<PAGE>
As filed with the Securities and Exchange Commission on April 12, 2000.
File No. 33-53692
811-3072-03
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
POST-EFFECTIVE AMENDMENT NO. 10
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:
Marianne O'Doherty
Hartford Life Insurance Company
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, 2000 pursuant to paragraph (b) of Rule 485
-----
60 days after filing pursuant to paragraph (a)(1) of Rule 485
-----
on _________, 2000 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.
F. Proposed maximum aggregate offering price to the public of the securities
being registered: Not yet determined.
G. Amount of filing fee: Not applicable.
H. Approximate date of proposed public offering: As soon as practicable after
the effective date of this registration statement.
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
<TABLE>
<CAPTION>
ITEM NO. OF FORM N-8B-2 CAPTION IN PROSPECTUS
----------------------- ---------------------
<S> <C>
1. Cover Page
2. Cover Page
3. Not Applicable
4. Statement of Additional Information -
Distribution of the Policies
5. About Us - Separate Account VL I
6. About Us - Separate Account VL I
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. About Us - Separate Account VL I; The Funds
11. About Us - Separate Account VL I; The Funds
12. About Us - The Funds
13. Fee Table; Charges and Deductions
14. Premiums
15. Premiums
16. Premiums
17. Making Withdrawals From Your Policy
18. About Us - The Funds; Charges and Deductions
19. Your Policy - Contract Rights
20. Not Applicable
21. Loans
22. Not Applicable
23. Not Applicable
24. Not Applicable
25. About Us - Hartford Life Insurance Company
26. Not Applicable
27. About Us - Hartford Life Insurance Company
28. Statement of Additional Information - General
Information and History
29. About Us - Hartford Life Insurance Company
30. Not Applicable
31. Not Applicable
32. Not Applicable
33. Not Applicable
34. Not Applicable
<PAGE>
35. Statement of Additional Information -
Distribution of the Policies
36. Not required by Form S-6
37. Not Applicable
38. Statement of Additional Information -
Distribution of the Policies
39. Statement of Additional Information -
Distribution of the Policies
40. Not Applicable
41. Statement of Additional Information -
Distribution of the Policies
42. Not Applicable
43. Not Applicable
44. Premiums
45. Not Applicable
46. Premiums; Making Withdrawals From Your Policy
47. About Us - The Funds
48. Cover Page; About Us - Hartford Life Insurance
Company
49. Not Applicable
50. About Us - Separate Account VL I
51. Not Applicable
52. About Us - The Funds
53. Taxes
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
</TABLE>
<PAGE>
<TABLE>
<S> <C>
STAG VARIABLE LIFE
SEPARATE ACCOUNT VL I
HARTFORD LIFE INSURANCE COMPANY
P.O. BOX 2999
HARTFORD, CT 06104-2999
TELEPHONE: (800) 231-5453 [LOGO]
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This Prospectus describes information you should know before you purchase the
Stag Variable Life insurance policy. Please read it carefully.
Stag Variable Life is a contract between you and Hartford Life Insurance
Company. You agree to make sufficient premium payments to us, and we agree to
pay a death benefit to your beneficiary. The policy is a flexible premium
variable life insurance policy. It is:
x Flexible premium, because you may add payments to your policy after the first
payment.
x Variable, because the value of your life insurance policy will fluctuate with
the performance of the investment options you select and the Fixed Account.
- --------------------------------------------------------------------------------
The following Sub-Accounts are available under the policy:
<TABLE>
<CAPTION>
SUB-ACCOUNT PURCHASES SHARES OF:
<S> <C>
Hartford Advisers Fund Sub-Account Class IA of Hartford Advisers HLS Fund, Inc.
Hartford Bond Fund Sub-Account Class IA of Hartford Bond HLS Fund, Inc.
Hartford Capital Appreciation Fund Sub-Account Class IA of Hartford Capital Appreciation HLS
Fund, Inc.
Hartford Dividend and Growth Fund Sub-Account Class IA of Hartford Dividend and Growth HLS
Fund, Inc.
Hartford Growth and Income Fund Sub-Account Class IA of Hartford Growth and Income HLS Fund of
Hartford Series Fund, Inc.
Hartford Index Fund Sub-Account Class IA of Hartford Index HLS Fund, Inc.
Hartford International Advisers Fund Sub-Account Class IA of Hartford International Advisers HLS
Fund, Inc.
Hartford International Opportunities Fund Sub-Account Class IA of Hartford International Opportunities
HLS Fund, Inc.
Hartford MidCap Fund Sub-Account Class IA of Hartford MidCap HLS Fund, Inc.
Hartford Mortgage Securities Fund Sub-Account Class IA of Hartford Mortgage Securities HLS
Fund, Inc.
Hartford Money Market Fund Sub-Account Class IA of Hartford Money Market HLS Fund, Inc.
Hartford Small Company Fund Sub-Account Class IA of Hartford Small Company HLS Fund, Inc.
Hartford Stock Fund Sub-Account Class IA of Hartford Stock HLS Fund, Inc.
Putnam VT Asia Pacific Growth Fund Sub-Account Class IA of Putnam VT Asia Pacific Growth Fund of
Putnam Variable Trust
Putnam VT Diversified Income Fund Sub-Account Class IA of Putnam VT Diversified Income Fund of
Putnam Variable Trust
Putnam VT Global Asset Allocation Fund Sub-Account Class IA of Putnam VT Global Asset Allocation Fund
of Putnam Variable Trust
Putnam VT Global Growth Fund Sub-Account Class IA of Putnam VT Global Growth Fund of Putnam
Variable Trust
Putnam VT Growth and Income Fund Sub-Account Class IA of Putnam VT Growth and Income Fund of
Putnam Variable Trust
Putnam VT Health Sciences Fund Sub-Account Class IA of Putnam VT Health Sciences Fund of
Putnam Variable Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUB-ACCOUNT PURCHASES SHARES OF:
<S> <C>
Putnam VT High Yield Fund Sub-Account Class IA of Putnam VT High Yield Fund of Putnam
Variable Trust
Putnam VT Income Fund Sub-Account Class IA of Putnam VT Income Fund of Putnam
Variable Trust
Putnam VT International Growth Fund Sub-Account Class IA of Putnam VT International Growth Fund of
Putnam Variable Trust
Putnam VT International Growth and Income Fund Sub-Account Class IA of Putnam VT International Growth and
Income Fund of Putnam Variable Trust
Putnam VT International New Opportunities Fund Sub-Account Class IA of Putnam VT International New
Opportunities Fund of Putnam Variable Trust
Putnam VT Investors Fund Sub-Account Class IA of Putnam VT Investors Fund of Putnam
Variable Trust
Putnam VT Money Market Fund Sub-Account Class IA of Putnam VT Money Market Fund of Putnam
Variable Trust
Putnam VT New Opportunities Fund Sub-Account Class IA of Putnam VT New Opportunities Fund of
Putnam Variable Trust
Putnam VT New Value Fund Sub-Account Class IA of Putnam VT New Value Fund of Putnam
Variable Trust
Putnam VT OTC & Emerging Growth Fund Sub-Account Class IA of Putnam VT OTC & Emerging Growth Fund
of Putnam Variable Trust
Putnam VT The George Putnam Fund of Boston Fund Class IA of Putnam VT The George Putnam Fund of
Sub-Account Boston of Putnam Variable Trust
Putnam VT Utilities Growth and Income Fund Sub-Account Class IA of Putnam VT Utilities Growth and Income
Fund of Putnam Variable Trust
Putnam VT Vista Fund Sub-Account Class IA of Putnam VT Vista Fund of Putnam
Variable Trust
Putnam VT Voyager Fund Sub-Account Class IA of Putnam VT Voyager Fund of Putnam
Variable Trust
Fidelity VIP II Asset Manager Portfolio Sub-Account Initial Class of Fidelity VIP II Asset Manager
Portfolio
Fidelity VIP Equity-Income Portfolio Sub-Account Initial Class of Fidelity VIP Equity-Income
Portfolio
Fidelity VIP Overseas Portfolio Sub-Account Initial Class of Fidelity VIP Overseas Portfolio
</TABLE>
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The policy may not be available for sale in all states.
This Prospectus can also be obtained from the Securities and Exchange
Commission's website (HTTP://WWW.SEC.GOV).
This life insurance policy IS NOT:
- a bank deposit or obligation;
- federally insured; or
- endorsed by any bank or governmental agency.
- --------------------------------------------------------------------------------
PROSPECTUS DATED: MAY 1, 2000
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 3
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
- ----------------------------------------------------------------------
<S> <C>
SUMMARY OF BENEFITS AND RISKS 4
- ----------------------------------------------------------------------
FEE TABLES 5
- ----------------------------------------------------------------------
ABOUT US 9
- ----------------------------------------------------------------------
Hartford Life Insurance Company 9
- ----------------------------------------------------------------------
Separate Account VL I 9
- ----------------------------------------------------------------------
The Funds 9
- ----------------------------------------------------------------------
CHARGES AND DEDUCTIONS 11
- ----------------------------------------------------------------------
YOUR POLICY 15
- ----------------------------------------------------------------------
PREMIUMS 18
- ----------------------------------------------------------------------
DEATH BENEFITS AND POLICY VALUES 20
- ----------------------------------------------------------------------
MAKING WITHDRAWALS FROM YOUR POLICY 21
- ----------------------------------------------------------------------
LOANS 21
- ----------------------------------------------------------------------
LAPSE AND REINSTATEMENT 22
- ----------------------------------------------------------------------
TAXES 23
- ----------------------------------------------------------------------
LEGAL PROCEEDINGS 26
- ----------------------------------------------------------------------
GLOSSARY OF SPECIAL TERMS 27
- ----------------------------------------------------------------------
WHERE YOU CAN FIND MORE INFORMATION 28
- ----------------------------------------------------------------------
</TABLE>
<PAGE>
4 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
SUMMARY OF BENEFITS AND RISKS
BENEFITS OF YOUR POLICY
FLEXIBILITY -- The policy is designed to be flexible to meet your specific life
insurance needs. You have the flexibility to choose death benefit options,
investment options, Guarantee Periods, and premiums you pay.
DEATH BENEFIT -- While the policy is in force and when the insured dies, we pay
a death benefit to your beneficiary. You select one of three death benefit
options:
- Level Option: The death benefit equals the current Face Amount.
- Return of Account Value Option: The death benefit is the current Face Amount
plus the Account Value of your policy;
- Return of Premium Option: The death benefit is the current Face Amount plus
the sum of the scheduled premiums paid.
The death benefit is reduced by any money you owe us, such as outstanding loans,
loan interest, or unpaid charges. You may change your death benefit option under
certain circumstances. You may increase or decrease the Face Amount on your
policy under certain circumstances.
GUARANTEE PERIOD OPTIONS -- You have the ability to choose a Guarantee Period of
one to ten years. During the Guarantee Period, additional contractual guarantees
are provided, including 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 provided for by favorable investment experience.
INVESTMENT OPTIONS -- You may invest in up to 9 different investment choices
within your policy, from a choice of 36 investment options and a Fixed Account.
You may transfer money among your investment choices, subject to restrictions.
PREMIUM PAYMENTS -- You have the flexibility to choose how you pay premiums. You
choose a schedule of premiums when you purchase the policy. You may change your
scheduled premiums, or pay additional premium, subject to certain limitations.
RIGHT TO EXAMINE YOUR POLICY -- You have a limited right to return the policy
for cancellation after purchase. See "Making Withdrawals From Your Policy --
Right to Examine a Policy."
RIGHT TO EXCHANGE YOUR POLICY -- During the first 24 months after your policy is
issued, you may exchange it, without submitting proof of insurability, for a
non-variable life insurance policy offered by us on the life of the insured.
SURRENDER -- You may surrender your policy at any time prior to the maturity
date for its Cash Surrender Value. You may apply the Cash Surrender Value to a
continuation option as extended term insurance or paid-up insurance. (See "Risks
of Your Policy," below).
LOANS -- You may take a loan on the policy. The policy secures the loan.
SETTLEMENT OPTIONS -- You or your beneficiary may choose to receive the proceeds
of the policy over a period of time by using one of several settlement options.
OPTIONAL COVERAGE -- You may add other coverages to your policy. See "Your
Policy -- Other Benefits."
WHAT DOES YOUR PREMIUM PAY FOR?
Your premium pays for three things. It pays for insurance coverage, it acts as
an investment in the Sub-Accounts, and it pays for sales loads and other
charges.
RISKS OF YOUR POLICY
INVESTMENT PERFORMANCE -- The value of your policy will fluctuate with the
performance of the investment options you choose. Your investment options may
decline in value, or they may not perform to your expectations. Your policy
values in the Sub-Accounts are not guaranteed.
UNSUITABLE FOR SHORT-TERM SAVINGS -- The policy is designed for long term
financial planning. You should not purchase the policy if you will need the
premium payment in a short time period.
RISK OF LAPSE -- Your policy could terminate if the value of the policy becomes
too low to support the policy's monthly charges, or if you do not pay your
scheduled premium. If this occurs, we will notify you in writing. You will then
have a 61-day grace period to pay additional amounts to prevent the policy from
terminating.
WITHDRAWAL LIMITATIONS -- After the Guarantee Period, partial withdrawals are
allowed. The minimum allowed is $500, and the maximum allowed is the Cash
Surrender Value minus $1,000. One partial withdrawal is allowed per month.
Withdrawals will reduce your policy's death benefit, and may be subject to a
surrender charge.
TRANSFER LIMITATIONS -- We reserve the right to limit the size of transfers and
remaining balances, and to limit the number and frequency of transfers among
your investment options and the Fixed Account.
LOANS -- Taking a loan from your policy may increase the risk that your policy
will lapse, will have a permanent effect on the policy's Account Value, and will
reduce the death proceeds.
ADVERSE TAX CONSEQUENCES -- You may be subject to income tax if you receive any
loans, withdrawals or other amounts from the policy, and you may be subject to a
10% penalty tax. Under certain circumstances (usually if you prefund future
benefits in seven years or less), your policy may become a modified endowment
policy under federal tax law. If these circumstances were to occur, loans and
other pre-death distributions are includable in gross income on an income first
basis, and may be subject to a 10% penalty (unless you have attained age
59 1/2). You should consult with a tax adviser before taking steps that may
affect whether your policy becomes a modified endowment policy. See "Taxes."
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 5
- --------------------------------------------------------------------------------
FEE TABLES
The following table describes the maximum fees and expenses that you will pay
when buying, owning, and surrendering the policy. The first table describes the
maximum fees and expenses that you will pay at the time that you buy the policy,
surrender the policy, or transfer cash value between investment options.
TRANSACTION FEES
<TABLE>
<CAPTION>
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED POLICIES FROM WHICH CHARGE IS DEDUCTED
<S> <C> <C> <C>
Front-end sales load When you pay premium. Policy Year Percent All
1 50%
2-10 11%
11+
Premium Related Tax When you pay premium. A percent of premium which All
Charge varies by your state and
municipality of residence. The
range of premium tax charge is
generally between 0% and 4%.
This rate will change if your
state or municipality changes
its premium tax charges. It may
change if you change your state
or municipality of residence.
Surrender Charges When you surrender your The amount of the surrender Policies surrendered during the first
policy or if your charge in the first policy year nine policy years, or if the policy
policy lapses. is established by Hartford based lapses.
on the premiums paid during the
first policy year and the length
of the Guarantee Period. Subject
to certain limits imposed by
state insurance laws, the
surrender charge decreases by an
equal amount each policy year
until it reaches zero during the
tenth policy year.
Face Amount Increase On the first Monthly $100 Policies where the owner has made an
Fee Activity Date on or increase in the Face Amount.
after the effective
date of the Face Amount
increase.
Transfer Fees When you make a $25 per transfer. Those policies with more than one
transfer after the transfer per month.
first transfer in any
month.
Withdrawal Charge When you take a $50 per withdrawal. Those policies where the owner has
withdrawal. made a withdrawal.
</TABLE>
<PAGE>
6 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
The next table describes the MAXIMUM FEES and expenses that you will pay
periodically during the time that you own the policy, not including Fund fees
and expenses.
ANNUAL CHARGES OTHER THAN FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED POLICIES FROM WHICH CHARGE IS DEDUCTED
<S> <C> <C> <C>
Cost of Insurance Monthly. The charge is the maximum cost All
Charges of insurance rate times the net
amount at risk. Maximum cost of
insurance rates are
individualized, depending on the
insured's issue age, sex,
insurance class, substandard
rating, and age of the policy.
Mortality and Expense Monthly. For policy years 1 through 20, All
Risk Charge the charge ranges from 1.40%
annually for a policy with a
one-year Guarantee Period, and
decreases as the length of the
Guarantee Period increases, to
.60% on a policy with a ten-year
Guarantee Period. After policy
year 20, the charge for all
policies is expected to equal
.60% annually. However, Hartford
reserves the right to continue
the charge at the level in
effect during policy years 1
through 20, except for policies
with a one year Guarantee
Period, for which Hartford
reserves the right to charge a
mortality and expense risk rate
of .90%.
Administrative Charge Monthly. $8.33 during the Guarantee All
Period.
$12 after the Guarantee Period.
Issue Charge Monthly. $8.33, plus an amount that All
varies by issue age and the
initial Face Amount.
Special Class Charge Monthly. Individualized based on a Only those Policies with benefits
special insurance class rating. rated for a special class.
Rider Charges Monthly. Individualized based on optional Only those policies with benefits
rider selected. provided by rider.
</TABLE>
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 7
- --------------------------------------------------------------------------------
The next table describes the Fund fees and expenses that you will pay
periodically during the time that you own the policy. The table shows the fees
and expenses charged by any of the Funds. More detail concerning each Fund's
fees and expenses is contained in the prospectus for each Fund.
ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
TOTAL FUND
OPERATING EXPENSES
MANAGEMENT FEES OTHER EXPENSES (INCLUDING ANY
(INCLUDING ANY (INCLUDING ANY WAIVERS AND ANY
WAIVERS) REIMBURSEMENTS) REIMBURSEMENTS)
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
Hartford Advisers HLS Fund 0.63% 0.02% 0.65%
- --------------------------------------------------------------------------------------------------------------------
Hartford Bond HLS Fund 0.49% 0.03% 0.52%
- --------------------------------------------------------------------------------------------------------------------
Hartford Capital Appreciation HLS Fund 0.64% 0.02% 0.66%
- --------------------------------------------------------------------------------------------------------------------
Hartford Dividend and Growth HLS Fund 0.65% 0.03% 0.68%
- --------------------------------------------------------------------------------------------------------------------
Hartford Growth and Income HLS Fund 0.78% 0.04% 0.82%
- --------------------------------------------------------------------------------------------------------------------
Hartford Index HLS Fund 0.40% 0.03% 0.43%
- --------------------------------------------------------------------------------------------------------------------
Hartford International Advisers HLS Fund 0.76% 0.09% 0.85%
- --------------------------------------------------------------------------------------------------------------------
Hartford International Opportunities HLS Fund 0.69% 0.09% 0.78%
- --------------------------------------------------------------------------------------------------------------------
Hartford MidCap HLS Fund 0.76% 0.03% 0.79%
- --------------------------------------------------------------------------------------------------------------------
Hartford Money Market HLS Fund 0.45% 0.02% 0.47%
- --------------------------------------------------------------------------------------------------------------------
Hartford Mortgage Securities HLS Fund 0.45% 0.03% 0.48%
- --------------------------------------------------------------------------------------------------------------------
Hartford Small Company HLS Fund 0.75% 0.03% 0.78%
- --------------------------------------------------------------------------------------------------------------------
Hartford Stock HLS Fund 0.46% 0.02% 0.48%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT Asia Pacific Growth Fund 0.80% 0.33% 1.13%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT Diversified Income Fund 0.68% 0.10% 0.78%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund 0.65% 0.12% 0.77%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT Global Growth Fund 0.61% 0.12% 0.73%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund 0.46% 0.04% 0.50%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund 0.70% 0.13% 0.83%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund 0.65% 0.07% 0.72%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT Income Fund 0.60% 0.07% 0.67%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT International Growth Fund 0.80% 0.22% 1.02%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT International Growth and Income Fund 0.80% 0.18% 0.98%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT International New Opportunities Fund 1.08% 0.33% 1.41%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund 0.63% 0.08% 0.71%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund 0.41% 0.08% 0.49%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund 0.54% 0.05% 0.59%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund 0.70% 0.10% 0.80%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT OTC & Emerging Growth Fund (1) 0.53% 0.37% 0.90%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston 0.65% 0.18% 0.83%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund 0.65% 0.06% 0.71%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund 0.65% 0.10% 0.75%
- --------------------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund 0.53% 0.04% 0.57%
- --------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Asset Manager Portfolio (2) 0.53% 0.09% 0.62%
- --------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio (2) 0.48% 0.08% 0.56%
- --------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio (2) 0.73% 0.14% 0.87%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
8 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
(1) Total Annual Fund Operating Expenses for Putnam VT OTC & Emerging Growth
Fund reflect voluntary reductions and reimbursements through at least
December 31, 2000. Absent voluntary reductions and reimbursements, Total
Annual Fund Operating Expenses would have been as follows:
<TABLE>
<CAPTION>
TOTAL ANNUAL FUND
MANAGEMENT FEES OTHER EXPENSES OPERATING EXPENSES
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Putnam VT OTC & Emerging Growth Fund 0.70% 0.37% 1.07%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(2) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, through arrangements with certain funds
or FMR on behalf of certain funds' custodian, credits realized as a result
of uninvested cash balances were used to reduce a portion of each applicable
fund's expenses. These reductions will continue through at least
December 31, 2000 pursuant to an agreement between the advisor and the
funds. Without these reductions, Total Operating Fund Expenses would have
been:
<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT FEES OTHER EXPENSES OPERATING EXPENSES
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Fidelity VIP II Asset Manager Portfolio 0.53% 0.10% 0.63%
- ----------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio 0.48% 0.09% 0.57%
- ----------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio 0.73% 0.18% 0.91%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
ABOUT US
HARTFORD LIFE INSURANCE COMPANY
Hartford Life Insurance Company is a stock life insurance company engaged in the
business of writing life insurance, both individual and group, in all states of
the United States as well as the District of Columbia. We were originally
incorporated under the laws of Massachusetts on June 5, 1902, and subsequently
redomiciled to Connecticut. Our offices are located in Simsbury, Connecticut;
however, our mailing address is P.O. Box 5085, Hartford, CT 06104-5085. We are
ultimately controlled by The Hartford Financial Services Group, Inc., one of the
largest financial service providers in the United States.
HARTFORD'S RATINGS
<TABLE>
<CAPTION>
EFFECTIVE DATE
RATING AGENCY OF RATING RATING BASIS OF RATING
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
A.M. Best and Company, Inc. 1/1/99 A+ Financial performance
- ------------------------------------------------------------------------------------------------
Standard & Poor's 8/1/99 AA Insurer financial strength
- ------------------------------------------------------------------------------------------------
Duff & Phelps 7/1/99 AA+ Claims paying ability
- ------------------------------------------------------------------------------------------------
</TABLE>
SEPARATE ACCOUNT VL I
The Sub-Accounts are subdivisions of our separate account, called Separate
Account VL I. The Separate Account exists to keep your life insurance policy
assets separate from our company assets. As such, the investment performance of
the Separate Account is independent from the investment performance of
Hartford's other assets. Hartford's other assets are utilized to pay your
insurance obligations under the policy. Your assets in the Separate Account are
held exclusively for your benefit and may not be used for any other liability of
Hartford. Separate Account VL I was established on September 30, 1992 under the
laws of Connecticut.
THE FUNDS
The Sub-Accounts of the Separate Account purchase shares of mutual funds set up
exclusively for variable annuity and variable life insurance products. These
funds are not the same mutual funds that you buy through your stockbroker or
through a retail mutual fund, but they may have similar investment strategies
and the same portfolio managers as retail mutual funds. You choose the
Sub-Accounts that meet your investment style.
We do not guarantee the investment results of any of the underlying Funds. Since
each underlying Fund has different investment objectives, each is subject to
different risks. These risks and the Funds' expenses are more fully described in
the accompanying prospectuses for the Funds, and the Funds' Statements of
Additional Information, which may be ordered from us. The Funds' prospectuses
should be read in conjunction with this Prospectus before investing.
The Funds may not be available in all states.
You may also allocate some or all of your premium payments to the "Fixed
Account," which pays a declared interest rate. See "The Fixed Account."
The investment goals of each of the Funds are as follows:
HARTFORD ADVISERS HLS FUND -- Seeks maximum long-term total rate of return by
investing in common stocks and other equity securities, bonds and other debt
securities, and money market instruments. Sub-advised by Wellington Management.
HARTFORD BOND HLS FUND -- Seeks maximum current income consistent with
preservation of capital by investing primarily in investment grade fixed-income
securities. Up to 20% of the total assets of this Fund may be invested in debt
securities rated in the highest category below investment grade ("Ba" by Moody's
Investor Services, Inc. or "BB" by Standard & Poor's) or, if unrated, are
determined to be of comparable quality by the Fund's investment adviser.
Securities rated below investment grade are commonly referred to as "high
yield-high risk securities" or "junk bonds." For more information concerning the
risks associated with investing in such securities, please refer to the section
in the accompanying prospectus for the Funds entitled "Hartford Bond HLS
Fund, Inc." Sub-advised by HIMCO.
HARTFORD CAPITAL APPRECIATION HLS FUND -- Seeks growth of capital by investing
in equity securities selected solely on the basis of potential for capital
appreciation. Sub-advised by Wellington Management.
HARTFORD DIVIDEND AND GROWTH HLS FUND -- Seeks a high level of current income
consistent with growth of capital by investing primarily in dividend paying
equity securities. Sub-advised by Wellington Management.
HARTFORD GROWTH AND INCOME HLS FUND -- Seeks growth of capital and current
income by investing primarily in equity securities with earnings growth
potential and steady or rising dividends. Sub-advised by Wellington Management.
HARTFORD INDEX HLS FUND -- Seeks to provide investment results that 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.* Sub-advised by HIMCO.
HARTFORD INTERNATIONAL ADVISERS HLS FUND -- Seeks maximum long-term total return
by investing in a portfolio of equity, debt and money market securities.
Securities in which the Fund invests primarily will be denominated in non-U.S.
currencies and will be traded in non-U.S. markets. Sub-advised by Wellington
Management.
* "STANDARD & POOR'S," "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. THE
INDEX FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY STANDARD & POOR'S AND
STANDARD & POOR'S MAKES NO REPRESENTATION REGARDING THE ADVISABILITY OF
INVESTING IN THE INDEX FUND.
<PAGE>
10 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND -- Seeks growth of capital by
investing primarily in equity securities issued by non-U.S. companies.
Sub-advised by Wellington Management.
HARTFORD MIDCAP HLS FUND -- Seeks to achieve long-term capital growth through
capital appreciation by investing primarily in equity securities of companies
with market capitalizations within the range represented by the Standard &
Poor's MidCap 400 Index. Sub-advised by Wellington Management.
HARTFORD MONEY MARKET HLS FUND -- Seeks maximum current income consistent with
liquidity and preservation of capital. Sub-advised by HIMCO.
HARTFORD MORTGAGE SECURITIES HLS FUND -- Seeks maximum current income consistent
with safety of principal and maintenance of liquidity by investing primarily in
mortgage-related securities. Sub-advised by HIMCO.
HARTFORD SMALL COMPANY HLS FUND -- Seeks growth of capital by investing
primarily in equity securities within the range represented by the Russell 2000
Index selected on the basis of potential for capital appreciation. Sub-advised
by Wellington Management.
HARTFORD STOCK HLS FUND -- Seeks long-term growth by investing primarily in
equity securities. Sub-advised by Wellington Management.
PUTNAM VT ASIA PACIFIC GROWTH FUND -- Seeks capital appreciation.
PUTNAM VT DIVERSIFIED INCOME FUND -- Seeks as high a level of current income as
Putnam Management believes is consistent with capital preservation. The Fund
invests in higher-yielding, lower-rated securities commonly referred to as "junk
bonds." See the special considerations for, and risks associated with,
investments in these securities described in the Fund prospectus.
PUTNAM VT GLOBAL ASSET ALLOCATION FUND -- Seeks a high level of long-term total
return consistent with preservation of capital.
PUTNAM VT GLOBAL GROWTH FUND -- Seeks capital appreciation.
PUTNAM VT GROWTH AND INCOME FUND -- Seeks capital growth and current income.
PUTNAM VT HEALTH SCIENCES FUND -- Seeks capital appreciation.
PUTNAM VT HIGH YIELD FUND -- Seeks high current income. Capital growth is a
secondary goal when consistent with achieving high current income. The Fund
invests in higher-yielding, lower-rated securities commonly referred to as "junk
bonds." See the special considerations for, and risks associated with,
investments in these securities described in the Fund prospectus.
PUTNAM VT INCOME FUND -- Seeks high current income consistent with what Putnam
Management believes to be prudent risk.
PUTNAM VT INTERNATIONAL GROWTH FUND -- Seeks capital appreciation.
PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND -- Seeks capital growth. Current
income is a secondary objective.
PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND -- Seeks long term capital
appreciation.
PUTNAM VT INVESTORS FUND -- Seeks long-term growth of capital and any increased
income that results from this growth.
PUTNAM VT MONEY MARKET FUND -- Seeks as high a rate of current income as Putnam
Management believes is consistent with preservation of capital and maintenance
of liquidity.
PUTNAM VT NEW OPPORTUNITIES FUND -- Seeks long-term capital appreciation.
PUTNAM VT NEW VALUE FUND -- Seeks long-term capital appreciation.
PUTNAM VT OTC & EMERGING GROWTH FUND -- Seeks capital appreciation.
PUTNAM VT THE GEORGE PUTNAM FUND OF BOSTON -- Seeks to provide a balanced
investment composed of a well-diversified portfolio of stocks and bonds which
produce both capital growth and current income.
PUTNAM VT UTILITIES GROWTH AND INCOME FUND -- Seeks capital growth and current
income.
PUTNAM VT VISTA FUND -- Seeks capital appreciation.
PUTNAM VT VOYAGER FUND -- Seeks capital appreciation.
FIDELITY VIP II ASSET MANAGER PORTFOLIO -- Seeks high total return with reduced
risk over the long-term by allocating its assets among stocks, bonds and
short-term money market instruments.
In addition, the fund may invest in all varieties of fixed income securities
including, lower-quality debt securities maturing in more than one year. For a
further discussion of lower-rated securities, see "Risks of Lower-Rated Debt
Securities" in the Fidelity prospectus for this Portfolio.
FIDELITY VIP EQUITY-INCOME PORTFOLIO -- Seeks reasonable income by investing
primarily in income-producing equity securities. In choosing these securities,
the fund 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 Index 500.
FMR normally invests at least 65% of the fund's total assets in income-producing
securities. FMR may also invest the fund's assets in other types of equity
securities and debt securities, including lower quality debt securities.
FIDELITY VIP OVERSEAS PORTFOLIO -- Seeks 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.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
International funds have increased economic and political risks as they are
exposed to events and factors in the various world markets. These risks may be
greater for funds that invest in emerging markets.
INVESTMENT ADVISERS -- Hartford HLS Funds are sponsored and administered by
Hartford Life Insurance Company. HL Investment Advisors, LLC ("HL Advisors")
serves as the investment adviser to each of the Hartford HLS Funds. Wellington
Management Company, LLP ("Wellington Management") and Hartford Investment
Management Company ("HIMCO") serve as sub-investment advisors and provide day to
day investment services.
Each Hartford HLS Fund, except for Hartford Growth and Income HLS Fund, is a
separate Maryland corporation registered with the Securities and Exchange
Commission as an open-end management investment company. Hartford Growth and
Income HLS Fund is a diversified series of Hartford Series Fund, Inc., a
Maryland corporation, also registered with the Securities and Exchange
Commission as an open-end management investment company. The shares of each Fund
have been divided into Class IA and Class IB. Only Class IA shares are available
in this policy.
Putnam Investment Management, Inc. ("Putnam Management") serves as the
investment manager for the Putnam Variable Trust. Putnam Management is
ultimately controlled by Marsh & McLennan Companies, Inc., a publicly owned
holding company whose principal businesses are international insurance brokerage
and employee benefit consulting.
The Funds of the Putnam Variable Trust are generally managed in styles similar
to other open-end investment companies which are managed by Putnam Management
and whose shares are generally offered to the public. These other Putnam funds
may, however, employ different investment practices and may invest in securities
different from those in which their counterpart Funds invest, and consequently
will not have identical portfolios or experience identical investment results.
Subject to the general oversight of the Trustees of Putnam Variable Trust,
Putnam Management manages the Funds' portfolios in accordance with their stated
investment objectives and policies, makes investment decisions for the Funds,
places orders to purchase and sell securities on behalf of the Funds, and
administers the affairs of the Funds. For its services, the Funds pay Putnam
Management a quarterly fee. See the accompanying Funds prospectus for a more
complete description of Putnam Management and the respective fees of the Funds.
Fidelity Management & Research Company is the investment adviser for the
Fidelity VIP Funds.
MIXED AND SHARED FUNDING -- Shares of the Funds may be sold to our other
separate accounts and our insurance company affiliates or other unaffiliated
insurance companies to serve as the underlying investment for both variable
annuity contracts and variable life insurance policies, a practice known as
"mixed and shared funding." As a result, there is a possibility that a material
conflict may arise between the interests of policy owners, and of owners of
other contracts whose contract values are allocated to one or more of these
other separate accounts investing in any one of the Funds. In the event of any
such material conflicts, we will consider what action may be appropriate,
including removing the Fund from the Separate Account or replacing the Fund with
another underlying fund. There are certain risks associated with mixed and
shared funding, as disclosed in the prospectuses for the Funds.
VOTING RIGHTS -- For Sub-Accounts in which you have invested, we will notify you
of shareholder's meetings of the Funds purchased by those Sub-Accounts. We will
send you proxy materials and instructions for you to vote the shares held for
your benefit by those Sub-Accounts. We will arrange for the handling and
tallying of proxies received from you or other policy owners. If you give no
instructions, we will vote those shares in the same proportion as shares for
which we received instructions.
ADMINISTRATIVE SERVICES -- Hartford has entered into agreements with the
investment advisers or distributors of many of the Funds. Under the terms of
these agreements, Hartford provides administrative services and the Funds pay a
fee to Hartford that is usually based on an annual percentage of the average
daily net assets of the Funds. These agreements may be different for each Fund
or each Fund family.
THE FIXED ACCOUNT
You may allocate amounts to the Fixed Account. The Fixed Account is not a part
of the Separate Account, but is a part of our general assets. As such, the Fixed
Account (and this description of the Fixed Account) is not subject to the same
securities laws as the Separate Account.
The Fixed Account credits at least 4% per year. We are not obligated to, but
may, credit more than 4% per year. If we do, such rates are determined at our
sole discretion. You assume the risk that, at any time, the Fixed Account may
credit no more than 4%.
CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------
DEDUCTIONS FROM PREMIUM
Before your premium is allocated to the Sub-Accounts and/or the Fixed Account,
we deduct a percentage from your premium for a sales load and a premium tax
charge. The amount allocated after the deductions is called your Net Premium.
FRONT-END SALES LOAD -- We deduct a front-end sales load from each premium you
pay. The front-end sales load is based on:
- - the level of scheduled premiums;
<PAGE>
12 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
- - the length of the Guarantee Period; and
- - the amount of any unscheduled premiums paid.
The maximum front-end sales load is:
- - 50% in the first policy year;
- - 11% in policy years 2 through 10;
- - 3% in policy years 11 and on.
For all Guarantee Periods, the maximum amount of premiums 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 Premium,
the maximum amount of premiums 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. Generally, the shorter the Guarantee Period, the lower the
front-end sales load. The levels range from those for the ten-year Guarantee
Period described above to 0% on a policy with a One year Guarantee Period.
However, there are other charges under the Policies that are lower for longer
Guarantee Periods.
PREMIUM TAX CHARGE -- We deduct a premium tax charge from each premium you pay.
The premium tax charge covers taxes assessed against us by a state and/or other
governmental entity. The range of such charge generally is between 0% and 4%.
DEDUCTIONS FROM ACCOUNT VALUE
MONTHLY DEDUCTION AMOUNTS -- Each month we will deduct an amount from your
Account Value to pay for the benefits provided by your policy. This amount is
called the Monthly Deduction Amount and equals the sum of:
- - the charge for the cost of insurance;
- - the charges for additional benefits provided by rider, if any;
- - the charges for "special" insurance class rating, if any;
- - the monthly administrative fee; and
- - the mortality and expense risk charge.
COST OF INSURANCE CHARGE -- The charge for the cost of insurance is equal to:
- - the cost of insurance rate per $1,000; multiplied by
- - the amount at risk; divided by
- - $1,000.
On any Monthly Activity Date, 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 our 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, we
reserve the right to use rates less than those shown in such 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. We 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 your Account Value and death benefit amount may vary from month to
month, the cost of insurance charge may also vary on each Monthly Activity Date.
RIDER CHARGE -- If your policy includes riders, a charge applicable to the
riders is made from the Account Value each month. The charge applicable to these
riders is to compensate Hartford for the anticipated cost of providing these
benefits and is specified on the applicable rider. For a description of the
riders available, see "Your Policy -- Supplemental Benefits."
SPECIAL CLASS CHARGE -- A charge for a special insurance class rating of an
insured may be made, if applicable, against the Account Value. This charge
compensates Hartford for the additional mortality risk associated with
individuals in such special classes.
MONTHLY ADMINISTRATIVE CHARGE AND ISSUE CHARGE -- We will assess a monthly
administrative charge to compensate us for administrative costs. This charge
covers average expected cost. The monthly administrative charge will be $8.33
per month initially and is guaranteed never to exceed that level during the
Guarantee Period. After the Guarantee Period, the charge is guaranteed never to
exceed $12 per month.
Additionally, we assess a monthly charge in the first policy year to compensate
us for the up-front costs of underwriting and issuing a policy. Subject to
certain maximum levels, such charge currently is equal to $8.33 per month, plus
an amount that varies by issue age and the policy's initial Face Amount. The
monthly issue charge and the maximum levels of such charge for some sample issue
ages are summarized in the following chart:
<TABLE>
<CAPTION>
MAXIMUM
MONTHLY
ISSUE AGE MONTHLY FIRST POLICY YEAR ISSUE CHARGE AMOUNT
<S> <C> <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>
* "IFA" refers to initial Face Amount
MORTALITY AND EXPENSE RISK CHARGE -- We deduct a mortality and expense risk
charge each month from your Account Value. The mortality and expense risk charge
for any Monthly Activity Date is equal to:
- - the mortality and expense risk rate; multiplied by
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
- - the portion of the Account Value allocated to the Sub-Account on the Monthly
Activity Date prior to assessing the Monthly Deduction Amount.
During the first 20 policy years, the longer the Guarantee Period is, the lower
the mortality and expense risk charge rate will be. For policy years 1 through
20, the mortality and expense risk charge rate ranges from 1.40% annually for a
policy with a one-year Guarantee Period, and decreases as the length of the
Guarantee Period increases, to .60% on a policy with a ten-year Guarantee
Period. After policy year 20, the mortality and expense risk charge rate for all
policies is expected to equal .60% annually. However, we reserve the right to
continue the mortality and expense risk charge rate at the level in effect
during policy years 1 through 20, except for policies with a one year Guarantee
Period, for which we reserve the right to charge a mortality and expense risk
rate of .90%. There are other contractual charges that are higher for longer
Guarantee Periods.
The mortality and expense risk charge compensates us for mortality and expense
risks assumed under the policies. The mortality risk assumed is that the cost of
insurance charges are insufficient to meet actual claims. The expense risk
assumed is that the expense incurred in issuing, distributing and administering
the policies exceed the administrative charges and sales loads collected.
Hartford may keep any difference between cost it incurs and the charges it
collects.
SURRENDER CHARGES -- A surrender charge is assessed against the Account Value if
your policy lapses or is surrendered during the first nine policy years. The
amount of such surrender charge in the first policy year is established by us
based on the premiums paid during the first policy year and the length of the
Guarantee Period. Subject to certain limits imposed by state insurance laws, the
surrender charge decreases by an equal amount each policy year until it reaches
zero during the tenth policy year.
Specifically, the maximum first year surrender charge 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 used
to calculate the first year surrender charge. Such percentage equals 110% with
respect to policies with a ten-year Guarantee Period and decreases as the
selected Guarantee Period decreases to 10% for policies with a one-year
Guarantee Period. There are other lower contractual charges applicable to longer
Guarantee Periods.
The schedule of surrender charges for a policy is set forth in that policy.
Additionally, your sales agent, upon request, will provide a schedule of
surrender charges which would apply under any given circumstances.
EXAMPLES OF FRONT-END SALES LOADS AND SURRENDER CHARGES
The following is an example of the actual front-end sales loads and surrender
charge schedule for a policy with a ten year Guarantee Period. The example uses
the same specific information (i.e., issue age, Face Amount, premium level,
etc.) as the illustration on page 9 of the Statement of Additional Information.
<TABLE>
<S> <C>
Death Benefit Option: Level
Face Amount: $250,000
Guarantee Period: 10 years
Charges Assumed: Current
Issue Age/Gender/Class: 45/Male/Preferred Plus
Scheduled Premium: $4,000 per year
Guideline Annual Premium: $4,819.38
Assumed Gross Annual Investment Return: 0%
</TABLE>
The "Total Cumulative Sales Load If Surrendered" column on the far right of the
table below represents the sum of all loads which would have been assessed since
the issuance of the policy assuming a surrender of the policy at the end of the
corresponding policy year.
This is:
- - the sum of the cumulative front-end sales load, plus
- - the actual surrender charge for that policy year.
<PAGE>
14 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
ADDITIONAL CHARGES/CREDITS IF SURRENDERED -- TEN YEAR GUARANTEE PERIOD
<TABLE>
<CAPTION>
TOTAL
CUMULATIVE MAXIMUM YEAR END ACTUAL CUMULATIVE
FRONT-END SURRENDER ACCOUNT SURRENDER SALES LOAD IF
POLICY YEAR SALES LOAD CHARGE VALUE CHARGE* SURRENDERED**
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
1 $2,000 $4,400 $ 1,274 $1,274 $3,274
2 2,440 3,911 4,172 3,911 6,351
3 2,880 3,422 6,928 3,422 6,302
4 3,320 2,933 9,582 2,933 6,253
5 3,760 2,444 12,157 2,444 6,204
6 4,200 1,956 14,669 1,956 6,156
7 4,640 1,467 17,122 1,467 6,107
8 5,080 978 19,532 978 6,058
9 5,520 489 21,890 489 6,009
10 5,960 0 24,187 0 5,960
11 6,080 0 26,679 0 6,080
- -------------------------------------------------------------------------------------
</TABLE>
* The Actual Surrender Charge assessed is the lesser of:
- The contractual maximum surrender charge, or
- Account Value at the end of the policy year.
** Assumes a surrender of the policy at the end of that policy year.
An example of the actual front-end sales load and surrender charge schedule for
a policy with a one year Guarantee Period is shown below. The example uses the
same specific information (i.e., issue age, Face Amount, premium level) as the
illustration on page 12 of the Statement of Additional Information.
<TABLE>
<S> <C>
Death Benefit Option: Level
Face Amount: $250,000
Guarantee Period: 1 Year
Charges Assumed: Current
Issue Age/Gender/Class: 45/Male/Preferred Plus
Scheduled Premium: $4,000 per year
Guideline Annual Premium: $4,819.38
Assumed Hypothetical Gross Annual Investment Return: 0%
</TABLE>
The "Total Cumulative Sales Load If Surrendered" column on the far right of the
table below 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:
- - the sum of the cumulative front-end sales load, plus
- - the actual surrender charge for that policy year.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 15
- --------------------------------------------------------------------------------
ADDITIONAL CHARGES IF SURRENDERED -- ONE YEAR GUARANTEE PERIOD
<TABLE>
<CAPTION>
TOTAL
CUMULATIVE MAXIMUM YEAR END ACTUAL CUMULATIVE
FRONT-END SURRENDER ACCOUNT SURRENDER SALES LOAD IF
POLICY YEAR SALES LOAD CHARGE VALUE CHARGE* SURRENDERED**
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
1 $0 $400 $ 3,195 $400 $400
2 0 355 6,415 355 355
3 0 311 9,454 311 311
4 0 267 12,360 267 267
5 0 222 15,158 222 222
6 0 178 17,867 178 178
7 0 133 20,492 133 133
8 0 89 23,052 89 89
9 0 44 25,537 44 44
10 0 0 27,937 0 0
11 0 0 30,189 0 0
- -------------------------------------------------------------------------------------
</TABLE>
* The Actual Surrender Charge assessed is the lesser of:
- The contractual maximum surrender charge, or
- Account Value at the end of the policy year.
** Assumes a surrender of the policy at the end of that policy year.
CHARGES FOR THE FUNDS
The investment performance of each Fund reflects the management fee that the
Fund pays to its investment manager as well as other operating expenses that the
Fund incurs. Investment management fees are generally daily fees computed as a
percentage of a Fund's average daily net assets as an annual rate. Please read
the prospectus for each Fund for complete details.
YOUR POLICY
- --------------------------------------------------------------------------------
CONTRACT RIGHTS
POLICY OWNER, OR "YOU" -- As long as your policy is in force, you may exercise
all rights under the policy while the insured is alive and no beneficiary has
been irrevocably named.
BENEFICIARY -- You name the beneficiary in your application for the policy. You
may change the beneficiary (unless irrevocably named) while the insured is alive
by notifying us in writing. If no beneficiary is living when the insured dies,
the death benefit will be paid to you, if living; otherwise, it will be paid to
your estate.
ASSIGNMENT -- You may assign your policy. Until you notify us in writing, no
assignment will be effective against us. We are not responsible for the validity
of any assignment.
STATEMENTS -- We will send you a statement at least once each year, showing:
- - the current Account Value, Cash Surrender Value and Face Amount;
- - the premiums paid, monthly deduction amounts and any loans since your last
statement;
- - the amount of any Indebtedness;
- - any notifications required by the provisions of your policy; and
- - any other information required by the Insurance Department of the state where
your policy was delivered.
CONTRACT LIMITATIONS
ALLOCATIONS TO SUB-ACCOUNTS AND THE FIXED ACCOUNT -- You may allocate amounts to
a maximum of nine (9) Sub-Accounts, or eight (8) Sub-Accounts and the Fixed
Account.
TRANSFERS OF ACCOUNT VALUE -- You may transfer amounts among the Fixed Account
and the Sub-Accounts subject to a charge described below. You may request
transfers in writing or by calling us at 1-800-231-5453. Transfers by telephone
may be made by your agent of record or by your attorney-in-fact pursuant to a
power of attorney. Telephone transfers may not be permitted in some states. We
will not be responsible for losses that result from acting upon telephone
requests reasonably believed to be genuine. We will employ reasonable procedures
to confirm that instructions communicated by telephone are genuine. The
procedures we follow for transactions initiated by telephone include requiring
callers to provide certain identifying information. All transfer instructions
communicated to us by telephone are tape recorded.
You may make one transfer per calendar month free of charge, excluding any
transfers made pursuant to your enrollment in the Dollar Cost Averaging Program.
Each subsequent transfer in
<PAGE>
16 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
excess of one per calendar month will be subject to a transfer charge of up to
$25. We reserve the right to limit at a future date the size of transfers and
remaining balances and to limit the number and frequency of transfers.
TRANSFERS FROM THE FIXED ACCOUNT -- Except for transfers made under the Dollar
Cost Averaging Program, any transfers from the Fixed Account must occur during
the 30-day period following each policy anniversary, and, if your accumulated
value in the Fixed Account exceeds $1,000, the amount transferred from the Fixed
Account in any policy year may not exceed 25% of the accumulated value in the
Fixed Account on the transfer date.
DEFERRAL OF PAYMENTS -- We may defer payment of any Cash Surrender Values,
withdrawals and loan amounts which are not from the Sub-Accounts for up to six
months from the date of the request. If we defer payment for more than 30 days,
we will pay you interest.
CHANGES TO CONTRACT OR SEPARATE ACCOUNT
MODIFICATION OF POLICY -- The only way the policy may be modified is by a
written agreement signed by our President, or one of our Vice Presidents,
Secretaries, or Assistant Secretaries.
SUBSTITUTION OF FUNDS -- We reserve the right to substitute the shares of any
other registered investment company for the shares of any Fund already purchased
or to be purchased in the future by the Separate Account provided that the
substitution has been approved by the Securities and Exchange Commission.
CHANGE IN OPERATION OF THE SEPARATE ACCOUNT -- The operation of the Separate
Account may be modified to the extent permitted by law, including deregistration
under the securities laws.
SEPARATE ACCOUNT TAXES -- Currently, no charge is made to the Separate Account
for federal, state and local taxes that may be allocable to the Separate
Account. A change in the applicable federal, state or local tax laws which
impose tax on Hartford and/ or the Separate Account may result in a charge
against the policy in the future. Charges for other taxes, if any, allocable to
the Separate Account may also be made.
OTHER BENEFITS
DOLLAR COST AVERAGING PROGRAM -- You may elect to allocate your Net Premiums
among the Sub-Accounts and the Fixed Account pursuant to the Dollar Cost
Averaging (DCA) program. If you choose the DCA program, your Net Premiums will
be deposited into the Hartford Money Market Sub-Account or the Fixed Account.
Amounts will be transferred monthly to the other investment options in
accordance with your premium allocation instructions. The dollar amount will be
allocated to the investment options that you specify, in the proportions that
you specify. If, on any transfer date, your Account Value allocated to the
Dollar Cost Averaging program is less than the amount you have elected to
transfer, your DCA program will terminate.
You may cancel your DCA election by notice in writing or by calling us at
1-800-231-5453. We reserve the right to change or discontinue the DCA program.
The main objective of a DCA program is to minimize the impact of short-term
price fluctuations. The DCA program allows you to take advantage of market
fluctuations. Since the same dollar amount is transferred to your selected
investment options at set intervals, the DCA program allows you to purchase more
accumulation units when prices are low and fewer accumulation units when prices
are high. Therefore, a lower average cost per accumulation unit may be achieved
over the long term. However, it is important to understand that the DCA program
does not assure a profit or protect against loss in a declining market.
SUPPLEMENTAL BENEFITS -- The following supplemental benefits are among the
options that may be included in a policy by rider, subject to the restrictions
and limitations set forth therein. Charges for the riders increase the Monthly
Deduction Amount.
- - DEDUCTION AMOUNT WAIVER RIDER -- We will waive Monthly Deduction Amounts if
the insured becomes totally disabled prior to age 65 for at least six months.
- - ACCIDENTAL DEATH BENEFIT RIDER -- We will increase the death proceeds if the
insured dies from an accident.
- - INCREASE IN COVERAGE OPTION RIDER -- We will guarantee you the 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:
- the original policy has been in force for five years,
- the insured's attained age is less than 80, and
- the Account Value of the original policy is sufficient to "pay up" the new
policy under assumptions defined in the rider.
The face amount of the new policy will be equal to the Face Amount, multiplied
by a percentage which depends on the insured's age, gender (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 to the date
of death of the insured, regardless of the age of the insured, subject to
certain death benefit and premium restrictions.
SETTLEMENT OPTIONS -- Proceeds under your policy may be paid in a lump sum or
may be applied to one of our four settlement options. The minimum amount that
may be placed under a settlement option is $5,000 (unless we consent to a lesser
amount), subject to our then-current rules. Once payments under the Second
Option, the Third Option or the Fourth Option begin, no surrender may be made
for a lump sum settlement in lieu of the life insurance payments. The following
payment options are available to you or your beneficiary. If a payment option is
not selected, proceeds will be paid in a lump sum. Your beneficiary may choose a
settlement.
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HARTFORD LIFE INSURANCE COMPANY 17
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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
one to 30 years.
FOURTH OPTION -- LIFE INCOME
LIFE ANNUITY -- An annuity 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 annuity providing monthly
income to the annuitant for a fixed period of 120 months and for as long
thereafter as the annuitant shall live.
The policy provides 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,
we may make payments less often.
The table for the Fourth Option is based on the 1983a Individual Annuity
Mortality Table, set back one year and with 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. We 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.
Other arrangements for income payments may be agreed upon.
SURRENDER/CONTINUATION OPTIONS -- At any time prior to the maturity date, 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, you may choose one of the above options if, during the Guarantee
Period:
- - a required scheduled premium is not paid by the end of the grace period; and
- - the Automatic Premium Loan Option is not elected or not available due to
insufficient Cash Surrender Value.
You may notify us in writing of your choice within 61 days after the due date
for the outstanding scheduled premium. If you do not notify us, we will
automatically apply the Cash Surrender Value to Option B, or, Option C if the
insurance class shown in your policy is "special." If your policy has no Cash
Surrender Value, it will terminate at the end of the grace period.
The effective date of the surrender/continuation options will be the earlier of
the date we receive your election request in writing or the end of the grace
period. When a surrender/continuation option becomes effective, all benefit
riders attached to a policy will terminate, unless otherwise provided in the
rider.
The following are descriptions of each option:
OPTION A -- SURRENDER FOR CASH
If you choose Option A, you must surrender your 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 -- CONTINUATION OF POLICY AS EXTENDED TERM INSURANCE
Option B is not available unless the insurance class shown in your policy is
"standard" or "preferred." If you choose Option B, 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 will begin on the
effective date of Option B 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 such term, we will pay you any Cash
Surrender Value not used to provide extended term insurance, and our liability
under the policy will cease.
OPTION C -- CONTINUATION OF POLICY AS PAID-UP INSURANCE
If you choose Option C, your policy will continue as paid-up life insurance. The
amount of paid-up life insurance will be calculated using the Cash Surrender
Value of your policy as a net single premium as of the effective date of this
benefit at the insured's then-attained age. Hartford reserves the right to
require evidence of insurability or limit the amount of Option C if the paid-up
amount exceeds the death benefit in effect on the effective date of Option C. We
will pay you any Cash Surrender Value not used to provide paid-up insurance.
If your policy is continued under Option B or Option C, as described 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.
BENEFITS AT MATURITY -- If the insured is living on the "maturity date" (the
anniversary of the policy date on which the insured attained age 100), we will
pay the Cash Surrender Value to you upon surrender of the policy to us. On the
maturity date, the policy will terminate and Hartford will have no further
obligations under the policy.
CLASS OF PURCHASERS
REDUCED CHARGES FOR ELIGIBLE GROUPS -- Certain charges and deductions described
above may be reduced for policies issued in connection with a specific plan, in
accordance with our
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18 HARTFORD LIFE INSURANCE COMPANY
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rules in effect as of the date the application for a policy is approved. To
qualify for such a reduction, a plan must satisfy certain criteria, i.e., as to
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 of the plan's members. The amount of reduction and the criteria
for qualification will be reflected 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 invested in the
Separate Account.
PREMIUMS
- --------------------------------------------------------------------------------
APPLICATION FOR A POLICY -- To purchase a policy you must submit an application
to us. Within limits, you may choose the initial Face Amount, scheduled
premiums, and the Guarantee Period. Policies generally will be issued only on
the lives of insureds age 80 and under who supply evidence of insurability
satisfactory to us. Acceptance is subject to our underwriting rules and we
reserve the right to reject an application for any reason. No change in the
terms or conditions of a policy will be made without your consent. The minimum
initial premium is the amount required to keep the policy in force for one
month, but not less than $50.
Your policy will be effective on the policy date only after we receive all
outstanding delivery requirements and the initial premium payment. The policy
date is the date used to determine all future cyclical transactions on the
policy, such as Monthly Activity Date and policy years.
PREMIUM PAYMENT FLEXIBILITY -- You have the ability to pay amounts greater or
less than your scheduled premiums. Prior to policy issue, you can choose the
level of the scheduled premiums, within a range determined by Hartford, based on
the Face Amount and the insured's gender (except where unisex rates apply),
issue age and risk classification.
During the Guarantee Period, Hartford will guarantee that your policy will not
lapse, regardless of the investment experience of the Funds, provided that you
pay the scheduled premiums when due and Indebtedness never exceeds the Cash
Value. In addition, unscheduled premiums are allowed during the Guarantee
Period. Even if you do not pay all scheduled premiums due during the Guarantee
Period, your policy will stay in force as long as the Policy Surplus exceeds
Indebtedness. After the Guarantee Period, you may change your scheduled premiums
to any level you desire. Unscheduled premiums will continue to be allowed.
Additionally, once the Guarantee Period has expired, your policy will not lapse
as long as the Cash Surrender Value is sufficient to cover the Monthly Deduction
Amounts. For more details, see "Lapse and Reinstatement."
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
initial premium payment 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 in the
Code.
During the Guarantee Period, your policy will not terminate due to insufficient
Cash Value, regardless of the investment experience of the Funds, provided all
scheduled premiums are paid when due and if Indebtedness does not exceed the
Cash Value.
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 Indebtedness, payment of such scheduled premium will not be
required in that year or in any future policy year. Your policy will not
terminate due to such nonpayment. However, future scheduled premiums during the
Guarantee Period will be required unless the Policy Surplus continues to exceed
Indebtedness in future policy years. In addition, as is true with any premium,
your Account Value and Policy Surplus in future years will be greater if you
make the premium payment.
For example, to determine whether or not non-payment of a scheduled premium in
policy year 2 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 equals or is greater than the Target Account Value and
Indebtedness remained less than the Policy Surplus, failure to pay any scheduled
premiums due in policy year 2 would not result in a lapse.
After the Guarantee Period, Hartford will send you reminder notices to pay
scheduled premiums during the insured's lifetime. Payment of the scheduled
premium may not be sufficient to keep your policy in force after the end of the
Guarantee Period.
UNSCHEDULED PREMIUMS -- Any premium payment we receive in an amount different
from the scheduled premium will be considered an unscheduled premium.
Unscheduled premiums of at least $50 can be made at any time while a policy is
in force.
You may pay additional premiums at any time prior to the scheduled maturity
date, subject to the following limitations:
- - The minimum premium that we will accept is $50 or the amount required to keep
the policy in force.
- - We reserve the right to refund any excess premiums that would cause the policy
to fail to meet the definition of life insurance under the Internal Revenue
Code.
- - We reserve the right to require evidence of insurability for any premium
payment that results in an increase in the death benefit greater than the
amount of the premium.
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HARTFORD LIFE INSURANCE COMPANY 19
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- - Any premium payment in excess of $1,000,000 is subject to our approval.
ALLOCATION OF PREMIUM PAYMENTS -- The initial Net Premium (and any additional
Net Premiums received by us before the end of the right to examine period) will
be allocated to the Hartford Money Market Sub-Account on the later of the policy
date or the date we receive your premium payment.
We will then allocate the Account Value in the Hartford Money Market Sub-Account
to the Fixed Account and the Sub-Accounts according to the premium allocation
specified in your policy application upon the expiration of the right to examine
policy period, or the date we receive the final requirement to put the policy in
force, whichever is later.
You may change your premium allocation upon request in writing. Allocations must
be in whole percentages. Subsequent Net Premiums will be allocated to the Fixed
Account and the Sub-Accounts according to your most recent written instructions
as long as the number of investment choices does not exceed nine (9), and the
percentage you allocate to each Sub-Account and/or the Fixed Account is in whole
percentages. If we receive a premium payment with a premium allocation
instruction that does not comply with the above rules, we will allocate the Net
Premium pro rata based on the values of your existing investment choices.
You will receive several different types of notifications as to what your
current premium allocation is. Each transaction confirmation received after we
receive a premium payment will show how a Net Premium has been allocated.
Additionally, each quarterly statement summarizes the current premium allocation
in effect for your policy.
ACCUMULATION UNITS -- Net Premiums allocated to the Sub-Accounts are used to
credit accumulation units to such Sub-Accounts.
The number of accumulation units in each Sub-Account to be credited to a policy
(including the initial allocation to the Hartford Money Market Sub-Account) and
the amount to be credited to the Fixed Account will be determined, first, by
multiplying the Net Premium by the appropriate allocation percentage in order to
determine the portion of Net Premiums or transferred Account Value to be
invested in the Fixed Account or the Sub-Account. Each portion of the Net
Premium or transferred Account Value to be invested in a Sub-Account is then
divided by the accumulation unit value in a particular Sub-Account next computed
following its receipt. The resulting figure is the number of accumulation units
to be credited to each Sub-Account.
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 the 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, i.e. (with respect to determining
Account Value, in connection with policy loans, or in 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 us at
the National Service Center, provided such date is a Valuation Day; otherwise
such determination will be made on the next succeeding date which is a Valuation
Day.
ACCOUNT VALUES -- Each policy will have an Account Value. There is no minimum
guaranteed Account 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, the interest credited to the Fixed Account and
the Loan Account, and the Monthly Deduction Amounts, Net Premiums paid, and any
withdrawals taken.
A policy's Account Value is related to the net asset value of the Funds
associated with the Sub-Accounts, if any, to which Net Premiums on the policy
have been allocated. The Account Value in the Sub-Accounts on any Valuation Day
is calculated by, first, multiplying the number of accumulation units in each
Sub-Account as of the Valuation Day by the then current value of the
accumulation units in that Sub-Account and then totaling the result for all of
the Sub-Accounts. A policy's Account Value equals the policy's value in all of
the Sub-Accounts, the Fixed Account, and the Loan Account. A policy's Cash Value
is equal to the Account Value less any applicable surrender charges. A policy's
Cash Surrender Value, which is the net amount available upon surrender of the
policy, is the Cash Value less any Indebtedness. See "Accumulation Unit Values,"
above.
We will pay death proceeds, Cash Surrender Values, partial withdrawals, and loan
amounts allocable to the Sub-Accounts within seven 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
Commission or the Commission declares that an emergency exists.
<PAGE>
20 HARTFORD LIFE INSURANCE COMPANY
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DEATH BENEFITS AND POLICY VALUES
DEATH BENEFIT -- Your policy provides for the payment of the death proceeds to
the named beneficiary upon receipt of due proof of the death of the insured.
Your policy will be effective on the policy date only after we receive all
outstanding delivery requirements and the initial premium payment. You must
notify us in writing as soon as possible after the death of the insured. The
death proceeds payable to the beneficiary equal the death benefit less any
Indebtedness and less any due and unpaid Monthly Deduction Amount occurring
during a grace period. The death benefit depends on the death benefit option you
select.
DEATH BENEFIT OPTIONS -- There are three death benefit options: the Level Death
Benefit Option ("Option A"), the Return of Account Value Death Benefit Option
("Option B") and the Return of Premium Death Benefit Option ("Option C").
Subject to the minimum death benefit described below, the death benefit under
each option is as follows:
- - Under Option A, the current Face Amount.
- - Under Option B, the current Face Amount plus the Account Value.
- - Under Option C, the current Face Amount plus the sum of the scheduled premiums
paid.
OPTION CHANGE -- After the Guarantee Period, you may change the Return of
Premium Death Benefit Option or Return of Account Value Death Benefit Option to
the Level Death Benefit Option. If you do, the Face Amount will become the
amount available as a death benefit immediately prior to the Death Benefit
Option change.
DEATH BENEFIT GUARANTEE -- During the Guarantee Period, your policy will not
terminate due to insufficient Cash Surrender Value, regardless of the investment
experience of the Funds, provided all scheduled premiums are paid when due and
Indebtedness does not exceed the Cash Value.
The Guarantee Period you select will affect the benefits provided by your
policy. Generally, the longer the Guarantee Period is, the higher front-end
sales loads and surrender charges are. However, the advantages of a longer
Guarantee Period include:
- - a longer period during which your Death Benefit is guaranteed, regardless of
the investment experience of the Sub-Accounts;
- - a longer period during which your current administrative fees are guaranteed.
As a result, the longer the Guarantee Period, the lower the guaranteed
administrative fees;
- - a longer period during which your current cost of insurance rates are
guaranteed. As a result, the longer the Guarantee Period, the lower the
guaranteed cost of insurance rates;
- - lower current cost of insurance rates; and
- - 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 without any evidence of insurability, additional
coverage, subject to limitations.
Because 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
such charges on policy values without a sales illustration. After consultation
with your sales agent, once you decide on a combination of policy features,
(e.g., Face Amount, level of scheduled premiums, Guarantee Period, and the
insured's issue age and gender) the sales agent will provide you with an
illustration which reflects the charges and benefits of that particular
combination, and includes a summary of policy charges and fees. In addition,
such illustrations are available for any permissible combination of benefits
which you may request.
MINIMUM DEATH BENEFIT -- Your policy has a minimum death benefit. We will
automatically increase the death benefit so that it will never be less than the
Account Value multiplied by the minimum death benefit percentage for the then
current year. This percentage varies according to the policy year and each
insured's issue age, sex (where unisex rates are not used) and insurance class.
EXAMPLES OF MINIMUM DEATH BENEFIT:
<TABLE>
<CAPTION>
A B
<S> <C> <C> <C>
- --------------------------------------------------------
Face Amount $100,000 $100,000
- --------------------------------------------------------
Account Value 46,500 34,000
- --------------------------------------------------------
Specified Percentage 250% 250%
- --------------------------------------------------------
Death Benefit Option Level Level
- --------------------------------------------------------
</TABLE>
In Example A, the 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 Indebtedness, constitutes the death proceeds payable 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%).
UNSCHEDULED INCREASES AND DECREASES IN FACE AMOUNT -- At any time after the
Guarantee Period, you may request in writing to change the Face Amount. The
minimum amount by which the Face Amount can be increased or decreased is based
on our rules then in effect.
We reserve the right to limit the number of increases or decreases made under a
policy to no more than one in any 12 month period.
All requests to increase the Face Amount must be applied for on a new
application and accompanied by your policy. All requests will be subject to
evidence of insurability satisfactory to us. Any increase approved by us will be
effective on the Monthly Activity Date shown on the new policy specifications
page, provided that
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 21
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the Monthly Deduction Amount for the first month after the effective date of the
increase 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 your request in writing. The remaining Face Amount
must not be less than that specified in our minimum rules then in effect.
Decreases in Face Amount will be applied as follows:
- - to the most recent increase in the Face Amount; then
- - successively to each prior increase in Face Amount; then
- - to the initial Face Amount.
If you ask to decrease the Face Amount of your policy below the initial Face
Amount, we will deduct, on a pro rata basis, a portion of any remaining
surrender charge from your Account Value. The amount of the reduction will be
equal to:
- - the initial Face Amount, minus the requested Face Amount, multiplied by
- - the surrender charge on the date of the request to change the Face Amount,
divided by
- - the initial Face Amount.
Your surrender charge will be reduced by the same amount.
CHARGES AND POLICY VALUES -- Your policy values decrease due to the deduction of
policy charges. Policy values may increase or decrease depending on investment
performance; investment expenses and fees reduce the investment performance of
the Sub-Accounts. Fluctuations in your account value may have an effect on your
death benefit. If your policy lapses, the policy terminates and no death benefit
will be paid.
MAKING WITHDRAWALS FROM YOUR POLICY
- --------------------------------------------------------------------------------
SURRENDER -- Provided your policy has a Cash Surrender Value, you may surrender
your policy to us. We will pay you the Cash Surrender Value. Our liability under
the policy will cease as of the date of your request for surrender, or the date
you request to have your policy surrendered, if later.
PARTIAL WITHDRAWALS -- After the Guarantee Period, partial withdrawals are
allowed. The minimum partial withdrawal allowed is $500. The maximum partial
withdrawal is the Cash Surrender Value, minus $1,000. One partial withdrawal is
allowed per month (between any successive Monthly Activity Dates). The Face
Amount is reduced by the amount of the partial withdrawal. Unless specified
otherwise, a partial withdrawal will be deducted pro rata from the Fixed Account
and the Sub-Accounts.
We do not currently impose a partial withdrawal charge. However, we reserve the
right to impose in the future a partial withdrawal charge of up to $50.
RIGHT TO EXAMINE A POLICY -- You have a limited right to return your policy for
cancellation. You may deliver or mail the policy to us or to the agent from whom
it was purchased any time during your free look period. Your free look period
ends the
later of 10 days after you receive your policy, 10 days after we deliver to you
a Notice of Right to Withdraw, or 45 days after you sign the application for
your policy (or longer in some states). In such event, the policy will be
rescinded and we will pay an amount equal to the greater of the premiums paid
for the policy less any Indebtedness or the sum of: i) the Account Value less
any Indebtedness, on the date the returned policy is received by us or the agent
from whom it was purchased; and, ii) any deductions under the policy or charges
associated with the Separate Account. If your policy is replacing another
policy, your free look period and the amount paid to you upon the return of your
policy vary by state.
RIGHT TO EXCHANGE A POLICY -- During the first 24 months after its issuance, you
may exchange your policy for a non-variable life insurance policy on the life of
the insured offered by us or an affiliate. No evidence of insurability will be
required. The new policy will have an amount at risk which equals or is less
than the amount at risk in effect on the date of exchange. Premiums under the
new policy will be based on the same risk classifications as the policy for
which the new policy was exchanged. An exchange of a policy under such
circumstances should be a tax-free transaction under Section 1035 of the Code.
LOANS
- --------------------------------------------------------------------------------
AVAILABILITY OF LOANS -- At any time while the policy is in force, you may
borrow against the policy by assigning it as sole security to us. Any new loan
taken together with any existing Indebtedness may not exceed 90% of the Cash
Value on the date we grant a loan.
Unless you specify otherwise, all loan amounts will be transferred on a pro rata
basis from the Fixed Account and each of the Sub-Accounts to the Loan Account.
If total Indebtedness equals or exceeds the Cash Value on any Monthly Activity
Date, the policy will then go into default. See "Lapse and Reinstatement."
INTEREST CHARGED ON INDEBTEDNESS -- Interest will accrue daily on the
Indebtedness at the policy loan rate. Because the interest charged on
Indebtedness may exceed the rate credited to the Loan Account, the Indebtedness
may grow faster than the Loan Account. If this happens, any difference between
the value
<PAGE>
22 HARTFORD LIFE INSURANCE COMPANY
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of the Loan Account and the Indebtedness will be transferred on each Monthly
Activity Date from the Fixed Account and Sub-Accounts to the Loan Account on a
pro rata basis. Policy loan rates are shown in the policy.
CREDITED INTEREST -- Any amounts in the Loan Account will be credited with
interest at an annual rate of 2% (in most states) during the first ten policy
years. Thereafter, the rate will be 3% (in most states). For preferred loans,
the rate is 4% (in most states).
PREFERRED LOAN -- If, at any time after the tenth policy anniversary, the Cash
Value exceeds the total of all premiums paid since issue, a Preferred Loan will
be available. The amount available for a Preferred Loan is the amount by which
the Cash Value exceeds total premiums paid. For policy years 11 and beyond, the
amount of the Loan Account which equals a Preferred Loan will be credited with
interest at a rate of 4% (in most states). The amount of Indebtedness that
qualifies as a Preferred Loan is determined by Hartford on each Monthly Activity
Date.
LOAN REPAYMENTS -- You can repay all or any part of your Indebtedness at any
time. The amount of policy loan repayment will be deducted from the Loan Account
and will be allocated among the Fixed Account and the Sub-Accounts in the same
percentage as premium payments are allocated.
TERMINATION DUE TO EXCESSIVE INDEBTEDNESS -- If total Indebtedness equals or
exceeds Cash Value under your policy, your policy will terminate 61 days after
we have mailed notice to your last known address and to the last known address
of any assignees of record. If sufficient loan repayment is not made by the end
of such 61 day period, your policy will terminate without value.
EFFECT OF LOANS ON ACCOUNT VALUE -- A loan, whether or not repaid, will have a
permanent effect on your Account Value. This effect occurs 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 on your Account Value
is likely to be. Such effect could be favorable or unfavorable. If the Fixed
Account and the Sub-Accounts earn more than the annual interest rate for funds
held in the Loan Account, your Account Value will not increase as rapidly as it
would have had no loan been made. If the Fixed Account and the Sub-Accounts earn
less than the Loan Account, then your Account Value will be greater than it
would have been had no loan been made. Additionally, if not repaid, the
aggregate amount of the outstanding Indebtedness will reduce the death proceeds
and the Cash Surrender Value otherwise payable.
LAPSE AND REINSTATEMENT
- --------------------------------------------------------------------------------
POLICY SURPLUS -- We use the Policy Surplus to determine whether 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.
However, if the Policy Surplus for a policy year during the Guarantee Period is
zero, all scheduled premiums due in that year are required to be paid.
The Policy Surplus is determined as follows:
- - The Policy Surplus for the first policy year is zero.
- - The Policy Surplus for each subsequent policy year is (x) minus (y), but never
less than zero where (x) is the Account Value at the end of the previous
policy year; and (y) is the target Account Value, as shown in the policy, for
the previous policy year.
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 the Policy Surplus for
a policy year is less than the Indebtedness or is zero on any given Monthly
Activity Date, all scheduled premiums due in that policy year, on or before that
date the Monthly Activity Date are required to be paid in order to keep the
policy in force. With respect to any required scheduled premium not paid on or
before its due date, we will allow a grace period which ends 61 days after the
applicable Monthly Activity Date. During the grace period, the policy will
continue in force. If any such required scheduled premium is not paid by the end
of the grace period, the policy will terminate except as provided under the
non-forfeiture options set forth in the policy or unless you have elected the
Automatic Premium Loan Option (see "--Automatic Premium Loan Option," below) and
there is sufficient Cash Value to cover the scheduled premium amounts due.
After the Guarantee Period, a 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 payments are not made by the
end of the grace period, a policy will terminate without value. Hartford will
mail you and any assignee under the policy written notice of the amount of
premium payments required to continue the policy in force at least 61 days
before the end of the grace period. The amount of premiums required to be paid
will be no greater then the amount, as of the date the grace period began,
deducted from Account Value in payment of three Monthly Deduction Amounts. If
such premiums are not paid by the end of the grace period, the policy will
terminate.
REINSTATEMENT -- Prior to the death of the insured, a policy may be reinstated
prior to the maturity date, provided such policy has not been surrendered for
cash, and provided further that:
- - you make your reinstatement request within five years from the policy
termination date;
- - you submit satisfactory evidence of insurability;
- - you pay all overdue required scheduled premiums, if any; and
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 23
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- - if the Guarantee Period has expired at the time of policy reinstatement and if
the amount paid in is insufficient to reinstate the policy, sufficient
premiums must be paid to:
- - cover all Monthly Deduction Amounts that are due and unpaid during the grace
period; and
- - 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 policy reinstatement date will reflect:
- - the Account Value at the time of termination; plus
- - Net Premiums attributable to premiums paid at the time of reinstatement; minus
- - 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 of
such policy taken place. Any Indebtedness at the time of termination must be
repaid upon reinstatement of the policy or carried over to the reinstated
policy.
AUTOMATIC PREMIUM LOAN OPTION -- If you elect the Automatic Premium Loan 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 such option in your policy application or by request in writing,
provided no scheduled premium is outstanding beyond its due date. In most
states, automatic premium loans will be treated as Preferred Loans. See "Loans
- -- Preferred Loan."
The Automatic Premium Loan Option will not be available if:
- - you have revoked the election of such option in writing; or
- - 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.
In most states, if you have outstanding Indebtedness pursuant to the Automatic
Premium Loan Option, we will allow you to restore the death benefit at the end
of the Guarantee Period to the amount that it would have equaled had no
Indebtedness been incurred pursuant to such option. In such case, we will not
require you to provide evidence of insurability. To remove any such outstanding
Indebtedness, we will reduce your Account Value, and the amount of Indebtedness
outstanding at the end of the Guarantee Period by the sum of the policy loan
incurred pursuant to the Automatic Premium Loan Option, plus all interest
accrued thereon. There will be no reduction in the Face Amount of your policy as
a result of this adjustment.
If you have outstanding Indebtedness pursuant to the Automatic Premium Loan
Option at the end of the Guarantee Period and you have not previously elected to
restore the death benefit at the end of a Guarantee Period as described above,
we will assume that you have elected to restore the death benefit at the end of
the Guarantee Period then in effect. We will notify you that we will make such
adjustment unless you instruct us not to make this adjustment. Such notification
will be made at least 30 days prior to the policy anniversary occurring at the
end of such Guarantee Period.
TAXES
- --------------------------------------------------------------------------------
GENERAL
Since Federal tax law is complex, the tax consequences of purchasing this policy
will vary depending on your situation. You may need tax or legal advice to help
you determine whether purchasing this policy is right for you.
Our general discussion of the tax treatment of this policy is based on our
understanding of federal income tax laws as they are currently interpreted. A
detailed description of all federal income tax consequences regarding the
purchase of this policy cannot be made in the prospectus. We also do not discuss
state, municipal or other tax laws that may apply to this policy. For detailed
information, you should consult with a qualified tax adviser familiar with your
situation.
TAXATION OF HARTFORD AND THE
SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford which is taxed as a life
insurance company under Subchapter L of the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, the Separate Account will not be taxed as a
"regulated investment company" under Subchapter M of 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
"Premiums -- Accumulation Unit Values").
Hartford 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 Separate Account for
federal income taxes. If Hartford 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 contracts under Section 7702 of the Code. The death benefit under a
life insurance contract is generally excluded from the gross income of the
beneficiary. Also, a life
<PAGE>
24 HARTFORD LIFE INSURANCE COMPANY
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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 intends to monitor premium levels to assure compliance with
the Section 7702 requirements.
Hartford 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 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. 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 described in Section 7702A(c). A modified
endowment contract ("MEC") is a life insurance policy that either:
(i) satisfies the Section 7702 definition of life insurance, but fails the
seven-pay test of Section 7702A or (ii) is exchanged for a MEC.
If the policy satisfies the seven-pay test at issuance, distributions and loans
made thereafter will not be subject to the MEC 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 Face
Amount. In addition, if there is a reduction in benefits under the policy within
the first seven years, the seven-pay test is applied as if the policy had
initially been issued at the reduced benefit level. Any reduction in benefits
attributable to the nonpayment of premiums will not be taken into account for
purposes of the seven-pay test if the benefits are reinstated within 90 days
after the reduction.
A policy that is classified as a MEC is eligible for certain aspects of the
beneficial tax treatment accorded to life insurance. That is, the death benefit
is excluded from income and increments in value are not subject to current
taxation. However, if the policy is classified as a MEC then withdrawals from
the contract will be considered first as withdrawals of income and then as a
recovery of premium payments. Thus, withdrawals will be includible in income to
the extent the contract value exceeds the investment in the contract. The amount
of any loan (including unpaid interest thereon) under the contract will be
treated as a withdrawal from the contract for tax purposes. In addition, if the
owner assigns or pledges any portion of the value of a contract (or agrees to
assign or pledge any portion), then such portion will be treated as a withdrawal
from the contract for tax purposes. Taxable withdrawals are subject to an
additional 10% tax, with certain exceptions. The owner's investment in the
contract is increased by the amount includible in income with respect to such
assignment, pledge, or loan, though it is not affected by any other aspect of
the assignment, pledge, or loan (including its release or repayment).
Generally, only distributions and loans made in the first year in which a policy
becomes a MEC, 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.
Before assigning, pledging, or requesting a loan under a policy that is a MEC,
an owner should consult a qualified tax adviser.
All MEC policies that are issued within any calendar year to the same policy
owner by one company or its affiliates are treated as one MEC policy for the
purpose of determining the taxable portion of any loan or distribution.
Hartford has instituted procedures to monitor whether a policy may become
classified as a MEC after issue.
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 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.
The federal estate tax is integrated with the federal gift tax under a unified
rate schedule and unified credit which shelters up to $675,000 (for 2000) from
the estate and gift tax. The Taxpayer Relief Act of 1997 gradually raises the
credit over the next six years to $1,000,000. 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
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 25
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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 as adjusted for inflation. 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
The Code requires that investments supporting your policy be adequately
diversified. Code Section 817 provides that a variable life insurance contract
will not be treated as a life insurance contract for any period during which the
investments made by the separate account or underlying fund are not adequately
diversified. If a contract is not treated as a life insurance contract, the
policy owner will be subject to income tax on annual increases in cash value.
The Treasury Department's diversification regulations 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 the
case of government securities, each government agency or instrumentality is
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 still comply within a reasonable period and avoid
the taxation of contract 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.
We monitor the diversification of investments in the separate accounts and test
for diversification as required by the Code. We intend to administer all
policies 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 separate accounts supporting the contract must be considered to be
owned by the insurance company and not by the policy owner. It is unclear under
what circumstances an investor is considered to have enough control over the
assets in the separate account to be considered the owner of the assets for tax
purposes.
The IRS has issued several rulings discussing investor control. These rulings
say that certain incidents of ownership by the policy owner, such as the ability
to select and control investments in a separate account, will cause the policy
owner to be treated as the owner of the assets for tax purposes.
In its explanation of the diversification regulations, the Treasury Department
recognized 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 control, and as of the date of this prospectus, guidance has
yet to be issued. We do not know if additional guidance will be issued. If
guidance is issued, we do not know if it will have a retroactive effect.
Due to the lack of specific guidance on investor control, there is some
uncertainty about when a policy owner is considered the owner of the assets for
tax purposes. We reserve the right to modify the policy, as necessary, to
prevent you from being considered the owner of assets in the separate account.
TAX DEFERRAL DURING ACCUMULATION PERIOD
Under existing provisions of the Code, except as described below, any increase
in an owner's Investment Value is generally not taxable to the policy owner
unless amounts are received (or are deemed to be received) under the policy
prior to the insured's death. If the policy is surrendered or matures, the
amount received will be includable in the policy owner's income to the extent
that it exceeds the policy owner's "investment in the contract." (If there is
any debt at the time of a surrender, then such debt will be treated as an amount
distributed to the owner.) The "investment in the contract" is the aggregate
amount of premium payments and other consideration paid for the policy, less the
aggregate amount received previously under the policy to the extent such amounts
received were excluded from gross income. Whether partial withdrawals (or other
such amounts deemed to be distributed) from the policy constitute income to the
policy owner depends, in part, upon whether the policy is considered a modified
endowment contract for Federal income tax purposes.
<PAGE>
26 HARTFORD LIFE INSURANCE COMPANY
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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
In certain circumstances, the Code limits the application of specific tax
advantages to individual owners of life insurance contracts. Prospective policy
owners which are not individuals should consult a qualified tax adviser to
determine the 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 adviser
regarding U.S. state, and foreign taxation with respect to a life insurance
policy purchase.
LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------
There are no pending material legal proceedings to which the Separate Account is
a party.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 27
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GLOSSARY OF SPECIAL TERMS
ACCOUNT VALUE: the total of all amounts in the Fixed Account, Loan Account and
Sub-Accounts.
CASH SURRENDER VALUE: the Cash Value less all Indebtedness.
CASH VALUE: the Account Value less any applicable Surrender Charges.
FACE AMOUNT: an amount we use to determine the Death Benefit. On the policy
date, the Face Amount equals the initial Face Amount shown in your policy.
Thereafter, it may change under the terms of the policy.
FIXED ACCOUNT: part of our general account to which all or a portion of the
Account Value may be allocated.
FUNDS: the registered open-end management companies in which assets of the
Separate Account may be invested.
GUARANTEE PERIOD: The period you select, of one to ten policy years, during
which additional guarantees are provided. These guarantees include the guarantee
that if scheduled premiums are paid, the death benefit will not be less than the
initial Face Amount regardless of the investment performance of the Sub-
Accounts.
GUIDELINE ANNUAL PREMIUM: The level annual premium payment necessary to provide
the future benefits under a policy through maturity, based on certain
assumptions specified under federal securities laws. These assumptions include
mortality charges based on the 1980 Commissioners' Standard Ordinary Mortality
Smoker or Nonsmoker Table, age last birthday, an assumed annual net rate of
return of 5% per year, and deduction of the fees and charges specified in a
Policy. For purposes of the policies, the Guideline Annual Premium is used only
in limiting front-end sales loads and surrender charges.
INDEBTEDNESS: all loans taken on the policy, plus any interest due or accrued
minus any loan repayments.
LOAN ACCOUNT: an account established for any amounts transferred from the Fixed
Account and Sub-Accounts as a result of loans. The amounts in the Loan Account
are credited with interest and are not subject to the investment experience of
any Sub-Accounts.
MONTHLY ACTIVITY DATE: the policy date and the same date in each succeeding
month as the policy date. However, whenever the Monthly Activity Date falls on a
date other than a Valuation Day, the Monthly Activity Date will be deemed to be
the next Valuation Day.
NET PREMIUM: the amount of premium credited to Account Value. It is premium paid
minus the sales load and premium tax charge.
POLICY SURPLUS: 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.
SEPARATE ACCOUNT: an account which has been established by us to separate the
assets funding the variable benefits for the class of contracts to which the
policy belongs from our other assets.
SUB-ACCOUNT: the subdivisions of the Separate Account.
SURRENDER CHARGE: a charge that may be assessed if you surrender your policy or
the Face Amount is decreased.
TARGET ACCOUNT VALUE: The Account Value, determined at policy issue, that would
result on each policy 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 are deducted but
before the mortality and expense risk charge is deducted) and current cost of
insurance and expense charges.
VALUATION DAY: the date on which a Sub-Account is valued. This occurs every day
the New York Stock Exchange is open for trading.
WE, US, OUR: Hartford Life Insurance Company, sometimes referred to as
"Hartford".
YOU, YOUR: the owner of the policy.
<PAGE>
28 HARTFORD LIFE INSURANCE COMPANY
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WHERE YOU CAN FIND MORE INFORMATION
You can call us at 1-800-231-5453 to ask us questions. The Statement of
Additional Information contains more information about this life insurance
policy and, like this prospectus, is filed with the Securities and Exchange
Commission. You should read the Statement of Additional Information because you
are bound by the terms contained in it.
We file other information with the Securities and Exchange Commission. You may
read and copy any document we file at the SEC's public reference room in
Washington, DC 20549-6009. Please call the SEC at 1-800-SEC-0330 for further
information. Our SEC filings are also available to the public at the SEC's web
site at HTTP://WWW.SEC.GOV.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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STATEMENT OF ADDITIONAL INFORMATION
SEPARATE ACCOUNT VL I
This Statement of Additional Information is not a prospectus. To obtain a
prospectus, write us at P.O. Box 2999, Hartford, CT 06104-2999, or call us at
1-800-231-5453.
DATE OF PROSPECTUS: MAY 1, 2000
DATE OF STATEMENT OF ADDITIONAL INFORMATION: MAY 1, 2000
<PAGE>
2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
GENERAL INFORMATION AND HISTORY 3
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SERVICES 5
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EXPERTS 5
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DISTRIBUTION OF POLICIES 5
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ADDITIONAL INFORMATION ABOUT CHARGES 6
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ILLUSTRATION OF DEATH BENEFITS 7
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FINANCIAL STATEMENTS SA-1
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</TABLE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 3
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GENERAL INFORMATION AND HISTORY
HARTFORD LIFE INSURANCE COMPANY ("HARTFORD") -- Hartford Life Insurance Company
is a stock life insurance company engaged in the business of writing life
insurance, both individual and group, in all states of the United States and the
District of Columbia. We were originally incorporated under the laws of
Massachusetts on June 5, 1902, and subsequently redomiciled to Connecticut. Our
offices are located in Simsbury, Connecticut; however, our mailing address is
P.O. Box 2999, Hartford, CT 06104-2999.
Hartford Life Insurance Company is controlled by Hartford Life & Accident
Insurance Company, which is controlled by Hartford Life Inc., which is
controlled by Hartford Accident & Indemnity Company, which is controlled by
Hartford Fire Insurance Company, which is controlled by Nutmeg Insurance
Company, which is controlled by The Hartford Financial Services Group, Inc. Each
of these companies is engaged in the business of insurance and financial
services.
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS PROFESSION,
HARTFORD; VOCATION OR EMPLOYMENT FOR PAST
NAME YEAR OF ELECTION FIVE YEARS; OTHER DIRECTORSHIPS
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
David A. Carlson Vice President, 1999 Assistant Vice President and Director of Taxes
(1998-1999), Hartford; Assistant Vice President and
Director of Taxes (1998-1999), Hartford; CIGNA Corporation
(1975-1998).
Peter W. Cummins Senior Vice President, 1997 Vice President (1989-1997); Director of Broker Dealer
Sales-ILAD (1989-1992), Hartford; Senior Vice President
(1997-Present); Vice President (1989-1997); Director of
Broker Dealer Sales-ILAD (1989-1991), Hartford Life and
Accident Insurance Company.
Timothy M. Fitch Vice President, 1995 Assistant Vice President (1992-1995), Hartford; Vice
President (1995-Present); Actuary (1994-Present);
Assistant Vice President (1992-1995), Hartford Life and
Accident Insurance Company.
Mary Jane B. Fortin Vice President & Chief Vice President & Chief Accounting Officer, (1998-Present),
Accounting Officer, 1998 Hartford Life & Annuity Insurance Company; Vice President
& Chief Accounting Officer, (1998-Present), Royal Life
Insurance Company of America; Vice President & Chief
Accounting Officer (1998-Present), Alpine Life Insurance
Company; Chief Accounting Officer (1997-Present), Hartford
Life, Inc.; Director, Finance (1995-1997), Value Health,
Inc.; Senior Manager (1993-1995), Coopers and Lybrand;
Audit Manager (1993-1996), Arthur Andersen & Co.
David T. Foy Senior Vice President, Chief Senior Vice President (1998-Present); Vice President
Financial Officer & (1998); Assistant Vice President (1995-1998), Hartford;
Treasurer, 1998 Senior Vice President (1998-Present), Hartford Life and
Director, 1999* Accident Insurance Company; Director, Strategic Planning
Corporate Finance (1995-1996); IA Product Development
(1994-1995), Hartford; Various Actuarial Roles
(1989-1993), Milliman & Robertson.
Lynda Godkin Senior Vice President, 1997 Associate General Counsel (1995-1996); Assistant General
General Counsel, 1996 Counsel and Secretary (1994-1995); Counsel (1990-1994),
Corporate Secretary, 1995 Hartford; Director (1997-Present); Senior Vice President
Director, 1997 (1997-Present); General Counsel (1996-Present); Corporate
Secretary (1995-Present); Associate General Counsel
(1995-1996); Assistant General Counsel and Secretary
(1994-1995); Counsel (1990-1994), Hartford Life and
Accident Insurance Company; Vice President and General
Counsel (1997-Present), Hartford Life, Inc.
Lois W. Grady Senior Vice President, 1998 Vice President (1993-1998); Assistant Vice President
(1987-1993), Hartford; Senior Vice President, (1998); Vice
President (1993-1997); Assistant Vice President
(1987-1993), Hartford Life and Accident Insurance Company.
</TABLE>
<PAGE>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS PROFESSION,
HARTFORD; VOCATION OR EMPLOYMENT FOR PAST
NAME YEAR OF ELECTION FIVE YEARS; OTHER DIRECTORSHIPS
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Stephen T. Joyce Senior Vice President, 1999 Vice President (1997-1999), Assistant Vice President
(1994-1997), Hartford; Assistant Vice President
(1994-1997), Hartford Life and Accident Insurance Company;
Vice President (1997-1999), Assistant Vice President
(1994-1997), Hartford Life and Annuity Insurance Company.
Michael D. Keeler Vice President, 1998 Vice President (1998-Present); Hartford Life and Accident
Insurance Company; Vice President (1995-1997), Providian
Insurance; Supervisor/Manager (1985-1995), U.S. West
Communications.
Robert A. Kerzner Senior Vice President, 1998 Director of Individual Life, Senior Vice President,
(1998-Present); Vice President, (1995-1998); Regional Vice
President (1991-1994), Hartford; Vice President
(1994-1997), Hartford Life and Accident Insurance Company.
Thomas M. Marra President, 2000 Executive Vice President (1995-2000), Senior Vice
Director, 1994* President (1994-1995); Vice President (1989-1994); Actuary
(1987-1995), Hartford; Director (1994-Present); Executive
Vice President (1995-Present); Senior Vice President
(1994-1995); Vice President (1989-1994), Actuary
(1987-1997), Hartford Life and Accident Insurance Company;
President (2000-Present), Executive Vice President
(1996-2000), Director (1994-Present), Senior Vice
President (1993-1996), Hartford Life and Annuity Insurance
Company; Chief Operating Officer (2000-Present), Executive
Vice President, Individual Life and Annuities (1997-2000),
Hartford Life, Inc.
Craig R. Raymond Senior Vice President, 1997 Vice President (1993-1997); Assistant Vice President
Chief Actuary, 1994 (1992-1993); Actuary (1990-1994), Hartford; Senior Vice
President (1997-Present); Chief Actuary (1995-Present);
Vice President (1993-1997); Actuary (1990-1995), Hartford
Life and Accident Insurance Company; Vice President and
Chief Actuary (1997-Present), Hartford Life, Inc.
Donald A. Salama Vice President, 1997 Vice President (1997-Present), Hartford Life and Accident
Insurance Company; Principal and Director, Institutional
Sales (1995-1998), The Vanguard Group; Senior Vice
President (1994-1995), Mercantile
Bancorporation; Vice President (1988-1994), Bankers Trust
Company.
Lowndes A. Smith Chief Executive Officer, 1997 President (1989-2000), Chief Operating Officer
Director, 1981* (1989-1997), Hartford; Chief Executive Officer
(1997-Present); President (1989-2000); Chief Operating
Officer (1989-1997), Director (1985-Present); Hartford
Life and Annuity Insurance Company; Director
(1981-Present); President (1989-Present), Chief Executive
Officer (1997-Present), Chief Operating Officer
(1989-1997), Hartford Life and Accident Insurance Company;
Chief Executive Officer and President and Director
(1997-Present), Hartford Life, Inc.
David M. Znamierowski Senior Vice President & Chief Vice President (1997), Hartford; Director (1998-Present);
Investment Officer, 1997 Senior Vice President (1997-Present), Hartford Life and
Director, 1998* Accident Insurance Company; Vice President, Investment
Strategy (1997-Present), Hartford Life, Inc.; Vice
President, Investment Strategy & Policy (1991-1996), Aetna
Life and Casualty.
</TABLE>
- ---------
* Denotes date of election to Board of Directors of Hartford.
Unless otherwise indicated, the principal business address of each of the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 5
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT VL I was established as a separate account under Connecticut
law on September 30, 1992. The Separate Account is classified as a unit
investment trust registered with the Securities and Exchange Commission under
the Investment Company Act of 1940.
SERVICES
- --------------------------------------------------------------------------------
SAFEKEEPING OF ASSETS -- Title to the assets of the Separate Account is held by
Hartford. The assets are kept physically segregated and are held separate and
apart from Hartford's general corporate assets. Records are maintained of all
purchases and redemptions of Fund shares held in each of the Sub-Accounts.
EXPERTS
- --------------------------------------------------------------------------------
INDEPENDENT PUBLIC ACCOUNTANTS -- The audited financial statements and financial
statement schedules included in this registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports. The principal business
address of Arthur Andersen LLP is One Financial Plaza, Hartford, Connecticut
06103.
ACTUARIAL EXPERT -- The hypothetical Policy illustrations included in this
Statement of Additional Information and the registration statement with respect
to the Separate Account have been approved by Thomas P. Kalmbach, FSA, MAAA,
Actuary, for Hartford, and are included in reliance upon his opinion as to their
reasonableness.
DISTRIBUTION OF POLICIES
- --------------------------------------------------------------------------------
Hartford Equity Sales Company, Inc. ("HESCO") serves as principal underwriter
for the policies and will offer the policies on a continuous basis. HESCO is
controlled by Hartford and is located at the same address as Hartford. HESCO is
registered with the Securities and Exchange Commission under the Securities
Exchange Act of 1934 as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. ("NASD").
The policies will be sold by salespersons who represent Hartford as insurance
agents and who are registered representatives of HESCO or certain other
registered broker-dealers who have entered into distribution agreements with
HESCO.
During the first Policy Year, the maximum sales commission payable to Hartford
agents, independent registered insurance brokers, and other registered
broker-dealers will be 45% of the premiums paid up to a target premium and 5% of
any excess. In Policy Years 2 through 10, sales commissions will not exceed 5.5%
of premiums paid. For Policy Years 11 and later, sales commissions will not
exceed 2% of the premiums paid. In addition, expense allowances may be paid. A
sales representative may be required to return all or a portion of the
commissions paid if a Policy sold by such sales representative terminates prior
to such Policy's second Policy anniversary.
Broker-dealers or financial institutions are compensated according to a schedule
set forth by HESCO and any applicable rules or regulations for variable
insurance compensation. Compensation is generally based on premium payments.
This compensation is usually paid from the sales charges described in the
Prospectus.
In addition, a broker-dealer or financial institution may also receive
additional compensation for, among other things, training, marketing or other
services provided. HESCO, its affiliates or Hartford may also make compensation
arrangements with certain broker-dealers or other financial institutions based
on total sales by the broker-dealer or financial institution of insurance
products. These payments, which may be different for broker-dealers or financial
institutions, will be made by HESCO, its affiliates or Hartford out of their
assets and will not affect the amounts paid by the policy owner to purchase,
hold or surrender variable insurance products.
The following table shows officers and directors of HESCO:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITIONS AND OFFICES
<S> <C>
- -----------------------------------------------------------------
David A. Carlson Vice President
Peter W. Cummins Senior Vice President
- -----------------------------------------------------------------
David T. Foy Treasurer
- -----------------------------------------------------------------
Lynda Godkin Senior Vice President, General
Counsel and Corporate Secretary
- -----------------------------------------------------------------
George R. Jay Controller
- -----------------------------------------------------------------
Robert A. Kerzner Executive Vice President, Director
- -----------------------------------------------------------------
Thomas M. Marra Executive Vice President, Director
- -----------------------------------------------------------------
Donald R. Salama Vice President
- -----------------------------------------------------------------
Lowndes A. Smith President and Chief Executive
Officer, Director
- -----------------------------------------------------------------
</TABLE>
<PAGE>
6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT CHARGES
SALES LOAD -- The front-end load portion of a deduction from premiums 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 the policies are 50% of the
premiums paid in the first Policy Year, 11% in Policy Years 2 through 10, and 3%
thereafter.
For all Guaranteed Periods, the maximum amount of premiums 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 Premium,
the maximum amount of amount of premiums 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.
Generally, the shorter the Guarantee Period, the lower the front-end sales load.
The levels range from those for the ten-year Guarantee Period described above to
0% on a policy with a One Year Guarantee Period. However, there are other
charges under the policies that are lower for longer Guarantee Periods.
The front-end load under the policies may be used to cover expenses related to
the sale and distribution of the policies.
REDUCED CHARGES FOR ELIGIBLE GROUPS -- Certain charges and deductions described
above may be reduced for policies issued in connection with a specific plan, in
accordance with our rules in effect as of the date the application for a policy
is approved. To qualify for such a reduction, a plan must satisfy certain
criteria, i.e., as to 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 of the plan's members. The amount of reduction and
the criteria for qualification will be reflected 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 invested in Separate
Account VL I.
UNDERWRITING PROCEDURES -- To purchase a policy you must submit an application
to us. Within limits, you may choose the Scheduled Premiums and the initial Face
Amount and the Guarantee Period in the policy application. Policies generally
will be issued only on the lives of insureds age 80 and under who supply
evidence of insurability satisfactory to us. Acceptance is subject to our
underwriting rules and we reserve the right to reject an application for any
reason. No change in the terms or conditions of a policy will be made without
your consent.
The cost of insurance charge is to cover our 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 we
reserve the right to use rates less than shown in such 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 on the Insured's risk class. We 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.
INCREASES IN FACE AMOUNT -- At any time after the Guarantee Period, you may
request in writing to change the Face Amount. The minimum amount by which the
Face Amount can be increased is based on our rules then in effect.
All requests to increase the Face Amount must be applied for on a new
application and shall be accompanied by Your existing policy. All such 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 cost of insurance deduction for the 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.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 7
- --------------------------------------------------------------------------------
ILLUSTRATIONS 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. They show how the Death Benefit, Account Value and Cash
Surrender Value 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 was a uniform,
gross annual rate of 0%, 6% and 12%. The Death Benefit, Account Value and Cash
Surrender Value 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. They
assume that no Policy loans or partial withdrawals have been made. The
illustrations are also based on the assumption that the Policy Owner has not
requested an increase or a decrease in the Face Amount and that no transfers
among the Funds have been made in any Policy Year.
The tables 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
Sub-Accounts is lower than the gross after-tax return of the Funds. This is
because the illustrations assume an investment management fee and other
estimated Fund expenses totaling 0.73%. The 0.73% figure is based on an average
of the current management fees and expenses of the 36 available 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
0.73%, will vary from year to year, and will depend on how the Account Value is
allocated.
As the headings indicate, the illustrations reflect the deductions of current
contractual charges and guaranteed contractual charges for a single gross
interest rate. Those charges include the monthly mortality and expense risk
charge, the monthly administrative charge, and the monthly mortality charge. All
illustrations assume a charge of 2.00% for taxes attributable to premiums and
reflect the fact that no charges against the Separate Account are currently made
for federal, state or local taxes attributable to the Policies.
Each illustration also shows the amount to which premiums would accumulate if an
amount equal to such premiums was invested to earn interest, after taxes, at a
rate of 5%, compounded annually.
Upon request, Hartford will furnish a comparable illustration based on a
proposed Policy's specific circumstances.
<PAGE>
8 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
GUARANTEE PERIOD: 1 YEAR
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED PLUS
$4,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES GUARANTEED CHARGES
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 4,200 3,618 3,218 250,000 3,618 3,218 250,000
2 8,610 7,687 7,331 250,000 7,177 6,821 250,000
3 13,241 12,033 11,722 250,000 11,020 10,709 250,000
4 18,103 16,733 16,466 250,000 15,174 14,908 250,000
5 23,208 21,846 21,624 250,000 19,664 19,442 250,000
6 28,568 27,434 27,256 250,000 24,514 24,336 250,000
7 34,196 33,549 33,416 250,000 29,754 29,620 250,000
8 40,106 40,262 40,173 250,000 35,412 35,323 250,000
9 46,312 47,623 47,579 250,000 41,523 41,479 250,000
10 52,827 55,690 55,690 250,000 48,124 48,124 250,000
11 59,669 64,476 64,476 250,000 55,262 55,262 250,000
12 66,852 74,052 74,052 250,000 62,990 62,990 250,000
13 74,395 84,494 84,494 250,000 71,377 71,377 250,000
14 82,314 95,903 95,903 250,000 80,489 80,489 250,000
15 90,630 108,393 108,393 250,000 90,407 90,407 250,000
16 99,361 122,024 122,024 250,000 101,220 101,220 250,000
17 108,530 137,011 137,011 250,000 113,035 113,035 250,000
18 118,156 153,517 153,517 250,000 125,975 125,975 250,000
19 128,264 171,726 171,726 250,000 140,184 140,184 250,000
20 138,877 191,850 191,850 250,000 155,845 155,845 250,000
25 200,454 339,635 339,635 393,977 263,653 263,653 305,838
30 279,043 581,733 581,733 622,454 434,176 434,176 464,568
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 9
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
GUARANTEE PERIOD: 1 YEAR
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED PLUS
$4,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES GUARANTEED CHARGES
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 4,200 3,406 3,006 250,000 3,406 3,006 250,000
2 8,610 7,037 6,681 250,000 6,542 6,186 250,000
3 13,241 10,690 10,379 250,000 9,735 9,424 250,000
4 18,103 14,413 14,146 250,000 12,985 12,718 250,000
5 23,208 18,232 18,009 250,000 16,287 16,065 250,000
6 28,568 22,168 21,990 250,000 19,632 19,454 250,000
7 34,196 26,232 26,098 250,000 23,013 22,880 250,000
8 40,106 30,445 30,356 250,000 26,420 26,331 250,000
9 46,312 34,804 34,760 250,000 29,840 29,795 250,000
10 52,827 39,304 39,304 250,000 33,260 33,260 250,000
11 59,669 43,889 43,889 250,000 36,668 36,668 250,000
12 66,852 48,554 48,554 250,000 40,056 40,056 250,000
13 74,395 53,288 53,288 250,000 43,416 43,416 250,000
14 82,314 58,100 58,100 250,000 46,731 46,731 250,000
15 90,630 62,996 62,996 250,000 49,984 49,984 250,000
16 99,361 67,891 67,891 250,000 53,150 53,150 250,000
17 108,530 72,885 72,885 250,000 56,207 56,207 250,000
18 118,156 77,985 77,985 250,000 59,116 59,116 250,000
19 128,264 83,192 83,192 250,000 61,839 61,839 250,000
20 138,877 88,513 88,513 250,000 64,334 64,334 250,000
25 200,454 122,244 122,244 250,000 71,963 71,963 250,000
30 279,043 162,534 162,534 250,000 63,580 63,580 250,000
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
10 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
GUARANTEE PERIOD: 1 YEAR
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED PLUS
$4,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.73% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES GUARANTEED CHARGES
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 4,200 3,195 2,795 250,000 3,195 2,795 250,000
2 8,610 6,413 6,058 250,000 5,933 5,577 250,000
3 13,241 9,450 9,139 250,000 8,551 8,240 250,000
4 18,103 12,354 12,087 250,000 11,048 10,782 250,000
5 23,208 15,148 14,926 250,000 13,419 13,197 250,000
6 28,568 17,854 17,676 250,000 15,654 15,476 250,000
7 34,196 20,475 20,341 250,000 17,745 17,612 250,000
8 40,106 23,030 22,941 250,000 19,681 19,592 250,000
9 46,312 25,511 25,467 250,000 21,450 21,406 250,000
10 52,827 27,906 27,906 250,000 23,037 23,037 250,000
11 59,669 30,152 30,152 250,000 24,431 24,431 250,000
12 66,852 32,242 32,242 250,000 25,621 25,621 250,000
13 74,395 34,159 34,159 250,000 26,601 26,601 250,000
14 82,314 35,906 35,906 250,000 27,351 27,351 250,000
15 90,630 37,486 37,486 250,000 27,851 27,851 250,000
16 99,361 38,796 38,796 250,000 28,074 28,074 250,000
17 108,530 39,944 39,944 250,000 27,992 27,992 250,000
18 118,156 40,927 40,927 250,000 27,564 27,564 250,000
19 128,264 41,735 41,735 250,000 26,742 26,742 250,000
20 138,877 42,363 42,363 250,000 25,480 25,480 250,000
25 200,454 44,606 44,606 250,000 10,778 10,778 250,000
30 279,043 38,457 38,457 250,000 0 0 250,000
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 11
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
GUARANTEE PERIOD: 10 YEARS
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED PLUS
$4,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES GUARANTEED CHARGES
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 4,200 1,464 0 250,000 1,464 0 250,000
2 8,610 4,916 1,005 250,000 4,916 1,005 250,000
3 13,241 8,625 5,203 250,000 8,625 5,203 250,000
4 18,103 12,661 9,728 250,000 12,661 9,728 250,000
5 23,208 17,083 14,639 250,000 17,083 14,639 250,000
6 28,568 21,950 19,994 250,000 21,950 19,994 250,000
7 34,196 27,314 25,847 250,000 27,314 25,847 250,000
8 40,106 33,245 32,267 250,000 33,245 32,267 250,000
9 46,312 39,799 39,310 250,000 39,799 39,310 250,000
10 52,827 47,035 47,035 250,000 47,035 47,035 250,000
11 59,669 55,326 55,326 250,000 54,368 54,368 250,000
12 66,852 64,431 64,431 250,000 62,375 62,375 250,000
13 74,395 74,431 74,431 250,000 71,142 71,142 250,000
14 82,314 85,440 85,440 250,000 80,752 80,752 250,000
15 90,630 97,581 97,581 250,000 91,308 91,308 250,000
16 99,361 110,927 110,927 250,000 102,923 102,923 250,000
17 108,530 125,706 125,706 250,000 115,738 115,738 250,000
18 118,156 142,100 142,100 250,000 129,910 129,910 250,000
19 128,264 160,315 160,315 250,000 145,627 145,627 250,000
20 138,877 180,586 180,586 250,000 163,127 163,127 250,000
25 200,454 320,165 320,165 371,391 286,119 286,119 331,898
30 279,043 549,061 549,061 587,495 487,048 487,048 521,141
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
12 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
GUARANTEE PERIOD: 10 YEARS
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED PLUS
$4,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES GUARANTEED CHARGES
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 4,200 1,369 0 250,000 1,369 0 250,000
2 8,610 4,538 627 250,000 4,538 627 250,000
3 13,241 7,747 4,324 250,000 7,747 4,324 250,000
4 18,103 11,038 8,105 250,000 11,038 8,105 250,000
5 23,208 14,439 11,995 250,000 14,439 11,995 250,000
6 28,568 17,970 16,015 250,000 17,970 16,015 250,000
7 34,196 21,642 20,176 250,000 21,642 20,176 250,000
8 40,106 25,477 24,499 250,000 25,477 24,499 250,000
9 46,312 29,475 28,986 250,000 29,475 28,986 250,000
10 52,827 33,635 33,635 250,000 33,635 33,635 250,000
11 59,669 38,239 38,239 250,000 37,242 37,242 250,000
12 66,852 42,968 42,968 250,000 40,867 40,867 250,000
13 74,395 47,813 47,813 250,000 44,507 44,507 250,000
14 82,314 52,786 52,786 250,000 48,147 48,147 250,000
15 90,630 57,895 57,895 250,000 51,773 51,773 250,000
16 99,361 63,066 63,066 250,000 55,362 55,362 250,000
17 108,530 68,395 68,395 250,000 58,896 58,896 250,000
18 118,156 73,893 73,893 250,000 62,342 62,342 250,000
19 128,264 79,569 79,569 250,000 65,665 65,665 250,000
20 138,877 85,433 85,433 250,000 68,831 68,831 250,000
25 200,454 117,387 117,387 250,000 81,116 81,116 250,000
30 279,043 155,002 155,002 250,000 80,894 80,894 250,000
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 13
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
GUARANTEE PERIOD: 10 YEARS
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED PLUS
$4,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.73% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES GUARANTEED CHARGES
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 4,200 1,274 0 250,000 1,274 0 250,000
2 8,610 4,171 260 250,000 4,171 260 250,000
3 13,241 6,925 3,503 250,000 6,925 3,503 250,000
4 18,103 9,577 6,644 250,000 9,577 6,644 250,000
5 23,208 12,150 9,706 250,000 12,150 9,706 250,000
6 28,568 14,659 12,704 250,000 14,659 12,704 250,000
7 34,196 17,109 15,642 250,000 17,109 15,642 250,000
8 40,106 19,515 18,537 250,000 19,515 18,537 250,000
9 46,312 21,868 21,380 250,000 21,868 21,380 250,000
10 52,827 24,161 24,161 250,000 24,161 24,161 250,000
11 59,669 26,647 26,647 250,000 25,636 25,636 250,000
12 66,852 28,999 28,999 250,000 26,918 26,918 250,000
13 74,395 31,200 31,200 250,000 27,999 27,999 250,000
14 82,314 33,253 33,253 250,000 28,858 28,858 250,000
15 90,630 35,158 35,158 250,000 29,474 29,474 250,000
16 99,361 36,822 36,822 250,000 29,817 29,817 250,000
17 108,530 38,339 38,339 250,000 29,859 29,859 250,000
18 118,156 39,708 39,708 250,000 29,556 29,556 250,000
19 128,264 40,922 40,922 250,000 28,858 28,858 250,000
20 138,877 41,972 41,972 250,000 27,716 27,716 250,000
25 200,454 43,613 43,613 250,000 13,452 13,452 250,000
30 279,043 36,804 36,804 250,000 0 0 0
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
14 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
GUARANTEE PERIOD: 1 YEAR
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED NON-NICOTINE
$4,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES GUARANTEED CHARGES
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 4,200 3,671 3,271 250,000 3,671 3,271 250,000
2 8,610 7,818 7,463 250,000 7,235 6,880 250,000
3 13,241 12,274 11,963 250,000 11,085 10,774 250,000
4 18,103 17,099 16,832 250,000 15,245 14,978 250,000
5 23,208 22,359 22,137 250,000 19,742 19,520 250,000
6 28,568 28,105 27,928 250,000 24,600 24,422 250,000
7 34,196 34,403 34,270 250,000 29,849 29,715 250,000
8 40,106 41,314 41,225 250,000 35,517 35,428 250,000
9 46,312 48,893 48,848 250,000 41,639 41,594 250,000
10 52,827 57,204 57,204 250,000 48,252 48,252 250,000
11 59,669 66,267 66,267 250,000 55,403 55,403 250,000
12 66,852 76,161 76,161 250,000 63,147 63,147 250,000
13 74,395 86,963 86,963 250,000 71,550 71,550 250,000
14 82,314 98,780 98,780 250,000 80,682 80,682 250,000
15 90,630 111,726 111,726 250,000 90,621 90,621 250,000
16 99,361 125,876 125,876 250,000 101,458 101,458 250,000
17 108,530 141,433 141,433 250,000 113,300 113,300 250,000
18 118,156 158,560 158,560 250,000 126,270 126,270 250,000
19 128,264 177,447 177,447 250,000 140,514 140,514 250,000
20 138,877 198,303 198,303 250,000 156,215 156,215 250,000
25 200,454 350,885 350,885 407,027 274,977 274,977 318,974
30 279,043 601,165 601,165 643,246 469,854 469,854 502,743
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 15
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
GUARANTEE PERIOD: 1 YEAR
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED NON-NICOTINE
$4,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES GUARANTEED CHARGES
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 4,200 3,458 3,058 250,000 3,458 3,058 250,000
2 8,610 7,162 6,806 250,000 6,595 6,240 250,000
3 13,241 10,914 10,603 250,000 9,791 9,480 250,000
4 18,103 14,744 14,478 250,000 13,043 12,776 250,000
5 23,208 18,684 18,462 250,000 16,347 16,125 250,000
6 28,568 22,746 22,568 250,000 19,695 19,517 250,000
7 34,196 26,948 26,815 250,000 23,079 22,946 250,000
8 40,106 31,304 31,215 250,000 26,489 26,400 250,000
9 46,312 35,813 35,768 250,000 29,912 29,867 250,000
10 52,827 40,476 40,476 250,000 33,335 33,335 250,000
11 59,669 45,241 45,241 250,000 36,747 36,747 250,000
12 66,852 50,112 50,112 250,000 40,138 40,138 250,000
13 74,395 55,076 55,076 250,000 43,502 43,502 250,000
14 82,314 60,147 60,147 250,000 46,822 46,822 250,000
15 90,630 65,330 65,330 250,000 50,080 50,080 250,000
16 99,361 70,556 70,556 250,000 53,251 53,251 250,000
17 108,530 75,911 75,911 250,000 56,313 56,313 250,000
18 118,156 81,397 81,397 250,000 59,228 59,228 250,000
19 128,264 87,027 87,027 250,000 61,957 61,957 250,000
20 138,877 92,807 92,807 250,000 64,459 64,459 250,000
25 200,454 129,623 129,623 250,000 75,582 75,582 250,000
30 279,043 174,710 174,710 250,000 72,979 72,979 250,000
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
16 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
GUARANTEE PERIOD: 1 YEAR
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED NON-NICOTINE
$4,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.73% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES GUARANTEED CHARGES
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 4,200 3,245 2,845 250,000 3,245 2,845 250,000
2 8,610 6,531 6,176 250,000 5,982 5,626 250,000
3 13,241 9,657 9,346 250,000 8,599 8,288 250,000
4 18,103 12,653 12,386 250,000 11,096 10,829 250,000
5 23,208 15,548 15,326 250,000 13,466 13,244 250,000
6 28,568 18,350 18,172 250,000 15,700 15,522 250,000
7 34,196 21,077 20,943 250,000 17,790 17,657 250,000
8 40,106 23,734 23,645 250,000 19,726 19,637 250,000
9 46,312 26,316 26,272 250,000 21,494 21,449 250,000
10 52,827 28,820 28,820 250,000 23,080 23,080 250,000
11 59,669 31,186 31,186 250,000 24,474 24,474 250,000
12 66,852 33,413 33,413 250,000 25,663 25,663 250,000
13 74,395 35,481 35,481 250,000 26,643 26,643 250,000
14 82,314 37,403 37,403 250,000 27,392 27,392 250,000
15 90,630 39,174 39,174 250,000 27,892 27,892 250,000
16 99,361 40,711 40,711 250,000 28,114 28,114 250,000
17 108,530 42,104 42,104 250,000 28,033 28,033 250,000
18 118,156 43,345 43,345 250,000 27,604 27,604 250,000
19 128,264 44,435 44,435 250,000 26,782 26,782 250,000
20 138,877 45,369 45,369 250,000 25,519 25,519 250,000
25 200,454 49,659 49,659 250,000 11,725 11,725 250,000
30 279,043 47,042 47,042 250,000 0 0 0
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 17
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
GUARANTEE PERIOD: 10 YEAR
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED NON-NICOTINE
$4,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES GUARANTEED CHARGES
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 4,200 1,514 0 250,000 1,514 0 250,000
2 8,610 5,041 1,129 250,000 5,041 1,129 250,000
3 13,241 8,852 5,430 250,000 8,852 5,430 250,000
4 18,103 13,006 10,073 250,000 13,006 10,073 250,000
5 23,208 17,566 15,122 250,000 17,566 15,122 250,000
6 28,568 22,587 20,631 250,000 22,587 20,631 250,000
7 34,196 28,128 26,662 250,000 28,128 26,662 250,000
8 40,106 34,257 33,279 250,000 34,257 33,279 250,000
9 46,312 41,029 40,540 250,000 41,029 40,540 250,000
10 52,827 48,511 48,511 250,000 48,511 48,511 250,000
11 59,669 57,084 57,084 250,000 56,013 56,013 250,000
12 66,852 66,514 66,514 250,000 64,212 64,212 250,000
13 74,395 76,886 76,886 250,000 73,193 73,193 250,000
14 82,314 88,318 88,318 250,000 83,046 83,046 250,000
15 90,630 100,937 100,937 250,000 93,876 93,876 250,000
16 99,361 114,830 114,830 250,000 105,802 105,802 250,000
17 108,530 130,219 130,219 250,000 118,970 118,970 250,000
18 118,156 147,285 147,285 250,000 133,542 133,542 250,000
19 128,264 166,240 166,240 250,000 149,718 149,718 250,000
20 138,877 187,321 187,321 250,000 167,743 167,743 250,000
25 200,454 331,949 331,949 385,060 294,023 294,023 341,067
30 279,043 569,311 569,311 609,163 499,820 499,820 534,808
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
18 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
GUARANTEE PERIOD: 10 YEAR
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED NON-NICOTINE
$4,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES GUARANTEED CHARGES
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 4,200 1,417 0 250,000 1,417 0 250,000
2 8,610 4,655 744 250,000 4,655 744 250,000
3 13,241 7,956 4,534 250,000 7,956 4,534 250,000
4 18,103 11,350 8,416 250,000 11,350 8,416 250,000
5 23,208 14,864 12,420 250,000 14,864 12,420 250,000
6 28,568 18,516 16,561 250,000 18,516 16,561 250,000
7 34,196 22,322 20,855 250,000 22,322 20,855 250,000
8 40,106 26,298 25,320 250,000 26,298 25,320 250,000
9 46,312 30,446 29,957 250,000 30,446 29,957 250,000
10 52,827 34,768 34,768 250,000 34,768 34,768 250,000
11 59,669 39,554 39,554 250,000 38,438 38,438 250,000
12 66,852 44,490 44,490 250,000 42,130 42,130 250,000
13 74,395 49,567 49,567 250,000 45,842 45,842 250,000
14 82,314 54,802 54,802 250,000 49,559 49,559 250,000
15 90,630 60,201 60,201 250,000 53,268 53,268 250,000
16 99,361 65,707 65,707 250,000 56,947 56,947 250,000
17 108,530 71,402 71,402 250,000 60,579 60,579 250,000
18 118,156 77,297 77,297 250,000 64,133 64,133 250,000
19 128,264 83,405 83,405 250,000 67,573 67,573 250,000
20 138,877 89,739 89,739 250,000 70,868 70,868 250,000
25 200,454 124,829 124,829 250,000 84,046 84,046 250,000
30 279,043 167,383 167,383 250,000 85,507 85,507 250,000
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 19
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
GUARANTEE PERIOD: 10 YEAR
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED NON-NICOTINE
$4,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.73% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES GUARANTEED CHARGES
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 4,200 1,321 0 250,000 1,321 0 250,000
2 8,610 4,282 371 250,000 4,282 371 250,000
3 13,241 7,119 3,697 250,000 7,119 3,697 250,000
4 18,103 9,858 6,925 250,000 9,858 6,925 250,000
5 23,208 12,524 10,079 250,000 12,524 10,079 250,000
6 28,568 15,127 13,171 250,000 15,127 13,171 250,000
7 34,196 17,677 16,211 250,000 17,677 16,211 250,000
8 40,106 20,184 19,206 250,000 20,184 19,206 250,000
9 46,312 22,639 22,150 250,000 22,639 22,150 250,000
10 52,827 25,039 25,039 250,000 25,039 25,039 250,000
11 59,669 27,644 27,644 250,000 26,510 26,510 250,000
12 66,852 30,131 30,131 250,000 27,788 27,788 250,000
13 74,395 32,483 32,483 250,000 28,866 28,866 250,000
14 82,314 34,706 34,706 250,000 29,723 29,723 250,000
15 90,630 36,799 36,799 250,000 30,338 30,338 250,000
16 99,361 38,683 38,683 250,000 30,681 30,681 250,000
17 108,530 40,440 40,440 250,000 30,724 30,724 250,000
18 118,156 42,064 42,064 250,000 30,424 30,424 250,000
19 128,264 43,553 43,553 250,000 29,730 29,730 250,000
20 138,877 44,903 44,903 250,000 28,593 28,593 250,000
25 200,454 48,599 48,599 250,000 14,393 14,393 250,000
30 279,043 45,343 45,343 250,000 0 0 0
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
The Death Benefit may, and the Account Values and Cash Surrender Values will
differ if premiums are paid in different amounts or frequencies.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life Insurance Company
Separate Account VL I and to the Owners of Units of Interest therein:
We have audited the accompanying statements of assets and liabilities of
Hartford Life Insurance Company Separate Account VL I (Bond Fund, Stock Fund,
Money Market Fund, Advisers Fund, Capital Appreciation Fund, Mortgage Securities
Fund, Index Fund, International Opportunities Fund, Dividend and Growth Fund,
Growth and Income Fund, International Advisers Fund, Small Company Fund, MidCap
Fund, Fidelity VIP Equity-Income Portfolio, Fidelity VIP Overseas Portfolio and
Fidelity VIP II Asset Manager Portfolio) (collectively, the Account) as of
December 31, 1999, and the related statements of operations and the statements
of changes in net assets for the periods presented. 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 Account as of December 31,
1999, and the results of their operations and the changes in their net assets
for the periods presented in conformity with generally accepted accounting
principles.
Hartford, Connecticut
February 17, 2000 ARTHUR ANDERSEN LLP
SA-1
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES
- --------------------------------------------------------------------------------
<TABLE>
December 31, 1999 Bond Fund Stock Fund Money Advisers Capital Mortgage Index Fund
Sub-Account Sub-Account Market Fund Fund Appreciation Securities Sub-Account
Sub-Account Sub-Account Fund Fund
Sub-Account Sub-Account
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
---------------------------------------------------------------------------------------------------------------------------
HARTFORD BOND HLS FUND, INC. -
CLASS IA
Shares 18,599,285
Cost $19,333,868
..........................................................................................................................
Market Value $18,485,123 $ -- $ -- $ -- $ -- $ -- $ --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD STOCK HLS FUND, INC. -
CLASS IA
Shares 10,177,147
Cost $48,640,156
..........................................................................................................................
Market Value -- 72,740,016 -- -- -- -- --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD MONEY MARKET HLS
FUND, INC. - CLASS IA
Shares 22,848,052
Cost $22,848,052
..........................................................................................................................
Market Value -- -- 22,848,052 -- -- -- --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD ADVISERS HLS FUND, INC.
-CLASS IA
Shares 13,453,423
Cost $31,687,173
..........................................................................................................................
Market Value -- -- -- 39,886,360 -- -- --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD CAPITAL APPRECIATION HLS
FUND, INC. - CLASS IA
Shares 13,323,038
Cost $52,858,628
..........................................................................................................................
Market Value -- -- -- -- 81,209,088 -- --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD MORTGAGE SECURITIES HLS
FUND, INC. - CLASS IA
Shares 2,542,832
Cost $2,711,678
..........................................................................................................................
Market Value -- -- -- -- -- 2,643,254 --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD INDEX HLS FUND, INC. -
CLASS IA
Shares 9,105,763
Cost $24,525,644
..........................................................................................................................
Market Value -- -- -- -- -- -- 38,142,036
---------------------------------------------------------------------------------------------------------------------------
HARTFORD INTERNATIONAL
OPPORTUNITIES HLS FUND, INC. -
CLASS IA
Shares 11,944,948
Cost $15,654,730
..........................................................................................................................
Market Value -- -- -- -- -- -- --
---------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company 6,692 76,112 -- 19,634 29,928 -- 17,026
..........................................................................................................................
Receivable from fund shares sold -- -- 1,272,035 -- -- -- --
..........................................................................................................................
TOTAL ASSETS 18,491,815 72,816,128 24,120,087 39,905,994 81,239,016 2,643,254 38,159,062
..........................................................................................................................
LIABILITIES:
Due to Hartford Life Insurance
Company -- -- 1,270,848 -- -- 7 --
..........................................................................................................................
Payable for fund shares purchased 6,715 76,185 -- 19,658 30,097 -- 16,991
..........................................................................................................................
TOTAL LIABILITIES 6,715 76,185 1,270,848 19,658 30,097 7 16,991
---------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $18,485,100 $72,739,943 $22,849,239 $39,886,336 $81,208,919 $2,643,247 $38,142,071
---------------------------------------------------------------------------------------------------------------------------
Units Owned by Participants 12,701,237 19,353,316 16,706,104 14,860,631 23,952,141 1,808,038 10,641,936
Unit Values $ 1.455378 $ 3.758526 $ 1.367718 $ 2.684027 $ 3.390466 $ 1.461942 $ 3.584129
---------------------------------------------------------------------------------------------------------------------------
<S> <C>
December 31, 1999 International
Opportunities
Fund
Sub-Account
------------------------------------------------------------
ASSETS:
Investments:
------------------------------------------------------------------------
HARTFORD BOND HLS FUND, INC. -
CLASS IA
Shares 18,599,285
Cost $19,333,868
................................
Market Value
------------------------------------------------------------------------------------
HARTFORD STOCK HLS FUND, INC. -
CLASS IA
Shares 10,177,147
Cost $48,640,156
................................
Market Value --
------------------------------------------------------------------------------------------------
HARTFORD MONEY MARKET HLS
FUND, INC. - CLASS IA
Shares 22,848,052
Cost $22,848,052
................................
Market Value --
------------------------------------------------------------------------------------------------------------
HARTFORD ADVISERS HLS FUND, INC.
-CLASS IA
Shares 13,453,423
Cost $31,687,173
................................
Market Value --
------------------------------------------------------------------------------------------------------------------------
HARTFORD CAPITAL APPRECIATION HLS
FUND, INC. - CLASS IA
Shares 13,323,038
Cost $52,858,628
................................
Market Value --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD MORTGAGE SECURITIES HLS
FUND, INC. - CLASS IA
Shares 2,542,832
Cost $2,711,678
................................
Market Value --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD INDEX HLS FUND, INC. -
CLASS IA
Shares 9,105,763
Cost $24,525,644
................................
Market Value --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD INTERNATIONAL
OPPORTUNITIES HLS FUND, INC. -
CLASS IA
Shares 11,944,948
Cost $15,654,730
................................
Market Value 22,407,947
---------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company 12,126
................................
Receivable from fund shares sold --
................................
TOTAL ASSETS 22,420,073
................................
LIABILITIES:
Due to Hartford Life Insurance
Company --
................................
Payable for fund shares purchased 12,171
................................
TOTAL LIABILITIES 12,171
---------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $22,407,902
---------------------------------------------------------------------------------------------------------------------------
Units Owned by Participants 9,429,518
Unit Values $ 2.376357
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-2
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
December 31, 1999 Dividend Growth and International Small MidCap Fund Fidelity Fidelity
and Growth Income Fund Advisers Company Sub-Account VIP Equity- VIP
Fund Sub-Account Fund Fund Income Overseas
Sub-Account Sub-Account Sub-Account Portfolio Portfolio
Sub-Account Sub-Account
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
---------------------------------------------------------------------------------------------------------------------------
HARTFORD DIVIDEND AND GROWTH HLS
FUND, INC. - CLASS IA
Shares 11,420,548
Cost $21,262,462
..........................................................................................................................
Market Value $24,540,793 $ -- $ -- $ -- $ -- $ -- $ --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD GROWTH AND INCOME HLS
FUND - CLASS IA
Shares 239,374
Cost $313,340
..........................................................................................................................
Market Value -- 342,699 -- -- -- -- --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD INTERNATIONAL ADVISERS
HLS FUND, INC. - CLASS IA
Shares 105,433
Cost $127,834
..........................................................................................................................
Market Value -- -- 147,257 -- -- -- --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD SMALL COMPANY HLS
FUND, INC. - CLASS IA
Shares 872,212
Cost $1,396,566
..........................................................................................................................
Market Value -- -- -- 1,908,206 -- -- --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD MIDCAP HLS FUND, INC. -
CLASS IA
Shares 663,622
Cost $1,094,205
..........................................................................................................................
Market Value -- -- -- -- 1,362,746 -- --
---------------------------------------------------------------------------------------------------------------------------
FIDELITY VIP EQUITY-INCOME
PORTFOLIO
Shares 703,207
Cost $15,421,868
..........................................................................................................................
Market Value -- -- -- -- -- 18,079,454 --
---------------------------------------------------------------------------------------------------------------------------
FIDELITY VIP OVERSEAS PORTFOLIO
Shares 227,189
Cost $4,430,420
..........................................................................................................................
Market Value -- -- -- -- -- -- 6,234,055
---------------------------------------------------------------------------------------------------------------------------
FIDELITY VIP II ASSET MANAGER
PORTFOLIO
Shares 158,060
Cost $2,627,413
..........................................................................................................................
Market Value -- -- -- -- -- -- --
---------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company 34,037 -- -- -- -- 35,721 1,420
..........................................................................................................................
Receivable from fund shares sold -- -- -- 3,172 2,627 -- --
..........................................................................................................................
Total Assets 24,574,830 342,699 147,257 1,911,378 1,365,373 18,115,175 6,235,475
..........................................................................................................................
LIABILITIES:
Due to Hartford Life Insurance
Company -- -- -- 3,172 2,630 -- --
..........................................................................................................................
Payable for fund shares purchased 33,998 -- -- -- -- 33,864 189
..........................................................................................................................
TOTAL LIABILITIES 33,998 -- -- 3,172 2,630 33,864 189
---------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $24,540,832 $ 342,699 $ 147,257 $1,908,206 $1,362,743 $18,081,311 $6,235,286
---------------------------------------------------------------------------------------------------------------------------
Units Owned by Participants 10,014,941 244,405 118,675 1,069,060 813,327 8,679,531 2,858,962
Unit Values $ 2.450422 $1.402176 $1.240838 $ 1.784939 $ 1.675516 $ 2.083213 $ 2.180961
---------------------------------------------------------------------------------------------------------------------------
<S> <C>
December 31, 1999 Fidelity
VIP II
Asset
Manager
Portfolio
Sub-Account
---------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
---------------------------------------------------------------------------------------------------------------------------
HARTFORD DIVIDEND AND GROWTH HLS
FUND, INC. - CLASS IA
Shares 11,420,548
Cost $21,262,462
................................
Market Value $ --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD GROWTH AND INCOME HLS
FUND - CLASS IA
Shares 239,374
Cost $313,340
................................
Market Value --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD INTERNATIONAL ADVISERS
HLS FUND, INC. - CLASS IA
Shares 105,433
Cost $127,834
................................
Market Value --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD SMALL COMPANY HLS
FUND, INC. - CLASS IA
Shares 872,212
Cost $1,396,566
................................
Market Value --
---------------------------------------------------------------------------------------------------------------------------
HARTFORD MIDCAP HLS FUND, INC. -
CLASS IA
Shares 663,622
Cost $1,094,205
................................
Market Value --
---------------------------------------------------------------------------------------------------------------------------
FIDELITY VIP EQUITY-INCOME
PORTFOLIO
Shares 703,207
Cost $15,421,868
................................
Market Value --
---------------------------------------------------------------------------------------------------------------------------
FIDELITY VIP OVERSEAS PORTFOLIO
Shares 227,189
Cost $4,430,420
................................
Market Value --
---------------------------------------------------------------------------------------------------------------------------
FIDELITY VIP II ASSET MANAGER
PORTFOLIO
Shares 158,060
Cost $2,627,413
................................
Market Value 2,950,977
---------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company 279
................................
Receivable from fund shares sold --
................................
Total Assets 2,951,256
................................
LIABILITIES:
Due to Hartford Life Insurance
Company --
................................
Payable for fund shares purchased 280
................................
TOTAL LIABILITIES 280
---------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $2,950,976
---------------------------------------------------------------------------------------------------------------------------
Units Owned by Participants 1,516,718
Unit Values $ 1.945633
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-3
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended Bond Fund Stock Fund Money Advisers Capital Mortgage Index Fund
December 31, 1999 Sub-Account Sub-Account Market Fund Appreciation Securities Sub-Account
Fund Sub-Account Fund Fund
Sub-Account Sub-Account Sub-Account
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $1,003,435 $ 498,051 $1,145,825 $ 833,700 $ 244,683 $ 147,468 $ 358,276
.........................................................................................................................
Capital gains income 49,287 4,831,542 579 2,827,247 3,889,973 -- 510,748
.........................................................................................................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
.........................................................................................................................
Net realized (loss) gain on
security transactions (8,622) 24,190 -- 19,707 144,049 (1,430) 3,462
.........................................................................................................................
Net unrealized (depreciation)
appreciation of investments
during the period (1,290,579) 6,361,493 -- 79,598 17,700,572 (117,153) 5,395,124
.........................................................................................................................
Net (loss) gain on investments (1,299,201) 6,385,683 -- 99,305 17,844,621 (118,583) 5,398,586
--------------------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS $(246,479) $11,715,276 $1,146,404 $3,760,252 $21,979,277 $ 28,885 $6,267,610
--------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Year Ended International
December 31, 1999 Opportunities
Fund
Sub-Account
------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 215,427
................................
Capital gains income --
................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
................................
Net realized (loss) gain on
security transactions 332,449
................................
Net unrealized (depreciation)
appreciation of investments
during the period 5,882,813
................................
Net (loss) gain on investments 6,215,262
------------------------------------------------------------------------
NET (DECREASE) INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS $6,430,689
------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-4
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended Dividend Growth and International Small MidCap Fund Fidelity Fidelity
December 31, 1999 and Growth Income Fund Advisers Company Sub-Account VIP VIP
Fund Sub-Account Fund Fund Equity- Overseas
Sub-Account Sub-Account Sub-Account Income Portfolio
Portfolio Sub-Account
Sub-Account
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 393,538 $ 926 $ 2,625 $ -- $ -- $ 242,891 $ 118,924
........................................................................................................................
Capital gains income 903,512 2,132 -- 2,440 51,503 536,917 191,813
........................................................................................................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
........................................................................................................................
Net realized (loss) gain on
security transactions (9,128) (1,830) 131 2,099 (575) (17,317) 529,176
........................................................................................................................
Net unrealized (depreciation)
appreciation of investments
during the period (98,307) 28,644 18,289 480,688 261,154 269,024 1,340,373
........................................................................................................................
Net gain (loss) on investments (107,435) 26,814 18,420 482,787 260,579 251,707 1,869,549
-------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,189,615 $29,872 $21,045 $485,227 $ 312,082 $1,031,515 $2,180,286
-------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Year Ended Fidelity
December 31, 1999 VIP II
Asset
Manager
Portfolio
Sub-Account
------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 81,026
................................
Capital gains income 102,633
................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
................................
Net realized (loss) gain on
security transactions 1,290
................................
Net unrealized (depreciation)
appreciation of investments
during the period 104,976
................................
Net gain (loss) on investments 106,266
------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $289,925
------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-5
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended Bond Fund Stock Fund Money Advisers Capital Mortgage Index Fund
December 31, 1999 Sub-Account Sub-Account Market Fund Fund Appreciation Securities Sub-Account
Sub-Account Sub-Account Fund Fund
Sub-Account Sub-Account
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 1,003,435 $ 498,051 $ 1,145,825 $ 833,700 $ 244,683 $ 147,468 $ 358,276
............................................................................................................................
Capital gains income 49,287 4,831,542 579 2,827,247 3,889,973 -- 510,748
............................................................................................................................
Net realized (loss) gain on
security transactions (8,622) 24,190 -- 19,707 144,049 (1,430) 3,462
............................................................................................................................
Net unrealized (depreciation)
appreciation of investments
during the period (1,290,579) 6,361,493 -- 79,598 17,700,572 (117,153) 5,395,124
............................................................................................................................
Net (decrease) increase in net
assets resulting from
operations (246,479) 11,715,276 1,146,404 3,760,252 21,979,277 28,885 6,267,610
............................................................................................................................
UNIT TRANSACTIONS:
Purchases 2,265,567 8,456,024 24,230,194 4,995,321 9,387,785 625,063 4,016,335
............................................................................................................................
Net transfers 10,688,936 1,601,175 (19,300,557) 1,297,298 (2,660,260) 426,413 1,537,214
............................................................................................................................
Surrenders for benefit payments
and fees (160,632) (2,223,564) (3,882,409) (1,412,715) (2,246,879) (24,433) (836,820)
............................................................................................................................
Net loan activity (273,041) (745,624) (461,767) (488,390) (1,096,388) 14,463 (289,827)
............................................................................................................................
Cost of insurance (639,068) (2,852,500) (1,509,608) (1,905,222) (2,984,592) (90,981) (1,392,082)
............................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 11,881,762 4,235,511 (924,147) 2,486,292 399,666 950,525 3,034,820
............................................................................................................................
Net increase in net assets 11,635,283 15,950,787 222,257 6,246,544 22,378,943 979,410 9,302,430
............................................................................................................................
NET ASSETS:
Beginning of period 6,849,817 56,789,156 22,626,982 33,639,792 58,829,976 1,663,837 28,839,641
-----------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $18,485,100 $72,739,943 $22,849,239 $39,886,336 $81,208,919 $ 2,643,247 $38,142,071
-----------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Year Ended International
December 31, 1999 Opportunities
Fund
Sub-Account
-------------------------------------------------------------
OPERATIONS:
Net investment income $ 215,427
................................
Capital gains income --
................................
Net realized (loss) gain on
security transactions 332,449
................................
Net unrealized (depreciation)
appreciation of investments
during the period 5,882,813
................................
Net (decrease) increase in net
assets resulting from
operations 6,430,689
................................
UNIT TRANSACTIONS:
Purchases 2,949,287
................................
Net transfers (3,664,980)
................................
Surrenders for benefit payments
and fees (610,721)
................................
Net loan activity (396,381)
................................
Cost of insurance (796,284)
................................
Net increase (decrease) in net
assets resulting from unit
transactions (2,519,079)
................................
Net increase in net assets 3,911,610
................................
NET ASSETS:
Beginning of period 18,496,292
--------------------------------------------------------------------------
END OF PERIOD $22,407,902
---------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-6
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended Dividend Growth and International Small MidCap Fidelity Fidelity
December 31, 1999 and Growth Income Advisers Company Fund Fund VIP Equity- VIP
Fund Fund Fund Sub-Account Sub-Account Income Overseas
Sub-Account Sub-Account Sub-Account Portfolio Portfolio
Sub-Account Sub-Account
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 393,538 $ 926 $ 2,625 $ -- $ -- $ 242,891 $ 118,924
.........................................................................................................................
Capital gains income 903,512 2,132 -- 2,440 51,503 536,917 191,813
.........................................................................................................................
Net realized (loss) gain on
security transactions (9,128) (1,830) 131 2,099 (575) (17,317) 529,176
.........................................................................................................................
Net unrealized (depreciation)
appreciation of investments
during the period (98,307) 28,644 18,289 480,688 261,154 269,024 1,340,373
.........................................................................................................................
Net increase in net assets
resulting from operations 1,189,615 29,872 21,045 485,227 312,082 1,031,515 2,180,286
.........................................................................................................................
UNIT TRANSACTIONS:
Purchases 3,848,968 40,452 3,088 87,710 149,645 2,479,043 1,231,714
.........................................................................................................................
Net transfers (82,113) 272,319 110,867 1,208,187 891,911 44,800 (3,895,647)
.........................................................................................................................
Surrenders for benefit payments
and fees (655,074) (1,403) (2,012) (5,049) (8,029) (482,465) (356,160)
.........................................................................................................................
Net loan activity (390,798) (4) -- (6,915) (2,839) (164,909) (146,964)
.........................................................................................................................
Cost of insurance (1,127,592) (10,287) (7,309) (21,610) (32,391) (821,815) (355,633)
.........................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 1,593,391 301,077 104,634 1,262,323 998,297 1,054,654 (3,522,690)
.........................................................................................................................
Net increase (decrease) in net
assets 2,783,006 330,949 125,679 1,747,550 1,310,379 2,086,169 (1,342,404)
.........................................................................................................................
NET ASSETS:
Beginning of period 21,757,826 11,750 21,578 160,656 52,364 15,995,142 7,577,690
--------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $24,540,832 $342,699 $ 147,257 $1,908,206 $1,362,743 $18,081,311 $6,235,286
--------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Year Ended Fidelity
December 31, 1999 VIP II
Asset
Manager
Portfolio
Sub-Account
----------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 81,026
................................
Capital gains income 102,633
................................
Net realized (loss) gain on
security transactions 1,290
................................
Net unrealized (depreciation)
appreciation of investments
during the period 104,976
................................
Net increase in net assets
resulting from operations 289,925
................................
UNIT TRANSACTIONS:
Purchases 369,373
................................
Net transfers 99,073
................................
Surrenders for benefit payments
and fees (47,199)
................................
Net loan activity (19,055)
................................
Cost of insurance (132,619)
................................
Net increase (decrease) in net
assets resulting from unit
transactions 269,573
................................
Net increase (decrease) in net
assets 559,498
................................
NET ASSETS:
Beginning of period 2,391,478
----------------------------------------------------------------------------------------------------------------
END OF PERIOD $2,950,976
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-7
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended Bond Fund Stock Fund Money Advisers Capital Mortgage Index Fund
December 31, 1998 Sub-Account Sub-Account Market Fund Fund Appreciation Securities Sub-Account
Sub-Account Sub-Account Fund Fund
Sub-Account Sub-Account
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 331,394 $ 426,569 $ 1,322,027 $ 662,962 $ 310,421 $ 102,546 $ 234,014
............................................................................................................................
Capital gains income -- 1,117,421 440 796,015 2,575,286 -- 458,685
............................................................................................................................
Net realized gain (loss) on
security transactions 71,193 (135,795) -- (51,519) (4,284) 9,356 (28,044)
............................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 185,585 10,569,607 -- 4,603,991 4,194,822 (17,750) 4,990,372
............................................................................................................................
Net increase in net assets
resulting from operations 588,172 11,977,802 1,322,467 6,011,449 7,076,245 94,152 5,655,027
............................................................................................................................
UNIT TRANSACTIONS:
Purchases 1,838,524 6,958,503 61,057,739 4,790,269 9,637,115 210,954 3,852,289
............................................................................................................................
Net transfers (1,406,522) 12,649,168 (62,188,027) 4,065,052 10,261,936 103,107 2,901,707
............................................................................................................................
Surrenders for benefit payments
and fees (97,508) (1,360,527) (1,774,809) (1,153,292) (1,873,503) 10,697 (889,933)
............................................................................................................................
Net loan activity (146,115) (537,841) (2,292,059) (554,217) (801,337) (192,976) (135,969)
............................................................................................................................
Cost of insurance (358,266) (1,755,336) (1,910,006) (1,265,069) (1,991,294) (44,114) (857,070)
............................................................................................................................
Net (decrease) increase in net
assets resulting from unit
transactions (169,887) 15,953,967 (7,107,162) 5,882,743 15,232,917 87,668 4,871,024
............................................................................................................................
Net increase (decrease) in net
assets 418,285 27,931,769 (5,784,695) 11,894,192 22,309,162 181,820 10,526,051
............................................................................................................................
NET ASSETS:
Beginning of period 6,431,532 28,857,387 28,411,677 21,745,600 36,520,814 1,482,017 18,313,590
-----------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $ 6,849,817 $56,789,156 $22,626,982 $33,639,792 $58,829,976 $1,663,837 $28,839,641
-----------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Year Ended International
December 31, 1998 Opportunities
Fund
Sub-Account
-------------------------------------------------------------
OPERATIONS:
Net investment income $ 238,928
................................
Capital gains income 863,200
................................
Net realized gain (loss) on
security transactions 35,100
................................
Net unrealized appreciation
(depreciation) of investments
during the period 808,400
................................
Net increase in net assets
resulting from operations 1,945,628
................................
UNIT TRANSACTIONS:
Purchases 3,475,235
................................
Net transfers 4,383,777
................................
Surrenders for benefit payments
and fees (862,986)
................................
Net loan activity (300,291)
................................
Cost of insurance (641,581)
................................
Net (decrease) increase in net
assets resulting from unit
transactions 6,054,154
................................
Net increase (decrease) in net
assets 7,999,782
................................
NET ASSETS:
Beginning of period 10,496,510
--------------------------------------------------------------------------
END OF PERIOD $18,496,292
---------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-8
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended Dividend Growth and International Small MidCap Fidelity Fidelity
December 31, 1998 and Growth Income Fund Advisers Company Fund Fund VIP Equity- VIP
Fund Sub-Account* Fund Sub-Account* Sub-Account* Income Overseas
Sub-Account Sub-Account* Portfolio Portfolio
Sub-Account Sub-Account
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 339,438 $ 42 $ -- $ -- $ -- $ 155,210 $ 47,702
...........................................................................................................................
Capital gains income 480,886 -- -- -- -- 552,364 140,597
...........................................................................................................................
Net realized gain (loss) on
security transactions (251) 3 17 165,038 -- (4,853) 9,814
...........................................................................................................................
Net unrealized appreciation of
investments during the period 1,697,176 714 1,133 30,952 7,387 701,127 379,546
...........................................................................................................................
Net increase in net assets
resulting from operations 2,517,249 759 1,150 195,990 7,387 1,403,848 577,659
...........................................................................................................................
UNIT TRANSACTIONS:
Purchases 3,822,100 1,229 1,630 5,974 1,848 2,918,513 1,507,008
...........................................................................................................................
Net transfers 5,421,686 9,925 19,068 (33,766) 43,693 2,162,849 3,697,147
...........................................................................................................................
Surrenders for benefit payments
and fees (709,634) (85) (91) (1,127) (131) (307,937) (128,400)
...........................................................................................................................
Net loan activity (324,543) -- -- (44) -- (195,032) (112,297)
...........................................................................................................................
Cost of insurance (752,950) (78) (179) (6,371) (433) (588,614) (219,366)
...........................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 7,456,659 10,991 20,428 (35,334) 44,977 3,989,779 4,744,092
...........................................................................................................................
Net increase in net assets 9,973,908 11,750 21,578 160,656 52,364 5,393,627 5,321,751
...........................................................................................................................
NET ASSETS:
Beginning of period 11,783,918 -- -- -- -- 10,601,515 2,255,939
----------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $21,757,826 $ 11,750 $21,578 $ 160,656 $ 52,364 $15,995,142 $7,577,690
----------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Year Ended Fidelity
December 31, 1998 VIP II
Asset
Manager
Portfolio
Sub-Account
----------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 47,628
................................
Capital gains income 142,885
................................
Net realized gain (loss) on
security transactions 779
................................
Net unrealized appreciation of
investments during the period 80,467
................................
Net increase in net assets
resulting from operations 271,759
................................
UNIT TRANSACTIONS:
Purchases 377,112
................................
Net transfers 438,799
................................
Surrenders for benefit payments
and fees (34,663)
................................
Net loan activity (13,265)
................................
Cost of insurance (84,019)
................................
Net increase (decrease) in net
assets resulting from unit
transactions 683,964
................................
Net increase in net assets 955,723
................................
NET ASSETS:
Beginning of period 1,435,755
----------------------------------------------------------------------------------------------------------------
END OF PERIOD $2,391,478
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* From inception, August 3, 1998 to December 31, 1998.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-9
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Notes to Financial Statements
December 31, 1999
1. ORGANIZATION:
Separate Account VL I (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. 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). Realized gains and losses on the
sales of securities are computed on the basis of identified cost of the fund
shares sold. Dividend and capital gains income is accrued as of the ex-dividend
date. Capital gains income represents those dividends from the Funds which are
characterized as capital gains under tax regulations.
B) SECURITY VALUATION -- The investments in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate Fund as
of December 31, 1999.
C) UNIT TRANSACTIONS -- Unit transactions are executed based on the unit values
calculated at the close of the business day.
D) 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.
E) 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:
A) DEDUCTIONS AND CHARGES FROM THE ACCOUNT VALUE -- On the policy date and on
each subsequent monthly activity date, the Company will deduct from the Account
an amount to cover mortality and expense risk charges, cost of insurance,
administrative charges and any other benefits provided by the rider. These
charges, which may vary from month to month in accordance which the terms of the
contracts, are deducted through termination of units of interest from the
applicable contractholders' accounts.
SA-10
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life Insurance Company
Separate Account VL I and to the Owners of Units of Interest therein:
We have audited the accompanying statements of assets and liabilities of
Hartford Life Insurance Company Separate Account VL I (Asia Pacific Growth,
Diversified Income, The George Putnam Fund of Boston, Global Asset Allocation,
Global Growth, Growth and Income, Health Sciences, High Yield, Income,
International Growth, International Growth and Income, International New
Opportunities, Investors, Money Market, New Opportunities, New Value, OTC &
Emerging Growth, Utilities Growth and Income, Vista, and Voyager sub-accounts),
(collectively, the Account) as of December 31, 1999, and the related statements
of operations and the statements of changes in net assets for the periods
presented. 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 Account as of December 31,
1999, and the results of its operations and the changes in its net assets for
the periods presented in conformity with generally accepted accounting
principles.
Hartford, Connecticut
February 11, 2000 ARTHUR ANDERSEN LLP
SA-11
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Statements of Assets & Liabilities
- --------------------------------------------------------------------------------
<TABLE>
December 31, 1999 Asia Diversified The George Global Global Growth Health
Pacific Income Putnam Asset Growth and Income Sciences
Growth Sub-Account Fund Allocation Sub-Account Sub-Account Sub-Account
Sub-Account of Boston Sub-Account
Sub-Account
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT ASIA PACIFIC GROWTH
FUND
Shares 102,094
Cost $1,677,538
.........................................................................................................................
Market Value: $1,765,200 $ -- $ -- $ -- $ -- $ -- $ --
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT DIVERSIFIED INCOME FUND
Shares 136,816
Cost $1,502,322
.........................................................................................................................
Market Value: -- 1,358,584 -- -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT THE GEORGE PUTNAM FUND
OF BOSTON
Shares 16,818
Cost $174,393
.........................................................................................................................
Market Value: -- -- 167,839 -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT GLOBAL ASSET ALLOCATION
FUND
Shares 690,780
Cost $11,251,352
.........................................................................................................................
Market Value: -- -- -- 13,546,203 -- -- --
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT GLOBAL GROWTH FUND
Shares 1,607,842
Cost $27,142,993
.........................................................................................................................
Market Value: -- -- -- -- 49,023,092 -- --
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT GROWTH AND INCOME FUND
Shares 1,838,619
Cost $45,211,160
.........................................................................................................................
Market Value: -- -- -- -- -- 49,275,000 --
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT HEALTH SCIENCES FUND
Shares 25,855
Cost $259,413
.........................................................................................................................
Market Value: -- -- -- -- -- -- 271,472
--------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company 1,409,721 1,320 -- -- -- 65,287 14
.........................................................................................................................
Receivable from fund shares sold -- -- -- 13,775 8,510 -- --
.........................................................................................................................
TOTAL ASSETS 3,174,921 1,359,904 167,839 13,559,978 49,031,602 49,340,287 271,486
.........................................................................................................................
LIABILITIES
Due to Hartford Life Insurance
Company -- -- -- 15,655 700 -- --
.........................................................................................................................
Payable for fund shares purchased 1,409,681 1,320 -- -- -- 65,273 14
.........................................................................................................................
TOTAL LIABILITIES 1,409,681 1,320 -- 15,655 700 65,273 14
--------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $1,765,240 $1,358,584 $167,839 $13,544,323 $49,030,902 $49,275,014 $271,472
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-12
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Statements of Assets and Liabilities (continued)
- --------------------------------------------------------------------------------
<TABLE>
December 31, 1999 High Yield Income International International International Investors Money
Sub-Account Sub-Account Growth Growth and New Sub-Account Market
Sub-Account Income Opportunities Sub-Account
Sub-Account Sub-Account
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
-------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT HIGH YIELD FUND
Shares 1,116,640
Cost $13,443,726
..............................................................................................................................
Market Value: $12,383,542 $ -- $ -- $ -- $ -- $ -- $ --
-------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT INCOME FUND
Shares 752,654
Cost $9,904,246
..............................................................................................................................
Market Value: -- 9,423,231 -- -- -- -- --
-------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL GROWTH
FUND
Shares 28,375
Cost $418,581
..............................................................................................................................
Market Value: -- -- 614,327 -- -- -- --
-------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL GROWTH
AND INCOME FUND
Shares 8,706
Cost $118,278
..............................................................................................................................
Market Value: -- -- -- 132,760 -- -- --
-------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL NEW
OPPORTUNITIES FUND
Shares 42,703
Cost $703,347
..............................................................................................................................
Market Value: -- -- -- -- 995,406 -- --
-------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT INVESTORS FUND
Shares 65,829
Cost $803,879
..............................................................................................................................
Market Value: -- -- -- -- -- 997,967 --
-------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT MONEY MARKET FUND
Shares 2,371,068
Cost $2,371,068
..............................................................................................................................
Market Value: -- -- -- -- -- -- 2,371,068
-------------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company 6,270 6,662 1 16 8,134 28 98
..............................................................................................................................
Receivable from fund shares sold -- -- -- -- -- -- 10
..............................................................................................................................
TOTAL ASSETS 12,389,812 9,429,893 614,328 132,776 1,003,540 997,995 2,371,176
..............................................................................................................................
LIABILITIES
Due to Hartford Life Insurance
Company -- -- -- -- -- -- --
..............................................................................................................................
Payable for fund shares purchased 6,293 6,469 -- 16 8,123 31 --
..............................................................................................................................
TOTAL LIABILITIES 6,293 6,469 -- 16 8,123 31 --
-------------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $12,383,519 $9,423,424 $614,328 $132,760 $ 995,417 $997,964 $ 2,371,176
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-13
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Statements of Assets & Liabilities (continued)
- --------------------------------------------------------------------------------
<TABLE>
December 31, 1999 New New OTC & Utilities Growth Vista Voyager
Opportunities Value Emerging and Income Sub-Account Sub-Account
Sub-Account Sub-Account Growth Sub-Account
Sub-Account
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
-------------------------------------------------------------------------------------------------------------------
PUTNAM VT NEW OPPORTUNITIES FUND
Shares 1,231,273
Cost $24,161,237
..................................................................................................................
Market Value: $53,609,625 $ -- $ -- $ -- $ -- $ --
-------------------------------------------------------------------------------------------------------------------
PUTNAM VT NEW VALUE FUND
Shares 22,167
Cost $266,347
..................................................................................................................
Market Value: -- 262,899 -- -- -- --
-------------------------------------------------------------------------------------------------------------------
PUTNAM VT OTC & EMERGING GROWTH
FUND
Shares 159,366
Cost $3,267,925
..................................................................................................................
Market Value: -- -- 3,631,946 -- -- --
-------------------------------------------------------------------------------------------------------------------
PUTNAM VT UTILITIES GROWTH &
INCOME FUND
Shares 253,524
Cost $3,522,876
..................................................................................................................
Market Value: -- -- -- 4,302,309 -- --
-------------------------------------------------------------------------------------------------------------------
PUTNAM VT VISTA FUND
Shares 11,580
Cost $187,809
..................................................................................................................
Market Value: -- -- -- -- 239,480 --
-------------------------------------------------------------------------------------------------------------------
PUTNAM VT VOYAGER FUND
Shares 1,592,290
Cost $53,723,476
..................................................................................................................
Market Value: -- -- -- -- -- 105,489,211
-------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company -- 6 28 224 61 5,348
..................................................................................................................
Receivable from fund shares sold 1,732 -- -- -- -- --
..................................................................................................................
TOTAL ASSETS 53,611,357 262,905 3,631,974 4,302,533 239,541 105,494,559
..................................................................................................................
LIABILITIES
Due to Hartford Life Insurance
Company 1,969 -- -- -- -- --
..................................................................................................................
Payable for fund shares purchased -- -- 84 108 60 15,237
..................................................................................................................
TOTAL LIABILITIES 1,969 -- 84 108 60 15,237
-------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $53,609,388 $262,905 $3,631,890 $4,302,425 $ 239,481 $105,479,322
-------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-14
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Statements of Assets and Liabilities (continued)
<TABLE>
----------------------------------------------------------------------------------
December 31, 1999 Units Unit Contract
Owned by Price Liability
Participants
<S> <C> <C> <C>
----------------------------------------------------------------------------------
Variable Life Contracts:
Asia Pacific Growth Fund 79,533 $22.195177 $ 1,765,240
.................................................................................
Diversified Income Fund 104,487 13.002362 1,358,584
.................................................................................
George Putnam Fund of Boston 15,887 10.564227 167,839
.................................................................................
Global Asset Allocation Fund 582,401 23.255993 13,544,323
.................................................................................
Global Growth Fund 1,260,424 38.900326 49,030,902
.................................................................................
Growth and Income Fund 1,900,842 25.922728 49,275,014
.................................................................................
Health Sciences Fund 25,135 10.800460 271,472
.................................................................................
High Yield Fund 750,572 16.498765 12,383,519
.................................................................................
Income Fund 654,334 14.401541 9,423,424
.................................................................................
International Growth Fund 39,205 15.669625 614,328
.................................................................................
International Growth and Income Fund 10,909 12.169641 132,760
.................................................................................
International New Opportunities Fund 50,284 19.795791 995,417
.................................................................................
Investors Fund 68,566 14.554810 997,964
.................................................................................
Money Market Fund 1,745,429 1.358506 2,371,176
.................................................................................
New Opportunities Fund 1,391,927 38.514515 53,609,388
.................................................................................
New Value Fund 24,710 10.639520 262,905
.................................................................................
OTC & Emerging Growth Fund 148,834 24.402281 3,631,890
.................................................................................
Utilities Growth and Income Fund 200,172 21.493623 4,302,425
.................................................................................
Vista Fund 14,758 16.227448 239,481
.................................................................................
Voyager Fund 2,311,876 45.624982 105,479,322
.................................................................................
GRAND TOTAL $309,857,373
----------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-15
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Statements of Operations
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended Asia Diversified The George Global Global Growth Health
December 31, 1999 Pacific Income Putnam Asset Growth and Income Sciences
Growth Sub-Account Fund Allocation Sub-Account Sub-Account Sub-Account
Sub-Account of Boston Sub-Account
Sub-Account
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ -- $97,311 $3,859 $ 244,139 $ 129,205 $ 665,486 $ 226
......................................................................................................................
Capital gains income -- -- 212 685,048 2,690,495 3,320,919 --
......................................................................................................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
......................................................................................................................
Net realized gain (loss) on
security transactions 769,641 4,632 12,573 21,824 122,593 (46,059) (260)
......................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 87,477 (76,531) (6,653) 504,123 16,269,773 (3,374,389) (164)
......................................................................................................................
Net gain (loss) on investments 857,118 (71,899) 5,920 525,947 16,392,366 (3,420,448) (424)
-----------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS: $857,118 $25,412 $9,991 $1,455,134 $19,212,066 $ 565,957 $(198)
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-16
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Statements of Operations (continued)
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended High Yield Income International International International Investors Money
December 31, 1999 Sub-Account Sub-Account* Growth Growth and New Sub-Account Market
Sub-Account Income Opportunities Sub-Account
Sub-Account Sub-Account
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $869,372 $ 482,299 $ -- $ -- $ 27 $ -- $72,286
........................................................................................................................
Capital gains income -- 143,890 -- -- -- -- --
........................................................................................................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
........................................................................................................................
Net realized (loss) gain on
security transactions (8,086) (8,133) 5,301 177 1,149 (962) --
........................................................................................................................
Net unrealized (depreciation)
appreciation of investments
during the period (335,073) (801,902) 189,549 12,287 291,403 184,285 --
........................................................................................................................
Net (loss) gain on investments (343,159) (810,035) 194,850 12,464 292,552 183,323 --
........................................................................................................................
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS: $526,213 $(183,846) $194,850 $12,464 $292,579 $183,323 $72,286
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Formerly Putnam U.S. Government and High Quality Bond Sub-Account, change
effective on April 9, 1999.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-17
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Statements of Operations (continued)
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended New New OTC & Utilities Vista Voyager
December 31, 1999 Opportunities Value Emerging Growth Sub-Account Sub-Account
Sub-Account Sub-Account Growth and Income
Sub-Account Sub-Account
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ -- $ 2 $ -- $115,864 $ -- $ 73,653
............................................................................................................
Capital gains income 437,296 341 9,092 121,681 16,964 5,906,409
............................................................................................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
............................................................................................................
Net realized (loss) gain on
security transactions 13,486 (344) 736,703 (839) 2,078 (54,159)
............................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 21,241,134 (4,513) 360,370 (267,639) 47,168 32,497,732
............................................................................................................
Net gain (loss) on investments 21,254,620 (4,857) 1,097,073 (268,478) 49,246 32,443,573
-------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS: $21,691,916 $(4,514) $1,106,165 $(30,933) $66,210 $38,423,635
-------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-18
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended Asia Diversified The George Global Global Growth Health
December 31, 1999 Pacific Income Putnam Asset Growth and Income Sciences
Growth Sub-Account Fund Allocation Sub-Account Sub-Account Sub-Account
Sub-Account of Boston Sub-Account
Sub-Account
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ -- $ 97,311 $ 3,859 $ 244,139 $ 129,205 $ 665,486 $ 226
......................................................................................................................
Capital gains income -- -- 212 685,048 2,690,495 3,320,919 --
......................................................................................................................
Net realized gain (loss) on
security transactions 769,641 4,632 12,573 21,824 122,593 (46,059) (260)
......................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 87,477 (76,531) (6,653) 504,123 16,269,773 (3,374,389) (164)
......................................................................................................................
Net increase (decrease) in net
assets resulting from
operations 857,118 25,412 9,991 1,455,134 19,212,066 565,957 (198)
......................................................................................................................
UNIT TRANSACTIONS:
Purchases 21,940 247,868 21,168 1,129,158 4,444,858 7,009,591 95,416
......................................................................................................................
Net transfers 886,693 (265,171) 139,562 (200,249) (2,017,326) 639,116 124,555
......................................................................................................................
Surrenders for benefit payments
and fees 12,129 (84,623) (3,201) (488,684) (1,005,816) (2,133,166) (54,890)
......................................................................................................................
Net loan activity (11) (21,727) (916) (74,888) (614,259) (621,297) (2,626)
......................................................................................................................
Cost of insurance (17,555) (80,513) (7,551) (433,657) (1,410,562) (2,232,539) (14,449)
......................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 903,196 (204,166) 149,062 (68,320) (603,105) 2,661,705 148,006
......................................................................................................................
Total increase (decrease) in net
assets 1,760,314 (178,754) 159,053 1,386,814 18,608,961 3,227,662 147,808
......................................................................................................................
NET ASSETS:
Beginning of period 4,926 1,537,338 8,786 12,157,509 30,421,941 46,047,352 123,664
-----------------------------------------------------------------------------------------------------------------------
END OF PERIOD $1,765,240 $1,358,584 $167,839 $13,544,323 $49,030,902 $49,275,014 $271,472
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-19
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended High Yield Income International International International Investors Money
December 31, 1999 Sub-Account Sub-Account* Growth Growth and New Sub-Account Market
Sub-Account Income Opportunities Sub-Account
Sub-Account Sub-Account
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 869,372 $ 482,299 $ -- $ -- $ 27 $ -- $ 72,286
.............................................................................................................................
Capital gains income -- 143,890 -- -- -- -- --
.............................................................................................................................
Net realized (loss) gain on
security transactions (8,086) (8,133) 5,301 177 1,149 (962) --
.............................................................................................................................
Net unrealized (depreciation)
appreciation of investments
during the period (335,073) (801,902) 189,549 12,287 291,403 184,285 --
.............................................................................................................................
Net increase (decrease) in net
assets resulting from
operations 526,213 (183,846) 194,850 12,464 292,579 183,323 72,286
.............................................................................................................................
UNIT TRANSACTIONS:
Purchases 2,509,553 1,482,153 38,064 30,798 48,934 116,791 175,971
.............................................................................................................................
Net transfers 2,683,231 2,191,880 308,046 76,004 660,415 611,363 1,200,618
.............................................................................................................................
Surrenders for benefit payments
and fees (333,995) (169,634) (3,955) (2,105) (2,887) (7,639) (136,680)
.............................................................................................................................
Net loan activity (222,215) (53,643) (11,431) (2,431) (7,683) (3,038) (17,357)
.............................................................................................................................
Cost of insurance (541,752) (373,477) (12,864) (4,393) (7,849) (29,422) (79,379)
.............................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 4,094,822 3,077,279 317,860 97,873 690,930 688,055 1,143,173
.............................................................................................................................
Total increase (decrease) in net
assets 4,621,035 2,893,433 512,710 110,337 983,509 871,378 1,215,459
.............................................................................................................................
NET ASSETS:
Beginning of period 7,762,484 6,529,991 101,618 22,423 11,908 126,586 1,155,717
------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $12,383,519 $9,423,424 $614,328 $132,760 $995,417 $997,964 $2,371,176
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Formerly Putnam U.S. Government and High Quality Bond Sub-Account, change
effective on April 9, 1999.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-20
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended New New OTC & Utilities Growth Vista Voyager
December 31, 1999 Opportunities Value Emerging and Income Sub-Account Sub-Account
Sub-Account Sub-Account Growth Sub-Account
Sub-Account
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ -- $ 2 $ -- $ 115,864 $ -- $ 73,653
....................................................................................................................
Capital gains income 437,296 341 9,092 121,681 16,964 5,906,409
....................................................................................................................
Net realized gain (loss) on
security transactions 13,486 (344) 736,703 (839) 2,078 (54,159)
....................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 21,241,134 (4,513) 360,370 (267,639) 47,168 32,497,732
....................................................................................................................
Net increase (decrease) in net
assets resulting from
operations 21,691,916 (4,514) 1,106,165 (30,933) 66,210 38,423,635
....................................................................................................................
UNIT TRANSACTIONS:
Purchases 4,703,703 28,774 22,023 458,095 33,693 7,999,040
....................................................................................................................
Net transfers 149,433 227,891 2,521,188 4,060 121,046 1,293,445
....................................................................................................................
Surrenders for benefit payments
and fees (1,038,801) (74) (4,728) (145,810) (2,677) (2,289,056)
....................................................................................................................
Loan withdrawals (546,905) (99) (2,686) (29,755) (58) (1,195,792)
....................................................................................................................
Cost of insurance (1,495,145) (6,613) (30,104) (172,471) (4,323) (2,956,587)
....................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 1,772,285 249,879 2,505,693 114,119 147,681 2,851,050
....................................................................................................................
Total increase (decrease) in net
assets 23,464,201 245,365 3,611,858 83,186 213,891 41,274,685
....................................................................................................................
NET ASSETS:
Beginning of period 30,145,187 17,540 20,032 4,219,239 25,590 64,204,637
---------------------------------------------------------------------------------------------------------------------
END OF PERIOD $53,609,388 $262,905 $3,631,890 $4,302,425 $ 239,481 $105,479,322
---------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-21
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended Asia Diversified The George Global Global Growth Health
December 31, 1998 Pacific Income Putnam Fund Asset Growth and Income Sciences
Growth Sub-Account of Boston Allocation Sub-Account Sub-Account Sub-Account*
Sub-Account* Sub-Account* Sub-Account
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ -- $ 44,660 $ 27 $ 229,958 $ 554,987 $ 592,084 $ 101
.........................................................................................................................
Capital gains income -- 18,969 -- 987,748 2,774,936 3,865,126 --
.........................................................................................................................
Net realized gain (loss) on
security transactions (1,950) 216 1 14,239 (7,956) 29,783 20
.........................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 184 (90,075) 99 133,720 2,948,427 1,038,459 12,223
.........................................................................................................................
Net increase (decrease) in net
assets resulting from
operations (1,766) (26,230) 127 1,365,665 6,270,394 5,525,452 12,344
.........................................................................................................................
UNIT TRANSACTIONS:
Purchases 1,047 429,937 1,797 1,222,858 5,019,364 7,070,954 4,436
.........................................................................................................................
Net transfers 5,701 266,909 7,237 685,135 3,191,859 6,016,210 108,383
.........................................................................................................................
Surrenders for benefit payments
and fees (21) (21,473) (123) (182,499) (823,255) (1,329,891) (347)
.........................................................................................................................
Net loan activity -- (11,902) -- (127,127) (671,453) (628,747) (2)
.........................................................................................................................
Cost of insurance (35) (55,844) (252) (330,869) (1,015,926) (1,562,683) (1,150)
.........................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 6,692 607,627 8,659 1,267,498 5,700,589 9,565,843 111,320
.........................................................................................................................
Total increase (decrease) in net
assets 4,926 581,397 8,786 2,633,163 11,970,983 15,091,295 123,664
.........................................................................................................................
NET ASSETS:
.........................................................................................................................
Beginning of period -- 955,941 -- 9,524,346 18,450,958 30,956,057 --
--------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $4,926 $1,537,338 $8,786 $12,157,509 $30,421,941 $46,047,352 $123,664
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
*From inception August 3, 1998, to December 31, 1998.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-22
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended High Yield Income International International International Investors Money
December 31, 1998 Sub-Account Sub-Account** Growth Growth and New Sub-Account* Market
Sub-Account* Income Opportunities Sub-Account
Sub-Account* Sub-Account*
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 513,505 $ 361,057 $ 227 $ 270 $ -- $ 70 $ 66,306
.............................................................................................................................
Capital gains income 80,578 9,397 -- 651 -- -- --
.............................................................................................................................
Net realized gain (loss) on
security transactions (10,213) 132,832 (2) 7 -- 34 --
.............................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period (1,174,864) 24,876 6,197 2,195 656 9,802 --
.............................................................................................................................
Net increase (decrease) in net
assets resulting from
operations (590,994) 528,162 6,422 3,123 656 9,906 66,306
.............................................................................................................................
UNIT TRANSACTIONS:
Purchases 1,578,769 1,791,710 2,747 2,250 1,145 2,864 223,214
.............................................................................................................................
Net transfers 1,518,889 (2,923,672) 93,024 17,972 10,162 115,108 (205,708)
.............................................................................................................................
Surrenders for benefit payments
and fees (493,675) (295,573) (238) (105) (24) (325) (32,523)
.............................................................................................................................
Net loan activity (58,172) (58,278) (3) (20) (24) (31,681)
.............................................................................................................................
Cost of insurance (330,916) (317,364) (334) (797) (31) (943) (59,689)
.............................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 2,214,895 (1,803,177) 95,196 19,300 11,252 116,680 (106,387)
.............................................................................................................................
Total increase (decrease) in net
assets 1,623,901 (1,275,015) 101,618 22,423 11,908 126,586 (40,081)
.............................................................................................................................
NET ASSETS:
Beginning of period 6,138,583 7,805,006 -- -- -- -- 1,195,798
------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $7,762,484 $6,529,991 $101,618 $22,423 $11,908 $126,586 $1,155,717
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*From inception August 3, 1998, to December 31, 1998.
**Formerly Putnam U.S. Government and High Quality Bond Sub-Account, change
effective on April 9, 1999.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-23
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended New New OTC & Utilities Vista Voyager
December 31, 1998 Opportunities Value Emerging Growth Sub-Account* Sub-Account
Sub-Account Sub-Account Growth and Income
Sub-Account* Sub-Account
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ -- $ 186 $ 7 $ 91,969 $ -- $ 117,946
..............................................................................................................
Capital gains income 305,733 35 -- 158,511 -- 2,877,880
..............................................................................................................
Net realized gain (loss) on
security transactions (74,393) 1 (18) 8,994 (101) (22,334)
..............................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 5,084,117 1,064 3,651 263,198 4,502 8,969,653
..............................................................................................................
Net increase (decrease) in net
assets resulting from
operations 5,315,457 1,286 3,640 522,672 4,401 11,943,145
..............................................................................................................
UNIT TRANSACTIONS:
Purchases 4,989,756 7,363 1,625 470,436 1,069 8,611,086
..............................................................................................................
Net transfers 3,222,851 9,119 15,102 341,606 20,251 4,732,697
..............................................................................................................
Surrenders for benefit payments
and fees (695,854) (100) (70) (76,934) 4 (1,882,355)
..............................................................................................................
Loan withdrawals (325,692) -- (10) (78,333) -- (723,265)
..............................................................................................................
Cost of insurance (962,450) (128) (255) (111,123) (135) (2,043,615)
..............................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 6,228,611 16,254 16,392 545,652 21,189 8,694,548
..............................................................................................................
Total increase (decrease) in net
assets 11,544,068 17,540 20,032 1,068,324 25,590 20,637,693
..............................................................................................................
NET ASSETS:
Beginning of period 18,601,119 -- -- 3,150,915 -- 43,566,944
---------------------------------------------------------------------------------------------------------------
END OF PERIOD $30,145,187 $17,540 $20,032 $4,219,239 $25,590 $64,204,637
---------------------------------------------------------------------------------------------------------------
</TABLE>
*From inception August 3, 1998, to December 31, 1998.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-24
<PAGE>
SEPARATE ACCOUNT VL I -- HARTFORD LIFE INSURANCE COMPANY
Notes to Financial Statements
December 31, 1999
1. ORGANIZATION:
Separate Account VL I (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. 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
policyowners of the Company in the various mutual funds (the Funds) as directed
by the policyowners.
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). Realized gains and losses on the
sales of securities are computed on the basis of identified cost of the fund
shares sold. Dividend and capital gains income is 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 investments in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate Fund as
of December 31, 1999.
C) UNIT TRANSACTIONS -- Unit transactions are executed based on the unit values
calculated at the close of the business day. All unit transactions are executed
at fair value.
D) 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.
E) 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:
A) COST OF INSURANCE -- In accordance with the terms of the policies, the
Company assesses cost of insurance charges to cover the Company's anticipated
mortality costs. Because a policy's account value and death benefit may vary
from month to month, the cost of insurance charges may also vary.
B) MORTALITY AND EXPENSE RISK CHARGE -- The Company, as issuer of variable life
policies, provides the mortality and expense undertakings and, with respect to
the Account, receives a maximum annual fee of 1.40% of the Account's average
daily net assets. These charges are reflected in surrenders for benefit payments
and fees on the accompanying statements of changes in net assets.
C) ADMINISTRATIVE AND ISSUE CHARGES -- The Company assesses a monthly
administrative charge to compensate the Company for administrative costs in
connection with the policies. This charge covers the average expected cost for
these services at a maximum of $12 per month. Additionally, the Company assesses
a monthly charge in the first policy year for up-front costs of underwriting and
issuing a policy at a monthly maximum amount of $62.50. These charges are
reflected in surrenders for benefit payments and fees on the accompanying
statements of changes in net assets.
D) DEDUCTION OF ANNUAL MAINTENANCE FEE -- Annual maintenance fees are deducted
through termination of units of interest from applicable policyowners' accounts,
in accordance with the terms of the policies. In addition, certain other charges
may apply based on the characteristics of the underlying policy. These charges
are reflected in surrenders for benefit payments and fees on the accompanying
statements of changes in net assets.
SA-25
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------------------
To Hartford Life Insurance Company:
We have audited the accompanying Consolidated Balance Sheets of Hartford Life
Insurance Company and subsidiaries as of December 31, 1999 and 1998, and the
related Consolidated Statements of Income, Changes in Stockholder's Equity and
Cash Flows for each of the three years in the period ended December 31, 1999.
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 financial statements and
schedules based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 Consolidated Financial Statements referred to above present
fairly, in all material respects, the financial position of Hartford Life
Insurance Company and subsidiaries as of December 31, 1999 and 1998, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in the Index to
Consolidated Financial Statements and Schedules are presented for the purpose of
complying with the Securities and Exchange Commission's rules and are not part
of the basic financial statements. These schedules have been subjected to the
auditing procedures applied in the audits of the basic 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 financial statements
taken as a whole.
Hartford, Connecticut
January 31, 2000 ARTHUR ANDERSEN LLP
F-1
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
<CAPTION>
1999 1998 1997
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(in millions)
REVENUES
Premiums and other considerations $2,045 $2,218 $1,637
Net investment income 1,359 1,759 1,368
Net realized capital gains (losses) (4) (2) 4
- ----------------------------------------------------------------------------------------------
TOTAL REVENUES 3,400 3,975 3,009
- ----------------------------------------------------------------------------------------------
BENEFITS, CLAIMS AND EXPENSES
Benefits, claims and claim adjustment expenses 1,574 1,911 1,379
Amortization of deferred policy acquisition costs 539 431 335
Dividends to policyholders 104 329 240
Other expenses 631 766 586
- ----------------------------------------------------------------------------------------------
TOTAL BENEFITS, CLAIMS AND EXPENSES 2,848 3,437 2,540
- ----------------------------------------------------------------------------------------------
Income before income tax expense 552 538 469
Income tax expense 191 188 167
- ----------------------------------------------------------------------------------------------
NET INCOME $ 361 $ 350 $ 302
- ----------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-2
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
<S> <C> <C>
- ------------------------------------------------------------------------------------------
1999 1998
- ------------------------------------------------------------------------------------------
(in millions, except
for share data)
ASSETS
Investments
Fixed maturities, available for sale, at fair value
(amortized cost of $13,923 and $14,505) $ 13,499 $ 14,818
Equity securities, at fair value 56 31
Policy loans, at outstanding balance 4,187 6,684
Other investments 342 264
- ------------------------------------------------------------------------------------------
TOTAL INVESTMENTS 18,084 21,797
- ------------------------------------------------------------------------------------------
Cash 55 17
Premiums receivable and agents' balances 29 17
Reinsurance recoverables 1,274 1,257
Deferred policy acquisition costs 4,013 3,754
Deferred income tax 459 464
Other assets 654 695
Separate account assets 110,397 90,262
- ------------------------------------------------------------------------------------------
TOTAL ASSETS $134,965 $118,263
- ------------------------------------------------------------------------------------------
LIABILITIES
Future policy benefits $ 4,332 $ 3,595
Other policyholder funds 16,004 19,615
Other liabilities 1,613 2,094
Separate account liabilities 110,397 90,262
- ------------------------------------------------------------------------------------------
TOTAL LIABILITIES 132,346 115,566
- ------------------------------------------------------------------------------------------
STOCKHOLDER'S EQUITY
Common stock -- 1,000 shares authorized, issued and
outstanding, par value $5,690 6 6
Capital surplus 1,045 1,045
Accumulated other comprehensive income (loss)
Net unrealized capital gains (losses) on securities, net
of tax (255) 184
- ------------------------------------------------------------------------------------------
TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (255) 184
- ------------------------------------------------------------------------------------------
Retained earnings 1,823 1,462
- ------------------------------------------------------------------------------------------
TOTAL STOCKHOLDER'S EQUITY 2,619 2,697
- ------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $134,965 $118,263
- ------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-3
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
Accumulated Other
Comprehensive
Income (Loss)
-----------------
<S> <C> <C> <C> <C> <C>
Net Unrealized
Capital Gains
(Losses) on Total
Common Capital Securities, Retained Stockholder's
Stock Surplus Net of Tax Earnings Equity
- -------------------------------------------------------------------------------------------------------------
(in millions)
1999
Balance, December 31, 1998 $6 $1,045 $ 184 $1,462 $2,697
Comprehensive income
Net income -- -- -- 361 361
Other comprehensive income (loss), net of
tax (1):
Changes in net unrealized capital gains
(losses) on securities (2) -- -- (439) -- (439)
Total other comprehensive income (loss) (439)
Total comprehensive income (loss) (78)
- -------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1999 $6 $1,045 $(255) $1,823 $2,619
- -------------------------------------------------------------------------------------------------------------
1998
Balance, December 31, 1997 $6 $1,045 $ 179 $1,113 $2,343
Comprehensive income
Net income -- -- -- 350 350
Other comprehensive income, net of tax
(1):
Changes in net unrealized capital gains
on securities (2) -- -- 5 -- 5
Total other comprehensive income 5
Total comprehensive income 355
Dividends (1) (1)
- -------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998 $6 $1,045 $ 184 $1,462 $2,697
- -------------------------------------------------------------------------------------------------------------
1997
Balance, December 31, 1996 $6 $1,045 $ 30 $ 811 $1,892
Comprehensive income
Net income -- -- -- 302 302
Other comprehensive income, net of tax
(1):
Changes in net unrealized capital gains
on securities (2) -- -- 149 -- 149
Total other comprehensive income 149
Total comprehensive income 451
- -------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997 $6 $1,045 $ 179 $1,113 $2,343
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net unrealized capital gain (loss) on securities is reflected net of tax of
$(236), $3 and $80, for the years ended December 31, 1999, 1998 and 1997,
respectively.
(2) Net of reclassification adjustment for after-tax gains (losses) realized in
net income of $(2), $(1) and $2 for the years ended December 31, 1999, 1998
and 1997, respectively.
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-4
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
<CAPTION>
1999 1998 1997
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(in millions)
OPERATING ACTIVITIES
Net income $ 361 $ 350 $ 302
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation and amortization (18) (23) 8
Net realized capital losses (gains) 4 2 (4)
Loss due to commutation of reinsurance 16 -- --
(Increase) decrease in premiums receivable and agents'
balances (18) 1 119
(Decrease) increase in other liabilities (263) (79) 223
Change in receivables, payables, and accruals 125 83 107
(Decrease) increase in accrued taxes (163) 60 126
Decrease (increase) in deferred income tax 241 (118) 40
Increase in deferred policy acquisition costs (358) (439) (555)
Increase in future policy benefits 797 536 585
Increase in reinsurance recoverables (318) (101) (31)
Other, net (81) 99 52
- --------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 325 371 972
- --------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchases of investments (5,753) (6,061) (6,869)
Sales of investments 6,383 4,901 4,256
Maturity of investments 1,818 1,761 2,329
Purchases of affiliates and other (25) -- --
- --------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES 2,423 601 (284)
- --------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Net disbursements for investment and universal life-type
contracts charged against policyholder accounts (2,710) (1,009) (677)
- --------------------------------------------------------------------------------------------
Net cash used for financing activities (2,710) (1,009) (677)
- --------------------------------------------------------------------------------------------
Net increase (decrease) in cash 38 (37) 11
Cash -- beginning of year 17 54 43
- --------------------------------------------------------------------------------------------
Cash -- end of year $ 55 $ 17 $ 54
- --------------------------------------------------------------------------------------------
Supplemental Disclosure of Cash Flow Information:
Net Cash Paid During the Year for:
Income taxes $ 111 $ 263 $ 9
Noncash Investing Activities:
In 1999, the Company's parent, Hartford Life and Accident Insurance Company, recaptured an
in force block of individual life insurance previously ceded to the Company. This
commutation resulted in a reduction in the Company's assets of $666, consisting of $556
of invested assets, $99 of deferred policy acquisition costs and $11 of other assets.
Liabilities decreased $650, consisting of $543 of other policyholder funds, $60 of future
policy benefits and $47 of other liabilities. As a result, the Company recognized an
after-tax loss relating to this transaction of $16.
In 1998, due to the recapture of an in force block of business previously ceded to MBL
Life Assurance Co. of New Jersey, reinsurance recoverables of $4,753 were exchanged for
the fair value of assets comprised of $4,310 in policy loans and $443 in other net
assets.
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-5
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA UNLESS OTHERWISE STATED)
-----------------------------------------------------------------------------
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
These Consolidated Financial Statements include Hartford Life Insurance Company
and its wholly-owned subsidiaries ("Hartford Life Insurance Company" or the
"Company"), Hartford Life and Annuity Insurance Company (HLAI) and Hartford
International Life Reassurance Corporation (HLRe), formerly American Skandia
Life Reinsurance Corporation. The Company is a wholly-owned subsidiary of
Hartford Life and Accident Insurance Company (HLA), a wholly-owned subsidiary of
Hartford Life, Inc. (Hartford Life). Hartford Life is a direct subsidiary of
Hartford Accident and Indemnity Company (HA&I), an indirect subsidiary of The
Hartford Financial Services Group, Inc. (The Hartford). In November 1998,
Hartford Life Insurance Company transferred in the form of a dividend, Hartford
Financial Services, LLC and its subsidiaries to HLA.
Pursuant to an initial public offering (the "IPO") on May 22, 1997, Hartford
Life sold 26 million shares of Class A Common Stock at $28.25 per share and
received proceeds, net of offering expenses, of $687. Of the proceeds, $527 was
used to retire debt related to Hartford Life's outstanding promissory notes and
line of credit with the remaining $160 contributed by Hartford Life to its
insurance subsidiaries to support growth in its core businesses. Hartford Life
became a publicly traded company upon the sale of 26 million shares representing
approximately 18.6% of the equity ownership in Hartford Life.
Along with its parent, HLA, the Company is a leading financial services and
insurance company which provides (a) investment products such as individual
variable annuities and fixed market value adjusted annuities, mutual funds and
retirement plan services for savings and retirement needs; (b) life insurance
for income protection and estate planning; (c) employee benefits products such
as group life and disability insurance that is directly written by the Company
and is substantially ceded to its parent, HLA, and (d) corporate owned life
insurance.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION
These Consolidated Financial Statements are prepared on the basis of accounting
principles generally accepted in the United States, which differ materially from
the statutory accounting practices prescribed by various insurance regulatory
authorities. All material intercompany transactions and balances between
Hartford Life Insurance Company and its subsidiaries have been eliminated.
The preparation of financial statements, in conformity with accounting
principles generally accepted in the United States, 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 most significant estimates include those used in determining deferred policy
acquisition costs and the liability for future policy benefits and other
policyholder funds. Although some variability is inherent in these estimates,
management believes the amounts provided are adequate.
Certain reclassifications have been made to prior year financial information to
conform to the current year presentation.
(B) ADOPTION OF NEW ACCOUNTING STANDARDS
Effective January 1, 1999, Hartford Life Insurance Company adopted Statement of
Position (SOP) No. 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use". This SOP provides guidance on
accounting for the costs of internal use software and in determining whether the
software is for internal use. The SOP defines internal use software as software
that is acquired, internally developed, or modified solely to meet internal
needs and identifies stages of software development and accounting for the
related costs incurred during the stages. Adoption of this SOP did not have a
material impact on the Company's financial condition or results of operations.
Effective January 1, 1999, Hartford Life Insurance Company adopted SOP
No. 97-3, "Accounting by Insurance and Other Enterprises for Insurance-Related
Assessments". This SOP addresses accounting by insurance and other enterprises
for assessments related to insurance activities, including recognition,
measurement and disclosure of guaranty fund or other assessments. Adoption of
this SOP did not have a material impact on the Company's financial condition or
results of operations.
The Company's cash flows were not impacted by these changes in accounting
principles.
(C) FUTURE ADOPTION OF NEW ACCOUNTING STANDARDS
In June 1999, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133". This statement amends SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities", to defer its effective date for
one year, to fiscal years beginning after June 15, 2000. Initial
F-6
<PAGE>
application for Hartford Life Insurance Company will begin January 1, 2001. SFAS
No. 133 establishes accounting and reporting guidance for derivative
instruments, including certain derivative instruments embedded in other
contracts. The standard requires, among other things, that all derivatives be
carried on the balance sheet at fair value. The standard also specifies hedge
accounting criteria under which a derivative can qualify for special accounting.
In order to receive special accounting, the derivative instrument must qualify
as either a hedge of the fair value or the variability of the cash flow of a
qualified asset or liability. Special accounting for qualifying hedges provides
for matching the timing of gain or loss recognition on the hedging instrument
with the recognition of the corresponding changes in value of the hedged item.
The Company has reviewed its derivative holdings and is in the process of
quantifying the impact of SFAS No. 133. The Company is also assessing what
actions, if any, need to be taken to minimize potential volatility, while at the
same time maintaining the economic protection needed to support the goals of its
business.
In October 1998, the American Institute of Certified Public Accountants (AICPA)
issued SOP No. 98-7, "Accounting for Insurance and Reinsurance Contracts That Do
Not Transfer Insurance Risk". This SOP provides guidance on the method of
accounting for insurance and reinsurance contracts that do not transfer
insurance risk, defined in the SOP as the deposit method. This SOP is effective
for financial statements for fiscal years beginning after June 15, 1999 and is
not expected to have a material impact on the Company's financial condition or
results of operations.
(D) REVENUE RECOGNITION
Revenues for investment products and universal life-type policies consist of
policy charges for policy administration, cost of insurance and surrender
charges assessed to policy account balances and are recognized in the period in
which services are provided. Premiums for traditional life insurance and
disability policies are recognized as revenues ratably over the policy period.
(E) DIVIDENDS TO POLICYHOLDERS
Certain life insurance policies contain dividend payment provisions that enable
the policyholder to participate in the earnings on that participating block of
business of the life insurance subsidiaries of the Company. The participating
insurance in force accounted for 34%, 35% and 33% in 1999, 1998 and 1997,
respectively, of total insurance in force.
(F) INVESTMENTS
Hartford Life Insurance Company's investments in both fixed maturities, which
include bonds, redeemable preferred stock and commercial paper, and equity
securities, which include common and non-redeemable preferred stocks, are
classified as "available for sale" in accordance with SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities". Accordingly, these
securities are carried at fair value with the after-tax difference from cost
reflected in stockholder's equity as a component of accumulated other
comprehensive income. Policy loans are carried at outstanding balance which
approximates fair value. Other invested assets consist primarily of partnership
investments, which are accounted for by the equity method, and mortgage loans,
whereby the carrying value approximates fair value. Realized capital gains and
losses on security transactions associated with the Company's immediate
participation guaranteed contracts are excluded from revenues and deferred over
the expected maturity of the securities, 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. Net realized capital gains and losses,
excluding those related to immediate participation guaranteed contracts, are
reported as a component of revenue and are determined on a specific
identification basis.
The Company's accounting policy for impairment requires recognition of an other
than temporary impairment charge on a security if it is determined that the
Company is unable to recover all amounts due under the contractual obligations
of the security. In addition, for securities expected to be sold, an other than
temporary impairment charge is recognized if the Company does not expect the
fair value of a security to recover to cost or amortized cost prior to the
expected date of sale. Once an impairment charge has been recorded, the Company
then continues to review the other than temporarily impaired securities for
additional impairment, if necessary.
(G) DERIVATIVE INSTRUMENTS
HEDGE ACCOUNTING -- Hartford Life Insurance Company uses a variety of derivative
instruments, including swaps, caps, floors, forwards and exchange traded
financial futures and options 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 Insurance Company does not hold or issue
derivative instruments for trading purposes. Hartford Life Insurance Company's
accounting for derivative 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", AICPA SOP No. 86-2, "Accounting for
Options" and various Emerging Issues Task Force pronouncements. Written options
are used, in all cases in conjunction with other assets and derivatives, as part
of the Company's asset and liability management strategy. Derivative instruments
are carried at values consistent with the asset or liability being hedged.
Derivative instruments used to hedge fixed maturities or equity securities are
carried at fair value with the after-tax difference from cost reflected in
stockholder's equity. Derivative instruments used to hedge other invested assets
or liabilities are carried at cost. For a discussion of SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities", issued in June
1998, see (c) Future Adoption of New Accounting Standards.
Derivative instruments must be designated at inception as a hedge and measured
for effectiveness both at inception
F-7
<PAGE>
and on an ongoing basis. Hartford Life Insurance Company's correlation threshold
for hedge designation is 80% to 120%. If correlation, which is assessed monthly
or quarterly and measured based on a rolling three month average, falls outside
the 80% to 120% range, hedge accounting will be terminated. Derivative
instruments 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. Consistent with industry
practice, synthetic instruments are accounted for like the financial instrument
they are intended to replicate. Derivative instruments which fail to meet risk
management criteria, subsequent to acquisition, are marked to market with the
impact reflected in the Consolidated Statements of Income.
FUTURES -- Gains or losses on financial futures contracts entered into in
anticipation of the investment of future receipt of product cash flows are
deferred and, at the time of the ultimate investment purchase, reflected as an
adjustment to the cost basis of the purchased asset. Gains or losses on futures
used in invested asset risk management are deferred and adjusted into the cost
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 net investment income
over the remaining asset life.
FORWARD COMMITMENTS -- Open forward commitment contracts are marked to market
through stockholder's equity. Such contracts are accounted for at settlement by
recording the purchase of the specified securities at the previously committed
price. Gains or losses resulting from the termination of forward commitment
contracts are recognized immediately in the Consolidated Statements of Income as
a component of net investment income.
OPTIONS -- 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 option. 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 -- 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 investment 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 capital gain or loss.
INTEREST RATE CAPS AND FLOORS -- Premiums paid on purchased cap or floor
agreements and the premium received on issued cap or floor 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 AND CURRENCY SWAPS CONTRACTS -- Forward exchange contracts and
foreign currency swaps are accounted for in accordance with SFAS No. 52. Changes
in the spot rate of instruments designated as hedges of the net investment in a
foreign subsidiary are reflected in the cumulative translation adjustment
component of stockholder's equity.
Cash flows from futures, options and swaps, accounted for as hedges, are
included with the cash flows of the item being hedged.
(H) SEPARATE ACCOUNTS
Hartford Life Insurance Company maintains separate account assets and
liabilities which are reported at fair value. Separate account assets are
segregated from other investments. Separate accounts reflect two categories of
risk assumption: non-guaranteed separate accounts, wherein the policyholder
assumes substantially all the investment risk and rewards, and guaranteed
separate accounts, wherein the Company contractually guarantees either a minimum
return or account value to the policyholder.
(I) DEFERRED POLICY ACQUISITION COSTS
Policy acquisition costs, which include commissions and certain other expenses
associated with acquiring business, are deferred and amortized over the
estimated lives of the contracts, usually 20 years. Generally, acquisition costs
are deferred and amortized using the retrospective deposit method. Under the
retrospective deposit method, acquisition costs are amortized in proportion to
the present value of expected gross profits from surrender charges, investment
charges, mortality and expense margins. Actual gross profits can vary from
management's estimates, resulting in increases or decreases in the rate of
amortization. Management periodically updates these estimates, when appropriate,
and evaluates the recoverability of the deferred acquisition cost asset. When
appropriate, management revises its assumptions on the estimated gross profits
of these contracts and the cumulative amortization for the books of business are
re-estimated and adjusted by a cumulative charge or credit to income.
F-8
<PAGE>
Acquisition costs and their related deferral are included in the Company's other
expenses as follows:
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
------------------------------
Commissions $ 887 $1,069 $ 976
Deferred acquisition costs (898) (891) (862)
Other 642 588 472
------------------------------
TOTAL OTHER EXPENSES $ 631 $ 766 $ 586
------------------------------
</TABLE>
(J) FUTURE POLICY BENEFITS
Liabilities for future policy benefits are computed by the net level premium
method using interest rate assumptions varying from 3% to 11% and withdrawal and
mortality assumptions appropriate at the time the policies were issued.
(K) OTHER POLICYHOLDER FUNDS
Other policyholder funds include reserves for investment contracts without life
contingencies, corporate owned life insurance and universal life insurance
contracts. These reserves are based on account values, which represent the
balance that accrues to the benefit of policyholders.
3. INVESTMENTS AND DERIVATIVE INSTRUMENTS
(A) COMPONENTS OF NET INVESTMENT INCOME
<TABLE>
<CAPTION>
For the years ended
December 31,
--------------------------------
1999 1998 1997
<S> <C> <C> <C>
--------------------------------
Interest income from fixed maturities $ 934 $ 952 $ 932
Interest income from policy loans 391 789 425
Income from other investments 48 32 26
--------------------------------
Gross investment income 1,373 1,773 1,383
Less: Investment expenses 14 14 15
--------------------------------
NET INVESTMENT INCOME $1,359 $1,759 $1,368
--------------------------------
</TABLE>
(B) COMPONENTS OF NET REALIZED CAPITAL GAINS (LOSSES)
<TABLE>
<CAPTION>
For the years ended
December 31,
--------------------------
1999 1998 1997
<S> <C> <C> <C>
--------------------------
Fixed maturities $(7) $(28) $(7)
Equity securities 2 21 12
Real estate and other 1 5 (1)
--------------------------
NET REALIZED CAPITAL GAINS (LOSSES) $(4) $(2) $ 4
--------------------------
</TABLE>
(C) NET UNREALIZED CAPITAL GAINS (LOSSES) ON EQUITY SECURITIES
<TABLE>
<CAPTION>
For the years ended
December 31,
--------------------------
1999 1998 1997
<S> <C> <C> <C>
--------------------------
Gross unrealized capital gains $ 9 $ 2 $14
Gross unrealized capital losses (2) (1) --
--------------------------
Net unrealized capital gains 7 1 14
Deferred income tax expense 2 -- 5
--------------------------
Net unrealized capital gains, net of tax 5 1 9
Balance -- beginning of year 1 9 8
--------------------------
NET CHANGE IN UNREALIZED CAPITAL GAINS (LOSSES) ON EQUITY
SECURITIES $ 4 $(8) $ 1
--------------------------
</TABLE>
F-9
<PAGE>
(D) NET UNREALIZED CAPITAL GAINS (LOSSES) ON FIXED MATURITIES
<TABLE>
<CAPTION>
For the years ended
December 31,
----------------------------
1999 1998 1997
<S> <C> <C> <C>
----------------------------
Gross unrealized capital gains $ 48 $ 421 $371
Gross unrealized capital losses (472) (108) (80)
Unrealized capital (gains) losses credited to policyholders 24 (32) (30)
----------------------------
Net unrealized capital gains (losses) (400) 281 261
Deferred income tax expense (benefit) (140) 98 91
----------------------------
Net unrealized capital gains (losses), net of tax (260) 183 170
Balance -- beginning of year 183 170 22
----------------------------
NET CHANGE IN UNREALIZED CAPITAL GAINS (LOSSES) ON FIXED
MATURITIES $(443) $ 13 $148
----------------------------
</TABLE>
(E) FIXED MATURITY INVESTMENTS
<TABLE>
<CAPTION>
As of December 31, 1999
---------------------------------------------
Gross Gross
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
<S> <C> <C> <C> <C>
---------------------------------------------
U.S. Government and Government agencies and authorities
(guaranteed and sponsored) $ 180 $ 5 $ (3) $ 182
U.S. Government and Government agencies and authorities
(guaranteed and sponsored) -- asset backed 1,094 5 (35) 1,064
States, municipalities and political subdivisions 155 2 (1) 156
Foreign governments 289 6 (14) 281
Public utilities 865 7 (39) 833
All other corporate, including international 5,646 18 (244) 5,420
All other corporate -- asset backed 4,103 5 (123) 3,985
Short-term investments 1,156 -- -- 1,156
Certificates of deposit 434 -- (12) 422
Redeemable preferred stock 1 -- (1) --
---------------------------------------------
TOTAL FIXED MATURITIES $13,923 $48 $(472) $13,499
---------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
As of December 31, 1998
---------------------------------------------
Gross Gross
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
<S> <C> <C> <C> <C>
---------------------------------------------
U.S. Government and Government agencies and authorities
(guaranteed and sponsored) $ 121 $ 2 $ -- $ 123
U.S. Government and Government agencies and authorities
(guaranteed and sponsored) -- asset backed 1,001 23 (8) 1,016
States, municipalities and political subdivisions 165 8 -- 173
Foreign governments 393 26 (7) 412
Public utilities 844 33 (3) 874
All other corporate, including international 5,469 260 (42) 5,687
All other corporate -- asset backed 4,155 58 (42) 4,171
Short-term investments 1,847 -- -- 1,847
Certificates of deposit 510 11 (6) 515
---------------------------------------------
TOTAL FIXED MATURITIES $14,505 $421 $(108) $14,818
---------------------------------------------
</TABLE>
The amortized cost and estimated fair value of fixed maturity investments as of
December 31, 1999 by estimated maturity year are shown below. Expected
maturities differ from contractual maturities due to call or prepayment
provisions. Asset backed securities, including mortgage backed securities and
collateralized mortgage obligations, are distributed to maturity year based on
the Company's estimates of the rate of future prepayments of principal over the
remaining lives of the securities. These estimates are developed using
prepayment speeds provided in broker consensus
F-10
<PAGE>
data. Such estimates are derived from prepayment speeds experienced at the
interest rate levels projected for the applicable underlying collateral and can
be expected to vary from actual experience.
<TABLE>
<CAPTION>
Amortized
Cost Fair Value
<S> <C> <C>
----------------------------
MATURITY
One year or less $ 2,454 $ 2,440
Over one year through five years 4,874 4,787
Over five years through ten years 3,072 2,940
Over ten years 3,523 3,332
----------------------------
TOTAL $13,923 $13,499
----------------------------
</TABLE>
(F) SALES OF FIXED MATURITY AND EQUITY SECURITY INVESTMENTS
Sales of fixed maturities, excluding short-term fixed maturities, for the years
ended December 31, 1999, 1998 and 1997 resulted in proceeds of $3.4 billion,
$3.2 billion and $4.2 billion, gross realized capital gains of $153, $103 and
$169, gross realized capital losses (including writedowns) of $160, $131 and
$176, respectively. Sales of equity security investments for the years ended
December 31, 1999, 1998 and 1997 resulted in proceeds of $7, $35 and $132 and
gross realized capital gains of $2, $21 and $12, respectively, and no gross
realized capital losses for all periods.
(G) CONCENTRATION OF CREDIT RISK
The Company is not exposed to any significant concentration of credit risk in
fixed maturities of a single issuer greater than 10% of stockholder's equity.
(H) DERIVATIVE INSTRUMENTS
Hartford Life Insurance Company utilizes a variety of derivative instruments,
including swaps, caps, floors, forwards and exchange traded futures and options,
in accordance with Company policy and in order to achieve one of three Company
approved objectives: to hedge risk arising from interest rate, price or currency
exchange rate volatility; to manage liquidity; or, to control transactions
costs. The Company utilizes derivative instruments to manage market risk through
four principal risk management strategies: hedging anticipated transactions,
hedging liability instruments, hedging invested assets and hedging portfolios of
assets and/or liabilities. The Company does not trade in these instruments for
the express purpose of earning trading profits.
The Company maintains a derivatives counterparty exposure policy which
establishes market based credit limits, favors long-term financial stability and
creditworthiness, and typically requires credit enhancement/credit risk reducing
agreements. Credit risk is measured as the amount owed to the Company based on
current market conditions and potential payment obligations between the Company
and its counterparties. Credit exposures are quantified weekly and netted, and
collateral is pledged to or held by the Company to the extent the current value
of derivatives exceed exposure policy thresholds.
The Company's derivative program is monitored by an internal compliance unit and
is reviewed by senior management. Notional amounts, which represent the basis
upon which pay or receive amounts are calculated and are not reflective of
credit risk, pertaining to derivative financial instruments (excluding the
Company's guaranteed separate account derivative investments), totaled $5.5
billion and $6.2 billion ($3.9 billion and $3.9 billion related to the Company's
investments, $1.6 billion and $2.3 billion on the Company's liabilities) as of
December 31, 1999 and 1998, respectively.
The tables below provide a summary of derivative instruments held by Hartford
Life Insurance Company as of December 31, 1999 and 1998, segregated by major
investment and liability category:
F-11
<PAGE>
<TABLE>
<CAPTION>
1999 -- Amount Hedged (Notional Amounts)
----------------------------------------------------------------------------------
Total Issued Purchased Interest Rate Foreign Total
Carrying Caps & Caps, Floors Swaps & Currency Notional
ASSETS HEDGED Value Floors & Options Futures (1) Forwards Swaps (2) Amount
<S> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------
Asset backed securities (excluding
anticipatory) $ 5,049 $ -- $ -- $ -- $ 911 $-- $ 911
Anticipatory (3) -- -- -- 5 112 -- 117
Other bonds and notes 7,294 494 611 -- 1,676 80 2,861
Short-term investments 1,156 -- -- -- -- -- --
----------------------------------------------------------------------------------
TOTAL FIXED MATURITIES 13,499 494 611 5 2,699 80 3,889
Equity securities, policy loans and
other investments 4,585 -- -- -- -- -- --
----------------------------------------------------------------------------------
TOTAL INVESTMENTS $18,084 494 611 5 2,699 80 3,889
----------------------------------------------------------------------------------
OTHER POLICYHOLDER FUNDS $16,004 -- 1,150 -- 430 -- 1,580
----------------------------------------------------------------------------------
TOTAL DERIVATIVE INSTRUMENTS --
NOTIONAL VALUE $ 494 $1,761 $ 5 $3,129 $80 $5,469
----------------------------------------------------------------------------------
TOTAL DERIVATIVE INSTRUMENTS --
FAIR VALUE $ (22) $ 8 $ -- $ (30) $ 2 $ (42)
----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1998 -- Amount Hedged (Notional Amounts)
-------------------------------------------------------------------------------
Total Issued Purchased Interest Rate Foreign Total
Carrying Caps & Caps & Swaps & Currency Notional
ASSETS HEDGED Value Floors Floors Futures (1) Forwards Swaps (2) Amount
<S> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------
Asset backed securities (excluding
anticipatory) $ 5,187 $ 44 $ 243 $ 3 $ 885 $-- $1,175
Anticipatory (3) -- -- -- -- 235 -- 235
Other bonds and notes 7,683 461 597 18 1,300 90 2,466
Short-term investments 1,948 -- -- -- -- -- --
-------------------------------------------------------------------------------
TOTAL FIXED MATURITIES 14,818 505 840 21 2,420 90 3,876
Equity securities, policy loans and
other investments 6,979 -- -- -- -- -- --
-------------------------------------------------------------------------------
TOTAL INVESTMENTS $21,797 505 840 21 2,420 90 3,876
-------------------------------------------------------------------------------
OTHER POLICYHOLDER FUNDS $19,615 -- 1,150 -- 1,195 -- 2,345
-------------------------------------------------------------------------------
TOTAL DERIVATIVE INSTRUMENTS --
NOTIONAL VALUE $ 505 $1,990 $21 $3,615 $90 $6,221
-------------------------------------------------------------------------------
TOTAL DERIVATIVE INSTRUMENTS --
FAIR VALUE $ (6) $ 19 $-- $ 27 $(7) $ 33
-------------------------------------------------------------------------------
</TABLE>
(1) As of December 31, 1999 and 1998, approximately 100% and 5%,
respectively, of the notional futures contracts expire within one year.
(2) As of December 31, 1999 and 1998, approximately 28% and 11%,
respectively, of foreign currency swaps expire within one year.
(3) Deferred gains and losses on anticipatory transactions are included in
the carrying value of fixed maturities in the Consolidated Balance Sheets. At
the time of the ultimate purchase, they are reflected as a basis adjustment to
the purchased asset. As of December 31, 1999, the Company had $1.4 of net
deferred losses on interest rate swaps and futures. The Company expects to basis
adjust the entire loss in 2000. During 1999, $0.2 of new future activity was
basis adjusted. As of December 31, 1998, the Company had no deferred gains for
interest rate swaps.
F-12
<PAGE>
The following is a reconciliation of notional amounts by derivative type and
strategy as of December 31, 1999 and 1998:
<TABLE>
<CAPTION>
BY DERIVATIVE TYPE
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
December 31, 1998 Maturities/ December 31, 1999
Notional Amount Additions Terminations (1) Notional Amount
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Caps $1,912 $ -- $ 148 $1,764
Floors 583 -- 178 405
Swaps/Forwards 3,705 991 1,487 3,209
Futures 21 292 308 5
Options -- 86 -- 86
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL $6,221 $1,369 $2,121 $5,469
- -------------------------------------------------------------------------------------------------------------------------------
BY STRATEGY
- -------------------------------------------------------------------------------------------------------------------------------
Liability $2,345 $ 17 $ 782 $1,580
Anticipatory 235 204 322 117
Asset 2,398 831 427 2,802
Portfolio 1,243 317 590 970
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL $6,221 $1,369 $2,121 $5,469
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) During 1999, the Company had no significant gains or losses on
terminations of hedge positions using derivative financial instruments.
4. FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS No. 107 "Disclosure about Fair Value of Financial Instruments" requires
disclosure of fair value information of financial instruments. For certain
financial instruments where quoted market prices are not available, other
independent valuation techniques and assumptions are used. Because considerable
judgment is used, these estimates are not necessarily indicative of amounts that
could be realized in a current market exchange. SFAS No. 107 excludes certain
financial instruments from disclosure, including insurance contracts. Hartford
Life Insurance Company uses the following methods and assumptions in estimating
the fair value of each class of financial instrument.
Fair value for fixed maturities and marketable equity securities approximates
those quotations published by applicable stock exchanges or received from other
reliable sources.
For policy loans, carrying amounts approximate fair value.
Other invested assets consist primarily of partnership investments, which are
accounted for by the equity method, and mortgage loans, whereby the carrying
value approximates fair value.
Other policyholder funds fair value information is determined by estimating
future cash flows, discounted at the current market rate.
The fair value of derivative financial instruments, including swaps, caps,
floors, futures, options and forward commitments, is determined using a pricing
model which is similar to external valuation models.
The carrying amount and fair values of Hartford Life Insurance Company's
financial instruments as of December 31, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
1999 1998
------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
------------------------------------
ASSETS
Fixed maturities $13,499 $13,499 $14,818 $14,818
Equity securities 56 56 31 31
Policy loans 4,187 4,187 6,684 6,684
Other investments 342 348 264 309
LIABILITIES
Other policyholder funds (1) 11,734 11,168 11,709 11,726
------------------------------------
</TABLE>
(1) Excludes corporate owned life insurance and universal life insurance
contracts.
F-13
<PAGE>
5. SEPARATE ACCOUNTS
Hartford Life Insurance Company maintained separate account assets and
liabilities totaling $110.4 billion and $90.3 billion as of December 31, 1999
and 1998, respectively, which are reported at fair value. Separate account
assets, which are segregated from other investments, reflect two categories of
risk assumption: non-guaranteed separate accounts totaling $101.7 billion and
$80.6 billion as of December 31, 1999 and 1998, respectively, wherein the
policyholder assumes substantially all the investment risk, and guaranteed
separate accounts totaling $8.7 and $9.7 billion as of December 31, 1999 and
1998, respectively, wherein Hartford Life Insurance Company contractually
guarantees either a minimum return or account value to the policyholder.
Included in non-guaranteed separate account assets were policy loans totaling
$860 and $1.8 billion as of December 31, 1999 and 1998, respectively. Net
investment income (including net realized capital 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 and other revenues were $1.1 billion, $908 and
$699 in 1999, 1998 and 1997, respectively. The guaranteed separate accounts
include fixed market value adjusted (MVA) individual annuities and modified
guaranteed life insurance. The average credited interest rate on these contracts
was 6.5% and 6.6% as of December 31, 1999 and 1998, respectively. The assets
that support these liabilities were comprised of $8.7 billion and $9.5 billion
in fixed maturities as of December 31, 1999 and 1998, respectively, and $0.2
billion of other invested assets as of December 31, 1998. The portfolios are
segregated from other investments and are managed to minimize liquidity and
interest rate risk. In order to minimize the risk of disintermediation
associated with early withdrawals, fixed MVA 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 $(96) and $40 in carrying value and $2.0 billion and
$3.5 billion in notional amounts as of December 31, 1999 and 1998, respectively.
6. STATUTORY RESULTS
<TABLE>
<CAPTION>
For the years ended December 31,
------------------------------------
1999 1998 1997
<S> <C> <C> <C>
------------------------------------
Statutory net income $ 151 $ 211 $ 214
------------------------------------
Statutory capital and surplus $1,905 $1,676 $1,441
------------------------------------
</TABLE>
A significant percentage of the consolidated statutory surplus is permanently
reinvested or is subject to various state regulatory restrictions which limit
the payment of dividends without prior approval. The total amount of statutory
dividends which may be paid by the insurance subsidiaries of the Company in
2000, without prior regulatory approval, is estimated to be $190.
Hartford Life Insurance Company and its domestic insurance subsidiaries prepare
their statutory financial statements in accordance with accounting practices
prescribed by the applicable state of domicile. Prescribed statutory accounting
practices include publications of the National Association of Insurance
Commissioners (NAIC), as well as state laws, regulations and general
administrative rules.
The NAIC adopted the Codification of Statutory Accounting Principles (SAP) in
March 1998. The proposed effective date for the statutory accounting guidance is
January 1, 2001. It is expected that Hartford Life Insurance Company's
domiciliary state will adopt the SAP and the Company will make the necessary
changes required for implementation. The Company has not yet determined the
impact that the SAP will have on the statutory financial statements of Hartford
Life Insurance Company and its insurance subsidiaries.
7. STOCK COMPENSATION PLANS
Hartford Life Insurance Company's employees are included in the 1997 Hartford
Life, Inc. Incentive Stock Plan (the "Plan"), which was adopted during the
second quarter of 1997. Under the Plan, options granted may be either non-
qualified options or incentive stock options qualifying under Section 422A of
the Internal Revenue Code, stock appreciation rights, performance shares or
restricted stock, or any combination of the foregoing. The aggregate number of
shares of Class A Common Stock which may be awarded in any one year shall be
subject to an annual limit. The maximum number of shares of Class A Common Stock
which may be granted under the Plan in each year shall be 1.5% of the total
issued and outstanding shares of Hartford Life Class A and Class B Common Stock
and treasury stock as reported in the Annual Report on Hartford Life's Form 10-K
of the Company for the preceding year plus unused portions of such limit from
prior years.
In addition, no more than 5 million shares of Class A Common Stock shall be
cumulatively available for awards of incentive stock options under the Plan, and
no more than 20% of the total number of shares on a cumulative basis shall be
available for restricted stock and performance shares awards. Performance shares
awards of common stock granted under the Plan become payable upon the attainment
of specific performance goals achieved over a three year period.
F-14
<PAGE>
All options granted have an exercise price equal to the market price of the
Company's stock on the date of grant and an option's maximum term is ten years.
Certain non-performance based options become exercisable upon the attainment of
specified market price appreciation of Hartford Life's common shares or at seven
years after the date of grant, while the remaining non-performance based options
become exercisable over a three year period commencing with the date of grant.
During the second quarter of 1997, Hartford Life established the Hartford Life,
Inc. Employee Stock Purchase Plan (ESPP). Under this plan, eligible employees of
Hartford Life and the Company may purchase Class A Common Stock of Hartford Life
at a 15% discount from the lower of the market price at the beginning or end of
the quarterly offering period. Hartford Life may sell up to 2,700,000 shares of
stock to eligible employees. Hartford Life sold 120,694, 121,943 and 54,316
shares under the ESPP in 1999, 1998 and 1997, respectively. The weighted average
fair value of the discount under the ESPP was $7.48 per share in 1999, $13.74
per share in 1998 and $9.63 per share in 1997.
8. POSTRETIREMENT BENEFIT AND SAVINGS PLANS
(A) PENSION PLANS
Hartford Life Insurance Company's employees are included in The Hartford's
noncontributory defined benefit pension plans. These plans provide pension
benefits that are based on years of service and the employee's compensation
during the last ten years of employment. The Company's funding policy is to
contribute annually an amount between the minimum funding requirements set forth
in the Employee Retirement Income Security Act of 1974, as amended, and the
maximum amount that can be deducted for U.S. federal income tax purposes.
Generally, pension costs are funded through the purchase of the Company's group
pension contracts. The cost to the Company was approximately $6 in both 1999 and
1998, and $5 in 1997.
The Company also provides, through The Hartford, certain health care and life
insurance benefits for eligible retired employees. A substantial portion of the
Company's employees may become eligible for these benefits upon retirement. The
Company's contribution for health care benefits will depend on the retiree's
date of retirement and years of service. In addition, the plan has a defined
dollar cap which limits average Company contributions. The Company has prefunded
a portion of the health care and life insurance obligations through trust funds
where such prefunding can be accomplished on a tax effective basis.
Postretirement health care and life insurance benefits expense, allocated by The
Hartford, was immaterial to the results of operations for 1999, 1998 and 1997.
The assumed rate in the per capita cost of health care (the health care trend
rate) was 7.1% for 1999, decreasing ratably to 5.0% in the year 2003. Increasing
or decreasing 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 covered employees.
(B) INVESTMENT AND SAVINGS PLAN
Substantially all employees of the Company are eligible to participate in The
Hartford's Investment and Savings Plan. Under this plan, designated
contributions, which may be invested in Class A Common Stock of Hartford Life or
certain other investments, are matched, up to 3% of compensation, by the
Company. The cost to Hartford Life Insurance Company for the above-mentioned
plan was approximately $4 in both 1999 and 1998, and $2 in 1997.
9. REINSURANCE
Hartford Life Insurance Company cedes insurance to other insurers in order to
limit its maximum losses. Such transfer does not relieve Hartford Life Insurance
Company of its primary liability. Failure of reinsurers to honor their
obligations could result in losses to Hartford Life Insurance Company. Hartford
Life Insurance Company reduces this risk by evaluating the financial condition
of reinsurers, and monitoring for possible concentrations of credit risk.
Hartford Life Insurance Company has no significant reinsurance related
concentrations of credit risk.
The Company records a receivable for the portion of reinsured benefits paid and
insurance liabilities. Reinsurance recoveries on ceded reinsurance contracts
were $397, $300 and $418 for the years ended December 31, 1999, 1998 and 1997,
respectively. Hartford Life Insurance Company also assumes insurance from other
insurers.
The effect of reinsurance on premiums and other considerations is summarized as
follows:
<TABLE>
<CAPTION>
For the years ended December 31,
------------------------------------
1999 1998 1997
<S> <C> <C> <C>
------------------------------------
Direct premiums and other considerations $2,660 $2,722 $2,164
Reinsurance assumed 95 150 159
Reinsurance ceded (710) (654) (686)
------------------------------------
PREMIUMS AND OTHER CONSIDERATIONS $2,045 $2,218 $1,637
------------------------------------
</TABLE>
F-15
<PAGE>
Hartford Life Insurance Company maintains certain reinsurance agreements with
HLA, whereby the Company cedes both group life and group accident and health
risk. Under these treaties, the Company ceded group life premium of $119, $132
and $80 in 1999, 1998 and 1997, respectively, and accident and health premium of
$430, $379, and $335, respectively, to HLA.
Pursuant to a reinsurance agreement dating back to 1992, the Company assumed
100% of certain blocks of individual life insurance from HLA. Under this
reinsurance agreement Hartford Life Insurance Company assumed $9, $13 and $18 of
premium from HLA in 1999, 1998 and 1997, respectively. On December 1, 1999, HLA
recaptured this in force block of individual life insurance previously ceded to
the Company. This commutation resulted in a reduction in the Company's assets of
$666, consisting of $556 of invested assets, $99 of deferred policy acquisition
costs and $11 of other assets. Liabilities decreased $650, consisting of $543 of
other policyholder funds, $60 of future policy benefits and $47 of other
liabilities. As a result, the Company recognized an after-tax loss relating to
this transaction of $16.
In 1998, the Hartford Life recaptured an in force block of Corporate Owned Life
Insurance (COLI) business previously ceded to MBL Assurance Co. of New Jersey
(MBL Life). The transaction was consummated through an assignment of a
reinsurance arrangement between Hartford Life and MBL Life to a Hartford Life
subsidiary. Hartford Life originally assumed the life insurance block in 1992
from Mutual Benefit Life, which was placed in court-supervised rehabilitation in
1991, and reinsured a portion of those policies back to MBL Life. This recapture
was effective January 1, 1998 and resulted in a decrease in ceded premiums and
other considerations of $163 in 1998. Additionally, this transaction resulted in
a decrease in reinsurance recoverables of $4.8 billion, which was exchanged for
the fair value of assets comprised of $4.3 billion in policy loans and $443 in
other net assets.
10. INCOME TAX
Hartford Life and The Hartford have entered into a tax sharing agreement under
which each member in the consolidated U.S. federal income tax return will make
payments between them such that, with respect to any period, the amount of taxes
to be paid by the Company, subject to certain adjustments, generally will be
determined as though the Company were filing separate federal, state and local
income tax returns.
As long as The Hartford continues to own at least 80% of the combined voting
power and 80% of the value of the outstanding capital stock of Hartford Life,
the Company will be included for federal income tax purposes in the affiliated
group of which The Hartford is the common parent. It is the intention of The
Hartford and its non-life subsidiaries to file a single consolidated federal
income tax return. The life insurance companies will file a separate
consolidated federal income tax return for 1997 and 1998 and intend to file a
separate consolidated federal income tax return for 1999. The Company's
effective tax rate was 35%, 35% and 36% in 1999, 1998 and 1997, respectively.
Income tax expense (benefit) is as follows:
<TABLE>
<CAPTION>
For the years ended
December 31,
------------------------------
1999 1998 1997
<S> <C> <C> <C>
------------------------------
Current $(50) $307 $162
Deferred 241 (119) 5
------------------------------
INCOME TAX EXPENSE $191 $188 $167
------------------------------
</TABLE>
A reconciliation of the tax provision at the U.S. federal statutory rate to the
provision (benefit) for income taxes is as follows:
<TABLE>
<CAPTION>
For the years ended
December 31,
------------------------------
1999 1998 1997
<S> <C> <C> <C>
------------------------------
Tax provision at the U.S. federal statutory rate $193 $188 $164
Other (2) -- 3
------------------------------
TOTAL $191 $188 $167
------------------------------
</TABLE>
Deferred tax assets (liabilities) include the following as of December 31:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C> <C>
---------------------
Tax basis deferred policy acquisition costs $ 720 $ 751
Financial statement deferred policy acquisition costs and
reserves 11 103
Employee benefits (3) 4
Net unrealized capital losses (gains) on securities 138 (98)
Investments and other (407) (296)
---------------------
TOTAL $ 459 $ 464
---------------------
</TABLE>
F-16
<PAGE>
Hartford Life Insurance Company had a current tax receivable of $56 as of
December 31, 1999 and a current tax payable of $65 as of December 31, 1998.
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, based on current tax law,
will be taxable in the future only under conditions which management considers
to be remote; therefore, no federal income taxes have been provided on the
balance in this account, which for tax return purposes was $104 as of December
31, 1999.
11. RELATED PARTY TRANSACTIONS
Transactions of the Company with its affiliates relate principally to tax
settlements, reinsurance, insurance coverage, rental and service fees, payment
of dividends and capital contributions. In addition, certain affiliated
insurance companies purchased group annuity contracts from the Company to fund
pension costs and claim annuities to settle casualty claims. Substantially all
general insurance expenses related to the Company, including rent and employee
benefit plan expenses, are initially paid by The Hartford. Direct expenses are
allocated to the Company using specific identification, and indirect expenses
are allocated using other applicable methods. Indirect expenses include those
for corporate areas which, depending on type, are allocated based on either a
percentage of direct expenses or on utilization. Indirect expenses allocated to
the Company by The Hartford were $47 in both 1999 and 1998 and $39 in 1997.
12. COMMITMENTS AND CONTINGENT LIABILITIES
(A) LITIGATION
Hartford Life Insurance Company is involved in pending and threatened litigation
in the normal course of its business in which claims for alleged economic and
punitive damages have been asserted. Some of these cases have been filed as
purported class actions and some cases have been filed in certain jurisdictions
that permit punitive damage awards disproportionate to the actual damages
incurred. Although there can be no assurances, at the present time the Company
does not anticipate that the ultimate liability arising from such pending or
threatened litigation, after consideration of provisions made for estimated
losses and costs of defense, will have a material adverse effect on the
financial condition or operating results of the Company.
(B) GUARANTY FUNDS
Under insurance guaranty fund laws in each state, the District of Columbia and
Puerto Rico, insurers licensed to do business can be assessed by state insurance
guaranty associations for certain obligations of insolvent insurance companies
to policyholders and claimants. Recent regulatory actions against certain large
life insurers encountering financial difficulty have prompted various state
insurance guaranty associations to begin assessing life insurance companies for
the deemed losses. Most of these laws do provide, however, that an assessment
may be excused or deferred if it would threaten an insurer's solvency and
further provide annual limits on such assessments. Part of the assessments paid
by the Company and its subsidiaries pursuant to these laws may be used as
credits for a portion of the associated premium taxes. The Company paid guaranty
fund assessments of approximately $2, $9 and $15 in 1999, 1998 and 1997,
respectively, of which $1 in 1999 and $4 in both 1998 and 1997 were estimated to
be creditable against premium taxes.
(C) LEASES
The rent paid to Hartford Fire for space occupied by the Company was $9 in 1999
and $7 in both 1998 and 1997. Future minimum rental commitments are as follows:
<TABLE>
<S> <C>
2000 $ 14
2001 14
2002 13
2003 12
2004 12
Thereafter 62
--------
TOTAL $ 127
--------
</TABLE>
The principal executive offices of Hartford Life Insurance Company, together
with its parent, are located in Simsbury, Connecticut. Rental expense is
recognized on a level basis over the term of the primary sublease for the
facility located in Simsbury, Connecticut, which expires on December 31, 2009,
and amounted to approximately $9 in each of the years ended December 31, 1999,
1998 and 1997.
(D) TAX MATTERS
Hartford Life's federal income tax returns are routinely audited by the Internal
Revenue Service. Hartford Life's 1996-1997 federal income tax returns are
currently under audit by the Internal Revenue Service. Management believes that
sufficient provision has been made in the financial statements for issues that
may result from tax examinations and other tax related matters for all open tax
years.
F-17
<PAGE>
13. SEGMENT INFORMATION
Hartford Life Insurance Company is organized into three reportable operating
segments which include Investment Products, Individual Life and Corporate Owned
Life Insurance (COLI). Investment Products offers individual fixed and variable
annuities, mutual funds, retirement plan services other investment products.
Individual Life sells a variety of life insurance products, including variable
life, universal life, interest sensitive whole life and term life insurance.
COLI primarily offers variable products used by employers to fund non-qualified
benefits or other post-employment benefit obligations as well as leveraged COLI.
The Company includes in "Other" corporate items not directly allocable to any of
its reportable operating segments, as well as certain employee benefit products
including group life and disability insurance that is directly written by the
Company and is substantially ceded to its parent, HLA.
The accounting policies of the reportable operating segments are the same as
those described in the summary of significant accounting policies in Note 2.
Hartford Life Insurance Company evaluates performance of its segments based on
revenues, net income and the segment's return on allocated capital. The Company
charges direct operating expenses to the appropriate segment and allocates the
majority of indirect expenses to the segments based on an intercompany expense
arrangement. Intersegment revenues are not significant and primarily occur
between corporate and the operating segments. These amounts include interest
income on allocated surplus and the amortization of net realized capital gains
and losses through net investment income utilizing the duration of the segment's
investment portfolios. The Company's revenues are primarily derived from
customers within the United States. The Company's long-lived assets primarily
consist of deferred policy acquisition costs and deferred tax assets from within
the United States. The following tables outlines summarized financial
information concerning the Company's segments.
<TABLE>
<CAPTION>
Investment Individual
1999 Products Life COLI Other Total
<S> <C> <C> <C> <C> <C>
--------------------------------------------------
Total revenues $ 1,884 $ 574 $ 830 $ 112 $ 3,400
Net investment income 699 169 431 60 1,359
Amortization of deferred policy acquisition costs 411 128 -- -- 539
Income tax expense (benefit) 159 37 15 (20) 191
Net income (loss) 300 68 28 (35) 361
Assets 106,352 5,962 20,198 2,453 134,965
</TABLE>
<TABLE>
<CAPTION>
Investment Individual
1998 Products Life COLI Other Total
<S> <C> <C> <C> <C> <C>
--------------------------------------------------
Total revenues $ 1,779 $ 543 $ 1,567 $ 86 $ 3,975
Net investment income 736 181 793 49 1,759
Amortization of deferred policy acquisition costs 326 105 -- -- 431
Income tax expense (benefit) 145 35 12 (4) 188
Net income (loss) 270 64 24 (8) 350
Assets 87,207 5,228 22,631 3,197 118,263
</TABLE>
<TABLE>
<CAPTION>
Investment Individual
1997 Products Life COLI Other Total
<S> <C> <C> <C> <C> <C>
-------------------------------------------------
Total revenues $ 1,510 $ 487 $ 980 $ 32 $ 3,009
Net investment income 739 164 429 36 1,368
Amortization of deferred policy acquisition costs 250 83 -- 2 335
Income tax expense 111 30 15 11 167
Net income 206 55 27 14 302
Assets 72,288 4,914 17,800 2,743 97,745
</TABLE>
14. QUARTERLY RESULTS FOR 1999 AND 1998 (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
<S> <C> <C> <C> <C> <C> <C> <C> <C>
March 31, June 30, September 30, December 31,
------------------------------------------------------------------------------
1999 1998 1999 1998 1999 1998 1999 1998
------------------------------------------------------------------------------
Revenues $838 $915 $853 $721 $846 $826 $863 $1,513
Benefits, claims and expenses 703 787 722 591 695 688 728 1,371
Net income 88 83 85 85 100 89 88 93
</TABLE>
F-18
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE I -- SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN AFFILIATES
AS OF DECEMBER 31, 1999
(IN MILLIONS)
<TABLE>
<CAPTION>
Amount at
Fair which shown
Type of Investment Cost Value on Balance Sheet
<S> <C> <C> <C>
------------------------------------
FIXED MATURITIES
Bonds and Notes
U.S. Government and Government agencies and authorities
(guaranteed and sponsored) $ 180 $ 182 $ 182
U.S. Government and Government agencies and authorities
(guaranteed and sponsored) -- asset backed 1,094 1,064 1,064
States, municipalities and political subdivisions 155 156 156
Foreign governments 289 281 281
Public utilities 865 833 833
All other corporate, including international 5,646 5,420 5,420
All other corporate -- asset backed 4,103 3,985 3,985
Short-term investments 1,156 1,156 1,156
Certificates of deposit 434 422 422
Redeemable preferred stock 1 -- --
------------------------------------
TOTAL FIXED MATURITIES 13,923 13,499 13,499
------------------------------------
EQUITY SECURITIES
Common Stocks
Industrial and miscellaneous 49 56 56
------------------------------------
TOTAL EQUITY SECURITIES 49 56 56
------------------------------------
TOTAL FIXED MATURITIES AND EQUITY SECURITIES 13,972 13,555 13,555
------------------------------------
Policy Loans 4,187 4,187 4,187
------------------------------------
OTHER INVESTMENTS
Mortgage loans on real estate 198 198 198
Other invested assets 127 150 144
------------------------------------
TOTAL OTHER INVESTMENTS 325 348 342
------------------------------------
TOTAL INVESTMENTS $18,484 $18,090 $18,084
------------------------------------
</TABLE>
S-1
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN MILLIONS)
<TABLE>
<CAPTION>
Net Benefits,
Deferred Realized Claims and
Policy Future Other Premiums Net Capital Claim
Acquisition Policy Policyholder and Other Investment Gains Adjustment
Segment Costs Benefits Funds Considerations Income (Losses) Expenses
<S> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------
1999
Investment Products $3,099 $2,744 $ 8,859 $1,185 $ 699 $-- $ 660
Individual Life 914 270 1,880 405 169 -- 254
Corporate Owned Life Insurance -- 321 5,244 399 431 -- 621
Other -- 997 21 56 60 (4) 39
-------------------------------------------------------------------------------------------
CONSOLIDATED OPERATIONS $4,013 $4,332 $16,004 $2,045 $1,359 $(4) $1,574
-------------------------------------------------------------------------------------------
1998
-------------------------------------------------------------------------------------------
Investment Products $2,823 $2,407 $ 9,194 $1,043 $ 736 $-- $ 670
Individual Life 931 466 2,307 363 181 (1) 262
Corporate Owned Life Insurance -- 225 8,097 774 793 -- 924
Other -- 497 17 38 49 (1) 55
-------------------------------------------------------------------------------------------
CONSOLIDATED OPERATIONS $3,754 $3,595 $19,615 $2,218 $1,759 $(2) $1,911
-------------------------------------------------------------------------------------------
1997
-------------------------------------------------------------------------------------------
Investment Products $2,478 $2,070 $ 9,620 $ 771 $ 739 $-- $ 677
Individual Life 837 392 2,182 323 164 -- 242
Corporate Owned Life Insurance -- 56 9,259 551 429 -- 439
Other -- 541 (27) (8) 36 4 21
-------------------------------------------------------------------------------------------
CONSOLIDATED OPERATIONS $3,315 $3,059 $21,034 $1,637 $1,368 $ 4 $1,379
-------------------------------------------------------------------------------------------
<CAPTION>
Amortization
of Deferred
Policy
Acquisition Dividends to Other
Segment Costs Policyholders Expenses
<S> <C> <C> <C>
---------------------------------------
1999
Investment Products $411 $ -- $354
Individual Life 128 -- 87
Corporate Owned Life Insurance -- 104 62
Other -- -- 128
---------------------------------------
CONSOLIDATED OPERATIONS $539 $104 $631
---------------------------------------
1998
---------------------------------------
Investment Products $326 $ -- $368
Individual Life 105 -- 77
Corporate Owned Life Insurance -- 329 278
Other -- -- 43
---------------------------------------
CONSOLIDATED OPERATIONS $431 $329 $766
---------------------------------------
1997
---------------------------------------
Investment Products $250 $ -- $266
Individual Life 83 -- 77
Corporate Owned Life Insurance -- 240 259
Other 2 -- (16)
---------------------------------------
CONSOLIDATED OPERATIONS $335 $240 $586
---------------------------------------
</TABLE>
S-2
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE IV -- REINSURANCE
(IN MILLIONS)
<TABLE>
<CAPTION>
Percentage
Gross Ceded to Assumed From Net of Amount
Amount Other Companies Other Companies Amount Assumed to Net
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------
FOR THE YEAR ENDED
DECEMBER 31, 1999
Life insurance in force $307,970 $131,162 $11,785 $188,593 6.2%
PREMIUMS AND OTHER CONSIDERATIONS
Life insurance and annuities $ 2,212 $ 275 $ 84 $ 2,021 4.2%
Accident and health insurance 448 435 11 24 45.8%
------------------------------------------------------------------------
TOTAL PREMIUMS AND OTHER CONSIDERATIONS $ 2,660 $ 710 $ 95 $ 2,045 4.6%
------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------------------------------------------
Life insurance in force $326,400 $200,782 $18,289 143,907 12.7%
------------------------------------------------------------------------
PREMIUMS AND OTHER CONSIDERATIONS
Life insurance and annuities $ 2,329 $ 271 142 $ 2,200 6.5%
Accident and health insurance 393 383 8 18 44.4%
------------------------------------------------------------------------
TOTAL PREMIUMS AND OTHER CONSIDERATIONS $ 2,722 $ 654 150 $ 2,218 6.8%
------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------------------------------------------
Life insurance in force $245,487 $178,771 $33,156 $ 99,872 33.2%
------------------------------------------------------------------------
PREMIUMS AND OTHER CONSIDERATIONS
Life insurance and annuities $ 1,818 $ 340 $ 157 $ 1,635 9.6%
Accident and health insurance 346 346 2 2 100.0%
------------------------------------------------------------------------
TOTAL PREMIUMS AND OTHER CONSIDERATIONS $ 2,164 $ 686 $ 159 $ 1,637 9.7%
------------------------------------------------------------------------
</TABLE>
S-3
<PAGE>
PART C
<PAGE>
OTHER INFORMATION
Item 27. Exhibits
(a) Resolution of the Board of Directors of Hartford Life Insurance
Company ("Hartford") authorizing the establishment of the Separate
Account.(1)
(b) Not Applicable.
(c) Principal Underwriting Agreement.(2)
(d) Form of Flexible Premium Variable Life Insurance Policy.(1)
(e) Form of Application for Flexible Premium Variable Life Insurance
Policies.(1)
(f) Certificate of Incorporation of Hartford(2) and Bylaws of Hartford.(1)
(g) Contracts of Reinsurance.(3)
(h) Form of Participation Agreement.(3)
(i) Not Applicable.
(j) Not Applicable.
(k) Opinion and consent of Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary.
(l) Opinion and Consent of Thomas P. Kalmbach, FSA, MAAA.
(m) Not Applicable.
- ---------------------
(1) Incorporated by reference to Post-Effective Amendment No. 3 to the
Registration Statement on Form S-6, File No. 33-53692, of Hartford Life
Insurance Company filed with the Securities and Exchange Commission on May
1, 1995.
(2) Incorporated by reference to Post-Effective Amendment No. 4 to the
Registration Statement on Form S-6, File No. 33-53692, of Hartford Life
Insurance Company filed with the Securities and Exchange Commission on May
1, 1996.
(3) Incorporated by reference to Post-Effective Amendment No. 9 to the
Registration Statement on Form S-6, File No. 33-53692, of Hartford Life
Insurance Company filed with the Securities and Exchange Commission on
April 12, 1999.
<PAGE>
(n) Consent of Arthur Andersen LLP, Independent Public Accountants.
(o) No financial statement will be omitted.
(p) Not Applicable.
(q) Memorandum describing transfer and redemption procedures.(1)
(r) Power of Attorney.
(s) Organizational Chart.
<PAGE>
Item 28. Officers and Directors.
- --------------------------------------------------------------------------------
NAME POSITION WITH HARTFORD
- --------------------------------------------------------------------------------
David A. Carlson Vice President
- --------------------------------------------------------------------------------
Peter W. Cummins Senior Vice President
- --------------------------------------------------------------------------------
Bruce W. Ferris Vice President
- --------------------------------------------------------------------------------
Timothy M. Fitch Vice President & Actuary
- --------------------------------------------------------------------------------
Mary Jane B. Fortin Vice President & Chief Accounting Officer
- --------------------------------------------------------------------------------
David T. Foy Senior Vice President, Chief Financial
Officer and Treasurer, Director*
- --------------------------------------------------------------------------------
Lynda Godkin Senior Vice President, General Counsel, and
Corporate Secretary, Director*
- --------------------------------------------------------------------------------
Lois W. Grady Senior Vice President
- --------------------------------------------------------------------------------
Stephen T. Joyce Senior Vice President
- --------------------------------------------------------------------------------
Michael D. Keeler Vice President
- --------------------------------------------------------------------------------
Robert A. Kerzner Senior Vice President
- --------------------------------------------------------------------------------
Thomas M. Marra President, Director*
- --------------------------------------------------------------------------------
Steven L. Matthiesen Vice President
- --------------------------------------------------------------------------------
Deanne Osgood Vice President
- --------------------------------------------------------------------------------
Craig R. Raymond Senior Vice President and Chief Actuary
- --------------------------------------------------------------------------------
Lowndes A. Smith Chief Executive Officer, Director*
- --------------------------------------------------------------------------------
David M. Znamierowski Senior Vice President and Chief Investment
Officer, Director*
- --------------------------------------------------------------------------------
Unless otherwise indicated, the principal business address of each of the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
- ------------------------------------------------
* Denotes Board of Directors of Hartford.
Item 29. Persons Controlled By or Under Common Control with the Depositor or
Registrant
Filed herewith as Exhibit(s).
<PAGE>
Item 30: Indemnification
Sections 33-770 to 33-778, inclusive, of the Connecticut General
Statutes ("CGS") provide that a corporation may provide indemnification
of or advance expenses to a director, officer, employee or agent.
Reference is hereby made to Section 33-771(e) of CGS regarding
indemnification of directors and Section 33-776(d) of CGS regarding
indemnification of officers, employees and agents of Connecticut
corporations. These statutes provide, in general, that Connecticut
corporations incorporated prior to January 1, 1997 shall, except to the
extent that their certificate of incorporation expressly provides
otherwise, indemnify their directors, officers, employees and agents
against "liability" (defined as the obligation to pay a judgment,
settlement, penalty, fine, including an excise tax assessed with
respect to an employee benefit plan, or reasonable expenses incurred
with respect to a proceeding) when (1) a determination is made pursuant
to Section 33-775 that the party seeking indemnification has met the
standard of conduct set forth in Section 33-771 or (2) a court has
determined that indemnification is appropriate pursuant to Section
33-774. Under Section 33-775, the determination of and the
authorization for indemnification are made (a) by the disinterested
directors, as defined in Section 33-770(3); (b) by special counsel; (c)
by the shareholders; or (d) in the case of indemnification of an
officer, agent or employee of the corporation, by the general counsel
of the corporation or such other officer(s) as the board of directors
may specify. Also, Section 33-772 provides that a corporation shall
indemnify an individual who was wholly successful on the merits or
otherwise against reasonable expenses incurred by him in connection
with a proceeding to which he was a party because he was a director of
the corporation. In the case of a proceeding by or in the right of the
corporation or with respect to conduct for which the director, officer,
agent or employee was adjudged liable on the basis that he received a
financial benefit to which he was not entitled, indemnification is
limited to reasonable expenses incurred in connection with the
proceeding against the corporation to which the individual was named a
party.
Under the Depositor's bylaws, the Depositor must indemnify both
directors and officers of the Depositor for (1) any claims and
liabilities to which they become subject by reason of being or having
been directors or officers of the Depositor and (2) legal and other
expenses incurred in defending against such claims, in each case, to
the extent such is consistent with statutory provisions.
Section 33-777 of CGS specifically authorizes a corporation to procure
indemnification insurance on behalf of an individual who was a
director, officer, employer or agent of the corporation. Consistent
with the statute, the directors and officers of the Depositor and
Hartford Equity Sales Company, Inc. ("HESCO") are covered under a
directors and
<PAGE>
officers liability insurance policy issued to The Hartford Financial
Services Group, Inc. and its subsidiaries.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being 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>
Item 31. Principal Underwriters
(a) Hartford Equity Sales Company ("HESCO") acts as principal
underwriter for the following investment companies:
Hartford Life Insurance Company - Separate Account VL I
Hartford Life Insurance Company - Separate Account VL II
Hartford Life Insurance Company - ICMG Secular Trust Separate
Account
Hartford Life Insurance Company - ICMG Registered Variable
Life Separate Account A
Hartford Life and Annuity Insurance Company - Separate Account VL I
Hartford Life and Annuity Insurance Company - Separate Account VL
II
Hartford Life and Annuity Insurance Company - ICMG Registered
Variable Life Separate Account One
(b) Directors and Officers of HESCO
Name and Principal Positions and Offices
Business Address With Underwriter
------------------ ------------------
David A. Carlson Vice President
Peter W. Cummins Senior Vice President
David T. Foy Treasurer
Lynda Godkin Senior Vice President, General Counsel
and Corporate Secretary
George R. Jay Controller
Robert A. Kerzner Executive Vice President, Director
Thomas M. Marra Executive Vice President, Director
Donald R. Salama Vice President
Lowndes A. Smith President and Chief Executive Officer,
Director
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
Item 32. Location of Accounts and Records
All of the accounts, books, records or other documents required to be
kept by Section 31(a) of the Investment Company Act of 1940 and rules
thereunder, are maintained by Hartford at 200 Hopmeadow Street,
Simsbury, Connecticut 06089.
<PAGE>
Item 33. Management Services
All management contracts are discussed in Part A and Part B of this Registration
Statement.
Item 34. Representation of Reasonableness of Fees
Hartford hereby represents that the aggregate fees and charges under the Policy
are reasonable in relation to the services rendered, the expenses expected to be
incurred, and the risks assumed by Hartford.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment Company
Act, the Registrant certifies that it meets all of the requirements for
effectiveness of this registration statement under rule 485(b) under the
Securities Act and has duly caused this registration statement to be signed on
its behalf by the undersigned, duly authorized, in the Town of Simsbury, and
State of Connecticut on the day of April 12, 2000.
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VL
(Registrant)
*By: David T. Foy
---------------------------------------------------
David T. Foy, Senior Vice President and Treasurer
*By: /s/ Marianne O'Doherty
-----------------------
Marianne O'Doherty
Attorney-In-Fact
HARTFORD LIFE INSURANCE COMPANY
(Depositor)
*By: David T. Foy
---------------------------------------------------
David T. Foy, Senior Vice President and Treasurer
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.
David T. Foy, Senior Vice President, Chief
Financial Officer and Treasurer, Director*
Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary, Director* *By: /s/ Marianne O'Doherty
Thomas M. Marra, President, Director* --------------------
Lowndes A. Smith, Chief Executive Officer, Marianne O'Doherty
Director* Attorney-in-Fact
David M. Znamierowski, Senior Vice President
And Chief Investment Officer, Director* Date: April 12, 2000
<PAGE>
EXHIBIT INDEX
1.3 Opinion and Consent of Lynda Godkin, Senior Vice President, General Counsel
and Corporate Secretary.
1.4 Opinion and Consent of Thomas Kalmbach, FSA, MAAA.
1.5 Consent of Arthur Andersen LLP, Independent Public Accountants.
1.6 Power of Attorney.
1.7 Organizational Chart.
<PAGE>
[LOGO]
[HARTFORD LIFE]
April 6, 2000
LYNDA GODKIN, SENIOR VICE PRESIDENT,
GENERAL COUNSEL & CORPORATE SECRETARY
Board of Directors
Hartford Life and Annuity Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: SEPARATE ACCOUNT VL I
HARTFORD LIFE INSURANCE COMPANY
FILE NO. 33-53692
Dear Sir/Madam:
I have acted as General Counsel to Hartford Life Insurance Company (the
"Company"), a Connecticut insurance company, and Hartford Life Insurance Company
Separate Account VL I (the "Account") in connection with the registration of an
indefinite amount of securities in the form of flexible premium variable life
insurance policies (the "Policies") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended. I have examined such documents
(including the Form S-6 Registration Statement) and reviewed such questions of
law as I considered necessary and appropriate, and on the basis of such
examination and review, it is my opinion that:
1. The Company is a corporation duly organized and validly existing as a
stock life insurance company under the laws of the State of Connecticut
and is duly authorized by the Insurance Department of the State of
Connecticut to issue the Policies.
2. The Account is a duly authorized and validly existing separate account
established pursuant to the provisions of Section 38a-433 of the
Connecticut Statutes.
3. To the extent so provided under the Policies, that portion of the
assets of the Account equal to the reserves and other contract
liabilities with respect to the Account will not be chargeable with
liabilities arising out of any other business that the Company may
conduct.
4. The Policies, when issued as contemplated by the Form S-6 Registration
Statement, will constitute legal, validly issued and binding
obligations of the Company.
<PAGE>
Board of Directors
Hartford Life Insurance Company
April 6, 2000
Page 2
I hereby consent to the filing of this opinion as an exhibit to the Form S-6
Registration Statement for the Policies and the Account.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
<PAGE>
[LOGO]
[HARTFORD LIFE]
Thomas P. Kalmbach, FSA, MAAA
Actuary
April 6, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: SEPARATE ACCOUNT VL I
HARTFORD LIFE INSURANCE COMPANY
FILE NO. 33-53692
Dear Sir/Madam:
This opinion is furnished in connection with the Form S-6 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 issued in the Form S-6 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 Form S-6
Registration Statement and to the reference to my name under the heading
"Experts" in the Statement of Additional Information included as part of such
Form S-6 Registration Statement.
Very truly yours,
/s/ Thomas P. Kalmbach
Thomas P. Kalmbach
<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 11, 2000
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
POWER OF ATTORNEY
David T. Foy
Lynda Godkin
Thomas M. Marra
Lowndes A. Smith
Raymond P. Welnicki
Lizabeth H. Zlatkus
David M. Znamierowski
do hereby jointly and severally authorize Lynda Godkin, Christine Repasy,
Marianne O'Doherty, Thomas S. Clark and Marta Czekajewski 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
under the Securities Act of 1933 and/or the Investment Company Act of 1940, and
do hereby ratify such signatures heretofore made by such persons.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
/s/ David T. Foy
- -------------------------------- Dated as of January 15, 2000
David T. Foy
/s/ Lynda Godkin
- -------------------------------- Dated as of January 15, 2000
Lynda Godkin
/s/ Thomas M. Marra
- -------------------------------- Dated as of January 15, 2000
Thomas M. Marra
/s/ Lowndes A. Smith
- -------------------------------- Dated as of January 15, 2000
Lowndes A. Smith
/s/ Raymond P. Welnicki
- -------------------------------- Dated as of January 15, 2000
Raymond P. Welnicki
/s/ Lizabeth H. Zlatkus
- -------------------------------- Dated as of January 15, 2000
Lizabeth H. Zlatkus
/s/ David M. Znamierowski
- -------------------------------- Dated as of January 15, 2000
David M. Znamierowski
<PAGE>
ORGANIZATIONAL CHART
<TABLE>
<CAPTION>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
---------------------------------------------
NUTMEG INSURANCE COMPANY |
(CONNECTICUT) THE HARTFORD INVESTMENT
| MANAGEMENT COMPANY
HARTFORD FIRE INSURANCE COMPANY (DELAWARE)
(CONNECTICUT) |
| |
HARTFORD ACCIDENT AND INDEMNITY COMPANY HARTFORD INVESTMENT
(CONNECTICUT) SERVICES, INC.
| (CONNECTICUT)
HARTFORD LIFE, INC.
(DELAWARE)
|
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
(CONNECTICUT)
|
|
|
-------------------------------------------------------------------------------------------------------------------------
| | | | | | | | |
HARTFORD LIFE | | | | | | PLANCO PLANCO
INTERNATIONAL, LTD.| | | | | | FINANCIAL INCORPORATED
(CONNECTICUT) | | | | | | SERVICES, (PENNSYLVANIA)
| | | | | | INCORPORATED
| | | | | | (PENNSYLVANIA)
| | | | | |
| HART LIFE HARTFORD FINANCIAL HARTFORD LIFE HARTFORD AMERICAN
| INSURANCE SERVICES LIFE INSURANCE COMPANY FINANCIAL MATURITY LIFE
| COMPANY INSURANCE COMPANY (CONNECTICUT) SERVICES, LLC INSURANCE COMPANY
| (CONNECTICUT) (CONNECTICUT) | (DELAWARE) (CONNECTICUT)
| | | |
| ------------------------------------- | AML FINANCIAL, INC.
| | | | | (CONNECTICUT)
|SERVUS LIFE HARTFORD HARTFORD |
| INSURANCE INTERNATIONAL LIFE AND |
| COMPANY LIFE REASSURANCE ANNUITY INSURANCE |
|(CONNECTICUT) CORPORATION COMPANY |
| (CONNECTICUT) (CONNECTICUT) |
| | |
| | |
| HARTFORD |
| LIFE, LTD. |
| (BERMUDA) |
| |
| |
----------| -----------------------------------------------------------------------
| | | | |
INTERNATIONAL HL INVESTMENT HARTFORD HARTFORD SECURITIES HARTFORD-COMPREHENSIVE
CORPORATE ADVISORS, LLC EQUITY SALES DISTRIBUTION EMPLOYEE
MARKETING GROUP, INC. (CONNECTICUT) COMPANY, INC. COMPANY, INC. BENEFIT SERVICE
(CONNECTICUT) | (CONNECTICUT) (CONNECTICUT) COMPANY
| | (CONNECTICUT)
| |
THE EVERGREEN HARTFORD INVESTMENT
GROUP, INC. FINANCIAL SERVICES
(NEW YORK) COMPANY
(DELAWARE)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
----------------------------------------------------------------------------------------------------------------------------
| | |
| | Hartford Accidental and Indemnity Company
| | (Connecticut)
| | |
| | Hartford Life, Inc
| | (Delaware)
| | |
| | Hartford Life and Accident Insurance Company
| | (Connecticut)
| | |
| | HARTFORD LIFE
| | -------INTERNATIONAL LTD.
| | | (CONNECTICUT)
| | | |
| | | ITT HARTFORD
| | | ----SUDAMERICANA
| | | | HOLDING S.A.
| | | | (ARGENTINA)
| | | |------------------------------------------------------
| | | | | |
| | | | ITT HARTFORD GALICIA INSTITUTO DE
| | | | SEGUROS VIDA COMPANIA SALTA COMPANIA DE
| | | |------DE VIDA S.A. DE SEGUROS S.A. SEGUROS DE VIDA S.A.
| | | | (URUGUAY) (ARGENTINA) (ARGENTINA)
| | | |
| | ICATU | | HARTFORD
| | HARTFORD | |---SEGUROS DE VIDA S.A.
| | SEGUROS S.A.----------| | (ARGENTINA)
| | (BRAZIL) |
| | | |
| | | | HARTFORD
| | -- ----------| |-------SEGUROS DE
| | | | | RETIRO S.A.
| | | | | (ARGENTINA)
|-----------|----------------|-------------------|--------------------------------------------------------------------------
| | | | |
| | | ICATU HARTFORD | CONSULTORA DE CAPITALES
| | | FUNDO DE PENSAO | S.A. SOCIEDAD GERENTE
| | | (BRAZIL) |----DE FONDOS COMUNES
| | | | | DE ENVERSION
| | | | | (ARGENTINA)
| | | ICATU HARTFORD |
| | | CAPITALIZACAO S.A. | CLARIDAD
| | | (BRAZIL) | ADMINISTRADORA DE
| | | | |---FONDOS DE JUBILACIONES
| | | BRAZILCAP | Y PENSIONES S.A.
| | | CAPITALIZACAO S.A. | (ARGENTINA)
| | | (BRAZIL) |
| | | |
| | -------------------------- |
| |--------------- | |
| | | |
HARTFORD FIRE HARTFORD FIRE | |------- SEGPOOL S.A.
INTERNATIONAL------------INTERNATIONAL, LTD. | | (ARGENTINA)
(GERMANY) GMBH (CONNECTICUT) | |
(WEST GERMANY) | |
| |
ICATU HARTFORD | | THESIS S.A.
ADMINISTRACAO | |-------- (ARGENTINA)
DE BENEFICIOS LTDA-- | |
(BRAZIL) |
|
|
|
|--------- U.O.R., S.A.
(ARGENTINA)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
- --------------------------------------------------------------------------------------------------------------------------------|
| |
THE HARTFORD INTERNATIONAL |
|-----------------------------------------------------------------------FINANCIAL SERVICES GROUP, INC. |
| | | (DELAWARE) |
| | | ----------------------|----------------- |
| | | | | | | |
ZWOLSCHE | | ITT HARTFORD LONDON AND | HARTFORD |
ALGEMEENE N.V. | | INTERNATIONAL, LTD. EDINBURGH | EUROPE, INC. |
(NETHERLANDS) | | (U.K.) INSURANCE GROUP, LTD.| (DELAWARE) |
| | | (U.K.) | |
| | | | | |
| | | ------------- | |
| | | | | |
| ITT ASSURANCES HARTFORD INTERNATIONAL | LONDON AND -THE HARTFORD |
| S.A. INSURANCE CO., N.V. |--- EDINBURGH INTERNATIONAL |
| ZWOLSCHE ALGEMEENE (FRANCE) (BELGIUM) | INSURANCE CO., LTD. FINANCIAL |
|----SCHADEVERZEKERING | | (U.K.) SERVICES |
--------| N.V.----------------------------------- | | | GROUP CIA |
| | (NETHERLANDS) | | | | DE SEGUROS Y |
Z.A. | | | | EXCESS INSURANCE REASEGUROS S.A.|
- --VERZEKERINGEN | | | | COMPANY LTD. (SPAIN) |
| N.V. | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| (BELGIUM) |------HERVERZEKERING B.V. | | | |
| | -----| (NETHERLANDS) | | | LONDON AND |
| | | | | | |--- EDINBURGH LIFE |
| Z.A. LUX S.A. | | | | ASSURANCE CO., LTD. |
| (LUXEMBURG) | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| |--LEVENS-VERZEKERING N.V.------------ | | | |
| | (NETHERLANDS) | | | | |
- ----------------|------------------------------------|------------|------|--------------|---------------------------------------|
| | | | | | |
| -------- | | | | |
| | | | | | | |
| ZWOLSCHE | ZWOLSCHE ALGEMEENE ZWOLSCHE ALGEMEENE | | | |
| ALGEMEENE |-----HYPOTHEKEN N.V. BELEGGINGEN III B.V. | | | |
| EUROPA B.V. | (NETHERLANDS) (NETHERLANDS) | | | |
| (NETHERLANDS) | ---------- | | |
- --------| | | | | |
| EXPLOITATIEMAAT- BELEGGINGSMAAT- | | |
|----- SCHAPPIJ SCHAPPIJ | | |
| BUIZERDLAAN B.V. BUIZERDLAAN B.V. | | |
| (NETHERLANDS) (NETHERLANDS) | | |
| | | |
| | | -----
| HOLLAND | |-------------------------- |
|---- BELEGGINGSGROEP B.V. | | | |
(NETHERLANDS) | |----------------- | |
| -------| | | |
| | | | | |
| | | | | |
F.A. KNIGHT | MACALISTER & LONDON AND | HARTFORD FIRE
& SON N.V. | DUNDAS, LTD. EDINBURGH | INTERNATIONAL
(BELGIUM) | (SCOTLAND) TRUSTEES, LTD. | SERVICIOS
| (U.K.) | (SPAIN)
------------------------- -----------
| | |
FENCOURT QUOTEL LONDON AND
PRINTERS, LTD. INSURANCE EDINBURGH
(U.K.) SYSTEMS, LTD. SERVICES, LTD.
(U.K.) (U.K.)
|
EUROSURE
INSURANCE
MARKETING, LTD.
(U.K.)
</TABLE>
