<PAGE>
File No. 33-73566
Securities and Exchange Commission
Washington, D.C.
Form N-4
Registration Statement Under the Securities Act of 1933
---------
Pre-Effective Amendment No. / /
-------- ---
Post-Effective Amendment No. 2 / X /
-------- ---
and/or
Registration Statement Under the Investment Company Act of 1940
Amendment No. 2
------
(check appropriate box or boxes)
Hartford Life Insurance Company -
Putnam Capital Manager Trust 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)
Depositor's Telephone Number: (203) 843-8847
Rodney Vessels, Esquire
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 this Registration
Statement.
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) of Rule 485
----
X on (May 1, 1995) pursuant to paragraph (b)(1)(v) of Rule 485
----
60 days after filing pursuant to paragraph (a)(1) of Rule 485
----
on May 1, 1995 pursuant to paragraph (a)(1) of Rule 485
----
75 days after filing pursuant to paragraph (a)(2) of Rule 485
----
on _____ pursuant to paragraph (a)(2) of Rule 485
----
<PAGE>
2
Calculation of Registration Fee Under Securities Act of 1933
- - --------------------------------------------------------------------------------
Title of Amount Proposed Maximum Proposed Maximum Amount of
Securities Being Offering Aggregate Registration
Being Requested Registered Price Per Unit Offering Price Fee
- - --------------------------------------------------------------------------------
PAID
Hartford Life Insurance Company - Pursuant to Regulation 270. 24f-2
Putnam Capital Manager Trust under the Investment Company Act
Separate Account Units of Interest of 1940, Registrant hereby elects to
register an indefinite number of units of
interest in this Separate Account.
- - --------------------------------------------------------------------------------
The Rule 24f-2 Notice for the Registrant's most recent fiscal year will be filed
on or about February 28, 1995.
<PAGE>
3
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(A)
N-4 Item No. Prospectus Heading
- - ----------------------------- -------------------------------
1. Cover Page Cover Page
2. Definitions Glossary of Special Terms
3. Synopsis or Highlights Summary
4. Condensed Financial Information Statement of Additional
Information
5. General Description of Registrant, The Contract; The Separate
Depositor, and Portfolio Companies Account; The Fixed Account; The
Company; The Funds; General
Matters
6. Deductions Charges Under the Contract
7. General Description of Operation of the Contract
Annuity Contracts Accumulation Period; Death
Benefit; The Contract;
The Separate Account; General
Matters
8. Annuity Period Annuity/Payout Period
9. Death Benefit Death Benefit
10. Purchases and Contract Value Operation of the Contract/
Accumulation Period
11. Redemptions Operation of the Contract/
Accumulation Period
12. Taxes Federal Tax Considerations
13. Legal Proceedings General Matters - Legal
Proceedings
14. Table of Contents of the Statement Table of Contents
of Additional Information
<PAGE>
4
HARTFORD LIFE INSURANCE COMPANY--
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT
This Prospectus describes the Putnam Capital Manager Plan, a tax deferred
variable annuity issued by Hartford Life Insurance Company ("HL"). Payments for
the Contract will be held in a series of Hartford Life Insurance Company -
Putnam Capital Manager Trust Separate Account (the "Putnam Separate Account" or
the "Separate Account"). Allocations to and transfers to and from the Fixed
Account are not permitted in certain states.
There are currently eleven Sub-Accounts available under the Contract. The
underlying investment portfolios ("Funds") of Putnam Capital Manager Trust for
the Sub-Accounts are PCM Asia Pacific Growth Fund, PCM Diversified Income Fund,
PCM Global Asset Allocation Fund, PCM Global Growth Fund, PCM Growth and Income
Fund, PCM High Yield Fund, PCM Money Market Fund, PCM New Opportunities Fund,
PCM U.S. Government and High Quality Bond Fund, PCM Utilities Growth and Income
Fund and PCM Voyager Fund.
This Prospectus sets forth the information concerning the Separate Account and
the Fixed Account that investors should know before investing. This Prospectus
should be kept for future reference. Additional information about the Separate
Account and the Fixed Account has been filed with the Securities and Exchange
Commission and is available without charge upon request. To obtain the
Statement of Additional Information send a written request to Hartford Life
Insurance Company, Attn: Individual Annuity Operations, P.O. Box 5085,
Hartford, CT 06102-5085. The Table of Contents for the Statement of Additional
Information may be found on page ___ of this Prospectus. The Statement of
Additional Information is incorporated by reference into this Prospectus.
- - --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- - --------------------------------------------------------------------------------
THIS PROSPECTUS IS ACCOMPANIED BY A CURRENT PROSPECTUS FOR PUTNAM CAPITAL
MANAGER TRUST AND IS VALID ONLY WHEN ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE
TRUST.
- - --------------------------------------------------------------------------------
VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR
GUARANTEED BY, ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE PROTECTED
BY THE FDIC, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY; THEY ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
- - --------------------------------------------------------------------------------
Prospectus Dated: May 1, 1995
---------------------
Statement of Additional Information Dated: May 1, 1995
-------------------
<PAGE>
5
GLOSSARY OF SPECIAL TERMS
ACCUMULATION UNIT: An accounting unit of measure used to calculate values
before Annuity payments begin.
ANNUAL WITHDRAWAL AMOUNT: The amount which can be withdrawn in any Contract
year prior to incurring surrender charges.
ANNUITANT: The person or Participant upon whose life the Contract is issued.
ANNUITY: A series of payments for life, or for life with a minimum number of
payments or a determinable sum guaranteed, or for a joint lifetime and
thereafter during the lifetime of the survivor, or for a designated period.
ANNUITY COMMENCEMENT DATE: The date on which Annuity payments are to commence.
For group unallocated Contracts, the date for each Participant is determined by
the Contract Owner in accordance with the terms of the Plan.
ANNUITY UNIT: An accounting unit of measure used to calculate the value of
Annuity payments.
BENEFICIARY: The person(s) who receive Contract Values in the event of the
Annuitant's or Contract Owner's death under certain conditions. Under a group
unallocated Contract, the person named within the Plan documents/enrollment
forms by each Participant entitled to receive benefits as per the terms of the
Contract in case of the death of the Participant.
CODE: The Internal Revenue Code of 1986, as amended.
COMMISSION: Securities and Exchange Commission.
CONTINGENT ANNUITANT: The person so designated by the Contract Owner, who upon
the Annuitant's death, prior to the Annuity Commencement Date, becomes the
Annuitant.
CONTRACT ANNIVERSARY: The anniversary of the Contract Date.
CONTRACT OWNER(S): The owner(s) of the Contract, trustee or other entity,
sometimes herein referred to as "you".
CONTRACT VALUE: The aggregate value of any Sub-Account Accumulation Units held
under the Contract plus the value of the Fixed Account.
CONTRACT YEAR: A period of 12 months commencing with the Contract Date or any
anniversary thereof.
<PAGE>
6
FIXED ACCOUNT: Part of the General Account of HL to which a Contract Owner may
allocate all or a portion of his Premium Payment or Contract Value.
DEATH BENEFIT: The amount payable upon the death of a Contract Owner,
Annuitant, or Participant, in the case of group Contracts, before annuity
payments have started.
FIXED ANNUITY: An Annuity providing for guaranteed payments which remain fixed
in amount throughout the payment period and which do not vary with the
investment experience of a separate account.
FUNDS: Currently, the portfolios of Putnam Capital Manager Trust described on
page ___ of this Prospectus.
GENERAL ACCOUNT: The General Account of HL which consists of all assets of
Hartford Life Insurance Company other than those allocated to the separate
accounts of the Hartford Life Insurance Company.
HL: Hartford Life Insurance Company.
HOME OFFICE OF THE COMPANY: Currently located at 200 Hopmeadow Street,
Simsbury, Connecticut. All correspondence concerning the Contract should be
sent to P.O. Box 5085, Hartford, CT 06102-5085, Attn: Individual Annuity
Operations.
MAXIMUM ANNIVERSARY VALUE: A value used in determining the death benefit. It
is based on a series of calculations of Contract Values on Contract
Anniversaries, premium payments and partial surrenders, as described on page
___.
MINIMUM DEATH BENEFIT: The minimum amount payable upon the death of the
Contract Owner/Annuitant or Participant in the case of group Contracts before
annuity payments have commenced.
PARTICIPANT: (For Group Unallocated Contracts Only). Any eligible employee of
an employer/Contract Owner participating in the Plan.
PLAN: A voluntary Plan of an Employer which qualifies for special tax treatment
under a section of the Internal Revenue Code.
PREMIUM PAYMENT: A payment made to HL pursuant to the terms of the Contract.
<PAGE>
7
PREMIUM TAX: A tax charged by a state or municipality on Premium Payments or
Contract Values.
SEPARATE ACCOUNT: The HL separate account entitled "Hartford Life Insurance
Company - Putnam Capital Manager Trust Separate Account".
SUB-ACCOUNT: Accounts established within the Separate Account with respect to a
Fund.
TERMINATION VALUE: The Contract Value upon termination of the Contract prior to
the Annuity Commencement Date, less any applicable Premium Taxes, the Annual
Maintenance Fee and any applicable contingent deferred sales charges.
TRUST: Putnam Capital Manager Trust.
UNALLOCATED CONTRACTS: Contracts issued to employers or such other entities as
Contract Owners with no allocation to a specific Participant, as defined herein.
The Plans will be responsible for the individual allocations.
VALUATION DAY: Every day the New York Stock Exchange is open for trading. The
value of the Separate Account is determined at the close of the New York Stock
Exchange (currently 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
VARIABLE ANNUITY: An Annuity providing for payments varying in amount in
accordance with the investment experience of the assets of the Separate Account.
<PAGE>
8
TABLE OF CONTENTS PAGE
GLOSSARY OF SPECIAL TERMS. . . . . . . . . . . . . . . . . . . . . . . . .
FEE TABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ACCUMULATION UNIT VALUES . . . . . . . . . . . . . . . . . . . . . . . . .
PERFORMANCE RELATED INFORMATION. . . . . . . . . . . . . . . . . . . . . .
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right to Cancel Period . . . . . . . . . . . . . . . . . . . . . . .
THE SEPARATE ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE FIXED ACCOUNT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OPERATION OF THE CONTRACT/ACCUMULATION PERIOD. . . . . . . . . . . . . . .
Premium Payments. . . . . . . . . . . . . . . . . . . . . . . . . . .
Value of Accumulation Units . . . . . . . . . . . . . . . . . . . . .
Value of the Fixed Account. . . . . . . . . . . . . . . . . . . . . .
Value of the Contract . . . . . . . . . . . . . . . . . . . . . . . .
Transfers Among Sub-Accounts. . . . . . . . . . . . . . . . . . . . .
Transfers Between the Fixed Account and the Sub-Accounts. . . . . . .
Redemption/Surrender of a Contract. . . . . . . . . . . . . . . . . .
DEATH BENEFIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHARGES UNDER THE CONTRACT . . . . . . . . . . . . . . . . . . . . . . . .
Contingent Deferred Sales Charges . . . . . . . . . . . . . . . . . .
During the First Seven Contract Years . . . . . . . . . . . . . . . .
After the Seventh Contract Year . . . . . . . . . . . . . . . . . . .
Mortality and Expense Risk Charge . . . . . . . . . . . . . . . . . .
Administration and Maintenance Fees . . . . . . . . . . . . . . . . .
Premium Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
9
ANNUITY BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annuity Options . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Annuity Unit and Valuation. . . . . . . . . . . . . . . . . . . .
Determination of Payment Amount . . . . . . . . . . . . . . . . . . .
FEDERAL TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxation of HL and the Separate Account . . . . . . . . . . . . . . .
Taxation of Annuities in General - Non-Tax Qualified Purchasers . . .
Federal Income Tax Withholding. . . . . . . . . . . . . . . . . . . .
General Provisions Affecting Qualified Retirement Plans . . . . . . .
Aggregation of Two or More Annuity Contracts. . . . . . . . . . . . .
GENERAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Modification. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Delay of Payments . . . . . . . . . . . . . . . . . . . . . . . . . .
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution of the Contracts . . . . . . . . . . . . . . . . . . . .
Other Contracts Offered . . . . . . . . . . . . . . . . . . . . . . .
Custodian of Separate Account Assets. . . . . . . . . . . . . . . . .
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional Information. . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TABLE OF CONTENTS TO STATEMENT OF ADDITIONAL INFORMATION . . . . . . . . .
<PAGE>
Prospectus- Putnam-New (After May 1, 1994)
SUMMARY
Contract Owner Transaction Expense
(All Sub Accounts)
<TABLE>
<S> <C>
Sales Load imposed on Purchases (as a percentage of premium payments). None
Exchange Fee.......................................................... $0
Deferred Sales Load (as a percentage of amounts withdrawn)
First Year (1)................................................... 6%
Second Year...................................................... 6%
Third Year....................................................... 5%
Fourth Year...................................................... 5%
Fifth Year....................................................... 4%
Sixth Year....................................................... 3%
Seventh Year..................................................... 2%
Eighth Year...................................................... 0%
Annual Contract Fee................................................... $30(2)
</TABLE>
<TABLE>
<S> <C>
Annual Expenses-Separate Account
(as a percentage of average account value)
Mortality and Expense Risk 1.250%
Administration Fees 0.150%
-----
Total 1.400%
</TABLE>
Annual Fund Operating Expense
(as a percentage of net assets)
<TABLE>
<CAPTION>
Total Fund
Management Other Operating
Fees Expenses Expenses
---------- -------- ----------
<S> <C> <C> <C>
PCM Growth and Income Fund..................... 0.57% 0.50% 0.62%
PCM High Yield Fund............................ 0.66% 0.08% 0.74%
PCM Global Growth Fund......................... 0.60% 0.17% 0.77%
PCM Money Market Fund.......................... 0.42% 0.13% 0.55%
PCM Global Asset Allocation Fund............... 0.66% 0.10% 0.76%
PCM U.S. Government and High Quality Bond Fund. 0.60% 0.07% 0.67%
PCM Utilities Growth and Income Fund........... 0.60% 0.08% 0.68%
PCM Voyager Fund............................... 0.63% 0.08% 0.71%
PCM Diversified Income Fund.................... 0.67% 0.13% 0.80%
PCM New Opportunities Fund (3)................. 0.70% 0.01% 0.71%
<FN>
(1) Length of time from premium payment.
(2) The annual contract fee is a single $30 charge on a Contract. It is deducted
proportionately from the investment options in use at the time of the charge.
In the Example, the annual contract fee is approximated as a 0.08% annual asset
charge based on the experience of the Contracts.
(3) Annualized expenses.
</TABLE>
<PAGE>
EXAMPLE
<TABLE>
<CAPTION>
If you surrender your contract If you annuitize at the end If you do not surrender your
at the end of the applicable of the applicable time period your contract:
time period: You would pay the following You would pay the following
You would pay the following expenes on a $1,000 investment, expenses on a $1,000 investment,
expenses on a $1,000 assuming a 5% annual return on assuming a 5% annual return on
investment, assuming a 5% assets: assets:
annual return on assets:
------------------------------- ---------------------------------- -------------------------------
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
------ ------- ------- -------- ------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PCM Growth and Income Fund... $82 $116 $154 $245 $21 $66 $113 $244 $22 $66 $114 $245
PCM High Yield Fund.......... 83 120 160 258 22 69 119 257 23 70 120 258
PCM Global Growth Fund....... 83 121 162 261 22 70 121 260 23 71 122 261
PCM Money Market Fund........ 81 114 150 238 20 63 109 237 21 64 110 238
PCM Global Asset Allocation
Fund........................ 83 121 161 260 22 70 120 259 23 71 121 260
PCM U.S. Government and
High Quality Bond Fund....... 82 118 157 250 21 67 116 249 22 68 117 250
PCM Utilities Growth and
Income Fund.................. 82 118 157 251 21 67 116 250 22 68 117 251
PCM Voyager Fund............. 82 119 159 254 22 68 118 253 22 69 119 254
PCM Diversified Income Fund.. 83 122 163 264 23 71 122 263 23 72 123 264
PCM New Opportunities
Fund........................ 82 119 169 254 22 68 118 253 22 69 119 254
<FN>
The purpose of this table is to assist the contract owner in understanding
various costs and expenses that a contract owner will bear directly or
indirectly. The table reflects expenses of the Separate Account and
underlying Funds. Premium taxes may also be applicable.
This EXAMPLE should not be considered a representation of passed or
future expenses and actual expenses may be greater or less than those shown.
</TABLE>
<PAGE>
10
SUMMARY
WHAT IS THE CONTRACT AND HOW MAY I PURCHASE ONE?
The Contract offered is a tax deferred Variable Annuity Contract (see "Taxation
of Annuities in General," page ___ ). Generally, the Contract is purchased by
completing an application or an order to purchase a Contract and submitting it,
along with the initial Premium Payments, to HL for its approval. The minimum
initial Premium Payment is $1,000 with a minimum allocation to any Fund of $500.
Certain plans may make smaller initial and subsequent periodic premium payments.
Subsequent Premium Payments, if made, must be a minimum of $500. A Contract
Owner may, at any time within 10 days of delivery of a Contract sold hereunder,
return the Contract to HL at its Home Office and the value of the Contract
(without deduction for any charges normally assessed thereunder) will be
refunded. The Contract Owner bears the investment risk during the period prior
to the Company's receipt of request for cancellation, except for Contract Owners
in Georgia, North Carolina, South Carolina, Washington, West Virginia, Utah, and
other states where required by law who will be refunded the premiums (see "Right
to Cancel Period," page ___ ).
WHO MAY PURCHASE THE CONTRACT?
Any individual, group or trust may purchase the Contracts, including any trustee
or custodian for a retirement plan which qualifies for special Federal tax
treatment under the Internal Revenue Code, including individual retirement
annuities. (See "Federal Tax Considerations" commencing on page ____ and
Appendix I commencing on page ___ .)
WHAT TYPES OF INVESTMENTS ARE AVAILABLE UNDER THE CONTRACT?
The underlying investments for the Contract are shares of Putnam Capital Manager
Trust, an open-end diversified series investment company with multiple
portfolios ("the Funds") as follows: PCM Asia Pacific Growth Fund, PCM
Diversified Income Fund, PCM Global Asset Allocation Fund, PCM Global Growth
Fund, PCM Growth and Income Fund, PCM High Yield Fund, PCM Money Market Fund,
PCM New Opportunities Fund, PCM U.S. Government and High Quality Bond Fund, PCM
Utilities Growth and Income Fund, PCM Voyager Fund, and such other Funds as
shall be offered from time to time, and the Fixed Account, or a combination of
the Funds and the Fixed Account. (See "The Funds" commencing on page _____ and
"The Fixed Account" commencing on page ___.)
<PAGE>
11
WHAT ARE THE CHARGES UNDER THE CONTRACTS?
SALES EXPENSES
There is no deduction for sales expenses from Premium Payments when made.
However, a contingent deferred sales charge may be assessed against Contract
Values when they are surrendered. (See "Contingent Deferred Sales Charges"
commencing on page ____.)
The length of time from receipt of a Premium Payment to the time of surrender
determines the contingent deferred sales charge. For this purpose, Premium
Payments will be deemed to be surrendered in the order in which they are
received and all surrenders will be first from Premium Payments and then from
other Contract values. The charge is a percentage of the amount withdrawn (not
to exceed the aggregate amount of the Premium Payments made). The charge is as
follows:
Length of Time
Charge from Premium Payment
------ --------------------
(Number of Years)
6% 1
6% 2
5% 3
5% 4
4% 5
3% 6
2% 7
0% 8 or more
No contingent deferred sales charge will be assessed in the event of death of
the Annuitant or Contract Owner, or upon the exercise of the withdrawal
privilege or if Contract Values are applied to an Annuity option provided for
under the Contract (except that a surrender out of Annuity Option Four will be
subject to a contingent deferred sales charge where applicable). (See
"Contingent Deferred Sales Charges" commencing on page ____.)
FREE WITHDRAWAL PRIVILEGE
Withdrawals of up to 10% per Contract Year, on a noncumulative basis, of the
Premium Payments made to a Contract may be made without the imposition of the
contingent deferred sales charge during the first seven Contract years. (See
"Contingent Deferred Sales Charges" commencing on page ____.) Certain plans or
programs may have different withdrawal privileges.
<PAGE>
12
MORTALITY AND EXPENSE RISKS
For assuming the mortality and expense risks under the Contract, HL will impose
a 1.25% per annum charge against all Contract Values held in the Sub-Accounts,
(See "Mortality and Expense Risk Charge," page ____.)
ANNUAL ADMINISTRATION AND MAINTENANCE FEE
The Contract provides for administration and Contract maintenance charges. For
administration, the charge is .15% per annum against all Contract Values held in
the Separate Account. For Contract maintenance, the charge is $30 annually.
(See "Administration and Maintenance Fees," page ____.) Contracts with a
Contract Value of $50,000 or more at time of Contract Anniversary will not be
assessed this fee.
PREMIUM TAXES
A deduction will be made for Premium Taxes for Contracts sold in certain states.
(See "Premium Taxes," page ____.)
CHARGES BY THE FUNDS
The Funds are subject to certain fees, charges and expenses. (See the
Prospectus for the Trust attached hereto.)
CAN I GET MY MONEY IF I NEED IT?
Subject to any applicable charges, the Contract may be surrendered, or portions
of the value of such Contract may be withdrawn, at any time prior to the Annuity
Commencement Date. However, if less than $500 remains in a Contract as a result
of a withdrawal, HL may terminate the Contract in its entirety. (See
"Redemption/Surrender of a Contract," page ____.)
DOES THE CONTRACT PAY ANY DEATH BENEFITS?
A Minimum Death Benefit is provided in the event of death of the Annuitant or
Contract Owner or Joint Contract Owner before Annuity payments have commenced.
(See "Death Benefit," page ____.)
WHAT ARE THE AVAILABLE ANNUITY OPTIONS UNDER THE CONTRACT?
There are five available Annuity options under the Contract which are described
on page ____. The Annuity Commencement Date may not be deferred beyond the
Annuitant's 90th birthday except in certain states where the Annuity
Commencement Date may not be deferred beyond the Annuitant's 85th birthday. If
<PAGE>
13
a Contract Owner does not elect otherwise, the Contract Value less applicable
premium taxes will be applied on the Annuity Commencement Date under the second
option to provide a life annuity with 120 monthly payments certain.
DOES THE CONTRACT OWNER HAVE ANY VOTING RIGHTS UNDER THE CONTRACT?
Contract Owners will have the right to vote on matters affecting an underlying
Fund to the extent that proxies are solicited by such Fund. If a Contract Owner
does not vote, HL shall vote such interests in the same proportion as shares of
the Fund for which instructions have been received by HL. (See "Voting Rights,"
page ____.)
PERFORMANCE RELATED INFORMATION
The Separate Account may advertise certain performance related information
concerning its Sub-Accounts. Performance information about a Sub-Account is
based on the Sub-Account's past performance only and is no indication of future
performance.
The PCM Asia Pacific Growth Fund, PCM Diversified Income Fund, PCM Global
Asset Allocation Fund, PCM Global Growth Fund, PCM Growth and Income Fund,
PCM High Yield Fund, PCM Money Market Fund, PCM New Opportunities Fund,
PCM U.S. Government and High Quality Bond Fund, and PCM Voyager Fund
Sub-Accounts may include total return in advertisements or other sales
material.
When a Sub-Account advertises its total return, it will usually be calculated
for one year, five years, and ten years or some other relevant periods if the
Sub-Account has not been in existence for at least ten years. Total return is
measured by comparing the value of an investment in the Sub-Account at the
beginning of the relevant period to the value of the investment at the end of
the period (assuming the deduction of any contingent deferred sales charge which
would be payable if the investment were redeemed at the end of the period).
The PCM Diversified Income Fund, PCM Growth and Income Fund, PCM High Yield Fund
and PCM U.S. Government and High Quality Bond 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
Contract Maintenance Fee.
The PCM Money Market Fund Sub-Account may advertise yield and effective yield.
The yield of a Sub-Account is based upon the income earned by the Sub-Account
over a seven-day period and then annualized, i.e. the income earned in the
period is assumed to be earned every seven days over a 52-week period and stated
as a percentage of the investment. Effective yield is calculated similarly but
when annualized, the income earned by the investment is assumed to be
<PAGE>
ACCUMULATION UNIT VALUES
(For an accumulation unit outstanding throughout the period)
The following information has been examined by Arthur Andersen & Co.,
independent public accountants, whose report thereon is included in the
Statement of Additional Information, which is incorporated by reference to
this Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Voyager Fund Sub-Account
Accumulation unit value at beginning of period..$ 23.530 $ 20.1 $ 18.472 $ 12.822 $ 13.272 $ 10.170 $ 10.000(a)
Accumulation unit value at end of period........$ 23.445 $ 23.530 $ 20.102 $ 18.472 $ 12.822 $ 13.272 $ 10.170
Number accumulation units outstanding at end
of period (in thousands)........................ 29,315 21,915 14,667 8,419 3,714 2,968 762
Growth and Income Fund Sub-Account
Accumulation unit value at beginning of period..$ 20.390 $ 18.1 $ 16.720 $ 14.243 $ 14.166 $ 11.848 $ 10.000(a)
Accumulation unit value at end of period........$ 20.178 $ 20.390 $ 18.096 $ 16.720 $ 14.243 $ 14.166 $ 11.848
Number accumulation units outstanding at end
of period (in thousands)........................ 67,016 53,464 32,856 19,420 10,888 7,037 2,187
Global Asset Allocation Sub-Account
Accumulation unit value at beginning of period..$ 16.988 $ 14.67 $ 13.992 $ 11.922 $ 12.068 $ 10.545 $ 10.000(a)
Accumulation unit value at end of period........$ 16.335 $ 16.99 $ 14.665 $ 13.992 $ 11.922 $ 12.068 $ 10.545
Number accumulation units outstanding at end
of period (in thousands)........................ 16,507 12,914 8,580 5,829 4,300 3,293 2,274
High Yield Fund Sub-Account
Accumulation unit value at beginning of period..$ 17.890 $ 15.17 $ 12.932 $ 9.055 $ 10.200 $ 10.624 $ 10.000(a)
Accumulation unit value at end of period........$ 17.476 $ 17.890 $ 15.173 $ 12.932 $ 9.055 $ 10.200 $ 10.624
Number accumulation units outstanding at end
of period (in thousands)........................ 11,462 11,174 7,076 3,296 2,072 2,680 1,822
U.S. Government and High Quality Bond Fund
Sub-Account
Accumulation unit value at beginning of period..$ 16.277 $ 14.83 $ 13.994 $ 12.100 $ 11.414 $ 10.150 $ 10.000(a)
Accumulation unit value at end of period........$ 15.533 $ 16.28 $ 14.833 $ 13.994 $ 12.100 $ 11.414 $ 10.150
Number accumulation units outstanding at end
of period (in thousands)........................ 33,516 37,806 27,611 16,368 8,107 5,399 2,786
Money Market Fund Sub-Account
Accumulation unit value at beginning of period..$ 1.294 $ 1.277 $ 1.250 $ 1.197 $ 1.124 $ 1.045 $ 1.000(a)
Accumulation unit value at end of period........$ 1.325 $ 1.294 $ 1.277 $ 1.250 $ 1.197 $ 1.124 $ 1.045
Number accumulation units outstanding at end
of period (in thousands)........................ 144,950 86,677 80,182 62,638 64,849 21,986 13,212
Global Growth Fund Sub-Account
Accumulation unit value at beginning of period..$ 13.432 $ 10.29 $ 10.472 $ 9.233 $ 10.000(b) -- --
Accumulation unit value at end of period........$ 13.119 $ 13.43 $ 10.289 $ 10.472 $ 9.233 -- --
Number accumulation units outstanding at end
of period (in thousands)........................ 30,285 17,711 7,638 3,800 1,405 -- --
Utilities Growth and Income Fund Sub-Account
Accumulation unit value at beginning of period..$ 11.876 $ 10.62 $ 10.000(c) -- -- -- --
Accumulation unit value at end of period........$ 10.889 $ 11.88 $ 10.618 -- -- -- --
Number accumulation units outstanding at end
of period (in thousands)........................ 23,090 26,176 5,956 -- -- -- --
Diversified Income Fund Sub-Account
Accumulation unit value at beginning of period..$ 10.188 $ 10.000(d) -- -- -- -- --
Accumulation unit value at end of period........$ 9.622 $ 10.188 -- -- -- -- --
Number accumulation units outstanding at end
of period (in thousands)........................ 13,403 4,428 -- -- -- -- --
New Opportunities Fund Sub-Account
Accumulation unit value at beginning of period..$ 10.000(a) -- -- -- -- -- --
Accumulation unit value at end of period........$ 10,718 -- -- -- -- -- --
Number accumulation units outstanding at end
of period (in thousands)........................ 3,681 -- -- -- -- -- --
<FN>
(a) Inception date, February 1, 1988.
(b) Inception date, May 1, 1990.
(c) Inception date, May 1, 1992.
(d) Inception date, September 15, 1993.
(e) Inception date, June 20, 1994.
</TABLE>
<PAGE>
14
reinvested in Sub-Account units and thus compounded in the course of a 52-week
period. Yield reflects the recurring charges at the Separate Account level
including the Contract Maintenance Fee.
Total return at the Separate Account level includes all Contract charges: sales
charges, mortality and expense risk charges, and the Contract Maintenance Fee,
and is therefore lower than total return at the Fund level, with no comparable
charges. Likewise, yield at the Separate Account level includes all recurring
charges (except sales charges), and is therefore lower than yield at the Fund
level, with no comparable charges.
INTRODUCTION
This Prospectus has been designed to provide you with the necessary information
to make a decision on purchasing a tax deferred Variable Annuity Contract
offered by HL and funded by the Fixed Account and/or a series of the Putnam
Separate Account. Please read the Glossary of Special Terms on pages 2 and 3
prior to reading this Prospectus to familiarize yourself with the terms being
used.
THE CONTRACT
The Putnam Capital Manager Plan is a tax deferred Variable Annuity Contract.
Payments for the Contract will be held in the Fixed Account and/or a series of
the Putnam Separate Account. Initially there are no deductions from your
Premium Payments (except for Premium Taxes, if applicable) so your entire
Premium Payment is put to work in the investment Sub-Account(s) of your choice
or the Fixed Account. Each Sub-Account invests in a different underlying Fund
with its own distinct investment objectives. You pick the Sub-Account(s) with
the investment objectives that meet your needs. You may select one or more
Sub-Accounts and/or the Fixed Account and determine the percentage of your
Premium Payment that is put into a Sub-Account or the Fixed Account. You may
also transfer assets among the Sub-Accounts and the Fixed Account so that your
investment program meets your specific needs over time. There are minimum
requirements for investing in each Sub-Account and the Fixed Account which are
described later in this Prospectus. In addition, there are certain other
limitations on withdrawals and transfers of amounts in the Sub-Accounts and the
Fixed Account as described in this Prospectus. See "Charges Under the Contract"
for a description of the charges for redeeming a Contract and other charges made
under the Contract.
Generally, the Contract contains the five optional forms of Annuity described
later in this Prospectus. Options 2, 4 and 5 are available with respect 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 HL.
<PAGE>
15
The Contract Owner may select an Annuity Commencement Date and an Annuity option
which may be on a fixed or variable basis, or a combination thereof. The
Annuity Commencement Date may not be deferred beyond the Annuitant's 90th
birthday except in certain states where the Annuity Commencement Date may not be
deferred beyond the Annuitant's 85th birthday.
The Annuity Commencement Date and/or the Annuity option may be changed from time
to time, but any such change must be made at least 30 days prior to the date on
which payments are scheduled to begin. If you do not elect otherwise, payments
will begin at the Annuitant's age 90 under Option 2 with 120 monthly payments
certain (Option 1 for Contracts issued in Texas).
When an Annuity is effected under a Contract, unless otherwise specified,
Contract Values held in the Sub-Accounts will be applied to provide a Variable
Annuity based on the pro rata amount in the various Sub-Accounts. Fixed Account
Contract Values will be applied to provide a Fixed Annuity. Variable Annuity
payments will vary in accordance with the investment performance of the
Sub-Accounts you have selected. The Contract allows the Contract Owner to
change the Sub-Accounts on which variable payments are based after payments have
commenced once every three (3) months. Any Fixed Annuity allocation may not be
changed.
The Contract offered under this Prospectus may be purchased by any individual
("Non-Qualified Contract") or by an individual, trustee or custodian for a
retirement plan qualified under Sections 401(a) or 403(a) of the Internal
Revenue Code; annuity purchase plans adopted by public school systems and
certain tax-exempt organizations according to Section 403(b) of the Internal
Revenue Code; Individual Retirement Annuities adopted according to Section 408
of the Internal Revenue Code; employee pension plans established for employees
by a state, a political subdivision of a state, or an agency or instrumentality
of either a state or a political subdivision of a state, and certain eligible
deferred compensation plans as defined in Section 457 of the Internal Revenue
Code ("Qualified Contracts").
RIGHT TO CANCEL PERIOD
If you are not satisfied with your purchase you may surrender the Contract by
returning it within ten days (or longer in some states) after you receive it. A
written request for cancellation must accompany the Contract. In such event, HL
will, without deduction for any charges normally assessed thereunder, pay you an
amount equal to the sum of (i) the difference between the Premium Payment and
the amounts allocated to the Sub-Account(s) and/or the Fixed Account under the
Contract and (ii) the Contract Value on the date of surrender attributable to
the amounts so allocated. You bear the investment risk during the period prior
to the Company's receipt of request for cancellation. HL 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.
<PAGE>
16
THE SEPARATE ACCOUNT
The Separate Account was established on June 22, 1987, in accordance with
authorization by the Board of Directors of HL. It is the Separate Account in
which HL sets aside and invests the assets attributable to variable annuity
Contracts, including the Contracts sold under this Prospectus. Although the
Separate Account is an integral part of HL, it is registered as a unit
investment trust under the Investment Company Act of 1940. This registration
does not, however, involve supervision by the Commission of the management or
the investment practices or policies of the Separate Account or HL. The
Separate Account meets the definition of "separate account" under federal
securities law.
Under Connecticut law, the assets of the Separate Account attributable to the
Contracts offered under this Prospectus are held for the benefit of the owners
of, and the persons entitled to payments under, those Contracts. Income, gains,
and losses, whether or not realized, from assets allocated to the Separate
Account, are, in accordance with the Contracts, credited to or charged against
the Separate Account. Also, the assets in the Separate Account are not
chargeable with liabilities arising out of any other business HL may conduct.
So Contract Values allocated to the Sub-Accounts will not be affected by the
rate of return of HL's General Account, nor by the investment performance of any
of HL's other separate accounts. However, the obligations arising under the
Contracts are general obligations of HL.
Your investment in the Separate Account is allocated to one or more Sub-Accounts
as per your specifications. Each Sub-Account is invested exclusively in the
shares of one underlying Fund. Net Premium Payments and proceeds of transfers
between Funds are applied to purchase shares in the appropriate Fund at net
asset value determined as of the end of the Valuation Period during which the
payments were received or the transfer made. All distributions from the Funds
are reinvested at net asset value. The value of your investment will therefore
vary in accordance with the net income and the market value of the portfolios of
the underlying Fund(s). During the Variable Annuity payout period, both your
Annuity payments and reserve values will vary in accordance with these factors.
HL does not guarantee the investment results of the Funds or any of the
underlying investments. There is no assurance that the value of a Contract
during the years prior to retirement or the aggregate 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 and
policies, each is subject to different risks. These risks are more fully
described in the accompanying Trust Prospectus.
HL reserves the right, subject to compliance with the law, to substitute the
shares of any other registered investment company for the shares of any Fund
held by the Separate Account. Substitution may occur only if shares of the
Fund(s) become unavailable or if there are changes in applicable law or
<PAGE>
17
interpretations of law. Current law requires notification to you of any such
substitution and approval of the Commission.
The Separate Account may be subject to liabilities arising from a Series of the
Separate Account whose assets are attributable to other variable annuity
Contracts or variable life insurance policies offered by the Separate Account
which are not described in this Prospectus.
THE FIXED ACCOUNT
THAT PORTION OF THE CONTRACT RELATING TO THE FIXED ACCOUNT IS NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") AND THE FIXED ACCOUNT IS NOT
REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940
("1940 ACT"). ACCORDINGLY, NEITHER THE FIXED ACCOUNT NOR ANY INTERESTS THEREIN
ARE SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE 1940 ACT,
AND THE DISCLOSURE REGARDING THE FIXED ACCOUNT HAS NOT BEEN REVIEWED BY THE
STAFF OF THE SECURITIES AND EXCHANGE COMMISSION. THE FOLLOWING DISCLOSURE ABOUT
THE FIXED ACCOUNT MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF
THE FEDERAL SECURITIES LAWS REGARDING THE ACCURACY AND COMPLETENESS OF
DISCLOSURE.
Premium Payments and Contract Values allocated to the Fixed Account become a
part of the general assets of HL. HL invests the assets of the General Account
in accordance with applicable laws governing investments of Insurance Company
General Accounts.
Currently, HL guarantees that it will credit interest at a rate of not less than
3% per year, compounded annually, to amounts allocated to the Fixed Account
under the Contracts. However, HL reserves the right to change the rate
according to state insurance law. HL may credit interest at a rate in excess of
3% per year; however, HL is not obligated to credit any interest in excess of 3%
per year. There is no specific formula for the determination of excess interest
credits. Some of the factors that the Company may consider in determining
whether to credit excess interest to amounts allocated to the Fixed Account and
the amount thereof, are general economic trends, rates of return currently
available and anticipated on the Company's investments, regulatory and tax
requirements and competitive factors. ANY INTEREST CREDITED TO AMOUNTS
ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF 3% PER YEAR WILL BE DETERMINED IN
THE SOLE DISCRETION OF THE COMPANY. THE OWNER ASSUMES THE RISK THAT INTEREST
CREDITED TO FIXED ACCOUNT ALLOCATIONS MAY NOT EXCEED THE MINIMUM GUARANTEE OF 3%
FOR ANY GIVEN YEAR.
<PAGE>
18
THE COMPANY
Hartford Life Insurance Company ("HL") was originally incorporated under the
laws of Massachusetts on June 5, 1902. It was subsequently redomiciled to
Connecticut. It is a stock life insurance company engaged in the business of
writing health and life insurance, both ordinary and group, in all states of the
United States and the District of Columbia. The offices of HL are located in
Simsbury, Connecticut; however, its mailing address is P.O. Box 5085, Hartford,
CT 06102-5085, Attn: Individual Annuity Operations. HL is ultimately 100%
owned by Hartford Fire Insurance Company, one of the largest multiple lines
insurance carriers in the United States. Hartford Fire Insurance Company is a
subsidiary of ITT Corporation.
HL has an A++ (superior) rating from A.M. Best and Company, Inc. HL has an AA+
rating from Standard & Poor's and Duff and Phelps highest rating (AAA) on the
basis of its claims paying ability.
These ratings do not apply to the performance of the Separate Account. However,
the Contractual obligations under this variable annuity are the general
corporate obligations of HL. These ratings do apply to HL's ability to meet its
insurance obligations under the Contract.
THE FUNDS
The underlying investment for the Contracts are shares of Putnam Capital Manager
Trust, an open-end diversified series investment company with multiple
portfolios ("Funds"). The underlying Funds corresponding to each Sub-Account
and their investment objectives are described below. HL reserves the right,
subject to compliance with the law, to offer additional funds with differing
investment objectives. The Funds may not be available in all states.
PCM ASIA PACIFIC GROWTH FUND
Seeks capital appreciation by investing primarily in securities of companies
located in Asia and in the Pacific Basin.
PCM DIVERSIFIED INCOME FUND
Seeks high current income consistent with capital preservation by investing in
the following three sectors of the fixed income securities markets: U.S.
government sector, high yield sector, and international sector.
PCM GLOBAL ASSET ALLOCATION FUND
Seeks a high level of long-term total return consistent with preservation of
capital by investing in U.S. equities, international equities, U.S. fixed income
securities, and international fixed income securities.
<PAGE>
19
PCM GLOBAL GROWTH FUND
Seeks capital appreciation through a globally diversified common stock
portfolio.
PCM GROWTH AND INCOME FUND
Seeks capital growth and current income by investing primarily in common stocks
that offer potential for capital growth, current income, or both.
PCM HIGH YIELD FUND
Seeks high current income by investing primarily in high-yielding, lower-rated
fixed income securities (commonly referred to as junk bonds), constituting a
diversified portfolio which is believed not to involve undue risk to income
or principal. Capital growth is a secondary objective when consistent with
the objectives of seeking high current income. (See the Special Considerations
for Investments in High Yield Securities disclosed in the Trust Prospectus.)
PCM MONEY MARKET FUND
Seeks to achieve as high a level of current income as is consistent with
liquidity and preservation of capital by investing in money market securities.
PCM NEW OPPORTUNITIES FUND
Seeks long-term capital appreciation by investing principally in common stocks
of companies in sectors of the economy which may possess above-average long-term
growth potential.
PCM U.S. GOVERNMENT AND HIGH QUALITY BOND FUND
Seeks current income consistent with preservation of capital through investment
in securities issued or guaranteed as to principal and interest by the U.S.
Government or by its agencies or instrumentalities and in other debt obligations
rated at least A by Standard & Poor's or Moody's or, if not rated, determined by
Putnam Investment to be of comparable quality.
PCM UTILITIES GROWTH AND INCOME FUND
Seeks capital growth and current income by concentrating its investments in
securities issued by Companies in the public utilities industries.
PCM VOYAGER FUND
Seeks capital appreciation primarily from a portfolio of common stocks which are
believed to have potential for capital appreciation which is significantly
<PAGE>
20
greater than that of market averages.
The PCM Asia Pacific Growth Fund, the PCM Diversified Income Fund, PCM Global
Growth Fund, PCM Growth and Income Fund, PCM High Yield Fund, PCM Money Market
Fund, PCM New Opportunities Fund, PCM Utilities Growth and Income Fund, and PCM
Voyager Fund are generally managed in styles similar to other open-end
investment companies which are managed by Putnam Investment and whose shares are
generally offered to the public. These other Putnam funds may, however, employ
different investment practices and may invest in securities different from those
in which their counterpart Funds invest, and consequently will not have
identical portfolios or experience identical investment results.
The Funds are available only to serve as the underlying investment for variable
annuity and variable life Contracts. A full description of the Funds, their
investment objectives, policies and restrictions, risks, charges and expenses
and other aspects of their operation is contained in the accompanying Trust
Prospectus which should be read in conjunction with this Prospectus before
investing, and in the Trust Statement of Additional Information which may be
ordered without charge from Putnam Investor Services, Inc.
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 HL and the Funds do not currently
foresee any such disadvantages either to variable annuity Contract Owners or to
variable life insurance Policy Owners, the Trust's Board of Trustees would
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 Trustees of the Funds were to conclude
that separate funds should be established for variable life and variable annuity
separate accounts, the variable annuity Contract Owners would not bear any
expenses attendant upon establishment of such separate funds.
Putnam Investment Management, Inc. ("Putnam Investment"), One Post Office
Square, Boston, Massachusetts, 02109, serves as the investment manager for the
Funds. Two affiliates, The Putnam Advisory Company, Inc. and Putnam Capital
Management, Inc., manage domestic and foreign institutional accounts and mutual
funds. Putnam Investment and its affiliates are wholly-owned subsidiaries of
Marsh & McLennan Companies, Inc., a publicly owned holding company whose
principal businesses are international insurance brokerage and employee benefit
consulting.
Subject to the general oversight of the Trustees of the Trust, Putnam Investment
manages the Funds' portfolios in accordance with their stated investment
objectives and policies, makes investment decisions for the Funds, places orders
to purchase and sell securities on behalf of the Funds, and administers the
affairs of the Funds. For its services, the Funds pay Putnam Investment a
quarterly fee. See the accompanying Trust Prospectus for a more complete
description of Putnam Investment and the respective fees of the Funds.
<PAGE>
21
OPERATION OF THE CONTRACT/ACCUMULATION PERIOD
PREMIUM PAYMENTS
The balance of each initial Premium Payment remaining after the deduction of any
applicable Premium Tax is credited to your Contract within two business days of
receipt of a properly completed application or an order to purchase a Contract
and the initial Premium Payment by HL at its Home Office, P.O. Box 5085,
Hartford, CT 06102-5085. It will be credited to the Sub-Account(s) and/or the
Fixed Account in accordance with your election. If the application or other
information is incomplete when received, the balance of each initial Premium
Payment, after deduction of any applicable Premium Tax, will be credited to the
Sub-Account(s) or the Fixed Account within five business days of receipt or the
entire Premium Payment will be immediately returned unless you have been
informed of the delay and request that the Premium Payment not be returned.
Subsequent Premium Payments are priced on the Valuation Day received by HL in
its Home Office or other designated administrative office.
The number of Accumulation Units in each Sub-Account to be credited to a
Contract will be determined by dividing the portion of the Premium Payment being
credited to each Sub-Account by the value of an Accumulation Unit in that
Sub-Account on that date.
The minimum initial Premium Payment is $1,000. Subsequent Premium Payments, if
made, must be a minimum of $500. Certain plans may make smaller initial and
subsequent periodic payments. Each Premium Payment may be split among the
various Sub-Accounts and the Fixed Account subject to minimum amounts then in
effect.
VALUE OF ACCUMULATION UNITS
The Accumulation Unit value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
Valuation Day by multiplying the Accumulation Unit value of the particular
Sub-Account on the preceding Valuation Day by a "Net Investment Factor" for that
Sub-Account for the Valuation Period then ended. The "Net Investment Factor"
for each of the Sub-Accounts is equal to the net asset value per share of the
corresponding Fund at the end of the Valuation Period (plus the per share amount
of any dividends or capital gains distributed by that Fund if the ex-dividend
date occurs in the Valuation Period then ended) divided by the net asset value
per share of the corresponding Fund at the beginning of the Valuation Period.
You should refer to the Trust Prospectus which accompanies this Prospectus for a
description of how the assets of each Fund are valued since each determination
has a direct bearing on the Accumulation Unit value of the Sub-Account and
therefore the value of a Contract. The Accumulation Unit value is affected by
the performance of the underlying Fund(s), expenses and deduction of the charges
described in this Prospectus.
<PAGE>
22
The shares of the Fund are valued at net asset value on each Valuation Day. A
description of the valuation methods used in valuing Fund shares may be found in
the accompanying Prospectus of the Trust.
VALUE OF THE FIXED ACCOUNT
HL will determine the value of the Fixed Account by crediting interest to
amounts allocated to the Fixed Account. The minimum Fixed Account interest rate
is 3%, compounded annually. HL may credit a lower minimum interest rate
according to state law. HL also may credit interest at rates greater than the
minimum Fixed Account interest rate.
VALUE OF THE CONTRACT
The value of the Sub-Account investments under your Contract at any time prior
to the commencement of Annuity payments can be determined by multiplying the
total number of Accumulation Units credited to your Contract in each Sub-Account
by the then current Accumulation Unit values for the applicable Sub-Account.
The value of the Fixed Account under your Contract will be the amount allocated
to the Fixed Account plus interest credited. You will be advised at least
semi-annually of the number of Accumulation Units credited to each Sub-Account,
the current Accumulation Unit values, the Fixed Account Value, and the total
value of your Contract.
TRANSFERS AMONG SUB-ACCOUNTS
You may transfer the values of your Sub-Account allocations from one or more
Sub-Accounts to another free of charge. Transfers by telephone may be made by
calling (800) 521-0538. Telephone transfers may not be permitted by some states
for their residents who purchase variable annuities. However, HL reserves the
right to limit the number of transfers to twelve (12) per Contract Year, with no
two (2) transfers occurring on consecutive Valuation Days.
HL may permit the Contract Owner to preauthorize transfers among Sub-Accounts
and between the Sub-Accounts and the Fixed Account under certain circumstances.
The policy of HL 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. HL will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine; otherwise, HL may be liable
for any losses due to unauthorized or fraudulent instructions. The procedures
HL follows for transactions initiated by telephone include requirements that
callers on behalf of a Contract Owner identify themselves and the Contract Owner
by name and social security number. All transfer instructions by telephone are
tape recorded.
<PAGE>
23
The right to reallocate Contract Values between the Sub-Accounts is subject to
modification if HL determines, in its sole discretion, 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 and the Fixed Account by a Contract Owner at any one
time. Such restrictions may be applied in any manner reasonably designed to
prevent any use of the transfer right which is considered by HL to be to the
disadvantage of other Contract Owners.
Transfers between the Sub-Accounts may be made both before and after Annuity
payments commence (limited to once a quarter) provided that the minimum
allocation to any Sub-Account may not be less than $500. No minimum balance is
presently required in any Sub-Account.
TRANSFERS BETWEEN THE FIXED ACCOUNT AND THE SUB-ACCOUNTS
Subject to the restrictions set forth above, transfers from the Fixed Account
into a Sub-Account may be made at any time during the Contract Year. The
maximum amount which may be transferred from the Fixed Account during any
Contract Year is the greater of 30% of the Fixed Account balance as of the last
Contract Anniversary or the greatest amount of any prior transfer from the Fixed
Account. If HL permits preauthorized transfers from the Fixed Account to the
Sub-Accounts, this restriction is inapplicable. However, if any interest rate
is renewed at a rate at least one percentage point less than the previous rate,
the Contract Owner may elect to transfer up to 100% of the funds receiving the
reduced rate within sixty days of notification of the interest rate decrease.
Generally, transfers may not be made from any Sub-Account into the Fixed Account
for the six-month period following any transfer from the Fixed Account into one
or more of the Sub-Accounts. HL reserves the right to defer transfers from the
Fixed Account for up to six months from the date of request.
REDEMPTION/SURRENDER OF A CONTRACT
At any time prior to the Annuity Commencement Date, you have the right, subject
to any IRS provisions applicable thereto, to surrender the value of the Contract
in whole or in part. Under any of the Annuity options excluding Options 4 and 5,
no surrenders are permitted after Annuity payments commence. Only full
surrenders are allowed out of Option 4 and any such surrender will be subject to
contingent deferred sales charges, if applicable. Full or partial withdrawals
may be made from Option 5 at any time and contingent deferred sales charges will
not be applied.
FULL SURRENDERS. At any time prior to the Annuity Commencement Date (and after
the Annuity Commencement Date with respect to values applied to Option 4), the
Contract Owner has the right to terminate the Contract. In such event, the
<PAGE>
24
Termination Value of the Contract may be taken in the form of a lump sum cash
settlement. The Termination Value of the Contract is equal to the Contract
Value less any applicable Premium Taxes, the Contract Maintenance Fee, if
applicable, and any applicable contingent deferred sales charges. The
Termination Value may be more or less than the amount of the Premium Payments
made to a Contract.
PARTIAL SURRENDERS. The Contract Owner may make a partial surrender of Contract
Values at any time prior to the Annuity Commencement Date so long as the amount
surrendered is at least equal to the minimum amount rules then in effect.
Additionally, if the remaining Contract Value following a surrender is less than
$500 (and, for Texas Contracts, there were no Premium Payments made during the
preceding two Contract Years), HL may terminate the Contract and pay the
Termination Value.
Certain plans or programs may have different withdrawal privileges. HL may
permit the Contract Owner to preauthorize partial surrenders subject to certain
limitations then in effect.
THERE ARE CERTAIN RESTRICTIONS ON SECTION 403(B) TAX SHELTERED ANNUITIES. AS OF
DECEMBER 31, 1988, ALL SECTION 403(B) ANNUITIES HAVE LIMITS ON FULL AND PARTIAL
SURRENDERS. CONTRIBUTIONS TO THE CONTRACT MADE AFTER DECEMBER 31, 1988 AND ANY
INCREASES IN CASH VALUE AFTER DECEMBER 31, 1988 MAY NOT BE DISTRIBUTED UNLESS
THE CONTRACT OWNER/EMPLOYEE HAS A) ATTAINED AGE 59 1/2, B) TERMINATED
EMPLOYMENT, C) DIED, D) BECOME DISABLED OR E) EXPERIENCED FINANCIAL HARDSHIP.
DISTRIBUTIONS DUE TO FINANCIAL HARDSHIP OR SEPARATION FROM SERVICE MAY STILL BE
SUBJECT TO A PENALTY TAX OF 10%.
HL WILL NOT ASSUME ANY RESPONSIBILITY IN DETERMINING WHETHER A WITHDRAWAL IS
PERMISSIBLE, WITH OR WITHOUT TAX PENALTY, IN ANY PARTICULAR SITUATION; OR IN
MONITORING WITHDRAWAL REQUESTS REGARDING PRE OR POST JANUARY 1, 1989 ACCOUNT
VALUES.
ANY SUCH FULL OR PARTIAL SURRENDER DESCRIBED ABOVE MAY RESULT IN ADVERSE TAX
CONSEQUENCES TO THE CONTRACT OWNER. THE CONTRACT OWNER, THEREFORE, SHOULD
CONSULT WITH HIS TAX ADVISER BEFORE UNDERTAKING ANY SUCH SURRENDER. (SEE
"FEDERAL TAX CONSIDERATIONS" COMMENCING ON PAGE ___.)
Payment on any request for a full or partial surrender from the Sub-Accounts
and/or the Fixed Account will be made as soon as possible and in any event no
later than seven days after the written request is received by HL at its Home
Office, Attn: Individual Annuity Operations, P.O. Box 5085, Hartford, CT
<PAGE>
25
06102-5085. HL may defer payment of any amounts from the Fixed Account for up
to six months from the date of the request for surrender. If HL defers payment
for more than 30 days, HL will pay interest of at least 3% per annum on the
amount deferred. In requesting a partial withdrawal you should specify the
Fixed Account and/or the Sub-Account(s) from which the partial withdrawal is to
be taken. Otherwise, such withdrawal and any applicable contingent deferred
sales charges will be effected on a pro rata basis according to the value in the
Fixed Account and each Sub-Account under a Contract. Within this context, the
contingent deferred sales charges are taken from the Premium Payments in the
order in which they were received: from the earliest Premium Payments to the
latest Premium Payments. (See "Contingent Deferred Sales Charges," page _____.)
DEATH BENEFIT
The Contracts provide that in the event the Annuitant dies before the Annuity
Commencement Date, the Contingent Annuitant will become the Annuitant. If the
Annuitant dies before the Annuity Commencement Date and either (a) there is no
designated Contingent Annuitant, (b) the Contingent Annuitant predeceases the
Annuitant, or (c) if any Contract Owner dies before the Annuity Commencement
Date, the Beneficiary as determined under the Contract Control Provisions, will
receive Minimum Death Benefit as determined on the date of receipt of due proof
of death by HL in its Home Office. With regard to Joint Contract Owners, at the
first death of a Joint Contract Owner prior to the Annuity Commencement Date,
the Beneficiary will be the surviving Contract Owner notwithstanding that the
beneficiary designation may be different.
GUARANTEED DEATH BENEFIT -- Upon death prior to the Annuity Commencement Date of
the Annuitant or Contract Owner, as applicable, the Beneficiary will receive the
greatest of (a) the Contract Value determined as of the day written proof of
death of such person is received by HL, 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, increased by
the dollar amount of any partial surrenders.
The Maximum Anniversary Value is equal to the greatest Anniversary Value
attained from the following:
As of the receipt of due proof of death, the Company will calculate an
Anniversary Value for each Contract Anniversary prior to the deceased's attained
age 81. The Anniversary Value is equal to the Contract Value on a Contract
Anniversary, increased by the dollar amount of any premium payment made since
that anniversary and reduced by the dollar amount of any partial surrenders
since that anniversary.
PAYMENT OF DEATH BENEFIT -- Death Benefit proceeds will remain invested in the
Separate Account in accordance with the allocation instructions given by the
Certificate Owner until the proceeds are paid or HL receives new instructions
from the Beneficiary. The Death Benefit may be taken in one sum, to be paid
<PAGE>
26
within 7 days after the date Due Proof of Death is received, or under any of the
settlement options then being offered by the Company provided, however, that:
(a) in the event of the death of any Contract Owner prior to the Annuity
Commencement Date, the entire interest in the Contract will be distributed
within 5 years after the death of the Contract Owner or, if the benefit is
payable over a period not extending beyond the life expectancy of the
Beneficiary or over the life of the Beneficiary, such distribution must commence
within one year of the date of death, and (b) in the event of the death of any
Contract Owner or Annuitant which occurs on or after the Annuity Commencement
Date, any remaining interest in the Contract will be paid at least as rapidly as
under the method of distribution in effect at the time of death. Notwithstanding
the foregoing, in the event of the Contract Owner's death where the sole
Beneficiary is the spouse of the Contract Owner and the Annuitant or Contingent
Annuitant is living, such spouse may elect, in lieu of receiving the death
benefit, to be treated as the Contract Owner. The proceeds due on the death may
be applied to provide variable payments, fixed payments, or a combination of
variable and fixed payments.
If the Contract is owned by a corporation or other non-individual, the Death
Benefit payable upon the death of the Annuitant prior to the Annuity
Commencement Date will be payable only as one sum or under the same settlement
options and in the same manner as if an individual Contract Owner died on the
date of the Annuitant's death.
There may be postponement in the payment of Death Benefits whenever (a) the New
York Stock Exchange is closed, except for holidays or weekends, or trading on
the New York Stock Exchange is restricted as determined by the Securities and
Exchange Commission; (b) the Securities and Exchange Commission permits
postponement and so orders; or (c) the Securities and Exchange Commission
determines that an emergency exists making valuation of the amounts or disposal
of securities not reasonably practicable.
GROUP UNALLOCATED CONTRACTS -- For Group Unallocated Contracts HL requires that
detailed accounting of cumulative purchase payments, cumulative gross
surrenders, and current Contract Value attached to each Plan Participant be
submitted on an annual basis by the Contract Owner. Failure to submit accurate
data satisfactory to HL will give HL the right to terminate this extension of
benefits.
CHARGES UNDER THE CONTRACT
CONTINGENT DEFERRED SALES CHARGES
There is no deduction for sales expenses from Premium Payments when made.
However, a contingent deferred sales charge may be assessed against Contract
Values when they are surrendered.
The length of time from receipt of a Premium Payment to the time of surrender
determines the contingent deferred sales charge. Premium payments will be
<PAGE>
27
deemed to be surrendered in the order in which they were received.
DURING THE FIRST SEVEN CONTRACT YEARS
During the first seven Contract years, all surrenders will be first from Premium
Payments and then from other Contract Values. If an amount equal to all premium
payments has been surrendered, a contingent deferred sales charge will not be
assessed against the surrender of the remaining Contract Value.
AFTER THE SEVENTH CONTRACT YEAR
After the seventh Contract year, all surrenders will first be from earnings and
then from premium payments. A contingent deferred sales charge will not be
assessed against the surrender of earnings. If an amount equal to all earnings
has been surrendered, a contingent deferred sales charge will not be assessed
against premium payments received more than seven years prior to surrender, but
will be assessed against premium payments received less than seven years prior
to surrender.
The charge is a percentage of the amount withdrawn (not to exceed the aggregate
amount of the Premium Payments made) and equals:
Charge Length of Time From Premium Payment
------ -----------------------------------
(Number of Years)
6% 1
6% 2
5% 3
5% 4
4% 5
3% 6
2% 7
0% 8 or more
The contingent deferred sales charges are used to cover expenses relating to the
sale and distribution of the Contracts, including commissions paid to any
distribution organization and its sales personnel, the cost of preparing sales
literature and other promotional activities. To the extent that these charges
do not cover such distribution expenses, the expenses will be borne by HL from
its general assets, including surplus. The surplus might include profits
resulting from unused mortality and expense risk charges.
During the first seven Contract Years, on a non-cumulative basis, a Contract
Owner may make a partial surrender of Contract Values of up to 10% of the
aggregate Premium Payments made to the Contract (as determined on the date of
<PAGE>
28
the requested withdrawal) without the application of the contingent deferred
sales charge. After the seventh Contract year, the Contract Owner may make a
partial surrender of 10% of premium payments made during the seven years prior
to the surrender and 100% of the Contract Value less the premium payments made
during the seven years prior to the surrender. The amounts not subject to sales
charges are known as the Annual Withdrawal Amount. The Annual Withdrawal
Amount is the amount which can be withdrawn in any Contract Year prior to
incurring surrender charges. An Extended Withdrawal Privilege rider allows an
Annuitant who attains age 70 1/2 under a Qualified Plan to withdraw an amount in
excess of the Annual Withdrawal Amount to comply with IRS minimum distribution
rules.
The contingent deferred sales charges which cover expenses relating to the sale
and distribution of the Contracts may be reduced for certain sales of the
Contracts under circumstances which may result in savings of such sales and
distribution expenses. Therefore, the contingent deferred sales charges may be
reduced if the Contracts are sold to certain employee and professional groups.
In addition, there may be other circumstances of which HL is not presently aware
which could result in reduced sales or distribution expenses. Reductions in
these charges will not be unfairly discriminatory against any Contract Owner.
HL may offer certain employer sponsored savings plans, in its discretion reduced
fees and charges including, but not limited to, the contingent deferred sales
charges, the mortality and expense risk charge and the maintenance fee for
certain sales under circumstances 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.
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) HL's actual
mortality experience among Annuitants before or after the Annuity Commencement
Date or (b) HL's actual expenses, if greater than the deductions provided for in
the Contracts because of the expense and mortality undertakings by HL.
For assuming these risks under the Contracts, HL will make a daily charge at the
rate of 1.25% per annum against all Contract Values held in the Sub-Accounts
during the life of the Contract, including the payout period, (estimated at .90%
for mortality and .35% for expense).
The mortality undertaking provided by HL under the Contracts, assuming the
selection of one of the forms of life Annuities, is to make monthly Annuity
payments (determined in accordance with the 1983a Individual Annuity Mortality
Table and other provisions contained in the Contract) to Annuitants regardless
of how long an Annuitant may live, and regardless of how long all Annuitants as
a group may live. HL also assumes the liability for payment of a minimum death
benefit under the Contract.
<PAGE>
29
The mortality undertakings are based on HL's determination of expected mortality
rates among all Annuitants. If actual experience among Annuitants during the
Annuity payment period deviates from HL's actuarial determination of expected
mortality rates among Annuitants because, as a group, their longevity is longer
than anticipated, HL must provide amounts from its general funds to fulfill its
Contract obligations. In that event, a loss will fall on HL. Also, in the
event of the death of an Annuitant or Contract Owner before the commencement of
Annuity payments, whichever is earlier, HL can, in periods of declining value,
experience a loss resulting from the assumption of the mortality risk relative
to the minimum death benefit.
In providing an expense undertaking, HL assumes the risk that the contingent
deferred sales charges and the Administration and Maintenance Fees for
maintaining the Contracts prior to the Annuity Commencement Date may be
insufficient to cover the actual cost of providing such items.
ADMINISTRATION AND MAINTENANCE FEES
HL will deduct certain fees from Contract Values to reimburse it for expenses
relating to the administration and maintenance of the Contract and the Fixed
Account. For Contract maintenance, HL will deduct an annual fee of $30 on each
Contract Anniversary on or before the Annuity Commencement Date. The deduction
will be made pro rata according to the value in each Sub-Account and the Fixed
Account under a Contract. If during a Contract Year the Contract is surrendered
for its full value, HL will deduct the Contract Maintenance Fee at the time of
such surrender. For administration, HL makes a daily charge at the rate of .15%
per annum against all Contract Values held in the Separate Account during both
the accumulation and annuity phases of the Contract. There is not necessarily a
relationship between the amount of administrative charge imposed on a given
Contract and the amount of expenses that may be attributable to that Contract;
expenses may be more or less than the charge.
The types of expenses incurred by the Separate Account 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.
<PAGE>
30
You should refer to the Trust Prospectus for a description of deductions and
expenses paid out of the assets of the Trust's portfolios.
PREMIUM TAXES
A deduction is also made for Premium Tax, if applicable, imposed by a state or
other governmental entity. Certain states impose a Premium Tax, currently
ranging up to 3.5%. Some states assess the tax at the time purchase payments
are made; others assess the tax at the time of annuitization. HL will pay
Premium Taxes at the time imposed under applicable law. At its sole discretion,
HL may deduct Premium Taxes at the time HL pays such taxes to the applicable
taxing authorities, at the time the Contract is surrendered, or at the time the
Contract annuitizes.
ANNUITY BENEFITS
You select an Annuity Commencement Date and an Annuity option which may be on a
fixed or variable basis, or a combination thereof. The Annuity Commencement
Date will not be deferred beyond the Annuitant's 90th birthday except for
certain states where deferral past age 85 is not permitted. The Annuity
Commencement Date and/or the Annuity option may be changed from time to time,
but any change must be at least 30 days prior to the date on which Annuity
payments are scheduled to begin. The Contract allows the Contract Owner to
change the Sub-Accounts on which variable payments are based after payments have
commenced once every three (3) months. Any Fixed Annuity allocation may not be
changed.
ANNUITY OPTIONS
The Contract contains the five optional Annuity forms described below. Options
2, 4 and 5 are available to Qualified Contracts only if the guaranteed payment
period is less than the life expectancy of the Annuitant at the time the option
becomes effective. Such life expectancy shall be computed on the basis of the
mortality table prescribed by the IRS, or if none is prescribed, the mortality
table then in use by the HL. With respect to Non-Qualified Contracts, if you do
not elect otherwise, payments in most states will automatically begin at the
Annuitant's age 90 (with the exception of states that do not allow deferral past
age 85) under Option 2 with 120 monthly payments certain. For Qualified
Contracts and Contracts issued in Texas, if you do not elect otherwise, payments
will begin automatically at the Annuitant's age 90 under Option 1 to provide a
life Annuity.
Under any of the Annuity options excluding Options 4 and 5, no surrenders are
permitted after Annuity payments commence. Only full surrenders are allowed out
of Option 4 and any such surrender will be subject to contingent deferred sales
charges, if applicable. Full or partial withdrawals may be made from Option 5
at any time and contingent deferred sales charges will not be applied.
<PAGE>
31
Option 1: Life Annuity
A life Annuity is an Annuity payable during the lifetime of the Annuitant and
terminating with the last payment preceding the death of the Annuitant. This
options offers the largest payment amount of any of the life Annuity options
since there is no guarantee of a minimum number of payments nor a provision for
a death benefit payable to a Beneficiary.
It would be possible under this option for an Annuitant to receive only one
Annuity payment if he died prior to the due date of the second Annuity payment,
two if he died before the date of the third Annuity payment, etc.
Option 2: Life Annuity with 120, 180 or 240 Monthly Payments Certain
This Annuity option is an Annuity payable monthly during the lifetime of an
Annuitant with the provision that payments will be made for a minimum of 120,
180 or 240 months, as elected. If, at the death of the Annuitant, payments have
been made for less than the minimum elected number of months, then the present
value as of the date of the Annuitant's death, of any remaining guaranteed
payments will be paid in one sum to the Beneficiary or Beneficiaries designated
unless other provisions have been made and approved by HL.
Option 3: Joint and Last Survivor Annuity
An Annuity payable monthly during the joint lifetime of the Annuitant and a
designated second person, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
Based on the options currently offered by HL, the Annuitant may elect that the
payment to the survivor be less than the payment made during the joint lifetime
of the Annuitant and a designated second person.
It would be possible under this option for an Annuitant and designated second
person to receive only one payment in the event of the common or simultaneous
death of the parties prior to the due date for the second payment and so on.
Option 4: Payments for a Designated Period
An amount payable monthly for the number of years selected which may be from 5
to 30 years. Under this option, you may, at any time, surrender the Contract
and receive, within seven days, the Termination Value of the Contract as
determined by HL.
In the event of the Annuitant's death prior to the end of the designated period,
the present value as of the date of the Annuitant's death, of any remaining
guaranteed payments will be paid in one sum to the Beneficiary or Beneficiaries
designated unless other provisions have been made and approved by HL.
<PAGE>
32
Option 4 is an option that does not involve life contingencies and thus no
mortality guarantee. Charges made for the mortality undertaking under the
Contracts thus provide no real benefit to a Contract Owner.
Option 5: Death Benefit Remaining with HL
Proceeds from the Death Benefit may be left with HL for a period not to exceed
five years from the date of the Contract Owner's death prior to the Annuity
Commencement Date. These proceeds will remain in the Sub-Account(s) to which
they were allocated at the time of death unless the Beneficiary elects to
reallocate them. Full or partial withdrawals may be made at any time. In the
event of withdrawals, the remaining value will equal the Contract Value of the
proceeds left with HL, minus any withdrawals.
HL may offer other annuity options from time to time.
THE ANNUITY UNIT AND VALUATION
The value of the Annuity Unit for each Sub-Account in the Separate Account for
any day is determined by multiplying the value for the preceding day by the
product of (1) the net investment factor (See "Valuation of Accumulation Units,"
commencing on page ____) for the day for which the Annuity Unit value is being
calculated and (2) a factor to neutralize the assumed investment rate of 5.00%
per annum discussed below.
DETERMINATION OF PAYMENT AMOUNT
When Annuity payments are to commence, the value of the Contract is determined
as the sum of the value of the Fixed Account no earlier than the close of
business on the fifth Valuation Day preceding the date the first Annuity payment
is due plus the product of the value of the Accumulation Unit of each
Sub-Account on that same day, and the number of Accumulation Units credited to
each Sub-Account as of the date the Annuity is to commence.
The Contract contains tables indicating the minimum dollar amount of the first
monthly payment under the optional forms of Annuity for each $1,000 of value of
a Sub-Account under a Contract. The first monthly payment varies according to
the form and type of Annuity selected. The Contract contains Annuity tables
derived from the 1983a Individual Annuity Mortality Table with ages set back one
year and with an assumed investment rate ("A.I.R.") of 3% per annum for the
Fixed Annuity and 5% per annum for the Variable Annuity.
The total first monthly Variable Annuity payment is determined by multiplying
the value (expressed in thousands of dollars) of a Sub-Account (less any
applicable Premium Taxes) by the amount of the first monthly payment per $1,000
of value obtained from the tables in the Contracts.
<PAGE>
33
Fixed Annuity payments are determined at annuitization by multiplying the values
allocated to the Fixed Account (less applicable Premium Taxes) by a rate to be
determined by HL which is no less than the rate specified in the Annuity tables
in the Contract. The Annuity payment will remain level for the duration of the
Annuity.
The amount of the first monthly Variable Annuity payment, determined as
described above, is divided by the value of an Annuity Unit for the appropriate
Sub-Account no earlier than the close of business on the fifth Valuation Day
preceding the day on which the payment is due in order to determine the number
of Annuity Units represented by the first payment. This number of Annuity Units
remains fixed during the Annuity payment period, and in each subsequent month
the dollar amount of the Variable Annuity payment is determined by multiplying
this fixed number of Annuity Units by the then current Annuity Unit value.
THE A.I.R. ASSUMED IN THE MORTALITY TABLES WOULD PRODUCE LEVEL VARIABLE ANNUITY
PAYMENTS IF THE INVESTMENT RATE REMAINED CONSTANT. IN FACT, PAYMENTS WILL VARY
UP OR DOWN AS THE INVESTMENT RATE VARIES UP OR DOWN FROM THE A.I.R.
The Annuity Unit value used in calculating the amount of the Variable Annuity
payments will be based on an Annuity Unit value determined as of the close of
business on a day no earlier than the fifth Valuation Day preceding the date of
the Annuity payment.
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 II, commencing on page ____, is based on HL's understanding of current
Federal income tax laws as they are currently interpreted.
<PAGE>
34
B. TAXATION OF HL AND THE SEPARATE ACCOUNT
The Separate Account is taxed as part of HL which is taxed as a life insurance
company in accordance with the Internal Revenue Code (the "Code"). Accordingly,
the Separate Account will not be taxed as a "regulated investment company" under
subchapter M of Chapter 1 of the Code. Investment income and any realized
capital gains on the assets of the Separate Account are reinvested and are taken
into account in determining the value of the Accumulation and Annuity Units (See
"Value of Accumulation Units" commencing on page ___). As a result, such
investment income and realized capital gains are automatically applied to
increase reserves under the Contract.
No taxes are due on interest, dividends and short-term or long-term capital
gains earned by the Separate Account with respect to Qualified or Non-Qualified
Contracts.
C. TAXATION OF ANNUITIES -- GENERAL PROVISIONS AFFECTING PURCHASERS OTHER THAN
QUALIFIED RETIREMENT PLANS
Section 72 of the Internal Revenue Code governs the taxation of annuities
in general.
1. NON-NATURAL PERSONS, CORPORATIONS, ETC. Section 72 contains
provisions for Contract Owners which are non-natural persons. Non-
natural persons include corporations, trusts, and partnerships. The
annual net increase in the value of the Contract is currently
includable in the gross income of a non-natural person unless the non-
natural person holds the Contract as an agent for a natural person.
There is an exception from current inclusion for certain annuities
held by structured settlement companies, certain annuities held by an
employer with respect to a terminated qualified retirement plan and
certain immediate annuities. A non-natural person which is a tax-
exempt entity for Federal tax purposes will not be subject to income
tax as a result of this provision.
If the Contract Owner is not an individual, the primary Annuitant
shall be treated as the Contract Owner for purposes of making
distributions which are required to be made upon the death of the
Contract Owner. If there is a change in the primary Annuitant, such
change shall be treated as the death of the Contract Owner.
2. OTHER CONTRACT OWNERS (NATURAL PERSONS). A Contract Owner is not
taxed on increases in the value of the Contract until an amount is
received or deemed received, e.g., in the form of a lump sum payment
(full or partial value of a Contract) or as Annuity payments under the
settlement option elected.
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
<PAGE>
35
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 3.c. below. As a result, any
such amount received or deemed received (1) shall be includable
in gross income to the extent that such amount does not exceed
any such "income on the contract," and (2) shall not be
includable in gross income to the extent that such amount does
exceed any such "income on the contract." If at the time that
any amount is received or deemed received there is no "income on
the contract" (e.g., because the gross value of the Contract does
not exceed the "investment in the contract" and no aggregation
rule applies), then such amount received or deemed received will
not be includable in gross income, and will simply reduce the
"investment in the contract."
iv. The receipt of any amount as a loan under the Contract or the
assignment or pledge of any portion of the value of the Contract
shall be treated as an amount received for purposes of this
subparagraph a. and the next subparagraph b.
v. In general, the transfer of the Contract, without full and
adequate consideration, will be treated as an amount received for
purposes of this subparagraph a. and the next subparagraph b.
This transfer rule does not apply, however, to certain transfers
of property between spouses or incident to divorce.
b. DISTRIBUTIONS AFTER ANNUITY COMMENCEMENT DATE. Annuity payments made
periodically after the Annuity Commencement Date are includable in
gross income to the extent the payments exceed the amount determined
by the application of the ratio of the "investment in the contract" to
the total amount of the payments to be made after the Annuity
Commencement Date (the "exclusion ratio").
i. When the total of amounts excluded from income by application of
the exclusion
<PAGE>
36
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. HL
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 3.a., above, of
amounts received or deemed received prior to the Annuity Commencement
Date. Withdrawals will first be treated as withdrawals of income
until all of the income from all such Contracts is withdrawn. As of
the date of this Prospectus, there are no regulations interpreting
this provision.
d. 10% PENALTY TAX -- APPLICABLE TO CERTAIN WITHDRAWALS AND ANNUITY
PAYMENTS.
i. If any amount is received or deemed received on the Contract
(before or after the Annuity Commencement Date), the Code applies
a penalty tax equal to ten percent of the portion of the amount
includable in gross income, unless an exception applies.
ii. The 10% penalty tax will not apply to the following distributions
(exceptions vary based upon the precise plan involved):
<PAGE>
37
1. Distributions made on or after the date the recipient has
attained the age of 59 1/2.
2. Distributions made on or after the death of the holder or where
the holder is not an individual, the death of the primary
Annuitant.
3. Distributions attributable to a recipient's becoming disabled.
4. A distribution that is part of a scheduled series of
substantially equal periodic payments for the life (or life
expectancy) of the recipient (or the joint lives or life
expectancies of the recipient and the recipient's Beneficiary).
5. Distributions of amounts which are allocable to the "investment
in the contract" prior to August 14, 1982 (see next subparagraph
e.).
e. SPECIAL PROVISIONS AFFECTING CONTRACTS OBTAINED THROUGH A TAX-FREE
EXCHANGE OF OTHER ANNUITY OR LIFE INSURANCE CONTRACTS PURCHASED PRIOR
TO AUGUST 14, 1982.
If the Contract was obtained by a tax-free exchange of a life
insurance or annuity Contract purchased prior to August 14, 1982, then
any amount received or deemed received prior to the Annuity
Commencement Date shall be deemed to come (1) first from the amount of
the "investment in the contract" prior to August 14, 1982 ("pre-
8/14/82 investment") carried over from the prior Contract, (2) then
from the portion of the "income on the contract" (carried over to, as
well as accumulating in, the successor Contract) that is attributable
to such pre-8/14/82 investment, (3) then from the remaining "income on
the contract" and (4) last from the remaining "investment in the
contract." As a result, to the extent that such amount received or
deemed received does not exceed such pre-8/14/82 investment, such
amount is not includable in gross income., In addition, to the extent
that such amount received or deemed received does not exceed the sum
of (a) such pre-8/14/82 investment and (b) the "income on the
contract" attributable thereto, such amount is not subject to the 10%
penalty tax. In all other respects, amounts received or deemed
received from such post-exchange Contracts are generally subject to
the rules described in this subparagraph 3.
f. REQUIRED DISTRIBUTIONS IN THE EVENT OF CONTRACT OWNER'S DEATH.
i. If any Contract Owner dies before the Annuity Commencement Date,
the entire interest must be distributed within five years of the
date of death; however, a portion or all of such interest may be
payable to a designated Beneficiary over the life of such
Beneficiary or for a period not extending beyond the life
expectancy of such Beneficiary with payments starting within one
year of the date of death.
<PAGE>
38
ii. If any Contract Owner or Annuitant dies on or after the Annuity
Commencement Date and before the entire interest in the Contract
has been distributed, any remaining portion of such interest will
be distributed at least as rapidly as under the method of
distribution in effect at the time of death.
iii. If a spouse is designated as a Beneficiary at the time of the
Contract Owner's death and there is a surviving Annuitant or
Contingent Annuitant, then such spouse will be treated as the
Contract Owner under subparagraph i. and ii. above.
iv. If the Contract Owner is not an individual, the primary Annuitant
shall be treated as the Contract Owner under subparagraphs i. and
ii. above. If there is a change in the primary Annuitant, such
change shall be treated as the death of the Contract Owner.
3. DIVERSIFICATION REQUIREMENTS.
Section 817 of the Code provides that a variable annuity contract
(other than certain contracts held in connection with a tax-qualified
retirement arrangement) 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. 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 has issued
diversification regulations which, among other things, require that no
more than 55% of the assets of a mutual fund (such as the HL mutual
funds) underlying a variable annuity contract, be invested in any one
investment. In determining whether the diversification standards are
met, each United States Government Agency or instrumentality shall be
treated as a separate issuer.
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 Internal Revenue 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 HL, HL will automatically withhold
10% of the taxable distribution.
<PAGE>
39
2. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD
GREATER THAN ONE YEAR)
The portion of a periodic distribution which constitutes taxable
income will be subject to Federal income tax withholding as if the
recipient were married claiming three exemptions. A recipient may
elect not to have income taxes withheld or have income taxes withheld
at a different rate by providing a completed election form. Election
forms will be provided at the time distributions are requested.
E. GENERAL PROVISIONS AFFECTING QUALIFIED RETIREMENT PLANS
The Contract may be used for a number of qualified retirement plans. If
the Contract is being purchased with respect to some form of qualified
retirment plan, please refer to Appendix I commencing on page ____ for
information relative to the types of plans for which it may be used and the
general explanation of the tax features of such plans.
GENERAL MATTERS
ASSIGNMENT
Ownership of a Contract described herein is generally assignable. However, if
the Contracts are issued pursuant to some form of qualified retirement plan, it
is possible that the ownership of the Contracts may not be transferred or
assigned depending on the type of qualified retirement plan involved. An
assignment of a Non-Qualified Contract may subject the assignment proceeds to
income taxes and certain penalty taxes. (See "Taxation of Annuities in General
- - - Non-Tax Qualified Purchasers," page ___.)
MODIFICATION
HL reserves the right to modify the Contract, but only if such modification: (i)
is necessary to make the Contract or the Separate Account comply with any law or
regulation issued by a governmental agency to which HL is subject; or (ii) is
necessary to assure continued qualification of the Contract under the Code or
other federal or state laws relating to retirement annuities or annuity
Contracts; or (iii) is necessary to reflect a change in the operation of the
Separate Account or the Sub-Account(s) or (iv) provides additional Separate
Account options or (v) withdraws Separate Account options. In the event of any
such modification HL will provide notice to the Contract Owner or to the
payee(s) during the Annuity period. HL may also make appropriate endorsement in
the Contract to reflect such modification.
DELAY OF PAYMENTS
There may be postponement of a surrender payment or death benefit whenever (a)
the New York Stock Exchange is closed, except for holidays or weekends, or
trading on the New York Stock Exchange is restricted as determined by the
Commission; (b) the Commission permits
<PAGE>
40
postponement and so orders; or (c) the Commission determines that an emergency
exists making valuation or disposal of securities not reasonably practicable.
VOTING RIGHTS
HL is the legal owner of all Fund shares held in the Separate Account. As the
owner, HL has the right to vote at the Funds' shareholder meetings. However, to
the extent required by federal securities laws or regulations, HL will:
1. Vote all Fund shares attributable to a Contract according to instructions
received from Contract Owner, and
2. Vote shares attributable to a Contract for which no voting instructions are
received in the same proportion as shares for which instructions are received.
If any federal securities laws or regulations, or their present interpretation
change to permit HL to vote Fund shares in its own right, HL may elect to do so.
HL will notify you of any Fund shareholders' meeting if the shares held for your
account may be voted at such meetings. HL will also send proxy materials and a
form of instruction by means of which you can instruct HL with respect to the
voting of the Fund shares held for your account.
In connection with the voting of Fund shares held by it, HL will arrange for the
handling and tallying of voting instructions received from Contract Owners. HL
as such, shall have no right, except as hereinafter provided, to vote any Fund
shares held by it hereunder which may be registered in its name or the names of
its nominees. HL 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 HL 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. In the event that the Contract Owner gives no instructions or leaves
the manner of voting discretionary, HL will vote such shares of the appropriate
Fund in the same proportion as shares of that Fund for which instructions have
been received. During the Annuity period under a Contract the number of votes
will decrease as the assets held to Fund Annuity benefits decrease.
DISTRIBUTION OF THE CONTRACTS
Hartford Equity Sales Company, Inc. ("HESCO") currently serves as Principal
Underwriter for the securities issued with respect to the Separate Account.
Hartford Securities Distribution Company, Inc. ("HSD") will replace HESCO as
principal underwriter upon approval by the Commission, the National Association
of Securities Dealers, Inc. ("NASD") and applicable state regulatory
authorities.
<PAGE>
41
Both HESCO and HSD are wholly-owned subsidiaries of Hartford Life Insurance
Company. The principal business address of HESCO and HSD is the same as
Hartford Life Insurance Company.
The securities will be sold by salespersons of HESCO, and subsequently HSD, who
represent HL as insurance and Variable Annuity agents and who are registered
representatives or Broker-Dealers who have entered into distribution agreements
with HESCO, and subsequently HSD.
HESCO is registered with the Commission under the Securities Exchange Act of
1934 as a Broker-Dealer and is a member of the NASD. HSD will be registered
with the Commission under the Securities Exchange Act of 1934 as a Broker-Dealer
and will become a member of the NASD.
Commissions will be paid by HL and will not be more than 6% of Premium Payments.
From time to time, HL may pay or permit other promotional incentives, in cash or
credit or other compensation.
OTHER CONTRACTS OFFERED
In addition to the Contracts described in this Prospectus, it is contemplated
that other forms of group or individual Variable Annuities may be sold providing
benefits which vary in accordance with the investment experience of the Separate
Account.
CUSTODIAN OF SEPARATE ACCOUNT ASSETS
The assets of the Separate Account are held by HL under a safekeeping
arrangement.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Separate Account is a party or to
which the assets of the Separate Account are subject. HL and Putnam Investment
are engaged in various matters of routine litigation which in their judgments
are not of material importance in relation to their respective total assets.
EXPERTS
The financial statements and schedules included in this prospectus and
elsewhere in the registration statement have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports
with respect thereto, and are included herein in reliance upon the authority
of said firm as experts in accounting and auditing.
<PAGE>
42
ADDITIONAL INFORMATION
Inquiries will be answered by calling your representative or by writing:
Hartford Life Insurance Company
Attn: Individual Annuity Operations
P.O. Box 5085
Hartford, CT 06102-5085
Telephone: (800) 862-6668
<PAGE>
43
APPENDIX I
INFORMATION REGARDING QUALIFIED RETIREMENT PLANS
THE TAX REFORM ACT OF 1986 AND THE TECHNICAL AND MISCELLANEOUS REVENUE ACT OF
1988 HAVE MADE SUBSTANTIAL CHANGES TO QUALIFIED RETIREMENT PLANS. YOU SHOULD
CONSULT YOUR TAX ADVISER TO FULLY ADDRESS ALL CHANGES OCCURRING AS A RESULT OF
THE TAX REFORM ACT AND THE TECHNICAL AND MISCELLANEOUS REVENUE ACT OF 1988 AND
THEIR EFFECT ON QUALIFIED RETIREMENT PLANS.
A. Contributions
1. Pension, Profit Sharing and Simplified Employee Pension Plans
Contributions to 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)), which do not exceed certain limitations prescribed in the
Code are fully tax deductible to the employer. Such contributions are not
currently taxable to the covered employees, and increases in the value of
Contracts purchased with such contributions are not subject to taxation
until received by the covered employees or their beneficiaries in the form
of Annuity payments or other distributions.
2. Tax Deferred Annuity Plans for Public School Teachers and Employers and
Employees of Certain Tax-Exempt Organizations
Contributions to tax deferred annuity plans (described in Section 403(a)
and 403(b) of the Code) by employers are not includable within the
employee's income to the extent those contributions do not exceed the
lesser of $9,500 or the exclusion allowance. Generally, the exclusion
allowance is equal to 20% of the employee's includable compensation for his
most recent full year of employment multiplied by the number of years of
his service, less the aggregate amount contributed by the employer for
annuity contracts which were not included within the gross income of the
employee for any prior taxable year. There are special provisions which
may allow an employee of an educational institution, a hospital or a home
health service agency to elect an overall limitation different from the
limitation described above.
3. Deferred Compensation Plans for Tax-Exempt Organizations and State and
Local Governments
Employees may contribute on a before tax basis to The Deferred Compensation
Plan of their employer in accordance with The Employer's Plan and Section
457 of the Code. Section 457 places limitations on contributions to
Deferred Compensation Plans
<PAGE>
44
maintained by a State ("State" means a State, a political sub-division of a
State, and an agency or instrumentality of a State or political
sub-division of a State) or other tax-exempt organization. Generally, the
limitation is 33 1/3 of includable compensation (25% of gross compensation)
or $7,500, whichever is less. The plan may also provide for additional
contributions during the three taxable years ending before normal
retirement age of a Participant for a total of up to $15,000 per year for
such three years.
An employee electing to participate in a plan should understand that his
rights and benefits are governed strictly by the terms of the plan, that he
is in fact a general creditor of the employer under the terms of the plan,
that the employer is legal owner of any Contract issued with respect to the
plan and that 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 plan for any charges in regard to participating therein other than
those disclosed in this Prospectus.
Certain distributions are required to be made upon the death of a
Participant. These requirements are generally described in Section C.2.f.
of "Federal Tax Considerations" on page _____.
4. Individual Retirement Annuities ("IRA's")
Individuals may contribute and deduct the lesser of $2,000 or 100 percent
of their compensation to an IRA. In the case of a spousal IRA, the maximum
deduction is the lesser of $2,250 or 100 percent of compensation. The
deduction for contributions is phased out between $40,000 and $50,000 of
adjusted gross income (AGI) for a married individual(and between $25,000
and $35,000 for single individuals) if either the individual or his or her
spouse is an active Participant in any Section 401(a), 403(a), 403(b) or
408(k) plan regardless of whether the individual's interest is vested.
To the extent deductible contributions are not allowed, individuals may
make designated nondeductible contributions to an IRA, subject to the above
limits.
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, HL has obtained approval from the Internal
Revenue Service to use the Contract as an IRA. For Contracts issued in New
Jersey, HL 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.
<PAGE>
45
B. Distributions
1. Pension and Profit Sharing Plans, Tax Sheltered Annuities, Individual
Retirement Annuities.
Annuity payments made under the Contracts are taxable under Section 72 of
the Code as ordinary income, in the year of receipt, to the extent that
they exceed the "excludable amount." The investment in the contract is the
aggregate amount of the contributions made by or on behalf of an employee
which were included as a part of his taxable income and not deducted.
Thus, annual premiums deducted for an IRA are not included in the
investment in the contract. The employee's investment in the contract is
divided by the expected number of payments to be made under the contract.
The amount so computed constitutes the "excludable amount," which is the
amount of each annuity payment considered a return of investment in each
year and, therefore, not taxable. Once the employee's investment in the
contract is recouped, the full amount of each payment will be fully
taxable. If the employee dies prior to recouping his or her investment in
the contract, a deduction is allowed for the last taxable year. The rules
for determining the excludable amount are contained in Section 72 of the
Code.
Generally, distributions or withdrawals prior to age 59 1/2 may be subject
to an additional income tax of 10% of the amount includable in income.
This additional tax does not apply to distributions made after the
employee's death, on account of disability and distributions in the form of
a life annuity and, except in the case of an IRA, certain distributions
after separation from service at or after age 55, and certain distributions
for eligible medical expenses. A life annuity is defined as a scheduled
series of substantially equal periodic payments for the life or life
expectancy of the Participant (or the joint lives or life expectancies of
the Participant and Beneficiary). The taxation of withdrawals and other
distributions varies depending on the type of distribution and the type of
plan from which the distribution is made. With respect to tax-deferred
annuity Contracts under Section 403(b) contributions to the Contract made
after December 31, 1988 and any increases in cash value, after that date
may not be distributed prior to attaining age 59 1/2, separation from
service, death or disability. Contributions (but not earnings) made after
December 31, 1988 may also be distributed by reason of financial hardship.
Generally, in order to avoid a penalty tax, annuity payments, periodic
payments or annual distributions MUST commence by April 1 of the calendar
year following the year in which the Participant 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 lives or life expectancies 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. With respect to a section
403(b) plan, this account balance is based upon earnings and contributions
after December 31, 1986. In addition, minimum distribution incidental
benefit rules may require a larger annual distribution based upon dividing
the
<PAGE>
46
entire account balance as of the close of business on the last day of the
previous calendar year by a factor promulgated by the Internal Revenue
Service which ranges from 26.2 (at age 70) to 1.8 (at age 115). Special
rules apply to require that distributions be made to Beneficiaries after
the death of the Participant. A penalty tax of up to 50% of the amount
which should be distributed may be imposed by the Internal Revenue Service
for failure to make such distribution.
2. Deferred Compensation Plans for Tax-Exempt Organizations and State and
Local Governments
Generally, in order to avoid a penalty tax, annuity payments, periodic
payments or annual distributions must commence by April 1 of the calendar
year following the year in which the Participant attains age 70 1/2.
Minimum distributions under a Section 457 Deferred Compensation Plan may be
further deferred if the Participant remains employed. 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 based upon dividing
the account balance by a factor promulgated by the Internal Revenue Service
which ranges from 26.2 (at age 70) to 1.8 (at age 115). Special rules
apply to require that distributions be made to Beneficiaries after the
death of the Participant. A penalty tax of up to 50% of the amount which
should be distributed may be imposed by the Internal Revenue Service for
failure to make a distribution.
Upon receipt of any monies pursuant to the terms of a Deferred Compensation
Plans for a tax-exempt organization, state or local government under
Section 457 of the Code, such monies are taxable to such employee as
ordinary income in the year in which received.
C. 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 Internal Revenue Code. The application of this provision is summarized
below:
1. Eligible Rollover Distributions
a. The Unemployment Compensation Amendments Act of 1992 requires that
federal income taxes be withheld from certain distributions from
tax-qualified retirement plans and from tax-sheltered annuities under
Section 403(b). These provisions DO NOT APPLY to distributions from
individual retirement annuities under section 408(b) or from
<PAGE>
47
deferred compensation programs under section 457.
b. If any portion of a distribution is an "eligible rollover
distribution", the law requires that 20% of that amount be withheld.
This amount is sent to the IRS as withheld income taxes. The following
types of payments DO NOT constitute an eligible rollover distribution
(and, therefore, the mandatory withholding rules will not apply):
- the non-taxable portion of the distribution;
- distributions which are part of a series of equal (or substantially
equal) payments made at least annually for your lifetime (or your
life expectancy), or your lifetime and your Beneficiary's lifetime
(or life expectancies), or for a period of ten years or more.
- required minimum distributions made pursuant to section 401(a)(9) of
the IRC.
c. However, these mandatory withholding requirements do not apply in the
event that all or a portion of any eligible rollover distribution is paid
in a "direct rollover". A direct rollover is the direct payment of an
eligible rollover distribution or portion thereof to an individual
retirement arrangement or annuity (IRA) or to another qualified employer
plan. IF A DIRECT ROLLOVER IS ELECTED, NO INCOME TAX WILL BE WITHHELD.
d. If any portion of a distribution is not an eligible rollover
distribution but is taxable, the mandatory withholding rules described
above do not apply. In this case, the voluntary withholding rules
described below apply.
2. Non-Eligible Rollover Distributions
a. 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.
b. Periodic Distributions (distributions payable over a period greater
than one year)
The portion of a periodic distribution which constitutes taxable income
will be subject to Federal income tax withholding as if the recipient
were married claiming three exemptions. A recipient may elect not to
have income taxes withheld or have income taxes withheld at a different
rate by providing a completed election form. Election forms will be
provided at the time distributions are requested.
<PAGE>
48
D. Any distribution from plans described in A.3 on page ____ is subject to the
regular wage withholding rules.
<PAGE>
49
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, 1989 and any increases in cash
value after December 31, 1988 may not be distributed to you unless you have:
a. attained age 59 1/2
b. terminated employment
c. died, or
d. become disabled.
Distributions of post December 31, 1988 contributions may also be made if you
have experienced a financial hardship.
Also, there may be a 10% penalty tax for distributions made because of financial
hardship or separation from service.
Also, please be aware that your 403(b) Plan may also offer other financial
alternatives other than the Hartford Variable Annuity. Please refer to your
Plan.
Please complete the following and return to:
Hartford Life Insurance Company
Individual Annuity Operations
P.O. Box 5085
Hartford, CT 06102-5085
- - - - - - - - - - - - - - - - - - - - - - - - - -
Name of Contract Owner/Participant
Address
City or Plan/School District
Date:
<PAGE>
50
TABLE OF CONTENTS
TO
STATEMENT OF ADDITIONAL INFORMATION
SECTION PAGE
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY . . . . . . . . . .
SAFEKEEPING OF ASSETS. . . . . . . . . . . . . . . . . . . . . . .
INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . . .
DISTRIBUTION OF CONTRACTS. . . . . . . . . . . . . . . . . . . . .
ANNUITY/PAYOUT PERIOD. . . . . . . . . . . . . . . . . . . . . . .
Annuity Payments. . . . . . . . . . . . . . . . . . . . . . .
The Annuity Unit and Valuation. . . . . . . . . . . . . . . .
Determination of Payment Amount . . . . . . . . . . . . . . .
CALCULATION OF YIELD AND RETURN. . . . . . . . . . . . . . . . . .
PERFORMANCE COMPARISONS. . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
51
- - - - - - - - - - - - - - - - - -
To Obtain a Statement of Additional Information, please complete the form below
and mail to:
Hartford Life Insurance Company
Attn: Individual Annuity Operations
P.O. Box 5085
Hartford, CT 06102-5085
Please send a Statement of Additional Information for the PCM Capital Manager to
me at the following address:
__________________________________
Name
__________________________________
Address
__________________________________
City/State Zip Code
- - - - - - - - - - - - - - - - - -
<PAGE>
PART B
<PAGE>
-2-
STATEMENT OF ADDITIONAL INFORMATION
HARTFORD LIFE INSURANCE COMPANY -
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT
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 Operations, P.O. Box 5085, Hartford, CT
06102-5085.
Date of Prospectus: May 1 , 1995
-------
Date of Statement of Additional Information: May 1 , 1995
-------
<PAGE>
-3-
TABLE OF CONTENTS
SECTION
PAGE
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY . . . . . . . . . . . .
SAFEKEEPING OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . . .
INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . . . . .
DISTRIBUTION OF CONTRACTS. . . . . . . . . . . . . . . . . . . . . . .
ANNUITY/PAYOUT PERIOD. . . . . . . . . . . . . . . . . . . . . . . . .
Annuity Payments. . . . . . . . . . . . . . . . . . . . . . . . .
The Annuity Unit and Valuation. . . . . . . . . . . . . . . . . .
Determination of Payment Amount . . . . . . . . . . . . . . . . .
CALCULATION OF YIELD AND RETURN. . . . . . . . . . . . . . . . . . . .
PERFORMANCE COMPARISONS. . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
-4-
INTRODUCTION
The tax deferred Variable Annuity Contracts described in the Prospectus are
designed to provide Annuity benefits to individuals who have established or wish
to establish retirement programs which may or may not qualify for special
Federal income tax treatment. The Annuitant under these Contracts may receive
Annuity benefits in accordance with the Annuity option selected and the
retirement program, if any, under which the Contracts have been purchased.
Annuity payments under a Contract will begin on a particular future date which
may be selected at any time under the Contract or automatically when the
Annuitant reaches age 90 except in certain states where the Annuitant must reach
age 85. There are several alternative annuity payment options available under
the Contract (see "Optional Forms of Annuity," page ____ of the Prospectus).
The Premium Payments under a Contract, less any applicable Premium Taxes, will
be applied to the Separate Account and/or the Fixed Account. Accordingly, the
net Premium Payment under the Contract will be applied to purchase interests
in one or more of the following eleven portfolios ("Funds") of Putnam Capital
Manager Trust, an open-end diversified series investment company: PCM Asia
Pacific Growth Fund, PCM Diversified Income Fund, PCM Global Asset Allocation
Fund, PCM Global Growth Fund, PCM Growth and Income Fund, PCM High Yield Fund,
PCM Money Market Fund, PCM New Opportunities Fund, PCM U.S. Government and High
Quality Bond Fund, PCM Utilities Growth and Income Fund and PCM Voyager Fund.
Shares of the Funds are purchased by the Separate Account without the imposition
of any additional sales charge. The value of a Contract depends on the value of
the shares of the Fund held by the Separate Account pursuant to that Contract.
As a result, the Contract Owner bears the investment risk since market value of
the shares may increase or decrease.
The Contracts provide that in the event the Annuitant dies before the selected
Annuity Commencement Date, the Contingent Annuitant will become the Annuitant.
If the Annuitant dies before the Annuity Commencement Date and there is no
designated Contingent Annuitant, or the Contingent Annuitant predeceases the
Annuitant, or if the Contract Owner dies before the Annuity Commencement Date,
the Beneficiary will receive the Contract Value determined on the date of
receipt of due proof of death by HL in its Home Office. However, upon death
prior to the Annuity Commencement Date, the Beneficiary will receive the greater
of (a) the Contract Value determined as of the day written proof of death of
such person is received by HL, or (b) 100% of the total Premium Payments made to
such Contract, reduced by any prior surrenders, or (c) the Contract Value on the
Specified Contract Anniversary immediately preceding the date of death,
increased by the dollar amount of any Premium Payments made and reduced by the
dollar amount of any partial terminations since the immediately preceding
Specified Contract Anniversary.
<PAGE>
-5-
DESCRIPTION OF HARTFORD LIFE INSURANCE COMPANY
Hartford Life Insurance Company ("HL") was originally incorporated under the
laws of Massachusetts on June 5, 1902. It was subsequently redomiciled to
Connecticut. It is a stock life insurance company engaged in the business of
writing health and life insurance, both ordinary and group, in all states of the
United States and the District of Columbia. The offices of HL are located in
Simsbury, Connecticut; however its mailing address is P.O. Box 5085, Hartford,
Connecticut 06102-5085. HL is ultimately 100% owned by Hartford Fire Insurance
Company, one of the largest multiple lines insurance carriers in the United
States. Hartford Fire Insurance Company is a subsidiary of ITT Corporation.
ITT Hartford Life and Annuity Insurance Company has an A++(superior) rating
from A.M. Best and Company, Inc. on the basis of its financial soundness and
operating performance, the highest ratings provided by this service.
ITT Hartford has an AA+ rating from Standard & Poor's and Duff and Phelps
highest rating (AAA) on the basis of its claims paying ability.
These ratings do not apply to the performance of the Separate Account. However,
the contractual obligation under this variable annuity are the general corporate
obligations of HL. These ratings do apply to HL's ability to meet its insurance
obligations under the Contract.
SAFEKEEPING OF ASSETS
The assets of the Separate Account are held by HL under a safekeeping
arrangement.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, One Financial Plaza, Hartford, Connecticut, independent
public accountants, will perform an annual audit of the Separate Account. The
financial statements included in this Statement of Additional Information have
been audited by Arthur Andersen LLP to the extent and for the periods
indicated in their report and are included herein in reliance upon the report of
said firm as experts in accounting and auditing.
DISTRIBUTION OF CONTRACTS
Hartford Equity Sales Company, Inc. ("HESCO") currently serves as Principal
Underwriter for the securities issued with respect to the Separate Account.
Hartford Securities Distribution Company, Inc. ("HSD") will replace HESCO as
principal underwriter upon approval by the Commission, the National Association
of Securities Dealers, Inc. ("NASD") and applicable state regulatory
authorities.
Both HESCO and HSD are wholly-owned subsidiaries of HL. The principal business
address of HESCO and HSD is the same as HL.
<PAGE>
-6-
The securities will be sold by salespersons of HESCO, and subsequently, HSD, who
represent HL as insurance and Variable Annuity agents and who are registered
representatives or Broker-Dealers who have entered into distribution agreements
with HESCO, and subsequently HSD.
ANNUITY/PAYOUT PERIOD
ANNUITY PAYMENTS
Variable Annuity payments are determined on the basis of (1) a mortality table
set forth in the Contracts and the type of Annuity payment option selected, and
(2) the investment performance of the investment medium selected. Fixed Annuity
payments are based on the Annuity tables contained in the Contracts, and will
remain level for the duration of the Annuity.
The amount of the Annuity payments will not be affected by adverse mortality
experience or by an increase in expenses in excess of the expense deduction for
which provision has been made (see "Mortality and Expense Risk Charge," page __
of the Prospectus).
For a Variable Annuity, the Annuitant will be paid the value of a fixed number
of Annuity Units each month. The value of such units and the amounts of the
monthly Variable Annuity payments will, however, reflect investment income
occurring after retirement, and thus the Variable Annuity payments will vary
with the investment experience of the Fund shares selected.
THE ANNUITY UNIT AND VALUATION
The value of the Annuity Unit for each Sub-Account in the Separate Account for
any day is determined by multiplying the value for the preceding day by the
product of (1) the net investment factor (see "Valuation of Accumulation Units,"
page ____ of the Prospectus) for the day for which the Annuity Unit value is
being calculated, and (2) a factor to neutralize the assumed investment rate
discussed below.
ILLUSTRATION OF CALCULATION OF ANNUITY UNIT VALUE
1. Net Investment Factor for period. . . . . . . . 1.011225
2. Adjustment for 4% Assumed Investment Rate . . . .999892
3. 2x1 . . . . . . . . . . . . . . . . . . . . . . 1.011116
4. Annuity Unit value, beginning of period . . . . .995995
5. Annuity Unit value, end of period (3x4) . . . . 1.007066
<PAGE>
-7-
DETERMINATION OF PAYMENT AMOUNT
When Annuity payments are to commence, the value of the Contract is determined
as the sum of the value of the Fixed Account no earlier than the close of
business on the fifth Valuation Day preceding the date the first Annuity payment
is due plus the product of the value of the Accumulation Unit of each
Sub-Account on that same day, and the number of Accumulation Units credited to
each Sub-Account as of the date the Annuity is to commence.
The Contract contains tables indicating the minimum dollar amount of the first
monthly payment under the optional forms of Annuity for each $1,000 of value of
a Sub-Account under a Contract. The first monthly payment varies according to
the form and type of Annuity selected. The Contracts contain Annuity tables
derived from the 1983a Individual Annuity Mortality Table with ages set back
one year with an assumed investment rate ("A.I.R.") of 3.00% per annum for a
Fixed Annuity and 5.00% per annum for a Variable Annuity. The total first
monthly Variable Annuity payment is determined by multiplying the value
(expressed in thousands of dollars) of a Sub-Account (less any applicable
Premium Taxes) by the amount of the first monthly payment per $1,000 of value
obtained from the tables in the Contracts.
Fixed Annuity payments are determined at annuitization by multiplying the values
allocated to the Fixed Account by a rate to be determined by HL which is no less
than the rate specified in the Annuity tables in the Contract. The Annuity
payment will remain level for the duration of the Annuity.
The amount of the first monthly Variable Annuity payment, determined as
described above, is divided by the value of an Annuity Unit for the appropriate
Sub-Account no earlier than the close of business on the fifth Valuation Day
preceding the day on which the payment is due in order to determine the number
of Annuity Units represented by the first payment. This number of Annuity Units
remains fixed during the Annuity Period, and in each subsequent month the dollar
amount of the Variable Annuity payment is determined by multiplying this fixed
number of Annuity Units by the then current Annuity Unit value.
The A.I.R. assumed in the mortality tables would produce level Variable Annuity
payments if the investment rate remained constant. In fact, payments will vary
up or down as the investment rate varies up or down from the A.I.R.
The Annuity payments will be made on the fifteenth day of each month following
selection. The Annuity Unit value used in calculating the amount of the
Variable Annuity payments will be based on an Annuity Unit value determined as
of the close of business on a day no earlier than the fifth Valuation Day
preceding the date of the Annuity payment.
<PAGE>
-8-
CALCULATION OF YIELD AND RETURN
YIELD OF THE PCM MONEY MARKET FUND SUB-ACCOUNT. As summarized in the Prospectus
under the heading "Performance Related Information," the yield of the
Sub-Account for a seven day period (the "base period") will be computed by
determining the "net change in value" of a hypothetical account having a balance
of one unit at the beginning of the period, dividing the net change in account
value by the value of the account at the beginning of the base period to obtain
the base period return, and multiplying the base period return by 365/7 with the
resulting yield figure carried to the nearest hundredth of one percent. Net
changes in value of a hypothetical account will include net investment income of
the account (accrued dividends as declared by the underlying funds, less expense
and Contract charges of the account) for the period, but will not include
realized gains or losses or unrealized appreciation or depreciation on the
underlying fund shares.
The effective yield is calculated by compounding the base period return by
adding 1, raising the sum to a power equal to 365/7 and subtracting 1 from the
result, according to the following formula:
365/7
Effective Yield = [(Base Period Return + 1) ] - 1
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 yield and effective yield for the Sub-Account for the seven-day period
ending December 31, 1994 is as follows:
Yield = 4.43%
Effective Yield = 4.53%
The High Yield Fund, U.S. Government and High Quality Bond Fund, and PCM Growth
and Income 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 Funds.
UTILITIES GROWTH AND INCOME FUND SUB-ACCOUNT
Yield calculations of the Sub-Account used for illustration purposes reflect the
interest earned by the Sub-Account, less applicable asset charges assessed
against a Contract Owner's account over the base period. The following is the
method used to determine the yield for the 30-day period ended December 31,
1994.
<PAGE>
-9-
Example:
Current Yield Formula for the Sub-Account
2*[((A-B)/(C*D)+1)RAISED TO THE POWER OF 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.
Yield = 3.47%
HIGH YIELD FUND SUB-ACCOUNT
Yield calculations of the Sub-Account used for illustration purposes reflect the
interest earned by the Sub-Account, less applicable asset charges assessed
against a Contract Owner's account over the base period. The following is the
method used to determine the yield for the 30-day period ended December 31,
1994.
Example:
Current Yield Formula for the Sub-Account
2*[((A-B)/(C*D) + 1)RAISED TO THE POWER OF 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.
Yield = 9.21%
U.S. GOVERNMENT AND HIGH QUALITY BOND FUND SUB-ACCOUNT
Yield calculations of the Sub-Account used for illustration purposes reflect the
interest earned by the Sub-Account, less applicable asset charges assessed
against a Contract Owner's account over the base period. The following is the
method used to determine the yield for the 30-day period ended December 31,
1994.
<PAGE>
-10-
Example:
Current Yield Formula for the Sub-Account
2*[((A-B)/(C*D) + 1)RAISED TO THE POWER OF 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.
Yield = 5.93%
GROWTH & INCOME FUND SUB-ACCOUNT
Yield calculations of the Sub-Account used for illustration purposes reflect the
interest earned by the Sub-Account, less applicable asset charges assessed
against a Contract Owner's account over the base period. The following is the
method used to determine the yield for the 30-day period ended December 31,
1994.
Example:
Current Yield Formula for the Sub-Account
2*[((A-B)/(C*D) + 1)RAISED TO THE POWER OF 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.
Yield = 2.34%
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.
<PAGE>
-11-
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.
PERFORMANCE COMPARISONS
YIELD AND TOTAL RETURN. The total return and yield may also be used to compare
the performance of the Sub-Accounts against certain widely acknowledged outside
standards or indices for stock and bond market performance. Index performance
is not representative of the performance of the PCM Sub-Account to which it is
compared and is not adjusted for commissions and other costs. Portfolio
holdings of the PCM Sub-Account will differ from those of the index to which it
is compared. Performance comparison indices include the following:
The Consumer Price Index, prepared by the U.S. Bureau of Labor Statistics, is a
commonly used measure of the rate of inflation. The index shows the average
change in the cost of selected consumer goods and services and does not
represent a return on an investment vehicle.
The Dow Jones Industrial Average is an unmanaged list of 30 common stocks
frequently used as a general measure of stock market performance. Its
performance figures reflect changes of market prices and reinvestment of all
distributions.
Lehman Brothers Corporate Bond Index is an unmanaged list of publicly issued,
fixed-rate, non-convertible investment-grade domestic corporate debt securities
frequently used as a general measure of the performance of fixed-income
securities. The average quality of bonds included in the index may be higher
than the average quality of those bonds in which PCM High Yield Fund customarily
invests. The index does not include bonds in certain of the lower rating
classifications in which the Fund may invest. The performance figures of the
index reflect changes in market prices and reinvestment of all interest
payments.
The Lehman Brothers 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 Lehman Brothers Government/Corporate Bond Index (the "SL
Government/Corporate Index") is a measure of the market value of approximately
5,300 bonds with a face value currently in excess of $1.3 trillion. To be
included in the SL Government/Corporate Index, an issue must have amounts
outstanding in excess of $1 million, have at least one year to maturity and be
rated "Baa" or higher ("investment grade") by a nationally recognized rating
agency. The index does not include bonds in certain of the lower-rating
classifications in which PCM High Yield Fund invests. Its performance figures
reflect changes in market prices and reinvestment of all interest payments.
<PAGE>
-12-
Morgan Stanley Capital International World Index is an unmanaged list of
approximately 1,450 equity securities listed on the stock exchanges of the
United States, Europe, Canada, Australia, New Zealand and the Far East, with all
values expressed in U.S. dollars. Performance figures reflect changes in market
prices and reinvestment of distributions net of withholding taxes. The
securities in the index change over time to maintain representativeness.
The NASDAQ-OTC Industrial Average (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. Its performance figures reflect changes of market prices but do not
reflect reinvestment of cash dividends.
Salomon Brothers Long-Term High-Grade Corporate Bond Index is an unmanaged list
of publicly traded corporate bonds having a rating of at least AA by Standard &
Poor's or Aa by Moody's and is frequently used as general measure of the
performance of fixed-income securities. The average quality of bonds included
in the index may be higher than the average quality of those bonds in which PCM
High Yield customarily invests. The index does not include bonds in certain of
the lower rating classifications in which the Fund may invest. Performance
figures for the index reflect changes of market prices and reinvestment of all
distributions.
The Salomon Brothers 7-10 Year Government Bond Index is an unmanaged list of
U.S. Government and government agency securities with maturities of 7 to 10
years. Performance figures for the index reflect changes of market prices and
reinvestment of all interest payments.
The Standard & Poor's Composite Index of 500 stocks (the "S&P 500") a market
value-weighted and unmanaged index showing changes in the aggregate market value
of 500 stocks relative to the base period 1941-43. The S&P 500 is composed
almost entirely of common stocks of companies listed on the New York Stock
Exchange, although the common stocks of a few companies listed on the American
Stock Exchange or traded over-the-counter are included. The 500 companies
represented include 400 industrial, 60 transportation and 40 financial services
concerns. The S&P 500 represents about 80% of the market value of all issues
traded on the New York Stock Exchange. Its performance figures reflect changes
of market prices and reinvestment of all regular cash dividends.
The Standard & Poor's 40 Utilities Index is unmanaged list of 40 utility stocks.
The Index assumes reinvestment of all distributions and reflects changes in
market prices but does not take into account brokerage commissions or other
fees. PCM Utilities Growth and Income Fund's telephone and electric utility
stocks are generally held in the same proportion as the telephone
<PAGE>
-13-
and electric stocks in the S&P Utilities Index. However, there are some utility
stocks held by the Fund that are not part of the Index.
The manner in which total return and yield will be calculated for public use is
described above. The following table summarizes the calculation of total return
and yield for each Sub-Account, where applicable, through December 31, 1994.
<PAGE>
PUTNAM - Money Market Sub-Account
The following is an example of this yield calculation for the Sub-Account
based on a seven day period ending December 31, 1994.
<TABLE>
<S> <C>
Assumption:
Value of a hypothetical pre-existing account
with exactly one unit at the beginning of the
period:.....................................................$1.323999
Value of the same account (excluding capital
changes) at the end of the seven day period.................$1.325124
Calculation:
Ending account value........................................$1.325124
Less beginning account value.................................1.323999
Net change in account value.................................$ 0.001125
Base period return:
(adjusted change / beginning account value)
$0.001125 / $1.323999 $ 0.000850
Current yield = $0.000850 * (365/7)=..................................4.43%
Effective Yield = (1 + 0.000850) RAISED TO THE POWER OF 365/7 - 1=....4.53%
</TABLE>
<PAGE>
Putnam Utilities Growth and Income Fund - Sub-Account - HL
The following is an example of this yield calculation for the Sub-Account
based on a one month period ending December 31, 1994.
Formula:
YIELD=2[(A-B+1) RAISED TO THE POWER OF 6-1]
---
CD
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.
Calculation: 2[(A-B/CD+1) RAISED TO THE POWER OF 6-1]
<TABLE>
<S> <C>
INTEREST INCOME a = 1,010,000
EXPENSES b = 288,600
AVERAGE UNITS c = 23,090,365
UNIT VALUE d = $ 10.889305
UIT YIELD = 3.47%
</TABLE>
<PAGE>
Putnam High Yield Fund - Sub-Account - HL
The following is an example of this yield calculation for the Sub-Account
based on a one month period ending December 31, 1994.
Formula:
YIELD=2[(A-B+1) RAISED TO THE POWER OF 6-1]
---
CD
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.
Calculation: 2[(A-B/CD+1) RAISED TO THE POWER OF 6-1]
<TABLE>
<S> <C>
INTEREST INCOME a = 1,730,000
EXPENSES b = 220,947
AVERAGE UNITS c = 11,461,548
UNIT VALUE d = $ 17.476456
UIT YIELD = 9.21%
</TABLE>
<PAGE>
Putnam U.S. Government and High Quality Bond Fund - Sub-Account - HL
The following is an example of this yield calculation for the Sub-Account
based on a one month period ending December 31, 1994.
Formula:
YIELD=2[(A-B+1) RAISED TO THE POWER OF 6-1]
---
CD
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.
Calculation: 2[(A-B/CD+1) RAISED TO THE POWER OF 6-1]
<TABLE>
<S> <C>
INTEREST INCOME a = 3,140,000
EXPENSES b = 599,039
AVERAGE UNITS c = 33,515,951
UNIT VALUE d = $ 15.532869
UIT YIELD = 5.93%
</TABLE>
<PAGE>
Putnam Growth & Income Fund - Sub-Account - HL
The following is an example of this yield calculation for the Sub-Account
based on a one month period ending December 31, 1994.
Formula:
YIELD=2[(A-B+1) RAISED TO THE POWER OF 6-1]
---
CD
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.
Calculation: 2[(A-B/CD+1) RAISED TO THE POWER OF 6-1]
<TABLE>
<S> <C>
INTEREST INCOME a = 4,160,000
EXPENSES b = 1,538,158
AVERAGE UNITS c = 67,015,929
UNIT VALUE d = $ 20.177784
UIT YIELD = 2.34%
</TABLE>
<PAGE>
AVERAGE ANNUAL TOTAL RETURN as of December 31, 1994
<TABLE>
<CAPTION>
Putnam IV PERIODS ENDED
- - ----------------------------------------------------------------------------------------
Sub-Account INCEPTION
DATE 1 YEAR 5 YEAR INCEPTION
- - ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PCM Growth and Income Fund 02/01/88 -9.98% 3.93% 8.30%
PCM High Yield Fund 02/01/88 -11.17% 8.17% 5.39%
PCM Money Market Fund 02/01/88 -6.61% -0.32% 1.06%
PCM Global Asset Allocation Fund 02/01/88 -12.62% 2.75% 4.54%
PCM U.S. Government and High Quality Bond Fund 02/01/88 -13.30% 3.00% 3.70%
PCM Voyager Fund 02/01/88 -9.34% 9.00% 10.66%
PCM Global Growth Fund 05/01/90 -11.20% N/A 2.07%
PCM Utilities Growth and Income Fund 05/01/92 -16.81% N/A -1.73%
PCM Diversified Income Fund 09/15/93 -14.23% N/A -9.86%
PCM New Opportunities Fund 06/20/94 N/A N/A -1.82%
<FN>
NOTE: Average annual total return assumes a hypothetical initial payment of
$1,000. At the end of each period, a total surrender is assumed. Maintenance
fees and contingent deferred sales loads, if applicable, are deducted to
determine ending redeemable value of the original payment. Then, ending
redeemable value is divided by the original investment to calculate total
return.
</TABLE>
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life Insurance Company Putnam Capital Manager Trust Separate Account
and to the Owners of Units of Interest therein:
We have audited the accompanying statement of assets and liabilities of Hartford
Life Insurance Company Putnam Capital Manager Trust Separate Account as of
December 31, 1994, and the related statement of operations for the year then
ended and the statements of changes in net assets for each of the two years in
the period then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hartford Life Insurance Company
Putnam Capital Manager Trust Separate Account as of December 31, 1994, and the
results of its operations for the year then ended and the changes in its net
assets for each of the two years in the period then ended, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
February 15, 1995
<PAGE>
<TABLE>
<CAPTION>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT--HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES
- - ------------------------------------------------------------------------------------------------------------------------------
December 31, 1994 Voyager Global Growth Global Asset High Yield
Fund Growth and Income Allocation Fund
Sub-Account Fund Fund Fund Sub-Account
Sub-Account Sub-Account Sub-Account
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
- - ------------------------------------------------------------------------------------------------------------------------------
PCM VOYAGER FUND
Shares 31,156,027
Cost $561,184,708
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: $691,663,790 $ 0 $ 0 $ 0 $ 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM GLOBAL GROWTH FUND
Shares 29,613,208
Cost $366,437,481
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 399,186,045 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM GROWTH AND INCOME FUND
Shares 82,444,786
Cost $1,288,175,014
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 1,355,392,281 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM GLOBAL ASSET ALLOCATION
FUND
Shares 20,497,352
Cost $258,797,925
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 0 270,360,078 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM HIGH YIELD FUND
Shares 17,509,574
Cost $191,002,418
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 0 0 200,659,720
- - ------------------------------------------------------------------------------------------------------------------------------
PCM U.S. GOVERNMENT AND
HIGH QUALITY FUND
Shares 42,642,616
Cost $510,933,368
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM NEW OPPORTUNITIES FUND
Shares 3,658,643
Cost $37,799,661
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM MONEY MARKET FUND
Shares 192,109,143
Cost $192,109,143
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM UTILITIES GROWTH &
INCOME FUND
Shares 23,561,783
Cost $268,170,502
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM DIVERSIFIED INCOME FUND
Shares 13,251,562
Cost $133,756,425
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life
Insurance Company 0 304,838 10,529 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
Receivable from fund shares sold 1,169,918 0 0 9,883 6,472
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $692,833,708 $399,490,883 $1,355,402,810 $270,369,961 $200,666,192
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Due to Hartford Life
Insurance Company 1,169,278 0 0 9,892 18,716
- - ------------------------------------------------------------------------------------------------------------------------------
Payable for fund shares purchased 0 303,682 9,459 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $1,169,278 $ 303,682 $ 9,459 $ 9,892 $ 18,716
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE ANNUITY
CONTRACT LIABILITIES) $691,664,430 $399,187,201 $1,355,393,351 $270,360,069 $200,647,476
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------------------
December 31, 1994 U.S. New Money Utilities Diversified
Government Opportunities Market Growth and Income Fund
and High Fund Fund Income Fund Sub-Account
Quality Sub-Account Sub-Account Sub-Account
Bond Fund
Sub-Account
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
- - ------------------------------------------------------------------------------------------------------------------------------
PCM VOYAGER FUND
Shares 31,156,027
Cost $561,184,708
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: $ 0 $ 0 $ 0 $ 0 $ 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM GLOBAL GROWTH FUND
Shares 29,613,208
Cost $366,437,481
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM GROWTH AND INCOME FUND
Shares 82,444,786
Cost $1,288,175,014
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM GLOBAL ASSET ALLOCATION
FUND
Shares 20,497,352
Cost $258,797,925
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM HIGH YIELD FUND
Shares 17,509,574
Cost $191,002,418
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM U.S. GOVERNMENT AND
HIGH QUALITY FUND
Shares 42,642,616
Cost $510,933,368
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 521,092,771 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM NEW OPPORTUNITIES FUND
Shares 3,658,643
Cost $37,799,661
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 39,586,518 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM MONEY MARKET FUND
Shares 192,109,143
Cost $192,109,143
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 192,109,143 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM UTILITIES GROWTH &
INCOME FUND
Shares 23,561,783
Cost $268,170,502
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 0 251,638,537 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM DIVERSIFIED INCOME FUND
Shares 13,251,562
Cost $133,756,425
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value: 0 0 0 0 129,070,213
- - ------------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life
Insurance Company 230,857 149,475 1,472,887 60,385 0
- - ------------------------------------------------------------------------------------------------------------------------------
Receivable from fund shares sold 0 0 0 0 36,032
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $521,323,628 $39,735,993 $193,582,030 $251,698,922 $129,106,245
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Due to Hartford Life
Insurance Company 0 0 0 0 35,283
- - ------------------------------------------------------------------------------------------------------------------------------
Payable for fund shares purchased 230,545 149,239 1,472,319 57,030 0
- - ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 230,545 $ 149,239 $ 1,472,319 $ 57,030 $ 35,283
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE ANNUITY
CONTRACT LIABILITIES) $521,093,083 $ 39,586,754 $192,109,711 $251,641,892 $129,070,962
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT -- HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES (CONTINUED)
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------------
December 31, 1994 Units Unit Contract
Owned by Price Liability
Participants
<S> <C> <C> <C>
Deferred annuity contracts in the accumulation period:
Individual Sub-Accounts:
- - -----------------------------------------------------------------------------------------------------------------------------------
Voyager Fund Sub-Account 29,315,343 $23.444549 $687,285,002
- - -----------------------------------------------------------------------------------------------------------------------------------
Voyager Fund .40% 1,043 11.177726 11,661
- - -----------------------------------------------------------------------------------------------------------------------------------
Global Growth Fund Sub-Account 30,284,767 13.118640 397,294,955
- - -----------------------------------------------------------------------------------------------------------------------------------
Global Growth Fund .40% 1,029 10.237421 10,535
- - -----------------------------------------------------------------------------------------------------------------------------------
Growth and Income Fund Sub-Account 67,015,929 20.177784 1,352,232,942
- - -----------------------------------------------------------------------------------------------------------------------------------
Growth and Income Fund .40% 1,029 10.247296 10,549
- - -----------------------------------------------------------------------------------------------------------------------------------
Global Asset Allocation Sub-Account 16,506,620 16.334545 269,628,127
- - -----------------------------------------------------------------------------------------------------------------------------------
Global Asset Allocation Fund .40% 1,015 10.164479 10,315
- - -----------------------------------------------------------------------------------------------------------------------------------
High Yield Fund Sub-Account 11,461,548 17.476456 200,307,240
- - -----------------------------------------------------------------------------------------------------------------------------------
High Yield Fund .40% 1,000 9.952840 9,953
- - -----------------------------------------------------------------------------------------------------------------------------------
U.S. Government and High Quality Bond Fund Sub-Account 33,515,951 15.532869 520,598,873
- - -----------------------------------------------------------------------------------------------------------------------------------
U.S. Government and High Quality Bond Fund .40% 1,000 10.020410 10,020
- - -----------------------------------------------------------------------------------------------------------------------------------
New Opportunities Fund Sub-Account 3,680,946 10.718448 39,454,026
- - -----------------------------------------------------------------------------------------------------------------------------------
New Opportunities Fund .40% 1,000 11.660590 11,661
- - -----------------------------------------------------------------------------------------------------------------------------------
Money Market Fund Sub-Account 144,949,610 1.325124 192,076,207
- - -----------------------------------------------------------------------------------------------------------------------------------
Money Market Fund .40% 10,000 1.020575 10,206
- - -----------------------------------------------------------------------------------------------------------------------------------
Utilities Growth and Income Fund Sub-Account 23,090,365 10.889305 251,438,025
- - -----------------------------------------------------------------------------------------------------------------------------------
Utilities Growth and Income Fund .40% 1,000 10.199140 10,199
- - -----------------------------------------------------------------------------------------------------------------------------------
Diversified Income Fund Sub-Account 13,402,793 9.621589 128,956,169
- - -----------------------------------------------------------------------------------------------------------------------------------
Diversified Income Fund .40% 1,030 9.938664 10,237
- - -----------------------------------------------------------------------------------------------------------------------------------
Total Accumulation Period $4,039,376,902
- - -----------------------------------------------------------------------------------------------------------------------------------
Annuity contracts in the annuity period: --
- - -----------------------------------------------------------------------------------------------------------------------------------
Individual Sub-Accounts:
- - -----------------------------------------------------------------------------------------------------------------------------------
Voyager Fund Sub-Account 186,302 23.444549 4,367,767
- - -----------------------------------------------------------------------------------------------------------------------------------
Global Growth Fund Sub-Account 143,438 13.118640 1,881,711
- - -----------------------------------------------------------------------------------------------------------------------------------
Growth and Income Fund Sub-Account 156,105 20.177784 3,149,860
- - -----------------------------------------------------------------------------------------------------------------------------------
Global Asset Allocation Sub-Account 44,178 16.334545 721,627
- - -----------------------------------------------------------------------------------------------------------------------------------
High Yield Fund Sub-Account 18,899 17.476456 330,283
- - -----------------------------------------------------------------------------------------------------------------------------------
U.S. Government and High Quality Bond Fund Sub-Account 31,172 15.532869 484,190
- - -----------------------------------------------------------------------------------------------------------------------------------
New Opportunities Fund Sub-Account 11,295 10.718448 121,067
- - -----------------------------------------------------------------------------------------------------------------------------------
Money Market Fund Sub-Account 17,582 1.325124 23,298
- - -----------------------------------------------------------------------------------------------------------------------------------
Utilities Growth and Income Fund Sub-Account 17,785 10.889305 193,668
- - -----------------------------------------------------------------------------------------------------------------------------------
Diversified Income Fund Sub-Account 10,867 9.621589 104,556
- - -----------------------------------------------------------------------------------------------------------------------------------
Total Annuity Period $11,378,027
- - -----------------------------------------------------------------------------------------------------------------------------------
GRAND TOTAL: $4,050,754,929
- - -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT--HARTFORD LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
- - ----------------------------------------------------------------------------------------------------------------------------------
For the Voyager Global Growth Global Asset High Yield
Year Fund Growth and Income Allocation Fund
Ended Sub-Account Fund Fund Fund Sub-Account
December 31, Sub-Account Sub-Account Sub-Account
1994
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT
INCOME:
Dividends $10,564,540 $ 1,496,858 $ 66,065,162 $ 13,119,586 $ 15,269,700
- - ----------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Mortality and
expense
undertakings (8,392,819) (4,800,498) (17,547,166) (3,598,050) (2,828,107)
- - ----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT
INCOME (loss) 2,171,721 (3,303,640) 48,517,996 9,521,536 12,441,593
- - ----------------------------------------------------------------------------------------------------------------------------------
Capital gains
income 0 0 0 0 0
- - ----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED
AND UNREALIZED
GAIN (LOSS)
ON INVESTMENTS:
- - ----------------------------------------------------------------------------------------------------------------------------------
Net realized
gain (loss) on
security
transactions (998,237) (493,827) (248,930) (68,141) 120,714
- - ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation)
of investments
during the
period 177,560 (6,333,248) (62,935,036) (19,607,592) (17,013,415)
- - ----------------------------------------------------------------------------------------------------------------------------------
Net
gains(losses)
on
investments (820,677) (6,827,075) (63,184,966) (19,675,733) (16,892,701)
- - ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE
(DECREASE)
IN NET ASSETS
RESULTING
FROM
OPERATIONS $1,351,044 $(10,130,715) $(14,665,970) $(10,154,197) $(4,451,108)
- - ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------------------
For the U.S. New Money Utilities Diversified
Year Government Opportunities Market Growth and Income Fund
Ended and High Fund Fund Income Fund Sub-Account
December 31, Quality Sub-Account* Sub-Account Sub-Account
1994 Bond Fund
Sub-Account
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT
INCOME:
Dividends $ 39,179,232 $ 0 $ 7,303,287 $ 12,084,793 $ 583,245
- - ----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Mortality and
expense
undertakings (7,781,578) (148,114) (2,640,381) (3,857,143) (1,534,176)
- - ----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT
INCOME (LOSS) 31,397,654 (148,114) 4,662,906 8,227,650 (950,931)
- - ----------------------------------------------------------------------------------------------------------------------------------
Capital gains
income 0 0 0 0 0
- - ----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED
AND
UNREALIZED
GAIN (LOSS)
ON INVESTMENTS:
- - ----------------------------------------------------------------------------------------------------------------------------------
Net realized
gain(loss) on
security
transactions (4,808,609) 74,005 0 (2,055,843) (3,968)
- - ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation)
of investments
during the
period (54,162,583) 1,786,857 0 (31,254,025) (5,318,331)
- - ----------------------------------------------------------------------------------------------------------------------------------
Net
gains (losses)
on investments (58,971,192) 1,854,862 0 (33,309,868) (5,322,299)
- - ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE
(DECREASE)
IN NET ASSETS
RESULTING
FROM OPERATIONS $(27,573,538) $1,712,748 $4,662,906 $(25,082,218) $(6,273,230)
- - ----------------------------------------------------------------------------------------------------------------------------------
<FN>
*From inception May 2, 1994 to December 31, 1994
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT--HARTFORD LIFE COMPANY
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- - ----------------------------------------------------------------------------------------------------------------------------------
For the Year Voyager Global Growth Global Asset High Yield
Ended Fund Growth and Income Allocation Fund
December 31, Sub-Account Fund Fund Fund Sub-Account
1994 Sub-Account Sub-Account Sub-Account
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS
Net Investment
income
(loss) $ 2,171,721 $ (3,303,640) $48,517,996 $ 9,521,536 $ 12,441,593
- - ----------------------------------------------------------------------------------------------------------------------------------
Capital gains
income 0 0 0 0 0
- - ----------------------------------------------------------------------------------------------------------------------------------
Net realized
gain (loss)
on security
transactions (998,237) (493,827) (248,930) (68,141) 120,714
- - ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation)
of investments
during the
period 177,560 (6,333,248) (62,935,036) (19,607,592) (17,013,415)
- - -----------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in
net assets
resulting
from
operations 1,351,044 (10,130,715) (14,665,970) (10,154,197) (4,451,108)
- - ----------------------------------------------------------------------------------------------------------------------------------
Unit
transactions
- - ----------------------------------------------------------------------------------------------------------------------------------
Purchases 168,733,919 124,079,785 296,721,145 64,078,344 53,058,444
- - ----------------------------------------------------------------------------------------------------------------------------------
Net transfers 26,090,652 60,124,645 46,773,244 10,727,780 (33,290,619)
- - ----------------------------------------------------------------------------------------------------------------------------------
Surrenders (24,508,474) (14,709,256) (66,764,997) (14,430,312) (14,911,789)
- - ----------------------------------------------------------------------------------------------------------------------------------
Net annuity
transactions 929,652 1,035,986 343,877 203,869 112,614
- - ----------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in
net assets
resulting
from unit
transactions 171,245,749 170,531,160 277,073,269 60,579,681 4,968,650
- - ----------------------------------------------------------------------------------------------------------------------------------
Total increase
(decrease) in
net assets 172,596,793 160,400,445 262,407,299 50,425,484 517,542
- - ----------------------------------------------------------------------------------------------------------------------------------
Net assets
- - ----------------------------------------------------------------------------------------------------------------------------------
Beginning of
period 519,067,637 238,786,756 1,092,986,052 219,934,585 200,129,934
- - ----------------------------------------------------------------------------------------------------------------------------------
END OF
PERIOD $691,664,430 $399,187,201 $1,355,393,351 $270,360,069 $200,647,476
- - ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------------------
For the U.S. New Money Utilities Diversified
Year Government Opportunities Market Growth and Income Fund
Ended and High Fund Fund Income Fund Sub-Account
December 31, Quality Sub-Account Sub-Account Sub-Account
1994 Bond Fund
Sub-Account
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net
Investment
income (loss) $ 31,397,654 $ (148,114) $ 4,662,906 $ 8,227,650 (950,931)
- - -----------------------------------------------------------------------------------------------------------------------------------
Capital gains
income 0 0 0 0 0
- - -----------------------------------------------------------------------------------------------------------------------------------
Net realized
gain (loss)
on security
transactions (4,808,609) 74,005 0 (2,055,843) (3,968)
- - ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation)
of investments
during the
period (54,162,583) 1,786,857 0 (31,254,025) (5,318,331)
- - ----------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in
net assets
resulting
from operations (27,573,538) 1,712,748 4,662,906 (25,082,218) (6,273,230)
- - ----------------------------------------------------------------------------------------------------------------------------------
Unit
transactions
- - ----------------------------------------------------------------------------------------------------------------------------------
Purchases 85,073,270 16,607,482 75,790,313 49,020,306 84,190,831
- - ----------------------------------------------------------------------------------------------------------------------------------
Net transfers (107,354,862) 21,592,177 20,688,427 (67,615,529) 12,766,618
- - ----------------------------------------------------------------------------------------------------------------------------------
Surrenders (44,927,238) (430,717) (21,225,538) (15,745,189) (6,832,527)
- - ----------------------------------------------------------------------------------------------------------------------------------
Net annuity
transactions 148,139 105,064 (11,125) 184,267 107,048
- - ----------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in
net assets
resulting
from unit
transactions (67,060,691) 37,874,006 75,242,077 (34,156,145) 90,231,970
- - ----------------------------------------------------------------------------------------------------------------------------------
Total increase
(decrease) in
net assets (94,634,229) 39,586,754 79,904,983 (59,238,363) 83,958,740
- - ----------------------------------------------------------------------------------------------------------------------------------
Net assets
- - ----------------------------------------------------------------------------------------------------------------------------------
Beginning of
period 615,727,312 0 112,204,728 310,880,255 45,112,222
- - ----------------------------------------------------------------------------------------------------------------------------------
END OF
PERIOD $521,093,083 $39,586,754 $192,109,711 $251,641,892 $129,070,962
- - ----------------------------------------------------------------------------------------------------------------------------------
<FN>
*From inception May 2, 1994 to December 31, 1994
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT--HARTFORD LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- - ------------------------------------------------------------------------------------------------------------------------------
For the Year Voyager Global Growth Global Asset High Yield
Ended Fund Growth and Income Allocation Fund
December 31, Sub-Account Fund Fund Fund Sub-Account
1993 Sub-Account Sub-Account Sub-Account
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net
investment
income (loss) $ (4,269,359) $ (563,692) $ 10,532,523 $ 3,260,912 $ 6,050,391
- - ------------------------------------------------------------------------------------------------------------------------------
Capital gains
income 4,674,976 0 9,868,453 2,571,761 0
- - ------------------------------------------------------------------------------------------------------------------------------
Net realized
gain (loss)
on security
transactions (646,746) (22,024) (68,913) 8,188 282,070
- - ------------------------------------------------------------------------------------------------------------------------------
Net 67,224,633 37,202,720 75,857,655 17,587,019 18,318,026
unrealized
appreciation
(depreciation)
of
investments
during the
period
- - ------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease)
in net assets
resulting
from
operations 66,983,504 36,617,004 96,189,718 23,427,880 24,650,487
- - ------------------------------------------------------------------------------------------------------------------------------
Unit
transactions:
- - ------------------------------------------------------------------------------------------------------------------------------
Purchases 160,398,383 76,138,180 391,946,381 66,054,692 69,603,364
- - ------------------------------------------------------------------------------------------------------------------------------
Net
transfers 8,452,687 52,305,152 43,478,620 14,179,716 6,516,084
- - ------------------------------------------------------------------------------------------------------------------------------
Surrenders (14,470,129) (5,563,729) (35,736,508) (10,032,248) (8,205,218)
- - ------------------------------------------------------------------------------------------------------------------------------
Net annuity
transactions 895,977 303,644 1,070,607 47,875 170,560
- - ------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease)
in net assets
resulting
from unit
transactions 155,276,918 123,183,247 400,759,100 70,250,035 68,084,790
- - ------------------------------------------------------------------------------------------------------------------------------
Total increase
(decrease)
in net assets 222,260,422 159,800,251 496,948,818 93,677,915 92,735,277
- - ------------------------------------------------------------------------------------------------------------------------------
Net assets:
- - ------------------------------------------------------------------------------------------------------------------------------
Beginning of
period 296,807,215 78,986,505 596,037,234 126,256,670 107,394,657
- - ------------------------------------------------------------------------------------------------------------------------------
END OF
PERIOD $519,067,637 $238,786,756 $1,092,986,052 $219,934,585 $200,129,934
- - ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- - ------------------------------------------------------------------------------------------------------------------------------
For the Year Ended U.S. Government Money Utilities Diversified
Ended and High Market Growth and Income Fund
December 31, Quality Fund Income Fund Sub-Account*
1993 Bond Fund Sub-Account Sub-Account
Sub-Account
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net
investment
income (loss) $ 15,112,437 $ 1,306,206 $ (1,478,098) $ (74,016)
- - ------------------------------------------------------------------------------------------------------------------------------
Capital gains
income 2,022,047 0 201,422 0
- - ------------------------------------------------------------------------------------------------------------------------------
Net realized
gain (loss)
on security
transactions 18,448 0 (50,925) 0
- - ------------------------------------------------------------------------------------------------------------------------------
Net 26,548,485 0 12,677,034 632,120
unrealized
appreciation
(depreciation)
of
investments
during the
period
- - ------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease)
in net assets
resulting
from
operations 43,701,417 1,306,206 11,349,433 558,104
- - ------------------------------------------------------------------------------------------------------------------------------
Unit
transactions:
- - ------------------------------------------------------------------------------------------------------------------------------
Purchases 230,624,766 58,210,083 220,627,705 30,257,576
- - ------------------------------------------------------------------------------------------------------------------------------
Net
transfers (38,137,228) (39,601,835) 21,252,865 14,389,599
- - ------------------------------------------------------------------------------------------------------------------------------
Surrenders (30,365,479) (10,114,557) (5,605,017) (93,057)
- - ------------------------------------------------------------------------------------------------------------------------------
Net annuity
transactions 81,528 (12,916) 13,284 0
- - ------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease)
in net assets
resulting
from unit
transactions 162,203,587 8,480,775 236,288,837 44,554,118
- - ------------------------------------------------------------------------------------------------------------------------------
Total increase
(decrease)
in net assets 205,905,004 9,786,981 247,638,270 45,112,222
- - ------------------------------------------------------------------------------------------------------------------------------
Net assets
- - ------------------------------------------------------------------------------------------------------------------------------
Beginning of
period 409,822,308 102,417,747 63,241,985 0
- - ------------------------------------------------------------------------------------------------------------------------------
END OF
PERIOD $615,727,312 $112,204,728 $310,880,255 $45,112,222
- - ------------------------------------------------------------------------------------------------------------------------------
<FN>
*From Inception, September 15, 1993 to December 31, 1993
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST ACCOUNT--HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
December 31,1994
1. ORGANIZATION:
Putnam Capital Manager Trust Separate Account (the Account) is a separate
investment account with Hartford Life Insurance Company (the Company) and is
registered with the Securities and Exchange Commission (SEC) as a unit
investment trust under the Investment Company Act of 1940, as amended. Both
the Company and the Account are subject to supervision and regulation by the
Department of Insurance of the State of Connecticut.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the Account,
which are in accordance with generally accepted accounting principles in the
investment company industry:
A) SECURITY TRANSACTIONS Security transactions are recorded on the trade date
(date the order to buy or sell is executed). Cost of investments sold is
determined on the basis of identified cost. Dividend and capital gains income
are accrued as of the ex-dividend date.
B) SECURITY VALUATION The investment in shares of the Funds is valued at the
closing net asset value per share as determined by the appropriate Fund on
December 31, 1994.
C) FEDERAL INCOME TAXES The operations of the Account form a part of, and are
taxed with, the total operations of the Company, which is taxed as an
insurance company under the Internal Revenue Code. Under current law, no
federal income taxes are payable with respect to the operations of the
Account.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
A) MORTALITY AND EXPENSE UNDERTAKINGS The Company, as issuer of variable
annuity contracts, provides the mortality and expense undertakings and, with
respect to the Account, receives a maximum annual fee of 1.25% of the
Account's average daily net assets. The Company also provides administrative
services and receives an annual fee of 0.15% of the Account's average daily
net assets.
B) DEDUCTION OF ANNUAL MAINTENANCE FEE Annual maintenance fees are deducted
through termination of units of interest from applicable contract owners'
accounts, in accordance with the terms of the contracts.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life Insurance Company and Subsidiaries:
We have audited the accompanying consolidated balance sheets of Hartford Life
Insurance Company (a Connecticut corporation and wholly-owned subsidiary of
Hartford Life and Accident Insurance Company) and subsidiaries as of December
31, 1994 and 1993, and the related consolidated statements of income,
stockholder's equity and cash flow for each of the three years in the period
ended December 31, 1994. These consolidated financial statements and the
schedules referred to below are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Hartford Life Insurance Company and subsidiaries as of December 31, 1994 and
1993, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1994 in conformity with generally
accepted accounting principles.
As discussed in the accompanying notes to the consolidated financial statements,
the Company adopted new accounting standards promulgated by the Financial
Accounting Standards Board, changing its methods of accounting, as of January 1,
1994, for debt and equity securities, and, effective January 1, 1992, for
postretirement benefits other than pensions and postemployment benefits.
Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedules listed in the
Index to Consolidated Financial Statements and Schedules are presented for
purposes of complying with the Securities and Exchange Commission's rules and
are not a required part of the basic consolidated financial statements. These
schedules have been subjected to the auditing procedures applied in the audits
of the basic consolidated financial statements and, in our opinion, fairly
state in all material respects the financial data required to be set forth
therein in relation to the basic consolidated financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
January 30, 1995
F-2
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
1994 1993 1992
<S> <C> <C> <C>
REVENUES:
Premiums and other considerations $1,100 $ 747 $ 259
Net investment income 1,292 1,051 907
Net realized gains on investments 7 16 5
------ ------ ------
2,399 1,814 1,171
BENEFITS, CLAIMS AND EXPENSES:
Benefits, claims and claim
adjustment expenses 1,405 1,046 797
Amortization of deferred policy
acquisition costs 145 113 55
Dividends to policyholders 419 227 47
Other insurance expenses 227 210 138
------ ------ ------
2,196 1,596 1,037
INCOME BEFORE INCOME TAX AND
CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES 203 218 134
Income tax expense 65 75 45
------ ------ ------
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGES IN ACCOUNTING PRINCIPLES 138 143 89
Cumulative effect of changes in
accounting principles net of tax benefit of $7 - - (13)
------ ------ ------
NET INCOME $ 138 $ 143 $ 76
------ ------ ------
------ ------ ------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
F-3
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
1994 1993
-------- --------
<S> <C> <C>
ASSETS
Investments:
Fixed maturities, available for sale, at fair
value in 1994 and at amortized cost in 1993
(amortized cost, $14,464 in 1994; fair
value, $12,845 in 1993) $13,429 $12,597
Equity securities, at fair value 68 90
Mortgage loans, at outstanding principal balance 316 228
Policy loans, at outstanding balance 2,614 1,397
Other investments 107 40
------- -------
16,534 14,352
Cash 20 1
Premiums and amounts receivable 160 327
Reinsurance recoverable 5,466 5,532
Accrued investment income 378 241
Deferred policy acquisition costs 1,809 1,334
Deferred income tax 590 114
Other assets 83 101
Separate account assets 22,809 16,284
------- -------
$47,849 $38,286
------- -------
------- -------
LIABILITIES AND STOCKHOLDER'S EQUITY
Future policy benefits $1,890 $1,659
Other policyholder funds 21,328 18,234
Other liabilities 1,000 916
Separate account liabilities 22,809 16,284
------- -------
47,027 37,093
Common stock - authorized 1,000 shares, $5,690
par value, issued and outstanding 1,000 shares 6 6
Capital surplus 826 676
Unrealized losses on securities, net of tax (654) (5)
Retained earnings 644 516
------- -------
822 1,193
------- -------
$47,849 $38,286
------- -------
------- -------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
F-4
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(IN MILLIONS)
<TABLE>
<CAPTION>
UNREALIZED
GAINS(LOSSES) TOTAL
COMMON CAPITAL ON RETAINED STOCKHOLDER'S
STOCK SURPLUS SECURITIES EARNINGS EQUITY
----- ------- ---------- -------- ------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1991 $ 6 $ 439 $ 1 $ 297 $ 743
Net Income 76 76
Capital Contribution - 25 - - 25
Excess of assets over liabilities on
reinsurance assumed from affiliate - 34 - - 34
Change in unrealized losses on equity
securities, net of tax - - (1) - (1)
------ ------- ------- ------- -------
BALANCE, DECEMBER 31, 1992 6 498 0 373 877
------ ------- ------- ------- -------
Net Income - - - 143 143
Capital Contribution - 180 - - 180
Excess of assets over liabilities on
reinsurance assumed from affiliate - (2) - - (2)
Change in unrealized losses on equity
securities, net of tax - - (5) - (5)
------ ------- ------- ------- -------
BALANCE, DECEMBER 31, 1993 6 676 (5) 516 1,193
------ ------- ------- ------- -------
Net Income - - - 138 138
Capital Contribution - 150 - - 150
Dividends Paid - - - (10) (10)
Change in unrealized losses on securities,
net of tax * - - (649) - (649)
------ ------- ------- ------- -------
BALANCE, DECEMBER 31, 1994 $ 6 $ 826 $ (654) $ 644 $ 822
------ ------- ------- ------- -------
------ ------- ------- ------- -------
<FN>
* The 1994 change in unrealized losses on securities, net of tax, includes a
gain of $91 due to adoption of SFAS #115 as discussed in note 1b to the
consolidated financial statements.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
F-5
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASHFLOW
(IN MILLIONS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES:
NET INCOME $ 138 $ 143 $ 76
Cumulative effect of accounting changes - - 13
Adjustments to net income:
Net realized investment gains before tax (7) (16) (5)
Net policyholder investment losses
(gains) before tax 5 (15) (15)
Net deferred policy acquisition costs (441) (292) (278)
Net amortization of premium (discount) on
fixed maturities 41 2 (16)
Deferred income tax benefits (128) (121) (14)
(Increase) decrease in premiums and
amounts receivable 10 (28) (14)
Increase in accrued investment income (106) (4) (116)
Decrease(increase) in other assets 101 (36) 88
Decrease(increase) in reinsurance
recoverable 75 (121) 0
Increase in liability for future policy
benefits 224 360 527
Increase in other liabilities 191 176 92
-------- --------- --------
CASH PROVIDED BY OPERATING ACTIVITIES 103 48 338
-------- --------- --------
INVESTING ACTIVITIES:
Purchases of fixed maturity investments (9,127) (12,406) (8,948)
Proceeds from sales of fixed maturity
investments 5,708 8,813 5,728
Maturities and principal paydowns of
long-term investments 1,931 2,596 1,207
Net purchases of other investments (1,338) (206) (106)
Net sales (purchases) of short-term
investments 135 (564) 221
-------- --------- --------
CASH USED FOR INVESTING ACTIVITIES (2,691) (1,767) (1,898)
-------- --------- --------
FINANCING ACTIVITIES:
Net receipts from investment and UL-type
contracts credited to policyholder account
balances 2,467 1,513 1,512
Capital contribution 150 180 25
Excess of assets over liabilities on
reinsurance assumed from affiliate - - 34
Dividends paid (10) - -
-------- --------- --------
CASH PROVIDED BY FINANCING
ACTIVITIES 2,607 1,693 1,571
-------- --------- --------
NET INCREASE(DECREASE) IN CASH 19 (26) 11
Cash at beginning of period 1 27 16
-------- --------- --------
CASH AT END OF PERIOD $ 20 $ 1 $ 27
-------- --------- --------
-------- --------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
F-6
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS)
1. SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION:
These consolidated financial statements include Hartford Life
Insurance Company (the Company or HLIC) and its wholly-owned
subsidiaries, ITT Hartford Life and Annuity Company (ILA) and ITT
Hartford International Life Reassurance Corporation (HLR), formerly
American Skandia Life Reinsurance Corporation. HLIC is a wholly-owned
subsidiary of Hartford Life and Accident Insurance Company (HLA).
The Company is ultimately owned by Hartford Fire Insurance Company
(Hartford Fire), which is ultimately owned by ITT Hartford Group,
Inc., a subsidiary of ITT Corporation (ITT).
The consolidated financial statements are prepared in conformity with
generally accepted accounting principles which differ in certain
material respects from the accounting practices prescribed or
permitted by various insurance regulatory authorities.
Certain reclassifications have been made to prior year financial
statements to conform to current year classifications.
(B) CHANGES IN ACCOUNTING PRINCIPLES:
Effective January 1, 1992, the Company adopted Statement of Financial
Accounting Standards (SFAS)No. 106, "Employers' Accounting for
Postretirement Benefits Other than Pensions" and SFAS No. 112,
Employers' Accounting for Postemployment Benefits", using the
immediate recognition method. Accordingly, a cumulative adjustment
(through December 31, 1991) of $7 after-tax has been recognized at
January 1, 1992.
Effective January 1, 1994, the Company adopted SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities".
The new standard requires, among other things, that fixed maturities
be classified as "held-to-maturity", "available-for-sale" or "trading"
based on the Company's intentions with respect to the ultimate
disposition of the security and its ability to effect those
intentions. The classification determines the appropriate accounting
carrying value (cost basis or fair value) and, in the case of fair
value, whether the adjustment impacts Stockholder's Equity directly or
is reflected in the Consolidated Statements of Income. Investments in
equity securities had previously been recorded at fair value with the
corresponding impact included in Stockholder's Equity. Under SFAS No.
115, the Company's fixed maturities are classified as "available for
sale" and accordingly, these investments are reflected at fair value
with the corresponding impact included as a component of Stockholder's
Equity designated as "Unrealized Loss on Securities, Net of Tax."
As with the underlying investment security, unrealized gains and
losses on derivative financial instruments are considered in
determining the fair value of the portfolios. The impact of adoption
was an increase to stockholder's equity of $91.
The Company's cash flows were not impacted by these changes in
accounting principles.
(C) REVENUE RECOGNITION:
Revenues for universal life policies and investment products consist
of policy charges for the cost of insurance,
F-7
<PAGE>
policy administration and surrender charges assessed to policy account
balances. Premiums for traditional life insurance policies are
recognized as revenues when they are due from policyholders. Deferred
acquisition costs are amortized using the retrospective deposit method
for universal life and other types of contracts where the payment
pattern is irregular or surrender charges are a significant source of
profit and the prospective deposit method is used where investment
margins are the primary source of profit.
(D) FUTURE POLICY BENEFITS AND OTHER POLICYHOLDER FUNDS:
Liabilities for future policy benefits are computed by the net level
premium method using interest rate assumptions varying from 3% to 11%
and withdrawal, mortality and morbidity assumptions which vary by
plan, year of issue and policy durations and include a provision for
adverse deviation. Liabilities for universal life insurance and
investment products represent policy account balances before
applicable surrender charges.
(E) POLICYHOLDER REALIZED GAINS AND LOSSES:
Realized gains and losses on security transactions associated with the
Company's immediate participation guaranteed contracts are excluded
from revenues, since under the terms of the contracts the realized
gains and losses will be credited to policyholders in future years as
they are entitled to receive them.
(F) DEFERRED POLICY ACQUISITION COSTS:
Policy acquisition costs, including commissions and certain
underwriting expenses associated with acquiring traditional life
insurance products, are deferred and amortized over the lesser of the
estimated or actual contract life. For universal life insurance and
investment products, acquisition costs are being amortized generally
in proportion to the present value of expected gross profits from
surrender charges, investment, mortality and expense margins.
(G) INVESTMENTS:
Investments in fixed maturities are classified as available for sale
and accordingly reflected at fair value with the corresponding impact
of unrealized gains and losses, net of tax, included as a component of
stockholder's equity. Securities and derivative instruments,
including swaps, caps, floors, futures, forward commitments and
collars, are based on dealer quotes or quoted market prices for the
same or similar securities. While the Company has the ability and
intent to hold all fixed income securities until maturity, due to
contract obligations, interest rates and tax laws, portfolio activity
occurs. These trades are motivated by the need to optimally position
investment portfolios in reaction to movements in capital markets or
distribution of policyholder liabilities. When an other than temporary
reduction in the value of publicly traded securities occurs, the
decrease is reported as a realized loss and the carrying value is
adjusted accordingly. Real estate is carried at cost less accumulated
depreciation. Equity securities, which include common stocks, are
carried at market value with the after-tax difference from cost
reflected in stockholder's equity. Realized investment gains and
losses, after deducting life and pension policyholders share are
reported as a component of revenue and are determined on a specific
identification basis.
(H) DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses a variety of derivative financial instruments as part
of an overall risk management strategy. These instruments, including
swaps, caps, collars and exchange traded financial futures, are used
as a means of hedging exposure to price, foreign currency and/or
interest rate risk on planned investment purchases or existing assets
and liabilities. The Company does not hold or issue derivative
financial instruments for trading purposes. The Company's minimum
correlation threshold for hedge designation is 80%. If correlation,
which is assessed monthly and measured based on a rolling three month
average, falls below 80%, hedge accounting will be terminated. Gains
or losses on futures purchased in anticipation of the future receipt
of product cash flows are deferred and, at the time of the ultimate
purchase, reflected as a basis adjustment to the purchased asset.
Gains or losses on futures used in invested asset risk management are
deferred and adjusted into the basis of the hedged asset when the
contract is closed. The basis adjustments are amortized into
investment income over the remaining asset life.
F-8
<PAGE>
Open forward commitment contracts are marked to market through
Stockholder's Equity. Such contracts are recorded at settlement by
recording the purchase of the specified securities at the previously
committed price. Gains or losses resulting from the termination of
the forward commitment contracts before the delivery of the securities
are recognized immediately in the income statement as a component of
investment income.
The Company's accounting for interest rate swaps and purchased or
written caps, floors, and options used to manage risk is in accordance
with the concepts established in SFAS 80, "Accounting for Futures
Contracts", the American Institute of Certified Public Accountants
Statement of Position 86-2, "Accounting for Options" and various EITF
pronouncements, except for written options which are written in all
cases in conjunction with other assets and derivatives as part of an
overall risk management strategy. Such synthetic instruments are
accounted for as hedges. Derivatives, used as part of a risk
management strategy, must be designated at inception and have
consistency of terms between the synthetic instrument and the
financial instrument being replicated. Synthetic instrument
accounting, consistent with industry practice, provides that the
synthetic asset is accounted for like the financial instrument it is
intended to replicate. Interest rate swaps and purchased or written
caps, floors and options which fail to meet management criteria are
accounted for at fair market value with the impact reflected in net
income.
Interest rate swaps involve the periodic exchange of payments without
the exchange of underlying principal or notional amounts. Net
payments are recognized as an adjustment to income. Should the swap
be terminated, the gains or losses are adjusted into the basis of the
asset or liability and amortized over the remaining life. The basis
of the underlying asset or liability is adjusted to reflect changing
market conditions such as prepayment experience. Should the asset be
sold or liability terminated, the gains or losses on the terminated
position are immediately recognized in earnings. Interest rate swaps
purchased in anticipation of an asset purchase ("anticipatory
transaction") are recognized consistent with the underlying asset
components. That is, the settlement component is recognized in the
Statement of Income while the change in market is recognized as an
unrealized gain or loss.
Premiums paid on purchased floor or cap agreements and the premium
received on issued cap or floor agreements used for risk management,
as well as the net payments, are adjusted into the basis of the
applicable asset and amortized over the asset life. Gains or losses
on termination of such positions are adjusted into the basis of the
asset or liability and amortized over the remaining asset life.
Forward exchange contracts and foreign currency swaps are accounted
for in accordance with SFAS 52. Changes in the spot rate of
instruments designated as hedges of the net investment in a foreign
subsidiary are reflected in the cumulative translation adjustment
component of stockholder's equity.
(I) RELATED PARTY TRANSACTIONS:
Transactions of the Company with its parent and affiliates relate
principally to tax settlements, insurance coverage, rental and service
fees and payment of dividends and capital contributions. In addition,
certain affiliated insurance companies purchased group annuity
contracts from the Company to fund pension costs and claim annuities
to settle casualty claims.
Substantially all general insurance expenses related to the Company,
including rent expenses, are initially paid by Hartford Fire. Direct
expenses are allocated to the Company using specific identification
and indirect expenses are allocated using other applicable methods.
The rent paid to Hartford Fire for the space occupied by the Company
was $3 in 1994, 1993, and 1992 respectively. The Company expects to
pay rent of $3 in 1995, 1996, 1997,1998, and 1999 respectively and
$60 thereafter, over the contract life of the lease.
See also Note (4) for the related party coinsurance agreements.
F-9
<PAGE>
2. INVESTMENTS
(A) COMPONENTS OF NET INVESTMENT INCOME:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Interest income $1,247 $1,007 $894
Income from other investments 54 53 15
------ ------ ------
GROSS INVESTMENT INCOME 1,301 1,060 909
Less: investment expenses 9 9 2
------ ------ ------
NET INVESTMENT INCOME $1,292 $1,051 $907
------ ------ ------
------ ------ ------
</TABLE>
(B) UNREALIZED GAINS (LOSSES) ON EQUITY SECURITIES:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Gross unrealized gains $ 2 $ 3 $ 2
Gross unrealized losses (11) (11) (2)
Deferred income tax expense (benefit) (3) (3) 0
------ ------ ------
NET UNREALIZED LOSSES AFTER TAX (6) (5) 0
Balance at beginning of year (5) 0 1
------ ------ ------
CHANGE IN NET UNREALIZED LOSSES ON
EQUITY SECURITIES $ (1) $ (5) $(1)
------ ------ ------
------ ------ ------
</TABLE>
(C) UNREALIZED GAINS (LOSSES) ON FIXED MATURITIES:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Gross unrealized gains $ 150 $ 538 $ 521
Gross unrealized losses (1,185) (290) (302)
-------- ------ ------
NET UNREALIZED (LOSSES) GAINS (1,035) 248 219
Unrealized losses credited to policyholders 37 0 0
Deferred income tax expense (benefit) (350) 87 75
-------- ------ ------
NET UNREALIZED (LOSSES) GAINS AFTER TAX (648) 161 144
Balance at beginning of year 161 144 297
-------- ------ ------
CHANGE IN NET UNREALIZED (LOSSES)GAINS ON
FIXED MATURITIES $ (809) $ 17 $(153)
-------- ------ ------
-------- ------ ------
</TABLE>
(D) COMPONENTS OF NET REALIZED GAINS:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Fixed maturities $(34) $(12) $20
Equity securities (11) 0 3
Real estate and other 47 43 (3)
Less: (decrease)increase in liability
to policyholders for realized gains (5) 15 15
------ ------ ------
NET REALIZED GAINS $ 7 $ 16 $ 5
------ ------ ------
------ ------ ------
</TABLE>
F-10
<PAGE>
(E) DERIVATIVE INVESTMENTS:
A summary of investments, segregated by major category along with the
types of derivatives and their respective notional amounts, are as
follows as of December 31, 1994 :
<TABLE>
<CAPTION>
SUMMARY OF INVESTMENTS
AS OF DECEMBER 31, 1994
(CARRYING AMOUNTS)
ISSUED CAPS, PURCHASED
TOTAL CARRYING NON- FLOORS & CAPS, FLOORS FUTURES SWAPS
VALUE DERIVATIVE OPTIONS (B) & OPTIONS (C) (D) (F)
-------------- ---------- ------------ ------------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Asset Backed Securities $5,670 $5,690 $(31) $24 $0 $(13)
Inverse Floaters (A) 474 482 (9) 4 0 (3)
Anticipatory (E) (30) 0 0 2 0 (32)
-------- ------- ------ ------ ------ ------
TOTAL ASSET BACKED SECURITIES 6,114 6,172 (40) 30 0 (48)
Other Bonds and Notes 6,533 6,606 0 0 0 (73)
Short-Term Investments 782 782 0 0 0 0
-------- ------- ------ ------ ------ ------
TOTAL FIXED MATURITIES 13,429 13,560 (40) 30 0 (121)
Other Investments 3,105 3,105 0 0 0 0
-------- ------- ------ ------ ------ ------
TOTAL INVESTMENTS $16,534 $16,665 $(40) $30 $0 $(121)
-------- ------- ------ ------ ------ ------
-------- ------- ------ ------ ------ ------
</TABLE>
SUMMARY OF INVESTMENTS IN DERIVATIVES
AS OF DECEMBER 31, 1994
(NOTIONAL AMOUNTS)
<TABLE>
<CAPTION>
ISSUED CAPS, PURCHASED
TOTAL NOTIONAL FLOORS, & CAPS, FLOORS, FUTURES SWAPS
AMOUNT OPTIONS (B) & OPTIONS (C) (D) (F)
-------------- ------------ ------------- -------- ------
<S> <C> <C> <C> <C> <C>
Asset Backed Securities $4,244 $1,311 $2,546 $75 $312
Inverse Floaters (A) 1,129 277 63 3 786
Anticipatory (E) 835 0 209 101 525
------- ------- ------- ------- -------
TOTAL ASSET BACKED 6,208 1,588 2,818 179 1,623
Other Bonds and Notes 670 0 72 74 524
Short-Term Investments 0 0 0 0 0
------- ------- ------- ------- -------
TOTAL FIXED MATURITIES 6,878 1,588 2,890 253 2,147
Other Investments 16 0 3 0 13
------- ------- ------- ------- -------
TOTAL INVESTMENTS $6,894 $1,588 $2,893 $253 $2,160
------- ------- ------- ------- -------
------- ------- ------- ------- -------
</TABLE>
F-11
<PAGE>
A summary of the notional and fair value of derivatives with off Balance Sheet
risk as of December 31, 1993 is as follows:
<TABLE>
<CAPTION>
ISSUED SWAPS, CAPS
FLOORS AND COLLARS FUTURES FORWARDS TOTAL
------------------ ------- -------- -----
<S> <C> <C> <C> <C>
Notional $7,015 $1,792 $91 $8,898
Fair Value $(4) $0 $1 $(3)
</TABLE>
(A) Inverse floaters, which are variations of CMO's for which the coupon
rates move inversely with an index rate (e.g. LIBOR). The risk to
principal is considered negligible as the underlying collateral for
the securities is guaranteed or sponsored by government agencies. To
address the volatility risk created by the coupon variability, the
Company uses a variety of derivative instruments, primarily interest
rate swaps and issued floors.
(B) Comprised primarily of caps ($1,459) with a weighted average strike
rate of 7.7% (ranging from 6.8% to 10.2%). Over 70% mature in 1997
and 1998. Issued floors total $125 with a weighted average strike
rate of 8.3% and mature in 2004.
(C) Comprised of purchased floors ($1,856), purchased options and collars
($633) and purchased caps ($404). The floors have a weighted average
strike price of 5.8% (ranging from 4.8% and 6.6%) and over 85% mature
in 1997 and 1998. The options and collars generally mature in 1995
and 2002. The caps have a weighted average strike price of 7.2%
(ranging from 4.5% and 8.9%) and over 66% mature in 1997 through
1999.
(D) Over 95% of futures contracts expire before December 31, 1995.
(E) Deferred gains and losses on anticipatory transactions are included in
the carrying value of bond investments in the consolidated balance
sheets. At the time of the ultimate purchase, they are reflected as
a basis adjustment to the purchased asset. At December 31, 1994,
these were $(33) million in net deferred losses for futures, interest
rate swaps and purchased options.
(F) The following table summarizes the maturities of interest rate and
foreign currency swaps outstanding at December 31, 1994 and the
related weighted average interest pay rate or receive rate assuming
current market conditions:
MATURITY OF SWAPS ON INVESTMENTS AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
MATURITY
DERIVATIVE TYPE 1995 1996 1997 1998 1999 2000+ TOTAL LAST
--------------- ---- ---- ---- ---- ---- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INTEREST RATE SWAPS:
PAY FIXED/RECEIVE VARIABLE:
Notional Value $0 $15 $50 $0 $446 $268 $779 2004
Weighted Average Pay Rate 0.0% 5.0% 7.2% 0.0% 8.2% 7.8% 7.9%
Weighted Average Receive Rate 0.0% 6.4% 5.7% 0.0% 7.5% 6.5% 7.0%
PAY VARIABLE/RECEIVE FIXED:
Notional Value $311 $50 $100 $25 $175 $100 $761 2002
Weighted Average Pay Rate 5.1% 5.3% 5.5% 5.3% 5.4% 6.0% 5.4%
Weighted Average Receive Rate 8.0% 8.0% 7.5% 4.0% 4.5% 7.2% 6.9%
PAY VARIABLE/RECEIVE DIFFERENT VARIABLE:
Notional Value $95 $50 $18 $15 $5 $232 $415 2005
Weighted Average Pay Rate 4.2% 6.4% 6.8% 6.2% 0.0% 6.0% 5.7%
Weighted Average Receive Rate 9.1% 6.3% 9.5% 6.4% 0.0% 6.3% 7.1%
TOTAL INTEREST RATE SWAPS $406 $115 $168 $40 $626 $600 $1,955 2004
Total Weighted Average Pay Rate 4.9% 5.7% 6.1% 5.6% 7.4% 6.8% 6.5%
Total Weighted Average Receive Rate 8.2% 7.1% 7.2% 4.9% 6.7% 6.5% 7.0%
FOREIGN CURRENCY SWAPS $35 $46 $29 $15 $10 $70 $205 2002
TOTAL SWAPS $441 $161 $197 $55 $636 $670 $2,160 2005
</TABLE>
F-12
<PAGE>
In addition to risk management through derivative financial
instruments pertaining to the investment portfolio, interest rate
sensitivity related to certain Company liabilities was altered
primarily through interest rate swap agreements. The notional amount
of the liability agreements in which the Company generally pays one
variable rate in exchange for another, was $1.7 billion and $1.3
billion at December 31, 1994 and 1993 respectively. The weighted
average pay rate is 6.2%; the weighted average receive rate is 6.6% ,
and these agreements mature at various times through 2004.
(F) CONCENTRATION OF CREDIT RISK:
The Company has a reinsurance recoverable of $4.4 billion from
Mutual Benefit Life Assurance Corporation (Mutual Benefit). The risk
of Mutual Benefit becoming insolvent is mitigated by the reinsurance
agreement's requirement that the assets be kept in a security trust
with the Company as sole beneficiary. Excluding investments in U.S.
government and agencies, the Company has no other significant
concentrations of credit risk.
The Company currently owns $39.2 million par value of Orange County,
California Pension Obligation Bonds, $17.1 million of which it
continues to carry as available for sale under FASB 115 and $22.1
million which are included in the Separate Account Assets. While
Orange County is currently operating under Protection of Chapter 9 of
the Federal Bankruptcy Laws, the Company believes it is probable that
it will collect all amounts due under the contractual terms of the
bonds and that the bonds are not permanently or other than temporarily
impaired.
As of December 31, 1994 the Company owned $66.1 million of Mexican
bonds, $52.3 million of which are payable in Mexican pesos but are
fully hedged back to U.S. dollars, and $13.8 million of U.S. Dollar
Denomination Mexican bonds. The primary risks associated with these
securities is a default by the Mexican government or imposition of
currency controls that prevent conversion of Mexican pesos to U.S.
dollars. The Company believes both of these risks are remote.
(G) FIXED MATURITIES:
The schedule below details the amortized cost and fair values of the
Company's fixed maturities by component, along with the gross
unrealized gains and losses:
<TABLE>
<CAPTION>
1994
----
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
--------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Government and government
agencies and authorities:
- - - guaranteed and sponsored $1,516 $1 $(87) $1,430
- - - guaranteed and sponsored
- asset backed 4,256 78 (571) 3,763
States, municipalities and
political subdivisions 148 1 (12) 137
International governments 189 1 (14) 176
Public utilities 531 1 (32) 500
All other corporate 3,717 38 (297) 3,458
All other corporate
- asset backed 2,442 30 (121) 2,351
Short-term investments 1,665 0 (51) 1,614
------- ----- -------- -------
TOTAL $14,464 $150 $(1,185) $13,429
------- ----- -------- -------
------- ----- -------- -------
</TABLE>
F-13
<PAGE>
<TABLE>
<CAPTION>
1993
----
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ---------- ---------- ------
<S> <C> <C> <C> <C>
U.S. Government and government
agencies and authorities:
- - - guaranteed and sponsored $ 1,637 $ 15 $ (12) $ 1,640
- - - guaranteed and sponsored
- asset backed 4,070 235 (219) 4,086
States, municipalities and
political subdivisions 73 9 0 82
International governments 100 5 (3) 102
Public utilities 423 20 (2) 441
All other corporate 3,598 180 (42) 3,736
All other corporate
- asset backed 1,806 74 (12) 1,868
Short-term investments 890 0 0 890
-------- ------- -------- --------
TOTAL $12,597 $ 538 $ (290) $12,845
-------- ------- -------- --------
-------- ------- -------- --------
</TABLE>
The amortized cost and estimated fair value of fixed maturity
investments at December 31, 1994, by maturity, are shown below. Asset
backed securities are distributed to maturity year based on the
Company's estimate of the rate of future prepayments of principal over
the remaining life of the securities. Expected maturities differ from
contractual maturities reflecting the borrowers' rights to call or
prepay their obligations.
<TABLE>
<CAPTION>
AMORTIZED COST ESTIMATED FAIR VALUE
-------------- --------------------
MATURITY
- - --------
<S> <C> <C>
Due in one year or less $ 2,214 $ 2,183
Due after one year through five years 7,000 6,647
Due after five years through ten years 3,678 3,334
Due after ten years 1,572 1,265
--------- ---------
$14,464 $13,429
--------- ---------
--------- ---------
</TABLE>
Sales of fixed maturities excluding short-term fixed maturities for
the years ended 1994, 1993, and 1992 resulted in proceeds of $5,708,
$8,813, and $5,728, respectively, resulting in gross realized gains of
$71, $192, and $140, and gross realized losses of $100, $219, and
$135, respectively, not including policyholder gains and losses.
Sales of equity securities and other investments for the years ended
December 31, 1994, 1993, and 1992 resulted in proceeds of $159, $127
and $7, respectively, resulting in gross realized gains of $3, $0, and
$3, and gross realized losses of $14, $0, and $0, respectively, not
including policyholder gains and losses.
F-14
<PAGE>
(H) FAIR VALUE OF FINANCIAL INSTRUMENTS NOT DISCLOSED ELSEWHERE :
BALANCE SHEET ITEMS:
<TABLE>
<CAPTION>
1994 1993
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
--------- ------ -------- ------
<S> <C> <C> <C> <C>
ASSETS
Other invested assets:
Policy loans $2,614 $2,614 $1,397 $1,397
Mortgage loans 316 316 228 228
Investments in partnership
and trusts 36 42 14 34
Miscellaneous 67 67 22 63
LIABILITIES
Other policy claims and
benefits $13,001 $12,374 $11,140 $11,415
</TABLE>
The following methods and assumptions were used to estimate the fair
value of each class of financial instrument:policy and mortgage loan
carrying amounts approximate fair value; investments in partnerships
and trusts are based on external market valuations from partnership
and trust management; and other policy claims and benefits payable are
determined by estimating future cash flows discounted at the current
market rate.
3. INCOME TAX
The Company is included in ITT's consolidated U.S. Federal income tax
return and remits to (receives from) ITT a current income tax
provision (benefit) computed in accordance with the tax sharing
arrangements between ITTand its insurance subsidiaries. The
effective tax rate was 32% in 1994, and approximates the U.S.
statutory tax rates of 35% in 1993 and 34% in 1992. The provision for
income taxes was as follows:
<TABLE>
<CAPTION>
INCOME TAX EXPENSE:
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Current $185 $ $ 190 $ $ 124
Deferred (120) (115) (79)
------- -------- --------
$ 65 $ $ 75 $ $ 45
------- -------- --------
------- -------- --------
</TABLE>
F-15
<PAGE>
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
TAX PROVISION AT U.S. STATUTORY RATE $71 $76 $46
Tax-exempt income (3) 0 0
Foreign tax credit (1) 0 0
Other (2) (1) (1)
----- ----- -----
PROVISION FOR INCOME TAX $ 65 $75 $45
----- ----- -----
----- ----- -----
</TABLE>
Income taxes paid were $ 244 , $301 and $36 in 1994, 1993, and 1992
respectively. The current taxes due from or (to) Hartford Fire were $46,
and $19 in 1994 and 1993 respectively.
Deferred tax assets include the following:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Tax deferred acquisition cost $284 $158
Book deferred acquisition costs and reserves (134) (30)
Employee benefits 7 7
Unrealized loss on "available for sale"
securities 353 3
Investments and other 80 (24)
------- -------
$590 $114
------- -------
------- -------
</TABLE>
Prior to the Tax Reform Act of 1984, the Life Insurance Company Income Tax
Act of 1959 permitted the deferral from taxation of a portion of statutory
income under certain circumstances. In these situations, the deferred
income was accumulated in a "Policyholders' Surplus Account" and will be
taxable in the future only under conditions which management considers to
be remote; therefore, no Federal income taxes have been provided on this
deferred income. The balance for tax return purposes of the Policyholders'
Surplus Account as of December 31, 1994 was $24.
4. REINSURANCE
The Company cedes insurance to non-affiliated insurers in order to limit
its maximum loss. Such transfer does not relieve the Company of its
primary liability. The Company also assumes insurance from other
insurers. Group life and accident and health insurance business is
substantially reinsured to affiliated companies.
Life insurance net retained premiums were comprised of the following:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Gross premiums $1,316 $1,135 $680
Reinsurance assumed 299 93 30
Reinsurance ceded 515 481 451
------- ------- -----
NET RETAINED PREMIUMS $1,100 $747 $259
------- ------- -----
------- ------- -----
</TABLE>
F-16
<PAGE>
Life reinsurance recoveries, which reduced death and other benefits, for
the years ended December 31, 1994, 1993 and 1992 approximated $164, $149,
and $73, respectively.
In December 1994, the Company assumed from a third party approximately
$500 million of corporate owned life insurance reserves on a coinsurance
basis. Also in December 1994, ILA ceded to ITT Lyndon Insurance Company
$1 billion in individual fixed and variable annuities on a modified
coinsurance basis. These transactions did not have a material impact on
consolidated net income.
In October 1994, HLR recaptured approximately $500 million of corporate
owned life insurance from a third party reinsurer. Subsequent to this
transaction, HLIC and HLR restructured their coinsurance agreement from
coinsurance to modified coinsurance, with the assets and policy liabilities
placed in the separate account. In May 1994, HLIC assumed and reinsured
the life insurance policies and the individual annuities of Pacific
Standard with reserves and account values of approximately $400 million.
The Company received cash and investment grade assets to support the life
insurance and individual annuity contract obligations assumed.
In June 1993, the Company assumed and partially reinsured the annuity, life
and accident and sickness insurance policies of Fidelity Bankers Life
Insurance Company in Receivership for Conservation and Rehabilitation, with
account values of $3.2 billion. The Company received cash and investment
grade assets to assume insurance and annuity contract obligations.
Substantially all of these contracts were placed in the Company's separate
accounts.
In November 1993, ILA acquired, through an assumption reinsurance
transaction, substantially all of the individual fixed and variable annuity
business of HLA. As a result of this transaction, the assets and
liabilities of the company increased approximately $1 billion. The excess
of liabilities assumed over assets received, of $2, was recorded as a
decrease to capital surplus. The impact on consolidated net income was not
significant.
On November 4, 1992, the Company entered into a definitive agreement
whereby the Company assumed the contract obligations of Mutual Benefit Life
Assurance Corporation's (Mutual Benefit) individual corporate owned life
insurance (COLI) contracts. The Company received $5.6 billion in cash and
invested assets, $5.3 billion of which were policy loans, from Mutual
Benefit for assuming the contract obligations. Simultaneously, the Company
coinsured approximately 84% of the contract obligations back to Mutual
Benefit, HLR and an unaffiliated reinsurer. In August 1993, the Company
received assets of $300 million for assuming the group COLI contract
obligations of Mutual Benefit, through an assumption reinsurance
transaction. Under the terms of the agreement, the Company coinsured back
75% of the liabilities to Mutual Benefit. All assets supporting Mutual
Benefit's reinsurance liability to HLIC are placed in a "security trust",
with Hartford Life as the sole beneficiary. The impact on 1992
consolidated net income was not significant.
In 1992, all ordinary individual life insurance written and in force in
HLA was assumed by HLIC. As a result of this transaction, the assets of
HLIC increased by approximately $437, liabilities increased approximately
$403. The excess of assets over liabilities of $34 was recorded as an
increase in capital.
5. PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS
The Company's employees are included in Hartford Fire's noncontributory
defined benefit pension plans. These plans provide pension benefits that
are based on years of service and the employee's compensation during the
last ten years of employment. The Company's funding policy is to
contribute annually an amount between the minimum funding requirements set
forth in the Employee Retirement Income Security Act of 1974 and the
maximum amount that can be deducted for Federal income tax purposes.
Generally, pension costs are funded through the purchase of the Company's
group pension contracts. The cost to the Company was approximately $2, $3
and $2 in 1994, 1993 and 1992, respectively.
The Company provides certain health care and life insurance benefits for
eligible retired employees. A substantial portion of the Company's
employees may become eligible for these benefits upon retirement.
Effective January 1, 1992, the Company adopted SFAS No. 106, using the
immediate recognition method for all benefits accumulated to date. As of
June 1992, the Company amended its plans, effective January 1, 1993,
whereby the Company's contribution for health care benefits will depend on
the retiree's date of retirement and years of service. In addition, the
plan amendments increased deductibles and set a defined dollar cap which
F-17
<PAGE>
limits average company contributions. The effect of these changes is not
material. The Company has prefunded a portion of the health care and life
insurance obligations through trust funds where such prefunding can be
accomplished on a tax effective basis. Postretirement health care and
life insurance benefits expense, allocated by Hartford Fire, was $1, $1,
and $1, for 1994, 1993, and 1992 respectively.
The assumed rate of future increases in the per capita cost of health care
(the health care trendrate) was 11% for 1994, decreasing ratably to 6 %
in the year 2001. Increasing the health care trend rates by one percent
per year would have an immaterial impact on the accumulated postretirement
benefit obligation and the annual expense. The assumed weighted average
discount rate was 8.5%. To the extent that the actual experience differs
from the inherent assumptions, the effect will be amortized over the
average future service of the covered employees.
6. BUSINESS SEGMENT INFORMATION
The reportable segments and product groups of HLIC and its subsidiaries are:
INDIVIDUAL LIFE AND ANNUITIES (ILAD)
- - -Individual life
- - -Fixed and variable retirement annuities
ASSET MANAGEMENT SERVICES (AMS)
- - -Group Pension Plans products and services
- - -Deferred Compensation Plans products and services
- - -Structured Settlements and lottery annuities
SPECIALTY
- - -Corporate Owned Life Insurance (COLI) and HLR
<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
REVENUES:
ILAD $691 $595 $305
AMS 789 794 770
Specialty 919 425 96
------- ------- -------
$2,399 $1,814 $1,171
------- ------- -------
------- ------- -------
INCOME BEFORE INCOME TAX:
ILAD $139 $129 $73
AMS 38 71 56
Specialty 26 18 5
------- ------- -------
$203 $218 $134
------- ------- -------
------- ------- -------
IDENTIFIABLE ASSETS:
ILAD $26,668 $19,147 $9,474
AMS 13,334 12,416 11,198
Specialty 7,847 6,723 5,910
------- ------- -------
$47,849 $ 38,286 $ 26,582
------- ------- -------
------- ------- -------
</TABLE>
7. STATUTORY NET INCOME AND SURPLUS
Substantially all of the statutory surplus is permanently reinvested or is
subject to dividend restrictions relating to various state regulations
which limit the payment of dividends without prior approval.
Statutory net income and surplus as of December 31 were:
F-18
<PAGE>
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Statutory net income $58 $63 $65
Statutory surplus $941 $812 $614
</TABLE>
The Company prepares its statutory financial statements in accordance with
accounting practices prescribed by the State of Connecticut Insurance
Department. Prescribed statutory accounting practices include publications
of the National Association of Insurance Commissioners ("NAIC"), as well as
state laws, regulations, and general administrative rules.
8. SEPARATE ACCOUNTS:
The Company maintains separate account assets and liabilities totaling
$22.8 billion and $16.3 billion at December 31, 1994 and 1993, respectively
which are reported at fair value. Separate account assets are segregated
from other investments and are not subject to claims that arise out of any
other business of the Company. Investment income and gains and losses of
separate accounts accrue directly to the policyholder. Separate accounts
reflect two categories of risk assumption: non-guaranteed separate
accounts totaling $14.8 billion and $11.5 billion at December 31, 1994 and
1993, respectively, wherein the policyholder assumes the investment risk,
and guaranteed separate account assets totaling $8.0 billion and $4.8
billion at December 31, 1994 and 1993, respectively, wherein the Company
contractually guarantees either a minimum return or account value to the
policyholder. Investment income (including investment gains and losses) on
separate account assets are not reflected in the Consolidated Statements of
Income. Separate account management fees, net of minimum guarantees, were
$256, $189, and $92, in 1994, 1993, and 1992, respectively.
The guaranteed separate accounts include modified guaranteed individual
annuity, and modified guaranteed life insurance. The average credit
interest rate on these contracts is 6.44%. The assets that support these
liabilities are comprised of $7.5 billion in bonds and $.5 billion in
policy loans. The portfolios are segregated from other investments and
are managed so as to minimize liquidity and interest rate risk. In order
to minimize the risk of disintermediation associated with early
withdrawals, individual annuity and modified guaranteed life insurance
contracts carry a graded surrender charge as well as a market value
adjustment. Additional investment risk is hedged using a variety of
derivatives which total $(16.2) million in carrying value and $3.2 billion
in notional amounts.
9. COMMITMENTS AND CONTINGENCIES
In August 1994, HLIC renewed a two year note purchase facility agreement
which in certain instances obligates the Company to purchase up to $100
million in collateralized notes from a third party. The Company is
receiving fees for this commitment. At December 31, 1994, the Company has
not purchased any notes under this agreement.
In March 1987, HLIC guaranteed the commercial mortgages (principal and
accrued interest) that were sold under a pooling and servicing agreement of
the same date. Mortgages aggregating approximately $53.0million were sold
in this transaction, and the remaining balance on these loans is $21.1
million. There was no impact on operations due to this guarantee.
Under insurance guaranty fund laws in most states, insurers doing business
therein can be assessed up to prescribed limits for policyholder losses
incurred by insolvent companies. The amount of any future assessments on
HLIC under these laws cannot be reasonably estimated. Most of these laws
do provide, however, that an assessment may be excused or deferred if it
would threaten an insurer's own financial strength. Additionally, guaranty
fund assessments are used to reduce state premium taxes paid by the Company
in certain states.
The Company is involved in various legal actions, some of which involve
claims for substantial amounts. In the opinion of management the ultimate
liability with respect to such lawsuits, as well as other contingencies, is
not considered material in relation to the consolidated financial position
of the Company.
F-19
<PAGE>
PART C
<PAGE>
-2-
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) A copy of the resolution authorizing the Separate Account is
filed with this Registration Statement.
(2) Not applicable. HL maintains custody of all assets.
(3) Principal Underwriter Agreement between HL and Hartford Equity
Sales Company, Inc. filed with this Registration Statement.
(4) A copy of the Individual Flexible Premium Variable Annuity
contract is filed with this Registration Statement.
(5) The form of Application is filed with this Registration
Statement.
(6) (a) Certificate of Incorporation of Hartford Life Insurance
Company is filed with this Registration Statement.
(b) Bylaws of Hartford Life Insurance Company is filed with this
Registration Statement.
(7) Not applicable.
(8) Not applicable.
(9) Not applicable.
(10) Consent of Arthur Andersen LLP is filed herewith.
(11) Not applicable.
(12) Not applicable.
(13) The Explanation of Total Return Calculation is filed
herewith.
<PAGE>
-3-
Item 25. Directors and Officers of the Depositor
Louis J. Abdou Vice President
David H. Annis Vice President
Paul J. Boldischar, Jr. Vice President
Wendell J. Bossen Vice President
Peter W. Cummins Vice President
Juliana B. Dalton Vice President
Ann M. deRaismes Vice President
Allen Douma, M.D. Medical Director
Donald R. Frahm Chairman & CEO
Bruce D. Gardner General Counsel & Secretary
Joseph H. Gareau Executive Vice President & Chief
Investment Officer
Richard J. Garrett Vice President & Treasurer
John P. Ginnetti Executive Vice President and Director
Asset Management Services
Lynda Godkin Assistant General Counsel & Secretary
Lois W. Grady Vice President
David A. Hall Senior Vice President & Actuary
Joseph Kanarek Vice President
Kevin J. Kirk Vice President
Andrew W. Kohnke Vice President
Stephen M. Maher Vice President & Actuary
William B. Malchodi, Jr. Vice President & Director of Taxes
Thomas M. Marra Senior Vice President & Actuary and
Director
Individual Life and Annuity Division
David J. McDonald Senior Vice President
<PAGE>
-4-
Kevin A. North Vice President
Joseph J. Noto Vice President
Leonard E. Odell, Jr. Senior Vice President
Michael C. O'Halloran Vice President & Senior Associate
General Counsel
Craig R. Raymond Vice President & Chief Actuary
Lowndes A. Smith President & Chief Operating Officer
Edward J. Sweeney Vice President
James E. Trimble Vice President & Actuary
Raymond P. Welnicki Senior Vice President
James T. Westervelt Senior Vice President & Group
Comptroller
Lizabeth H. Zlatkus Vice President
Donald J. Znamierowski Vice President
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
Item 26. Persons Controlled By or Under Common Control with the Depositor or
Registrant
Exhibit 26 is incorporated by reference to Part C of the
Registration Statement filed on June 28, 1988.
Item 27. Number of Contract Owners
As of December 31, 1994, there were no Contract Owners.
Item 28. Indemnification-Incorporated herein by reference to the Registration
Statement filed on September 14, 1987.
Item 29. Principal Underwriters
(a) HESCO acts as principal underwriter for the following
investment companies:
<PAGE>
-5-
Hartford Life Insurance Company -
DC Variable Account I
Hartford Life Insurance Company -
Separate Account Two (DC Variable Account II)
Hartford Life Insurance Company -
Separate Account Two (Variable Account "A")
Hartford Life Insurance Company -
Separate Account Two (QP Variable Account)
Hartford Life Insurance Company -
Separate Account Two (NQ Variable Account)
Hartford Life Insurance Company -
Separate Account One
Hartford Life Insurance Company -
Separate Account Two (Director)
Hartford Life Insurance Company -
Thomson McKinnon Separate Account
Hartford Money Market Fund, Inc.
Hartford Life Insurance Company - Separate Account Three
ITT Hartford Life and Annuity Insurance Company - Separate Account
Three
Hartford Life Insurance Company - Separate Account Five
ITT Hartford Life and Annuity Insurance Company - Separate Account Five
ITT Hartford Life and Annuity Insurance Company - Separate Account Six
Hartford Life Insurance Company Separate Account VL I
<PAGE>
-6-
(b) Directors and Officers of HESCO
Name and Principal Positions and Offices
Business Address With Underwriter
------------------ ----------------------
Donald E. Waggaman, Jr. Treasurer
Bruce D. Gardner Secretary
George R. Jay Controller
Lowndes A. Smith President
Item 30. Location of Accounts and Records
Accounts and records are maintained by HL.
Item 31. Management Services
None
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.
The Registrant is relying on the no-action letter issued by the Division of
Investment Management to American Council of Life Insurance, Ref. No. IP-6-88,
November 28, 1988. The Registrant has complied with the four provisions of the
no-action letter.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY, INC.
AND
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, INC.
POWER OF ATTORNEY
Donald R. Frahm
Bruce D. Gardner
Joseph H. Gareau
John P. Ginnetti
Thomas M. Marra
Leonard E. Odell, Jr.
Lowndes A. Smith
Raymond P. Welnicki
Lizabeth H. Zlatkus
Donald J. Znamierowski
do hereby jointly and severally authorize Bruce D. Gardner and/or Rodney J.
Vessels to sign as their agent, any Registration Statement, pre-effective
amendment, and any post-effective amendment of the Hartford Life Insurance
Company, Inc. and Hartford Life and Accident Insurance Company, Inc. 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/ Donald R. Frahm Dated:
- - -------------------------------- --------------------------------
Donald R. Frahm
/s/ Bruce D. Gardner Dated:
- - -------------------------------- --------------------------------
Bruce D. Gardner
/s/ John P. Ginnetti Dated:
- - -------------------------------- --------------------------------
John P. Ginnetti
/s/ Thomas M. Marra Dated: 12-9-94
- - -------------------------------- --------------------------------
Thomas M. Marra
/s/ Leonard E. Odell, Jr. Dated: 12/2/94
- - -------------------------------- --------------------------------
Leonard E. Odell, Jr.
/s/ Lowndes A. Smith Dated:
- - -------------------------------- --------------------------------
Lowndes A. Smith
/s/ Raymond P. Welnicki Dated:
- - -------------------------------- --------------------------------
Raymond P. Welnicki
/s/ Lizabeth H. Zlatkus Dated:
- - -------------------------------- --------------------------------
Lizabeth H. Zlatkus
/s/ Donald J. Znamierowski Dated: 12/8/94
- - -------------------------------- --------------------------------
Donald J. Znamierowski
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets all the requirements for
effectiveness of this Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and duly caused this Registration Statement to be signed
on its behalf, in the City of Hartford, and State of Connecticut on this 28th
day of February, 1995.
HARTFORD LIFE INSURANCE COMPANY -
PUTNAM CAPITAL MANAGEMENT TRUST
SEPARATE ACCOUNT
(Registrant)
*By:
---------------------------------------
Thomas M. Marra, Senior Vice President
HARTFORD LIFE INSURANCE COMPANY *By: /s/ Rodney J. Vessels
(Depositor) -------------------------
Rodney J. Vessels
*By: Attorney-in-Fact
---------------------------------------
Thomas M. Marra, Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons and in the capacities and on
the dates indicated.
Donald R. Frahm, Chairman and
Chief Executive officer, Director *
Bruce D. Gardner, General Counsel
Corporate Secretary, Director *
Joseph H. Gareau, Executive Vice
President and Chief Investment
Officer, Director *
John P. Ginnetti, Senior Vice
President, Director *
Thomas M. Marra, Senior Vice *By: /s/ Rodney J. Vessels
President, Director * -------------------------------
Leonard E. Odell, Jr., Senior Rodney J. Vessels
Vice President, Director *
Lowndes A. Smith, President,
Chief Operating Officer, Director *
Raymond P. Welnicki, Senior Vice Dated: 4/28/95
President, Director * -----------------------
Lizabeth H. Zlatkus, Vice President
Director *
Donald J. Znamierowski, Vice President
Comptroller, Director *
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE I - SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN AFFILIATES
DECEMBER 31, 1994
(IN MILLIONS)
<TABLE>
<CAPTION>
AMOUNT
SHOWN ON
BALANCE
TYPE OF INVESTMENT COST FAIR VALUE SHEET
------------------ ---------- ---------- ----------
<S> <C> <C> <C>
FIXED MATURITIES
Bonds
U.S. Government and government agencies
and authorities:
- guaranteed and sponsored $ 1,516 $ 1,429 $ 1,429
- guaranteed and sponsored - asset backed 4,256 3,763 3,763
States, municipalities and political subdivisions 148 137 137
International governments 189 176 176
Public utilities 531 500 500
All other corporate 3,717 3,458 3,458
All other corporate - asset backed 2,442 2,350 2,350
Short-term investments 1,665 1,616 1,616
------ ------ ------
TOTAL FIXED MATURITIES 14,464 13,429 13,429
EQUITY SECURITIES
Common Stocks - industrial, miscellaneous and all other 76 68 68
------ ------ ------
TOTAL FIXED MATURITIES AND EQUITY SECURITIES 14,540 13,497 13,497
Policy loans 2,614 2,614 2,614
Mortgage loans 316 316 316
Other investments 103 109 107
------ ------ ------
TOTAL INVESTMENTS $ 17,573 $ 16,536 $ 16,534
------ ------ ------
------ ------ ------
</TABLE>
Note: Fair values for stocks and bonds approximate those quotations published
by applicable stock exchanges or are received from other reliable
sources. The fair value for short - term investments approximates
cost.
Policy and mortgage loan carrying amounts approximate fair value.
S-1
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION
(IN MILLIONS)
<TABLE>
<CAPTION>
BENEFITS, AMORTIZ-
CLAIMS ATION OF
AND CLAIM DEFERRED
DEFERRED FUTURE OTHER PREMIUMS NET ADJUST- POLICY OTHER
POLICY POLICY POLICYHOL- AND OTHER INVESTMENT MENT ACQUISI- INSURANCE
ACQUISITION BENEFITS DER FUNDS CONSIDERA- INCOME EXPENSES TION EXPENSES
SEGMENT COSTS * * TIONS (1) (2) COSTS (3)
- - ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Year ended
December 31,
1994
- - --------------
ILAD $ 1,708 $ 582 $ 4,257 $ 492 $ 199 $ 334 $ 137 $ 80
AMS 101 845 10,160 39 750 695 8 48
SPECIALTY 0 463 6,911 569 350 376 0 518
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 1,809 $ 1,890 $ 21,328 $ 1,100 $ 1,299 $ 1,405 $ 145 $ 646
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Year ended
December 31,
1993
- - --------------
ILAD $ 1,237 $ 428 $ 3,535 $ 423 $ 172 $ 249 $ 97 $ 120
AMS 97 703 9,026 35 759 662 16 45
SPECIALTY 0 528 5,673 289 136 135 0 272
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 1,334 $ 1,659 $ 18,234 $ 747 $ 1,067 $ 1,046 $ 113 $ 437
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Year ended
December 31,
1992
- - -------------
ILAD $ 698 $ 1,115 $ 1,004 $ 178 $ 127 $ 104 $ 49 $ 79
AMS 101 583 8,256 27 743 657 6 51
SPECIALTY 0 46 5,822 54 42 36 0 55
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 799 $ 1,744 $ 15,082 $ 259 $ 912 $ 797 $ 55 $ 185
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<FN>
(*) As Restated
(1) Investment income is allocated to the segments based on each segment's
share of investable funds or on a direct basis, where applicable, including
realized capital gains and losses.
(2) Benefits, claims and claim adjustment expenses includes the increase in
liability for future policy benefits and death, disability and other
contract benefit payments.
(3) Other insurance expenses are allocated to the segments based on specific
identification, where possible, and related activities, including dividends
to policyholders.
</TABLE>
S-2
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE IV - REINSURANCE
(IN MILLIONS)
<TABLE>
<CAPTION>
PERCENTAGE
CEDED TO ASSUMED OF AMOUNT
GROSS OTHER FROM OTHER NET ASSUMED
AMOUNT COMPANIES COMPANIES AMOUNT TO NET
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1994
LIFE INSURANCE IN FORCE $ 136,929 $ 87,553 $ 35,016 $ 84,392 41.5%
--------- --------- --------- ---------
Premiums and other considerations
ILAD $ 448 $ 71 $ 106 $ 483 22.0%
AMS 39 0 0 39 0.0%
Specialty 521 140 188 569 33.0%
Accident and Health 308 304 5 9 55.6%
--------- --------- --------- ---------
TOTAL $ 1,316 515 299 1,100 27.2%
--------- --------- --------- ---------
--------- --------- --------- ---------
YEAR ENDED DECEMBER 31, 1993
LIFE INSURANCE IN FORCE $ 93,099 $ 71,415 $ 27,067 $ 48,751 55.5%
--------- --------- --------- ---------
Premiums and other considerations
ILAD $ 417 $ 85 $ 91 $ 423 21.5%
AMS 25 0 0 25 0.0%
Specialty 386 97 0 289 0.0%
Accident and Health 307 299 2 10 20.0%
--------- --------- --------- ---------
TOTAL $ 1,135 $ 481 $ 93 $ 747 12.4%
--------- --------- --------- ---------
--------- --------- --------- ---------
YEAR ENDED DECEMBER 31, 1992
LIFE INSURANCE IN FORCE $ 44,661 $ 64,207 $ 51,430 $ 31,884 161.3%
--------- ---------
Premiums and other considerations
ILAD $ 208 $ 71 $ 27 $ 164 16.5%
AMS 27 0 0 27 0.0%
Specialty 153 99 0 54 0.0%
Accident and Health 292 281 3 14 21.4%
--------- --------- --------- ---------
TOTAL $ 680 $ 451 $ 30 $ 259 37.9%
--------- --------- --------- ---------
</TABLE>
S-3
<PAGE>
Exhibit (b)(1)
CERTIFICATION
I, John P. Ginnetti, Secretary of Hartford Life Insurance Company,
hereby certify that the attached is a true copy of a resolution adopted
at a meeting of the Board of Directors of said company held on June 22, 1987.
/s/ John P. Ginnetti
----------------------------
Secretary
Dated: August 6, 1987
<PAGE>
RESOLVED, That Harford Life Insurance Company is hereby authorized to establish
a new separate account to be designated "Hartford Life Insurance Company -
Putnam Capital Accumulation Trust-Separate Account" (the "Account") and to issue
variable annuities and/or variable life insurance contracts with reserves for
such contracts being segregated in such Account.
FURTHER RESOLVED, That the officers of Hartford Life Insurance Company are
hereby authorized and directed to take all actions necessary to:
(1) Comply with applicable state and federal laws and regulations
applicable to the establishment and operation of the Account;
(2) Establish, from time to time, the terms and conditions pursuant to
which interests in the Account will be sold to contract owners;
(3) Establish all procedures, standards and arrangements necessary or
appropriate for the operation of the Account including, but not
limited to, the establishment of the investment policies of the
Account; and
(4) Transfer funds to the Account, up to a maximum of $100,000 to provide
for its efficient operation, all on such terms and for such periods as
said officers deem to be necessary or appropriate.
<PAGE>
Exhibit (b)(3)
PRINCIPAL UNDERWRITER AGREEMENT
THIS AGREEMENT, dated as of the 1st day of August, 1987, made by and between
HARTFORD LIFE INSURANCE COMPANY ("HLIC" or the "Sponsor"), a corporation
organized and existing under the laws of the State of Connecticut, and HARTFORD
EQUITY SALES COMPANY, INC. ("HESCO"), a corporation organized and existing under
the laws of the State of Connecticut.
WITNESSETH:
WHEREAS, the Board of Directors of HLIC has made provision for the
establishment of a separate account within HLIC in accordance with the laws
of the State of Connecticut, which separate account was organized and is
established and registered as a unit trust type investment company with the
Securities and Exchange Commission under the Investment Company Act of
1940, as amended, and which is designated Hartford Insurance Company
- Putname Capital Accumulation Trust Separate Account (referred to as the
"Unit Trust"); and
WHEREAS, HESCO offers to the public a certain Individual Flexible Premium
Annuity Insurance Contracts contract (the "Contract") issued by HLIC with
respect to the Unit Trust and units of interest thereunder which are
registered under the Securities Act of 1933, as amended; and
WHEREAS, HESCO has previously agreed to act as distributor in connection
with offers and sales of the Contract under the terms and conditions set
forth in this Distribution Agreement.
NOW THEREFORE, in consideration of the mutual agreements made herein, the
Sponsor and HESCO agree as follows:
I.
HESCO'S DUTIES
1. HESCO, as principal underwriter for the Contract, will use its best efforts
to effect offers and sales of the Contract through broker-dealers that are
members of the National Association of Securities Dealers, Inc. and whose
registered representatives are duly licensed as insurance agents of HLIC.
HESCO is responsible for compliance with all applicable requirements of the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, and the Investment Company Act of 1940, as amended, and the rules
and regulations thereunder, and all other applicable laws, rules and
regulations relating to the sales and distribution of the Contract, the
need for which arises out of its duties as principal underwriter of said
Contract and relating to the creation of the Unit Trust.
<PAGE>
-2-
2. HESCO agrees that it will not use any prospectus, sales literature, or any
other printed matter or material or offer for sale or sell the Contract if
any of the foregoing in any way represent the duties, obligations, or
liabilities of HLIC as being greater than, or different from, such duties,
obligations and liabilities as are set forth in this Agreement, as it may
be amended from time to time.
3. HESCO agrees that it will utilize the then currently effective prospectus
relating to the Unit Trust's Contracts in connection with its selling
efforts.
As to the other types of sales materials, HESCO agrees that it will use
only sales materials which conform to the requirements of federal and state
insurance laws and regulations and which have been filed, where necessary,
with the appropriate regulatory authorities.
4. HESCO agrees that it or its duly desigatned agent shall maintain records
of the name and address of, and the securities issued by the Unit Trust and
held by, every holder of any security issued pursuant to this Agreement, as
required by the Section 26(a) (4) of the Investment Company Act of 1940, as
amended.
5. HESCO's services pursuant to this Agreement shall not be deemed to be
exclusive, and it may render similar services and act as an underwriter,
distributor, or dealer for other investment companies in the offering of
their shares.
6. In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations and duties hereunder on the part
of HESCO, HESCO shall not be subject to liability to the Unit Trust or to
any Contract Owner or party in interest under a Contract for any
act or omission in the course, or connected with, rendering services
hereunder.
II.
HLIC's DUTIES
1. The Unit Trust reserves the right at any time to suspend or limit the
public offering of the Contracts upon thirty days' written notice to HESCO,
except where the notice period may be shortened because of legal action
taken by any regulatory agency.
2. The Unit Trust agrees to advice HESCO immediately:
(a) Of any request by the Securities and Exchange Commission for amendment
of its Securities Act registration statement or for additional
information;
(b) Of the issuance by the Securities and Exchange Commission of any stop
order suspending the effectiveness of the Securities Act registration
<PAGE>
-3-
statement relating to units of interest issued with respect to the
Unit Trust or of the initiation of any proceedings for that purpose;
(c) Of the happening of any material event, if known, which makes untrue
any statement in said Securities Act registration statement or which
requires change therein in order to make any statement therein not
misleading.
HLIC will furnish to HESCO such information with respect to the Unit Trust
and the Contracts in such form and signed by such of its officers and
directors as HESCO may reasonably request and will warrant that the
statements therein contained when so signed will be true and correct. HLIC
will also furnish, from time to time, such additional information regarding
the Unit Trust's financial condition as HESCO may reasonably request.
III.
COMPENSATION
For providing the principal underwriting functions on behalf of the Unit Trust,
HESCO shall be entitled to receive compensation as agreed upon from time to time
by HLIC and HESCO.
IV.
RESIGNATION AND REMOVAL OF PRINCIPAL UNDERWRITER
HESCO may resign as Principal Underwriter hereunder, upon 120 days' prior
written notice to HLIC. However, such resignation shall not become effective
until either the Unit Trust has been completely liquidated and the proceeds of
the liquidation distributed through HLIC to the Contract Owners or a successor
Principal Underwriter has been designated and has accepted its duties.
V.
MISCELLANEOUS
1. This Agreement may not be assigned by any of the parties hereto without the
written consent of the other party.
2. All notices and other communications provided for hereunder shall be in
writing and shall be delivered by hand or mailed first class, postage
pre-paid, addressed as follows:
(a) If to HLIC - Hartford Life Insurance Company, P.O. Box 2999,
Hartford, Connecticut 06104-2999.
<PAGE>
-4-
(b) If to HESCO - Hartford Equity Sales Company, Inc., Hartford
Plaza, Hartford, Connecticut 06115
or to such other address as HESCO or the Sponsor shall designate by written
notice to the other.
3. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which shall be deemed one
instrument, and an executed copy of this Agreement and all amendments
hereto shall be kept on file by the Sponsor and shall be open to inspection
any any time during the business hours of the Sponsor.
4. This Agreement shall inure to the benefit of and be binding upon the
successor of the parties hereto.
5. This Agreement shall be construed and governed by and according to the laws
of the State of Connecticut.
6. This Agreement may be amended from time to time by the mutual agreement and
consent of the parties hereto.
7. a. This Agreement shall become effective on July 1, 1987, and shall
continue in effect for a period of two years from that date and,
unless sooner terminated in accordance with 7(b) below, shall
continue in effect from year to year thereafter provided that its
continuance is specifically approved at least annually by a majority
of the members of the Board of Directors of HLIC.
b. This Agreement (1) may be terminated at any time, without the payment
of any penalty, either by a vote of a majority of the members of the
Board of Directors of HLIC on sixty days prior written notice to
HESCO; (2) shall immediately terminate in the event of its assignment
and (3) may be terminated by HESCO on sixty days prior written notice
to HLIC, but such termination will not be effective until HLIC shall
have contracted with one or more persons to act as principal
underwriter of the Contracts. HESCO hereby agrees that it will
continue to act as principal underwriter until its successor or
successors assume such undertaking.
<PAGE>
-5-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
(Seal) HARTFORD LIFE INSURANCE COMPANY
Attest:
/s/ John P. Ginnetti By: /s/ Edward N. Bennett
- - ---------------------------- -----------------------------------
John P. Ginnetti Edward N. Bennet
(Seal) HARTFORD EQUITY SALES COMPANY, INC.
Attest:
/s/ John P. Ginnetti By: /s/ Joel P. Brightman
- - ---------------------------- -----------------------------------
John P. Ginnetti Joel P. Brightman
1726s
Putnam
<PAGE>
Exhibit (b)(4)
INDIVIDUAL FLEXIBLE PREMIUM
VARIABLE ANNUITY CONTRACT
Hartford Life Insurance Company
P.O. Box 2999
Hartford, Connecticut 06104-2999
(a stock life insurance company, herein called the Company)
Unless otherwise directed by the Contract Owner, the Company agrees to pay the
named Annuitant, on the Annuity Commencement Date, if the Annuitant and Contract
Owner are then living, the first of a series of annuity payments the frequency,
period and dollar amounts of which shall be determined on the basis as set forth
herein, in accordance with the Annuity Option selected.
This contract is issued in consideration of the payment of the initial premium
payment.
This contract is subject to the laws of the jurisdiction where it is delivered.
The Contract Specifications on Page 3 and the conditions and provisions on this
and the following pages are part of the contract.
RIGHT TO EXAMINE CONTRACT
We want you to be satisfied with the contract you have purchased. We urge you to
closely examine its provisions. If for any reason you are not satisfied with
your purchase you may surrender the contract by returning the contract within
ten days after you receive it. A written request for cancellation must accompany
the contract. In such event, we will pay to the Contract Owner an amount equal
to the sum of (i) the difference between the premiums paid and the amounts
allocated to any Account under the contract and (ii) the Contract Value on the
date of surrender. The Contract Owner bears only the investment risk during the
period prior to the Company's receipt of request for cancellation.
Signed for the Company
/s/ Bruce D. Gardner /s/ Lowndes A. Smith
--------------------------- ---------------------------
Bruce D. Gardner, SECRETARY Lowndes A. Smith, PRESIDENT
Premium Payments are flexible as described herein.
Nonparticipating
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SUB-ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED
DOLLAR AMOUNT. DETAILS OF THE VARIABLE PROVISIONS ARE DESCRIBED UNDER VALUATION
PROVISIONS, PAGES 9 AND 10.
[ITT HARTFORD LOGO]
<PAGE>
TABLE OF CONTENTS
Page
Contract Specifications 3
Definition of Certain Terms 4
Premium Payments Provision 5
Contract Control Provisions 6
General Provisions 7
Valuation Provisions 9
Termination Provisions 10
Settlement Provisions 12
Annuity Tables 15
Page 2
<PAGE>
CONTRACT SPECIFICATIONS
CONTRACT NUMBER [SPECIMEN] CONTRACT DATE [FEBRUARY]
NAME OF ANNUITANT [JAMES SCOTT] DATE OF ISSUE [FEBRUARY]
AGE OF ANNUITANT [35] ANNUITY COMMENCEMENT
DATE [JANUARY]
SEX OF ANNUITANT [MALE] INITIAL PREMIUM PAYMENT [$20,000]
MINIMUM SUBSEQUENT
PAYMENT 500
MINIMUM FIXED ACCOUNT
INTEREST RATE 3%
CONTINGENT
ANNUITANT [PAUL SCOTT]
DESIGNATED
BENEFICIARY [ANN SCOTT] CONTRACT OWNER [SAME]
(IF OTHER THAN ANNUITANT)
- - --------------------------------------------------------------------------------
DESCRIPTION OF BENEFITS
INDIVIDUAL FLEXIBLE VARIABLE ANNUITY CONTRACT
ANNUAL WITHDRAWAL AMOUNT: CONTRACT YEARS 1-7
10% OF PREMIUM PAYMENTS
AFTER CONTRACT YEAR 7
THE GREATER OF:
100% OF THE CONTRACT VALUE REDUCED BY THE
TOTAL OF ANY PREMIUM PAYMENTS MADE DURING
THE 7 YEARS PRIOR TO WITHDRAWAL; OR
10% OF PREMIUM PAYMENTS MADE DURING THE 7
YEARS PRIOR TO WITHDRAWAL.
ANNUAL CONTRACT MAINTENANCE FEE: $0 IF THE CONTRACT VALUE IS $50,000 OR MORE
ON THE CONTRACT ANNIVERSARY
$30 IF THE CONTRACT VALUE IS LESS THAN
$50,000 ON THE CONTRACT ANNIVERSARY
MORTALITY AND EXPENSE RISK CHARGE: 1.25% PER ANNUM OF THE AVERAGE DAILY
CONTRACT VALUE
ADMINISTRATION CHARGE: .15% PER ANNUM OF THE AVERAGE DAILY CONTRACT
VALUE. THIS CHARGE WILL NOT BE ASSESSED
AGAINST FIXED ACCOUNT VALUES.
Page 3
<PAGE>
CONTINGENT DEFERRED SALES CHARGES:
SUBJECT TO THE ANNUAL WITHDRAWAL AMOUNT, SURRENDERS OF CONTRACT VALUES
ATTRIBUTABLE TO PREMIUM PAYMENTS MAY BE SUBJECT TO A CONTINGENT DEFERRED SALES
CHARGE ("CHARGE"). THE LENGTH OF TIME FROM RECEIPT OF THE PREMIUM PAYMENT TO THE
TIME OF SURRENDER DETERMINES THE CHARGES.
DURING THE FIRST SEVEN CONTRACT YEARS, ALL SURRENDERS WILL BE FIRST FROM PREMIUM
PAYMENTS AND THEN FROM EARNINGS. IF AN AMOUNT EQUAL TO ALL PREMIUM PAYMENTS HAS
BEEN SURRENDERED, A CHARGE WILL NOT BE ASSESSED AGAINST THE SURRENDER OF THE
REMAINING CONTRACT VALUE.
AFTER THE SEVENTH CONTRACT YEAR, ALL SURRENDERS WILL FIRST BE FROM EARNINGS AND
THEN FROM PREMIUM PAYMENTS. A CHARGE WILL NOT BE ASSESSED AGAINST THE SURRENDER
OF EARNINGS. IF AN AMOUNT EQUAL TO ALL EARNINGS HAS BEEN SURRENDERED, A CHARGE
WILL NOT BE ASSESSED AGAINST PREMIUM PAYMENTS RECEIVED MORE THAN SEVEN YEARS
PRIOR TO SURRENDER, BUT WILL BE ASSESSED AGAINST PREMIUM PAYMENTS RECEIVED LESS
THAN SEVEN YEARS PRIOR TO SURRENDER. FOR THIS PURPOSE, PREMIUM PAYMENTS WILL BE
DEEMED TO BE SURRENDERED IN THE ORDER IN WHICH THEY WERE RECEIVED.
THE CHARGE IS A PERCENTAGE OF THE AMOUNT SURRENDERED (NOT TO EXCEED THE
AGGREGATE AMOUNT OF THE PREMIUM PAYMENTS MADE) AND EQUALS:
LENGTH OF TIME FROM PREMIUM PAYMENT
CHARGE (NUMBER OF YEARS)
6% 1
6% 2
5% 3
5% 4
4% 5
3% 6
2% 7
0% 8 AND THEREAFTER
NO CONTINGENT DEFERRED SALES CHARGES WILL BE ASSESSED IN THE EVENT THE CONTRACT
TERMINATES DUE TO THE DEATH OF THE ANNUITANT OR CONTRACT OWNER (AS APPLICABLE),
OR IF CONTRACT VALUES ARE APPLIED TO AN ANNUITY OPTION PROVIDED FOR UNDER THIS
CONTRACT (PROVIDED HOWEVER, ANY SURRENDER OUT OF OPTION 4 WILL BE SUBJECT TO
CONTINGENT DEFERRED SALES CHARGES, IF APPLICABLE) OR UPON THE EXERCISE OF THE
ANNUAL WITHDRAWAL AMOUNT.
Page 3 (Continued)
<PAGE>
FUND OPTIONS
THE INITIAL PREMIUM PAYMENT WILL BE ALLOCATED AS SPECIFIED IN YOUR APPLICATION.
THE SAME ALLOCATION WILL BE MADE FOR SUBSEQUENT PREMIUM PAYMENTS UNLESS YOU
CHANGE THE ALLOCATION OR, AT THE TIME OF A PREMIUM PAYMENT, YOU INSTRUCT US TO
ALLOCATE THAT PAYMENT DIFFERENTLY.
SEPARATE ACCOUNT: PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT
SUB-ACCOUNT BASED ON:
PCM VOYAGER FUND PCM VOYAGER FUND
PCM GLOBAL GROWTH FUND PCM GLOBAL GROWTH FUND
PCM GLOBAL ASSET ALLOCATION FUND PCM GLOBAL ASSET ALLOCATION FUND
PCM GROWTH & INCOME FUND PCM GROWTH & INCOME FUND
PCM UTILITIES GROWTH & INCOME FUND PCM GROWTH & INCOME FUND
PCM HIGH YIELD FUND PCM HIGH YIELD FUND
PCM DIVERSIFIED INCOME FUND PCM DIVERSIFIED INCOME FUND
PCM U.S. GOVERNMENT & HIGH PCM U.S. GOVERNMENT &
QUALITY BOND FUND HIGH QUALITY BOND FUND
PCM MONEY MARKET FUND PCM MONEY MARKET FUND
OR OTHER FUNDS AS MAY BE MADE AVAILABLE FROM TIME TO TIME.
Page 3 (Continued)
<PAGE>
DEFINITION OF ACCOUNT - Any of the Sub-Accounts or the Fixed Account.
CERTAIN TERMS
ACCUMULATION UNIT - An accounting unit of measure used to
calculate the value of a Sub-Account of this contract before
annuity payments begin.
ADMINISTRATIVE OFFICE OF THE COMPANY - Currently located at
200 Hopmeadow St., Simsbury, Ct. All correspondence concerning
this contract should be sent to our mailing address at P.O.
Box 2999, Attn: Individual Annuity Operations, Hartford, CT
06104-2999.
ANNUAL WITHDRAWAL AMOUNT - The amount that can be withdrawn in
any Contract Year prior to incurring surrender charges.
ANNUITANT - The person on whose life this contract is issued.
ANNUTITY COMMENCEMENT DATE - The date on which annuity payments
are to begin as described under Settlement Provisions in this
contract.
ANNUITY UNIT - An accounting unit of measure used to calculate
the amount of annuity payments under the variable annuity
option.
BENEFICIARY - The person entitled to receive benefits as per
the terms of the contract in case of the death of the Contract
Owner or Annuitant, as applicable.
COMPANY - The Hartford Life Insurance Company.
CONTINGENT ANNUITANT - The person so designated by the
Contract Owner who, upon the Annuitant's death, prior to the
Annuity Commencement Date, becomes the Annuitant.
CONTRACT ANNIVERSARY - An anniversary of the Contract Date.
Similarly, Contract Years are measured from the Contract Date.
The Contract Date is shown on Page 3.
CONTRACT MAINTENANCE FEE - An amount which is deducted from
the value of the contract at the end of the Contract Year or
on the date of surrender of this contract, if earlier.
CONTRACT OWNER - The owner(s) of the contract.
CONTRACT VALUE - The value of the Sub-Accounts plus the value
of the Fixed Account on any day.
DATE OF ISSUE - The date on which an Account is established
for the Contract Owner by the Company.
DOLLAR COST AVERAGING - Contract Owner initiated systematic
transfers from one or more Accounts to any other available
Sub-Accounts.
DUE PROOF OF DEATH - A certified copy of the 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 the Company.
FIXED ACCOUNT - Part of the Company's General Account to which
all or a portion of the Contract Value may be allocated.
Page 4
<PAGE>
DEFINITION OF FUND(S) - Currently the Funds specified on Page 3 or any other
CERTAIN TERMS Fund(s) that may be added by the Company.
(CONTINUED)
GENERAL ACCOUNT - All assets of the Company other than those
allocated to the Separate Accounts of the Company.
MAXIMUM ANNIVERSARY VALUE - A value used in determining the
death benefit. It is based on a series of calculations of
Account Values on Contract Anniversaries, premium payments and
partial surrenders.
As of the date of death, the Company will calculate an
Anniversary Value for each Contract Anniversary prior to the
deceased's attained age 81. The Anniversary Value is equal to
the Account 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. The Maximum Anniversary
Value is equal to the greatest Anniversary Value attained from
this series of calculations.
PREMIUM TAX - The amount of tax, if any, charged by a federal,
state or municipal entity on premium payments or Contract
Values.
SEPARATE ACCOUNT - An Account established by the Company to
separate the assets funding the variable benefits for the
class of contracts to which this contract belongs from the
other assets of the Company. The assets in the Separate
Account are not chargeable with liabilities arising out of any
other business the Company may conduct. The Separate Account
and the Funds, which are the underlying securities of the
Separate Account, are listed on the Contract Specifications on
Page 3 of this contract.
SUB-ACCOUNT - The subdivisions of the Separate Account which
are used to determine how the Contract Owner's Account is
allocated between the Funds.
TERMINATION VALUE - The value of the contract upon
termination, as described in the section of the contract
captioned "Termination Provisions."
VALUATION DAY - Every day the New York Stock Exchange is open
for trading.
PREMIUM PREMIUM PAYMENTS
PAYMENTS
Premium payments are payable at the Administrative Office of
the Company. Payments may be made by check payable to Hartford
Life Insurance Company or by any other method which the
Company deems acceptable.
The Initial Premium Payment is shown on Page 3. This is a
flexible premium annuity. Additional payments may be accepted
by the Company. The additional payments must be at least equal
to the minimum subsequent premium payment shown on Page 3.
ALLOCATION OF PREMIUM PAYMENTS
The Contract Owner shall specify that portion of any premium
payment to be allocated to each Account, provided, however,
that the minimum allocation to any Account may not be less
than the Company's minimum amount then in effect.
Page 5
<PAGE>
PREMIUM The Contract Owner may transfer Contract Values held in the
PAYMENTS Accounts into other Accounts; however, the Company reserves
(CONTINUED) the right to limit the number of transfers to no more
frequently than 12 per Contract Year with no two transfers
being made on consecutive Valuation Days. Subject to the
following two paragraphs, any such limitations will apply to
all Contract Owners.
The right to reallocate Contract Values between the Accounts
is subject to modification if the Company 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 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 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 the Company to be
to the disadvantage of other Contract Owners.
The maximum amount transferable from the Fixed Account during
any Contract Year is the greater of 30% of the Fixed Account
balance as of the last Contract Anniversary or the greatest of
any prior transfer from the Fixed Account. This limitation
does not apply to Dollar Cost Averaging. However, if any
interest rate is renewed at a rate at least one percentage
point less than the previous rate, the Contract Owner may
elect to transfer up to 100% of the Funds receiving that
reduced rate within 60 days of notification of the interest
rate decrease. Transfers may not be made from the Sub-Accounts
into the Fixed Account for the six-month period following any
transfer from the Fixed Account into the other Sub-Accounts.
The Company reserves the right to defer transfers from the
Fixed Account for up to six months from the date of request.
CONTRACT ANNUITANT, CONTINGENT ANNUITANT, CONTRACT OWNER
CONTROL
PROVISIONS The Annuitant may not be changed.
The designations of Contract Owner and Contingent Annuitant
will remain in effect until changed by the Contract Owner.
Changes in the designation of the Contract Owner may be made
during the lifetime of the Annuitant by written notice to the
Company. Changes in the designation of Contingent Annuitant
may be made at any time prior to the Annuity Commencement Date
by written notice to the Company. Notwithstanding the
foregoing, if no Contingent Annuitant has been named and the
Contract Owner/Annuitant's spouse is the Beneficiary, it will
be assumed that the Contract Owner/Annuitant's spouse is the
Contingent Annuitant.
The Contract Owner has the sole power to exercise all the
rights, options and privileges granted by this contract or
permitted by the Company and to agree with the Company to any
change in or amendment to the contract. The rights of the
Contract Owner shall be subject to the rights of any assignee
of record with the Company and of any irrevocably designated
Beneficiary. In the case of joint Contract Owners, each
Contract Owner alone may exercise all rights, options and
privileges, except with respect to the Termination and Partial
Surrender/Annual Withdrawal Amount Provisions and change of
ownership.
Page 6
<PAGE>
CONTRACT BENEFICIARY
CONTROL
PROVISIONS The Designated Beneficiary will remain in effect until
(Continued) changed by the Contract Owner. Changes in the Designated
Beneficiary may be made during the lifetime of the
Annuitant by written notice to the Administrative Office of
the Company. If the Designated Beneficiary has been designated
irrevocably, however, such designation cannot be changed or
revoked without such Beneficiary's written consent. Upon
receipt of such notice and written consent, if required, at
the Administrative Office of the Company, the new designation
will take effect as of the date the notice is signed, whether
or not the Annuitant or Contract Owner is alive at the time of
receipt of such notice. The change will be subject to any
payments made or other action taken by the Company before the
receipt of the notice.
In the event of the death of the Annuitant when there is no
surviving Contingent Annuitant, the Beneficiary will be as
follows. If the death of the Annuitant occurs prior to the
Annuity Commencement Date, the Beneficiary shall be the
surviving Contract Owner, or joint Contract Owners, if
applicable, notwithstanding that the Designated Beneficiary
may be different. Otherwise, the Beneficiary will be the
Designated Beneficiary then in effect. If the Annuitant is the
sole Contract Owner and there is no Designated Beneficiary in
effect, the Annuitant's estate will be the Beneficiary.
In the event of the death of a Contract Owner prior to the
Annuity Commencement Date, the Beneficiary will be as follows.
If the owner was the sole Contract Owner, the Beneficiary
shall be the Designated Beneficiary then in effect. If no
Beneficiary designation is in effect or if the Designated
Beneficiary has predeceased the Contract Owner, the Contract
Owner's estate shall be the Beneficiary. At the first death of
a joint Contract Owner prior to the Annuity Commencement Date,
the Beneficiary shall be the surviving Contract Owner
notwithstanding that the Designated Beneficiary may be
different.
GENERAL THE CONTRACT
PROVISIONS
This contract constitutes the entire contract.
MODIFICATION
No modification of this contract shall be made except over the
signature of the President, a Vice President, a Secretary or
an Assistant Secretary of the Company.
The Company reserves the right to modify the contract, but
only if such modification: (i) is necessary to make the
contract or the Separate Account comply with any law or
regulation issued by a governmental agency to which the
Company is subject; (ii) is necessary to assure continued
qualification of the contract under the Internal Revenue Code
or other federal or state laws relating to retirement
annuities or annuity contracts; (iii) is necessary to reflect
a change in the operation of the Separate Account or the Sub-
Account(s); (iv) provides additional Account options; or (v)
withdraws Account options. In the event of any such
modification, the Company will provide notice to the Contract
Owner, or to the payee(s) during the annuity period. The
Company may also make appropriate endorsement in the Contract
to reflect such modification.
Page 7
<PAGE>
GENERAL MINIMUM VALUE STATEMENT
PROVISIONS
(CONTINUED) Any Termination Values, death benefits or settlement
provisions available under this contract equal or exceed those
required by the state in which the contract is delivered.
NON-PARTICIPATION
This contract does not share in the surplus earnings of the
Company. That portion of the assets of the Separate Account
equal to the reserves and other contract liabilities of the
Separate Account shall not be chargeable with liabilities
arising out of any other business the Company may conduct.
MISSTATEMENT OF AGE AND SEX
If the age or sex of the Annuitant has been misstated, the
amount of the annuity payable by the Company shall be that
provided by that portion of the amounts allocated to effect
such annuity on the basis of the corrected information without
changing the date of the first payment of such annuity. Any
underpayments by the Company shall be made up immediately and
any overpayments shall be charged against future amounts
becoming payable.
If the age of the Annuitant or Contract Owner has been
misstated, the amount of any death benefit payable shall be
determined based upon the correct age of the Annuitant or
Contract Owner.
INCONTESTABILITY
We cannot contest this Contract.
REPORTS TO THE CONTRACT OWNER
There shall be furnished to each Contract Owner copies of any
shareholder reports of the Funds and of any other notices,
reports or documents required by law to be delivered to
Contract Owners. Annually, a statement of the Contract Value
is sent to the Contract Owner.
VOTING RIGHTS
The Company shall notify the Contract Owner of any Fund
shareholder's meetings at which the shares held for the
Contract Owner's Account may be voted and shall also send
proxy materials and a form of instruction by means of which
the Contract Owner can instruct the Company with respect to
the voting of the shares held for the Contract Owner's
Account. In connection with the voting of Fund shares held by
it, the Company shall arrange for the handling and tallying of
proxies received from Contract Owners. The Company will vote
the Fund shares held by it in accordance with the instructions
received from the Contract Owners having the right to give
voting instructions. If a Contract Owner desires to attend any
meeting which shares held for the Contract Owner's benefit may
be voted, the Contract Owner may request the Company 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.
Page 8
<PAGE>
GENERAL In the event that the Contract Owner gives no
PROVISIONS instructions or leaves the manner of voting
(CONTINUED) discretionary, the Company will vote such shares of the
appropriate Fund in the same proportion as shares of that Fund
for which instructions have been received. Also, the Company
will vote the Fund Shares in this proportionate manner which
are held by the Company for its own Account. During the
annuity period under a contract the number of votes will
decrease as the assets held to fund annuity benefits decrease.
SUBSTITUTION
The Company reserves the right to substitute the shares of any
other registered investment company for the shares of any Fund
already purchased or to be purchased in the future by the
Separate Account provided that the substitution has been
approved by the Securities and Exchange Commission.
CHANGE IN THE OPERATION OF THE SEPARATE ACCOUNT
At the Company's election and subject to any necessary vote by
persons having the right to give instructions with respect to
the voting of the Fund shares held by the Sub-Accounts, the
Variable Account may be operated as a management company under
the Investment Company Act of 1940 or it may be deregistered
under the Investment Company Act of 1940 in the event
registration is no longer required. Deregistration of the
Variable Account requires an order by the Securities and
Exchange Commission.
PROOF OF SURVIVAL
The payment of any annuity benefit will be subject to evidence
that the Annuitant is alive on the date such payment is
otherwise due.
VALUATION NET PREMIUM PAYMENTS
PROVISIONS
The net premium payment is equal to the premium payment minus
any applicable Premium Taxes. The net premium payment is
applied to provide Fixed Account values or Sub-Account
Accumulation Units with respect to the Sub-Account(s) selected
by the Contract Owner.
The number of Accumulation Units credited to each Sub-Account
is determined by dividing the net premium payment allocated to
a Sub-Account by the dollar value of one Accumulation Unit for
such Sub-Account, next computed after the receipt of a premium
payment by the Company. The number of Accumulation Units so
determined will not be affected by any subsequent change in
the value of such Accumulation Units. The Accumulation Unit
value in any Sub-Account may increase or decrease from day to
day as described below.
The Company will determine the value of the Fixed Account by
crediting interest to amounts allocated to the Fixed Account.
The minimum Fixed Account interest rate is the rate shown on
Page 3, compounded annually. The Company, at its discretion,
may credit interest rates greater than the minimum Fixed
Account interest rate.
Page 9
<PAGE>
VALUATION NET INVESTMENT FACTOR
PROVISIONS
(CONTINUED) The net investment factor for each of the Sub-Accounts is
equal to the net asset value per share of the corresponding
Fund at the end of the valuation period (plus the per share
amount of any unpaid dividends or capital gains by that Fund)
divided by the net asset value per share of the corresponding
Fund at the beginning of the valuation period and subtracting
from that amount the mortality and expense risk charge and the
administration charge shown on Page 3. The General Account net
investment factor is guaranteed to be equal to the Minimum
Fixed Account Interest Rate shown on Page 3.
ACCUMULATION UNIT VALUE
The Accumulation Unit Value for each Sub-Account will vary to
reflect the investment experience of the applicable Fund and
will be determined on each Valuation Day by multiplying the
Accumulation Unit Value of the particular Sub-Account on the
preceding Valuation Day by the net investment factor for that
Sub-Account for the valuation period then ended. The value of
the Sub-Account on each Valuation Day is then determined by
multiplying the number of Accumulation Units in that Sub-
Account by the Accumulation Unit Value on that Valuation Day.
ANNUITY UNIT VALUE
The value of an Annuity Unit for each Sub-Account of the
Separate Account will vary to reflect the investment
experience of the applicable Funds and will be determined by
multiplying the value of the Annuity Unit for that Sub-Account
on the preceding day by the product of (a) the net investment
factor for that Sub-Account for the day for which the Annuity
Unit value is being calculated, and (b) 0.999866, which is a
factor that neutralizes an assumed interest rate of 5%.
CONTRACT MAINTENANCE FEE
During each year that this contract is in force prior to the
Annuity Commencement Date, a fee will be deducted from the
contract at the end of the Contract Year or on the date of
surrender of this contract, if earlier. The fee will be
charged against the Contract Value by reducing the Fixed
Account value and, with respect to the Sub-Accounts, the
number of Accumulation Units held on that date on a pro-rata
basis with respect to each active Account.
The number of Accumulation Units deducted from the Sub-Account
is determined by dividing the pro-rata portion of the Contract
Maintenance Fee applicable to that Sub-Account, by the value
of an Accumulation Unit for the Sub-Account at the end of the
Contract Year, or on the date of surrender, as applicable.
TERMINATION TERMINATION PRIOR TO THE ANNUITY COMMENCEMENT DATE
PROVISIONS
FULL SURRENDER
At any time prior to the Annuity Commencement Date, the
Contract Owner has the right to terminate the contract by
submitting a written request to the Administrative Office of
the Company. In such event, the Termination Value of the
contract may be taken in the form of a cash settlement.
Page 10
<PAGE>
TERMINATION The Termination Value of the contract is equal
PROVISIONS to the Contract Value less:
(CONTINUED)
(a) any applicable Premium Taxes not previously deducted;
(b) the Contract Maintenance Fee as specified on Page 3; and
(c) any applicable contingent deferred sales charges as
specified on Page 3.
The Termination Value provided by the contract is not less
than the minimum values required by the insurance laws of the
state in which this contract is issued.
PARTIAL SURRENDERS/ANNUAL WITHDRAWAL AMOUNT
The Contract Owner may request, in writing, a partial
surrender of Contract Values at any time prior to the Annuity
Commencement Date provided the Contract Value remaining after
the surrender is at least equal to the Company's minimum
amount rules then in effect. If the remaining Contract Value
following such surrender is less than the Company's minimum
amount rules, the Company will terminate the contract and pay
the Termination Value.
The contingent deferred sales charge will be assessed against
any Contract Values surrendered as described on Page 3.
However, on a noncumulative basis, the Contract Owner may make
partial surrenders during any Contract Year, up to the Annual
Withdrawal Amount shown on Page 3 and the contingent deferred
sales charge will not be assessed against such amounts.
Surrender of Contract Values in excess of the Withdrawal
Amount and additional surrenders made in any Contract Year
will be subject to the contingent deferred sales charge, as
described on Page 3, if applicable.
For Federal tax purposes, any surrenders will be deemed to be
first from earnings, to the extent that they exist, and then
from the premium payments.
TERMINATION AFTER THE ANNUITY COMMENCEMENT DATE
This contract may not be surrendered for its Termination Value
after the commencement of annuity payments, except with
respect to Options Four and Five.
PAYMENT ON SURRENDER - DEFERRAL OF PAYMENT
Payment on any request for surrender will be made as soon as
possible and, with respect to the Contract Values in the Sub-
Accounts, no later than seven days after the written request
is received by the Company. However, such payment may be
subject to postponement:
(a) for any period during which the New York Stock Exchange
is closed or during which trading on the New York Stock
Exchange is restricted;
(b) for any period during which an emergency exists as a
result of which (i) disposal of the securities held in
the Sub-Accounts is not reasonably practicable, or (ii)
it is not reasonably practicable for the value of the net
assets of the Separate Account to be fairly determined;
and
(c) for such other periods as the Securities and Exchange
Commission may, by order, permit for the protection of
the Contract Owners. The conditions under which trading
shall be deemed to be restricted or any emergency shall
be deemed to exist shall be determined by rules and
regulations of the Securities and Exchange Commission.
Page 11
<PAGE>
TERMINATION The Company may defer payment of any amounts
PROVISIONS from the Fixed Account for up to six months
(CONTINUED) from the date of the request to surrender. If the Company
defers payment for more than 30 days, the Company will pay
interest of at least 3% per annum on the amount deferred.
DEATH BENEFIT
If the Annuitant dies before the Annuity Commencement Date and
there is no designated Contingent Annuitant surviving, or if
the Contract Owner dies before the Annuity Commencement Date,
the Death Benefit will be payable as determined under the
Contract Control Provisions. The Death Benefit is calculated
as of the date the Company receives written notification of
Due Proof of Death at the Administration Office of the
Company.
The Death Benefit will be the greatest of:
(a) The Contract Value on the date of receipt of Due Proof of
Death at the Administration Office of the Company; or
(b) The Maximum Anniversary Value as described on Page 5 if
this Contract; or
(c) 100% of all premium payments made under the Contract,
reduced by the dollar amount of any partial surrenders
since the Date of Issue.
The Death Benefit may be taken in one sum or under any of the
settlement options then being offered by the Company provided,
however, that, in the event of a Contract Owner's death, any
settlement option must provide that any amount payable as a
death benefit will commence upon notification of Due Proof of
Death and be completed within five years of the date of death
or, if the benefit is payable over a period not extending
beyond the life expectancy of the Beneficiary or over the life
of the Beneficiary, such distribution must commence within one
year of the date of death. Notwithstanding the foregoing, in
the event of the Contract Owner's death where the sole
Beneficiary is the spouse of the Contract Owner and the
Annuitant or Contingent Annuitant is living, such spouse may
elect, in lieu of receiving the death benefit, to be treated
as the Contract Owner.
SETTLEMENT When payment is taken in one sum, payment will be made within
PROVISIONS 7 days after the date Due Proof of Death is received, except
when the Company is permitted to defer such payment under the
Investment Company Act of 1940.
ANNUITY COMMENCEMENT DATE
The Annuity Commencement Date is shown on Page 3. This date
may be changed by the Contract Owner with 30 days advance
written notification and may be the fifteenth day of any month
before or including the month of the Annuitant's 90th
birthday. In the event the Contingent Annuitant becomes the
Annuitant and in the absence of a written election to the
contrary, the Annuity Commencement Date will be the fifteenth
day of the month coincident with or next following the
Annuitant's 90th birthday.
Page 12
<PAGE>
SETTLEMENT ELECTION OF ANNUITY OPTION
PROVISIONS
(CONTINUED) The Contract Owner may elect to have the Termination Value,
without deduction for any contingent deferred sales charge,
applied on the Annuity Commencement Date under any one of the
annuity options described below except the fifth option or
under any of the settlement options then being offered by the
Company. The Termination Value is determined on the basis of
the Accumulation Unit value of each Sub-Account and the value
of the Fixed Account no later than the fifth Valuation Day
preceding the date annuity payments are to commence.
DATE OF PAYMENT
The first payment under any option shall be made on the
fifteenth day of the month immediately following approval of
claim for settlement. Subsequent payments shall be made on the
fifteenth day of each subsequent month in accordance with the
manner of payment selected.
DEATH OF THE ANNUITANT
In the event of the death of the Annuitant while receiving
annuity payments, the present value of any remaining payments
will be paid in one sum to the Beneficiary unless other
provisions shall have been made and approved by the Company.
If the Annuitant was also the Contract Owner, any method of
distribution must provide that any amount payable as a death
benefit will be distributed at least as rapidly as under the
method of distribution in effect at the Contract Owner's
death. In the case of the Separate Account calculations, for
such present value of the remaining payments the Company will
assume a net investment rate of 5% per annum. The Annuity Unit
value on the date of receipt of Due Proof of Death shall be
used for the purpose of determining such present value. In the
case of the General Account the net investment rate assumed
will be the rate used by the Company to determine the amount
of each certain payment.
ALLOCATION OF ANNUITY
The person electing an annuity option may further elect to
have the value of the contract applied to provide a variable
annuity, a fixed dollar annuity a or combination of both. Once
very 3 months, following the commencement of annuity payments,
the Contract Owner may elect, in writing, to transfer among
any Sub-Account(s) on which variable annuity payments are
based. No transfers may be made between the Sub-Accounts and
the General Account.
If no election is made to the contrary, the value of each Sub-
Account shall be applied to provide a variable annuity based
thereon, and the value of the Fixed Account shall be applied
to provide a fixed dollar annuity.
VARIABLE ANNUITY AND FIXED DOLLAR ANNUITY
VARIABLE ANNUITY - A variable annuity is an annuity with
payments increasing or decreasing in amount in accordance
with the net investment results of the Sub-Account(s) of the
Separate Account (as described in the Valuation Provisions).
After the first monthly payment for a variable annuity has
been determined in accordance with the provisions of this
contract, a number of Sub-Account Annuity Units is determined
by dividing that first monthly payment by the appropriate Sub-
Account Annuity Unit value on the effective date of the
annuity payments.
Page 13
<PAGE>
SETTLEMENT Once variable annuity payments have begun, the number
PROVISIONS of Annuity Units remains fixed with respect to a particular
(CONTINUED) Sub-Account. If the Contract Owner elects that continuing
annuity payments be based on a different Sub-Account, the
number will change effective with that election but will
remain fixed in number following such election. The method of
calculating the unit value is described under Valuation
Provisions.
The dollar amount of the second and subsequent variable
annuity payments is not predetermined and may increase or
decrease from month to month. The actual amount of each
variable annuity payment after the first is determined by
multiplying the number of Sub-Account Annuity Units by the
Sub-Account Annuity Unit value as described in the Valuation
Provisions. The Sub-Account Annuity Unit value will be
determined no earlier than the fifth Valuation Date preceding
the date the annuity payment is due.
The Company guarantees that the dollar amount of variable
annuity payments will not be adversely affected by variations
in the expense results and in the actual mortality experience
of payees from the mortality assumptions, including any age
adjustment, used in determining the first monthly payment.
Fixed Dollar Annuity - A fixed dollar annuity is an annuity
with payments which remain fixed as to dollar amount
throughout the payment period.
ANNUITY OPTIONS
FIRST OPTION - Life Annuity - An annuity payable monthly
during the lifetime of the payee, ceasing with the last
payment due prior to the death of the payee.
SECOND OPTION - Life Annuity with 120, 180 or 240 Monthly
Payments Certain - An annuity providing monthly income to the
payee for a fixed period of 120 months, 180 months, or 240
months (as selected), and for as long thereafter as the
payee shall live.
THIRD OPTION - Joint and Last Survivor Life Annuity - An
annuity payable monthly during the joint lifetime of the payee
and a secondary payee, and thereafter during the remaining
lifetime of the survivor, ceasing with the last payment prior
to the death of the survivor.
FOURTH OPTION - Payment for a Designated Period - An amount
payable monthly for the number of years selected which may be
from 5 to 30 years. The remaining balance of proceeds in the
General Account or the Separate Account for any day is equal
to the balance on the previous day decreased by the amount of
any installment paid on that day and the remainder multiplied
by the applicable net investment factor for the day as
described in the valuation provisions. Any surrender out of
this option will be subject to contingent deferred sales
charges, as described on Page 3.
If this contract is issued to qualify under Section 401, 403,
or 408 of the Internal Revenue Code of 1954 as amended, the
fourth option shall be available 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 will be computed under the mortality table then in
use by the Company.
Page 14
<PAGE>
SETTLEMENT FIFTH OPTION - Death Benefit Remaining with the Company
PROVISIONS - Proceeds from the Death Benefit left with the
(CONTINUED) Company for a period not to exceed five years from the
date of the Contract Owner's death prior to the Annuity
Commencement Date. The proceeds will remain in the Sub-
Account(s) to which they were allocated at the time of death
unless the Beneficiary elects to reallocate them. Full or
partial withdrawals may be made at any time. In the event of
withdrawals, the remaining value will equal the Contract Value
of the proceeds left with the Company, minus any withdrawals.
In the absence of an election by the Contract Owner, the
Termination Value, without deduction for any contingent
deferred sales charge, will be applied on the Annuity
Commencement Date under the second option to provide a life
annuity with 120 monthly payments certain.
ANNUITY TABLES DESCRIPTION OF TABLES
The attached tables show the minimum dollar amount of the
first monthly payments for each $1,000 applied under the
options. Under the First or Second Options, the amount of each
payment will depend upon the age and sex of the payee at the
time the first payment is due. Under the Third Option, the
amount of each payment will depend upon the sex of both payees
and their ages at the time the first payment is due.
The variable payment annuity tables for the First, Second and
Third Options are based on the 1983a Individual Annuity
Mortality Table with ages set back one year and an interest
rate of 5% per annum. The table for the Fourth Option is based
on an interest rate of 5% per annum.
The fixed annuity payment tables for the First, Second and
Third Options are based on the 1983a Individual Annuity
Mortality Table with ages set back one year and an intrest
rate of 3% per annum. The table for the Fourth Option
is based on an interest rate of 3% per annum.
Once the Contract Owner has elected an annuity option, that
election may not be changed with respect to any Annuitant
following the commencement of annuity payments.
MINIMUM PAYMENT
No election of any options or combination of options may be
made under this contract unless the first payment for each
affected Account would be at least equal to the minimum
payment amount according to Company rules then in effect. If
at any time, payments to be made to any payee from each
Account are or become less than the minimum payment amount,
the Company shall have the right to change the frequency of
payment to such intervals as will result in a payment at least
equal to the minimum. If any amount due would be less than the
minimum payment amount per annum, the Company may make such
other settlement as may be equitable to the payee.
Page 15
<PAGE>
VARIABLE PAYMENT ANNUITY TABLES
Amount of First Monthly Payment
For Each $1,000 Applied to
Variable Payment Annuities
Second and subsequent annuity payments, when based on the investment experience
of a Separate Account, are variable and are not guaranteed as to fixed dollar
amount.
SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
Male Payee Female Payee
---------- ------------
Monthly Payments Guaranteed Monthly Payments Guaranteed
Age -------------------------------- --------------------------------
None 120 180 240 None 120 180 240
<S> <C> <C> <C> <C> <C> <C> <C> <C>
35 $4.68 $3.67 $4.66 $4.64 $4.52 $4.52 $4.51 $4.50
40 4.86 4.85 4.82 4.79 4.65 4.65 4.64 4.62
45 5.10 5.07 5.03 4.97 4.83 4.82 4.80 4.77
50 5.41 5.35 5.28 5.20 5.06 5.04 5.01 4.97
51 5.48 5.41 5.34 5.24 5.12 5.09 5.06 5.01
52 5.55 5.48 5.40 5.30 5.17 5.14 5.11 5.05
53 5.63 5.55 5.46 5.35 5.23 5.20 5.16 5.10
54 5.71 5.63 5.53 5.40 5.30 5.26 5.22 5.15
55 5.80 5.70 5.60 5.45 5.37 5.33 5.28 5.20
56 5.89 5.79 5.67 5.51 5.44 5.40 5.34 5.26
57 5.99 5.88 5.74 5.57 5.52 5.47 5.40 5.31
58 6.10 5.97 5.82 5.62 5.60 5.54 5.47 5.37
59 6.21 6.07 5.90 5.68 5.68 5.62 5.54 5.43
60 6.33 6.17 5.98 5.74 5.79 5.71 5.62 5.49
61 6.46 6.28 6.07 5.80 5.89 5.80 5.70 5.55
62 6.60 6.40 6.16 5.86 6.00 5.90 5.78 5.61
63 6.75 6.52 6.25 5.91 6.11 6.00 5.86 5.67
64 6.91 6.64 6.34 5.97 6.23 6.11 5.95 5.74
65 7.09 6.78 6.43 6.02 6.37 6.22 6.04 5.80
66 7.27 6.91 6.52 6.08 6.51 6.34 6.14 5.87
67 7.47 7.06 6.62 6.12 6.66 6.47 6.24 5.93
68 7.68 7.21 6.71 6.17 6.82 6.60 6.34 5.99
69 7.91 7.36 6.81 6.22 7.00 6.74 6.44 6.05
70 8.15 7.52 6.90 6.26 7.19 6.89 6.54 6.11
75 9.65 8.35 7.30 6.41 8.41 7.74 7.06 6.34
80 11.78 9.16 7.59 6.48 10.24 8.70 7.46 6.46
85 14.73 9.80 7.74 6.51 13.00 9.55 7.69 6.50
90 18.62 10.21 7.80 6.51 17.00 10.10 7.79 6.51
</TABLE>
JOINT AND LAST SURVIVOR ANNUITY
<TABLE>
<CAPTION>
Age of Age of Female Payee
Male 35 40 45 50 55 60 65 70 75 80 85 90
Payee
- - -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $4.38 $4.42 $4.47 $4.52 $4.56 $4.59 $4.62 $4.64 $4.65 $4.66 $4.67 $4.68
40 4.41 4.47 4.54 4.60 4.66 4.71 4.75 4.79 4.81 4.83 4.85 4.85
45 4.43 4.51 4.60 4.68 4.77 4.85 4.91 4.97 5.01 5.05 5.07 5.08
50 4.45 4.55 4.65 4.76 4.88 5.00 5.10 5.19 5.26 5.31 5.35 5.37
55 4.47 4.57 4.70 4.84 4.99 5.15 5.30 5.44 5.56 5.65 5.71 5.75
60 4.49 4.60 4.73 4.90 5.09 5.30 5.52 5.73 5.92 6.07 6.17 6.24
65 4.50 4.61 4.76 4.95 5.17 5.43 5.73 6.04 6.34 6.59 6.79 6.91
70 4.50 4.63 4.78 4.98 5.23 5.54 5.92 6.34 6.79 7.21 7.55 7.80
75 4.51 4.64 4.80 5.01 5.28 5.63 6.07 6.60 7.22 7.87 8.46 8.91
80 4.51 4.64 4.81 5.03 5.31 5.69 6.18 6.81 7.60 8.52 9.45 10.24
85 4.52 4.65 4.82 5.04 5.34 5.73 6.25 6.96 7.89 9.07 10.40 11.67
90 4.52 4.65 4.82 5.05 5.35 5.75 6.30 7.05 8.09 9.49 11.21 13.03
</TABLE>
PAYMENTS FOR A DESIGNATED PERIOD
<TABLE>
<CAPTION>
Amount Amount Amount Amount Amount Amount
No. of No. of No. of No. of No. of No. of
of Payment of Payment of Payment of Payment of Payment of Payment
Years Amounts Years Amounts Years Amounts Years Amounts Years Amounts Years Amounts
- - ----- ------- ----- ------- ----- ------- ----- ------- ----- ------- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5 $18.74 10 $10.51 15 $7.82 20 $6.51 25 $5.76 30 $5.28
6 15.99 11 9.77 16 7.49 21 6.33 26 5.65
7 14.02 12 9.16 17 7.20 22 6.17 27 5.54
8 12.56 13 8.64 18 6.94 23 6.02 28 5.45
9 11.42 14 8.20 19 6.71 24 5.88 29 5.36
</TABLE>
The monthly payment for any combination of ages not shown will be quoted upon
request.
Page 16
<PAGE>
FIXED PAYMENT ANNUITY TABLES
Amount of Monthly Payments
For Each $1,000 Applied to
Fixed Payment Annuities
Payments are fixed and are guaranteed as to fixed dollar amount.
FIRST AND SECOND OPTIONS - SINGLE LIFE ANNUITIES WITH:
<TABLE>
<CAPTION>
Age Male Payee Female Payee
- - --- ---------- ------------
Monthly Payments Guaranteed Monthly Payments Guaranteed
-------------------------------- --------------------------------
None 120 180 240 None 120 180 240
<S> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.41 $3.40 $3.39 $3.38 $3.23 $3.23 $3.22 $3.22
40 3.61 3.60 3.58 3.56 3.39 3.38 3.38 3.37
45 3.87 3.85 3.82 3.77 3.59 3.58 3.57 3.55
50 4.19 4.15 4.10 4.03 3.84 3.83 3.81 3.77
51 4.27 4.22 4.17 4.08 3.90 3.89 3.86 3.82
52 4.34 4.29 4.23 4.14 3.97 3.95 3.92 3.88
53 4.43 4.37 4.30 4.20 4.03 4.01 3.98 3.93
54 4.51 4.45 4.37 4.26 4.10 4.08 4.04 3.99
55 4.60 4.54 4.45 4.32 4.18 4.15 4.11 4.04
56 4.70 4.62 4.53 4.39 4.25 4.22 4.18 4.11
57 4.80 4.72 4.61 4.45 4.34 4.30 4.25 4.17
58 4.91 4.82 4.69 4.51 4.42 4.38 4.32 4.23
59 5.03 4.92 4.78 4.58 4.52 4.47 4.40 4.30
60 5.15 5.03 4.87 4.64 4.61 4.56 4.48 4.37
61 5.28 5.14 4.96 4.71 4.72 4.66 4.57 4.44
62 5.42 5.26 5.06 4.78 4.83 4.76 4.66 4.51
63 5.57 5.39 5.16 4.84 4.95 4.86 4.75 4.58
64 5.74 5.52 5.26 4.90 5.07 4.98 4.85 4.65
65 5.91 5.66 5.36 4.96 5.21 5.10 4.95 4.72
66 6.10 5.81 5.46 5.02 5.35 5.22 5.05 4.79
67 6.29 5.96 5.56 5.08 5.51 5.36 5.16 4.86
68 6.50 6.11 5.66 5.13 5.67 5.50 5.26 4.93
69 6.73 6.28 5.76 5.18 5.85 5.65 5.37 5.00
70 6.97 6.44 5.86 5.23 6.04 5.80 5.49 5.06
75 8.45 7.32 6.31 5.40 7.26 6.69 6.04 5.32
80 10.55 8.17 6.62 5.48 9.07 7.69 6.48 5.45
</TABLE>
THIRD OPTION - JOINT AND LAST SURVIVOR ANNUITY
<TABLE>
<CAPTION>
Age of Age of Female Payee
Male 35 40 45 50 55 60 65 70 75 80
Payee
- - -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.07 $3.14 $3.20 $3.25 $3.30 $3.33 $3.35 $3.37 $3.39 $3.40
40 3.11 3.20 3.28 3.36 3.42 3.48 3.52 3.55 3.57 3.59
45 3.15 3.25 3.36 3.46 3.56 3.64 3.71 3.76 3.80 3.83
50 3.17 3.29 3.42 3.56 3.69 3.82 3.92 4.01 4.08 4.12
55 3.19 3.32 3.47 3.54 3.81 3.99 4.16 4.29 4.40 4.48
60 3.20 3.34 3.51 3.70 3.92 4.15 4.39 4.61 4.79 4.93
65 3.21 3.36 3.54 3.75 4.00 4.29 4.61 4.94 5.24 5.48
70 3.22 3.37 3.56 3.78 4.05 4.40 4.80 5.25 5.70 6.12
75 3.22 3.38 3.57 3.81 4.11 4.48 4.95 5.51 6.15 6.80
80 3.23 3.38 3.58 3.82 4.14 4.54 5.05 5.71 6.52 7.45
</TABLE>
FORTH OPTION - PAYMENTS FOR A DESIGNATED PERIOD
<TABLE>
<CAPTION>
Amount Amount Amount Amount Amount Amount
No. of No. of No. of No. of No. of No. of
of Payment of Payment of Payment of Payment of Payment of Payment
Years Amounts Years Amounts Years Amounts Years Amounts Years Amounts Years Amounts
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5 $17.91 10 $9.61 15 $6.87 20 $5.51 25 $4.71 30 $4.18
6 15.14 11 8.86 16 6.53 21 5.32 26 4.59
7 13.16 12 8.24 17 6.23 22 5.15 27 4.47
8 11.68 13 7.71 18 5.96 23 4.99 28 4.37
9 10.53 14 7.26 19 5.73 24 4.84 29 4.27
</TABLE>
The monthly payment for any combination of ages not shown will be quoted upon
request.
Page 17
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
INDIVIDUAL FLEXIBLE PREMIUM
VARIABLE ANNUITY CONTRACT
[ITT HARTFORD LOGO]
Hartford Life Insurance Company
P.O. Box 2999
Hartford, Connecticut 06104-2999
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
<S><C>
Application for U.S.P.S.-First Class or Express-Mail to: Private Express Mail Carriers-M
Variable Annuity Contract ITT Hartford 200 Hopmeadow Street
Attn: IAO-PCM Simsbury, CT 06089
Hartford Life Insurance Company P.O. Box 2999
Hartford, CT 06104-2999
[ITT HARTFORD LOGO]
- - ------------------------------------------------------------------------------------------------------------------------------------
--- -- ----
1. Contract Owner James Scott SS#/TIN 123 45 6789
------------------------------------ --- -- ----
If no Annuitant is Name -- -- --
specified in Section 3, Date of Birth 09 10 58
the Contract Owner 1 Main Street -- -- --
will be the Annuitant. ------------------------------------ month day year
Street Address
Hartford CT 06106
------------------------------------ /X/ Male / / Female / / Trustee
City State Zip
- - ------------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------
2. Joint Contract ------------------------------------
Owner (if any) Name
--- -- ----
------------------------------------ SS#/TIN
Relationship to Contract Owner / / Male / / Female --- -- ----
-- -- --
Date of Birth
-- -- --
month day year
- - ------------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------
3. Annuitant ------------------------------------ --- -- ----
Name SS#/TIN
Complete only if --- -- ----
different from the ------------------------------------
contract owner in Street Address -- -- --
Section 1. Date of Birth
------------------------------------ -- -- --
City State Zip / / Male / / Female
month day year
- - ------------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------
4. Contingent Annuitant Paul Scott Brother
------------------------------------------------------------------------------------------------------
Name Relationship to Owner
- - ------------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------
5. Beneficiary (ies) Ann Scott Wife 100%
------------------------------------------------------------------------------------------------------
Designated Name(s) Relationship to Contract Owner Percentage
------------------------------------------------------------------------------------------------------
Contingent Name(s) Relationship to Contract Owner Percentage
- - ------------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------
6. Tax Qualified Plans A. / / Initial / / Transfer / / Rollover
Check the appropriate B. / / IRA / / 403(b) / / 401(k) / / 401(a) / / SEP-IRA / / Other
box(es) in A, B, and C. --------------------
C. / / Individual Accounts / / Unallocated Plan Account
Tax Year for which initial contribution is being made:
-------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------
7. Fund Selection Please check selected fund(s) and note whole percentage allocations.
The initial premium /X/ PCM Voyager Fund 50 % / / PCM High Yield Fund %
will be allocated as ---- ----
selected here. If / / PCM Global Growth Fund % / / PCM Diversified Income Fund %
Dollar Cost Averaging, ---- ----
complete the DCA / / PCM Global Asset Allocation Fund % / / PCM U.S. Gov. & High Quality Bond %
enrollment section ---- Fund ----
on the reverse side. / / PCM Growth & Income Fund % / / PCM Money Market Fund %
---- ----
/X/ PCM Utilities Growth & Income Fund 50 % / / PCM Fixed Account %
---- ----
/ / Other %
-------------------- ----
Make checks payable to: ITT Hartford Life Insurance Companies Initial $ 20,000 Total 100 %
-------- ----
Monies remitted via /X/ check / / wire / / 1035 / / Qualified Transfer
- - ------------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------
8. Special Remarks
- - ------------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------
Will the annuity applied for replace one or more existing annuity or life insurance contracts? / / Yes /X/ No (If yes, explain
Have you purchased another ITT Hartford Annuity during the previous 12 months? / / Yes /X/ No in Special
Remarks)
I hereby represent my answers to the above questions to be true and correct to the best of my knowledge and belief. I UNDERSTAND
THAT ANNUITY PAYMENTS OR SURRENDER VALUES, WHEN BASED UPON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND NOT
GUARANTEED AS TO A FIXED DOLLAR AMOUNT.
/X/ RECEIPT OF A VARIABLE ANNUITY AND FUND PROSPECTUS IS HEREBY ACKNOWLEDGED. If not checked, the appropriate prospectus will be
mailed to you.
SIGNED AT Hartford, CT ON 2-4-94 /s/ James Scott
------------------------ ---------- ------------------------------------------------------------------
City, State Date (Contract Owner's signature)
Do you, as Agent, have reason to believe the contract applied
for will replace existing annuities or insurance? / / Yes /X/ No ------------------------------------------------------------------
(Joint Contract Owner's signature)
LICENSED
AGENT /s/ John Adams Broker/Dealer Pains Webber
--------------------------------- ----------------------------------------------------
(signature)
John Adams Address Financial Plaza, Hartford, CT
--------------------------------- -----------------------------------------------------------
(print)
Telephone # (203) 547-5000
--------------------------------- -------------------------------------------------------
</TABLE>
<PAGE>
Exhibit (b)(5)
INDIVIDUAL FLEXIBLE PREMIUM
VARIABLE ANNUITY CONTRACT
[LOGO]
Hartford Life Insurance Company
P.O. Box 2999
Hartford, Connecticut 06104-2999
<PAGE>
<TABLE>
<S> <C> <C>
Application for U.S.P.S - First Class or Express - Mail to: Private Express Mail Carriers - Mail to:
Variable Annuity Contract ITT LOGO ITT Hartford 200 Hopmeadow Street
Attn: IAO - PCM Simsbury, CT 06089
Hartford Life Insurance Company P.O. Box 2999
Hartford, CT 06104-2999
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
1. CONTRACT OWNER James Scott SS#/TIN /1/2/3/4/5/6/7/8/9
------------------------
If no Annuitant is Name
specified in Section 3, Date of Birth /0/9/ /1/0/ /58/
the Contract Owner 1 Main Street month day year
will be the Annuitant. -------------------------
Street Address
Hartford, CT 06106 /X/Male //Female // Trustee
--------------------------
City State Zip
- - ------------------------------------------------------------------------------------------------------------------------------------
2. JOINT CONTRACT SS#/TIN // // // // // // // // //
OWNER (if any) ------------------------
Name
Date of Birth // // // // // //
month day year
-------------------------
Relationship to Contract Owner // Male // Female
- - ------------------------------------------------------------------------------------------------------------------------------------
3. ANNUITANT
------------------------ SS#TIN // // // // // // // // //
Complete only if Name
different from the Date of Birth // // // // // //
contract owner in month day year
Section 1. -------------------------
Street Address
-------------------------
City State Zip // Male // Female
- - ------------------------------------------------------------------------------------------------------------------------------------
4. CONTINGENT ANNUITANT Paul Scott Brother
----------------------------------------------------------------------------
Name Relationship to Owner
- - -----------------------------------------------------------------------------------------------------------------------------------
5. BENEFICIARY (IES) Ann Scott Wife 100%
------------------------------------------------------------------------------
DESIGNATED Name(s) Relationship to Contract Owner Percentage
CONTINGENT ------------------------------------------------------------------------------
Name(s) Relationship to Contract Owner Percentage
- - ------------------------------------------------------------------------------------------------------------------------------------
6. TAX QUALIFIED PLANS A. // Initial // Transfer // Rollover
Check the appropriate B. // IRA // 403(b) // 401(k) // 401(a) //SEP-IRA // Other ------------
box(es) in A,B, and C. C. // Individual Accounts // Unallocated Plan Account
Tax Year for which initial contribution is being made: -------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------
7. FUND SELECTION Please check selected fund(s) and note whole percentage allocations.
/X/ PCM Voyager Fund 50 % // PCM High Yield Fund %
The initial premium will be // PCM Global Growth Fund % // PCM Diversified Income Fund %
allocated as selected here. // PCM Global Asset Allocation Fund % // PCM U.S. Gov. & High Quality Bond Fund %
If Dollar Cost Averaging, // PCM Growth & Income Fund % // PCM Money Market Fund %
complete the DCA enrollment /X/ PCM Utilities Growth & Income Fund % // PCM Fixed Account %
section on the reverse side. // Other______________ %
Make checks payable to: ITT Hartford Life Insurance Companies Initial $20,000 Total 100%
Monies remitted via /X/ check // wire // 1035 // Qualified Transfer ------
- - ------------------------------------------------------------------------------------------------------------------------------------
8. SPECIAL REMARKS
- - ------------------------------------------------------------------------------------------------------------------------------------
Will the annuity applied for replace one or more existing
annuity or life insurance contracts? // Yes /X/ No (if yes, explain in Special Remarks)
Have you purchased another ITT Hartford Annuity
during the previous 12 months? // Yes /X/ No
I hereby represent my answers to the above questions to be true and correct to the best of my knowledge and
belief. I UNDERSTAND THAT ANNUITY PAYMENTS OR SURRENDER VALUES, WHEN BASED UPON THE INVESTMENT EXPERIENCE
OF A SEPARATE ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT.
/X/ RECEIPT OF A VARIABLE ANNUITY AND FUND PROSPECTUS IS HEREBY ACKNOWLEDGED. If not checked, the appropriate
prospectus will be mailed to you.
SIGNED AT Hartford, CT on 2-4-94 James Scott
---------------------- ---------- ----------------------------------
City, State Date (Contract Owner's signature)
Do you, as Agent, have reason to believe the
contract applied for will replace existing
annuities or insurance? // Yes /X/ No -----------------------------------
(Joint Contract Owner's signature)
LICENSED John Adams
AGENT ----------------------------------- Broker/Dealer Paine Webber
(signature) -----------------------
John Adams
----------------------------------- Address Financial Plaza, Hartford, CT
(print) ------------------------------
------------------------------------ Telephone # (203) 547-5000
License I.D. # (Florida Agents Only) ---------------------------
</TABLE>
<PAGE>
Exhibit (b)(6)(a)
RESTATED CERTIFICATE OF INCORPORATION
HARTFORD LIFE INSURANCE COMPANY
This Restated Certificate of Incorporation gives effect to the
amendment of the Certificate of Incorporation of the corporation and otherwise
purports merely to restate all those provisions already in effect. This
Restated Certificate of Incorporation has been adopted by the Board of Directors
and by the sole shareholder.
Section 1. The name of the corporation is Hartford Life Insurance
Company and it shall have all the powers granted by the general
statutes, as now enacted or hereinafter amended to corporations formed
under the Stock Corporation Act.
Section 2. The corporation shall have the purposes and powers to
write any and all forms of insurance which any other corporation now
or hereafter chartered by Connecticut and empowered to do an insurance
business may now or hereafter may lawfully do; to accept and to cede
reinsurance; to issue policies and contracts for any kind or
combinations of kinds of insurance; to issue policies or contracts
either with or without participation in profits; to acquire and hold
any or all of the shares or other securities of any insurance
corporation; and to engage in any lawful act or activity for which
corporations may be formed under the Stock Corporation Act. The
corporation is authorized to exercise the powers herein granted in any
state, territory or jurisdiction of the United States or in any
foreign country.
Section 3. The capital with which the corporation shall commence
business shall be an amount not less than one thousand dollars. The
authorized capital shall be two million five hundred thousand dollars
divided into one thousand shares of common capital stock with a par
value of twenty-five hundred dollars each.
We hereby declare, under the penalties of false statement that the
statements made in the foregoing Certificate are true.
Dated: February 10, 1982 HARTFORD LIFE INSURANCE COMPANY
By /s/ illegible
------------------------------
Attest:
/s/ William A. McMahon
- - ------------------------------
<PAGE>
<PAGE>
Exhibit (b)(6)(b)
By-Laws
of the
HARTFORD LIFE INSURANCE COMPANY
As passed and effective
February 13, 1978
and amended on
July 13, 1978
January 5, 1979
and
February 19, 1984
<PAGE>
ARTICLE I
Name - Home Office
Section 1. This corporation shall be named HARTFORD LIFE INSURANCE
COMPANY.
Section 2. The principal place of business and Home Office shall be
in the City of Hartford, Connecticut.
ARTICLE II
Stockholders' Meetings - Notice - Quorum - Right to Vote
Section 1. All meetings of the Stockholders shall be held at the
principal business office of the Company unless the Directors shall otherwise
provide and direct.
Section 2. The annual meeting of the Stockholders shall be held on
such day and at such hour as the Board of Directors may decide. For cause the
Board of Directors may postpone or adjourn such annual meeting to any other time
during the year.
Section 3. Special meetings of the Stockholders may be called by the
Board of Directors, the Executive Committee, the Chairman of the Board, the
President or any Vice President.
Section 4. Notice of Stockholders' meetings shall be mailed to each
Stockholder, at his address as it appears on the records of the Company, at
least seven days prior to the meeting. The notice shall state the place, date
and time of the meeting and shall specify all matters proposed to be acted upon
at the meeting.
Section 5. At each annual meeting the Stockholders choose Directors
as hereinafter provided.
Section 6. Each Stockholder shall be entitled to one vote for each
share of stock held by him at all meetings of the Company. Proxies may be
authorized by written power of attorney.
Section 7. Holders of one-half of the whole amount of the stock
issued and outstanding shall constitute a quorum.
<PAGE>
- 2 -
Section 8. Each Stockholder shall be entitled to a certificate of
stock which shall be signed by the President or a Vice President, and either the
Treasurer or an Assistant Treasurer of the Company, and shall bear the seal of
the Company, but such signatures and seal may be facsimile if permitted by the
laws of the State of Connecticut.
ARTICLE III
Directors - Meetings - Quorum
Section 1. The property, business and affairs of the Company shall be
managed by a board of not less than three nor more than twenty Directors, who
shall be chosen by ballot at each annual meeting. Vacancies occurring between
annual meetings may be filled by the Board of Directors by election. Each
Director shall hold office until the next annual meeting of Stockholders and
until his successor is chosen and qualified.
Section 2. Meetings of the Board of Directors may be called by the
direction of the Chairman of the Board, the President, or any three Directors.
Section 3. Three days' notice of meetings of the Board of Directors
shall be given to each Director, either personally or by mail or telegraph, at
his residence or usual place of business, but notice may be waived, at any time,
in writing.
Section 4. One third of the number of existing directorships, but not
less than two Directors, shall constitute a quorum.
ARTICLE IV
Election of Officers - Duties of Board of
Directors and Executive Committee
Section 1. The President shall be elected by the Board of Directors.
The Board of Directors may also elect one of its members to serve as Chairman of
the Board of Directors. The Chairman of the Board, or an individual appointed
by him, shall have authority to appoint all other officers, except as stated
herein, including one or more Vice Presidents and Assistant Vice Presidents, the
Treasurer
<PAGE>
and one or more Associate or Assistant Treasurers, one or more Secretaries and
Assistant Secretaries and such other Officers as the Chairman of the Board may
from time to time designate. All Officers of the Company shall hold office
during the pleasure of the Board of Directors. The Directors may require any
Officer of the Company to give security for the faithful performance of his
duties.
Section 2. The Directors may fill any vacancy among the officers by
election for the unexpired term.
Section 3. The Board of Directors may appoint from its own number an
Executive Committee of not less than five Directors. The Executive Committee
may exercise all powers vested in and conferred upon the Board of Directors at
any time when the Board is not in session. A majority of the members of said
Committee shall constitute a quorum.
Section 4. Meetings of the Executive Committee shall be called
whenever the Chairman of the Board, the President or a majority of its members
shall request. Forty-eight hours' notice shall be given of meetings but notice
may be waived, at any time, in writing.
Section 5. The Board of Directors shall annually appoint from its own
number a Finance Committee of not less than three Directors, whose duties shall
be as hereinafter provided.
Section 6. The Board of Directors may, at any time, appoint such
other Committees, not necessarily from its own number, as it may deem necessary
for the proper conduct of the business of the Company, which Committees shall
have only such powers and duties as are specifically assigned to them by the
Board of Directors or the Executive Committee.
Section 7. The Board of Directors may make contributions, in such
amounts as it determines to be reasonable, for public welfare or for charitable,
scientific or educational purposes, subject to the limits and restrictions
imposed by law and to such rules and regulations consistent with law as it
makes.
ARTICLE V
Officers
Chairman of the Board
Section 1. The Chairman of the Board shall preside at the meetings of
the Board of Directors and the Executive Committee and, in the absence of the
Chairman of the Finance Committee, at the meetings of the Finance Committee. In
the absence or inability of the Chairman of the Board to so preside, the
President shall preside in his place.
<PAGE>
President
Section 2. The President, under the supervision and control of the
Chairman of the Board, shall have general charge and oversight of the business
and affairs of the Company. The President shall preside at the meetings of the
Stockholders. He shall be a member of and shall preside at all meetings of all
Committees not referred to in Section 1 of this ARTICLE except that he may
designate a Chairman for each such other Committee.
Section 3. In the absence or inability of the President to perform
his duties, the Chairman of the Board may designate a Vice President to exercise
the powers and perform the duties of the President during such absence or
inability.
Secretary
Section 4. The Secretary of the Corporation shall keep a record of
all the meetings of the Company, of the Board of Directors and of the Executive
Committee, and he shall discharge all other duties specifically required of the
Secretary by law. The other Secretaries and Assistant Secretaries shall perform
such duties as may be assigned to them by the Board of Directors or by their
senior officers and any Secretary or Assistant Secretary may affix the seal of
the Company and attest it and the signature of any officer to any and all
instruments.
Treasurer
Section 5. The Treasurer shall keep, or cause to be kept, full and
accurate accounts of the Company. He shall see that the funds of the Company
are disbursed as may be ordered by the Board of Directors or the Finance
Committee. He shall have charge of all moneys paid to the Company and on
deposit to the credit of the Company or in any other properly authorized name,
in such banks or depositories as may be designated in a manner provided by these
by-laws. He shall also discharge all other duties that may be required of him
by law.
Other Officers
Section 6. The other officers shall perform such duties as may be
assigned to them by the President or the Board of Directors.
<PAGE>
- 5 -
ARTICLE VI
Finance Committee
Section 1. If a Finance Committee is established it shall be the duty
of that committee to supervise the investment of the funds of the Company in
securities in which insurance companies are permitted by law to invest, and all
other matters connected with the management of investments. If no Finance
Committee is established this duty shall be performed by the Board of Directors.
Section 2. All loans or purchases for the investment and reinvestment
of the funds of the Company shall be submitted for approval to the Finance
Committee, if not specifically approved by the Board of Directors.
Section 3. Sale or transfer of any stocks or bonds shall be made upon
authorization of the Finance Committee unless specifically authorized by the
Board of Directors.
Section 4. Transfers of stock and registered bonds, deeds, leases,
releases, sales, mortgages chattle or real, assignments or partial releases of
mortgages chattel or real, and in general all instruments of defeasance of
property and all agreements or contracts affecting the same, except discharges
of mortgages and entries to foreclose the same as hereinafter provided, shall be
authorized by the Finance Committee or the Board of Directors, and be executed
jointly for the Company by two persons, to wit: The Chairman of the Board, the
President or a Vice President, and a Secretary, the Treasurer or an Assistant
Treasurer, but may be acknowledged and delivered by either one of those
executing the instrument; provided, however, that either a Secretary, the
Treasurer, or an Assistant Treasurer alone, when authorized as aforesaid, or any
person specially authorized by the Finance Committee as attorney for the
Company, may make entry to foreclose any mortgage, and a Secretary, the
Treasurer or an Assistant Treasurer alone is authorized, without the necessity
of further authority, to discharge by deed or otherwise any mortgage on payment
to the Company of the principal, interest and all charges due.
Section 5. The Finance Committee may fix times and places for regular
meetings. No notice of regular meetings shall be necessary. Reasonable notice
shall be given of special meetings but the action of a majority of the Finance
Committee at any meeting shall be valid notwithstanding any defect in the notice
of such meeting.
<PAGE>
- 6 -
Section 6. In the absence of specific authorization from the Board of
Directors or the Finance Committee, the Chairman of the Board, the President, a
Vice President or the Treasurer shall have the power to vote or execute proxies
for voting any shares held by the Company.
ARTICLE VII
Funds
Section 1. All monies belonging to the Company shall be deposited to
the credit of the Company, or in such other name as the Finance Committee, the
Chairman of the Finance Committee or such executive officers as are designated
by the Board of Directors shall direct, in such bank or banks as may be
designated from time to time by the Finance Committee, the Chairman of the
Finance Committee, or by such executive officers as are designated by the Board
of Directors. Such monies shall be drawn only on checks or drafts signed by any
two executive officers of the Company, provided that the Board of Directors may
authorize the withdrawal of such monies by check or draft signed with the
facsimile signature of any one or more executive officers, and provided further,
that the Finance Committee may authorize such alternative methods of withdrawals
as it deems proper.
The Board of Directors, the President, the Chairman of the Finance
Committee, a Vice President, or such executive officers as are designated by the
Board of Directors may authorize withdrawal of funds by checks or drafts drawn
at offices of the Company to be signed by Managers, General Agents or employees
of the Company, provided that all such checks or drafts shall be signed by two
such authorized persons, except checks or drafts used for the payment of
claims or losses which need be signed by only one such authorized person, and
provided further that the Board of Directors of the Company or executive
officers designated by the Board of Directors may impose such limitations or
restrictions upon the withdrawal of such funds as it deems proper.
<PAGE>
- 7 -
ARTICLE VIII
Indemnity of Directors and Officers
Section 1. The Company shall indemnify and hold harmless each
Director and officer now or hereafter serving the Company, whether or not then
in office, from and against any and all claims and liabilities to which he may
be or become subject by reason of his being or having been a Director or officer
of the Company, or of any other company which he serves as a Director or officer
at the request of the Company, to the extent such is consistent with the
statutory provisions pertaining to indemnification, and shall provide such
further indemnification for legal and/or all other expenses reasonably incurred
in connection with defending against such claims and liabilities as is
consistent with statutory requirements.
ARTICLE IX
Amendment of ByLaws
Section 1. The Directors shall have power to adopt, amend and repeal
such bylaws as may be deemed necessary or appropriate for the management of the
property and affairs of the Company.
Section 2. The Stockholders at any annual or special meeting may
amend or repeal these bylaws or adopt new ones if the notice of such meeting
contains a statement of the proposed alteration, amendment, repeal or adoption,
or the substance thereof.
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
Registration Statement File No. 33-73566 on Form N-4 for Hartford Life Insurance
Company.
Hartford, Connecticut
April 21, 1995
<PAGE>
Exhibit (b)(13)
Explanation of Total Return Calculation
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 3808366645
<INVESTMENTS-AT-VALUE> 4050759096
<RECEIVABLES> 3451276
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4054210372
<PAYABLE-FOR-SECURITIES> 3455443
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 3455443
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 4050754929
<DIVIDEND-INCOME> 165666403
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (53128032)
<NET-INVESTMENT-INCOME> 112538371
<REALIZED-GAINS-CURRENT> (8482836)
<APPREC-INCREASE-CURRENT> (194659813)
<NET-CHANGE-FROM-OPS> (90604278)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
