<PAGE>
[LOGO]
HARTFORD LEADERS
1999
HARTFORD LIFE INSURANCE COMPANY
HARTFORD LIFE & ANNUITY INSURANCE COMPANY
SEPARATE ACCOUNTS AND
HARTFORD HLS
MONEY MARKET FUND
ANNUAL REPORT
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Hartford Life Insurance Company Separate Account Financial
Statements for:
Separate Account Seven.................................. 2
Hartford Life and Annuity Insurance Company Separate Account
Financial Statements for:
Separate Account Seven.................................. 18
Hartford HLS Mutual Funds Financial Statements for:
Hartford Money Market HLS Fund.......................... MF-1
</TABLE>
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
HARTFORD AMERICAN FUNDS
MONEY MARKET ASSET AMERICAN FUNDS AMERICAN FUNDS
HLS ALLOCATION BOND GLOBAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in the Hartford
Money Market HLS Fund:
Hartford Money Market HLS
Fund, Inc. - Class IA
Shares 3,927,653
Cost $3,927,653
Market Value.............. $3,927,653 -- -- --
Investments in American Funds
Insurance Series:
Asset Allocation Fund
Shares 149,944
Cost $2,359,658
Market Value.............. -- $2,258,152 -- --
Bond Fund
Shares 272,500
Cost $2,674,701
Market Value.............. -- -- $2,654,149 --
Global Growth Fund
Shares 194,533
Cost $3,435,833
Market Value.............. -- -- -- $4,164,947
Global Small Capitalization
Fund
Shares 70,595
Cost $1,144,251
Market Value.............. -- -- -- --
Growth Fund
Shares 227,132
Cost $15,291,922
Market Value.............. -- -- -- --
Growth-Income Fund
Shares 409,587
Cost $15,099,051
Market Value.............. -- -- -- --
International Fund
Shares 164,674
Cost $3,867,188
Market Value.............. -- -- -- --
New World Fund
Shares 99,427
Cost $1,028,049
Market Value.............. -- -- -- --
Investments in the Franklin
Templeton Variable Insurance
Products Trust:
Real Estate Securities Fund
Shares 7,119
Cost $103,928
Market Value.............. -- -- -- --
Small Cap Fund
Shares 64,378
Cost $1,275,742
Market Value.............. -- -- -- --
Mutual Shares Securities
Fund
Shares 64,165
Cost $821,533
Market Value.............. -- -- -- --
Investments in the Templeton
Variable Products Series
Fund:
Franklin Strategic Income
Investments Fund
Shares 76,779
Cost $764,210
Market Value.............. -- -- -- --
Due from Hartford Life
Insurance Company............ 30,045 8,978 5,309 29,739
Receivable for fund shares
sold......................... -- -- -- --
---------- ---------- ---------- ----------
Total Assets.................. 3,957,698 2,267,130 2,659,458 4,194,686
---------- ---------- ---------- ----------
LIABILITIES:
Due to Hartford Life Insurance
Company...................... -- -- -- --
Payable for fund shares
purchased.................... 29,963 8,978 5,310 29,739
---------- ---------- ---------- ----------
Total Liabilities............. 29,963 8,978 5,310 29,739
---------- ---------- ---------- ----------
Net Assets (variable annuity
contract liabilities)........ $3,927,735 $2,258,152 $2,654,148 $4,164,947
========== ========== ========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 2
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
AMERICAN FUNDS FRANKLIN
GLOBAL SMALL AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS REAL ESTATE
CAPITALIZATION GROWTH GROWTH-INCOME INTERNATIONAL NEW WORLD SECURITIES
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------- -------------- -------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in the Hartford
Money Market HLS Fund:
Hartford Money Market HLS
Fund, Inc. - Class IA
Shares 3,927,653
Cost $3,927,653
Market Value.............. -- -- -- -- -- --
Investments in American Funds
Insurance Series:
Asset Allocation Fund
Shares 149,944
Cost $2,359,658
Market Value.............. -- -- -- -- -- --
Bond Fund
Shares 272,500
Cost $2,674,701
Market Value.............. -- -- -- -- -- --
Global Growth Fund
Shares 194,533
Cost $3,435,833
Market Value.............. -- -- -- -- -- --
Global Small Capitalization
Fund
Shares 70,595
Cost $1,144,251
Market Value.............. $1,225,521 -- -- -- -- --
Growth Fund
Shares 227,132
Cost $15,291,922
Market Value.............. -- $16,028,736 -- -- -- --
Growth-Income Fund
Shares 409,587
Cost $15,099,051
Market Value.............. -- -- $13,545,054 -- -- --
International Fund
Shares 164,674
Cost $3,867,188
Market Value.............. -- -- -- $4,401,730 -- --
New World Fund
Shares 99,427
Cost $1,028,049
Market Value.............. -- -- -- -- $1,170,252 --
Investments in the Franklin
Templeton Variable Insurance
Products Trust:
Real Estate Securities Fund
Shares 7,119
Cost $103,928
Market Value.............. -- -- -- -- -- $105,928
Small Cap Fund
Shares 64,378
Cost $1,275,742
Market Value.............. -- -- -- -- -- --
Mutual Shares Securities
Fund
Shares 64,165
Cost $821,533
Market Value.............. -- -- -- -- -- --
Investments in the Templeton
Variable Products Series
Fund:
Franklin Strategic Income
Investments Fund
Shares 76,779
Cost $764,210
Market Value.............. -- -- -- -- -- --
Due from Hartford Life
Insurance Company............ 20,453 261,870 248,815 60,113 25,954 --
Receivable for fund shares
sold......................... -- -- -- -- -- --
---------- ----------- ----------- ---------- ---------- --------
Total Assets.................. 1,245,974 16,290,606 13,793,869 4,461,843 1,196,206 105,928
---------- ----------- ----------- ---------- ---------- --------
LIABILITIES:
Due to Hartford Life Insurance
Company...................... -- -- -- -- -- 18
Payable for fund shares
purchased.................... 20,454 261,869 248,813 60,114 25,954 --
---------- ----------- ----------- ---------- ---------- --------
Total Liabilities............. 20,454 261,869 248,813 60,114 25,954 18
---------- ----------- ----------- ---------- ---------- --------
Net Assets (variable annuity
contract liabilities)........ $1,225,520 $16,028,737 $13,545,056 $4,401,729 $1,170,252 $105,910
========== =========== =========== ========== ========== ========
<CAPTION>
FRANKLIN
FRANKLIN MUTUAL SHARES STRATEGIC
SMALL CAP SECURITIES INCOME INVESTMENTS
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ------------------
<S> <C> <C> <C>
ASSETS:
Investments in the Hartford
Money Market HLS Fund:
Hartford Money Market HLS
Fund, Inc. - Class IA
Shares 3,927,653
Cost $3,927,653
Market Value.............. -- -- --
Investments in American Funds
Insurance Series:
Asset Allocation Fund
Shares 149,944
Cost $2,359,658
Market Value.............. -- -- --
Bond Fund
Shares 272,500
Cost $2,674,701
Market Value.............. -- -- --
Global Growth Fund
Shares 194,533
Cost $3,435,833
Market Value.............. -- -- --
Global Small Capitalization
Fund
Shares 70,595
Cost $1,144,251
Market Value.............. -- -- --
Growth Fund
Shares 227,132
Cost $15,291,922
Market Value.............. -- -- --
Growth-Income Fund
Shares 409,587
Cost $15,099,051
Market Value.............. -- -- --
International Fund
Shares 164,674
Cost $3,867,188
Market Value.............. -- -- --
New World Fund
Shares 99,427
Cost $1,028,049
Market Value.............. -- -- --
Investments in the Franklin
Templeton Variable Insurance
Products Trust:
Real Estate Securities Fund
Shares 7,119
Cost $103,928
Market Value.............. -- -- --
Small Cap Fund
Shares 64,378
Cost $1,275,742
Market Value.............. $1,724,699 -- --
Mutual Shares Securities
Fund
Shares 64,165
Cost $821,533
Market Value.............. -- $850,186 --
Investments in the Templeton
Variable Products Series
Fund:
Franklin Strategic Income
Investments Fund
Shares 76,779
Cost $764,210
Market Value.............. -- -- $764,718
Due from Hartford Life
Insurance Company............ -- 1,976 112,773
Receivable for fund shares
sold......................... -- -- --
---------- -------- --------
Total Assets.................. 1,724,699 852,162 877,491
---------- -------- --------
LIABILITIES:
Due to Hartford Life Insurance
Company...................... -- -- --
Payable for fund shares
purchased.................... 72 1,974 112,775
---------- -------- --------
Total Liabilities............. 72 1,974 112,775
---------- -------- --------
Net Assets (variable annuity
contract liabilities)........ $1,724,627 $850,188 $764,716
========== ======== ========
</TABLE>
---------------------------------------------------- 3
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<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES -- (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
MFS
CAPITAL MFS MFS MFS
OPPORTUNITIES EMERGING GROWTH GLOBAL EQUITY GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- ------------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments in the MFS
Variable Insurance Trust:
Capital Opportunities Series
Shares 157,794
Cost $2,946,692
Market Value.............. $3,428,872 -- -- --
Emerging Growth Series
Shares 162,329
Cost $4,454,467
Market Value.............. -- $6,158,752 -- --
Global Equity Series
Shares 10,915
Cost $126,858
Market Value.............. -- -- $131,521 --
Growth
Shares 256,414
Cost $3,081,188
Market Value.............. -- -- -- $3,576,971
Growth with Income Series
Shares 156,109
Cost $3,163,664
Market Value.............. -- -- -- --
High Income Series
Shares 102,765
Cost $1,160,901
Market Value.............. -- -- -- --
New Discovery Series
Shares 52,426
Cost $680,146
Market Value.............. -- -- -- --
Total Return Series
Shares 71,028
Cost $1,250,916
Market Value.............. -- -- -- --
Investments in the Templeton
Variable Products Series
Fund:
Templeton Asset Allocation
Fund
Shares 14,154
Cost $309,850
Market Value.............. -- -- -- --
Templeton International Fund
Shares 65,746
Cost $1,314,319
Market Value.............. -- -- -- --
Investments in the Franklin
Templeton Variable Insurance
Products Trust:
Templeton Developing Markets
Equity Fund
Shares 28,573
Cost $249,395
Market Value.............. -- -- -- --
Templeton Global Growth Fund
Shares 60,187
Cost $881,906
Market Value.............. -- -- -- --
Due from Hartford Life
Insurance Company............ 76,191 45,813 49,425 88,259
Receivable for fund shares
sold......................... -- -- -- --
---------- ---------- -------- ----------
Total Assets.................. 3,505,063 6,204,565 180,946 3,665,230
---------- ---------- -------- ----------
LIABILITIES:
Due to Hartford Life Insurance
Company...................... -- -- -- --
Payable for fund shares
purchased.................... 76,192 45,812 49,427 88,260
---------- ---------- -------- ----------
Total Liabilities............. 76,192 45,812 49,427 88,260
---------- ---------- -------- ----------
Net Assets (variable annuity
contract liabilities)........ $3,428,871 $6,158,753 $131,519 $3,576,970
========== ========== ======== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 4
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
MFS MFS TEMPLETON
GROWTH MFS NEW MFS ASSET TEMPLETON
WITH INCOME HIGH INCOME DISCOVERY TOTAL RETURN ALLOCATION INTERNATIONAL
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in the MFS
Variable Insurance Trust:
Capital Opportunities Series
Shares 157,794
Cost $2,946,692
Market Value.............. -- -- -- -- -- --
Emerging Growth Series
Shares 162,329
Cost $4,454,467
Market Value.............. -- -- -- -- -- --
Global Equity Series
Shares 10,915
Cost $126,858
Market Value.............. -- -- -- -- -- --
Growth
Shares 256,414
Cost $3,081,188
Market Value.............. -- -- -- -- -- --
Growth with Income Series
Shares 156,109
Cost $3,163,664
Market Value.............. $3,326,691 -- -- -- -- --
High Income Series
Shares 102,765
Cost $1,160,901
Market Value.............. -- $1,180,775 -- -- -- --
New Discovery Series
Shares 52,426
Cost $680,146
Market Value.............. -- -- $905,389 -- -- --
Total Return Series
Shares 71,028
Cost $1,250,916
Market Value.............. -- -- -- $1,260,746 -- --
Investments in the Templeton
Variable Products Series
Fund:
Templeton Asset Allocation
Fund
Shares 14,154
Cost $309,850
Market Value.............. -- -- -- -- $329,372 --
Templeton International Fund
Shares 65,746
Cost $1,314,319
Market Value.............. -- -- -- -- -- $1,454,965
Investments in the Franklin
Templeton Variable Insurance
Products Trust:
Templeton Developing Markets
Equity Fund
Shares 28,573
Cost $249,395
Market Value.............. -- -- -- -- -- --
Templeton Global Growth Fund
Shares 60,187
Cost $881,906
Market Value.............. -- -- -- -- -- --
Due from Hartford Life
Insurance Company............ 26,350 22,541 6,973 25,947 9,263 14,900
Receivable for fund shares
sold......................... -- -- -- -- -- --
---------- ---------- -------- ---------- -------- ----------
Total Assets.................. 3,353,041 1,203,316 912,362 1,286,693 338,635 1,469,865
---------- ---------- -------- ---------- -------- ----------
LIABILITIES:
Due to Hartford Life Insurance
Company...................... -- -- -- -- -- --
Payable for fund shares
purchased.................... 26,353 22,541 6,974 25,948 9,265 14,902
---------- ---------- -------- ---------- -------- ----------
Total Liabilities............. 26,353 22,541 6,974 25,948 9,265 14,902
---------- ---------- -------- ---------- -------- ----------
Net Assets (variable annuity
contract liabilities)........ $3,326,688 $1,180,775 $905,388 $1,260,745 $329,370 $1,454,963
========== ========== ======== ========== ======== ==========
<CAPTION>
TEMPLETON
DEVELOPING TEMPLETON
MARKETS EQUITY GLOBAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------
<S> <C> <C>
ASSETS:
Investments in the MFS
Variable Insurance Trust:
Capital Opportunities Series
Shares 157,794
Cost $2,946,692
Market Value.............. -- --
Emerging Growth Series
Shares 162,329
Cost $4,454,467
Market Value.............. -- --
Global Equity Series
Shares 10,915
Cost $126,858
Market Value.............. -- --
Growth
Shares 256,414
Cost $3,081,188
Market Value.............. -- --
Growth with Income Series
Shares 156,109
Cost $3,163,664
Market Value.............. -- --
High Income Series
Shares 102,765
Cost $1,160,901
Market Value.............. -- --
New Discovery Series
Shares 52,426
Cost $680,146
Market Value.............. -- --
Total Return Series
Shares 71,028
Cost $1,250,916
Market Value.............. -- --
Investments in the Templeton
Variable Products Series
Fund:
Templeton Asset Allocation
Fund
Shares 14,154
Cost $309,850
Market Value.............. -- --
Templeton International Fund
Shares 65,746
Cost $1,314,319
Market Value.............. -- --
Investments in the Franklin
Templeton Variable Insurance
Products Trust:
Templeton Developing Markets
Equity Fund
Shares 28,573
Cost $249,395
Market Value.............. $299,735 --
Templeton Global Growth Fund
Shares 60,187
Cost $881,906
Market Value.............. -- $938,910
Due from Hartford Life
Insurance Company............ 1,074 3,942
Receivable for fund shares
sold......................... -- --
-------- --------
Total Assets.................. 300,809 942,852
-------- --------
LIABILITIES:
Due to Hartford Life Insurance
Company...................... -- --
Payable for fund shares
purchased.................... 1,073 3,941
-------- --------
Total Liabilities............. 1,073 3,941
-------- --------
Net Assets (variable annuity
contract liabilities)........ $299,736 $938,911
======== ========
</TABLE>
---------------------------------------------------- 5
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES -- (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ ---------- -----------
<S> <C> <C> <C>
DEFERRED ANNUITY CONTRACTS IN THE
ACCUMULATION PERIOD:
Hartford Money Market HLS Fund
1.5%............................ 1,931,127 $ 1.016961 $ 1,963,881
Hartford Money Market HLS Fund
1.4%............................ 485,270 1.017478 493,752
Hartford Money Market HLS Fund
1.25%........................... 1,443,769 1.018239 1,470,102
Asset Allocation Fund 1.5%....... 95,715 9.763857 934,547
Asset Allocation Fund 1.25%...... 116,323 9.776112 1,137,189
Asset Allocation Fund 1.4%....... 19,083 9.768759 186,416
Bond Fund 1.5%................... 130,825 10.093283 1,320,450
Bond Fund 1.65%.................. 1,015 10.089521 10,243
Bond Fund 1.25%.................. 110,301 10.105950 1,114,694
Bond Fund 1.4%................... 20,673 10.098350 208,761
Global Growth Fund 1.5%.......... 83,301 13.962993 1,163,127
Global Growth Fund 1.65%......... 590 13.957799 8,237
Global Growth Fund 1.4%.......... 25,408 13.969976 354,951
Global Growth Fund 1.25%......... 188,737 13.980455 2,638,632
Global Small Capitalization Fund
1.5%............................ 32,795 13.767193 451,501
Global Small Capitalization Fund
1.4%............................ 6,579 13.774075 90,619
Global Small Capitalization Fund
1.5%............................ 49,578 13.784415 683,400
Growth Fund 1.5%................. 377,385 12.502121 4,718,115
Growth Fund 1.65%................ 795 12.497460 9,933
Growth Fund 1.25%................ 786,889 12.517781 9,850,100
Growth Fund .80%................. 36 12.865591 466
Growth Fund 1.4%................. 115,932 12.508384 1,450,123
Growth-Income Fund 1.5%.......... 342,021 9.579464 3,276,375
Growth-Income Fund 1.65%......... 2,725 9.575882 26,097
Growth-Income Fund 1.25%......... 954,356 9.591485 9,153,688
Growth-Income Fund 1.4%.......... 113,613 9.584268 1,088,896
International Fund 1.5%.......... 129,165 14.644814 1,891,603
International Fund 1.25%......... 160,614 14.663115 2,355,098
International Fund 1.4%.......... 10,548 14.652129 154,551
International Fund .80%.......... 35 13.799473 477
New World Fund 1.5%.............. 12,627 11.644005 147,031
New World Fund 1.25%............. 70,565 11.658593 822,685
New World Fund 1.4%.............. 17,214 11.649838 200,536
Real Estate Securities Fund
1.5%............................ 3,571 8.830523 31,538
Real Estate Securities Fund
1.4%............................ 6,166 8.834957 54,478
Real Estate Securities Fund
1.25%........................... 2,250 8.841604 19,894
Small Cap Fund 1.5%.............. 13,274 16.636909 220,836
Small Cap Fund 1.65%............. 216 16.630728 3,590
Small Cap Fund 1.4%.............. 13,640 16.645221 227,037
Small Cap Fund 1.25%............. 76,431 16.657685 1,273,164
Mutual Shares Securities Fund
1.5%............................ 18,240 9.783931 178,459
Mutual Shares Securities Fund
1.65%........................... 314 9.780274 3,069
Mutual Shares Securities Fund
1.4%............................ 11,575 9.788843 113,303
Mutual Shares Securities Fund
1.25%........................... 56,691 9.796213 555,357
Franklin Strategic Income
Investments Fund 1.5%........... 2,250 10.176193 22,901
Franklin Strategic Income
Investments Fund 1.4%........... 57,494 10.181293 585,359
Franklin Strategic Income
Investments Fund 1.25%.......... 15,355 10.188959 156,456
Capital Opportunities Series
1.5%............................ 79,197 12.203397 966,469
Capital Opportunities Series
1.65%........................... 352 12.198850 4,288
Capital Opportunities Series
1.4%............................ 22,816 12.209515 278,576
Capital Opportunities Series
1.25%........................... 178,377 12.218688 2,179,538
Emerging Growth Series 1.5%...... 143,014 15.402545 2,202,777
Emerging Growth Series 1.65%..... 577 15.396821 8,882
Emerging Growth Series 1.4%...... 28,898 15.410232 445,330
Emerging Growth Series 1.25%..... 227,066 15.421795 3,501,764
Global Equity Series 1.5%........ 342 11.585770 3,967
Global Equity Series 1.4%........ 6,004 11.591574 69,594
Global Equity Series 1.25%....... 4,996 11.600282 57,958
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 6
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ ---------- -----------
<S> <C> <C> <C>
Growth Series 1.5%............... 52,128 $12.001263 $ 625,599
Growth Series 1.4%............... 48,508 12.007270 582,453
Growth Series 1.25%.............. 197,142 12.016294 2,368,918
Growth with Income Series 1.5%... 34,885 9.950259 347,119
Growth with Income Series
1.65%........................... 2,379 9.946537 23,667
Growth with Income Series 1.4%... 22,935 9.955242 228,328
Growth with Income Series
1.25%........................... 273,777 9.962740 2,727,574
High Income Series 1.5%.......... 27,923 10.039968 280,342
High Income Series 1.4%.......... 18,374 10.044992 184,566
High Income Series 1.25%......... 71,212 10.052557 715,867
New Discovery Series 1.5%........ 6,421 14.318332 91,945
New Discovery Series 1.4%........ 1,691 14.325485 24,229
New Discovery Series 1.25%....... 55,050 14.336247 789,214
Total Return Series 1.5%......... 61,956 9.688322 600,252
Total Return Series 1.65%........ 2,066 9.684701 20,004
Total Return Series 1.4%......... 12,872 9.693183 124,773
Total Return Series 1.25%........ 53,164 9.700481 515,716
Templeton Asset Allocation Fund
1.5%............................ 7,913 10.855332 85,898
Templeton Asset Allocation Fund
1.4%............................ 12,377 10.860766 134,421
Templeton Asset Allocation Fund
1.25%........................... 10,033 10.868937 109,051
Templeton International Fund
1.5%............................ 64,725 10.946563 708,512
Templeton International Fund
1.4%............................ 20,130 10.952050 220,463
Templeton International Fund
1.25%........................... 47,990 10.960275 525,988
Templeton Developing Markets
Equity Fund 1.5%................ 100 11.108629 1,112
Templeton Developing Markets
Equity Fund 1.4%................ 6,254 11.114200 69,507
Templeton Developing Markets
Equity Fund 1.25%............... 20,599 11.122555 229,117
Templeton Global Growth Fund
1.5%............................ 9,400 10.605862 99,693
Templeton Global Growth Fund
1.4%............................ 2,901 10.611118 30,778
Templeton Global Growth Fund
1.25%........................... 76,130 10.619149 808,440
-----------
GRAND TOTAL........................ $75,814,406
===========
</TABLE>
---------------------------------------------------- 7
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM INCEPTION, JULY 1, 1999, TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
HARTFORD AMERICAN FUNDS
MONEY MARKET ASSET AMERICAN FUNDS AMERICAN FUNDS
HLS ALLOCATION BOND GLOBAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends..................... $ 45,304 $ 21,760 $ 59,157 $ 17,852
EXPENSES:
Mortality and expense
undertakings................. (11,924) (5,478) (8,200) (9,403)
--------- --------- --------- ---------
Net investment income
(loss)..................... 33,380 16,282 50,957 8,449
--------- --------- --------- ---------
CAPITAL GAINS INCOME............ 2 126,885 -- 155,656
--------- --------- --------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
security transactions........ -- 31 359 1,389
Net unrealized (depreciation)
appreciation of investments
during the period............ -- (101,506) (20,553) 729,114
--------- --------- --------- ---------
Net (loss) gain on
investments................ -- (101,475) (20,194) 730,503
--------- --------- --------- ---------
Net increase in net assets
resulting from
operations................. $ 33,382 $ 41,692 $ 30,763 $ 894,608
========= ========= ========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 8
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
AMERICAN FUNDS FRANKLIN
GLOBAL SMALL AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS REAL ESTATE
CAPITALIZATION GROWTH GROWTH-INCOME INTERNATIONAL NEW WORLD SECURITIES
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------- -------------- -------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends..................... $ -- $ -- $ 62,951 $ 14,573 $ 3,676 $ 247
EXPENSES:
Mortality and expense
undertakings................. (2,120) (36,369) (31,452) (7,626) (2,616) (209)
--------- ---------- ----------- --------- --------- -------
Net investment income
(loss)..................... (2,120) (36,369) 31,499 6,947 1,060 38
--------- ---------- ----------- --------- --------- -------
CAPITAL GAINS INCOME............ 98,577 1,922,000 1,917,941 389,714 435 343
--------- ---------- ----------- --------- --------- -------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
security transactions........ (1,737) (599) 526 (25,899) 999 (25)
Net unrealized (depreciation)
appreciation of investments
during the period............ 81,270 736,813 (1,553,997) 534,543 142,203 2,000
--------- ---------- ----------- --------- --------- -------
Net (loss) gain on
investments................ 79,533 736,214 (1,553,471) 508,644 143,202 1,975
--------- ---------- ----------- --------- --------- -------
Net increase in net assets
resulting from
operations................. $ 175,990 $2,621,845 $ 395,969 $ 905,305 $ 144,697 $ 2,356
========= ========== =========== ========= ========= =======
<CAPTION>
FRANKLIN
FRANKLIN MUTUAL SHARES STRATEGIC
SMALL CAP SECURITIES INCOME INVESTMENTS
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends..................... $ 184 $ 929 $18,285
EXPENSES:
Mortality and expense
undertakings................. (3,102) (1,919) (1,780)
--------- ------- -------
Net investment income
(loss)..................... (2,918) (990) 16,505
--------- ------- -------
CAPITAL GAINS INCOME............ 26 -- --
--------- ------- -------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
security transactions........ 1,167 191 27
Net unrealized (depreciation)
appreciation of investments
during the period............ 448,957 28,653 508
--------- ------- -------
Net (loss) gain on
investments................ 450,124 28,844 535
--------- ------- -------
Net increase in net assets
resulting from
operations................. $ 447,232 $27,854 $17,040
========= ======= =======
</TABLE>
---------------------------------------------------- 9
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE PERIOD FROM INCEPTION, JULY 1, 1999, TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
MFS
CAPITAL MFS MFS MFS
OPPORTUNITIES EMERGING GROWTH GLOBAL EQUITY GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- ------------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends..................... $ -- $ -- $ 101 $ 5,430
EXPENSES:
Mortality and expense
undertakings................. (6,375) (12,765) (116) (8,158)
--------- ---------- --------- ---------
Net investment (loss)....... (6,375) (12,765) (15) (2,728)
--------- ---------- --------- ---------
CAPITAL GAINS INCOME............ -- -- 1,971 7,094
--------- ---------- --------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
security transactions........ 442 1,060 2 202
Net unrealized appreciation of
investments during the
period....................... 482,180 1,704,285 4,664 495,783
--------- ---------- --------- ---------
Net gain on investments..... 482,622 1,705,345 4,666 495,985
--------- ---------- --------- ---------
Net increase in net assets
resulting from
operations................. $ 476,247 $1,692,580 $ 6,622 $ 500,351
========= ========== ========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 10
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
MFS MFS TEMPLETON
GROWTH MFS NEW MFS ASSET TEMPLETON
WITH INCOME HIGH INCOME DISCOVERY TOTAL RETURN ALLOCATION INTERNATIONAL
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends..................... $ -- $ -- $ -- $ -- $ -- $--
EXPENSES:
Mortality and expense
undertakings................. (8,327) (3,554) (1,803) (2,288) (511) (3,984)
--------- ---------- ---------- --------- --------- --------
Net investment (loss)....... (8,327) (3,554) (1,803) (2,288) (511) (3,984)
--------- ---------- ---------- --------- --------- --------
CAPITAL GAINS INCOME............ -- -- 15,390 -- -- --
--------- ---------- ---------- --------- --------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
security transactions........ (34) 12 153 (7) 5 569
Net unrealized appreciation of
investments during the
period....................... 163,027 19,874 225,243 9,829 19,522 140,647
--------- ---------- ---------- --------- --------- --------
Net gain on investments..... 162,993 19,886 225,396 9,822 19,527 141,216
--------- ---------- ---------- --------- --------- --------
Net increase in net assets
resulting from
operations................. $ 154,666 $ 16,332 $ 238,983 $ 7,534 $ 19,016 $137,232
========= ========== ========== ========= ========= ========
<CAPTION>
TEMPLETON
DEVELOPING TEMPLETON
MARKETS EQUITY GLOBAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends..................... $ 54 $ 242
EXPENSES:
Mortality and expense
undertakings................. (720) (1,502)
------- ---------
Net investment (loss)....... (666) (1,260)
------- ---------
CAPITAL GAINS INCOME............ -- 1,172
------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
security transactions........ 67 32
Net unrealized appreciation of
investments during the
period....................... 50,339 57,004
------- ---------
Net gain on investments..... 50,406 57,036
------- ---------
Net increase in net assets
resulting from
operations................. $49,740 $ 56,948
======= =========
</TABLE>
---------------------------------------------------- 11
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM INCEPTION, JULY 1, 1999, TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
HARTFORD AMERICAN FUNDS
MONEY MARKET ASSET AMERICAN FUNDS AMERICAN FUNDS
HLS ALLOCATION BOND GLOBAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)....................... $ 33,380 $ 16,282 $ 50,957 $ 8,449
Capital gains income.......... 2 126,885 -- 155,656
Net realized gain (loss) on
security transactions........ -- 31 359 1,389
Net unrealized (depreciation)
appreciation of investments
during the period............ -- (101,506) (20,553) 729,114
---------- ---------- ---------- ----------
Net increase in net assets
resulting from operations.... 33,382 41,692 30,763 894,608
---------- ---------- ---------- ----------
UNIT TRANSACTIONS:
Purchases..................... 4,862,876 1,425,884 2,036,552 2,511,217
Net transfers................. (951,728) 811,493 598,489 776,934
Surrenders for benefit
payments and fees............ (16,795) (20,917) (11,656) (17,812)
Net annuity transactions...... -- -- -- --
---------- ---------- ---------- ----------
Net increase in net assets
resulting from unit
transactions................. 3,894,353 2,216,460 2,623,385 3,270,339
---------- ---------- ---------- ----------
Net increase in net assets.... 3,927,735 2,258,152 2,654,148 4,164,947
NET ASSETS:
Beginning of period........... -- -- -- --
---------- ---------- ---------- ----------
End of period................. $3,927,735 $2,258,152 $2,654,148 $4,164,947
========== ========== ========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 12
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
AMERICAN FUNDS FRANKLIN
GLOBAL SMALL AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS REAL ESTATE
CAPITALIZATION GROWTH GROWTH-INCOME INTERNATIONAL NEW WORLD SECURITIES
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------- -------------- -------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)....................... $ (2,120) $ (36,369) $ 31,499 $ 6,947 $ 1,060 $ 38
Capital gains income.......... 98,577 1,922,000 1,917,941 389,714 435 343
Net realized gain (loss) on
security transactions........ (1,737) (599) 526 (25,899) 999 (25)
Net unrealized (depreciation)
appreciation of investments
during the period............ 81,270 736,813 (1,553,997) 534,543 142,203 2,000
---------- ----------- ----------- ---------- ---------- --------
Net increase in net assets
resulting from operations.... 175,990 2,621,845 395,969 905,305 144,697 2,356
---------- ----------- ----------- ---------- ---------- --------
UNIT TRANSACTIONS:
Purchases..................... 824,033 10,722,699 9,961,708 2,406,935 531,587 89,856
Net transfers................. 230,437 2,742,725 3,242,751 1,099,087 499,704 14,541
Surrenders for benefit
payments and fees............ (4,940) (58,532) (55,372) (9,598) (5,736) (843)
Net annuity transactions...... -- -- -- -- -- --
---------- ----------- ----------- ---------- ---------- --------
Net increase in net assets
resulting from unit
transactions................. 1,049,530 13,406,892 13,149,087 3,496,424 1,025,555 103,554
---------- ----------- ----------- ---------- ---------- --------
Net increase in net assets.... 1,225,520 16,028,737 13,545,056 4,401,729 1,170,252 105,910
NET ASSETS:
Beginning of period........... -- -- -- -- -- --
---------- ----------- ----------- ---------- ---------- --------
End of period................. $1,225,520 $16,028,737 $13,545,056 $4,401,729 $1,170,252 $105,910
========== =========== =========== ========== ========== ========
<CAPTION>
FRANKLIN
FRANKLIN MUTUAL SHARES STRATEGIC
SMALL CAP SECURITIES INCOME INVESTMENTS
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)....................... $ (2,918) $ (990) $ 16,505
Capital gains income.......... 26 -- --
Net realized gain (loss) on
security transactions........ 1,167 191 27
Net unrealized (depreciation)
appreciation of investments
during the period............ 448,957 28,653 508
---------- -------- --------
Net increase in net assets
resulting from operations.... 447,232 27,854 17,040
---------- -------- --------
UNIT TRANSACTIONS:
Purchases..................... 630,903 649,702 97,027
Net transfers................. 654,035 175,147 660,466
Surrenders for benefit
payments and fees............ (7,543) (2,515) (9,817)
Net annuity transactions...... -- -- --
---------- -------- --------
Net increase in net assets
resulting from unit
transactions................. 1,277,395 822,334 747,676
---------- -------- --------
Net increase in net assets.... 1,724,627 850,188 764,716
NET ASSETS:
Beginning of period........... -- -- --
---------- -------- --------
End of period................. $1,724,627 $850,188 $764,716
========== ======== ========
</TABLE>
---------------------------------------------------- 13
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE PERIOD FROM INCEPTION, JULY 1, 1999, TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
MFS
CAPITAL MFS MFS MFS
OPPORTUNITIES EMERGING GROWTH GLOBAL EQUITY GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- ------------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment (loss)
income....................... $ (6,375) $ (12,765) $ (15) $ (2,728)
Capital gains income.......... -- -- 1,971 7,094
Net realized gain (loss) on
security transactions........ 442 1,060 2 202
Net unrealized appreciation of
investments during the
period....................... 482,180 1,704,285 4,664 495,783
---------- ---------- -------- ----------
Net increase in net assets
resulting from operations.... 476,247 1,692,580 6,622 500,351
---------- ---------- -------- ----------
UNIT TRANSACTIONS:
Purchases..................... 2,513,108 3,239,426 96,068 1,951,955
Net transfers................. 445,144 1,236,084 28,845 1,134,814
Surrenders for benefit and
payments and fees............ (5,628) (9,337) (16) (10,150)
Net annuity transactions...... -- -- -- --
---------- ---------- -------- ----------
Net increase in net assets
resulting from unit
transactions................. 2,952,624 4,466,173 124,897 3,076,619
---------- ---------- -------- ----------
Net increase in net assets.... 3,428,871 6,158,753 131,519 3,576,970
NET ASSETS:
Beginning of period........... -- -- -- --
---------- ---------- -------- ----------
End of period................. $3,428,871 $6,158,753 $131,519 $3,576,970
========== ========== ======== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 14
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
MFS MFS TEMPLETON
GROWTH MFS NEW MFS ASSET TEMPLETON
WITH INCOME HIGH INCOME DISCOVERY TOTAL RETURN ALLOCATION INTERNATIONAL
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment (loss)
income....................... $ (8,327) $ (3,554) $ (1,803) $ (2,288) $ (511) $ (3,984)
Capital gains income.......... -- -- 15,390 -- -- --
Net realized gain (loss) on
security transactions........ (34) 12 153 (7) 5 569
Net unrealized appreciation of
investments during the
period....................... 163,027 19,874 225,243 9,829 19,522 140,647
---------- ---------- -------- ---------- -------- ----------
Net increase in net assets
resulting from operations.... 154,666 16,332 238,983 7,534 19,016 137,232
---------- ---------- -------- ---------- -------- ----------
UNIT TRANSACTIONS:
Purchases..................... 2,159,882 977,701 393,804 968,780 236,918 997,440
Net transfers................. 1,020,966 191,978 276,347 290,507 76,346 324,351
Surrenders for benefit and
payments and fees............ (8,826) (5,236) (3,746) (6,076) (2,910) (4,060)
Net annuity transactions...... -- -- -- -- -- --
---------- ---------- -------- ---------- -------- ----------
Net increase in net assets
resulting from unit
transactions................. 3,172,022 1,164,443 666,405 1,253,211 310,354 1,317,731
---------- ---------- -------- ---------- -------- ----------
Net increase in net assets.... 3,326,688 1,180,775 905,388 1,260,745 329,370 1,454,963
NET ASSETS:
Beginning of period........... -- -- -- -- -- --
---------- ---------- -------- ---------- -------- ----------
End of period................. $3,326,688 $1,180,775 $905,388 $1,260,745 $329,370 $1,454,963
========== ========== ======== ========== ======== ==========
<CAPTION>
TEMPLETON
DEVELOPING TEMPLETON
MARKETS EQUITY GLOBAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment (loss)
income....................... $ (666) $ (1,260)
Capital gains income.......... -- 1,172
Net realized gain (loss) on
security transactions........ 67 32
Net unrealized appreciation of
investments during the
period....................... 50,339 57,004
-------- --------
Net increase in net assets
resulting from operations.... 49,740 56,948
-------- --------
UNIT TRANSACTIONS:
Purchases..................... 195,729 615,160
Net transfers................. 56,350 270,275
Surrenders for benefit and
payments and fees............ (2,083) (3,472)
Net annuity transactions...... -- --
-------- --------
Net increase in net assets
resulting from unit
transactions................. 249,996 881,963
-------- --------
Net increase in net assets.... 299,736 938,911
NET ASSETS:
Beginning of period........... -- --
-------- --------
End of period................. $299,736 $938,911
======== ========
</TABLE>
---------------------------------------------------- 15
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. ORGANIZATION:
Separate Account Seven (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 annuity contractowners of the Company in various mutual
funds (the Funds) as directed by the contractowners.
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.
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:
Deductions and Charges -- Certain amounts are deducted from the Contracts,
as described below:
a) MORTALITY AND EXPENSE RISK CHARGES--The Company will make deductions at a
maximum annual rate of 1.25% of the contract's value for the mortality
and expense risks which the company undertakes.
b) TAX EXPENSE CHARGE--If applicable, the Company will make deductions at a
maximum rate of 3.5% of the contract's value to meet premium tax
requirements. An additional tax charge based on a percentage of the
contract's value may be assessed to partial withdrawals or surrenders.
These expenses are included in surrenders for benefit payments and fees
on the accompanying statements of changes in net assets.
c) ADMINISTRATIVE CHARGE--The Company will make deductions to cover
administrative expenses at a maximum annual rate of 0.15% of the
contract's value. These expenses are included in surrenders for benefit
payments and fees on the accompanying statements of changes in net
assets.
d) ANNUAL MAINTENANCE FEE--An annual maintenance fee in the amount of $30
may be deducted from the contract's value each contract year. However,
this fee is not applicable to contracts with values of $50,000 or more,
as determined on the most recent contract anniversary. These expenses are
included in surrenders for benefit payments and fees on the accompanying
statements of changes in net assets.
______________________________________ 16 ______________________________________
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
TO HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT SEVEN 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 Seven (Hartford Money Market
HLS, American Funds Asset Allocation, American Funds Bond, American Funds Global
Growth, American Funds Global Small Capitalization, American Funds Growth,
American Funds Growth-Income, American Funds International, American Funds New
World, Franklin Real Estate Securities, Franklin Small Cap, Mutual Shares
Securities, Franklin Strategic Income Investments, MFS Capital Opportunities,
MFS Emerging Growth, MFS Global Equity, MFS Growth, MFS Growth with Income, MFS
High Income, MFS New Discovery, MFS Total Return, Templeton Asset Allocation,
Templeton International, Templeton Developing Markets Equity, and Templeton
Global Growth 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 period 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 period presented in conformity with generally accepted accounting
principles.
Hartford, Connecticut
February 17, 2000 ARTHUR ANDERSEN LLP
______________________________________ 17 ______________________________________
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
HARTFORD AMERICAN FUNDS
MONEY MARKET ASSET AMERICAN FUNDS AMERICAN FUNDS
HLS ALLOCATION BOND GLOBAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in the Hartford
Money Market HLS Fund:
Hartford Money Market HLS
Fund, Inc. - Class IA
Shares 4,834,594
Cost $4,834,594
Market Value.............. $4,834,594 -- -- --
Investments in American Funds
Insurance Series:
Asset Allocation Fund
Shares 750,527
Cost $11,826,994
Market Value.............. -- $11,302,929 -- --
Bond Fund
Shares 403,982
Cost $3,967,969
Market Value.............. -- -- $3,934,782 --
Global Growth Fund
Shares 577,199
Cost $10,475,370
Market Value.............. -- -- -- $12,357,820
Global Small Capitalization
Fund
Shares 467,904
Cost $7,471,027
Market Value.............. -- -- -- --
Growth Fund
Shares 714,974
Cost $49,188,239
Market Value.............. -- -- -- --
Growth-Income Fund
Shares 1,508,680
Cost $55,632,088
Market Value.............. -- -- -- --
International Fund
Shares 635,091
Cost $14,985,288
Market Value.............. -- -- -- --
New World Fund
Shares 409,985
Cost $4,245,642
Market Value.............. -- -- -- --
Investments in the Franklin
Templeton Variable Insurance
Products Trust:
Real Estate Securities Fund
Shares 26,404
Cost $388,845
Market Value.............. -- -- -- --
Small Cap Fund
Shares 128,525
Cost $2,708,869
Market Value.............. -- -- -- --
Mutual Shares Securities
Fund
Shares 290,756
Cost $3,811,532
Market Value.............. -- -- -- --
Investments in the Templeton
Variable Products Series
Fund:
Franklin Strategic Income
Investments Fund
Shares 90,218
Cost $902,687
Market Value.............. -- -- -- --
Due from Hartford Life and
Annuity Insurance Company.... -- 108,667 5,554 122,562
Receivable for fund shares
sold......................... 8,193 -- -- --
---------- ----------- ---------- -----------
Total Assets.................. 4,842,787 11,411,596 3,940,336 12,480,382
---------- ----------- ---------- -----------
LIABILITIES:
Due to Hartford Life and
Annuity Insurance Company.... 8,112 -- -- --
Payable for fund shares
purchased.................... -- 108,673 5,555 122,564
---------- ----------- ---------- -----------
Total Liabilities............. 8,112 108,673 5,555 122,564
---------- ----------- ---------- -----------
Net Assets (variable annuity
contract liabilities)........ $4,834,675 $11,302,923 $3,934,781 $12,357,818
========== =========== ========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 18
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
AMERICAN FUNDS FRANKLIN
GLOBAL SMALL AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS REAL ESTATE
CAPITALIZATION GROWTH GROWTH-INCOME INTERNATIONAL NEW WORLD SECURITIES
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------- -------------- -------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in the Hartford
Money Market HLS Fund:
Hartford Money Market HLS
Fund, Inc. - Class IA
Shares 4,834,594
Cost $4,834,594
Market Value.............. -- -- -- -- -- --
Investments in American Funds
Insurance Series:
Asset Allocation Fund
Shares 750,527
Cost $11,826,994
Market Value.............. -- -- -- -- -- --
Bond Fund
Shares 403,982
Cost $3,967,969
Market Value.............. -- -- -- -- -- --
Global Growth Fund
Shares 577,199
Cost $10,475,370
Market Value.............. -- -- -- -- -- --
Global Small Capitalization
Fund
Shares 467,904
Cost $7,471,027
Market Value.............. $ 8,122,818 -- -- -- -- --
Growth Fund
Shares 714,974
Cost $49,188,239
Market Value.............. -- $50,455,740 -- -- -- --
Growth-Income Fund
Shares 1,508,680
Cost $55,632,088
Market Value.............. -- -- $49,892,033 -- -- --
International Fund
Shares 635,091
Cost $14,985,288
Market Value.............. -- -- -- $16,975,973 -- --
New World Fund
Shares 409,985
Cost $4,245,642
Market Value.............. -- -- -- -- $4,825,525 --
Investments in the Franklin
Templeton Variable Insurance
Products Trust:
Real Estate Securities Fund
Shares 26,404
Cost $388,845
Market Value.............. -- -- -- -- -- $392,897
Small Cap Fund
Shares 128,525
Cost $2,708,869
Market Value.............. -- -- -- -- -- --
Mutual Shares Securities
Fund
Shares 290,756
Cost $3,811,532
Market Value.............. -- -- -- -- -- --
Investments in the Templeton
Variable Products Series
Fund:
Franklin Strategic Income
Investments Fund
Shares 90,218
Cost $902,687
Market Value.............. -- -- -- -- -- --
Due from Hartford Life and
Annuity Insurance Company.... 83,195 705,288 325,330 561,199 13,833 --
Receivable for fund shares
sold......................... -- -- -- -- -- --
----------- ----------- ----------- ----------- ---------- --------
Total Assets.................. 8,206,013 51,161,028 50,217,363 17,537,172 4,839,358 392,897
----------- ----------- ----------- ----------- ---------- --------
LIABILITIES:
Due to Hartford Life and
Annuity Insurance Company.... -- -- -- -- -- 30
Payable for fund shares
purchased.................... 83,194 705,279 325,325 561,200 13,833 --
----------- ----------- ----------- ----------- ---------- --------
Total Liabilities............. 83,194 705,279 325,325 561,200 13,833 30
----------- ----------- ----------- ----------- ---------- --------
Net Assets (variable annuity
contract liabilities)........ $ 8,122,819 $50,455,749 $49,892,038 $16,975,972 $4,825,525 $392,867
=========== =========== =========== =========== ========== ========
<CAPTION>
FRANKLIN
FRANKLIN MUTUAL SHARES STRATEGIC
SMALL CAP SECURITIES INCOME INVESTMENTS
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ------------------
<S> <C> <C> <C>
ASSETS:
Investments in the Hartford
Money Market HLS Fund:
Hartford Money Market HLS
Fund, Inc. - Class IA
Shares 4,834,594
Cost $4,834,594
Market Value.............. -- -- --
Investments in American Funds
Insurance Series:
Asset Allocation Fund
Shares 750,527
Cost $11,826,994
Market Value.............. -- -- --
Bond Fund
Shares 403,982
Cost $3,967,969
Market Value.............. -- -- --
Global Growth Fund
Shares 577,199
Cost $10,475,370
Market Value.............. -- -- --
Global Small Capitalization
Fund
Shares 467,904
Cost $7,471,027
Market Value.............. -- -- --
Growth Fund
Shares 714,974
Cost $49,188,239
Market Value.............. -- -- --
Growth-Income Fund
Shares 1,508,680
Cost $55,632,088
Market Value.............. -- -- --
International Fund
Shares 635,091
Cost $14,985,288
Market Value.............. -- -- --
New World Fund
Shares 409,985
Cost $4,245,642
Market Value.............. -- -- --
Investments in the Franklin
Templeton Variable Insurance
Products Trust:
Real Estate Securities Fund
Shares 26,404
Cost $388,845
Market Value.............. -- -- --
Small Cap Fund
Shares 128,525
Cost $2,708,869
Market Value.............. $3,443,182 -- --
Mutual Shares Securities
Fund
Shares 290,756
Cost $3,811,532
Market Value.............. -- $3,852,516 --
Investments in the Templeton
Variable Products Series
Fund:
Franklin Strategic Income
Investments Fund
Shares 90,218
Cost $902,687
Market Value.............. -- -- $898,571
Due from Hartford Life and
Annuity Insurance Company.... -- 20,083 --
Receivable for fund shares
sold......................... 64,584 -- --
---------- ---------- --------
Total Assets.................. 3,507,766 3,872,599 898,571
---------- ---------- --------
LIABILITIES:
Due to Hartford Life and
Annuity Insurance Company.... 64,586 -- 37
Payable for fund shares
purchased.................... -- 20,083 --
---------- ---------- --------
Total Liabilities............. 64,586 20,083 37
---------- ---------- --------
Net Assets (variable annuity
contract liabilities)........ $3,443,180 $3,852,516 $898,534
========== ========== ========
</TABLE>
---------------------------------------------------- 19
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES -- (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
MFS
CAPITAL MFS MFS MFS
OPPORTUNITIES EMERGING GROWTH GLOBAL EQUITY GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- ------------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments in the MFS
Variable Insurance Trust:
Captial Opportunities Series
Shares 265,821
Cost $4,927,430
Market Value.............. $5,776,295 -- -- --
Emerging Growth Series
Shares 270,260
Cost $7,633,757
Market Value.............. -- $10,253,678 -- --
Global Equity Series
Shares 23,361
Cost $257,939
Market Value.............. -- -- $281,497 --
Growth Series
Shares 748,472
Cost $9,051,819
Market Value.............. -- -- -- $10,441,189
Growth with Income Series
Shares 458,720
Cost $9,293,484
Market Value.............. -- -- -- --
High Income Series
Shares 164,933
Cost $1,866,207
Market Value.............. -- -- -- --
New Discovery Series
Shares 109,051
Cost $1,543,273
Market Value.............. -- -- -- --
Total Return Series
Shares 155,736
Cost $2,740,072
Market Value.............. -- -- -- --
Investments in the Templeton
Variable Products Series
Fund:
Templeton Asset Allocation
Fund
Shares 43,631
Cost $946,759
Market Value............ -- -- -- --
Templeton International
Fund
Shares 95,280
Cost $1,910,697
Market Value.............. -- -- -- --
Investments in the Franklin
Templeton Variable
Insurance Products Trust:
Templeton Developing Markets
Equity Fund
Shares 97,163
Cost $890,346
Market Value.............. -- -- -- --
Templeton Global Growth Fund
Shares 141,277
Cost $2,054,554
Market Value.............. -- -- -- --
Due from Hartford Life and
Annuity Insurance
Company.................... 129,008 220,700 206 97,731
Receivable for fund shares
sold....................... -- -- -- --
---------- ----------- -------- -----------
Total Assets................ 5,905,303 10,474,378 281,703 10,538,920
---------- ----------- -------- -----------
LIABILITIES:
Due to Hartford Life and
Annuity Insurance
Company.................... -- -- -- --
Payable for fund shares
purchased.................. 128,996 220,693 206 97,730
---------- ----------- -------- -----------
Total Liabilities........... 128,996 220,693 206 97,730
---------- ----------- -------- -----------
Net Assets (variable annuity
contract liabilities)...... $5,776,307 $10,253,685 $281,497 $10,441,190
========== =========== ======== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 20
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
MFS MFS TEMPLETON
GROWTH MFS NEW MFS ASSET TEMPLETON
WITH INCOME HIGH INCOME DISCOVERY TOTAL RETURN ALLOCATION INTERNATIONAL
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in the MFS
Variable Insurance Trust:
Captial Opportunities Series
Shares 265,821
Cost $4,927,430
Market Value.............. -- -- -- -- -- --
Emerging Growth Series
Shares 270,260
Cost $7,633,757
Market Value.............. -- -- -- -- -- --
Global Equity Series
Shares 23,361
Cost $257,939
Market Value.............. -- -- -- -- -- --
Growth Series
Shares 748,472
Cost $9,051,819
Market Value.............. -- -- -- -- -- --
Growth with Income Series
Shares 458,720
Cost $9,293,484
Market Value.............. $9,775,327 -- -- -- -- --
High Income Series
Shares 164,933
Cost $1,866,207
Market Value.............. -- $1,895,083 -- -- -- --
New Discovery Series
Shares 109,051
Cost $1,543,273
Market Value.............. -- -- $1,883,312 -- -- --
Total Return Series
Shares 155,736
Cost $2,740,072
Market Value.............. -- -- -- $2,764,321 -- --
Investments in the Templeton
Variable Products Series
Fund:
Templeton Asset Allocation
Fund
Shares 43,631
Cost $946,759
Market Value............ -- -- -- -- $1,015,298 --
Templeton International
Fund
Shares 95,280
Cost $1,910,697
Market Value.............. -- -- -- -- -- $2,108,545
Investments in the Franklin
Templeton Variable
Insurance Products Trust:
Templeton Developing Markets
Equity Fund
Shares 97,163
Cost $890,346
Market Value.............. -- -- -- -- -- --
Templeton Global Growth Fund
Shares 141,277
Cost $2,054,554
Market Value.............. -- -- -- -- -- --
Due from Hartford Life and
Annuity Insurance
Company.................... 45,162 11,772 9,698 17,626 10,057 16,229
Receivable for fund shares
sold....................... -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total Assets................ 9,820,489 1,906,855 1,893,010 2,781,947 1,025,355 2,124,774
---------- ---------- ---------- ---------- ---------- ----------
LIABILITIES:
Due to Hartford Life and
Annuity Insurance
Company.................... -- -- -- -- -- --
Payable for fund shares
purchased.................. 45,165 11,772 9,698 17,625 10,058 16,230
---------- ---------- ---------- ---------- ---------- ----------
Total Liabilities........... 45,165 11,772 9,698 17,625 10,058 16,230
---------- ---------- ---------- ---------- ---------- ----------
Net Assets (variable annuity
contract liabilities)...... $9,775,324 $1,895,083 $1,883,312 $2,764,322 $1,015,297 $2,108,544
========== ========== ========== ========== ========== ==========
<CAPTION>
TEMPLETON
DEVELOPING TEMPLETON
MARKETS EQUITY GLOBAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------
<S> <C> <C>
ASSETS:
Investments in the MFS
Variable Insurance Trust:
Captial Opportunities Series
Shares 265,821
Cost $4,927,430
Market Value.............. -- --
Emerging Growth Series
Shares 270,260
Cost $7,633,757
Market Value.............. -- --
Global Equity Series
Shares 23,361
Cost $257,939
Market Value.............. -- --
Growth Series
Shares 748,472
Cost $9,051,819
Market Value.............. -- --
Growth with Income Series
Shares 458,720
Cost $9,293,484
Market Value.............. -- --
High Income Series
Shares 164,933
Cost $1,866,207
Market Value.............. -- --
New Discovery Series
Shares 109,051
Cost $1,543,273
Market Value.............. -- --
Total Return Series
Shares 155,736
Cost $2,740,072
Market Value.............. -- --
Investments in the Templeton
Variable Products Series
Fund:
Templeton Asset Allocation
Fund
Shares 43,631
Cost $946,759
Market Value............ -- --
Templeton International
Fund
Shares 95,280
Cost $1,910,697
Market Value.............. -- --
Investments in the Franklin
Templeton Variable
Insurance Products Trust:
Templeton Developing Markets
Equity Fund
Shares 97,163
Cost $890,346
Market Value.............. $1,019,242 --
Templeton Global Growth Fund
Shares 141,277
Cost $2,054,554
Market Value.............. -- $2,203,925
Due from Hartford Life and
Annuity Insurance
Company.................... 25,971 --
Receivable for fund shares
sold....................... -- --
---------- ----------
Total Assets................ 1,045,213 2,203,925
---------- ----------
LIABILITIES:
Due to Hartford Life and
Annuity Insurance
Company.................... -- 87
Payable for fund shares
purchased.................. 25,972 --
---------- ----------
Total Liabilities........... 25,972 87
---------- ----------
Net Assets (variable annuity
contract liabilities)...... $1,019,241 $2,203,838
========== ==========
</TABLE>
---------------------------------------------------- 21
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES -- (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ ---------- ------------
<S> <C> <C> <C>
DEFERRED ANNUITY CONTRACTS IN THE
ACCUMULATION PERIOD:
Hartford Money Market HLS Fund
1.5%............................ 2,074,158 $ 1.016961 $ 2,109,338
Hartford Money Market HLS Fund
1.65%........................... 71,247 1.016589 72,429
Hartford Money Market HLS Fund
1.4%............................ 764,248 1.017478 777,606
Hartford Money Market HLS Fund
.80%............................ 206,879 1.009271 208,797
Hartford Money Market HLS Fund
1.25%........................... 1,636,654 1.018239 1,666,505
Asset Allocation Fund 1.5%....... 87,462 9.763857 853,968
Asset Allocation Fund 1.65%...... 375 9.760205 3,662
Asset Allocation Fund 1.25%...... 876,015 9.776112 8,564,018
Asset Allocation Fund 1.4%....... 175,200 9.768759 1,711,489
Asset Allocation Fund .80%....... 15,779 10.542607 166,355
Asset Allocation Fund .95%....... 326 10.539231 3,431
Bond Funds 1.5%.................. 52,995 10.093283 534,893
Bond Funds 1.65%................. 296 10.089521 2,985
Bond Funds 1.25%................. 260,877 10.105950 2,636,406
Bond Funds 1.4%.................. 74,247 10.098350 749,774
Bond Funds .80%.................. 1,050 10.215146 10,723
Global Growth Fund 1.5%.......... 104,986 13.962993 1,465,922
Global Growth Fund 1.65%......... 67 13.957799 935
Global Growth Fund 1.25%......... 642,755 13.980455 8,986,014
Global Growth Fund 1.4%.......... 121,545 13.969976 1,697,976
Global Growth Fund .80%.......... 14,192 13.738117 194,966
Global Growth Fund .95%.......... 874 13.733732 12,005
Global Small Capitalization Fund
1.5%............................ 83,214 13.767193 1,145,626
Global Small Capitalization Fund
1.65%........................... 203 13.762055 2,798
Global Small Capitalization Fund
1.25%........................... 405,681 13.784415 5,592,081
Global Small Capitalization Fund
1.4%............................ 96,623 13.774075 1,330,898
Global Small Capitalization Fund
.80%............................ 3,875 12.864359 49,845
Global Small Capitalization Fund
.95%............................ 122 12.860263 1,571
Growth Fund 1.5%................. 249,621 12.502121 3,120,797
Growth Fund 1.65%................ 896 12.497460 11,193
Growth Fund 1.25%................ 3,037,420 12.517781 38,021,763
Growth Fund 1.4%................. 669,105 12.508384 8,369,423
Growth Fund .80%................. 68,214 12.865591 877,609
Growth Fund .95%................. 4,274 12.861482 54,964
Growth-Income Fund 1.5%.......... 420,107 9.579464 4,024,401
Growth-Income Fund 1.65%......... 1,108 9.575882 10,606
Growth-Income Fund 1.25%......... 3,467,764 9.591485 33,261,005
Growth-Income Fund 1.4%.......... 1,221,950 9.584268 11,711,494
Growth-Income Fund .80%.......... 73,889 10.667962 788,243
Growth-Income Fund .95%.......... 9,029 10.664545 96,289
International Fund 1.5%.......... 173,580 14.644814 2,542,043
International Fund 1.65%......... 265 14.639368 3,885
International Fund 1.25%......... 763,939 14.663115 11,201,728
International Fund 1.4%.......... 211,632 14.652129 3,100,853
International Fund .80%.......... 6,859 13.799473 94,647
International Fund .95%.......... 2,379 13.795072 32,816
New World Fund 1.5%.............. 34,388 11.644005 400,413
New World Fund 1.25%............. 318,002 11.658593 3,707,459
New World Fund 1.4%.............. 43,228 11.649838 503,596
New World Fund .80%.............. 13,865 12.227288 169,536
New World Fund .95%.............. 3,642 12.223385 44,521
Real Estate Securities Fund
1.4%............................ 8,001 8.834957 70,687
Real Estate Securities Fund
1.5%............................ 556 8.830523 4,914
Real Estate Securities Fund
1.25%........................... 35,883 8.841604 317,266
Small Cap Fund 1.65%............. 68 16.630728 1,129
Small Cap Fund 1.4%.............. 55,787 16.645221 928,593
Small Cap Fund .80%.............. 3,281 15.792122 51,819
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 22
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ ---------- ------------
<S> <C> <C> <C>
Small Cap Fund 1.25%............. 127,349 $16.657685 $ 2,121,333
Small Cap Fund 1.5%.............. 20,455 16.636909 340,306
Mutual Shares Securities Fund
1.5%............................ 37,456 9.783931 366,469
Mutual Shares Securities Fund
1.4%............................ 58,310 9.788843 570,787
Mutual Shares Securities Fund
.80%............................ 878 10.820902 9,501
Mutual Shares Securities Fund
1.25%........................... 296,621 9.796213 2,905,759
Franklin Strategic Income
Investments Fund 1.5%........... 18,907 10.176193 192,402
Franklin Strategic Income
Investments Fund 1.4%........... 25,087 10.181293 255,423
Franklin Strategic Income
Investments Fund 1.25%.......... 44,235 10.188959 450,709
Capital Opportunities Series
1.5%............................ 26,869 12.203397 327,891
Capital Opportunities Series
1.65%........................... 613 12.198850 7,476
Capital Opportunities Series
1.4%............................ 115,379 12.209515 1,408,719
Capital Opportunities Series
.80%............................ 9,747 12.923763 125,969
Capital Opportunities Series
.95%............................ 251 12.919637 3,244
Capital Opportunities Series
1.25%........................... 315,840 12.218688 3,859,154
Emerging Growth Series 1.5%...... 48,459 15.402545 746,394
Emerging Growth Series 1.65%..... 216 15.396821 3,324
Emerging Growth Series 1.4%...... 97,184 15.410232 1,497,633
Emerging Growth Series .80%...... 6,126 15.486126 94,865
Emerging Growth Series 1.25%..... 510,071 15.421795 7,866,218
Global Equity Series 1.5%........ 3,841 11.585770 44,498
Global Equity Series 1.4%........ 5,874 11.591574 68,094
Global Equity Series 1.25%....... 14,560 11.600282 168,905
Growth Series 1.5%............... 48,051 12.001263 576,670
Growth Series 1.65%.............. 178 11.996788 2,141
Growth Series 1.4%............... 206,422 12.007270 2,478,566
Growth Series .80%............... 6,787 12.475323 84,672
Growth Series .95%............... 127 12.471334 1,581
Growth Series 1.25%.............. 603,672 12.016294 7,253,905
Growth with Income Series 1.5%... 57,782 9.950259 574,945
Growth with Income Series 1.4%... 260,156 9.955242 2,589,914
Growth with Income Series .80%... 24,789 11.140286 276,154
Growth with Income Series .95%... 682 11.136718 7,596
Growth with Income Series
1.25%........................... 635,038 9.962740 6,326,715
High Income Series 1.5%.......... 18,321 10.039968 183,942
High Income Series 1.65%......... 199 10.036216 1,993
High Income Series 1.4%.......... 38,888 10.044992 390,628
High Income Series .80%.......... 4,284 10.256453 43,934
High Income Series 1.25%......... 126,792 10.052557 1,274,586
New Discovery Series 1.5%........ 18,944 14.318332 271,245
New Discovery Series 1.4%........ 34,123 14.325485 488,834
New Discovery Series .80%........ 2,276 15.447904 35,156
New Discovery Series 1.25%....... 75,897 14.336247 1,088,077
Total Return Series 1.5%......... 27,654 9.688322 267,922
Total Return Series 1.65%........ 512 9.684701 4,956
Total Return Series 1.4%......... 52,252 9.693183 506,484
Total Return Series .80%......... 10,142 10.346954 104,938
Total Return Series 1.25%........ 193,807 9.700481 1,880,022
Templeton Asset Allocation Fund
1.5%............................ 5,725 10.855332 62,148
Templeton Asset Allocation Fund
1.4%............................ 12,669 10.860766 137,594
Templeton Asset Allocation Fund
.80%............................ 2,261 11.197144 25,315
Templeton Asset Allocation Fund
1.25%........................... 72,706 10.868937 790,240
Templeton International Fund
1.5%............................ 78,674 10.946563 861,205
Templeton International Fund
1.65%........................... 97 10.942481 1,058
Templeton International Fund
1.4%............................ 15,020 10.952050 164,501
Templeton International Fund
.80%............................ 83 11.343193 937
Templeton International Fund
1.25%........................... 83,869 10.960275 919,230
Templeton Developing Markets
Equity Fund 1.5%................ 17,367 11.108629 192,923
</TABLE>
---------------------------------------------------- 23
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES -- (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ ---------- ------------
<S> <C> <C> <C>
Templeton Developing Markets
Equity Fund 1.4%................ 15,369 11.114200 170,818
Templeton Developing Markets
Equity Fund .80%................ 2,331 12.735770 29,681
Templeton Developing Markets
Equity Fund 1.25%............... 56,266 11.122555 625,819
Templeton Global Growth Fund
1.5%............................ 33,037 10.605862 350,387
Templeton Global Growth Fund
1.4%............................ 18,982 10.611177 201,425
Templeton Global Growth Fund
.80%............................ 1,356 11.265124 15,279
Templeton Global Growth Fund
1.25%........................... 154,132 10.619149 1,636,747
------------
SUB-TOTAL INDIVIDUAL............. 220,412,664
------------
ANNUITY CONTRACTS IN THE ANNUITY
PERIOD:
Capital Opportunities............ 3,589 12.218688 43,854
Emerging Growth.................. 2,934 15.421795 45,251
Growth........................... 3,633 12.016294 43,655
Templeton International Fund..... 14,745 10.960275 161,613
------------
SUB-TOTAL........................ 294,373
------------
GRAND TOTAL:....................... $220,707,037
============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 24
----------------------------------------------------
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM INCEPTION, JULY 1, 1999, TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
HARTFORD AMERICAN FUNDS
MONEY MARKET ASSET AMERICAN FUNDS AMERICAN FUNDS
HLS ALLOCATION BOND GLOBAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends..................... $ 46,468 $ 107,085 $ 70,666 $ 48,518
EXPENSES:
Mortality and expense
undertakings................. (12,396) (24,079) (7,701) (21,470)
-------- --------- -------- ----------
Net investment income
(loss)..................... 34,072 83,006 62,965 27,048
-------- --------- -------- ----------
CAPITAL GAINS INCOME............ 2 625,352 -- 432,861
-------- --------- -------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized (loss) gain on
security transactions........ -- (693) 80 4,145
Net unrealized (depreciation)
appreciation of investments
during the period............ -- (524,065) (33,186) 1,882,450
-------- --------- -------- ----------
Net (loss) gain on
investments................ -- (524,758) (33,106) 1,886,595
-------- --------- -------- ----------
Net increase in net assets
resulting from
operations................. $ 34,074 $ 183,600 $ 29,859 $2,346,504
======== ========= ======== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 26
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
AMERICAN FUNDS FRANKLIN
GLOBAL SMALL AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS REAL ESTATE
CAPITALIZATION GROWTH GROWTH-INCOME INTERNATIONAL NEW WORLD SECURITIES
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------- -------------- -------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends..................... $ -- $ -- $ 217,556 $ 50,483 $ 16,169 $ 247
EXPENSES:
Mortality and expense
undertakings................. (17,908) (84,203) (107,465) (29,283) (13,461) (870)
---------- ---------- ----------- ---------- -------- ------
Net investment income
(loss)..................... (17,908) (84,203) 110,091 21,200 2,708 (623)
---------- ---------- ----------- ---------- -------- ------
CAPITAL GAINS INCOME............ 620,472 5,334,235 7,081,509 1,256,215 1,824 343
---------- ---------- ----------- ---------- -------- ------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized (loss) gain on
security transactions........ 1,272 1,809 52 1,316 (210) 3
Net unrealized (depreciation)
appreciation of investments
during the period............ 651,790 1,267,501 (5,740,055) 1,990,685 579,884 4,051
---------- ---------- ----------- ---------- -------- ------
Net (loss) gain on
investments................ 653,062 1,269,310 (5,740,003) 1,992,001 579,674 4,054
---------- ---------- ----------- ---------- -------- ------
Net increase in net assets
resulting from
operations................. $1,255,626 $6,519,342 $ 1,451,597 $3,269,416 $584,206 $3,774
========== ========== =========== ========== ======== ======
<CAPTION>
FRANKLIN
FRANKLIN MUTUAL SHARES STRATEGIC
SMALL CAP SECURITIES INCOME INVESTMENTS
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends..................... $ 24 $33,504 $ 23,286
EXPENSES:
Mortality and expense
undertakings................. (4,718) (12,650) (1,838)
-------- ------- --------
Net investment income
(loss)..................... (4,694) 20,854 21,448
-------- ------- --------
CAPITAL GAINS INCOME............ 3 -- --
-------- ------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized (loss) gain on
security transactions........ 1,333 27 8
Net unrealized (depreciation)
appreciation of investments
during the period............ 734,313 40,984 (4,116)
-------- ------- --------
Net (loss) gain on
investments................ 735,646 41,011 (4,108)
-------- ------- --------
Net increase in net assets
resulting from
operations................. $730,955 $61,865 $ 17,340
======== ======= ========
</TABLE>
---------------------------------------------------- 27
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE PERIOD FROM INCEPTION, JULY 1, 1999, TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
MFS
CAPITAL MFS MFS MFS
OPPORTUNITIES EMERGING GROWTH GLOBAL EQUITY GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- ------------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends..................... $ -- $ -- $ 342 $ 15,377
EXPENSES:
Mortality and expense
undertakings................. (10,787) (18,890) (556) (26,124)
-------- ---------- ------- ----------
Net investment (loss)....... (10,787) (18,890) (214) (10,747)
-------- ---------- ------- ----------
CAPITAL GAINS INCOME............ -- -- 6,678 20,089
-------- ---------- ------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized (loss) gain on
security transactions........ (178) 14,860 21 699
Net unrealized appreciation of
investments during the
period....................... 848,865 2,619,921 23,558 1,389,371
-------- ---------- ------- ----------
Net gain on investments..... 848,687 2,634,781 23,579 1,390,070
-------- ---------- ------- ----------
Net increase in net assets
resulting from
operations................. $837,900 $2,615,891 $30,043 $1,399,412
======== ========== ======= ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 28
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
MFS MFS TEMPLETON
GROWTH MFS NEW MFS ASSET TEMPLETON
WITH INCOME HIGH INCOME DISCOVERY TOTAL RETURN ALLOCATION INTERNATIONAL
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends..................... $ -- $-- $ -- $-- $-- $--
EXPENSES:
Mortality and expense
undertakings................. (22,828) (4,690) (2,645) (6,708) (1,875) (6,084)
-------- ------- -------- ------- ------- --------
Net investment (loss)....... (22,828) (4,690) (2,645) (6,708) (1,875) (6,084)
-------- ------- -------- ------- ------- --------
CAPITAL GAINS INCOME............ -- -- 30,240 -- -- --
-------- ------- -------- ------- ------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized (loss) gain on
security transactions........ 710 28 346 (779) 28 4,720
Net unrealized appreciation of
investments during the
period....................... 481,842 28,875 340,039 24,249 68,538 197,847
-------- ------- -------- ------- ------- --------
Net gain on investments..... 482,552 28,903 340,385 23,470 68,566 202,567
-------- ------- -------- ------- ------- --------
Net increase in net assets
resulting from
operations................. $459,724 $24,213 $367,980 $16,762 $66,691 $196,483
======== ======= ======== ======= ======= ========
<CAPTION>
TEMPLETON
DEVELOPING TEMPLETON
MARKETS EQUITY GLOBAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends..................... $ 280 $ 2,556
EXPENSES:
Mortality and expense
undertakings................. (1,763) (5,111)
-------- --------
Net investment (loss)....... (1,483) (2,555)
-------- --------
CAPITAL GAINS INCOME............ -- 12,366
-------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized (loss) gain on
security transactions........ 219 44
Net unrealized appreciation of
investments during the
period....................... 128,896 149,371
-------- --------
Net gain on investments..... 129,115 149,415
-------- --------
Net increase in net assets
resulting from
operations................. $127,632 $159,226
======== ========
</TABLE>
---------------------------------------------------- 29
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM INCEPTION, JULY 1, 1999, TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
HARTFORD AMERICAN FUNDS
MONEY MARKET ASSET AMERICAN FUNDS AMERICAN FUNDS
HLS ALLOCATION BOND GLOBAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)....................... $ 34,072 $ 83,006 $ 62,965 $ 27,048
Capital gains income.......... 2 625,352 -- 432,861
Net realized (loss) gain on
security transactions........ -- (693) 80 4,145
Net unrealized (depreciation)
appreciation of investments
during the period............ -- (524,065) (33,186) 1,882,450
---------- ----------- ---------- -----------
Net increase in net assets
resulting from operations.... 34,074 183,600 29,859 2,346,504
---------- ----------- ---------- -----------
UNIT TRANSACTIONS:
Purchases..................... 7,967,520 7,618,821 2,124,047 6,076,761
Net transfers................. (3,055,671) 3,527,799 1,800,607 3,965,843
Surrenders for benefit
payments and fees............ (111,248) (27,297) (19,732) (31,290)
Net annuity transactions...... -- -- -- --
---------- ----------- ---------- -----------
Net increase in net assets
resulting from unit
transactions................. 4,800,601 11,119,323 3,904,922 10,011,314
---------- ----------- ---------- -----------
Net increase in net assets.... 4,834,675 11,302,923 3,934,781 12,357,818
NET ASSETS:
Beginning of period........... -- -- -- --
---------- ----------- ---------- -----------
End of period................. $4,834,675 $11,302,923 $3,934,781 $12,357,818
========== =========== ========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 30
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
AMERICAN FUNDS FRANKLIN
GLOBAL SMALL AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS REAL ESTATE
CAPITALIZATION GROWTH GROWTH-INCOME INTERNATIONAL NEW WORLD SECURITIES
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------- -------------- -------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)....................... $ (17,908) $ (84,203) $ 110,091 $ 21,200 $ 2,708 $ (623)
Capital gains income.......... 620,472 5,334,235 7,081,509 1,256,215 1,824 343
Net realized (loss) gain on
security transactions........ 1,272 1,809 52 1,316 (210) 3
Net unrealized (depreciation)
appreciation of investments
during the period............ 651,790 1,267,501 (5,740,055) 1,990,685 579,884 4,051
---------- ----------- ----------- ----------- ---------- --------
Net increase in net assets
resulting from operations.... 1,255,626 6,519,342 1,451,597 3,269,416 584,206 3,774
---------- ----------- ----------- ----------- ---------- --------
UNIT TRANSACTIONS:
Purchases..................... 4,912,426 29,873,970 30,646,309 9,369,647 3,017,760 198,158
Net transfers................. 2,009,812 14,242,350 17,985,180 4,406,012 1,232,526 194,010
Surrenders for benefit
payments and fees............ (55,045) (179,913) (191,048) (69,103) (8,967) (3,075)
Net annuity transactions...... -- -- -- -- -- --
---------- ----------- ----------- ----------- ---------- --------
Net increase in net assets
resulting from unit
transactions................. 6,867,193 43,936,407 48,440,441 13,706,556 4,241,319 389,093
---------- ----------- ----------- ----------- ---------- --------
Net increase in net assets.... 8,122,819 50,455,749 49,892,038 16,975,972 4,825,525 392,867
NET ASSETS:
Beginning of period........... -- -- -- -- -- --
---------- ----------- ----------- ----------- ---------- --------
End of period................. $8,122,819 $50,455,749 $49,892,038 $16,975,972 $4,825,525 $392,867
========== =========== =========== =========== ========== ========
<CAPTION>
FRANKLIN
FRANKLIN MUTUAL SHARES STRATEGIC
SMALL CAP SECURITIES INCOME INVESTMENTS
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)....................... $ (4,694) $ 20,854 $ 21,448
Capital gains income.......... 3 -- --
Net realized (loss) gain on
security transactions........ 1,333 27 8
Net unrealized (depreciation)
appreciation of investments
during the period............ 734,313 40,984 (4,116)
---------- ---------- --------
Net increase in net assets
resulting from operations.... 730,955 61,865 17,340
---------- ---------- --------
UNIT TRANSACTIONS:
Purchases..................... 1,410,520 2,491,146 436,025
Net transfers................. 1,321,166 1,310,620 449,194
Surrenders for benefit
payments and fees............ (19,461) (11,115) (4,025)
Net annuity transactions...... -- -- --
---------- ---------- --------
Net increase in net assets
resulting from unit
transactions................. 2,712,225 3,790,651 881,194
---------- ---------- --------
Net increase in net assets.... 3,443,180 3,852,516 898,534
NET ASSETS:
Beginning of period........... -- -- --
---------- ---------- --------
End of period................. $3,443,180 $3,852,516 $898,534
========== ========== ========
</TABLE>
---------------------------------------------------- 31
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE PERIOD FROM INCEPTION, JULY 1, 1999, TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
MFS
CAPITAL MFS MFS MFS
OPPORTUNITIES EMERGING GROWTH GLOBAL EQUITY GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- ------------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment (loss)......... $ (10,787) $ (18,890) $ (214) $ (10,747)
Capital gains income.......... -- -- 6,678 20,089
Net realized (loss) gain on
security transactions........ (178) 14,860 21 699
Net unrealized appreciation of
investments during the
period....................... 848,865 2,619,921 23,558 1,389,371
---------- ----------- -------- -----------
Net increase in net assets
resulting from operations.... 837,900 2,615,891 30,043 1,399,412
---------- ----------- -------- -----------
UNIT TRANSACTIONS:
Purchases..................... 3,171,521 4,835,008 158,130 6,014,916
Net transfers................. 1,789,502 2,803,121 95,487 3,039,764
Surrenders for benefit
payments and fees............ (65,866) (44,896) (2,163) (56,152)
Net annuity transactions...... 43,250 44,561 -- 43,250
---------- ----------- -------- -----------
Net increase in net assets
resulting from unit
transactions................. 4,938,407 7,637,794 251,454 9,041,778
---------- ----------- -------- -----------
Net increase in net assets.... 5,776,307 10,253,685 281,497 10,441,190
NET ASSETS:
Beginning of period........... -- -- -- --
---------- ----------- -------- -----------
End of period................. $5,776,307 $10,253,685 $281,497 $10,441,190
========== =========== ======== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 32
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
MFS MFS TEMPLETON
GROWTH MFS NEW MFS ASSET TEMPLETON
WITH INCOME HIGH INCOME DISCOVERY TOTAL RETURN ALLOCATION INTERNATIONAL
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment (loss)......... $ (22,828) $ (4,690) $ (2,645) $ (6,708) $ (1,875) $ (6,084)
Capital gains income.......... -- -- 30,240 -- -- --
Net realized (loss) gain on
security transactions........ 710 28 346 (779) 28 4,720
Net unrealized appreciation of
investments during the
period....................... 481,842 28,875 340,039 24,249 68,538 197,847
---------- ---------- ---------- ---------- ---------- ----------
Net increase in net assets
resulting from operations.... 459,724 24,213 367,980 16,762 66,691 196,483
---------- ---------- ---------- ---------- ---------- ----------
UNIT TRANSACTIONS:
Purchases..................... 5,093,520 1,427,075 764,906 1,487,466 394,881 812,666
Net transfers................. 4,249,461 455,887 752,518 1,271,385 559,125 1,116,318
Surrenders for benefit
payments and fees............ (27,381) (12,092) (2,092) (11,291) (5,400) (164,889)
Net annuity transactions...... -- -- -- -- -- 147,966
---------- ---------- ---------- ---------- ---------- ----------
Net increase in net assets
resulting from unit
transactions................. 9,315,600 1,870,870 1,515,332 2,747,560 948,606 1,912,061
---------- ---------- ---------- ---------- ---------- ----------
Net increase in net assets.... 9,775,324 1,895,083 1,883,312 2,764,322 1,015,297 2,108,544
NET ASSETS:
Beginning of period........... -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
End of period................. $9,775,324 $1,895,083 $1,883,312 $2,764,322 $1,015,297 $2,108,544
========== ========== ========== ========== ========== ==========
<CAPTION>
TEMPLETON
DEVELOPING TEMPLETON
MARKETS EQUITY GLOBAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT
-------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment (loss)......... $ (1,483) $ (2,555)
Capital gains income.......... -- 12,366
Net realized (loss) gain on
security transactions........ 219 44
Net unrealized appreciation of
investments during the
period....................... 128,896 149,371
---------- ----------
Net increase in net assets
resulting from operations.... 127,632 159,226
---------- ----------
UNIT TRANSACTIONS:
Purchases..................... 485,858 1,217,309
Net transfers................. 410,542 836,607
Surrenders for benefit
payments and fees............ (4,791) (9,304)
Net annuity transactions...... -- --
---------- ----------
Net increase in net assets
resulting from unit
transactions................. 891,609 2,044,612
---------- ----------
Net increase in net assets.... 1,019,241 2,203,838
NET ASSETS:
Beginning of period........... -- --
---------- ----------
End of period................. $1,019,241 $2,203,838
========== ==========
</TABLE>
---------------------------------------------------- 33
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT SEVEN
- --------------------------------------------------------------------------------
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,1999
1. ORGANIZATION:
Separate Account Seven (the Account) is a separate investment account within
Hartford Life & Annuity 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 annuity 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
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:
Deductions and Charges -- Certain amounts are deducted from the Contracts,
as described below:
a) MORTALITY AND EXPENSE RISK CHARGES--The Company will make deductions at a
maximum annual rate of 1.25% of the contract's value for the mortality
and expense risks which the company undertakes.
b) TAX EXPENSE CHARGE--If applicable, the Company will make deductions at a
maximum rate of 3.5% of the contract's value to meet premium tax
requirements. An additional tax charge based on a percentage of the
contract's value may be assessed to partial withdrawals or surrenders.
These expenses are included in surrenders for benefit payments and fees
on the accompanying statements of changes in net assets.
c) ADMINISTRATIVE CHARGE--The Company will make deductions to cover
administrative expenses at a maximum annual rate of 0.15% of the
contract's value. These expenses are included in surrenders for benefit
payments and fees on the accompanying statements of changes in net
assets.
d) ANNUAL MAINTENANCE FEE--An annual maintenance fee in the amount of $30
may be deducted from the contract's value each contract year. However,
this fee is not applicable to contracts with values of $50,000 or more,
as determined on the most recent contract anniversary. These expenses are
included in surrenders for benefit payments and fees on the accompanying
statements of changes in net assets.
______________________________________ 34 ______________________________________
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
TO HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
SEPARATE ACCOUNT SEVEN AND TO THE
OWNERS OF UNITS OF INTEREST THEREIN:
We have audited the accompanying statements of assets and liabilities of
Hartford Life and Annuity Insurance Company Separate Account Seven (Hartford
Money Market HLS, American Funds Asset Allocation, American Funds Bond, American
Funds Global Growth, American Funds Global Small Capitalization, American Funds
Growth, American Funds Growth-Income, American Funds International, American
Funds New World, Franklin Real Estate Securities, Franklin Small Cap, Mutual
Shares Securities, Franklin Strategic Income Investments, MFS Capital
Opportunities, MFS Emerging Growth, MFS Global Equity, MFS Growth, MFS Growth
with Income, MFS High Income, MFS New Discovery, MFS Total Return, Templeton
Asset Allocation, Templeton International, Templeton Developing Markets Equity,
and Templeton Global Growth 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 period 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 period presented in conformity with generally accepted accounting
principles.
Hartford, Connecticut
February 17, 2000 ARTHUR ANDERSEN LLP
______________________________________ 35 ______________________________________
<PAGE>
HARTFORD MONEY MARKET HLS FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- --------------------- ------------
<C> <S> <C>
COMMERCIAL PAPER -- 67.7%
$ 10,000,000 7-Eleven, Inc.
5.63% due 01/18/00................. $ 9,973,413
20,000,000 7-Eleven, Inc.
6.02% due 03/13/00................. 19,759,200
20,000,000 Abbey National PLC
4.93% due 01/18/00................. 19,953,438
21,000,000 Abbey National PLC
6.22% due 01/04/00................. 20,989,115
10,000,000 BankAmerica Corp.
5.05% due 02/14/00................. 9,938,277
10,000,000 BankAmerica Corp.
5.72% due 03/06/00................. 9,896,722
20,000,000 Bemis Co., Inc.
5.33% due 02/07/00................. 19,890,438
10,000,000 Bemis Co., Inc.
5.37% due 02/14/00................. 9,934,366
20,000,000 Bradford & Bingley Building Society
5.86% due 04/03/00................. 19,697,233
15,000,000 CAFCO
5.75% due 01/31/00................. 14,928,125
20,000,000 Campbell Soup Co.
4.83% due 01/31/00................. 19,919,500
20,000,000 Chase Manhatten Corp. (The)
5.72% due 02/22/00................. 19,834,755
20,000,000 CIESCO LP
5.97% due 01/26/00................. 19,917,083
10,000,000 Countrywide Home Loan, Inc.
5.25% due 01/03/00................. 9,997,083
20,000,000 Countrywide Home Loan, Inc.
5.25% due 01/06/00................. 19,985,416
20,000,000 Countrywide Home Loan, Inc.
6.17% due 01/03/00................. 19,993,144
20,000,000 Daimler Chrysler N.A. Holding
5.82% due 03/23/00................. 19,734,866
20,000,000 du Pont (E.I.) de Nemours & Co.
5.72% due 03/07/00................. 19,790,266
25,000,000 Emerson Electric Co.
5.30% due 02/28/00................. 24,786,527
20,000,000 Finova Capital Corp.
5.89% due 01/26/00................. 19,918,194
25,000,000 Fleet Financial Group
5.75% due 02/15/00................. 24,820,312
20,000,000 Ford Motor Credit Co.
5.38% due 02/22/00................. 19,844,577
9,325,000 Ford Motor Credit Co.
5.50% due 01/13/00................. 9,307,904
10,000,000 General Electric Capital Corp.
5.38% due 02/08/00................. 9,943,211
10,000,000 General Electric Capital Corp.
5.91% due 04/17/00................. 9,824,341
20,000,000 General Electric Capital Corp.
5.38% due 02/14/00................. 19,868,488
10,000,000 General Motors Acceptance Corp.
5.37% due 02/28/00................. 9,913,483
10,000,000 Goldman Sachs Group, Inc.
6.00% due 05/22/00................. 9,763,333
21,000,000 GTE Corp.
5.40% due 01/26/00................. 20,921,250
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- --------------------- ------------
<C> <S> <C>
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- --------------------- ------------
<C> <S> <C>
$ 20,000,000 Halifax PLC
5.88% due 03/23/00................. $ 19,732,133
20,000,000 International Lease Finance Corp.
5.77% due 02/23/00................. 19,830,105
20,000,000 KFW International Finance, Inc.
5.86% due 03/27/00................. 19,720,022
20,000,000 Lucent Technologies, Inc.
4.92% due 01/24/00................. 19,937,133
10,000,000 Market Street Funding
5.75% due 01/05/00................. 9,993,611
10,000,000 Market Street Funding
5.80% due 01/25/00................. 9,961,333
20,000,000 Market Street Funding
5.82% due 02/11/00................. 19,867,433
10,643,000 Market Street Funding
6.15% due 01/14/00................. 10,619,363
10,000,000 Merita Bank Ltd.
5.38% due 02/09/00................. 9,941,716
20,000,000 Merita Bank Ltd.
5.92% due 03/20/00................. 19,740,177
10,000,000 Merrill Lynch & Co., Inc.
5.36% due 02/28/00................. 9,913,644
10,000,000 Merrill Lynch & Co., Inc.
5.83% due 06/14/00................. 9,732,791
20,000,000 Merrill Lynch & Co., Inc.
5.90% due 03/14/00................. 19,760,722
10,000,000 Morgan Stanley Dean Witter & Co.
5.43% due 01/24/00................. 9,965,308
18,000,000 National Rural Utilities
5.77% due 03/13/00................. 17,792,280
20,000,000 National Rural Utilities
5.90% due 03/24/00................. 19,727,944
20,000,000 Nationwide Building Society
5.74% due 02/22/00................. 19,834,177
20,000,000 Spintab
5.74% due 02/16/00................. 19,853,311
10,000,000 Spintab
6.06% due 01/25/00................. 9,959,600
19,000,000 Stanley Works (The)
5.95% due 03/03/00................. 18,805,302
20,000,000 Triple A One Funding Corp.
6.04% due 01/14/00................. 19,956,377
20,000,000 Westpac Banking
5.88% due 04/07/00................. 19,683,133
20,000,000 Wood Street Funding Corp.
6.08% due 01/12/00................. 19,962,844
------------
Total commercial paper............... $857,334,519
============
CORPORATE NOTES -- 24.8%
10,000,000 BankAmerica Corp.
6.315% due 02/09/00................ $ 10,002,493
20,000,000 Citigroup, Inc.
6.261% due 02/03/00................ 20,001,738
20,000,000 Comerica, Inc.
6.422% due 02/02/00................ 19,999,483
20,000,000 Dow Chemical Co. (The)
6.021% due 03/15/00................ 19,998,500
10,000,000 First Union National Bank
6.015% due 03/10/00................ 10,000,000
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
MF-1
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- --------------------- ------------
<C> <S> <C>
</TABLE>
CORPORATE NOTES -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- --------------------- ------------
<C> <S> <C>
$ 20,000,000 General Mills, Inc.
6.006% due 07/17/00................ $ 19,989,445
20,000,000 General Motors Acceptance Corp.
6.141% due 02/03/00................ 20,000,184
S20,000,000 Goldman Sachs Group, Inc.
6.285% due 02/01/00................ 20,000,000
10,000,000 Key Bank N.A.
6.196% due 01/31/00................ 9,999,850
25,000,000 Morgan (J.P.) & Co., Inc.
6.051% due 02/25/00................ 25,000,720
10,000,000 Morgan Stanley Dean Witter & Co.
6.18% due 03/10/00................. 10,002,011
15,000,000 Morgan Stanley Dean Witter & Co.
6.277% due 01/20/00................ 15,000,988
24,000,000 Texaco Capital, Inc.
6.011% due 05/03/00................ 23,992,419
30,000,000 Toyota Motor Credit Corp.
6.021% due 01/09/01................ 29,978,791
20,000,000 Wachovia Corp.
6.131% due 09/14/00................ 19,997,273
20,000,000 Wells Fargo & Co.
6.010% due 03/10/00................ 19,997,937
20,000,000 Xerox Credit Corp.
6.043% due 12/08/00................ 19,993,119
------------
Total corporate notes................ $313,954,951
============
REPURCHASE AGREEMENT -- 9.4%
119,389,000 Interest in $208,259,000 joint $119,389,000
repurchase agreement dated 12/31/99
with State Street Bank 2.80% due
01/03/00; maturity amount
$119,416,857 (Collateralized by
$211,642,000 U.S. Treasury Notes
5.50% - 6.875% due 05/15/01 -
05/15/06)..........................
============
</TABLE>
<TABLE>
<CAPTION>
MARKET
VALUE
--------------
<S> <C> <C>
DIVERSIFICATION OF NET ASSETS:
Total commercial paper (cost
$857,334,519)............................ 67.7% $ 857,334,519
Total corporate notes (cost
$313,954,951)............................ 24.8 313,954,951
Total repurchase agreement (cost
$119,389,000) ........................... 9.4 119,389,000
----- --------------
Total investment in securities (total cost
$1,290,678,470).......................... 101.9 1,290,678,470
Cash, receivables and other assets........ 0.6 8,169,566
Payable for Fund shares redeemed.......... (2.1) (26,958,502)
Payable for dividends..................... (0.4) (5,640,996)
Other liabilities......................... (0.0) (8,804)
----- --------------
Net assets................................ 100.0% $1,266,239,734
===== ==============
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $0.10 per share;
3,000,000,000 shares authorized; 1,266,239,734
shares outstanding............................... $ 126,623,973
Capital surplus................................... 1,139,615,761
--------------
Net assets........................................ $1,266,239,734
==============
Class IA
</TABLE>
<TABLE>
<S> <C>
Shares of beneficial interest outstanding, $0.10
par value, 2,475,000,000 shares authorized (Net
assets $1,257,435,810)........................... 1,257,435,810
==============
</TABLE>
<TABLE>
<S> <C>
Net asset value........................................... $1.00
=====
</TABLE>
<TABLE>
<S> <C>
Class IB
Shares of beneficial interest outstanding, $0.10
par value, 525,000,000 shares authorized (Net
assets $8,803,924)............................... 8,803,924
==============
</TABLE>
<TABLE>
<S> <C>
Net asset value........................................... $1.00
=====
</TABLE>
S Securities exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At December 31, 1999, the market
value of these securities amounted to $20,000,000 or 1.6% of net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
MF-2
<PAGE>
HARTFORD MONEY MARKET HLS FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
HARTFORD
MONEY MARKET
HLS FUND, INC.
--------------
<S> <C>
INVESTMENT INCOME:
Interest.................................................. 56,896,327
------------
Total investment income, net............................ 56,896,327
------------
EXPENSES:
Investment advisory fees.................................. 2,688,668
Administrative services fees.............................. 2,150,934
Accounting services....................................... 161,445
Custodian fees gross...................................... 11,202
Custodian fees expense offset............................. (5,700)
Board of Directors fees................................... 3,391
Distribution fees -- Class IB............................. 14,142
Distribution fees -- Class IB waived...................... (3,970)
Other expenses............................................ 78,586
------------
Total expenses, net..................................... 5,098,698
------------
Net investment income..................................... 51,797,629
------------
NET REALIZED GAIN ON INVESTMENTS:
Net realized gain on security transactions................ 22,249
------------
Net realized gain on investments.......................... 22,249
------------
Net increase in net assets resulting from operations...... $ 51,819,878
============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
MF-3
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1999 1998
HARTFORD HARTFORD
MONEY MARKET MONEY MARKET
HLS FUND, INC. HLS FUND, INC.
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income..................................... $ 51,797,629 $ 36,098,085
Net realized gain......................................... 22,249 11,475
-------------- --------------
Net increase in net assets resulting from operations...... 51,819,878 36,109,560
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class IA................................................ (51,531,940) (36,067,869)
Class IB................................................ (265,689) (30,216)
From realized gain on investments
Class IA................................................ (22,169) (11,470)
Class IB................................................ (80) (5)
-------------- --------------
Total distributions..................................... (51,819,878) (36,109,560)
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Class IA................................................ 384,949,803 260,005,789
Class IB................................................ 6,624,881 2,179,043
-------------- --------------
Net increase from capital share transactions........ 391,574,684 262,184,832
-------------- --------------
Net increase in net assets.......................... 391,574,684 262,184,832
NET ASSETS:
Beginning of year......................................... 874,665,050 612,480,218
-------------- --------------
End of year............................................... $1,266,239,734 $ 874,665,050
============== ==============
Accumulated undistributed net investment income........... -- --
============== ==============
</TABLE>
-------------------------------------------------- MF-4
--------------------------------------------------
<PAGE>
HARTFORD MONEY MARKET HLS FUND, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. ORGANIZATION:
Hartford Money Market HLS Fund, Inc., is organized under the laws of the
State of Maryland and is registered with the Securities and Exchange
Commission (SEC) under the Investment Company Act of 1940, as amended, as
diversified open-end management investment company. The Hartford Money
Market HLS Fund, Inc., (The Fund) is a component of The Hartford HLS Mutual
Funds (The Mutual Funds).
The Fund serves as the underlying investment vehicle for certain variable
annuity and variable life insurance separate accounts and group pension
contracts of Hartford Life Insurance Company and Hartford Life and Annuity
Insurance Company (collectively, The Hartford Life Insurance Companies). The
Hartford Life Insurance Companies are affiliates of The Fund. The Fund's
investment objective is to seek a high level of current income consistent
with liquidity and preservation of capital through investment in
money-market securities.
The Fund is divided into Class IA and IB shares. Each class is offered at
net asset value without a sales charge and is subject to the same expenses
except that the Class IB shares are subject to distribution fees charged
pursuant to a Rule 12-b1 plan. Distribution and Service Plans have been
adopted in accordance with rule 12b-1 of the Investment Company Act of 1940,
as amended.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the Fund,
which is in accordance with generally accepted accounting principles in the
investment company industry:
a) SECURITY TRANSACTIONS-- Security transactions are recorded on the trade
date (the day the order to buy or sell is executed).
b) SECURITY VALUATION-- Short-term securities held in the Fund is valued at
amortized cost or original cost plus accrued interest receivable, both of which
approximate market value.
c) REPURCHASE AGREEMENTS-- A repurchase agreement is an agreement by which
the seller of a security agrees to repurchase the security sold at a mutually
agreed upon time and price. At the time Hartford Money Market HLS
Fund, Inc., enters into a repurchase agreement, the value of the
underlying collateral security(ies), including accrued interest, will be
equal to or exceed the value of the repurchase agreement and, in the case
of repurchase agreements exceeding one day, the value of the underlying
security(ies), including accrued interest, is required during the term of
the agreement to be equal to or exceed the value of the repurchase
agreement. Securities which serve to collateralize the repurchase
agreement are held by the Fund's custodian in book entry or physical form
in the custodial account of the Fund. Repurchase agreements are valued at
cost plus accrued interest receivable. All repurchase agreements are
handled through the Fund's custodian, State Street Bank.
d) JOINT TRADING ACCOUNT-- Pursuant to an exemptive order issued by the SEC,
the Fund may transfer uninvested cash balances into a joint trading account
managed by The Hartford Investment Management Company (HIMCO). These
balances may be invested in one or more repurchase agreements and/or
short-term money market instruments.
e) FEDERAL INCOME TAXES-- For federal income tax purposes, the Fund intends
to continue to qualify as regulated investment companies under Subchapter M of
the Internal Revenue Code by distributing substantially all of their
taxable net investment income and net realized capital gains to their
shareholders or otherwise complying with the requirements of regulated
investment companies. Accordingly, no provision for federal income taxes
has been made in the accompanying financial statements.
f) FUND SHARE VALUATION AND DISTRIBUTIONS TO SHAREHOLDERS-- Orders for the
Fund's shares are executed in accordance with the investment instructions of the
contract holders. Interest income and expenses are accrued on a daily
basis. The net asset value of the Fund's shares is determined as of the
close of each business day of the New York Stock Exchange. Orders for the
purchase of the Fund's shares received prior to the close of the Exchange
on any day on which the Fund is open for business are priced at the
per-share net asset value determined as of the close of the Exchange.
Orders received after the close of the Exchange, or on a day on which the
Exchange and/or the Fund is not open for business, are priced at the next
determined per-share net asset value. The Fund seeks to maintain a stable
net asset value per share of $1.00 by declaring a daily dividend from net
investment income, including net short-term
MF-5
<PAGE>
capital gains and losses, and by valuing its investments using the
amortized cost method. Dividends are distributed monthly.
g) 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 expense during the period. Operating results in the
future could vary from the amounts derived from management's estimates.
h) RESTRICTED SECURITIES-- The Fund may invest up to 10% in illiquid
securities. "Illiquid Securities" are those that may not be sold or disposed of
in the ordinary course of business, at approximately the price used to
determine a Fund's net asset value per share. The Fund may also purchase
certain restricted securities, commonly known as Rule 144A securities,
that can be resold to institutions and which may be determined to be
liquid pursuant to policies and guidelines established by the Funds' Board
of Directors. At December 31, 1999 the Fund did not hold any restricted
securities (excluding 144A issues).
3. EXPENSES:
a) INVESTMENT MANAGEMENT AND ADVISORY AGREEMENTS-- HL Investment Advisors,
LLC (HL Advisors an indirect majority-owned subsidiary of The Hartford Financial
Services Group, Inc. (The Hartford), serves as investment manager to the
Funds pursuant to Investment Management Agreements approved by the Fund's
Board of Directors and shareholders. The rate of compensation paid to HL
Advisors for services rendered was 0.250% per annum based on the average
daily net assets of the Fund.
Pursuant to an investment service agreement between HL Advisors and HIMCO,
HIMCO provides the day-to-day investment management services to the Fund.
HIMCO is a wholly-owned subsidiary of The Hartford. HIMCO determines the
purchase and sale of portfolio securities and places such orders for
execution in the name of the Fund. In conjunction with their investment
activity, HIMCO regularly furnishes reports to the Fund's Board of
Directors concerning economic forecasts, investment strategy, portfolio
activity and performance of the Fund.
b) ADMINISTRATIVE SERVICES AGREEMENT-- Under the Administrative Services
Agreement between Hartford Life Insurance Company (HL) and the Fund, HL provides
administrative services to the Fund and receives monthly compensation at
the annual rate of 0.20% of the Fund's average daily net assets. The Fund
assumes and pays certain other expenses (including, but not limited to,
shareholder accounting, state taxes and directors' fees). Directors' fees
represent remuneration paid or accrued to directors not affiliated with HL
or any other related company.
c) OPERATING EXPENSES-- Allocable expenses of the Mutual Funds are charged
to the Fund based on the ratio of the net assets of the Fund to the combined net
assets of the Mutual Funds. Non-allocable expenses are charged to the Fund
based on specific identification.
d) EXPENSE OFFSET-- The Fund has entered into certain expense offset
arrangements with the Custodian Bank. The amount of the Fund's expense
reductions is shown on the accompanying Statement of Operations as
Custodian fees expense offset.
e) DISTRIBUTION PLAN FOR CLASS IB SHARES-- The Fund has adopted a
Distribution Plan pursuant to Rule 12b-1 under the 1940 Act for the Class IB
shares. Pursuant to the Distribution Plan, the Fund compensates the
Distributor from assets attributable to the Class IB shares for services
rendered and expenses borne in connection with activities primarily
intended to result in the sale of the Class IB shares.
Although the Distribution Plan provides that the Fund may pay annually up
to 0.25% of the average daily net assets of a Fund attributable to its
Class IB shares for activities primarily intended to result in the sale of
Class IB shares, the Distributor has voluntarily agreed to waive 0.07% of
the fee. This waiver may be withdrawn at any time after notice to
shareholders. Under the terms of the Distribution Plan and the principal
underwriting agreement, the Fund is authorized to make payments monthly to
the Distributor which may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class IB shares
for such entities' fees or expenses incurred or paid in that regard.
MF-6
<PAGE>
HARTFORD MONEY MARKET HLS FUND, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1999
4. AFFILIATE HOLDINGS:
As of December 31, 1999, HL group pension contracts held direct interests of
88,529,586 which represents 6.99% of total shares in the Fund.
5. CAPITAL SHARE TRANSACTIONS:
The following information is for the year ended December 31, 1999:
<TABLE>
<CAPTION>
HARTFORD MONEY MARKET
HLS FUND, INC.
-------------------------------
SHARES AMOUNT
-------------- ---------------
<S> <C> <C>
CLASS 1A
Shares sold............................. 3,906,482,986 $ 3,906,482,986
Shares issued on reinvestment of
distributions.......................... 51,555,581 51,555,581
Shares redeemed......................... (3,573,088,764) (3,573,088,764)
-------------- ---------------
Net Increase............................ 384,949,803 $ 384,949,803
============== ===============
CLASS 1B
Shares sold............................. 13,572,465 $ 13,572,465
Shares issued on reinvestment of
distributions.......................... 265,771 265,771
Shares redeemed......................... (7,213,355) (7,213,355)
-------------- ---------------
Net Increase............................ 6,624,881 $ 6,624,881
============== ===============
</TABLE>
The following information is for the year ended December 31, 1998:
<TABLE>
<CAPTION>
HARTFORD MONEY MARKET
HLS FUND, INC.
---------------------------------
SHARES AMOUNT
---------------- ---------------
<S> <C> <C>
CLASS 1A
Shares sold............................. 2,279,384,552 $ 2,279,385,544
Shares issued on reinvestment of
distributions.......................... 36,079,243 36,079,243
Shares redeemed......................... (2,055,458,998) (2,055,458,998)
---------------- ---------------
Net Increase............................ 260,004,797 $ 260,005,789
================ ===============
CLASS 1B
Shares sold............................. 2,658,059 $ 2,658,060
Shares issued on reinvestment of
distributions.......................... 30,221 30,221
Shares redeemed......................... (509,238) (509,238)
---------------- ---------------
Net Increase............................ 2,179,042 $ 2,179,043
================ ===============
</TABLE>
6. LINE OF CREDIT:
The Fund participated in a $500,000,000 committed revolving line of credit
facility. The facility is to be used for temporary or emergency purposes.
Under the arrangement, the Fund is required to own securities having a
market value in excess of 300% of the total bank borrowings. The interest
rate on borrowings varies depending on the nature of the loan. The facility
also requires a fee to be paid based on the amount of the commitment, which
has not been utilized. During the year ended December 31, 1999, the Fund did
not have any borrowings under this facility.
MF-7
<PAGE>
(This page has been left blank intentionally.)
MF-8
<PAGE>
HARTFORD MONEY MARKET HLS FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA (3)
----------------------------------------
NET REALIZED
AND
NET ASSET UNREALIZED
VALUE AT NET GAIN
BEGINNING INVESTMENT (LOSS) ON
OF PERIOD INCOME INVESTMENTS
---------- ----------- -------------
<S> <C> <C> <C>
For the Year Ended
December 31, 1999
Class 1A............... $1.000 $0.070 $ 0.000
Class 1B............... 1.000 0.068 0.000
For the Year Ended
December 31, 1998
Class 1A............... 1.000 0.051 0.000
From inception
April 1, 1998, through
December 31, 1998
Class 1B............... 1.000 0.037 0.000
For the Year Ended
December 31
1997................... 1.000 0.049 0.000
1996................... 1.000 0.050 0.000
1995................... 1.000 0.056 0.000
1994................... 1.000 0.039 0.000
</TABLE>
(1) Annualized.
(2) Not Annualized.
(3) Information presented relates to a share of capital stock outstanding for
the indicated period.
MF-9
<PAGE>
<TABLE>
<CAPTION>
RATIOS AND SUPPLEMENTAL DATA
----------------------------------------------------------------- ---------------------------------
DIVIDENDS NET ASSET NET ASSETS
TOTAL FROM FROM NET VALUE AT AT END OF
INVESTMENT INVESTMENT TOTAL END OF TOTAL PERIOD
OPERATIONS INCOME DISTRIBUTIONS PERIOD RETURN (IN THOUSANDS)
----------- -------------- -------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
For the Year Ended
December 31, 1999
Class 1A............... $ 0.070 $(0.070) $(0.070) $ 1.000 4.89% $1,257,436
Class 1B............... 0.068 (0.068) (0.068) 1.000 4.71 8,804
For the Year Ended
December 31, 1998
Class 1A............... 0.051 (0.051) (0.051) 1.000 5.25 872,486
From inception
April 1, 1998, through
December 31, 1998
Class 1B............... 0.037 (0.037) (0.037) 1.000 3.76(2) 2,179
For the Year Ended
December 31
1997................... 0.049 (0.049) (0.049) 1.000 5.31 612,480
1996................... 0.050 (0.050) (0.050) 1.000 5.09 542,586
1995................... 0.056 (0.056) (0.056) 1.000 5.74 339,709
1994................... 0.039 (0.039) (0.039) 1.000 3.95 321,465
<CAPTION>
TO AVERAGE TO AVERAGE INVESTMENT
NET ASSETS NET ASSETS INCOME
AFTER BEFORE TO AVERAGE
WAIVERS WAIVERS NET ASSETS
---------- ---------- ----------
<S> <C> <C> <C>
For the Year Ended
December 31, 1999
Class 1A............... 0.47% 0.47% 4.81%
Class 1B............... 0.65 0.72 4.63
For the Year Ended
December 31, 1998
Class 1A............... 0.45 -- 5.12
From inception
April 1, 1998, through
December 31, 1998
Class 1B............... 0.64(1) -- 4.81(1)
For the Year Ended
December 31
1997................... 0.44 -- 5.21
1996................... 0.44 -- 5.04
1995................... 0.45 -- 5.57
1994................... 0.47 -- 3.99
</TABLE>
(1) Annualized.
(2) Not Annualized.
(3) Information presented relates to a share of capital stock outstanding for
the indicated period.
MF-10
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
HARTFORD MONEY MARKET HLS FUND, INC.:
We have audited the accompanying statement of net assets of Hartford Money
Market HLS Fund, Inc., (the Fund) (a Maryland corporation) as of December 31,
1999, and the related statement of operations, statements of changes in net
assets and financial highlights for the periods then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights 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. Our procedures included
confirmation of securities owned as of December 31, 1999 by correspondence with
the custodian bank. 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 and financial highlights referred to
above present fairly, in all material respects, the financial position of
Hartford Money Market HLS Fund, Inc. as of December 31, 1999, and the results of
its operations, the changes in its net assets and the financial highlights for
the periods then ended in conformity with generally accepted accounting
principles.
Hartford, Connecticut
February 14, 2000 ARTHUR ANDERSEN LLP
MF-11
<PAGE>
- -----------------------------------------------------------------------------
Hartford Life Insurance Companies BULK RATE
P.O. Box 2999 U.S. POSTAGE
Hartford, CT 06104-2999 PAID
PERMIT #20
HOLLISTON, MA
01746
HV-2234-1
Printed in U.S.A.-Registered Trademark- 2000 The Hartford, Hartford, CT 06115
