<PAGE>
File No. 33-53692
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 4
TO FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
A. Exact name of trust: Separate Account VL I
B. Name of depositor: Hartford Life Insurance Company
C. Complete address of depositor's principal executive offices:
P.O. Box 2999
Hartford, CT 06104-2999
D. Name and complete address of agent for service:
Scott K. Richardson, Esq.
ITT Hartford Life Insurance Companies
P.O. Box 2999
Hartford, CT 06104-2999
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) of Rule 485
--------
X on May 1, 1996 pursuant to paragraph (b) of Rule 485
--------
60 days after filing pursuant to paragraph (a)(1) of Rule 485
--------
on May 1, 1996 pursuant to paragraph (a)(1) of Rule 485
--------
this post-effective amendment designates a new effective date for
-------- a previously filed post-effective amendment.
E. Title and amount of securities being registered:
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant has registered an indefinite amount of securities. The Rule
24f-2 Notice for the Registrant's most recent fiscal year was filed on or
about February 29, 1996.
<PAGE>
-2-
F. Proposed maximum aggregate offering price to the public of the securities
being registered:
Not yet determined.
G. Amount of filing fee: Paid
H. Approximate date of proposed public offering:
As soon as practicable after the effective date of this registration
statement.
The registrant hereby represents that it is relying on Section (13)(i)(B) of
Rule 6e-3(T).
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
----------- ---------------------
1. Cover page
2. Cover page
3. Not applicable
4. The Company; Distribution of the Policies
5. Summary - Separate Account VL I; Separate
Account VL I - General
6. Separate Account VL I - General
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. Summary; Separate Account VL I - Funds; The
Policy - Application for a Policy; Detailed
Description of Policy Benefits and
Provisions; Other Matters - Voting Rights,
Dividends
11. Summary; Separate Account VL I - Funds
12. Summary; Separate Account VL I - Funds
13. Deductions and Charges from the Account
Value; Distribution of the Policies; Federal
Tax Considerations
14. Detailed Description of Policy Benefits and
Provisions - Application for a Policy
<PAGE>
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
----------- ---------------------
15. Detailed Description of Policy Benefits and
Provisions - Allocation of Premium Payments
16. Separate Account VL I - Funds; Detailed
Description of Policy Benefits and Provisions
- Allocation of Premium Payments
17. Summary; Detailed Description of Policy
Benefits and Provisions - Cash Value and
Amount Payable on Surrender of the Policy,
The Right to Examine or Exchange the Policy
and Surrender/Continuation Options.
18. Separate Account VL I - Funds; Deduction and
Charges from the Account Value; Federal Tax
Considerations
19. Other Matters - Statements to Policy Owners
20. Not applicable
21. Detailed Description of Policy Benefits and
Provisions - Policy Loans
22. Not applicable
23. Safekeeping of the Separate Account Assets
24. Other Matters - Assignment
25. The Company
26. Not applicable
27. The Company
28. The Company; Management
29. The Company
30. Not applicable
<PAGE>
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
----------- ---------------------
31. Not applicable
32. Not applicable
33. Not applicable
34. Not applicable
35. Distribution of the Policies
36. Not required by Form S-6
37. Not applicable
38. Distribution of the Policies
39. The Company; Distribution of the Policies
40. Not applicable
41. The Company; Distribution of the Policies
42. Not applicable
43. Not applicable
44. Detailed Description of Policy Benefits and
Provisions - Allocation of Premium Payments
45. Not applicable
46. Detailed Description of Policy Benefits and
Provision - Cash Value
47. Separate Account VL I - Funds
48. Cover page; The Company
49. Not applicable
<PAGE>
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
----------- ---------------------
50. Separate Account VL I - General
51. Summary; The Company; Detailed Description of
Policy Benefits and Provisions; Other Matters
- Beneficiary
52. Separate Account VL I - Funds, Investment
Advisers
53. Federal Tax Considerations
54. Not applicable
55. Not applicable
56. Not required by Form S-6
57. Not required by Form S-6
58. Not required by Form S-6
59. Not required by Form S-6
<PAGE>
HARTFORD
LIFE INSURANCE COMPANY
P.O. Box 2999
Hartford, CT 06104-2999
Telephone (800) 243-5433
STAG VARIABLE LIFE
Flexible Premium
Variable Life Insurance Policies
[LOGO]
This Prospectus describes a flexible premium variable life insurance
policy (the "Policies", and each individually a "Policy") offered by Hartford
Life Insurance Company (the "Hartford Life") to applicants age 80 and under.
For a given amount of Death Benefit chosen, the Purchaser of the Policy has
considerable flexibility in selecting the timing and amount of premium
payments. In addition, the Purchaser can select a Guarantee Period, of from
one to ten years, during which additional guarantees are provided. Among these
is the guarantee that the Death Benefit will be no less than the Initial Face
Amount and the Policy will not lapse as long as certain Scheduled Premiums are
paid or are provided for by favorable investment experience. Unscheduled
Premium Payments are also allowed.
The Guarantee Period selected by You will affect the benefits provided by
the Policy. In general, the longer the Guarantee Period is, the higher the
Front-End Sales Loads and Surrender Charges are. However, the advantages of a
longer Guarantee Period include lower Cost of Insurance rates and lower
Mortality and Expense Risk Rates. See "Guarantee Period" on page for more
details.
Sales agents can provide prospective purchasers with individualized sales
illustrations which reflect all the fees and charges associated with the
Policy options selected.
The Policies provide for a death benefit payable at the Insured's death.
The Policy Owner may select one of three death benefit options; a fixed amount
equal to the Face Amount, a variable amount equal to the Face Amount plus the
Account Value, or a variable amount equal to the Face Amount plus a return of
Scheduled Premiums.
Under all three options, the Policies have Cash Values which increase with
the payment of each premium and which decrease to reflect fees and charges
made by the Hartford Life. These fees and charges vary depending on the face
amount of the Policy, the age of the Insured, the level of the premiums paid,
and the length of the Guarantee Period.
If a Policy is surrendered during the first two Policy Years, the Policy
Owner may be entitled to a refund of excess loads in addition to the Cash
Surrender Value.
There is no guaranteed minimum cash value for a Policy. The Cash Value of
a Policy will also vary up or down to reflect the investment experience of the
Funds to which the premium payment(s) has been allocated and the Policy Owner
bears the investment risk for all amounts so allocated.
The initial premium will be allocated to Hartford Money Market Sub-Account
and after the Right to Examine Period has expired, to one or more of the
Sub-Accounts or to the Fixed Account as specified in the Policy Owner's
application. The Funds underlying the Sub-Accounts presently are: Hartford
Advisers Fund, Inc., Hartford Capital Appreciation Fund, Inc. formerly
Hartford Aggressive Growth Fund, Inc., Hartford Bond Fund, Inc., Hartford
Dividend and Growth Fund, Inc., Hartford Index Fund, Inc., Hartford
International Opportunities Fund, Inc., Hartford Mortgage Securities Fund,
Inc., Hartford Stock Fund, Inc., and HVA Money Market Fund, Inc. managed by
the Hartford Investment Management Company (the "Hartford Funds"), 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 managed by The
Putnam Management Company, Inc. (the "Putnam Funds"), and the Equity-Income
Portfolio, Overseas Portfolio and Asset Manager Portfolio managed by Fidelity
Management & Research Company (the "Fidelity Funds").
These Policies are subject to a Front-End Sales Load and Surrender Charge
which are set forth in the sections entitled "Deduction from the Premium" and
"Deductions and Charges from the Account Value" on pages - . In addition,
there are examples on pages and to help you in your selection of a
Guarantee Period.
------------------------------------------------------------------------------
MAXIMUM FRONT-END SALES LOADS ARE 50% OF THE PREMIUMS PAID IN THE FIRST POLICY
YEAR, 11% IN YEARS 2 THROUGH 10 AND 3% IN YEARS 11 AND LATER. THE MAXIMUM
SURRENDER CHARGE UNDER THE POLICY IS 110% OF THE PREMIUM PAID IN THE FIRST
POLICY YEAR. HOWEVER, ACTUAL CHARGES MAY BE LESS. SEE "FRONT-END SALES LOAD"
ON PAGE , "SURRENDER CHARGES" ON PAGE , AND "REFUND OF EXCESS LOADS" ON
PAGE FOR MORE DETAILS.
------------------------------------------------------------------------------
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IT MAY NOT BE ADVANTAGEOUS TO PURCHASE FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE AS A REPLACEMENT FOR YOUR CURRENT LIFE INSURANCE OR IF YOU ALREADY
OWN A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED BY THE CURRENT PROSPECTUSES OF
THE APPLICABLE ELIGIBLE FUNDS WHICH CONTAIN A FULL DESCRIPTION OF THOSE FUNDS.
ALL PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
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.
------------------------------------------------------------------------------
The date of this Prospectus is May 1, 1996.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GLOSSARY OF SPECIAL TERMS............................................... 4
SUMMARY................................................................. 6
DETAILED DESCRIPTION OF POLICY BENEFITS AND PROVISIONS.................. 10
General............................................................... 10
Premiums.............................................................. 11
Premium Payment Flexibility......................................... 11
Scheduled Premiums.................................................. 11
Unscheduled Premiums................................................ 11
Allocation of Premium Payments...................................... 12
Accumulation Units.................................................. 12
Accumulation Unit Values............................................ 12
Premium Limitation.................................................. 12
Cash Values........................................................... 13
Amount Payable on Surrender of the Policy........................... 13
Load Refund......................................................... 13
Partial Withdrawals................................................. 13
Transfers of Account Value............................................ 13
Amount and Frequency of Transfers................................... 13
Transfers to or from Sub-Accounts................................... 14
Transfers from the Fixed Account.................................... 14
Policy Loans.......................................................... 14
Loan Interest....................................................... 14
Credited Interest................................................... 14
Preferred Loan...................................................... 15
Loan Repayments..................................................... 15
Termination Due to Excessive Indebtedness........................... 15
Effect of Loans on Account Value.................................... 15
Death Benefit......................................................... 15
Death Benefit Options............................................... 15
Option Change....................................................... 15
Death Benefit Guarantee............................................. 16
Minimum Death Benefit............................................... 16
Increases and Decreases in Face Amount.............................. 16
Benefits at Maturity.................................................. 17
Lapse and Reinstatement............................................... 17
Policy Surplus...................................................... 17
Lapse and Grace Period.............................................. 17
Reinstatement....................................................... 18
Automatic Premium Loan Option....................................... 18
The Right to Examine or Exchange the Policy........................... 18
Surrender/Continuation Options........................................ 19
Option Descriptions................................................. 19
Valuation of Payments and Transfers................................... 20
Application for a Policy.............................................. 20
Reduced Charges for Eligible Groups................................. 20
Deductions from the Premium........................................... 20
Front End Sales Load................................................ 20
Premium Related Tax Charge.......................................... 21
Deductions and Charges from the Account Value......................... 21
Monthly Deduction Amounts........................................... 21
Surrender Charges................................................... 22
Examples of Front-End Sales Loads and Surrender Charges............. 23
Charges Against the Funds........................................... 25
Taxes............................................................... 26
THE COMPANY............................................................. 26
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
SEPARATE ACCOUNT VL I................................................... 27
General............................................................... 27
Funds................................................................. 27
Hartford Funds...................................................... 27
Putnam Funds........................................................ 28
Fidelity Funds...................................................... 29
Investment Adviser.................................................... 30
Hartford Funds...................................................... 30
Putnam Funds........................................................ 31
Fidelity Funds...................................................... 31
THE FIXED ACCOUNT....................................................... 31
OTHER MATTERS........................................................... 32
Voting Rights......................................................... 32
Statements to Policy Owners........................................... 32
Limit on Right to Contest............................................. 32
Misstatement as to Age................................................ 32
Payment Options....................................................... 33
Beneficiary........................................................... 33
Assignment.......................................................... 33
Dividends........................................................... 33
SUPPLEMENTAL BENEFITS................................................... 34
Deduction Amount Waiver Rider......................................... 34
Accidental Death Benefit Rider........................................ 34
Increase in Coverage Option Rider..................................... 34
Maturity Date Extension Rider......................................... 34
EXECUTIVE OFFICERS AND DIRECTORS........................................ 35
DISTRIBUTION OF THE POLICIES............................................ 38
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS............................ 38
FEDERAL TAX CONSIDERATIONS.............................................. 38
General............................................................... 38
Taxation of Hartford Life and the Separate Account.................... 38
Income Taxation of Policy Benefits.................................... 39
Modified Endowment Contracts.......................................... 39
Estate and Generation Skipping Taxes.................................. 39
Diversification Requirements.......................................... 40
Ownership of the Assets in the Separate Account....................... 40
Life Insurance Purchased for Use in Split Dollar Arrangements......... 41
Federal Income Tax Withholding........................................ 41
Non-Individual Ownership of Policies.................................. 41
Other................................................................. 41
Life Insurance Purchases by Nonresident Aliens and Foreign
Corporations......................................................... 41
LEGAL PROCEEDINGS....................................................... 41
EXPERTS................................................................. 41
REGISTRATION STATEMENT.................................................. 42
LEGAL MATTERS........................................................... 42
APPENDIX A ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES AND SURRENDER
VALUES............................................................... 43
</TABLE>
The Policies may not be available in all states.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER OR OTHER PERSON IS AUTHORIZED
TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON.
3
<PAGE>
GLOSSARY OF SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCOUNT VALUE: Value used to determine certain policy benefits and charges.
ACCUMULATION UNIT: An accounting unit of measure used to calculate the value of
a Sub-Account.
ANNUAL SCHEDULED PREMIUM AND/OR SCHEDULED PREMIUMS: The amount of Premiums
selected by you within limits established under the Policy.
ATTAINED AGE: The Issue Age plus the number of fully completed Policy Years.
CASH SURRENDER VALUE: Cash Value less all Indebtedness.
CASH VALUE: The Account Value less all remaining Surrender Charges, if any.
CODE: The Internal Revenue Code of 1986, as amended.
DATE OF ISSUE: The date from which the Suicide and Incontestability provisions
are measured.
DEATH BENEFIT: The Death Benefit Option in effect determines how the Death
Benefit is calculated. The three Death Benefit Options provided are described in
the Death Benefit section of this Prospectus.
DEATH PROCEEDS: The amount which we will pay on the death of the Insured. This
amount equals the Death Benefit less any Indebtedness.
FACE AMOUNT: On the Policy Date, the Face Amount equals the Initial Face Amount.
Thereafter it may change in accordance with the terms of the Policy.
FIXED ACCOUNT: Portion of Account Value invested in the General Account of
Hartford Life Insurance Company.
FUNDS: The registered open-end management investment companies in which assets
of the Separate Account may be invested.
GUARANTEE PERIOD: The period, selected by you, from one to ten years, during
which additional Policy guarantees are provided. Among these is the guarantee
that if Scheduled Premiums are paid, the Death Benefit will be no less than the
initial Face Amount regardless of the investment performance of the Sub-
Accounts. See "Guarantee Period" on page .
GUIDELINE ANNUAL PREMIUM: The level annual premium payment necessary to provide
the future benefits under the policy through maturity, based on certain
assumptions specified under the Federal Securities laws. These assumptions
include mortality charges based on the 1980 CSO Table, an assumed annual net
rate of return of 5% per year, and deduction of the fees and charges specified
in the Policy. For purposes of the policy, the Guideline Annual Premium is used
only in limiting front-end sales loads and surrender charges.
HARTFORD LIFE: Hartford Life Insurance Company
IN WRITING: In a written form satisfying to Us.
INDEBTEDNESS: The outstanding loan on the Policy, including any interest due or
accrued.
INSURED: The person on whose life the Policy is issued.
ISSUE AGE: As of the Policy Date, the Insured's age on his/her last birthday.
LOAN ACCOUNT: An account established for any amounts transferred from the Fixed
Account and Sub-Accounts as a result of loans. The account is credited with
interest and is not based on the investment experience of the Separate Account.
MATURITY DATE: The date on which the policy will mature.
MONTHLY ACTIVITY DATE: The Policy Date and the same date in each succeeding
month as the Policy Date except that whenever the Monthly Activity Date falls on
a date other than a Valuation Day, the Monthly Activity Date will be deemed the
next Valuation Day.
MONTHLY DEDUCTION AMOUNT: The fees and charges deducted from the Account Value
on the Monthly Activity Date.
NATIONAL SERVICE CENTER: Located in Minneapolis, Minnesota.
NET PREMIUM: The amount of premium actually credited to the Account Value.
POLICY: A flexible premium variable life insurance contract issued by the
Hartford Life, as described in this Prospectus.
POLICY ANNIVERSARY: An anniversary of the Policy Date. Similarly, Policy Years
are measured from the Policy Date.
POLICY DATE: The date from which Policy Anniversaries and Policy Years are
determined.
4
<PAGE>
POLICY LOAN RATE: The interest rate charged on policy loans.
POLICY OWNER: The person having rights to benefits under the Policy during the
lifetime of the Insured; the Policy Owner may or may not be the Insured.
POLICY SURPLUS: This is an amount which we calculate for each Policy Year during
the Guarantee Period to determine whether or not payment of a Scheduled Premium
is required and is calculated as described in "Policy Surplus" on page .
POLICY YEARS: Annual periods computed from the Policy Date.
PRO RATA BASIS: An allocation method based on the proportion of the Account
Value in the Fixed Account and each Sub-Account.
SCHEDULED PREMIUM: Amount of premium shown on your specifications.
SEPARATE ACCOUNT: An account established by Hartford Life Insurance Company to
separate the assets funding the Policies from other assets of Hartford Life
Insurance Company; in this case, "Separate Account VL I".
SUB-ACCOUNT: The subdivisions of the Separate Account.
UNSCHEDULED PREMIUMS: Any premium payment other than a Scheduled Premium
Payment.
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.
YOU, YOUR: The Owner of the policy.
WE, US, OUR, THE COMPANY: Hartford Life Insurance Company.
5
<PAGE>
SUMMARY
THE POLICY
The flexible premium variable life insurance policies offered by this
Prospectus are funded by a Fixed Account and Separate Account VL I, a separate
account established by Hartford Life pursuant to Connecticut insurance law and
organized as a unit investment trust registered under the Investment Company Act
of 1940. Separate Account VL I is presently comprised of 22 sub-accounts (the
"Sub-Accounts" and each individually a "Sub-Account"), each of which invests
exclusively in one of the underlying Funds. If an initial premium is submitted
with an application for a Policy, it will be allocated, to the Hartford Money
Market Sub-Account. At a later date the values in the Hartford Money Market
Sub-Account will be allocated to one or more of the Sub-Accounts or the Fixed
Account as specified in the Policy Owner's application. This later date is the
latest of 45 days after the application is signed, ten days after We receive the
premium and the date We receive the final requirement to put the policy in
force. The Policies are credited with units ("Accumulation Units") in each
selected Sub-Account, the assets of which are invested in the applicable Fund. A
Policy Owner may transfer the funds among the Sub-Accounts and the Fixed Account
subject to a transfer charge. See "Transfer of Account Value" of "Detailed
Description of Policy Benefits and Provisions," page .
The Policies are first and foremost life insurance policies with death
benefits, cash values, and other features traditionally associated with life
insurance. The Policies are called "flexible premium" because, once the desired
level and pattern of Death Benefits have been determined, a purchaser has
considerable flexibility in the selection of the timing and amount of premium to
be paid. The Policies are called "variable" because, unlike the fixed benefits
of an ordinary whole life insurance policy, the Cash Value will, and the Death
Benefit may increase or decrease depending on the investment experience of the
Funds to which the premium payment(s) has been allocated. However, as long as
the policy remains in force, no partial withdrawals occur, and there are no
requests to increase or decrease the Face Amount, the Death Benefit will never
be less than the Initial Face Amount. See "Detailed Description of Policy
Benefit and Provisions -- Death Benefit," page .
POLICY DESIGN OPTIONS
The options in the Policy are structured to give a Purchaser and his sales
agent the ability to select a Policy tailor-made for the purchaser's specific
life insurance needs.
The Policy options which give the purchaser such flexibility fall into four
major categories:
1. Death Benefit Options -- These allow the Purchaser to select various
levels and patterns of Death Benefits.
2. Premium Options -- Once the Purchaser has decided on the appropriate
Death Benefit, he then has considerable flexibility in determining the
desired premium schedule.
3. Guarantee Period Options -- The Purchaser also has the ability to choose
a Guarantee Period from one to ten years. During this period, additional
contractual guarantees are provided. Among these is the guarantee that
the Death Benefit will be no less than the Initial Face Amount and the
Policy will not lapse as long as certain Scheduled Premiums selected by
the Purchaser are paid or provided for by favorable investment
experience.
4. Investment Options -- The Purchaser has the choice of allocating the
Policy's Account Value among nine or less of the Policy's 23 investment
options. These include the 22 variable sub-accounts and the fixed
account.
DEATH BENEFIT
The Policies provide for three Death Benefit options. These can be level and
equal to the Face Amount, a Face Amount plus Return of Account Value Death
Benefit or a Face Amount plus Return of Scheduled Premium Death Benefit. At the
death of the Insured, we will pay the Death Proceeds to the Beneficiary. The
Death Proceeds equal the Death Benefit less any Indebtedness under the Policy.
See "Detailed Description of Policy Benefits and Provision -- Death Benefit,"
page .
PREMIUM
You have considerable flexibility as to when and in what amounts you pay
premiums.
6
<PAGE>
Prior to issue, you can choose the level of the Scheduled Premiums, within a
range determined by the Hartford Life based on the Face Amount of the policy,
the insured's sex (except where unisex rates apply), age at issue, and the
insured's risk classification.
During the Guarantee Period, the Hartford Life will guarantee that the
Policy will not lapse, regardless of the investment experience of the Funds, if
you pay the Scheduled Premiums when due. In addition, Unscheduled Premium
Payments are allowed during the Guarantee Period.
Even if You do not pay all Scheduled Premiums due during the Guarantee
Period, the Policy will stay in force as long as the Policy Surplus exceeds the
Indebtedness in the Policy.
After the Guarantee Period, You may change your Scheduled Premiums to any
level you desire, and Unscheduled Premium Payments are still allowed. Once the
Guarantee Period has expired, the Policy will not lapse as long as the Cash
Surrender Value is sufficient to cover the Monthly Deduction Amounts.
No premium payment will be accepted which causes the Policy to not meet the
tax qualification guidelines for life insurance under the Internal Revenue Code
of 1986, as amended.
There are circumstances, usually if a Policy Owner wants to refund future
benefits in seven years or less, when the Policy may become a Modified Endowment
Contract under federal tax law. If it does, loans and other pre-death
distributions are includable in gross income on an income-first basis. A 10%
penalty tax may be imposed on income distributed before the insured attains age
59 1/2. Prospective purchasers and Policy Owners are advised to consult a
qualified tax adviser before taking steps that may affect whether the Policy
becomes a Modified Endowment Contract. See "Federal Tax Considerations, Modified
Endowment Contract" for a discussion of the "seven pay test", page .
GUARANTEE PERIOD
The Guarantee Period selected by You will affect the benefits provided by
the Policy. In general, the longer the Guarantee Period is, the higher the
front-end sales loads and Surrender Charges are. However, the advantages of a
longer Guarantee Period include:
a. a longer period during which Your Death Benefit is guaranteed, regardless
of the investment experience of the Sub-Accounts,
b. a longer period during which your current administrative fees are
guaranteed (as a result, the longer the Guarantee Period is, the lower
the guaranteed administrative fees are),
c. a longer period during which your current Cost of Insurance rates are
guaranteed (as a result, the longer the Guarantee Period is, the lower
the guaranteed Cost of Insurance rates are),
d. lower current Cost of Insurance rates,
e. lower Mortality and Expense risk rates.
In addition, if you choose a Guarantee Period longer than five years, You
may be given the right to purchase additional coverage, subject to limitations,
without any evidence of Insurability. See "Supplemental Benefits" on page .
Due to the way the different charges and fees depend on different factors,
such as the length of the Guarantee Period, it is difficult to anticipate the
net effect of these charges on the Policy values without a sales illustration.
Once a purchaser, in consultation with his sales agent, has decided on a
combination of policy features, (such as face amount, level of Scheduled
Premiums, Guarantee Period, and the age and sex of Insured) the sales agent will
provide that purchaser with an illustration which reflects the charges and
benefits of that particular combination and a summary of Policy charges and
fees. In addition, these illustrations are available for any allowable
combination of benefits which a prospective purchaser may request.
For more information concerning Front-End Sales Loads, see page ,
Surrender Charges, see page , Cost of Insurance Charges, see page , and
Mortality and Expense Risk Charges see page .
SEPARATE ACCOUNT VL I
Separate Account VL I is a separate account established by Hartford Life
pursuant to the insurance laws of the State of Connecticut and organized as a
registered unit investment trust under the Investment Company Act of 1940.
Separate Account VL I is presently comprised of 22 Sub-Accounts, each of which
invests
7
<PAGE>
exclusively in one of the Funds. Each Hartford Fund is organized as a
corporation under the laws of the State of Maryland and is a diversified
open-end management investment company registered under the Investment Company
Act of 1940. The Putnam Funds are organized as Putnam Capital Manager Trust, a
Massachusetts business trust organized on September 24, 1987, and is an
open-end, series investment company with multiple portfolios or funds registered
under the Investment Company Act of 1940. The Fidelity Funds involve two
diversified open-end management investment companies, each with multiple
portfolios and organized as a Massachusetts business trust. The Equity-Income
Portfolio and Overseas Portfolio are portfolios of the Variable Insurance
Products Fund, organized on November 13, 1981. The Asset Manager Portfolio is a
portfolio of the Variable Insurance Products Fund II, organized on March 21,
1988.
Registration under the Investment Company Act of 1940 does not involve
supervision of the management or investment practices or policies by the
Commission. The shares of the Funds are sold to Separate Account VL I and to
other separate accounts of Hartford Life or its affiliates which fund similar
annuity or life insurance products.
Currently, the Funds are Hartford Advisers Fund, Inc., Hartford Capital
Appreciation Fund, Inc., Hartford Bond Fund, Inc., Hartford Dividend and Growth
Fund, Inc., Hartford Index Fund, Inc., Hartford International Opportunities
Fund, Inc., Hartford Mortgage Securities Fund, Inc., Hartford Stock Fund, Inc.,
and HVA Money Market Fund, Inc. (hereinafter the "Hartford Funds"), 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 (hereinafter the "Putnam
Funds"), and the Equity-Income Portfolio, Overseas Portfolio and Asset Manager
Portfolio (hereinafter the "Fidelity Funds"). Applicants should read the
prospectuses for each of the Funds accompanying this Prospectus in connection
with the purchase of a Policy. The investment objectives of each of the Funds
are as set forth in "Separate Account VL I," page .
Total fund operating expenses in 1995, including management fees, were .65%
for Hartford Advisers Fund; .68% for Hartford Capital Appreciation Fund; .53%
for Hartford Bond Fund; .77% for Hartford Dividend and Growth Fund; .39% for
Hartford Index Fund; .86% for Hartford International Opportunities Fund; .47%
for Hartford Mortgage Securities Fund; .48% for Hartford Stock Fund; .45% for
HVA Money Market Fund; .85% for PCM Diversified Income Fund; .84% for PCM Global
Asset Allocation Fund; .75% for PCM Global Growth Fund; .57% for PCM Growth and
Income Fund; .79% for PCM High Yield Fund; .57% for PCM Money Market Fund; .84%
for PCM New Opportunities Fund; .70% for PCM U.S. Government and High Quality
Bond Fund; .78% for PCM Utilities Growth and Income Fund; .68% for PCM Voyager
Fund; .61% for Equity-Income Portfolio; .91% for Overseas Portfolio; and .81%
for Asset Manager Portfolio.
The investment adviser for the Hartford Funds is The Hartford Investment
Management Company, a wholly-owned subsidiary of Hartford Life. The Hartford
Investment Management Company, Inc. retains a sub-investment adviser with
respect to some of the Funds. The Putnam Funds are advised by Putnam Investments
Management Inc., a subsidiary of Putnam Investments, Inc. The Fidelity Funds are
managed by Fidelity Management & Research Company. See "Separate Account VL I,"
page .
FIXED ACCOUNT
Premium Payments and Cash Values allocated to the Fixed Account become part
of the general assets of the Hartford Life. The Hartford Life invests the assets
of the General Account in accordance with applicable law governing the
investments of Insurance Company general accounts.
DEDUCTIONS FROM THE PREMIUM
Before the allocation of the premium to the Account Value, a deduction as a
percentage of premium is made for the front-end sales load and premium taxes.
The amount of each premium allocated to the Account Value is your Net Premium.
FRONT-END SALES LOAD
The front-end sales load of the premium deduction is based on the level of
Scheduled Premiums, the length of the Guarantee Period, and the amount of any
Unscheduled Premiums paid.
The maximum front-end sales load percentages are 50% of the premiums paid in
the first Policy Year, 11% in Policy Years 2 through 10, and 3% in Policy Years
11 and later.
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For all Guarantee Periods, the maximum amount of premium paid in any Policy
Year subject to a front-end sales load is the Guideline Annual Premium. In
addition, if Scheduled Premiums are less than the Guideline Annual Premium, the
maximum amount of premium paid in the first Policy Year subject to a front-end
sales load is the Scheduled Premium.
The actual schedule of front-end sales loads for any given Policy is
specified in that Policy.
PREMIUM RELATED TAX CHARGE
We deduct a percentage of each premium to cover taxes assessed against the
Hartford Life that are attributable to premiums. This percentage will vary by
locale depending on the tax rates in effect there. The range is generally
between 0% and 4%.
DEDUCTIONS AND CHARGES FROM THE ACCOUNT VALUE
We will subtract amounts from your Account Value to provide for the Monthly
Deduction Amount. These will be taken on a Pro Rata Basis from the Fixed Account
and Sub-Accounts on each Monthly Activity Date.
The Monthly Deduction Amount equals:
(a) the Cost of Insurance; plus
(b) the charges for additional benefits provided by rider, if any; plus
(c) the charges for "special" insurance class rating, if any; plus
(d) the Monthly Administrative Fee, plus
(e) the Mortality and Expense Risk Charge.
Hartford Life may also set up a provision for income taxes against the
assets of Separate Account VL I. See "Deductions and Charges From the Account
Value, page and "Federal Tax Considerations," page .
The Mortality and Expense Risk Charge ranges from .90% annually for a Policy
with a one-year Guarantee Period and decreases proportionately as the Guarantee
Period gets longer to .60% on a Policy with a ten-year Guarantee Period.
Applicants should review the prospectuses for the Funds which accompany this
Prospectus for a description of the charges assessed against the assets of each
of the Funds.
SURRENDER CHARGES
A contingent deferred sales load ("Surrender Charge") is assessed against
the Account Value of a Policy if the Policy lapses or is surrendered during the
first nine Policy Years. The amount of the Surrender Charge applicable during
the first Policy Year is established by Hartford Life based on the premiums and
the length of the Guarantee Period chosen by the Policy Owner. Subject to
certain limits imposed by state insurance law, the Surrender Charge decreases by
an equal amount each Policy Year until it reaches zero during the tenth Policy
Year.
The actual schedule of Surrender Charges for any given Policy is set forth
in that Policy. In addition, sales agents will provide, upon request, the
schedule of Surrender Charges which would apply under any given circumstances.
The aggregate front-end sales load and Surrender Charge assessed if a Policy
lapses or is surrendered (i.e., the total sales load) will not exceed the sales
load limitations specified by the Securities and Exchange Commission. Generally,
the total sales load under the Policy will not exceed 180% of the Guideline
Annual Premium, or 9% of the sum of the Guideline Annual Premium that would be
paid over a 20-year period. In cases where the anticipated life expectancy of
the insured(s) named in the Policy is less than 20 years, the total sales load
will not exceed 9% of the sum of the Guideline Annual Premiums for the shorter
period.
LIMITS ON FRONT-END SALES LOADS AND SURRENDER CHARGES
Certain Federal securities and State insurance laws and regulations limit
the front-end sales loads and surrender charges which can be assessed on these
Policies. The front-end sales loads and surrender charges assessed in these
Policies comply with these limitations.
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<PAGE>
Front-end sales loads and Surrender Charges which cover expenses relating to
the sale and distribution of the contracts may be reduced for certain sales of
the contracts under circumstances which may result in savings of such sales and
distribution expenses.
CASH VALUE
As with many other types of insurance policies, each Policy will have a cash
value ("Cash Value"). The Cash Value of the Policy will increase or decrease to
reflect the interest credited to the Fixed Account and Loan Account, investment
experience of the Sub-Accounts applicable to the Policy and deductions for the
Monthly Deduction Amount. There is no minimum guaranteed Cash Value and the
Policy Owner bears the risk of the investment in the Funds. See "Detailed
Description of the Policy Benefits and Provisions -- Cash Value," page .
POLICY LOANS
A Policy Owner may obtain a cash loan from Hartford Life. The loan is
secured by the Policy. At the time a loan is requested, the Indebtedness
(including the currently applied for loan) may not exceed 90% of the Cash Value.
See "Detailed Description of Policy Benefits and Provisions -- Policy Loans,"
page .
CHARGES AGAINST THE FUNDS
Separate Account VL I purchases shares of the Funds at net asset value. The
net asset value of the Fund shares reflects investment advisory fees and
administrative and other expenses already deducted from the assets of the Funds.
These charges are described herein. See "Charges Against the Funds," page .
THE RIGHT TO EXAMINE THE POLICY
An applicant has a limited right to return his or her Policy for
cancellation. If the applicant returns the Policy within ten days after delivery
of the Policy, or within 45 days after completion of the application, whichever
is latest (subject to applicable state regulation), Hartford Life will return to
the applicant, within seven days thereafter, the premium paid.
SURRENDER/CONTINUATION OPTIONS
At any time prior to the Maturity Date, provided the Policy has a Cash
Surrender Value, You may generally choose to have the Cash Surrender Value
applied under one of the following options:
Option A -- Surrender for Cash
Option B -- Continue as Extended Term Insurance
Option C -- Continue as Paid-Up Insurance
See "Detailed Description of Policy Benefits and Provisions," and
"Surrender/Continuation Options", pages .
TAX CONSEQUENCES
The current Federal tax law generally excludes all death benefit payments
from the gross income of the Policy Beneficiary. See "Federal Tax
Considerations," page .
DETAILED DESCRIPTION OF POLICY
BENEFITS AND PROVISIONS
GENERAL
This Prospectus describes a flexible premium variable life insurance policy
where the Purchaser of the Policy has considerable flexibility in selecting the
timing and amount of premium payments. In addition, the Purchaser can select a
Guarantee Period, from one to ten years, during which additional guarantees are
provided such as the guarantee that the Death Benefit will be no less than the
Initial Face Amount and the Policy will not lapse as long as certain Scheduled
Premiums are paid or are provided for by favorable investment experience. As
stated below, Unscheduled Premium payments are also allowed.
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PREMIUMS
PREMIUM PAYMENT FLEXIBILITY
A significant feature of the Policy is that it gives you the ability to pay
amounts greater or less than the Scheduled Premiums.
Prior to issue, you can choose the level of the Scheduled Premiums, within a
range determined by the Hartford Life, based on the Face Amount of the policy,
the insured's sex (except where unisex rates apply), age at issue, and the
insured's risk classification.
During the Guarantee Period, the Hartford Life will guarantee that the
Policy will not lapse, regardless of the investment experience of the Funds, if
you pay the Scheduled Premiums when due and the Indebtedness never exceeds the
Cash Value. In addition, Unscheduled Premium payments are allowed during the
Guarantee Period.
Even if you do not pay all Scheduled Premiums due during the Guarantee
Period, the Policy will stay in force as long as the Policy Surplus exceeds the
Indebtedness in the Policy.
After the Guarantee Period, you may change your Scheduled Premiums to any
level you desire, and Unscheduled Premium payments are still allowed. Once the
Guarantee Period has expired, the Policy will not lapse as long as the Cash
Surrender Value is sufficient to cover the Monthly Deduction Amounts.
See also "Lapse and Reinstatement" on page for more details.
SCHEDULED PREMIUMS
You have the right to pay Scheduled Premiums annually, semiannually,
quarterly, or monthly. The first Scheduled Premium is due on the Policy Date.
During the Guarantee Period, each Scheduled Premium after the first is due at
the expiration of the period for which the preceding Scheduled Premium was paid.
A Scheduled Premium may be paid at any time prior to its due date, subject to
the premium limitations set forth by the Internal Revenue Code as indicated in
the "Premium Limitation" section. See page .
During the Guarantee Period, if all Scheduled Premiums are paid when due and
if Indebtedness does not exceed the Cash Value, the Policy will not terminate
due to insufficient Cash Surrender Value, regardless of the investment
experience of the Funds.
During the Guarantee Period, if you fail to pay a Scheduled Premium when
due, and if, on the premium due date and for the rest of that Policy Year, the
Policy Surplus exceeds the Indebtedness, payment of that Scheduled Premium will
not be required in that year or in any future year. The Policy will not
terminate due to this nonpayment. However, future Scheduled Premiums during the
Guarantee Period will be required unless the Policy Surplus continues to exceed
the Indebtedness in those future Policy Years. In addition, as is true with any
premium, your Account Value and Policy Surplus in future years will be larger if
you make the premium payment than if you do not.
For example, to determine whether or not non-payment of a Scheduled Premium
in the second Policy Year would result in a lapse, You would compare the actual
Account Value on the first Policy Anniversary to the first Target Account Value.
If the actual Account Value was equal to or greater than the Target Account
Value and the Indebtedness remained less than this Policy Surplus, failure to
pay any Scheduled Premiums due in the second Policy Year would not result in a
lapse.
After the Guarantee Period, the Company will send reminder notices for the
Owner to pay Scheduled Premiums during the Insured's lifetime. Payment of the
Scheduled Premium may not be sufficient to keep the policy in force after the
end of the Guarantee Period.
UNSCHEDULED PREMIUMS
Any premium we receive under the Policy in an amount different from the
Scheduled Premium will be considered an Unscheduled Premium. Unscheduled
Premiums of at least $50.00 can be made at any time while the policy is in
force.
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ALLOCATION OF PREMIUM PAYMENTS
The initial Net Premium will be allocated to the Hartford Money Market
Sub-Account on the later of the Policy Date or the date We receive the premium.
The value in this Hartford Money Market Sub-Account will then be allocated
to the Fixed Account and Sub-Accounts according to the premium allocation
specified in the application on the latest of 45 days after the application is
signed, ten days after We receive the premium and the date We receive the final
requirement to put the policy in force.
Any additional Net Premiums received by Us prior to such date will be
allocated to the Hartford Money Market Fund Sub-Account.
Upon written request, You may change the premium allocation. Portions
allocated to the Fixed Account and Sub-Accounts must be whole percentages of 10%
or more. Subsequent Net Premiums will be allocated to the Fixed Account and
Sub-Accounts according to Your most recent instructions, subject to the
following. The Account Value may be allocated to no more than nine of these. If
We receive a premium and Your most recent allocation instructions would violate
this requirement, We will allocate the Net Premium to the Fixed Account and
Sub-Accounts according to Your previous premium allocation.
The owner receives several different types of notification as to what his
current premium allocation is. The initial allocation chosen by the owner is
shown in the contract. And, each transactional confirmation received after a
premium payment will show how that premium has been allocated. In addition, each
quarterly statement summarized the current premium allocation in effect for that
contract.
ACCUMULATION UNITS
Net Premiums allocated to the Sub-Accounts are used to credit Accumulation
Units to those Sub-Accounts.
The number of Accumulation Units in each Sub-Account to be credited to a
Policy (including the initial allocation to Hartford Money Market Sub-Account)
and the amount credited to the Fixed Account will be determined first by
multiplying the Net Premium by the appropriate allocation percentage to
determine the portion to be invested in the Fixed Account or Sub-Account. Each
portion to be invested in a Sub-Account is then divided by the then Accumulation
Unit Value of that particular Sub-Account next computed following receipt of the
payment.
ACCUMULATION UNIT VALUES
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 dividend or capital gain distributions paid by that Fund 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.
All valuations in connection with a Policy, e.g., with respect to
determining Cash Value and Account Value and in connection with Policy Loans, or
calculation of Death Benefits, or with respect to determining the number of
Accumulation Units to be credited to a Policy with each premium payment, other
than the initial premium payment, will be made on the date the request or
payment is received by Hartford Life at the National Service Center if such date
is a Valuation Day; otherwise such determination will be made on the next
succeeding date which is a Valuation Day.
PREMIUM LIMITATION
If premiums are received which would cause the policy to fail to meet the
definition of a life insurance policy in accordance with the Internal Revenue
Code, We will refund the excess premium payments. We will refund such premium
payments and interest thereon within 60 days after the end of a Policy Year.
Except for Scheduled Premiums that are required, a premium payment that
results in an increase in the Death Benefit greater than the amount of the
premium will be accepted only after We approve evidence of insurability.
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CASH VALUES
As with traditional life insurance, each Policy will have a Cash Value. The
Cash Value is equal to the Account Value less any remaining Surrender Charges.
There is no minimum guaranteed Cash Value.
The Account Value of a Policy changes on a daily basis and will be computed
on each Valuation Day. The Account Value will vary to reflect the investment
experience of the Sub-Accounts, and the interest credited to the Fixed and Loan
Accounts as well as the Monthly Deduction Amounts. The Account Value of a
particular Policy is related to the net asset value of the Funds associated with
the Sub-Accounts, if any, to which premium payments on the Policy have been
allocated. The Account Value in the Sub-Accounts on any Valuation Day is
calculated by multiplying the number of Accumulation Units in each Sub-Account
as of the Valuation Day by the current Accumulation Unit Value of that
Sub-Account and then summing the result for all the Sub-Accounts. The Account
Value equals the Account Value in the Sub-Accounts plus the value of the Fixed
and Loan Accounts. The Cash Value is the Account Value minus any remaining
Surrender Charge. The Cash Surrender Values which is the net amount available
upon surrender of the Policy, is the Cash Value less any Indebtedness. See "The
Policy -- Accumulation Unit Values," page .
AMOUNT PAYABLE ON SURRENDER OF THE POLICY
As long as the Policy is in effect, a Policy Owner may elect, without the
consent of the Beneficiary (provided the designation of Beneficiary is not
irrevocable), to fully surrender the Policy. Upon surrender, the Policy Owner
will receive the Cash Surrender Value determined as of the day Hartford Life
receives the Policy Owner's written request or the date requested by the Policy
Owner, whichever is later. The Cash Surrender Value equals the Cash Value less
any Indebtedness. The Policy will terminate on the date of receipt of the
written request, or the date the Policy Owner requests the surrender to be
effective, whichever is later.
LOAD REFUND
If a Policy is surrendered during the first two Policy Years, the Policy
Owner may be entitled to payment of a refund in addition to the Cash Surrender
Value.
The refund will be equal to the excess, if any, of the sum of the actual
front-end sales load charged to-date plus the Surrender Charge assessed upon
Surrender over:
1. the sum of 30% of payments in aggregate amount less than or equal to one
Guideline Annual Premium plus 10% of payments in aggregate amount greater
than one Guideline Annual Premium but not more than two Guideline Annual
Premiums; and
2. 9% of each payment made in excess of two Guideline Annual Premiums.
PARTIAL WITHDRAWALS
After the Guarantee Period, partial withdrawals are allowed. The minimum
partial withdrawal allowed is $500.00. The maximum partial withdrawal is the
Cash Surrender Value, less $1,000.00. A partial withdrawal charge of up to
$50.00 may be charged. A maximum of twelve partial withdrawals are allowed each
Policy Year; however, only one (1) partial withdrawal is allowed between any
successive Monthly Activity Dates. The Face Amount is reduced by the amount of
the Partial Withdrawal. Unless specified otherwise, the Partial Withdrawal will
be deducted on a Pro Rata Basis from the Fixed Account and the Sub-Accounts.
TRANSFERS OF ACCOUNT VALUE
AMOUNT AND FREQUENCY OF TRANSFERS
Upon request and as long as the Policy is in effect, You may transfer
amounts among the Fixed Account and Sub-Accounts. Transfers may be made by
written request or by calling toll free 1-800-231-5453. Transfers by telephone
may be made by the agent of record or by the attorney-in-fact pursuant to a
power of attorney. Telephone transfers may not be permitted in some states. The
policy of Hartford Life 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. We will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine; otherwise, We may be liable
for any losses due to unauthorized or fraudulent
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<PAGE>
instructions. The procedures We follow for transactions initiated by telephone
include requirements that callers provide certain identifying information for
themselves ( if not the Policy Owner) and the Policy Owner. All transfer
instructions by telephone are tape recorded.
The amounts which may be transferred and the number of transfers will be
limited by Our rules then in effect.
Currently there are no restrictions on transfers other than those described
below. There is no charge currently for the first four (4) transfers in any
Policy Year. Each subsequent transfer is subject to a $25 Transfer Charge.
We reserve the right at a future date to limit the size of transfers and
remaining balances, and to limit the number and frequency of transfers.
TRANSFERS TO OR FROM SUB-ACCOUNTS
In the event of a transfer from a Sub-Account, the number of Accumulation
Units credited to the Sub-Account from which the transfer is made will be
reduced. The reduction will be determined by dividing:
1. the amount transferred by,
2. the Accumulation Unit Value for that Sub-Account on the Valuation Day, We
receive Your request for transfer In Writing.
In the event of a transfer to a Sub-Account, We will increase the number of
Accumulation Units credited to the Sub-Account. The increase will equal:
1. the amount transferred divided by,
2. the Accumulation Unit Value for that Sub-Account determined on the
Valuation Day, We receive your request for transfer in writing.
TRANSFERS FROM THE FIXED ACCOUNT
In addition to the conditions above, transfers from the Fixed Account are
subject to the following:
(a) the transfer must occur during the 30-day period following each Policy
Anniversary; and
(b) if the Accumulated Value in Your Fixed Account exceeds $1,000, the
amount transferred in any Policy Year may be no larger than 25% of the
Accumulated Value in the Fixed Account on the date of transfer.
POLICY LOANS
As long as the Policy is in effect, a Policy Owner may obtain, without the
consent of the Beneficiary (provided the designation of Beneficiary is not
irrevocable), a cash loan from Hartford Life. The total Indebtedness at the time
of the new loan (including the accrued interest on prior loans plus the
currently applied for loan) may not exceed 90% of the Cash Value.
The amount of each loan will be transferred on a Pro Rata Basis from the
Fixed Account and each of the Sub-Accounts (unless the Policy Owner specifies
otherwise) to the Loan Account. The Loan Account is a mechanism used to ensure
that any outstanding Indebtedness remains fully secured by the Account Value.
LOAN INTEREST
Interest will accrue daily on the Indebtedness at the Policy Loan Interest
Rate indicated in the Policy. The difference between the value of the Loan
Account and the Indebtedness will be transferred on a Pro Rata Basis from the
Fixed Account and Sub-Accounts to the Loan Account on each Monthly Activity
Date.
CREDITED INTEREST
During the first ten Policy Years, any amounts in the Loan Account will be
credited with interest at a rate equal to the Policy Loan Rate, minus 2%. For
Policy Years 11 and beyond, except for Preferred Loans described below, the Loan
Account will be credited with interest at a rate equal to the policy Loan Rate
applicable to that Indebtedness, minus 1%.
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PREFERRED LOAN
If, any time after the tenth Policy Anniversary, the Cash Value exceeds the
total of all premiums paid since issue, a Preferred Loan is available. The
amount available for a Preferred Loan is the amount by which the Cash Value
exceeds total premiums paid. The amount of the Loan Account which equals a
Preferred Loan will be credited with interest at a rate equal to the Policy Loan
Rate. The amount of Indebtedness that qualifies as a Preferred Loan is
determined on each Monthly Activity Date.
LOAN REPAYMENTS
You can repay any part of or the entire loan at any time.
The amount of loan repayment will be deducted from the Loan Account and will
be allocated among the Fixed Account and Sub-Accounts in the same percentage as
premiums are allocated.
TERMINATION DUE TO EXCESSIVE INDEBTEDNESS
If total Indebtedness equals or exceeds the Cash Value, the Policy will
terminate 61 days after we have mailed notice to your last known address and
that of any assignees of record. If sufficient loan repayment if not made by the
end of this 61 day period, the Policy will end without value.
EFFECT OF LOANS ON ACCOUNT VALUE
A loan, whether or not repaid, will have a permanent effect on the Account
Value because the investment results of each Sub-Account will apply only to the
amount remaining in such Sub-Accounts. In addition, the rate of interest
credited to the Fixed Account will usually be different than the rate credited
to the Loan Account. The longer a loan is outstanding, the greater the effect is
likely to be. The effect could be favorable or unfavorable. If the Fixed Account
and Sub-Accounts earn more than the annual interest rate for funds held in the
Loan Account, a Policy Owner's Account Value will not increase as rapidly as it
would have had no loan been made. If the Fixed Account and Sub-Accounts earn
less than the Loan Account, the Policy Owners Account Value will be greater than
it would have been had no loan been made. Also, if not repaid, the aggregate
amount of the outstanding loan (i.e., the Indebtedness) will reduce the Death
Proceeds and Cash Surrender Value otherwise payable.
DEATH BENEFIT
The Policies provide for the payment of the Death Proceeds to the named
Beneficiary when the Insured under the Policy dies. The Death Proceeds payable
to the Beneficiary equal the Death Benefit less any Indebtedness. The Death
Benefit depends on the Death Benefit Option selected by You.
DEATH BENEFIT OPTIONS
There are three Death Benefit Options: the Level Death Benefit Option, the
Return of Account Value Death Benefit Option and the Return of Premium Death
Benefit Option. Subject to the Minimum Death Benefit described below, the Death
Benefits under each option are:
1. Under the Level Death Benefit Option, the Death Benefit is the Face
Amount.
2. Under the Return of Account Value Death Benefit Option, the Death Benefit
is the Face Amount plus the Account Value.
3. Under the Return of Premium Death Benefit Option, the Death Benefit is
the Face Amount plus the sum of the Scheduled Premiums paid.
OPTION CHANGE
After the Guarantee Period, You may change the Return of Scheduled premium
or Return of Account Value Death Benefit to the Level Death Benefit. If that
option Change is elected, the Face Amount will become that amount available as a
Death Benefit immediately prior to the Option Change.
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DEATH BENEFIT GUARANTEE
During the Guarantee Period, if all Scheduled Premiums are paid when due and
if Indebtedness does not exceed the Cash Value, the Policy will not terminate
due to insufficient Cash Surrender Value, regardless of the investment
experience of the Funds.
MINIMUM DEATH BENEFIT
Notwithstanding the above, there is a minimum Death Benefit equal to the
Account Value multiplied by a specified percentage. This percentage varies
according to the Insured's Issue Age, Attained Age, sex (where unisex rates are
not used), and insurance class and are specified in the Policy.
EXAMPLES OF THE MINIMUM DEATH BENEFIT:
<TABLE>
<CAPTION>
A B
-------- --------
<S> <C> <C>
Face Amount............................................. $100,000 $100,000
Account Value on Date of Death.......................... 46,500 34,000
Specified Percentage.................................... 250% 250%
Death Benefit Option.................................... Level Level
</TABLE>
In Example A, the minimum Death Benefit equals $116,250, i.e., the greater
of $100,000 (the Face Amount) or $116,250 (the Account Value at the Date of
Death of $46,500, multiplied by the specified percentage of 250%). This amount
less any outstanding loans constitutes the Death Proceeds which we would pay to
the Beneficiary.
In Example B, the death benefit is $100,000, i.e., the greater of $100,000
(the Face Amount) or $85,000 (the Account Value of $34,000 multiplied by the
specified percentage of 250%).
All or part of the Death Proceeds may be paid in cash or applied under a
"Payment Option." See "Other Matters -- Payment Options," page .
INCREASES AND DECREASES IN FACE AMOUNT
At any time after the Guarantee Period, You may request a change in the Face
Amount by writing to Us.
The minimum Face Amount for an increase or decrease will be based on Our
rules then in effect.
All requests to increase the Face Amount must be applied for on a new
application and accompanied by the Policy. All requests will be subject to
evidence of insurability satisfactory to Us. Any increase approved by Us will be
effective on the date shown on the new policy specifications page provided
that the deduction for the Cost of Insurance for the first month is made. The
Monthly Administrative Fee on the first Monthly Activity Date on or after the
effective date of the increase will reflect a charge for the increase.
A decrease in the Face Amount will be effective on the Monthly Activity Date
following the date we receive the request. The remaining Face Amount must not be
less than Our minimum rules then in effect. Decreases will be applied:
(a) to the most recent increase; then
(b) successively to each prior increase; and then
(c) to the Initial Face Amount.
If You ask to decrease Your Face Amount below the Initial Face Amount, We
will deduct a portion of any remaining Surrender Charge from Your Account Value.
This will be done on a Pro Rata Basis. Your Surrender Charge will be reduced by
the same amount.
The amount of the reduction will be equal to:
(a) the Initial Face Amount minus the requested Face Amount, times
(b) the Surrender Charge on the date of the request to change the Face
Amount, divided by
(c) the Initial Face Amount.
We reserve the right to limit the number of increases or decreases made
under the Policy to no more than one in any 12 month period.
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BENEFITS AT MATURITY
If the Insured is living on the "Maturity Date" (the anniversary of the
Policy Date on which the Insured is attained age 100), on surrender of the
Policy to Hartford Life, Hartford Life will pay to the Policy Owner the Cash
Surrender Value. On the Maturity Date, the Policy will terminate and Hartford
Life will have no further obligations under the Policy.
LAPSE AND REINSTATEMENT
POLICY SURPLUS
We use the Policy Surplus to determine whether or not a policy will
terminate if Scheduled Premiums are not paid when due. If the Policy Surplus is
greater than zero for a Policy Year, the Scheduled Premiums may not be required.
If, however, the Policy Surplus for a Policy Year during the Guarantee Period is
zero, all Scheduled Premiums due in that year are required.
Here is how we determine the Policy Surplus.
The Policy Surplus for the first Policy Year is zero. The Policy Surplus for
each subsequent Policy Year is (a) minus (b), but never less than zero where:
(a) is the Account Value at the end of the previous Policy Year; and
(b) is the Target Account Value for the previous Policy Year. The Target
Account Values are shown in the Policy.
The Target Account Value on each anniversary is the Account Value,
determined at issue, that would result on each anniversary assuming all Annual
Scheduled Premiums were paid when due (including the one due on that anniversary
for the next Policy Year), a 6% net yield on assets (after fund level charges
but before the mortality and expense risk charge is deducted) and current cost
of insurance and expense charges.
Once determined for a given Policy Year, the Policy Surplus remains constant
for the entire Policy Year.
LAPSE AND GRACE PERIOD
During the Guarantee Period: If, on any given Monthly Activity Date the
Policy Surplus for that Policy Year is zero or less than the Indebtedness, all
Scheduled Premiums due in that Policy Year, on or before that date are required
to keep the Policy in force. For any such required Scheduled Premium not paid on
or before its due date, We will allow a grace period which ends 61 days after
that Monthly Activity Date. During this time the Policy will continue in force.
If any such required Scheduled Premium is not paid by the end of this grace
period, the Policy will terminate except as provided under the Non-Forfeiture
Options or unless You have elected the Automatic Premium Loan Option and there
is sufficient Cash Value to cover the amounts due.
After the Guarantee Period: The policy may terminate 61 days after a Monthly
Activity Date on which the Cash Surrender Value is less than zero. The 61-day
period is the Grace Period. If sufficient premium is not paid by the end of the
Grace Period, the policy will terminate without value. The Company will mail the
Owner and any assignee written notice of the amount of premium that will be
required to continue the Policy in force at least 61 days before the end of the
Grace Period. The premiums required will be no greater then the amount required
to pay three Monthly Deduction Amounts as of the day the Grace Period began. If
that premium is not paid by the end of the Grace Period, the policy will
terminate.
17
<PAGE>
REINSTATEMENT
Prior to the death of the Insured, and unless the Policy has been
surrendered for cash, the Policy may be reinstated prior to the Maturity Date,
provided:
(a) You make Your request within five years;
(b) satisfactory evidence of insurability is submitted;
(c) You pay all overdue required Scheduled Premiums, if any; and
(d) if, at the time of reinstatement, the Guarantee Period has expired, and,
if the amount paid in
(e) is insufficient to do so, sufficient premium must be paid to:
(i) cover all Monthly Deduction Amounts that are due and unpaid during
the Grace Period, and
(ii) keep the Policy in force for three months after the date of
reinstatement.
The Face Amount of the reinstated Policy cannot exceed the Face Amount at
the time of lapse. The Account Value on the reinstatement date will reflect:
(a) The Account Value at the time of termination; plus
(b) Net Premiums attributable to premiums paid at the time of reinstatement;
minus
(c) a charge to reflect the benefits, if any, provided under the Extended
Term or Reduced Paid-Up Options.
The Surrender Charges for the reinstated policy will be the same as they
would have been on the original policy had no lapse and subsequent reinstatement
taken place.
Upon reinstatement, any Indebtedness at the time of termination must be
repaid or carried over to the reinstated Policy.
AUTOMATIC PREMIUM LOAN OPTION
If You elect this option, We will automatically process a Policy Loan to pay
any Scheduled Premium which is due and not paid by the end of its grace period
following the due date. You may elect this option in the application or by
requesting it In Writing while no Scheduled Premium is outstanding beyond its
due date.
The Automatic Premium Loan Option will not be available if:
(a) You have revoked the election In Writing; or
(b) the loan amount needed to pay any unpaid Scheduled Premium would exceed
the Cash Surrender Value on the most recent Scheduled Premium due date.
In either instance, the Surrender/Continuation Options will apply as of the
end of the Grace Period.
THE RIGHT TO EXAMINE OR EXCHANGE THE POLICY
An Applicant has a limited right to return a Policy for cancellation. If the
Policy is returned, by mail or personal delivery to Hartford Life or to the
agent who sold the Policy, to be canceled within ten days after delivery of the
Policy to the Policy Owner, within 10 days of Hartford Life's mailing or
personal delivery of a Notice of Right to Withdraw or within 45 days of
completion of the Policy application, (whichever is later, and subject to
applicable state regulation), Hartford Life will return to the Applicant, within
seven days thereafter, the greater of the premium paid, less any Indebtedness,
or the sum of (1) the Account Value, less any Indebtedness, on the date the
returned Policy is received by Hartford Life or its agent and (2) any deductions
under the policy or by the Funds for taxes, charges or fees.
Once the Policy is in effect, it may be exchanged during the first 24 months
after its issuance, for a non-variable life insurance policy offered by Us or an
affiliate on the life of the insureds. No evidence of insurability will be
required. The new policy will have an amount at risk which equals or is less
than the amount ar risk in
18
<PAGE>
effect on the date of exchange. Premiums under the new policy will be based on
the same risk classifications as this Policy. An exchange of the Policy under
these circumstances should be a tax-free transaction under Section 1035 of the
Code.
SURRENDER/CONTINUATION OPTIONS
At any time prior to the Maturity Date, provided the Policy has a Cash
Surrender Value, You may choose to have the Cash Surrender Value applied under
one of the following options:
Option A -- Surrender for Cash
Option B -- Continue as Extended Term Insurance
Option C -- Continue as Paid-Up Insurance
In addition, if during the Guarantee Period:
(a) a Scheduled Premium which is required is not paid by the end of the
Grace Period; and
(b) the Automatic Premium Loan Option is not elected or not available due to
insufficient Cash Surrender Value.
You may choose one of the above options. You may notify Us of Your choice In
Writing within 61 days after the due date of the outstanding Scheduled Premium.
In the absence of such notification, We will automatically apply the Cash
Surrender Value to Option B unless the insurance class shown in your Policy is
"special" in which case the automatic Option will be Option C. If the Policy has
no Cash Surrender Value, it will terminate at the end of the Grace Period.
WHEN EFFECTIVE -- The effective date of this benefit will be the earlier of:
(a) the date We receive Your request; or
(b) the end of the Grace Period.
When a Surrender/Continuation Option becomes effective, all benefit riders
attached to the Policy will terminate unless otherwise provided in the Rider.
OPTION DESCRIPTIONS
Option A -- Surrender for Cash
If You choose this option, You must surrender the policy to Us. We will pay
You the Cash Surrender Value at the time of surrender, and Our liability under
the Policy will cease.
Option B -- Continue as Extended Term Insurance.
This option is not available unless the insurance class shown in the Policy
is "Standard" or "Preferred." If you choose this option, the Extended Term
Insurance Death Benefit will be the Death Benefit in effect on the effective
date of the non-forfeiture benefit less any Indebtedness. The term period will
begin on the effective date of this benefit and will extend for a period of time
equal to that which the Cash Surrender Value will provide as a net single
premium at the Insured's then Attained Age. At the end of that term period, Our
liability under the policy will cease. We will pay You any Cash Surrender Value
not used to provide Extended Term Insurance.
Option C -- Continue as Paid-Up Insurance.
If You choose this option, the Policy will continue as Paid-Up Life
Insurance. The amount of Paid-Up Life Insurance will be calculated using the
Cash Surrender Value of the policy as a net single premium as of the effective
date of this benefit at the then Attained Age of the Insured. The Company
reserves the right to require evidence of insurability or limit the amount of
the benefit if the Paid-Up amount exceeds the Death Benefit in effect on the
effective date of this benefit. We will pay You any Cash Surrender Value not
used to provide Paid-Up Insurance.
If the Policy is continued under Option B or Option C above, the Cash
Surrender Value available within 30 days after any Policy Anniversary will not
be less than the Cash Value on such Policy Anniversary minus any Indebtedness.
19
<PAGE>
VALUATION OF PAYMENTS AND TRANSFERS
We value the Policy on every Valuation Day.
We will pay Death Proceeds, Cash Surrender Values, Partial Withdrawals, and
loan amounts attributable to the Sub-Accounts within seven (7) days after We
receive all the information needed to process the payment unless the New York
Stock Exchange is closed for other than a regular holiday or weekend, trading is
restricted by the Securities and Exchange Commission (SEC) or that the SEC
declares that an emergency exists.
Hartford Life may defer payment of any amounts not attributable to the
Sub-Accounts for up to six months from the date on which we receive the request.
APPLICATION FOR A POLICY
Individuals wishing to purchase a Policy must submit an application to
Hartford Life. Within limits, an applicant may choose the Scheduled Premiums and
the Initial Face Amount and the Guarantee Period. A Policy generally will be
issued only on the lives of insureds age 80 and under who supply evidence of
insurability satisfactory to Hartford Life. Acceptance is subject to Hartford
Life's underwriting rules and Hartford Life reserves the right to reject an
application for any reason. No change in the terms or conditions of a Policy
will be made without the consent of the Policy Owner.
The Policy will be effective on the Policy Date only after Hartford Life has
received all outstanding delivery requirements and received the initial premium.
The Policy Date is the date used to determine all future cyclical transactions
on the Policy, e.g., Monthly Activity Date, Policy Months and Policy Years.
REDUCED CHARGES FOR ELIGIBLE GROUPS
Certain of the charges and deductions described below may be reduced for
Policies issued in connection with a specific plan in accordance with Our rules
in effect as of the date an application for a Policy is approved. To qualify for
such a reduction, a plan must satisfy certain criteria as to, for example, size
of the plan, expected number of participants and anticipated premium payment
from the plan. Generally, the sales contacts and effort, administrative costs
and mortality cost per Policy vary based on such factors as the size of the
plan, the
purposes for which Policies are purchased and certain characteristics for the
plan's members. The amount of reduction and the criteria for qualification will
reflect in the reduced sales effort and administrative costs resulting from, and
the different mortality experience expected as a result of, sales to qualifying
plans. We may modify from time to time on a uniform basis both the amounts of
reductions and the criteria for qualification. Reductions in these charges will
not be unfairly discriminatory against any person, including the affected Policy
Owners funded by Separate Account VL I.
DEDUCTIONS FROM THE PREMIUM
Before the allocation of the premium payment to the Account Value, a
deduction as a percentage of premium is made for the front-end sales load and
premium taxes. The amount of each premium allocated to the Account Value is your
Net Premium.
FRONT END SALES LOAD
The front-end sales load of the premium deduction is based on the level of
Scheduled Premiums, the length of the Guarantee Period, and the amount of any
Unscheduled Premiums paid.
The maximum front-end sales load percentages for Policies are 50% of the
premiums paid in the first Policy Year, 11% in Policy Years 2 through 10, and 3%
in Policy Years 11 and later.
For all Guarantee Periods, the maximum amount of premium paid in any Policy
Year that is subject to a front-end sales load is the Guideline Annual Premium.
In addition, if Scheduled Premiums are less than the Guideline Annual Premiums,
the maximum amount of premium paid in the first Policy Year subject to a front-
end sales load is the Scheduled Premium.
20
<PAGE>
The actual schedule of front-end sales loads for any given Policy is
specified in that Policy.
Generally, the shorter the Guarantee Period, the lower the front-end sales
loads. The levels range from those for the ten-year Guarantee Period cited above
to 0% on a contract with a One Year Guarantee Period. However, there are other
contractual charges that are lower for longer Guarantee Periods. See "Guarantee
Period" for a further description.
For an example of the effect of Front-End Sales Loads, see "Examples of
Front-End Sales Loads and Surrender Charges," page .
PREMIUM RELATED TAX CHARGE
We deduct a percentage of each premium to cover taxes assessed against the
Hartford Life that are attributable to premiums. This percentage will vary by
locale depending on the tax rates in effect there.
DEDUCTIONS AND CHARGES FROM THE ACCOUNT VALUE
MONTHLY DEDUCTION AMOUNTS
On the Policy Date and on each subsequent Monthly Activity Date, Hartford
Life will deduct an amount (the "Monthly Deduction Amount") from the Account
Value to cover certain charges and expenses incurred in connection with a
Policy. Each Monthly Deduction Amount will be deducted on a Pro Rata Basis from
the Fixed Account and each of the Sub-Accounts. The Monthly Deduction Amount
will vary from month to month.
The Monthly Deduction Amount equals:
(a) the charge for the Cost of Insurance; plus
(b) the charges for additional benefits provided by rider, if any; plus
(c) the charges for "special" insurance class rating, if any; plus
(d) the Monthly Administrative Fee; plus
(e) the Mortality and Expense Risk Charge
(a) COST OF INSURANCE CHARGE
The charge for the Cost of Insurance is equal to:
(i) the Cost of Insurance rate per $1,000; multiplied by
(ii) the amount at risk; divided by
(iii) $1,000
The amount at risk equals the Death Benefit less the Account Value on that
date, prior to assessing the Monthly Deduction Amount.
The cost of insurance charge is to cover Hartford Life's anticipated
mortality costs. For standard risks, the cost of insurance rate will not exceed
those based on the 1980 Commissioners Standard Ordinary Mortality Table. A table
of guaranteed cost of insurance rates per $1,000 will be included in each
Policy; however, Hartford Life reserves the right to use rates less than those
shown in the table. Substandard risks will be charged a higher cost of insurance
rate that will not exceed rates based on a multiple of the 1980 Commissioners
Standard Ordinary Mortality Table. The multiple will be based on the insured's
risk class. Hartford Life will determine the cost of insurance rate at the start
of each Policy Year. Any changes in the cost of insurance rate will be made
uniformly for all insureds in the same risk class.
Because the Account Value and the Death Benefit Amount under a Policy may
vary from month to month, the cost of insurance charge may also vary on each
Monthly Activity Date.
(b) RIDER CHARGE
If the policy includes riders, a charge is made applicable to the riders
from the Account Value on each Monthly Activity Date.
The charge applicable to these riders is to compensate the Hartford Life for
anticipated cost of providing these benefits and are specified on the applicable
rider.
21
<PAGE>
The Riders available are described on page under "Supplemental Benefits"
section.
(c) SPECIAL CLASS CHARGE
A charge for a special insurance class rating of the Insured may be made
against the Account Value, if applicable. This charge is to compensate the
Hartford Life for the additional mortality risk associated with individuals in
these classes.
(d) MONTHLY ADMINISTRATIVE FEE AND OTHER EXPENSE CHARGES AGAINST
SUB-ACCOUNTS
Hartford Life will assess a monthly administrative charge to compensate
Hartford Life for administrative costs in connection with the Policies. This
charge will be $8.33 per month initially and is guaranteed never to exceed that
level during the Guarantee Period. After the Guarantee Period, this charge is
guaranteed never to exceed $12.00 per month. This charge covers the average
expected cost for these expenses.
In addition, in the first Policy Year, there is a monthly first year charge
to compensate the Hartford Life for the up-front costs to underwrite and issue a
policy. This additional first year charge, subject to certain maximums, is equal
to $8.33 per month plus an amount that varies by issue age and the Initial Face
Amount (IFA). This additional first year charge and the maximums are summarized
in the chart below for some sample ages.
<TABLE>
<CAPTION>
ADDITIONAL FIRST YEAR MAXIMUM MONTHLY
ISSUE AGE MONTHLY CHARGE AMOUNT
- -------------- ------------------------------------------------------- -----------------
<C> <S> <C>
25 $8.33 plus $.0333 per $1,000 of IFA $ 50.00
35 $8.33 plus $.0375 per $1,000 of IFA $ 54.17
45 $8.33 plus $.0417 per $1,000 of IFA $ 62.50
55 $8.33 plus $.0625 per $1,000 of IFA $ 62.50
65 $8.33 plus $.0708 per $1,000 of IFA $ 62.50
</TABLE>
(e) MORTALITY AND EXPENSE RISK CHARGE
A charge is made for mortality and expense risks assumed by Hartford Life.
This charge is allocated to Hartford Life's general account. Hartford Life may
profit from this charge. See also, "Policy Benefits and Rights -- Cash Value,"
page .
The Mortality and Expense Risk Charge for any Monthly Activity Date is equal
to:
(i) the Mortality and Expense Risk Rate; multiplied by
(ii) the portion of the Account Value allocated to the Sub-Account on the
Monthly Activity Date prior to assessing the Monthly Deduction Amount.
The Mortality and Expense Risk Rate on any give Contract will be the same
both during and after the Guarantee Period.
The longer the Guarantee Period, the lower the Mortality and Expense Risk
Rate. The levels range from .90% annually for a Policy with a one-year Guarantee
Period and this level decreases proportionately as the Guarantee Period gets
longer to .60% on a Policy with a ten-year Guarantee Period. There are other
contractual charges that are higher for longer Guarantee Periods. See "Guarantee
Period" for a fuller description.
The mortality risk assumed is that the actual cost of insurance charges
specified in the Policy will be insufficient to meet actual claims. Hartford
Life also assumes the risk of the Death Benefit Guarantee during the Guarantee
Period. See "Detailed Description of Policy Benefits and Provisions -- Death
Benefit Guarantee," page . The expense risk assumed is that expenses incurred
in issuing and administering the Policies will exceed the Administrative charges
set in the Policy.
SURRENDER CHARGES
A contingent deferred sales load ("Surrender Charge") is assessed against
the Account Value of a Policy if the Policy lapses or is surrendered during the
first nine Policy Years. The amount of the Surrender Charge applicable during
the first Policy Year is established by Hartford Life based on the premiums paid
during the first year and the length of the Guarantee Period chosen by the
Policy Owner. Subject to certain limits imposed by state insurance law, the
Surrender Charge decreases by an equal amount each Policy Year until it reaches
zero during the tenth Policy Year.
22
<PAGE>
Specifically, the maximum first year Surrender Charge under a Policy is
equal to the sum of (i) a specified percentage of the Scheduled Premium up to
the Guideline Annual Premium and (ii) 5% of the excess, of the first year
premium over the Guideline Annual Premium. The longer the Guarantee Period, the
higher the percentage is which is used in the preceding calculation. This
percentage is equal to 110% with respect to Policies with a ten-year Guarantee
Period and decreases as the Guarantee Period chosen decreases to 10% for
Policies with a one-year Guarantee Period. However, there are other contractual
charges that are lower for longer Guarantee Periods. See "Guarantee Period" for
a fuller description.
The actual schedule of Surrender Charges for any given Policy is set forth
in that Policy. In addition, sales agents will provide, upon request, the
schedule of Surrender Charges which would apply under any given circumstances.
The aggregate front-end sales load and Surrender Charge assessed if a Policy
lapses or is surrendered (i.e., the total sales load) will not exceed the sales
load limitations specified by the Securities and Exchange Commission. Generally,
the total sales load under the Policy will not exceed 180% of the Guideline
Annual Premium, or 9% of the sum of the Guideline Annual Premium that would be
paid over a 20-year period. In cases where the anticipated life expectancy of
the insured(s) named in the Policy is less than 20 years, the total sales load
will not exceed 9% of the sum of the Guideline Annual Premiums for the shorter
period.
For an example of the effect of Surrender Charges, see "Examples of
Front-End Sales Loads and Surrender Charges", see below.
EXAMPLES OF FRONT-END SALES LOADS AND SURRENDER CHARGES
An example of the actual Front-End Sales Loads and Surrender Charge schedule
as well as and the impact of the refund of the sales load, if any, (see "Load
Refund" on page ), for a Policy with a ten-year Guarantee Period is shown
below. This example uses the same specific information (i.e., issue age, face
amount, premium level, etc.) as the illustration on page of the prospectus.
<TABLE>
<S> <C>
Death Benefit Option: Level
Face Amount: $250,000
Guarantee Period: 10 years
Charges Assumed: Current
Issue Age/Sex/Class: 45/Male/Preferred
Scheduled Premium: $4,000.00 per year
Guideline Annual Premium: $4,819.38
Assumed Gross Annual
Investment Return: 0%
</TABLE>
The Total Cumulative Sales Load column on the far right represents the sum
of all loads which would have been assessed since the issue of the policy
assuming a surrender of the Policy at the end of the corresponding policy year.
This is:
a) The sum of the Cumulative Front-End Sales Load, plus
b) The actual Surrender Charge for that Policy Year, minus
c) The Sales Load Refund, if any, applicable to that Policy year. (see
"Cash Values -- Load Refund".)
23
<PAGE>
ADDITIONAL CHARGES/CREDITS IF SURRENDERED
SURRENDER CHARGES
<TABLE>
<CAPTION>
TOTAL
CUMULATIVE CUMULATIVE
POLICY FRONT-END MAXIMUM YEAR END ACTUAL SURRENDER SALES LOAD SALES LOAD IF
YEAR SALES LOAD SURRENDER CHARGE ACCOUNT VALUE CHARGE REFUND SURRENDERED**
- ------ ----------- ---------------- ------------- ---------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
1 2,000 4,400 1,232 1,232 2,032 1,200
2 2,440 3,911 4,074 3,911 4,590 1,791
3 2,880 3,422 6,764 3,422 0 6,302
4 3,320 2,933 9,345 2,933 0 6,253
5 3,760 2,444 11,843 2,444 0 6,204
6 4,200 1,956 14,274 1,956 0 6,156
7 4,640 1,467 16,645 1,467 0 6,107
8 5,080 978 18,971 978 0 6,058
9 5,520 489 21,246 489 0 6,009
10 5,960 0 23,456 0 0 5,960
11 6,080 0 25,850 0 0 6,080
</TABLE>
- ------------------------
*The Actual Surrender Charge assessed is the smaller of:
a) The contractual maximum surrender charge, or
b) Year-End Account Value
** Assumes a surrender of the Policy at the end of that Policy Year
An example of the actual Front-End Sales Loads and Surrender Charge schedule
as well as the impact of the refund of the sales load, if any, (see "Load
Refund" on page ) for a Policy with a one-year Guarantee Period is shown
below. This example uses the same specific information (i.e., issue age, face
amount, premium level) as the illustration on page of the prospectus.
<TABLE>
<S> <C>
Death Benefit Option: Level
Face Amount: $250,000
Guarantee Period: 1 Year
Charges Assumed: Current
Issue Age/Sex/Class: 45/Male/Preferred
Scheduled Premium: $4,000.00 per year
Guideline Annual Premium: $4,819.38
Assumed Hypothetical Gross Annual
Investment Return: 0%
</TABLE>
The Total Cumulative Sales Load column on the far right represents the sum
of all loads which would have been assessed since the issue of the Policy
assuming a surrender of the Policy at the end of the corresponding Policy Year.
This is:
a) The sum of the Cumulative Front-End Sales Load, plus
b) The Actual Surrender Charge for that Policy Year, minus
c) The Sales Load Refund, if any, applicable to that Policy Year. (see
"Cash Values -- Load Refund")
24
<PAGE>
ADDITIONAL CHARGES/CREDITS IF SURRENDERED
SURRENDER CHARGES
<TABLE>
<CAPTION>
TOTAL
CUMULATIVE CUMULATIVE
POLICY FRONT-END MAXIMUM YEAR END ACTUAL SURRENDER SALES LOAD SALES LOAD IF
YEAR SALES LOAD SURRENDER CHARGE ACCOUNT VALUE CHARGE REFUND SURRENDERED**
- ------ ----------- ---------------- ------------- ---------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
1 0 400 3,169 400 0 400
2 0 355 6,361 355 0 355
3 0 311 9,381 311 0 311
4 0 267 12,273 267 0 267
5 0 222 15,067 222 0 222
6 0 178 17,780 178 0 178
7 0 133 20,422 133 0 133
8 0 89 23,008 89 0 89
9 0 44 25,529 44 0 44
10 0 0 27,976 0 0 0
11 0 0 30,273 0 0 0
</TABLE>
- ------------------------
*The Actual Surrender Charge assessed is the smaller of:
a) The contractual maximum surrender charge, or
b) Year-End Account Value
** Assumes a surrender of the Policy at the end of that Policy Year
The total Cumulative Sales Load column on the far right represents the sum
of all loads which would have been assessed since the issue of the Policy
assuming a surrender on the Policy at the end of the corresponding Policy Year.
This is:
a) The sum of the Cumulative Front-End Load, plus
b) The actual Surrender Charge for that Policy Year, minus
c) The Sales Load Refund, if any, applicable to that Policy Year. (see
"Cash Values -- Load Refund")
CHARGES AGAINST THE FUNDS
The investment advisers charge the Funds a daily investment management fee
as compensation for services. The following Table shows the fee charged for each
Fund available for investment by Policy Owners.
<TABLE>
<CAPTION>
ANNUAL INVESTMENT MANAGEMENT
AS A PERCENTAGE OF AVERAGE
HARTFORD FUNDS DAILY NET ASSETS
- ------------------------------------------------ --------------------------------------------------
<S> <C>
Hartford Capital Appreciation Fund, Inc.,
Hartford Advisers Fund, Inc.,
Hartford International Opportunities Fund,
Inc.,
Hartford Dividend and Growth Fund, Inc........ .575% of the first $250 million of average net
assets
.525% of the next $250 million of average net
assets
.475% of the next $250 million of average net
assets
.425% of any amount over $1.0 billion
Hartford Bond Fund, Inc.,
Hartford Stock Fund, Inc...................... .325% of the first $250 million of average net
assets
.300% of the next $250 million of average net
assets
.275% of the next $250 million of average net
assets
.250% of any amount over 1.0 billion
Hartford Index Fund, Inc........................ .20%
Hartford Mortgage Securities Fund, Inc.,
HVA Money Market Fund, Inc.................... .25%
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
ANNUAL INVESTMENT MANAGEMENT
AS A PERCENTAGE OF AVERAGE
PUTNAM FUNDS DAILY NET ASSETS
- ------------------------------------------------ --------------------------------------------------
<S> <C>
PCM Diversified Income Fund,
PCM Global Asset Allocation Fund,
PCM High Yield Fund,
PCM New Opportunities Fund and
PCM Voyager Fund.............................. .70% of the first $500 million of average net
assets
.60% of the next $500 million of average net
assets
.55% of the next $500 million of average net
assets
.50% of any amount over $1.5 billion
PCM Growth and Income Fund...................... .65% of the first $500 million of average net
assets .55% of the next $500 million of average
net assets .50% of the next $500 million of
average net assets .45% of any amount over $1.5
billion
PCM Money Market Fund........................... .45% of the first $500 million of average net
assets .35% of the next $500 million of average
net assets .30% of the next $500 million of
average net assets .25% of any amount over $1.5
billion
PCM U.S. Government and
High Quality Bond Fund........................ .65% of the first $500 million of average net
assets
.55% of the first $500 million of average net
assets
.50% of the next $500 million of average net
assets
.45% of the next $5 billion of average net assets
.425% of the first $5 billion of average net
assets
.405% of the first $5 billion of average net
assets
.39% of the next $5 billion of average net assets
.38% of any excess thereafter
PCM Global Growth Fund and
PCM Utilities Growth and Income Fund.......... .60%
<CAPTION>
FIDELITY FUNDS
- ------------------------------------------------
<S> <C>
Equity-Income Portfolio......................... .52%
Overseas Portfolio.............................. .77%
Asset Manager Portfolio......................... .72%
</TABLE>
TAXES
Currently, no charge is made to Separate Account VL I for federal, state,
and local taxes that may be attributable to Separate Account VL I. A change in
the applicable federal, state or local tax laws which impose tax on Hartford
Life and/or Separate Account VL I may result in a charge against the Policy in
the future. Charges for other taxes, if any, attributable to Separate Account VL
I may also be made.
THE COMPANY
Hartford Life Insurance Company ("Hartford Life") was originally
incorporated under the laws of Massachusetts on June 5, 1902. It was
subsequently redomiciled to Connecticut. It is a stock life insurance company
engaged in the business of writing health and life insurance, both individual
and group, in all states of the United States and the District of Columbia. The
offices of Hartford Life are located in Simsbury, Connecticut; however, its
mailing address is P.O. Box 2999, Hartford, Connecticut 06102-2999.
Hartford Life is ultimately 100% owned by Hartford Fire Insurance Company,
one of the largest multiple lines insurance carriers in the United States. On
December 20, 1995, Hartford Fire Insurance Company became an independent,
publicly traded corporation.
26
<PAGE>
Hartford Life is rated A+ (superior) by A.M. Best and Company, Inc on the
basis of its financial soundness and operating performance. Hartford Life is
rated AA+ by both Standard & Poor's and Duff and Phelps on the basis of its
claims paying ability.
These ratings do not apply to the performance of the Separate Account.
However, the policy obligations under this variable life insurance policy are
the general corporate obligations of Hartford Life. These ratings do apply to
Hartford Life's ability to meet its insurance obligations under the policy.
Hartford Life is subject to Connecticut law governing insurance companies
and is regulated and supervised by the Connecticut Commissioner of Insurance. An
annual statement in a prescribed form must be filed with that Commissioner on or
before March 1st in each year covering the operations of Hartford Life for the
preceding year and its financial condition on December 31st of such year.
Its books and assets are subject to review or examination by the
Commissioner or his agents at all times, and a full examination of its
operations is conducted by the National Association of Insurance Commissioners
("NAIC") at least once in every four years. In addition, Hartford Life is
subject to the insurance laws and regulations of any jurisdiction in which it
sells its insurance policies. Hartford Life is also subject to various Federal
and state securities laws and regulations.
SEPARATE ACCOUNT VL I
GENERAL
Separate Account VL I is a separate account of Hartford Life established on
September 18, 1992 pursuant to the insurance laws of the State of Connecticut
and organized as a unit investment trust registered with the Securities and
Exchange Commission under the Investment Company Act of 1940. Under Connecticut
law, the assets of Separate Account VL I are held exclusively for the benefit of
Policy Owners and persons entitled to payments under the Policies. The assets
for Separate Account VL I are not chargeable with liabilities arising out of any
other business which Hartford Life may conduct.
FUNDS
The assets of each Sub-Account of Separate Account VL I are invested
exclusively in one of the Funds. A Policy Owner may allocate premium payments
among the Sub-Accounts. Policy Owners should review the following brief
descriptions of the investment objectives of each of the Funds in connection
with that allocation. There is no assurance that any of the Funds will achieve
its stated objectives. Policy Owners are also advised to read the prospectuses
for each of the Funds accompanying this prospectus for more detailed
information.
HARTFORD FUNDS
HARTFORD ADVISERS FUND, INC.
To achieve maximum long term total rate of return consistent with
prudent investment risk by investing in common stock and other equity
securities, bonds and other debt securities, and money market instruments.
The investment adviser will vary the investments of the Fund among equity
and debt securities and money market instruments depending upon its analysis
of market trends. Total rate of return consists of current income, including
dividends, interest and discount accruals and capital appreciation.
HARTFORD BOND FUND, INC.
To achieve maximum current income consistent with preservation of
capital by investing primarily in bonds.
HARTFORD CAPITAL APPRECIATION FUND, INC.
To achieve growth of capital by investing in equity securities and
securities convertible into equity securities selected solely on the basis
of potential for capital appreciation; income, if any, is an incidental
consideration.
27
<PAGE>
HARTFORD DIVIDEND AND GROWTH FUND, INC.
To achieve a high level of current income consistent with growth of
capital and reasonable investment risk by investing primarily in equity
securities and securities convertible into equity securities.
HARTFORD INDEX FUND, INC.
To provide investment results which approximate the price and yield
performance of publicly-traded common stocks in the aggregate, as
represented by the Standard & Poor's 500 Composite Stock Price Index. *
HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.
To achieve long-term total return consistent with prudent investment
risk through investment primarily in equity securities issued by foreign
companies.
HARTFORD MORTGAGE SECURITIES FUND, INC.
To achieve maximum current income consistent with safety of principal
and maintenance of liquidity by investing primarily in mortgage-related
securities, including securities issued by the Government National Mortgage
Association ("GNMA").
HARTFORD STOCK FUND, INC.
To achieve long-term capital growth primarily through capital
appreciation, with income a secondary consideration, by investing in
equity-type securities.
HVA MONEY MARKET FUND, INC.
To achieve maximum current income consistent with liquidity and
preservation of capital by investing in money market securities.
* "Standard & Poor's-Registered Trademark-", "S&P-Registered Trademark-", "S&P
500-Registered Trademark-", "Standard & Poor's 500", and "500" are trademarks
of The McGraw-Hill Companies, Inc. and have been licensed for use by Hartford
Life Insurance Company. The Hartford Index Fund, Inc. ("Index Fund") is not
sponsored, endorsed, sold or promoted by Standard & Poor's ("S&P") and S&P
makes no representation regarding the advisability of investing in the Index
Fund.
PUTNAM FUNDS
PCM DIVERSIFIED INCOME FUND
Seeks high current income consistent with capital preservation by
investing in the following three sections of the fixed income securities
markets: U.S. Government Sector, High Yield Sector (which invests primarily
in what are commonly referred to as "junk bonds"), and International Sector.
See the Special Considerations for investments in high yield securities
described in the Fund prospectus.
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.
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 Putnam Investment
28
<PAGE>
Management, Inc. ("Putnam Management") believes does not involve undue risk
to income or principal. Capital growth is a secondary objective when
consistent with high current income. See the special considerations for
investments in high yield securities described in the Fund prospectus.
PCM MONEY MARKET FUND
Seeks to achieve as high a level of current income as Putnam Management
believes is consistent with preservation of capital and maintenance of
liquidity by investing in high-quality money market instruments.
PCM NEW OPPORTUNITIES FUND
Seeks long-term capital appreciation by investing principally in common
stocks of companies in sectors of the economy which Putnam Management
believes possess above-average long-term growth potential.
PCM U.S. GOVERNMENT AND HIGH QUALITY BOND FUND
Seeks current income consistent with preservation of capital by
investing primarily 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 Management 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
Aggressively seeks capital appreciation primarily from a portfolio of
common stocks which Putnam Management believes have potential for capital
appreciation which is significantly greater than that of market averages.
FIDELITY FUNDS
EQUITY-INCOME PORTFOLIO
To seek reasonable income by investing primarily in income-producing
equity securities. In choosing these securities, the Portfolio will also
consider the potential for capital appreciation. The Portfolio's goal is to
achieve a yield which exceeds the composite yield on the securities
comprising the Standard & Poor's Daily Stock Price Index of 500 Common
Stocks. The Portfolio may invest in high yielding, lower-rated securities
(commonly referred to as "junk bonds") which are subject to greater risk
than investments in higher-rated securities. For a further discussion of
lower-rated securities, please see "Risks of Lower-Rated Debt Securities" in
the Fidelity prospectus for this Portfolio.
OVERSEAS PORTFOLIO
To seek long-term growth of capital primarily through investments in
foreign securities and provides a means for aggressive investors to
diversify their own portfolios by participating in companies and economies
outside of the United States.
ASSET MANAGER PORTFOLIO
To seek high total return with reduced risk over the long-term by
allocating its assets among stocks, bonds and short-term fixed-income
instruments.
The Hartford Funds are organized as corporations under the laws of the State
of Maryland and are registered as diversified open-end management companies
under the Investment Company Act of 1940. The Putnam Funds are organized as a
business trust fund or the laws of Massachusetts and are organized as an
open-end series investment company under the Investment Company Act of 1940. The
Fidelity Funds involve
29
<PAGE>
two diversified open-end management investment companies, each with multiple
portfolios and organized as a Massachusetts business trust. The Equity-Income
Portfolio and Overseas Portfolio are portfolios of the Variable Insurance
Products Fund. The Asset Manager Portfolio is a portfolio of the Variable
Insurance Products Fund II. Each Fund continually issues an unlimited number of
full and fractional shares of beneficial interest in the Fund. Such shares are
offered to separate accounts, including Separate Account VL I, established by
Hartford Life or one of its affiliated companies specifically to fund the
Policies and other policies issued by Hartford Life or its affiliates as
permitted by the Investment Company Act of 1940.
It is conceivable that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Funds simultaneously. Although neither Hartford Life nor the Funds
currently foresee any such disadvantages either to variable life insurance
Policy Owners or to variable annuity Policy Owners, the Board of Directors
intend for the Hartford Funds and the Board of Trustees for the Putnam Funds,
and the Board of Trustees for the Fidelity Funds (collectively the "Board") to
monitor events in order to identify any material conflicts between such Policy
Owners and to determine what action, if any, should be taken in response
thereto. If the Boards were to conclude that separate funds should be
established for variable life and variable life insurance separate accounts,
Hartford Life will bear the attendant expenses.
All investment income of and other distributions to each Sub-Account of
Separate Account VL I arising from the applicable Fund are reinvested in shares
of that Fund at net asset value. The income and both realized gains or losses on
the assets of each Sub-Account of Separate Account VL I are therefore separate
and are credited to or charged against the Sub-Account without regard to income,
gains or losses from any other Sub-Account or from any other business of
Hartford Life. Hartford Life will purchase shares in the Funds in connection
with premium payments allocated to the applicable Sub-Account in accordance with
Policy Owners directions and will redeem shares in the Funds to meet Policy
obligations or make adjustments in reserves, if any. The Funds are required to
redeem Fund shares at net asset value and generally to make payment within seven
days.
Hartford Life reserves the right, subject to compliance with the law as then
in effect, to make additions to, deletions from, or substitutions for Separate
Account VL I and its Sub-Accounts which fund the Policies. If shares of any of
the Funds should no longer be available for investment, or if, in the judgment
of Hartford Life's management, further investment in shares of any Fund should
become inappropriate in view of the purposes of the Policies, Hartford Life may
substitute shares of another Fund for shares already purchased, or to be
purchased in the future, under the Policies. No substitution of securities will
take place without notice to and consent of Policy Owners and without prior
approval of the Securities and Exchange Commission to the extent required by the
Investment Company Act of 1940. Subject to Policy Owner approval, if required,
Hartford Life also reserves the right to end the registration under the
Investment Company Act of 1940 of Separate Account VL I or any other separate
accounts of which it is the depositor which may fund the Policies.
Each Fund is subject to certain investment restrictions which may not be
changed without the approval of a majority of the shareholders of the Fund. See
the accompanying prospectuses for each of the Funds.
INVESTMENT ADVISER
HARTFORD FUNDS
The investment adviser for each of the Hartford Funds is The Hartford
Investment Management Company. ("HIMCO"), a wholly-owned subsidiary of Hartford
Life. HIMCO was organized under the laws of the State of Connecticut in October
of 1981.
HIMCO also serves as investment adviser to several other Hartford Life
sponsored funds which are also registered with the Securities and Exchange
Commission. HIMCO is registered as an investment adviser under the Investment
Advisers Act of 1940. HIMCO provides investment advice and, in general,
supervises the management and investment program of Hartford Bond Fund, Inc.,
Hartford Index Fund, Inc., Hartford International Opportunities Fund, Inc.,
Hartford Mortgage Securities Fund, Inc., and HVA Money Market Fund, Inc.,
pursuant to an Investment Advisory Agreement entered into with each of these
Funds for which HIMCO receives a fee. HIMCO also supervises the investment
programs of Hartford Advisers Fund, Inc., Hartford Dividend and Growth Fund,
Inc., Hartford Capital Appreciation Fund, Inc. and Hartford Stock Fund, Inc.
pursuant to an Investment Management Agreement for which HIMCO receives a fee.
In addition,
30
<PAGE>
with respect to these four Funds, HIMCO has a Sub-Investment Advisory Agreement
with Wellington Management Company ("Wellington Management") to provide an
investment program to HIMCO for utilization by HIMCO in rendering services to
these funds. Wellington Management is a professional investment counseling firm
which provides investment services to investment companies, other institutions
and individuals. Wellington Management organized as a private Massachusetts
partnership and its predecessor organizations have provided investment advisory
services to investment companies since 1933 and to investment counseling clients
since 1960. See the accompanying prospectuses for each of the Funds for a more
complete description of HIMCO and Wellington Management and their respective
fees.
PUTNAM FUNDS
Putnam Management, One Post Office Square, Boston, Massachusetts, 02109,
serves as the investment manager for the Funds. An affiliate, The Putnam
Advisory Company, Inc., manages domestic and foreign institutional accounts and
mutual funds. Another affiliate , Putnam Fiduciary Trust Company, provides
investment advice to institutional clients under its banking and fiduciary
policies. Putnam Management 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.
FIDELITY FUNDS
The Fidelity Funds are managed by Fidelity Management & Research Company
("Fidelity Management"), whose principal business address is 82 Devonshire
Street, Boston, Massachusetts. Fidelity Management is one of America's largest
investment management organizations. It is composed of a number of different
companies, which provide a variety of financial services and products. Fidelity
Management is the original Fidelity company, founded in 1946. It provides a
number of mutual funds and other clients with investment research and portfolio
management services. Various Fidelity companies perform certain activities
required to operate Variable Insurance Products Fund and Variable Insurance
Products Fund II.
THE FIXED ACCOUNT
THAT PORTION OF THE POLICY 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 Cash Values allocated to the Fixed Account become a
part of the general assets of Hartford Life. Hartford Life invests the assets of
the General Account in accordance with applicable law governing the investments
of Insurance Company General Accounts.
The Fixed Account Minimum Credited Rate is shown in the Contract. Currently,
Hartford Life guarantees that it will credit interest at a rate of not less than
4% per year, compounded annually, to amounts allocated to the Fixed Account
under the Policies. Hartford Life may credit interest at a rate in excess of the
Fixed Account Minimum Credited Rate, however, Hartford Life is not obligated to
credit any interest in excess of the Fixed Account Minimum Credited Rate. There
is no specific formula for the determination of excess interest credits. Some of
the factors that the Company may consider in determining whether to credit
excess interest to amounts allocated to the Fixed Account and the amount
thereof, are general economic trends, rates of return currently available and
anticipated on the Company's investments, regulatory and tax requirements and
competitive factors. ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED
ACCOUNT IN EXCESS OF THE FIXED ACCOUNT MINIMUM CREDITED RATE WILL BE DETERMINED
IN THE SOLE DISCRETION OF THE COMPANY. THE OWNER ASSUMES THE RISK THAT INTEREST
CREDITED TO FIXED ACCOUNT ALLOCATIONS MAY NOT EXCEED THE FIXED ACCOUNT MINIMUM
CREDITED RATE.
31
<PAGE>
OTHER MATTERS
VOTING RIGHTS
In accordance with its view of presently applicable law, Hartford Life will
vote the shares of the Funds at regular and special meetings of the shareholders
of the Funds in accordance with instructions from Policy Owners (or the assignee
of the Policy, as the case may be) having a voting interest in Separate Account
VL I. The number of shares held in the Separate Account which are attributable
to each Policy Owner is determined by dividing the Policy Owner's interest in
each Sub-Account by the net asset value of the applicable shares of the Funds.
Hartford Life will vote shares for which no instructions have been given and
shares which are not attributable to Policy Owners (i.e., shares owned by
Hartford Life) in the same proportion as it votes shares for which it has
received instructions. If the Investment Company Act of 1940 or any rule
promulgated thereunder should be amended, however, or if Hartford Life's present
interpretation should change and, as a result, Hartford Life determines it is
permitted to vote the shares of the Funds in its own right, it may elect to do
so.
The voting interests of the Policy Owner (or the assignee) in the Funds will
be determined as follows: Policy Owners may cast one vote for each full or
fractional Accumulation Unit owned under the Policy and allocated to a
Sub-Account the assets of which are invested in the particular Fund on the
record date for the shareholder meeting for that Fund. If, however, a Policy
Owner has taken a loan secured by the Policy, amounts transferred from the
Sub-Account(s) to the Loan Account(s) in connection with the loan (see "Policy
Benefits and Rights -- Policy Loans," page ) will not be considered in
determining the voting interests of the Policy Owner. Policy Owners should
review the prospectuses for the Funds which accompany this Prospectus to
determine matters on which shareholders may vote.
Hartford Life may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as to cause a change in the sub-classification or investment objective
of one or more of the Funds or to approve or disapprove an investment advisory
policy for the Funds. In addition, Hartford Life itself may disregard voting
instructions in favor of changes initiated by a Policy Owner in the investment
policy or the investment adviser of the Funds if Hartford Life reasonably
disapproves of such changes. A change would be disapproved only if the proposed
change is contrary to state law or prohibited by state regulatory authorities.
In the event Hartford Life does disregard voting instructions, a summary of that
action and the reasons for such action will be included in the next periodic
report to Policy Owners.
STATEMENTS TO POLICY OWNERS
We will send You a statement at least once each Policy Year, showing:
(a) the current Account Value, Cash Value and Face Amount;
(b) the premiums paid, Monthly Deduction Amounts and loans since the last
report;
(c) the amount of any Indebtedness;
(d) notifications required by the provisions of the Policy; and
(e) any other information required by the Insurance Department of the State
where the policy was delivered
LIMIT ON RIGHT TO CONTEST
Hartford Life may not contest the validity of the Policy after it has been
in effect during the Insured's lifetime for two years from the Issue Date. If
the Policy is reinstated, the two-year period is measured from the date of
reinstatement. Any increase in the Face Amount as a result of a premium payment
is contestable for two years from its effective date. In addition, if the
Insured commits suicide in the two-year period, or such period as specified in
state law, the benefit payable will be limited to the premiums paid less any
Indebtedness and partial withdrawals.
MISSTATEMENT AS TO AGE
If the age of the Insured is incorrectly stated, the amount of Death Benefit
will be appropriately adjusted as specified in the Policy.
32
<PAGE>
PAYMENT OPTIONS
Proceeds under the Policies may be paid in a lump sum or may be applied to
one of Hartford Life's payment options. The minimum amount that may be placed
under a payment option is $5,000 unless Hartford Life consents to a lesser
amount. Once payments under Options 2, 3 or 4 commence, no surrender of the
Policy may be made for the purpose of receiving a lump sum settlement in lieu of
the life insurance payments. The following options are available under the
Policies.
FIRST OPTION -- Interest Income
Payments of interest at the rate we declare, but not less than 3 1/2% per
year, on the amount applied under this option.
SECOND OPTION -- Income of Fixed Amount
Equal payments of the amount chosen until the amount applied under this
option, with interest of not less than 3 1/2% per year, is exhausted. The
final payment will be for the balance remaining.
THIRD OPTION -- Payments for a Fixed Period
An amount payable monthly for the number of years selected which may be from
1 to 30 years.
FOURTH OPTION -- Life Income
LIFE ANNUITY -- an life insurance payable monthly during the lifetime of the
Annuitant and terminating with the last monthly payment due preceding the
death of the Annuitant.
LIFE ANNUITY WITH 120 MONTHLY PAYMENTS CERTAIN -- an life insurance providing
monthly income to the Annuitant for a fixed period of 120 months and for as
long thereafter as the annuitant shall live.
The Tables in the Policy provide for guaranteed dollar amounts of monthly
payments for each $1,000 applied under the four Payment Options. Under the
Fourth Option, the amount of each payment will depend upon the age of the
Annuitant at the time the first payment is due. If any periodic payment due any
payee is less than $200, Hartford Life may make payments less often.
The Table for the Fourth Option is based on the 1983 Individual Annuity
Mortality Table set back one year and a net investment rate of 3.5% per annum.
The Tables for the First, Second and Third Options are based on a net investment
rate of 3.5% per annum. Hartford Life may, however, from time to time, at our
discretion if mortality appears more favorable and interest rates justify, apply
other tables which will result in higher monthly payments for each $1,000
applied under one or more of the four Payment Options.
Hartford Life will make any other arrangements for income payments as may be
agreed on.
BENEFICIARY
The applicant names the Beneficiary in the application for the Policy. The
Policy Owner may change the Beneficiary (unless irrevocably named) during the
Insured's lifetime by written request to Hartford Life. If no Beneficiary is
living when the Insured dies, the Death Proceeds will be paid to the Policy
Owner if living; otherwise to the Policy Owner's estate.
ASSIGNMENT
The Policy may be assigned as collateral for a loan or other obligation.
Hartford Life is not responsible for any payment made or action taken before
receipt of written notice of such assignment. Proof of interest must be filed
with any claim under a collateral assignment.
DIVIDENDS
No dividends will be paid under the Policies.
33
<PAGE>
SUPPLEMENTAL BENEFITS
The following supplemental benefits, which are subject to the restrictions
and limitations set forth therein, may be included in a Policy.
DEDUCTION AMOUNT WAIVER RIDER
Subject to certain age and underwriting restrictions, the Policy may include
a Deduction Amount Waiver Rider. This rider provides for the waiver of the
Policy's Monthly Deduction Amounts in the event of total disability prior to the
Insured reaching Attained Age 65 and continuing for at least six months. The
number of Monthly Deduction Amounts waived depends on the Insured's Attained Age
when the disability began. If this rider is added, the Monthly Deduction Amounts
will be increased to include the charges for this rider.
ACCIDENTAL DEATH BENEFIT RIDER
Subject to certain age and underwriting requirements, the Policy may include
an Accidental Death Benefit Rider.
This rider provides for an increase in the amount paid upon the death of the
Insured if the death results from an accident.
If this rider is added, the Monthly Deduction Amounts will be increased to
include the charges for this rider.
INCREASE IN COVERAGE OPTION RIDER
Subject to certain age and underwriting requirements, the Policy may include
an Increase in Coverage Option Rider.
This rider gives the Owner the guaranteed right to purchase a new Flexible
Premium Variable Life Insurance policy on the life of the Insured, without
evidence of insurability, if certain conditions are met. These conditions
include:
1. the original policy has been in force for five years,
2. the Insured's Attained Age is less than 80, and
3. the Account Value of the original policy is sufficient to "pay-up" the
policy under assumptions defined in the rider.
The Face Amount of the new policy will be equal to the Face Amount times a
percentage. This percentage depends on the Insured's age, sex (except where
unisex rates are used), and insurance class. The Scheduled Premium fee for the
new policy is based on the Scheduled Premium for the original policy.
MATURITY DATE EXTENSION RIDER
We will extend the Maturity Date (the date on which the Policy will mature)
to the date of the Insureds' death, regardless of the age of the Insured.
Certain Death Benefit and premium restrictions apply. See "Income Taxation of
Policy Benefits."
34
<PAGE>
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
VOCATION OR EMPLOYMENT
POSITION WITH HARTFORD LIFE, FOR PAST 5 YEARS;
NAME, AGE YEAR OF ELECTION OTHER DIRECTORSHIPS
- ---------------------------------- -------------------------------------- -----------------------------------------
<S> <C> <C>
Louis J. Abdou, 53 Vice President, 1987 Vice President (1987-Present), Hartford
Life.
Wendell J. Bossen, 62 Vice President, 1992** President (1992-Present), International
Corporate Marketing Group, Inc.;
Executive Vice President (1984-1992),
Mutual Benefit.
Gregory A. Boyko, 44 Vice President, 1995 Vice President and Controller
(1995-Present), Hartford Life; Chief
Financial Officer (1994-1995), IMG
American Life; Senior Vice President
(1992-1994), Connecticut Mutual Life
Insurance Company.
Peter W. Cummins, 59 Vice President, 1989 Vice President, Individual Annuity
Operations (1989-Present), Hartford
Life.
Ann M. deRaismes, 45 Vice President, 1994 Vice President (1994-Present); Assistant
Vice President (1992); Director of
Human Resources (1991-Present),
Hartford Life.
Timothy M. Fitch, 43 Vice President, 1995 Vice President (1995-Present); Assistant
Vice President (1993); Director (1991),
Hartford Life.
Donald R. Frahm, 64 Chairman and Chief Executive Chairman and Chief Executive Officer of
Officer, 1988 the Hartford Insurance Group
Director, 1988* (1988-Present).
Bruce D. Gardner, 45 Vice President, 1996 Vice President (1996-Present); General
Counsel and Director, 1994* Corporate
Secretary (1991-1996), Hartford Life.
Joseph H. Gareau, 49 Executive Vice President and Executive Vice President and Chief
Chief Investment Officer, 1993 Investment Officer, (1993-Present),
Director, 1993* Hartford Life; Senior Vice President
and Chief Investment Officer (1992),
ITT Hartford's Property-Casualty
Companies.
J. Richard Garrett, 51 Treasurer, 1994 Treasurer (1994-Present); Vice President
Vice President, 1993 (1993- Present) Hartford Life;
Treasurer (1977), Hartford Insurance
Group.
John P. Ginnetti, 50 Executive Vice President, 1994 Executive Vice President and Director
Asset Management Services
(1994-Present); Senior Vice President,
(1988), Hartford Life.
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
VOCATION OR EMPLOYMENT
POSITION WITH HARTFORD LIFE, FOR PAST 5 YEARS;
NAME, AGE YEAR OF ELECTION OTHER DIRECTORSHIPS
- ---------------------------------- -------------------------------------- -----------------------------------------
<S> <C> <C>
Lynda Godkin, 42 Assoc. General Counsel, Associate General Counsel and Corporate
Corporate Secretary, 1995 Secretary (1995-Present); Assistant
General Counsel and Secretary (1994);
Counsel (1990), Hartford Life.
Lois W. Grady, 51 Vice President, 1993 Vice President (1993-Present); Assistant
Vice President (1988), Hartford Life.
David A. Hall, 42 Senior Vice President and Senior Vice President and Actuary
Actuary, 1992 (1992-Present), Hartford Life.
Joseph Kanarek, 48 Vice President, 1991 Vice President (1991-Present), Hartford
Life.
Robert A. Kerzner, 44 Vice President, 1994 Vice President (1994-Present); Regional
Vice President (1991); Life Sales
Manager (1990), Hartford Life.
Kevin J. Kirk, 44 Vice President, 1992 Vice President (1992-Present); Assistant
Vice President; Assistant Director,
Asset Management Services (1985);
Hartford Life.
Andrew W. Kohnke, 47 Vice President, 1992 Vice President (1992-Present); Assistant
Vice President (1989), Hartford Life.
Steven M. Maher, 41 Vice President and Vice President and Actuary
Actuary, 1993 (1993-Present); Assistant Vice
President (1987), Hartford Life.
William B. Malchodi, Jr., 45 Vice President, 1994 Vice President (1994-Present); Director
of Taxes (1992-Director or Taxes, 1992
Present); Assistant General Counsel and
Assistant Director of Taxes (1986),
Hartford Insurance Group.
Thomas M. Marra, 37 Executive Vice President, 1996 Executive Vice President and Director
Director, 1994* Individual Life and Annuity Division
(1996-Present); Senior Vice President
and Director, Individual Life and
Annuity Division (1993- 1996); Director
of Individual Annuities (1991),
Hartford Life.
Robert F. Nolan, 41 Vice President, 1995 Vice President (1995-Present), Assistant
Vice President Hartford Life; Manager
Public Relations (1986), Aetna Life and
Casualty Insurance Co.
Joseph J. Noto, 44 Vice President, 1989 Vice President (1989-Present), Hartford
Life.
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
VOCATION OR EMPLOYMENT
POSITION WITH HARTFORD LIFE, FOR PAST 5 YEARS;
NAME, AGE YEAR OF ELECTION OTHER DIRECTORSHIPS
- ---------------------------------- -------------------------------------- -----------------------------------------
<S> <C> <C>
Leonard E. Odell, Jr., 51 Senior Vice President, 1994 Senior Vice President (1994-Present);
Director, 1994* Vice President and Chief Actuary
(1982), Hartford Life.
Michael C. O'Halloran, 49 Vice President, 1994 Vice President (1994-Present); Senior
Associate General Counsel, Associate General Counsel and Director
1988 (1988-Present), Law Department,
Hartford Insurance Group.
Craig D. Raymond, 35 Vice President, 1993 Vice President and Chief Actuary
Chief Actuary, 1994 (1994-Present); Vice President (1993);
Assistant Vice President (1992);
Actuary (1989-1994), Hartford Life.
Lowndes A. Smith, 56 President and Chief Operating President and Chief Operating Officer
Officer, 1989 (1989- Present), Hartford Life; Senior
Director, 1981* Vice President and Group Controller
(1987), Hartford Insurance Group.
Edward J. Sweeney, 39 Vice President, 1993 Vice President (1993-Present); Chicago
Regional Manager (1985-1993), Hartford
Life.
James E. Trimble, 39 Vice President and Actuary, 1990 Vice President (1990-Present); Assistant
Vice President (1987-1990), Hartford
Life.
Raymond P. Welnicki, 47 Senior Vice President, 1993 Senior Vice President (1994-Present);
Director, 1994* Vice President (1993), Hartford Life;
Board of Directors, Ethix Corp.,
formerly employed by Aetna Life &
Casualty.
Walter C. Welsh, 49 Vice President, 1995 Vice President (1995-Present); Assistant
Vice President (1993), Hartford Life.
James J. Westervelt, 49 Senior Vice President, Group Senior Vice President and Group
Controller, 1994 Controller (1994- Present); Vice
President and Group Controller (1989),
Hartford Insurance Group.
Lizabeth H. Zlatkus, 37 Vice President, 1994 Vice President (1994-Present); Assistant
Director, 1994* Vice President (1992); Hartford Life;
formerly Director, Hartford Insurance
Group.
</TABLE>
- ------------------------
* Denotes date of election to Board of Directors.
** ITT Hartford Affiliated Company.
37
<PAGE>
DISTRIBUTION OF THE POLICIES
Hartford Life intends to sell the Policies in all jurisdictions where it is
licensed to do business. The Policies will be sold by life insurance sales
representatives who represent Hartford Life and who are registered
representatives of Hartford Equity Sales Company, Inc. ("HESCO"), or certain
other registered Broker-Dealers. Any sales representative or employee will have
been qualified to sell variable life insurance policies under applicable Federal
and State laws. Each Broker-Dealer is registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 and all are
members of the National Association of Securities Dealers, Inc. HESCO is the
principal underwriter for the Policies. During the first Policy Year, the
maximum sales commission payable to Hartford Life agents, independent registered
insurance brokers, and other registered Broker-Dealers is 45% of the premiums
paid up to a target premium and 5% of any excess. In Policy Years 2 through 10,
agent commissions will not exceed 5.5% of premiums paid. For Policy Years 11 and
later, the agent commissions will not exceed 2% of the premiums paid. In
addition, expense allowances may be paid. The sales representative may be
required to return all or a portion of the commissions paid if the Policy
terminates prior to the second Policy Anniversary.
SAFEKEEPING OF THE
SEPARATE ACCOUNT'S ASSETS
The assets of the Separate Account are held by Hartford Life. The assets of
the Separate Account are kept physically segregated and held separate and apart
from the General Account of Hartford Life. Hartford Life maintains records of
all purchases and redemptions of shares of the Fund. Additional protection for
the assets of the Separate Account is afforded by Hartford Life's blanket
fidelity bond issued by Aetna Casualty and Surety Company, in the aggregate
amount of $50 million, covering all of the officers and employees of Hartford
Life.
FEDERAL TAX CONSIDERATIONS
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE POLICY OWNER INVOLVED AND THE TYPE OF PLAN UNDER
WHICH THE POLICY IS PURCHASED, LEGAL AND TAX ADVICE MAY BE NEEDED BY A PERSON,
TRUSTEE OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A POLICY DESCRIBED HEREIN.
It should be understood that any detailed description of the Federal income
tax consequences regarding the purchase of these Policies 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. This discussion of Federal tax
considerations is based upon Hartford Life's understanding of current Federal
income tax laws as they are currently interpreted.
TAXATION OF HARTFORD LIFE AND THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford Life which is taxed as a
life insurance company under Subchapter L of the Internal Revenue Code ("Code").
Accordingly, the Separate Account will not be taxed as a "regulated investment
company" under Subchapter M of the Code. Investment income and realized capital
gains on the assets of the Separate Account (the underlying Funds) are
reinvested and are taken into account in determining the value of the
Accumulation Units. As a result, such investment income and realized capital
gains are automatically applied to increase reserves under the Policy. (See
"Detailed Description of Policy Benefits and Provisions--Accumulation Unit
Values, on page ).
Hartford Life does not expect to incur any Federal income tax on the
earnings or realized capital gains attributable to the Separate Account. Based
upon this expectation, no charge is currently being made to the
38
<PAGE>
Separate Account for Federal income taxes. If Hartford Life incurs income taxes
attributable to the Separate Account or determines that such taxes will be
incurred, it may assess a charge for such taxes against the Separate Account.
INCOME TAXATION OF POLICY BENEFITS
For Federal income tax purposes, the Policies should be treated as life
insurance policies under Section 7702 of the Code. The death benefit under a
life insurance policy is generally excluded from the gross income of the
Beneficiary. Also, a life insurance Policy Owner is generally not taxed on
increments in the policy value until the Policy is partially or completely
surrendered. Section 7702 limits the amount of premiums that may be invested in
a Policy that is treated as life insurance. Hartford Life intends to monitor
premium levels to assure compliance with the Section 7702 requirements.
Hartford Life also believes that any loan received under a Policy will be
treated as Indebtedness of the Policy Owner, and that no part of any loan under
a Policy will constitute income to the Policy Owner. A surrender or assignment
of the Policy may have tax consequences depending upon the circumstances. Policy
Owners should consult a qualified tax adviser concerning the effect of such
changes.
During the first fifteen Policy Years, an "income first" rule generally
applies to distributions of cash required to be made under Code Section 7702
because of a reduction in benefits under the Policy.
The Maturity Date Extension Rider allows a Policy Owner to extend the
Maturity Date to the date of the death of the insured. If the Maturity Date of
the Policy is extended by rider, Hartford Life believes that the Policy will
continue to be treated as a life insurance contract for Federal income tax
purposes after the scheduled Maturity Date. However, due to the lack of specific
guidance on this issue, the result is not certain. If the Policy is not treated
as a life insurance contract for Federal income tax purposes after the scheduled
Maturity Date, among other things, the Death Proceeds may be taxable to the
recipient. The Policy Owner should consult a qualified tax adviser regarding the
possible adverse tax consequences resulting from an extension of the scheduled
Maturity Date.
MODIFIED ENDOWMENT CONTRACTS
Code Section 7702A applies an additional test, the "seven-pay" test, to life
insurance contracts. A modified endowment contract is a life insurance policy
which satisfies the Section 7702 definition of life insurance but fails the
seven-pay test of Section 7702A. The seven-pay test provides that premiums
cannot be paid at a rate more rapidly than that allowed by the payment of seven
annual premiums using specified computational rules provided in Section
7702A(c).
A policy that is classified as a modified endowment contract is generally
eligible for the beneficial tax treatment accorded to life insurance. That is,
the death benefit is generally excluded from income and increments in value are
not subject to current taxation. However, a loans, distributions or other
amounts received from a modified endowment contract are treated first as income,
then as a recovery of basis. Taxable withdrawals are subject to a 10% additional
tax, with certain exceptions. Generally, only distributions and loans made in
the first year in which a policy becomes a modified endowment contract, and in
subsequent years, are taxable. However, distributions and loans made in the two
years prior to a policy's failing the seven-pay test are deemed to be in
anticipation of failure and are subject to tax.
If the Policy satisfies the seven-pay test for seven years, distributions
and loans made thereafter will not be subject to the modified endowment contract
rules, unless the Policy is changed materially. The seven-pay test will be
applied anew at any time the Policy undergoes a material change, which includes
an increase in the death benefit.
All modified endowment contracts that are issued within any calendar year to
the same Policy Owner by one company or its affiliates shall be treated as one
modified endowment contract for the purpose of determining the taxable portion
of any loan or distribution.
ESTATE AND GENERATION SKIPPING TAXES
When the Insured dies, the Death Proceeds will generally be includible in
the Policy Owner's estate for purposes of Federal estate tax if the Insured
owned the Policy. If the Policy Owner was not the Insured, the fair
39
<PAGE>
market value of the Policy would be included in the Policy Owner's estate upon
the Policy Owner's death. The Policy would not be includible in the Insured's
estate if the Insured neither retained incidents of ownership at death nor had
given up ownership within three years before death.
Federal estate tax is integrated with Federal gift tax under a unified rate
schedule. In general, estates of less than $600,000 will not incur a Federal
estate tax liability. In addition, an unlimited marital deduction may be
available for Federal estate and gift tax purposes. The unlimited marital
deduction permits the deferral of taxes until the death of the surviving spouse.
If the Policy Owner (whether or not he or she is the Insured) transfers
ownership of the Policy to someone two or more generations younger, the transfer
may be subject to the generation skipping transfer tax, the taxable amount being
the value of the Policy. The generation-skipping transfer tax provisions
generally apply to transfers which would be subject to the gift and estate tax
rules. Individuals are generally allowed an aggregate generation skipping
transfer exemption of $1 million. Because these rules are complex, the Policy
Owner should consult with a qualified tax adviser for specific information if
ownership is passing to younger generations.
DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable life insurance contract
(other than a pension plan policy) will not be treated as a life insurance
policy for any period during which the investments made by the separate account
or underlying fund are not adequately diversified in accordance with regulations
prescribed by the Treasury Department. If a Policy is not treated as a life
insurance policy, the Policy Owner will be subject to income tax on the annual
increases in cash value.
The Treasury Department has issued diversification regulations which
generally require, among other things, that no more than 55% of the value of the
total assets of the segregated asset account underlying a variable contract is
represented by any one investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three investments, and no
more than 90% is represented by any four investments. In determining whether the
diversification standards are met, all securities of the same issuer, all
interests in the same real property project, and all interests in the same
commodity are each treated as a single investment. In addition, in the case of
government securities, each government agency or instrumentality shall be
treated as a separate issuer.
A separate account must be in compliance with the diversification standards
on the last day of each calendar quarter or within 30 days after the quarter
ends. If an insurance company inadvertently fails to meet the diversification
requirements, the company may comply within a reasonable period and avoid the
taxation of policy income on an ongoing basis. However, either the company or
the Policy Owner must agree to pay the tax due for the period during which the
diversification requirements were not met.
Hartford Life monitors the diversification of investments in the separate
accounts and tests for diversification as required by the Code. Hartford Life
intends to administer all contracts subject to the diversification requirements
in a manner that will maintain adequate diversification.
OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT
In order for a variable life insurance contract to qualify for tax deferral,
assets in the segregated asset accounts supporting the variable contract must be
considered to be owned by the insurance company and not by the variable contract
owner. The Internal Revenue Service ("IRS") has issued several rulings which
discuss investor control. The IRS has ruled that incidents of ownership by the
contract owner, such as the ability to select and control investments in a
separate account, will cause the contract owner to be treated as the owner of
the assets for tax purposes.
Further, in the explanation to the temporary Section 817 diversification
regulations, the Treasury Department noted that the temporary regulations "do
not provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor, rather
than the insurance company, to be treated as the owner of the assets in the
account." The explanation further indicates that "the temporary regulations
provide that in appropriate cases a segregated asset account may include
multiple sub-accounts, but do not specify the extent to which policyholders may
direct their investments to particular sub-accounts without being treated as the
owners of the underlying assets. Guidance on this and other issues will be
provided in regulations or revenue rulings under section 817(d), relating to the
definition of variable contract." The final regulations issued under Section 817
did not provide guidance regarding investor
40
<PAGE>
control, and as of the date of this Prospectus, no other such guidance has been
issued. Further, Hartford Life does not know if or in what form such guidance
will be issued. In addition, although regulations are generally issued with
prospective effect, it is possible that regulations may be issued with
retroactive effect. Due to the lack of specific guidance regarding the issue of
investor control, there is necessarily some uncertainty regarding whether a
Policy Owner could be considered the owner of the assets for tax purposes.
Hartford Life reserves the right to modify the Policies, as necessary, to
prevent Policy Owners from being considered the owners of the assets in the
separate accounts.
LIFE INSURANCE PURCHASED FOR USE IN SPLIT DOLLAR ARRANGEMENTS
On January 26, 1996, the IRS released a technical advice memorandum ("TAM")
on the taxability of life insurance policies used in certain split dollar
arrangements. A TAM, issued by the National Office of the IRS, provides advice
as to the internal revenue laws, regulations, and related statutes with respect
to a specific set of facts and a specific taxpayer. In the TAM, among other
things, the IRS concluded that an employee was subject to current taxation on
the excess of the cash surrender value of the policy over the premiums to be
returned to the employer. Purchasers of life insurance policies to be used in
split dollar arrangements are strongly advised to consult with a qualified tax
adviser to determine the tax treatment resulting from such an arrangement.
FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the Policy Owner,
such amounts will be subject to Federal income tax withholding and reporting,
pursuant to the Code.
NON-INDIVIDUAL OWNERSHIP OF POLICIES
Legislation has recently been proposed which would limit certain of the tax
advantages now afforded non-individual owners of life insurance contracts.
Prospective Policy Owners which are not individuals should consult a qualified
tax adviser to determine the status of this proposed legislation and its
potential impact on the purchaser.
OTHER
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership, or receipt of Policy proceeds depend on the
circumstances of each Policy Owner or beneficiary. A qualified tax adviser
should be consulted to determine the impact of these taxes.
LIFE INSURANCE PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
The discussion above provides general information regarding U.S. federal
income tax consequences to life insurance purchasers that are U.S. citizens or
residents. Purchasers that are not U.S. citizens or residents will generally be
subject to U.S. federal income tax and withholding on taxable distributions from
life insurance policies at a 30% rate, unless a lower treaty rate applies. In
addition, purchasers may be subject to state and/or municipal taxes and taxes
that may be imposed by the purchaser's country of citizenship or residence.
Prospective purchasers are advised to consult with a qualified tax advisor
regarding U.S. state, and foreign taxation with respect to a life insurance
policy purchase.
LEGAL PROCEEDINGS
There are no pending material legal proceedings affecting the Policies,
Separate Account VL I or any of the Funds.
EXPERTS
The financial statements and schedules included in this Prospectus and
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report herein, and are included herein
in reliance upon the authority of said firm as experts in accounting and
auditing in giving
41
<PAGE>
said report. The principal business address of Arthur Andersen LLP is One
Financial Plaza, Hartford, Connecticut 06103. Reference is made to said report
of Hartford Life Insurance Company (the depositor), which includes an
explanatory paragraph with respect to the adoption of new accounting standards
changing the methods of accounting for debt and equity securities.
The hypothetical Policy illustrations included in this Prospectus and
Registration Statement have been approved by Ken A. McCullum, FSA, MAAA,
Director of Individual Life Product Development, are included in reliance upon
his opinion as to their reasonableness.
REGISTRATION STATEMENT
A registration statement has been filed with the Securities and Exchange
Commission under the Securities Act of 1933 as amended. This Prospectus does not
contain all information set forth in the registration statement, its amendments
and exhibits, to all of which reference is made for further information
concerning Separate Account VL I, Hartford Life, and the Policies.
LEGAL MATTERS
Legal matters in connection with the issue and sale of the flexible premium
variable life insurance polices described in this Prospectus and the
organization of Hartford Life, its authority to issue the Policies under
Connecticut law and the validity of the forms of the Policies under Connecticut
law and legal matters relating to the federal securities and income tax laws
have been passed on by Lynda Godkin, Associate General Counsel of Hartford Life.
42
<PAGE>
APPENDIX A
ILLUSTRATION OF DEATH BENEFITS, ACCOUNT
VALUES AND CASH SURRENDER VALUES
The following tables illustrate how the Death Benefits, Account Values and
Cash Surrender Values of a Policy may change with the investment experience of
the Separate Account. The tables show how the Death Benefits, Account Values and
Cash Surrender Values of a Policy issued to an Insured of a given age would vary
over time if the investment return on the assets held in each Fund were a
uniform, gross annual rate of 0%, 6% and 12%. The Death Benefits, Account Values
and Cash Surrender Values would be different from those shown if the gross
annual investment returns averaged 0%, 6% and 12% over a period of years, but
fluctuated above and below those averages for individual Policy Years. The
tables assume that no Policy Loans are made and that no partial withdrawals have
been made. The tables are also based on the assumption that the Owner has not
requested an increase or decrease in the Fact Amount and that no fund transfers
have been made in any Policy Year.
The tables on pages to illustrate a Policy issued to a Male Insured, Age
45 in the Preferred Premium Class with an Initial Face Amount of $250,000 and a
Scheduled Premium that is paid at the beginning of each Policy Year. The Death
Benefits, Account Values and Cash Surrender Values would be lower if the Insured
was a smoker or in a special class since the cost of insurance charges would
increase.
The tables reflect the fact that the net return on the assets held in the
subaccounts is lower than the gross after-tax return of the Funds. This is
because these tables assume an investment management fee and other estimated
Fund expenses totaling 0.70%. The 0.70% figure is based on an average of the
current management fees and expenses of the available twenty-two Funds, taking
into account any applicable expense caps or reimbursement arrangements. Actual
fees and expenses of the Funds associated with a Policy may be more or less than
0.70%, will vary from year to year, and will depend on how the Account Value is
allocated.
As their headings indicate, the tables reflect the deductions of current
contractual charges and guaranteed contractual charges for a single gross
interest rate. These charges include the monthly charge to the Account for
assuming mortality and expense risks, the monthly administrative charge, and the
monthly mortality charge. All tables assume a charge of 2.25% for taxes
attributable to premiums and reflect the fact that no charges against the
Account are currently made for federal, state or local taxes attributable to the
Policy.
Each table also shows the amount to which the premiums would accumulate if
an amount equal to those premiums were invested to earn interest, after taxes,
at 5% compounded annually.
Upon request, Hartford Life will furnish a comparable illustration based on
a proposed Policy's specific circumstances.
43
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VARIABLE LIFE ONE AND TO THE
OWNERS OF UNITS OF INTEREST THEREIN:
We have audited the accompanying statement of assets & liabilities of the Bond
Fund Sub-Account, Stock Fund Sub-Account, Money Market Fund Sub-Account,
Advisers Fund Sub-Account, Capital Appreciation Fund Sub-Account, Mortgage
Securities Fund Sub-Account, Index Fund Sub-Account, International
Opportunities Fund Sub-Account, Dividend and Growth Fund Sub-Account, Fidelity
VIP Equity Fund Sub-Account, Fidelity VIP Overseas Fund Sub-Account and
Fidelity VIP II Asset Manager Fund Sub-Account (the Account) (constituting
Hartford Life Insurance Company Separate Account Variable Life One) as of
December 31, 1995, and the related statement of operations for the year then
ended (except for Fidelity VIP Equity Income Fund Sub-Account, Fidelity VIP
Overseas Fund Sub-Account and Fidelity VIP II Asset Manager Fund Sub-Account
which reflect the period from inception, May 1, 1995, to December 31, 1995),
and statements of changes in net assets for each of the two years in the period
then ended (except for Fidelity VIP Equity Income Fund Sub-Account, Fidelity
VIP Overseas Fund Sub-Account and Fidelity VIP II Asset Manager Fund
Sub-Account which reflect the period from inception, May 1, 1995, to December
31, 1995 and Dividend and Growth Fund Sub-Account which reflects the year ended
December 31, 1995). These financial statements are the responsibility of the
Account's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Bond Fund Sub-Account,
Stock Fund Sub-Account, Money Market Fund Sub-Account, Advisers Fund
Sub-Account, Capital Appreciation Fund Sub-Account, Mortgage Securities Fund
Sub-Account, Index Fund Sub-Account, International Opportunities Fund
Sub-Account, Dividend and Growth Fund Sub-Account, Fidelity VIP Equity Fund
Sub-Account, Fidelity VIP Overseas Fund Sub-Account and Fidelity VIP II Asset
Manager Fund Sub-Account (the Account) (constituting Hartford Life Insurance
Company Separate Account Variable Life One) as of December 31, 1995, the
results of their operations for the year then ended (except for Fidelity VIP
Equity Income Fund Sub-Account, Fidelity VIP Overseas Fund Sub-Account and
Fidelity VIP II Asset Manager Fund Sub-Account which reflect the period from
inception, May 1, 1995, to December 31, 1995) and the changes in their net
assets for each of the two years in the period then ended (except for Fidelity
VIP Equity Income Fund Sub-Account, Fidelity VIP Overseas Fund Sub-Account and
Fidelity VIP II Asset Manager Fund Sub-Account which reflect the period from
inception, May 1, 1995, to December 31, 1995 and Dividend and Growth Fund
Sub-Account which reflects the year ended December 31, 1995) in conformity with
generally accepted accounting principles.
Hartford, Connecticut
February 19, 1996 Arthur Andersen LLP
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund, Inc.
Shares 1,606,221
Cost $1,561,680
Market Value.................................. $1,651,616 -- -- --
Hartford Stock Fund, Inc.
Shares 1,967,237
Cost $5,980,432
Market Value.................................. -- $6,938,484 -- --
HVA Money Market Fund, Inc.
Shares 9,602,997
Cost $9,602,997
Market Value.................................. -- -- $9,602,997 --
Hartford Advisers Fund, Inc.
Shares 2,369,257
Cost $4,065,702
Market Value.................................. -- -- -- $4,640,048
Hartford Capital Appreciation Fund, Inc.
Shares 2,302,713
Cost $7,054,945
Market Value.................................. -- -- -- --
Hartford Mortgage Securities Fund, Inc.
Shares 641,321
Cost $ 656,691
Market Value.................................. -- -- -- --
Hartford Index Fund, Inc.
Shares 738,584
Cost $1,326,863
Market Value.................................. -- -- -- --
Hartford International Opportunities Fund, Inc.
Shares 3,016,436
Cost $3,619,160
Market Value.................................. -- -- -- --
Hartford Dividend and Growth Fund, Inc.
Shares 46,225
Cost $ 55,570
Market Value.................................. -- -- -- --
Fidelity VIP Equity Income Fund
Shares 37,136
Cost $ 877,721
Market Value.................................. -- -- -- --
Fidelity VIP Overseas Fund
Shares 4,484
Cost $ 74,109
Market Value.................................. -- -- -- --
Fidelity Asset Manager Fund
Shares 2,344
Cost $ 34,516
Market Value.................................. -- -- -- --
Due from Hartford Life Insurance Company........ 584 46,514 1,235,574 25,477
Receivable from fund shares sold................ -- -- -- --
------------- ----------- ----------- -------------
Total Assets.................................... 1,652,200 6,984,998 10,838,571 4,665,525
------------- ----------- ----------- -------------
LIABILITIES:
Due to Hartford Life Insurance Company.......... -- -- -- --
Payable for fund shares purchased............... 584 46,515 1,229,222 25,478
------------- ----------- ----------- -------------
Total Liabilities............................... 584 46,515 1,229,222 25,478
------------- ----------- ----------- -------------
Net Assets (variable life contract liabilities). $1,651,616 $6,938,483 $9,609,349 $4,640,047
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
Units Outstanding................................. 1,386,137 4,822,055 8,593,579 3,459,254
Accumulation Unit Value at end of period.......... $ 1.191524 $ 1.438906 $ 1.118201 $ 1.341343
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND EQUITY
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACOUNT
----------------- --------------- ----------- ------------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund, Inc.
Shares 1,606,221
Cost $1,561,680
Market Value........... -- -- -- -- -- --
Hartford Stock Fund, Inc.
Shares 1,967,237
Cost $5,980,432
Market Value........... -- -- -- -- -- --
HVA Money Market Fund, Inc.
Shares 9,602,997
Cost $9,602,997
Market Value........... -- -- -- -- -- --
Hartford Advisers Fund, Inc.
Shares 2,369,257
Cost $4,065,702
Market Value........... -- -- -- -- -- --
Hartford Capital
Appreciation Fund, Inc.
Shares 2,302,713
Cost $7,054,945
Market Value........... $8,035,685 -- -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 641,321
Cost $ 656,691
Market Value........... -- $ 687,022 -- -- -- --
Hartford Index Fund, Inc.
Shares 738,584
Cost $1,326,863
Market Value........... -- -- $1,497,790 -- -- --
Hartford International
Opportunities Fund, Inc.
Shares 3,016,436
Cost $3,619,160
Market Value........... -- -- -- $3,938,532 -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 46,225
Cost $ 55,570
Market Value........... -- -- -- -- $ 60,878 --
Fidelity VIP Equity
Income Fund
Shares 37,136
Cost $ 877,721
Market Value........... -- -- -- -- -- $ 715,612
Fidelity VIP Overseas Fund
Shares 4,484
Cost $ 74,109
Market Value........... -- -- -- -- -- --
Fidelity Asset Manager Fund
Shares 2,344
Cost $ 34,516
Market Value........... -- -- -- -- -- --
Due from Hartford Life
Insurance Company....... 152,277 1,239 45,827 151,542 -- 10
Receivable from fund
shares sold............. -- -- -- -- 7,874 --
----------------- --------------- ----------- ------------------ ------------ ------------
Total Assets............. 8,187,962 688,261 1,543,617 4,090,074 68,752 715,622
----------------- --------------- ----------- ------------------ ------------ ------------
LIABILITIES:
Due to Hartford Life
Insurance Company....... -- -- -- -- 7,874 --
Payable for fund shares
purchased............... 152,276 1,239 45,827 151,543 -- --
----------------- --------------- ----------- ------------------ ------------ ------------
Total Liabilities........ 152,276 1,239 45,827 151,543 7,874 --
----------------- --------------- ----------- ------------------ ------------ ------------
Net Assets (variable
life contract
liabilities)............ $8,035,686 $ 687,022 $1,497,790 $3,938,531 $ 60,878 $ 715,622
----------------- --------------- ----------- ------------------ ------------ ------------
----------------- --------------- ----------- ------------------ ------------ ------------
Units Outstanding.......... 5,555,220 583,159 1,043,582 2,972,166 49,377 595,397
Accumulation Unit Value
at end of period......... $ 1.446511 $ 1.178104 $ 1.435240 $ 1.325138 $ 1.232922 $ 1.201923
</TABLE>
<TABLE>
<CAPTION>
FIDELITY VIP FIDELITY VIP II
OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACOUNT
----------------- -------------------
<S> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund, Inc.
Shares 1,606,221
Cost $1,561,680
Market Value........... -- --
Hartford Stock Fund, Inc.
Shares 1,967,237
Cost $5,980,432
Market Value........... -- --
HVA Money Market Fund, Inc.
Shares 9,602,997
Cost $9,602,997
Market Value........... -- --
Hartford Advisers Fund, Inc
Shares 2,369,257
Cost $4,065,702
Market Value........... -- --
Hartford Capital
Appreciation Fund, Inc.
Shares 2,302,713
Cost $7,054,945
Market Value........... -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 641,321
Cost $ 656,691
Market Value........... -- --
Hartford Index Fund, Inc.
Shares 738,584
Cost $1,326,863
Market Value........... -- --
Hartford International
Opportunities Fund, Inc.
Shares 3,016,436
Cost $3,619,160
Market Value........... -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 46,225
Cost $ 55,570
Market Value........... -- --
Fidelity VIP Equity
Income Fund
Shares 37,136
Cost $ 877,721
Market Value........... -- --
Fidelity VIP Overseas Fund
Shares 4,484
Cost $ 74,109
Market Value........... $ 76,459 --
Fidelity Asset Manager Fund
Shares 2,344
Cost $ 34,516
Market Value........... -- $ 37,015
Due from Hartford Life
Insurance Company....... -- --
Receivable from fund
shares sold............. 10,528 11,491
----------------- -------------------
Total Assets............. 86,987 48,506
----------------- -------------------
LIABILITIES:
Due to Hartford Life
Insurance Company....... 10,630 11,536
Payable for fund shares
purchased............... -- --
----------------- -------------------
Total Liabilities........ 10,630 11,536
----------------- -------------------
Net Assets (variable
life contract
liabilities)............ $ 76,357 $ 36,970
----------------- -------------------
----------------- -------------------
Units Outstanding.......... 71,025 32,873
Accumulation Unit Value
at end of period......... $ 1.075072 $ 1.124638
</TABLE>
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 72,383 $ 97,045 $305,022 $121,941
-------- ---------- -------- --------
Net investment income
(loss).............. 72,383 97,045 305,022 121,941
-------- ---------- -------- --------
Capital gains income... -- 85,946 -- 30,081
-------- ---------- -------- --------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 7,394 5,809 -- 2,907
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 97,007 1,009,567 -- 667,925
-------- ---------- -------- --------
Net gains (losses) on
investments......... 104,401 1,015,376 -- 670,832
--------- ---------- -------- --------
Net increase
(decrease) in net
assets resulting
from operations..... $176,784 $1,198,367 $305,022 $822,854
--------- ---------- -------- --------
--------- ---------- -------- --------
</TABLE>
* From inception, May 1, 1995, to December 31, 1995.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND EQUITY
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACOUNT*
----------------- --------------- ----------- ------------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 48,724 $39,041 $ 16,866 $ 46,972 $ 536 $ 5,067
---------- ------- -------- -------- ------ ----------
Net investment income
(loss).............. 48,724 39,041 16,866 46,972 536 5,067
---------- ------- -------- -------- ------ ----------
Capital gains income... 159,934 -- 117 19,345 -- --
---------- ------- -------- -------- ------ ----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (91) 66 232 1,947 67 (7)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 998,680 47,911 170,588 351,104 5,309 37,890
---------- ------- -------- -------- ------ ----------
Net gains (losses) on
investments......... 998,589 47,977 170,820 353,051 5,376 37,883
---------- ------- -------- -------- ------ ----------
Net increase
(decrease) in net
assets resulting
from operations..... $1,207,247 $87,018 $187,803 $419,368 $5,912 $ 42,950
---------- ------- -------- -------- ------ ----------
---------- ------- -------- -------- ------ ----------
<CAPTION>
FIDELITY VIP
FIDELITY VIP II
OVERSEAS ASSET
FUND MANAGER FUND
SUB-ACCOUNT* SUB-ACCOUNT*
------------ ------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ -- $ --
------ ------
Net investment income
(loss).............. -- --
------ ------
Capital gains income... -- --
------ ------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 140 229
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 2,351 2,499
------ ------
Net gains (losses) on
investments......... 2,491 2,728
------ ------
Net increase
(decrease) in net
assets resulting
from operations..... $2,491 $2,728
------ ------
------ ------
</TABLE>
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 72,383 $ 97,045 $ 305,022 $ 121,941
Capital gains income... -- 85,946 -- 30,081
Net realized gain
(loss) on security
transactions.......... 7,394 5,809 -- 2,907
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 97,007 1,009,567 -- 667,925
---------- ---------- -------------- -----------
Net increase (decrease)
in net assets
resulting from
operations............ 176,784 1,198,367 305,022 822,854
---------- ---------- -------------- -----------
UNIT TRANSACTIONS:
Purchases.............. 80,111 891,394 30,911,497 599,791
Net transfers.......... 1,202,083 3,494,521 (22,537,618) 1,102,448
Surrenders............. (16,941) (130,094) (212,380) (101,194)
Net loan withdrawals... (73,159) (82,429) (5,589,429) (26,807)
Cost of insurance and
other fees............ (33,808) (192,045) (484,560) (126,639)
---------- ---------- -------------- -----------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 1,158,286 3,981,347 2,087,510 1,447,599
---------- ---------- -------------- -----------
Total increase
(decrease) in net
assets................ 1,335,070 5,179,714 2,392,532 2,270,453
NET ASSETS:
Beginning of period.... 316,546 1,758,769 7,216,817 2,369,594
---------- ---------- -------------- -----------
End of period.......... $1,651,616 $6,938,483 $ 9,609,349 $4,640,047
---------- ---------- -------------- -----------
---------- ---------- -------------- -----------
</TABLE>
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 6,922 $ 20,615 $ 99,860 $ 51,536
Capital gains income... 311 27,224 -- 17,202
Net realized gain
(loss) on security
transactions.......... (195) (175) -- 1,897
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (7,019) (60,514) -- (96,460)
---------- ---------- -------------- -----------
Net increase (decrease)
in net assets
resulting from
operations............ 19 (12,850) 99,860 (25,825)
---------- ---------- -------------- -----------
UNIT TRANSACTIONS:
Purchases.............. 37,028 290,304 20,258,603 434,023
Net transfers.......... 272,187 1,294,999 (13,565,371) 1,557,649
Surrenders............. (4,429) (35,895) (142,419) (40,579)
Loan withdrawals....... (14) (4,367) (435,997) (26,091)
Cost of insurance...... (5,283) (61,111) (265,027) (51,186)
---------- ---------- -------------- -----------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 299,489 1,483,930 5,849,789 1,873,816
---------- ---------- -------------- -----------
Total increase
(decrease) in net
assets................ 299,508 1,471,080 5,949,649 1,847,991
NET ASSETS:
Beginning of period.... 17,038 287,689 1,267,168 521,603
---------- ---------- -------------- -----------
End of period.......... $ 316,546 $1,758,769 $ 7,216,817 $2,369,594
---------- ---------- -------------- -----------
---------- ---------- -------------- ------------
</TABLE>
* From inception, May 1, 1995, to December 31, 1995.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
CAPTIAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 48,724 $ 39,041 $ 16,866 $ 46,972 $ 536
Capital gains income... 159,934 -- 117 19,345 --
Net realized gain
(loss) on security
transactions.......... (91) 66 232 1,947 67
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 998,680 47,911 170,588 351,014 5,309
------------- ------------- ---------- -------------- ----------
Net increase (decrease)
in net assets
resulting from
operations............ 1,207,247 87,018 187,803 419,278 5,912
------------- --------------- ---------- -------------- ----------
UNIT TRANSACTIONS:
Purchases.............. 1,865,000 9,664 258,782 968,432 30,236
Net transfers.......... 2,860,807 112,099 942,414 909,391 37,813
Surrenders............. (209,729) (6,610) (20,596) (161,497) (12,610)
Net loan withdrawals... (53,870) -- (30,128) (39,629) --
Cost of insurance and
other fees............ (276,771) (9,804) (42,284) (150,874) (473)
------------- ------------- ---------- -------------- ----------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 4,185,437 105,349 1,108,188 1,525,823 54,966
------------- ------------- ---------- -------------- ----------
Total increase
(decrease) in net
assets................ 5,392,684 192,367 1,295,991 1,945,101 60,878
NET ASSETS:
Beginning of period.... 2,643,002 494,655 201,799 1,993,340 --
------------- ------------- ---------- -------------- ----------
End of period.......... $8,035,686 $ 687,022 $1,497,790 $3,938,441 $ 60,878
------------- ------------- ---------- -------------- ----------
------------- ------------- ---------- -------------- ----------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 6,904 $ 20,821 $ 2,556 $ 17,054
Capital gains income... 73,831 23 -- --
Net realized gain
(loss) on security
transactions.......... 240 (255) 2 (309)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (37,253) (17,533) (324) (49,550)
------------- ------------- ---------- --------------
Net increase (decrease)
in net assets
resulting from
operations............ 43,722 3,056 2,234 (32,805)
------------- ------------- ---------- --------------
UNIT TRANSACTIONS:
Purchases.............. 701,847 6,854 68,645 487,568
Net transfers.......... 1,548,441 487,586 116,406 1,394,539
Surrenders............. (85,763) (3,931) (6,167) (56,052)
Loan withdrawals....... (2,817) -- -- (5,771)
Cost of insurance...... (109,663) (3,376) (8,623) (65,611)
------------- ------------- ---------- --------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 2,052,045 487,133 170,261 1,754,673
------------- ------------- ---------- --------------
Total increase
(decrease) in net
assets................ 2,095,767 490,189 172,495 1,721,868
NET ASSETS:
Beginning of period.... 547,235 4,466 29,304 271,472
------------- ------------- ---------- --------------
End of period.......... $2,643,002 $ 494,655 $ 201,799 $1,993,340
------------- ------------- ---------- --------------
------------- ------------- ---------- --------------
</TABLE>
<TABLE>
<CAPTION>
FIDELITY VIP FIDELITY VIP II
EQUITY FIDELITY VIP ASSET MANAGER
INCOME FUND OVERSEAS FUND FUND
SUB-ACOUNT* SUB-ACCOUNT* SUB-ACCOUNT*
------------ ------------- -----------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 5,067 $18,683 $ --
Capital gains income... -- -- --
Net realized gain
(loss) on security
transactions.......... (7) 140 229
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 37,890 2,351 2,499
------------ ------------- --------
Net increase (decrease)
in net assets
resulting from
operations............ 42,950 2,491 2,728
------------ ------------- --------
UNIT TRANSACTIONS:
Purchases.............. 206,082 18,683 12,310
Net transfers.......... 474,024 67,416 34,943
Surrenders............. (7,434) (12,233) (13,011)
Net loan withdrawals... -- -- --
Cost of insurance and
other fees............ -- -- --
------------ ------------- --------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 672,672 73,866 34,242
------------ ------------- --------
Total increase
(decrease) in net
assets................ 715,622 76,357 36,970
NET ASSETS:
Beginning of period.... -- -- --
------------ ------------- --------
End of period.......... $ 715,622 $76,357 $ 36,970
------------ ------------- --------
------------ ------------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
Hartford Life Insurance Company
Separate Account Variable Life One
Statement of Net Assets & Liabilities
December 31, 1995
<TABLE>
<CAPTION>
Capital Mortgage
Bond Stock Money Market Advisers Appreciation Securities
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Hartford Bond Fund, Inc.
Shares 1,606,221
Cost $1,561,680
Market Value ............................. $1,651,616 - - - - -
Hartford Stock Fund, Inc.
Shares 1,961,094
Cost $5,958,766
Market Value ............................. - $6,916,818 - - - -
HVA Money Market Fund, Inc.
Shares 8,671,482
Cost $8,671,482
Market Value ............................. - - $8,671,482 - - -
Hartford Advisers Fund, Inc.
Shares 2,369,257
Cost $4,065,702
Market Value ............................. - - - $4,640,048 - -
Hartford Capital Appreciation Fund, Inc.
Shares 2,267,586
Cost $6,932,362
Market Value ............................. - - - - $7,913,102 -
Hartford Mortgage Securities Fund, Inc.
Shares 641,321
Cost $656,691
Market Value ............................. - - - - - $687,022
Receivable from Hartford Life Insurance Co 584 24,848 304,059 25,477 29,694 1,239
Receivable from fund shares sold.............. 0 0 0 0 0 0
----------- ----------- ------------- ----------- ------------ -----------
Total Assets ................................. 1,652,200 6,941,666 8,975,541 4,665,525 7,942,796 688,261
----------- ----------- ------------- ----------- ------------ -----------
Liabilities:
Payable to Hartford Life Insurance Co. ....... 0 0 0 0 0 0
Payable for fund shares purchased............. 584 24,849 297,707 25,478 29,693 1,239
----------- ----------- ------------- ----------- ------------ -----------
Total Liabilities ............................ 584 24,849 297,707 25,478 29,693 1,239
----------- ----------- ------------- ----------- ------------ -----------
Net Assets ................................... $1,651,616 $6,916,817 $8,677,834 $4,640,047 $7,913,103 $687,022
----------- ----------- ------------- ----------- ------------ -----------
----------- ----------- ------------- ----------- ------------ -----------
Variable Annuity Policies:
Units Owned by Participants ................... 1,386,137 4,806,998 7,760,531 3,459,254 5,470,476 583,159
Unit Price .................................... $1.191524 $1.438906 $1.118201 $1.341343 $1.446511 $1.178104
<CAPTION>
International Dividend and Fidelity VIP Fidelity VIP Fidelity VIP II
Index Opportunities Growth Equity Income Overseas Asset Manager
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ------------- ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Hartford Index Fund, Inc.
Shares 714,951
Cost $1,278,937
Market Value ............................. $1,449,864 - - - - -
Hartford International Opportunities Fund, Inc.
Shares 2,909,140
Cost $3,479,065
Market Value ............................. - $3,798,437 - - - -
Hartford Dividend and growth Fund, Inc.
Shares 46,225
Cost $55,570
Market Value ............................. - - $60,878 - - -
Fidelity VIP Equity Income Fund
Shares 36,920
Cost $873,551
Market Value ............................. - - - $711,442 - -
Fidelity VIP Overseas Fund
Shares 4,484
Cost $74,109
Market Value ............................. - - - - $76,459 -
Fidelity VIP II Asset Manager Fund
Shares 2,344
Cost $34,516
Market Value ............................. - - - - - $37,015
Receivable from Hartford Life Insurance Co .... 0 11,447 0 0 0 0
Receivable from fund shares sold............... 2,099 0 7,874 4,170 10,528 11,491
----------- ------------- ------------ ------------ ------------ --------------
Total Assets .................................. 1,451,963 3,809,884 68,752 715,612 86,987 48,506
----------- ------------- ------------ ------------ ------------ --------------
Liabilities:
Payable to Hartford Life Insurance Co. ....... 2,099 0 7,874 4,160 10,630 11,536
Payable for fund shares purchased............. 0 11,448 0 0 0 0
----------- ------------- ------------ ------------ ------------ --------------
Total Liabilities ............................ 2,099 11,448 7,874 4,160 10,630 11,536
----------- ------------- ------------ ------------ ------------ --------------
Net Assets ................................... $1,449,864 $3,798,436 $60,878 $711,452 $76,357 $36,970
----------- ------------- ------------ ------------ ------------ --------------
----------- ------------- ------------ ------------ ------------ --------------
Variable Annuity Policies:
Units Owned by Participants ................... 1,010,190 2,866,445 49,377 591,928 71,025 32,873
Unit Price .................................... $1.435240 $1.325138 $1.232922 $1.201923 $1.075072 $1.124638
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Hartford Life Insurance Company
Separate Account Variable Life One
Statement of Net Assets & Liabilities
December 31, 1995
<TABLE>
<CAPTION>
Global Growth and Global Asset High
Voyager Growth Income Allocation Yield
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S>
Assets: <C> <C> <C> <C> <C>
M Voyager Fund
Shares 375,547
Cost $9,022,663
Market Value . . . . . . . . . . . . . . . . . $11,454,185 - - - -
PCM Global Growth Fund
Shares 298,217
Cost $4,040,858
Market Value . . . . . . . . . . . . . . . . . - $4,526,932 - - -
PCM Growth and Income Fund
Shares 316,101
Cost $5,642,506
Market Value . . . . . . . . . . . . . . . . . - - $6,786,680 - -
PCM Global Asset and Allocation Fund
Shares 230,068
Cost $3,203,535
Market Value . . . . . . . . . . . . . . . . . - - - $3,715,587 -
PCM High Yield Fund
Shares 90,813
Cost $1,072,461
Market Value . . . . . . . . . . . . . . . . . - - - - $1,123,354
PCM U.S. Government and High Quality Fund
Shares 83,019
Cost $1,081,264
Market Value . . . . . . . . . . . . . . . . . - - - - -
PCM New Opportunities Fund
Shares 56,612
Cost $826,675
Market Value . . . . . . . . . . . . . . . . . - - - - -
PCM Money Market Fund
Shares 396,216
Cost $396,216
Market Value . . . . . . . . . . . . . . . . . - - - - -
PCM Utilities Growth and Income Fund
Shares 91,509
Cost $1,052,249
Market Value . . . . . . . . . . . . . . . . . - - - - -
PCM Diversified Income Fund
Shares 1,288
Cost $13,025
Market Value . . . . . . . . . . . . . . . . . - - - -
Receivable from Hartford Life Insurance Co. . . 12,796 1,096 5,308 4,379 2,188
Receivable from fund shares sold. . . . . . . . 0 0 0 0 0
------------- ------------ ------------ ------------ ------------
Total Assets. . . . . . . . . . . . . . . . . . 11,466,981 4,528,028 6,791,988 3,719,966 1,125,542
------------- ------------ ------------ ------------ ------------
Liabilities:
Payable to Hartford Life Insurance Co.. . . . . 0 0 0 0 0
Payable for fund shares purchased.. . . . . . . 12,795 1,095 5,308 4,379 2,188
------------- ------------ ------------ ------------ ------------
Total Liabilities. . . . . . . . . . . . . . . 12,795 1,095 5,308 4,379 2,188
------------- ------------ ------------ ------------ ------------
Net Assets . . . . . . . . . . . . . . . . . . $11,454,186 $4,526,933 $6,786,680 $3,715,587 $1,123,354
------------- ------------ ------------ ------------ ------------
------------- ------------ ------------ ------------ ------------
Variable Annuity Policies:
Units Owned by Participants. . . . . . . . . . . 706,041 333,751 464,527 280,752 87,577
Unit Price . . . . . . . . . . . . . . . . . . . $16.223126 $13.563797 $14.609859 $13.234414 $12.827097
<CAPTION>
U.S. Government
and High New Money Utilities Growth Diversified
Quality Bond Opportunities Market and Income Income
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S>
Assets: <C> <C> <C> <C> <C>
PCM Voyager Fund
Shares 375,547
Cost $9,022,663
Market Value . . . . . . . . . . . . . . . . . - - - - -
PCM Global Growth Fund
Shares 298,217
Cost $4,040,858
Market Value . . . . . . . . . . . . . . . . . - - - - -
PCM Growth and Income Fund
Shares 316,101
Cost $5,642,506
Market Value . . . . . . . . . . . . . . . . . - - - - -
PCM Global Asset and Allocation Fund
Shares 230,068
Cost $3,203,535
Market Value . . . . . . . . . . . . . . . . . - - - - -
PCM High Yield Fund
Shares 90,813
Cost $1,072,461
Market Value . . . . . . . . . . . . . . . . . - - - - -
PCM U.S. Government and High Quality Fund
Shares 83,019
Cost $1,081,264
Market Value . . . . . . . . . . . . . . . . . $1,140,686 - - - -
PCM New Opportunities Fund
Shares 56,612
Cost $826,675
Market Value . . . . . . . . . . . . . . . . . - $884,844 - - -
PCM Money Market Fund
Shares 396,216
Cost $396,216
Market Value . . . . . . . . . . . . . . . . . - - $396,216 - -
PCM Utilities Growth and Income Fund
Shares 91,509
Cost $1,052,249
Market Value . . . . . . . . . . . . . . . . . - - - $1,215,244 -
PCM Diversified Income Fund
Shares 1,288
Cost $13,025
Market Value . . . . . . . . . . . . . . . . . $14,208
Receivable from Hartford Life Insurance Co. . . 0 10,332 53,116 869 0
Receivable from fund shares sold. . . . . . . . 0 0 0 0 0
------------- ------------ ------------ ------------ ------------
Total Assets. . . . . . . . . . . . . . . . . . 1,140,686 895,176 449,332 1,216,113 14,208
------------- ------------ ------------ ------------ ------------
Liabilities:
Payable to Hartford Life Insurance Co.. . . . . 0 0 0 0 0
Payable for fund shares purchased.. . . . . . . 0 10,332 53,116 869 0
------------- ------------ ------------ ------------ ------------
Total Liabilities. . . . . . . . . . . . . . . 0 10,332 53,116 869 0
------------- ------------ ------------ ------------ ------------
Net Assets . . . . . . . . . . . . . . . . . . $1,140,686 $884,844 $396,216 $1,215,244 $14,208
------------- ------------ ------------ ------------ ------------
------------- ------------ ------------ ------------ ------------
Variable Annuity Policies:
Units Owned by Participants. . . . . . . . . . . 93,422 65,723 355,815 95,002 1,281
Unit Price . . . . . . . . . . . . . . . . . . . $12.210050 $13.463131 $1.113543 $12.791781 $11.087649
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Hartford Life Insurance Company
Separate Account Variable Life One
Statement of Operations
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Capital Mortgage
Bond Stock Money Market Advisers Appreciation Securities
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends . . . . . . . . . . . . . . . . $72,383 $97,045 $305,022 $121,941 $48,724 $39,041
Expenses:
Mortality and expense undertakings. . . . 0 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- -----------
Net investment income(loss). . . . . . . 72,383 97,045 305,022 121,941 48,724 39,041
----------- ----------- ----------- ----------- ----------- -----------
Capital gains income. . . . . . . . . . . 0 85,946 30,081 159,934
----------- ----------- ----------- ----------- ----------- -----------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) on security
transaction. . . . . . . . . . . . . . . 7,394 5,809 0 2,907 (91) 66
Net unrealized appreciation of
investments during the period . . . . . 97,007 1,009,567 0 667,925 998,680 47,911
----------- ----------- ----------- ----------- ----------- -----------
Net gains on investments . . . . . . . . 104,401 1,015,376 0 670,832 998,589 47,977
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations . . . . . . . . . . . . $176,784 $1,198,367 $305,022 $822,854 $1,207,247 $87,018
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Hartford Life Insurance Company
Separate Account Variable Life One
Statement of Changes in Net Assets
For the Year Ended December 31, 1995
Operations:
Net investment income (loss) . . . . . . 72,383 97,045 305,022 121,941 48,724 39,041
Capital gains income . . . . . . . . . . 0 85,946 0 30,081 159,934 0
Net realized gain (loss) on security
transaction . . . . . . . . . . . . . . 7,394 5,809 0 2,907 (91) 66
Net unrealized appreciation of
investments during the period. . . . . 97,007 1,009,567 0 667,925 998,680 47,911
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations . . . . . . . . . . . . . 176,784 1,198,367 305,022 822,854 1,207,247 87,018
----------- ----------- ----------- ----------- ----------- -----------
Unit transactions:
Purchases. . . . . . . . . . . . . . . . 80,111 891,394 29,116,153 599,791 1,865,000 9,664
Net transfers. . . . . . . . . . . . . . 1,202,083 3,472,876 (21,713,143) 1,102,448 2,738,224 112,099
Surrenders . . . . . . . . . . . . . . . (16,941) (130,094) (212,380) (101,194) (209,729) (6,610)
Net loan withdrawals . . . . . . . . . . (73,159) (82,429) (5,589,429) (26,807) (53,870) 0
Cost of insurance and other charges. . . (33,808) (192,066) (445,206) (126,639) (276,771) (9,804)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from unit transactions. . . . . . . . . 1,158,286 3,959,681 1,155,995 1,447,599 4,062,854 105,349
----------- ----------- ----------- ----------- ----------- -----------
Total increase in net assets . . . . . . 1,335,070 5,158,048 1,461,017 2,270,453 5,270,101 192,367
Net Assets:
Beginning of Period. . . . . . . . . . . 316,546 1,758,769 7,216,817 2,369,594 2,643,002 494,655
----------- ----------- ----------- ----------- ----------- -----------
End of Period. . . . . . . . . . . . . . $1,651,616 $6,916,817 $8,677,834 $4,640,047 $7,913,103 $687,022
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
International Dividend and Fidelity VIP Fidelity VIP Fidelity VIP II
Index Opportunities Growth Equity Income Overseas Asset Manager
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends . . . . . . . . . . . . . . . . $16,866 $46,972 $536 $5,067 $0 $0
Expenses:
Mortality and expense undertakings. . . . 0 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- -----------
Net investment income(loss). . . . . . . 16,866 46,972 536 5,067 0 0
----------- ----------- ----------- ----------- ----------- -----------
Capital gains income. . . . . . . . . . . 117 19,345 0
----------- ----------- ----------- ----------- ----------- -----------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) on security
transaction. . . . . . . . . . . . . . . 232 1,947 67 (7) 140 229
Net unrealized appreciation of
investments during the period. . . . . 170,588 351,104 5,309 37,890 2,351 2,499
----------- ----------- ----------- ----------- ----------- -----------
Net gains on investments. . . . . . . . 170,820 353,051 5,376 37,883 2,491 2,728
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations. . . . . . . . . . . . $187,803 $419,368 $5,912 $42,950 $2,491 $2,728
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Hartford Life Insurance Company
Separate Account Variable Life One
Statement of Changes in Net Assets
For the Year Ended December 31, 1995
Operations:
Net investment income (loss) . . . . . . 16,866 46,972 536 5,067 0 0
Capital gains income . . . . . . . . . . 117 19,345 0 0 0 0
Net realized gain (loss) on security
transaction. . . . . . . . . . . . . . 232 1,947 67 (7) 140 229
Net unrealized appreciation of
investments during the period . . . . 170,588 351,104 5,309 37,890 2,351 2,499
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations . . . . . . . . . . . . . 187,803 419,368 5,912 42,950 2,491 2,728
----------- ----------- ----------- ----------- ----------- -----------
Unit transactions:
Purchases. . . . . . . . . . . . . . . . 258,782 968,432 30,236 206,082 18,683 12,310
Net transfers. . . . . . . . . . . . . . 894,501 769,296 37,813 469,891 67,416 34,943
Surrenders . . . . . . . . . . . . . . . (20,596) (161,497) (12,610) (7,434) (12,233) (13,011)
Net loan withdrawals . . . . . . . . . . (30,128) (39,629) 0 0 0 0
Cost of insurance and other charges. . . (42,297) (150,874) (473) (37) 0 0
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from unit transactions. . . . . . . . . 1,060,262 1,385,728 54,966 668,502 73,866 34,242
----------- ----------- ----------- ----------- ----------- -----------
Total increase in net assets. . . . . . . 1,248,065 1,805,096 60,878 711,452 76,357 36,970
Net Assets:
Beginning of Period. . . . . . . . . . . 201,799 1,993,340 0 0 0 0
----------- ----------- ----------- ----------- ----------- -----------
End of Period. . . . . . . . . . . . . . $1,449,864 $3,798,436 $60,878 $711,452 $76,357 $36,970
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Hartford Life Insurance Company
Separate Account Variable Life One
Statement of Operations
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Global Growth and Global Asset High
Voyager Growth Income Allocation Yield
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends ........................................... $14,475 $24,814 $121,893 $39,388 $45,484
Expenses:
Mortality and expense undertakings ..................... 0 0 0 0 0
----------- ----------- ----------- ------------ -----------
Net investment income(loss) ........................... 14,475 24,814 121,893 39,388 45,484
----------- ----------- ----------- ------------ -----------
Capital gains income.................................... 106,726 46,171 31,376 0 0
----------- ----------- ----------- ------------ -----------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) on security transactions 1,707 932 1,768 14,435 35
Net unrealized appreciation of
investments during the period ..................... 2,361,906 471,341 1,198,951 535,036 64,042
----------- ----------- ----------- ------------ -----------
Net gains on investments ............................. 2,363,613 472,273 1,200,719 549,471 64,077
----------- ----------- ----------- ------------ -----------
Net increase in net assets resulting from
operations .......................................... $2,484,814 $543,258 $1,353,988 $588,859 $109,561
----------- ----------- ----------- ------------ -----------
----------- ----------- ----------- ------------ -----------
<CAPTION>
U.S. Government
and High New Money Utilities Growth Diversified
Quality Bond Opportunities Market and Income Income
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends ............................................... $22,761 $0 $14,226 $47,950 $0
Expenses:
Mortality and expense undertakings ..................... 0 0 0 0 0
----------- ----------- ----------- ------------ -----------
Net investment income(loss) ........................... 22,761 0 14,226 47,950 0
----------- ----------- ----------- ------------ -----------
Capital gains income.................................... 0 0 0 0 0
----------- ----------- ----------- ------------ -----------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) on security transactions 1,030 56 0 3,151 10
Net unrealized appreciation of
investments during the period ..................... 74,145 58,166 0 229,924 1,182
----------- ----------- ----------- ------------ -----------
Net gains on investments ............................. 75,175 58,222 0 233,075 1,192
----------- ----------- ----------- ------------ -----------
Net increase in net assets resulting from
operations ........................................... $97,936 $58,222 $14,226 $281,025 $1,192
----------- ----------- ----------- ------------ -----------
----------- ----------- ----------- ------------ -----------
</TABLE>
Hartford Life Insurance Company
Separate Account Variable Life One
Statement of Changes in Net Assets
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Global Growth and Global Asset High
Voyager Growth Income Allocation Yield
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) ............................ 14,475 24,814 121,893 39,388 45,484
Capital gains income..................................... 106,726 46,171 31,376 0 0
Net realized gain (loss) on security transactions 1,707 932 1,768 14,435 35
Net unrealized appreciation of
investments during the period ..................... 2,361,906 471,341 1,198,951 535,036 64,042
----------- ----------- ----------- ------------ -----------
Net increase in net assets resulting from operations 2,484,814 543,258 1,353,988 588,859 109,561
----------- ----------- ----------- ------------ -----------
Unit transactions:
Purchases................................................ 2,208,784 1,154,464 899,746 339,758 232,533
Net transfers ........................................... 3,971,353 1,138,308 2,362,146 2,109,652 488,483
Surrenders............................................... (313,366) (133,739) (160,057) (72,050) (36,113)
Net loan withdrawals..................................... (64,074) (58,904) (75,016) (55,002) (3,445)
Cost of insurance and other charges...................... (368,618) (172,021) (152,234) (78,172) (47,259)
----------- ----------- ----------- ------------ -----------
Net increase in net assets resulting from unit
transactions............................................ 5,434,079 1,928,108 2,874,585 2,244,186 634,199
----------- ----------- ----------- ------------ -----------
Total increase in net assets ............................ 7,918,893 2,471,366 4,228,573 2,833,045 743,760
Net Assets:
Beginning of Period.................................. 3,535,293 2,055,567 2,558,107 882,542 379,594
----------- ----------- ----------- ------------ -----------
End of Period............................................ $11,454,186 $4,526,933 $6,786,680 $3,715,587 $1,123,354
----------- ----------- ----------- ------------ -----------
----------- ----------- ----------- ------------ -----------
<CAPTION>
U.S. Government
and High New Money Utilities Growth Diversified
Quality Bond Opportunities Market and Income Income
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) ........................... 22,761 0 14,226 47,950 0
Capital gains income.................................... 0 0 0 0 0
Net realized gain (loss) on security transactions 1,030 56 0 3,151 10
Net unrealized appreciation of
investments during the period .................... 74,145 58,166 0 229,924 1,182
----------- ----------- ----------- ------------ -----------
Net increase in net assets resulting from operations 97,936 58,222 14,226 281,025 1,192
----------- ----------- ----------- ------------ -----------
Unit transactions:
Purchases............................................... 165,903 140,605 77,580 168,645 765
Net transfers .......................................... 684,146 712,707 103,778 71,815 12,424
Surrenders.............................................. (33,996) (14,763) (5,881) (74,646) (57)
Net loan withdrawals.................................... (11,534) (5,438) (31,209) (2,201) 0
Cost of insurance and other charges..................... (27,019) (6,489) (14,549) (26,397) (116)
----------- ----------- ----------- ------------ -----------
Net increase in net assets resulting from unit
transactions........................................... 777,500 826,622 129,719 137,216 13,016
Total increase in net assets ........................... 875,436 884,844 143,945 418,241 14,208
Net Assets:
Beginning of Period..................................... 264,250 0 252,271 797,003 0
----------- ----------- ----------- ------------ -----------
End of Period........................................... $1,139,686 $884,844 $396,216 $1,215,244 $14,208
----------- ----------- ----------- ------------ -----------
----------- ----------- ----------- ------------ -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. ORGANIZATION:
Separate Account Variable Life One (the Account) is a separate investment
account within Hartford Life Insurance Company (the Company) and is
registered with the Securities and Exchange Commission (SEC) as a unit
investment trust under the Investment Company Act of 1940, as amended. The
Account consists of twenty two sub-accounts. These financial statements
include twelve sub-accounts which invest solely in Hartford and Fidelity
Mutual Funds (the Funds). The other ten sub-accounts, which invest in Putnam
Capital Manager Trust Funds, are presented in separate financial statements.
Both the Company and the Account are subject to supervision and regulation
by the Department of Insurance of the State of Connecticut and the SEC. The
Account invests deposits by variable life contractholders of the Company in
various mutual funds (the Funds) as directed by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date. Capital gains income
represents dividends from the Funds which are characterized as capital
gains under tax regulations.
b) SECURITY VALUATION--The investment in shares of the Hartford and Fidelity
mutual funds are valued at the closing net asset value per share as
determined by the appropriate Fund as of December 31, 1995.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as an
insurance company under the Internal Revenue Code. Under current law, no
federal income taxes are payable with respect to the operations of the
Account.
d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the financial statements and the reported
amounts of income and expenses during the period. Operating results in
the future could vary from the amounts derived from management's
estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes deductions
for mortality and expense undertakings, cost of insurance, administrative
fees, and state premium taxes. These charges are deducted through
termination of units of interest from applicable contract owners' accounts.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life Insurance Company and Subsidiaries:
We have audited the accompanying consolidated balance sheets of Hartford Life
Insurance Company (a Connecticut corporation and wholly-owned subsidiary of
Hartford Life and Accident Insurance Company) and subsidiaries as of December
31, 1995 and 1994, and the related consolidated statements of income,
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 1995. These consolidated financial statements and the
schedules referred to below are the responsibility of Hartford Life Insurance
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Hartford Life Insurance Company and subsidiaries as of December 31, 1995 and
1994, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995 in conformity with generally
accepted accounting principles.
As discussed in Note 1 in Notes to Consolidated Financial Statements, Hartford
Life Insurance Company adopted new accounting standards promulgated by the
Financial Accounting Standards Board, changing its methods of accounting, as of
January 1, 1994, for debt and equity securities.
Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedules listed in
the Index to Consolidated Financial Statements and Schedules are presented for
purposes of complying with the Securities and Exchange Commission's rules and
are not a required part of the basic consolidated financial statements. These
schedules have been subjected to the auditing procedures applied in the audits
of the basic consolidated financial statements and, in our opinion, fairly
state in all material respects the financial data required to be set forth
therein in relation to the basic consolidated financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
January 24, 1996
F-1
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------
1995 1994 1993
------- ------- ------
<S> <C> <C> <C>
REVENUES
Premiums and other considerations $1,487 $1,100 $747
Net investment income 1,328 1,292 1,051
Net realized (losses) gains (11) 7 16
------ ------ -----
TOTAL REVENUES 2,804 2,399 1,814
------ ------ -----
BENEFITS, CLAIMS AND EXPENSES
Benefits, claims and claim
adjustment expenses 1,422 1,405 1,046
Dividends to policyholders 675 419 227
Amortization of deferred policy
acquisition costs 199 145 113
Other insurance expense 317 227 210
------ ------ -----
TOTAL BENEFITS, CLAIMS AND EXPENSES 2,613 2,196 1,596
------ ------ -----
INCOME BEFORE INCOME TAX EXPENSE 191 203 218
Income tax expense 62 65 75
------ ------ -----
NET INCOME $129 $138 $143
------ ------ -----
------ ------ -----
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
F-2
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
AS OF DECEMBER 31,
------------------
1995 1994
------- --------
ASSETS
<S> <C> <C>
Investments
Fixed maturities
available for sale, at market value
(amortized cost of $14,440 and $14,464) $14,400 $13,429
Equity securities, at market value
(cost of $61 and $76) 63 68
Mortgage loans, at outstanding balance 265 316
Policy loans, at outstanding balance 3,381 2,614
Other investments, at cost 156 107
------- -------
TOTAL INVESTMENTS 18,265 16,534
Cash 46 20
Premiums and amounts receivable 165 160
Reinsurance recoverable 6,221 5,466
Accrued investment income 394 378
Deferred policy acquisition costs 2,188 1,809
Deferred income tax 420 590
Other assets 234 83
Separate account assets 36,264 22,809
------- -------
TOTAL ASSETS $64,197 $47,849
------- -------
------- -------
LIABILITIES
Future policy benefits $2,373 $1,890
Other policyholder funds 22,598 21,328
Other liabilities 1,233 1,000
Separate account liabilities 36,264 22,809
------- -------
TOTAL LIABILITIES 62,468 47,027
------- -------
Commitments and contingencies (Note 9)
STOCKHOLDER'S EQUITY
Common stock
Authorized 1,000 shares, $5,690 par value
Issued and outstanding 1,000 shares 6 6
Additional paid-in capital 1,007 826
Retained earnings 773 644
Unrealized loss on investments, net of tax (57) (654)
------- -------
TOTAL STOCKHOLDER'S EQUITY 1,729 822
------- -------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $64,197 $47,849
------- -------
------- -------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
F-3
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(IN MILLIONS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
UNREALIZED LOSS TOTAL
COMMON ADDITIONAL RETAINED ON INVESTMENTS, STOCKHOLDER'S
STOCK PAID-IN-CAPITAL EARNINGS NET OF TAX EQUITY
------ --------------- -------- --------------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1992 $6 $498 $373 $0 $877
Net income - - 143 - 143
Capital contribution - 180 - - 180
Excess of assets over liabilities
on reinsurance assumed from affiliate - (2) - - (2)
Change in unrealized loss on investments, net of tax - - - (5) (5)
------ --------------- -------- --------------- -------------
BALANCE, DECEMBER 31, 1993 6 676 516 (5) 1,193
------ --------------- -------- --------------- -------------
Net income - - 138 - 138
Capital contribution - 150 - - 150
Dividend paid - - (10) - (10)
Change in unrealized loss on investments, net of tax* - - - (649) (649)
------ --------------- -------- --------------- -------------
BALANCE, DECEMBER 31, 1994 6 826 644 (654) 822
------ --------------- -------- --------------- -------------
Net income - - 129 - 129
Capital contribution - 181 - - 181
Change in unrealized loss on investments, net of tax - - - 597 597
------ --------------- -------- --------------- -------------
BALANCE, DECEMBER 31, 1995 $6 $1,007 $773 ($57) $1,729
------ --------------- -------- --------------- -------------
------ --------------- -------- --------------- -------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(*) The 1994 change in unrealized loss on investments, net of tax, included an
unrealized gain of $91 due to adoption of SFAS No. 115 as discussed in Note 1(b)
of Notes to Consolidated Financial Statements.
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
F-4
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------
1995 1994 1993
------------- -------------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $129 $138 $143
Adjustments to net income:
Net realized (losses) gains 11 (7) (16)
(Decrease) increase in liability to policyholders for realized gains (3) 5 (15)
Net amortization of premium on fixed maturities 21 41 2
Provision for deferred income taxes (172) (128) (121)
Increase in deferred policy acquisition costs (379) (441) (292)
(Increase) decrease in premiums and amounts receivable (81) 10 (28)
Increase in accrued investment income (16) (106) (4)
(Increase) decrease in other assets (177) 101 (36)
(Increase) decrease in reinsurance recoverable (35) 75 (121)
Increase in liability for future policy benefits 483 224 360
Increase in other liabilities 281 191 176
------------- -------------- -------------
CASH PROVIDED BY OPERATING ACTIVITIES 62 103 48
------------- -------------- -------------
INVESTING ACTIVITIES
Purchases of fixed maturities investments (6,228) (9,127) (12,406)
Proceeds from sales of fixed maturities investments 4,848 5,708 8,813
Maturities and principal paydowns of fixed maturities investments 1,741 1,931 2,596
Net purchases of other investments (871) (1,338) (206)
Net (purchases)/sales of short-term investments (24) 135 (564)
------------- -------------- -------------
CASH USED FOR INVESTING ACTIVITIES (534) (2,691) (1,767)
------------- -------------- -------------
FINANCING ACTIVITIES
Net receipts from investment and UL-type contracts credited to
policyholder account balances 498 2,467 1,513
Capital contribution 0 150 180
Dividends paid 0 (10) 0
------------- -------------- -------------
CASH PROVIDED BY FINANCING ACTIVITIES 498 2,607 1,693
------------- -------------- -------------
NET INCREASE (DECREASE) IN CASH 26 19 (26)
Cash at beginning of year 20 1 27
------------- -------------- -------------
CASH AT END OF YEAR $46 $20 $1
------------- -------------- -------------
------------- -------------- -------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
F-5
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS)
1. SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION
These consolidated financial statements include Hartford Life Insurance Company
and its wholly-owned subsidiaries ("Hartford Life" or the "Company"), ITT
Hartford Life and Annuity Insurance Company ("ILA") and ITT Hartford
International Life Reassurance Corporation ("HLRe"), formerly American Skandia
Life Reinsurance Corporation. Hartford Life is a wholly-owned subsidiary of
Hartford Life and Accident Insurance Company ("HLA"). Hartford Life is
ultimately owned by Hartford Fire Insurance Company ("Hartford Fire"), which is
ultimately owned by ITT Hartford Group, Inc. ("ITT Hartford"), formerly a
subsidiary of ITT Corporation ("ITT"). On December 19, 1995, ITT Corporation
distributed all of the outstanding shares of ITT Hartford Group to ITT
Corporation Shareholders of record in an action known herein as the
"Distribution". As a result of the Distribution, ITT Hartford became an
independent publicly traded company.
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The
Company offers life, annuity, pension, and disability insurance products.
These products are distributed and marketed by multiple distribution channels
which include broker-dealers, agents and banks, as well as a captive sales
force. Hartford Life conducts business primarily in the United States and is
licensed to write business in all 50 states. The Company is headquartered in
Simsbury, Connecticut and has 3,045 direct employees.
The consolidated financial statements are prepared in conformity with generally
accepted accounting principles which differ in certain material respects from
the accounting practices prescribed or permitted by various insurance
regulatory authorities.
(B) CHANGES IN ACCOUNTING PRINCIPLES
Effective January 1, 1994, Hartford Life adopted Statement of Financial
Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in
Debt and Equity Securities". The new standard requires, among other things,
that securities be classified as "held-to-maturity", "available-for-sale" or
"trading" based on Hartford Life's intentions with respect to the ultimate
disposition of the security and its ability to effect those intentions. The
classification determines the appropriate accounting carrying value (cost basis
or fair value) and, in the case of fair value, whether the adjustment impacts
Stockholder's Equity directly or is reflected in the Consolidated Statements of
Income. Investments in equity securities had previously been and continue to
be recorded at fair value with the corresponding impact included in
Stockholder's Equity. Under SFAS No. 115, Hartford Life's fixed maturities
are classified as "available-for-sale" and accordingly, these investments are
reflected at fair value with the corresponding impact included as a component
of Stockholder's Equity designated as "Unrealized loss on investments, net of
tax." As with the underlying investment security, unrealized gains and losses
on derivative financial instruments are considered in determining the fair
value of the portfolios. The impact of adoption was an increase to
Stockholder's Equity of $91. Hartford Life's cash flows were not impacted by
this change in accounting principle.
(C) REVENUE RECOGNITION
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.
Deferred acquisition costs are amortized using the retrospective deposit method
for universal life and other types of contracts where the payment pattern is
irregular or surrender charges are a significant source of profit and the
prospective deposit method is used where investment margins are the primary
source of profit.
F-6
<PAGE>
(D) FUTURE POLICY BENEFITS AND OTHER POLICYHOLDER FUNDS
Liabilities for future policy benefits are computed by the net level premium
method using interest rate assumptions varying from 3% to 11% and withdrawal,
mortality and morbidity assumptions which vary by plan, year of issue and
policy durations and include a provision for adverse deviation. Other
policyholder funds which represent liabilities for universal life insurance and
investment products reflect policy account balances before applicable surrender
charges.
(E) POLICYHOLDER REALIZED GAINS AND LOSSES
Realized gains and losses on security transactions associated with Hartford
Life's immediate participation guaranteed contracts are excluded from
revenues, since under the terms of the contracts the realized gains and losses
will be credited to policyholders in future years as they are entitled to
receive them.
(F) DEFERRED POLICY ACQUISITION COSTS
Policy acquisition costs, including commissions and certain underwriting
expenses associated with acquiring traditional life insurance products, are
deferred and amortized over the lesser of the estimated or actual contract
life. For universal life insurance and investment products, acquisition costs
are being amortized generally in proportion to the present value of expected
gross profits from surrender charges, investment, mortality and expense
margins.
(G) INVESTMENTS
Hartford Life's investments in fixed maturities include bonds, redeemable
preferred stock and commercial paper which are classified as "available-for-
sale" and accordingly are carried at market value with the after-tax difference
from cost reflected as a component of Stockholder's Equity designated
"Unrealized loss on investments, net of tax". Equity securities, which include
common and non-redeemable preferred stocks, are carried at market value with
the after-tax difference from cost reflected in Stockholder's Equity. Realized
investment gains and losses, after deducting life and pension policyholders'
share, are reported as a component of revenue and are determined on a specific
identification basis.
(H) DERIVATIVE FINANCIAL INSTRUMENTS
Hartford Life uses a variety of derivative financial instruments including,
swaps, caps, floors, options, forwards and exchange traded financial futures as
part of an overall risk management strategy. These instruments, are used as a
means of hedging exposure to price, foreign currency and/or interest rate risk
on planned investment purchases or existing assets and liabilities. Hartford
Life does not hold or issue derivative financial instruments for trading
purposes. Hartford Life's accounting for derivative financial instruments used
to manage risk is in accordance with the concepts established in SFAS No. 80,
"Accounting for Futures Contracts," SFAS No. 52 , "Foreign Currency
Translation", American Institute of Certified Public Accountants Statement of
Position 86-2, "Accounting for Options" and various Emerging Issues Task Force
pronouncements. Written options are in all cases used in conjunction with other
assets and derivatives as part of an overall risk management strategy.
Derivative instruments are carried at values consistent with the asset or
liability being hedged. Derivatives used to hedge fixed maturities or equities
are carried at fair value with the after-tax difference from cost reflected in
Stockholder's Equity. Derivatives used to hedge other invested assets or
liabilities are carried at cost.
Derivatives, used as part of a risk management strategy, must be designated at
inception as a hedge and measured for effectiveness both at inception and on an
ongoing basis. Hartford Life's minimum correlation threshold for hedge
designation is 80%. If correlation, which is assessed monthly and measured
based on a rolling three month average, falls below 80%, hedge accounting will
be terminated. Derivatives used to create a synthetic asset must meet synthetic
accounting criteria including designation at inception and consistency of terms
between the synthetic and the instrument being replicated. Synthetic
instrument accounting, consistent with industry practice, provides that the
synthetic asset is accounted for like the financial instrument it is intended
to replicate. Derivatives which fail to meet risk management criteria are
marked to market with the impact reflected in the Consolidated Statements
of Income.
Gains or losses on financial futures contracts entered into in anticipation
of the future receipt of product cash flows are deferred and, at the time of
the ultimate purchase, reflected as a basis adjustment to the purchased
asset. Gains or losses on futures used in invested asset risk management are
deferred and adjusted into the basis of the hedged asset when the contract
futures are closed, except for futures used in duration hedging which are
deferred and basis adjusted on a quarterly basis. The basis adjustments are
amortized into investment income over the remaining asset life.
F-7
<PAGE>
Open forward commitment contracts are marked to market through Stockholder's
Equity. Such contracts are recorded at settlement by recording the purchase of
the specified securities at the previously committed price. Gains or losses
resulting from the termination of the forward commitment contracts before the
delivery of the securities are recognized immediately in the Consolidated
Statements of Income as a component of net investment income.
The cost of options entered into as part of a risk management strategy are
basis adjusted to the underlying asset or liability and amortized over the
remaining life of the hedge. Gains or losses on expiration or termination are
adjusted into the basis of the underlying asset or liability and amortized over
the remaining asset life.
Interest rate swaps involve the periodic exchange of payments without the
exchange of underlying principal or notional amounts. Net receipts or payments
are accrued and recognized over the life of the swap agreement as an
adjustment to income. Should the swap be terminated, the gain or loss is
adjusted into the basis of the asset or liability and amortized over the
remaining life. Should the hedged asset be sold or liability terminated without
terminating the swap position, any swap gains or losses are immediately
recognized in earnings. Interest rate swaps purchased in anticipation of an
asset purchase ("anticipatory transaction") are recognized consistent with the
underlying asset components such that the settlement component is recognized in
the Consolidated Statements of Income while the change in market value is
recognized as an unrealized gain or loss.
Premiums paid on purchased floor or cap agreements and the premium received on
issued floor or cap agreements (used for risk management), are adjusted into
the basis of the applicable asset and amortized over the asset life. Gains or
losses on termination of such positions are adjusted into the basis of the
asset or liability and amortized over the remaining asset life. Net payments
are recognized as an adjustment to income or basis adjusted and amortized
depending on the specific hedge strategy.
Forward exchange contracts and foreign currency swaps are accounted for in
accordance with SFAS No. 52.
(I) RELATED PARTY TRANSACTIONS
Transactions of Hartford Life with its parent and affiliates relate principally
to tax settlements, insurance coverage, rental and service fees and payment of
dividends and capital contributions. In addition, certain affiliated insurance
companies purchased group annuity contracts from Hartford Life to fund pension
costs and claim annuities to settle casualty claims.
On June 30, 1995, the assets of Lyndon Insurance Company ("Lyndon") were
contributed to ILA. As a result, ILA received approximately $365 in fixed
maturities, equity securities and cash, $26 in receivables, $187 of current
tax liability, $20 in deferred tax liability, and $3 of other liabilities.
The excess of assets over liabilities of $181 were recorded as an increase to
paid-in capital.
Substantially all general insurance expenses related to Hartford Life,
including rent expenses, are initially paid by Hartford Fire. Direct expenses
are allocated to Hartford Life using specific identification and indirect
expenses are allocated using other applicable methods.
The rent paid to Hartford Fire for the space occupied by Hartford Life was $3
in 1995, 1994, and 1993 respectively. Hartford Life expects to pay rent of $3
in 1996, 1997, 1998, 1999, and 2000, respectively and $57 thereafter, over the
contract life of the lease.
(J) DIVIDEND TO POLICYHOLDERS
Dividends to policyholders primarily represent those amounts paid to corporate
owned life insurance ("COLI") policyholders. These dividend liabilities, which
appear as other policyholder funds on the Consolidated Balance Sheets, are
recorded when approved by the board of directors.
See Note (4) for the related party coinsurance agreements.
F-8
<PAGE>
2. INVESTMENTS
(a) COMPONENTS OF NET INVESTMENT INCOME
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
<S> <C> <C> <C>
1995 1994 1993
------ ------ ------
Interest income $1,338 $1,247 $1,007
Income from other investments 1 54 53
------ ------ ------
GROSS INVESTMENT INCOME 1,339 1,301 1,060
Less: Investment expenses 11 9 9
------ ------ ------
NET INVESTMENT INCOME $1,328 $1,292 $1,051
------ ------ ------
------ ------ ------
(b) UNREALIZED GAINS/(LOSSES) ON EQUITY SECURITIES
As of December 31,
--------------------------
1995 1994 1993
------ ------ ------
Gross unrealized gains $4 $2 $3
Gross unrealized losses (2) (11) (11)
Deferred income tax expenses/(benefit) 1 (3) (3)
------ ------ ------
NET UNREALIZED GAINS (LOSSES) AFTER TAX 1 (6) (5)
Balance at the beginning of the year (6) (5) (0)
------ ------ ------
CHANGE IN NET UNREALIZED GAINS (LOSSES) ON EQUITY SECURITIES $7 ($1) ($5)
------ ------ ------
------ ------ ------
(c) UNREALIZED GAINS/(LOSSES) IN FIXED SECURITIES
As of December 31,
--------------------------
1995 1994 1993
------ ------ ------
Gross unrealized gains $529 $150 $538
Gross unrealized losses (569) (1,185) (290)
Unrealized (losses)/gains credited to policyholder (52) 37 0
Deferred income tax (benefit)/expense (34) (350) 87
------ ------ ------
NET UNREALIZED (LOSSES) GAINS AFTER TAX (58) (648) 161
Balance at the beginning of the year (648) 161 144
------ ------ ------
CHANGE IN NET UNREALIZED GAINS(LOSES)
ON FIXED MATURITIES $590 ($809) $17
------ ------ ------
------ ------ ------
(d) COMPONENTS OF NET REALIZED GAINS/(LOSSES)
Year ended December 31,
--------------------------
1995 1994 1993
------ ------ ------
Fixed maturities $23 ($34) ($12)
Equity securities (6) (11) 0
Real estate and other (25) 47 43
Less: (decrease)/increase in liability to policyholders
for realized gains (3) 5 (15)
------ ------ ------
NET REALIZED (LOSSES) GAINS ($11) $7 $16
------ ------ ------
------ ------ ------
</TABLE>
F-9
<PAGE>
(e) DERIVATIVE INVESTMENTS
A summary of investments, segregated by major category along with the types of
derivatives and their respective notional amounts, are as follows as of
December 31, 1995 :
<TABLE>
<CAPTION>
SUMMARY OF INVESTMENTS
AS OF DECEMBER 31, 1995
(CARRYING AMOUNT)
Caps, Floors & Options Foreign
Carrying ----------------------- Currency
Value Non-Derivative Issued(b) Purchased(c) Futures(d) Swaps(f) Swaps
-------- ----------- -------- ----------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset-backed securities $5,764 $5,752 ($1) $30 $0 ($17) $0
Inverse floaters(a) 711 794 (30) 16 0 (69) 0
Anticipatory(e) 0 0 0 0 0 0 0
-------- ----------- -------- ----------- --------- -------- -------
TOTAL ASSET-BACKED SECURITIES 6,475 6,546 (31) 46 0 (86) 0
Other bonds and notes 7,118 7,165 (1) 0 0 (22) (24)
Short-term investments 807 807 0 0 0 0 0
-------- ----------- -------- ----------- --------- -------- -------
TOTAL FIXED MATURITIES 14,400 14,518 (32) 46 0 (108) (24)
Other investments 3,865 3,865 0 0 0 0 0
-------- ----------- -------- ----------- --------- -------- -------
TOTAL INVESTMENTS $18,265 $18,383 ($32) $46 $0 ($108) ($24)
-------- ----------- -------- ----------- --------- -------- -------
-------- ----------- -------- ----------- --------- -------- -------
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF INVESTMENTS
AS OF DECEMBER 31, 1995
(NOTIONAL AMOUNT)
(EXCLUDING LIABILITY HEDGES)
Caps, Floors & Options Foreign
Notional ---------------------- Currency
Amount Issued(b) Purchased(c) Futures(d) Swaps(f) Swaps
-------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Asset-backed securities $3,863 $118 $3,133 $322 $290 $0
Inverse floaters(a) 1,601 560 354 6 681 0
Anticipatory(e) 238 0 0 213 25 0
-------- --------- --------- ---------- --------- ---------
TOTAL ASSET-BACKED SECURITIES 5,702 678 3,487 541 996 0
Other bonds and notes 1,365 33 66 322 757 187
Short-term investments 0 0 0 0 0 0
-------- --------- --------- ---------- --------- ---------
TOTAL FIXED MATURITIES 7,067 711 3,553 863 1,753 187
Other investments 18 0 0 0 18 0
-------- --------- --------- ---------- --------- ---------
TOTAL INVESTMENTS $7,085 $711 $3,553 $863 $1,771 $187
-------- --------- --------- ---------- --------- ---------
-------- --------- --------- ---------- --------- ---------
</TABLE>
(a) Inverse floaters are variations of CMO's for which the coupon rates
move inversely with an index rate (e.g. LIBOR). The risk to principal is
considered negligible as the underlying collateral for the securities is
guaranteed or sponsored by government agencies. To address the volatility
risk created by the coupon variability, Hartford Life uses a variety of
derivative instruments, primarily interest rate swaps and issued floors.
(b) Includes issued caps $475 with a weighted average strike rate of 8.5%
(ranging from 7.0% to 10.4%) and over 85% mature in 2000 through 2004. Issued
floors totaled $236, have a weighted average strike rate of 8.1% (ranging
from 5.3% to 10.9%) and mature through 2007 with 76% maturing by 2004.
(c) Comprised of purchased floors of $1.8 billion and purchased caps of $1.7
billion. The floors have a weighted average strike price of 5.8% (ranging from
3.7% to 6.8%) and over 85% mature in 1997 through 1999. The caps have a
weighted average strike price of 7.5% (ranging from 4.5% and 10.1%) and over
82% mature in 1997 through 1999.
(d) Over 95% of futures contracts expire before December 31, 1996.
(e) Deferred gains and losses on anticipatory transactions are included in the
carrying value of bond investments in the consolidated balance sheets. At the
time of the ultimate purchase, they are reflected as a basis adjustment to the
purchased asset. At December 31, 1995, there were $5.3 in net deferred losses
for futures, interest rate swaps and purchased options.
(f) The following table summarizes the maturities by notional value of interest
rate swaps outstanding at December 31, 1995 and the related weighted average
interest pay rate or receive rate assuming current market conditions:
F-10
<PAGE>
<TABLE>
<CAPTION>
MATURITY OF SWAPS ON INVESTMENTS
AS OF DECEMBER 31, 1995
LAST
1996 1997 1998 1999 2000 THEREAFTER TOTAL MATURITY
---- ---- ---- ---- ---- ---------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INTEREST RATE SWAPS
PAY FIXED/RECEIVE VARIABLE
Notional Value $15 $50 $0 $453 $31 $229 $778 2004
Weighted Average Pay Rate 5.0% 7.2% 0.0% 8.1% 7.1% 7.8% 7.8%
Weighted Average Receive Rate 5.8% 5.9% 0.0% 5.8% 5.7% 5.9% 5.9%
PAY VARIABLE/RECEIVE FIXED
Notional Value $100 $68 $25 $25 $35 $190 $443 2007
Weighted Average Pay Rate 5.9% 8.6% 5.9% 0.0% 5.9% 5.4% 5.4%
Weighted Average Receive Rate 2.4% 7.9% 4.0% 0.0% 6.5% 6.9% 6.9%
PAY VARIABLE/RECEIVE DIFFERENT VARIABLE
Notional Value $50 $18 $36 $12 $200 $234 $550 2004
Weighted Average Pay Rate 5.8% 0.0% 3.7% 3.5% 4.5% 16.3% 5.7%
Weighted Average Receive Rate 5.4% 0.0% 5.6% 5.2% 6.8% 5.9% 6.4%
TOTAL INTEREST RATE SWAPS $165 $136 $61 $490 $266 $653 $1,771 2007
WEIGHTED AVERAGE PAY RATE 5.8% 7.8% 4.6% 7.6% 5.0% 7.3% 6.9%
WEIGHTED AVERAGE RECEIVE RATE 3.6% 7.2% 4.9% 5.4% 6.6% 6.3% 5.8%
</TABLE>
(g) The following table reconciles the derivative notional amounts by derivative
type and by strategy:
<TABLE>
<CAPTION>
BY DERIVATIVE TYPE
----------------------------------------------------------------------
12/31/94 MATURITIES/ 12/31/95
NOTIONAL AMOUNT ADDITIONS TERMINATIONS NOTIONAL AMOUNT
--------------- --------- ------------ ---------------
<S> <C> <C> <C> <C>
Caps $1,861 $2,666 $2,343 $2,184
Floors 2,131 237 188 2,180
Swaps/Collars/Forwards/Options 4,374 1,355 2,163 3,566
Futures 253 6,125 5,515 863
--------------- --------- ------------ ---------------
TOTAL $8,619 $10,383 $10,209 $8,793
--------------- --------- ------------ ---------------
--------------- --------- ------------ ---------------
BY STRATEGY
----------------------------------------------------------------------
12/31/94 MATURITIES/ 12/31/95
NOTIONAL AMOUNT ADDITIONS TERMINATIONS NOTIONAL AMOUNT
--------------- ---------- ------------ ---------------
Liability $1,725 $729 $746 $1,708
Anticipatory 626 1,564 1,952 238
Asset 3,048 3,153 3,217 2,984
Portfolio 3,220 4,937 4,294 3,863
--------------- ---------- ------------ --------------
TOTAL $8,619 $10,383 $10,209 $8,793
--------------- ---------- ------------ --------------
--------------- ---------- ------------ --------------
</TABLE>
In addition to risk management through derivative financial instruments
pertaining to the investment portfolio, interest rate sensitivity related to
certain Company liabilities was altered primarily through interest rate swap
agreements. The notional
F-11
<PAGE>
amount of the liability agreements in which Hartford Life generally pays one
variable rate in exchange for another, was $1.7 billion at December 31, 1995 and
1994 respectively. The weighted average pay rate is 5.9%; the weighted average
receive rate is 6.0% , and these agreements mature at various times through
2001.
(F) CONCENTRATION OF CREDIT RISK
Hartford Life has a reinsurance recoverable of $5.6 billion from Mutual Benefit
Life Assurance Corporation (Mutual Benefit). The risk of Mutual Benefit
becoming insolvent is mitigated by the reinsurance agreement's requirement that
the assets be kept in a security trust with Hartford Life as sole beneficiary.
Excluding investments in U.S. government and agencies, Hartford Life has no
other significant concentrations of credit risk.
Included in fixed maturity investments at December 31, 1995 were $39 of
Orange County, California Pension Obligation Bonds, $17 of which were carried
in the general account and $22 which were included in Hartford Life's
guaranteed separate accounts. During 1995 all interest payments due were
received. While Orange County is currently operating under Protection of
Chapter 9 of the Federal Bankruptcy Laws, Hartford Life believes the bonds
are not impaired other than on a temporary basis.
(G) FIXED MATURITIES
The schedule below details the amortized cost and fair values of Hartford Life's
fixed maturities by component, along with the gross unrealized gains and losses:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,1995
--------------------------------------------------
GROSS UNREALIZED
AMORTIZED --------------------- MARKET
COST GAINS LOSSES VALUE
---------- ------- ------ -----
<S> <C> <C> <C> <C>
U.S. Government and government agencies and
authorities;
Guaranteed and sponsored $502 $4 ($9) $497
Guaranteed and sponsored-asset backed 3,568 210 (387) 3,391
State, municipalities and political subdivisions 201 4 (3) 202
International governments 291 19 (4) 306
Public utilities 949 29 (2) 976
All other corporate-asset backed 3,065 76 (55) 3,086
All other corporate 5,056 187 (109) 5,134
Short-term investments 808 0 0 808
---------- ------- ----- -----
TOTAL INVESTMENTS $14,440 $529 ($569) $14,440
---------- ------- ----- -----
---------- ------- ----- -----
AS OF DECEMBER 31,1994
--------------------------------------------------
GROSS UNREALIZED
AMORTIZED --------------------- MARKET
COST GAINS LOSSES VALUE
---------- ------- ------ -----
U.S. Government and government agencies
and authorities;
Guaranteed and sponsored $1,516 $1 ($87) $1,430
Guaranteed and sponsored-asset backed 4,256 78 (571) 3,763
State, municipalities and political subdivisions 148 1 (12) 137
International governments 189 1 (14) 176
Public utilities 531 1 (32) 500
All other corporate-asset backed 2,442 30 (121) 2,351
All other corporate 3,717 38 (297) 3,458
Short-term investments 1,665 0 (51) 1,614
--------- ------- -------- -------
TOTAL INVESTMENTS $14,464 $150 ($1,185) $13,429
--------- ------- -------- -------
--------- ------- -------- -------
</TABLE>
F-12
<PAGE>
The amortized cost and estimated fair value of fixed maturities at December 31,
1995, by maturity, are shown below. Asset backed securities are distributed to
maturity year based on estimates of the rate of future prepayments of principal
over the remaining life of the securities. Expected maturities differ from
contractual maturities reflecting the borrowers' rights to call or prepay their
obligations.
<TABLE>
<CAPTION>
AMORTIZED MARKET
COST VALUE
---------- ---------
<S> <C> <C>
Due in one year or less $3,146 $3,133
Due after one year through five years 6,373 6,316
Due after five years through ten years 3,609 3,644
Due after ten years 1,312 1,307
---------- ---------
TOTAL $14,440 $14,400
---------- ---------
---------- ---------
</TABLE>
Sales of fixed maturities excluding short-term fixed maturities for the years
ended December 31, 1995, 1994, and 1993 resulted in proceeds of $4,848, $5,708,
and $8,813, respectively, resulting in gross realized gains of $91, $71, and
$192, respectively, and gross realized losses of $72, $100, and $219,
respectively, not including policyholder gains and losses. Sales of equity
securities and other investments for the years ended December 31, 1995, 1994,
and 1993 resulted in proceeds of $64, $159, and $127, respectively, resulting in
gross realized gains of $28, $3, and $0, respectively, and gross realized losses
of $59, $14, $0, respectively, not including policyholder gains and losses.
(H) FAIR VALUE OF FINANCIAL INSTRUMENTS
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1995 AS OF DECEMBER 31, 1994
----------------------- -----------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities $14,400 $14,400 $13,429 $13,429
Equity securities 63 63 68 68
Policy loans 3,381 3,381 2,614 2,614
Mortgage loans 265 265 316 316
Investments in partnerships and trusts 94 97 36 42
Miscellaneous 62 62 67 67
LIABILITIES
Other policy claims and benefits $12,727 $12,767 $13,001 $12,374
</TABLE>
The following methods and assumptions were used to estimate the fair value of
each class of financial instrument: fair value for fixed maturities and equity
securities approximate those quotations published by applicable stock exchanges
or are received from other reliable sources; policy and mortgage loan carrying
amounts approximate fair value; investments in partnerships and trusts are based
on external market valuations from partnership and trust management; and other
policy claims and benefits payable are determined by estimating future cash
flows discounted at the current market rate.
3. INCOME TAX
Hartford Life is included in ITT Hartford Group's consolidated U.S. Federal
income tax return and remits to (receives from) ITT Hartford Group, Inc. a
current income tax provision (benefit) computed in accordance with the tax
sharing arrangements between its insurance subsidiaries. The effective tax
rate was 32% in 1995 and 1994, and approximates the U.S. statutory tax rate
of 35% in 1993.
F-13
<PAGE>
The provision for income taxes was as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
INCOME TAX EXPENSES
Current $211 $185 $190
Deferred (149) (120) (115)
------- ------- -------
TOTAL $62 $65 $75
------- ------- -------
------- ------- -------
INCOME TAX PROVISION
Tax provision at U.S. statutory rate $67 $71 $76
Tax-exempt income (3) (3) 0
Foreign tax credit (4) (1) 0
Other 2 (2) (1)
------- ------- -------
PROVISION FOR INCOME TAX $62 $65 $75
------- ------- -------
------- ------- -------
</TABLE>
Income taxes paid were $162, $244, and $301 in 1995, 1994, and 1993
respectively. The current taxes due from Hartford Fire were $8 and $46 in 1995
and 1994, respectively.
Deferred tax assets(liabilities) include the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1994
--------- ---------
<S> <C> <C>
Tax deferred acquisition costs $410 $284
Book deferred acquisition costs and reserves 138 (134)
Employee benefits 8 7
Unrealized net loss on investments 32 353
Investments and other (168) 80
--------- ---------
TOTAL DEFERRED TAX ASSET $420 $590
--------- ---------
--------- ---------
</TABLE>
Prior to the Tax Reform Act of 1984, the Life Insurance Company Income Tax Act
of 1959 permitted the deferral from taxation of a portion of statutory income
under certain circumstances. In these situations, the deferred income was
accumulated in a "Policyholders' Surplus Account" and will be taxable in the
future only under conditions which management considers to be remote; therefore,
no Federal income taxes have been provided on this deferred income. The balance
for tax return purposes of the Policyholders' Surplus Account as of December 31,
1995 was $37.
4. REINSURANCE
Hartford Life cedes insurance to non-affiliated insurers in order to limit its
maximum loss. Such transfer does not relieve Hartford Life of its primary
liability. Hartford Life also assumes insurance from other insurers. Group
life and accident and health insurance business is substantially reinsured to
affiliated companies.
Life insurance net retained premiums were comprised of the following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Gross premiums $1,545 $1,316 $1,135
Insurance assumed 591 299 93
Insurance ceded 649 515 481
------- ------- -------
NET RETAINED PREMIUMS $1,487 $1,100 $747
------- ------- -------
------- ------- -------
</TABLE>
F-14
<PAGE>
Life reinsurance recoveries, which reduced death and other benefits, for the
years ended December 31, 1995, 1994 and 1993 approximated $220, $164, and $149,
respectively.
In December 1994, Hartford Life assumed from a third party approximately $500
of corporate owned life insurance reserves on a coinsurance basis. In
December 1995, this block of business was reinsured to HLRe utilizing
modified coinsurance, with the assets and policy liabilities placed in a
separate account. In October 1994, HLRe recaptured approximately $500 of
corporate owned life insurance from a third party reinsurer. Subsequent to
this transaction, Hartford Life and HLRe restructured their coinsurance
agreement from coinsurance to modified coinsurance, with the assets and
policy liabilities placed in the separate account. These transactions did not
have a material impact on consolidated net income.
Also in December 1994, ILA ceded to a third party $1.0 billion in individual
fixed and variable annuities on a modified coinsurance basis. In December 1995,
Hartford Life ceded approximately $1.2 billion in individual variable annuities
on a modified coinsurance basis to a third party. These transactions did not
have a material impact on consolidated net income.
In May 1994, Hartford Life assumed the life insurance policies and the
individual annuities of Pacific Standard with reserves and account values of
approximately $400. Hartford Life received cash and investment grade assets
to support the life insurance and individual annuity contract obligations
assumed.
In November 1993, ILA acquired, through an assumption reinsurance
transaction, substantially all of the individual fixed and variable annuity
business of HLA. As a result of this transaction, the assets and liabilities
of Hartford Life increased approximately $1 billion. The excess of
liabilities assumed over assets received, of $2, was recorded as a decrease
to capital surplus. The remaining $41 in assets and liabilities were
transferred in October 1995. The impact on consolidated net income was not
significant.
In August 1993, Hartford Life received assets of $300 for assuming the group
COLI contract obligations of Mutual Benefit Life Insurance Company, through
an assumption reinsurance transaction. Under the terms of the agreement,
Hartford Life coinsured back 75% of the liabilities to Mutual Benefit Life
Insurance Company. All assets supporting Mutual Benefit's reinsurance
liability to Hartford Life are placed in a "security trust", with Hartford
Life as the sole beneficiary. The impact on 1993 consolidated net income was
not significant.
5. PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS
Hartford Life's employees are included in Hartford Fire's noncontributory
defined benefit pension plans. These plans provide pension benefits that are
based on years of service and the employee's compensation during the last ten
years of employment. Hartford Life'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 Hartford Life's group pension contracts. The cost to
Hartford Life was approximately $2, $2, and $3 in 1995, 1994 and 1993,
respectively.
Hartford Life provides certain health care and life insurance benefits for
eligible retired employees. A substantial portion of Hartford Life's employees
may become eligible for these benefits upon retirement. Hartford Life's
contribution for health care benefits will depend on the retiree's date of
retirement and years of service. In addition, the plan has a defined dollar cap
which limits average company contributions. Hartford Life has prefunded a
portion of the health care and life insurance obligations through trust funds
where such prefunding can be accomplished on a tax effective basis.
Postretirement health care and life insurance benefits expense, allocated by
Hartford Fire were immaterial for 1995, 1994, and 1993 respectively.
The assumed rate of future increases in the per capita cost of health care (the
health care trend rate) was 10.1% for 1995, decreasing ratably to 6.0% in the
year 2001. Increasing the health care trend rates by one percent per year would
have an immaterial impact on the accumulated postretirement benefit obligation
and the annual expense. To the extent that the actual experience differs from
the inherent assumptions, the effect will be amortized over the average future
service of the covered employees.
F-15
<PAGE>
6. BUSINESS SEGMENT INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
REVENUES
Individual Life and Annuity $797 $691 $595
Asset Management Services 734 789 794
Specialty Insurance Operations 1,273 919 425
------ ------ ------
TOTAL REVENUES $2,804 $2,399 $1,814
------ ------- ------
------ ------- ------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
YEAR ENDED DECEMBER 31
------------------------
1995 1994 1993
------ ------- -----
INCOME BEFORE INCOME TAX EXPENSE
Individual Life and Annuity $236 $139 $129
Asset Management Services (79) 38 71
Specialty Insurance Operations 34 26 18
------ ------ ------
TOTAL INCOME BEFORE INCOME
TAX EXPENSE $191 $203 $218
------ ------ ------
------ ------ ------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
YEAR ENDED DECEMBER 31
---------------------------
1995 1994 1993
------- ------- -------
IDENTIFIABLE ASSETS
Individual Life and Annuity $36,741 $26,668 $19,147
Asset Management Services 13,962 13,334 12,416
Specialty Insurance Operations 13,494 7,847 6,723
------- ------- -------
TOTAL IDENTIFIABLE ASSETS $64,197 $47,849 $38,286
------- ------- -------
------- ------- -------
</TABLE>
7. STATUTORY NET INCOME AND SURPLUS
Substantially all of the statutory surplus is permanently reinvested or is
subject to dividend restrictions relating to various state regulations which
limit the payment of dividends without prior approval. Statutory net income
and surplus as of December 31 were:
<TABLE>
<CAPTION>
1995 1994 1993
--------- -------- --------
<S> <C> <C> <C>
Statutory net income $112 $58 $63
Statutory surplus $1,125 $941 $812
</TABLE>
8. SEPARATE ACCOUNTS
Hartford Life maintains separate account assets and liabilities totaling $36.3
billion and $22.8 billion at December 31, 1995 and 1994, respectively which
are reported at fair value. Separate account assets are segregated from other
investments and investment income and gains and losses accrue directly to the
policyholder. Separate accounts reflect two categories of risk assumption:
non-guaranteed separate accounts totaling $25.9 billion and $14.8 billion at
December 31, 1995 and 1994, respectively, wherein the policyholder assumes the
investment risk, and guaranteed separate account assets totaling $10.4 billion
and $8.0 billion at December 31, 1995 and 1994, respectively, wherein Hartford
Life contractually guarantees either a minimum return or account value to the
policyholder. Included in the non-guaranteed category are policy loans
totaling $1.7 billion and $0.5 billion at December 31, 1995 and 1994,
respectively. Investment income (including investment gains and losses) and
interest credited to policyholders on separate account assets are not
reflected in the Consolidated Statements of Income. Separate account
management fees, net of minimum guarantees, were $387, $256, and $189, in
1995, 1994, and 1993, respectively.
F-16
<PAGE>
The guaranteed separate accounts include modified guaranteed individual
annuity, and modified guaranteed life insurance. The average credit interest
rate on these contracts is 6.62%. The assets that support these liabilities
were comprised of $10.4 billion in bonds at December 31, 1995. The portfolios
are segregated from other investments and are managed so as to minimize
liquidity and interest rate risk. In order to minimize the risk of
disintermediation associated with early withdrawals, individual annuity and
modified guaranteed life insurance contracts carry a graded surrender charge
as well as a market value adjustment. Additional investment risk is hedged
using a variety of derivatives which totaled $133 million in carrying value
and $2.7 billion in notional amounts at December 31, 1995.
9. COMMITMENTS AND CONTINGENCIES
In August 1994, Hartford Life renewed a two year note purchase facility
agreement which in certain instances obligates Hartford Life to purchase up to
$100 million in collateralized notes from a third party. Hartford Life is
receiving fees for this commitment. At December 31, 1995, Hartford Life had
not purchased any notes under this agreement.
Under insurance guaranty fund laws in most states, insurers doing business
therein can be assessed up to prescribed limits for policyholder losses
incurred by insolvent companies. The amount of any future assessments on
Hartford Life under these laws cannot be reasonably estimated. Most of these
laws do provide, however, that an assessment may be excused or deferred if it
would threaten an insurer's own financial strength. Additionally, guaranty
fund assessments are used to reduce state premium taxes paid by the Company in
certain states. Hartford Life paid guaranty fund assessments of approximately
$10, $8 and $6 in 1995, 1994, and 1993, respectively.
Hartford Life is involved in various legal actions, some of which involve
claims for substantial amounts. In the opinion of management the ultimate
liability with respect to such lawsuits, as well as other contingencies, is
not considered material in relation to the consolidated financial position of
Hartford Life.
F-17
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE I - SUMMARY OF INVESTMENTS (OTHER THAN INVESTMENTS IN AFFILIATES)
AS OF DECEMBER 31, 1995
(IN MILLIONS)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
FAIR REPORTED ON
COST VALUE BALANCE SHEET
-------------- ------------- -----------------
<S> <C> <C> <C>
FIXED MATURITIES
Bonds
U.S. Government and government agencies and authorities
Guaranteed and sponsored $502 $497 $497
Guaranteed and sponsored - asset backed 3,568 3,391 $3,391
States, municipalities and political subdivisions 201 202 $202
International governments 291 306 $306
Public utilities 949 976 $976
All other corporate 5,056 5,134 $5,134
All other corporate - asset backed 3,065 3,086 $3,086
Short-term investments 808 808 $808
---------- --------- ---------
TOTAL FIXED MATURITIES $14,440 $14,400 $14,400
EQUITY SECURITIES
Common stocks - industrial, miscellaneous and all other 61 63 63
TOTAL FIXED MATURITIES AND EQUITY SECURITIES $14,501 $14,463 $14,463
POLICY LOANS 3,381 3,381 3,381
MORTGAGE LOANS 265 265 265
OTHER INVESTMENTS 156 159 156
--------- -------- -------
TOTAL INVESTMENTS $18,303 $18,268 $18,265
--------- -------- -------
--------- -------- -------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Fair value for stocks and bonds approximate those quotations published by
applicable stock exchanges or are received from other reliable sources. The
fair value for short-term investments approximates cost.
Policy and mortgage loans carrying amounts approximate fair value.
S-1
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE III - SUPPLEMENTAL INSURANCE INFORMATION
(in millions)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Amort. of
Deferred Future Other Premiums and Net Benefits, Claims Deferred Other
Policy Policy Policyholder Other Investment and Claim Adj. Policy Insurance
Acq. Costs Benefits Funds Considerations Income Expenses Acq. Costs Expenses
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
As of December 31, 1995 Year ended December 31, 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Individual Life and Annuity $2,088 $706 $4,371 $514 $283 $277 $176 $108
Asset Management Services 87 1,169 8,942 51 683 722 23 68
Specialty Insurance
Operations 13 498 9,285 922 351 423 0 816
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
TOTAL $2,188 $2,373 $22,598 $1,487 $1,317 $1,422 $199 $992
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
As of December 31, 1994 Year ended December 31, 1994
Individual Life and
Annuity $1,708 $582 $4,257 $492 $199 $334 $137 $80
Asset Management Services 101 845 10,160 39 750 695 8 48
Specialty Insurance
Operations 0 463 6,911 569 350 376 0 518
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
TOTAL $1,809 $1,890 $21,328 $1,100 $1,299 $1,405 $145 $646
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
As of December 31, 1993 Year ended December 31, 1993
Individual life and Annuity $1,237 $428 $3,535 $423 $172 $249 $97 $120
Asset Management Services 97 703 9,026 35 759 662 16 45
Specialty Insurance
Operations 0 528 5,673 289 136 135 0 272
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
TOTAL $1,334 $1,659 $18,234 $747 $1,067 $1,046 $113 $437
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Investment income is allocated to the reportable division based on each
division's share of investable funds or on a direct basis, where applicable,
including realized capital gains and losses.
Benefits, claims and claims adjustment expenses include the increase in
liability for future policy benefits and death, disability and other contract
benefits payments.
Other insurance expenses are allocated to the division based upon specific
identification, where possible.
S-2
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE IV - REINSURANCE
(in millions)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Percentage of
Gross Ceded to Assumed from Net Amount Assumed
Amount Other Companies Other Companies Amount to Net Amount
-------- ----------------- ----------------- -------- ----------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
LIFE INSURANCE IN FORCE $182,716 $112,774 $26,996 $96,938 27.8%
PREMIUMS AND OTHER CONSIDERATIONS
Individual Life and Annuity $549 $163 $122 $508 24.0%
Asset Management Services 51 0 0 51 0.0%
Specialty Insurance Operations 632 162 452 922 49.0%
313 324 17 6 283.3%
-------- ----------------- ----------------- --------
TOTAL $1,545 $649 $591 $1,487 39.7%
-------- ----------------- ----------------- --------
-------- ----------------- ----------------- --------
YEAR ENDED DECEMBER 31, 1994
LIFE INSURANCE IN FORCE $136,929 $87,553 $35,016 $84,392 41.5%
PREMIUMS AND OTHER CONSIDERATIONS
Individual Life and Annuity $448 $71 $106 $483 21.9%
Asset Management Services 39 0 0 39 0.0%
Specialty Insurance Operations 521 140 188 569 33.0%
Accident and Health 308 304 5 9 55.6%
-------- ----------------- ----------------- --------
TOTAL $1,316 $515 $299 $1,100 27.2%
-------- ----------------- ----------------- --------
-------- ----------------- ----------------- --------
YEAR ENDED DECEMBER 31, 1993
LIFE INSURANCE IN FORCE $93,099 $71,415 $27,067 $48,751 55.5%
PREMIUMS AND OTHER CONSIDERATIONS
Individual Life and Annuity $417 $85 $91 $423 21.5%
Asset Management Services 25 0 0 25 0.0%
Specialty Insurance Operations 386 97 0 289 0.0%
Accident and Health 307 299 2 10 20.0%
-------- ----------------- ----------------- --------
TOTAL $1,135 $481 $93 $747 12.4%
-------- ----------------- ----------------- --------
-------- ----------------- ----------------- --------
</TABLE>
S-3
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
The prospectus consisting of pages.
The undertaking to file reports.
The Rule 484 undertaking.
The signatures.
(1) The following exhibits included herewith correspond to those required by
paragraph A of the instructions for exhibits to Form N-8B-2.
(A1) Resolution of Board of Directors of the Company is incorporated by
reference to Post-Effective Amendment No. 3, to the Registration
Statement File No. 33-53692, dated May 1, 1995.
(A2) Not applicable.
(A3a) Principal Underwriting Agreement is incorporate herein.
(A3b) Form of Selling Agreements is incorporate herein.
(A3c) Not applicable.
(A4) Not applicable.
(A5) Form of Flexible Premium Variable Life Insurance Policy is
incorporated by reference as stated above.
(A6a) Charter of Hartford Life Insurance Company is incorporated by
reference as stated above.
(A6b) Bylaws of Hartford Life Insurance Company is incorporated by
reference as stated above.
(A7) Not applicable.
(A8) Not applicable.
<PAGE>
(A9) Not applicable.
(A10) Form of Application for Flexible Premium Variable Life Insurance
Policies is incorporated by reference as stated above.
(A11) Memorandum describing transfer and redemption procedures is
incorporated by reference as stated above.
(2) Opinion and counsel of Lynda Godkin, Associate General Counsel is
incorporated herein.
(3) No financial statement will be omitted from the Prospectus pursuant to
Instruction 1(b) or (c) of Part I.
(4) Not applicable.
(5) Opinion and consent of Ken A. McCullum, FSA, MAAA is incorporated herein.
(6) Consent of Arthur Andersen LLP, Independent Certified Public Accountants is
incorporated herein.
(7) Opinion and consent of Counsel is incorporated by reference as Exhibit 2.
(8) Opinion and consent of Actuary is incorporated by reference as Exhibit 5.
(9) Power of Attorney is incorporate herein.
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
UNDERTAKINGS AND REPRESENTATIONS AS REQUIRED BY RULE 6E-3(T)
1. Separate Account VL I meets the definition of "Separate Account" under Rule
6e-3(T).
2. The Registrant represents that:
(a) it relies on Rule 6e-3(T)(b)(13)(ii)(F) to offer the Policies;
(b) the level of mortality and expense risk charge is within the range of
industry practice for comparable flexible contracts.
(c) the Company has conducted a survey of similar policies and insurers
and determined that the charge is within the range of industry
practice;
(d) the Company undertakes to keep and make available to the Commission
upon request the documents we used to support the representation in
(b); and
(e) the Company further represents that the account will invest only in
management investment companies which have undertaken to have a Board
of Directors, a majority of whom are not interested persons of the
Company, formulate and approve a plan under Rule 12b-1 to finance
distribution expenses.
(f) The life insurer has concluded that there is a reasonable likelihood
that the distribution financing arrangement of the separate account
benefits the separate account and contractholders and will keep and
make available to the Commission on request a memorandum setting for
the basis for this representation.
UNDERTAKING ON INDEMNIFICATION
Article VIII of the Bylaws of Hartford Life Insurance Company, a Connecticut
corporation, provides for indemnification of its officers, directors and
employees to the extent consistent with statutory requirements.
Connecticut General Laws Section 33-320a provides for indemnification of
officers, directors and employees of a corporation as follows:
(b) Except as otherwise provided in this section, a corporation shall indemnify
any person made a party to any proceeding, other than an action by or in the
right of the corporation, by reason of the fact that he, or the person whose
legal representative he is, is or was a shareholder, director, officer, employee
or agent of the corporation, or an eligible outside party, against judgments,
fines, penalties, amounts paid in settlement and reasonable expenses actually
incurred by him, and the person whose legal representative he is, in connection
with such proceeding. The corporation
<PAGE>
shall not so indemnify any such person unless (1) such person, and the person
whose legal representative he is, was successful on the merits in the defense of
any proceeding referred to in this subsection, or (2) it shall be concluded as
provided in subsection (d) of this section that such person, and the person
whose legal representative he is, acted in good faith and in a manner he
reasonably believed to be in the best interests of the corporation or, in the
case of a person serving as a fiduciary of an employee benefit plan or trust,
either in the best interests of the corporation or in the best interests of the
participants and beneficiaries of such employee benefit plan or trust and
consistent with the provisions of such employee benefit plan or trust and, with
respect to any criminal action or proceeding, that he had no reasonable cause to
believe his conduct was unlawful, or (3) the court, on application as provided
in subsection (e) of this section, shall have determined that in view of all the
circumstances such person is fairly and reasonably entitled to be indemnified,
and then for such amount as the court shall determine; except that, in
connection with an alleged claim based upon his purchase or sale of securities
of the corporation or of another enterprise, which he serves or served at the
request of the corporation, the corporation shall only indemnify such person
after the court shall have determined, on application as provided in subsection
(e) of this section, that in view of all the circumstances such person is fairly
and reasonably entitled to be indemnified, and then for such amount as the court
shall determine. The termination of any proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent shall
not, of itself, create a presumption that the person did not act in good faith
or in a manner which he did not reasonably believe to be in the best interests
of the corporation or of the participants and beneficiaries of such employee
benefit plan or trust and consistent with the provisions of such employee
benefit plan or trust, or, with respect to any criminal action or proceeding,
that he had reasonable cause to believe that his conduct was unlawful.
(c) Except as otherwise provided in this section, a corporation shall
indemnify any person made a party to any proceeding, by or in the right of the
corporation, to procure a judgment in its favor by reason of the fact that he,
or the person whose legal representative he is, is or was a shareholder,
director, officer, employee or agent of the corporation, or an eligible outside
party, against reasonable expenses actually incurred by him in connection with
such proceeding in relation to matters as to which such person, or the person
whose legal representative he is, is finally adjudged not to have breached his
duty to the corporation, or where the court, on application as provided in
subsection (e) of this section, shall have determined that in view of all the
circumstances such person is fairly and reasonably entitled to be indemnified,
and then for such amount as the court shall determine. The corporation shall
not so indemnify any such person for amounts paid to the corporation, to a
plaintiff or to counsel for a plaintiff in settling or otherwise disposing of a
proceeding, with or without court approval; or for expenses incurred in
defending a proceeding which is settled or otherwise disposed of without court
approval.
(d) The conclusion provided for in subsection (b) of this section may be
reached by any one of the following: (1) The Board of Directors of the
corporation by a consent in writing signed by a majority of those directors who
were not parties to such proceeding; (2) independent legal counsel selected by a
consent in writing signed by a majority of those directors who were not parties
to such proceeding; (3) in the case of any employee or agent who is not an
officer or director of the corporation, the corporation's general counsel; or
(4) the shareholders of the
<PAGE>
corporation by the affirmative vote of at least a majority of the voting power
of shares not owned by parties to such proceeding, represented at an annual or
special meeting of shareholders, duly called with notice of such purpose stated.
Such person shall also be entitled to apply to a court for such conclusion, upon
application as provided in subsection (e), even though the conclusion reached by
any of the foregoing shall have been adverse to him or to the person whose legal
representative he is.
(e) Where an application for indemnification or for a conclusion as provided in
this section is made to a court, it shall be made to the court in which the
proceeding is pending or to the superior court for the judicial district where
the principal office of the corporation is located. The application shall be
made in such manner and form as may be required by the applicable rules of the
court or, in the absence thereof, by direction of the court. The court may also
direct the notice be given in such manner as it may require at the expense of
the corporation to the shareholders of the corporation and to such other persons
as the court may designate. In the case of an application to a court in which a
proceeding is pending in which the person seeking indemnification is a party by
reason of the fact that he, or the person whose legal representative he is, is
or was serving at the request of the corporation as a director, partner,
trustee, officer, employee or agent of another enterprise, or as a fiduciary of
an employee benefit plan or trust maintained for the benefit of employees of any
other enterprise, timely notice of such application shall be given by such
person to the corporation.
(f) Expenses which may be indemnifiable under this section incurred in
defending a proceeding may be paid by the corporation in advance of the final
disposition of such proceeding as authorized by the Board of Directors upon
agreement by or on behalf of the shareholder, director, officer, employee, agent
or eligible outside party, or his legal representative, to repay such amount if
he is later found not entitled to be indemnified by the corporation as
authorized in this section.
(g) A corporation shall not indemnify any shareholder, director, officer,
employee, agent or eligible outside party, other than a shareholder, director,
officer, employee, agent or eligible outside party who is or was serving at the
request of the corporation as a director, officer, partner, trustee, employee or
agent of another enterprise, against judgments, fines, penalties, amounts paid
in settlement and expenses to an extent either greater or less than that
authorized in this section. No provision made a part of the incorporation, the
bylaws, a resolution or shareholders or directors, an agreement, or otherwise on
or after October 1, 1982, shall be valid unless consistent with this section.
Notwithstanding the foregoing, the corporation may procure insurance providing
greater indemnification and may share the premium cost with any shareholder,
director, officer, employee, agent or eligible outside party on such basis as
may be agreed upon. The rights and remedies provided in this section shall be
exclusive."
The registrant hereby undertakes that insofar as indemnification for liability
arising under the Securities Act of 1933 (the "Act") may be permitted to
directors, officers and controlling persons of the registrant, pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of
<PAGE>
expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned thereunto duly authorized, and its
seal to be herewith affixed and attested, all in the city of Simsbury, and the
State of Connecticut on the 16 day of APRIL, 1996.
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VL I
(Registrant)
By: /S/ GREGORY A. BOYKO
-----------------------------------------------
Gregory A. Boyko, Vice President & Controller
HARTFORD LIFE INSURANCE COMPANY
(Depositor)
By: /S/ GREGORY A. BOYKO
-----------------------------------------------
Gregory A. Boyko, Vice President & Controller
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, Vice President
Director *
Joseph H. Gareau, Executive Vice
President and Chief Investment
Officer, Director *
John P. Ginnetti, Executive Vice
President, Director *
Thomas M. Marra, Executive Vice *By: /S/ LYNDA GODKIN
President, Director * ----------------------------------
Leonard E. Odell, Jr., Senior Lynda Godkin
Vice President, Director * Attorney-In-Fact
Lowndes A. Smith, President,
Chief Operating Officer, Dated: APRIL 16, 1996
Director * --------------------------------
Raymond P. Welnicki, Senior Vice
President, Director *
Lizabeth H. Zlatkus, Vice President
Director *
<PAGE>
[Exhibit 1A3a]
PRINCIPAL UNDERWRITER AGREEMENT
THIS AGREEMENT, dated as of the June 26, 1995, made by and between HARTFORD LIFE
INSURANCE COMPANY ("HLIC" or the "Sponsor"), a corporation organized and
existing under the laws of the State of Connecticut, and HARTFORD EQUITY SALES
COMPANY, INC. ("HESCO"), a corporation organized and existing under the laws of
the State of Connecticut,
WITNESSETH:
WHEREAS, the Board of Directors of HLIC has made provision for the establishment
of a separate account within HLIC in accordance with the laws of the State of
Connecticut, which separate account was organized and is established and
registered as a unit investment trust type investment company with the
Securities and Exchange Commission under the Investment Company Act of 1940
("1940 Act"), as amended, and which is designated Hartford Life Insurance
Company Separate Account VL I (referred to as the "UIT"); and
WHEREAS, HESCO offers to the public a certain Flexible Premium Variable Life
Insurance Policy (the "Policy") issued by HLIC with respect to the UIT units of
interest thereunder which are registered under the Securities Act of 1933 ("1933
Act"), as amended; and
WHEREAS, HESCO has previously agreed to act as distributor in connection with
offers and sales of the Policy under the terms and conditions set forth in this
Principal Underwriter Agreement.
NOW THEREFORE, in consideration of the mutual agreements made herein, HLIC and
HESCO agree as follows:
I.
HESCO'S DUTIES
1. HESCO, as principal underwriter for the Policy, will use its best efforts
to effect offers and sales of the Policy through broker-dealers that are
members of the National Association of Securities Dealers, Inc. and whose
registered representatives are duly licensed as insurance agents of HLIC.
HESCO is responsible for compliance with all applicable requirements of the
1933 Act, as amended, the Securities Exchange Act of 1934 ("1934 Act"), as
amended, and the 1940 Act, as amended, and the rules and regulations
relating to the sales and distribution of the Policy, the need for which
arises out of its duties as principal underwriter of said Policy and
relating to the creation of the UIT.
<PAGE>
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 Policy if
any of the foregoing in any way represent the duties, obligations, or
liabilities of HLIC as being greater than, or different from, such duties,
obligations and liabilities as are set forth in this Agreement, as it may
be amended from time to time.
3. HESCO agrees that it will utilize the then currently effective prospectus
relating to the UIT's Policies 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 UIT and held by,
every holder of any security issued pursuant to this Agreement, as required
by the Section 26(a)(4) of the 1940 Act, 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 under a Policy for any act
or omission in the course, or connected with, rendering services hereunder.
II.
1. The UIT reserves the right at any time to suspend or limit the public
offering of the Policies upon 30 days' written notice to HESCO, except
where the notice period may be shortened because of legal action taken by
any regulatory agency.
2. The UIT agrees to advice HESCO immediately:
(a) Of any request by the Securities and Exchange Commission for amendment
of its 1933 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 1933 Act registration
statement relating to units of interest issued with respect to the UIT
or of the initiation of any proceedings for that purpose;
<PAGE>
(c) Of the happening of any material event, if known, which makes untrue
any statement in said 1933 Act registration statement or which
requires a change therein in order to make any statement therein not
misleading.
HLIC will furnish to HESCO such information with respect to the UIT and the
Policies in such form and signed by such of its officers and directors and
HESCO may reasonably request and will warrant that the statements therein
contained when so signed will be true and correct. HLIC will also furnish,
from time to time, such additional information regarding the UIT's
financial condition as HESCO may reasonably request.
III.
COMPENSATION
In accordance with an Expense Reimbursement Agreement between HLIC and HESCO,
HESCO is entitled to receive: (1) compensation equal to a pro rata portion of
$10,000 per year for all services provided on behalf of HLIC and the UIT; plus
(2) reimbursement for the actual expenses incurred by HESCO in excess of $10,000
for all operating costs associated with the services provided on behalf of HLIC
and the UIT under this Principal Underwriter Agreement. No additional
compensation is payable in excess of that required under the Expense
Reimbursement Agreement. The Expense Reimbursement Agreement provides for an
aggregate payment of $10,000 for all services performed by HESCO on behalf of
HLIC and its affiliated companies and any unit investment trusts sponsored by
HLIC and its affiliated companies.
IV.
RESIGNATION AND REMOVAL OF PRINCIPAL UNDERWRITER
HESCO may resign as a Principal Underwriter hereunder, upon 120 days' prior
written notice to HLIC. However, such resignation shall not become effective
until either the UIT has been completely liquidated and the proceeds of the
liquidation distributed through HLIC to the Policy 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.
<PAGE>
2. All notices and other communications provided for hereunder shall be in
writing and shall be delivered by hand or mailed first class, postage
prepaid, addressed as follows:
(a) If to HLIC - Hartford Life Insurance Company, Inc. P.O. Box 2999,
Hartford, Connecticut 06104.
(b) If to HESCO - Hartford Equity Sales Company, Inc., P.O. Box 2999,
Hartford, Connecticut 06104.
or to such other address as HESCO or HLIC shall designate by written notice
to the other.
3. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which shall be deemed one
instrument, and an executed copy of this Agreement and all amendments
hereto shall be kept on file by the Sponsor and shall be open to inspection
any 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 June 26, 1995 and shall continue
in effect for a period of two years from that date and, unless sooner
terminated in accordance with 7(b) below, shall continue in effect from
year to year thereafter provided that its continuance is specifically
approved at least annually by a majority of the members of the Board of
Directors of HLIC.
(b) This Agreement (1) may be terminated at any time, without the payment
of any penalty, either by a vote of a majority of the members of the
Board of Directors of HLIC on 60 days' prior written notice to HESCO;
(2) shall immediately terminate in the event of its assignment and (3)
may be terminated by HESCO on 60 days' prior written notice to HLIC,
but such termination will not be effective until HLIC shall have an
agreement with one or more persons to act as successor principal
underwriter of the Policies. HESCO hereby agrees that it will continue
to act as successor 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 INSURANCE COMPANY
BY: /s/ Thomas M. Marra
--------------------------------
Thomas M. Marra
Senior Vice President
Attest: HARTFORD EQUITY SALES COMPANY, INC.
/s/ Lynda Godkin BY: /s/ George Jay
- ----------------------- --------------------------------
Lynda Godkin George Jay
Secretary Controller
<PAGE>
BROKER-DEALER SALES AND
SUPERVISION AGREEMENT
This Broker-Dealer Sales and Supervision Agreement ("Agreement")
dated ____________________ is made by and between Hartford Life Insurance
Company and ITT Hartford Life and Annuity Insurance Company (referred to
collectively as "Companies"), Hartford Securities Distribution Company, Inc.
("Distributor"), a broker-dealer registered with the Securities and Exchange
Commission ("SEC") under the Securities and Exchange Act of 1934 ("1934 Act")
and a member of the National Association of Securities Dealers, Inc. ("NASD")
and __________________________________, who is also a broker-dealer registered
with the SEC under the 1934 Act and a member of the NASD ("Broker-Dealer"), and
any and all undersigned insurance agency affiliates ("Affiliates") of Broker-
Dealer.
WHEREAS, Companies offer certain variable life insurance policies and variable
and modified guaranteed annuity contracts which are deemed to be securities
under the Securities Act of 1933 (the "Registered Products"); and
WHEREAS, Companies wish to appoint the Broker-Dealer and Affiliates as agents of
the Companies for the solicitation and procurement of applications for
Registered Products; and
WHEREAS, Distributor is the principal underwriter of the Registered Products;
and
WHEREAS, Distributor anticipates having registered representatives who are
associated with Broker-Dealer ("Registered Representatives"), who are NASD
registered and are duly licensed under applicable state insurance law and
appointed as life insurance agents of Companies solicit and sell the Registered
Products; and
WHEREAS, Distributor acknowledges that the Broker-Dealer will provide certain
supervisory and administrative services to Registered Representatives who are
associated with the Broker-Dealer in connection with the solicitation, service
and sale of the Registered Products; and
WHEREAS, Broker-Dealer agrees to provide the aforementioned supervisory services
to its Registered Representatives who have been appointed by the Companies to
sell the Registered Products.
NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties agree to the following:
I. APPOINTMENT OF THE BROKER-DEALER
The Companies hereby appoint Broker-Dealer as an agent of the Companies for
the solicitation and procurement of applications for the Registered Products
offered by the Companies, as outlined in Exhibit A attached herein, in all
states in which the Companies are authorized to do business and in which
Broker-Dealer or any Affiliates are properly licensed. Distributor hereby
authorizes Broker-Dealer under the securities laws to supervise Registered
Representatives in connection with the solicitation, service and sale of the
Registered Products.
II. AUTHORITY OF THE BROKER-DEALER
<PAGE>
Broker-Dealer has the authority to represent Distributor and Companies only
to the extent expressly granted in this Agreement. Broker-Dealer and any
Registered Representatives shall not hold themselves out to be employees of
Companies or Distributor in any dealings with the public. Broker-Dealer and
any Registered Representatives shall be independent contractors as to
Distributor or Companies. Nothing contained herein is intended to create a
relationship of employer and employee between Broker-Dealer and Distributor
or Companies or between Registered Representatives and Distributor or
Companies.
III. BROKER-DEALER REPRESENTATION
Broker-Dealer represents that it is a registered broker-dealer under the
1934 Act, a member in good standing of the NASD, and is registered as a
broker-dealer under state law to the extent necessary to perform the duties
described in this Agreement. Broker-Dealer represents that its Registered
Representatives, who will be soliciting applications for the Registered
Products, will be duly registered representatives associated with Broker-
Dealer and that they will be representatives in good standing with
accreditation as required by the NASD to sell the Registered Products.
Broker-Dealer agrees to abide by all rules and regulations of the NASD,
including its Rules of Fair Practice, and to comply with all applicable
state and federal laws and the rules and regulations of authorized
regulatory agencies affecting the sale of the Registered Products.
IV. BROKER-DEALER OBLIGATIONS
(a) TRAINING AND SUPERVISION
Broker-Dealer has full responsibility for the training and
supervision of all Registered Representatives associated with
Broker-Dealer and any other persons who are engaged directly or
indirectly in the offer or sale of the Registered Products. Broker-
Dealer shall, during the term of this Agreement, establish and
implement reasonable procedures for periodic inspection and
supervision of sales practices of its Registered Representatives.
If a Registered Representative ceases to be a Registered
Representative of Broker-Dealer, is disqualified for continued
registration or has their registration suspended by the NASD or
otherwise fails to meet the rules and standards imposed by Broker-
Dealer, Broker-Dealer shall immediately notify such Registered
Representative that he or she is no longer authorized to solicit
applications, on behalf of the Companies, for the sale of Registered
Products. Broker-Dealer shall immediately notify Distributor of
such termination or suspension.
(b) SOLICITATION
Broker-Dealer agrees to supervise its Registered Representatives so
that they will only solicit applications in states where the
Registered Products are approved for sale in accordance with
applicable state and federal laws. Broker-Dealer shall be notified
by Companies or Distributor of the availability of the Registered
Products in each state.
(c) NO CHURNING
Broker-Dealer and any Registered Representatives shall not make any
misrepresentation or incomplete comparison of products for the
purpose of inducing a policyholder to lapse, forfeit or surrender
its insurance in favor of purchasing a Registered Product.
(d) PROSPECTUS DELIVERY AND SUITABILITY REQUIREMENTS
Broker-Dealer shall ensure that its Registered Representatives
comply with the prospectus delivery requirements under the
Securities Act of 1933. In addition, Broker-Dealer shall ensure
that its Registered Representatives shall not make recommendations
to an applicant to purchase a Registered Product in the absence of
reasonable grounds to believe that the
2
<PAGE>
purchase is suitable for such applicant, as outlined in the
suitability requirements of the 1934 Act and the NASD Rules of Fair
Practice. Broker-Dealer shall ensure that each application
obtained by its Registered Representatives shall bear evidence of
approval by one of its principals indicating that the application
has been reviewed for suitability.
(e) PROMOTIONAL MATERIAL
Broker-Dealer and its Registered Representatives are not authorized
to provide any information or make any representation in connection
with this Agreement or the solicitation of the Registered Products
other than those contained in the prospectus or other promotional
material produced or authorized by Companies or Distributor.
Broker-Dealer agrees that if it develops any promotional material
for sales, training, explanatory or other purposes in connection
with the solicitation of applications for Registered Products,
including generic advertising and/or training materials which may be
used in connection with the sale of Registered Products, it will
obtain the prior written consent of Distributor, and where
appropriate, approval of Companies, such approval not to be
unreasonably withheld.
(f) RECORD KEEPING
Broker-Dealer is responsible for maintaining the records of its
Registered Representatives. Broker-Dealer shall maintain such other
records as are required of it by applicable laws and regulations.
The books, accounts and records maintained by Broker-Dealer that
relate to the sale of the Registered Products, or dealings with the
Companies, Distributor and/or Broker-Dealer shall be maintained so
as to clearly and accurately disclose the nature and details of each
transaction.
Broker-Dealer acknowledges that all the records maintained by
Broker-Dealer relating to the solicitation, service or sale of the
Registered Products subject to this Agreement, including but not
limited to applications, authorization cards, complaint files and
suitability reviews, shall be available to Companies and Distributor
upon request during normal business hours. Companies and
Distributor may retain copies of any such records which Companies
and Distributor, in their discretion, deems necessary or desirable
to keep.
(g) REFUND OF COMPENSATION
Broker-Dealer agrees to repay Companies the total amount of any
compensation which may have been paid to it within thirty (30)
business days of notice of the request for such refund should
Companies for any reason return any premium on a Registered Product
which was solicited by a Registered Representative of Broker-Dealer.
(h) PREMIUM COLLECTION
Broker-Dealer only has the authority to collect initial premiums
unless specifically set forth in the applicable commission schedule.
Unless previously authorized by Distributor, neither Broker-Dealer
nor any of its Registered Representatives shall have any right to
withhold or deduct any part of any premium it shall receive for
purposes of payment of commission or otherwise.
V. COMPANIES AND/OR DISTRIBUTOR OBLIGATIONS
(a) PROSPECTUS/PROMOTIONAL MATERIAL
Companies and/or Distributor will provide Broker-Dealer with
reasonable quantities of the currently effective prospectus for the
Registered Products and appropriate sales promotional
3
<PAGE>
material which has been filed with the NASD, and applicable state
insurance departments.
(b) COMPENSATION
Distributor will pay Broker-Dealer as full compensation for all
services rendered by Broker-Dealer under this Agreement, commissions
and/or service fees in the amounts, in the manner and for the period
of time as set forth in the Commission Schedules attached to this
Agreement or subsequently made a part hereof, and which are in
effect at the time such Registered Products are sold. The manner of
commission payments (I.E. fronted or trail) is not subject to change
after the effective date of a contract for which the compensation is
payable.
Distributor or Companies may change the Commission Schedules
attached to this Agreement at any time. Such change shall become
effective only when Distributor or Companies provide the Broker-
Dealer with written notice of the change. No such change shall
affect any contracts issued upon applications received by Companies
at Companies' Home Office prior to the effective date of such
change.
Distributor agrees to identify to Broker-Dealer for each such
payment, the name of the Registered Representative of Broker-Dealer
who solicited each contract covered by the payment. Distributor
will not compensate Broker-Dealer for any Registered Product which
is tendered for redemption after acceptance of the application. Any
chargebacks will be assessed against the Broker-Dealer of record at
the time of the redemption.
Distributor will only compensate Broker-Dealer or Affiliates, as
outlined below, for those applications accepted by Companies, and
only after receipt by Companies at Companies' Home Office or at such
other location as Companies may designate from time to time for its
various lines of business, of the required premium and compliance by
Broker-Dealer with any outstanding contract and prospectus delivery
requirements.
In the event that this Agreement terminates for fraudulent
activities or due to a material breach by the Broker-Dealer,
Distributor will only pay to Broker-Dealer or Affiliate commissions
or other compensation earned prior to discovery of events requiring
termination. No further commissions or other compensation shall
thereafter be payable.
(c) COMPENSATION PAYABLE TO AFFILIATES
If Broker-Dealer is unable to comply with state licensing
requirements because of a legal impediment which prohibits a non-
domiciliary corporation from becoming a licensed insurance agency or
prohibits non-resident ownership of a licensed insurance agency,
Distributor agrees to pay compensation to Broker-Dealer's
contractually affiliated insurance agency, a wholly-owned life
agency affiliate of Broker-Dealer, or a Registered Representative or
principal of Broker-Dealer who is properly state licensed. As
appropriate, any reference in this Agreement to Broker-Dealer shall
apply equally to such Affiliate. Distributor agrees to pay
compensation to an Affiliate subject to Affiliates agreement to
comply with the requirements of Exhibit B, attached hereto.
VI. TERMINATION
(a) This Agreement may be terminated by any party by giving thirty (30)
days' notice in writing to the other party.
(b) Such notice of termination shall be mailed to the last known address
of Broker-Dealer appearing on Companies' records, or in the event of
termination by Broker-Dealer, to the Home Office of Companies at
P.O. Box 2999, Hartford, Connecticut 06104-2999.
4
<PAGE>
(c) 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.
(d) This Agreement shall automatically terminate without notice upon the
occurrence of any of the events set forth below:
(1) Upon the bankruptcy or dissolution of Broker-Dealer.
(2) When and if Broker-Dealer commits fraud or gross negligence in the
performance of any duties imposed upon Broker-Dealer by this
Agreement or wrongfully withholds or misappropriates, for Broker-
Dealer's own use, funds of Companies, its policyholders or
applicants.
(3) When and if Broker-Dealer materially breaches this Agreement or
materially violates state insurance or Federal securities laws and
administrative regulations of a state in which Broker-Dealer
transacts business.
(4) When and if Broker-Dealer fails to obtain renewal of a necessary
license in any jurisdiction, but only as to that jurisdiction.
(e) The parties agree that on termination of this Agreement, any
outstanding indebtedness to Companies shall become immediately due
and payable.
VII. GENERAL PROVISIONS
(a) COMPLAINTS AND INVESTIGATIONS
Broker-Dealer shall cooperate with Distributor and Companies in the
investigation and settlement of all complaints or claims against
Broker-Dealer and/or Distributor or Companies relating to the
solicitation or sale of the Registered Products under this
Agreement. Broker-Dealer, Distributor and Companies each shall
promptly forward to the other any complaint, notice of claim or
other relevant information which may come into either one's
possession. Broker-Dealer, Distributor and Companies agree to
cooperate fully in any investigation or proceeding in order to
ascertain whether Broker-Dealer's, Distributor's or Companies'
procedures with respect to solicitation or servicing is consistent
with any applicable law or regulation.
In the event any legal process or notice is served on Broker-Dealer
in a suit or proceeding against Distributor or Companies, Broker-
Dealer shall forward forthwith such process or notice to Companies
at its Home Office in Hartford, Connecticut, by certified mail.
(b) WAIVER
The failure of Distributor or Companies to enforce any provisions of
this Agreement shall not constitute a waiver of any such provision.
The past waiver of a provision by Distributor or Companies shall not
constitute a course of conduct or a waiver in the future of that
same provision.
(c) INDEMNIFICATION
Broker-Dealer shall indemnify and hold Distributor and Companies
harmless from any liability, loss or expense sustained by Companies
or the Distributor (including reasonable attorney fees) on account
of any acts or omissions by Broker-Dealer or persons employed or
appointed by Broker-Dealer, except to the extent Companies' or
Distributor's acts or omissions caused such
5
<PAGE>
liability.
Indemnification by Broker-Dealer is subject to the conditions that
Distributor or Companies promptly notify Broker-Dealer of any claim
or suit made against Distributor or Companies, and that Distributor
or Companies allow Broker-Dealer to make such investigation,
settlement, or defense thereof as Broker-Dealer deems prudent.
Broker-Dealer expressly authorizes Companies to charge against all
compensation due or to become due to Broker-Dealer under this
Agreement any monies paid or liabilities incurred by Companies under
this Indemnification provision.
Distributor and Companies shall indemnify and hold Broker-Dealer
harmless from any liability, loss or expense sustained by the
Broker-Dealer (including reasonable attorney fees) on account of any
acts or omissions by Distributor or Companies, except to the extent
Broker-Dealer's acts or omissions caused such liability.
Indemnification by Distributor or Companies is subject to the
condition that Broker-Dealer promptly notify Distributor or
Companies of any claim or suit made against Broker-Dealer, and that
Broker-Dealer allow Distributor or Companies to make such
investigation, settlement, or defense thereof as Distributor or
Companies deems prudent.
(d) ASSIGNMENT
No assignment of this Agreement, or commissions payable hereunder,
shall be valid unless authorized in writing by Distributor. Every
assignment shall be subject to any indebtedness and obligation of
Broker-Dealer that may be due or become due to Companies and any
applicable state insurance regulations pertaining to such
assignments.
(e) OFFSET
Companies may at any time deduct, from any monies due under this
Agreement, every indebtedness or obligation of Broker-Dealer to
Companies or to any of its affiliates.
(f) CONFIDENTIALITY
Companies, Distributor and Broker-Dealer agree that all facts or
information received by any party related to a contract owner shall
remain confidential, unless such facts or information is required to
be disclosed by any regulatory authority or court of competent
jurisdiction.
(g) PRIOR AGREEMENTS
This Agreement terminates all previous agreements, if any, between
Companies, Distributor and Broker-Dealer. However, the execution of
this Agreement shall not affect any obligations which have already
accrued under any prior agreement.
(h) CHOICE OF LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Connecticut.
By executing this Broker-Dealer Sales and Supervision Agreement Specifications
Page, Broker-Dealer acknowledges that it has read this Agreement in its entirety
and is in agreement with the terms and conditions outlining the rights of
Distributor, Companies and Broker-Dealer and Affiliates under this Agreement.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement to be
effective as set forth above, upon the later of the execution date below or
approval of Distributor's registration by all appropriate state securities
commissions.
6
<PAGE>
BROKER-DEALER HARTFORD SECURITIES DISTRIBUTION
COMPANY INC.
By: By:
Title: Title:
Date: Date:
AFFILIATE (IF APPLICABLE) HARTFORD LIFE INSURANCE COMPANY
By: By:
Title: Title:
Date: Date:
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
By:
Title:
Date:
7
<PAGE>
EXHIBIT B
In accordance with Section V.(c) of the Broker-Dealer-Dealer Sales and
Supervision Agreement, no compensation is payable unless Broker-Dealer and
Registered Representative have first complied with all applicable state
insurance laws, rules and regulations. Distributor must ensure that any Broker-
Dealer with whom Distributor intends to enter into an Agreement and any
Registered Representatives meet the licensing and registration requirements of
the state(s) Broker-Dealer operates in and the NASD.
Companies are required by the Insurance Department in all 50 states to pay
compensation only to individuals and entities that are properly insurance
licensed and appointed. For registered products, Distributor must also comply
with NASD regulations that require Distributor to pay compensation to an NASD
registered Broker-Dealer. Distributor must comply with both state and NASD
requirements.
Distributor requires confirmation that Broker-Dealer holds current state
insurance licenses or markets insurance products through a contractual affiliate
or wholly owned life agency, which is properly insurance licensed. If Broker-
Dealer is properly state licensed then compensation may be paid to Broker-Dealer
in compliance with both state and NASD requirements.
If Broker-Dealer is not state insurance licensed and relies on the licensing of
a contractual affiliate or wholly owned life agency, the SEC has issued a number
of letters indicating that, under specific limited circumstances, it will take
"no action" against insurers (Distributor) paying compensation on registered
products to Broker-Dealer's contractual affiliate or wholly owned life agency.
At the request of Broker-Dealer, Distributor will provide copies of several of
these letters as well as a summary of their requirements.
If Broker-Dealer intends to rely on one of these "no-action" letters, legal
counsel for Broker-Dealer must confirm to Distributor in writing that all of the
circumstances of any one of the SEC no-action letters are applicable. Broker-
Dealer's counsel must summarize each point upon which the no-action relief was
granted and represent that Broker-Dealer's method of operation is identical or
meets the same criteria. Broker-Dealer's counsel must also confirm that, to the
best of counsel's knowledge, the SEC has not rescinded or modified its no-action
position since the letter was released.
The Broker-Dealer Sales and Supervision Agreement will not be finalized and no
new applications for registered products will be accepted or no new compensation
will be payable unless the appropriate proof of state licensing or no-action
relief is confirmed. In addition to a letter from Broker-Dealer's counsel,
copies of the following documentation is required:
-- life insurance licenses for all states in which Broker-Dealer holds
these licenses and intends to operate and/or;
-- life insurance licenses for any contractual affiliate or wholly owned
life agency; and
-- the SEC No-Action Letter that will be relied upon.
If you have any questions regarding these matters, please contact your Life
Licensing and Contracting representative.
8
<PAGE>
Exhibit 1A6a
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 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 Section 3 of the Corporation's Restated Certificate
of Incorporation be amended to read as follows:
"Section 3. The capital with which the Corporation shall
commence business shall be an amount not less than one
thousand dollars ($1,000). The authorized capital shall be
five million six hundred and ninety thousand dollars
($5,690,000) divided into one thousand (1,000) shares of
common capital stock with a par value of five thousand six
hundred and ninety dollars ($5,690) each."
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
<PAGE>
77
(Continued)
- --------------------------------------------------------------------------------
- ---------------
/ / 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
400 440 400 267 294 400
- --------------------------------------------------------------------------------
- ---------------
(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)
Howard N. Bennett (Sr. Vice President)
NAME OF SECRETARY OR ASSISTANT SECRETARY (Print or Type)
Robert C. Fischer (Secretary)
- --------------------------------------------------------------------------------
- ---------------
SIGNED (President or Vice President) SIGNED (Secretary or Assistant
Secretary)
/s/ Howard 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
------ ---------
<PAGE>
Exhibit 1 (a)(6)(b)
By-Laws
of the
HARTFORD LIFE INSURANCE COMPANY
As passed and effective
February 13, 1978
and amended on
July 13, 1978
January 5, 1979
and
February 19, 1984
<PAGE>
ARTICLE I
Name - Home Office
Section 1. This corporation shall be named HARTFORD LIFE INSURANCE
COMPANY.
Section 2. The principal place of business and Home Office shall be
in the City of Hartford, Connecticut.
ARTICLE II
Stockholders' Meetings - Notice - Quorum - Right to Vote
Section 1. All meetings of the Stockholders shall be held at the
principal business office of the Company unless the Directors shall otherwise
provide and direct.
Section 2. The annual meeting of the Stockholders shall be held on
such day and at such hour as the Board of Directors may decide. For cause the
Board of Directors may postpone or adjourn such annual meeting to any other time
during the year.
Section 3. Special meetings of the Stockholders may be called by the
Board of Directors, the Executive Committee, the Chairman of the Board, the
President or any Vice President.
Section 4. Notice of Stockholders' meetings shall be mailed to each
Stockholder, at his address as it appears on the records of the Company, at
least seven days prior to the meeting. The notice shall state the place, date
and time of the meeting and shall specify all matters proposed to be acted upon
at the meeting.
Section 5. At each annual meeting the Stockholders choose Directors
as hereinafter provided.
Section 6. Each Stockholder shall be entitled to one vote for each
share of stock held by him at all meetings of the Company. Proxies may be
authorized by written power of attorney.
Section 7. Holders of one-half of the whole amount of the stock
issued and outstanding shall constitute a quorum.
<PAGE>
- 2 -
Section 8. Each Stockholder shall be entitled to a certificate of
stock which shall be signed by the President or a Vice President, and either the
Treasurer or an Assistant Treasurer of the Company, and shall bear the seal of
the Company, but such signatures and seal may be facsimile if permitted by the
laws of the State of Connecticut.
ARTICLE III
Directors - Meetings - Quorum
Section 1. The property, business and affairs of the Company shall be
managed by a board of not less than three nor more than twenty Directors, who
shall be chosen by ballot at each annual meeting. Vacancies occurring between
annual meetings may be filled by the Board of Directors by election. Each
Director shall hold office until the next annual meeting of Stockholders and
until his successor is chosen and qualified.
Section 2. Meetings of the Board of Directors may be called by the
direction of the Chairman of the Board, the President, or any three Directors.
Section 3. Three days' notice of meetings of the Board of Directors
shall be given to each Director, either personally or by mail or telegraph, at
his residence or usual place of business, but notice may be waived, at any time,
in writing.
Section 4. One third of the number of existing directorships, but not
less than two Directors, shall constitute a quorum.
ARTICLE IV
Election of Officers - Duties of Board of
Directors and Executive Committee
Section 1. The President shall be elected by the Board of Directors.
The Board of Directors may also elect one of its members to serve as Chairman of
the Board of Directors. The Chairman of the Board, or an individual appointed
by him, shall have authority to appoint all other officers, except as stated
herein, including one or more Vice Presidents and Assistant Vice Presidents, the
Treasurer
<PAGE>
and one or more Associate or Assistant Treasurers, one or more Secretaries and
Assistant Secretaries and such other Officers as the Chairman of the Board may
from time to time designate. All Officers of the Company shall hold office
during the pleasure of the Board of Directors. The Directors may require any
Officer of the Company to give security for the faithful performance of his
duties.
Section 2. The Directors may fill any vacancy among the officers by
election for the unexpired term.
Section 3. The Board of Directors may appoint from its own number an
Executive Committee of not less than five Directors. The Executive Committee
may exercise all powers vested in and conferred upon the Board of Directors at
any time when the Board is not in session. A majority of the members of said
Committee shall constitute a quorum.
Section 4. Meetings of the Executive Committee shall be called
whenever the Chairman of the Board, the President or a majority of its members
shall request. Forty-eight hours' notice shall be given of meetings but notice
may be waived, at any time, in writing.
Section 5. The Board of Directors shall annually appoint from its own
number a Finance Committee of not less than three Directors, whose duties shall
be as hereinafter provided.
Section 6. The Board of Directors may, at any time, appoint such
other Committees, not necessarily from its own number, as it may deem necessary
for the proper conduct of the business of the Company, which Committees shall
have only such powers and duties as are specifically assigned to them by the
Board of Directors or the Executive Committee.
Section 7. The Board of Directors may make contributions, in such
amounts as it determines to be reasonable, for public welfare or for charitable,
scientific or educational purposes, subject to the limits and restrictions
imposed by law and to such rules and regulations consistent with law as it
makes.
ARTICLE V
Officers
Chairman of the Board
Section 1. The Chairman of the Board shall preside at the meetings of
the Board of Directors and the Executive Committee and, in the absence of the
Chairman of the Finance Committee, at the meetings of the Finance Committee. In
the absence or inability of the Chairman of the Board to so preside, the
President shall preside in his place.
<PAGE>
President
Section 2. The President, under the supervision and control of the
Chairman of the Board, shall have general charge and oversight of the business
and affairs of the Company. The President shall preside at the meetings of the
Stockholders. He shall be a member of and shall preside at all meetings of all
Committees not referred to in Section 1 of this ARTICLE except that he may
designate a Chairman for each such other Committee.
Section 3. In the absence or inability of the President to perform
his duties, the Chairman of the Board may designate a Vice President to exercise
the powers and perform the duties of the President during such absence or
inability.
Secretary
Section 4. The Secretary of the Corporation shall keep a record of
all the meetings of the Company, of the Board of Directors and of the Executive
Committee, and he shall discharge all other duties specifically required of the
Secretary by law. The other Secretaries and Assistant Secretaries shall perform
such duties as may be assigned to them by the Board of Directors or by their
senior officers and any Secretary or Assistant Secretary may affix the seal of
the Company and attest it and the signature of any officer to any and all
instruments.
Treasurer
Section 5. The Treasurer shall keep, or cause to be kept, full and
accurate accounts of the Company. He shall see that the funds of the Company
are disbursed as may be ordered by the Board of Directors or the Finance
Committee. He shall have charge of all moneys paid to the Company and on
deposit to the credit of the Company or in any other properly authorized name,
in such banks or depositories as may be designated in a manner provided by these
by-laws. He shall also discharge all other duties that may be required of him
by law.
Other Officers
Section 6. The other officers shall perform such duties as may be
assigned to them by the President or the Board of Directors.
<PAGE>
- 5 -
ARTICLE VI
Finance Committee
Section 1. If a Finance Committee is established it shall be the duty
of that committee to supervise the investment of the funds of the Company in
securities in which insurance companies are permitted by law to invest, and all
other matters connected with the management of investments. If no Finance
Committee is established this duty shall be performed by the Board of Directors.
Section 2. All loans or purchases for the investment and reinvestment
of the funds of the Company shall be submitted for approval to the Finance
Committee, if not specifically approved by the Board of Directors.
Section 3. Sale or transfer of any stocks or bonds shall be made upon
authorization of the Finance Committee unless specifically authorized by the
Board of Directors.
Section 4. Transfers of stock and registered bonds, deeds, leases,
releases, sales, mortgages chattle or real, assignments or partial releases of
mortgages chattel or real, and in general all instruments of defeasance of
property and all agreements or contracts affecting the same, except discharges
of mortgages and entries to foreclose the same as hereinafter provided, shall be
authorized by the Finance Committee or the Board of Directors, and be executed
jointly for the Company by two persons, to wit: The Chairman of the Board, the
President or a Vice President, and a Secretary, the Treasurer or an Assistant
Treasurer, but may be acknowledged and delivered by either one of those
executing the instrument; provided, however, that either a Secretary, the
Treasurer, or an Assistant Treasurer alone, when authorized as aforesaid, or any
person specially authorized by the Finance Committee as attorney for the
Company, may make entry to foreclose any mortgage, and a Secretary, the
Treasurer or an Assistant Treasurer alone is authorized, without the necessity
of further authority, to discharge by deed or otherwise any mortgage on payment
to the Company of the principal, interest and all charges due.
Section 5. The Finance Committee may fix times and places for regular
meetings. No notice of regular meetings shall be necessary. Reasonable notice
shall be given of special meetings but the action of a majority of the Finance
Committee at any meeting shall be valid notwithstanding any defect in the notice
of such meeting.
<PAGE>
- 6 -
Section 6. In the absence of specific authorization from the Board of
Directors or the Finance Committee, the Chairman of the Board, the President, a
Vice President or the Treasurer shall have the power to vote or execute proxies
for voting any shares held by the Company.
ARTICLE VII
Funds
Section 1. All monies belonging to the Company shall be deposited to
the credit of the Company, or in such other name as the Finance Committee, the
Chairman of the Finance Committee or such executive officers as are designated
by the Board of Directors shall direct, in such bank or banks as may be
designated from time to time by the Finance Committee, the Chairman of the
Finance Committee, or by such executive officers as are designated by the Board
of Directors. Such monies shall be drawn only on checks or drafts signed by any
two executive officers of the Company, provided that the Board of Directors may
authorize the withdrawal of such monies by check or draft signed with the
facsimile signature of any one or more executive officers, and provided further,
that the Finance Committee may authorize such alternative methods of withdrawals
as it deems proper.
The Board of Directors, the President, the Chairman of the Finance
Committee, a Vice President, or such executive officers as are designated by the
Board of Directors may authorize withdrawal of funds by checks or drafts drawn
at offices of the Company to be signed by Managers, General Agents or employees
of the Company, provided that all such checks or drafts shall be signed by two
such authorized persons, except checks or drafts used for the payment of
claims or losses which need be signed by only one such authorized person, and
provided further that the Board of Directors of the Company or executive
officers designated by the Board of Directors may impose such limitations or
restrictions upon the withdrawal of such funds as it deems proper.
<PAGE>
- 7 -
ARTICLE VIII
Indemnity of Directors and Officers
Section 1. The Company shall indemnify and hold harmless each
Director and officer now or hereafter serving the Company, whether or not then
in office, from and against any and all claims and liabilities to which he may
be or become subject by reason of his being or having been a Director or officer
of the Company, or of any other company which he serves as a Director or officer
at the request of the Company, to the extent such is consistent with the
statutory provisions pertaining to indemnification, and shall provide such
further indemnification for legal and/or all other expenses reasonably incurred
in connection with defending against such claims and liabilities as is
consistent with statutory requirements.
ARTICLE IX
Amendment of ByLaws
Section 1. The Directors shall have power to adopt, amend and repeal
such bylaws as may be deemed necessary or appropriate for the management of the
property and affairs of the Company.
Section 2. The Stockholders at any annual or special meeting may
amend or repeal these bylaws or adopt new ones if the notice of such meeting
contains a statement of the proposed alteration, amendment, repeal or adoption,
or the substance thereof.
<PAGE>
[Exhibit 2]
March 15, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: SEPARATE ACCOUNT VL I ("SEPARATE ACCOUNT")
HARTFORD LIFE INSURANCE COMPANY ("COMPANY")
FILE NO. 33-53692
Dear Sir/Madam:
In my capacity as Associate General Counsel of the Company, I have supervised
the establishment of the Separate Account by the Board of Directors of the
Company as a separate account for assets applicable to Policies offered by the
Company pursuant to Connecticut law. I have participated in the preparation of
the registration statement for the Separate Account on Form S-6 under the
Securities Act of 1933 and the Investment Company Act of 1940 with respect to
the Policies.
I am of the following opinion:
1. The Separate Account is a separate account of the Company validly existing
pursuant to Connecticut law and the regulations issued thereunder.
2. The assets held in the Separate Account are not chargeable with liabilities
arising out of any other business the Company may conduct.
3. The Policies are legally issued and represent binding obligations of the
Company.
In arriving at the foregoing opinion, I have made such examination of the law
and examined such records and other documents as in my opinion as are necessary
or appropriate.
I hereby consent to the filing of this opinion as an exhibit to the registration
statement under the Securities Act of 1933.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
Associate General Counsel & Secretary
<PAGE>
[Exhibit 5]
March 1, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs;
This opinion is furnished in connection with the registration statement under
the Securities Act of 1933 as amended ("Securities Act"), of a certain flexible
premium variable life insurance policy (the "Policy") that will be offered and
sold by Hartford Life Insurance Company and certain units of interest to be
issued in connection with the Policy.
The hypothetical illustrations of the Policy used in this Registration Statement
accurately reflect reasonable estimates of projected performance of the Policy
under the stipulated rates of investment return, the contractual expense
deductions and guaranteed cost-of-insurance rates, and utilizing a reasonable
estimation for expected fund operating expenses.
I hereby consent to the use of this opinion as an exhibit to the Securities Act
Registration Statement on Form S-6 and to the reference to my name under the
heading "Experts" in the Prospectus included in the Securities Act Registration
Statement.
Very truly yours,
/s/ Ken A. McCullum
Ken A. McCullum, FSA, MAAA
Director Individual Life
Product Development
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of
this Registration Statement File No. 33-53692 for Hartford Life Insurance
Company Separate Account VL I on Form S-6.
/s/ Arthur Andersen LLP
Hartford, Connecticut
April 24, 1996
<PAGE>
Exhibit 9
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
do hereby jointly and severally authorize Lynda Godkin and/or Scott K.
Richardson to sign as their agent, any Registration Statement, pre-effective
amendment, post-effective amendment and any application for exemptive relief of
the Hartford Life Insurance Company, 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: 10/19/95
- ----------------------------------- ---------------------
Donald R. Frahm
/s/ Bruce D. Gardner Dated: 10/19/95
- ----------------------------------- ---------------------
Bruce D. Gardner
/s/ Joseph H. Gareau Dated: 10/19/95
- ----------------------------------- ---------------------
Joseph H. Gareau
/s/ John P. Ginnetti Dated: 10/26/95
- ----------------------------------- ---------------------
John P. Ginnetti
/s/ Thomas M. Marra Dated: 10/19/95
- ----------------------------------- ---------------------
Thomas M. Marra
/s/ Leonard E. Odell, Jr. Dated: 10/20/95
- ----------------------------------- ---------------------
Leonard E. Odell, Jr.
/s/ Lowndes A. Smith Dated: 10/19/95
- ----------------------------------- ---------------------
Lowndes A. Smith
<PAGE>
/s/ Raymond P. Welnicki Dated: 10/24/95
- ----------------------------------- ---------------------
Raymond P. Welnicki
/s/ Lizabeth H. Zlatkus Dated: 10/20/95
- ----------------------------------- ---------------------
Lizabeth H. Zlatkus
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 34,910,386
<INVESTMENTS-AT-VALUE> 37,882,138
<RECEIVABLES> 1,688,937
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 39,571,075
<PAYABLE-FOR-SECURITIES> 1,682,724
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1,682,724
<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> 37,888,351
<DIVIDEND-INCOME> 753,597
<INTEREST-INCOME> 0
<OTHER-INCOME> 295,423
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 753,597
<REALIZED-GAINS-CURRENT> 18,693
<APPREC-INCREASE-CURRENT> 3,390,831
<NET-CHANGE-FROM-OPS> 4,458,544
<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> 20,893,739
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0.000
<PER-SHARE-NII> 0.000
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0.000
<EXPENSE-RATIO> 0.000
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
