<PAGE>
As filed with the Securities and Exchange Commission on January 6, 1999
File No.
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.
---
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
HARTFORD LIFE INSURANCE COMPANY
THOMSON MCKINNON SEPARATE ACCOUNT
(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
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 promised that this will become effective:
immediately upon filing pursuant to paragraph (b) of Rule 485
---
on May 1, 1999 pursuant to paragraph (b) of Rule 485
---
60 days after filing pursuant to paragraph (a)(1) of Rule 485
---
on ______ 1998 pursuant to paragraph (a)(1) of Rule 485
---
this posteffective amendment designates a new effective
--- date for a previously filed post-effective amendment.
PURSUANT TO RULE 24F-2(a) UNDER THE INVESTMENT COMPANY ACT OF 1940, THE
REGISTRANT HAS REGISTERED AN INDEFINITE AMOUNT OF SECURITIES.
<PAGE>
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(A)
N-4 ITEM NO. PROSPECTUS HEADING
------------ ------------------
1. Cover Page Hartford, The Separate Account and The
Funds
2. Definitions Glossary of Special Terms
3. Synopsis or Highlights Summary
4. Condensed Financial Not Applicable
Information
5. General Description of Hartford, The Separate Account and
Registrant The Funds
6. Deductions Contract Fees and Charges
7. General Description of Description of the Contracts,
Annuity Contracts Separate Account Two,
and Surrenders
8. Annuity Period Settlement Provisions
9. Death Benefit Death Before the Annuity Commencement
Date, Death On or After the Annuity
Commencement Date, and Distribution
Requirements: Prior to the Annuity
Commencement Date
10. Purchases and Contract Value Description of the Contracts
11. Redemptions Surrenders
12. Taxes Federal Tax Considerations
13. Legal Proceedings Legal Matters, Experts
14. Table of Contents of the Table of Contents to
Statement of Additional Statement of Additional
Information Information
<PAGE>
15. Cover Page Part B; Statement of Additional
Information
16. Table of Contents Table of Contents
17. General Information and History Description of Hartford Life Insurance
Company
18. Services None
19. Purchase of Securities Distribution of the Contracts
being Offered
20. Underwriters Distribution of the Contracts
21. Calculation of Performance Data Calculation of Yield and Return
22. Annuity Payments Settlement Provisions
23. Financial Statements Financial Statements
24. Financial Statements and Financial Statements and
Exhibits Exhibits
25. Directors and Officers of the Directors and Officers of the
Depositor Depositor
26. Persons Controlled by or Under Persons Controlled by or Under
Common Control with the Common Control with the Depositor
Depositor or Registrant or Registrant
27. Number of Contract Owners Number of Contract Owners
28. Indemnification Indemnification
29. Principal Underwriters Principal Underwriters
30. Location of Accounts and Location of Accounts and Records
Records
31. Management Services Management Services
32. Undertakings Undertakings
<PAGE>
PART A
<PAGE>
[PRODUCT NAME]
HARTFORD LIFE INSURANCE COMPANY
THOMSON MCKINNON SEPARATE ACCOUNT
P.O. BOX 5085
HARTFORD, CONNECTICUT 06102-5085
TELEPHONE: 1-800-862-6668 (CONTRACT
OWNERS)
[LOGO] 1-800-862-7155 (REGISTERED REPRESENTATIVES)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This Prospectus describes information you should know before you purchase The
[Product Name] variable annuity. Please read it carefully.
The [PRODUCT NAME] variable annuity is a contract between you and Royal Life
Insurance Company of America where you agree to make payments to us and we agree
to make a series of payments to you at a later date. The [PRODUCT NAME] is a
flexible premium, tax-deferred, variable annuity offered to both individuals and
groups. It is:
X Flexible, because you may add payments at any time.
X Tax-deferred, which means you don't pay taxes until you take payment out or
until we start to make payments to you.
X Variable, because the value of your annuity will fluctuate with the
performance of the stock market.
At purchase, you allocate your payments to "sub-accounts" or subdivisions of our
separate account, an account that keeps your annuity assets separate from our
company assets. These 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, but 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 style. The sub-accounts and the
funds are listed below:
- - Bond Sub-Account which purchases shares of Class IA of Hartford Bond HLS Fund,
Inc.
- - High Yield Sub-Account which purchases shares of Class IA of Hartford High
Yield HLS Fund, Inc.
- - Index Sub-Account which purchases shares of Class IA of Hartford Index 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.
You may also allocate some or all of your payments to the "fixed account," which
pays an interest rate guaranteed for at least one year from the time the payment
is made. Payments put in the fixed account are not segregated from our assets
like the assets of 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-xxx-xxxx to get a Statement of Additional
Information, free of charge. The Statement of Additional Information contains
more information about this 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. 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
- - available for sale in all states
- --------------------------------------------------------------------------------
PROSPECTUS DATED: MAY 1, 1999
STATEMENT OF ADDITIONAL INFORMATION DATED: MAY 1, 1999
<PAGE>
2 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
---------------------------------------------------------------------- ----
<S> <C>
GLOSSARY OF SPECIAL TERMS............................................. 3
FEE TABLE............................................................. 5
SUMMARY............................................................... 6
HARTFORD, THE SEPARATE ACCOUNT AND THE FUNDS.......................... 7
Hartford Life Insurance Company..................................... 7
Separate Account.................................................... 7
The Funds........................................................... 7
PERFORMANCE RELATED INFORMATION....................................... 9
DESCRIPTION OF THE CONTRACTS.......................................... 10
Contracts Offered................................................... 10
Purchasing a Contract............................................... 10
Right to Examine the Contract....................................... 10
Crediting and Allocating the Premium Payment........................ 10
Contract Value -- Before the Annuity Commencement Date.............. 10
Sub-Account Value Transfers Before and After the Annuity
Commencement Date.................................................. 11
Surrenders.......................................................... 12
Contract Fees and Charges........................................... 13
Death Before the Annuity Commencement Date.......................... 14
Death On or After the Annuity Commencement Date..................... 15
Distribution Requirements: Prior to the Annuity Commencement Date... 15
SETTLEMENT PROVISIONS................................................. 15
Annuity Payment Options............................................. 16
Annuity Proceeds Settlement Option.................................. 17
Annuity Calculation Date and Annuity Commencement Date.............. 17
Income Payment Dates................................................ 17
Variable Annuity Payments........................................... 17
ADDITIONAL CONTRACT INFORMATION....................................... 19
Assignment.......................................................... 19
Misstatement of Age or Sex.......................................... 19
Contract Modification............................................... 19
FEDERAL TAX CONSIDERATIONS............................................ 19
A. General.......................................................... 19
B. Taxation of Hartford and the Separate Account.................... 20
C. Taxation of Annuities -- General Provisions Affecting Purchasers
Other than Qualified Retirement Plans.............................. 20
D. Federal Income Tax Withholding................................... 23
E. General Provisions Affecting Tax-Qualified Retirement Plans...... 23
F. Annuity Purchases by Nonresident Aliens and Foreign
Corporations....................................................... 23
OTHER INFORMATION..................................................... 23
Distribution of the Contracts....................................... 23
Legal Matters....................................................... 24
Year 2000........................................................... 24
Experts............................................................. 24
Additional Information.............................................. 25
APPENDIX I -- INFORMATION REGARDING TAX-QUALIFIED RETIREMENT PLANS.... 26
TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION............. 29
</TABLE>
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 3
- --------------------------------------------------------------------------------
GLOSSARY OF SPECIAL TERMS
ACCUMULATION UNIT: A unit of measure we use to calculate values before we begin
to make payments to you.
ADMINISTRATIVE OFFICE: Located at 200 Hopmeadow Street, Simsbury, CT 06089.
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 investment
options in use at the time.
ANNUITANT: The person on whose life the Contract is issued. The Annuitant may
not be changed.
ANNUITY: A Contract issued by an insurance company that provides, in exchange
for premium payments, a series of income payments. This Prospectus describes a
deferred annuity where premium payments accumulate tax-deferred until a partial
or full surrender is taken or until we begin to make payments to you.
ANNUITY CALCULATION DATE: The date as of which the first Annuity payment is
calculated. It will be no more than five Valuation Days prior to the Annuity
Commencement Date.
ANNUITY COMMENCEMENT DATE: The date we start to make payments to you.
ANNUITY UNIT: A unit of measure we use to calculate the value of the payments we
make to you.
ASSUMED INVESTMENT RETURN: The annual rate of return shown on the specification
page of the Contract.
BENEFICIARY: The person entitled to receive the payment of the death benefit
upon the death of you or the Annuitant.
CODE: The Internal Revenue Code of 1986, as amended.
COMMISSION: The Securities and Exchange Commission.
COMMUTED VALUE: The present value of remaining guaranteed Annuity payments under
the Payment for a Period Certain Annuity payment option.
CONTINGENT ANNUITANT: The person you may designate who becomes the Annuitant if
the original Annuitant dies before we start making payments to you.
CONTRACT: The contract is the individual Annuity and any endorsements or riders.
If you are enrolled under a group annuity, you receive a certificate rather than
a contract.
CONTRACT ANNIVERSARY: The anniversary of the Contract Date.
CONTRACT ISSUE DATE: The date as of which an account is established for the
Contract Owner.
CONTRACT OWNER OR YOU: The owner of the annuity.
CONTRACT VALUE: The total value of your Sub-Accounts.
CONTRACT YEAR: A period of 12 months commencing with the Contract Date the first
year and the Contract Anniversary after the first year.
DEATH BENEFIT: The amount we pay when you or the Annuitant dies.
DUE PROOF OF DEATH: A certified copy of a death certificate, an order of a court
of competent jurisdiction, a statement from a physician who attended the
deceased or any other proof acceptable to Royal.
FUNDS: The Funds described in this Prospectus or any supplement or amendments.
GENERAL ACCOUNT: Our General Account that is all our assets other than the
assets in our separate accounts.
HARTFORD OR WE: Hartford Life Insurance Company.
INCOME PAYMENT DATE: The date each month, quarter, semi-annual period or year as
of which Hartford computes the Annuity payments.
JOINT ANNUITANT: Upon annuitization, a person other than the Annuitant on whose
life continuation of Annuity payments may be made. The contract will have a
Joint Annuitant only if the Annuity payment option selected provides for a
survivor. The Joint Annuitant may not be changed.
MAXIMUM ANNIVERSARY VALUE: One of the values we use to determine your Death
Benefit. It is determined annually on your anniversary date and is equal to the
highest value your annuity reached on any annuity anniversary date. The maximum
anniversary value is calculated only up to age 80, and we use that value each
year after age 80 as your maximum anniversary value.
NET INVESTMENT FACTOR: The Net Investment Factor for each of the Sub-Accounts,
equal to the Net Asset Value of the corresponding Fund at the end of the
Valuation Period (plus the per share amount of any dividends or capital gains
distributed by that Fund if the ex-dividend date occurs in the Valuation Period
then ended) divided by the Net Asset Value of the corresponding Fund at the
beginning of the Valuation Period.
PAYEE: The person or party designated by the Contract Owner to receive Annuity
payments.
PREMIUM PAYMENT: A payment made to Hartford pursuant to the terms of the
Contract.
PREMIUM TAX: A tax charged by a state or municipality on premium payments.
SEPARATE ACCOUNT: For this annuity, the separate account is the Thomson McKinnon
Separate Account.
SUB-ACCOUNT: Divisions established within the Separate Account.
<PAGE>
4 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SURRENDER VALUE: Prior to the Annuity Commencement Date, the Surrender Value is
the Contract Value, less any applicable Premium Taxes, and/or the Annual
Maintenance Fee. After the Annuity Commencement Date, the Surrender Value under
the Payment for a Period Certain Annuity payment option is equal to the Commuted
Value.
TERMINATION VALUE: What we pay you if you terminate your annuity before we begin
to make payments to you.
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>
<CAPTION>
CONTRACT CONTRACT
YEARS YEARS
1-7 8+
--------- ---------
<S> <C> <C>
Sales Load Imposed on Purchases (as a percentage of premium
payments)....................................................... None None
Exchange Fee...................................................... $0 $0
Deferred Sales Load (as a percentage of amounts withdrawn)........ None None
Annual Maintenance Fee (1)........................................ $30 $30
Annual Expenses -- Separate Account (as percentage of average
Contract value)
Mortality and Expense Risk (2)................................ 1.50% 1.25%
Administration Fees........................................... 0% 0%
Other Account Fees............................................ 0% 0%
Total....................................................... 1.50% 1.25%
</TABLE>
- ------------
(1) The Annual Maintenance Fee is an annual $30 charge for annuities with a
contract value less than $50,000 on your Anniversary Date or when you
surrender your annuity.
(2) After the seventh Contract Year or upon the Annuity Commencement Date,
whichever is earlier, the mortality and expense risk charge will be reduced
to 1.25% per annum, applied against the Contract Values held in the Separate
Account.
ANNUAL FUND OPERATING EXPENSES
(as percentage of average annual net assets)
<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OPERATING
FEES OTHER EXPENSES
(WITH WAIVERS) EXPENSES (WITH WAIVERS)
-------------- -------- --------------
<S> <C> <C> <C>
Hartford Bond Fund.............................. 0.515% 0.020% 0.535%
Hartford High Yield Fund (1).................... 0.200% 0.150% 0.350%
Hartford Index Fund............................. 0.400% 0.015% 0.415%
Hartford Money Market Fund...................... 0.450% 0.015% 0.465%
Hartford Mortgage Securities Fund............... 0.450% 0.025% 0.475%
</TABLE>
- ------------
(1) Hartford High Yield Fund is a new Fund. "Total Fund Operating Expenses" are
based on annualized estimates of such expenses to be incurred in the current
fiscal year. HL Investment Advisors, Inc. has agreed to waive its fees for
it until the assets of the Fund (excluding assets contributed by companies
affiliated with HL Investment Advisors, Inc.) reach $20 million. Before this
waiver, the "Management Fees" and "Total Fund Operating Expenses" would be:
<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT FEES OTHER EXPENSES OPERATING EXPENSES
--------------- -------------- ------------------
<S> <C> <C> <C>
Hartford High Yield Fund........... 0.750% 0.150% 0.900%
</TABLE>
EXAMPLE
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
If you surrender your contract If you annuitize your Contract
at the end of the applicable at the end of the applicable
time period: You would pay the time period, you would pay the
following expenses on a $1,000 following expenses on a $1,000
investment, assuming a 5% investment, assuming a 5%
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
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bond Fund.................... 21 66 114 235 21 66 113 234
High Yield Fund.............. 20 70 N/A N/A 19 69 N/A N/A
Index Fund................... 20 63 107 222 20 62 107 221
Money Market Fund............ 21 64 110 228 20 63 109 227
Mortgage Securities Fund..... 21 64 111 229 20 64 110 228
</TABLE>
The purpose of these tables is to assist you in understanding the various
costs and expenses that you will bear directly or indirectly. The table reflects
expenses of the Separate Account and underlying Funds. Premium taxes may also be
applicable.
The Annual Maintenance Fee has been reflected in the EXAMPLE using a method
intended to show the "average" impact of the fee. The Annual Maintenance Fee is
deducted only when the Contract Value is less than $50,000. In the EXAMPLE, the
Annual Maintenance Fee is approximated as a 0.08% 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.
<PAGE>
6 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SUMMARY
HOW DO I PURCHASE THE ANNUITY?
You must complete our enrollment form and submit it to us for approval with
your first payment. Your first payment must be at least $20,000 and subsequent
payments must be at least $500. Certain plans may be allowed to make smaller
periodic payments.
For a limited time, usually ten days after you receive your annuity you may
cancel your annuity without paying a sales charge and receive a refund equal to
the Contract Value plus any applicable Premium Taxes.
WHAT TYPE OF SALES CHARGE WILL I PAY?
You do not pay a sales charge when you purchase your annuity or when you
make additional premium payments to your annuity.
CAN I TAKE OUT ANY OF MY MONEY?
- - You may withdraw all or part of the amounts you have invested at any time
before we start making payments to you.
- - You may withdraw all or part of the amounts you have invested after the
Annuity Commencement Date under the Payment for a Period Certain Annuity
payment option.
You may have to pay tax on the money you take out and, if you take money out
before you are 59 1/2 you may have to pay a tax penalty.
WILL WE PAY A DEATH BENEFIT?
The Contract provides for a minimum Death Benefit in the event of the death
of the Annuitant or Contract Owner before the Annuity Commencement Date and,
under some Annuity payment options, after the Annuity Commencement Date. (See
"Death Before the Annuity Commencement Date" and "Death On or After the Annuity
Commencement Date.")
IS THERE AN ANNUAL MAINTENANCE FEE?
We deduct a $30.00 fee each year on the anniversary of your purchase or when
you terminate your annuity, if the value of your annuity is less than $50,000.
WHAT CHARGES WILL I PAY ON AN ANNUAL BASIS?
You pay two different types of charges each year. The first type of charge
is the fee you pay for insurance. This charge is:
MORTALITY AND EXPENSE RISK CHARGE. We deduct a 1.50% per annum mortality and
expense risk charge against all Contract Value held in the Separate Account for
Contract Years 1-7. After Contract Year 7 or after the Annuity Commencement
Date, whichever is earlier, the mortality and expense risk charge will decrease
to 1.25% per annum of the Contract Values held in the Separate Account. (See
"Contract Fees and Charges.")
EXPENSES OF THE FUNDS. Currently, the total fund charges range from 0.39% to
0.87% of the average daily value of the amount you have invested in the funds.
The annual insurance charges and the total fund charges as of December 31,
1997 are set forth in the table below:
<TABLE>
<CAPTION>
ANNUAL ANNUAL ANNUAL TOTAL TOTAL
INSURANCE MAINTENANCE FUND CHARGES
THE SUB-ACCOUNTS CHARGE* FEE CHARGES** YOU PAY
- --------------------------------------------- --------- ----------- ------------ -------
<S> <C> <C> <C> <C>
Bond......................................... 1.50% .08% 0.535% 2.115%
High Yield................................... 1.50% .08% 0.350% 1.930%
Index........................................ 1.50% .08% 0.415% 1.995%
Money Market................................. 1.50% .08% 0.465% 2.045%
Mortgage Securities.......................... 1.50% .08% 0.475% 2.055%
</TABLE>
* These charges are for the first seven years. In the eighth Contract Year
the Annual Insurance Charge drops to 1.25% for the life of the Contract.
** These charges reflect any fees that may have been waived by the funds'
investment advisers.
The figure that appears in the "Annual Total Fund Charges" column
illustrates the sum of the management fees and other expenses that the funds
charge. For a complete description of these fees, see the funds' prospectuses.
ANNUITY PAYMENT OPTIONS
The following Annuity payment options are available under the Contract on
either a fixed or variable basis: LIFE ANNUITY; LIFE ANNUITY WITH A CASH REFUND;
LIFE ANNUITY WITH
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 7
- --------------------------------------------------------------------------------
PAYMENTS FOR A PERIOD CERTAIN; JOINT AND LAST SURVIVOR LIFE ANNUITY; JOINT AND
LAST SURVIVOR LIFE ANNUITY WITH PAYMENTS FOR A PERIOD CERTAIN; and PAYMENT FOR A
PERIOD CERTAIN. In the absence of an Annuity payment option election, and
depending on state law, the Contract Value (less applicable Premium Taxes) will
be applied on the Annuity Commencement Date to provide Fixed Annuity payments
under the Settlement Provision Option LIFE ANNUITY WITH PAYMENTS FOR A PERIOD
CERTAIN guaranteed for 10 years. (See "Settlement Provisions.")
In addition, the ANNUITY PROCEEDS SETTLEMENT OPTION is offered to a
Beneficiary who may opt to leave the Death Benefit invested in the Sub-Accounts.
HARTFORD, THE SEPARATE
ACCOUNT AND THE FUNDS
HARTFORD LIFE INSURANCE COMPANY
Hartford Life Insurance Company ("Hartford") is a stock life insurance
company engaged in the business of writing life insurance, both individual and
group, in all states of the United States and the District of Columbia. Hartford
was originally incorporated under the laws of Massachusetts on June 5, 1902, and
was subsequently redomiciled to Connecticut. Its offices are located in
Simsbury, Connecticut; however, its mailing address is P.O. Box 2999, Hartford,
CT 06104-2999. Hartford is ultimately controlled by The Hartford Financial
Services Group, Inc., one of the largest financial service providers in the
United States.
HARTFORD RATING
<TABLE>
<CAPTION>
EFFECTIVE
DATE
RATING AGENCY OF RATING RATING BASIS OF RATING
- -------------------- ------------- ------ -----------------------
<S> <C> <C> <C>
A.M. Best and Financial soundness and
Company, Inc........ 9/9/97 A+ operating performance.
Insurer financial
Standard & Poor's... 1/23/98 AA strength
Duff & Phelps....... 1/23/98 AA+ Claims paying ability
</TABLE>
SEPARATE ACCOUNT
The Separate Account was established on December 8, 1986. It is the Separate
Account in which Hartford sets aside and invests the assets attributable to
certain Variable Annuity contracts, including the Contracts sold under this
Prospectus. Separate Account assets are held by Hartford under a safekeeping
arrangement. Although the Separate Account is an integral part of Hartford, it
is registered as a unit investment trust under the 1940 Act. This registration
does not, however, involve Commission supervision of the management or the
investment practices or policies of the Separate Account or Hartford. The
Separate Account meets the definition of "separate account" under federal
securities law.
Premium Payments, less any applicable Premium Taxes, are allocated to one or
more Sub-Accounts according to your instructions. Each Sub-Account is invested
exclusively in the assets of one underlying Fund. Premium Payments and proceeds
of transfers between Sub-Accounts are applied to purchase shares in the
appropriate Fund at Net Asset Value determined as of the end of the Valuation
Period during which the payments were received or the transfer made. All
distributions from a Fund are reinvested at Net Asset Value. The value of your
investment will therefore vary in accordance with the net income and fluctuation
in the individual investments within the underlying Fund. During the Variable
Annuity payout period, both your Annuity payments and reserve values will vary
in accordance with these factors.
Under Connecticut law, the assets of the Separate Account attributable to
the Contracts offered under this Prospectus are held for the benefit of the
owners of, and the persons entitled to payments under, those Contracts. Income,
gains, and losses, whether or not realized, from assets allocated to the
Separate Account, are, in accordance with the Contracts, credited to or charged
against the Separate Account. Also, the assets in the Separate Account are not
chargeable with liabilities arising out of any other business Hartford may
conduct. Contract Values allocated to the Separate Account are not affected by
the rate of return of Hartford's General Account, nor by the investment
performance of any of Hartford's other separate accounts. The Separate Account
may be subject to liabilities arising from a Sub-Account of the Separate Account
whose assets are attributable to other variable annuity contracts or variable
life insurance policies offered by the Separate Account which are not described
in this Prospectus. However, all obligations arising under the Contracts are
general corporate obligations of Hartford.
Hartford does not guarantee the investment results of the Separate Accounts
or any of the underlying Funds. There is no assurance that the value of a
Contract during the years prior to retirement or the aggregate amount of the
variable Annuity payments will equal the total of Premium Payments made under
the Contract. Since each underlying Fund has different investment objectives,
each is subject to different risks. These risks are more fully described in the
accompanying Funds' prospectus.
THE FUNDS
All of the Funds are sponsored by Hartford and are incorporated under the
laws of the State of Maryland. HL Investment Advisors, Inc. ("HL Investment")
serves as the investment adviser to each of the Funds. In addition, HL
Investment has entered into investment service agreements with The Hartford
Investment Management Company ("HIMCO").
<PAGE>
8 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
HIMCO is investment sub-adviser for the Hartford Bond Fund, Hartford High
Yield Fund, Hartford Index Fund, Hartford Mortgage Securities Fund, and Hartford
Money Market Fund.
A full description of the Funds, their investment policies and restrictions,
risks, charges and expenses, and all other aspects of their operation is
contained in the Funds' prospectus and Statement of Additional Information,
which may be ordered from Hartford free of charge. The Funds' prospectus should
be read in conjunction with this Prospectus before investing. The Funds may not
be available in all states.
The investment objective of each Fund is as follows:
HARTFORD BOND FUND
Seeks maximum current income consistent with preservation of capital by
investing primarily in fixed-income securities. Up to 20% of the total assets of
this Fund may be invested in debt securities rated in the highest category below
investment grade ("Ba" by Moody's or "BB" by S&P) 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. --
Investment Policies."
HARTFORD HIGH YIELD FUND
Seeks high current income by investing in non-investment grade fixed-income
securities. Growth of capital is a secondary objective.
HARTFORD INDEX FUND
Seeks to provide investment results which approximate the price and yield
performance of publicly-traded common stocks in the aggregate, as represented by
the Standard & Poor's 500 Composite Stock Price Index.*
HARTFORD MONEY MARKET FUND
Seeks maximum current income consistent with liquidity and preservation of
capital.
HARTFORD MORTGAGE SECURITIES FUND
Seeks maximum current income consistent with safety of principal and
maintenance of liquidity by investing primarily in mortgage-related securities,
including securities issued by the Government National Mortgage Association.
VOTING RIGHTS -- Hartford is the legal owner of all Fund shares held in the
Separate Account. As the owner, Hartford has the right to vote at the Fund's
shareholder meetings. However, to the extent required by federal securities laws
or regulations, Hartford will:
1. Vote all Fund shares attributable to a Contract according to instructions
received from the Contract Owner, and
2. Vote all Fund shares attributable to a Contract for which no voting
instructions are received in the same proportion as shares for which
instructions are received.
If any federal securities laws or regulations, or their present
interpretation, change to permit Hartford to vote Fund shares in its own right,
Hartford may elect to do so.
Hartford will notify you of any Fund shareholders' meeting if the shares
held for your account may be voted at such meetings. Hartford will send proxy
materials and a form of instruction by means of which you can instruct Hartford
with respect to the voting of the Fund shares held for your account.
In connection with the voting of Fund shares held by it, Hartford will
arrange for the handling and tallying of proxies received from Contract Owners.
Hartford as such, shall have no right, except as described below, to vote any
Fund shares held by it under the Contract which may be registered in its name or
the names of its nominees. Hartford will, however, vote the Fund shares held by
it in accordance with the instructions received from the Contract Owners for
whose accounts the Fund shares are held. If a Contract Owner desires to attend
any meeting at which shares held for the Contract Owner's benefit may be voted,
the Contract Owner may request Hartford to furnish a proxy or otherwise arrange
for the exercise of voting rights with respect to the Fund shares held for such
Contract Owner's account. Hartford will vote shares for which no instructions
have been given and shares which are not attributable to Contract Owners (i.e.
shares owned by Hartford) in the same proportion as it votes shares of that Fund
for which it has received instructions. During the Annuity period under a
Contract, the number of votes will decrease as the assets held to fund Annuity
benefits decrease.
The Funds are available only to serve as the underlying investment vehicles
for variable annuity and variable life insurance contracts, including the
Contracts described in this Prospectus, issued by Hartford. It is conceivable
that in the future it may be disadvantageous for variable annuity separate
accounts and variable life insurance separate accounts to invest in the Funds
simultaneously. Although Hartford and the Funds do not currently foresee any
such disadvantages either to variable annuity contract owners or to variable
life insurance policy owners, the Funds' Board of
* "STANDARD & POOR'S-REGISTERED TRADEMARK-", "S&P-REGISTERED TRADEMARK-", "S&P
500-REGISTERED TRADEMARK-", "STANDARD & POOR'S 500", AND "500" ARE TRADEMARKS
OF THE MCGRAW-HILL COMPANIES, INC. AND HAVE BEEN LICENSED FOR USE BY HARTFORD
LIFE INSURANCE COMPANY. THE INDEX FUND IS NOT SPONSORED, ENDORSED, SOLD OR
PROMOTED BY STANDARD & POOR'S ("S&P") AND S&P MAKES NO REPRESENTATION
REGARDING THE ADVISABILITY OF INVESTING IN THE INDEX FUND.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
Directors intends to monitor events in order to identify any material conflicts
between such contract owners and policy owners and to determine what action, if
any, should be taken in response thereto. If the Board of Directors of the Funds
were to conclude that separate funds should be established for variable life and
variable annuity separate accounts, the variable annuity contract owners would
not bear any expense related to the establishment of such separate funds.
SUBSTITUTIONS, ADDITIONS, OR DELETIONS OF INVESTMENTS -- Hartford retains
the right, subject to any applicable law, to make certain changes to the
investment options offered under the Contract. Hartford reserves the right to
eliminate the shares of any of the Funds 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, if the shares of the Funds
are no longer available for investment, or, if in Hartford's judgment,
investment in any Fund would be inappropriate in view of the purposes of the
Separate Account. To the extent required by the 1940 Act, substitutions of
shares attributable to a Contract Owner's interest in a Fund will not be made
until Commission approval has been obtained and the Contract Owner has been
notified of the change.
New Funds may be established at the discretion of Hartford. Any new Fund
will be made available to existing Contract Owners on a basis to be determined
by Hartford. Hartford may also close one or more Funds to additional Premium
Payments or transfers from existing Sub-Accounts.
In the event of any substitution or change, Hartford may, by appropriate
endorsement, make such changes in the Contract as may be necessary or
appropriate to reflect such substitution or change. Furthermore, if deemed to be
in the best interest of persons having voting rights in the Contracts, 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 its Sub-Accounts. Performance information about a Sub-Account is
based on the Sub-Account's past performance only and is no indication of future
performance.
All of the Sub-Accounts may include total return in advertisements or other
sales material.
When a Sub-Account advertises its standardized total return, it will be
calculated to a date not earlier than the effective date of the Separate
Account. This figure will usually be calculated for one year, five years, and
ten years or some other relevant period if the Separate Account has not been in
existence for one, five or 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.
In addition to the standardized total return, the Sub-Account may advertise
non-standardized total returns. This figure will usually be calculated for one
year, 5 years, and 10 years or other relevant period if the Separate Account has
not been in existence for one, five or ten years. This non-standardized total
return is measured in the same manner as the standardized total return described
above, except that the Annual Maintenance Fee is not deducted. Therefore, this
non-standardized total return for a Sub-Account is higher than standardized
total return for a Sub-Account.
The Separate Account may also advertise non-standard total returns which
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.
The Bond Fund, Mortgage Securities Fund and High Yield Fund Sub-Accounts may
advertise yield in addition to total return. The yield will be computed in the
following manner: The net investment income per unit earned during a recent one
month period is divided by the unit value on the last day of the period. This
figure reflects the recurring charges at the Separate Account level including
the Annual Maintenance Fee.
The Money Market Fund Sub-Account may advertise yield and effective yield.
The yield of the Money Market Fund Sub-Account is based upon the income earned
by the Sub-Account over a 7-day period and then annualized, i.e. the income
earned in the period is assumed to be earned every 7 days over a 52-week period
and stated as a percentage of the investment. Effective yield is calculated
similarly but when annualized, the income earned by the investment is assumed to
be reinvested in Sub-Account units and thus compounded in the course of a
52-week period. Yield and effective yield reflect the recurring charges at the
Separate Account level including the Annual Maintenance Fee.
The Separate Account may also disclose yield, standard total return, and
non-standard total return. For periods prior to the date the Separate Account
commenced operations, performance information for the Sub-Accounts will be
calculated based on the performance of the underlying
<PAGE>
10 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Funds and the assumption that the Sub-Accounts were in existence for the same
periods as those of the underlying Funds, with a level of charges equal to those
currently assessed against the Sub-Accounts.
Hartford may provide information on various topics to Contract Owners and
prospective Contract Owners in advertising, sales literature or other materials.
These topics may include the relationship between sectors of the economy and the
economy as a whole and its effect on various securities markets, investment
strategies and techniques (such as value investing, dollar cost averaging and
asset allocation), the advantages and disadvantages of investing in tax-
advantaged and taxable instruments, customer profiles and hypothetical purchase
scenarios, financial management and tax and retirement planning, and other
investment alternatives, including comparisons between the Contracts and the
characteristics of and market for such alternatives.
DESCRIPTION OF THE CONTRACTS
CONTRACTS OFFERED
The Contracts are individual or group tax-deferred Variable Annuity
Contracts designed for retirement planning purposes and may be purchased by any
individual, group or trust, including any trustee or custodian for a retirement
plan qualified under Sections 401(a) or 403(a) of the Internal Revenue Code;
annuity purchase plans adopted by public school systems and certain tax-exempt
organizations according to Section 403(b) of the Code; Individual Retirement
Annuities adopted according to Section 408 of the Code; employee pension plans
established for employees by a state, a political subdivision of a state, or an
agency or instrumentality of either a state or a political subdivision of a
state, and certain eligible deferred compensation plans as defined in Section
457 of the 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
Annuitants on the Contract Issue Date is 85. Generally, the minimum Premium
Payment is $20,000. Thereafter, the minimum Premium Payment is $500. Certain
plans may be allowed to make smaller periodic payments. Unless Hartford gives
its prior approval, it will not accept a Premium Payment in excess of
$1,000,000. Each Premium Payment may be split among the various Sub-Accounts
subject to minimum amounts then in effect. Hartford will send Contract Owners a
confirmation notice upon receipt and acceptance of the Contract Owner's 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. A
written request for cancellation must accompany the Contract. In such event,
Hartford will, without deduction for any charges normally assessed thereunder,
pay you an amount equal to the Contract Value plus any applicable Premium Tax on
the date of receipt of the request for cancellation. You bear the investment
risk during the period prior to Hartford's receipt of request for cancellation.
Hartford 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 ALLOCATING
THE PREMIUM PAYMENT
The initial Premium Payment, less any applicable Premium Tax, will be
credited to your Contract within 2 business days of receipt of the initial
Premium Payment and a properly completed application or an order to purchase a
Contract by Hartford at the Administrative Office of the Company. It will be
credited to the Sub-Account(s) in accordance with your election. If the
application, order request, or other required information is incomplete when
received, Hartford reserves the right to retain the Premium Payment for up to
five business days while it attempts to complete the information. If the
information cannot be made complete within 5 business days, the applicant will
be informed of the reasons for the delay and the Premium Payment will be
returned unless the applicant specifically consents to Hartford retaining the
Premium Payment until the information is made complete. The Premium Payment will
then be allocated within two business days after receipt of the complete
information.
Subsequent Premium Payments received by Hartford in the Administrative
Office of the Company, or other designated administrative offices are priced on
the Valuation Day prior to the close of the New York Stock Exchange (generally
4:00 p.m. E.T.). Unless otherwise specified, Hartford will allocate any
subsequent Premium Payment to Sub-Accounts in accordance with the most recent
premium allocation instructions received by Hartford.
CONTRACT VALUE -- BEFORE THE ANNUITY
COMMENCEMENT DATE
SUB-ACCOUNT VALUE -- The Contract Value is the sum of all Sub-Account Values
and therefore reflects the investment performance of the Sub-Accounts to which
it is allocated. The Sub-Account Value for any Sub-Account as of the Contract
Issue Date is equal to the amount of the Premium Payment allocated to that
Sub-Account. The Sub-Account Value for a Contract is determined on any given
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
day by the multiplying the number of Accumulation Units attributable to the
Contract in that Sub-Account by the Accumulation Unit value for that
Sub-Account. Therefore, on any Valuation Day the Contract Owner's Sub-Account
Value reflects any variation of the interest income, dividends, net capital
gains or losses, realized or unrealized, and any amounts transferred into or out
of that Sub-Account.
ACCUMULATION UNITS -- The portions of the Premium Payments allocated to a
Sub-Account or amounts of Contract Value transferred to a Sub-Account are
converted into Accumulation Units. For any Contract, the number of Accumulation
Units credited to a Sub-Account is determined by dividing the dollar amount
directed to the Sub-Account by the value of the Accumulation Unit for that Sub-
Account for the Valuation Day as of which the portion of the Premium Payment or
transferred Contract Value is invested in the Sub-Account. Transferred Contract
Value is invested in a Sub-Account as of the end of the Valuation Period during
which the transfer request was received. Therefore, a Premium Payment or portion
of a Premium Payment allocated to or amounts transferred to a Sub-Account under
a Contract increase the number of Accumulation Units of that Sub-Account
credited to the Contract.
Surrenders, transfers out of a Sub-Account, the death of any Contract Owner
or the Annuitant before the Annuity Commencement Date, and the application of
Contract Value less Premium Tax to an Annuity payment option on the Annuity
Calculation Date all result in a decrease in the number of Accumulation Units of
one or more Sub-Accounts. Accumulation Units are valued as of the end of the
Valuation Period.
The Accumulation Unit value for each Sub-Account was arbitrarily set
initially at $1 when the Sub-Account began operations. Thereafter, the
Accumulation Unit value 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 for the Valuation Day for which the Accumulation Unit value is
being calculated. (See "Net Investment Factor," below.)
The Sub-Account Value as of each Valuation Day is then determined by
multiplying: (a) the number of Accumulation Units in the Sub-Account by (b) the
Accumulation Unit value for that Sub-Account as of that Valuation Day.
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
applicable administration charge deducted from the Sub-Account, adjusted for
the number of days in the Valuation Period.
SUB-ACCOUNT VALUE TRANSFERS BEFORE AND AFTER
THE ANNUITY COMMENCEMENT DATE
You may transfer the your Sub-Account Values from one or more Sub-Accounts
to another Sub-Account free of charge. However, Hartford reserves 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 a
Contract Owner or by the attorney-in-fact pursuant to a power of attorney by
calling Hartford at (800) 862-6668 or by the agent of record by calling (800)
862-7155. Telephone transfers may not be permitted by some states.
The policy of Hartford and its agents and affiliates is that they will not
be responsible for losses resulting from acting upon telephone requests
reasonably believed to be genuine. Hartford will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. The procedures
Hartford follows for transactions initiated by telephone include requirements
that callers provide certain information for identification purposes. All
transfer instructions by telephone are tape recorded.
Hartford may permit the Contract Owner to preauthorize transfers among
Sub-Accounts and between Sub-Accounts under certain circumstances. Transfers
between the Sub-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 Sub-Account.
It is the responsibility of the Contract Owner to verify the accuracy of all
confirmations of transfers and to promptly advise Hartford of any inaccuracies
within 30 days of receipt of the confirmation.
<PAGE>
12 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Subject to the exceptions set forth in the following paragraph, the right to
reallocate Contract Values is subject to modification if Hartford determines, in
its sole opinion, that the exercise of that right by one or more Contract Owners
is, or would be, to the disadvantage of other Contract Owners. Any modification
could be applied to transfers to or from some or all of the Sub-Accounts and
could include, but 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 a Contract
Owner at any one time. Such restrictions may be applied in any manner reasonably
designed to prevent any use of the transfer right which is considered by
Hartford to be to the disadvantage of other Contract Owners.
For Contracts issued in the State of New York, the reservation of rights set
forth in the preceding paragraph is limited to: (i) requiring up to a maximum of
10 Valuation Days between each transfer; (ii) limiting the amount to be
transferred on any one Valuation Day to no more than $2 million; and (iii) upon
30 days prior written notice, to only accepting transfer instructions from the
Contract Owner and not from the Contract Owner's representative, agent or person
acting under a power of attorney for the Contract Owner.
Currently, and with respect to Contracts issued in all states, the only
restriction in effect is that Hartford will not accept instructions from agents
acting under a power of attorney of multiple Contract Owners whose accounts
aggregate more than $2 million, unless the agent has entered into a third party
transfer services agreement with Hartford.
SURRENDERS
FULL SURRENDERS PRIOR TO THE ANNUITY COMMENCEMENT DATE -- At any time prior
to the Annuity Commencement Date, the Contract Owner has 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 settlement. With the exception of
Annuity payment options 6, no surrenders are permitted after the Annuity
Commencement Date.
The Surrender Value of the Contract is equal to the Contract Value less any
Premium Taxes, and the Annual Maintenance Fee, if applicable. The Surrender
Value may be more or less than the amount of the Premium Payments made to a
Contract.
PARTIAL SURRENDERS PRIOR TO THE ANNUITY COMMENCEMENT DATE -- The Contract
Owner may make a partial surrender of Contract Values at any time prior to the
Annuity Commencement Date so long as the amount surrendered is at least equal to
Hartford's minimum amount rules then in effect. Additionally, if the remaining
Contract Value following a surrender is less than $500, Hartford 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 Premium Payments made during
the previous 2 Contract Years.
When requesting a partial surrender, you should specify the Sub-Account(s)
from which the partial surrender will be taken. Otherwise, the surrender will be
effected on a pro rata basis according to the value in each Sub-Account.
Hartford may permit the Contract Owner to preauthorize partial surrenders
subject to certain limitations then in effect.
SURRENDERS AFTER THE ANNUITY COMMENCEMENT DATE -- A Contract Owner may fully
surrender the Contract on or after the Annuity Commencement Date if the Payment
For a Period Certain Annuity payment option is in effect. Under the Payments For
a Period Certain option, Hartford pays the Contract Owner the Commuted Value
upon surrender. This surrender charge is computed as of the date Hartford
receives the written request for surrender at the Administrative Office of the
Company. No partial surrenders are permitted after the Annuity Commencement
Date.
A Contract Owner may request in writing a partial and full surrender of the
Contract.Partial surrenders may be requested by telephone provided certain
requirements are met. (See "Telephone Surrender Privileges," below.)
CONTRACT OWNERS SHOULD CONSULT THEIR TAX ADVISER REGARDING THE TAX
CONSEQUENCES OF A SURRENDER -- A surrender made before age 59 1/2 may result in
adverse tax consequences, including the imposition of a penalty tax of 10% of
the taxable portion of the Surrender Value. (See Federal Tax Considerations,
page 19.)
TELEPHONE SURRENDER PRIVILEGES -- Hartford permits partial surrenders by
telephone subject to dollar amount limitations in effect at the time a Contract
Owner requests the surrender. To request partial surrenders by telephone, a
Contract Owner must have completed and returned to Hartford a Telephone
Redemption Program Enrollment Form authorizing telephone surrenders. If there
are joint Contract Owners, both must authorize Hartford to accept telephone
instructions and agree that Hartford may accept telephone instructions for
partial surrenders from either Contract Owner. Partial surrender requests will
not be honored until Hartford receives all required documents in proper form.
Telephone authorization will remain valid until (a) Hartford receives
written notice of revocation by a Contract Owner, or, in the case of joint
Contract Owners, written notice from either Contract Owner; (b) Hartford
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
discontinues the privilege; or (c) Hartford has reason to believe that a
Contract Owner has entered into a market timing agreement with an investment
adviser and/or broker/dealer.
Hartford may record any telephone calls to verify data concerning
transactions and may adopt other procedures to confirm that telephone
instructions are genuine. Hartford 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, Hartford must
receive telephone surrender instructions prior to the close of trading on the
New York Stock Exchange (generally 4:00 p.m.).
Hartford may modify, suspend, or terminate telephone transaction privileges
at any time.
PAYMENT OF SURRENDER AMOUNTS -- Payment of any request for a full or partial
surrender from the Sub-Accounts will be made as soon as possible and in any
event no later than seven days after the request is received by Hartford at the
Administrative Office of the Company.
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.
CERTAIN QUALIFIED CONTRACT SURRENDERS -- 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%. HARTFORD WILL NOT
ASSUME ANY RESPONSIBILITY FOR DETERMINING WHETHER A WITHDRAWAL IS PERMISSIBLE,
WITH OR WITHOUT TAX PENALTY, IN ANY PARTICULAR SITUATION; OR IN MONITORING
WITHDRAWAL REQUESTS REGARDING PRE OR POST JANUARY 1, 1989 CONTRACT VALUES.
ANY FULL OR PARTIAL SURRENDER DESCRIBED ABOVE MAY AFFECT THE CONTINUING
TAX-QUALIFIED STATUS OF SOME CONTRACTS OR PLANS AND MAY RESULT IN ADVERSE TAX
CONSEQUENCES TO THE CONTRACT OWNER. THE CONTRACT OWNER, THEREFORE, SHOULD
CONSULT WITH HIS OR HER TAX ADVISER BEFORE UNDERTAKING ANY SUCH SURRENDER. (SEE
"FEDERAL TAX CONSIDERATIONS," PAGE 19.)
CONTRACT FEES AND CHARGES
MORTALITY AND EXPENSE RISK CHARGE -- Although Variable Annuity payments made
under the Contracts will vary in accordance with the investment performance of
the underlying Fund shares held in the Sub-Account(s), the payments will not be
affected by (a) Hartford's actual mortality experience before or after the
Annuity Commencement Date or (b) Hartford's actual expenses, if greater than the
deductions provided for in the Contracts because of the expense and mortality
undertakings by Hartford.
During Contract Years 1-7, Hartford will, for assuming these risks under the
Contracts, make a daily charge at the rate of 1.50% per annum against all
Contract Values (estimated at .95% for mortality and .55% for expense). After
Contract Year 7 or upon the Annuity Commencement Date, whichever is earlier,
Hartford will make a daily charge of 1.25% per annum (estimated at .90% for
mortality and .35% for expense) against all Sub-Account Values.
The mortality undertaking provided by Hartford under the Contracts, assuming
the selection of one of the forms of life Annuities, is to make monthly Annuity
payments (determined in accordance with the 1983a Individual Annuity Mortality
Table projected to the year 2000 using Projection Scale G and other provisions
contained in the Contract) to Annuitants regardless of how long an Annuitant may
live, and regardless of how long all Annuitants as a group may live. Hartford
also assumes the liability for payment of a minimum Death Benefit under the
Contract.
The mortality undertakings are based on Hartford's determination of expected
mortality rates among all Annuitants. If actual experience among Annuitants
during the Annuity payment period deviates from Hartford's actuarial
determination of expected mortality rates among Annuitants because, as a group,
their longevity is longer than anticipated, Hartford must provide amounts from
its general funds to fulfill its Contract obligations. Hartford will bear the
loss in such a situation. Also, in the event of the death of an Annuitant or
Contract Owner before the Annuity Commencement Date, whichever is earlier,
Hartford can, in periods of declining value, experience a loss resulting from
the assumption of the mortality risk relative to the guaranteed Death Benefit.
<PAGE>
14 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
In providing an expense undertaking, Hartford assumes 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, Hartford will deduct an Annual Maintenance
Fee, if applicable, from Contract Values to reimburse it for expenses relating
to the maintenance of the Contract and the Sub-Account(s) thereunder. The Annual
Maintenance Fee is $30 per Contract Year for Contracts with less than $50,000
Contract Value on the Contract Anniversary. If, during a Contract Year, the
Contract is surrendered for its full value, Hartford will deduct the Annual
Maintenance Fee, if applicable, at the time of such surrender. The fee is a flat
fee which will be due in the full amount regardless of the time of the Contract
Year that Contract Values are surrendered. The deduction will be made pro rata
according to the value in each Sub-Account under a Contract.
The types of expenses covered by the Annual Maintenance Fee include, but are
not limited to, expenses of issuing the Contract and expenses for confirmations,
Contract quarterly statements, processing of transfers and surrenders,
responding to Contract Owner inquiries, reconciling and depositing cash
receipts, calculation and monitoring daily Sub-Account unit values, Separate
Account reporting, including semiannual and annual reports and mailing and
tabulation of shareholder proxy solicitations.
Hartford reserves the right to waive the Annual Maintenance Fee under
certain conditions.
PREMIUM TAXES -- A deduction is also made for Premium Tax, if applicable,
imposed by a federal, state or other governmental entity. Certain states impose
a Premium Tax, currently ranging up to 4%. Some states assess the tax at the
time Premium Payments are made; others assess the tax at the time of
annuitization. Hartford will pay Premium Taxes at the time imposed under
applicable law. At its sole discretion, Hartford may deduct Premium Taxes at the
time Hartford pays such taxes to the applicable government authorities, at the
time the Contract is surrendered, at the time the Death Benefit is paid, or on
the Annuity Commencement Date.
EXCEPTIONS TO CHARGES UNDER THE CONTRACT -- Hartford may offer, in its
discretion, reduced fees and charges including, but not limited to, the
mortality and expense risk charge 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 BEFORE THE ANNUITY
COMMENCEMENT DATE
If the Contract Owner or the Annuitant dies before the Annuity Commencement
Date, Hartford will pay a Death Benefit.
If the deceased had not attained age 81, the Death Benefit is the greatest
of:
(a) the Contract Value, or
(b) 100% of the total Premium Payments made to such Contract, reduced by any
prior surrenders, or
(c) the Maximum Anniversary Value immediately preceding the date of death.
The Maximum Anniversary Value is equal to the greatest Contract Anniversary
value attained from the following: Hartford will calculate a Contract
Anniversary value for each Contract Anniversary prior to the deceased's attained
age 81. The Contract Anniversary value is equal to the Contract Value on 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.
If the deceased had attained age 81, then the Death Benefit is the greatest
of:
(a) the Contract Value, or
(b) 100% of the total Premium Payments made to such Contract, reduced by any
prior surrenders, or
(c) the Maximum Anniversary Value at the deceased's attained age 80, reduced by
any prior surrenders and increased by premiums paid.
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 Hartford receives written notification of Due Proof of
Death. Any Annuity payments made or after the date of death, but before receipt
of written notification of Due Proof of Death will be recovered by Hartford from
the Payee.
The calculated Death Benefit will remain invested in the Separate Account in
accordance with the last allocation instructions given by the Contract Owner
until the proceeds are paid or Hartford receives new settlement instructions
from the Beneficiary. During the time period between Hartford's receipt of
written notification of Due Proof of Death and Hartford's receipt of the
complete settlement instructions, the calculated Death Benefit will remain
invested in the Sub-Account(s) previously elected by the Contract Owner and will
be subject to market fluctuations.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 15
- --------------------------------------------------------------------------------
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 and the Annuitant is living, the
spouse may elect, in lieu of receiving the Contract Value, to be treated as the
Contract Owner. If no Beneficiary designation is in effect or if the Beneficiary
has predeceased the Contract Owner, the Contract Owner's estate will be the
Beneficiary.
IF THE ANNUITANT DIES 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.
DEATH ON OR AFTER THE ANNUITY
COMMENCEMENT DATE
If the Annuitant dies on or after the Annuity Commencement Date, Hartford
will pay the Death Benefit under the following Annuity payment options: Life
Annuity with Cash Refund and Life Annuity with Payment for a Period Certain.
PAYMENT FOR A PERIOD CERTAIN -- The Death Benefit on or after the Annuity
Commencement Date, under the Payment for a Period Certain Annuity payment option
is as follows:
IF THE ANNUITANT DIES on or after the Annuity Commencement Date, the
Beneficiary will have the option of having payments continue to the Beneficiary
for the remainder of the period or taking the Death Benefit in one sum. If the
Beneficiary opts to take the Death Benefit in one sum, the Death Benefit will
equal the Commuted Value.
IF A CONTRACT OWNER WHO IS NOT THE ANNUITANT DIES on or after the Annuity
Commencement Date, any surviving joint Contract Owner becomes the sole Contract
Owner. If there is no surviving Contract Owner, the Beneficiary becomes the new
Contract Owner. If any Contract Owner dies, the remaining Annuity payments will
be distributed at least as rapidly as under the method of distribution being
used as of the date of such death.
LIFE ANNUITY WITH CASH REFUND -- The Death Benefit on or after the Annuity
Commencement Date, under the Life Annuity with Cash Refund Annuity payment
option equals the Contract Value less Premium Tax used to purchase Annuity Units
on the Annuity Calculation Date minus the sum of all Annuity payments made.
DISTRIBUTION REQUIREMENTS: PRIOR TO THE
ANNUITY COMMENCEMENT DATE
The Death Benefit will be distributed based on the Contract Owner's or
Annuitant's date of death and the Beneficiary's election:
(a) in a single lump sum, within 5 years from the death
(b) under an Annuity payment option provided that:
(1) Annuity payments begin within one year of the date of death, and
(2) Annuity payments are made in substantially equal installments over the
life of the Beneficiary, or
(3) Annuity payments are made in substantially equal installments over a
period not greater than the life expectancy of the Beneficiary;
(c) if the sole Beneficiary is the spouse of the deceased Contract Owner, he or
she may by written notice within one year of the Contract Owner's death,
elect to continue the Contract as the new Contract Owner.If the spouse so
elects, all of his or her rights as Beneficiary cease and if the deceased
Contract Owner was also the sole Annuitant and appointed no Contingent
Annuitant, he or she will become the Annuitant (For qualified plans, see
"Appendix I", page 26); or
(d) if the Contract Owner is not an individual, then the "primary Annuitant"
shall be treated as the Contract Owner under (a) and (b) above. For this
purpose, the "primary Annuitant" means the individual, the events in the
life of whom are of primary importance in affecting the timing or amount of
the payout under the Contract.
The Death Benefit will only be paid after Hartford has received Due Proof of
Death.
There may be postponement in the payment of Death Benefits whenever (a) the
New York Stock Exchange is closed, including for holidays and weekends, or
trading on the New York Stock Exchange is restricted as determined by the
Commission; (b) the Commission permits postponement and so orders; or (c) the
Commission determines that an emergency exists making valuation of the amounts
or disposal of securities not reasonably practicable.
SETTLEMENT PROVISIONS
You select an Annuity Commencement Date and an Annuity payment option which
may be on a fixed or variable basis, or a combination thereof. The Annuity
Commencement Date will not be deferred beyond the end of Annuitant's age 90 or
the end of Contract Year 10, whichever is later. (If the Contract is sold as
part of a Charitable Remainder Trust, the Annuity Commencement Date may be
<PAGE>
16 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
deferred to the end of the Annuitant's age 100.) The Annuity Commencement Date
and/or the Annuity payment option may be changed from time to time, but any
change must be at least 30 days prior to the date on which Annuity payments are
scheduled to begin.
The Contract contains the 6 Annuity payment options described below and
Option 7, the Annuity Proceeds Settlement Option. Annuity payment options 3, 5,
6 and the Annuity Proceeds Settlement Option are each available to Qualified
Contracts only if the guaranteed payment period is less than the life expectancy
of the Annuitant at the time the option becomes effective. Such life expectancy
shall be computed on the basis of the mortality table prescribed by the IRS, or
if none is prescribed, the mortality table then in use by Hartford. With respect
to Non-Qualified Contracts, if you do not elect otherwise, Fixed Annuity
payments will automatically begin on the Annuity Commencement Date under Annuity
payment option 3 with Annuity payments guaranteed for 10 years. For Qualified
Contracts and Contracts issued in Texas, if you do not elect otherwise, Fixed
Annuity payments will begin automatically on the Annuity Commencement Date,
under option 1 to provide a life Annuity.
With the exception of Annuity payment Option 6, no surrenders are permitted
after Annuity payments commence.
ANNUITY PAYMENT OPTIONS
OPTION 1 -- Life Annuity
Hartford makes Annuity payments for as long as the Annuitant lives. Under
this option, a Payee would receive only one Annuity payment if the Annuitant
dies after the first such payment, two Annuity payments if the Annuitant dies
after the second payment, etc.
OPTION 2 -- Life Annuity with a Cash Refund
Hartford makes Variable Annuity payments as long as the Annuitant lives. If
the Annuitant dies and the sum of all Annuity payments made are less than the
Contract Value less Premium Tax on the Annuity Calculation Date, the Beneficiary
is entitled to a Death Benefit. The Death Benefit equals the Contract Value less
Premium Tax on the Annuity Calculation Date minus the sum of all Annuity
payments made. This option is only available when for Variable Annuity payment
using the 5% A.I.R.
OPTION 3 -- Life Annuity with Payments for a Period Certain
Hartford makes Annuity payments for as long as the Annuitant lives. At the
time this option is selected, the Contract Owner must select a specific number
of years (a minimum of 5 years and maximum of 100 minus the Annuitant's age). If
the Annuitant dies before the specified number of years has passed, the
Beneficiary will have the option of either having the payments continue to the
Beneficiary for the remainder of the period or receiving the present value of
the remaining payments in one sum. Some restrictions apply to Qualified
Contracts with regards to the specified number of years for which payments are
guaranteed. (See first paragraph under "Settlement Provisions," page 15.)
OPTION 4 -- Joint and Last Survivor Life Annuity
Hartford makes Annuity payments while the Annuitant and Joint Annuitant are
living. After the death of either Annuitant, payments continue for as long as
the other Annuitant lives. Under this option, a Payee would receive only one
Annuity payment if the Annuitant and Joint Annuitant die after the first such
payment, etc. At the time of purchase the Contract Owner must elect to have
Annuity payments after the death of the first Annuitant made in amounts equal to
100%, 66.67% or 50% of the amount that would otherwise be paid.
OPTION 5 -- Joint and Last Survivor Life Annuity with Payments for a Period
Certain
Hartford makes Annuity payments to the Payee while the Annuitant and Joint
Annuitant are living. After the death of either Annuitant, Annuity payments
continue to the Payee for as long as the Joint Annuitant lives. At the time of
purchase, the Contract Owner must elect to have Annuity payments after the death
of the first Annuitant made in amounts equal to 100%, 66.67% or 50% of the
amount that would otherwise be paid. At the time this Option is selected, the
Contract Owner must select a specific number of years (a minimum of five years
and maximum of 100 minus the younger Annuitant's age). If the Annuitant and
Joint Annuitant die before the specified number of years has passed, the
Beneficiary will have the option of either having the payments continue to the
Beneficiary for the remainder of the period or receiving the present value of
the remaining payments in one sum. Some restrictions apply to Qualified
Contracts with regards to the specified number of years for which payments are
guaranteed. (See first paragraph under "Settlement Provisions," page 15.)
OPTION 6 -- Payments for a Period Certain
Hartford makes Annuity payments for the number of years (a minimum of 5
years and maximum of 100 minus the Annuitants age) selected by the Contract
Owner. If the Annuitant dies before the specified number of years have passed,
Annuity payments to the Beneficiary will continue until the specified number of
years have elapsed. After the death of the Annuitant, the Beneficiary will have
the option of either having the payments continue to the Beneficiary for the
remainder of the period or receiving the present value of the remaining payments
in one sum. Some restrictions apply to Qualified Contracts with regards to the
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 17
- --------------------------------------------------------------------------------
specified number of years for which payments are guaranteed. (See first
paragraph under "Settlement Provisions," page 15.)
ANNUITY PROCEEDS SETTLEMENT OPTION
OPTION 7 -- Annuity Proceeds Settlement Option
Proceeds from the Death Benefit may be left with Hartford for a period not
to exceed 5 years from the date of the Contract Owner's death prior to the
Annuity Commencement Date. These proceeds will remain in the Sub-Account(s) to
which they were allocated at the time of death unless the Beneficiary elects to
reallocate them. Full or partial surrenders may be made at any time. In the
event of surrenders, the remaining value will equal the Contract Value of the
proceeds left with Hartford, minus any surrenders. This option may not be
available under certain Contracts issued in connection with Qualified Plans.
Hartford may offer other Annuity payment options from time to time.
VARIABLE AND FIXED ANNUITY PAYMENTS -- When an Annuity is effected under a
Contract, unless otherwise specified, Contract Values (less applicable Premium
Taxes) held in the Sub-Accounts will be applied to provide a Variable Annuity
based on the pro rata amount in the various Sub-Accounts. YOU SHOULD CONSIDER
THE QUESTION OF ALLOCATION OF CONTRACT VALUES (LESS APPLICABLE PREMIUM TAXES)
AMONG SUB-ACCOUNTS OF THE SEPARATE ACCOUNT AND THE GENERAL ACCOUNT OF HARTFORD
TO MAKE CERTAIN THAT ANNUITY PAYMENTS ARE BASED ON THE INVESTMENT ALTERNATIVE
BEST SUITED TO YOUR NEEDS FOR RETIREMENT.
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 than $50, Hartford has the right to change the frequency of payment to
intervals that will result in payments of at least $50. For New York Contracts,
the minimum monthly Annuity payment is $20. If any amount due is less than the
minimum amount per year, Hartford may make such other settlement as may be
equitable to the Payee.
When Annuity payments are to commence, the value of the Contract is
determined as the sum of the product of the value of the Accumulation Unit of
each Sub-Account on that same day, and the number of Accumulation Units credited
to each Sub-Account as of the date the Annuity is to commence.
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 the
Contract Owner. Available payment frequencies include monthly, quarterly,
semi-annual and annual. The payment frequency may not be charged after payment
has begun.
ANNUITY CALCULATION DATE AND ANNUITY
COMMENCEMENT DATE
The Contract Owner selects the Annuity Commencement Date in the application
or order request. The Annuity Calculation Date will be no more than five
Valuation Days before the Annuity Commencement Date. The Contract Value less any
applicable Premium Tax is applied to purchase Annuity Units of the Sub-Accounts
selected by the Contract Owner as of the Annuity Calculation Date. The first
Annuity payment is computed using the value of such Annuity Units as of the
Annuity Calculation Date.
INCOME PAYMENT DATES
All Annuity payments after the first Annuity payment are computed and
payable as of the Income Payment Dates. These dates are the same day of the
month as the Annuity Commencement Date based on the Annuity payment frequency
selected by the Contract Owner and shown on the specification page of the
Contract. Available Annuity payment frequencies includes monthly, quarterly,
semi-annual and annual. The Annuity payment frequency may not be changed once
selected by the Contract Owner.
In the event that the Contract Owner does not select a payment frequency,
Annuity payments will be made monthly.
VARIABLE ANNUITY PAYMENTS
THE FIRST VARIABLE ANNUITY PAYMENT -- Variable Annuity payments are periodic
payments from Hartford to the designated Payee, the amount of which varies from
one Income Payment Date to the next as a function of the net investment
performance of the Sub-Accounts selected by the Contract Owner to support such
Annuity payments. The dollar amount of the first Variable Annuity payment
depends on the Annuity payment option chosen, the age of the Annuitant, the
gender of the Annuitant (if applicable), the amount of Contract Value applied to
purchase the Annuity payments, and the applicable annuity purchase rates based
on the 1983a Individual Annuity Mortality table using projection scale G
projected to the year 2000 and an 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
<PAGE>
18 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
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) and adding (c),
where:
(a) is the number of Annuity Units of each Sub-Account credited under the
Contract;
(b) is the Annuity Unit value (described below) for that Sub-Account; and
(c) is the results of each Sub-Account calculation.
The total subsequent Variable Annuity payments equal the sum of the amounts
attributable to each Sub-Account.
Notwithstanding the foregoing, when an Income Payment Date would fall on a
day that is not a Valuation Day, the Income Payment is computed as of the next
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 payments 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
(c) is the Annuity Unit Factor.
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 or Sub-Accounts 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 the Contract Owner. Without this adjustment, the Net
Investment Factor would decrease the Annuity Unit value to the extent that such
value represented an annualized rate of return of less than 0.0% and increase
the Annuity Unit value to the extent that such value represented an annualized
rate of return of greater than 0.0%.
Subject to state approval, 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:
1. If a Contract Owner selects 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.
2. If a Contract Owner selects 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.
3. If a Contract Owner selects 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
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 19
- --------------------------------------------------------------------------------
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 A.I.R. IN FACT, PAYMENTS WILL VARY UP
OR DOWN AS THE INVESTMENT RATE VARIES UP OR DOWN FROM THE A.I.R.
EXCHANGE ("TRANSFER") OF ANNUITY UNITS -- After the Annuity Calculation
Date, the Contract Owner may exchange (i.e., "transfer") the dollar value of a
designated number of Annuity Units of a particular Sub-Account for an equivalent
dollar amount of Annuity Units of another Sub-Account. On the date of the
transfer, the dollar amount of a Variable Annuity payment generated from the
Annuity Units of either Sub-Account would be the same. Transfers are executed as
of the day Hartford receives a written request for a transfer. For guidelines
refer to "Sub-Account Value Transfers Before and After the Annuity Commencement
Date," page 11.
FIXED 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.
ADDITIONAL CONTRACT
INFORMATION
ASSIGNMENT
Ownership of a Contract described herein is generally assignable. However,
if the Contracts are issued pursuant to some form of Qualified Plan, it is
possible that the ownership of the Contracts may not be transferred or assigned
depending on the type of qualified retirement plan involved. An assignment of a
Non-Qualified Contract may be deemed a distribution which subjects the
assignment proceeds to income taxes and certain penalty taxes.
MISSTATEMENT OF AGE OR SEX
If the Annuitant's stated age and/or sex in the Contract are incorrect,
Hartford will change the benefits payable to those which the Premium Payments
would have purchased for the correct age and sex. Sex is not a factor when
Annuity Benefits are based on unisex annuity payment rate tables. If Annuity
payments were made based on incorrect age or sex, we will increase or reduce a
later Annuity payment or payments to adjust for the error. Any adjustment will
include interest, at a rate of 4% per year, from the date of wrong payment to
the date the adjustment is made.
CONTRACT MODIFICATION
Hartford reserves the right to modify the Contract, but only if such
modification: (a) is necessary to make the Contract or the Separate Account
comply with any law or regulation issued by a governmental agency to which
Hartford is subject; or (b) is necessary to assure continued qualification of
the Contract under the Code or other federal or state laws relating to
retirement annuities or annuity Contracts; or (c) is necessary to reflect a
change in the operation of the Separate Account or the Sub-Account(s) or (d)
provides additional Separate Account options or (e) withdraws Separate Account
options. In the event of any such modification Hartford will provide notice to
the Contract Owner or to the payee(s) during the Annuity period. Hartford may
also make appropriate endorsement to the Contract to reflect such modification.
FEDERAL TAX CONSIDERATIONS
What are some of the federal tax consequences which affect these Contracts?
A. GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE CONTRACT OWNER INVOLVED AND THE TYPE OF PLAN UNDER
WHICH THE CONTRACT IS PURCHASED, LEGAL AND TAX ADVICE MAY BE NEEDED BY A PERSON,
TRUSTEE OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A CONTRACT DESCRIBED
HEREIN.
It should be understood that any detailed description of the federal income
tax consequences regarding the purchase of these Contracts cannot be made in
this Prospectus and that special tax rules may be applicable with respect to
certain purchase situations not discussed herein. In addition, no attempt is
made here to consider any applicable state or other tax laws. For detailed
information, a qualified tax adviser should always be consulted. The discussion
here and in Appendix I, commencing on page 26, is
<PAGE>
20 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
based on Hartford's understanding of existing federal income tax laws as they
are currently interpreted.
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 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 "Contract Value -- Before the Annuity
Commencement Date" commencing on page 10). 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.
Section 72 contains provisions for Contract Owners which are non-natural
persons. Non-natural persons include corporations, trusts, and partnerships. The
annual net increase in the value of the Contract is currently includable in the
gross income of a non-natural person unless the non-natural person holds the
Contract as an agent for a natural person. There is an exception from current
inclusion for certain annuities held in tax-qualified retirement arrangements,
certain annuities held by structured settlement companies, certain annuities
held by an employer with respect to a terminated tax-qualified retirement plan
and certain immediate annuities. A non-natural person which is a tax-exempt
entity for federal tax purposes will not be subject to income tax as a result of
this provision.
If the Contract Owner is not an individual, the primary Annuitant shall be
treated as the Contract Owner for purposes of making distributions which are
required to be made upon the death of the Contract Owner. If there is a change
in the primary Annuitant, such change shall be treated as the death of the
Contract Owner.
2. OTHER CONTRACT OWNERS (NATURAL PERSONS).
A Contract Owner is not taxed on increases in the value of the Contract
until an amount is received or deemed received, e.g., in the form of a lump sum
payment (full or partial value of a Contract) or as Annuity payments under the
settlement option elected.
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 as a
result of divorce.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 21
- --------------------------------------------------------------------------------
B. DISTRIBUTIONS AFTER THE ANNUITY
COMMENCEMENT DATE.
Annuity payments made periodically after the Annuity Commencement Date are
includable in gross income to the extent the payments exceed the amount
determined by the application of the ratio of the "investment in the contract"
to the total amount of the payments to be made after the Annuity Commencement
Date (the "exclusion ratio").
i. When the total of amounts excluded from income by application of the
exclusion ratio is equal to the investment in the contract as of the Annuity
Commencement Date, any additional payments (including surrenders) will be
entirely includable in gross income.
ii. If the annuity payments cease by reason of the death of the Annuitant and,
as of the date of death, the amount of annuity payments excluded from gross
income by the exclusion ratio does not exceed the investment in the
contract as of the Annuity Commencement Date, then the remaining portion of
unrecovered investment shall be allowed as a deduction for the last taxable
year of the Annuitant.
iii. Generally, nonperiodic amounts received or deemed received after the
Annuity Commencement Date are not entitled to any exclusion ratio and
shall be fully includable in gross income. However, upon a full surrender
after such date, only the excess of the amount received (after any
surrender charge) over the remaining "investment in the contract" shall be
includable in gross income (except to the extent that the aggregation rule
referred to in the next subparagraph c. may apply).
C. AGGREGATION OF TWO OR MORE ANNUITY CONTRACTS.
Contracts issued after October 21, 1988 by the same insurer (or affiliated
insurer) to the same Contract Owner within the same calendar year (other than
certain contracts held in connection with a tax-qualified retirement
arrangement) will be treated as one annuity Contract for the purpose of
determining the taxation of distributions prior to the Annuity Commencement
Date. An annuity contract received in a tax-free exchange for another annuity
contract or life insurance contract may be treated as a new Contract for this
purpose. Hartford 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 premature
distribution 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 Contract Owner 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 Contract Owner's becoming disabled.
4. A distribution that is part of a scheduled series of substantially equal
periodic payments for the life (or life expectancy) of the Contract
Owner (or the joint lives or life expectancies of the Contract Owner and
the Contract Owner's Beneficiary).
5. Distributions of amounts which are allocable to the investment in the
contract prior to August 14, 1982 (see next subparagraph e.).
E. SPECIAL PROVISIONS AFFECTING CONTRACTS OBTAINED THROUGH A TAX-FREE
EXCHANGE OF OTHER ANNUITY OR LIFE INSURANCE CONTRACTS PURCHASED PRIOR TO
AUGUST 14, 1982.
If the Contract was obtained by a tax-free exchange of a life insurance or
annuity contract purchased prior to August 14, 1982, then any amount received or
deemed received prior to the Annuity Commencement Date shall be deemed to come
(1) first from the amount of the "investment in the contract" prior to August
14, 1982 ("pre-8/14/82 investment") carried over from the prior Contract, (2)
then from the portion of the "income on the contract" (carried over to, as well
as accumulating in, the successor Contract) that is attributable to such
pre-8/14/82 investment, (3) then from the remaining "income on the contract" and
(4) last from the remaining "investment in the contract." As a result, to the
extent that such amount received or deemed received does not exceed such
pre-8/14/82 investment, such amount is not includable in gross income. In
addition, to the extent that such amount received or deemed received does not
exceed the sum of (a) such pre-8/14/82 investment and (b) the "income on the
contract" attributable thereto, such amount is not subject to the 10% penalty
tax. In all other respects, amounts received or deemed received from such post-
<PAGE>
22 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
exchange Contracts are generally subject to the rules described in this
subparagraph 3.
F. REQUIRED DISTRIBUTIONS.
i. Death of Contract Owner or Primary Annuitant
Subject to the alternative election or spouse beneficiary provisions in ii
or iii below:
1. If any Contract Owner dies on or after the Annuity Commencement Date and
before the entire interest in the Contract has been distributed, the
remaining portion of such interest shall be distributed at least as
rapidly as under the method of distribution being used as of the date of
such death;
2. If any Contract Owner dies before the Annuity Commencement Date, the
entire interest in the Contract will be distributed within 5 years after
such death; and
3. If the Contract Owner is not an individual, then for purposes of 1. or
2. above, the primary annuitant under the Contract shall be treated as
the Contract Owner, and any change in the primary annuitant shall be
treated as the death of the Contract Owner. The primary annuitant is the
individual, the events in the life of whom are of primary importance in
affecting the timing or amount of the payout under the Contract.
ii. Alternative Election to Satisfy Distribution Requirements
If any portion of the interest of a Contract Owner described in I. above is
payable to or for the benefit of a designated beneficiary, such beneficiary
may elect to have the portion distributed over a period that does not
extend beyond the life or life expectancy of the beneficiary. The election
and payments must begin within a year of the death.
iii. Spouse Beneficiary
If any portion of the interest of a Contract Owner is payable to or for
the benefit of his or her spouse, and the Annuitant or Contingent
Annuitant is living, such spouse shall be treated as the Contract Owner of
such portion for purposes of section I. above.
3. DIVERSIFICATION REQUIREMENTS.
Section 817 of the Code provides that a variable annuity contract will not
be treated as an annuity contract for any period during which the investments
made by the separate account or underlying fund are not adequately diversified
in accordance with regulations prescribed by the Treasury Department. If a
Contract is not treated as an annuity contract, the Contract Owner will be
subject to income tax on the annual increases in cash value.
The Treasury Department has issued diversification regulations which
generally require, among other things, that no more than 55% of the value of the
total assets of the segregated asset account underlying a variable contract is
represented by any one investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three investments, and no
more than 90% is represented by any four investments. In determining whether the
diversification standards are met, all securities of the same issuer, all
interests in the same real property project, and all interests in the same
commodity are each treated as a single investment. In addition, in the case of
government securities, each government agency or instrumentality shall be
treated as a separate issuer.
A separate account must be in compliance with the diversification standards
on the last day of each calendar quarter or within 30 days after the quarter
ends. If an insurance company inadvertently fails to meet the diversification
requirements, the company may comply within a reasonable period and avoid the
taxation of contract income on an ongoing basis. However, either the company or
the Contract Owner must agree to pay the tax due for the period during which the
diversification requirements were not met.
Hartford monitors the diversification of investments in the separate
accounts and tests for diversification as required by the Code. Hartford intends
to administer all contracts subject to the diversification requirements in a
manner that will maintain adequate diversification.
4. OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT.
In order for a variable annuity contract to qualify for tax deferral, assets
in the segregated asset accounts supporting the variable contract must be
considered to be owned by the insurance company and not by the variable contract
owner for tax purposes. The Internal Revenue Service ("IRS") has issued several
rulings which discuss investor control. The IRS has ruled that certain incidents
of ownership by the contract owner, such as the ability to select and control
investments in a separate account, could cause the contract owner to be treated
as the owner of the assets for tax purposes.
Further, in the explanation to the temporary Section 817 diversification
regulations, the Treasury Department noted that the temporary regulations "do
not provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor, rather
than the insurance company, to be treated as the owner of the assets in the
account." The explanation further indicates that "the temporary regulations
provide that in appropriate cases a segregated asset account may include
multiple sub-accounts, but do not specify the extent to which policyholders may
direct their investments to particular sub-accounts without being treated as the
owners of the underlying assets. Guidance on this and other issues will be
provided in regulations or
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 23
- --------------------------------------------------------------------------------
revenue rulings under Section 817(d), relating to the definition of variable
contract." The final regulations issued under Section 817 did not provide
guidance regarding investor control, and as of the date of this prospectus, no
other such guidance has been issued. Further, Hartford does not know if or in
what form such guidance will be issued. In addition, although regulations are
generally issued with prospective effect, it is possible that regulations may be
issued with retroactive effect. Due to the lack of specific guidance regarding
the issue of investor control, there is necessarily some uncertainty regarding
whether a Contract Owner could be considered the owner of the assets for tax
purposes. Hartford reserves the right to modify the contracts, as necessary, to
prevent Contract Owners from being considered the owners of the assets in the
separate accounts.
D. FEDERAL INCOME TAX WITHHOLDING
The portion of a distribution which is taxable income to the recipient will
be subject to federal income tax withholding, pursuant to Section 3405 of the
Code. The application of this provision is summarized below:
1. NON-PERIODIC DISTRIBUTIONS.
The portion of a non-periodic distribution which constitutes taxable income
will be subject to federal income tax withholding unless the recipient elects
not to have taxes withheld. If an election not to have taxes withheld is not
provided, 10% of the taxable distribution will be withheld as federal income
tax. Election forms will be provided at the time distributions are requested. If
the necessary election forms are not submitted to Hartford, 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 unless the recipient elects otherwise. A recipient may
elect not to have income taxes withheld or to have income taxes withheld at a
different rate by providing a completed election form. Election forms will be
provided at the time distributions are requested.
E. GENERAL PROVISIONS AFFECTING
TAX-QUALIFIED RETIREMENT PLANS
The Contract may be used for a number of qualified retirement plans. If the
Contract is being purchased with respect to some form of qualified retirement
plan, please refer to Appendix I commencing on page 26 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 adviser
regarding U.S., state, and foreign taxation with respect to an annuity purchase.
OTHER INFORMATION
DISTRIBUTION OF THE 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. Hartford's parent company indirectly owns 100% of
HSD. The principal business address of HSD is the same as that of Hartford.
The securities will be sold by salespersons of HSD who represent Hartford as
insurance and by variable annuity agents 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 1% of Premium
Payments. Trail commissions of 1% annually will be paid on a quarterly basis
beginning after the first Contract Year. 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
<PAGE>
24 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
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 difference for 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.
The securities may also be sold directly to employees of Hartford and
Hartford Fire Insurance Company, an affiliate of Hartford, without compensation
to HSD salespersons. The securities will be credited with an additional 5% of
the employee's Premium Payment by Hartford. This additional percentage of
Premium Payment in no way affects present or future charges, rights, benefits or
current Contract Values of other Contract Owners.
LEGAL MATTERS
There are no material legal proceedings to which the Separate Account is a
party.
Counsel with respect to federal laws and regulations applicable to the issue
and sale of the Contracts and with respect to Connecticut law is Lynda Godkin,
General Counsel, Hartford Life, P.O. Box 2999, Hartford, Connecticut 06104-2999.
YEAR 2000
The Year 2000 issue relates to the ability or inability of computer systems
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 computer systems that are in use today were developed years
ago when a year was identified using a two-digit field rather than a four-digit
field. As information and data containing or related to the century date are
introduced to computer hardware, software and other systems, date sensitive
systems may recognize the year 2000 as 1900, or not at all, which may result in
computer systems processing information incorrectly. This, in turn, may
significantly and adversely affect the integrity and reliability of information
databases 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 and others, may also
adversely affect any given company.
As an insurance and financial services company, Hartford has thousands of
individual and business customers that have purchased or invested in insurance
policies, annuities, mutual funds and other financial products. Nearly all of
these policies and products contain date sensitive data, such as policy
expiration dates, birth dates, premium payments dates and the like. In addition,
Hartford has business relationships with numerous third parties that affect
virtually all aspects of its business, including, without limitation, suppliers,
computer hardware and software vendors, insurance agents and brokers, securities
broker-dealers and other distributors of financial products.
Beginning in 1990, Hartford began working on making its computer systems
Year 2000 ready, either by installing new programs or by replacing systems. In
January 1998, Hartford commenced a company-wide program to further identify,
assess and remediate the impact of Year 2000 problems in all of Hartford's
business segments. Hartford currently anticipates that this internal program
will be substantially completed by the end of 1998, and testing of computer
systems will continue through 1999.
In addition, as part of its Year 2000 program, Hartford is identifying third
parties with which it has significant business relations in order to attempt to
assess any potential impact on Hartford as a result of such third-party Year
2000 issues and remediation plans. Hartford currently anticipates that it will
substantially complete this evaluation by the end of 1998, and will conduct
systems testing with certain third parties through 1999. 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 successfully address their Year 2000
issues. Hartford will continue to assess Year 2000 risk exposures related to its
own operations and its third-party relationships and is in the process of
developing business contingency plans.
The costs of addressing the Year 2000 issue that have been incurred through
the six months ended June 30, 1998 have not been material to Hartford's
financial condition or results of operations. Hartford will continue to incur
costs related to its Year 2000 efforts and does not anticipate that the costs to
be incurred will be material to its financial condition or results of
operations.
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.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 25
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
Inquiries will be answered by calling your representative or by writing:
Hartford Life Insurance Company
Attn: Individual Annuity Services
P.O. Box 5085
Hartford, Connecticut 06102-5085
Telephone: (800) 862-6668 (Contract Owners)
(800) 862-7155 (Registered Representatives)
<PAGE>
26 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
APPENDIX I
INFORMATION REGARDING TAX-QUALIFIED RETIREMENT PLANS
The tax rules applicable to tax-qualified contract owners, including
restrictions on contributions and distributions, taxation of distributions and
tax penalties, vary according to the type of plan as well as the terms and
conditions of the plan itself. Various tax penalties may apply to contributions
in excess of specified limits, to distributions in excess of specified limits,
to distributions which do not satisfy certain requirements and to certain other
transactions with respect to qualified plans. Accordingly, this summary provides
only general information about the tax rules associated with use of the Contract
by a qualified plan. Contract owners, plan participants and beneficiaries are
cautioned that the rights and benefits of any person to benefits are controlled
by the terms and conditions of the plan regardless of the terms and conditions
of the Contract. Some qualified plans are subject to distribution and other
requirements, which are not incorporated into Hartford's administrative
procedures. Owners, participants and beneficiaries are responsible for
determining that contributions, distributions and other transactions comply with
applicable law. Because of the complexity of these rules, owners, participants
and beneficiaries are encouraged to consult their own tax advisors as to
specific tax consequences.
A. TAX-QUALIFIED PENSION OR
PROFIT-SHARING PLANS
Provisions of the Code permit eligible employers to establish tax-qualified
pension or profit sharing plans (described in Section 401(a) and 401(k), if
applicable, and exempt from taxation under Section 501(a) of the Code), and
Simplified Employee Pension Plans (described in Section 408(k)). Such plans are
subject to limitations on the amount that may be contributed, the persons who
may be eligible and the time when distributions must commence. Employers
intending to use these contracts in connection with such plans should seek
competent tax and other legal advice.
B. TAX SHELTERED ANNUITIES
UNDER SECTION 403(b)
Section 403(b) of the Code permits public school employees and employees of
certain types of charitable, educational and scientific organizations specified
in Section 501(c)(3) of the Code to purchase annuity contracts, and, subject to
certain limitations, exclude such contributions from gross income. Generally,
such contributions may not exceed the lesser of $10,000 (indexed) or 20% of the
employees "includable compensation" for his most recent full year of employment,
subject to other adjustments. Special provisions may allow some employees to
elect a different overall limitation.
Tax-sheltered annuity programs under Section 403(b) are subject to a
PROHIBITION AGAINST DISTRIBUTIONS FROM THE CONTRACT ATTRIBUTABLE TO
CONTRIBUTIONS MADE PURSUANT TO A SALARY REDUCTION AGREEMENT unless such
distribution is made:
(1) after the participating employee attains age 59 1/2;
(2) upon separation from service;
(3) upon death or disability; or
(4) in the case of hardship (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.
C. DEFERRED COMPENSATION PLANS
UNDER SECTION 457
Employees and independent contractors performing services for eligible
employers may have contributions made to the Deferred Compensation Plan of their
employer in accordance with the employer's plan and Section 457 of the Code.
Section 457 places limitations on contributions to Eligible Deferred
Compensation Plans maintained by a State ("State" means a State, a political
sub-division of a State, and an agency or instrumentality of a State or
political sub-division of a State) or other tax-exempt organization. Generally,
the limitation is 33 1/3% of includable compensation (typically 25% of gross
compensation) or $7,500 (indexed), whichever is less. Such a plan may also
provide for additional "catch-up" deferrals during the three taxable years
ending before a participant attains normal retirement age.
An employee electing to participate in an Eligible Deferred Compensation
Plan should understand that his or her rights and benefits are governed strictly
by the terms of the plan and that the employer is the legal owner of any
contract issued with respect to the plan. The employer, as owner of the
contract(s), retains all voting and redemption rights which may accrue to the
contract(s) issued with respect to the plan. The participating employee should
look to the terms of his or her plan for any charges in regard to participating
therein other than those disclosed in this Prospectus. Participants should also
be aware that effective August 20, 1996, the Small Business Job Protection Act
of
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 27
- --------------------------------------------------------------------------------
1996 requires that all assets and income of an Eligible Deferred Compensation
Plan established by a governmental employer which is a State, a political
subdivision of a State, or any agency or instrumentality of a State or political
subdivision of a State, must be held in trust (or under certain specified
annuity contracts or custodial accounts) for the exclusive benefit of
participants and their beneficiaries. Special transition rules apply to such
governmental Eligible Deferred Compensation Plans already in existence on August
20, 1996, and provide that such plans need not establish a trust before January
1, 1999. However, this requirement of a trust does not apply to amounts under an
Eligible Deferred Compensation Plan of a tax-exempt (non-governmental)
organization and such amounts will be subject to the claims of such tax-exempt
employer's general creditors.
In general, distributions from an Eligible Deferred Compensation Plan are
prohibited under Section 457 unless made after the participating employee
attains age 70 1/2, separates from service, dies, or suffers an unforeseeable
financial emergency. Present federal tax law does not allow tax-free transfers
or rollovers for amounts accumulated in a Section 457 plan except for transfers
to other Section 457 plans in limited cases.
D. INDIVIDUAL RETIREMENT ANNUITIES
UNDER SECTION 408
Section 408 of the Code permits eligible individuals to establish individual
retirement programs through the purchase of Individual Retirement Annuities
("IRAs"). IRAs are subject to limitations on the amount that may be contributed,
the contributions that may be deducted from taxable income, the persons who may
be eligible and the time when distributions may commence. Also, distributions
from certain qualified plans may be "rolled-over" on a tax-deferred basis into
an IRA.
IRAs generally may not invest in life insurance contracts. However, an
annuity that is used as an IRA may provide a death benefit that equals the
greater of the premiums paid and the annuity's cash value. The Contract offers
an enhanced Death Benefit that may exceed the greater of the Contract Value and
total Premium Payments less prior surrenders. For Contracts issued in most
states, Hartford has obtained approval from the Internal Revenue Service to use
the Contract as an IRA. For Contracts issued in New York, Hartford has asked the
Internal Revenue Service to approve use of the Contract as an IRA, but there is
no assurance that approval will be granted.
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 regular IRA only after two years have expired since the
participant first commenced participation in the SIMPLE IRA. Amounts cannot be
rolled over to a SIMPLE IRA from a qualified plan or a regular IRA. Hartford is
a non designated financial institution.
Effective after December 31, 1997, the Contract can be offered as ROTH IRAs
under Section 408A of the Code. Contributions to a ROTH IRA are not deductible.
Subject to special limitations, a distribution from a regular IRA may be rolled
over to a ROTH IRA. However, a rollover to a ROTH IRA is not excludable from
gross income. If certain specified conditions are met, qualified distributions
from a ROTH IRA are tax-free.
E. TAX PENALTIES
Distributions from retirement plans are generally taxed under Section 72 of
the Code. Under these rules, a portion of each distribution may be excludable
from income. The excludable amount is the portion of the distribution which
bears the same ratio as the after-tax contributions bear to the expected return.
1. PREMATURE DISTRIBUTION
Distributions from an IRA or a qualified plan before an participant attains
age 59 1/2 are generally subject to an additional tax equal to 10% of the
taxable portion of the distribution. The 10% penalty does not apply to
distributions made after the employee's death, on account of disability, for
eligible medical expenses and distributions in the form of a life annuity and,
except in the case of an IRA, certain distributions after separation from
service after age 55. For these purposes, a life annuity means a scheduled
series of substantially equal periodic payments for the life or life expectancy
of the participant (or the joint lives or life expectancies of the participant
and Beneficiary).
In addition, effective for distributions made from an IRA after December 31,
1997, there is no such penalty tax on distributions that do not exceed the
amount of certain qualifying higher education expenses, as defined by Section
72(t)(7) of the Code, or which are qualified first-time homebuyer distributions
meeting the requirements of Section 72(t)(8) of the Code.
If you are a participant in a SIMPLE IRA plan, you should be aware that the
10% penalty tax described above is increased to 25% with respect to non-exempt
premature 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.
2. MINIMUM DISTRIBUTION TAX
If the amount distributed is less than the minimum required distribution for
the year, the participant is subject to a 50% tax on the amount that was not
properly distributed.
<PAGE>
28 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
An individual's interest in a tax-qualified retirement plan must generally
be distributed, or begin to be distributed, not later than April 1 of the
calendar year following the later of (i) the calendar year in which the
individual attains age 70 1/2 or (ii) the calendar year in which the individual
retires from service with the employer sponsoring the plan ("required beginning
date"). However, the required beginning date for an individual who is a five (5)
percent owner (as defined in the Code), or who is the owner of an IRA, is April
1 of the calendar year following the calendar year in which the individual
attains age 70 1/2. The entire interest of the participant must be distributed
beginning no later than this required beginning date over a period which may not
extend beyond a maximum of the life expectancy of the participant and a
designated Beneficiary. Each annual distribution must equal or exceed a "minimum
distribution amount" which is determined by dividing the account balance by the
applicable life expectancy. This account balance is generally based upon the
account value as of the close of business on the last day of the previous
calendar year. In addition, minimum distribution incidental benefit rules may
require a larger annual distribution.
If an individual dies before reaching his or her required beginning date,
the individual's entire interest must generally be distributed within five years
of the individual's death. However, this rule will be deemed satisfied, if
distributions begin before the close of the calendar year following the
individual's death to a designated Beneficiary (or over a period not extending
beyond the life expectancy of the beneficiary). If the Beneficiary is the
individual's surviving spouse, distributions may be delayed until the individual
would have attained age 70 1/2.
If an individual dies after reaching his or her required beginning date or
after distributions have commenced, the individual's interest must generally be
distributed at least as rapidly as under the method of distribution in effect at
the time of the individual's death.
3. WITHHOLDING
In general, distributions from IRAs and plans described in Section 457 of
the Code are subject to regular wage withholding rules.
Periodic distributions from other tax-qualified retirement plans that are
made for a specified period of 10 or more years or for the life or life
expectancy of the participant or the joint lives or life expectancies of the
participant and beneficiary are generally subject to federal income tax
withholding as if the recipient were married claiming three exemptions. The
recipient of periodic distributions may generally elect not to have withholding
apply or to have income taxes withheld at a different rate by providing a
completed election form.
Other distributions from such other tax-qualified plans are generally
subject to mandatory income tax withholding at the flat rate of 20% unless such
distributions are:
(a) the non-taxable portion of the distribution;
(b) required minimum distributions; or
(c) direct transfer distributions.
Direct transfer distributions are direct payments to an IRA or to another
eligible retirement plan under Code section 401(a)(31).
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 29
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
TO
STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
SECTION PAGE
------------------------------------------------------------------------ ----
<S> <C>
DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY..........................
SAFEKEEPING OF ASSETS...................................................
INDEPENDENT PUBLIC ACCOUNTANTS..........................................
DISTRIBUTION OF CONTRACTS...............................................
CALCULATION OF YIELD AND RETURN.........................................
PERFORMANCE COMPARISONS.................................................
FINANCIAL STATEMENTS....................................................
</TABLE>
<PAGE>
This form must be completed for all tax sheltered annuities.
SECTION 403(b)(11) ACKNOWLEDGMENT FORM
The Hartford variable annuity Contract which you have recently purchased is
subject to certain restrictions imposed by the Tax Reform Act of 1986.
Contributions to the Contract after December 31, 1988 and any increases in cash
value after December 31, 1988 may not be distributed to you unless you have:
a. attained age 59 1/2,
b. separated from service,
c. died, or
d. become disabled.
Distributions of post December 31, 1988 contributions, excluding any income
thereon, may also be made if you have experienced a financial hardship.
Also, there may be a 10% penalty tax for distributions made prior to age 59 1/2
because of financial hardship or separation from service.
Also, please be aware that your 403(b) Plan may also offer other financial
alternatives other than the Hartford variable annuity. Please refer to your
Plan.
Please complete the following and return to:
Hartford Life Insurance Company
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 [PRODUCT NAME] to me
at the following address:
- ----------------------------------------------------
Name
- ------------------------------------------------------------
Address
- ------------------------------------------------------------
City/State Zip
Code
<PAGE>
PART B
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
HARTFORD LIFE INSURANCE COMPANY
THOMSON MCKINNON SEPARATE ACCOUNT
[PRODUCT NAME]
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: May 1, 1999
Date of Statement of Additional Information: May 1, 1999
<PAGE>
2
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY . . . . . . . . .
SAFEKEEPING OF ASSETS . . . . . . . . . . . . . . . . . . . . . .
INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . .
DISTRIBUTION OF CONTRACTS . . . . . . . . . . . . . . . . . . . .
CALCULATION OF YIELD AND RETURN . . . . . . . . . . . . . . . . .
PERFORMANCE COMPARISONS . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
3
DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY
Hartford Life Insurance Company is a stock life insurance company engaged in
the business of writing health and life insurance, both individual and group,
in all states of the United States and the District of Columbia. Hartford
was originally incorporated under the laws of Massachusetts on June 5, 1902,
and was subsequently redomiciled to Connecticut. Its offices are located in
Simsbury, Connecticut; however, its mailing address is P.O. Box 2999,
Hartford, CT 06104-2999. Hartford is a subsidiary of Hartford Fire
Insurance Company, one of the largest multiple lines insurance carriers in
the United States. Hartford is ultimately controlled by The Hartford
Financial Services Group, Inc., a Delaware corporation.
HARTFORD RATINGS
RATING AGENCY EFFECTIVE RATING BASIS OF RATING
DATE OF RATING
- -------------------------------------------------------------------------------
A.M. Best and Company, Inc. 9/9/97 A+ Financial soundness and
operating performance.
Standard & Poor's 1/23/98 AA Insurer financial
strength
Duff & Phelps 1/23/98 AA+ Claims paying ability
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
and will offer the Contracts on a continuous basis.
<PAGE>
4
HSD is an affiliate of Hartford. Hartford's parent company indirectly owns
100% of HSD. The principal business address of HSD is the same as that of
Hartford.
The securities will be sold by salespersons of HSD, who represent Hartford as
insurance and Variable Annuity agents and who are registered representatives
of Broker-Dealers who have entered into distribution agreements with HSD.
HSD is registered with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 as a Broker-Dealer and is a member of the
National Association of Securities Dealers, Inc. ("NASD").
CALCULATION OF YIELD AND RETURN
YIELD OF THE MONEY MARKET FUND SUB-ACCOUNT. As summarized in the Prospectus
under the heading "Performance Related Information," the yield of the Money
Market Fund Sub-Account for a seven day period (the "base period") will be
computed by determining the "net change in value" (calculated as set forth
below) of a hypothetical account having a balance of one accumulation unit of
the Sub-Account at the beginning of the period, subtracting a hypothetical
charge reflecting deductions from Contract Owner accounts, and dividing the
difference by the value of the account at the beginning of the base period to
obtain the base period return, and then multiplying the base period return by
(365/7) with the resulting yield figure carried to the nearest hundredth of
one percent. Net changes in value of a hypothetical account will include net
investment income of the account (accrued daily dividends as declared by the
underlying funds, less daily expense charges of the account) for the period,
but will not include realized gains or losses or unrealized appreciation or
depreciation on the underlying fund shares.
The effective yield is calculated by compounding the base period return by
adding 1, raising the sum to a power equal to 365 divided by 7 and
subtracting 1 from the result, according to the following formula:
Effective Yield = [(Base Period Return + 1) 365/7] - 1
The yield and effective yield for the seven day period ending December 31,
1997 for the Money Market Fund Sub-Account is as follows:
($30 Annual Maintenance Fee)
Yield: 3.87%
Effective Yield: 3.94%
THE MONEY MARKET FUND SUB-ACCOUNT'S YIELD AND EFFECTIVE YIELD WILL VARY IN
RESPONSE TO FLUCTUATIONS IN INTEREST RATES AND IN THE EXPENSES OF THE
SUB-ACCOUNT. THE CURRENT YIELD AND EFFECTIVE YIELD REFLECT RECURRING CHARGES
ON THE SEPARATE ACCOUNT LEVEL, INCLUDING THE MAXIMUM ANNUAL MAINTENANCE FEE.
<PAGE>
5
YIELDS OF BOND FUND, MORTGAGE SECURITIES FUND AND HIGH YIELD FUND SUB-ACCOUNTS.
As summarized in the Prospectus under the heading "Performance Related
Information," yields of these two Sub-Accounts will be computed by
annualizing a recent month's net investment income, divided by a Fund share's
net asset value on the last trading day of that month. Net changes in the
value of a hypothetical account will assume the change in the underlying
fund's "net asset value per share" for the same period in addition to the
daily expense charge assessed at the sub-account level for the respective
period. The Bond Fund, High Yield Fund and Mortgage Securities Fund
Sub-Accounts' yields will vary from time to time depending upon market
conditions and the composition of the underlying funds' portfolios. Yield
should also be considered relative to changes in the value of the
Sub-Accounts' shares and to the relative risks associated with the investment
objectives and policies of the Hartford Bond Fund, Hartford High Yield Fund
and Hartford Mortgage Securities Fund.
THE YIELD REFLECTS RECURRING CHARGES ON THE SEPARATE ACCOUNT LEVEL, INCLUDING
THE ANNUAL MAINTENANCE FEE.
Yield calculations of the Bond Fund and Mortgage Securities Sub-Accounts used
for illustration purposes reflect the interest earned by the Sub-Accounts,
less applicable asset based charges assessed under the Contract over the base
period. Yield quotations based on a 30 day period ended December 31, 1997
were computed by dividing the dividends and interests earned during the
period by the maximum offering price per unit on the last day of the period,
according to the following formula:
Example:
Current Yield Formula for the Sub-Account 2[((A-B)/(CD) + 1)6 - 1]
Where A = Dividends and interest earned during the period.
B = Expenses accrued for the period (net of reimbursements).
C = The average daily number of units outstanding during the period that
were entitled to receive dividends.
D = The maximum offering price per unit on the last day of the period.
BOND FUND
Yield = 4.77%
MORTGAGE SECURITIES FUND
Yield = 5.08%
The yield for the Hartford High Yield Fund is not yet available because the
Fund is new. At any time in the future, yields and total return may be higher
or lower than past yields and there can be no assurance that any historical
results will continue.
<PAGE>
6
CALCULATION OF TOTAL RETURN. As summarized in the Prospectus under the
heading "Performance Related Information," total return is a measure of the
change in value of an investment in a Sub-Account over the period covered.
The formula for total return used herein includes three steps: (1)
calculating the value of the hypothetical initial investment of $1,000 as of
the end of the period by multiplying the total number of units owned at the
end of the period by the unit value per unit on the last trading day of the
period; (2) assuming redemption at the end of the period and deducting any
applicable contingent deferred sales charge and (3) dividing this account
value for the hypothetical investor by the initial $1,000 investment and
annualizing the result for periods of less than one year. Total return will
be calculated for one year, five years and ten years or some other relevant
periods if a Sub-Account has not been in existence for at least ten years.
The following are the standardized average annual total return quotations for
the Sub-Accounts for the 1, 5, and 10 year periods ended December 31, 1997.
(These returns assume a mortality and risk expense charge of 1.50% and an
Annual Maintenance fee of $30.) No information is included for the High Yield
Fund Sub-Account because as of December 31, 1997, the Sub-Account had not
commenced operations.
<TABLE>
<CAPTION>
Since
Sub-Accounts Inception 1 Year 5 Year 10 Year
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bond Fund 5.41% 6.69% 3.17% 4.75%
Index Fund 10.38% 27.63% 15.06% 13.49%
Money Market Fund 4.05% 0.88% 0.06% 1.43%
Mortgage Securities Fund 5.33% 4.39% 2.30% 4.40%
</TABLE>
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
<PAGE>
7
return described above, except that the Annual Maintenance Fee is not
deducted. Therefore, non-standardized total return for a Sub-Account is
higher than standardized total return for a Sub-Account.
The following are the non-standardized annualized total return quotations for
the Sub-Accounts for the 1, 5, and 10 year periods ended December 31, 1997.
(These returns assume a mortality and risk expense charge of 1.50% and an
Annual Maintenance fee of $30.) No information is included for the High Yield
Fund Sub-Account because as of December 31, 1997, the Sub-Account had not
commenced operation.
<TABLE>
<CAPTION>
Since
Sub-Accounts Inception 1 Year 5 Year 10 Year
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bond Fund 7.46% 9.69% 6.06% 7.19%
Index Fund 12.83% 30.63% 17.70% 15.47%
Money Market Fund 6.05% 3.88% 3.09% 4.17%
Mortgage Securities Fund 7.44% 7.39% 5.25% 6.83%
</TABLE>
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
<PAGE>
8
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 about 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.
<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 to be filed by Amendment.
(2) Not applicable.
(3) (a) Principal Underwriter Agreement.1
(3) (b) Form of Dealer Agreement.1
(4) Form of Individual Flexible Premium Variable Annuity Contract
to be filed by Amendment.
(5) Form of Application to be filed by Amendment.
(6) (a) Certificate of Incorporation of Hartford.2
(6) (b) Bylaws of Hartford.3
(7) Not applicable.
(8) Not applicable.
(9) Opinion and Consent of Lynda Godkin, Senior Vice President,
General Counsel, and Corporate Secretary.
(10) Consent of Arthur Andersen LLP, Independent Public
Accountants to be filed by Amendment.
(11) No financial statements are omitted.
(12) Not applicable.
- -------------------------------
1 Incorporated by reference to Post Effective Amendment No. 3, to
the Registration Statement File No. 33-73570, dated
April 29, 1996.
2 Incorporated by reference to Post Effective Amendment No. 19, to
the Registration Statement File No. 33-73570, filed on
April 14, 1997.
3 Incorporated by reference to Post-Effective Amendment No. 2, to
the Registration Statement File No. 33-73570, dated May 1, 1995.
<PAGE>
(13) Not applicable.
(14) Not applicable.
(15) Copy of Power of Attorney.
(16) Organizational Chart.
Item 25. Directors and Officers of the Depositor
NAME POSITION WITH HARTFORD
Dong H. Ahn Vice President
Wendell J. Bossen Vice President
Gregory A. Boyko Senior Vice President, Director*
Peter W. Cummins Senior Vice President
Ann M. de Raismes Senior Vice President
Timothy M. Fitch Vice President and Actuary
David T. Foy Senior Vice President and Treasurer
Bruce D. Gardner Vice President
J. Richard Garrett Vice President and Assistant Treasurer
John P. Ginnetti Executive Vice President & Director of Asset
Management Services, Director*
William A. Godfrey, III Senior Vice President
Lynda Godkin Senior Vice President, General Counsel and
Corporate Secretary, Director*
Lois W. Grady Senior Vice President
Christopher Graham Vice President
Mark E. Hunt Vice President
Stephen T. Joyce Vice President
Michael D. Keeler Vice President
Robert A. Kerzner Senior Vice President
David N. Levenson Vice President
Steven M. Maher Vice President and Actuary
William B. Malchodi, Jr. Vice President
Raymond J. Marra Vice President
Thomas M. Marra Executive Vice President and Director, Individual
Life and Annuity Division, Director*
- ------------------------
<PAGE>
NAME POSITION WITH HARTFORD
Robert F. Nolan, Jr. Senior Vice President
Joseph J. Noto Vice President
Michael C. O Halloran Vice President
Daniel E. O Sullivan Vice President
Craig R. Raymond Senior Vice President and Chief Actuary
Marry P. Robinson Vice President
Donald A. Salama Vice President
Timothy P. Schiltz Vice President
Lowndes A. Smith President and Chief Executive Officer, Director*
Keith A. Stevenson Vice President
Edward A. Sweeney Vice President
Judith V. Tilbor Vice President
Raymond P. Welnicki Senior Vice President and Director, Employee
Benefit Division, Director*
Walter C. Welsh Senior Vice President
Lizabeth H. Zlatkus Senior Vice President, Director*
David M. Znamierowski Senior Vice President, Director*
Unless otherwise indicated, the principal business address of each the
above individuals is P.O. Box 2999, Hartford, CT 06104-2999.
*Denotes Board of Directors.
Item 26. Persons Controlled By or Under Common Control with the Depositor
or Registrant
Filed herewith as Exhibit 16.
Item 27. Number of Contract Owners
As of ___________, 1999, there were ____________ Contract Owners.
Item 28. Indemnification
Under Section 33-772 of the Connecticut General Statutes, unless
limited by its certificate of incorporation, the Registrant must
indemnify a director who was wholly successful, on the merits or
otherwise, in the defense of any proceeding to which he was a party
because he is or was a director of the corporation against
reasonable expenses incurred by him in connection with the
proceeding.
<PAGE>
The Registrant may indemnify an individual made a party to a
proceeding because he is or was a director against liability
incurred in the proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Registrant, and, with respect to any criminal
proceeding, had no reason to believe his conduct was unlawful.
Conn. Gen. Stat. Section 33-771(a). Additionally, pursuant to Conn.
Gen. Stat. Section 33-776, the Registrant may indemnify officers
and employees or agents for liability incurred and for any expenses
to which they becomes subject by reason of being or having been
an employees or officers of the Registrant. Connecticut law
does not prescribe standards for the indemnification
of does not prescribe standards for that their indemnification
may be broader than the right of indemnification
granted to directors.
The foregoing statements are specifically made subject to the
detailed provisions of Section 33-770 et seq.
Notwithstanding the fact that Connecticut law obligates the
Registrant to indemnify a only a director that was successful on
the merits in a suit, under Article III, Section 1 of the
Registrant's bylaws, the Registrant must indemnify both directors
and officers of the Registrant for (1) any claims and liabilities
to which they become subject by reason of being or having been
a directors or officers of the company and legal and
(2) other expenses incurred in defending against such claims,
in each case, to the extent such is consistent with statutory
provisions.
Additionally, the directors and officers of Hartford and Hartford
Securities Distribution Company, Inc. ("HSD") are covered under
a directors and officers liability insurance policy issued to
The Hartford Financial Services Group, Inc. and its subsidiaries.
Such policy will reimburse the Registrant for any payments that it
shall make to directors and officers pursuant to law and will,
subject to certain exclusions contained in the policy, further pay
any other costs, charges and expenses and settlements
and judgments arising from any proceeding involving any director or
officer of the Registrant in his past or present capacity as such,
and for which he may be liable, except as to any liabilities arising
from acts that are deemed to be uninsurable.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being
<PAGE>
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of
such issue.
Item 29. Principal Underwriters
(a) HSD acts as principal underwriter for the following investment
companies:
Hartford Life Insurance Company - Separate Account One
Hartford Life Insurance Company - Separate Account Two
Hartford Life Insurance Company - Separate Account Two
(DC Variable Account I)
Hartford Life Insurance Company - Separate Account Two
(DC Variable Account II)
Hartford Life Insurance Company - Separate Account Two
(QP Variable Account)
Hartford Life Insurance Company - Separate Account Two
(Variable Account "A")
Hartford Life Insurance Company - Separate Account Two
(NQ Variable Account)
Hartford Life Insurance Company - Putnam Capital Manager Trust
Separate Account
Hartford Life Insurance Company - Separate Account Three
Hartford Life Insurance Company - Separate Account Five
Hartford Life and Annuity Insurance Company - Separate
Account One
ITT Hartford Life and Annuity Insurance Company - Putnam
Capital Manager Trust Separate Account Two
ITT Hartford Life and Annuity Insurance Company - Separate
Account Three
ITT Hartford Life and Annuity Insurance Company - Separate
Account Five
ITT Hartford Life and Annuity Insurance Company - Separate
Account Six
American Maturity Life Insurance Company - Separate Account AMLVA
(b) Directors and Officers of HSD
Name and Principal Business Address
Positions and Offices With Underwriter
- --------------------- -----------------
Lowndes A. Smith President and Chief Executive Officer,
Director
John P. Ginnetti Executive Vice President, Director
Thomas M. Marra Executive Vice President, Director
Peter W. Cummins Senior Vice President
Lynda Godkin Senior Vice President, General Counsel
and Corporate Secretary
Donald E. Waggaman, Jr. Treasurer
George R. Jay Controller
Paul E. Olson Supervising Registered Principal
James Cubanski Assistant Secretary
Stephen T. Joyce Assistant Secretary
Glen J. Kvadus Assistant Secretary
<PAGE>
Name and Principal Business Address
Positions and Offices With Underwriter
- --------------------- -----------------
Edward M. Ryan, Jr. Assistant Secretary
Unless otherwise indicated, the principal business address of
each the above individuals is P.O. Box 2999, Hartford, CT 06104-2999.
Item 30. Location of Accounts and Records
All of the accounts, books, records or other documents required
to be kept by Section 31(a) of the Investment Company Act of 1940
and rules thereunder, are maintained by Hartford at
200 Hopmeadow Street, Simsbury, Connecticut 06089.
Item 31. Management Services
All management contracts are discussed in Part A and Part B of this
Registration Statement.
Item 32. Undertakings
(a) The Registrant hereby undertakes to file a post-effective
amendment to this Registration Statement as frequently as is
necessary to ensure that the audited financial statements in
the Registration Statement are never more than 16 months old
so long as payments under the variable annuity Contracts may
be accepted.
(b) The Registrant hereby undertakes to include either (1) as part
of any application to purchase a Contract offered by the
Prospectus, a space that an applicant can check to request a
Statement of Additional Information, or (2) a post card or
similar written communication affixed to or included in the
Prospectus that the applicant can remove to send for a
Statement of Additional Information.
(c) The Registrant hereby undertakes to deliver any Statement of
Additional Information and any financial statements required
to be made available under this Form promptly upon written or
oral request.
(d) Hartford hereby represents that the aggregate fees and charges
under the Contract are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the
risks assumed by Hartford.
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 Town of Simsbury, and State of Connecticut on this 6th day
of January, 1999.
HARTFORD LIFE INSURANCE COMPANY -
THOMSON MCKINNON SEPARATE ACCOUNT
(Registrant)
*By: Thomas M. Marra
--------------------
Thomas M. Marra, Executive Vice President
HARTFORD LIFE INSURANCE COMPANY *By: /s/ Marianne O'Doherty
(Depositor) ----------------------
Marianne O'Doherty
*By: Thomas M. Marra Attorney-in-Fact
--------------------
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 * *By: /s/ Marianne O'Doherty
----------------------
John P. Ginnetti, Executive Vice Marianne O'Doherty
President and Director, Asset Management Attorney-in-Fact
Services, Director* Dated: January 6, 1999
Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary, Director*
Thomas M. Marra, Executive Vice
President and Director, Individual Life and
Annuity Division, Director *
Lowndes A. Smith, President and
Chief Executive Officer, Director*
Raymond P. Welnicki, Senior Vice
President and Director, Employee Benefit
Division, Director *
Lizabeth H. Zlatkus, Senior Vice President,
Director *
David M. Znamierowski, Senior Vice President,
Director *
<PAGE>
EXHIBIT INDEX
(9) Opinion and Consent of Lynda Godkin, Senior Vice President,
General Counsel and Corporate Secretary.
(15) Copy of Power of Attorney.
(16) Organizational Chart.
<PAGE>
Exhibit 9
January 6, 1999 Lynda Godkin
Senior Vice President, General Counsel
& Corporate Secretary
Board of Directors
Hartford Life Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: HARTFORD LIFE INSURANCE COMPANY
THOMSON MCKINNON SEPARATE ACCOUNT
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.
<PAGE>
Board of Directors
January 6, 1999
Page 2
I hereby consent to the filing of this opinion as an exhibit to the Form N-4
registration statement for the Contracts and the Account.
Sincerely yours,
/s/ Lynda Godkin
Lynda Godkin
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
POWER OF ATTORNEY
-----------------
Gregory A. Boyko
John P. Ginnetti
Lynda Godkin
Thomas M. Marra
Lowndes A. Smith
Raymond P. Welnicki
Lizabeth H. Zlatkus
David M. Znamierowski
do hereby jointly and severally authorize Lynda Godkin, Marianne O'Doherty,
and Leslie T. Soler to sign as their agent, any Registration Statement,
pre-effective amendment, post-effective amendment and any application for
exemptive relief of the Hartford Life Insurance Company and Hartford Life and
Accident Insurance Company under the Securities Act of 1933 and/or the
Investment Company Act of 1940.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for
the purpose herein set forth.
/s/ Gregory A. Boyko Dated as of March 16, 1998
- --------------------------------------- --------------------------
Gregory A. Boyko
/s/ John P. Ginnetti Dated as of March 16, 1998
- --------------------------------------- --------------------------
John P. Ginnetti
/s/ Lynda Godkin Dated as of March 16, 1998
- --------------------------------------- --------------------------
Lynda Godkin
/s/ Thomas M. Marra Dated as of March 16, 1998
- --------------------------------------- --------------------------
Thomas M. Marra
/s/ Lowndes A. Smith Dated as of March 16, 1998
- --------------------------------------- --------------------------
Lowndes A. Smith
/s/ Raymond P. Welnicki Dated as of March 16, 1998
- --------------------------------------- --------------------------
Raymond P. Welnicki
/s/ Lizabeth H. Zlatkus Dated as of March 16, 1998
- --------------------------------------- --------------------------
Lizabeth H. Zlatkus
/s/ David M. Znamierowski Dated as of March 16, 1998
- --------------------------------------- --------------------------
David M. Znamierowski
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
THE HARTFORD
The Hartford Financial Services Group, Inc.
(Delaware)
|
- -------------------------------------------------------------------------------------------------------------
Nutmeg Insurance Company The Hartford Investment
(Connecticut) Management Company
| (Delaware)
Hartford Fire Insurance Company |
(Connecticut) Hartford Investment
| Services, Inc.
Hartford Accident and Indemnity Company (Connecticut)
(Connecticut)
|
Hartford Life, Inc.
(Delaware)
|
Hartford Life and Accident Insurance Company
(Connecticut)
|
|
|
- -------------------------------------------------------------------------------------------------------------
Alpine Life Hartford Financial Hartford Life American Maturity ITT Hartford Canada
Insurance Services Life Insurance Company Life Insurance Holdings, Inc.
Company Insurance Co. (Connecticut) Company (Canada)
(New Jersey) (Connecticut) | (Connecticut) |
| | |
| AML Financial, Inc. |
| (Connecticut) Hartford Life
| Insurance Company
| of Canada
| (Canada)
|
|
- -------------------------------------------------------------------------------------------------------------
Hartford Life and Annuity ITT Hartford International Hartford Financial Services Royal Life
Insurance Company Life Reassurance Corporation Corporation Insurance
(Connecticut) (Connecticut) (Delaware) Company of
| | America
| | (Connecticut)
| |
ITT Hartford Life, Ltd. |
(Bermuda) |
|
|
- -------------------------------------------------------------------------------------------------------------
MS Fund HL Funding HL Investment Hartford Hartford Securities Hartford-Comp. Emp.
America Company, Inc. Advisors, Inc. Equity Sales Distribution Benefit Service
1993-K, Inc. (Connecticut) (Connecticut) Company, Inc. Company, Inc. Company
(Delaware) | (Connecticut) (Connecticut) (Connecticut)
|
Hartford Investment
Financial Services
Company
(Delaware)
</TABLE>
