<PAGE>
File No. 33-43398
Securities and Exchange Commission
Washington, D.C.
Form N-4
-----
Pre-Effective Amendment No. / /
------ ----
-----
Post-Effective Amendment No. 6 / X /
----- ----
and/or
Registration Statement Under the Investment Company Act of 1940
Amendment No. 6
-----
(check appropriate box or boxes)
Hartford Life and Accident Insurance Company
Separate Account One
(Exact Name of Registrant)
Hartford Life and Accident Insurance Company
Separate Account One
(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 and Accident Pursuant to Regulation 270. 24f-2 under the
Insurance Company Investment Company Act of 1940, Registrant has
Separate Account One previously elected to register an indefinite
Units of Interest 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-
SEPARATE ACCOUNT ONE
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 Accumulation Unit Values; Yield
Information
5. General Description of Registrant, The Contract, Separate Account
Depositor, and Portfolio Companies One and the Fixed Account; Hartford Life
& Accident Insurance Company and the
Funds; Miscellaneous
6. Deductions Charges Under the Contract
7. General Description of Operation of the Contract;
Annuity Contracts Payment of Benefits; The Contract;
Separate Account One; and the Fixed
Account
8. Annuity Period Payment of Benefits
9. Death Benefit Payment of Benefits; Operation of the
Contract
10. Purchases and Contract Value Operation of the Contract
11. Redemptions Payment of Benefits
12. Taxes Federal Tax Considerations
13. Legal Proceedings Miscellaneous - Are there any material
legal proceedings affecting the Separate
Account?
14. Table of Contents of the Statement Table of Contents to Statement
of Additional Information of Additional Information
<PAGE>
-4-
PART A
<PAGE>
5
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
SEPARATE ACCOUNT ONE
------------------------------------------
This Prospectus describes the Director, individual and group tax deferred
variable annuity Contracts designed for retirement planning purposes.
The Contracts are issued by Hartford Life & Accident Insurance Company (HL&A).
Payments for the Contracts will be held in a series of Hartford Life & Accident
Insurance Company Separate Account One (Separate Account One or the "Separate
Account"), or in the Fixed Account of HL&A. Allocations to and transfers to and
from the Fixed Account are not permitted in certain states.
The following Sub-Accounts are available under the Contracts. Opposite each
Sub-Account is the name of the underlying investment for that Sub-Account.
Advisers Fund Sub-Account - shares of Hartford Advisers Fund, Inc.
("Advisers Fund")
Capital Appreciation Fund - shares of Hartford Capital Appreciation
Sub-Account Fund, Inc. ("Capital Appreciation Fund")
(formerly "Hartford Aggressive Growth
Fund, Inc.")
Bond Fund Sub-Account - shares of Hartford Bond Fund, Inc. ("Bond
Fund")
Dividend and Growth Fund - shares of Hartford Dividend and Growth
Sub-Account Fund, Inc. ("Dividend and Growth Fund")
Index Fund Sub-Account - shares of Hartford Index Fund, Inc.
("Index Fund")
International Advisers Fund - shares of Hartford International Advisers
Sub-Account Fund, Inc. ("International Advisers
Fund").
International Opportunities - shares of Hartford International
Fund Sub-Account Opportunities Opportunities Fund, Inc.
("International Opportunities Fund")
Money Market Fund - shares of HVA Money Market Fund, Inc.
Sub-Account ("Money Market Fund")
Mortgage Securities Fund - shares of Hartford Mortgage Securities
Sub-Account Fund, Inc. ("Mortgage Securities Fund")
Stock Fund Sub-Account - shares of Hartford Stock Fund, Inc.
("Stock Fund")
<PAGE>
6
This Prospectus sets forth the information concerning the Separate Account and
the Fixed Account, where available, 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 & Accident Insurance Company, Attn: Individual Annuity
Operations, P.O. Box 5085, Hartford, CT 06102-5085. The Table of Contents for
the Statement of Additional Information may be found on page ___ of this
Prospectus. The Statement of Additional Information is incorporated by
reference to this Prospectus.
- - --------------------------------------------------------------------------------
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.
- - --------------------------------------------------------------------------------
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>
7
TABLE OF CONTENTS
-----------------
PAGE
FEE TABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PERFORMANCE RELATED INFORMATION. . . . . . . . . . . . . . . . . . . . .
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE CONTRACT, SEPARATE ACCOUNT ONE AND THE FIXED ACCOUNT . . . . . . . .
What are the Contracts? . . . . . . . . . . . . . . . . . . . . . .
Who can buy these Contracts?. . . . . . . . . . . . . . . . . . . .
What is the Separate Account and how does it operate? . . . . . . .
What is the Fixed Account and how does it operate?. . . . . . . . .
May I transfer assets between Sub-Accounts? . . . . . . . . . . . .
May I transfer assets between the Fixed Account and the Sub-Accounts?
OPERATION OF THE CONTRACT. . . . . . . . . . . . . . . . . . . . . . . .
How is my Premium Payment credited? . . . . . . . . . . . . . . . .
What size Premium Payments must I make? . . . . . . . . . . . . . .
What if I am not satisfied with my purchase?. . . . . . . . . . . .
May I assign or transfer my Contract? . . . . . . . . . . . . . . .
How do I know what my Contract is worth?. . . . . . . . . . . . . .
How is the Accumulation Unit value determined?. . . . . . . . . . .
How are the underlying Fund shares valued?. . . . . . . . . . . . .
<PAGE>
8
TABLE OF CONTENTS
PAGE
How is the value of the Fixed Account determined? . . . . . . . . .
PAYMENT OF BENEFITS. . . . . . . . . . . . . . . . . . . . . . . . . . .
What would my Beneficiary receive as a death benefit? . . . . . . .
How can a Contract be redeemed or surrendered?. . . . . . . . . . .
Can payment of a redemption, surrender or death benefit ever be
postponed beyond the seven day period?. . . . . . . . . . . . . . .
May I surrender once Annuity payments have started? . . . . . . . .
What are my Annuity Benefits? . . . . . . . . . . . . . . . . . . .
How are Annuity payments determined?. . . . . . . . . . . . . . . .
CHARGES UNDER THE CONTRACTS. . . . . . . . . . . . . . . . . . . . . . .
How are the sales charges under the Contracts made? . . . . . . . .
Is there ever a time when the sales charges do not apply? . . . . .
What do the sales charges cover?. . . . . . . . . . . . . . . . . .
What is the mortality and expense risk charge?. . . . . . . . . . .
Are there any administrative charges? . . . . . . . . . . . . . . .
How much are the deductions for Premium Taxes?. . . . . . . . . . .
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY AND THE FUNDS . . . . . . . .
What is HL&A? . . . . . . . . . . . . . . . . . . . . . . . . . . .
What are the Funds? . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
9
TABLE OF CONTENTS
PAGE
Does HL&A have any interest in the Funds?
FEDERAL TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . .
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
What are my voting rights?. . . . . . . . . . . . . . . . . . . . .
Will other Contracts be participating in the Separate Account?. . .
How are the Contracts sold?. . . . . . . . . . . . . . . . . . . .
Who is the custodian of the Separate Account's assets?. . . . . . .
Are there any material legal proceedings affecting the
Separate Account? . . . . . . . . . . . . . . . . . . . . . . . . .
Who has passed on the legal matters affecting the Separate Account?
Are you relying on any experts as to any portion of this Prospectus?
How may I get additional information? . . . . . . . . . . . . . . .
APPENDIX I - Information Regarding Tax Qualified Plans . . . . . . . . .
TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
10
GLOSSARY OF SPECIAL TERMS
ACCUMULATION UNIT: An accounting unit of measure used to calculate values
before Annuity payments begin.
ANNUITANT: The person or Participant upon whose life the Contract is issued.
ANNUITY: A series of payments for life, or for life with a minimum number of
payments or a determinable sum guaranteed, or for a joint lifetime and
thereafter during the lifetime of the survivor, or for a designated period.
ANNUITY COMMENCEMENT DATE: The date on which Annuity payments are to commence.
Under group unallocated Contracts, the date for each Participant is determined
by the Contract Owner in accordance with the terms of the Plan. It will always
be the fifteenth of a calendar month.
ANNUITY UNIT: An accounting unit of measure used to calculate the value of
Annuity payments.
BENEFICIARY: The person(s) who receive Contract Values in the event of the
Annuitant's or Contract Owner's death under certain conditions. Under a group
unallocated Contract, the person named by the Participant within the Plan
documents/enrollment forms who is entitled to receive benefits in case of the
death of the Participant.
CODE: The Internal Revenue Code of 1986, as amended.
COMMISSION: Securities and Exchange Commission.
CONTINGENT ANNUITANT: The person so designated by the Contract Owner, who upon
the Annuitant's death, prior to the Annuity Commencement Date, becomes the
Annuitant.
CONTRACT ANNIVERSARY: The anniversary of the Contract Date.
CONTRACT OWNER(S): The owner(s) of the Contract, trustee or other entity,
sometimes herein referred to as "you".
CONTRACT VALUE: The aggregate value of any Sub-Account Accumulation Units held
under the Contract plus the value of the Fixed Account.
CONTRACT YEAR: A period of 12 months commencing with the Contract Date or any
anniversary thereof.
<PAGE>
11
FIXED ACCOUNT: Part of the General Account of HL&A to which a Contract Owner
may allocate all or a portion of his Premium Payment or Contract Value.
FIXED ANNUITY: An Annuity providing for guaranteed payments which remain fixed
in amount throughout the payment period and which do not vary with the
investment experience of a separate account.
FUNDS: The Funds described commencing on page____of this Prospectus and any
additional Funds which may be made available from time to time.
GENERAL ACCOUNT: The General Account of HL&A which consists of all assets of
the Hartford Life & Accident Insurance Company other than those allocated to the
separate accounts of the Hartford Life & Accident Insurance Company.
HL: Hartford Life Insurance Company.
HL&A: Hartford Life & Accident Insurance Company.
HOME OFFICE OF THE COMPANY: Currently located at 200 Hopmeadow Street,
Simsbury, CT. All correspondence concerning this Contract should be sent to
P.O. Box 5085, Hartford, CT 06102-5085, Attn: Individual Annuity Operations.
MINIMUM DEATH BENEFIT: The minimum amount payable upon the death of a Contract
Owner, Annuitant or Participant, in the case of group Contracts prior to age 85
and before annuity payments have commenced.
PARTICIPANT: (For Group Unallocated Contracts Only) - Any eligible employee of
an Employer/Contract Owner participating in the Plan.
PLAN: A voluntary Plan of an employer which qualifies for special tax treatment
under a Section of the Internal Revenue Code.
PREMIUM PAYMENT: The payment made to HL&A pursuant to the terms of the
Contract.
PREMIUM TAX: A tax on premiums charged by a state or municipality on Premium
Payments or Contract Values.
SEPARATE ACCOUNT: The HL&A separate account entitled "Hartford Life & Accident
Insurance Company Separate Account One".
<PAGE>
12
SPECIFIED CONTRACT ANNIVERSARY: Every seventh Contract Anniversary (i.e., the
7th, 14th, 21st, etc. Contract Anniversaries).
SUB-ACCOUNT: Accounts established within the Separate Account with respect to a
Fund.
TERMINATION VALUE: The Contract Value upon termination of the Contract prior to
the Annuity Commencement Date, less any applicable Premium Taxes, the Annual
Maintenance Fee and any applicable contingent deferred sales charges.
UNALLOCATED CONTRACTS: Contracts issued to employers, or other entity, as
Contract Owner under which no allocation of Contract Values is made for a
specific Participant. The Plans will be responsible for the individual
allocations.
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>
Prospectus - Director Hartford Life & Accident
<TABLE>
<CAPTION>
SUMMARY
Contract Owner Transaction Expense
(All Sub Accounts)
<S> <C>
Sales Load Imposed on Purchases (as a percentage of premium payments) . . . . . . . . . . . . . . . . . . . None
Exchange Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0
Deferred Sales Load (as a percentage of amounts withdrawn) . . . . . . . . . . . . . . . . . . . . . . . . .
First Year (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7%
Second Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6%
Third Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5%
Fourth Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4%
Fifth Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3%
Sixth Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2%
Seventh Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1%
Eighth Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0%
Annual Contract Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25 (2)
Annual Expenses - Separate Account
(as a percentage of average account value)
Mortality and Expense Risk 1.250%
</TABLE>
<TABLE>
<CAPTION>
Annual Fund Operating Expense
(as a percentage of net assets)
Total Fund
Management Other Operating
Fees Expenses Expenses
-------- -------- --------
<S> <C> <C> <C>
Hartford Bond Fund . . . . . . . . . . . . . . . . . . . . 0.500% 0.047% 0.547%
Hartford Stock Fund. . . . . . . . . . . . . . . . . . . . 0.462% 0.039% 0.501%
HVA Money Market Fund . . . . . . . . . . . . . . . . . . 0.425% 0.049% 0.474%
Hartford Advisers Fund . . . . . . . . . . . . . . . . . . 0.615% 0.040% 0.655%
Hartford Capital Appreciation Fund.. . . . . . . . . . . . . . 0.675% 0.045% 0.720%
Hartford Mortgage Securities Fund. . . . . . . . . . . . . 0.425% 0.052% 0.477%
Hartford Index Fund. . . . . . . . . . . . . . . . . . . . 0.375% 0.079% 0.454%
Hartford International Opportunities Fund. . . . . . . . . 0.725% 0.126% 0.851%
Hartford Dividend & Growth Fund. . . . . . . . . . . . . . 0.668% 0.166% 0.834%
Hartford International Advisers Fund (3) . . . . . . . . . 0.750% 0.250% 1.000%
<FN>
(1) Length of time from premium payment.
(2) The annual contract fee is a single $25 charge on a Contract. It is deducted
proportionally from the investment options in use at the time of the charge. In
the Example, the annual contract fee is approximated as a 0.07% annual asset
charge based on the experience of the Contracts.
(3) Hartford International Advisers Fund is a new fund; operating expenses are
based on annualized estimates of such expenses to be incurred in the current
fiscal year.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXAMPLE
If you surrender your contract at If you annuitize at the end of the
the end of the applicable time period: applicable time period:
You would pay the following expenses You would pay the following expenses
on a $1,000 investment, assuming a 5% on a $1,000 investment, assuming a -
annual return on assets: annual return on assets:
------ ------ ------ ------- ------ ------ ------ --------
Sub-Account 1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
- - ----------- ------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Hartford Bond Fund . . . . . . . . . . . . . $89 $109 $132 $220 $18 $58 $101 219
Hartford Stock Fund. . . . . . . . . . . . . 89 108 129 215 18 57 99 214
HVA Money Market Fund. . . . . . . . . . . . 88 107 128 212 18 56 97 211
Hartford Advisers Fund . . . . . . . . . . . 90 113 137 232 20 62 107 231
Hartford Capital Appreciation Fund . . . . . 91 115 141 239 20 64 110 238
Hartford Mortgage Securities Fund. . . . . . 88 107 128 213 18 56 97 212
Hartford Index Fund. . . . . . . . . . . . . 88 106 127 210 17 56 96 209
Hartford International Opportunities Fund. . 92 119 148 252 22 68 117 252
Hartford Dividend & Growth Fund. . . . . . . 92 118 147 251 21 67 116 250
Hartford International Advisers Fund . . . . 94 123 155 268 23 72 125 267
If you do not surrender your
contract:
You would pay the following expenses
on a $1,000 investment, assuming a 5%
annual return on assets:
------ ------ ------ -------
Sub-Account 1 year 3 years 5 years 10 years
- - ----------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Hartford Bond Fund . . . . . . . . . . . . . $19 $59 $102 $220
Hartford Stock Fund. . . . . . . . . . . . . 19 58 99 215
HVA Money Market Fund. . . . . . . . . . . . 18 57 98 212
Hartford Advisers Fund . . . . . . . . . . . 20 63 107 232
Hartford Capital Appreciation Fund . . . . . 21 65 111 239
Hartford Mortgage Securities Fund. . . . . . 18 57 98 213
Hartford Index Fund. . . . . . . . . . . . . 18 56 97 210
Hartford International Opportunities Fund. . 22 69 118 252
Hartford Dividend & Growth Fund. . . . . . . 22 68 117 251
Hartford International Advisers Fund . . . . 24 73 125 268
</TABLE>
The purpose of this table is to assist the contract owner in understanding
various costs and expenses that a contract owner will bear directly or
indirectly. The table reflects expenses of the Separate Account and 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.
<PAGE>
14
SUMMARY
A. CONTRACTS OFFERED
Individual and group tax-deferred Variable Annuity Contracts (see "C.
Taxation of Annuities in General," page___). Generally, the Contracts are
purchased by completing an application or an order to purchase a Contract
and submitting it, along with the initial Premium Payment, to HL&A for its
approval. A Contract Owner may at any time, within 10 days of delivery of
a Contract sold hereunder, return the Contract to HL&A at its Home Office
and the value of the Contract (without deduction for any charges normally
assessed thereunder) will be refunded. The Contract Owner bears the
investment risk during the period prior to the Company's receipt of request
for cancellation except for Contract owners in Georgia, North Carolina,
South Carolina, Washington, West Virginia, Utah, and other states where
required by law, who will be refunded the premium (see "How is my Premium
Payment credited?" page___).
B. ELIGIBLE PURCHASERS
Any individual, group, or trust may purchase the Contracts, including any
trustee or custodian for a retirement plan which qualifies for special
federal tax treatment under the Internal Revenue Code, including individual
retirement annuities ("Qualified Contracts"). (See "Federal Tax
Considerations" commencing on page___and Appendix I commencing on page___.)
C. MINIMUM PREMIUM PAYMENTS
The minimum initial Premium Payment is $1,000. Thereafter, the minimum
payment is $500. Certain plans or programs may make smaller periodic
premium payments. (See "What size Premium Payments must I make?" page___.)
D. UNDERLYING INVESTMENTS FOR CONTRACTS
Shares of Hartford Advisers Fund, Inc., Hartford Capital Appreciation Fund,
Inc., Hartford Bond Securities Fund, Inc., Hartford Index Fund, Inc.,
Hartford International Advisers Fund, Inc., Hartford International
Opportunities Fund, Inc., Hartford Mortgage Securities Fund, Inc., Hartford
Stock Fund, Inc., HVA Money Market Fund, Inc., and such other funds as
shall be offered from time to time, and the Fixed Account, or a combination
of the Funds and the Fixed Account. Qualified Contracts issued prior to
May 1, 1987 may also have shares of Hartford U.S. Government Money Market
Fund, Inc.
<PAGE>
15
E. CHARGES UNDER THE CONTRACTS
1. SALES EXPENSES
There is no deduction for sales expenses from Premium Payments when
made. However, a contingent deferred sales charge may be assessed
against Contract Values when they are surrendered. (See "Charges
under the Contracts" commencing on page___.)
The length of time from receipt of a Premium Payment to the time of
surrender determines the contingent deferred sales charge. For this
purpose, Premium Payments will be deemed to be surrendered in the
order in which they are received and all surrenders will be first from
Premium Payments and then from other Contract Values. The charge is a
percentage of the amount withdrawn (not to exceed the aggregate amount
of the Premium Payments made) and equals:
<TABLE>
<CAPTION>
Charge Length Of Time From Premiun Payment
------ -----------------------------------
(Number of Years)
<S> <C>
7% 1
6% 2
5% 3
4% 4
3% 5
2% 6
1% 7
0% 8 or more
</TABLE>
No contingent deferred sales charge will be assessed in the event of
death of the Annuitant or Contract Owner, or upon the exercise of the
withdrawal privilege or if Contract Values are applied to an Annuity
option provided for under the Contract (except that a surrender out of
an Annuity Option Four will be subject to a contingent deferred sales
charge where applicable). (See "Is there ever a time when the sales
charges do not apply?" commencing on page___.)
2. WITHDRAWAL PRIVILEGE
Withdrawals of up to 10% per Contract Year, on a noncumulative basis, of
the Premium Payments made to a Contract may be made without the
imposition of the
<PAGE>
16
contingent deferred sales charge. (See "Is there ever a time when the
sales charges do not apply?" commencing on page___.) Certain plans or
programs may have different withdrawal privileges.
3. ANNUAL MAINTENANCE FEE
The Contracts provide for an administrative charge in the amount of
$25.00 to be deducted from Contract Values each Contract Year.
Contracts with a Contract Value of $50,000 or more at time of Contract
Anniversary will not be assessed this fee. (See "Are there any
administrative charges?" commencing on page___.)
4. MORTALITY AND EXPENSE RISKS
For assuming the mortality and expense risks under the Contracts, HL&A
will make a 1.25% per annum charge against all Contract Values held in
the Separate Account, except the Fixed Account. (See "What is the
mortality and expense risk charge?" commencing on page___.)
5. PREMIUM TAXES
A deduction will be made for Premium Taxes for Contracts sold in certain
states. (See "How much are the deductions for Premium Taxes?"
commencing on page___.)
6. CHARGES BY THE FUNDS
The Funds are subject to certain fees, charges and expenses (see the
Prospectus for the Funds attached hereto).
F. LIQUIDITY
Subject to any applicable charges, the Contracts may be surrendered, or
portions of the value of such Contracts may be withdrawn, at any time prior
to the Annuity Commencement Date. However, if less than $1,000 remains in a
Contract as a result of a withdrawal, HL&A may terminate the Contract in its
entirety (see "How can a Contract be redeemed or surrendered?" commencing on
page___).
G. MINIMUM DEATH BENEFITS
A minimum death benefit is provided in the event of death of the Annuitant
or Contract Owner prior to age 85 and before Annuity payments have
commenced. (See "What would my Beneficiary receive as a death benefit?"
commencing on page___.)
<PAGE>
17
H. ANNUITY OPTIONS
The Annuity Commencement Date may not be deferred beyond the Annuitant's
90th birthday except in certain states where the Annuitant's Commencement
Date may not be deferred beyond the Annuitant's 85th birthday. If a
Contract Owner does not elect otherwise, the Contract Value (less applicable
Premium Taxes) will be applied on the Annuity Commencement Date under the
second option to provide a life annuity with 120 monthly payments certain
(see "What Annuity Commencement Date and Form of Annuity may I elect?"
commencing on page___).
I. VOTING RIGHTS OF CONTRACT OWNERS
Contract Owners will have the right to vote on matters affecting the
underlying Fund to the extent that proxies are solicited by such Fund. If a
Contract Owner does not vote, HL&A shall vote such interest in the same
proportion as shares of the Fund for which instructions have been received
by HL&A (see "What are my voting rights?" commencing on page___).
<PAGE>
ACCUMULATION UNIT VALUES
(For an accumulation unit outstanding throughout the period)
The following information has been examined by Arthur Andersen LLP,
independent public accountants, whose report thereon is included in the
Statement of Additional Information, which is incorporated by reference to this
Prospectus.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
BOND SECURITIES FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . $ 1.694 $ 1.556 $ 1.516 (a)
Accumulation unit value at end of period . . . . . . . . . $ 1.607 $ 1.694 $ 1.556
Number accumulation units outstanding at end of period
(in thousands). . . . . . . . . . . . . . . . . . . . . . 241 127 2,565
STOCK FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . $ 2.250 $ 1.993 $ 1.832 (a)
Accumulation unit value at end of period . . . . . . . . . $ 2.180 $ 2.250 $ 1.993
Number accumulation units outstanding at end of period
(in thousands). . . . . . . . . . . . . . . . . . . . . . 714 $ 524 8,883
MONEY MARKET FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . $ 1.424 $ 1.401 $ 1.388 (a)
Accumulation unit value at end of period . . . . . . . . . $ 1.462 $ 1.424 $ 1.401
Number accumulation units outstanding at end of period
(in thousands). . . . . . . . . . . . . . . . . . . . . . 201 177 1,604
CAPITAL APPRECATION FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . $ 2.072 $ 1.870 $ 1.755 (a)
Accumulation unit value at end of period . . . . . . . . . $ 1.991 $ 2.072 $ 1.870
Number accumulation units outstanding at end of period
(in thousands). . . . . . . . . . . . . . . . . . . . . . 5,389 3,836 19,302
AGGRESSIVE GROWTH FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . $ 2.583 $ 2.165 $ 1.816 (a)
Accumulation value at end of period. . . . . . . . . . . . $ 2.615 $ 2.583 $ 2.165
Number accumulation units outstanding at end of period
(in thousands). . . . . . . . . . . . . . . . . . . . . . 704 568 4,649
MORTGAGE SECURITIES FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . $ 1.685 $ 1.604 $ 1.590 (a)
Accumulation unit value at end of period . . . . . . . . . $ 1.637 $ 1.685 $ 1.604
Number accumulation units outstanding at end of period
(in thousands). . . . . . . . . . . . . . . . . . . . . . 191 164 7,312
INDEX FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . $ 1.755 $ 1.629 $ 1.535 (a)
Accumulation unit value at end of period . . . . . . . . . $ 1.750 $ 1.755 $ 1.629
Number accumulation units outstanding at end of period
(in thousands). . . . . . . . . . . . . . . . . . . . . . 434 414 1,007
INTERNATIONAL OPPORTUNITIES FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . $ 1.220 $ 0.924 $ 0.981 (a)
Accumulation unit value at end of period . . . . . . . . . $ 1.181 $ 1.220 $ 0.924
Number accumulation units outstanding at end of period
(in thousands). . . . . . . . . . . . . . . . . . . . . . 1,273 647 4,113
DIVIDEND & GROWTH FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . $ 1.000 (b)
Accumulation unit value at end of period . . . . . . . . . $ 1.008
Number accumulation units outstanding at end of period
(in thousands). . . . . . . . . . . . . . . . . . . . . . 48
(a) Inception date July 1, 1992.
(b) Inception date March 8, 1994.
</TABLE>
<PAGE>
19
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.
Advisers Fund, Capital Appreciation Fund, The Bond Fund, Dividend and Growth
Fund, HVA Money Market Fund, Index Fund, International Advisers Fund,
International Opportunities Fund, Mortgage Securities Fund, Stock Fund, and U.S.
Government Money Market Fund Sub-Accounts may include total return in
advertisements or other sales material.
When a Sub-Account advertises its standardized total return, it will usually be
calculated for one year, five years, and ten years or some other relevant
periods if the Sub-Account has not been in existence for at least ten years.
Total return is measured by comparing the value of an investment in the
Sub-Account at the beginning of the relevant period to the value of the
investment at the end of the period (assuming the deduction of any contingent
deferred sales charge which would be payable if the investment were redeemed at
the end of the period).
In addition to the standardized total return, the Sub-Account may advertise a
non-standardized total return. This figure will usually be calculated for one
year, five years, and ten years or other periods. Non-standardized total return
is measured in the same manner as the standardized total return described above,
except that the contingent deferred sales charge and the Annual Maintenance Fee
are not deducted. Therefore, non-standardized total return for a Sub-Account is
higher than standardized total return for a Sub-Account.
The Bond Fund and Mortgage Securities Fund Sub-Accounts may advertise yield in
addition to total return. The yield will be computed in the following manner:
The net investment income per unit earned during a recent one month period is
divided by the unit value on the last day of the period. This figure reflects
the recurring charges at the Separate Account level including the Annual
Maintenance Fee.
The HVA Money Market Fund and U.S. Government Money Market Sub-Accounts may
advertise yield and effective yield. The yield of a Sub-Account is based upon
the income earned by the Sub-Account over a seven-day period and then
annualized, i.e. the income earned in the period is assumed to be earned every
seven days over a 52-week period and stated as a percentage of the investment.
Effective yield is calculated similarly but when annualized, the income earned
by the investment is assumed to be reinvested in Sub-Account units and thus
compounded in the course of a 52-week period. Yield and effective yield reflect
the recurring charges at the Separate Account level including the Annual
Maintenance Fee.
<PAGE>
20
The Separate Account may also disclose yield, standard total return, and
non-standard total return for periods prior to the date the Separate Account
commenced operations. For periods prior to the date the Separate Account
commenced operations, performance information for the Sub-Accounts will be
calculated based on the performance of the underlying Funds and the assumption
that the Sub-Accounts were in existence for the same periods as those of the
underlying Funds, with a level of charges equal to those currently assessed
against the Sub-Accounts.
INTRODUCTION
This Prospectus has been designed to provide you with the necessary information
to make a decision on purchasing an individual or group tax-deferred Variable
Annuity Contract offered by HL&A in the Fixed Account and/or a series of
Separate Account One. This Prospectus describes only the elements of the
Contracts pertaining to the Separate Account and the Fixed Account except where
reference to the General Account is specifically made. Please read the Glossary
of Special Terms on pages and prior to reading this Prospectus to
familiarize yourself with the terms being used.
THE CONTRACT,
SEPARATE ACCOUNT ONE, AND THE FIXED ACCOUNT
What are the Contracts?
The Contract is an individual or group tax-deferred Variable Annuity
Contract designed for retirement planning purposes. Initially there are no
deductions from your Premium Payments (except for Premium Taxes, if
applicable) so your entire Premium Payment is put to work in the investment
Sub-Account(s) of your choice or the Fixed Account. Currently, there are
ten Sub-Accounts, each investing in a different underlying Fund with its
own distinct investment objectives. More Sub-Accounts may be made
available by HL&A at a later time. You pick the Sub-Account(s) with the
investment objectives that meet your needs. You may select one or more
Sub-Accounts and/or the Fixed Account and determine the percentage of your
Premium Payment that is put into a Sub-Account or the Fixed Account. You
may also transfer assets among the Sub-Accounts and the Fixed Account so
that your investment program meets your specific needs over time. There
are some limitations on the amounts in each Sub-Account and the Fixed
Account. These limitations are described later in this Prospectus. In
addition, there are certain other limitations on withdrawals and transfers
of amounts in the Sub-Accounts and the Fixed Account, as described in this
Prospectus. (See "Charges Under the Contract" for a description of the
charges for redeeming a Contract and other charges made under the
Contract.)
<PAGE>
21
Generally, the Contract contains the five optional Annuity forms 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&A.
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 in most states, 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 Annuity payments are scheduled to begin. If you do not
elect otherwise, payments will begin at the Annuitant's age 90, except in
certain states, payments will begin at the Annuitant's age 85 under Option
2 with 120 monthly payments certain (Option 1 for Texas Contracts).
When an Annuity is effected under a Contract, unless otherwise specified,
Contract Values held in the Sub-Accounts will be applied to provide a
Variable Annuity based on the pro rata amount in the various Sub-Accounts.
Fixed Account Contract Values will be applied to provide a Fixed Account
Annuity. Variable Annuity payments will vary in accordance with the
investment performance of the Sub-Accounts you have selected. You should
consider the question of allocation of Contract Values among Sub-Accounts
of the Separate Account and the General Account of HL&A to make certain
that Annuity payments are based on the investment alternative best suited
to your needs for retirement. The Contract allows the Contract Owner to
change the Sub-Accounts on which variable payments are based after payments
have commenced once every three (3) months. Any Fixed Annuity allocation
may not be changed.
HL&A 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&A 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&A will provide
notice to the Contract Owner or to the payee(s) during the Annuity period.
HL&A may also make appropriate endorsement in the Contract to reflect such
modification.
<PAGE>
22
Who can buy these Contracts?
The individual and group Variable Annuity Contracts offered under this
Prospectus may be purchased by any individual ("Non-Qualified Contract") or
by a trustee or custodian for a retirement plan qualified under Sections
401(a) or 403(a) of the Internal Revenue Code; annuity purchase plans
adopted by public school systems and certain tax-exempt organizations
according to Section 403(b) of the Internal Revenue Code; Individual
Retirement Annuities adopted according to Section 408 of the Internal
Revenue Code; employee pension plans established for employees by a state,
a political subdivision of a state, or an agency or instrumentality of
either a state or a political subdivision of a state, and certain eligible
deferred compensation plans as defined in Section 457 of the Internal
Revenue Code ("Qualified Contracts").
What is the Separate Account and how does it operate?
The Separate Account was established on May 20, 1991, in accordance with
authorization by the Board of Directors of HL&A. It is the Separate
Account in which HL&A 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&A, it
is registered as a unit investment trust under the Investment Company Act
of 1940. This registration does not, however, involve Securities and
Exchange Commission supervision of the management or the investment
practices or policies of the Separate Account or HL&A. 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&A may conduct. So, Contract Values allocated to the
Sub-Accounts will not be affected by the rate of return of HL&A's General
Account, nor by the investment performance of any of HL&A's other separate
accounts. However, all obligations arising under the Contracts are general
corporate obligations of HL&A.
Your investment in the Separate Account is allocated to one or more
Sub-Accounts as per your specifications. Each Sub-Account is invested
exclusively in the assets of one underlying Fund. Net Premium Payments and
proceeds of transfers between Sub-Accounts
<PAGE>
23
are applied to purchase shares in the appropriate Fund at net asset value
determined as of the end of the Valuation Period during which the payments
were received or the transfer made. All distributions from the Fund are
reinvested at net asset value. The value of your investment will therefore
vary in accordance with the net income and fluctuation in the individual
investments within the underlying Fund portfolio or portfolios. During the
Variable Annuity payout period, both your Annuity payments and reserve
values will vary in accordance with these factors.
HL&A does not guarantee the investment results of the Sub-Accounts or any
of the underlying investments. There is no assurance that the value of a
Contract during the years prior to retirement or the aggregate amount of
the Variable Annuity payments will equal the total of Premium Payments made
under the Contract. Since each underlying Fund has different investment
objectives, each is subject to different risks. These risks are more fully
described in the accompanying Fund Prospectus.
HL&A reserves the right, subject to compliance with the law, to substitute
the shares of any other registered investment company for the shares of any
Fund held by the Separate Account. Substitution may occur only if shares
of the Fund(s) become unavailable or if there are changes in applicable law
or interpretations of law. Current law requires notification to you of any
such substitution and approval of the Commission.
The Separate Account may be subject to liabilities arising from a Series of
the Separate Account whose assets are attributable to other variable
annuity Contracts or variable life insurance policies offered by the
Separate Account which are not described in this Prospectus.
What is the Fixed Account and how does it operate?
THAT PORTION OF THE CONTRACT RELATING TO THE FIXED ACCOUNT IS NOT
REGISTERED UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") AND THE FIXED
ACCOUNT IS NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT
COMPANY ACT OF 1940 ("1940 ACT"). ACCORDINGLY, NEITHER THE FIXED ACCOUNT
NOR ANY INTERESTS THEREIN ARE SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF
THE 1933 ACT OR THE 1940 ACT, AND THE DISCLOSURE REGARDING THE FIXED
ACCOUNT HAS NOT BEEN REVIEWED BY THE STAFF OF THE SECURITIES AND EXCHANGE
COMMISSION. THE FOLLOWING DISCLOSURE ABOUT THE FIXED ACCOUNT MAY BE
SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL
SECURITIES LAWS REGARDING THE ACCURACY AND COMPLETENESS OF DISCLOSURE.
<PAGE>
24
Premium Payments and Contract Values allocated to the Fixed Account become
a part of the general assets of HL&A. HL&A invests the assets of the
General Account in accordance with applicable law governing the investments
of Insurance Company General Accounts.
Currently, HL&A guarantees that it will credit interest at a rate of not
less than 4% per year, compounded annually, to amounts allocated to the
Fixed Account under the Contracts. However, HL&A reserves the right to
change the rate according to state insurance law. HL&A may credit interest
at a rate in excess of 4% per year; however, HL&A is not obligated to
credit any interest in excess of 4% per year. There is no specific formula
for the determination of excess interest credits. Some of the factors that
HL&A 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
HL&A's investments, regulatory and tax requirements and competitive
factors. ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT
IN EXCESS OF 4% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF HL&A.
THE OWNER ASSUMES THE RISK THAT INTEREST CREDITED TO FIXED ACCOUNT
ALLOCATIONS MAY NOT EXCEED THE MINIMUM GUARANTEE OF 4% FOR ANY GIVEN YEAR.
May I transfer assets between Sub-Accounts?
You may transfer the values of your Sub-Account allocations from one or
more Sub-Accounts to another free of charge. However, HL&A reserves the
right to limit the number of transfers to twelve (12) per Contract Year,
with no two (2) transfers occurring on consecutive Valuation Days.
Transfers by telephone may be made by calling (800) 862-6668. Telephone
transfers may not be permitted by some states for their residents who
purchase variable annuities.
HL&A may permit the Contract Owner to preauthorize transfers among Sub-
Accounts and between Sub-Accounts and the Fixed Account under certain
circumstances. The policy of HL&A 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&A will employ
reasonable procedures to confirm that instructions communicated by
telephone are genuine; otherwise, HL&A may be liable for any losses due to
unauthorized or fraudulent instructions. The procedures HL&A 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>
25
Subject to the exceptions set forth in the following paragraph, the right
to reallocate Contract Values between the Sub-Accounts is subject to
modification if HL&A determines, in its sole opinion, that the exercise of
that right by one or more Contract Owners is, or would be, to the
disadvantage of other Contract Owners. Any modification could be applied
to transfers to or from some or all of the Sub-Accounts and could include,
but not be limited to, the requirement of a minimum time period between
each transfer, not accepting transfer requests of an agent acting under a
power of attorney on behalf of more than one Contract Owner, or limiting
the dollar amount that may be transferred between the Sub-Accounts 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&A to be to the disadvantage of
other Contract Owners.
For Contracts issued in the State of New York, the reservation of rights
set forth in the preceding paragraph is limited to (i) requiring up to a
maximum of 10 Valuation Days between each transfer: (ii) limiting the
amount to be transferred on any one Valuation Day to no more than $2
million; and (iii) upon 30 days prior written notice, to only accepting
transfer instructions from the Contract Owner and not from the Contract
Owner's representative, agent or person acting under a power of attorney
for the Contract Owner.
Currently, and with respect to Contracts issued in all states, the only
restriction in effect is that Hartford will not accept instructions from
agents acting under a power of attorney of multiple Contract Owners whose
accounts aggregate more than $2 million, unless the agent has entered into
a third party transfer services agreement with Hartford.
Transfers between the Sub-Accounts may be made both before and after
Annuity payments commence (limited to once a quarter) provided that the
minimum allocation to any Sub-Account may not be less than $500. No
minimum balance is required in any Sub-Account.
May I transfer assets between the Fixed Account and the Sub-Accounts?
Subject to the restrictions set forth above, transfers from the Fixed
Account into a Sub-Account may be made at any time during the Contract
Year. The maximum amount which may be transferred from the Fixed Account
during any Contract Year is the greater of 30% of the Fixed Account balance
as of the last Contract Anniversary or the greatest amount of any prior
transfer from the Fixed Account. If HL&A permits preauthorized transfers
from the Fixed Account to the Sub-Accounts, this restriction is
inapplicable. Also, if any interest rate is renewed at a rate of at least
one percentage point less than the previous rate, the Contract Owner may
elect to transfer up to 100% of the funds receiving the reduced rate within
60 days of notification of the interest rate decrease. Generally,
transfers
<PAGE>
26
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&A reserves the right to defer transfers from
the Fixed Account for up to six months from the date of request.
OPERATION OF THE CONTRACT
How is my Premium Payment credited?
The balance of each initial Premium Payment remaining after the deduction
of any applicable Premium Tax is credited to your Contract within two
business days of receipt of a properly completed application or an order to
purchase a Contract and the initial Premium Payment by HL&A at its Home
Office, P.O. Box 5085, Hartford, CT 06102-5085. It will be credited to
the Sub-Account(s) and/or the Fixed Account in accordance with your
election. If the application or other information is incomplete when
received, the balance of each initial Premium Payment, after deduction of
any applicable Premium Tax, will be credited to the Sub-Account(s) or the
Fixed Account within five business days of receipt. If the initial Premium
Payment is not credited within five business days, the Premium Payment will
be immediately returned unless you have been informed of the delay and
request that the Premium Payment not be returned.
The number of Accumulation Units in each Sub-Account to be credited to a
Contract will be determined by dividing the portion of the Premium Payment
being credited to each Sub-Account by the value of an Accumulation Unit in
that Sub-Account on that date.
Subsequent Premium Payments are priced on the Valuation Day received by
HL&A in its Home Office or other designated administrative offices.
What size Premium Payments must I make?
The minimum initial Premium Payment is $1,000. Thereafter, the minimum
Premium Payment is $500. Certain plans may make smaller periodic payments.
Each Premium Payment may be split among the various Sub-Accounts and/or the
Fixed Account subject to minimum amounts then in effect.
What if I am not satisfied with my purchase?
If you are not satisfied with your purchase you may surrender the Contract
by returning it within ten days (or longer in some states) after you
receive it. A written request for cancellation must accompany the
Contract. In such event, HL&A will, without deduction for any charges
normally assessed thereunder, pay you an amount equal to the sum of (i) the
<PAGE>
27
difference between the Premium Payment and the amounts allocated to the Sub
Account(s) and/or the Fixed Account under the Contract and (ii) the value
of the Contract on the date of surrender attributable to the amounts so
allocated. You bear the investment risk during the period prior to HL&A's
receipt of request for cancellation. HL&A will refund the premium paid
only for individual retirement annuities (if returned within seven days of
receipt) and in those states where required by law.
May I assign or transfer my Contract?
Ownership of a Contract described herein is generally assignable. However,
if the Contracts are issued pursuant to some form of Qualified Plan, it is
possible that the ownership of the Contracts may not be transferred or
assigned depending on the type of qualified retirement plan involved. An
assignment of a Non-Qualified Contract may subject the assignment proceeds
to income taxes and certain penalty taxes. (See "Taxation of Annuities in
General - Non-Tax Qualified Purchasers" commencing on page___.)
How do I know what my Contract is worth?
The value of the Sub-Account investments under your Contract at any time
prior to the commencement of Annuity payments can be determined by
multiplying the total number of Accumulation Units credited to your Contract
in each Sub-Account by the then current Accumulation Unit values for the
applicable Sub-Account. The value of the Fixed Account under your Contract
will be the amount allocated to the Fixed Account plus interest credited.
You will be advised at least semiannually of the number of Accumulation
Units credited to each Sub-Account, the current Accumulation Unit values,
the Fixed Account value, and the total value of your Contract.
How is the Accumulation Unit value determined?
The Accumulation Unit value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
Valuation Day by multiplying the Accumulation Unit value of the particular
Sub-Account on the preceding Valuation Day by a "Net Investment Factor" for
that Sub-Account for the Valuation Period then ended. The "Net Investment
Factor" for each of the Sub-Accounts is equal to the net asset value per
share of the corresponding Fund at the end of the Valuation Period (plus the
per share amount of any dividends or capital gains distributed by that Fund
if the ex-dividend date occurs in the Valuation Period then ended) divided
by the net asset value per share of the corresponding Fund at the beginning
of the Valuation Period. You should refer to the Prospectus for each of the
Funds which accompanies this Prospectus for a description of how the assets
of each Fund are valued since each determination has a direct bearing on the
Accumulation Unit value of the Sub-Account and therefore the value of a
<PAGE>
28
Contract. The Accumulation Unit Value is affected by the performance of the
underlying Fund(s), expenses and deduction of the charges described in this
Prospectus.
How are the underlying Fund shares valued?
The shares of the Fund are valued at net asset value on each Valuation Day.
A complete description of the valuation method used in valuing Fund shares
may be found in the accompanying Prospectus of the Funds.
How is the value of the Fixed Account determined?
HL&A 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 4%, compounded annually. HL&A may credit a lower minimum interest
rate according to state law. HL&A, also, may credit interest at rates
greater than the minimum Fixed Account interest rate.
PAYMENT OF BENEFITS
What would my Beneficiary receive as a death benefit?
The Contracts provide that in the event the Annuitant dies before the
selected Annuity Commencement Date, the Contingent Annuitant will become the
Annuitant. If the Annuitant dies before the Annuity Commencement Date and
either (a) there is no designated Contingent Annuitant,(b) the Contingent
Annuitant predeceases the Annuitant, or (c) if any Contract Owner dies
before the Annuity Commencement Date, the Beneficiary, as determined under
the Contract Control Provisions, will receive the Minimum Death Benefit as
determined on the date of receipt of due proof of death by HL&A in its Home
Office. With regard to Joint Contract Owners, at the first death of a joint
Contract Owner prior to the Annuity Commencement Date, the Beneficiary will
be the surviving Contract Owner notwithstanding that the beneficiary
designation may be different.
However, if, upon death prior to the Annuity Commencement Date, the
Annuitant or Contract Owner, as applicable, had not attained his 85th
birthday the Beneficiary will receive the greatest of (a) the Contract Value
determined as of the day written proof of death of such person is received
by HL&A, or (b) 100% of the total Premium Payments made to such Contract,
reduced by any prior surrenders, or (c) the Contract Value on the Specified
Contract Anniversary immediately preceding the date of death, increased by
the dollar amount of any Premium Payments made and reduced by the dollar
amount of any partial terminations since the immediately preceding Specified
Contract Anniversary in all states except North Carolina where the
Beneficiary will receive the greater of the Contract Value for the premium
payments as set forth in (a) and (b) above.
<PAGE>
29
If the deceased, the Annuitant or Contract Owner, as applicable, had
attained age 85, then the Death Benefit will equal the Contract Value.
Death Benefit proceeds will remain invested in the Separate Account in
accordance with the allocation instructions given by the Certificate Owner
until the proceeds are paid or HL&A receives new instructions from the
Beneficiary. The Death Benefit may be taken in one sum, payable within 7
days after the date Due Proof of Death is received, or under any of the
settlement options then being offered by the Company provided, however,
that: (a) in the event of the death of any Contract Owner prior to the
Annuity Commencement Date, the entire interest in the Contract will be
distributed within 5 years after the death of the Contract Owner and (b) in
the event of the death of any Contract Owner or Annuitant which occurs on or
after the Annuity Commencement Date, any remaining interest in the Contract
will be paid at least as rapidly as under the method of distribution in
effect at the time of death, or, if the benefit is payable over a period not
extending beyond the life expectancy of the Beneficiary or over the life of
the Beneficiary, such distribution must commence within one year of the date
of death. Notwithstanding the foregoing, in the event of the Contract
Owner's death where the sole Beneficiary is the spouse of the Contract Owner
and the Annuitant or Contingent Annuitant is living, such spouse may elect,
in lieu of receiving the death benefit, to be treated as the Contract Owner.
The proceeds due on the death may be applied to provide variable payments,
fixed payments, or a combination of variable and fixed payments.
If the Contract is owned by a corporation or other non-individual, the Death
Benefit payable upon the death of the Annuitant prior to the Annuity
Commencement Date will be payable only as one sum or under the same
settlement options and in the same manner as if an individual Contract Owner
died on the date of the Annuitant's death.
For a discussion of the manner in which Annuity payments are determined and
may vary from month to month (see "How are Annuity payments determined?"
commencing on page___).
How can a Contract be redeemed or surrendered?
At any time prior to the Annuity Commencement Date, you have the right,
subject to any IRS provisions applicable thereto, to surrender the value of
the Contract in whole or in part.
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
<PAGE>
30
the right to terminate the Contract. In such event, the Termination Value
of the Contract may be taken in the form of a lump sum cash settlement.
The Termination Value of the Contract is equal to the Contract Value less
any applicable Premium Taxes, the Annual Maintenance Fee, if applicable, and
any applicable contingent deferred sales charges. The Termination Value may
be more or less than the amount of the Premium Payments made to a Contract.
PARTIAL SURRENDERS
The Contract Owner may make a partial surrender of Contract Values at any
time prior to the Annuity Commencement Date so long as the amount
surrendered is at least equal to the minimum amount rules then in effect.
Additionally, if the remaining Contract Value following a surrender is less
than $1,000, HL&A may terminate the Contract and pay the Termination Value.
For Contracts issued in Texas, there is an additional requirement that the
Contract will not be terminated when the remaining Contract Value after a
surrender is less than $1,000 unless there were no Premium Payments made
during the previous two Contract Years.
Once each Contract Year, on a non-cumulative basis, partial surrenders of
Contract Values of up to 10% of the aggregate Premium Payments made to the
Contract may be made without being subject to the contingent deferred sales
charge. Certain plans or programs may have different withdrawal privileges.
HL&A 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&A 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.
<PAGE>
31
ANY SUCH FULL OR PARTIAL SURRENDER DESCRIBED ABOVE MAY AFFECT THE CONTINUING
TAX-QUALIFIED STATUS OF SOME CONTRACTS OR PLANS AND MAY RESULT IN ADVERSE
TAX CONSEQUENCES TO THE CONTRACT OWNER. THE CONTRACT OWNER, THEREFORE,
SHOULD CONSULT WITH HIS TAX ADVISER BEFORE UNDERTAKING ANY SUCH SURRENDER.
(SEE "FEDERAL TAX CONSIDERATIONS" COMMENCING ON PAGE___.)
Payment on any request for a full or partial surrender from the Sub-Accounts
will be made as soon as possible and in any event no later than seven days
after the written request is received by HL&A at its Home Office, Attn:
Individual Annuity Operations, P.O. Box 5085, Hartford, CT 06102-5085. HL&A
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&A defers payment for more
than 30 days, HL&A will pay interest of at least 4% per annum on the amount
deferred. In requesting a partial withdrawal you should specify the
Sub-Account(s) and/or the Fixed Account from which the partial withdrawal is
to be taken. Otherwise, such withdrawal and any applicable contingent
deferred sales charges will be effected on a pro rata basis according to the
value in the Fixed Account and each Sub-Account under a Contract. Within
this context, the contingent deferred sales charges are taken from the
Premium Payments in the order in which they were received: from the
earliest Premium Payments to the latest Premium Payments (see "How are the
charges under these Contracts made?" page___).
Can payment of a redemption, surrender or death benefit ever be postponed beyond
the seven day period?
Yes. There may be postponement whenever (a) the New York Stock Exchange is
closed, except for holidays or weekends, or trading on the New York Stock
Exchange is restricted as determined by the Securities and Exchange
Commission; (b) the Securities and Exchange Commission permits postponement
and so orders; or (c) the Securities and Exchange Commission determines that
an emergency exists making valuation of the amounts or disposal of
securities not reasonably practicable.
May I surrender once Annuity payments have started?
No. Surrenders are not permitted after Annuity payments commence EXCEPT
that a full surrender is allowed when payments for a designated period
(Option 4 or 5) are selected as the Annuity option.
<PAGE>
32
What are my Annuity benefits?
You select an Annuity Commencement Date and an Annuity option which may be
on a fixed or variable basis, or a combination thereof. The Annuity
Commencement Date will not be deferred beyond the Annuitant's 90th birthday
except for certain states where deferral past age 85 is not permitted. The
Annuity Commencement Date and/or the Annuity option may be changed from time
to time, but any change must be made at least 30 days prior to the date on
which Annuity payments are scheduled to begin. The Contract allows the
Contract Owner to change the Sub-Accounts on which variable payments are
based after payments have commenced once every three (3) months. Any Fixed
Annuity allocation may not be changed.
ANNUITY OPTIONS - The Contract contains the five optional Annuity forms
described below. Options 2, 4 and 5 are available to Qualified Contracts
only if the guaranteed payment period is less than the life expectancy of
the Annuitant at the time the option becomes effective. Such life
expectancy shall be computed on the basis of the mortality table prescribed
by the IRS, or if none is prescribed, the mortality table then in use by the
HL&A. With respect to Non-Qualified Contracts, if you do not elect
otherwise, payments in most states will automatically begin at the
Annuitant's age 90 (with the exception of states that do not allow deferral
past age 85) under Option 2 with 120 monthly payments certain. For
Qualified Contracts and Contracts issued in Texas, if you do not elect
otherwise, payments will begin automatically at the Annuitant's age 90 under
Option 1 to provide a life Annuity.
Under any of the Annuity options excluding Options 4 and 5, no surrenders
are permitted after Annuity payments commence. Only full surrenders are
allowed out of Option 4 and any such surrender will be subject to contingent
deferred sales charges, if applicable. Full or partial withdrawals may be
made from Option 5 at any time and contingent deferred sales charges will
not be applied.
OPTION 1: LIFE ANNUITY - A life Annuity is an Annuity payable during the
lifetime of the Annuitant and terminating with the last payment preceding
the death of the Annuitant. This option offers the largest payment amount
of any of the life Annuity options since there is no guarantee of a minimum
number of payments nor a provision for a death benefit payable to a
Beneficiary.
It would be possible under this option for an Annuitant to receive only one
Annuity payment if he died prior to the due date of the second Annuity
payment, two if he died before the due date of the third Annuity payment,
etc.
OPTION 2: LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN - This
Annuity option is an Annuity payable monthly during the lifetime of an
Annuitant with the provision
<PAGE>
33
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&A.
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&A, 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&A.
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&A.
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&A - Proceeds from the Death
Benefit may be left with HL&A 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&A, minus any withdrawals.
HL&A may offer other annuity options from time to time.
<PAGE>
34
How are Annuity payments determined?
The value of the Annuity Unit for each Sub-Account in the Separate Account
for any day is determined by multiplying the value for the preceding day by
the product of (1) the net investment factor (see "How is the Accumulation
Unit value determined?" commencing on page___) for the day for which the
Annuity Unit value is being calculated, and (2) a factor to neutralize the
assumed investment rate of 4.00% per annum discussed below.
When Annuity payments are to commence, the value of the Contract is
determined as the sum of the value of the Fixed Account no earlier than the
close of business on the fifth Valuation Day preceding the date the first
Annuity payment is due plus the product of the value of the Accumulation
Unit of each Sub-Account on that same day, and the number of Accumulation
Units credited to each Sub-Account as of the date the Annuity is to
commence.
The Contract contains tables indicating the minimum dollar amount of the
first monthly payment under the optional forms of Annuity for each $1,000 of
value of a Sub-Account under a Contract. The first monthly payment varies
according to the form and type of Annuity selected. The Contract contains
Annuity tables derived from the 1983a Individual Annuity Mortality Table
with ages set back one year and with an assumed investment rate ("A.I.R.")
of 4% per annum. The total first monthly Variable Annuity payment is
determined by multiplying the value (expressed in thousands of dollars) of a
Sub-Account (less any applicable Premium Taxes) by the amount of the first
monthly payment per $1,000 of value obtained from the tables in the
Contracts.
Fixed Annuity payments are determined at annuitization by multiplying the
values allocated to the Fixed Account (less applicable Premium Taxes) by a
rate to be determined by HL&A 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.
LEVEL VARIABLE ANNUITY PAYMENTS WOULD BE PRODUCED IF THE INVESTMENT RATE
REMAINED CONSTANT AND EQUAL TO THE A.I.R. IN
<PAGE>
35
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.
CHARGES UNDER THE CONTRACTS
How are the sales charges under the Contracts made?
There is no deduction for sales expenses from Premium Payments when made.
However, a contingent deferred sales charge may be assessed against Contract
Values when they are surrendered.
The length of time from receipt of a Premium Payment to the time of
surrender determines the contingent deferred sales charge. For this
purpose, Premium Payments will be deemed to be surrendered in the order in
which they are received and all surrenders will be first from Premium
Payments and then from other Contract Values. The charge is a percentage of
the amount withdrawn (not to exceed the aggregate amount of the Premium
Payments made) and equals:
<TABLE>
<CAPTION>
Charge Length Of Time From Premiun Payment
------ -----------------------------------
(Number of Years)
<S> <C>
7% 1
6% 2
5% 3
4% 4
3% 5
2% 6
1% 7
0% 8 or more
</TABLE>
No contingent deferred sales charge will be assessed in the event of death
of the Annuitant or Contract Owner, or if Contract Values are applied to an
Annuity option provided for under the Contract (except that a surrender out
of Option 4 will be subject to a contingent deferred sales charge if
applicable) or upon the exercise of the withdrawal privilege. (See "Is
there ever a time when the sales charges do not apply?" commencing on page
___.)
<PAGE>
36
In the case of a redemption in which you request a certain dollar amount be
withdrawn, the sales charge is deducted from the amount withdrawn and the
balance is paid to you. Example: You request a total withdrawal of $1,000
and the applicable sales load is 5%. Your Sub-Account(s) and/or the Fixed
Account will be reduced by $1,000 and you will receive $950 (i.e., the
$1,000 total withdrawal less the 5% sales charge). This is the method
applicable on a full surrender of your Contract. In the case of a partial
redemption in which you request to receive a specified amount, the sales
charge will be calculated on the total amount that must be withdrawn from
your Sub-Account(s) and/or the Fixed Account in order to provide you with
the amount requested. Example: You request to receive $1,000 and the
applicable sales charge is 5%. Your Sub-Account(s) and/or the Fixed Account
will be reduced by $1,052.63 (i.e., a total withdrawal of $1,052.63 which
results in a $52.63 sales charge ($1,052.63 x 5%) and a net amount paid to
you of $1,000 as requested).
Is there ever a time when the sales charges do not apply?
Yes. During any Contract Year, on a non-cumulative basis, a Contract Owner
may make a partial surrender of Contract Values of up to 10% of the
aggregate Premium Payments made to the Contract (as determined on the date
of the requested withdrawal) without the application of the contingent
deferred sales charge described above. Certain plans or programs may have
different withdrawal privileges. Any such withdrawal will be deemed to be
from Contract Values other than Premium Payments. From time to time, HL&A
may permit the Contract Owner to preauthorize partial surrenders subject to
certain limitations then in effect. Additional surrenders or any surrender
of the Contract Values in excess of such amount in any Contract Year during
the period when contingent deferred sales charges are applicable will be
subject to the appropriate charge as set forth above.
No contingent deferred sales charges otherwise applicable will be assessed
in the event of death of the Annuitant, death of the Contract Owner or if
payments are made under an Annuity option provided for under the Contract,
except that in the case of a surrender out of Annuity Option 4, contingent
deferred sales charges will be assessed, if applicable.
HL&A may offer to 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 fees 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.
What do the sales charges cover?
The contingent deferred sales charges are used to cover expenses relating to
the sale and distribution of the Contracts, including commissions paid to
any distribution organization
<PAGE>
37
and its sales personnel, the cost of preparing sales literature and other
promotional activities. To the extent that these charges do not cover such
distribution expenses they will be borne by HL&A from its general assets,
including surplus. The surplus might include profits resulting from unused
mortality and expense risk charges.
What is the mortality and expense risk charge?
Although Variable Annuity payments made under the Contracts will vary in
accordance with the investment performance of the underlying Fund shares
held in the Sub-Account(s), the payments will not be affected by (a) HL&A's
actual mortality experience among Annuitants before or after the Annuity
Commencement Date or (b) HL&A's actual expenses, if greater than the
deductions provided for in the Contracts because of the expense and
mortality undertakings by HL&A.
For assuming these risks under the Contracts, HL&A will make a daily charge
at the rate of 1.25% per annum against all Contract Values held in the
Sub-Separate Accounts during the life of the Contract (estimated at .90% for
mortality and .35% for expense).
The mortality undertakings provided by HL&A 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&A also assumes the
liability for payment of a minimum death benefit under the Contract.
The mortality undertakings are based on HL&A's determination of expected
mortality rates among all Annuitants. If actual experience among Annuitants
during the Annuity payment period deviates from HL&A's actuarial
determination of expected mortality rates among Annuitants because, as a
group, their longevity is longer than anticipated, HL&A must provide amounts
from its general funds to fulfill its Contract obligations. In that event,
a loss will fall on HL&A. Also, in the event of the death of an Annuitant
or Contract Owner prior to age 85 or before the commencement of Annuity
payments, whichever is earlier, HL&A 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&A assumes the risk that the
contingent deferred sales charges and the Annual Maintenance Fee for
maintaining the Contracts prior to the Annuity Commencement Date may be
insufficient to cover the actual cost of providing such items.
<PAGE>
38
Are there any administrative charges?
Each year, on each Contract Anniversary on or before the Annuity
Commencement Date, HL&A will deduct an Annual Maintenance Fee from Contract
Values to reimburse it for expenses relating to the maintenance of the
Contract, the Fixed Account, and the Sub-Account(s) thereunder. If during a
Contract Year the Contract is surrendered for its full value, HL&A will
deduct the Annual Maintenance Fee at the time of such surrender. The fee is
a flat fee which will be due in the full amount regardless of the time of
the Contract Year that Contract Values are surrendered. The Annual
Maintenance Fee is $25.00 per Contract Year. The deduction will be made pro
rata according to the value in each Sub-Account and the Fixed Account under
a Contract.
How much are the deductions for Premium Taxes?
A deduction is also made for Premium Tax, if applicable, 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&A will pay
Premium Taxes at the time imposed under applicable law. At its sole
discretion, HL&A may deduct Premium Taxes at the time HL&A pays such taxes
to the applicable taxing authorities, at the time the Contract is
surrendered, or at the time the Contract annuitizes.
HARTFORD ADVISORS FUND, INC,
What is HL&A?
Hartford Life & Accident Insurance Company was originally incorporated under
the laws of Connecticut on February 14, 1967. 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&A are located in Simsbury, Connecticut;
however, its mailing address is P.O. Box 5085, Hartford, CT 06102-5085.
Hartford Life & Accident 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.
Hartford Life & Accident Insurance Company is rated A++ (superior) by
A.M. Best and Company, Inc. on the basis of its financial soundness and
operating performance. Hartford Life & Accident Insurance Company has an AA+
rating from Standard and Poor's and Duff and Phelps' highest rating (AAA) on
the basis of its claims-paying ability.
<PAGE>
39
These ratings do not apply to the performance of the Separate Account.
However, the contractual obligations under this variable annuity are the
general corporate obligations of Hartford Life and Accident Insurance
Company. These ratings do apply to Hartford Life and Accident's ability
to meet its insurance obligations under the Contract.
What are the Funds?
Hartford Stock Fund, Inc. was organized on March 11, 1976. Hartford
Advisers Fund, Inc., Hartford Bond Fund, Inc., Hartford U.S. Government
Money Market Fund, Inc., and HVA Money Market Fund, Inc. were all organized
on December 1, 1982. Hartford Capital Appreciation Fund, Inc. was organized
on September 20, 1983. Hartford Mortgage Securities Fund, Inc. was organized
on October 5, 1984. Hartford Index Fund, Inc. was organized on May 16,
1983. Hartford International Advisers Fund, Inc. was organized on
February 15, 1995. Hartford International Opportunities Fund, Inc. was
organized on January 25, 1990. Hartford Dividend and Growth Fund was
organized on October 23, 1993. All of the Funds were incorporated under the
laws of the State of Maryland and are collectively referred to as the
"Funds."
The investment objectives of each of the Funds are as follows:
Hartford Capital Appreciation Fund, Inc.
To achieve maximum long term total rate of return consistent with prudent
investment risk by investing in common stock and other equity securities,
bonds and other debt securities, and money market instruments.
Hartford Capital Appreciation Fund, Inc.
To achieve growth of capital by investing in securities selected solely on
the basis of potential for capital appreciation; income, if any, is an
incidental consideration.
Hartford Bond Fund, Inc.
To achieve maximum current income consistent with preservation of capital by
investing primarily in fixed-income securities.
Hartford Dividend and Growth Fund, Inc.
To seek a high level of current income consistent with growth of capital and
reasonable investment risk.
<PAGE>
40
Hartford Index Fund, Inc.
To provide investment results which approximate the price and yield
performance of publicly-traded common stocks in the aggregate, as
represented by the Standard & Poor's 500 Composite Stock Price Index. The
Fund is neither sponsored by, nor affiliated with, Standard & Poor's
Corporation.
Hartford International Advisers Fund, Inc.
To provide maximum long-term total return consistent with prudent investment
risk by investing in a portfolio of equity, debt and money securities.
Securities in which the Fund invests primarily will be denominated in non-
U.S. currencies and will be traded in non-U.S. markets.
Hartford International Opportunities Fund, Inc.
To achieve long-term total return consistent with prudent investment risk
through investment primarily in equity securities issued by foreign
companies.
Hartford Mortgage Securities Fund, Inc.
To achieve maximum current income consistent with safety of principal and
maintenance of liquidity by investing primarily in mortgage-related
securities, including securities issued by the Government National Mortgage
Association ("GNMA").
Hartford Stock Fund, Inc.
To achieve long-term capital growth primarily through capital appreciation,
with income as a secondary consideration, by investing in equity-type
securities.
HVA Money Market Fund, Inc.
To achieve maximum current income consistent with liquidity and preservation
of capital by investing in money market securities.
The following Fund is available only for qualified Contracts issued prior to
May 1, 1987.
Hartford U.S. Government Money Market Fund, Inc.
To achieve maximum current income consistent with preservation of capital by
investing in short-term, marketable obligations issued or guaranteed by the
United States Government or by agencies or instrumentalities of the United
States Government whether or not they are guaranteed by the full faith and
credit of the federal government. The Fund was organized on December 1,
1982 under the laws of the state of Maryland.
ALL FUNDS
All of the Funds are sponsored by HL&A. The Funds are available only to
serve as the underlying investment for the variable annuity and variable
life insurance Contracts issued by HL&A.
<PAGE>
41
Although HL&A and the Funds do not currently foresee any such disadvantages
either to variable annuity Contract owners or to variable life insurance
Policy owners, the Funds' Board of Directors intends to monitor events in
order to identify any material conflicts between such Contract Owners and
Policyowners and to determine what action, if any, should be taken in
response thereto. If the Board of Directors of the Funds were to conclude
that separate funds should be established for variable life and variable
annuity separate accounts, the variable annuity Contract Owners would not
bear any expenses attendant to the establishment of such separate funds.
The Hartford Investment Management Company ("HIMCO") serves as investment
manager or adviser to each of the Funds. In addition, Wellington Management
Company ("Wellington") has served as sub-investment adviser to certain of
the Funds since August 1984.
HIMCO serves as investment manager for Hartford Advisers, Hartford Capital
Appreciation, Hartford Dividend and Growth, Hartford International
Advisers, Hartford International Opportunities, and Hartford Stock Funds,
and pursuant to an Investment Management Agreement between each. Wellington
serves as sub-investment adviser to each of these funds pursuant to a
Sub-Investment Advisory Agreement between Wellington and HIMCO on behalf of
each fund.
HIMCO serves as the investment adviser to Hartford Bond, Hartford Mortgage
Securities Funds, Hartford U.S. Government Money Market, and HVA Money
Market Funds, pursuant to an Investment Advisory Agreement between these
funds and HIMCO.
A full description of the Funds, their investment policies and restrictions,
risks, charges and expenses and all other aspects of their operation is
contained in the accompanying Funds' Prospectus which should be read in
conjunction with this Prospectus before investing and in the Funds' Statement of
Additional Information which may be ordered from HL&A.
Does HL&A have any interest in the Funds?
No.
FEDERAL TAX CONSIDERATIONS
What are some of the Federal tax consequences which affect these Contracts?
<PAGE>
42
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 III, commencing on page___, is based on
HL&A's understanding of current federal income tax laws as they are
currently interpreted.
B. TAXATION OF HL&A AND THE SEPARATE ACCOUNT
The Separate Account is taxed as part of HL&A 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 11). 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 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
<PAGE>
43
employer with respect to a terminated Qualified Plan and certain
immediate annuities. A non-natural person which is a tax-exempt entity
for Federal tax purposes will not be subject to income tax as a result
of this provision.
If the Contract Owner is not an individual, the primary Annuitant shall
be treated as the Contract Owner for purposes of making distributions
which are required to be made upon the death of the Contract Owner. If
there is a change in the primary Annuitant, such change shall be treated
as the death of the Contract Owner.
2. OTHER CONTRACT OWNERS (NATURAL PERSONS). A Contract Owner is not taxed
on increases in the value of the Contract until an amount is received or
deemed received, e.g., in the form of a lump sum payment (full or
partial value of a Contract) or as Annuity payments under the settlement
option elected.
The provisions of Section 72 of the Code concerning distributions are
summarized briefly below. Also summarized are special rules affecting
distributions from Contracts obtained in a tax-free exchange for other
annuity contracts or life insurance contracts which were purchased prior
to August 14, 1982.
a. DISTRIBUTIONS PRIOR TO THE ANNUITY COMMENCEMENT DATE.
i. Total premium payments less prior withdrawals which were not
includable in gross income equal the "investment in the
contract" under Section 72 of the Code.
ii. When the value of the Contract (ignoring any surrender charges)
exceeds the "investment in the contract," any amount
surrendered which is less than or equal to the difference
between such value of the Contract and the "investment in the
contract" will be included in gross income.
iii. When such value of the Contract is less than or equal to the
"investment in the contract," any amount surrendered which is
less than or equal to the "investment in the contract" shall be
treated as a return of "investment in the contract" and will
not be included in gross income.
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 surrendered which will
be covered by the provisions in subparagraph ii. or iii. above.
v. In general, the transfer of the Contract, without full and
adequate consideration, will be treated as an amount
surrendered which will be covered by the provisions
<PAGE>
44
in subparagraph ii. or iii. above. 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 after the Annuity Commencement Date are includable in gross
income to the extent the payments exceed the amount determined by
the application of the ratio of the "investment in the contract" to
the total amount of the payments to be made after the Annuity
Commencement Date (the "exclusion ratio").
i. When the total of amounts excluded from income by application
of the exclusion ratio is equal to the investment in the
contract as of the Annuity Commencement Date, any additional
payments (including surrenders) will be entirely includable in
gross income.
ii. If the annuity payments cease by reason of the death of the
Annuitant and, as of the date of death, the amount of annuity
payments excluded from gross income by the exclusion ratio does
not exceed the investment in the contract as of the Annuity
Commencement Date, then the remaining portion of unrecovered
investment shall be allowed as a deduction for the last taxable
year of the Annuitant.
iii. Certain distributions, such as surrenders made after the
Annuity Commencement Date, are not treated as annuity payments,
and shall be included in gross income.
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&A 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 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.
<PAGE>
45
d. PENALTY -- 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 penalty will not apply to the following distributions
(exceptions vary based upon the precise plan involved):
1. Distributions made on or after the date the recipient has
attained the age of 59 1/2.
2. Distributions made on or after the death of the Contract
Holder or where the Contract 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 "investments
in the contract" made prior to August 14, 1982.
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 surrendered prior to the Annuity Commencement Date
which does not exceed the portion of the "investment in the
contract" (generally premiums paid into the prior Contract, less
amounts deemed received) prior to August 14, 1982, shall not be
included in gross income. In all other respects, the general
provisions apply to distributions from such Contracts.
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.
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46
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 must 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&A 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&A, HL&A will automatically withhold 10% of the
taxable distribution.
<PAGE>
47
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 TAX-QUALIFIED PLANS
The Contract may be used for a number of qualified plans. If the Contract is
being purchased with respect to some form of Qualified 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.
MISCELLANEOUS
What are my voting rights?
HL&A is the legal owner of all Fund shares held in the Separate Account. As
the owner, HL&A has the right to vote at the Funds' shareholder meetings.
However, to the extent required by federal securities laws or regulations,
HL&A 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&A to vote Fund shares in its own right,
HL&A may elect to do so.
HL&A will notify you of any Fund shareholders' meeting if the shares held
for your account may be voted at such meetings. HL&A will also send proxy
materials and a form of instruction by means of which you can instruct HL&A
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&A will arrange
for the handling and tallying of proxies received from Contract Owners.
HL&A 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&A 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
<PAGE>
48
request HL&A 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. HL&A will vote shares for which no instructions have been given
and shares which are not attributable to Contract Owners (i.e. shares owned
by HL&A) in the same proportion as it votes shares of that Fund for which it
has received instructions. During the Annuity period under a Contract the
number of votes will decrease as the assets held to fund Annuity benefits
decrease.
Will other Contracts be participating in the Separate Account?
In addition to the Contracts described in this Prospectus, it is
contemplated that other forms of group or individual Variable Annuities may
be sold providing benefits which vary in accordance with the investment
experience of the Separate Account.
How are the Contracts sold?
Hartford 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 Hartford Life Insurance
Company. The principal business address of HESCO and HSD is the same as
HL&A.
The securities will be sold by salespersons of HESCO, and subsequently HSD,
who represent HL&A 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&A and will not be more than 6% of Premium
Payments.
From time to time, HL&A may pay or permit other promotional incentives, in
cash or credit or other compensation.
The securities may also be sold directly to employees of HL&A and Hartford
Fire Insurance Company, the ultimate parent of HL&A, without compensation to
HESCO or HSD salespersons. The securities will be credited with an
additional 3% of the employee's premium payment by HL&A. This additional
percentage of premium payment in no way affects present or future charges,
rights, benefits or current values of other Contract Owners.
<PAGE>
49
Who is the custodian of the Separate Account's assets?
The assets of the Separate Account are held by HL&A under a safekeeping
arrangement.
Are there any material legal proceedings affecting the Separate Account?
No.
Are you relying on any experts as to any portion of this Prospectus?
The financial statements and schedules 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.
How may I get additional information?
Inquiries will be answered by calling your representative or by writing:
Hartford Life & Accident Insurance Company, Attn: Individual Annuity
Operations
P.O. Box 5085, Hartford, Connecticut 06102-5085, Telephone: (800)
862-6668
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50
APPENDIX I
INFORMATION REGARDING TAX-QUALIFIED PLANS
THE TAX REFORM ACT OF 1986 AND THE TECHNICAL AND MISCELLANEOUS REVENUE ACT OF
1988 HAVE MADE SUBSTANTIAL CHANGES TO QUALIFIED 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 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.
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51
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 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 non-deductible contributions to an IRA, subject to the above
limits.
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
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52
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
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
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53
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.
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 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
Plan 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 deferred
compensation programs under section 457.
b. If any portion of a distribution is an "eligible rollover distribution",
the law requires that
<PAGE>
54
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 of 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.
D. Any distribution from plans described in A.3 on page___ is subject to the
regular wage withholding rules.
<PAGE>
55
TABLE OF CONTENTS
TO
STATEMENT OF ADDITIONAL INFORMATION
SECTION PAGE NO.
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF HARTFORD LIFE & ACCIDENT INSURANCE COMPANY. . . . . . .
SAFEKEEPING OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . . .
INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . . . . .
DISTRIBUTION OF CONTRACTS. . . . . . . . . . . . . . . . . . . . . . .
ANNUITY PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Annuity Payments. . . . . . . . . . . . . . . . . . . . . . .
B. Electing the Annuity Commencement Date and Form of Annuity. .
C. Optional Annuity Forms. . . . . . . . . . . . . . . . . . . .
OPTION 1: Life Annuity . . . . . . . . . . . . . . . . . . . . .
OPTION 2: Life Annuity With 120, 180 or 240 Monthly. . . . . . .
Payments Certain . . . . . . . . . . . . . . . . . . .
OPTION 3: Joint and Last Survivor Annuity. . . . . . . . . . . .
OPTION 4: Payments for a Designated Period . . . . . . . . . . .
OPTION 5: Death Benefit Remaining with the Company . . . . . . .
D. The Annuity Unit and Valuation. . . . . . . . . . . . . . . .
E. Determination of Amount of First Monthly Annuity
Payment-Fixed and Variable. . . . . . . . . . . . . . . . . .
F. Amount of Second and Subsequent Monthly Annuity Payments. . .
<PAGE>
56
G. Date and Time of Annuity Payments . . . . . . . . . . . . . .
CALCULATION OF YIELD AND RETURN. . . . . . . . . . . . . . . . . . . .
PERFORMANCE COMPARISONS. . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
57
This form must be completed for all tax-sheltered annuities.
SECTION 403(B)(11) ACKNOWLEDGMENT FORM
The Hartford variable annuity Contract which you have recently purchased is
subject to certain restrictions imposed by the Tax Reform Act of 1986.
Contributions to the Contract after December 31, 1988 and any increases in cash
value after December 31, 1988 may not be distributed to you unless you have:
a. attained age 59 1/2
b. terminated employment
c. died, or
d. become disabled.
Distributions of post December 31, 1988 contributions may also be made if you
have experienced a financial hardship.
Also, there may be a 10% penalty tax for distributions made because of financial
hardship or separation from service.
Also, please be aware that your 403(b) Plan may also offer other financial
alternatives other than the Hartford variable annuity. Please refer to your
Plan.
Please complete the following and return to:
Hartford Life & Accident Insurance Company
Individual Annuity Operations
P.O. Box 5085
Hartford, CT 06102-5085
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Name of Contract Owner/Participant:
Address:
City or Plan/School District:
Date:
Contract No:
Signature:
<PAGE>
58
- - - - - - - - - - - - - - - - - -
To Obtain a Statement of Additional Information, please complete the form below
and mail to:
Hartford Life & Accident Insurance Company
Attn: Individual Annuity Operations
P.O. Box 5085
Hartford, CT 06102-5085
Please send a Statement of Additional Information for the Director to me at the
following address:
______________________________
Name
______________________________
Address
______________________________
City/State Zip Code
- - - - - - - - - - - - - - - - - -
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
SEPARATE ACCOUNT ONE
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 & Accident
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
Form HE-1897-9
Printed in U.S.A.
<PAGE>
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TABLE OF CONTENTS
SECTION PAGE
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF HARTFORD LIFE & ACCIDENT INSURANCE COMPANY. . . . . . . . .
SAFEKEEPING OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . .
INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . .
DISTRIBUTION OF CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . .
ANNUITY PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Annuity Payments . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Electing the Annuity Commencement Date and Form of Annuity . . . . .
C. Optional Annuity Forms . . . . . . . . . . . . . . . . . . . . . . .
OPTION 1: Life Annuity . . . . . . . . . . . . . . . . . . . . . . . .
OPTION 2: Life Annuity With 120, 180 or 240 Monthly Payments Certain .
OPTION 3: Joint and Last Survivor Annuity. . . . . . . . . . . . . . .
OPTION 4: Payments for a Designated Period . . . . . . . . . . . . . .
OPTION 5: Death Benefit Remaining with the Company . . . . . . . . . .
D. The Annuity Unit and Valuation . . . . . . . . . . . . . . . . . . .
E. Determination of Amount of First Monthly Annuity
Payment-Fixed and Variable . . . . . . . . . . . . . . . . . . . . .
F. Amount of Second and Subsequent Monthly Annuity Payments . . . . . .
G. Date and Time of Annuity Payments. . . . . . . . . . . . . . . . . .
<PAGE>
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CALCULATION OF YIELD AND RETURN. . . . . . . . . . . . . . . . . . . . . .
PERFORMANCE COMPARISONS. . . . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
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INTRODUCTION
The individual and group tax-deferred variable annuity contracts described in
the Prospectus are designed to provide Annuity benefits to individuals who have
established or wish to establish retirement programs which may or may not
qualify for special federal income tax treatment. The Annuitant under these
contracts may receive Annuity benefits in accordance with the Annuity option
selected and the retirement program, if any, under which the contracts have been
purchased. Annuity payments under a contract will begin on a particular future
date which may be selected at any time under the contract or automatically when
the Annuitant reaches age 90, except in certain states where deferral past age
85 is not permitted. There are several alternative annuity payment options
available under the contract (see "Optional Annuity Forms," commencing on
page ).
The Premium Payments under a contract, less any applicable Premium Taxes, will
be applied to the Separate Account and/or the Fixed Account. Accordingly, the
net Premium Payment under the contract will be applied to purchase interests in
one or more of the Bond Fund, HVA Money Market Fund, Stock Fund, U.S. Government
Money Market Fund (for qualified Contracts issued prior to May 1, 1987),
Advisers Fund, Capital Appreciation Fund, Index Fund, International
Opportunities Fund, Mortgage Securities Fund Sub-Accounts.
Shares of the Funds are purchased by the Separate Account without the imposition
of a sales charge. The value of a contract depends on the value of the shares
of the Fund held by the Separate Account pursuant to that contract. As a
result, the Contract Owner bears the investment risk since market value of the
shares may increase or decrease.
There is no assurance that the value of the Contract Owner's contract at any
time will equal or exceed the Premium Payments made. However, if the Annuitant
or Contract Owner dies before the Annuity Commencement Date, the contracts
provide that a death benefit equal to the value of the contract as of the date
due proof of death is received by Hartford Life & Accident Insurance Companies
shall be payable. This amount is the greater of (a) the Contract Value on the
date of receipt of due proof of death by Hartford Life & Accident Insurance
Companies, 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. (See "Payments of Benefits" commencing on page___ of the
Prospectus.)
DESCRIPTION OF HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
Hartford Life & Accident Insurance Company ("HL&A") was originally incorporated
under the laws of Connecticut on February 14, 1967. 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&A are located in Simsbury, Connecticut;
<PAGE>
-5-
however its mailing address is P.O. Box 5085, Hartford, Connecticut 06102-5085.
HL&A 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.
Hartford Life and Accident 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. Hartford
Life and Accident 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&A. These ratings do apply to HL&A's ability to meet
its insurance obligations under the contract.
SAFEKEEPING OF ASSETS
The assets of the Separate Account are held by HL&A 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 Hartford Life Insurance
Company. The principal business address of HESCO and HSD is the same as HL&A.
The securities will be sold by salespersons of HESCO, and subsequently HSD, who
represent HL&A 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.
<PAGE>
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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.
ANNUITY PERIOD
A. Annuity Payments
Variable Annuity payments are determined on the basis of (1) a mortality
table set forth in the contracts and the type of Annuity payment option
selected, and (2) the investment performance of the investment medium
selected. Fixed Annuity payments are based on the Annuity tables contained
in the contracts, and will remain level for the duration of the Annuity.
The amount of the Annuity payments will not be affected by adverse mortality
experience or by an increase in expenses in excess of the expense deduction
for which provision has been made (see "Charges Under the Contracts,"
commencing on page of the Prospectus).
For a Variable Annuity the Annuitant will be paid the value of a fixed number
of Annuity Units each month. The value of such units and the amounts of the
monthly Variable Annuity payments will, however, reflect investment income
occurring after retirement, and thus the Variable Annuity payments will vary
with the investment experience of the Fund shares selected.
B. Electing the Annuity Commencement Date and Form of Annuity
The Contract Owner selects an Annuity Commencement Date and an Annuity option
which may be on a fixed or variable basis, or a combination thereof. The
Annuity Commencement Date will not be deferred beyond the Annuitant's 90th
birthday, except 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 such change must be made at least 30 days prior to the
date on which Annuity payments are scheduled to begin.
The contract contains the five optional Annuity forms described below.
Options 2, 4, and 5 are available with respect to Qualified Contracts only if
the guaranteed payment period is less than the 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&A.
With respect to Non-Qualified Contracts, if you do not elect otherwise,
payments will automatically begin at the Annuitant's age 85 under Option 2
with 120 monthly payments certain.
<PAGE>
-7-
For Qualified Contracts and contracts issued in Texas, if you do not elect
otherwise, payments will begin automatically at the Annuitant's age 85 under
Option 1 to provide a life Annuity.
When an Annuity is effected under a contract, unless otherwise specified,
variable values will be applied to provide a Variable Annuity based on
Contract Values as they are held in the various Sub-Accounts under the
contracts. Fixed Account Contract Values will be applied to provide a Fixed
Annuity. The Contract Owner should consider the question of allocation of
Contract Values among Sub-Accounts of the Separate Account and the General
Account of HL&A to make certain that Annuity payments are based on the
investment alternative best suited to the Contract Owner's needs for
retirement.
If at any time Annuity payments with respect to a Variable or a Fixed Annuity
or a combination of the two are or become less than $50.00 per payment, HL&A
has the right to change the frequency of payment to such intervals as will
result in Annuity payments of at least $50.00. For New York contracts the
minimum payment is $20.00
There may be other annuity options available offered by HL&A from time to
time.
C. Optional Annuity Forms
OPTION 1: Life Annuity
A life Annuity is an Annuity payable during the lifetime of the Annuitant and
terminating with the last monthly payment preceding the death of the
Annuitant. This option offers the maximum level of monthly payments of any
of the life Annuity options since there is no guarantee of a minimum number
of payments nor a provision for a death benefit payable to a Beneficiary.
It would be possible under this option for an Annuitant to receive only one
Annuity payment if he died prior to the due date of the second Annuity
payment, two if he died before the due date of the third Annuity payment,
etc.
OPTION 2: Life Annuity with 120, 180 or 240 Monthly Payments Certain
This Annuity option is an Annuity payable monthly during the lifetime of an
Annuitant with the provision that if, at the death of the Annuitant, payments
have been made for less than 120, 180 or 240 months, as elected, then the
present value as of the date of the Annuitant's death of the current dollar
amount at the date of death, of any remaining guaranteed monthly payments
will be paid in one sum to the Beneficiary or Beneficiaries designated.
<PAGE>
-8-
Illustration of Annuity Payments
Individual Age 65, Life Annuity
With 120 Payments Certain
1. Net amount applied . . . . . . . . . . . . . . . . . . . . 13,978.25
2. Initial monthly income per $1,000 of payment applied . . . 6.24
3. Initial monthly payment (1x2 DIVIDED BY 1,000) . . . . . . 87.22
4. Annuity Unit value . . . . . . . . . . . . . . . . . . . . .953217
5. Number of monthly Annuity Units (3 DIVIDED BY 4) . . . . . 91.501
6. Assume Annuity Unit value for second month equal to. . . . .963723
7. Second monthly payment (6x5) . . . . . . . . . . . . . . . 88.18
8. Assume Annuity Unit value for third month equal to . . . . .964917
9. Third monthly payment (8x5). . . . . . . . . . . . . . . . 88.29
For the purpose of this illustration, purchase is assumed to have been made
on the fifth business day preceding the first payment date. In determining
the second and subsequent payments, the Annuity Unit value of the fifth
business day preceding the Annuity due date is used.
OPTION 3: Joint and Last Survivor Annuity
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.
It would be possible under this option for an Annuitant and designated
second person in the event of the common or simultaneous death of the
parties to receive only one payment in the event of death prior to the due
date for the second payment and so on.
OPTION 4: Payments for a Designated Period
An amount payable monthly for the number of years selected which may be
from 5 to 30 years. Under this option, you may, at any time, surrender the
contract and receive, within seven days, the Termination Value of the
contract.
In the event of the Annuitant's death prior to the end of the designated
period, the present value as of the date of the Annuitant's death, of the
current dollar amount of any remaining guaranteed monthly payments will be
paid in one sum to the Beneficiary or Beneficiaries designated.
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.
<PAGE>
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Option 5: Death Benefit Remaining with the Company
Proceeds from the Death Benefit may be left with the Company for a period
not to exceed five years from the date of the Contract Owner's death prior
to the Annuity Commencement Date 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. For purposes
of determining this charge, the original Contract Date of this Contract
will be used.
-------------------------------------------------------------------------
Under any of the Annuity options above, excluding Option 4, no surrenders
are permitted after Annuity payments commence. Only full surrenders are
allowed out of Option 4 and any such surrender will be subject to
contingent deferred charges, if applicable.
------------------------------------------------------------------------
D. The Annuity Unit and Valuation
The value of the Annuity Unit for each Sub-Account in the Separate Account
for any day is determined by multiplying the value for the preceding day by
the product of (1) the net investment factor (see page of the prospectus)
for the day for which the Annuity Unit value is being calculated, and (2) a
factor to neutralize the assumed investment rate of 4.00% per annum
discussed in Section E. below.
ILLUSTRATION OF CALCULATION OF ANNUITY UNIT VALUE
1. Net Investment Factor for period . . . . . . . . . . . . 1.011225
2. Adjustment for 4% Assumed Rate of Investment Return. . . .999892
3. 2x1. . . . . . . . . . . . . . . . . . . . . . . . . . . 1.011116
4. Annuity Unit value, beginning of period. . . . . . . . . .995995
5. Annuity Unit value, end of period (3x4). . . . . . . . . 1.007066
E. Determination of Amount of First Monthly Annuity Payment-Fixed and Variable
When Annuity payments are to commence, the value of the contract is
determined as the sum of the value of the Fixed Account no earlier than the
close of business on the fifth Valuation Day preceding the date the first
Annuity payment is due plus the product of the value of the Accumulation
Unit of each Sub-Account on that same day, and the number of Accumulation
Units credited to each Sub-Account as of the date the Annuity is to
commence.
<PAGE>
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The contract contains tables indicating the minimum dollar amount of the
first monthly payment under the optional forms of Annuity for each $1,000
of value of a Sub-Account under a contract. The first monthly payment
varies according to the form and type of Annuity selected. The contracts
contains Annuity tables derived from the 1983a Individual Annuity
Mortality table with ages set back one year with an assumed investment rate
("A.I.R.") of 4% per annum. The total first monthly Variable Annuity
payment is determined by multiplying the value (expressed in thousands of
dollars) of a Sub-Account (less any applicable Premium Taxes) by the amount
of the first monthly payment per $1,000 of value obtained from the tables
in the contracts.
Fixed Annuity payments are determined at annuitization by multiplying the
values allocated to the Fixed Account by a rate to be determined by
Hartford Life & Accident Insurance Company which is no less than the rate
specified in the Annuity tables in the contract. The Annuity payment will
remain level for the duration of the Annuity.
F. Amount of Second and Subsequent Monthly Variable Annuity Payments
The amount of the first monthly Variable Annuity payment, determined as
described above, is divided by the value of an Annuity Unit for the
appropriate Sub-Account no earlier than the close of business on the fifth
Valuation Day preceding the day on which the payment is due in order to
determine the number of Annuity Units represented by the first payment.
This number of Annuity Units remains fixed during the Annuity Period, and
in each subsequent month the dollar amount of the Variable Annuity payment
is determined by multiplying this fixed number of Annuity Units by the then
current Annuity Unit value.
Level Variable Annuity Payments would be produced if the investment rate
remained constant and equal to the A.I.R. In fact, payments will vary up
or down as the investment rate varies up or down from the A.I.R.
G. Date and Time of Annuity Payments
The Annuity payments will be made on the fifteenth day of each month
following selection. The Annuity Unit value used in calculating the amount
of the Variable Annuity payments will be based on an Annuity Unit value
determined as of the close of business on a day no earlier than the fifth
Valuation Day preceding the date of the Annuity payment.
CALCULATION OF YIELD AND RETURN
YIELD OF THE HVA MONEY MARKET FUND SUB-ACCOUNT. As summarized in the Prospectus
under the heading "Performance Related Information," the yield of the Money
Market Fund Sub-Account for a seven day period (the "base period") will be
computed by determining the
<PAGE>
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"net change in value" (calculated as set forth below) of a hypothetical account
having a balance of one share at the beginning of the period, dividing the net
change in account value by the value of the account at the beginning of the base
period to obtain the base period return, and multiplying the base period return
by 365/7 with the resulting yield figure carried to the nearest hundredth of one
percent. Net changes in value of a hypothetical account will include net
investment income of the account (accrued daily dividends as declared by the
underlying funds, less daily expense charges of the account) for the period, but
will not include realized gains or losses or unrealized appreciation or
depreciation on the underlying fund shares.
The Money Market Fund Sub-Account yield and effective yield will vary in
response to fluctuations in interest rates and in the expenses of the two
Sub-Accounts.
THE CURRENT YIELD AND EFFECTIVE YIELD REFLECT RECURRING CHARGES ON THE SEPARATE
ACCOUNT LEVEL, INCLUDING THE MAXIMUM ANNUAL POLICY FEE.
Money Market Fund Sub-Account
The yield and effective yield for the seven day period ending December 31, 1994
is as follows:
($25 annual policy fee)
Yield 4.06%
Effective Yield 4.14%
YIELDS OF BOND FUND AND MORTGAGE SECURITIES FUND SUB-ACCOUNTS. As summarized in
the Prospectus under the heading "Performance Related Information," yields of
these two Sub-Accounts will be computed by annualizing a recent month's net
investment income, divided by a Fund share's net asset value on the last trading
day of that month. Net changes in the value of a hypothetical account will
assume the change in the underlying mutual fund's "net asset value per share"
for the same period in addition to the daily expense charge assessed, at the
sub-account level for the respective period. The Bond Fund and Mortgage
Securities Fund Sub-Accounts' yields will vary from time to time depending upon
market conditions and, the composition of the underlying funds' portfolios.
Yield should also be considered relative to changes in the value of the
Sub-Accounts' shares and to the relative risks associated with the investment
objectives and policies of the Bond Fund and Mortgage Securities Fund.
The yield reflects recurring charges on the Separate Account level, including
the annual policy fee.
BOND FUND SUB-ACCOUNT
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.
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Example:
Current Yield Formula for the Sub-Account
2*[((A-B)/(C*D) + 1)TO THE 6TH POWER - 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 = 5.87%
MORTGAGE SECURITIES 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 days period ended December 31,
1994.
Example:
Current Yield Formula for the Sub-Account
2*[((A-B)/(C*D) + 1)TO THE 6TH POWER - 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 = 6.51%
At any time in the future, yields and total return may be higher or lower than
past yields and there can be no assurance that any historical results will
continue.
The method of calculating yields described above for these Sub-Accounts differs
from the method used by the Sub-Accounts prior to May 1, 1988. The denominator
of the fraction used to calculate yield was previously the average unit value
for the period calculated. That denominator will hereafter be the unit value of
the Sub-Accounts on the last trading day of the period calculated.
<PAGE>
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CALCULATION OF TOTAL RETURN. As summarized in the Prospectus under the heading
"Performance Related Information", total return is a measure of the change in
value of an investment in a Sub-Account over the period covered. The formula
for total return used herein includes three steps: (1) calculating the value of
the hypothetical initial investment of $1,000 as of the end of the period by
multiplying the total number of units owned at the end of the period by the unit
value per unit on the last trading day of the period by the unit value per unit
on the last trading day of the period; (2) assuming redemption at the end of the
period and deducting any applicable contingent deferred sales charge and (3)
dividing this account value for the hypothetical investor by the initial $1,000
investment and annualizing the result for periods of less than one year. Total
return will be calculated for one year, five years and ten years or some other
relevant periods if a Sub-Account has not been in existence for at least ten
years.
PERFORMANCE COMPARISONS
YIELD AND TOTAL RETURN. Each Sub-Account may from time to time include its
total return in advertisements or in information furnished to present to
prospective shareholders. Each Sub-Account may from time to time include its
yield and total return in advertisements or information furnished to present to
prospective shareholders. Each Sub-Account may from time to time include in
advertisements its total return (and yield in the case of certain Sub-Accounts)
the ranking of those performance figures relative to such figures for groups of
other annuities analyzed by Lipper Analytical Services and Morningstar, Inc. as
having the same investment objectives.
The total return and yield may also be used to compare the performance of the
Sub-Accounts against certain widely acknowledged outside standards or indices
for stock and bond market performance. The Standard & Poor's Composite Index of
500 Stocks (the "S&P 500") is a market value-weighted and unmanaged index
showing the changes in the aggregate market value of 500 stocks relative to the
base period 1941-43. The S&P 500 is composed almost entirely of common stocks
of companies listed on the New York Stock Exchange, although the common stocks
of a few companies listed on the American Stock Exchange or traded
over-the-counter are included. The 500 companies represented include 400
industrial, 60 transportation and 40 financial services concerns. The S&P 500
represents about 80% of the market value of all issues traded on the New York
Stock Exchange.
The NASDAQ-OTC Composite Price Index (The "NASDAQ Index") is a market
value-weighted and unmanaged index showing the changes in the aggregate market
value of approximately 3,500 stocks relative to the base measure of 100.00 on
February 5, 1971. The NASDAQ Index is composed entirely of common stocks of
companies traded over-the-counter and often through the National Association of
Securities Dealers Automated Quotations ("NASDAQ") system. Only those
over-the-counter stocks having only one market maker or traded on exchanges are
excluded.
<PAGE>
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The Morgan Stanley Capital International EAFE Index (the "EAFE Index") is an
unmanaged index, which includes over 1,000 companies representing the stock
markets of Europe, Australia, New Zealand, and the Far East. The EAFE Index is
weighted by market capitalization, and therefore, it has a heavy representation
in countries with large stock markets, such as Japan.
The Lehman Government Bond Index (the "Lehman Government Index") is a measure of
the market value of all public obligations of the U.S. Treasury; all publicly
issued debt of all agencies of the U.S. Government and all quasi-federal
corporations; and all corporate debt guaranteed by the U.S. Government.
Mortgage-backed securities, flower bonds and foreign targeted issued are not
included in the Lehman Government Index.
The Lehman Government/Corporate Bond Index (the "Lehman 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 Lehman
Government/Corporate Index, an issue must have amounts outstanding in excess of
$1 million, have at least one year to maturity and be rated "Baa" or higher
("investment grade") by a nationally recognized rating agency.
The Composite Index for HVA Advisers Fund is comprised of the S&P 500 (55%), the
Lehman Government/Corporate Bond Index (35%), both mentioned above, and 90 Day
U.S. Treasury Bills (10%).
The manner in which total return and yield will be calculated for public use is
described above. The following table summarizes the calculation of total return
and yield for each Sub-Account, where applicable, through December 31, 1994.
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND - DIRECTOR
The following is an example of this calculation for the Sub-Account based
on a seven day period ending December 31, 1994.
<S> <C>
Assumption:
Value of a hypothetical pre-existing account
with exactly one unit at the beginning of the
period: . . . . . . . . . . . . . . . . . . . . . . . . $1.461333
Value of the same account (excluding capital
changes) at the end of the seven day period . . . . . . . . $1.462471
Calculation:
Ending account value. . . . . . . . . . . . . . . . . . . $1.462471
Less beginning account value. . . . . . . . . . . . . . . 1.461333423
Net change in account value . . . . . . . . . . . . . . . $0.001138
Base period return:
(adjusted change/beginning account value)
$0.001138 / $1.461333 $0.000778
Current yield = $0.000778 * (365/7) = . . . . . 4.06%
Effective yield = (1+ 0.000778) [RAISED TO THE POWER OF] 365/7 - 1 = . . . . 4.14%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN as of December 31, 1994
DIRECTOR HARTFORD LIFE & ACCIDENT PERIODS ENDED
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sub-Account Inception 1 YEAR 5 YEAR 10 YR/INCEPT.
Date
- - ----------------------------------------------------------------------------------------------------------------------------------
Bond Fund Sub-Account 08/31/77 -14.28 3.07 5.51
Stock Fund Sub-Account 08/31/77 -12.38 4.00 10.29
Money Market Fund Sub-Account 07/01/80 -6.83 0.66 2.83
Advisers Fund Sub-Account 03/31/83 -13.14 3.48 8.77
Aggressive Growth Fund Sub-Account 04/02/84 -6.24 10.80 13.07
U.S. Government Money Market Sub-Account 04/30/83 -7.12 0.26 2.31
Mortgage Securities Fund Sub-Account 01/15/85 -12.13 2.54 5.64
Index Fund Sub-Account 05/01/87 -9.79 3.76 5.33
International Opportunities Fund Sub-Account 07/02/90 -12.43 N/A 0.22
Dividend & Growth Fund Sub-Account 03/08/94 N/A N/A -8.57
</TABLE>
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 of $25 and contingent deferred sales loads of up to 7%,
if applicable, are deducted to determine ending redeemable value of the
original payment. Then, the ending redeemable value is divided by the
original investment to calculate total return.
<PAGE>
- - --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- - --------------------------------------------------------------------------------
To Hartford Life & Accident Insurance Company
Separate Account One and to the
Owners of Units of Interest therein:
- - --------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities of ITT
Hartford Life & Accident Insurance Company Separate Account One as of December
31, 1994, and the related statement of operations for the year then ended and
statement 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 & Accident
Insurance Company Separate Account One as of December 31, 1994, the results of
its operations for the year then ended and the changes in its net assets for
each of the two years in conformity with generally accepted accounting
principles.
Hartford, Connecticut
February 10, 1995 Arthur Andersen LLP
- - ---------------------------------------53---------------------------------------
<PAGE>
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------------
Separate Account One
- - -----------------------------------------------------------------------------------------------------------------------------------
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES
DECEMBER 31, 1994
- - -----------------------------------------------------------------------------------------------------------------------------------
Bond Fund Stock Fund
Sub-Account Sub-Account
----------- -----------
<S> <C> <C> <C>
Assets:
Investments:
Hartford Bond Fund, Inc.
Shares 418,466
Cost $ 420,191
Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 387,508 --
Hartford Stock Fund, Inc.
Shares 555,230
Cost $ 1,597,375
Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- $ 1,555,455
HVA Money Market Fund, Inc.
Shares 325,712
Cost $ 325,712
Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Hartford Advisers Fund, Inc.
Shares 6,702,881
Cost $11,108,879
Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Hartford Capital Appreciation Fund, Inc.
Shares 644,119
Cost $ 1,687,247
Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Hartford Mortgage Securities Fund, Inc.
Shares 318,214
Cost $ 346,536
Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Hartford Index Fund, Inc.
Shares 499,242
Cost $ 698,294
Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Hartford International Opportunities Fund, Inc.
Shares 1,279,385
Cost $ 1,402,198
Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Hartford Dividend and Growth Fund, Inc.
Shares 49,009
Cost $ 48,923
Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Due from Hartford Life and Accident Insurance Company . . . . . . . . 989 1,655
Receivable from fund shares sold . . . . . . . . . . . . . . . . . . . . -- --
---------- -----------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 388,497 $ 1,557,110
---------- -----------
Liabilities:
Due to Hartford Life and Accident Insurance Company . . . . . . . . . -- --
Payable for fund shares purchased. . . . . . . . . . . . . . . . . . . . 962 856
---------- -----------
Total Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 962 856
---------- -----------
Net Assets (variable annuity contract liabilities) . . . . . . . . . . . $ 387,535 $ 1,556,254
---------- -----------
---------- -----------
Deferred annuity contracts in the accumulation period:
Individual Sub-Accounts:
Units Owned by Participants. . . . . . . . . . . . . . . . . . . . . . . . 241,203 713,735
Unit Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,606,681 $ 2,180,436
Annuity contracts in the annuity period:
Individual Sub-Accounts:
Units Owned by Participants. . . . . . . . . . . . . . . . . . . . . . . . -- --
Unit Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- - ------------------------------------ 46 ---------------------------------------
<PAGE>
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Money Aggressive Mortgage International Dividend and
Market Fund Advisers Fund Growth Fund Securities Fund Index Fund Opportunities Fund Growth Fund
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
- - ----------- ------------- ----------- --------------- ----------- ------------------ ------------
-- -- -- -- -- -- --
-- -- -- -- -- -- --
$ 325,712 -- -- -- -- -- --
-- $ 10,727,826 -- -- -- -- --
-- -- $ 1,842,103 -- -- -- --
-- -- -- $ 313,243 -- -- --
-- -- -- -- $ 759,942 -- --
-- -- -- -- -- $ 1,504,186 --
-- -- -- -- -- -- $ 48,720
-- 1,625 604 -- 53 1,070 --
250 -- -- 11 100 -- 3
- - ----------- ------------- ------------- ------------ ----------- ------------ -----------
325,962 10,729,451 1,842,707 313,254 760,095 1,505,256 48,723
- - ----------- ------------- ------------- ------------ ----------- ------------ -----------
251 -- -- 36 -- -- 3
-- 785 846 -- -- 1,102 --
- - ----------- ------------- ------------- ------------ ----------- ------------ -----------
251 785 846 36 -- 1,102 3
- - ----------- ------------- ------------- ------------ ----------- ------------ -----------
$ 325,711 $ 10,728,666 $ 1,841,861 $ 313,218 $ 760,095 $ 1,504,154 $ 48,720
- - ----------- ------------- ------------- ------------ ----------- ------------ -----------
- - ----------- ------------- ------------- ------------ ----------- ------------ -----------
201,082 5,389,112 704,267 191,361 434,411 1,273,282 48,269
$ 1.462471 $ 1.990804 $ 2.615288 $ 1.636791 $ 1.749714 $ 1.181321 $ 1.009335
21,631 -- -- -- -- -- --
$ 1.462471 -- -- -- -- -- --
</TABLE>
- - ----------------------------------- 47 ----------------------------------------
<PAGE>
- - -------------------------------------------------------------------------------
Separate Account One
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
- - -------------------------------------------------------------------------------
Bond Fund Stock Fund
Sub-Account Sub-Account
----------- -----------
<S> <C> <C>
Investment income:
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,463 $ 31,589
Expenses:
Mortality and expense undertakings . . . . . . . . . . . . . . . . . . . . . . . . (3,730) (18,052)
----------- -----------
Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . 15,733 13,537
----------- -----------
Capital gains income 4,170 75,267
----------- -----------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) on security transactions. . . . . . . . . . . . . . . . . (2,306) (482)
Net unrealized appreciation (depreciation) of investments during the period. . . . (34,023) (138,536)
----------- -----------
Net gain (losses) on investments . . . . . . . . . . . . . . . . . . . . . . . . (36,329) (139,018)
----------- -----------
Net increase (decrease) in net assets resulting from operations. . . . . . . . . $(16,426) $ (50,214)
----------- -----------
----------- -----------
<FN>
*From Inception, March 8, 1994, to December 31, 1994.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- - ----------------------------------- 48 ----------------------------------------
<PAGE>
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------------------
CAPITAL
MONEY APPRECIATION MORTGAGE INTERNATIONAL DIVIDEND AND
MARKET FUND ADVISERS FUND FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT*
- - ------------ ------------- ------------ --------------- ----------- ------------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 10,676 $ 348,536 $ 6,922 $ 21,781 $ 18,515 $ 19,852 $ 1,314
(3,434) (130,579) (21,579) (3,949) (9,147) (17,606) (496)
- - ----------- ------------ ----------- ----------- --------- ----------- ----------
7,242 217,957 (14,837) 17,832 9,368 2,246 818
- - ----------- ------------ ----------- ----------- --------- ----------- ----------
-- 268,203 131,711 1,262 -- -- --
- - ----------- ------------ ----------- ----------- --------- ----------- ----------
-- (7,057) (8,874) (2,951) 81 (6,682) (617)
-- (924,313) (103,586) (25,542) (11,389) (46,248) (203)
- - ----------- ------------ ----------- ----------- --------- ----------- ----------
-- (931,370) (112,460) (28,493) (11,308) (52,930) (820)
- - ----------- ------------ ----------- ----------- --------- ----------- ----------
$ 7,242 $ (445,210) $ 4,414 $ (9,399) $ (1,940) $ (50,684) $ (2)
- - ----------- ------------ ----------- ----------- --------- ----------- ---------
- - ----------- ------------ ----------- ----------- --------- ----------- ---------
</TABLE>
- - --------------------------------------- 49 ------------------------------------
<PAGE>
- - -------------------------------------------------------------------------------
SEPARATE ACCOUNT ONE
- - -------------------------------------------------------------------------------
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1994
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BOND FUND STOCK FUND
SUB-ACCOUNT SUB-ACCOUNT
----------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,733 $ 13,537
Capital gains income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,170 75,267
Net realized gain (loss) on security transactions. . . . . . . . . . . . . . . . . . . . . (2,306) (482)
Net unrealized appreciation (depreciation) of investments during the period. . . . . . . . (34,023) (138,536)
------------ ------------
Net increase (decrease) in net assets resulting form operations. . . . . . . . . . . . . . (16,426) (50,214)
------------ ------------
UNIT TRANSACTIONS:
Purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,432 296,833
Net transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130,427 146,495
Surrenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371 (15,344)
Net annuity transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
------------ ------------
Net increase (decrease) in net assets resulting from unit transactions . . . . . . . . . . 188,230 427,984
------------ ------------
Total increase (decrease) in net assets. . . . . . . . . . . . . . . . . . . . . . . . . . 171,804 377,770
NET ASSETS:
Beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,731 1,178,484
------------ ------------
End of Period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 387,535 $ 1,556,254
------------ ------------
------------ ------------
</TABLE>
- - -------------------------------------------------------------------------------
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1993
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BOND FUND STOCK FUND
SUB-ACCOUNT SUB-ACCOUNT
----------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 494,944 $ 523,498
Capital gains income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,593 1,157,753
Net realized gain (loss) on security transactions. . . . . . . . . . . . . . . . . . . . . 195,866 5,302,982
Net unrealized appreciation (depreciation) of investments during the period. . . . . . . . 54,175 (877,654)
------------ ------------
Net increase (decrease) in net assets resulting from operations. . . . . . . . . . . . . . 750,578 6,106,579
------------ ------------
UNIT TRANSACTIONS:
Purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,703,610 36,341,550
Net transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,869,282) (58,363,167)
Surrenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (359,229) (608,845)
Net annuity transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
------------ ------------
Net increase (decrease) in net assets resulting from unit transactions . . . . . . . . . . (4,524,901) (22,630,462)
------------ ------------
Total increase (decrease) in net assets. . . . . . . . . . . . . . . . . . . . . . . . . . (3,774,323) (16,523,883)
NET ASSETS:
Beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,990,054 17,702,367
------------ ------------
End of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 215,731 $ 1,178,484
------------ ------------
------------ ------------
<FN>
* From Inception, March 8, 1994, to December 31, 1994.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
- - -------------------------------------- 50 -------------------------------------
<PAGE>
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------------------
CAPITAL
MONEY APPRECIATION MORTGAGE INTERNATIONAL DIVIDEND AND
MARKET FUND ADVISERS FUND FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT*
- - ------------ ------------- ------------ --------------- ----------- ------------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 7,242 $ 217,957 $ (14,837) $ 17,832 $ 9,368 $ 2,246 $ 818
-- 268,203 131,711 1,262 -- -- --
-- (7,057) (8,874) (2,951) 81 (6,682) (617)
-- (924,313) (103,586) (25,542) (11,389) (46,248) (203)
- - ----------- ------------ ----------- ----------- --------- ----------- ----------
7,242 (445,210) 4,414 (9,399) (1,940) (50,684) (2)
- - ----------- ------------ ----------- ----------- --------- ----------- ----------
160,695 2,881,917 364,450 92,206 20,149 362,667 897
(94,589) 651,815 26,386 (43,532) 15,263 413,531 47,825
(30,707) (310,624) (20,307) (1,681) (732) (10,485) --
31,095 -- -- -- -- -- --
- - ----------- ------------ ----------- ----------- --------- ----------- ----------
66,494 3,223,108 370,529 46,993 34,680 765,713 48,722
- - ----------- ------------ ----------- ----------- --------- ----------- ----------
73,736 2,777,898 374,943 37,594 32,740 715,029 48,720
251,975 7,950,768 1,466,918 275,624 727,355 789,125 --
- - ----------- ------------ ----------- ----------- --------- ----------- ----------
$ 325,711 $ 10,728,666 $ 1,841,861 $ 313,218 $ 760,095 $ 1,504,154 $ 48,720
- - ----------- ------------ ----------- ----------- --------- ----------- ----------
- - ----------- ------------ ----------- ----------- --------- ----------- ----------
- - ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------------------
MONEY AGGRESSIVE MORTGAGE INTERNATIONAL
MARKET FUND ADVISERS FUND GROWTH FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
- - ------------ ------------- ----------- --------------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
$ 88,262 $ 2,177,302 $ (55,383) $ 945,183 $ 39,490 $ (35,725)
-- 1,481,941 216,275 -- -- --
-- 9,497,811 8,239,605 (219,546) 235,036 2,537,533
-- (527,308) (880,320) 160,696 32,612 202,372
- - ----------- ------------ ----------- ----------- ------------- ----------
88,262 12,629,746 7,520,177 886,333 307,138 2,704,180
- - ----------- ------------ ----------- ----------- ------------ -----------
12,170,147 117,774,099 42,160,131 14,362,927 3,786,943 12,098,796
(13,937,890) (156,426,903) (58,331,633) (26,226,799) (5,010,304) (17,657,804)
(316,514) (2,111,221) 53,972 (478,466) 4,082 (154,439
-- -- -- -- -- --
- - ----------- ------------ ----------- ----------- ------------ -----------
(2,084,257) (40,764,025) (16,117,530) (12,342,338) (1,219,279) (5,713,447)
- - ----------- ------------ ----------- ----------- ------------ -----------
(1,995,995) (28,134,279) (8,597,353) (11,456,005) (912,141) (3,009,267)
2,247,970 36,085,047 10,064,271 11,731,629 1,639,496 3,798,392
- - ----------- ------------ ----------- ----------- ------------ -----------
$ 251,975 $ 7,950,768 $ 1,466,918 $ 275,624 $ 727,355 $ 789,125
- - ----------- ------------ ----------- ----------- ------------ -----------
- - ----------- ------------ ----------- ----------- ------------ -----------
</TABLE>
- - -------------------------------------- 51 -------------------------------------
<PAGE>
- - -------------------------------------------------------------------------------
SEPARATE ACCOUNT ONE
- - -------------------------------------------------------------------------------
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
1. ORGANIZATION:
Separate Account One (the Account) is a separate investment account within
Hartford Life & Accident Insurance Company (the Company) and is
registered with the Securities and Exchange Commission (SEC) as a unit
investment trust under the Investment Company Act of 1940, as amended.
Both the Company and the Account are subject to supervision and regulation
by the Department of Insurance of the State of Connecticut and the SEC.
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 Hartford mutual
funds are valued at the closing net asset value per share as determined
by the appropriate Fund as of 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.
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.
- - --------------------------------------- 52 ------------------------------------
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Hartford Life and Accident Insurance Company:
We have audited the accompanying statutory-basis balance sheets of Hartford
Life and Accident Insurance Company (a Connecticut corporation and
wholly-owned subsidiary of Hartford Accident and Indemnity Insurance
Company) (the Company) as of December 31, 1994 and 1993, and the related
statutory-basis statements of income, changes in capital and surplus and
cash flows for each of the three years in the period ended December 31,
1994. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
statutory-basis 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.
The Company presents its financial statements in conformity with statutory
accounting practices as described in Note 1. When statutory-basis financial
statements are presented for purposes other than for filing with a
regulatory agency, generally accepted auditing standards require that an
auditor's report on them state whether they are presented in conformity with
generally accepted accounting principles. The accounting practices used by
the Company vary from generally accepted accounting principles as explained
and quantified in Note 1. In our opinion, because the differences in
accounting practices as described in Note 1 are material, the
statutory-basis financial statements referred to above do not present
fairly, in accordance with generally accepted accounting principles, the
financial position of the Company as of December 31, 1994 and 1993, and the
results of its operations and its cash flows for each of the three years in
the period ended December 31, 1994.
<PAGE>
However, in our opinion, the statutory-basis financial statements referred
to above present fairly, in all material respects, the financial position of
the Company as of December 31, 1994 and 1993, and the results of its
operations and its cash flows for each of the three years in the period
ended December 31, 1994 in conformity with statutory accounting practices as
described in Note 1.
Hartford, Connecticut
January 30, 1995
<PAGE>
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
STATUTORY BALANCE SHEETS
($000)
<TABLE>
<CAPTION>
December 31,
----------------------------
1994 1993
---------- ----------
<S> <C> <C>
ASSETS
Bonds $1,415,749 $1,266,401
Common Stocks 1,013,607 817,893
Mortgage Loans 6,328 6,825
Cash & Short-Term Investments 90,410 95,189
Other Invested Assets 107,454 95,458
---------- ----------
Total Cash & Invested Assets 2,633,548 2,281,768
Investment Income Due & Accrued 13,408 13,807
Premium Balances Receivable 97,910 94,114
Receivables from Affiliates 1,949 40,251
Other Assets 20,101 16,677
Separate Account Assets 32,323 24,224
---------- ----------
Total Assets $2,799,239 $2,470,839
---------- ----------
---------- ----------
LIABILITIES
Aggregate Reserves for Future Benefits $1,236,281 $1,011,069
Policy & Contract Claims 224,017 255,932
Liability for Premium & Other Deposit Funds 3,338 3,977
Asset Valuation Reserve 20,174 16,676
Payable to Affiliates 44,427 36,487
Other Liabilities 150,347 166,311
Separate Account Liabilities 32,323 24,224
---------- ----------
Total Liabilities 1,710,907 1,514,676
---------- ----------
CAPITAL AND SURPLUS
Common Stock 2,500 2,500
Gross Paid-In & Contributed Surplus 906,028 738,128
Unassigned Funds 179,804 215,535
---------- ----------
Total Capital & Surplus 1,088,332 956,163
---------- ----------
TOTAL LIABILITIES AND CAPITAL AND SURPLUS $2,799,239 $2,470,839
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
<PAGE>
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
STATUTORY STATEMENTS OF INCOME
($000)
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
REVENUES
Premiums & Annuity Considerations $1,042,286 $1,034,468 $ 719,306
Annuity & Other Fund Deposits 8,834 (1,376) 285,102
Net Investment Income 126,403 97,946 133,085
Other Revenues 20,781 (234,526) 21,414
---------- ---------- ----------
Total Revenues 1,198,304 896,512 1,158,907
---------- ---------- ----------
BENEFITS AND EXPENSES
Death and Annuity Benefits 260,265 223,954 218,996
Surrenders and Other Benefit Payments 407,144 503,060 493,657
Commissions and Other Expenses 262,495 309,068 285,111
Increase in Reserves for Future Benefits 230,718 141,303 (142,669)
Decrease in Liability for Premium
and Other Deposit Funds (500) (53,087) 41,447
Net Transfers to Separate Accounts 8,543 (263,415) 223,752
---------- ---------- ----------
Total Benefits & Expenses 1,168,665 860,903 1,120,304
---------- ---------- ----------
NET GAIN FROM OPERATIONS
BEFORE FEDERAL INCOME TAXES 29,639 35,609 38,603
Federal Income Tax (Benefit)/Expense (860) 10,183 (8,052)
---------- ---------- ----------
NET GAIN FROM OPERATIONS 30,499 25,426 46,655
Net Realized Capital Losses (4,415) (1,496) 17,775
---------- ---------- ----------
NET INCOME $ 26,084 $ 23,930 $ 64,430
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
<PAGE>
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
STATUTORY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
($000)
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Capital & Surplus - Beginning of Year $ 956,163 $ 824,240 $ 801,279
---------- ---------- ----------
Net Income 26,084 23,930 64,430
Net Unrealized (Losses)/Gains (26,416) 25,089 (1,129)
Change in Asset Valuation Reserve (3,498) (8,930) (3,237)
Change in IMR Non-Admitted Asset 4,603 (9,173) (5,138)
Change in Other Non-Admitted Assets (4,861) (565) (2,082)
Dividends to Stockholder (29,279) (48,408) (29,883)
Paid-In Capital 167,900 150,000 0
Other Surplus Changes (2,364) 0 0
---------- ---------- ----------
Change in Capital & Surplus 132,169 131,923 22,961
---------- ---------- ----------
Capital & Surplus - End of Year $1,088,332 $ 956,163 $ 824,240
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
<PAGE>
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
STATUTORY STATEMENTS OF CASH FLOW
($000)
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Operations
Premiums, Annuity Considerations & Fund Deposits $1,033,932 $1,046,061 $ 994,388
Investment Income 120,348 98,806 130,342
Other Income 32,694 (218,377) 16,374
---------- ---------- ----------
Total Income 1,186,974 926,490 1,141,104
---------- ---------- ----------
Benefits Paid 706,933 719,701 702,392
Net Transfers to (from) Separate Accounts 9,524 (263,415) 223,762
Federal Income Taxes Paid on Operations 7,655 1,073 12,751
Other Expenses 266,980 310,853 273,138
---------- ---------- ----------
Total Benefits & Expenses 991,092 768,212 1,212,043
---------- ---------- ----------
Net Cash from Operations 195,882 158,278 (70,939)
---------- ---------- ----------
Proceeds from Investments
Bonds 759,956 1,708,865 1,678,134
Common Stocks 8,929 0 46,009
Mortgage Loans 496 452 413
Other 6,397 6,635 25,924
---------- ---------- ----------
Net Investment Proceeds 775,778 1,715,952 1,750,480
---------- ---------- ----------
Other Cash Provided
Paid-In Capital 167,900 150,000 0
Other Sources 56,730 6,507 18,156
---------- ---------- ----------
Total Proceeds 1,196,290 2,030,737 1,697,697
---------- ---------- ----------
Cost of Investments Acquired
Bonds 902,950 1,654,463 1,655,479
Common Stocks 219,385 180,706 26,508
Other 27,916 71,545 6,681
---------- ---------- ----------
Total Investments Acquired 1,150,251 1,906,714 1,688,568
---------- ---------- ----------
Other Cash Applied
Dividends Paid to Stockholder 42,979 34,708 29,883
Other 7,839 40,812 11,099
---------- ---------- ----------
Total Other Cash Applied 50,818 75,520 40,982
---------- ---------- ----------
Total Applications 1,201,069 1,982,234 1,729,850
---------- ---------- ----------
Net Change in Cash & Short-Term Investments (4,779) 48,503 (31,953)
Cash & Short-Term Investments, Beginning of Year 95,189 46,686 78,639
---------- ---------- ----------
Cash & Short-Term Investments, End of Year $ 90,410 $ 95,189 $ 46,686
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
<PAGE>
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
(Amounts in thousands unless otherwise stated)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION
Hartford Life and Accident Insurance Company (HLA or the Company) is a
wholly owned subsidiary of Hartford Accident and Indemnity Insurance
Company (HA&I), which is an indirect subsidiary of the ITT Hartford
Insurance Group, Inc. (ITT Hartford), a wholly owned subsidiary of
ITT Corporation (ITT). HLA is the parent company of Hartford Life
Insurance Company (HLIC), American Maturity Life Insurance Company,
Alpine Life Insurance Company and has an indirect interest in ITT
Hartford Life and Annuity Insurance Company and ITT Hartford Life of
Canada Insurance Company.
HLA has experienced significant growth in the group long and short term
disability markets over the last several years and has concentrated its
efforts to maximize its position in those markets. The Company also
offers a complete line of the regular forms of traditional and universal
life insurance, annuities and individual disability income coverages.
Ordinary life is written exclusively on the non-participating plan.
During 1992, the company began selling individual flexible premium
annuity products containing several variable options (within the
company's separate accounts) along with a fixed general account option.
The Company also sells group life and offered a full range of health
plans including a complete selection of group medical/dental plans,
with traditional, minimum premium plan, administrative services only
and stop loss funding arrangements. The Company complimented its medical
offerings through partnership arrangements with local managed care
networks in most metropolitan markets. During 1993, the Company decided
to exit the medical and dental business which will take effect during
1994 and 1995.
BASIS OF PRESENTATION
The accompanying statutory basis financial statements of HLA were
prepared in conformity with statutory accounting practices prescribed
or permitted by the National Association of Insurance Commissioners
(NAIC) and the Insurance Department of the State of Connecticut.
Statutory accounting practices and generally accepted accounting
principles (GAAP) differ in certain significant respects. These
differences principally involve:
(1) treatment of policy acquisition costs (commissions, underwriting
and selling expenses, premium taxes, etc.) which are charged to
expense when incurred for statutory purposes rather than on a
pro-rata basis over the expected life of the policy;
(2) recognition of premium revenues, which for statutory purposes
are generally recorded as collected or when due during the premium
paying period of the contract. For GAAP purposes, revenues for
universal life policies and investment products consist of policy
charges for the cost of insurance, policy administration and
surrender charges assessed to policy account balances. Premiums for
traditional life insurance policies are recognized as revenues when
they are due from policyholders. The retrospective deposit method is
used in accounting for universal life and other types of contracts
where the payment pattern is irregular or surrender charges are a
significant source of profit. The prospective deposit method is used
where investment margins are the primary source of profit;
(3) development of liabilities for future policy benefits, which for
statutory purposes predominantly use interest rate and mortality
assumptions prescribed by the National Association of Insurance
Commissioners (NAIC) which may vary considerably from interest and
mortality assumptions used for GAAP financial reporting;
<PAGE>
-2-
(4) providing for income taxes based on current taxable income only
for statutory purposes, rather than establishing additional assets or
liabilities for deferred federal income taxes to recognize the tax
effect related to reporting revenues and expenses in different
periods for financial statement and tax reporting purposes;
(5) excluding certain assets designated as non-admitted assets (past
due agent's balances, furniture and equipment, etc.) from the balance
sheet for statutory purposes by directly charging surplus;
(6) establishing accruals for post-retirement and post-employment
health care benefits on an optional basis, immediate recognition or
a twenty year phase-in approach, whereas GAAP liabilities were
established at date of adoption. For statutory reporting purposes,
the Company established accruals utilizing the twenty year phase-in
approach;
(7) establishing a formula reserve for realized and unrealized losses
due to default and equity risk associated with certain invested
assets (Asset Valuation Reserve); as well as the deferral and
amortization of realized gains and losses, resulting from changes in
interest rates during the period the asset is held, into income over
the remaining life of the asset sold (Interest Maintenance Reserve);
whereas on a GAAP basis, no such formula reserve is required and
realized gains and losses are recognized in the period the asset is
sold;
(8) the reporting of net reserves and benefits as a result of
reinsurance ceded, where risk transfer has taken place. On a GAAP
basis reserves are reported gross of reinsurance with reserve
credits taken as recoverable assets.
(9) the reporting of fixed maturities at amortized cost, where
GAAP requires 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 Company's fixed
maturities were classified on a GAAP basis as "available-for-sale"
and accordingly, these investments were 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 of December 31, 1994, 1993 and 1992, the significant differences
between statutory and GAAP basis net income and capital and surplus
are summarized as follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- -------
<S> <C> <C> <C>
GAAP Net Income: $190,944 $154,491 $79,167
Equity earnings of affiliates (144,821) (135,938) (72,550)
Deferred acquisition costs (3,405) 19,606 (18,893)
Benefit reserve adjustment (11,693) (3,258) 11,249
Deferred taxes (1,826) (19,285) (16,547)
Accrual for post retirement and post
employment health care benefits (2,228) 623 47,755
Interest maintenance reserve deferral and
amortization (4,603) 9,174 2,831
Separate accounts 496 (12,235) 13,392
Change in guarantee fund accrual 0 0 2,018
Other 3,220 10,752 16,008
------- ------- ------
Statutory Net Income $26,084 $23,930 $64,430
------- ------- -------
------- ------- -------
</TABLE>
<PAGE>
-3-
<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
GAAP Capital and Surplus: $927,798 $1,332,215 $1,081,524
Investment in affiliates (534,320) (381,376) (265,200)
Deferred acquisition costs (13,738) (10,331) (29,937)
Benefit reserve adjustment (11,503) 190 3,448
Deferred taxes (38,806) (36,789) (17,504)
Asset Valuation Reserve (20,174) (16,676) (7,746)
Accrual for post retirement and post
employment health care benefits 44,818 46,409 45,786
Separate accounts 1,653 1,157 13,392
Non admitted assets (9,951) (5,090) (9,056)
Unrealized (Gain) Loss on Bonds 721,415 0 0
Other, net 21,775 26,454 9,533
--------- ------- -------
Statutory Capital and Surplus $1,088,332 $956,163 $824,240
--------- ------- -------
--------- ------- -------
</TABLE>
AGGREGATE RESERVES AND LIABILITIES FOR PREMIUM AND OTHER DEPOSIT FUNDS
Aggregate reserves for payment of future life, health and annuity
benefits were computed in accordance with presently accepted actuarial
standards. Reserves for future life insurance benefits are established
and maintained primarily using the Commissioner's Reserve Valuation
Method (CRVM). Reserves for life insurance policies are generally based
on the 1958 and 1983 Commissioner's Standard Ordinary Mortality Tables at
various rates ranging from 2.5% to 7.75%. On-benefit annuity reserves
are based principally on Individual and Group Annuity Tables at various
rates ranging from 2.5% to 8%. Premium and deposit funds are generally
valued on the Commissioner's Annuity Reserve Valuation Method (CARVM).
Health claim reserves are established using the loss development factor
method. Disability reserves are based on the present value of estimated
future benefits.
HLA has established separate accounts to segregate the assets and
liabilities of certain annuity contracts that must be segregated from
the Company's general assets under the terms of the contracts. The
assets consist primarily of marketable securities reported at market
value. Premiums, benefits and expenses of these contracts are reported
in the Statutory Statement of Income.
INVESTMENTS
Investments in fixed maturities include bonds which are carried at
amortized cost. Bonds which are deemed ineligible to be held at
amortized cost by the National Association of Insurance Commissioners
(NAIC) Securities Valuation Office (SVO) are carried at the appropriate
SVO published value. When a permanent reduction in the value of publicly
traded securities occurs, the decrease is reported as a realized loss
and the carrying value is adjusted accordingly. Common stocks are carried
at market value with the after-tax difference from cost reflected in
surplus. Other invested assets are generally recorded at fair value.
<PAGE>
-4-
INVESTMENTS - (CONTINUED)
The Company uses a variety of financial instruments including interest
rate swaps, floors, issued caps, exchange traded financial futures,
foreign currency swaps, options on bonds and futures, and forward
commitments as a means of hedging exposure to price and/or interest rate
risk on planned investment purchases or existing assets and liabilities.
Income and losses generated from these instruments is generally deferred
and amortized over the life of the hedged asset or liability.
Realized capital gains and losses, net of taxes and amounts transferred
to the Interest Maintenance Reserve (IMR), are reported in the Statement
of Income. Changes in unrealized capital gains and losses on common stock
are reported as additions to or reductions of surplus. The Asset
Valuation Reserve is designed to provide a standardized reserve process
for realized and unrealized losses due to the default and equity risks
associated with invested assets. The reserve increased by $3,498, $8,930
and $3,237 in 1994, 1993 and 1992, respectively. Additionally, the IMR,
captures net realized capital gains and losses, net of applicable income
taxes, resulting from changes in interest rates and amortizes these gains
or losses into income over the remaining life of the mortgage loan or
bond sold. The amount of 1994, 1993 and 1992 net capital losses
reclassified to IMR were $1,790, $9,577 and $7,408, respectively. The
amount of losses amortized in 1994, 1993 and 1992 were $5,393, $404
and $2,270, respectively. Realized investment gains and losses are
determined on a specific identification basis.
RECLASSIFICATIONS:
Certain reclassifications have been made to prior year financial
statements to conform to current year classifications.
2. INVESTMENTS
(A) COMPONENTS OF NET INVESTMENT INCOME:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- -------
<S> <C> <C> <C>
Interest income from bonds and short-term
investments $ 94,841 $ 96,162 $126,095
Interest income from mortgage loans 601 642 682
Interest income from policy loans 0 0 1,629
Income from other invested assets 22,019 2,281 4,864
Dividends from stock 10,127 144 561
------- ------ -------
Gross investment income 127,588 99,229 133,831
Less: Investment expenses 1,185 1,283 746
------- ------ -------
Net investment income $126,403 $97,946 $133,085
------- ------ -------
------- ------ -------
</TABLE>
(B) UNREALIZED GAINS (LOSSES) ON STOCK:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- -------
<S> <C> <C> <C>
Gross unrealized gains $141,542 $159,069 $140,519
Gross unrealized losses (6,997) (5,237) (2,747)
------- ------ -------
Net unrealized gains 134,545 153,832 137,772
Balance at beginning of year 152,782 137,772 133,229
------- ------ -------
Change in net unrealized gains (losses) on
equity securities $(18,237) $ 16,060 $ 4,543
------- ------ -------
</TABLE>
<PAGE>
-5-
(c) UNREALIZED GAINS (LOSSES) ON BONDS AND SHORT TERM INVESTMENTS:
<TABLE>
<CAPTION>
1994 1993 1992
--------- -------- --------
<S> <C> <C> <C>
Gross unrealized gains $ 8,465 $ 41,373 $ 44,388
Gross unrealized losses (111,269) (23,385) (43,148)
--------- -------- --------
Net unrealized gains (102,804) 17,988 1,240
Balance at beginning of year 17,988 1,240 41,573
--------- -------- --------
Change in net unrealized (losses)gains on
bonds and short term investments $(120,792) $ 16,748 $(40,333)
--------- -------- --------
</TABLE>
(d) COMPONENTS OF NET REALIZED GAINS:
<TABLE>
<CAPTION>
1994 1993 1992
--------- -------- --------
<S> <C> <C> <C>
Bonds $ (37) $(18,420) $ 650
Stocks 2,215 0 15,859
Real estate and other (63) 10,123 3,265
--------- -------- --------
Realized gains (losses) 2,115 (8,297) 19,774
Capital gains taxes 8,320 2,776 9,407
--------- -------- --------
Net realized gains (6,205) (11,073) 10,367
--------- -------- --------
Less: IMR Capital Gains (Losses) (1,790) (9,577) (7,408)
--------- -------- --------
Capital Gains Net of IMR $ (4,415) $ (1,496) $ 17,775
--------- -------- --------
</TABLE>
(e) DERIVATIVE INVESTMENTS
SUMMARY OF INVESTMENTS - (CARRYING AMOUNTS)
(in millions)
<TABLE>
<CAPTION>
Total Issued Caps, Purchased
Carrying Non- Floors & Caps, Floors Futures Swaps
Value Derivative Options (A) & Options (B) (C),(D) (D),(E)
-------- ---------- ------------ ------------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
TOTAL ASSET BACKED $ 654 $ 654 $ 0 $0 $0 $ 0
Other Bonds and Notes 763 763 0 0 0 0
Short-Term Investment 76 76 0 0 0 0
-------- ---------- ------------ ------------- -------- --------
TOTAL FIXED MATURITIES 1,493 1,493 0 0 0 0
Other Investments 107 108 (1) 2 0 (1)
-------- ---------- ------------ ------------- -------- --------
TOTAL INVESTMENTS $1,600 $1,601 $(1) $2 $0 $(1)
-------- ---------- ------------ ------------- -------- --------
</TABLE>
<PAGE>
-6-
SUMMARY OF DERIVATIVES ON INVESTMENTS - (NOTIONAL AMOUNTS)
(in millions)
<TABLE>
<CAPTION>
Issued Caps, Purchased
Total Notional Floors & Caps, Floors Futures Swaps
Amount Options (A) & Options (B) (C),(D) (D),(E)
-------------- ------------ ------------- -------- --------
<S> <C> <C> <C> <C> <C>
TOTAL ASSET BACKED $717 $200 $200 $112 $205
SECURITIES
Other Bonds and Notes 61 0 11 3 47
Short-Term Investment 0 0 0 0 0
-------------- ------------ ------------- -------- --------
TOTAL FIXED MATURITIES 778 200 211 115 252
Other Investments 0 0 0 0 0
-------------- ------------ ------------- -------- --------
TOTAL INVESTMENTS $778 $200 $211 $115 $252
-------------- ------------ ------------- -------- --------
</TABLE>
SUMMARY OF INVESTMENTS - (MARKET VALUE AMOUNTS)
(in millions)
<TABLE>
<CAPTION>
Issued Caps, Purchased
Total Market Non- Floors & Caps, Floors Futures Swaps
Value Derivative Options (A) & Options (B) (C),(D) (D),(E)
------------ ---------- ------------ ------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
TOTAL ASSET BACKED $ 604 $ 604 $ 0 $0 $0 $ 0
SECURITIES
Other Bonds and Notes 708 709 0 0 0 (1)
Short-Term Investment 76 76 0 0 0 0
------------ ---------- ------------ ------------- -------- --------
TOTAL FIXED MATURITIES 1,388 1,389 0 0 0 (1)
Other Investments 94 107 (1) 3 0 (16)
------------ ---------- ------------ ------------- -------- --------
TOTAL INVESTMENTS $1,482 $1,496 $(1) $3 $0 $(17)
------------ ---------- ------------ ------------- ------- --------
</TABLE>
A summary of the notional and fair value of derivatives with off Balance Sheet
risk as of December 31, 1993 is as follows: (in millions)
<TABLE>
<CAPTION>
Issued Swaps, Caps
Floors and Collars Futures Forwards Total
------------------ -------- -------- --------
<S> <C> <C> <C> <C>
Notional $491,926 $114,610 $24,449 $630,985
Fair Value $ 776 $ 0 $ 356 $ 1,132
<FN>
(A) Comprised of one $100 million cap with a strike rate of 8.8% maturing in 1997.
(B) Comprised of purchased floors ($200 million) with a weighted avg. strike rate
of 4.875 and a purchased cap with a strike rate of 7.75%. All mature in 1997.
(C) Over 98% of futures contracts expire before December 31, 1995.
(D) At December 31, 1994, we had ($18.2) million in net deferred losses for
futures and interest rate swaps. We expect to basis adjust all ($18.2) million
in 1995.
(E) 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.
</TABLE>
<PAGE>
-7-
Maturity of Swaps on Investments as of December 31, 1994
<TABLE>
<CAPTION>
Last
Derivative Type 1995 1996 1997 1998 1999 2000+ Total Maturity
--------------- ----- ---- ---- ---- ---- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Rate Swaps:
Pay Fixed/Receive Variable:
Notional Value $ 0 $ 0 $ 0 $ 0 $ 0 $20 $ 20 2004
Weighted Average Pay Rate 0.0% 0.0% 0.0% 0.0% 0.0% 9.0% 9.0%
Weighted Average Receive Rate 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Pay Variable/Receive Fixed:
Notional Value $160 $20 $ 0 $ 0 $ 0 $25 $205 2004
Weighted Average Pay Rate 5.1% 5.4% 0.0% 0.0% 0.0% 6.4% 5.3%
Weighted Average Receive Rate 8.2% 4.7% 0.0% 0.0% 0.0% 5.8% 7.5%
Pay Variable/Receive Different Variable:
Notional Value $ 10 $ 0 $ 0 $ 0 $ 0 $ 0 $ 10 2004
Weighted Average Pay Rate 5.8% 0.0% 0.0% 0.0% 0.0% 0.0% 5.8%
Weighted Average Receive Rate 20.0% 0.0% 0.0% 0.0% 0.0% 0.0% 20.0%
Total Interest Rate Swaps $170 $20 $ 0 $ 0 $ 0 $45 $235 2004
Total Weighted Average Pay Rate 5.1% 5.4% 0.0% 0.0% 0.0% 7.5% 5.6%
Total Weighted Average Receive Rate 8.9% 4.7% 0.0% 0.0% 0.0% 3.2% 7.4%
Foreign Currency Swaps $ 17 $ 0 $ 0 $ 0 $ 0 $ 0 $ 17 1995
Total Swaps $187 $20 $ 0 $ 0 $ 0 $45 $252 2004
</TABLE>
(e) CONCENTRATION OF CREDIT RISK:
Excluding U.S. government and government agency investments, the Company
is not exposed to any significant concentration of credit risk.
<PAGE>
-8-
(F) BONDS, SHORT TERM AND UNAFFILIATED STOCK INVESTMENTS:
<TABLE>
<CAPTION>
1994
----------------------------------------------
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 $ 206,571 $ 31 $ (24,981) $ 181,621
- - - guaranteed and sponsored - asset backed 362,998 2,178 (41,933) 323,243
States, municipalities and political subdivisions 10,347 0 (1,208) 9,139
International governments 13,599 98 (1,533) 12,164
Public utilities 53,687 174 (3,108) 50,755
All other corporate 388,491 331 (15,915) 372,907
All other corporate - asset backed 290,855 5,653 (15,945) 280,563
Short-term investments 76,041 0 0 76,041
Certificates of Deposit 89,201 0 (6,848) 82,553
---------- ---------- ---------- ----------
Total $1,491,790 $8,465 $(111,269) $1,388,986
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
1994
----------------------------------------------
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Common Stock $ 879,052 $141,542 $ (6,997) $1,013,607
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
<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 $ 248,809 $ 562 $ (3,436) $ 245,935
- - - guaranteed and sponsored - asset backed 363,297 12,939 (6,915) 369,321
States, municipalities and political subdivisions 85,091 3,964 (3) 89,052
International governments 13,857 588 (87) 14,138
Public utilities 51,544 3,281 (468) 54,457
All other corporate 399,793 16,067 (4,326) 411,534
All other corporate - asset backed 104,110 3,992 (8,150) 99,952
Short-term investments 85,674 0 0 85,674
---------- ---------- ---------- ---------
Total $1,352,075 $41,373 $ (23,385) $1,370,063
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
<PAGE>
-9-
BONDS, SHORT-TERM AND UNAFFILIATED STOCK INVESTMENTS - (CONTINUED)
<TABLE>
<CAPTION>
1993
---------------------------------------------
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Common Stock $664,061 $159,069 $(5,237) $817,893
---------- ---------- ---------- ---------
---------- ---------- ---------- ---------
</TABLE>
The amortized cost and estimated market value of bonds and short-term
investments at December 31, 1994 by management's anticipated maturity are
shown below. Asset backed securities are distributed to maturity year based
on HLA's estimate of the rate of future prepayments of principal over the
remaining life of the securities. Expected maturities differ from
contractual maturities reflecting borrowers' rights to call or prepay their
obligations.
<TABLE>
<CAPTION>
Amortized Estimated
Maturity Cost Fair Value
- - -------- ---------- ----------
<S> <C> <C>
Due in one year or less $ 178,450 $ 177,900
Due after one year through five years 738,492 713,444
Due after five years through ten years 402,535 367,494
Due after ten years 172,313 130,148
---------- ----------
Total Bond Maturities $1,491,790 $1,388,986
---------- ----------
---------- ----------
</TABLE>
Proceeds from sales of investments in bonds and short-term investments
during 1994, 1993 and 1992 were $555,765, $1,819,865 and $2,052,575,
respectively, resulting in gross realized gains of $9,959, $33,981 and
$29,714, respectively, and gross realized losses of $7,928, $52,401 and
$29,064, before transfers to IMR.
(G) FAIR VALUE OF INVESTMENT-RELATED FINANCIAL INSTRUMENTS NOT DISCLOSED
ELSEWHERE:
BALANCE SHEET ITEMS: (IN MILLIONS)
<TABLE>
<CAPTION>
1994 1993
------------------ -----------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Assets
Mortgage loans $ 6,328 $ 6,328 $ 6,825 $ 6,825
Investments in partnership and trusts 101,000 101,000 75,231 69,597
Futures, options, and miscellaneous (1,000) (13,000) 1,949 10,597
Liabilities
Liabilities on investment contracts $ 3,376 $ 3,328 $ 3,900 $ 3,874
</TABLE>
<PAGE>
-10-
The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which it is practical
to do so: securities and derivative instruments, including swaps, issued
caps, floors, futures, forward commitments and collars, are based on
dealer quotes or quoted market prices for the same or similar
securities; 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. RELATED PARTY TRANSACTIONS:
Transactions between the Company and Hartford Fire relate principally to
tax settlements, reinsurance, rental and service fees, capital
contributions and payments of dividends. Substantially all general
expenses related to HLA, including rent expenses, are initially paid by
Hartford Fire. Direct expenses are allocated using specific
identification and indirect expenses are allocated using other
applicable methods. The rent paid to Hartford Fire for the space
occupied by HLA was $7,926, $7,926 and $7,646 in 1994, 1993 and 1992.
Transactions between the Company and its direct subsidiary, HLIC, relate
principally to tax settlements, expenses, reinsurance, rental and
service fees, capital contributions and payments of dividends.
For additional information, see Footnote 5, 6 and 7.
4. FEDERAL INCOME TAXES:
HLA and its affiliates are included in the consolidated Federal income
tax return of Hartford Fire which is ultimately included in the income
tax return of ITT. Allocation of taxes is based primarily upon separate
company tax return calculations with current credit for net losses used
in consolidation. Intercompany Federal income tax balances are
generally settled quarterly with Hartford Fire.
Federal income taxes paid by the Company were $7,655, $1,073 and $12,751
in 1994, 1993 and 1992, respectively.
5. CAPITAL AND SURPLUS AND SHAREHOLDER DIVIDEND RESTRICTIONS:
The maximum amount of dividends which can be paid, without prior
approval, by State of Connecticut insurance companies to shareholders is
generally restricted to the greater of 10% of surplus as of the
preceding December 31st or the net gain from operations for the previous
year. Dividends are paid as determined by the Board of Directors and are
not cumulative. Dividends paid by the Company to its parent, HA&I were
$42,979, $34,708 and $29,883 in 1994, 1993 and 1992, respectively.
Additionally, dividends declared by the Company to its parent, HA&I in
1994, 1993 and 1992 were $29,279, $48,408 and $29,883, respectively.
HLA received capital contributions totalling $167,900, including the
stock of ITT Hartford Life of Canada ($17,900) and $150,000 in 1994 and
1993, respectively, from its parent, Hartford A & I. In 1993, HLA
contributed $180,000 of capital to HLIC.
6. PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS:
The Company's employees are included in Hartford Fire's non-contributory
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. Pension expense was $2,428, $4,520
and $4,717 in 1994, 1993 and 1992, respectively. Liabilities for these
plans are included in the financial statements of Hartford Fire.
The Company also participates in ITT's Investment and Savings Plan,
which includes a deferred compensation option under IRC section 401(k)
and an ESOP allocation under IRC section 404(k). The liabilities for
these plans are included in the financial statements of Hartford Fire.
<PAGE>
-11-
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS - (CONTINUED)
The Company's employees are included in the Hartford Fire's
contributory defined health care and life insurance benefit plans.
These plans provide health care and life insurance benefits for retired
employees. Substantially all employees may become eligible for those
benefits if they reach normal or early retirement age while still
working for the Company. 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 (not
including provisions for accrual of postretirement benefit obligations),
allocated by Hartford Fire, was $1,895, $1,542 and $1,961 for 1994, 1993
and 1992, respectively.
The Company began accruing for postretirement benefit obligations other
than pensions during 1993. In accordance with statutory accounting
procedures, the Company elected to establish these liabilities of
$17,380 based on a twenty-year phase in approach. Accordingly, the
Company recognized an expense of $869 in 1994 as a result of this new
accounting procedure.
The assumed rate of future increases in the per capita cost of health
care (the health care trend rate) was 11% for 1994, decreasing ratably
to 6.0% in the year 2001. Increasing the health care trend rates by
one percent per year would have an immaterial impact on the accumulated
postretirement benefit obligation and the annual expense.
Post-employment benefits are primarily comprised of obligations to
provide medical and life insurance to employees on long term disability.
Post-employment benefits expense was not material in 1994, 1993 and 1992.
7. REINSURANCE:
In November 1993, HLA ceded substantially all of the individual fixed
and variable annuity business to ITT Hartford Life and Annuity Insurance
Company (ILA). As a result of this transaction, the assets and
liabilities of the company decreased approximately $1 billion.
The Company assumes all accident and health, credit and group life
insurance in force, except for corporate owned life insurance from HLIC,
as well as all group life and health business written by Hartford Fire
and certain domestic property casualty affiliates of ITT Hartford. The
Company cedes all individual life insurance to HLIC. The Company also
maintains reinsurance treaties, primarily annual renewable term
agreements, with numerous life insurance companies.
The Company did not write-off any uncollectible reinsurance recoverables
during the year. In management's opinion, there is no material exposure
from uncollected reinsurance. The Company did not commute any
reinsurance during the year.
8. COMMITMENTS AND CONTINGENCIES:
The Company has no material contingent liabilities, nor has the Company
committed any surplus funds for any contingent liabilities or
arrangements. HLA is involved in various legal actions which have arisen
in the normal course of the Company's business. In the opinion of
management, the ultimate liability with respect to such lawsuits as well
as other contingencies is not considered to be material in relation to
the results of operations and financial position of the Company.
9. SUBSEQUENT EVENTS:
None
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) All financial statements are included in Part A and Part B of the
Registration Statement.
(b) (1) A copy of the resolution authorizing the Separate Account is
incorporated herein
(2) Not applicable. HL&A maintains custody of all assets.
(3) Principal Underwriter Agreement between Hartford Life and
Accident Insurance Company and Hartford Equity Sales Company,
Inc., is incorporated herein.
Form of Dealer Agreement is incorporated herein.
(4) A copy of the Individual Flexible Premium Variable Annuity
Contract is incorporated herein.
(5) The Form of Application is incorporated herein.
(6) (a) Restated Certificate of Incorporation of Hartford Life and
Accident Insurance Company is incorporated herein.
(b) Bylaws of Hartford Life and Accident Insurance Company are
incorporated herein.
(27) Financial Data Schedule
(7) Not applicable.
(8) Not applicable.
<PAGE>
-2-
(9) (a) Not applicable.
(9) (b) Not applicable.
(10) Not applicable.
(12) Schedule of Performance Data is filed herein.
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
<PAGE>
-3-
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
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
<PAGE>
-4-
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 herein by reference to the Registration
Statement filed on April 11, 1988.
Item 27. Number of Contract Owners
As of there were Contract Owners.
-----
Item 28. Indemnification - Incorporated herein by reference to the Registration
Statement filed on July 10, 1986.
Item 29. Principal Underwriters
(a) HESCO acts as principal underwriter for the following
investment companies:
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 (NQ
Variable Account)
Hartford Life Insurance Company - Separate Account Two (QP
Variable Account)
Hartford Life Insurance Company - Separate Account One
Hartford Life Insurance Company - Separate Account Two (Director)
Hartford Life Insurance Company - Putnam Capital Manager Trust
Separate Account
Hartford Life and Accident Insurance Company - Putnam Capital
Manager Separate Account One
<PAGE>
-5-
Hartford Life and Accident Insurance Company - Separate Account
One
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
(b) Directors and Officers of HESCO
Name and Principal Positions and Offices
Business Address With Underwriter
------------------ ---------------------
Donald P. 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:
Hartford Life & Accident Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
Item 31. Management Services
None
Item 32. Undertakings
<PAGE>
-6-
(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 Counsel of Life Insurance, Ref. No. IP-6-88,
November 28, 1988. The Registrant has complied with the four provisions of the
no-action letter.
(Sep. Acct. Two)
<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
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of 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 April, 1995.
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY -
SEPARATE ACCOUNT ONE
(Registrant)
*By: By:
--------------------------------------- --------------------------
Thomas M. Marra, Senior Vice President Rodney J. Vessels
Attorney-in-Fact
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
(Depositor)
*By:
---------------------------------------
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 * By: April 28, 1995
Thomas M. Marra, Senior Vice ----------------------
President, Director * Rodney J. Vessels
Leonard E. Odell, Jr., Senior Attorney-in-Fact
Vice President, Director *
Lowndes A. Smith, President Dated:
Chief Operating Officer, ---------------------
Director *
Raymond P Welnicki, Senior Vice
President, Director *
Lizabeth H. Zlatkus, Vice President
Director *
Donald J. Znamierowski, Vice President
Comptroller, Director *
33-43398
<PAGE>
EXHIBIT 1(b)
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
CONSENT OF DIRECTORS
We, the undersigned, being all of the Directors of Hartford Life and Accident
Insurance Company ("Company"), hereby consent to the following actions, such
actions to have the same force and effect as if taken at a meeting duly held for
such purpose.
RESOLVED, that Company is hereby authorized to establish a separate account
in accordance with state insurance laws and to issue variable annuity
insurance contracts with reserves for such contracts being segregated in
such separate account.
FURTHER RESOLVED, that the officers of the Company are hereby authorized
to:
(1) Designate or redesignate the Account as such Officers deem
appropriate;
(2) Comply with applicable state and federal laws and regulations
applicable to the establishment and operation of the Account;
(3) Establish, from time to time, the terms and conditions pursuant to
which interests in the Account will be sold; and
(4) Establish all procedures, standards and arrangements necessary or
appropriate for the operation of the Account.
/s/ Edward N. Bennett /s/ Donald R. Frahm
-------------------------- ---------------------------
Edward N. Bennett Donald R. Frahm
/s/ John P. Ginnetti /s/ Larry K. Lance
-------------------------- ---------------------------
John P. Ginnetti Larry K. Lance
/s/ David J. McDonald /s/ Lowndes A. Smith
-------------------------- ---------------------------
David J. McDonald Lowndes A. Smith
/s/ Michael S. Wilder /s/ Howard A. York
-------------------------- ---------------------------
Michael S. Wilder Howard A. York
/s/ Donald J. Znamierowski
--------------------------
Donald J. Znamierowski
Dated: May 20, 1994
<PAGE>
EXHIBIT 3(b)
PRINCIPAL UNDERWRITER AGREEMENT
THIS AGREEMENT, dated as of the ___ day of ______, 1991, made by and between
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY ("HL&A" 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 HL&A has made provision for the
establishment of a separate account within HL&A 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 Life & Accident
Insurance Company Separate Account Two (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 HL&A
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 HL&A.
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 HL&A 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 designated 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.
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 advise 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.
HL&A 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.
HL&A 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 HL&A. However, such resignation shall not become effective
until either the Unit Trust has been completely liquidated and the proceeds of
the liquidation distributed through HL&A 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
at 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 __________, 1991, 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 HL&A.
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 HL&A 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 HL&A, but such termination will not be effective until HLIC
shall have contracted with one or more persons to act as principal
underwriter of the Contacts. HESCO hereby agrees that it will continue
to act as principal underwriter until its successor or successors
assume such undertaking.
<PAGE>
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 AND ACCIDENT INSURANCE COMPANY
Attest:
By
- - -------------------------------- ---------------------------------
(SEAL) HARTFORD EQUITY SALES COMPANY, INC.
Attest:
By
- - -------------------------------- ---------------------------------
<PAGE>
[ITT LOGO]
SALES AGREEMENT
1.0 APPOINTMENT
1.1 The Hartford insurance company(ies) named in the Sales Agreement
Specifications Page and, with respect to SEC Registered contracts,
Hartford Equity Sales Company, Inc., as Principal Underwriter,
(hereinafter collectively referred to as "Company") hereby appoint the
named individual(s) or organization(s) as "Agent" of Company for the
solicitation and procurement of applications for insurance contracts
(hereinafter referred to as "Contracts") in the line(s) of business
set forth in the Sales Agreement Specifications Page, in all states in
which Company is authorized to do business and in which Agent is
properly licensed and appointed, without exclusive representation.
2.0 AUTHORITY
2.1 Agent has the power or authority to represent Company only to the
extent expressly granted in this Agreement and no further power or
authority is implied.
2.2 Nothing contained herein is intended to create a relationship of
employer and employee between Company and Agent. Agent and, if
applicable, any sub-agents appointed by Agent, shall be independent
contractors as to Company and free to exercise their own judgment as
to the time, place and means of performing all acts hereunder, but
they shall conform to all regulations of Company not unreasonably
interfering with freedom of action or judgment.
2.3 This Agreement terminates all previous Agency agreements, if any,
between Company and Agent. However, the execution of this Agreement
shall not affect any obligations which have already accrued under any
prior agreement.
2.4 Agent does not have the authority to collect premiums for each line of
business, other than initial premiums, unless specifically set forth
in the applicable commission schedule.
2.5 If Agent is a Class I through Class XX Agent, Agent is authorized to
procure and solicit applications for Contracts through sub-agents
which Agent may appoint with the approval of Company. No agreement
between Agent and any sub-agent shall impose any liability or
obligation upon Company unless Company is a party thereto in writing.
All sub-agents shall be duly licensed under the applicable insurance
laws to sell annuity, life and health insurance contracts by the
proper authorities in the jurisdictions in which Agent proposes to
offer such Contracts. The sub-agents shall indicate in each
application for a Contract that it has been solicited on behalf of
Agent.
2.5.1 Agent shall supervise any sub-agents appointed by Agent to
solicit sales of the Contracts and Agent shall be responsible
for all acts and omissions of each sub-agent within the scope
of his agency appointment at all times. Agent shall exercise
all responsibilities required by the applicable federal and
state law and regulations. Company shall not have any
responsibility for the supervision of any sub-agents of Agent.
2.5.2 Company may, by written notice to Agent, refuse to permit any
sub-agent to solicit applications for the sale of any of the
Contracts hereunder and may, by such notice, require Agent to
cause any such sub-agent to cease any such solicitation or
sales, and Company may require Agent to cancel the appointment
of any sub-agent with Company.
Form HL-A 11450 1 Printed in U.S.A.
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<PAGE>
2.6 If Agent is assigned a different Agent Class for different Lines of
Business (i.e. Class I Agent for Variable Annuities and a Class V
Agent for Individual Life, Annuity and Health Insurance), the
provisions of this Agreement, which specifically relate only to a
particular Class of Agent shall only apply to Agent in transacting
that Line of Business for which Agent is so classified, if any.
3.0 SEC REGISTERED CONTRACTS
3.1 If Agent is a Class I through Class XX Agent and an NASD registered
Broker-Dealer, Agent agrees that, with respect to SEC Registered
Contracts, Agent has full responsibility for the training and
supervision of all persons, including sub-agents of Agent, associated
with Agent who are engaged directly or indirectly in the offer or sale
of such Contracts and that all such persons shall be subject to the
control of Agent with respect to such persons' activities in
connection with the Contracts. Agent will cause the sub-agents to be
trained in the sale of the Contracts and will cause such sub-agents to
be registered representatives of Agent before such sub-agents engage
in the offer or sale of the Contracts. Agent shall cause Agent's sub-
agents' qualifications to be certified to the satisfaction of Company
and shall notify Company if any sub-agents cease to be registered
representatives of Agent.
3.1.1 Agent will fully comply with the requirements of the National
Association of Securities Dealers, Inc. and of the Securities
Exchange Act of 1934 and all other applicable federal or state
laws and will establish such rules and procedures as may be
necessary to cause diligent supervision of the securities
activities of the sub-agents. Upon request by Company, Agent
shall furnish any records necessary to establish such diligent
supervision.
3.1.2 Before a sub-agent is permitted to solicit and procure
applications for the Contracts, Agent and the sub-agent shall
have entered into an agreement pursuant to which the sub-agent
will be appointed a sub-agent and a registered representative
of Agent and in which the sub-agent will agree that his
selling activities relating to the Contracts will be under the
supervision and control of Agent, and the sub-agent's right to
continue to sell such Contracts is subject to his continued
compliance with such agreement.
3.1.3 In the event a sub-agent fails or refuses to submit to
supervision of Agent in accordance with this Agreement, or
otherwise fails to meet the rules and standards imposed by
Agent, Agent shall immediately notify such sub-agent that he
is no longer authorized to sell the Contracts, and Agent shall
take whatever additional action may be necessary to terminate
the sales activities of such sub-agent relating to the
Contracts including immediate notification of Company of such
termination.
3.2 If Agent is not an NASD Registered Broker/Dealer but is a member of an
affiliated group of legal entities one of which is an NASD Registered
Broker/Dealer ("Broker/Dealer") and a party to this Agreement, Agent
agrees that, with respect to SEC Registered contracts, the sub-agents
of Agent shall be registered representatives of such Broker/Dealer.
3.2.1 As appropriate, any reference in this Agreement to Agent shall
apply equally to such Broker/Dealer.
3.2.2 Each Agent which is not a Broker/Dealer hereby directs Company
to pay any compensation due, pursuant to Paragraph 4, to the
Broker/Dealer.
3.2.3 If Agent is not a Broker/Dealer but is a member of an
affiliated group of legal entities one of which is a Broker/
Dealer and a party to this Agreement, Agent and Broker/Dealer
agree that, with respect to SEC Registered Contracts, Agent and
Broker/Dealer have responsibility for the training and
supervision of all registered representatives of Broker/Dealer
and who are sub-agents of Agent and who are engaged directly
or indirectly in the offer or sale of such SEC Registered
Contracts and that all such representatives shall be subject to
the control of Agent and Broker/Dealer with respect to their
activities in connection with the SEC Registered Contracts.
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3.3 If Agent is neither an NASD Registered Broker-Dealer nor a member of
an affiliated group of legal entities one of which is a Broker/Dealer,
Agent and any sub-agents shall be registered representatives of
Hartford Equity Sales Company, Inc.
3.4 All other provisions of this Agreement apply to the sale of SEC
Registered Contracts.
4.0 COMPENSATION
4.1 Company will pay Agent as full compensation hereunder, commissions
and/or service fees on premiums paid to Company on account of
Contracts issued upon applications procured pursuant to this Agreement
and while this Agreement is in effect.
4.1.1 Commission and/or service fees will be paid in the amounts and
for the periods of time as set forth in the Commission
Schedules included in this Agreement or subsequently made a
part hereof, and which are in effect at the time such
Contracts are sold.
4.1.2 The Commission Schedules included in this Agreement are
subject to change by Company at any time, but only upon
written notice to Agent. No such change shall affect any
Contracts issued upon applications received by Company at
Company's Home Office prior to the effective date of such
change.
4.1.3 Any Commission Schedule included in this Agreement or
subsequently made a part hereof may provide other or
additional conditions regarding compensation and if so, will
be controlling to the extent of the other or additional
conditions.
4.2 Compensation will be earned by Agent only for those applications
accepted by Company, and only after receipt by Company at Company's
Home Office in Hartford, Connecticut, of the required premium and
compliance by Agent with any outstanding delivery requirements.
4.2.1 No compensation will be earned or paid on premiums (other than
premiums on health insurance contracts) waived by Company
pursuant to any "waiver of premium" provision.
4.2.2 Should Company for any reason return any premium on a policy
issued hereunder, Agent agrees to repay Company the total
amount of any compensation which may have been paid thereon
within thirty (30) business days of notice of such refund.
4.3 Any compensation otherwise payable to Agent in accordance with this
Section 4.0 shall be reduced by the amount, if any, of such
compensation paid directly, at the direction of Agent, by Company to
any person and appointed by Company and Agent or, in connection with
group policies, the amounts paid by Company to a resident licensed
agent in a state which requires the countersignature by, or the
effectuating of the insurance through, a resident licensed agent.
4.4 In the event of termination of this Agreement for one or more of the
reasons specified in Subparagraphs 7.2.2 or 7.2.3 below, no further
commissions or other compensation shall thereafter be payable.
4.5 In the event of termination in accordance with 7.1 below if in any
calendar year following such termination the aggregate commissions
payable hereunder for all life and health policies (not SEC regulated
contracts) total less than $100.00, no further commissions shall be
payable hereunder, other references to vesting to the contrary not
withstanding. This rule is not applicable to any SEC registered
equity product.
With respect to registered Contracts, if Agent is disqualified for
continued registration with the NASD, Company shall not be obligated
to pay any compensation, the payment of which would represent a
violation of NASD rules.
4.6 With respect to registered Contracts, if Agent is disqualified for
continued registration with the NASD, Company shall not be obligated
to pay any compensation, the payment of which would represent a
violation of NASD rules.
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<PAGE>
In such event, Company shall hold any commission otherwise due on any
Contract in force in "escrow" from the date of such disqualification
until the termination of any litigation or administrative proceedings
relating to such disqualification, provided Agent commences an appeal
to the NASD within 180 days following the disqualification notice and
actively pursues such appeal. Should Agent's registration in the NASD
be reinstated, all compensation due or becoming due Agent during the
period of disqualification shall be immediately paid, provided this
does not violate any NASD rules or regulations in effect at said time.
5.0 GENERAL PROVISIONS
5.1 Agent shall cooperate with Company in the investigation and
settlement of all claims against Agent and/or Company relating to the
solicitation or sale of Contracts under this Agreement. Agent shall
promptly forward to Company any notice of claim or other relevant
information which may come into Agent's possession.
5.2 Agent shall keep full and accurate records of the business transacted
by Agent under this Agreement and shall forward to Company such
reports of said business as Company may prescribe. Company shall have
the right to examine said records at reasonable times. All rate books,
manuals, forms, supplies and any other properties furnished by Company
and in the possession of Agent shall be returned to Company on
termination of this Agreement.
5.3 Agent shall bear all of Agent's expenses incurred in the performance
of this Agreement.
5.4 Agent shall have a duty to obtain applications for Company and, where
appropriate, to conserve and renew coverage placed with Company.
5.5 All applications for the purchase of Contracts shall be subject to
acceptance by Company. Company reserves the right to prescribe
conditions, rules and regulations for the offer and acceptance of its
Contracts, which may be changed from time to time and which shall be
forwarded to Agent.
5.6 Company reserves the right to modify, change or discontinue the
offering of any form of Contract at any time.
5.7 No waiver or modification of this Agreement will be effective unless
it be in writing and signed by a duly authorized officer of Company
and Agent or a duly authorized officer of Agent.
5.8 The failure of Company to enforce any provisions of this Agreement
shall not constitute a waiver of any such provision. The past waiver
of a provision by Company shall not constitute a course of conduct or
a waiver in the future of that same provision.
5.9 In the event any legal process or notice is served on Agent in a suit
or proceeding against Company, Agent shall forward forthwith such
process or notice to Company at its Home Office in Hartford,
Connecticut, by certified mail.
5.10 Agent shall not use any advertising material, prospectus, proposal, or
representation either in general or in relation to a Contract of
Company unless furnished by Company or until the consent of Company
shall have been first secured. Agent shall not issue or recirculate
any illustration, circular, statement or memorandum of any sort,
misrepresenting the terms, benefits or advantages of any Contract
issued by Company, or make any misleading statement as to dividends or
other benefits to be received thereon, or as to the financial position
of Company.
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<PAGE>
5.10.1 In regard to SEC Registered Contracts, Agent agrees not to
make written or oral representations except such as are
contained in current prospectuses and authorized supplementary
sales literature made available by Company. In respect to such
products Agent also agrees to comply with the Securities and
Exchange Commission Statement of Policy and the regulations
thereunder of the National Association of Securities Dealers,
Inc.
5.11 Agent shall indemnify and save Company harmless from any loss or
expense on account of any unauthorized act or transaction by Agent, or
persons employed or appointed by Agent, or any claim by a sub-agent of
Agent for compensation due or to become due on account of such sub-
agent's sale of Contracts.
5.11.1 Agent expressly authorizes Company to charge against all
compensation due or to become due to Agent under this
Agreement any monies paid or liabilities incurred by Company
under this Paragraph 5.11.
5.12 Agent shall not offer or pay any rebate of premium or make any offer
of any other inducement not specified in the Contracts to any person
to insure with Company. Agent shall not make any misrepresentation or
incomplete comparison for the purpose of inducing a policyholder in
any other company to lapse, forfeit or surrender its insurance
therein.
5.13 No assignment of this Agreement, or commissions payable hereunder,
shall be valid unless authorized in writing by Company. Every
assignment shall be subject to any indebtedness and obligation of
Agent that may be due or become due to Company and any applicable
state insurance regulations pertaining to such assignments.
5.14 Company may at any time deduct, from any monies due under this
Agreement, every indebtedness or obligation of Agent to Company.
5.14.1 On termination of this Agreement, any outstanding indebtedness
to Company shall become immediately due and payable.
6.0 LIMITATION OF AUTHORITY
6.1 Agent is not authorized, and is expressly forbidden on behalf of
Company, to incur any indebtedness or liability, or to make, alter or
discharge agreements, or to waive forfeitures, extend the time of
payment of any premium, waive payment in cash, or to receive any money
due or to become due Company, except as specifically provided in this
Agreement.
6.2 No individual Contract providing life, health or disability insurance
coverage shall be delivered if a sub-agent or Agent has knowledge that
the health of the proposed insured has changed since the application
was taken or unless the first premium has been fully paid and delivery
made by the delivery date specified by Company or, if no delivery date
is specified, within sixty (60) days from the date said Contract is
mailed from Company's Home Office.
6.2.1 Any Contract not delivered, in accordance with this Paragraph
6.2, shall be returned to Company immediately.
7.0 TERMINATION
7.1 This entire Agreement may be terminated by either party by giving
thirty (30) days' notice in writing to the other party.
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<PAGE>
7.1.1 Such notice of termination shall be mailed to the last known
address of Agent appearing on Company's records, or in the
event of termination by Agent, to the Home Office of Company
at P.O. Box 2999, Hartford, Connecticut 06104-2999.
7.1.2 Such notice shall be an effective notice of termination of
this Agreement as of the time the notice is deposited in the
United States mail or the time of actual receipt of such
notice if delivered by means other than mail.
7.2 This Agreement shall automatically terminate without notice upon the
occurrence of any of the events set forth below:
7.2.1 Upon the bankruptcy or dissolution of Agent provided, however,
that if there is more than one Agent, the Agreement shall
automatically terminate only with respect to the bankrupt or
dissolved Agent.
7.2.2 When and if Agent commits fraud or gross negligence in the
performance of any duties imposed upon Agent by this Agreement
or wrongfully withholds or misappropriates, for Agent's own
use, funds of Company, its policyholders or applicants.
7.2.3 When and if Agent materially breaches this Agreement or
materially violates the insurance or Federal or State
securities laws of a state in which Agent transacts business.
7.2.4 When and if Agent fails to obtain renewal of a necessary
license in any jurisdiction, but only as to that jurisdiction.
7.2.5 When and if Agent is disqualified for continued membership
with the NASD or registration with the Securities and Exchange
Commission, but only as to SEC registered Contracts.
7.3 The provisions of Sections 4.0 and 6.0 shall survive the termination
of this Agreement, as appropriate.
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<PAGE>
EXHIBIT 4(b)
INDIVIDUAL FLEXIBLE PREMIUM
VARIABLE ANNUITY CONTRACT
HARTFORD LIFE AND ACCIDENT 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 CANCEL
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. 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. If you request cancellation before you receive the contract, any
premium paid will be refunded in full.
Signed for the Company
/s/ Bruce D. Gardner /s/ Lowndes A. Smith
--------------------------- ---------------------------
Bruce D. Gardner, SECRETARY Lowndes A. Smith, PRESIDENT
Purchase 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 8,9 AND 10.
INDIVIDUAL FLEXIBLE PREMIUM VARIABLE ANNUITY CONTRACT
<PAGE>
CONTRACT SPECIFICATIONS
CONTRACT NUMBER SPECIMEN CONTRACT DATE FEBRUARY 8, 1992
NAME OF ANNUITANT JAMES SCOTT DATE OF ISSUE FEBRUARY 8, 1992
AGE OF ANNUITANT 35 ANNUITY COMMENCEMENT
DATE JANUARY 1, 2022
SEX OF ANNUITANT MALE INITIAL PREMIUM PAYMENT $20,000
MINIMUM SUBSEQUENT PAYMENT 500
MINIMUM FIXED ACCOUNT INTEREST RATE 4%
CONTINGENT ANNUITANT PAUL SCOTT
DESIGNATED BENEFICIARY ANN SCOTT CONTRACT OWNER
(IF OTHER THAN ANNUITANT) SAME
- - --------------------------------------------------------------------------------
FORM NUMBERS DESCRIPTION OF BENEFITS
HL-
A13363, A13354
A13355, 12427,
12428, 12429
12430, 12431, INDIVIDUAL FLEXIBLE PREMIUM VARIABLE ANNUITY CONTRACT
11894
THE INITIAL PREMIUM PAYMENT WILL BE ALLOCATED AS SPECIFIED IN YOUR APPLICATION.
THE SAME ALLOCATIONS 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: SEPARATE ACCOUNT TWO
SUB-ACCOUNT BASED ON:
AGGRESSIVE GROWTH FUND HVA AGGRESSIVE GROWTH FUND, INC.
STOCK FUND HVA STOCK FUND, INC.
INTERNATIONAL OPPORTUNITIES FUND HARTFORD INTERNATIONAL
OPPORTUNITIES FUND, INC.
ADVISERS FUND HVA ADVISERS FUND, INC.
INDEX FUND HARTFORD INDEX FUND, INC.
BOND/DEBT SECURITIES FUND HVA BOND FUND, INC.
GNMA/MORTGAGE SECURITIES FUND HARTFORD GNMA/MORTGAGE
SECURITIES FUND, INC.
MONEY MARKET FUND HVA MONEY MARKET FUND, INC.
OR OTHER FUNDS AS MAY BE MADE AVAILABLE FROM TIME TO TIME.
PAGE 3
<PAGE>
CONTRACT SPECIFICATIONS (continued)
CONTRACT OWNER SPECIMEN DATE OF ISSUE FEBRUARY 8, 1992
NAME OF ANNUITANT JAMES SCOTT ANNUITY COMMENCEMENT JANUARY 1, 2022
- - --------------------------------------------------------------------------------
CONTINGENT DEFERRED SALES CHARGES:
SUBJECT TO THE WITHDRAWAL PRIVILEGE, CONTINGENT DEFERRED SALES CHARGES ON
CONTRACTS WILL BE ASSESSED AGAINST CONTRACT VALUES WHEN SURRENDERED. THE LENGTH
OF TIME FROM RECEIPT OF THE PREMIUM PAYMENT TO THE TIME OF SURRENDER DETERMINES
THE CHARGE. FOR THIS PURPOSE, PREMIUM PAYMENTS WILL BE DEEMED TO BE SURRENDERED
IN THE ORDER IN WHICH THEY WERE RECEIVED AND ALL SURRENDERS WILL BE FIRST FROM
PREMIUM PAYMENTS AND THEN FROM OTHER CONTRACT VALUES. THIS CHARGE IS A
PERCENTAGE OF THE AMOUNT WITHDRAWN (NOT TO EXCEED THE AGGREGATE AMOUNT OF THE
PREMIUM PAYMENTS MADE) AND EQUALS:
LENGTH OF TIME FROM PREMIUM PAYMENT
CHARGE (NUMBER OF YEARS)
7% 1
6% 2
5% 3
4% 4
3% 5
2% 6
1% 7
0% 8 AND THEREAFTER
NO CONTINGENT DEFERRED SALES CHARGES WILL BE ASSESSED IN THE EVENT OF 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 WITHDRAWAL PRIVILEGE.
ANNUAL WITHDRAWAL PRIVILEGE AMOUNT: 10% OF PREMIUM PAYMENTS
ANNUAL CONTRACT MAINTENANCE FEE: $25
MORTALITY AND EXPENSE RISK CHARGE: 1.25% PER ANNUM OF THE AVERAGE DAILY CONTRACT
VALUE IN THE SUB-ACCOUNTS.
ADMINISTRATION CHARGE: .15% PER ANNUM OF THE AVERAGE DAILY CONTRACT VALUE.
SPECIFIED CONTRACT ANNIVERSARIES: EVERY 7TH ANNIVERSARY (i.e., THE 7TH, 14TH,
21ST, ETC. CONTRACT ANNIVERSARIES).
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.
ANNUITANT - The person on whose life this contract is issued.
ANNUITY 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 and Accident 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.
FUND(S) - Currently the Funds specified on Page 3.
GENERAL ACCOUNT - All assets of the Company other than those
allocated to the separate accounts of the Company.
HOME 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, Hartford, CT 06104-2999.
MINIMUM DEATH BENEFIT - The minimum amount payable upon the
death of an Annuitant or Contract Owner, as applicable, prior
to age 85 and before annuity payments have commenced.
Page 4
<PAGE>
DEFINITION OF
CERTAIN TERMS
(CONTINUED)
PREMIUM TAX - The amount of tax, if any, charged by a
state or municipality 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 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.
SPECIFIED CONTRACT ANNIVERSARIES - The Contract Anniversaries
shown on page 3.
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 Home Office of
the Company. Payments may be made by check payable to
Hartford Life and Accident 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.
The Contract Owner may transfer Contract Values held in the
Accounts into other Accounts; however, the Company reserves
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.
Page 5
<PAGE>
PREMIUM
PAYMENTS
(CONTINUED) 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/Withdrawal Privilege Provisions.
BENEFICIARY
The Designated Beneficiary will remain in effect until
changed by the Contract Owner. Changes in the Designated
Beneficiary may be made during the lifetime of the
Annuitant by written notice to the Home 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 Home 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 Annuitant is a joint Contract Owner and the
death of the Annuitant occurs prior to the Annuity
Commencement Date, the Beneficiary shall be the surviving
Contract Owner, notwithstanding that the Designated
Beneficiary may be different. Otherwise, the Beneficiary will
be the Designated Beneficiary then in effect. If there is no
Designated Beneficiary in effect or if the Designated
Beneficiary is no longer living, the Contract Owner will be the
Beneficiary. If the Annuitant is the sole Contract Owner and
there is no Designated Beneficiary in effect, the Annuitant's
estate will be the Beneficiary.
Page 6
<PAGE>
CONTRACT
CONTROL
PROVISIONS
(CONTINUED) 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.
MINIMUM VALUE STATEMENT
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.
Page 7
<PAGE>
GENERAL
PROVISIONS
(CONTINUED) 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 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. The Company 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 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. In the event that the
Contract Owner gives no instructions or leaves the manner of
voting 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, 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
Fund(s) become unavailable or due to changes in applicable
law or interpretations of law. Current law requires
notification to you of any such substitution and approved
of 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.
Page 8
<PAGE>
VALUATION
PROVISIONS
(CONTINUED) 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.
NET INVESTMENT FACTOR
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 was fixed at $1.00 on the date Fund shares
were originally purchased for the Sub-Accounts of the Separate
Account, and for any day thereafter is 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) 0.999892.
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.
Page 9
<PAGE>
VALUATION
PROVISIONS
(CONTINUED) 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 Home Office of
the Company. In such event, the Termination Value of the
contract may be taken in the form of a cash settlement.
The Termination Value of the contract is equal
to the Contract Value less:
(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 PRIVILEGE
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 Privilege Amount shown on Page 3 and the contingent
deferred sales charge will not be assessed against such
amounts.
Any withdrawal privilege amount surrenders will be deemed to be
from Contract Values other than premium payments. Surrender of
Contract Values in excess of the withdrawal privilege 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.
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 Option Four.
Page 10
<PAGE>
TERMINATION
PROVISIONS
(CONTINUED) 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.
The Company may defer payment of any amounts from the Fixed
Account for up to six months 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 4% 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 to the Beneficiary as
determined under the Contract Control Provisions. 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 Designated Beneficiary may be
different. The Death Benefit is calculated as of the date the
Company receives written notification of Due Proof of Death at
the Home Office of the Company.
If the deceased (the Annuitant or Contract Owner, as
applicable) had not yet attained age 85, the Death Benefit
will be the greatest of the following amounts:
(a) The Contract Value on the date of receipt of Due Proof
of Death at the Home Office of the Company;
(b) 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; or
(c) 100% of all premium payments made under the Contract,
reduced by the dollar amount of any partial
terminations since the Date of Issue.
If the deceased (the Annuitant or Contract Owner, as
applicable) had attained age 85, then the Death Benefit will
equal the Contract Value.
Page 11
<PAGE>
TERMINATION The death benefit may be taken in one sum or under any of the
PROVISIONS settlement options then being offered by the Company provided,
(CONTINUED) 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.
When payment is taken in one sum, payment will be made within
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.
SETTLEMENT ANNUITY COMMENCEMENT DATE
PROVISIONS
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.
ELECTION OF ANNUITY OPTION
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 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 4% 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.
Page 12
<PAGE>
SETTLEMENT
PROVISIONS
(CONTINUED) 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 or a combination of both. Once
every 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. Once variable annuity payments have begun,
the number of Annuity Units remains fixed with respect to a
particular 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 Day 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.
Page 13
<PAGE>
SETTLEMENT
PROVISIONS
(CONTINUED) * 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,
these options 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.
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 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.
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.
DESCRIPTION OF TABLES - The 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 4% per annum. The table for the Fourth Option is based
on an interest rate of 4% per annum.
For purposes of electing fixed annuity payments, the Contract
Owner may elect any of the tables established and offered by
the Company; provided, however, that no such election may be
changed with respect to any Annuitant following the
commencement of annuity payments.
Page 14
<PAGE>
Amount of First Monthly Payment
For Each $1,000 Applied
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.
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 $4.03 $4.02 $4.01 $3.99 $3.56 $3.66 $3.66 $3.84
40 4.22 4.21 4.19 4.16 4.01 4.00 3.99 3.98
45 4.47 4.44 4.41 4.36 4.19 4.18 4.17 4.15
50 4.79 4.74 4.68 4.60 4.44 4.42 4.39 4.36
51 4.65 4.61 4.74 4.65 4.50 4.47 4.45 4.40
52 4.94 4.88 4.60 4.71 4.56 4.53 4.50 4.45
53 5.02 4.95 4.87 4.76 4.62 4.59 4.56 4.50
54 5.10 5.03 4.94 4.82 4.69 4.66 4.52 4.56
55 5.19 5.11 5.01 4.88 4.76 4.72 4.68 4.61
56 5.29 5.20 5.09 4.94 4.84 4.80 4.74 4.67
57 5.39 5.29 5.17 5.00 4.92 4.87 4.81 4.73
58 5.48 5.38 5.25 5.06 5.00 4.95 4.88 4.79
59 5.61 5.48 5.33 5.12 5.09 5.03 4.95 4.85
60 5.73 5.59 5.42 5.18 5.19 5.12 5.04 4.91
61 5.66 5.70 5.51 5.24 5.29 5.22 5.12 4.96
62 6.00 5.82 5.60 5.31 5.40 5.32 5.21 5.05
63 6.16 5.95 5.69 5.37 5.52 5.42 5.30 5.11
64 6.32 6.08 5.79 5.43 5.65 5.53 5.39 5.18
65 6.49 6.21 5.89 5.48 5.75 5.65 5.49 5.25
66 6.68 6.35 5.96 5.64 5.92 5.77 5.58 5.32
67 6.88 6.50 6.08 5.59 6.08 5.90 5.69 5.39
68 7.09 6.65 6.15 5.64 6.24 6.04 5.79 5.45
69 7.91 6.81 6.26 5.69 6.42 6.18 5.90 5.51
70 7.56 6.97 6.37 5.73 6.61 6.34 6.01 5.58
75 9.05 7.83 6.80 5.89 7.83 7.21 6.54 5.82
80 11.15 8.65 7.10 5.97 9.65 8.19 6.97 5.94
</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 $3.62 $3.68 $3.73 $3.77 $3.81 $3.84 $3.67 $3.89 $3.90 $3.91
40 3.65 3.73 3.80 3.65 3.92 3.97 4.01 4.04 4.07 4.09
45 3.68 3.77 3.66 3.95 4.04 4.12 4.18 4.23 4.27 4.30
50 3.70 3.80 3.92 4.04 4.16 4.27 4.37 4.45 4.52 4.57
55 3.72 3.83 3.96 4.11 4.27 4.43 4.58 4.71 4.81 4.89
60 3.73 3.85 4.00 4.17 4.36 4.57 4.79 4.99 5.17 5.30
65 3.74 3.67 4.03 4.21 4.44 4.70 4.99 5.29 5.57 5.80
70 3.75 3.66 4.05 4.25 4.50 4.61 5.17 5.57 5.99 6.38
75 3.76 3.89 4.08 4.27 4.54 4.88 5.31 5.82 6.40 7.00
80 3.76 3.90 4.07 4.29 4.57 4.94 5.41 6.01 6.75 7.58
</TABLE>
FOURTH 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 Monthly of Monthly of Monthly of Monthly of Monthly of Monthly
Years Payments Years Payments Years Payments Years Payments Years Payments Years Payments
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5 $18.32 10 $10.05 15 $7.34 20 $6.00 25 $5.22 30 $4.72
6 15.56 11 9.31 16 7.00 21 5.81 26 5.10
7 13.59 12 8.69 17 6.71 22 5.64 27 5.00
8 12.12 13 8.17 18 6.44 23 5.49 28 4.90
9 10.97 14 7.72 19 6.21 24 5.35 29 4.80
</TABLE>
The monthly payment for any ages not shown will be quoted upon
request.
<PAGE>
[The Hartford Logo]
Hartford Life and Accident Insurance Company
P.O. Box 2999
Hartford, Connecticut 06104-2999
(a stock life insurance company)
Premium payments are flexible as described herein.
Nonparticipating
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT.
INDIVIDUAL FLEXIBLE PREMIUM
VARIABLE ANNUITY CONTRACT
<PAGE>
<TABLE>
<S> <C>
U.S.P.S.-First Class or Express-Mail to:
Hartford Life and Accident Insurance
Company
Application for [Logo] Attn: Broker/Dealer Operations-Director
Variable Annuity Contract P.O. Box 2999
Hartford, CT 06104-2999
Private Express Mail Carriers-Mail to:
200 Hopmeadow Street
Please Print Simsbury, CT 06089
- - ------------------------------------------------------------------------------------------------------------------------------------
CONTRACT OWNER Street, City, State, Zip Code Birthdate (Mo. Day Yr.)
/ / Male / /
/ / Female Tax ID/Social Security No.
- - ------------------------------------------------------------------------------------------------------------------------------------
JOINT CONTRACT OWNER (if any) Birthdate (Mo. Day Yr.)
/ / Male / /
/ / Female Tax ID/Social Security No.
- - ------------------------------------------------------------------------------------------------------------------------------------
ANNUITANT (If other than Contract Owner) Street, City, State, Zip Code Birthdate (Mo. Day Yr.)
/ / Male / /
/ / Female Tax ID/Social Security No.
- - ------------------------------------------------------------------------------------------------------------------------------------
SELECT ONE OR MORE SUB-ACCOUNTS
CONTINGENT ANNUITANT Relationship Please check /X/ and indicate whole % allocation
- - ------------------------------------------------------------------- / / Aggressive Growth Fund %
------
DESIGNATED BENEFICIARY Relationship / / Stock Fund %
------
- - ------------------------------------------------------------------- / / International Opportunities Fund %
------
CONTINGENT BENEFICIARY Relationship / / Advisers Fund %
------
- - ------------------------------------------------------------------- / / Index Fund %
------
FOR TAX-QUALIFIED PLANS Check appropriate boxes: / / Bond/Debt Securities Fund %
------
A. / / Initial / / Transfer / / Rollover / / GNMA/Mortgage Securities Fund %
------
B. / / IRA / / 403(b) / / 401(k) / / 401 (a) / / Other / / Money Market Fund %
-------- ------
C. / / Allocated Accounts / / Unallocated Accounts / / Fixed Account %
------
Tax Year for which initial contribution is being made / / Other %
------------- --------------------- ------
- - -------------------------------------------------------------------
ANNUITY COMMENCEMENT DATE (Optional) Initial Premium Payment $ Total 100 %
---------------------
The fifteenth day of , Make check payable to Hartford Life and Accident Insurance
----------- --------
(month) (year) Company
- - ------------------------------------------------------------------------------------------------------------------------------------
SPECIAL REMARKS
- - ------------------------------------------------------------------------------------------------------------------------------------
Will the annuity applied for replace one or more existing annuity or life insurance contracts? / / Yes / / No If yes, explain in
Have you purchased another Hartford annuity during the previous 12 months? / / Yes / / No 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 ARE NOT
GUARANTEED AS TO A FIXED DOLLAR AMOUNT.
/ / RECEIPT OF A VARIABLE ANNUITY AND FUND PROSPECTUS IS HEREBY ACKNOWLEDGED. If not checked, the appropriate prospectus will be
mailed to you.
------------------------------- -------------------
SIGNED AT ON
(Month, Day, Year)
Registered --------------------------------------------------------------
-------------------------------------------------
Representative (Contract Owner's signature)
(Print)
------------------------------------------------- --------------------------------------------------------------
(Signature) (Joint Contract Owner's signature)
MUST BE COMPLETED BY REGISTERED REPRESENTATIVE
Do you have reason to believe the contract applied for will replace existing annuities or insurance owned by
the annuitant? / / Yes / / No
See reverse to enroll in Dollar Cost Averaging and/or Automatic Withdrawal.
/ / Combo/Split Funded Annuity (single premium annuity certain) - See Prospectus for application
Registered ----------------- ----------------------- Broker/Dealer
-------------------------------------------------
----------------- ----------------------- Sales/Branch Office
Representative Code -------- -------------------------------------------
Field Office Code Staff Code Telephone
--------------------- -------- -----------------------------------------------------
</TABLE>
<PAGE>
CERTIFICATE AMENDING AND RESTATING
THE CERTIFICATE OF INCORPORATION
BY ACTION OF THE BOARD OF DIRECTORS AND SHAREHOLDERS
1. The Certificate of Incorporation of Hartford Life and Accident
Insurance Company (the "Corporation") is amended and restated by
the following resolution of the Board of Directors and Shareholders of
the Corporation:
RESOLVED, that the Certificate of Incorporation of the Corporation, as
supplemented and amended to date, is further amended and restated to read
as follows:
Section 1. The name of the Corporation is Hartford Life and Accident
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. Said corporation may make insurance upon lives, may grant
and issue annuities, either in connection with or separate from
contracts of insurance predicated upon life risks, may issue policies
stipulated to be with or without participation in profits, may issue
policies or certificates of insurance against loss of life or personal
injury resulting from any cause, and against loss resulting from
disease or accident, and against any other casualty or risk which may
be subject to life, accident or health insurance. Said corporation in
addition to the foregoing is authorized generally to do a life,
accident and health insurance business, and is authorized to insure
against any and all hazards against which life, accident and health
insurance companies are now, or may hereafter at any time be authorized
to insure by the laws of this state, or of any other state or territory
of the United States or foreign countries in which the company may be
licensed to carry on business.
Section 3. The capital stock of the Corporation shall consist of
eighty thousand (80,000) shares of common stock, two hundred and
fifty dollars ($250) par value per share for a total authorized
capital of twenty million dollars ($20,000,000).
2.(a) The above resolution merely restates and does not change the provisions
of the original Certificate of Incorporation as supplemented and
amended to date, except that:
- Section 1 has been amended to set forth the name of the
corporation and the powers granted to it under the Stock
Corporations Act.
<PAGE>
-2-
- Sections 3(b)-(o) are deleted.
- Sections 4-13 are deleted.
(b) Other than as indicated in Paragraph 2(a) above, there is no
discrepancy between the provisions of the original Certificate
of Incorporation as supplemented and amended to date and the
provisions of this Certificate Amending and Restating the
Certificate of Incorporation.
3. The above resolution was adopted by the Board of Directors and the
Shareholders of the Corporation. The number of shares entitled to vote
thereon was 10,000 and the vote required for adoption was 6,700 shares,
as the corporation has less than one hundred record holders. The vote
favoring adoption was 10,000
Dated at Simsbury, Connecticut this 31st day of October, 1989.
We hereby declare, under penalties of false statement, that the
statements made in the foregoing Certificate are true.
/s/ B. Gardner
____________________________________
Associate General Counsel & Director
/s/ [illegible]
___________________________________
Vice President
<PAGE>
By-Laws
of the
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
adopted at the
SUBSCRIBER'S FIRST MEETING
held
February 14, 1967
as amended at the
Stockholder's Meeting held on April 30, 1968,
February 8, 1971
August 4, 1978
February 24, 1983
and
February 29, 1984
<PAGE>
ARTICLE I
Stockholders and Stockholders' Meetings
Section 1. The annual meeting of the stockholders of the Hartford
Life and Accident Insurance Company shall be held at the office of the Company,
in the City of Hartford, Connecticut, on such day and at such hour of each year
as the Board of Directors may appoint for the election of Directors and such
other business as may properly come before said meeting. For sufficient cause
to them appearing, the Board of Directors may postpone or adjourn such annual
meeting to any other day or hour within any month of the year during which such
annual meeting is to be held. (as amended 2/29/84)
Section 2. Special meetings of the stockholders may be called at any
time by the Chairman of the Board of Directors or the President or, in the
absence of both, by any Vice-President.
Section 3. Written notice of every meeting of the stockholders and of
the time and place thereof shall be given by an Executive Officer of the Company
at least seven days prior to the time appointed for such meeting, which notice
shall also state in general terms the purpose or purposes for which the meeting
is called. Said requirements of notice shall be deemed to have been waived by
attendance at such meeting without protesting the lack of proper notice.
No business other than that stated in such notice shall be transacted
at such meeting if notice thereof is required to be given by law; but business
not required by law to be stated in such notice may be transacted.
Section 4. At every meeting of the stockholders the Chairman of the
Board of Directors or the President shall serve as Chairman of the meeting. A
Secretary of the Company shall serve as Clerk and shall keep minutes of the
proceedings at said meetings, which minutes shall be made a part of the
permanent records of the Company. Should such officers be absent or otherwise
unable to act as Chairman and Clerk of the meeting, the stockholders shall elect
a Chairman and Clerk by a voice vote.
Section 5. Each Stockholder shall be entitled to a certificate or
certificates for the number of shares of capital stock held by him, signed by
either the Chairman of the Board, the President, the Chairman of the Finance
Committee or a Vice President and by a Secretary or Assistant Secretary.
Transfers of stock shall be made upon the proper books of the Company in person
or by a duly authorized attorney.
<PAGE>
ARTICLE II
Directors
Section 1. The management of the property and affairs of the Company
shall be vested in the Board of Directors subject to the provisions of the
Charter of the Company, the acts amendatory thereof and these By-Laws.
Section 2. The number of Directors of the Company shall be not less
than nine nor more than twenty. Each Director shall serve for the term for
which he shall have been elected and until his successor shall have been chosen
and qualified and shall have accepted his election.
Section 3. When any vacancy shall occur in the membership of the
Board of Directors, due to resignation, death or otherwise, a majority of
Directors may choose a Director to fill such vacancy, such appointment to be
held to the expiration of the term of the class of Directors in which such
vacancy occurs. (as amended 2/24/83)
Section 4. Regular meeting of the Board of Directors shall be held at
such time and on such day as may be determined by the Board of Directors.
Notice of each such meeting shall be given to the Directors by a Secretary or
Assistant Secretary. When so requested by the Chairman of the Board of
Directors or by the President, or, in their absence, by the Chairman of the
Finance Committee or by any Vice President, special meetings shall be called by
a Secretary or Assistant Secretary. If notice of any such special meeting is
given to a majority of Directors, any meeting held pursuant to such notice shall
be legally held if a quorum is present.
Regular and special meetings of the Board of Directors shall be held
in the City of Hartford or such other place as may be designated by the Board of
Directors or the officer or Directors requesting any such meeting to be called.
The Directors may meet without notice immediately after the
adjournment of any annual meeting of the stockholders.
Section 5. Five members of the Board of Directors, present at a
regular or special meeting duly assembled shall constitute a quorum for the
transaction of business, and the action of a majority of Directors present at
such meeting shall be the act of the Board. The President of the Company shall,
at every meeting of the Board, be one of the Directors constituting a quorum,
except in the case of his illness or necessary absence, in which case the
Directors shall fill his place by electing one of their number as President for
the duration of such meeting. At every meeting of the Board, the presiding
officer of the meeting shall have the right to vote.
<PAGE>
Section 6. The Board may elect from its members a Chairman of the
Board of Directors who shall, when present, preside at all meetings of the Board
of Directors, shall perform such duties as may be assigned to him by the Board
of Directors and shall have such authority and powers as an executive officer of
the Company as may be granted to him by the Board of Directors. He shall,
unless earlier removed from such office by the Board of Directors, hold office
for one year and until a successor is elected in his stead by the Board.
Section 7. A Secretary of the Company designated by the Board of
Directors shall keep a record of meetings of the Board of Directors. In the
absence of a Secretary, another Secretary or an Assistant Secretary may be
directed by the Chairman of the Board, the President, the Chairman of the
Finance Committee or any Vice President to keep such records. Records of any
meeting of the Board of Directors in executive session shall be kept by one of
its members.
Section 8. The Board of Directors may be affirmative vote of the
majority of the whole Board appoint an Executive Committee of three or more
members of the Board of Directors, which Executive Committee shall, during the
intervals between the meetings of the Board of Directors, have authority to
exercise any and all of the powers of the Board of Directors. The members of
the Executive Committee shall, subject to prior removal by the Board of
Directors, hold office until the first meeting of the Board of Directors
following the next annual meeting of the stockholders and until their successors
have been appointed. In the event the Board of Directors shall not appoint an
Executive Committee, the Finance Committee shall have the power to exercise the
powers which would otherwise vest in such an Executive Committee.
The Board of Directors may also, by affirmative vote of the majority
of the whole Board, appoint such other committees from its own members as it may
deem advisable and delegate to such committees such of the powers of the Board
of Directors as it may deem judicious.
Section 9. The Board of Directors, by affirmative vote of a majority
of the whole Board, shall annually appoint a Finance Committee of three or more
members of the Board of Directors, one of whom shall be the Chairman of the
Finance Committee elected as such as hereinafter provided. Appointments to the
Finance committee may be revoked and new appointments may be made by the Board
of Directors at any time in its discretion. The Finance Committee shall have
the power and it shall be its duty to supervise and manage the finances of the
Company and it shall have and discharge such other powers and duties as are
granted and imposed upon it by these By-Laws or by the Board of Directors. Such
powers and duties shall include, but not by way of limitation, the direction of
the mode, manner and time of making investments, the sale, transfer, and
<PAGE>
exchange of investments, and the re-investment of the proceeds thereof. The
Finance Committee may decide what number of its members shall constitute a
quorum for the transaction of business provided such quorum shall consist of not
less than three members. A record of the meetings of the Finance Committee
shall be kept and reported to the Board of Directors and the Finance Committee
shall make such other reports to the Board of Directors concerning the funds,
securities and investments of the Company as may be requested by the Board of
Directors.
Section 10. The Board of Directors may, from time to time, make and
declare such dividends to the Stockholders out of the Company's earnings or
surplus as it may deem expedient.
Section 11. Each Director, Officer and employee of the Company, and his
heirs, executors or administrators, shall be indemnified or reimbursed by the
Company for all expenses necessarily incurred by him in connection with the
defense or reasonable settlement of any action, suit or proceeding in which he
is made a party by reason of his being or having been a Director, Officer or
employee of the Company, except in relation to matters as to which such
Director, Officer or employee is finally adjudged in such action, suit or
proceeding to be liable for negligence or misconduct in the performance of his
duties as such Director, Officer or employee. The foregoing right of
indemnification or reimbursement shall not be exclusive of any other rights to
which he may be entitled under any statute, by-law, agreement, vote of
stockholders or otherwise.
Section 12. The Board of Directors may, be affirmative vote of a
majority of the whole Board, fix the compensation to be paid each of them for
attending meetings of the Board, provided that such compensation shall not
exceed One Hundred Dollars ($100.00) for each meeting attended and provided
further that if it should be decided, by a similar vote, to pay such
compensation on an annual basis such compensation shall not exceed Eighteen
Hundred Dollars ($1,800.00) annually for each Director. The Board of Directors
may also, by a similar vote, fix the compensation to be paid a Director for
special services performed by him as a member of a committee of the Board or
otherwise performed by him at the request of the Board.
ARTICLE III
Funds
Section 1. All monies belonging t 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
<PAGE>
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 Fiance 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 to be signed by only one such authorized 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.
ARTICLE IV
Officers
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 and, if there is a Finance Committee, the Board of Directors
shall elect one of its members to serve as Chairman of such Committee. 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 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. (as
amended 2/29/84)
Section 2. The President shall have the general care, oversight and
supervision of the affairs of the Company, subject to the direction of the Board
of Directors.
Section 3. The Vice Presidents shall perform such duties as may be
assigned to them, and exercise such powers as may be granted to them by the
Board of Directors, the Chairman of the Board of directors or by the President
of the Company. In the absence of
<PAGE>
the President, or when he is unable to act, the Board of Directors may designate
the Chairman of the Board or any Vice President to perform the duties imposed
upon and to exercise all of the powers granted to, the President, as the
emergencies of the Company may require.
Section 4. The President, Chairman of the Finance Committee or any
Vice Presidents shall have power and authority to execute for and on behalf of
the Company any and all instruments relating to the property, funds and
securities of the Company, including but not by way of limitation, contracts,
transfers, assignments, powers of attorney, deeds, conveyances, endorsements and
releases of or by the Company. Any such officer or his appointee shall also
have power to represent the interests of the Company at any meeting of any
corporation, association or other interests, the stock or obligations of which
are hold by the Company, or he may execute a proxy therefor.
Section 5. The Secretaries and Assistant Secretaries shall perform
such duties as may be assigned to them by the Board of Directors, the Chairman
of 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 other Executive Officer to any and all instruments.
Section 6. The President or any Vice President acting with any
Secretary or Assistant Secretary shall have the power to sign and execute on
behalf of the Company any and all policies or contracts of insurance or
reinsurance, together with endorsements, riders or other instruments relating or
applicable thereto, and any such policies or contracts of insurance or
reinsurance, and endorsements, riders or other instruments relating thereto, so
signed and executed, with or without the common seal, shall be valid and binding
upon the Company. The signatures of such officers may be affixed to any such
instruments by a facsimile, and any such instruments bearing such facsimile
signatures shall be valid and binding upon the Company provided they shall also
have been countersigned by a duly authorized representative or agent of the
Company. Any Executive Officer of the Company shall have power to authorize or
to terminate the authorization of, any representative or agent of the Company to
so countersign any such instruments or to otherwise represent or act on behalf
of the Company in the exercise of such power and authority as may be vested in
such representative or agent.
<PAGE>
ARTICLE V
Seal, Amendments, Definitions and Repeal
Section 1. The Corporate Seal shall carry the name of the Company and
may be changed from time to time by the Officers of the Company.
Section 2. These By-Laws may be altered, repealed or amended or
additional By-Laws may be enacted at any annual or special meeting of the
stockholders, provided that notice thereof be given in the notice of such
meeting.
Subject to these By-Laws and the Charter of the Company, the Directors
shall have power to make such By-Laws, rules and regulations, not inconsistent
with the laws of the State of Connecticut or with these By-Laws, as may be
deemed necessary for the management of the property and affairs of the Company,
the government of the officers, the transfer of its stock and the conduct of
meetings of the stockholders of the Company and Directors, and the Directors
shall have power to alter and amend By-Laws as made by them.
Section 3. The use of the word "person" or "persons" in these By-Laws
shall be taken to mean and include persons, firms associations and corporations
and the use of the masculine pronoun shall be taken to mean and include the
masculine, feminine and neuter.
STATE OF CONNECTICUT)
) ss. Hartford, Connecticut
COUNTY OF HARTFORD )
This is to certify that the foregoing is a true copy of the By-Laws of
Hartford Life and Accident Insurance Company and that they are in full force and
effect at this date.
ATTEST:
_______________________________________
Secretary
<TABLE> <S> <C>
<PAGE>
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