<PAGE>
File No. 33-46160
Securities and Exchange Commission
Washington, D.C.
Form N-4
Registration Statement Under the Securities Act of 1933
----
Pre-Effective Amendment No. / /
---- -----
----
Post-Effective Amendment No. 5 / X /
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and/or
Registration Statement Under the Investment Company Act of 1940
Amendment No. 5
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(check appropriate box or boxes)
Hartford Life and Accident Insurance Company -
Putnam Capital Manager Trust Separate Account One
(Exact Name of Registrant)
Hartford Life and Accident Insurance Company
(Name of Depositor)
P.O. Box 2999
Hartford, CT 06104-2999
(Address of Depositor's Principal Offices)
Depositor's Telephone Number: (203) 843-8847
Rodney J. 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.
<PAGE>
-2-
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 May 1, 1995 pursuant to paragraph (a)(2) of Rule 485
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
Insurance Company - Putnam the Investment Company Act of 1940,
Capital Manager Trust Registrant hereby elects to register
Separate Account One Units an indefinite number of units of interest
of Interest in this Separate Account.
- - ------------------------------------------------------------------------------
The Rule 24f-2 Notice for the Registrant's most recent fiscal year was filed on
or about February 28, 1995.
<PAGE>
-3-
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(a)
N-4 Item No. Prospectus Heading
------------ ------------------
1. Cover Page Cover Page
2. Definitions Glossary of Special Terms
3. Synopsis or Highlights Summary
4. Condensed Financial Info. Statement of Additional Information
5. General Description of The Contract; The Separate Account
Registrant, Depositor, and One; The Fixed Account; The Company;
Portfolio Companies The Funds; General Matters
6. Deductions Charges Under the Contract
7. General Description of Operation of the Contract; Accumulation
Annuity Contracts Period; Death Benefit; The Contract; The
Separate Account One; General Matters
8. Annuity Period Annuity Benefits
9. Death Benefit Death Benefit
10. Purchases and Contract Value Operation of the Contract/Accumulation
Period
11. Redemptions Operation of the Contract/Accumulation
Period
12. Taxes Federal Tax Considerations
13. Legal Proceedings General Matters - Legal Proceedings
14. Table of Contents of the Table of Contents to Statement of
Statement of Additional Additional Information
Information
<PAGE>
-4-
PART A
<PAGE>
-5-
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY--
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT ONE
This Prospectus describes the Putnam Capital Manager Plan, a tax deferred
variable annuity issued by Hartford Life and Accident Insurance Company
("HL&A"). Payments for the contract will be held in a series of Hartford Life
and Accident Insurance Company - Putnam Capital Manager Trust Separate Account
One (the "Putnam Separate Account One" or the "Separate Account") and in the
Fixed Account of HL&A. Allocations to and transfers to and from the Fixed
Account are not permitted in certain states.
There are currently ten Sub-Accounts available under the contract. The
underlying investment portfolios ("Funds") of Putnam Capital Manager Trust for
the Sub-Accounts are PCM Diversified Income Fund, PCM Global Asset Allocation
Fund, PCM Global Growth Fund, PCM Growth and Income Fund, PCM High Yield Fund,
PCM Money Market Fund, PCM New Opportunities Fund, PCM U.S. Government and High
Quality Bond Fund, PCM Utilities Growth and Income Fund and PCM Voyager Fund.
This Prospectus sets forth the information concerning the Separate Account and
the Fixed Account that investors should know before investing. This Prospectus
should be kept for future reference. Additional information about the Separate
Account and the Fixed Account has been filed with the Securities and Exchange
Commission and is available without charge upon request. To obtain the
Statement of Additional Information send a written request to Hartford Life and
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 into this Prospectus.
- - --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- - --------------------------------------------------------------------------------
THIS PROSPECTUS IS ACCOMPANIED BY A CURRENT PROSPECTUS FOR PUTNAM CAPITAL
MANAGER TRUST AND IS VALID ONLY WHEN ACCOMPANIED BY A CURRENT PROSPECTUS FOR
THE TRUST.
- - --------------------------------------------------------------------------------
VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR
GUARANTEED BY, ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE PROTECTED
BY THE FDIC, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY; THEY ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
- - --------------------------------------------------------------------------------
Prospectus Dated: May 1, 1995
Statement of Additional Information Dated: May 1, 1995
<PAGE>
-6-
TABLE OF CONTENTS
SECTION PAGE
- - ------- ----
GLOSSARY OF SPECIAL TERMS. . . . . . . . . . . . . . . . . . . . . . . .
FEE TABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ACCUMULATION UNIT VALUES . . . . . . . . . . . . . . . . . . . . . . . .
PERFORMANCE RELATED INFORMATION. . . . . . . . . . . . . . . . . . . . .
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right to Cancel Period. . . . . . . . . . . . . . . . . . . . . . .
THE SEPARATE ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . .
THE FIXED ACCOUNT. . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OPERATION OF THE CONTRACT/ACCUMULATION PERIOD. . . . . . . . . . . . . .
Premium Payments. . . . . . . . . . . . . . . . . . . . . . . . . .
Value of Accumulation Units . . . . . . . . . . . . . . . . . . . .
Value of the Fixed Account. . . . . . . . . . . . . . . . . . . . .
Value of the Contract . . . . . . . . . . . . . . . . . . . . . . .
Transfers Among Sub-Accounts. . . . . . . . . . . . . . . . . . . .
Transfers Between the Fixed Account and the Sub-Accounts. . . . . .
Redemption/Surrender of a Contract. . . . . . . . . . . . . . . . .
<PAGE>
-7-
DEATH BENEFIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHARGES UNDER THE CONTRACT . . . . . . . . . . . . . . . . . . . . . . .
Contingent Deferred Sales Charges . . . . . . . . . . . . . . . . .
Free Withdrawal Privilege . . . . . . . . . . . . . . . . . . . . .
Mortality and Expense Risk Charge . . . . . . . . . . . . . . . . .
Administration and Maintenance Fees . . . . . . . . . . . . . . . .
Premium Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .
ANNUITY BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annuity Options . . . . . . . . . . . . . . . . . . . . . . . . . .
The Annuity Unit and Valuation. . . . . . . . . . . . . . . . . . .
Determination of Payment Amount . . . . . . . . . . . . . . . . . .
FEDERAL TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxation of HL&A and the Separate Account . . . . . . . . . . . . .
Taxation of Annuities in General - Non-Tax Qualified Purchasers . .
Federal Income Tax Withholding. . . . . . . . . . . . . . . . . . .
General Provisions Affecting Tax-Qualified Plans. . . . . . . . . .
Aggregation of Two or More Annuity Contracts. . . . . . . . . . . .
GENERAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Modification. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Delay of Payments . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
-8-
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution of the Contracts . . . . . . . . . . . . . . . . . . .
Other Contracts Offered . . . . . . . . . . . . . . . . . . . . . .
Custodian of Separate Account Assets. . . . . . . . . . . . . . . .
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . .
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional Information. . . . . . . . . . . . . . . . . . . . . . .
APPENDIX I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TABLE OF CONTENTS TO STATEMENT OF ADDITIONAL INFORMATION . . . . . . . .
<PAGE>
-9-
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.
For group unallocated contracts, the date for each Participant is determined by
the Contract Owner in accordance with the terms of the Plan.
ANNUITY UNIT: An accounting unit of measure used to calculate the value of
Annuity payments.
BENEFICIARY: The person(s) who receive Contract Values in the event of the
Annuitant's or Contract Owner's death under certain conditions. Under a group
unallocated contract, the person named within the Plan documents/enrollment
forms by each Participant entitled to receive benefits as per the terms of the
contract in case of the death of the Participant.
CODE: The Internal Revenue Code of 1986, as amended.
COMMISSION: Securities and Exchange Commission.
CONTINGENT ANNUITANT: The person so designated by the Contract Owner, who upon
the Annuitant's death, prior to the Annuity Commencement Date, becomes the
Annuitant.
CONTRACT ANNIVERSARY: The anniversary of the Contract Date.
CONTRACT OWNER(S): The owner(s) of the contract, trustee or other entity,
sometimes herein referred to as "you".
CONTRACT VALUE: The aggregate value of any Sub-Account Accumulation Units held
under the contract plus the value of the Fixed Account.
CONTRACT YEAR: A period of 12 months commencing with the Contract Date or any
anniversary thereof.
DEATH BENEFIT: The amount payable upon the Death of a Contract Owner,
Annuitant, or Participant in the case of group contracts before annuity payments
have started.
<PAGE>
-10-
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: Currently, the portfolios of Putnam Capital Manager Trust described on
page ___ of this Prospectus.
GENERAL ACCOUNT: The General Account of HL&A which consists of all assets of
the Hartford Life and Accident Insurance Company other than those allocated to
the separate accounts of the Hartford Life and Accident Insurance Company.
HL&A: Hartford Life Insurance Company.
HOME OFFICE OF THE COMPANY: Currently located at 200 Hopmeadow Street,
Simsbury, Connecticut. All correspondence concerning the contract should be
sent to P.O. Box 5085, Hartford, CT 06102-5085, Attn: Individual Annuity
Operations.
MINIMUM DEATH BENEFIT: The minimum amount payable upon the death of the
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: A payment made to HL&A pursuant to the terms of the contract.
PREMIUM TAX: A tax charged by a state or municipality on Premium Payments or
Contract Values.
SEPARATE ACCOUNT: The HL&A separate account entitled "Hartford Life and
Accident Insurance Company - Putnam Capital Manager Trust Separate Account One".
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.
<PAGE>
-11-
TERMINATION VALUE: The Contract Value upon termination of the contract prior to
the Annuity Commencement Date, less any applicable Premium Taxes, the Annual
Maintenance Fee and any applicable contingent deferred sales charges.
TRUST: Putnam Capital Manager Trust.
UNALLOCATED CONTRACTS: Contracts issued to employers or such other entities as
Contract Owners with no allocation to a specific Participant, as defined herein.
The Plans will be responsible for the individual allocations.
VALUATION DAY: Every day the New York Stock Exchange is open for trading. The
value of the Separate Account is determined at the close of the New York Stock
Exchange (currently 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
VARIABLE ANNUITY: An Annuity providing for payments varying in amount in
accordance with the investment experience of the assets of the Separate Account.
<PAGE>
SUMMARY
Contract Owner Transaction Expense
(All Sub Accounts)
<TABLE>
<S> <C>
Sales Load Imposed on Purchase (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%
Administration Fees 0.150%
-----
Total 1.400%
</TABLE>
Annual Fund Operating Expense
(as a percentage of net assets)
<TABLE>
Total Fund
Management Other Operating
Fees Expenses Expenses
---------- -------- ----------
<S> <C> <C> <C>
PCM Growth and Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.57% 0.05% 0.62%
PCM High Yield Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.66% 0.08% 0.74%
PCM Global Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.60% 0.17% 0.77%
PCM Money Market Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.42% 0.13% 0.55%
PCM Global Asset Allocation Fund . . . . . . . . . . . . . . . . . . . . . . . . 0.66% 0.10% 0.76%
PCM U.S. Government and High Quality Bond Fund . . . . . . . . . . . . . . . . . 0.60% 0.07% 0.67%
PCM Utilities Growth and Income Fund . . . . . . . . . . . . . . . . . . . . . . 0.60% 0.08% 0.68%
PCM Voyager Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.63% 0.08% 0.71%
PCM Diversified Income Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 0.67% 0.13% 0.80%
PCM New Opportunities Fund (3) . . . . . . . . . . . . . . . . . . . . . . . . . 0.70% 0.01% 0.71%
<FN>
(1) Length of time from premium payment.
(2) The annual maintenance charge 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 maintenance charge is approximated as a
0.07% annual asset charge based on the experience of the Contracts.
(3) Annualized expenses.
</TABLE>
<PAGE>
EXAMPLE
<TABLE>
<CAPTION>
If you surrender your contract at If you annualize 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 5%
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>
PCM Growth and Income Fund . . . . . . . $91 $116 $143 $244 $21 $65 $113 $243
PCM High Yield Fund. . . . . . . . . . . 93 120 150 257 22 69 119 256
PCM Global Growth Fund . . . . . . . . . 93 121 151 260 22 70 120 259
PCM Money Market Fund. . . . . . . . . . 91 114 140 237 20 63 109 236
PCM Global Asset Allocation Fund . . . . 93 120 151 259 22 70 120 258
PCM U.S. Government and High Quality
Bond Fund. . . . . . . . . . . . . . . 92 118 146 249 21 67 115 248
PCM Utilities Growth and Income Fund . . 92 118 147 250 21 67 116 249
PCM Voyager Fund . . . . . . . . . . . . 92 119 148 253 22 66 117 252
PCM Diversified Income Fund. . . . . . . 93 122 153 263 23 71 122 262
PCM New Opportunities Fund (3) . . . . . 92 119 148 253 22 68 117 252
<CAPTION>
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>
PCM Growth and Income Fund . . . . . . . $21 $66 $113 $244
PCM High Yield Fund. . . . . . . . . . . 23 70 120 257
PCM Global Growth Fund . . . . . . . . . 23 71 121 260
PCM Money Market Fund. . . . . . . . . . 21 64 110 237
PCM Global Asset Allocation Fund . . . . 23 70 121 259
PCM U.S. Government and High Quality
Bond Fund. . . . . . . . . . . . . . . 22 68 116 249
PCM Utilities Growth and Income Fund . . 22 68 117 250
PCM Voyager Fund . . . . . . . . . . . . 22 69 118 253
PCM Diversified Income Fund. . . . . . . 23 72 123 263
PCM New Opportunities Fund (3) . . . . . 22 69 118 253
<FN>
The purpose of this table is to assist the contract owner in understanding
various costs and expenses that a contract owner will bear directly or
indirectly. The table reflects expenses of the Separate Accounts and underlying
Funds. Premium taxes may also be applicable.
This EXAMPLE should not be considered a representation of pasted or future
expenses and actual expenses may be greater or less than those shown.
</TABLE>
<PAGE>
-12-
SUMMARY
WHAT IS THE CONTRACT AND HOW MAY I PURCHASE ONE?
The contract offered is a tax deferred Variable Annuity contract (see "Taxation
of Annuities in General," page ____). Generally, the contract is purchased by
completing an application or an order to purchase a contract and submitting it,
along with the initial Premium Payments, to HL&A for its approval. The minimum
initial Premium Payment is $1,000 with a minimum allocation to any Fund of $500.
Certain plans may make smaller initial and subsequent periodic premium payments.
Subsequent Premium Payments, if made, must be a minimum of $500. A Contract
Owner may, at any time within 10 days of delivery of a contract sold hereunder,
return the contract to HL&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 premiums (see "Right
to Cancel Period," page ____).
WHO MAY PURCHASE THE CONTRACT?
Any individual, group or trust may purchase the Contracts, including any trustee
or custodian for a retirement plan which qualifies for special federal tax
treatment under the Internal Revenue Code including individual retirement
annuities. (See "Federal Tax Considerations" commencing on page ____ and
Appendix I commencing on page ___.)
WHAT TYPES OF INVESTMENTS ARE AVAILABLE UNDER THE CONTRACT?
The underlying investments for the contract are shares of Putnam Capital Manager
Trust, an open-end diversified series investment company with multiple
portfolios ("the Funds") as follows: PCM Diversified Income Fund, PCM Global
Asset Allocation Fund, PCM Global Growth Fund, PCM Growth and Income Fund, PCM
High Yield Fund, PCM Money Market Fund, PCM New Opportunities Fund, PCM U.S.
Government and High Quality Bond Fund, PCM Utilities Growth and Income Fund, PCM
Voyager Fund, and such other Funds as shall be offered from time to time, and
the Fixed Account, or a combination of the Funds and the Fixed Account. (See
"The Funds" commencing on page ____ and "The Fixed Account" commencing on
page ____.)
<PAGE>
-13-
WHAT ARE THE CHARGES UNDER THE CONTRACTS?
SALES EXPENSES
There is no deduction for sales expenses from Premium Payments when made.
However, a contingent deferred sales charge may be assessed against
Contract Values when they are surrendered. (See "Contingent Deferred Sales
Charges" commencing on page ____.)
The length of time from receipt of a Premium Payment to the time of
surrender determines the contingent deferred sales charge. For this
purpose, Premium Payments will be deemed to be surrendered in the order in
which they are received and all surrenders will be first from Premium
Payments and then from other Contract Values. The charge is a percentage
of the amount withdrawn (not to exceed the aggregate amount of the Premium
Payments made). The charge is as follows:
Length of Time from Premium Payment
Charge (Number of Years)
------ -----------------
7% 1
6% 2
5% 3
4% 4
3% 5
2% 6
1% 7
0% 8 or more
No contingent deferred sales charge will be assessed in the event of death
of the Annuitant or Contract Owner, or upon the exercise of the withdrawal
privilege or if Contract Values are applied to an Annuity option provided
for under the contract (except that a surrender out of Annuity Option Four
will be subject to a contingent deferred sales charge where applicable).
(See "Contingent Deferred Sales Charges" commencing on page ____.)
FREE WITHDRAWAL PRIVILEGE
Withdrawals of up to 10% per Contract Year, on a noncumulative basis, of
the Premium Payments made to a contract may be made without the imposition
of the contingent deferred sales charge. (See "Contingent Deferred Sales
Charges" commencing on page ___.) Certain plans or programs may have
different withdrawal privileges.
<PAGE>
-14-
MORTALITY AND EXPENSE RISKS
For assuming the mortality and expense risks under the contract, HL&A will
impose a 1.25% per annum charge against all Contract Values held in the
Sub-Accounts, except the Fixed Account (see "Mortality and Expense Risk
Charge," page ____).
ANNUAL ADMINISTRATION AND MAINTENANCE FEE
The contract provides for administration and contract maintenance charges.
For administration, the charge is .15% per annum against all Contract
Values held in the Separate Account. For contract maintenance, the charge
is $25 annually. (See "Administration and Maintenance Fees," page ____.)
Contracts with a Contract Value of $50,000 or more at time of Contract
Anniversary will not be assessed this fee.
PREMIUM TAXES
A deduction will be made for Premium Taxes for contracts sold in certain
states. (See "Premium Taxes," page ____.)
CHARGES BY THE FUNDS
The Funds are subject to certain fees, charges and expenses. (See the
Prospectus for the Trust attached hereto.)
CAN I GET MY MONEY IF I NEED IT?
Subject to any applicable charges, the contract may be surrendered, or portions
of the value of such contract may be withdrawn, at any time prior to the Annuity
Commencement Date. However, if less than $500 remains in a contract as a result
of a withdrawal, HL&A may terminate the contract in its entirety. (See
"Redemption/Surrender of a Contract," page ____.)
DOES THE CONTRACT PAY ANY DEATH BENEFITS?
A minimum death benefit is provided in the event of death of the Annuitant or
Contract Owner prior to age 85 and before Annuity payments have commenced. (See
"Death Benefit," commencing on page ____.)
WHAT ARE THE AVAILABLE ANNUITY OPTIONS UNDER THE CONTRACT?
There are five available Annuity options under the Contract which are described
on page ____. The Annuity Commencement Date may not be deferred beyond the
Annuitant's 90th birthday except in certain states where the Annuity
Commencement Date may not be deferred beyond the Annuitant's 85th birthday. If
a Contract Owner does not elect otherwise, the Contract Value less
<PAGE>
ACCUMULATION UNIT VALUES
(For an accumulation unit outstanding throughout the period)
The following information has been examined by Arthur Andersen & Co.,
independent public accountants, whose report thereon is included in the
Statement of Additional Information, which is incorporated by reference to this
Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
VOYAGER FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . . . . . . . . . . . . $23.530 $20.102 $17.335 (a)
Accumulation unit value at end of period . . . . . . . . . . . . . . . . . . . . $23.445 $23.530 $20.102
Number of accumulation units outstanding at end of period (in thousands) . . . . 128 78 1,010
GROWTH AND INCOME FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . . . . . . . . . . . . $20.390 $18.096 $17.662 (a)
Accumulation unit value at end of period . . . . . . . . . . . . . . . . . . . . $20.178 $20.390 $18.096
Number of accumulation units outstanding at end of period (in thousands) . . . . 244 176 2,507
GLOBAL ASSET ALLOCATION SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . . . . . . . . . . . . $16.988 $14.665 $14.128 (a)
Accumulation unit value at end of period . . . . . . . . . . . . . . . . . . . . $16.335 $16.988 $14.665
Number of accumulation units outstanding at end of period (in thousands) . . . . 77 45 563
HIGH YIELD FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . . . . . . . . . . . . $17.890 $15.173 $14.582 (a)
Accumulation unit value at end of period . . . . . . . . . . . . . . . . . . . . $17.476 $17.890 $15.173
Number of accumulation units outstanding at end of period (in thousands) . . . . 42 32 737
U.S. GOVERNMENT AND HIGH QUALITY BOND FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . . . . . . . . . . . . $16.277 $14.833 $14.229 (a)
Accumulation unit value at end of period . . . . . . . . . . . . . . . . . . . . $15.533 $16.277 $14.833
Number of accumulation units outstanding at end of period (in thousands) . . . . 78 93 1,701
MONEY MARKET FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . . . . . . . . . . . . $ 1.294 $ 1.277 $ 1.266 (a)
Accumulation unit value at end of period . . . . . . . . . . . . . . . . . . . . $ 1.325 $ 1.294 $ 1.277
Number of accumulation units outstanding at end of period (in thousands) . . . . 69 97 2,458
GLOBAL GROWTH FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . . . . . . . . . . . . $13.432 $10.289 $10.717 (a)
Accumulation unit value at end of period . . . . . . . . . . . . . . . . . . . . $13.119 $13.432 $10.289
Number of accumulation units outstanding at end of period (in thousands) . . . . 161 105 750
UTILITIES GROWTH AND INCOME FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . . . . . . . . . . . . $11.876 $10.618 $10.054 (a)
Accumulation unit value at end of period . . . . . . . . . . . . . . . . . . . . $10.889 $11.876 $10.618
Number of accumulation units outstanding at end of period (in thousands) . . . . 92 105 1,904
DIVERSIFIED INCOME FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . . . . . . . . . . . . $10.000 $10.000 (b) --
Accumulation unit value at end of period . . . . . . . . . . . . . . . . . . . . $ 9.622 $10.188 --
Number of accumulation units outstanding at end of period (in thousands) . . . . 39 4,428 --
NEW OPPORTUNITIES FUND SUB-ACCOUNT
Accumulation unit value at beginning of period . . . . . . . . . . . . . . . . . $10.000 (c)
Accumulation unit value at end of period . . . . . . . . . . . . . . . . . . . . $10.718
Number of accumulation units outstanding at end of period (in thousands) . . . . 7
<FN>
(a) Inception date, July 1, 1992.
(b) Inception date, September 15, 1993
(c) Incaption date, June 20, 1994.
</TABLE>
<PAGE>
-15-
applicable premium taxes will be applied on the Annuity Commencement Date under
the second option to provide a life annuity with 120 monthly payments certain.
DOES THE CONTRACT OWNER HAVE ANY VOTING RIGHTS UNDER THE CONTRACT?
Contract Owners will have the right to vote on matters affecting an underlying
Fund to the extent that proxies are solicited by such Fund. If a Contract Owner
does not vote, HL&A shall vote such interests in the same proportion as shares
of the Fund for which instructions have been received by HL&A. (See "Voting
Rights," page ____.)
PERFORMANCE RELATED INFORMATION
The Separate Account may advertise certain performance related information
concerning its Sub-Accounts. Performance information about a Sub-Account is
based on the Sub-Account's past performance only and is no indication of future
performance.
The PCM Diversified Income Fund, PCM Global Asset Allocation Fund, PCM Global
Growth Fund, PCM Growth and Income Fund, PCM High Yield Fund, PCM Money Market
Fund, PCM New Opportunities Fund, PCM U.S. Government and High Quality Bond
Fund, PCM Utilities Growth and Income Fund and PCM Voyager Fund Sub-Accounts may
include total return in advertisements or other sales material.
When a Sub-Account advertises its total return, it will usually be calculated
for one year, five years, and ten years or some other relevant periods if the
Sub-Account has not been in existence for at least ten years. Total return is
measured by comparing the value of an investment in the Sub-Account at the
beginning of the relevant period to the value of the investment at the end of
the period (assuming the deduction of any contingent deferred sales charge which
would be payable if the investment were redeemed at the end of the period).
The PCM Diversified Income Fund, PCM Global Asset Allocation Fund, PCM Growth
and Income Fund, PCM High Yield Fund, PCM U.S. Government and High Quality Bond
Fund, and PCM Utilities Growth and Income Fund Sub-Accounts may advertise yield
in addition to total return. The yield will be computed in the following
manner: The net investment income per unit earned during a recent one month
period is divided by the unit value on the last day of the period. This figure
reflects the recurring charges at the Separate Account level including the
Contract Maintenance Fee.
The PCM Money Market Fund Sub-Account may advertise yield and effective yield.
The yield of a Sub-Account is based upon the income earned by the Sub-Account
over a seven-day period and then annualized, i.e. the income earned in the
period is assumed to be earned every seven days over a 52-week period and stated
as a percentage of the investment. Effective yield is calculated similarly but
when annualized, the income earned by the investment is assumed to be
<PAGE>
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reinvested in Sub-Account units and thus compounded in the course of a 52-week
period. Yield reflects the recurring charges at the Separate Account level
including the Contract Maintenance Fee.
Total return at the Separate Account level includes all contract charges: sales
charges, mortality and expense risk charges, and the Contract Maintenance Fee,
and is therefore lower than total return at the Fund level, with no comparable
charges. Likewise, yield at the Separate Account level includes all recurring
charges (except sales charges), and is therefore lower than yield at the Fund
level, with no comparable charges.
INTRODUCTION
This Prospectus has been designed to provide you with the necessary information
to make a decision on purchasing a tax deferred Variable Annuity contract
offered by HL&A and funded by the Fixed Account and/or a series of the Putnam
Separate Account. Please read the Glossary of Special Terms on pages 9, 10 and
11 prior to reading this prospectus to familiarize yourself with the terms being
used.
THE CONTRACT
The Putnam Capital Manager Plan is a tax-deferred Variable Annuity contract.
Payments for the contract will be held in the Fixed Account and/or a series of
the Putnam Separate Account. Initially there are no deductions from your
Premium Payments (except for Premium Taxes, if applicable) so your entire
Premium Payment is put to work in the investment Sub-Account(s) of your choice
or the Fixed Account. Each Sub-Account invests in a different underlying Fund
with its own distinct investment objectives. You pick the Sub-Account(s) with
the investment objectives that meet your needs. You may select one or more
Sub-Accounts and/or the Fixed Account and determine the percentage of your
Premium Payment that is put into a Sub-Account or the Fixed Account. You may
also transfer assets among the Sub-Accounts and the Fixed Account so that your
investment program meets your specific needs over time. There are minimum
requirements for investing in each Sub-Account and the Fixed Account which are
described later in this Prospectus. In addition, there are certain other
limitations on withdrawals and transfers of amounts in the Sub-Accounts and the
Fixed Account as described in this Prospectus. See "Charges Under the Contract"
for a description of the charges for redeeming a contract and other charges made
under the contract.
Generally, the contract contains the five optional forms of Annuity described
later in this Prospectus. Options 2, 4 and 5 are available with respect to
Qualified Contracts only if the guaranteed payment period is less than the life
expectancy of the Annuitant at the time the option becomes effective. Such life
expectancy shall be computed on the basis of the mortality table prescribed by
the IRS, or if none is prescribed, the mortality table then in use by HL&A.
<PAGE>
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The Contract Owner may select an Annuity Commencement Date and an Annuity option
which may be on a fixed or variable basis, or a combination thereof. The
Annuity Commencement Date may not be deferred beyond the Annuitant's 90th
birthday, except in certain states where the Annuity Commencement Date may not
be deferred beyond the Annuitant's 85th birthday.
The Annuity Commencement Date and/or the Annuity option may be changed from time
to time, but any such change must be made at least 30 days prior to the date on
which payments are scheduled to begin. If you do not elect otherwise, payments
will begin at the Annuitant's age 90, except in certain states payments will
begin at Annuitant's age 85, under Option 2 with 120 monthly payments certain
(Option 1 for Contracts issued in Texas).
When an Annuity is effected under a contract, unless otherwise specified,
Contract Values held in the Sub-Accounts will be applied to provide a Variable
Annuity based on the pro rata amount in the various Sub-Accounts. Fixed Account
Contract Values will be applied to provide a Fixed Annuity. Variable Annuity
payments will vary in accordance with the investment performance of the
Sub-Accounts you have selected. The contract allows the Contract Owner to
change the Sub-Accounts on which variable payments are based after payments have
commenced once every three (3) months. Any Fixed Annuity allocation may not be
changed.
The contract offered under this Prospectus may be purchased by any individual
("Non-Qualified Contract") or by an individual, trustee or custodian for a
retirement plan qualified under Sections 401(a) or 403(a) of the Internal
Revenue Code; annuity purchase plans adopted by public school systems and
certain tax-exempt organizations according to Section 403(b) of the Internal
Revenue Code; Individual Retirement Annuities adopted according to Section 408
of the Internal Revenue Code; employee pension plans established for employees
by a state, a political subdivision of a state, or an agency or instrumentality
of either a state or a political subdivision of a state, and certain eligible
deferred compensation plans as defined in Section 457 of the Internal Revenue
Code ("Qualified Contracts").
RIGHT TO CANCEL PERIOD
If you are not satisfied with your purchase you may surrender the contract by
returning it within ten days (or longer in some states) after you receive it. A
written request for cancellation must accompany the contract. In such event,
HL&A will, without deduction for any charges normally assessed thereunder, pay
you an amount equal to the sum of (i) the difference between the Premium Payment
and the amounts allocated to the Sub-Account(s) and/or the Fixed Account under
the contract and (ii) the Contract Value on the date of surrender attributable
to the amounts so allocated. You bear the investment risk during the period
prior to the Company's receipt of request for cancellation. HL&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.
<PAGE>
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THE SEPARATE ACCOUNT
The Separate Account was established on February 28, 1992, 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 supervision by the Commission 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, the obligations arising under
the contracts are general 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
shares of one underlying Fund. Net Premium Payments and proceeds of transfers
between Funds are applied to purchase shares in the appropriate Fund at net
asset value determined as of the end of the Valuation Period during which the
payments were received or the transfer made. All distributions from the Funds
are reinvested at net asset value. The value of your investment will therefore
vary in accordance with the net income and the market value of the portfolios of
the underlying Fund(s). During the Variable Annuity payout period, both your
Annuity payments and reserve values will vary in accordance with these factors.
HL&A does not guarantee the investment results of the Funds or any of the
underlying investments. There is no assurance that the value of a contract
during the years prior to retirement or the aggregate amount of the Variable
Annuity payments will equal the total of Premium Payments made under the
contract. Since each underlying Fund has different investment objectives and
policies, each is subject to different risks. These risks are more fully
described in the accompanying Trust Prospectus.
HL&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.
<PAGE>
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The Separate Account may be subject to liabilities arising from a Series of the
Separate Account whose assets are attributable to other variable annuity
contracts or variable life insurance policies offered by the Separate Account
which are not described in this Prospectus.
THE FIXED ACCOUNT
THAT PORTION OF THE CONTRACT RELATING TO THE FIXED ACCOUNT IS NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") AND THE FIXED ACCOUNT IS NOT
REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940
("1940 ACT"). ACCORDINGLY, NEITHER THE FIXED ACCOUNT NOR ANY INTERESTS THEREIN
ARE SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE 1940 ACT,
AND THE DISCLOSURE REGARDING THE FIXED ACCOUNT HAS NOT BEEN REVIEWED BY THE
STAFF OF THE SECURITIES AND EXCHANGE COMMISSION. THE FOLLOWING DISCLOSURE ABOUT
THE FIXED ACCOUNT MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF
THE FEDERAL SECURITIES LAWS REGARDING THE ACCURACY AND COMPLETENESS OF
DISCLOSURE.
Premium Payments and Contract Values allocated to the Fixed Account become a
part of the general assets of HL&A. HL&A invests the assets of the General
Account in accordance with applicable laws governing investments of Insurance
Company General Accounts.
Currently, HL&A guarantees that it will credit interest at a rate of not less
than 3% per year, compounded annually, to amounts allocated to the Fixed Account
under the Contracts. However, HL&A reserves the right to change the rate
according to state insurance law. HL&A may credit interest at a rate in excess
of 3% per year; however, HL&A is not obligated to credit any interest in excess
of 3% per year. There is no specific formula for the determination of excess
interest credits. Some of the factors that the 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 the HL&A's investments, regulatory and tax
requirements and competitive factors. ANY INTEREST CREDITED TO AMOUNTS
ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF 3% PER YEAR WILL BE DETERMINED IN
THE SOLE DISCRETION OF THE HL&A. THE OWNER ASSUMES THE RISK THAT INTEREST
CREDITED TO FIXED ACCOUNT ALLOCATIONS MAY NOT EXCEED THE MINIMUM GUARANTEE OF 3%
FOR ANY GIVEN YEAR.
THE COMPANY
Hartford Life and Accident Insurance Company ("HL&A") was originally
incorporated under the laws of Massachusetts 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, except New York, of the
United States and the District of Columbia. The offices of HL&A are located in
<PAGE>
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Simsbury, Connecticut; however, its mailing address is P.O. Box 5085, Hartford,
CT 06102-5085, Attn: Individual Annuity Operations. 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 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 for claims paying ability.
These ratings do not apply to 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 to apply to
Hartford Life and Accident's ability to meet its insurance obligations under the
Contract.
THE FUNDS
The underlying investment for the contracts are shares of Putnam Capital
Manager Trust, an open-end diversified series investment company with multiple
portfolios ("Funds"). The underlying Funds corresponding to each Sub-Account
and their investment objectives are described below. HL&A reserves the right,
subject to compliance with the law, to offer additional funds with differing
investment objectives. The Funds may not be available in all states.
PCM DIVERSIFIED INCOME FUND
Seeks high current income consistent with capital preservation by investing in
the following three sectors of the fixed income securities markets: U.S.
government sector, high yield sector, and international sector.
PCM GLOBAL ASSET ALLOCATION FUND
Seeks a high level of long-term total return consistent with preservation of
capital by investing in U.S. equities, international equities, U.S. fixed income
securities, and international fixed income securities.
PCM GLOBAL GROWTH FUND
Seeks capital appreciation through a globally diversified common stock
portfolio.
<PAGE>
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PCM GROWTH AND INCOME FUND
Seeks capital growth and current income by investing primarily in common stocks
that offer potential for capital growth, current income, or both.
PCM HIGH YIELD FUND
Seeks high current income by investing primarily in high-yielding, lower-rated
fixed income securities (commonly referred to as junk bonds), constituting a
diversified portfolio which is believed not to involve undue risk to income or
principal. Capital growth is a secondary objective when consistent with the
objectives of seeking high current income. (See the Special Considerations for
Investments in High Yield Securities disclosed in the Trust Prospectus.)
PCM MONEY MARKET FUND
Seeks to achieve as high a level of current income as is consistent with
liquidity and preservation of capital by investing in money market securities.
PCM NEW OPPORTUNITIES FUND
Seeks long-term capital appreciation by investing principally in common stocks
of companies in sectors of the economy which may possess above-average long-term
growth potential.
PCM U.S. GOVERNMENT AND HIGH QUALITY BOND FUND
Seeks current income consistent with preservation of capital through investment
in securities issued or guaranteed as to principal and interest by the U.S.
Government or by its agencies or instrumentalities and in other debt obligations
rated at least A by Standard & Poor's or Moody's or, if not rated, determined by
Putnam Investment to be of comparable quality.
PCM UTILITIES GROWTH AND INCOME FUND
Seeks capital growth and current income by concentrating its investments in
securities issued by Companies in the public utilities industries.
PCM VOYAGER FUND
Seeks capital appreciation primarily from a portfolio of common stocks which are
believed to have potential for capital appreciation which is significantly
greater than that of market averages.
The PCM Diversified Income Fund, PCM Global Growth Fund, PCM Growth and Income
Fund, PCM High Yield Fund, PCM Money Market Fund, and PCM New Opportunities
Fund, PCM Utilities Growth and Income Fund and PCM Voyager Fund are generally
managed in styles similar to other open-end investment companies which are
<PAGE>
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managed by Putnam Investment and whose shares are generally offered to the
public. These other Putnam Funds may, however, employ different investment
practices and may invest in securities different from those in which their
counterpart Funds invest, and consequently will not have identical portfolios
or experience identical investment results.
The Funds are available only to serve as the underlying investment for variable
annuity and variable life contracts. A full description of the Funds, their
investment objectives, policies and restrictions, risks, charges and expenses
and other aspects of their operation is contained in the accompanying Trust
Prospectus which should be read in conjunction with this Prospectus before
investing, and in the Trust Statement of Additional Information which may be
ordered without charge from Putnam Investor Services, Inc.
It is conceivable that in the future it may be disadvantageous for variable
annuity separate accounts and variable life insurance separate accounts to
invest in the Funds simultaneously. Although HL&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 Trust's Board of
Trustees would monitor events in order to identify any material conflicts
between such Contract Owners and Policy Owners and to determine what action, if
any, should be taken in response thereto. If the Board of Trustees of the Funds
were to conclude that separate funds should be established for variable life and
variable annuity separate accounts, the variable annuity Contract Owners would
not bear any expenses attendant upon establishment of such separate funds.
Putnam Investment Management, Inc. ("Putnam Investment"), One Post Office
Square, Boston, Massachusetts, 02109, serves as the investment manager for the
Funds. Two affiliates, The Putnam Advisory Company, Inc. and Putnam Capital
Management, Inc., manage domestic and foreign institutional accounts and mutual
funds. Putnam Investment and its affiliates are wholly-owned subsidiaries of
Marsh & McLennan Companies, Inc., a publicly owned holding company whose
principal businesses are international insurance brokerage and employee benefit
consulting.
Subject to the general oversight of the Trustees of the Trust, Putnam Investment
manages the Funds' portfolios in accordance with their stated investment
objectives and policies, makes investment decisions for the Funds, places orders
to purchase and sell securities on behalf of the Funds, and administers the
affairs of the Funds. For its services, the Funds pay Putnam Investment a
quarterly fee. See the accompanying Trust Prospectus for a more complete
description of Putnam Investment and the respective fees of the Funds.
<PAGE>
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OPERATION OF THE CONTRACT/ACCUMULATION PERIOD
PREMIUM PAYMENTS
The balance of each initial Premium Payment remaining after the deduction of any
applicable Premium Tax is credited to your contract within two business days of
receipt of a properly completed application or an order to purchase a contract
and the initial Premium Payment by HL&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 or the
entire Premium Payment will be immediately returned unless you have been
informed of the delay and request that the Premium Payment not be returned.
Subsequent Premium Payments are priced on the Valuation Day received by HL&A in
its Home Office or other designated administrative offices.
The number of Accumulation Units in each Sub-Account to be credited to a
contract will be determined by dividing the portion of the Premium Payment being
credited to each Sub-Account by the value of an Accumulation Unit in that
Sub-Account on that date.
The minimum initial Premium Payment is $1,000. Subsequent Premium Payments, if
made, must be a minimum of $500. Certain plans may make smaller initial and
subsequent periodic payments. Each Premium Payment may be split among the
various Sub-Accounts and the Fixed Account subject to minimum amounts then in
effect.
VALUE OF ACCUMULATION UNITS
The Accumulation Unit value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
Valuation Day by multiplying the Accumulation Unit value of the particular
Sub-Account on the preceding Valuation Day by a "Net Investment Factor" for that
Sub-Account for the Valuation Period then ended. The "Net Investment Factor"
for each of the Sub-Accounts is equal to the net asset value per share of the
corresponding Fund at the end of the Valuation Period (plus the per share amount
of any dividends or capital gains distributed by that Fund if the ex-dividend
date occurs in the Valuation Period then ended) divided by the net asset value
per share of the corresponding Fund at the beginning of the Valuation Period.
You should refer to the Trust Prospectus which accompanies this Prospectus for a
description of how the assets of each Fund are valued since each determination
has a direct bearing on the Accumulation Unit value of the Sub-Account and
therefore the value of a contract. The Accumulation Unit value is affected by
the performance of the underlying Fund(s), expenses and deduction of the charges
described in this Prospectus.
<PAGE>
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The shares of the Fund are valued at net asset value on each Valuation Day. A
description of the valuation methods used in valuing Fund shares may be found in
the accompanying Prospectus of the Trust.
VALUE OF THE FIXED ACCOUNT
HL&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 3%, compounded annually. HL&A may credit lower minimum interest rates
according to state law. HL&A, also, may credit interest at rates greater than
the minimum Fixed Account interest rate.
VALUE OF THE CONTRACT
The value of the Sub-Account investments under your contract at any time prior
to the commencement of Annuity payments can be determined by multiplying the
total number of Accumulation Units credited to your contract in each Sub-Account
by the then current Accumulation Unit values for the applicable Sub-Account.
The value of the Fixed Account under your contract will be the amount allocated
to the Fixed Account plus interest credited. You will be advised at least semi-
annually of the number of Accumulation Units credited to each Sub-Account, the
current Accumulation Unit values, the Fixed Account Value, and the total value
of your contract.
TRANSFERS AMONG SUB-ACCOUNTS
You may transfer the values of your Sub-Account allocations from one or more
Sub-Accounts to another free of charge. Transfers by telephone may be made by
calling (800) 521-0538. Telephone transfers may not be permitted by some states
for their residents who purchase variable annuities. However, HL&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.
HL&A may permit the Contract Owner to preauthorize transfers among Sub-Accounts
and between the Sub-Accounts and the Fixed Account under certain circumstances.
The policy of HL&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.
The right to reallocate Contract Values between the Sub-Accounts is subject to
modification if HL&A determines, in its sole discretion, that the exercise of
that right by one or more Contract Owners is, or would be, to the disadvantage
of other Contract Owners. Any modification could be applied to transfers to or
<PAGE>
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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.
Transfers between the Sub-Accounts may be made both before and after Annuity
payments commence (limited to once a quarter) provided that the minimum
allocation to any Sub-Account may not be less than $500. No minimum balance is
presently required in any Sub-Account.
TRANSFERS BETWEEN THE FIXED ACCOUNT AND THE SUB-ACCOUNTS
Subject to the restrictions set forth above, transfers from the Fixed Account
into a Sub-Account may be made at any time during the Contract Year. The
maximum amount which may be transferred from the Fixed Account during any
Contract Year is the greater of 30% of the Fixed Account balance as of the last
Contract Anniversary or the greatest amount of any prior transfer from the Fixed
Account. If HL&A permits preauthorized transfers from the Fixed Account to the
Sub-Accounts, this restriction is inapplicable. However, if any interest rate
is renewed at a rate at least one percentage point less than the previous rate,
the Contract Owner may elect to transfer up to 100% of the funds receiving the
reduced rate within sixty days of notification of the interest rate decrease.
Generally, transfers may not be made from any Sub-Account into the Fixed Account
for the six-month period following any transfer from the Fixed Account into one
or more of the Sub-Accounts. HL&A reserves the right to defer transfers from
the Fixed Account for up to six months from the date of request.
REDEMPTION/SURRENDER OF A CONTRACT
At any time prior to the Annuity Commencement Date, you have the right, subject
to any IRS provisions applicable thereto, to surrender the value of the contract
in whole or in part. 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.
FULL SURRENDERS. At any time prior to the Annuity Commencement Date (and after
the Annuity Commencement Date with respect to values applied to Option 4), the
Contract Owner has the right to terminate the contract. In such event, the
Termination Value of the contract may be taken in the form of a lump sum cash
settlement. The Termination Value of the contract is equal to the Contract
Value less any applicable Premium Taxes, the Contract Maintenance Fee, if
applicable and any applicable contingent deferred sales charges. The
Termination Value may be more or less than the amount of the Premium Payments
made to a contract.
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PARTIAL SURRENDERS. The Contract Owner may make a partial surrender of Contract
Values at any time prior to the Annuity Commencement Date so long as the amount
surrendered is at least equal to the minimum amount rules then in effect.
Additionally, if the remaining Contract Value following a surrender is less than
$500 (and, for Texas contracts, there were no Premium Payments made during the
preceding two Contract Years), HL&A may terminate the contract and pay the
Termination Value.
During the 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.
ANY SUCH FULL OR PARTIAL SURRENDER DESCRIBED ABOVE MAY RESULT IN ADVERSE TAX
CONSEQUENCES TO THE CONTRACT OWNER. THE CONTRACT OWNER, THEREFORE, SHOULD
CONSULT WITH HIS TAX ADVISER BEFORE UNDERTAKING ANY SUCH SURRENDER. (SEE
"FEDERAL TAX CONSIDERATIONS" COMMENCING ON PAGE ____.)
Payment on any request for a full or partial surrender from the Sub-Accounts
and/or the Fixed Account will be made as soon as possible and in any event no
later than seven days after the written request is received by HL&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 3% per annum
on the amount deferred. In requesting a partial withdrawal you should specify
the Fixed Account and/or the Sub-Account(s) from which the partial withdrawal is
to be taken. Otherwise, such withdrawal and any applicable contingent deferred
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sales charges will be effected on a pro rata basis according to the value in the
Fixed Account and each Sub-Account under a contract. Within this context, the
contingent deferred sales charges are taken from the Premium Payments in the
order in which they were received: from the earliest Premium Payments to the
latest Premium Payments. (See "Contingent Deferred Sales Charges," page ____.)
DEATH BENEFIT
The contracts provide that in the event the Annuitant dies before the Annuity
Commencement Date, the Contingent Annuitant will become the Annuitant. If the
Annuitant dies before the Annuity Commencement Date and either (a) there is no
designated Contingent Annuitant, (b) the Contingent Annuitant predeceases the
Annuitant, or (c) if any Contract Owner dies before the Annuity Commencement
Date, the Beneficiary as determined under the Contract Control Provisions, will
receive Minimum Death Benefit as determined on the date of receipt of due proof
of death by HL&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. If the deceased, the Annuitant or
Contract Owner, as applicable, had attained age 85, then the Death Benefit will
equal the Contract Value. 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 or the Premium
Payments as set forth in (a) and (b) above.
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 HL&A 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.
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Notwithstanding the foregoing, in the event of the Contract Owner's death where
the sole Beneficiary is the spouse of the Contract Owner and the Annuitant or
Contingent Annuitant is living, such spouse may elect, in lieu of receiving the
death benefit, to be treated as the Contract Owner. The proceeds due on the
death may be applied to provide variable payments, fixed payments, or a
combination of variable and fixed payments.
If the Contract is owned by a corporation or other non-individual, the Death
Benefit payable upon the death of the Annuitant prior to the Annuity
Commencement Date will be payable only as one sum or under the same settlement
options and in the same manner as if an individual Contract Owner died on the
date of the Annuitant's death.
There may be postponement in the payment of death benefits whenever (a) the New
York Stock Exchange is closed, except for holidays or weekends or trading on the
New York Stock Exchange is restricted as determined by the Commission; (b) the
Commission permits postponement and so orders; or (c) the Commission determines
that an emergency exists making valuation or disposal of securities not
reasonably practicable.
For a discussion of the manner in which Annuity payments are determined and may
vary from month to month see "Determination of Payment Amount," page ____.
CHARGES UNDER THE CONTRACT
CONTINGENT DEFERRED SALES CHARGES
There is no deduction for sales expenses from Premium Payments when made.
However, a contingent deferred sales charge may be assessed against Contract
Values when they are surrendered.
The length of time from receipt of a Premium Payment to the time of surrender
determines the contingent deferred sales charge. 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:
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Length of Time
Charge from Premium Payments
------ ---------------------
(Number of Years)
7% 1
6% 2
5% 3
4% 4
3% 5
2% 6
1% 7
0% 8 or more
No contingent deferred sales charges will be assessed on a distribution due to
the 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.
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 also 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). This example does
not take into account the Free Withdrawal Privilege described below.
The contingent deferred sales charges are used to cover expenses relating to the
sale and distribution of the contracts, including commissions paid to any
distribution organization and its sales personnel, and the cost of preparing
sales literature and other promotional activities. It is anticipated that gross
commissions paid on the sale of the contracts will not exceed 5.5% of all
Premium Payments. To the extent that these charges do not cover such
distribution expenses, the expenses 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.
HL&A may offer certain employer sponsored savings plans, in its discretion
reduced fees and charges including, but not limited to, the contingent deferred
sales charges, the mortality and expense risk charge and the maintenance fee for
certain sales under circumstances which may result in savings of certain costs
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and expenses. Reductions in these fees and charges will not be unfairly
discriminatory against any Contract Owner.
FREE WITHDRAWAL PRIVILEGE.
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.
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-Accounts
during the life of the contract, including the payout period, (estimated at .90%
for mortality and .35% for expense).
The mortality undertaking provided by HL&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 and before the commencement of Annuity payments, whichever is earlier,
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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 Administration and Maintenance Fees for
maintaining the contracts prior to the Annuity Commencement Date may be
insufficient to cover the actual cost of providing such items.
ADMINISTRATION AND MAINTENANCE FEES
HL&A will deduct certain fees from Contract Values to reimburse it for expenses
relating to the administration and maintenance of the contract and the Fixed
Account. For contract maintenance, HL&A will deduct an annual fee of $25 on
each Contract Anniversary on or before the Annuity Commencement Date. The
deduction will be made pro rata according to the value in each Sub-Account and
the Fixed Account under a contract. If during a Contract Year the contract is
surrendered for its full value, HL&A will deduct the contract Maintenance Fee at
the time of such surrender. For administration, HL&A makes a daily charge at
the rate of .15% per annum against all Contract Values held in the Separate
Account during both the accumulation and annuity phases of the contract. There
is not necessarily a relationship between the amount of administrative charge
imposed on a given contract and the amount of expenses that may be attributable
to that contract; expenses may be more or less than the charge.
The types of expenses incurred by the Separate Account include, but are not
limited to, expenses of issuing the contract and expenses for confirmations,
contract quarterly statements, processing of transfers and surrenders,
responding to Contract Owner inquiries, reconciling and depositing cash
receipts, calculation and monitoring daily Sub-Account unit values, Separate
Account reporting, including semiannual and annual reports and mailing and
tabulation of shareholder proxy solicitations.
You should refer to the Trust Prospectus for a description of deductions and
expenses paid out of the assets of the Trust's portfolios.
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PREMIUM TAXES
A deduction is also made for Premium Tax, if applicable, imposed by a state or
other governmental entity. Certain states impose a Premium Tax, currently
ranging up to 3.5%. Some states assess the tax at the time purchase payments
are made; others assess the tax at the time of annuitization. HL&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.
ANNUITY BENEFITS
You select an Annuity Commencement Date and an Annuity option which may be on a
fixed or variable basis, or a combination thereof. The Annuity Commencement
Date will not be deferred beyond the Annuitant's 90th birthday except for
certain states where deferral past age 85 is not permitted. The Annuity
Commencement Date and/or the Annuity option may be changed from time to time,
but any change must be at least 30 days prior to the date on which Annuity
payments are scheduled to begin. The contract allows the Contract Owner to
change the Sub-Accounts on which variable payments are based after payments have
commenced once every three (3) months. Any Fixed Annuity allocation may not be
changed.
ANNUITY OPTIONS
The contract contains the five optional Annuity forms described below. Options
2, 4 and 5 are available to Qualified Contracts only if the guaranteed payment
period is less than the life expectancy of the Annuitant at the time the option
becomes effective. Such life expectancy shall be computed on the basis of the
mortality table prescribed by the IRS, or if none is prescribed, the mortality
table then in use by the HL&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.
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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 date of the third Annuity payment, etc.
OPTION 2: Life Annuity with 120, 180 or 240 Monthly Payments Certain
This Annuity option is an Annuity payable monthly during the lifetime of an
Annuitant with the provision that payments will be made for a minimum of 120,
180 or 240 months, as elected. If, at the death of the Annuitant, payments have
been made for less than the minimum elected number of months, then the present
value as of the date of the Annuitant's death, of any remaining guaranteed
payments will be paid in one sum to the Beneficiary or Beneficiaries designated
unless other provisions have been made and approved by HL&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.
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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.
THE ANNUITY UNIT AND VALUATION
The value of the Annuity Unit for each Sub-Account in the Separate Account for
any day is determined by multiplying the value for the preceding day by the
product of (1) the net investment factor (see "Valuation of Accumulation Units,"
commencing on page ____) for the day for which the Annuity Unit value is being
calculated and (2) a factor to neutralize the assumed investment rate of 4.00%
per annum discussed below.
DETERMINATION OF PAYMENT AMOUNT
When Annuity payments are to commence, the value of the contract is determined
as the sum of the value of the Fixed Account no earlier than the close of
business on the fifth Valuation Day preceding the date the first Annuity payment
is due plus the product of the value of the Accumulation Unit of each
Sub-Account on that same day, and the number of Accumulation Units credited to
each Sub-Account as of the date the Annuity is to commence.
The contract contains tables indicating the minimum dollar amount of the first
monthly payment under the optional forms of Annuity for each $1,000 of value of
a Sub-Account under a contract. The first monthly payment varies according to
the form and type of Annuity selected. The contract contains Annuity tables
derived from the 1983a Individual Annuity Mortality Table with ages set back one
year and with an assumed investment rate ("A.I.R.") of 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.
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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.
THE A.I.R. ASSUMED IN THE MORTALITY TABLES WOULD PRODUCE LEVEL VARIABLE ANNUITY
PAYMENTS IF THE INVESTMENT RATE REMAINED CONSTANT. IN FACT, PAYMENTS WILL VARY
UP OR DOWN AS THE INVESTMENT RATE VARIES UP OR DOWN FROM THE A.I.R.
The Annuity Unit value used in calculating the amount of the Variable Annuity
payments will be based on an Annuity Unit value determined as of the close of
business on a day no earlier than the fifth Valuation Day preceding the date of
the Annuity payment.
FEDERAL TAX CONSIDERATIONS
WHAT ARE SOME OF THE FEDERAL TAX CONSEQUENCES WHICH AFFECT THESE CONTRACTS?
A. GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING TO
THE ACTUAL STATUS OF THE CONTRACT OWNER INVOLVED AND THE TYPE OF PLAN UNDER
WHICH THE CONTRACT IS PURCHASED, LEGAL AND TAX ADVICE MAY BE NEEDED BY A PERSON,
TRUSTEE OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A CONTRACT DESCRIBED
HEREIN.
It should be understood that any detailed description of the federal income tax
consequences regarding the purchase of these contracts cannot be made in this
Prospectus and that special tax rules may be applicable with respect to certain
purchase situations not discussed herein. In addition, no attempt is made here
to consider any applicable state or other tax laws. For detailed information, a
qualified tax adviser should always be consulted. The discussion here and in
Appendix I, commencing on page ____, is based on HL&A's understanding of current
federal income tax laws as they are currently interpreted.
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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 ___). 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
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.
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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 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
<PAGE>
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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.
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.
<PAGE>
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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.
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.
<PAGE>
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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.
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 II 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.
<PAGE>
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GENERAL MATTERS
ASSIGNMENT
Ownership of a Contract described herein is generally assignable. However, if
the Contracts are issued pursuant to some form of Qualified Plan, it is possible
that the ownership of the Contracts may not be transferred or assigned depending
on the type of qualified retirement plan involved. An assignment of a
Non-Qualified contract may subject the assignment proceeds to income taxes and
certain penalty taxes. (See "Taxation of Annuities in General - Non-Tax
Qualified Purchasers," page ____.)
MODIFICATION
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.
DELAY OF PAYMENTS
There may be postponement of a surrender payment or death benefit whenever (a)
the New York Stock Exchange is closed, except for holidays or weekends, or
trading on the New York Stock Exchange is restricted as determined by the
Commission; (b) the Commission permits postponement and so orders; or (c) the
Commission determines that an emergency exists making valuation or disposal of
securities not reasonably practicable.
VOTING RIGHTS
HL&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.
<PAGE>
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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 voting instructions 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 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. In the event that the Contract Owner gives no instructions or
leaves the manner of voting discretionary, HL&A will vote such shares of the
appropriate Fund in the same proportion as shares of that Fund for which
instructions have been received. During the Annuity period under a Contract the
number of votes will decrease as the assets held to Fund Annuity benefits
decrease.
DISTRIBUTION OF THE CONTRACTS
Hartford Equity Sales Company, Inc. ("HESCO") currently serves as Principal
Underwriter for the securities issued with respect to the Separate Account.
Hartford Securities Distribution Company, Inc. ("HSD") will replace HESCO as
principal underwriter upon approval by the Commission, the National Association
of Securities Dealers, Inc. ("NASD") and applicable state regulatory
authorities.
Both HESCO and HSD are wholly-owned subsidiaries of Hartford Life Insurance
Company. The principal business address of HESCO and HSD is the same as
Hartford Life Insurance 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.
<PAGE>
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OTHER CONTRACTS OFFERED
In addition to the Contracts described in this Prospectus, it is contemplated
that other forms of group or individual Variable Annuities may be sold providing
benefits which vary in accordance with the investment experience of the Separate
Account.
CUSTODIAN OF SEPARATE ACCOUNT ASSETS
The assets of the Separate Account are held by HL&A under a safekeeping
arrangement.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Separate Account is a party or to
which the assets of the Separate Account are subject. HL&A and Putnam
Investments are engaged in various matters of routine litigation which in their
judgments are not of material importance in relation to their respective total
assets.
EXPERTS
Arthur Andersen LLP, One Financial Plaza, Hartford, Connecticut, independent
public accountants, will perform an annual audit of HL&A and the Separate
Account. The financial statements included in the 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 therein in reliance upon the
report of said firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
Inquiries will be answered by calling your representative or by writing:
Hartford Life and Accident Insurance Company
Attn: Individual Annuity Operations
P.O. Box 5085
Hartford, CT 06102-5085
Telephone: (800) 862-6668
<PAGE>
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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.
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
<PAGE>
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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 filing a joint return
(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 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
<PAGE>
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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 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.
<PAGE>
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2. Deferred Compensation Plans for Tax-Exempt Organizations and State and
Local Governments
Generally, in order to avoid a penalty tax, annuity payments, periodic
payments or annual distributions must commence by April 1 of the calendar
year following the year in which the Participant attains age 70 1/2.
Minimum distributions under a Section 457 Deferred Compensation Plan may be
further deferred if the Participant remains employed. The entire interest
of the Participant must be distributed beginning no later than this
required beginning date over a period which may not extend beyond a maximum
of the life expectancy of the Participant and a designated Beneficiary.
Each annual distribution must equal or exceed a "minimum distribution
amount" which is determined by dividing the account balance by the
applicable life expectancy. This account balance is generally based upon
the account value as of the close of business on the last day of the
previous calendar year. In addition, minimum distribution incidental
benefit rules may require a larger annual distribution based upon dividing
the account balance by a factor promulgated by the Internal Revenue Service
which ranges from 26.2 (at age 70) to 1.8 (at age 115). Special rules
apply to require that distributions be made to Beneficiaries after the
death of the Participant. A penalty tax of up to 50% of the amount which
should be distributed may be imposed by the Internal Revenue Service for
failure to make a distribution.
Upon receipt of any monies pursuant to the terms of a Deferred Compensation
Plans for a tax-exempt organization, state or local government under
Section 457 of the Code, such monies are taxable to such employee as
ordinary income in the year in which received.
C. Federal Income Tax Withholding
The portion of a distribution which is taxable income to the recipient will be
subject to federal income tax withholding, pursuant to Section 3405 of the
Internal Revenue Code. The application of this provision is summarized below:
1. Eligible Rollover Distributions
a. The Unemployment Compensation Amendments Act of 1992 requires that
federal income taxes be withheld from certain distributions from
tax-qualified retirement plans and from tax-sheltered annuities under
Section 403(b). These provisions DO NOT APPLY to distributions from
individual retirement annuities under section 408(b) or from deferred
compensation programs under section 457.
b. If any portion of a distribution is an "eligible rollover
distribution", the law requires that 20% of that amount be withheld. This
amount is sent to the IRS as withheld income taxes. The following types of
payments DO NOT constitute an eligible rollover distribution (and,
therefore, the mandatory withholding rules will not apply):
- the non-taxable portion of the distribution;
- distributions which are part of a series of equal (or substantially
equal) payments made at least annually for your lifetime (or your life
expectancy), or your lifetime and your Beneficiary's lifetime (or life
<PAGE>
-48-
expectancies), or for a period of ten years or more.
- required minimum distributions made pursuant to section 401(a)(9) of
the IRC.
c. However, these mandatory withholding requirements do not apply in the
event that all or a portion of any eligible rollover distribution is paid
in a "direct rollover". A direct rollover is the direct payment of an
eligible rollover distribution or portion thereof to an individual
retirement arrangement or annuity (IRA) or to another qualified employer
plan. IF A DIRECT ROLLOVER IS ELECTED, NO INCOME TAX WILL BE WITHHELD.
d. If any portion of a distribution is not an eligible rollover
distribution but is taxable, the mandatory withholding rules described
above do not apply. In this case, the voluntary withholding rules
described below apply.
2. Non-Eligible Rollover Distributions
a. Non-Periodic Distributions
The portion of a non-periodic distribution which constitutes taxable income
will be subject to federal income tax withholding unless the recipient
elects not to have taxes withheld. If an election not to have taxes
withheld is not provided, 20% 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>
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THIS FORM MUST BE COMPLETED FOR ALL TAX-SHELTERED ANNUITIES.
SECTION 403(B)(11) ACKNOWLEDGMENT FORM
The Hartford variable annuity contract which you have recently purchased is
subject to certain restrictions imposed by the Tax Reform Act of 1986.
Contributions to the contract after December 31, 1989 and any increases in cash
value after December 31, 1988 may not be distributed to you unless you have:
a. attained age 59 1/2
b. terminated employment
c. died, or
d. become disabled.
Distributions of post December 31, 1988 contributions may also be made if you
have experienced a financial hardship.
Also, there may be a 10% penalty tax for distributions made because of financial
hardship or separation from service.
Also, please be aware that your 403(b) Plan may also offer other financial
alternatives other than the Hartford variable annuity. Please refer to your
Plan.
Please complete the following and return to:
Hartford Life and 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:
<PAGE>
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TABLE OF CONTENTS
TO
STATEMENT OF ADDITIONAL INFORMATION
SECTION PAGE
- - ------- ----
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY. . . . . . .
SAFEKEEPING OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . .
INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . .
DISTRIBUTION OF CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . .
ANNUITY/PAYOUT PERIOD. . . . . . . . . . . . . . . . . . . . . . . . . .
Annuity Payments. . . . . . . . . . . . . . . . . . . . . . . . . .
The Annuity Unit and Valuation. . . . . . . . . . . . . . . . . . .
Determination of Payment Amount . . . . . . . . . . . . . . . . . .
CALCULATION OF YIELD AND RETURN. . . . . . . . . . . . . . . . . . . . .
PERFORMANCE COMPARISONS. . . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
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--------------
To Obtain a Statement of Additional Information, please complete the form below
and mail to:
Hartford Life and Accident Insurance Company
Attn: Individual Annuity Operations
P.O. Box 5085
Hartford, CT 06102-5085
Please send a Statement of Additional Information for the PCM Capital Manager to
me at the following address:
- - ----------------------------------------------------
Name
- - ----------------------------------------------------
Address
- - ----------------------------------------------------
City/State Zip Code
--------------
<PAGE>
PART B
<PAGE>
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PART B
STATEMENT OF ADDITIONAL INFORMATION
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY -
PUTNAM CAPITAL MANAGER TRUST 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
<PAGE>
-3-
TABLE OF CONTENTS
SECTION PAGE
- - ------- ----
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF HARTFORD LIFE & ACCIDENT INSURANCE COMPANY. . . . . . . .
SAFEKEEPING OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . .
INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . .
DISTRIBUTION OF CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . .
ANNUITY/PAYOUT PERIOD. . . . . . . . . . . . . . . . . . . . . . . . . .
Annuity Payments. . . . . . . . . . . . . . . . . . . . . . . . . .
The Annuity Unit and Valuation. . . . . . . . . . . . . . . . . . .
Determination of Payment Amount . . . . . . . . . . . . . . . . . .
CALCULATION OF YIELD AND RETURN. . . . . . . . . . . . . . . . . . . . .
PERFORMANCE COMPARISONS. . . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . .
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INTRODUCTION
The tax-deferred variable annuity contracts described in the Prospectus are
designed to provide Annuity benefits to individuals who have established or wish
to establish retirement programs which may or may not qualify for special
federal income tax treatment. The Annuitant under these contracts may receive
Annuity benefits in accordance with the Annuity option selected and the
retirement program, if any, under which the contracts have been purchased.
Annuity payments under a contract will begin on a particular future date which
may be selected at any time under the contract or automatically when the
Annuitant reaches age 90, except in certain states where deferral past age 85
is not permitted. There are several alternative annuity payment options
available under the contract (see "Optional Forms of Annuity," page ____ of the
Prospectus). For a description of prior contracts see page 5.
The Premium Payments under a contract, less any applicable Premium Taxes, will
be applied to the Separate Account and/or the Fixed Account. Accordingly, the
net Premium Payment under the contract will be applied to purchase interests in
one or more of the following ten portfolios ("Funds") of Putnam Capital Manager
Trust, an open-end diversified series investment company: PCM Diversified
Income Fund, PCM Global Asset Allocation Fund, PCM Global Growth Fund, PCM
Growth and Income Fund, PCM High Yield Fund, PCM Money Market Fund, PCM New
Opportunities Fund, PCM U.S. Government and High Quality Bond Fund, PCM
Utilities Growth and Income Fund and PCM Voyager Fund.
Shares of the Funds are purchased by the Separate Account without the imposition
of any additional sales charge. The value of a contract depends on the value of
the shares of the Fund held by the Separate Account pursuant to that contract.
As a result, the Contract Owner bears the investment risk since market value of
the shares may increase or decrease.
The contracts provide that in the event the Annuitant dies before the selected
Annuity Commencement Date, the Contingent Annuitant will become the Annuitant.
If the Annuitant dies before the Annuity Commencement Date and there is no
designated Contingent Annuitant, or the Contingent Annuitant predeceases the
Annuitant, or if the Contract Owner dies before the Annuity Commencement Date,
the Beneficiary will receive the Contract Value determined on the date of
receipt of due proof of death by HL&A in its Home Office. 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.
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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; 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. HL&A is rated A++ (superior) by
A.M. Best and Company, Inc. on the basis of its financial soundness and
operating performance. HL&A has an AA+ rating from Standard and Poor's and
Duff and Phelps' highest rating (AAA) on the basis of its claims-paying ability.
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
Hartford Life Insurance Company.
The securities will be sold by salespersons of HESCO, and subsequently HSD, who
represent HL as insurance and Variable Annuity agents and who are registered
representatives or Broker-Dealers who have entered into distribution agreements
with HESCO, and subsequently HSD.
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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.
This offering of the Separate Account Contracts is continuous.
ANNUITY/PAYOUT PERIOD
ANNUITY PAYMENTS
Variable Annuity payments are determined on the basis of (1) a mortality table
set forth in the contracts and the type of Annuity payment option selected, and
(2) the investment performance of the investment medium selected. Fixed Annuity
payments are based on the Annuity tables contained in the contracts, and will
remain level for the duration of the Annuity.
The amount of the Annuity payments will not be affected by adverse mortality
experience or by an increase in expenses in excess of the expense deduction for
which provision has been made (see "Mortality and Expense Risk Charge," page
____ of the Prospectus).
For a Variable Annuity, the Annuitant will be paid the value of a fixed number
of Annuity Units each month. The value of such units and the amounts of the
monthly Variable Annuity payments will, however, reflect investment income
occurring after retirement, and thus the Variable Annuity payments will vary
with the investment experience of the Fund shares selected.
THE ANNUITY UNIT AND VALUATION
The value of the Annuity Unit for each Sub-Account in the Separate Account for
any day is determined by multiplying the value for the preceding day by the
product of (1) the net investment factor (see "Valuation of Accumulation Units,"
page ____ the Prospectus) for the day for which the Annuity Unit value is being
calculated, and (2) a factor to neutralize the assumed investment rate discussed
below.
ILLUSTRATION OF CALCULATION OF ANNUITY UNIT VALUE
1. Net Investment Factor for period. . . . . . . . . . . . 1.011225
2. Adjustment for 4% Assumed Investment Rate . . . . . . . .999892
3. 2x1 . . . . . . . . . . . . . . . . . . . . . . . . . . 1.011116
4. Annuity Unit value, beginning of period . . . . . . . . .995995
5. Annuity Unit value, end of period (3x4) . . . . . . . . 1.007066
<PAGE>
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DETERMINATION OF PAYMENT AMOUNT
When Annuity payments are to commence, the value of the contract is determined
as the sum of the value of the Fixed Account no earlier than the close of
business on the fifth Valuation Day preceding the date the first Annuity payment
is due plus the product of the value of the Accumulation Unit of each
Sub-Account on that same day, and the number of Accumulation Units credited to
each Sub-Account as of the date the Annuity is to commence.
The contract contains tables indicating the minimum dollar amount of the first
monthly payment under the optional forms of Annuity for each $1,000 of value of
a Sub-Account under a contract. The first monthly payment varies according to
the form and type of Annuity selected. The contracts contain Annuity tables
derived from the 1983a Individual Annuity Mortality Table with ages set back one
year with an assumed investment rate ("A.I.R.") of 4.00% 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 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 Period, and in each subsequent month the dollar
amount of the Variable Annuity payment is determined by multiplying this fixed
number of Annuity Units by the then current Annuity Unit value.
The A.I.R. assumed in the mortality tables would produce level Variable Annuity
payments if the investment rate remained constant. In fact, payments will vary
up or down as the investment rate varies up or down from the A.I.R.
The Annuity payments will be made on the fifteenth day of each month following
selection. The Annuity Unit value used in calculating the amount of the
Variable Annuity payments will be based on an Annuity Unit value determined as
of the close of business on a day no earlier than the fifth Valuation Day
preceding the date of the Annuity payment.
1398s
(Putnam Sep. Acct.)
<PAGE>
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CALCULATION OF YIELD AND RETURN
YIELD OF THE PCM MONEY MARKET FUND SUB-ACCOUNT. As summarized in the Prospectus
under the heading "Performance Related Information," the yield of the
Sub-Account for a seven day period (the "base period") will be computed by
determining the "net change in value" of a hypothetical account having a balance
of one unit at the beginning of the period, dividing the net change in account
value by the value of the account at the beginning of the base period to obtain
the base period return, and multiplying the base period return by 365/7 with the
resulting yield figure carried to the nearest hundredth of one percent. Net
changes in value of a hypothetical account will include net investment income of
the account (accrued dividends as declared by the underlying funds, less expense
and contract charges of the account) for the period, but will not include
realized gains or losses or unrealized appreciation or depreciation on the
underlying fund shares.
The effective yield is calculated by compounding the base period return by
adding 1, raising the sum to a power equal to 365/7 and subtracting 1 from the
result, according to the following formula:
365/7
Effective Yield = [(Base Period Return + 1) ] - 1
The Money Market Fund Sub-Account's yield and effective yield will vary in
response to fluctuations in interest rates and in the expenses of the
Sub-Account.
The yield and effective yield for the sub-account for the seven-day period
ending December 31, 1994 is as follows:
Yield = 4.44%
Effective Yield = 4.54%
The Diversified Income Fund Sub-Account, Global Asset Allocation Fund
Sub-Account, Growth and Income Fund, High Yield Fund, and U.S. Government and
High Quality Bond Fund Sub-Accounts' yields will vary from time to time
depending upon market conditions and, the composition of the underlying funds'
portfolios. Yield should also be considered relative to changes in the value of
the Sub-Accounts' shares and to the relative risks associated with the
investment objectives and policies of the Funds.
DIVERSIFIED INCOME FUND SUB-ACCOUNT
Yield calculations of the Sub-Account used for illustration purposes reflect the
interest earned by the Sub-Account, less applicable asset charges assessed
against a Contract Owner's account over the base period. The following is the
method used to determine the yield for the 30-day period ended December 31,
1994.
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Example:
Current Yield Formula for the Sub-Account
2*[((A-B)/(C*D) + 1)RAISED TO THE POWER OF 6 - 1]
Where A = Dividends and interest earned during the period.
B = Expenses accrued for the period (net of reimbursements).
C = The average daily number of units outstanding during the
period that were entitled to receive dividends.
D = The maximum offering price per unit on the last day of the period.
Yield = 6.06%
GLOBAL ASSET ALLOCATION FUND SUB-ACCOUNT
Yield calculations of the Sub-Account used for illustration purposes reflect the
interest earned by the Sub-Account, less applicable asset charges assessed
against a Contract Owner's account over the base period. The following is the
method used to determine the yield for the 30-day period ended December 31,
1994.
Example:
Current Yield Formula for the Sub-Account
2*[((A-B)/(C*D) + 1)RAISED TO THE POWER OF 6 - 1]
Where A = Dividends and interest earned during the period.
B = Expenses accrued for the period (net of reimbursements).
C = The average daily number of units outstanding during the
period that were entitled to receive dividends.
D = The maximum offering price per unit on the last day of the period.
Yield = 1.62%
GROWTH & INCOME FUND SUB-ACCOUNT
Yield calculations of the Sub-Account used for illustration purposes reflect the
interest earned by the Sub-Account, less applicable asset charges assessed
against a Contract Owner's account over the base period. The following is the
method used to determine the yield for the 30-day period ended December 31,
1994.
Example:
Current Yield Formula for the Sub-Account
2*[((A-B)/(C*D) + 1)RAISED TO THE POWER OF 6 - 1]
Where A = Dividends and interest earned during the period.
B = Expenses accrued for the period (net of reimbursements).
<PAGE>
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C = The average daily number of units outstanding during
the period that were entitled to receive dividends.
D = The maximum offering price per unit on the last day of the period.
Yield = 2.34%
HIGH YIELD FUND SUB-ACCOUNT
Yield calculations of the Sub-Account used for illustration purposes reflect the
interest earned by the Sub-Account, less applicable asset charges assessed
against a Contract Owner's account over the base period. The following is the
method used to determine the yield for the 30-day period ended December 31,
1994.
Example:
Current Yield Formula for the Sub-Account
2*[((A-B)/(C*D) + 1)RAISED TO THE POWER OF 6 - 1]
Where A = Dividends and interest earned during the period.
B = Expenses accrued for the period (net of reimbursements).
C = The average daily number of units outstanding during
the period that were entitled to receive dividends.
D = The maximum offering price per unit on the last day of the period.
Yield = 9.21%
U.S. GOVERNMENT AND HIGH QUALITY BOND FUND SUB-ACCOUNT
Yield calculations of the Sub-Account used for illustration purposes reflect the
interest earned by the Sub-Account, less applicable asset charges assessed
against a Contract Owner's account over the base period. The following is the
method used to determine the yield for the 30-day period ended December 31,
1994.
Example:
Current Yield Formula for the Sub-Account
2*[((A-B)/(C*D) + 1)RAISED TO THE POWER OF 6 - 1]
Where A = Dividends and interest earned during the period.
B = Expenses accrued for the period (net of reimbursements).
C = The average daily number of units outstanding during
the period that were entitled to receive dividends.
D = The maximum offering price per unit on the last day of the period.
Yield = 5.93%
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UTILITIES GROWTH AND INCOME FUND SUB-ACCOUNT
Yield calculations of the Sub-Account used for illustration purposes reflect the
interest earned by the Sub-Account, less applicable asset charges assessed
against a Contract Owner's account over the base period. The following is the
method used to determine the yield for the 30-day period ended December 31,
1994.
Example:
Current Yield Formula for the Sub-Account
2*[((A-B)/(C*D) + 1)RAISED TO THE POWER OF 6 - 1]
Where A = Dividends and interest earned during the period.
B = Expenses accrued for the period (net of reimbursements).
C = The average daily number of units outstanding during the
period that were entitled to receive dividends.
D = The maximum offering price per unit on the last day of the period.
Yield = 3.47%
CALCULATION OF TOTAL RETURN. As summarized in the Prospectus under the heading
"Performance Related Information", total return is a measure of the change in
value of an investment in a Sub-Account over the period covered. The formula
for total return used herein includes three steps: (1) calculating the value of
the hypothetical initial investment of $1,000 as of the end of the period by
multiplying the total number of units owned at the end of the period by the unit
value per unit on the last trading day of the period; (2) assuming redemption at
the end of the period and deducting any applicable contingent deferred sales
charge and (3) dividing this account value for the hypothetical investor by the
initial $1,000 investment and annualizing the result for periods of less than
one year. Total return will be calculated for one year, five years, and ten
years or some other relevant periods if a Sub-Account has not been in existence
for at least ten years.
At any time in the future, yields and total return may be higher or lower than
past yields and there can be no assurance that any historical results will
continue.
PERFORMANCE COMPARISONS
YIELD AND TOTAL RETURN. The total return and yield may also be used to compare
the performance of the Sub-Accounts against certain widely acknowledged outside
standards or indices for stock and bond market performance. Index performance
is not representative of the performance of the PCM Sub-Account to which it is
compared and is not adjusted for commissions and other costs. Portfolio
holdings of the PCM Sub-Account will differ from those of the index to which it
is compared. Performance comparison indices include the following:
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The Consumer Price Index, prepared by the U.S. Bureau of Labor Statistics, is a
commonly used measure of the rate of inflation. The index shows the average
change in the cost of selected consumer goods and services and does not
represent a return on an investment vehicle.
The Dow Jones Industrial Average is an unmanaged list of 30 common stocks
frequently used as a general measure of stock market performance. Its
performance figures reflect changes of market prices and reinvestment of all
distributions.
Lehman Brothers Corporate Bond Index is an unmanaged list of publicly issued,
fixed-rate, non-convertible investment-grade domestic corporate debt securities
frequently used as a general measure of the performance of fixed-income
securities. The average quality of bonds included in the index may be higher
than the average quality of those bonds in which PCM High Yield Fund customarily
invests. The index does not include bonds in certain of the lower rating
classifications in which the Fund may invest. The performance figures the index
reflect changes in market prices and reinvestment of all interest payments.
The Lehman Brothers Government Bond Index (the "SL Government Index") is a
measure of the market value of all public obligations of the U.S. Treasury; all
publicly issued debt of all agencies of the U.S. Government and all
quasi-federal corporations; and all corporate debt guaranteed by the U.S.
Government. Mortgage-backed securities, flower bonds and foreign targeted
issues are not included in the SL Government Index.
The Lehman Brothers Government/Corporate Bond Index (the "SL
Government/Corporate Index") is a measure of the market value of approximately
5,300 bonds with a face value currently in excess of $1.3 trillion. To be
included in the SL Government/Corporate Index, an issue must have amounts
outstanding in excess of $1 million, have at least one year to maturity and be
rated "Baa" or higher ("investment grade") by a nationally recognized rating
agency. The index does not include bonds in certain of the lower-rating
classifications in which PCM High Yield Fund invests. Its performance figures
reflect changes in market prices and reinvestment of all interest payments.
Morgan Stanley Capital International World Index is an unmanaged list of
approximately 1,450 equity securities listed on the stock exchanges of the
United States, Europe, Canada, Australia, New Zealand and the Far East, with all
values expressed in U.S. dollars. Performance figures reflect changes in market
prices and reinvestment of distributions net of withholding taxes. The
securities in the index change over time to maintain representativeness.
The NASDAQ-OTC Industrial Average (The "NASDAQ Index") is a market
value-weighted and unmanaged index showing the changes in the aggregate market
value of approximately 3,500 stocks relative to the base measure of 100.00 on
February 5, 1971. The NASDAQ Index is composed entirely of common stocks of
companies traded over-the-counter and often through the National Association of
Securities Dealers Automated Quotations ("NASDAQ") system. Only those
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over-the-counter stocks having only one market maker or traded on exchanges are
excluded. Its performance figures reflect changes of market prices but do not
reflect reinvestment of cash dividends.
Salomon Brothers Long-Term High-Grade Corporate Bond Index is an unmanaged list
of publicly traded corporate bonds having a rating of at least AA by Standard &
Poor's or Aa by Moody's and is frequently used as general measure of the
performance of fixed-income securities. The average quality of bonds included
in the index may be higher than the average quality of those bonds in which PCM
High Yield customarily invests. The index does not include bonds in certain of
the lower rating classifications in which the Fund may invest. Performance
figures for the index reflect changes of market prices and reinvestment of all
distributions.
The Salomon Brothers 7-10 Year Government Bond Index is an unmanaged list of
U.S. Government and government agency securities with maturities of 7 to 10
years. Performance figures for the index reflect changes of market prices and
reinvestment of all interest payments.
The Standard & Poor's Composite Index of 500 stocks (the "S&P 500") a market
value-weighted and unmanaged index showing changes in the aggregate market value
of 500 stocks relative to the base period 1941-43. The S&P 500 is composed
almost entirely of common stocks of companies listed on the New York Stock
Exchange, although the common stocks of a few companies listed on the American
Stock Exchange or traded over-the-counter are included. The 500 companies
represented include 400 industrial, 60 transportation and 40 financial services
concerns. The S&P 500 represents about 80% of the market value of all issues
traded on the New York Stock Exchange. Its performance figures reflect changes
of market prices and reinvestment of all regular cash dividends.
The Standard & Poor's 40 Utilities Index is unmanaged list of 40 utility stocks.
The Index assumes reinvestment of all distributions and reflects changes in
market prices but does not take into account brokerage commissions or other
fees. PCM Utilities Growth and Income Fund's telephone and electric utility
stocks are generally held in the same proportion as the telephone and electric
stocks in the S&P Utilities Index. However, there are some utility stocks held
by the Fund that are not part of the Index.
The manner in which total return and yield will be calculated for public use is
described above. The following table summarizes the calculation of total return
and yield for each Sub-Account, where applicable, through December 31, 1994.
<PAGE>
PUTNAM-Money Market Sub-Account
The following is an example of this yield calculation for the Sub-Account based
on a seven day period ending December 31,1994.
Assumption:
Value of a hypothetical pre-existing account
with exactly one unit at the beginning of the
period: . . . . . . . . . . . . . . . . . . . . . . . . $1.323996
Value of the same account (excluding capital
changes) at the end of the seven day period . . . . . . $1.325124
Calculation:
Ending account value. . . . . . . . . . . . . . . . . . $1.325124
Less beginning account value. . . . . . . . . . . . . . 1.323996
Net change in account value . . . . . . . . . . . . . . $0.001128
Base period return:
(adjusted change/beginning account value)
$0.001128/ $1.323996 $0.000852
Current yield = $0.000852 *(365/7) =. . . . . . . . . 4.44%
Effective yield = (1 + 0.000852)RAISED TO THE POWER OF
365/7 - 1 = . . . . . . . 4.54%
<PAGE>
Putnam Diversified Income Fund - Sub-Account - HLA
The following is an example of this yield calculation for the Sub-Account
based on a one month period ending December 31,1994.
Formula:
YIELD = 2[(A-B + 1)RAISED TO THE POWER OF 6-1]
---
CD
Where: a = dividends and interest earned during the
period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of units
outstanding during the period that
were entitled to receive dividends.
d = the maximum offering price per unit on
the last day of the period.
Calculation: 2[(A-B/CD + 1)RAISED TO THE POWER OF 6-1]
INTEREST INCOME a = 644,000
EXPENSES b = 433
AVERAGE UNITS c = 13,402,793
UNIT VALUE d = $9.621589
UIT YIELD = 6.06%
<PAGE>
Putnam Global Asset Allocation Fund - Sub-Account - HLA
The following is an example of this yield calculation for the Sub-Account
based on a one month period ending December 31, 1994.
Formula:
YIELD = 2[(A-B + 1)RAISED TO THE POWER OF 6-1]
---
CD
Where: a = dividends and interest earned during the
period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of units
outstanding during the period that
were entitled to receive dividends.
d = the maximum offering price per unit on
the last day of the period.
Calculation: 2[(A-B/CD + 1)RAISED TO THE POWER OF 6-1]
INTEREST INCOME a = 3,110
EXPENSES b = 1,427
AVERAGE UNITS c = 76,518
UNIT VALUE d = $16.334545
UIT YIELD = 1.62%
<PAGE>
Putnam Growth & Income Fund - Sub-Account - HLA
The following is an example of this yield calculation for the Sub-Account
based on a one month period ending December 31,1994.
Formula:
YIELD = 2[(A-B + 1)RAISED TO THE POWER OF 6-1]
---
CD
Where: a = dividends and interest earned during the
period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of units
outstanding during the period that
were entitled to receive dividends.
d = the maximum offering price per unit on
the last day of the period.
Calculation: 2[(A-B/CD + 1)RAISED TO THE POWER OF 6-1]
INTEREST INCOME a = 15,200
EXPENSES b = 5,633
AVERAGE UNITS c = 244,306
UNIT VALUE d = $20.177784
UIT YIELD = 2.34%
<PAGE>
Putnam High Yield Fund - Sub-Account - HLA
The following is an example of this yield calculation for the Sub-Account
based on a one month period ending December 31,1994.
Formula:
YIELD = 2[(A-B + 1)RAISED TO THE POWER OF 6-1]
---
CD
Where: a = dividends and interest earned during the
period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of units
outstanding during the period that
were entitled to receive dividends.
d = the maximum offering price per unit on
the last day of the period.
Calculation: 2[(A-B/CD + 1)RAISED TO THE POWER OF 6-1]
INTEREST INCOME a = 6,352
EXPENSES b = 836
AVERAGE UNITS c = 41,925
UNIT VALUE d = $17.476456
UIT YIELD = 9.21%
<PAGE>
Putnam U.S. Government and High Quality Bond Fund - Sub-Account - HLA
The following is an example of this yield calculation for the Sub-Account
based on a one month period ending December 31,1994.
Formula:
YIELD = 2[(A-B + 1)RAISED TO THE POWER OF 6-1]
---
CD
Where: a = dividends and interest earned during the
period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of units
outstanding during the period that
were entitled to receive dividends.
d = the maximum offering price per unit on
the last day of the period.
Calculation: 2[(A-B/CD + 1)RAISED TO THE POWER OF 6-1]
INTEREST INCOME a = 7,325
EXPENSES b = 1,417
AVERAGE UNITS c = 77,914
UNIT VALUE d = $15.532869
UIT YIELD = 5.93%
<PAGE>
Putnam Utilities Growth and Income Fund - Sub-Account - HLA
The following is an example of this yield calculation for the Sub-Account
based on a one month period ending December 31, 1994.
Formula:
YIELD = 2[(A-B + 1)RAISED TO THE POWER OF 6-1]
---
CD
Where: a = dividends and interest earned during the
period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of units
outstanding during the period that
were entitled to receive dividends.
d = the maximum offering price per unit on
the last day of the period.
Calculation: 2[(A-B/CD + 1)RAISED TO THE POWER OF 6-1]
INTEREST INCOME a = 4,050
EXPENSES b = 1,189
AVERAGE UNITS c = 91,555
UNIT VALUE d = $10.889305
UIT YIELD = 3.47%
<PAGE>
AVERAGE ANNUAL TOTAL RETURN as of December 31, 1994
<TABLE>
<CAPTION>
Putnam III PERIODS ENDED
- - -----------------------------------------------------------------------------------------------------------------------------
Sub-Account Inception
Date 1 YEAR 5 YEAR INCEPTION
- - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PCM Growth and Income Fund 02/01/88 -10.47% 4.58% 8.77%
PCM High Yield Fund 02/01/88 -11.65% 8.78% 6.00%
PCM Money Market Fund 02/01/88 -7.11% 0.38% 1.70%
PCM Global Asset Allocation Fund 02/01/88 -13.08% 3.42% 5.11%
PCM U.S. Government and High Quality Bond Fund 02/01/88 -13.75% 3.64% 4.28%
PCM Voyager Fund 02/01/88 -9.84% 9.58% 11.14%
PCM Global Growth Fund 05/01/90 -11.67% N/A 2.83%
PCM Utilities Growth and Income Fund 05/01/92 -17.23% N/A -1.19%
PCM Diversified Income Fund 09/15/93 -14.67% N/A -10.23%
PCM New Opportunities Fund 06/20/94 N/A N/A -2.32%
<FN>
NOTE: Average annual total return assumes a hypothetical initial payment of
$1,000. At the end of each period, a total surrender is assumed.
Maintenance fees and contingent deferred sales loads, if applicable, are
deducted to determine ending redeemable value of the original payment.
Then, the ending redeemable value is divided by the original investment to
calculate total return.
</TABLE>
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life & Accident Insurance Company Putnam Capital Manager Trust
Separate Account One and to the Owners of Units of Interest therein:
We have audited the accompanying statement of assets and liabilities of Hartford
Life & Accident Insurance Company Putnam Capital Manager Trust Separate Account
One as of December 31, 1994, and the related statement of operations for the
year then ended and the statements of changes in net assets for each of the two
years in the period then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hartford Life & Accident
Insurance Company Putnam Capital Manager Trust Separate Account One as of
December 31, 1994, and the results of its operations for the year then ended and
the changes in its net assets for each of the two years in the period then
ended, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
February 15, 1995
<PAGE>
<TABLE>
<CAPTION>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT ONE--HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES
- - ------------------------------------------------------------------------------------------------------------------------------
December 31, 1994 Voyager Global Growth Global Asset High Yield
Fund Growth and Income Allocation Fund
Sub-Account Fund Fund Fund Sub-Account
Sub-Account Sub-Account Sub-Account
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments
- - ------------------------------------------------------------------------------------------------------------------------------
PCM VOYAGER FUND
Shares 135,590
Cost $2,755,875
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value $ 3,010,096 $ 0 $ 0 $ 0 $ 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM GLOBAL GROWTH FUND
Shares 156,777
Cost $1,944,369
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 2,113,350 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM GROWTH AND INCOME FUND
Shares 301,730
Cost $4,917,352
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 4,960,446 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM GLOBAL ASSET ALLOCATION
FUND
Shares 94,748
Cost $1,278,446
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 0 1,249,722 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM HIGH YIELD FUND
Shares 63,938
Cost $722,467
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 0 0 732,726
- - ------------------------------------------------------------------------------------------------------------------------------
PCM U.S. GOVERNMENT AND
HIGH QUALITY FUND
Shares 100,013
Cost $1,241,427
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM NEW OPPORTUNITIES FUND
Shares 6,912
Cost $68,776
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM MONEY MARKET FUND
Shares 91,946
Cost $91,946
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM UTILITIES GROWTH &
INCOME FUND
Shares 95,361
Cost $1,029,241
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM DIVERSIFIED INCOME FUND
Shares 38,120
Cost $387,709
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life and
Accident Insurance Company 0 104 1.896 115 0
- - ------------------------------------------------------------------------------------------------------------------------------
Receivable from fund shares sold 120 111 245 48 28
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $3,010,216 $2,113,565 $4,962,587 $1,249,885 $732,754
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Due to Hartford Life and
Accident Insurance Company 1,992 0 0 0 50
- - ------------------------------------------------------------------------------------------------------------------------------
Payable for fund shares purchased 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,992 0 0 0 50
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE ANNUITY
CONTRACT LIABILITIES) $3,008,224 $2,113,565 $4,962,587 $1,249,885 $732,704
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------------------
December 31, 1994 U.S. New Money Utilities Diversified
Government Opportunities Market Growth and Income Fund
and High Fund Fund Income Fund Sub-Account
Quality Sub-Account Sub-Account Sub-Account
Bond Fund
Sub-Account
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments
- - ------------------------------------------------------------------------------------------------------------------------------
PCM VOYAGER FUND
Shares 135,590
Cost $2,755,875
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value $ 0 $ 0 $ 0 $ 0 $ 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM GLOBAL GROWTH FUND
Shares 156,777
Cost $1,944,369
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM GROWTH AND INCOME FUND
Shares 301,730
Cost $4,917,352
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM GLOBAL ASSET ALLOCATION
FUND
Shares 94,748
Cost $1,278,446
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM HIGH YIELD FUND
Shares 63,938
Cost $722,467
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM U.S. GOVERNMENT AND
HIGH QUALITY FUND
Shares 100,013
Cost $1,241,427
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 1,222,161 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM NEW OPPORTUNITIES FUND
Shares 6,912
Cost $68,776
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 74,784 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM MONEY MARKET FUND
Shares 91,946
Cost $91,946
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 91,946 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM UTILITIES GROWTH &
INCOME FUND
Shares 95,361
Cost $1,029,241
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 0 1,018,455 0
- - ------------------------------------------------------------------------------------------------------------------------------
PCM DIVERSIFIED INCOME FUND
Shares 38,120
Cost $387,709
- - ------------------------------------------------------------------------------------------------------------------------------
Market Value 0 0 0 0 371,288
- - ------------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life and
Accident Insurance Company 128 0 1,589 2,529 0
- - ------------------------------------------------------------------------------------------------------------------------------
Receivable from fund shares sold 47 3 0 39 14
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $1,222,336 $74,787 $93,535 $1,021,023 $371,302
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Due to Hartford Life and
Accident Insurance Company 0 3 0 0 12
- - ------------------------------------------------------------------------------------------------------------------------------
Payable for fund shares purchased 0 0 1,597 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 0 3 1,597 0 12
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE ANNUITY
CONTRACT LIABILITIES) $1,222,336 $74,784 $91,938 $1,021,023 $371,290
- - ------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
26
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT ONE--HARTFORD LIFE & ACCIDENT
INSURANCE COMPANY
<TABLE>
<CAPTION>
STATEMENT OF ASSETS & LIABILITIES (CONTINUED)
- - ------------------------------------------------------------------------------------------------------------------------------
December 31, 1994 Units Unit Contract
Owned by Price Liability
Participants
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Deferred annuity contracts in the accumulation period:
Individual Sub-Accounts:
- - ------------------------------------------------------------------------------------------------------------------------------
Voyager Fund Sub-Account 128,312 $23.444549 $3,008,224
- - ------------------------------------------------------------------------------------------------------------------------------
Global Growth Fund Sub-Account 161,112 13.118640 2,113,565
- - ------------------------------------------------------------------------------------------------------------------------------
Growth and Income Fund Sub-Account 244,306 20.177784 4,929,557
- - ------------------------------------------------------------------------------------------------------------------------------
Global Asset Allocation Fund Sub-Account 76,518 16.334545 1,249,885
- - ------------------------------------------------------------------------------------------------------------------------------
High Yield Fund Sub-Account 41,925 17.476456 732,704
- - ------------------------------------------------------------------------------------------------------------------------------
U.S. Government and High Quality Bond Fund Sub-Account 77,914 15.532869 1,210,222
- - ------------------------------------------------------------------------------------------------------------------------------
New Opportunities Fund Sub-Account 6,977 10.718448 74,784
- - ------------------------------------------------------------------------------------------------------------------------------
Money Market Fund Sub-Account 69,380 1.325124 91,938
- - ------------------------------------------------------------------------------------------------------------------------------
Utilities Growth and Income Fund Sub-Account 91,555 10.889305 996,966
- - ------------------------------------------------------------------------------------------------------------------------------
Diversified Income Fund Sub-Account 38,589 9.621589 371,290
- - ------------------------------------------------------------------------------------------------------------------------------
Total Accumulation Period $14,779,135
- - ------------------------------------------------------------------------------------------------------------------------------
Annuity contracts in the annuity period:
- - ------------------------------------------------------------------------------------------------------------------------------
Individual Sub-Accounts:
- - ------------------------------------------------------------------------------------------------------------------------------
Growth and Income Fund Sub-Account 1,637 20.177784 33,030
- - ------------------------------------------------------------------------------------------------------------------------------
U.S. Government and High Quality Bond Fund Sub-Account 780 15.532869 12,114
- - ------------------------------------------------------------------------------------------------------------------------------
Utilities Growth and Income Fund Sub-Account 2,209 10.889305 24,057
- - ------------------------------------------------------------------------------------------------------------------------------
Total Annuity Period: $69,201
- - ------------------------------------------------------------------------------------------------------------------------------
GRAND TOTAL: $14,848,336
- - ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
27
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT ONE--HARTFORD LIFE & ACCIDENT
INSURANCE COMPANY
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
- - ------------------------------------------------------------------------------------------------------------------------------
For the Year Voyager Global Growth Global Asset High Yield
Ended December Fund Growth and Income Allocation Fund
31, 1994 Sub-Account Fund Fund Fund Sub-Account
Sub-Account Sub-Account Sub-Account
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment
Income:
Dividends $ 50,368 $ 9,227 $255,791 $ 66,929 $ 63,808
- - ------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and
expense undertakings $ (37,025) (27,186) (65,147) (17,232) (10,801)
- - ------------------------------------------------------------------------------------------------------------------------------
Net Investment
income (loss) 13,343 (17,959) 190,644 49,697 53,007
- - ------------------------------------------------------------------------------------------------------------------------------
Capital gains income 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
Net realized
and unrealized
gain (loss) on
investments:
- - ------------------------------------------------------------------------------------------------------------------------------
Net realized gain
(loss) on security
transactions (1,800) (2,491) (436) (627) (5,680)
- - ------------------------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation) of
investments
during the
period (16,585) (27,893) (244,544) (102,072) (70,401)
- - ------------------------------------------------------------------------------------------------------------------------------
Net gains (losses)
on investments (18,385) (30,384) (244,980) (102,699) (76,081)
- - ------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in
net assets
resulting from
operations: $(5,042) $(48,343) $(54,336) $(53,002) $(23,074)
- - ------------------------------------------------------------------------------------------------------------------------------
*From inception, May 2, 1994 to December 31, 1994
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------------------
For the Year U.S. New Money Utilities Diversified
Ended December Government Opportunities Market Growth and Income Fund
31, 1994 and High Fund Fund Income Fund Sub-Account
Quality Sub-Account Sub-Account Sub-Account
Bond Fund
Sub-Account
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment
Income:
Dividends $ 103,508 0 $ 8,045 $ 50,808 $ 2,170
- - ------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and
expense undertakings (19,722) (428) (3,077) (16,373) (5,033)
- - ------------------------------------------------------------------------------------------------------------------------------
Net Investment
income (loss) 83,786 (428) 4,968 34,435 (2,863)
- - ------------------------------------------------------------------------------------------------------------------------------
Capital gains income 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
Net realized
and unrealized
gain (loss) on
investments:
- - ------------------------------------------------------------------------------------------------------------------------------
Net realized gain
(loss) on security
transactions (16,142) (35) 0 (14,681) (199)
- - ------------------------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation) of
investments
during the
period (141,739) 6,009 0 (126,591) (18,726)
- - ------------------------------------------------------------------------------------------------------------------------------
Net gains (losses)
on investments (157,881) 5,974 0 (141,272) (18,925)
- - ------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in
net assets
resulting from
operations: $(74,095) $5,546 $ 4,968 $(106,837) $(21,788)
- - ------------------------------------------------------------------------------------------------------------------------------
<FN>
*From inception, May 2, 1994 to December 31, 1994
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
28
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT ONE--HARTFORD LIFE & ACCIDENT
INSURANCE COMPANY
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- - ------------------------------------------------------------------------------------------------------------------------------
For the Year Voyager Global Growth Global Asset High Yield
Ended December Fund Growth and Income Allocation Fund
31, 1994 Sub-Account Fund Fund Fund Sub-Account
Sub-Account Sub-Account Sub-Account
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations:
Net investment
income (loss) $ 13,343 $(17,959) $190,644 $ 49,697 $ 53,007
- - ------------------------------------------------------------------------------------------------------------------------------
Capital gains
income 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
Net realized gain
(loss) on security
transactions (1,800) (2,491) (436) (627) (5,680)
- - ------------------------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation) of
investments
during the
period (16,585) (27,893) (244,544) (102,072) (70,401)
- - ------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in net
assets resulting
from operations (5,042) (48,343) (54,336) (53,002) (23,074)
- - ------------------------------------------------------------------------------------------------------------------------------
Unit
transactions:
Purchases 907,452 351,178 1,008,091 419,757 306,901
- - ------------------------------------------------------------------------------------------------------------------------------
Net transfers 306,353 448,117 507,543 147,511 (105,110)
- - ------------------------------------------------------------------------------------------------------------------------------
Surrenders (38,797) (45,164) (123,305) (26,344) (18,632)
- - ------------------------------------------------------------------------------------------------------------------------------
Net annuity
transactions 0 1,568 5,596 2,575 0
- - ------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in net
assets resulting
from unit
transactions 1,175,008 755,699 1,397,925 543,499 183,159
- - ------------------------------------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets 1,169,966 707,356 1,343,589 490,497 160,085
- - ------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of
period 1,838,258 1,406,209 3,618,998 759,388 572,619
- - ------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $3,008,224 $2,113,565 $4,962,587 $1,249,885 $732,704
- - ------------------------------------------------------------------------------------------------------------------------------
*From inception, May 2, 1994 to December 31, 1994
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------------------
For the Year U.S. Government New Money Utilities Diversified
Ended December and High Opportunities Market Growth and Income Fund
31, 1994 Quality Fund Fund Income Fund Sub-Account
Bond Fund Sub-Account Sub-Account Sub-Account
Sub-Account
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations:
Net investment
income (loss) $ 83,786 $ (428) $ 4,968 $ 34,435 $ (2,863)
- - ------------------------------------------------------------------------------------------------------------------------------
Capital gains
income 0 0 0 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
Net realized gain
(loss) on security
transactions (16,142) (35) 0 (14,681) (199)
- - ------------------------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation) of
investments
during the
period (141,739) 6,009 0 (126,591) (18,726)
- - ------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in net
assets resulting
from operations (74,095) 5,546 4,968 (106,837) (21,788)
- - ------------------------------------------------------------------------------------------------------------------------------
Unit
transactions:
Purchases 214,158 0 55,837 209,568 105,335
- - ------------------------------------------------------------------------------------------------------------------------------
Net transfers (362,372) 69,238 (79,135) (320,540) 71,071
- - ------------------------------------------------------------------------------------------------------------------------------
Surrenders (78,505) 0 (15,551) (30,854) (33,730)
- - ------------------------------------------------------------------------------------------------------------------------------
Net annuity
transactions (728) 0 0 (1,476) 0
- - ------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in net
assets resulting
from unit
transactions (227,447) 69,238 (38,849) (143,302) 142,676
- - ------------------------------------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets (301,542) 74,784 (33,881) (250,139) 120,888
- - ------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of
period 1,523,878 0 125,819 1,271,162 250,402
- - ------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $1,222,336 $74,784 $ 91,938 $1,021,023 $371,290
- - ------------------------------------------------------------------------------------------------------------------------------
<FN>
*From inception, May 2, 1994 to December 31, 1994
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
29
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- - ------------------------------------------------------------------------------------------------------------------------------
For the Year Voyager Global Growth Global Asset High Yield
Ended December 31, 1993 Fund Growth and Income Allocation Fund
Sub-Account Fund Fund Fund Sub-Account
Sub-Account Sub-Account Sub-Account
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ (535,721) $ (70,591) $ 1,381,033 $ 309,346 $ 1,103,251
- - ------------------------------------------------------------------------------------------------------------------------------
Capital gains income 567,371 0 1,255,854 254,504 0
- - ------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
security transactions 11,684,585 4,447,419 10,211,744 1,827,799 2,937,772
- - ------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) of investments
during the period (1,129,126) 105,529 (520,509) (109,602) (95,703)
- - ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 10,587,109 4,482,357 12,328,122 2,327,047 3,945,320
- - ------------------------------------------------------------------------------------------------------------------------------
Unit transactions
- - ------------------------------------------------------------------------------------------------------------------------------
Purchases 43,459,738 16,728,120 92,655,585 17,264,144 29,560,888
- - ------------------------------------------------------------------------------------------------------------------------------
Net transfers (72,439,872) (27,350,016) (144,504,777) (26,478,944) (42,793,688)
- - ------------------------------------------------------------------------------------------------------------------------------
Surrenders (73,737) (170,479) (2,252,093) (602,354) (1,319,149)
- - ------------------------------------------------------------------------------------------------------------------------------
Net annuity transactions 0 0 (1,760) 0 0
- - ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from unit transactions (29,053,871) (10,792,375) (54,103,045) (9,817,154) (14,551,949)
- - ------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets (18,466,762) (6,310,018) (41,774,923) (7,490,107) (10,606,629)
- - ------------------------------------------------------------------------------------------------------------------------------
Net assets:
- - ------------------------------------------------------------------------------------------------------------------------------
Beginning of period 20,305,020 7,716,227 45,393,921 8,249,495 11,179,248
- - ------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $1,838,258 $1,406,209 $3,618,998 $ 759,388 $ 572,619
- - ------------------------------------------------------------------------------------------------------------------------------
*From inception, September 15, 1993 to December 31, 1993
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- - ----------------------------------------------------------------------------------------------------------------
For the Year U.S. Government Money Utilities Diversified
Ended December 31, 1993 and High Market Growth and Income Fund
Quality Fund Income Fund Sub-Account*
Bond Fund Sub-Account Sub-Account
Sub-Account
- - ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 1,555,790 $ 65,708 $ (228,933) $ (1,963)
- - ---------------------------------------------------------------------------------------------------------------
Capital gains income 199,661 0 76,976 0
- - ---------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
security transactions 2,755,255 0 4,138,964 (426)
- - ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) of investments
during the period (155,870) 0 (338,802) 2,306
- - ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 4,354,836 65,708 3,648,205 (83)
- - ---------------------------------------------------------------------------------------------------------------
Unit transactions:
- - ---------------------------------------------------------------------------------------------------------------
Purchases 40,629,508 11,031,366 39,840,930 1,065,889
- - ---------------------------------------------------------------------------------------------------------------
Net transfers (67,198,094) (13,577,242) (61,752,100) (816,769)
- - ---------------------------------------------------------------------------------------------------------------
Surrenders (1,499,550) (532,059) (707,176) 1,365
- - ---------------------------------------------------------------------------------------------------------------
Net annuity transactions (873) 0 (1,807) 0
- - ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from unit
transactions (28,069,009) (3,077,935) (22,620,153) 250,485
- - ---------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets (23,714,173) (3,012,227) (18,971,948) 250,402
- - ---------------------------------------------------------------------------------------------------------------
Net assets:
- - ---------------------------------------------------------------------------------------------------------------
Beginning of period 25,238,051 3,138,046 20,243,110 0
- - ---------------------------------------------------------------------------------------------------------------
END OF PERIOD $1,523,878 $ 125,819 $ 1,271,162 $ 250,402
- - ---------------------------------------------------------------------------------------------------------------
<FN>
*From inception, September 15, 1993 to December 31, 1993
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
30
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1994
1. ORGANIZATION:
Putnam Capital Manager Trust 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.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the Account,
which are in accordance with generally accepted accounting principles in the
investment company industry:
A) SECURITY TRANSACTIONS Security transactions are recorded on the trade date
(date the order to buy or sell is executed). Cost of investments sold is
determined on the basis of identified cost. Dividend and capital gains income
are accrued as of the ex-dividend date.
B) SECURITY VALUATION The investment in shares of the Funds is valued at the
closing net asset value per share as determined by the appropriate Fund 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. The Company also provides administrative services and
receives an annual fee of 0.15% of the Account's average daily net assets.
B) DEDUCTION OF ANNUAL MAINTENANCE FEE Annual maintenance fees are deducted
through termination of units of interest from applicable contract owners'
accounts, in accordance with the terms of the contracts.
31
<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 Policy 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) 223,762
---------- ---------- ----------
Total Benefits and 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 Gains (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 (4,661) (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) 223,726
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 759,958 1,708,865 1,678,134
Common Stocks 8,929 0 46,009
Other 495 452 413
--------- ---------- ----------
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 1,688,668
--------- ---------- ----------
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 1,729,650
--------- ---------- ----------
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
DECEMBER 31, 1994
(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 intrest 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) 19,605 (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) 523 47,755
Interest maintenance reserve deferral
and amortization (4,503) 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 (13,736) (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 $1,088,322 $ 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 in 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
$6,393, $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 601 542 682
Interest income from policy loans 0 0 1,629
Income from other invested assets 22,019 2,281 4,864
Dividends from stocks 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 $(120,792) $ 16,748 $(40,333)
bonds and short-term investments ---------- --------- ---------
---------- --------- ---------
</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 (83) 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 Investments 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 SECURITIES $ 717 $ 200 $ 200 $ 112 $ 205
Other Bonds and Notes 61 0 11 3 47
Short-Term Investments 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>
<TABLE>
<CAPTION>
SUMMARY OF INVESTMENTS - (MARKET VALUE AMOUNTS)
-----------------------------------------------
(IN MILLIONS)
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 Securities $ 604 $ 604 $ 0 $ 0 $ 0 $ 0
Other Bonds and Notes 708 709 0 0 0 (1)
Short-Term Investments 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 values 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 on one $100 million cap with a strike rate of 8.6% 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 of 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) 12,154
Public utilities 53,687 174 (3,106) 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 (6,648) 82,553
-------- -------- -------- --------
Total $1,491,790 $ 8,465 $(111,269) $1,388,986
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
<CAPTION>
1994
-----------------------------------------------------------
GROSS GROSS
UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Common Stock $879,062 $141,542 $(6,997) $1,013,607
--------- --------- --------- ----------
--------- --------- --------- ----------
<CAPTION>
1993
-----------------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS GAINS VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Government and government agencies
and authorities:
- - - guaranteed and sponsored $ 248,809 $ 562 $ (3,438) $ 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 13,657 568 (67) 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
COST FAIR VALUE
----------- ------------
Maturity
- - --------
<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 $ 8,328 $ 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 rated by one percent
per year would have an immaterial impact on the accumulated postretirement
benefit obligation and the annual expense.
Post-retirement 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
filed within this Registration Statement.
(2) Not applicable. HL&A maintains custody of all assets.
Exhibits (1), (3), (4), (5), 6(a) and 6(b) are incorporated in this
Registration Statement.
(7) Not applicable.
(8) Not applicable.
(9) Not applicable.
(10) Consent of Arthur Andersen LLP is filed herewith.
(11) Not applicable.
(12) Not applicable.
(13) The Explanation of Total Return Calculation is filed herewith.
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
<PAGE>
-2-
Ann M. deRaismes Vice President
Allen Douma, M.D. Medical Director
Donald R. Frahm Chairman & CEO
Bruce D. Gardner General Counsel & Secretary
Joseph H. Gareau Executive Vice President & Chief Investment
Officer
Richard J. Garrett Vice President & Treasurer
John P. Ginnetti Executive Vice President and Director Asset
Management Services
Lynda Godkin Assistant General Counsel & Secretary
Lois W. Grady Vice President
David A. Hall Senior Vice President & Actuary
Joseph Kanarek Vice President
Kevin J. Kirk Vice President
Andrew W. Kohnke Vice President
Stephen M. Maher Vice President & Actuary
William B. Malchodi, Jr. Vice President & Director of Taxes
Thomas M. Marra Senior Vice President & Actuary and Director
Individual Life and Annuity Division
David J. McDonald Senior Vice President
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
<PAGE>
-3-
Craig R. Raymond Vice President & Chief Actuary
Lowndes A. Smith President & Chief Operating Officer
Edward J. Sweeney Vice President
James E. Trimble Vice President & Actuary
Raymond P. Welnicki Senior Vice President
James T. Westervelt Senior Vice President & Group Comptroller
Lizabeth H. Zlatkus Vice President
Donald J. Znamierowski Vice President
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
Item 26. Persons Controlled By or Under Common Control with the Depositor or
Registrant
Exhibit 26 is incorporated by reference to Part C of the Registration
Statement filed on June 28, 1988.
Item 27. Number of Contract Owners
As of ____________, 1994, there were _____ Contract Owners.
Item 28. Indemnification-Incorporated herein by reference to the Registration
Statement filed on September 14, 1987.
Item 29. Principal Underwriters
(a) HESCO acts as principal underwriter for the following investment
companies:
Hartford Life Insurance Company - DC Variable Account I
Separate Account Two (DC Variable Account II)
Separate Account Two (Variable Account "A")
Separate Account Two (NQ Variable Account)
<PAGE>
-4-
Separate Account Two (QP Variable Account)
Separate Account One
Separate Account Two (Director)
Hartford Life Insurance Company - Putnam Capital Manager Trust
Separate Account
Hartford Money Market Fund, Inc.
Hartford Life Insurance Company - Separate Account Three
ITT Hartford Life and Annuity Insurance Company - Separate Account
Three
Hartford Life Insurance Company - Separate Account Five
ITT Hartford Life and Annuity Insurance Company - Separate Account
Five
ITT Hartford Life and Annuity Insurance Company - Separate Account Six
Hartford Life Insurance Company Separate Account VL I
(b) Directors and Officers of HESCO
Name and Principal Positions and Offices
Business Address With Underwriter
------------------ ---------------------
Donald E. Waggaman, Jr. Treasurer
Bruce D. Gardner Secretary
George R. Jay Controller
Lowndes A. Smith President
Item 30. Location of Accounts and Records
Accounts and records are maintained by:
Hartford Life & Accident Insurance Company
200 Hopmeadow Street
Simsbury CT 06089
<PAGE>
-5-
Item 31. Management Services
None
Item 32. Undertakings
(a) The Registrant hereby undertakes to file a post-effective amendment to
this registration statement as frequently as is necessary to ensure
that the audited financial statements in the registration statement
are never more than 16 months old so long as payments under the
Variable Annuity Contracts may be accepted.
(b) The Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the Prospectus, a space
that an applicant can check to request a Statement of Additional
Information, or (2) a post card or similar written communication
affixed to or included in the Prospectus that the applicant can remove
to send for a Statement of Additional Information.
(c) The Registrant hereby undertakes to deliver any Statement of
Additional Information and any financial statements required to be
made available under this Form promptly upon written or oral request.
The Registrant is relying on the no-action letter issued by the Division of
Investment Management to American Council of Life Insurance, Ref. No. IP-6-88,
November 28, 1988. The Registrant has complied with the four provisions of the
no-action letter.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY, INC.
AND
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, INC.
POWER OF ATTORNEY
Donald R. Frahm
Bruce D. Gardner
Joseph H. Gareau
John P. Ginnetti
Thomas M. Marra
Leonard E. Odell, Jr.
Lowndes A. Smith
Raymond P. Welnicki
Lizabeth H. Zlatkus
Donald J. Znamierowski
do hereby jointly and severally authorize Bruce D. Gardner and/or Rodney J.
Vessels to sign as their agent, any Registration Statement, pre-effective
amendment, and any post-effective amendment of the Hartford Life Insurance
Company, Inc. and Hartford Life and Accident Insurance Company, Inc. under the
Securities Act of 1933 and/or the Investment Company Act of 1940.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
/s/ Donald R. Frahm Dated:
- - ------------------------------ ----------------------------
Donald R. Frahm
/s/ Bruce D. Gardner Dated:
- - ------------------------------ -----------------------------
Bruce D. Gardner
/s/ John P. Ginnetti Dated:
- - ------------------------------ -----------------------------
John P. Ginnetti
/s/ Thomas M. Marra Dated: 12-9-94
- - ------------------------------ -----------------------------
Thomas M. Marra
/s/ Leonard E. Odell, Jr. Dated: 12-7-94
- - ------------------------------ -----------------------------
Leonard E. Odell, Jr.
/s/ Lowndes A. Smith Dated:
- - ------------------------------ -----------------------------
Lowndes A. Smith
/s/ Raymond P. Welnicki Dated:
- - ------------------------------ -----------------------------
Raymond P. Welnicki
/s/ Lizabeth H. Zlatkus Dated:
- - ------------------------------ -----------------------------
Lizabeth H. Zlatkus
/s/ Donald J. Znamierowski Dated: 12-8-94
- - ------------------------------ -----------------------------
Donald J. Znamierowski
<PAGE>
SIGNATURES
----------
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets all the requirements for
effectiveness of this Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and duly caused this Registration Statement to be signed
on its behalf, in the City of Hartford, and the State of Connecticut on this
27th day of February, 1995.
HARTFORD LIFE & ACCIDENT
INSURANCE COMPANY - PUTNAM
CAPITAL MANAGER TRUST -
SEPARATE ACCOUNT ONE
(Registrant)
*By: *By: /s/ Rodney J. Vessels
-------------------------------------- ---------------------
Thomas M. Marra, Senior Vice President Rodney J. Vessels
Attorney-in-Fact
HARTFORD LIFE 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*
Thomas M. Marra, Senior Vice *By: /s/ Rodney J. Vessels
President, Director* -----------------------
Leonard E. Odell, Jr., Senior Rodney J. Vessels
Vice President, Director* Attorney-In-Fact
Lowndes A. Smith, President,
Chief Operating Officer, Dated: April 27, 1995
Director* ----------------------
Raymond P. Welnicki, Senior Vice
President, Director*
Lizabeth H. Zlatkus, Vice President
Director*
Donald J. Znamierowski, Vice President
Comptroller, Director*
<PAGE>
ARTHUR ANDERSON LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
Registration Statement File No. 33-46160 on Form N-4 for Hartford Life and
Accident Insurance Company.
Hartford, Connecticut
April 21, 1995
<PAGE>
PRINCIPAL UNDERWRITER AGREEMENT
THIS AGREEMENT, dated as of the 1st day of August, 1987, 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 -- Putnam Capital Accumulation Trust Separate Account One
(referred to as the "Unit Trust"); and
WHEREAS, HESCO offers to the public 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.
HL&A'S DUTIES
1. The Unit Trust reserves the right at any time to suspend or limit the
public offering of the Contracts upon thirty days' written notice to HESCO,
except where the notice period may be shortened because of legal action
taken by any regulatory agency.
2. The Unit Trust agrees to 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 July 1, 1987, and shall
continue in effect for a period of two years from that date and,
unless sooner terminated in accordance with 7(b) below, shall continue
in effect from year to year thereafter provided that its continuance
is specifically approved at least annually by a majority of the
members of the Board of Directors of 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 HLIC on sixty days prior written notice to
HESCO; (2) shall immediately terminate in the event of its assignment
and (3) may be terminated by HESCO on sixty days prior written notice
to HLIC, but such termination will not be effective until HLIC
shall have contracted with one or more persons to act as principal
underwriter of the 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
- - -------------------------------- ---------------------------------
Edward N. Bennett
(SEAL) HARTFORD EQUITY SALES COMPANY, INC.
Attest:
By
- - -------------------------------- ---------------------------------
Lowndes A. Smith, President
<PAGE>
[ITT HARTFORD 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.
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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.
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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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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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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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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Exhibit 4
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
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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
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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
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DESCRIPTION OF BENEFITS
INDIVIDUAL FLEXIBLE PREMIUM VARIABLE ANNUITY CONTRACT
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: PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT ONE
SUB-ACCOUNT BASED ON:
PCM MULTI-STRATEGY FUND PCM MULTI-STRATEGY FUND
PCM GROWTH & INCOME FUND PCM GROWTH & INCOME FUND
PCM VOYAGER FUND PCM VOYAGER FUND
PCM U.S. GOVERNMENT & HIGH GRADE PCM U.S. GOVERNMENT & HIGH GRADE
BOND FUND BOND FUND
PCM HIGH YIELD FUND PCM HIGH YIELD FUND
PCM MONEY MARKET FUND PCM MONEY MARKET FUND
PCM GLOBAL GROWTH FUND PCM GLOBAL GROWTH FUND
PCM UTILITIES FUND PCM UTILITIES FUND
OR OTHER FUNDS AS MAY BE MADE AVAILABLE FROM TIME TO TIME.
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CONTRACT SPECIFICATIONS (continued)
CONTRACT OWNER SPECIMEN DATE OF ISSUE FEBRUARY 8, 1992
NAME OF ANNUITANT JAMES SCOTT ANNUITY COMMENCEMENT JANUARY 1, 2022
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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).
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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.
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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.
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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>
Male Payee Female Payee
---------- ------------
Monthly Payments Guaranteed Monthly Payments Guaranteed
Age -------------------------------- --------------------------------
None 120 180 240 None 120 180 240
<S> <C> <C> <C> <C> <C> <C> <C> <C>
35 $4.03 $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 $15.32 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>
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
?????? ----------------- ----------------------- 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>
Exhibit 6 (a)
<TABLE>
<S><C>
CERTIFICATE
PENDING OR RESTATING CERTIFICATE
OF INCORPORATION BY ACTION OF / / INCORPORATORS / / BOARD OF /X/ BOARD OF DIRECTORS / / BOARD OF DIRECTORS
DIRECTORS AND SHAREHOLDERS AND MEMBERS
(Stock Corporation) (Nonstock Corporation)
_________________________
For office use only
_________________________
STATE OF CONNECTICUT ACCOUNT NO
SECRETARY OF THE STATE _________________________
INITIALS
_________________________
- - ---------------------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------------------
1. NAME OF CORPORATION DATE
Hartford Life and Accident Insurance Company August 2,1984
- - ---------------------------------------------------------------------------------------------------------------------------------
B. AMENDED
2. The Certificate of incorporation is /X/ A. AMENDED ONLY / / AND RESTATED / / C. RESTATED ONLY by the following resolution
RESOLVED, That Article Three, Section (a) of the Corporation's
Certificate of Incorporation be amended to read as follows:
"Section 3(a). The capital with which the Corporation shall
consist of eighty thousand (80,000) common stock, two hundred
and fifty dollars ($250) par value per share for a total
authorized capital of twenty million dollars ($20,000,000).
3. (Omit if 2.A is checked.)
(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 as follows:
(Indicate amendments made, if any, if none, so indicate)
(b) Other than as indicated in Par. 3(a), there is no discrepancy between the provisions of the
original Certificate of Incorporation as supplemented to date, and the provisions of this
Certificate Restating the Certificate of Incorporation.
- - ---------------------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------------------
BY ACTION
OF
INCORPORATORS
/ / 4. The above resolution was adopted by vote of at least two-thirds of the incorporators before the
organization meeting of the corporation, and approved in writing by all subscribers (if any) for
shares of the corporation, (or if nonstock corporation, by all applicants for membership entitled
to vote, if any.)
We (at least two-thirds of the incorporators) hereby declare, under the penalties of false statement that
the statements made in the foregoing certificate are true.
- - ---------------------------------------------------------------------------------------------------------------------------------
SIGNED SIGNED SIGNED
- - ---------------------------------------------------------------------------------------------------------------------------------
APPROVED
(All subscribers, or, if nonstock corporation, all applicants for membership entitled to vote, if none, so indicate)
- - ---------------------------------------------------------------------------------------------------------------------------------
SIGNED SIGNED SIGNED
- - ---------------------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------------------
(Over)
</TABLE>
<PAGE>
(Continued)
<TABLE>
- - ---------------------------------------------------------------------------------------------------------------------------------
<S><C>
/ / 4. (Omit if 2C is checked.) The above resolution was adopted by the board of directors acting alone,
/ / there being no shareholders or subscribers. / / the board of directors being so authorized
pursuant to Section 33-341, Conn. G.S. as amended
/ / the corporation being a nonstock corporation and having no members
and no applicants for membership entitled to vote on such resolution.
- - ---------------------------------------------------------------------------------------------------------------------------------
5. The number of affirmative votes 6. The number of directors' votes
required to adopt such resolution is: in favor of the resolution was:
- - ----------------------------------------------------------------------------------------------------------------------------------
We hereby declare, under the penalties of false statement that the statements made in the foregoing certificate are true.
- - ----------------------------------------------------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT (Print or Type) NAME OF SECRETARY OR ASSISTANT SECRETARY (Print or Type)
- - ----------------------------------------------------------------------------------------------------------------------------------
SIGNED (President or Vice President) SIGNED (Secretary or Assistant Secretary)
- - ----------------------------------------------------------------------------------------------------------------------------------
/X/ 4. The above resolution was adopted by the board of directors and by shareholders.
5. Vote of shareholders:
(a) (Use if no shares are required to be voted as a class.)
- - ---------------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES ENTITLED TO VOTE TOTAL VOTING POWER VOTE REQUIRED FOR ADOPTION VOTE FAVORING ADOPTION
10.000 10.000 6,667 10.000
- - ----------------------------------------------------------------------------------------------------------------------------------
(b) (If the shares of any class are entitled to vote as a class, indicate the designation and number of outstanding shares of
each such class, the voting power thereof, and the vote of each such class for the amendment resolution.)
We hereby declare, under the penalties of false statement that the statements made in the foregoing certificate are true.
- - ---------------------------------------------------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT (Print or Type) NAME OF SECRETARY OR ASSISTANT SECRETARY (Print or Type)
Edward N. Bennett (Sr. Vice President) Robert C. Fischer (Secretary)
- - ---------------------------------------------------------------------------------------------------------------------------------
SIGNED (President or Vice President) SIGNED (Secretary or Assistant Secretary)
/s/ Edward N. Bennett /s/ Robert C. Fischer
- - ---------------------------------------------------------------------------------------------------------------------------------
/ / 4. The above resolution was adopted by the board of directors and by members.
5. Vote of members:
(a) (Use if no members are required to vote as a class.)
- - ---------------------------------------------------------------------------------------------------------------------------------
NUMBER OF MEMBERS VOTING TOTAL VOTING POWER VOTE REQUIRED FOR ADOPTION VOTE FAVORING ADOPTION
- - ----------------------------------------------------------------------------------------------------------------------------------
(b) (If the members of any class are entitled to vote as a class indicate the designator and number of members of each such
class, the voting power thereof, and the vote of each such class for the amendment resolution.)
We hereby declare, under the penalties of false statement that the statements made in the foregoing certificate are true
- - ---------------------------------------------------------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT (Print or Type) NAME OF SECRETARY OR ASSISTANT SECRETARY (Print or Type)
- - ---------------------------------------------------------------------------------------------------------------------------------
SIGNED (President or Vice President) SIGNED (Secretary or Assistant Secretary)
- - ---------------------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------------------
FILING FEE CERTIFICATION FEE TOTAL FEES
$30- $27- $57-
-------------------------------------------------------------------------
FILED SIGNED (For Secretary of the State)
STATE OF CONNECTICUT
-------------------------------------------------------------------------
AUG - 3 1984 CERTIFIED COPY SENT ON (Date) INITIALS
8/6/84
-------------------------------------------------------------------------
SECRETARY OF THE STATE TO
-------------------------------------------------------------------------
By Time 3:00 P.M. CARD LIST PROOF
------ ---------
</TABLE>
<PAGE>
BYLAWS
OF THE
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
Amended 10/30/89
<PAGE>
ARTICLE I
NAME - HOME OFFICE
Section 1. This corporation shall be named HARTFORD LIFE AND ACCIDENT
INSURANCE COMPANY.
Section 2. The principal place of business and Home Office
shall be in the City of Hartford, Connecticut.
ARTICLE II
STOCKHOLDERS' MEETINGS - NOTICE - QUORUM - RIGHT TO VOTE
Section 1. All meetings of the Stockholders shall be held
at the principal business office of the Company unless the Directors
shall otherwise provide and direct.
Section 2. The annual meeting of the Stockholders shall be
held on such day and at such hour as the Board of Directors may
decide. For cause the Board of Directors may postpone or adjourn
such annual meeting to any other time during the year.
Section 3. Special meetings of the Stockholders may be
called by the Board of Directors, the Executive Committee, the
Chairman of the Board, the President or any Vice President.
Section 4. Notice of Stockholders' meetings shall be
mailed to each Stockholder, at his address as it appears on the
records of the Company, at least seven days prior to the meeting.
The notice shall state the place, date and time of the meeting and
shall specify all matters proposed to be acted upon at the meeting.
Section 5. At each annual meeting the Stockholders shall
choose Directors as hereinafter provided.
Section 6. Each Stockholder shall be entitled to one vote
for each share of stock held by him at all meetings of the Company.
Proxies may be authorized by written power of attorney.
Section 7. Holders of one-half of the whole amount of the
stock issued and outstanding shall constitute a quorum.
Section 8. Each Stockholder shall be entitled to a
certificate of stock which shall be signed by the President or a
Vice President, and either the Treasurer or an Assistant Treasurer
of the Company, and shall bear the seal of the Company, but such
signatures and seal may be facsimile if permitted by the laws of the
State of Connecticut.
<PAGE>
-2-
ARTICLE III
DIRECTORS - MEETINGS - QUORUM
Section 1. The property, business and affairs of the
Company shall be managed by a board of not less than three nor more
than twenty Directors, who shall be chosen by ballot at each annual
meeting. Vacancies occurring between annual meetings may be filled
by the Board of Directors by election. Each Director shall hold
office until the next annual meeting of Stockholders and until his
successor is chosen and qualified.
Section 2. Meetings of the Board of Directors may be
called by the direction of the Chairman of the Board, the President,
or any three Directors.
Section 3. Three days' notice of meetings of the Board of
Directors shall be given to each Director, either personally or by
mail or telegraph, at his residence or usual place of business, but
notice may be waived, at any time, in writing.
Section 4. One third of the number of existing
directorships, but not less than two Directors, shall constitute a
quorum.
ARTICLE IV
ELECTION OF OFFICERS - DUTIES OF BOARD OF
DIRECTORS AND EXECUTIVE COMMITTEE
Section 1. The President shall be elected by the Board of
Directors. The Board of Directors may also elect one of its members
to serve as Chairman of the Board of Directors. The Chairman of the
Board, or an individual appointed by him, shall have authority to
appoint all other officers, except as stated herein, including one
or more Vice Presidents and Assistant Vice Presidents, the Treasurer
and one or more Associate or Assistant Treasurers, one or more
Secretaries and Assistant Secretaries and such other Officers as the
Chairman of the Board may from time to time designate. All Officers
of the Company shall hold office during the pleasure of the Board of
Directors. The Directors may require any Officer of the Company to
give security for the faithful performance of his duties.
Section 2. The Directors may fill any vacancy among the
officers by election for the unexpired term.
Section 3. The Board of Directors may appoint from its own
number an Executive Committee of not less than five Directors. The
Executive Committee may exercise all powers vested in and conferred
upon the Board of Directors at any time when the Board is not in
session. A majority of the members of said Committee shall
constitute a quorum.
<PAGE>
-3-
Section 4. Meetings of the Executive Committee shall be
called whenever the Chairman of the Board, the President or a
majority of its members shall request. Forty-eight hours' notice
shall be given of meetings but notice may be waived, at any time, in
writing.
Section 5. The Board of Directors shall annually appoint
from its own number a Finance Committee of not less than three
Directors, whose duties shall be as hereinafter provided.
Section 6. The Board of Directors may, at any time,
appoint such other Committees, not necessarily from its own number,
as it may deem necessary for the proper conduct of the business of
the Company, which Committees shall have only such powers and duties
as are specifically assigned to them by the Board of Directors or
the Executive Committee.
Section 7. The Board of Directors may make contributions,
in such amounts as it determines to be reasonable, for public
welfare or for charitable, scientific or educational purposes,
subject to the limits and restrictions imposed by law and to such
rules and regulations consistent with law as it makes.
ARTICLE V
OFFICERS
CHAIRMAN OF THE BOARD
Section 1. The Chairman of the Board shall preside at the
meetings of the Board of Directors and the Executive Committee and,
in the absence of the Chairman of the Finance Committee, at the
meetings of the Finance Committee. In the absence or inability of
the Chairman of the Board to so preside, the President shall preside
in his place.
PRESIDENT
Section 2. The President, under the supervision and
control of the Chairman of the Board, shall have general charge and
oversight of the business and affairs of the Company. The President
shall preside at the meetings of the Stockholders. He shall be a
member of and shall preside at all meetings of all Committees not
referred to in Section 1 of this ARTICLE except that he may
designate a Chairman for each such other Committee.
Section 3. In the absence or inability of the President to
perform his duties, the Chairman of the Board may designate a Vice
President to exercise the powers and perform the duties of the
President during such absence or inability.
<PAGE>
-4-
SECRETARY
Section 4. The Secretary of the Corporation shall keep a
record of all the meetings of the Company, of the Board of Directors
and of the Executive Committee, and he shall discharge all other
duties specifically required of the Secretary by law. The other
Secretaries and Assistant Secretaries shall perform such duties as
may be assigned to them by the Board of Directors or by their senior
officers and any Secretary or Assistant Secretary may affix the seal
of the Company and attest it and the signature of any officer to any
and all instruments.
TREASURER
Section 5. The Treasurer shall keep, or cause to be kept,
full and accurate accounts of the Company. He shall see that the
funds of the Company are disbursed as may be ordered by the Board of
Directors or the Finance Committee. He shall have charge of all
monies paid to the Company and on deposit to the credit of the
Company or in any other properly authorized name, in such banks or
depositories as may be designated in a manner provided by these
bylaws. He shall also discharge all other duties that may be
required of him by law.
OTHER OFFICERS
Section 6. The other officers shall perform such duties as
may be assigned to them by the President or the Board of Directors.
ARTICLE VI
FINANCE COMMITTEE
Section 1. If a Finance Committee is established it shall
be the duty of that committee to supervise the investment of the
funds of the Company in securities in which insurance companies are
permitted by law to invest, and all other matters connected with the
management of investments. If no Finance Committee is established
this duty shall be performed by the Board of Directors.
Section 2. All loans or purchases for the investment and
reinvestment of the funds of the Company shall be submitted for
approval to the Finance Committee, if not specifically approved by
the Board of Directors.
Section 3. Sale or transfer of any stocks or bonds shall
be made upon authorization of the Finance Committee unless
specifically authorized by the Board of Directors.
<PAGE>
-5-
Section 4. Transfers of stock and registered bonds, deeds,
leases, releases, sales, mortgages chattel or real, assignments or
partial releases of mortgages chattel or real, and in general all
instruments of defeasance of property and all agreements or
contracts affecting the same, except discharges of mortgages and
entries to foreclose the same as hereinafter provided, shall be
authorized by the Finance Committee or the Board of Directors, and
be executed jointly for the Company by two persons, to wit: The
Chairman of the Board, the President or a Vice President, and a
Secretary, the Treasurer or an Assistant Treasurer, but may be
acknowledged and delivered by either one of those executing the
instrument; provided, however, that either a Secretary, the
Treasurer, or an Assistant Treasurer alone, when authorized as
aforesaid, or any person specially authorized by the Finance
Committee as attorney for the Company, may make entry to foreclose
any mortgage, and a Secretary, the Treasurer or an Assistant
Treasurer alone is authorized, without the necessity of further
authority, to discharge by deed or otherwise any mortgage on payment
to the Company of the principal, interest and all charges due.
Section 5. The Finance Committee may fix times and places
for regular meetings. No notice of regular meetings shall be
necessary. Reasonable notice shall be given of special meetings but
the action of a majority of the Finance Committee at any meeting
shall be valid notwithstanding any defect in the notice of such
meeting.
Section 6. In the absence of specific authorization from
the Board of Directors or the Finance Committee, the Chairman of the
Board, the President, a Vice President or the Treasurer shall have
the power to vote or execute proxies for voting any shares held by
the Company.
ARTICLE VII
FUNDS
Section 1. All monies belonging to the Company shall be
deposited to the credit of the Company, or in such other name as the
Finance Committee, the Chairman of the Finance Committee or such
executive officers as are designated by the Board of Directors shall
direct, in such bank or banks as may be designated from time to time
by the Finance Committee, the Chairman of the Finance Committee, or
by such executive officers as are designated by the Board of
Directors. Such monies shall be drawn only on checks or drafts
signed by any two executive officers of the Company, provided that
the Board of Directors may authorize the withdrawal of such monies
by check or draft signed with the facsimile signature of any one or
more executive officers, and provided further, that the Finance
Committee may authorize such alternative methods of withdrawals as
it deems proper.
<PAGE>
-6-
The Board of Directors, the President, the Chairman of the
Finance Committee, a Vice President, or such executive officers as
are designated by the Board of Directors may authorize withdrawal of
funds by checks or drafts drawn at offices of the Company to be
signed by Managers, General Agents or employees of the Company,
provided that all such checks or drafts shall be signed by two such
authorized persons, except checks or drafts used for the payment of
claims or losses which need be signed by only one such authorized
person, and provided further that the Board of Directors of the
Company or executive officers designated by the Board of Directors
may impose such limitations or restrictions upon the withdrawal of
such funds as it deems proper.
ARTICLE VIII
INDEMNITY OF DIRECTORS AND OFFICERS
Section 1. The Company shall indemnify and hold harmless
each Director and officer now or hereafter serving the Company,
whether or not then in office, from and against any and all claims
and liabilities to which he may be or become subject by reason of
his being or having been a Director or officer of the Company, or of
any other company which he serves as a Director or officer at the
request of the Company, to the extent such is consistent with the
statutory provisions pertaining to indemnification, and shall
provide such further indemnification for legal and/or all other
expenses reasonably incurred in connection with defending against
such claims and liabilities as is consistent with statutory
requirements.
ARTICLE IX
AMENDMENT OF BYLAWS
Section 1. The Directors shall have power to adopt, amend
and repeal such bylaws as may be deemed necessary or appropriate for
the management of the property and affairs of the Company.
Section 2. The Stockholders at any annual or special
meeting may amend or repeal these bylaws or adopt new ones if the
notice of such meeting contains a statement of the proposed
alteration, amendment, repeal or adoption, or the substance thereof.
STATE OF CONNECTICUT)
) ss. Hartford, Connecticut
COUNTY OF HARTFORD
This is to certify that the foregoing is a true copy of the
bylaws of the Hartford Life and Accident Insurance Company and that they are in
full force and effect at this date.
ATTEST:
______________________________
Secretary
<PAGE>
ARTHUR ANDERSON LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
Registration Statement File No. 33-46160 on Form N-4 for Hartford Life and
Accident Insurance Company.
Hartford, Connecticut
April 21, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 14,437,608
<INVESTMENTS-AT-VALUE> 14,844,974
<RECEIVABLES> 7,016
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 14,851,990
<PAYABLE-FOR-SECURITIES> 3,651
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 3,651
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 14,848,336
<DIVIDEND-INCOME> 610,654
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (202,024)
<NET-INVESTMENT-INCOME> 408,630
<REALIZED-GAINS-CURRENT> (42,091)
<APPREC-INCREASE-CURRENT> (742,542)
<NET-CHANGE-FROM-OPS> (376,003)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,481,603
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 0
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<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
