than statements or representations contained in the
disclosure documents or sales literature for the Contracts not supplied by
the Distributor, the Adviser, or the Fund or persons under their control) or
wrongful conduct of the Fund, Adviser or Distributor or persons under their
control, with respect to the sale or distribution of the Contracts or Fund
shares; or

3. Arise out of any untrue statement or alleged untrue
statement of a material fact contained in a disclosure document, or sales
literature covering the Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement or
statements therein not misleading, if such statement or omission was made in
reliance upon information furnished to Hartford by or on behalf of the
Distributor, the Adviser, or the Fund; or

4. Arise as a result of any failure by the Distributor, the
Adviser, or the Fund to provide the services and furnish the materials under
the terms of this Agreement; or

5. Arise out of or result from any material breach of any
representation and/or warranty made by the Distributor, the Adviser, or the
Fund in this Agreement or arise out of or result from any other material
breach of this Agreement by the Distributor, the Adviser, or the Fund; as
limited by and in accordance with the provisions of Sections 7.2(B) and
7.2(C) hereof.

<PAGE>

B. The Distributor, the Adviser, or the Fund shall not be liable
under this indemnification provision with respect to any Losses to which an
Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations and duties under this
Agreement or to each Company or the Separate Account, whichever is applicable.

C. The Distributor, the Adviser, or the Fund shall not be liable
under this indemnification provision with respect to any claim made against
an Indemnified Party unless such Indemnified Party shall have notified the
Distributor, the Adviser, or the Fund, as applicable, in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the
Distributor, the Adviser, or the Fund of any such claim shall not relieve the
Distributor, the Adviser, or the Fund from any liability which they may have
to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, the Distributor, the Adviser, or the
Fund will be entitled to participate, at their own expense, in the defense
thereof. The Distributor, the Adviser, and the Fund also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in
the action. After notice from the Distributor, the Adviser, and the Fund to
such party of their election to assume the defense thereof, the Indemnified
Party shall bear the expenses of any additional counsel retained by it, and
the Distributor, the Adviser, and the Fund will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.

D. Hartford agrees promptly to notify the Distributor, the Adviser,
and the Fund of the commencement of any litigation or proceedings against it
or any of its officers or directors in connection with the issuance or sale
of the Contracts or the operation of each Separate Account.

7.3 Any party seeking indemnification (the "Potential Indemnitee") will
promptly notify any party from whom they intend to seek indemnification (each
a "Potential Indemnitor") of all demands made and/or actions commenced
against the Potential Indemnitee which may require a Potential Indemnitor to
provide such indemnification. At its option and expense, a Potential
Indemnitor may retain counsel and control any litigation for which it may be
responsible to indemnify a Potential Indemnitee under this Agreement.

<PAGE>

7.4 With respect to any claim, the parties each shall give the other
reasonable access during normal business hours to its books, records, and
employees and those books, records, and employees within its control
pertaining to such claim, and shall otherwise cooperate with one another in
the defense of any claim. Regardless of which party defends a particular
claim, the defending party shall give the other parties written notice of any
significant development in the case as soon as practicable, and such other
party, at all times, shall have the right to intervene in the defense of the
case.

7.5 If a party is defending a claim and indemnifying the other party hereto,
and: (i) a settlement proposal is made by the claimant, or (ii) the defending
party desires to present a settlement proposal to the claimant, then the
defending party promptly shall notify the other party hereto of such
settlement proposal together with its counsel's recommendation. If the
defending party desires to enter into the settlement and the other party
fails to consent within five (5) business days (unless such period is
extended, in writing, by mutual agreement of the parties hereto), then the
other party, from the time it fails to consent forward, shall defend the
claim and shall further indemnify the defending party for all costs
associated with the claim which are in excess of the proposed settlement
amount.

Regardless of which party is defending the claim: (i) if a settlement
requires an admission of liability by the non-defending party or would
require the non-defending party to either take action (other than purely
ministerial action) or refrain from taking action (due to an injunction or
otherwise) (a "Specific Performance Settlement"), the defending party may
agree to such settlement only after obtaining the express, written consent of
the non-defending party. If a non-defending party fails to consent to a
Specific Performance Settlement, the consequences described in the last
sentence of the first paragraph of this Section 7.5 shall NOT apply.

7.6 The parties shall use good faith efforts to resolve any dispute
concerning this indemnification obligation. Should those efforts fail to
resolve the dispute, the ultimate resolution shall be determined in a DE NOVO
proceeding, separate and apart from the underlying matter complained of,
before a court of competent jurisdiction. Either party may initiate such
proceedings with a court of competent jurisdiction at any time following the
termination of the efforts by such parties to resolve the dispute
(termination of such efforts shall be deemed to have occurred thirty (30)
days from the commencement of the same unless such time period is extended by
the written agreement of the parties). The prevailing party in such a
proceeding shall be entitled to recover reasonable attorneys' fees, costs,
and expenses.

ARTICLE VIII. APPLICABLE LAW

8.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Connecticut.

<PAGE>

8.2 This Agreement, its terms and definitions, shall be subject to the
provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and
rulings thereunder, including such exemptions from those statutes, rules and
regulations as the Securities and Exchange Commission may grant.

ARTICLE XI. TERMINATION

9.1 This Agreement shall continue in full force and effect until the first to
occur of:

A. Termination by any party for any reason upon six-months advance
written notice delivered to the other parties, it being understood that no
party may give notice under this provision until July 1, 2004; or

B. Termination by Hartford by written notice to the Fund, the
Adviser or the Distributor with respect to any Fund in the event any of the
Fund's shares are not registered, issued or sold in accordance with
applicable state and/or federal law, or such law precludes the use of such
shares as the underlying investment medium of the Contracts issued or to be
issued by Hartford; or,

C. Termination by Hartford upon written notice to the Fund with
respect to any Fund in the event that such Fund ceases to qualify as a
Regulated Investment Company under Subchapter M of the Code or under any
successor or similar provision; or

D. Termination by Hartford upon written notice to the Fund and the
Distributor with respect to any Fund in the event that such Fund fails to
meet the diversification requirements specified in this Agreement.

9.2 Effect of Termination.

A. Notwithstanding any termination of this Agreement, the Fund shall
at the option of Hartford, continue to make available additional shares of
the Fund pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of this Agreement
(the "Existing Contracts") unless such further sale of Fund shares is
proscribed by law, regulation or applicable regulatory body. Specifically,
without limitation, the owners of the Existing Contracts will be permitted to
direct allocation and reallocation of investments in the Fund, redeem
investments in the Fund and invest in the Fund through additional purchase
payments.

B. Hartford agrees not to redeem Fund shares attributable to the
Contracts except (i) as necessary to implement Contract owner initiated or
approved transactions,

<PAGE>

or (ii) as required by state and/or federal laws or regulations or judicial
or other legal precedent of general application or (iii) as permitted by an
order of the SEC. Upon request, Hartford will promptly furnish to the Fund
the opinion of counsel for Hartford to the effect that any redemption
pursuant to clause (ii) above is a legally required redemption.

C. In addition to the foregoing, Article VII Indemnification shall
survive any termination of this Agreement.

ARTICLE X. NOTICES

10.1 Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.

If to the Fund:

____________________________
____________________________
____________________________

If to the Distributor:

____________________________
____________________________
____________________________

If to the Adviser:

____________________________
____________________________
____________________________

If to Hartford: With a copy to:

Hartford Life Insurance Co. Hartford Life Insurance Co.
200 Hopmeadow Street 200 Hopmeadow Street
Simsbury, Connecticut 06070 Simsbury, Connecticut 06070
Attn: Thomas M. Marra Attn: Lynda Godkin, General Counsel

<PAGE>

ARTICLE XI. MISCELLANEOUS

11.1 Subject to the requirements of legal process and regulatory authority,
each party will treat as confidential the names and addresses of the owners
of the Contracts and all information reasonably identified as confidential in
writing by any other parties and, except as permitted by this Agreement,
shall not disclose, disseminate or utilize such names and addresses and other
confidential information until such time as it may come into the public
domain without the express written consent of the affected party.

11.2 The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

11.3 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

11.4 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.

11.5 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the NASD and
state insurance regulators) and shall permit such authorities (and other
parties) reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.

11.6 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations at law or in equity, which the parties hereto are entitled to
under state and federal laws.

11.7 This Agreement or any of the rights and obligations hereunder may not be
assigned by any party without the prior written consent of all parties.

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in as name and on its behalf by its duly authorized representative
as of the date specified above.

Hartford Life Insurance Company
On its behalf and each Separate Account named in
Schedule A, as may be amended from time to time

<PAGE>

By:
----------------------------------------
Peter Cummins
Its Senior Vice President

FUND

By:
----------------------------------------
Its

DISTRIBUTOR

By:
----------------------------------------
Its

ADVISER

By:
----------------------------------------
Its

<PAGE>

SCHEDULE A

SEPARATE ACCOUNTS AND CONTRACTS

- -------------------------------------------------------------------------------
NAME OF SEPARATE ACCOUNT AND DATE CONTRACT FORM NUMBERS
ESTABLISHED
- -------------------------------------------------------------------------------

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

<PAGE>

SCHEDULE B

PARTICIPATING FUNDS

<PAGE>
EXHIBIT 9

[LOGO]
[HARTFORD LIFE]

September 3, 1999 LYNDA GODKIN
Senior Vice President, General Counsel &
Corporate Secretary
Law Department

Board of Directors
Hartford Life Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089

RE: HARTFORD LIFE INSURANCE COMPANY SEPARATE ACCOUNT TWO
HARTFORD LIFE INSURANCE COMPANY
FILE NO. 333-69485

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 variable
annuity contracts (the "Contracts") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended. I have examined
such documents (including the Form N-4 registration statement) and reviewed
such questions of law as I considered necessary and appropriate, and on the
basis of such examination and review, it is my opinion that:

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

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
reports (and to all references to our Firm) included in or made a part of
this Registration Statement File No. 333-69485 for Hartford Life Insurance
Company Separate Account Two on Form N-4.

Hartford, Connecticut /s/ Arthur Andersen LLP
September 3, 1999

<PAGE>

HARTFORD LIFE INSURANCE COMPANY

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

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

do hereby jointly and severally authorize Lynda Godkin, Christine Repasy,
Marianne O'Doherty, Thomas S. Clark and Brian Lord 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 under the Securities Act of 1933 and/or the Investment Company Act of
1940, and do hereby ratify any such signatures heretofore made by such
persons.

IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for
the purpose herein set forth.

/s/ Gregory A. Boyko Dated as of January 15, 1999
- ------------------------------
Gregory A. Boyko

/s/ David T. Foy Dated as of January 15, 1999
- ------------------------------
David T. Foy

/s/ Lynda Godkin Dated as of January 15, 1999
- ------------------------------
Lynda Godkin

/s/ Thomas M. Marra Dated as of January 15, 1999
- ------------------------------
Thomas M. Marra

/s/ Lowndes A. Smith Dated as of January 15, 1999
- ------------------------------
Lowndes A. Smith

/s/ Raymond P. Welnicki Dated as of January 15, 1999
- ------------------------------
Raymond P. Welnicki

/s/ Lizabeth H. Zlatkus Dated as of January 15, 1999
- ------------------------------
Lizabeth H. Zlatkus

/s/ David M. Znamierowski Dated as of January 15, 1999
- ------------------------------
David M. Znamierowski

<PAGE>

ORGANIZATIONAL CHART

<S> <C>

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
---------------------------------------------
NUTMEG INSURANCE COMPANY |
(CONNECTICUT) THE HARTFORD INVESTMENT
| MANAGEMENT COMPANY
HARTFORD FIRE INSURANCE COMPANY (DELAWARE)
(CONNECTICUT) |
| |
HARTFORD ACCIDENT AND INDEMNITY COMPANY HARTFORD INVESTMENT
(CONNECTICUT) SERVICES, INC.
| (CONNECTICUT)
HARTFORD LIFE, INC.
(DELAWARE)
|
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
(CONNECTICUT)
|
|
|
-------------------------------------------------------------------------------------------------------------------------
| | | | | | | | |
HARTFORD LIFE | | | | | | HLIC PLANCO
INTERNATIONAL LTD. | | | | | | CANADA FINANCIAL
(CONNECTICUT) | | | | | | HOLDINGS, INC. SERVICES,
| | | | | | | (CANADA) INCORPORATED
| | | | | | | | (PENNSYLVANIA)
| | | | | | | | |
| | ALPINE LIFE HARTFORD FINANCIAL HARTFORD LIFE HARTFORD AMERICAN | |
| | INSURANCE SERVICES LIFE INSURANCE COMPANY FINANCIAL MATURITY LIFE | |
| | COMPANY INSURANCE CO. (CONNECTICUT) SERVICES, LLC INSURANCE COMPANY | |
| | (CONNECTICUT) (CONNECTICUT) | (DELAWARE) (CONNECTICUT) | PLANCO, INC.
| | | | | | (PENNSYLVANIA)
| | ------------------------------------- | AML FINANCIAL, INC. |
HARTFORD CALMA | | | | | (CONNECTICUT) |
COMPANY | ROYAL LIFE HARTFORD HARTFORD | HARTFORD
(FLORIDA) | INSURANCE INTERNATIONAL LIFE AND | LIFE INSURANCE
| COMPANY LIFE REASSURANCE ANNUITY INSURANCE | COMPANY
| OF AMERICA CORP. COMPANY | OF CANADA
|(CONNECTICUT) (CONNECTICUT) (CONNECTICUT) | (CANADA)
| | |
| | |
| ITT HARTFORD |
| LIFE, LTD. |
| (BERMUDA) |
| |
| |
----------| ---------------------------------------------------------------------------------------------
| | | | | |
INTERNATIONAL MS FUND HL INVESTMENT HARTFORD HARTFORD SECURITIES HARTFORD COMP. EMP.
CORPORATE AMERICA 1993-K ADVISORS, LLC EQUITY SALES DISTRIBUTION BENEFITS SERVICE
MARKETING GROUP, INC. SPE, INC. (CONNECTICUT) COMPANY, INC. COMPANY, INC. COMPANY
(CONNECTICUT) (DELAWARE) | (CONNECTICUT) (CONNECTICUT) (CONNECTICUT)
| |
| |
THE EVERGREEN HARTFORD INVESTMENT
GROUP, INC. FINANCIAL SERVICES
(NEW YORK) COMPANY
(DELAWARE)
</TABLE>

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
----------------------------------------------------------------------------------------------------------------------------
| | |
| | HARTFORD LIFE
| | -------INTERNATIONAL LTD.
| | | (CONNECTICUT)
| | | |
| | | ITT HARTFORD
| | | ----SUDAMERICANA
| | | | HOLDING S.A.
| | | | (ARGENTINA)
| | | |------------------------------------------------------
| | | | | |
| | | | HARTFORD GALICIA INSTITUTO DE
| | | | SEGUROS VIDA COMPANIA SALTA COMPANIA DE
| | | |--------DE VIDA DE SEGUROS S.A. SEGUROS DE VIDA S.A.
| | | | (URUGUAY) (ARGENTINA) (ARGENTINA)
| | | |
| | ICATU | | ITT HARTFORD
| | HARTFORD | |-----SEGUROS DE VIDA
| | SEGUROS S.A.----------| | (ARGENTINA)
| | (BRAZIL) | |
| | | | |
| | | | | ITT HARTFORD
| | -- ----------| | |------SEGUROS DE
| | | | | | RETIRO S.A.
| | | | | | (ARGENTINA)
|-----------|----------------|---------------|---|--------------------------------------------------------------------------
| | | | | |
| | | ICATU HARTFORD | | CONSULTORA DE CAPITALES
| | | FUNDO DE PENSAO | | S.A. SOCIEDAD GERENTE
| | | (BRAZIL) | |----DE FONDOS COMUNES
| | | | | | DE ENVERSION
| | | | | | (ARGENTINA)
| | | ICATU HARTFORD | |
| | | CAPITALIZACAO S.A. | | CLARIDAD
| | | (BRAZIL) | | ADMINISTRADORA DE
| | | | | |---FONDOS DE JUBILACIONES
| | | BRAZILCAP | | Y PENSIONES S.A.
| | | CAPITALIZACAO S.A. | | (ARGENTINA)
| | | (BRAZIL) | |
| | | | |
| | -------------------------- | |
| |--------------- | | |
| | | | |
HARTFORD FIRE HARTFORD FIRE | | |------- SEGPOOL S.A.
INTERNATIONAL------------INTERNATIONAL, LTD. | | | (ARGENTINA)
(GERMANY) GMBH (CONNECTICUT) | | |
(WEST GERMANY) | | |
| | |
ICATU HARTFORD | | | THESIS S.A.
ADMINISTRACAO | | |-------- (ARGENTINA)
DE BENEFICIOS LTDA-- | | |
(BRAZIL) | |
| |
----------------- |
| |
CAB |--------- U.O.R., S.A.
CORPORATION (ARGENTINA)
(BRITISH VIRGIN ISLANDS)

</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
- --------------------------------------------------------------------------------------------------------------------------------|
| |
THE HARTFORD INTERNATIONAL |
|-----------------------------------------------------------------------FINANCIAL SERVICES GROUP, INC. |
| | | (DELAWARE) |
| | | ----------------------|----------------- |
| | | | | | | |
ZWOLSCHE | | ITT HARTFORD LONDON AND | HARTFORD |
ALGEMEENE N.V. | | INTERNATIONAL, LTD. EDINBURGH | EUROPE, INC. |
(NETHERLANDS) | | (U.K.) INSURANCE GROUP, LTD.| (DELAWARE) |
| | | (U.K.) | |
| | | | | |
| | | ------------- | |
| | | | | |
| ITT ASSURANCES HARTFORD INTERNATIONAL | LONDON AND --ITT ERCOS |
| S.A. INSURANCE CO., N.V. |--- EDINBURGH DE SEGUROS Y |
| ZWOLSCHE ALGEMEENE (FRANCE) (BELGIUM) | INSURANCE CO., LTD. REASEGUROS S.A.|
|----SCHADEVERZEKERING | | (U.K.) (SPAIN) |
--------| N.V.----------------------------------- | | | |
| | (NETHERLANDS) | | | | |
Z.A. | | | | EXCESS INSURANCE |
- --VERZEKERINGEN | | | | COMPANY LTD. |
| N.V. | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| (BELGIUM) |------HERVERZEKERING B.V. | | | |
| | -----| (NETHERLANDS) | | | LONDON AND |
| | | | | | |--- EDINBURGH LIFE |
| Z.A. LUX S.A. | | | | ASSURANCE CO., LTD. |
| (LUXEMBURG) | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| |--LEVENS-VERZEKERING N.V.------------ | | | |
| | (NETHERLANDS) | | | | |
- ----------------|------------------------------------|------------|------|--------------|---------------------------------------|
| | | | | | |
| -------- | | | | |
| | | | | | | |
| ZWOLSCHE | ZWOLSCHE ALGEMEENE ZWOLSCHE ALGEMEENE | | | |
| ALGEMEENE |-----HYPOTHEKEN N.V. BELEGGINGEN III B.V. | | | |
| EUROPA B.V. | (NETHERLANDS) (NETHERLANDS) | | | |
| (NETHERLANDS) | ---------- | | |
- --------| | | | | |
| EXPLOITATIEMAAT- BELEGGINGSMAAT- | | |
|----- SCHAPPIJ SCHAPPIJ | | |
| BUIZERDLAAN B.V. BUIZERDLAAN B.V. | | |
| (NETHERLANDS) (NETHERLANDS) | | |
| | | |
| | | -----
| HOLLAND | |-------------------------- |
|---- BELEGGINGSGROEP B.V. | | | |
(NETHERLANDS) | |----------------- | |
| -------| | | |
| | | | | |
| | | | | |
F.A. KNIGHT | MACALISTER & LONDON AND | HARTFORD FIRE
& SON N.V. | DUNDAS, LTD. EDINBURGH | INTERNATIONAL
(BELGIUM) | (SCOTLAND) TRUSTEES, LTD. | SERVICIOS
| (U.K.) | (SPAIN)
------------------------- -----------
| | |
FENCOURT QUOTEL LONDON AND
PRINTERS, LTD. INSURANCE EDINBURGH
(U.K.) SYSTEMS, LTD. SERVICES, LTD.
(U.K.) (U.K.)
|
EUROSURE
INSURANCE
MARKETING, LTD.
(U.K.)

</TABLE>