<PAGE>
As filed with the Securities and Exchange Commission on December 22, 1998.
File No. 333-xxxx
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 22 [X]
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT TWO
(Exact Name of Registrant)
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
(Name of Depositor)
P.O. Box 2999
Hartford, CT 06104-2999
(Address of Depositor's Principal Offices)
(860) 843-4891
(Depositor's Telephone Number, Including Area Code)
Brian Lord, Esq.
Hartford Life, Inc.
P.O. Box 2999
Hartford, CT 06104-2999
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) of Rule 485
---
on May 1, 1999 pursuant to paragraph (b) of Rule 485
---
60 days after filing pursuant to paragraph (a)(1) of Rule 485
---
on _____________, 1998 pursuant to paragraph (a)(1) of
--- Rule 485
this post-effective amendment designates a new effective date for
--- a previously filed post-effective amendment.
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of the registration statement.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration shall become effective on such
date as the Commission, acting pursuant to Section 8(a), may determine.
<PAGE>
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(A)
N-4 Item No. Prospectus Heading
- ----------------------------------------------------------
1. Cover Page Hartford Life Insurance Company -
Putnam Capital Manager Trust Separate
Account Two
2. Definitions Glossary of Special Terms
3. Synopsis or Highlights Summary
4. Condensed Financial Yield Information
Information
5. General Description of Hartford Life Insurance Company, The
Registrant Separate Account, The Fixed Accounts,
and The Funds
6. Deductions Contract Charges
7. General Description of The Contract, The Separate Account, The
Annuity Contracts Fixed Accounts, and Surrenders
8. Annuity Period Settlement Provisions
9. Death Benefit Death Benefits
10. Purchases and Contract Value The Contract, and Contract Value
11. Redemptions Surrenders
12. Taxes Federal Tax Considerations
13. Legal Proceedings Legal Matters and Experts
14. Table of Contents of the Table of Contents to
Statement of Additional Statement of Additional
Information Information
15. Cover Page Part B; Statement of Additional
Information
16. Table of Contents Table of Contents
17. General Information and History Summary
<PAGE>
18. Services None
19. Purchase of Securities Distribution of Contracts
being Offered
20. Underwriters Distribution of Contracts
21. Calculation of Performance Data Calculation of Yield and Return
22. Annuity Payments Settlement Provisions
23. Financial Statements Financial Statements
24. Financial Statements and Financial Statements and
Exhibits Exhibits
25. Directors and Officers of the Directors and Officers of the
Depositor Depositor
26. Persons Controlled by or Under Persons Controlled by or Under
Common Control with the Common Control with the Depositor
Depositor or Registrant or Registrant
27. Number of Contract Owners Number of Contract Owners
28. Indemnification Indemnification
29. Principal Underwriters Principal Underwriters
30. Location of Accounts and Location of Accounts and Records
Records
31. Management Services Management Services
32. Undertakings Undertakings
<PAGE>
PART A
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY -
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT TWO
[PRODUCT NAME]
P.O. Box 5085
Hartford, Connecticut 06102-5085
Telephone:1-800-521-0538
- --------------------------------------------------------------------------------
This Prospectus describes information you should know before you purchase
[Product Name] variable annuity. Please read it carefully.
[Product Name] variable annuity is a Contract between you and Hartford Life and
Annuity Insurance Company where you agree to make at least one payment to us and
we agree to make a series of annuity payments to you at a later date. This
annuity is a flexible premium, tax-deferred, variable annuity offered to both
individuals and groups. It is:
X Flexible, because you may add premium payments at any time.
X Tax-deferred, which means you don't pay taxes until you take money out or
until we start to make annuity payments to you.
X Variable, because the value of your annuity will fluctuate with the
performance of the underlying Fund.
At purchase, you allocate your premium payment, which is any purchase payment
less any Premium Taxes, to "Sub-Accounts". These are subdivisions of our
Separate Account, an account that keeps your annuity assets separate from our
company assets. The Sub-Accounts then purchase shares of mutual funds set up
exclusively for variable annuity or variable life insurance products. These
Funds are not the same mutual funds that you buy through your stockbroker or
through a retail mutual fund. They may have similar investment strategies and
the same portfolio managers as retail mutual funds. This annuity offers you
Funds with investment strategies ranging from conservative to aggressive and you
may pick those funds that meet your investment goals and risk tolerance. The
Sub-Accounts and the Funds are listed below:
- - Putnam Asia Pacific Growth Sub-Account which purchases shares of Class IA of
Putnam VT Asia Pacific Growth Fund of the Putnam Variable Trust;
- - Putnam Diversified Income Sub-Account which purchases shares of Class IA of
Putnam VT Diversified Income Fund of the Putnam Variable Trust;
- - The George Putnam Fund Sub-Account which purchases shares of Class IA of
Putnam VT The George Putnam Fund of Boston of the Putnam Variable Trust;
- - Putnam Global Asset Allocation Sub-Account which purchases shares of Class IA
of Putnam VT Global Asset Allocation Fund of the Putnam Variable Trust;
- - Putnam Global Growth Sub-Account which purchases shares of Class IA of Putnam
VT Global Growth Fund of the Putnam Variable Trust;
- - Putnam Growth and Income Sub-Account which purchases shares of Class IA of
Putnam VT Growth and Income Fund of the Putnam Variable Trust;
- - Putnam Health Sciences Sub-Account which purchases shares of Class IA of
Putnam VT Health Sciences Fund of the Putnam Variable Trust;
- - Putnam High Yield Sub-Account which purchases shares of Class IA of Putnam VT
High Yield Fund of the Putnam Variable Trust;
- - Putnam International Growth Sub-Account which purchases shares of Class IA of
Putnam VT International Growth Fund of the Putnam Variable Trust;
- - Putnam International Growth and Income Sub-Account which purchases shares of
Class IA of Putnam VT International Growth and Income Fund of the Putnam
Variable Trust;
- - Putnam International New Opportunities Sub-Account which purchases shares of
Class IA of Putnam VT International New Opportunities Fund of the Putnam
Variable Trust;
1 - PROSPECTUS
<PAGE>
- - Putnam Investors Sub-Account which purchases shares of Class IA of Putnam VT
Investors Fund of the Putnam Variable Trust;
- - Putnam Money Market Sub-Account which purchases shares of Class IA of Putnam
VT Money Market Fund of the Putnam Variable Trust;
- - Putnam New Opportunities Sub-Account which purchases shares of Class IA of
Putnam VT New Opportunities Fund of the Putnam Variable Trust;
- - Putnam New Value Sub-Account which purchases shares of Class IA of Putnam VT
New Value Fund of the Putnam Variable Trust;
- - Putnam OTC & Emerging Growth Sub-Account which purchases shares of Class IA of
Putnam VT OTC & Emerging Growth Fund of the Putnam Variable Trust;
- - Putnam Research Sub-Account which purchases shares of Class IA of Putnam VT
Research Fund of the Putnam Variable Trust;
- - Putnam U.S. Government and High Quality Bond Sub-Account which purchases
shares of Class IA of Putnam VT U.S. Government and High Quality Bond Fund of
the Putnam Variable Trust;
- - Putnam Utilities Growth & Income Sub-Account which purchases shares of Class
IA of Putnam VT Utilities Growth & Income Fund of the Putnam Variable Trust;
- - Putnam Vista Sub-Account which purchases shares of Class IA of Putnam VT Vista
Fund of the Putnam Variable Trust; and
- - Putnam Voyager Sub-Account which purchases shares of Class IA of Putnam VT
Voyager Fund of the Putnam Variable Trust.
You may also allocate some or all of your premium payment to one of the "Fixed
Accounts", which pays an interest rate guaranteed for a certain time period from
the time the payment is made. Premium payments put in a Fixed Account are not
segregated from our company assets like the assets of the Separate Account.
If you decide to buy this annuity, you should keep this Prospectus for your
records. You can also call us at 1-800-521-0538 to get a Statement of Additional
Information, free of charge. The Statement of Additional Information contains
more information about this annuity and, like this Prospectus, is filed with the
Securities and Exchange Commission. We have included the Table of Contents for
the Statement of Additional Information at the end of this Prospectus. Although
we file the Prospectus and the Statement of Additional Information with the
Securities and Exchange Commission, the Commission doesn't approve or disapprove
these securities or determine if the information is truthful or complete. Anyone
who represents that the Securities and Exchange Commission does these things may
be guilty of a criminal offense.
This Prospectus and the Statement of Additional Information can also be obtained
from the Securities and Exchange Commission's website (HTTP://WWW.SEC.GOV).
This annuity IS NOT:
- - A bank deposit or obligation
- - Federally insured
- - Endorsed by any bank or governmental agency
This annuity may not be available for sale in all states.
Prospectus Dated: March 1, 1999
Statement of Additional Information Dated: March 1, 1999
2 - PROSPECTUS
<PAGE>
TABLE OF CONTENTS
-------------------------------------------------------------------
<TABLE>
<CAPTION>
Page
----------------------------------------------------------------------------
<S> <C>
Glossary of Special Terms 4
----------------------------------------------------------------------------
Fee Table 5
----------------------------------------------------------------------------
Summary 8
----------------------------------------------------------------------------
Hartford Life and Annuity Insurance Company 10
----------------------------------------------------------------------------
The Separate Account 10
----------------------------------------------------------------------------
The Funds 11
----------------------------------------------------------------------------
Performance Related Information 13
----------------------------------------------------------------------------
The Fixed Accounts 14
----------------------------------------------------------------------------
The Contract 15
----------------------------------------------------------------------------
Contract Value - Before the Annuity Commencement Date 16
----------------------------------------------------------------------------
Contract Value Transfers Before and After the Annuity
Commencement Date 17
----------------------------------------------------------------------------
Surrenders 17
----------------------------------------------------------------------------
Contract Charges 18
----------------------------------------------------------------------------
Death Benefits 20
----------------------------------------------------------------------------
Settlement Provisions 22
----------------------------------------------------------------------------
Annuity Payments 23
----------------------------------------------------------------------------
Other Information 25
----------------------------------------------------------------------------
<CAPTION>
Page
<S> <C>
----------------------------------------------------------------------------
Federal Tax Considerations 25
----------------------------------------------------------------------------
Taxation of Hartford and the Separate Account 25
----------------------------------------------------------------------------
Taxation of Annuities - General Provisions Affecting Purchasers
Other Than Qualified Retirement Plans 25
----------------------------------------------------------------------------
Federal Income Tax Withholding 29
----------------------------------------------------------------------------
General Provisions Affecting Qualified Retirement Plans 29
----------------------------------------------------------------------------
Annuity Purchases By Nonresident Aliens and Foreign Corporations 29
----------------------------------------------------------------------------
Miscellaneous 29
----------------------------------------------------------------------------
How Contracts Are Sold 29
----------------------------------------------------------------------------
Year 2000 30
----------------------------------------------------------------------------
Legal Matters 30
----------------------------------------------------------------------------
Experts 31
----------------------------------------------------------------------------
More Information 31
----------------------------------------------------------------------------
Appendix I -- Information Regarding Tax-Qualified Plans 32
----------------------------------------------------------------------------
</TABLE>
3 - PROSPECTUS
<PAGE>
Glossary of Special Terms
-------------------------------------------------------------------
ACCOUNT: Any of the Sub-Accounts or Fixed Accounts.
ACCUMULATION UNIT: A unit of measure we use to calculate values before we begin
to make annuity payments to you.
ADMINISTRATIVE OFFICE: Located at 200 Hopmeadow Street, Simsbury, CT 06089. The
mailing address is Post Office Box 5085, Hartford, CT 06104-5085.
ANNIVERSARY VALUE: The value equal to the Contract Value as of a Contract
Anniversary, increased by the dollar amount of any premium payments made since
that anniversary and reduced by the dollar amount of any partial Surrenders
since that anniversary.
ANNUAL MAINTENANCE FEE: An annual $30 charge for annuities having a value of
less than $50,000 on the most recent Contract Anniversary or when the annuity is
Surrendered in full. The charge is deducted proportionately from the Fund in use
at the time.
ANNUITANT: The person on whose life the Contract is based. The Annuitant may not
be changed.
ANNUITY: A Contract issued by us that provides, in exchange for premium
payments, a series of annuity payments.
ANNUITY CALCULATION DATE: The date we calculate your first annuity payment.
ANNUITY COMMENCEMENT DATE: The date we start to make annuity payments to you.
ANNUITY UNIT: A unit of measure we use to calculate the value of the annuity
payments we make to you.
ASSUMED INVESTMENT RETURN ("AIR"): The investment return, either 3%, 5% or 6%,
which we base your variable dollar amount payments on. You select the AIR before
we start to make annuity payments.
BENEFICIARY: The person or persons you designate to receive payment of the death
benefit upon the death of the Contract Owner.
CODE: The Internal Revenue Code of 1986, as amended.
CONTINGENT ANNUITANT: The person you may designate to become the Annuitant if
the original Annuitant dies before we begin making annuity payments.
CONTRACT: The contract is the individual Annuity contract and any endorsements
or riders. If you have a group annuity, you will receive a certificate rather
than a contract.
CONTRACT ANNIVERSARY: The annual anniversary of the date we issued your annuity.
If your contract anniversary falls on a day that is not a Valuation Day, then
the next Valuation Day will be your Contract Anniversary for that year.
CONTRACT OWNER(S) OR YOU: The owner(s) or holder(s) of this Annuity
CONTRACT VALUE: The total value of your Annuity that we get by adding up the
value of each of your Sub-Accounts and Fixed Accounts on any Valuation Day.
CONTRACT YEAR: The 12 months following the date you purchased your annuity and
from any Contract Anniversary.
DOLLAR COST AVERAGING ("DCA"): Systematic transfers from one Account to another.
DCA PROGRAM FIXED ACCOUNTS: Fixed Accounts we establish to use for dollar cost
averaging programs. These are part of our General Account.
DEATH BENEFIT: The amount we pay when the Contract Owner or the Annuitant dies.
DUE PROOF OF DEATH: A certified copy of a death certificate, an order of a court
of competent jurisdiction, or any other proof acceptable to us.
FIXED ACCOUNT: This is an account that is part of our General Account. You may
allocate all or a portion of your premium payments or transfer of Contract Value
to this account.
FUNDS: The Funds described in this Prospectus or any supplements to the
Prospectus.
GENERAL ACCOUNT: Our General Account that includes our company assets and your
annuity assets allocated to any of the Fixed Accounts or DCA Program Fixed
Accounts.
HARTFORD OR WE: Hartford Life and Annuity Insurance Company
INTEREST ACCUMULATION VALUE: This is the amount which we use for the purpose of
calculating the optional interest accumulation death benefit.
MAXIMUM ANNIVERSARY VALUE: This is the highest Anniversary Value prior the
deceased's 81st birthday or the date of death, if earlier.
PAYEE: The person or party designated by you to receive annuity payments.
PREMIUM TAX: A tax charged by a state or municipality on premium payments.
SEPARATE ACCOUNT: An account that we establish to separate the assets for your
annuity Sub-Accounts from our company assets. Hartford Life and Annuity
Insurance Company Putnam Capital Manager Trust Separate Account Two.
SUB-ACCOUNT: Divisions established within the Separate Account.
SURRENDER: A complete or partial withdrawal or distribution from your annuity.
SURRENDER VALUE: What we pay you if you terminate your annuity before we begin
to make annuity payments.
VALUATION DAY: Every day the New York Stock Exchange is open for trading. The
value of the Separate Account is determined as of the close of the New York
Stock Exchange (generally 4:00 p.m. Eastern Time).
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
4 - PROSPECTUS
<PAGE>
FEE TABLE
SUMMARY
-------------------------------------------------------------------
CONTRACT OWNER TRANSACTION EXPENSES (ALL SUB-ACCOUNTS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
<S> <C>
Sales Load Imposed on Purchases (as a percentage of
premium payments) None
- ---------------------------------------------------------------
Exchange Fee $0
- ---------------------------------------------------------------
Contingent Deferred Sales Charge (as a percentage of
amounts Surrendered)(1)
First Year(2) 7%
- ---------------------------------------------------------------
Second Year 6%
- ---------------------------------------------------------------
Third Year 6%
- ---------------------------------------------------------------
Fourth Year 5%
- ---------------------------------------------------------------
Fifth Year 4%
- ---------------------------------------------------------------
Sixth Year 3%
- ---------------------------------------------------------------
Seventh Year 2%
- ---------------------------------------------------------------
Eighth Year 0%
- ---------------------------------------------------------------
Annual Maintenance Fee(3) $30
- ---------------------------------------------------------------
ANNUAL EXPENSES - SEPARATE ACCOUNT (as a percentage of
daily Sub-Account value)
Mortality and Expense Risk 1.250%
- ---------------------------------------------------------------
Administrative Fees 0.150%
- ---------------------------------------------------------------
Total 1.400%
- ---------------------------------------------------------------
Optional Charges
Optional Interest Accumulation Death Benefit (as a
percentage of daily Sub-Account value) .15%
- ---------------------------------------------------------------
</TABLE>
(1) The Contingent Deferred Sales Charge is not assessed on partial Surrenders
which do not exceed 15% of premium payments each Contract year, on a
non-cumulative basis.
(2) Length of time from each premium payment.
(3) The Annual Maintenance Fee is a single $30 charge on a Contract deducted
each Contract Anniversary or upon Surrender. It is deducted proportionally
from the investment options in use at the time of the charge. The Annual
Maintenance Fee is deducted only when the Contract Value is less than
$50,000.
5 - PROSPECTUS
<PAGE>
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
Total Fund
Management Operating
Fees Expenses
(with Other (with
waivers) Expenses waivers)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Putnam VT Asia Pacific Growth Fund 0.80% 0.27% 1.07%
- ---------------------------------------------------------------------------------------------
Putnam VT Diversified Income Fund 0.69% 0.11% 0.80%
- ---------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston(1) 0.49% 0.36% 0.85%
- ---------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund 0.66% 0.11% 0.77%
- ---------------------------------------------------------------------------------------------
Putnam VT Global Growth Fund 0.60% 0.15% 0.75%
- ---------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund 0.47% 0.04% 0.51%
- ---------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund(1) 0.56% 0.34% 0.90%
- ---------------------------------------------------------------------------------------------
Putnam VT High Yield Fund 0.66% 0.06% 0.72%
- ---------------------------------------------------------------------------------------------
Putnam VT International Growth Fund(1) 0.73% 0.47% 1.20%
- ---------------------------------------------------------------------------------------------
Putnam VT International Growth and Income Fund 0.80% 0.32% 1.12%
- ---------------------------------------------------------------------------------------------
Putnam VT International New Opportunities Fund(1) 0.92% 0.68% 1.60%
- ---------------------------------------------------------------------------------------------
Putnam VT Investors Fund(1) 0.52% 0.33% 0.85%
- ---------------------------------------------------------------------------------------------
Putnam VT Money Market Fund 0.45% 0.09% 0.54%
- ---------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund 0.58% 0.05% 0.63%
- ---------------------------------------------------------------------------------------------
Putnam VT New Value Fund 0.70% 0.15% 0.85%
- ---------------------------------------------------------------------------------------------
Putnam VT OTC & Emerging Growth Fund(1) 0.56% 0.34% 0.90%
- ---------------------------------------------------------------------------------------------
Putnam VT Research Fund(1) 0.37% 0.48% 0.85%
- ---------------------------------------------------------------------------------------------
Putnam VT U.S. Government and High Quality Bond Fund 0.61% 0.08% 0.69%
- ---------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund 0.67% 0.07% 0.74%
- ---------------------------------------------------------------------------------------------
Putnam VT Vista Fund 0.65% 0.22% 0.87%
- ---------------------------------------------------------------------------------------------
Putnam VT Voyager Fund 0.54% 0.05% 0.59%
- ---------------------------------------------------------------------------------------------
</TABLE>
(1) The "Management Fees" and "Other Expenses" shown in the table above reflect
an expense limitation. In the absence of an expense limitation, "Management
Fees," "Other Expenses" and "Total Fund Operating Expenses" would have been:
<TABLE>
<CAPTION>
Total Fund
Management Other Operating
Fees Expenses Expenses
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston* 0.65% 0.36% 1.01%
- ---------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund* 0.70% 0.34% 1.04%
- ---------------------------------------------------------------------------------------------
Putnam VT International Growth Fund 0.80% 0.47% 1.27%
- ---------------------------------------------------------------------------------------------
Putnam VT International New Opportunities Fund 1.20% 0.68% 1.88%
- ---------------------------------------------------------------------------------------------
Putnam VT Investors Fund* 0.65% 0.33% 0.98%
- ---------------------------------------------------------------------------------------------
Putnam VT OTC & Emerging Growth Fund* 0.70% 0.34% 1.04%
- ---------------------------------------------------------------------------------------------
Putnam VT Research Fund* 0.65% 0.48% 1.13%
- ---------------------------------------------------------------------------------------------
</TABLE>
* Estimated "Management Fees," "Other Expenses" and "Total Fund Operating
Expenses."
6 - PROSPECTUS
<PAGE>
EXAMPLE
<TABLE>
<CAPTION>
If you do not
surrender your
Contract, you
would pay the
following
If you surrender your Contract If you annuitize your Contract expenses on a
at the end of the applicable at the end of the applicable $1,000
time period you would pay the time period you would pay the investment,
following expenses on a $1,000 following expenses on a $1,000 assuming a 5%
investment, assuming a 5% investment, assuming a 5% annual return
annual return on assets: annual return on assets: on assets:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
3 5 10 3 5 10 3
Sub-Account 1 year years years years 1 year years years years 1 year years
- -------------------------------------------------------------------------------------------------------------------------------
Putnam Asia Pacific Growth $80 $128 $176 $289 $25 $79 $135 $289 $26 $80
- -------------------------------------------------------------------------------------------------------------------------------
Putnam Diversified Income 77 119 162 262 23 71 122 261 23 71
- -------------------------------------------------------------------------------------------------------------------------------
The George Putnam Fund 78 121 N/A N/A 23 72 N/A N/A 24 73
- -------------------------------------------------------------------------------------------------------------------------------
Putnam Global Asset Allocation 77 118 161 259 22 70 120 258 23 70
- -------------------------------------------------------------------------------------------------------------------------------
Putnam Global Growth 77 118 160 257 22 69 119 256 23 70
- -------------------------------------------------------------------------------------------------------------------------------
Putnam Growth and Income 80 112 147 231 20 62 106 230 20 62
- -------------------------------------------------------------------------------------------------------------------------------
Putnam Health Sciences 78 122 N/A N/A 24 74 N/A N/A 24 74
- -------------------------------------------------------------------------------------------------------------------------------
Putnam High Yield 76 117 158 253 22 68 117 253 22 69
- -------------------------------------------------------------------------------------------------------------------------------
Putnam International Growth 81 132 183 302 27 83 142 302 27 84
- -------------------------------------------------------------------------------------------------------------------------------
Putnam International Growth and Income 80 129 179 294 26 81 138 294 26 81
- -------------------------------------------------------------------------------------------------------------------------------
Putnam International New Opportunities 85 144 203 341 31 95 162 341 31 96
- -------------------------------------------------------------------------------------------------------------------------------
Putnam Investors 78 121 N/A N/A 23 72 N/A N/A 24 73
- -------------------------------------------------------------------------------------------------------------------------------
Putnam Money Market 75 111 149 234 20 63 108 234 21 63
- -------------------------------------------------------------------------------------------------------------------------------
Putnam New Opportunities 75 114 153 244 21 65 113 243 21 66
- -------------------------------------------------------------------------------------------------------------------------------
Putnam New Value 78 121 165 267 23 72 124 266 24 73
- -------------------------------------------------------------------------------------------------------------------------------
Putnam OTC & Emerging Growth 78 122 N/A N/A 24 74 N/A N/A 24 74
- -------------------------------------------------------------------------------------------------------------------------------
Putnam Research 84 123 N/A N/A 23 72 N/A N/A 24 73
- -------------------------------------------------------------------------------------------------------------------------------
Putnam U.S. Government and High Quality Bond 76 116 157 250 21 67 116 249 22 68
- -------------------------------------------------------------------------------------------------------------------------------
Putnam Utilities Growth and Income 77 118 159 255 22 69 118 255 23 70
- -------------------------------------------------------------------------------------------------------------------------------
Putnam Vista 78 122 166 269 23 73 125 268 24 74
- -------------------------------------------------------------------------------------------------------------------------------
Putnam Voyager 75 113 151 240 20 64 111 239 21 65
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
- ---------------------------------------------
5 10
Sub-Account years years
- ---------------------------------------------
Putnam Asia Pacific Growth $136 $289
- ---------------------------------------------
Putnam Diversified Income 122 262
- ---------------------------------------------
The George Putnam Fund N/A N/A
- ---------------------------------------------
Putnam Global Asset Allocation 121 259
- ---------------------------------------------
Putnam Global Growth 120 257
- ---------------------------------------------
Putnam Growth and Income 107 231
- ---------------------------------------------
Putnam Health Sciences N/A N/A
- ---------------------------------------------
Putnam High Yield 118 253
- ---------------------------------------------
Putnam International Growth 143 302
- ---------------------------------------------
Putnam International Growth and Income 139 294
- ---------------------------------------------
Putnam International New Opportunities 163 341
- ---------------------------------------------
Putnam Investors N/A N/A
- ---------------------------------------------
Putnam Money Market 109 234
- ---------------------------------------------
Putnam New Opportunities 113 244
- ---------------------------------------------
Putnam New Value 125 267
- ---------------------------------------------
Putnam OTC & Emerging Growth N/A N/A
- ---------------------------------------------
Putnam Research N/A N/A
- ---------------------------------------------
Putnam U.S. Government and High Quality Bond 117 250
- ---------------------------------------------
Putnam Utilities Growth and Income 119 255
- ---------------------------------------------
Putnam Vista 126 269
- ---------------------------------------------
Putnam Voyager 111 240
- ---------------------------------------------
</TABLE>
The purpose of this table is to assist you in understanding various costs and
expenses that your will bear directly or indirectly. The table reflects expenses
of the Separate Account and underlying Funds. We will deduct any Premium Taxes
that apply.
In the Example, the Annual Maintenance Fee is approximately a 0.08% annual asset
charge based on the experience of the Contracts. This Example should not be
considered a representation of past or future expenses and actual expenses may
be greater or less than those shown.
Pursuant to requirements of the Investment Company Act of 1940, the Annual
Maintenance Fee has been reflected in the Examples by a method intended to show
the "average" impact of the Annual Maintenance Fee on an investment in the
Separate Account.
7 - PROSPECTUS
<PAGE>
SUMMARY
-------------------------------------------------------------------
HOW DO I PURCHASE THIS ANNUITY?
You must complete our application or order request and submit it to us for
approval with your first premium payment. Your first premium payment must be at
least $1,000 and subsequent premium payments must be at least $500. The minimum
premium payment requirements may differ if you are participating in our
automatic investing ("InvestEase") program.
- - For a limited time, usually within ten days after you receive your annuity,
you may cancel your annuity without paying a Contingent Deferred Sales
Charge. You bear the investment risk for your premium payment prior to our
receipt of your request for cancellation.
WHAT TYPE OF SALES CHARGE
WILL I PAY?
CONTINGENT DEFERRED SALES CHARGE ("CDSC")
The CDSC covers expenses relating to the sale and distribution of the Contracts,
including commissions paid to distributing organizations and the cost of
preparing sales literature and other promotional activities.
We assess a CDSC when you request a full or partial Surrender. The percentage of
the CDSC is based on how long each premium payment has been in the Contract.
Each premium payment has its own CDSC schedule. Premium payments are Surrendered
in the order that they were received. The longer you leave your premium payment
in the Contract, the lower the CDSC will be when you Surrender.
The CDSC is a percentage of the amount Surrendered (not to exceed the total
amount of the premium payments made) and equals:
<TABLE>
<CAPTION>
Length of Time from CDSC
Premium Payment Charge
<S> <C>
- --------------------------------------------------------
1 year 7%
2 years 6%
3 years 6%
4 years 5%
5 years 4%
6 years 3%
7 years 2%
8 years or more 0%
</TABLE>
IS THERE AN ANNUAL MAINTENANCE FEE?
Yes. We deduct this $30 fee each year on your Contract Anniversary or when you
completely Surrender your annuity, if, on either of those dates, the value of
your annuity is less than $50,000.
WHAT CHARGES WILL I PAY ON AN ANNUAL BASIS?
You pay three different types of charges each year. The first type of charge is
the fee you pay for insurance. This charge is:
A mortality and expense risk charge that is subtracted daily and is equal to an
annual charge of 1.25% of your Contract Value invested in the Funds.
The second type of charge is the fee you pay for the Funds.
Currently, fund charges range from 0.39% to 0.79% of the average daily value of
the amount you have invested in the fund. See the Annual Operation Expense Table
for more complete information and the funds' prospectuses attached to this
Prospectus.
The third type of charge is the fee you pay for the Separate Account. This
charge is:
An administrative fee is .15% per annum of the Contract Values held in the
Separate Account.
If an Optional Death Benefit is elected an additional charge is deducted daily
from your Contract Value and is equal to 0.15% per year of your Contract Value
invested in the Funds.
CAN I TAKE OUT ANY OF MY MONEY?
You can partially or fully Surrender your Contract subject to a Contingent
Deferred Sales Charge (CDSC). You can partially Surrender your Contract without
any CDSC applied to the Surrender under the following conditions:
- - Surrenders which don't exceed 15% of premium payments per Contract Year
(Annual Withdrawal Amount);
- - Surrenders made from premium payments invested more than seven years;
- - 100% Surrender of earnings after the seventh Contract Year;
- - Surrenders under the nursing home waiver (described as Eligible Confinement in
the Contract); or
- - Surrenders eligible for disability waiver under a group qualified plan.
WILL HARTFORD PAY A DEATH BENEFIT?
Your Contract has a Death Benefit and we offer an Optional Interest Accumulation
Death Benefit ("Optional Death Benefit") that you can elect for an additional
fee. There is a Death Benefit if the Contract Owner, joint owner or Annuitant,
die before we begin to make annuity payments. The Death Benefit will remain
invested in the Sub-Accounts according to your last instructions (unless
otherwise mutually specified by your Beneficiaries) and will be subject to
market fluctuations.
8 - PROSPECTUS
<PAGE>
IF YOU DO NOT ELECT THE OPTIONAL DEATH BENEFIT, the Death Benefit, which we will
calculate as of the date we receive Due Proof of Death, will be the greater of:
1) 100% of the total premium payments you have made to us reduced by any
subsequent Surrenders;
2) The Contract Value of your annuity, or
3) Your Maximum Anniversary Value, which is described below.
The Maximum Anniversary Value is based on a series of calculations on Contract
Anniversaries, of Contract Values, premium payments and partial Surrenders. We
will calculate an Anniversary Value for each Contract Anniversary prior to the
deceased's 81st birthday or date of death. The Anniversary Value is equal to the
Contract Value as of a Contract Anniversary, increased by the dollar amount of
any premium payments made since that anniversary and reduced by the dollar
amount of any partial Surrenders since that anniversary. The Maximum Anniversary
Value is equal to the greatest Anniversary Value attained from this series of
calculations.
IF YOU ELECT THE OPTIONAL DEATH BENEFIT, the Death Benefit, which we will
calculate as of the date we receive Due Proof of Death, will be the greater of:
1) 100% of the total premium payments you have made to us reduced by any
subsequent Surrenders;
2) The Contract Value of your annuity;
3) Your Maximum Anniversary Value, which is the highest Anniversary Value
before the deceased's 81st birthday or date of death; or
4) Your Interest Accumulation Value.
The INTEREST ACCUMULATION VALUE is calculated by accumulating interest on your
premium payments at a rate of 5% per year up to the deceased's 81st birthday or
date of death, assuming you have not taken any Surrenders. If you have taken any
Surrenders, the 5% will be accumulated on your premium payments, but there will
be an adjustment for any of the Surrenders. This adjustment will reduce the
Optional Death Benefit proportionally for the Surrenders. The Optional Death
Benefit is limited to a maximum of 200% of premium payments, less proportional
adjustments for any Surrenders. For examples on how the Optional Death Benefit
is calculated see "Appendix II". If you elect the Optional Death Benefit, we
will deduct an additional charge daily from your Contract Value equal to .15% of
the Sub-Account value.
SPOUSAL CONTRACT CONTINUATION. If the Beneficiary is the Contract Owner's
spouse, the Contract will continue with the spouse as Contract Owner, unless the
spouse elects to receive the Death Benefit as a lump sum payment. If the
Contract continues with the spouse as Contract Owner, we will adjust the
Contract Value to the amount that we would have paid as the Death Benefit
payment, had the spouse elected to receive the Death Benefit as a lump sum
payment or as an annuity payment option. This provision will only apply one time
for each Contract.
WHAT ANNUITY PAYMENT OPTIONS ARE AVAILABLE?
When you purchase your annuity, you may choose one of the following annuity
payment options, or receive a lump sum payment:
LIFE ANNUITY where we make scheduled payments for the Annuitant's life.
- - Payments under this option stop upon the death of the Annuitant, even if the
Annuitant dies after one payment.
LIFE ANNUITY WITH CASH REFUND where we make payments during the life of the
Annuitant and when the Annuitant dies, we pay the remaining value to the
Beneficiary. The remaining value is calculated at the time we receive Due Proof
of Death by subtracting the annuity payments already made from the Contract
Value, less any applicable Premium Taxes, applied to this annuity payment
option.
- - This option is only available if you select a variable dollar amount payment
with the 5% AIR or fixed dollar amount annuity payments.
LIFE ANNUITY WITH PAYMENTS FOR A PERIOD CERTAIN where we make payments for the
life of the Annuitant but you are at least guaranteed payments for a time period
you select which is a minimum of 5 years and a maximum of 100 years minus your
annuitant's age.
- - If the Annuitant dies prior to the end of the period selected, we will pay
the value of the remaining payments to your Beneficiary, either in a lump sum
or we will continue payments until the end of the period selected.
JOINT AND LAST SURVIVOR ANNUITY where we make payments during the lifetimes of
the Annuitant and another designated individual called the Joint Annuitant. At
the time of electing this annuity payment option, the Contract Owner may elect
reduced payments over the remaining lifetime of the survivor.
- - Payments under this option STOP UPON THE DEATH OF THE ANNUITANT AND JOINT
ANNUITANT, even if the Annuitant and Joint Annuitant die after one payment.
JOINT AND LAST SURVIVOR LIFE ANNUITY WITH PAYMENTS FOR A PERIOD CERTAIN where we
make payments during the lifetime of the Annuitant and a Joint Annuitant, and we
guarantee that those payments for a time period you select which is a minimum of
5 years and a maximum 100 years
9 - PROSPECTUS
<PAGE>
minus the younger Annuitant's age. At the time of electing this Annuity Option,
the Contract Owner may elect reduced payments over the remaining lifetime of the
survivor.
- - If the Annuitant and the Joint Annuitant die prior to the end of the period
selected, we will pay the value of the remaining payments to your
Beneficiary, either in a lump sum or we will continue payments until the end
of the period selected.
PAYMENTS FOR A PERIOD CERTAIN where we agree to make payments for a specified
time. The minimum period that you can select is 10 years during the first two
Contract Years and 5 years after the second Contract Anniversary. The maximum
period that you can select is 100 years minus your Annuitant's age.
- - If you select this option under a variable dollar amount payment, YOU MAY
SURRENDER YOUR ANNUITY after annuity payments have started and we will give
you the present value of the remaining payments less any applicable
Contingent Deferred Sales Charge.
- - If the Annuitant dies prior to the end of the period selected, we will pay
the value of the remaining payments to your Beneficiary, either in a lump sum
or we will continue payments until the end of the period selected.
You must begin to take payments before the Annuitant's 90th birthday or the end
of the 10th Contract Year, which ever comes later, unless you elect a later date
to begin receiving payments subject to the laws and regulations then in effect
and our approval. If you do not tell us what annuity payment option you want
before that time, we will pay you under the Life Annuity with a 10 year period
certain. You and Hartford can agree to start payments at a later date if the
laws in effect allow us to defer payment and we agree to allow you to defer.
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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Hartford Life and Annuity Insurance Company is a stock life insurance company
engaged in the business of writing life insurance and annuities, both individual
and group, in all states of the United States and the District of Columbia,
except New York. Effective on January 1, 1998, Hartford's name changed from ITT
Hartford Life and Annuity Insurance Company to Hartford Life and Annuity
Insurance Company. Hartford was originally incorporated under the laws of
Wisconsin on January 9, 1956, and was subsequently redomiciled to Connecticut.
Its offices are located in Simsbury, Connecticut; however, its mailing address
is P.O. Box 2999, Hartford, CT 06104-2999. Hartford is a subsidiary of Hartford
Fire Insurance Company, one of the largest multiple lines insurance carriers in
the United States. Hartford is ultimately controlled by The Hartford Financial
Services Group, Inc., a Delaware corporation.
HARTFORD RATINGS
<TABLE>
<CAPTION>
EFFECTIVE
DATE OF
RATING AGENCY RATING RATING BASIS OF RATING
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Financial soundness and
A.M. Best and Company, Inc. 9/9/97 A+ operating performance.
- ---------------------------------------------------------------------------------------
Standard & Poor's 1/23/98 AA Insurer financial strength
- ---------------------------------------------------------------------------------------
Duff & Phelps 1/23/98 AA+ Claims paying ability
- ---------------------------------------------------------------------------------------
</TABLE>
THE SEPARATE ACCOUNT
-------------------------------------------------------------------
The Separate Account is where we set aside and invest the assets of some of our
annuity contracts, including this Contract. The Separate Account was established
on March 31, 1993 and is registered as a unit investment trust under the
Investment Company Act of 1940. This registration does not involve supervision
by the Commission of the management or the investment practices of the Separate
Account or Hartford. The Separate Account meets the definition of "Separate
Account" under federal securities law. This Separate Account holds only assets
for variable annuity contracts. The Separate Account:
- - Holds assets for the benefit of you and other Contract Owners, and the persons
entitled to the payments described in the Contract.
- - Is not subject to the liabilities arising out of any other business Hartford
may conduct.
10 - PROSPECTUS
<PAGE>
- - Is not affected by the rate of return of Hartford's General Account or by the
investment performance of any of Hartford's other Separate Accounts.
- - May be subject to liabilities from a Sub-Account of the Separate Account which
holds assets of other variable annuity contracts offered by the Separate
Account which are not described in this Prospectus.
- - Is credited with income and gains, and takes losses, whether or not realized,
from the assets it holds.
We do not guarantee the investment results of the Separate Account. There is no
assurance that the value of your Annuity will equal the total of the payments
you make to us.
THE FUNDS
-------------------------------------------------------------------
The underlying investments for the Contracts are Class IA shares of Putnam
Variable Trust, an open-end series investment company with multiple portfolios
("Funds"). The underlying Funds corresponding to each Sub-Account and their
investment objectives are described below.
We do not guarantee the investment results of any of the underlying Funds. Since
each underlying Fund has different investment objectives, each is subject to
different risks. These risks and the Funds' expenses are more fully described in
the accompanying Funds' prospectus and Statement of Additional Information,
which may be ordered from us. The Funds' prospectus should be read in
conjunction with this Prospectus before investing.
The Funds may not be available in all states
The investment goals of each of the Funds are as follows:
PUTNAM VT ASIA PACIFIC GROWTH FUND Seeks capital appreciation by investing
primarily in securities of companies located in Asia and in the Pacific Basin.
The fund's investments will normally include common stocks, preferred stocks,
securities convertible into common stocks or preferred stocks, and warrants to
purchase common stocks or preferred stocks.
PUTNAM VT DIVERSIFIED INCOME FUND Seeks high current income consistent with
capital preservation by investing in the following three sectors of the fixed
income securities markets: a U.S. Government and Investment Grade Sector, a High
Yield Sector (which invests primarily in securities commonly known as "junk
bonds"), and an International Sector. See the special considerations for
investments in high yield securities described in the Fund prospectus.
PUTNAM VT THE GEORGE PUTNAM FUND OF BOSTON Seeks to provide a balanced
investment composed of a well-diversified portfolio of stocks and bonds which
will produce both capital growth and current income.
PUTNAM VT GLOBAL ASSET ALLOCATION FUND Seeks a high level of long-term total
return consistent with preservation of capital by investing in U.S. equities,
international equities, U.S. fixed income securities, and international fixed
income securities.
PUTNAM VT GLOBAL GROWTH FUND Seeks capital appreciation through a globally
diversified portfolio of common stocks.
PUTNAM VT GROWTH AND INCOME FUND Seeks capital growth and current income by
investing primarily in common stocks that offer potential for capital growth,
current income, or both.
PUTNAM VT HEALTH SCIENCES FUND Seeks capital appreciation by investing at least
80% of its assets (other than assets invested in U.S. government securities,
short-term debt obligations, and cash or money market instruments) in common
stocks and other securities of companies in the health sciences industries.
PUTNAM VT HIGH YIELD FUND Seeks high current income and, when consistent with
this objective, a secondary objective of capital growth, by investing primarily
in high-yielding, lower-rated fixed income securities, constituting a portfolio
which Putnam Management believes does not involve undue risk to income or
principal. See the special considerations for investments in high yield
securities described in the Fund prospectus.
PUTNAM VT INTERNATIONAL GROWTH FUND Seeks capital appreciation by investing
primarily in equity securities of companies located in a country other than the
United States.
PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND Seeks capital growth, and a
secondary objective of high current income by investing primarily in common
stocks that offer potential for capital growth and may, when consistent with its
investment objectives, invest in common stocks that offer potential for current
income. Under normal market conditions, the fund expects to invest substantially
all of its assets in securities principally traded on markets outside the United
States.
PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND Seeks long term capital
appreciation by investing in
11 - PROSPECTUS
<PAGE>
companies that have above-average growth prospects due to the fundamental growth
of their market sector. Under normal market conditions, the fund expects to
invest substantially all of its total assets, other than cash or short-term
investments held pending investment, in common stocks, preferred stocks,
convertible preferred stocks, covertible bonds and other equity securities
principally traded in securities markets outside the United States.
PUTNAM VT INVESTORS FUND Seeks long-term growth of capital and any increased
income that results from this growth by investing primarily in common stocks
that Putnam Management believes afford the best opportunity for capital growth
over the long term.
PUTNAM VT MONEY MARKET FUND Seeks as high a rate of current income as Putnam
Management believes is consistent with preservation of capital and maintenance
of liquidity by investing in high-quality money market instruments.
PUTNAM VT NEW OPPORTUNITIES FUND Seeks long-term capital appreciation by
investing principally in common stocks of companies in sectors of the economy
which Putnam Management believes possess above-average long-term growth
potential.
PUTNAM VT NEW VALUE FUND Seeks long-term capital appreciation by investing
primarily in common stocks that Putnam Management believes are undervalued at
the time of purchase and have the potential for long-term capital appreciation.
PUTNAM VT OTC & EMERGING GROWTH FUND Seeks capital appreciation by investing
primarily in common stocks that Putnam Management believes have potential for
capital appreciation significantly greater than that of market averages.
PUTNAM VT RESEARCH FUND Seeks capital appreciation by investing primarily in
common stocks recommended by Putnam Management, as having potential for capital
appreciation.
PUTNAM VT U.S. GOVERNMENT AND HIGH QUALITY BOND FUND Seeks current income
consistent with preservation of capital by investing primarily in securities
issued or guaranteed as to principal and interest by the U.S. Government or by
its agencies or instrumentalities and in other debt obligations rated at least A
by a nationally recognized securities rating agency such as Standard & Poor's or
Moody's Investor Services, Inc. or, if not rated, determined by Putnam
Management to be of comparable quality.
PUTNAM VT UTILITIES GROWTH AND INCOME FUND Seeks capital growth and current
income by concentrating its investments in debt and equity securities issued by
companies in the public utilities industries.
PUTNAM VT VISTA FUND Seeks capital appreciation by investing in a diversified
portfolio of common stocks which Putnam Management believes have the potential
for above-average capital appreciation.
PUTNAM VT VOYAGER FUND Seeks capital appreciation by investing primarily in
common stocks of companies that Putnam Management believes have potential for
capital appreciation that is significantly greater than that of market averages.
Putnam VT Asia Pacific Growth Fund, Putnam VT Diversified Income Fund, Putnam VT
The George Putnam Fund of Boston, Putnam VT Global Growth Fund, Putnam VT Growth
and Income Fund, Putnam VT Health Sciences Fund, Putnam VT High Yield Fund,
Putnam VT International Growth Fund, Putnam VT International Growth and Income
Fund, Putnam VT International New Opportunities Fund, Putnam VT Investors Fund,
Putnam VT Money Market Fund, Putnam VT New Opportunities Fund, Putnam VT New
Value Fund, Putnam VT OTC & Emerging Growth Fund, Putnam VT Research Fund,
Putnam VT U.S. Government and High Quality Bond Fund, Putnam VT Utilities Growth
and Income Fund, Putnam VT Vista Fund, and Putnam VT Voyager Fund are generally
managed in styles similar to other open-end investment companies which are
managed by Putnam Management and whose shares are generally offered to the
public. These other Putnam funds may, however, employ different investment
practices and may invest in securities different from those in which their
counterpart Funds invest, and consequently will not have identical portfolios or
experience identical investment results.
The Funds are available only to serve as the underlying investment for variable
annuity and variable life Contracts. A full description of the Funds, their
investment objectives, policies and restrictions, risks, charges and expenses
and other aspects of their operation are contained in the accompanying Trust
prospectus which should be read in conjunction with this Prospectus before
investing, and in the Trust's Statement of Additional Information which may be
ordered without charge from Putnam Investor Services, Inc.
It is conceivable that in the future it may be disadvantageous for variable
annuity separate accounts and variable life insurance separate accounts to
invest in the Funds simultaneously. Although Hartford and the Funds do not
currently foresee any such disadvantages either to variable annuity Contract
Owners or to variable life insurance policy owners, the Trust's Board of
Trustees intends to monitor events in order to identify any material conflicts
between such Contract Owners and policy owners and to determine what action, if
any, should be taken in response thereto. If the Board of Trustees of the Funds
were to conclude that separate funds should be established for variable life and
variable annuity separate accounts, the variable annuity Contract Owners would
not bear any expenses attendant upon establishment of such separate funds.
12 - PROSPECTUS
<PAGE>
Putnam Management, One Post Office Square, Boston, MA 02109, serves as the
investment manager for the Funds. An affiliate, Putnam Advisory Company, Inc.,
manages domestic and foreign institutional accounts and mutual funds. Another
affiliate, Putnam Fiduciary Trust Company, provides investment advice to
institutional clients under its banking and fiduciary policies. Putnam
Management and its affiliates are wholly-owned subsidiaries of Marsh & McLennan
Companies, Inc., a publicly owned holding company whose principal businesses are
international insurance brokerage and employee benefit consulting.
Subject to the general oversight of the Trustees of the Trust, Putnam Management
manages the Funds' portfolios in accordance with their stated investment
objectives and policies, makes investment decisions for the Funds, places orders
to purchase and sell securities on behalf of the Funds, and administers the
affairs of the Funds. For its services, the Funds pay Putnam Management a
quarterly fee. See the accompanying Trust prospectus for a more complete
description of Putnam Management and the respective fees of the Funds.
MIXED FUNDING. Shares of the Funds are sold to our other Separate Accounts and
our insurance company affiliates or other unaffiliated insurance companies to
serve as the underlying investment for both variable annuity contracts and
variable life insurance contracts, a practice known as "mixed funding." As a
result, there is a possibility that a material conflict may arise between the
interests of Contract Owners, and of owners of other contracts whose contract
values are allocated to one or more of these other Separate Accounts investing
in any one of the Funds. In the event of any such material conflicts, we will
consider what action may be appropriate, including removing the Fund from the
Separate Account or replacing the Fund with another Fund. There are certain
risks associated with mixed funding, as disclosed in the funds' prospectus.
VOTING RIGHTS. We are the legal owners of all Fund shares held in the Separate
Account and we have the right to vote at the Fund's shareholder meetings. To the
extent required by federal securities laws or regulations, we will:
- - Notify you of any Fund shareholders' meeting if the shares held for your
Contract may be voted.
- - Send proxy materials and a form of instructions that you can use tell us how
to vote the Fund shares held for your Contract.
- - Arrange for the handling and tallying of proxies received from Contract
Owners.
- - Vote all Fund shares attributable to your Contract according to instructions
received from you, and
- - Vote all Fund shares for which no voting instructions are received in the same
proportion as shares for which instructions have been received.
If any federal securities laws or regulations, or their present interpretation,
change to permit us to vote Fund shares on our own, we may decide to do so. You
may attend any Shareholder Meeting at which shares held for your Contract may be
voted. After we begin to make payments to you, the number of votes you have will
decrease.
SUBSTITUTIONS, ADDITIONS, OR DELETIONS OF FUNDS. We reserve the right, subject
to any applicable law, to make certain changes to the Funds offered under your
Contract. We may, in our sole discretion, establish new Funds. New Funds will be
will be made available to existing Contract Owners as we determined appropriate.
We may also close one or more Funds to additional payments or transfers from
existing Sub-Accounts.
We reserve the right to eliminate the shares of any of the Funds for any reason
and to substitute shares of another registered investment company for the shares
of any Fund already purchased or to be purchased in the future by the Separate
Account. To the extent required by the 1940 Act, substitutions of shares
attributable to your interest in a Fund will not be made until we have the
approval of the Commission and we have notified you of the change.
In the event of any substitution or change, We may, by appropriate endorsement,
make such changes in the Contract as may be necessary or appropriate to reflect
such substitution or change. If we decide that it is in the best interest
Contracts Owners, the Separate Account may be operated as a management company
under the 1940 Act or any other form permitted by law, may be de-registered
under the 1940 Act in the event such registration is no longer required, or may
be combined with one or more other Separate Accounts.
PERFORMANCE RELATED INFORMATION
-------------------------------------------------------------------
The Separate Account may advertise certain performance-related information
concerning the Sub-Accounts. Performance information about a Sub-Account is
based on the Sub-Account's past performance only and is no indication of future
performance.
13 - PROSPECTUS
<PAGE>
When a Sub-Account advertises its STANDARDIZED TOTAL RETURN, it will usually be
calculated for one year, five years, and ten years or some other relevant
periods if the Sub-Account has not been in existence for at least ten years.
Total return is measured by comparing the value of an investment in the
Sub-Account at the beginning of the relevant period to the value of the
investment at the end of the period.
In addition to the standardized total return, the Sub-Account may advertise a
NON-STANDARDIZED TOTAL RETURN. This figure will usually be calculated for one
year, five years, and ten years or other periods. Non-standardized total return
is measured in the same manner as the standardized total return described above,
except that the Annual Maintenance Fee is not deducted. Therefore,
non-standardized total return for a Sub-Account is higher than standardized
total return for a Sub-Account.
The Separate Account may also advertise NON-STANDARD TOTAL RETURNS THAT PRE-DATE
THE INCEPTION DATE OF THE SEPARATE ACCOUNT. These non-standardized total returns
are calculated by assuming that the Sub-Accounts have been in existence for the
same periods as the underlying Funds and by taking deductions for charges equal
to those currently assessed against the Sub-Accounts. These non-standardized
returns must be accompanied by standardized total returns.
If applicable, the Sub-Accounts may advertise YIELD IN ADDITION TO TOTAL RETURN.
The yield will be computed in the following manner: The net investment income
per unit earned during a recent one month period, divided by the unit value on
the last day of the period. This figure reflects the recurring charges at the
Separate Account level including the Annual Maintenance Fee.
The Putnam Money Market Sub-Account may advertise yield and effective yield. The
yield of a Sub-Account is based upon the income earned by the Sub-Account over a
seven-day period and then annualized, i.e. the income earned in the period is
assumed to be earned every seven days over a 52-week period and stated as a
percentage of the investment. Effective yield is calculated similarly but when
annualized, the income earned by the investment is assumed to be reinvested in
Sub-Account units and thus compounded in the course of a 52-week period. Yield
and effective yield reflect the recurring charges at the Separate Account level
including the Annual Maintenance Fee.
The Separate Account may also disclose yield for periods prior to the date the
Separate Account commenced operations. For periods prior to the date the
Separate Account commenced operations, performance information for the Sub-
Accounts will be calculated based on the performance of the underlying Funds and
the assumption that the Sub-Accounts were in existence for the same periods as
those of the underlying Funds, with a level of charges equal to those currently
assessed against the Sub-Accounts.
We may provide information on various topics to Contract Owners and prospective
Contract Owners in advertising, sales literature or other materials. These
topics may include the relationship between sectors of the economy and the
economy as a whole and its effect on various securities markets, investment
strategies and techniques (such as value investing, dollar cost averaging and
asset allocation), the advantages and disadvantages of investing in tax-deferred
and taxable instruments, customer profiles and hypothetical purchase scenarios,
financial management and tax and retirement planning, and other investment
alternatives, including comparisons between the Contracts and the
characteristics of and market for such alternatives.
THE FIXED ACCOUNTS
-------------------------------------------------------------------
IMPORTANT INFORMATION YOU SHOULD KNOW. THIS PORTION OF THE CONTRACT RELATING TO
THE FIXED ACCOUNTS IS NOT REGISTERED UNDER THE SECURITIES ACT OF 1933 ("1933
ACT") AND THE FIXED ACCOUNTS ARE NOT REGISTERED AS INVESTMENT COMPANIES UNDER
THE INVESTMENT COMPANY ACT OF 1940 ("1940 ACT"). NONE OF THE FIXED ACCOUNTS OR
ANY OF THEIR INTERESTS ARE SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF THE 1933
ACT OR THE 1940 ACT, AND THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION HAS
NOT REVIEWED THE DISCLOSURE REGARDING THE FIXED ACCOUNTS. THE FOLLOWING
DISCLOSURE ABOUT THE FIXED ACCOUNTS MAY BE SUBJECT TO CERTAIN GENERALLY
APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES LAWS REGARDING THE ACCURACY AND
COMPLETENESS OF DISCLOSURE.
Payments and Contract Values allocated to a Fixed Account become a part of our
general assets. We invest the assets of the General Account in accordance with
applicable law governing the investments of insurance company General Accounts.
We have more than one Fixed account. The standard fixed Account (the "Fixed
Account") and then a number of DCA Program Fixed Accounts, which we collectively
refer to as the "Fixed Accounts."
14 - PROSPECTUS
<PAGE>
CURRENTLY, WE GUARANTEE THAT WE WILL CREDIT INTEREST AT A RATE OF NOT LESS THAN
3% PER YEAR, COMPOUNDED ANNUALLY, TO AMOUNTS YOU ALLOCATE TO THE FIXED ACCOUNT.
WE RESERVE THE RIGHT, IN OUR SOLE DISCRETION, TO CREDIT INTEREST AT A RATE IN
EXCESS OF 3% PER YEAR. YOU ASSUME THE RISK THAT INTEREST CREDITED TO THE FIXED
ACCOUNT MAY NOT EXCEED THE MINIMUM GUARANTEE OF 3% FOR ANY GIVEN YEAR.
We will periodically publish the Fixed Account interest rates currently in
effect. There is no specific formula for the determination of interest rates.
Some of the factors that we may consider in determining whether to credit excess
interest are: general economic trends, rates of return currently available and
anticipated on our investments, regulatory and tax requirements and competitive
factors. We will account for any deductions, Surrenders or transfers from the
Fixed Account on a "first-in", "first-out" basis.
From time to time, we may credit increased interest rates to Contract Owners
under certain programs established at our sole discretion.
DOLLAR COST AVERAGING ("DCA") PROGRAMS. These programs will use designated DCA
Program Fixed Accounts. Currently, Contract Owners may enroll in a special pre-
authorized transfer program known as our Dollar Cost Averaging Plus Program (the
"Program"). Under this Program, Contract Owners who enroll may allocate a
minimum of $5,000 of their payment into the appropriate DCA Program Fixed
Account (we may allow a lower minimum payment for qualified plan transfers or
rollovers, including IRAs) and pre-authorize transfers to any of the
Sub-Accounts under either the 6 Month Transfer Program or 12 Month Transfer
Program. The 6-Month Transfer Program and the 12-Month Transfer Program will
generally have different credited interest rates. Under the 6 Month Transfer
Program, the interest rate can accrue up to 6 months and all payments and
accrued interest must be transferred from the DCA Program Fixed Account in use
to the selected Sub-Accounts in 3 to 6 months. Under the 12-Month Transfer
Program, the interest rate can accrue up to 12 months and all payments and
accrued interest must be transferred to the selected Sub-Accounts in 7 to 12
months. This will be accomplished by monthly transfers for the period selected
and a final transfer of the entire amount remaining in the Program, which will
generally be less than the prior monthly transfer amounts.
The pre-authorized transfers will begin within 15 days after we receive the
initial Program payment and complete enrollment instructions. If We do not
receive complete Program enrollment instructions within 15 days of receipt of
the initial Program payment, the Program will be voided and the entire balance
in the Program will be transferred to the Accounts designated by you. If you do
not designate an Account, we will transfer any remaining amounts to the Fixed
Account and you will receive the Fixed Account's current effective interest
rate. Any subsequent payments we receive within the Program period selected will
be allocated to the Sub-Accounts over the remainder of that Program transfer
period, unless otherwise directed by You.
You may only have one dollar cost averaging program in place at one time, this
means one standard dollar cost averaging plan or one Dollar Cost Averaging Plus
Program.
You may elect to terminate the pre-authorized transfers by calling or writing us
of your intent to cancel enrollment in the Program. Upon cancellation of
enrollment in the Program, you will no longer receive the increased interest
rate and unless we receive instructions to the contrary, the amounts remaining
in the DCA Program Fixed Account may be transferred to the Fixed Account and
accrue the interest rate currently in effect.
We reserve the right to discontinue, modify or amend the Program or any other
interest rate program established by Hartford. Any change to the Program will
not affect Contract Owners currently enrolled in the Program. This Program may
not be available in all states; please contact us to determine if it is
available in your state.
THE CONTRACT
-------------------------------------------------------------------
THE CONTRACT OFFERED. The Contracts are individual or group tax-deferred
variable annuity contracts. They are designed for retirement planning purposes
and may be purchased by any individual, group or trust, including; (a) any
trustee or custodian for a retirement plan qualified under Sections 401(a), or
403(a) of the Internal Revenue Code (which includes Section 401(k)); (b) annuity
purchase plans adopted by public school systems and certain tax-exempt
organizations according to Section 403(b) of the Code; (c) Individual Retirement
Annuities adopted according to Section 408 of the Code; (d) employee pension
plans established for employees by a state, a political subdivision of a state,
or an agency or instrumentality of either a state or a political subdivision of
a state, and (e) certain eligible deferred compensation plans as defined in
Section 457 of the Code ("Qualified Contracts").
15 - PROSPECTUS
<PAGE>
PURCHASING A CONTRACT. A prospective Contract Owner may purchase a Contract by
completing and submitting an application or an order request along with an
initial premium payment to the Administrative Office of the Company. The maximum
age for Annuitant, Owner and Joint Owner on the Contract Issue Date is 85.
Generally, the minimum premium payment is $1,000. The minimum subsequent premium
payment is $500. Certain plans may be allowed to make smaller periodic premium
payments. Unless we give our prior approval, we will not accept a premium
payment in excess of $1,000,000. Each premium payment, which is your premium
payment after the deduction of any applicable Premium Taxes, may be split among
the various Accounts subject to minimum amounts then in effect. We will send you
a confirmation notice upon receipt and acceptance of your premium payment.
RIGHT TO EXAMINE THE CONTRACT. If you are not satisfied with your purchase, you
may cancel the Contract by returning it within 10 days (or longer in some
states) after you receive it. You must send a written request for cancellation
along with the Contract. We will, without deduction for any CDSC normally
assessed, pay you an amount equal to the Contract Value. YOU BEAR THE INVESTMENT
RISK DURING THE PERIOD PRIOR TO OUR RECEIPT OF YOUR REQUEST FOR CANCELLATION.We
will refund the premium paid only for Individual Retirement Annuities, if
returned within seven days of receipt, and in those states where required by
law.
CREDITING AND VALUATION. Your premium payment, which is the balance remaining
after the deduction of any Premium Tax, is credited to your Contract within two
business days of receipt by us at our Administrative Office of a properly
completed application or an order to purchase a Contract and the premium
payment. The payment will be credited to the Accounts according to the
instructions we receive from you.
If your application or other information is incomplete when received, your
payment will be credited to the Accounts within five business days of receipt of
complete information. If the payment is not credited within five business days,
it will be immediately returned to you unless you have been informed of the
delay and tell us not to return it.
Subsequent premium payments are priced on the Valuation Day we receive the
payment in our Administrative Office, provided it is received before the New
York Stock Exchange closes. Unless otherwise specified, We will allocate any
subsequent payments to Accounts according to your most recent instructions.
CONTRACT VALUE - BEFORE THE
ANNUITY COMMENCEMENT DATE
Your Contract Value reflects interest rate credited any amounts allocated to the
Fixed Accounts and the investment performance of the Sub-Accounts where you have
payments allocated.
SUB-ACCOUNT VALUES. Your Sub-Account Values on the date we issue your Contract
is the amount of your premium payment allocated to any Sub-Account. After that,
we determine your Sub-Account value by determining the Accumulation Unit value
for each Sub-Account, and then multiplying that value by the number of those
units. Sub-Account Value reflects any variation of the interest income,
dividends, net capital gains or losses, realized or unrealized, and any amounts
transferred into or out of that Sub-Account.
ACCUMULATION UNITS. The number of Accumulation Units credited to a Sub-Account
you have is determined by dividing the dollar amount you allocated to that
Sub-Account by the value of one Accumulation Unit for that Sub-Account. The
number of Accumulation Units of a Sub-Account increases when you allocate a
payment or a portion of a payment to the Sub-Account or transfer Contract Value
to a Sub-Account. The number of Accumulation Units of a Sub-Account decreases
when you apply Contract Value less Premium Tax to an annuity payment option on
the Annuity Calculation Date, when you Surrender, when you make transfers out of
a Sub-Account, and when we pay a Death Benefit before the Annuity Commencement
Date. Accumulation Units are valued as of the end of the Valuation Period.
ACCUMULATION UNIT VALUE. The Accumulation Unit value for each Sub-Account was
arbitrarily set initially at $1 when the Sub-Account began operations. After
that, the Accumulation Unit value for each Sub-Account will equal (a) the
Accumulation Unit value at the end of the preceding Valuation Day multiplied by
(b) the Net Investment Factor (see the definition below) for the Valuation Day
for which the Accumulation Unit value is being calculated.
You will be advised, at least semiannually, of the number of Accumulation Units
credited to each Sub-Account, the current Accumulation Unit values, and the
total value of your Contract.
THE NET INVESTMENT FACTOR (BEFORE AND AFTER THE ANNUITY COMMENCEMENT DATE). The
Net Investment Factor is an index applied to measure the investment performance
of a Sub-Account from one Valuation Period to the next. For each Sub-Account,
the Net Investment Factor reflects the investment performance of the Fund in
which that Sub-Account invests and the charges assessed against that Sub-Account
for a Valuation Period. The Net Investment Factor is calculated by dividing (a)
by (b) and subtracting (c) from the result, where:
(a) Is the Net Asset Value of the Fund held in that Sub-Account, determined at
the end of the current Valuation Period (plus the per share amount of any
dividends or capital gains distributions made by that Fund);
16 - PROSPECTUS
<PAGE>
(b) Is the Net Asset Value of the Fund held in the Sub-Account, determined at
the beginning of the Valuation Period;
(c) Is a daily factor representing the mortality and expense risk charge and any
optional charges deducted from the Sub-Account, adjusted for the number of
days in the Valuation Period.
CONTRACT VALUE TRANSFERS BEFORE AND AFTER THE ANNUITY COMMENCEMENT DATE
You may transfer your Contract Values from one or more Accounts to another
Account free of charge. WE RESERVE THE RIGHT TO LIMIT THE NUMBER OF TRANSFERS TO
12 PER CONTRACT YEAR, WITH NO 2 TRANSFERS OCCURRING ON CONSECUTIVE VALUATION
DAYS. Transfers by telephone may be made by you or by your attorney-in-fact
pursuant to a power of attorney by calling us at 1-800-521-0538 or by the agent
of record by calling 1-800-862-7155. Telephone transfers may not be permitted by
some states. There may be limitations on transfers to and from the Fixed
Accounts that are described in your Contract. Some states may allow us to limit
the dollar amount transferred.
We, or our agents and affiliates will not be responsible for losses resulting
from acting upon telephone requests reasonably believed to be genuine. We will
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine. The procedure we follow for transactions initiated by
telephone include requirements that callers provide certain information for
identification purposes. All transfer instructions by telephone are
tape-recorded.
We may permit you to pre-authorize transfers under certain circumstances.
Transfers between the Accounts may be made both before and after the Annuity
Commencement Date. Generally, the minimum allocation to any Sub-Account may not
be less than $500. All percentage (%) allocations must be in whole numbers
(e.g., 1%). No minimum balance is presently required in any Account.
It is your responsibility to verify the accuracy of all confirmations of
transfers and to promptly advise us in our Administrative Offices of any
inaccuracies within 30 days of the date you receive your confirmation.
The right to reallocate Contract Values is subject to modification if we
determine, in our sole opinion, that the exercise of that right by one or more
Contract Owners is, or would be, to the disadvantage of other Contract Owners.
Any modification could be applied to transfers to or from some or all of the
Accounts and could include, but not be limited to, the requirement of a minimum
time period between each transfer, not accepting transfer requests of an agent
acting under a power of attorney on behalf of more than one Contract Owner, or
limiting the dollar amount that may be transferred between the Sub-Accounts by
you at any one time. SUCH RESTRICTIONS MAY BE APPLIED IN ANY MANNER REASONABLY
DESIGNED TO PREVENT ANY USE OF THE TRANSFER RIGHT WHICH WE CONSIDER TO BE TO THE
DISADVANTAGE OF OTHER CONTRACT OWNERS.
For Contracts issued in THE STATES OF FLORIDA, MARYLAND OR OREGON, the
reservation of rights set forth in the preceding paragraph is limited to: (i)
requiring up to a maximum of 10 Valuation Days between each transfer; (ii)
limiting the amount to be transferred on any one Valuation Day to no more than
$2 million; and (iii) upon 30 days prior written notice, to only accepting
transfer instructions from you and not from your representative, agent or person
acting under a power of attorney for you.
Currently, we will not accept instructions from agents acting under a power of
attorney of multiple Contract Owners whose Accounts aggregate more than $2
million, unless the agent has entered into a third party transfer services
agreement with us.
SURRENDERS
Contract Owners should consult their tax adviser regarding the tax consequences
of a Surrender.
- - A Surrender made before age 59 1/2 may result in adverse tax consequences,
including a penalty tax of 10% of the taxable portion of the Surrender Value.
(See "Federal Tax Considerations").
PAYMENT OF SURRENDER AMOUNTS. Payment of any request for a full or partial
Surrender from the Accounts will be made as soon as possible and in any event no
later than seven days after we receive the request at our Administrative Office.
There may be postponement in the payment of Surrender Amounts whenever (a) the
New York Stock Exchange is closed; (b) trading on the New York Stock Exchange is
restricted as determined by the Commission; (c) the Commission permits
postponement and so orders; or (d) the Commission determines that an emergency
exists making valuation of the amounts or disposal of securities not reasonably
practicable.
FULL SURRENDERS PRIOR TO THE ANNUITY COMMENCEMENT DATE. At any time prior to the
Annuity Commencement Date, you have the right to fully Surrender the Contract.
In such event, the Surrender Value of the Contract may be taken in the form of a
lump sum cash payment.
The Surrender Value of the Contract is equal to the Contract Value less any
Premium Taxes, the Annual Maintenance Fee and any Contingent Deferred Sales
Charge, if applicable. The Surrender Value may be more or less than the amount
of the payments made to your Contract.
17 - PROSPECTUS
<PAGE>
PARTIAL SURRENDERS PRIOR TO THE ANNUITY COMMENCEMENT DATE. You may make a
partial Surrender of your Contract Value at any time prior to the Annuity
Commencement Date so long as the amount Surrendered is at least equal to our
minimum amount rules then in effect. Additionally, if the remaining Contract
Value following a Surrender is less than $500, we may terminate the Contract and
pay the Surrender Value. For Contracts issued in TEXAS, the Contract will not be
terminated when the remaining Contract Value after a Surrender is less than $500
unless there were no payments made during the previous 2 Contract Years.
When requesting a partial Surrender, you should specify the Account(s) from
which the partial Surrender will be taken; otherwise, the Surrender will be
taken on a pro rata basis according to the value in each active Account.
We may permit you to pre-authorize partial Surrenders subject to certain
limitations then in effect. We permit partial Surrenders by telephone subject to
dollar amount limitations in effect at the time you request the Surrender. To
request partial Surrenders by telephone, you must have completed and returned to
us a Telephone Redemption Program Enrollment Form authorizing telephone
Surrenders. If there are joint Contract Owners, both must authorize us to accept
telephone instructions and agree that We may accept telephone instructions for
partial Surrenders from either Contract Owner. Partial Surrender requests will
not be honored until we receive all required documents in proper form.
Telephone authorization will remain valid until (a) we receive written notice of
revocation by you, or, in the case of joint Contract Owners, written notice from
either Contract Owner; (b) we discontinue the privilege; or (c) we have reason
to believe that you have entered into a market timing agreement with an
investment adviser and/or broker/dealer.
We may record any telephone calls to verify data concerning transactions and may
adopt other procedures to confirm that telephone instructions are genuine. We
will not be liable for losses or expenses arising out of telephone instructions
reasonably believed to be genuine.
In order to obtain that day's unit values on Surrender, We must receive
telephone Surrender instructions prior to the close of trading on the New York
Stock Exchange (generally 4:00 p.m.).
WE MAY MODIFY, SUSPEND, OR TERMINATE TELEPHONE TRANSACTION PRIVILEGES AT ANY
TIME.
SURRENDERS AFTER THE ANNUITY COMMENCEMENT DATE. You may fully Surrender your
Contract on or after the Annuity Commencement Date if you elect the Payment For
a Period Certain Settlement Option. We pay you the commuted value that is equal
to the present value of the remaining payments we are scheduled to make less any
applicable Contingent Deferred Sales Charge. The commuted value is determined as
of the date we receive your written request for Surrender at our Administrative
Office.
NO PARTIAL SURRENDERS ARE PERMITTED AFTER THE ANNUITY COMMENCEMENT DATE.
IMPORTANT TAX INFORMATION. THERE ARE CERTAIN RESTRICTIONS ON SECTION 403(B)
TAX-SHELTERED ANNUITIES. AS OF DECEMBER 31, 1988, ALL SECTION 403(B) ANNUITIES
HAVE LIMITS ON FULL AND PARTIAL SURRENDERS. CONTRIBUTIONS TO THE CONTRACT MADE
AFTER DECEMBER 31, 1988 AND ANY INCREASES IN CASH VALUE AFTER DECEMBER 31, 1988
MAY NOT BE DISTRIBUTED UNLESS THE CONTRACT OWNER/EMPLOYEE HAS A) ATTAINED AGE
59 1/2, B) SEPARATED FROM SERVICE, C) DIED, D) BECOME DISABLED OR E) EXPERIENCED
FINANCIAL HARDSHIP (CASH VALUE INCREASES MAY NOT BE DISTRIBUTED FOR HARDSHIPS
PRIOR TO AGE 59 1/2). DISTRIBUTIONS PRIOR TO AGE 59 1/2 DUE TO FINANCIAL
HARDSHIP OR SEPARATION FROM SERVICE MAY STILL BE SUBJECT TO A PENALTY TAX OF
10%. WE WILL NOT ASSUME ANY RESPONSIBILITY FOR DETERMINING WHETHER A SURRENDER
IS PERMISSIBLE, WITH OR WITHOUT TAX PENALTY, IN ANY PARTICULAR SITUATION; OR IN
MONITORING SURRENDER REQUESTS REGARDING PRE OR POST JANUARY 1, 1989 CONTRACT
VALUES. ANY FULL OR PARTIAL SURRENDER DESCRIBED ABOVE MAY AFFECT THE CONTINUING
TAX-QUALIFIED STATUS OF SOME CONTRACTS OR PLANS AND MAY RESULT IN ADVERSE TAX
CONSEQUENCES TO THE CONTRACT OWNER. THE CONTRACT OWNER, THEREFORE, SHOULD
CONSULT WITH A TAX ADVISER BEFORE UNDERTAKING ANY SUCH SURRENDER. (SEE "FEDERAL
TAX CONSIDERATIONS").
CONTRACT CHARGES
CONTINGENT DEFERRED SALES CHARGE ("CDSC")
The CDSC covers expenses relating to the sale and distribution of the Contracts,
including commissions paid to distributing organizations and the cost of
preparing sales literature and other promotional activities.
We assess a CDSC when you request a full or partial Surrender. The percentage of
the CDSC is based on how long each premium payment has been in the Contract.
Each premium payment has its own CDSC schedule. Premium payments are Surrendered
in the order that they were received. The longer you leave your premium payment
in the Contract, the lower the CDSC will be when you Surrender.
18 - PROSPECTUS
<PAGE>
The CDSC is a percentage of the amount Surrendered (not to exceed the total
amount of the premium payments made) and equals:
<TABLE>
<CAPTION>
Length of Time from CDSC
Premium Payment Charge
<S> <C>
- --------------------------------------------------------
1 year 7%
2 years 6%
3 years 6%
4 years 5%
5 years 4%
6 years 3%
7 years 2%
8 years or more 0%
</TABLE>
PAYMENTS NOT SUBJECT TO CDSC
ANNUAL WITHDRAWAL AMOUNT. During the first seven Contract years, you may make a
partial Surrender of Contract Values of up to 15% of the premium payments each
Contract Year on a non-cumulative basis, as determined on the date of the
requested Surrender, without the application of the CDSC. After the seventh
Contract Year, you may make a partial Surrender each Contract Year of 15% of
premium payments made during the seven years prior to the Surrender and 100% of
the Contract Value less the premium payments made during the seven years prior
to the Surrender.
EXTENDED SURRENDER PRIVILEGE. This privilege allows Annuitants who attain age
70 1/2 with a Contract held under an Individual Retirement Account or 403(b)
plan to Surrender an amount equal to the required minimum distribution for the
stated Contract without incurring any CDSC.
WAIVERS OF CDSC
CONFINEMENT IN A NURSING HOME, HOSPITAL OR LONG TERM CARE FACILITY (described as
Eligible Confinement in the Contract). We will waive any CDSC applicable to a
partial or full Surrender if the Annuitant, Contract Owner or joint owner is
confined, at the recommendation of a physician for medically necessary reasons,
for at least 180 calendar days to: a hospital recognized as a general hospital
by the proper authority of the state in which it is located; or a hospital
recognized as a general hospital by the Joint Commission on the Accreditation of
Hospitals; or a facility certified as a hospital or long-term care facility; or
a nursing home licensed by the state in which it is located and offers the
services of a registered nurse 24 hours a day.
The Annuitant, Contract Owner or joint owner cannot be confined at the time the
Contract is purchased in order to receive this waiver and the Contract Owner(s)
must have been the Contract Owner(s) continuously since the Contract issue date.
You must provide written proof of confinement satisfactory to Hartford and you
must request the partial or full Surrender within 91 calendar days of the last
day of confinement.
This waiver may not be available in all states. Please contact your registered
representative or contact Us to determine availability.
DEATH OF THE ANNUITANT OR CONTRACT OWNER OR PAYMENTS UNDER AN ANNUITY OPTION. No
CDSC otherwise applicable will be assessed in the event of death of the
Annuitant, death of the Contract Owner or if payments are made under an Annuity
option (other than a Surrender of variable payments for a Period Certain Annuity
option) provided for under the Contract.
OTHER PLANS OR PROGRAMS. Certain plans or programs established by us from time
to time may have different Surrender privileges.
MORTALITY AND EXPENSE RISK CHARGE. For assuming risks under the Contract, We
deduct a daily charge at the rate of 1.25% per year against all Contract Values
held in the Accounts during the life of the Contract. Although variable annuity
payments made under the Contracts will vary in accordance with the investment
performance of the underlying Fund shares held in the Sub-Account(s), the
payments will not be affected by (a) our actual mortality experience among
Annuitants before or after the Annuity Commencement Date or (b) our actual
expenses, if greater than the deductions provided for in the Contracts because
of the expense and mortality undertakings by us.
There are two types of mortality risks: those made during the accumulation or
deferral phase and those made during the annuity payout phase. The mortality
risk we take in the accumulation phase is that we may experience a loss
resulting from the assumption of the mortality risk relative to the death
benefit in event of the death of an Annuitant or Contract Owner before
commencement of Annuity payments, in periods of declining value. The mortality
risk we take during the annuity payout phase is to make monthly Annuity payments
(determined in accordance with the 1983a Individual Annuity Mortality Table and
other provisions contained in the Contract) to Annuitants regardless of how long
an Annuitant may live, and regardless of how long all Annuitants as a group may
live. These mortality undertakings are based on our determination of expected
mortality rates among all Annuitants. If actual experience among Annuitants
during the Annuity payment period deviates from our actuarial determination of
expected mortality rates among Annuitants because, as a group, their longevity
is longer than anticipated, we must provide amounts from our general funds to
fulfill our contractual obligations. We will bear the loss in such a situation.
During the accumulation phase, we also provide an expense undertaking. We assume
the risk that the Annual Maintenance Fee for maintaining the Contracts prior to
the Annuity Commencement Date may be insufficient to cover the actual cost of
providing such items.
19 - PROSPECTUS
<PAGE>
ANNUAL MAINTENANCE FEE. Each year, on each Contract Anniversary on or before the
Annuity Commencement Date, we will deduct an Annual Maintenance Fee, if
applicable, from Contract Values to reimburse us for expenses relating to the
maintenance of the Contract and Accounts. If during a Contract Year the Contract
is Surrendered for its full value, we will deduct the Annual Maintenance Fee at
the time of such Surrender. The fee is a flat fee that will be due in the full
amount regardless of the time of the Contract Year that Contract Values are
Surrendered. The Annual Maintenance Fee is $30 per Contract Year for Contracts
with less than $50,000 Contract Value on the Contract Anniversary. Fees will be
deducted on a pro rata basis according to the value in each Account under a
Contract.
WAIVERS OF THE ANNUAL MAINTENANCE FEE. Annual Maintenance Fees are waived for
Contracts with Contract Value equal to or greater than $50,000. In addition, we
will waive one Annual Maintenance Fee for Contract Owners who own one or more
Contracts with a combined Contract Value of $50,000 up to $100,000. If you have
multiple Contracts with a combined Contract Value of $100,000 or greater, we
will waive the Annual Maintenance Fee on all Contracts. However, we reserve the
right to limit the number of Annual Maintenance Fee waivers to a total of six
Contracts. We reserve the right to waive the Annual Maintenance Fee under other
conditions.
ADMINISTRATIVE CHARGE. For administration, we apply a daily charge at the rate
of .15% per annum against all Contract Values held in the Separate Account
during both the accumulation and annuity phases of the Contract. There is not
necessarily a relationship between the amount of administrative charge imposed
on a given Contract and the amount of expenses that may be attributable to that
Contract; expenses may be more or less than the charge.
The types of expenses incurred by the Separate Account include, but are not
limited to, expenses of issuing the Contract and expenses for confirmations,
Contract quarterly statements, processing of transfers and surrenders,
responding to Contract Owner inquiries, reconciling and depositing cash
receipts, calculation and monitoring daily Sub-Account unit values, Separate
Account reporting, including semiannual and annual reports and mailing and
tabulation of shareholder proxy solicitations.
You should refer to the Trust prospectus for a description of deductions and
expenses paid out of the assets of the Trust's portfolios.
PREMIUM TAXES. Charges are also deducted for Premium Tax, if applicable, imposed
by state or other governmental entity. Certain states impose a Premium Tax,
currently ranging up to 3.5%. Some states assess the tax at the time purchase
payments are made; others assess the tax at the time of annuitization. We will
pay Premium Taxes at the time imposed under applicable law. At our sole
discretion, we may deduct Premium Taxes at the time we pay such taxes to the
applicable taxing authorities, at the time the Contract is Surrendered, at the
time a death benefit is paid, or at the time the Contract annuitizes.
OPTIONAL DEATH BENEFIT FEE. If you elect the Optional Death Benefit, we will
deduct daily from your Contract Value an additional charge which equals .15% of
the Sub-Account value.
EXCEPTIONS TO CHARGES UNDER THE CONTRACT. We may offer, at our discretion,
reduced fees and charges including, but not limited to, CDSC, the mortality and
expense risk charge, administration charges, optional charges and the Annual
Maintenance Fee for certain sales (including employer sponsored savings plans)
under circumstances which may result in savings of certain costs and expenses.
Reductions in these fees and charges will not be unfairly discriminatory against
any Contract Owner.
DEATH BENEFITS
DEATH BEFORE THE ANNUITY COMMENCEMENT DATE
DETERMINATION OF THE BENEFICIARY. If the Contract Owner or the Annuitant dies
before the Annuity Commencement Date, we will pay a Death Benefit to the
Beneficiary.
- - IF THE CONTRACT OWNER DIES before the Annuity Commencement Date, any surviving
joint Contract Owner becomes the Beneficiary. If there is no surviving joint
Contract Owner, the designated Beneficiary will be the Beneficiary. If the
Contract Owner's spouse is the sole Beneficiary, the spouse may elect, in lieu
of receiving the Contract Value, to be treated as the Contract Owner. If the
Annuitant is not living and there is no Contingent Annuitant, the spouse will
be presumed to be the Contingent Annuitant. If no Beneficiary designation is
in effect or if the Beneficiary has predeceased the Contract Owner, the
Contract Owner's estate will be the Beneficiary.
- - IF THE ANNUITANT DIES before the Annuity Commencement Date, the Contingent
Annuitant will become the Annuitant. If either (a) there is no Contingent
Annuitant, (b) the Contingent Annuitant predeceases the Annuitant, or (c) if
any sole Contract Owner dies before the Annuity Commencement Date, the
Beneficiary, as determined under the Contract control provisions, will receive
the Death Benefit. However, if the Annuitant dies prior to the Annuity
Commencement Date and the Contract Owner is living, the Contract Owner shall
be the Beneficiary. In that case, the rights of any designated Beneficiary
shall be void.
DETERMINATION OF THE DEATH BENEFIT
IF YOU DID NOT ELECT THE OPTIONAL DEATH BENEFIT, Your Death Benefit, which we
will calculate as of the date we receive Due Proof of Death, will be calculated
as follows:
20 - PROSPECTUS
<PAGE>
If the deceased HAD NOT REACHED THEIR 81ST BIRTHDAY, the Death Benefit is the
greater of:
1) 100% of the total premium payments made to the Contract, reduced by any
subsequent Surrenders, or
2) The Contract Value of your annuity, or
3) Your Maximum Anniversary Value, which is described below.
The Maximum Anniversary Value is based on a series of calculations on Contract
Anniversaries of Contract Values, premium payments and partial Surrenders. We
will calculate an Anniversary Value for each Contract Anniversary prior to the
deceased's 81st birthday or date of death. The Anniversary Value is equal to the
Contract Value as of a Contract Anniversary, increased by the dollar amount of
any premium payments made since that anniversary and reduced by the dollar
amount of any partial Surrenders since that anniversary. The Maximum Anniversary
Value is equal to the greatest Anniversary Value attained from this series of
calculations.
IF THE DECEASED REACHED THEIR 81ST BIRTHDAY, then the Death Benefit is the
greater of:
1) 100% of the total premium payments made to us, reduced by any subsequent
Surrenders, or
2) The Contract Value of your annuity, or
3) The Maximum Anniversary Value.
IF YOU DID ELECT THE OPTIONAL DEATH BENEFIT, the Death Benefit, which we will
calculate as of the date we receive Due Proof of Death, will be the greater of:
1) 100% of the total premium payments made to us, reduced by any subsequent
Surrenders;
2) The Contract Value of your annuity;
3) The Maximum Anniversary Value; or
4) The Interest Accumulation Value, which is described below.
The Interest Accumulation Value is calculated by accumulating interest on your
premium payments at a rate of 5% per year up to the deceased's 81st birthday or
date of death, assuming you have not taken any Surrenders. If you have taken any
Surrenders, the 5% will be accumulated on your premium payments, but there will
be an adjustment for any of the Surrenders. This adjustment will reduce the
Optional Death Benefit proportionally for the Surrenders. We stop compounding
interest on the deceased's 81st birthday or date of death. After that date, the
Interest Accumulation Value will be adjusted by adding any subsequent payments
and subtracting proportional adjustments for any partial Surrenders. The
Optional Death Benefit is limited to a maximum of 200% of premium payments, less
proportional adjustments for any Surrenders. For examples on how the Optional
Death Benefit is calculated see "Appendix II".
SPOUSAL CONTRACT CONTINUATION. If the Death Benefit beneficiary is the Contract
Owner's spouse, the Contract will continue with the spouse as Contract Owner,
unless the spouse elects to receive the Death Benefit as a lump sum payment or
as an annuity payment option. If the Contract continues with the spouse as
Contract Owner, we will adjust the Contract Value to the amount that we would
have paid as the Death Benefit payment, had the spouse elected to receive the
Death Benefit as a lump sum payment. This provision will only apply one time for
each Contract.
CALCULATION OF THE DEATH BENEFIT. If the Contract Owner or Annuitant dies before
the Annuity Commencement Date and a Death Benefit is payable to the Beneficiary,
the Death Benefit will be calculated as of the date we receive written
notification of Due Proof of Death. THE DEATH BENEFIT REMAINS INVESTED IN THE
SEPARATE ACCOUNT ACCORDING TO YOUR LAST INSTRUCTIONS UNTIL THE PROCEEDS ARE PAID
OR WE RECEIVE NEW SETTLEMENT INSTRUCTIONS FROM THE BENEFICIARY. DURING THE TIME
PERIOD BETWEEN OUR RECEIPT OF WRITTEN NOTIFICATION OF DUE PROOF OF DEATH AND OUR
RECEIPT OF THE COMPLETE SETTLEMENT INSTRUCTIONS, THE CALCULATED DEATH BENEFIT
WILL BE SUBJECT TO MARKET FLUCTUATIONS. UPON RECEIPT OF COMPLETE SETTLEMENT
INSTRUCTIONS, WE WILL CALCULATE THE PAYABLE AMOUNT.
Any Annuity payments made on or after the date of death, but before receipt of
written notification of Due Proof of Death will be recovered by us from the
Payee.
DEATH ON OR AFTER THE ANNUITY COMMENCEMENT DATE
If, on or after the Annuity Commencement Date, the Contract Owner dies and the
Annuitant is living, the Beneficiary becomes the Contract Owner. If the
Annuitant dies and the Contract Owner is living, the Contract Owner becomes the
Beneficiary.
If the Annuitant dies on or after the Annuity Commencement Date, a Death Benefit
may be paid or payments may continue under the following annuity payment
options:
X Life Annuity with Cash Refund
X Life Annuity with payments for a Period Certain
X Joint and Last Survivor Life Annuity with payments for a Period Certain and
payments for a Period Certain.
21 - PROSPECTUS
<PAGE>
SETTLEMENT PROVISIONS
-------------------------------------------------------------------
You select an Annuity Commencement Date which will not be deferred beyond the
Valuation Day immediately following the later of the Annuitant's 90th birthday
or the end of the tenth Contract Year. You may elect a later Annuity
Commencement Date if we allow and subject to the laws and regulations then in
effect. If the Contract is sold as part of a Charitable Remainder Trust, the
Annuity Commencement Date may be deferred to the Annuitant's 100th birthday. The
Annuity Commencement Date may be changed from time to time, but ANY CHANGE MUST
BE WITHIN 30 DAYS PRIOR TO THE DATE ON WHICH ANNUITY PAYMENTS ARE SCHEDULED TO
BEGIN.
You also elect in writing an annuity payment option, which may be any of the
options described below or any annuity payment option then being offered by us.
The annuity payment option may not be changed on or after the Annuity
Commencement Date. The Contract contains the six annuity payment options
described below and the Annuity Proceeds Settlement Option.
For Qualified Contracts, the following annuity payment options are only
available if the guaranteed payment period is less than the life expectancy of
the Annuitant at the time the option becomes effective. The Annuity Proceeds
Settlement option is available for Qualified Contracts only if the guaranteed
payment period is less than the life expectancy of the Beneficiary at the time
the option becomes effective. Such life expectancies are computed on the basis
of the mortality table prescribed by the IRS, or if none is prescribed, the
mortality table in use by us. If you do not elect otherwise, fixed dollar amount
annuity payments will begin automatically on the Annuity Commencement Date,
under the Life Annuity Payment Option.
For Non-Qualified Contracts, if you do not elect otherwise, fixed dollar amount
annuity payments will automatically begin on the Annuity Commencement Date under
the annuity payment option Life Annuity with payments for a Period Certain of 10
years. For Contracts and Contracts issued in Texas, if you do not elect
otherwise, fixed dollar amount annuity payments will begin automatically on the
Annuity Commencement Date, under the Life Annuity Payment Option.
With the exception of the option Payments for a Period Certain, if the variable
dollar amount payment is selected, no Surrenders are permitted after annuity
payments begin.
ANNUITY PAYMENT OPTIONS
OPTION 1 -- LIFE ANNUITY where we make Annuity payments for as long as the
Annuitant lives.
- - Payments under this option STOP UPON THE DEATH OF THE ANNUITANT, even if the
Annuitant dies after one payment.
OPTION 2 -- LIFE ANNUITY WITH CASH REFUND where we make payments during the life
of the Annuitant and when the Annuitant dies, we pay the remaining value to the
Beneficiary. The remaining value is calculated at the time we receive Due Proof
of Death by subtracting the annuity payments already made from the Contract
Value less any applicable Premium Taxes applied to this annuity payment option.
- - This option is only available if you select payments using A VARIABLE DOLLAR
AMOUNT PAYMENT OPTION WITH THE 5% AIR OR FIXED DOLLAR AMOUNT ANNUITY
PAYMENTS.
OPTION 3 -- LIFE ANNUITY WITH PAYMENTS FOR A PERIOD CERTAIN where we make
payments to you for the life of the Annuitant but you are at least guaranteed
payments for a time period you select which is a minimum of 5 years and a
maximum of 100 years minus your Annuitant's age.
- - If the Annuitant dies prior to the end of the period selected, we will pay
your Beneficiary the present value of the remaining payments, either in a
lump sum payment or we will continue payments until the end of the period
selected.
OPTION 4 -- JOINT AND LAST SURVIVOR ANNUITY where we make payments during the
lifetimes of the Annuitant and another designated individual called the Joint
Annuitant At the time of electing this Annuity Option, the Contract Owner may
elect reduced payments over the remaining lifetime of the survivor.
- - Payments under this option STOP UPON THE DEATH OF THE ANNUITANT AND JOINT
ANNUITANT, even if the Annuitant and Joint Annuitant die after one payment.
OPTION 5 -- JOINT AND LAST SURVIVOR LIFE ANNUITY WITH PAYMENTS FOR A PERIOD
CERTAIN where we make payments during the lifetime of the Annuitant and a Joint
Annuitant, and we guarantee that those payments for a time period you select
which is not less than 5 years and no more than 100 years minus the younger
Annuitant's age. At the time of electing this Annuity Option, the Contract Owner
may elect reduced payments over the remaining lifetime of the survivor.
- - If the Annuitant and Joint Annuity die prior to the end of the period
selected, we will pay your Beneficiary the present value of the remaining
payments, either in a
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lump sum payment or We will continue payments until the end of the period
selected.
OPTION 6 -- PAYMENTS FOR A PERIOD CERTAIN where we agree to make payments for a
specified time. The minimum period that you can select is 10 years during the
first two Contract years and 5 years after the second Contract Anniversary. The
maximum period that you can select is 100 years minus your Annuitant's age.
- - If you select this option under a variable dollar amount payment, YOU MAY
SURRENDER YOUR ANNUITY after annuity payments have started and we will give
you the present value of the remaining payments less any applicable
Contingent Deferred Sales Charge.
- - If the Annuitant dies prior to the end of the period selected, we will pay
your Beneficiary the present value of the remaining payments, either in a
lump sum payment or we will continue payments until the end of the period
selected.
OPTION 7 -- THE ANNUITY PROCEEDS SETTLEMENT OPTION. Proceeds from the Death
Benefit may be left with us for at least 5 years from the date of the Contract
Owner's death if the death occurs prior to the Annuity Commencement Date. These
proceeds will remain in the Account(s) to which they were allocated at the time
of death unless the Beneficiary elects to reallocate them. Full or partial
Surrenders may be made at any time. In the event of a complete Surrender, the
remaining value will equal the Contract Value of the proceeds left with us,
minus any partial Surrenders. This option may not be available under certain
Contracts issued in connection with Qualified Plans.
WE MAY OFFER OTHER ANNUITY PAYMENT OPTIONS FROM TIME TO TIME.
ANNUITY PAYMENTS
When your decide to begin to take payments, we calculate your Contract Value
minus any Premium Tax which we must pay and, unless you instruct us otherwise,
we apply that amount to a variable annuity with the same Sub-Account values. You
may however, choose to have your Contract Value applied to a fixed annuity
instead.
Important: You should consider the question of allocation of Contract Values
(less applicable Premium Taxes) among Accounts to make certain that annuity
payments are based on the investment alternative best suited to your needs for
retirement.
ANNUITY PAYMENTS. The minimum Annuity payment is $50. No election may be made
which results in a first payment of less than $50. If at any time Annuity
payments are or become less than $50, we have the right to change the frequency
of payment to intervals so that payments will at least be $50. If any amount due
is less than the minimum amount per year, we make such other settlement as may
be equitable to the Payee.
All Annuity payments under any option will occur the same day of the month as
the Annuity Commencement Date, based on the payment frequency selected by you.
Available payment frequencies include monthly, quarterly, semi-annual and
annual. The payment frequency may be changed within 30 days prior to the
anniversary of your Annuity Commencement Date.
ANNUITY COMMENCEMENT DATE. You select the Annuity Commencement Date in your
application or order request. The Annuity Calculation Date will be no more than
five Valuation Days before the Annuity Commencement Date.
ANNUITY CALCULATION DATE. On the Annuity Calculation Date, your Contract Value
less any applicable Premium Tax is applied to purchase Annuity Units of the
Sub-Accounts selected by you. The first Annuity payment is computed using the
value of these Annuity Units as of the Annuity Calculation Date.
INCOME PAYMENT DATES. All Annuity payments after the first Annuity payment are
computed and payable as of the Income Payment Dates. These dates are the same
day of the month as the Annuity Commencement Date, based on the Annuity payment
frequency selected by you. They are also shown on the specification page of your
Contract. You may choose from monthly, quarterly, semi-annual and annual
payments. The Annuity payment frequency may not be changed once selected by you.
IN THE EVENT THAT YOU DO NOT SELECT A PAYMENT FREQUENCY, ANNUITY PAYMENTS WILL
BE MADE MONTHLY.
VARIABLE ANNUITY PAYMENTS
THE FIRST VARIABLE ANNUITY PAYMENT. Variable Annuity payments are periodic
payments we pay to your designated Payee, the amount of which varies from one
Income Payment Date to the next as a function of the net investment performance
of the Sub-Accounts selected by you. The dollar amount of the first Variable
Annuity payment depends on the annuity payment option chosen, the age of the
Annuitant, the gender of the Annuitant (if applicable), the amount of Contract
Value less applicable Premium Tax applied to purchase the Annuity payments, and
the applicable annuity purchase rates based on the 1983a Individual Annuity
Mortality table using projection scale G projected to the year 2000 and an AIR
of not less than 3.0%.
The dollar amount of the first Variable Annuity payment attributable to each
Sub-Account is determined by dividing the dollar amount of the Contract Value
less applicable Premium Tax applied to that Sub-Account on the Annuity
Calculation Date by $1,000 and multiplying the result by the payment factor in
the Contract for the selected annuity payment option. The dollar value of the
first Variable
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Annuity payment is the sum of the first Variable Annuity payments attributable
to each Sub-Account.
ANNUITY UNITS. The number of Annuity Units attributable to a Sub-Account is
derived by dividing the first Variable Annuity payment attributable to that
Sub-Account by the Annuity Unit value for that Sub-Account for the Valuation
Period ending on the Annuity Calculation Date or during which the Annuity
Calculation Date falls if the Valuation Period does not end on such date. The
number of Annuity Units attributable to each Sub-Account under a Contract
remains fixed unless there is a transfer of Annuity Units between Sub-Accounts.
SUBSEQUENT VARIABLE ANNUITY PAYMENTS. The dollar amount of each subsequent
Variable Annuity payment attributable to each Sub-Account is calculated on the
Income Payment Date. It is determined by multiplying (a) by (b), where:
(a) is the number of Annuity Units of each Sub-Account credited under the
Contract and
(b) is the Annuity Unit value (described below) for that Sub-Account.
The total subsequent Variable Annuity payments equal the sum of the amounts
attributable to each Sub-Account.
When an Income Payment Date falls on a day that is not a Valuation Day, the
Income Payment is computed as of the prior Valuation Day. If the date of the
month elected does not occur in a given month, i.e., the 29th, 30th, or 31st of
a month, the payment will be computed as of the last Valuation Day of the month.
The Annuity Unit value of each Sub-Account for any Valuation Period is equal to
(a) multiplied by (b) multiplied by (c) where:
(a) is the Net Investment Factor for the Valuation Period for which the Annuity
Unit value is being calculated;
(b) is the Annuity Unit value for the preceding Valuation Period; and
(c) is the Annuity Unit Factor.
The Annuity Unit Factor neutralizes the AIR percentage (3%, 5%, or 6%). The
daily Annuity Unit Factor corresponding to the AIR percentages of 3%, 5%, and 6%
are 0.999919, 0.999866, and 0.999840, respectively
THE ASSUMED INVESTMENT RETURN (AIR). The Annuity Unit value will increase or
decrease from one Income Payment Date to the next in direct proportion to the
net investment return of the Sub-Account(s) supporting the Variable Annuity
payments, less an adjustment to neutralize the selected AIR. Dividing what would
otherwise be the Annuity Unit value by the AIR factor is necessary in order to
adjust the change in the Annuity Unit value (resulting from the Net Investment
Factor) so that the Annuity Unit value only changes to the extent that the Net
Investment Factor represents a rate of return greater than or less than the AIR
selected by you. Without this adjustment, the Net Investment Factor would
decrease the Annuity Unit value to the extent that such value represented an
annualized rate of return of less than 0.0% and increase the Annuity Unit value
to the extent that such value represented an annualized rate of return of
greater than 0.0%.
The Contract permits Contract Owners to select one of three AIRs: 3%, 5% or 6%.
A higher AIR will result in a higher initial payment, a more slowly rising
series of subsequent payments when actual investment performance (minus any
deductions and expenses) exceeds the AIR, and a more rapid drop in subsequent
payments when actual investment performance (minus any deductions and expenses)
is less than the AIR. The following examples may help clarify the impact of
selecting one AIR over another:
- - If you select a 3% AIR and if the net investment return of the Sub-Account for
an Annuity payment period is equal to the pro-rated portion of the 3% AIR, the
Variable Annuity payment attributable to that Sub-Account for that period will
equal the Annuity payment for the prior period. To the extent that such net
investment return exceeds an annualized rate of return of 3% for a payment
period, the Annuity payment for that period will be greater than the Annuity
payment for the prior period and to the extent that such return for a period
falls short of an annualized rate of 3%, the Annuity payment for that period
will be less than the Annuity payment for the prior period.
- - If you select a 5% AIR and if the net investment return of the Sub-Account for
an Annuity payment period is equal to the pro-rated portion of the 5% AIR, the
Variable Annuity payment attributable to that Sub-Account for that period will
equal the Annuity payment for the prior period. To the extent that such net
investment return exceeds an annualized rate of return of 5% for a payment
period, the Annuity payment for that period will be greater than the Annuity
payment for the prior period and to the extent that such return for a period
falls short of an annualized rate of 5%, the Annuity payment for that period
will be less than the Annuity payment for the prior period.
- - If you select a 6% AIR and if the net investment return of the Sub-Account for
an Annuity payment period is equal to the pro-rated portion of the 6% AIR, the
Variable Annuity payment attributable to that Sub-Account for that period will
equal the Annuity payment for the prior period. To the extent that such net
investment return exceeds an annualized rate of return of 6% for a payment
period, the
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Annuity payment for that period will be greater than the Annuity payment for the
prior period and to the extent that such return for a period falls short of an
annualized rate of 6%, the Annuity payment for that period will be less than the
Annuity payment for the prior period.
Level Variable Annuity payments would be produced if the investment rate returns
remained constant and equal to the AIR. In fact, payments will vary up or down
as the investment rate varies up or down from the AIR.
EXCHANGE (TRANSFER) OF ANNUITY UNITS. After the Annuity Calculation Date, you
may exchange (i.e., transfer) the dollar value of a designated number of Annuity
Units of a particular Sub-Account for an equivalent dollar amount of Annuity
Units of another Sub-Account. On the date of the transfer, the dollar amount of
a Variable Annuity payment generated from the Annuity Units of either
Sub-Account would be the same. Transfers are executed as of the day Hartford
receives a written request for a transfer. For guidelines refer to Sub-Account
Value Transfers Before and After the Annuity Commencement Date.
FIXED DOLLAR ANNUITY. Fixed Annuity payments are determined at annuitization by
multiplying the Contract Value (less applicable Premium Taxes) by a rate to be
determined by Hartford which is no less than the rate specified in the Fixed
Annuity option tables in the Contract. The Annuity payment will remain level for
the duration of the Annuity. Any Fixed Annuity allocation may not be changed.
OTHER INFORMATION
ASSIGNMENT. Ownership of this Contract is generally assignable. However, if the
Contracts are issued pursuant to some form of Qualified Plan, it is possible
that the ownership of the Contracts may not be transferred or assigned depending
on the type of tax-qualified retirement plan involved. An assignment of a
Non-Qualified Contract may subject the Contract Values or assignment proceeds to
income taxes and certain penalty taxes.
CONTRACT MODIFICATION. The Annuitant may not be changed; however, the Contingent
Annuitant may be changed at any time prior to the Annuity Commencement Date by
sending us written notice. We may modify the Contract, but no modification will
effect the amount or term of any Contract unless a modification is required to
conform the Contract to applicable Federal or State law. No modification will
effect the method by which Contract Values are determined.
FEDERAL TAX CONSIDERATIONS
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What are some of the federal tax consequences which affect these Contracts?
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING TO
THE ACTUAL STATUS OF THE CONTRACT OWNER INVOLVED AND THE TYPE OF PLAN UNDER
WHICH THE CONTRACT IS PURCHASED, LEGAL AND TAX ADVICE MAY BE NEEDED BY A PERSON,
TRUSTEE OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A CONTRACT DESCRIBED
HEREIN.
It should be understood that any detailed description of the federal income tax
consequences regarding the purchase of these Contracts cannot be made in this
Prospectus and that special tax rules may be applicable with respect to certain
purchase situations not discussed herein. In addition, no attempt is made here
to consider any applicable state or other tax laws. For detailed information, a
qualified tax adviser should always be consulted. The discussion here and in
Appendix I, commencing on page 32, is based on Hartford's understanding of
existing federal income tax laws as they are currently interpreted.
TAXATION OF HARTFORD AND THE SEPARATE ACCOUNT
The Separate Account is taxed as part of Hartford which is taxed as a life
insurance company in accordance with the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, the Separate Account will not be taxed as a
"regulated investment company" under subchapter M of Chapter 1 of the Code.
Investment income and any realized capital gains on the assets of the Separate
Account are reinvested and are taken into account in determining the value of
the Accumulation and Annuity Units (See "Accumulation Unit Values" commencing on
page 16). As a result, such investment income and realized capital gains are
automatically applied to increase reserves under the Contract.
No taxes are due on interest, dividends and short-term or long-term capital
gains earned by the Separate Account with respect to Qualified or Non-Qualified
Contracts.
TAXATION OF ANNUITIES - GENERAL PROVISIONS AFFECTING PURCHASERS OTHER THAN
QUALIFIED RETIREMENT PLANS
Section 72 of the Code governs the taxation of annuities in general.
1. NON-NATURAL PERSONS, CORPORATIONS, ETC. Section 72 contains provisions for
Contract Owners which are non-
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natural persons. Non-natural persons include corporations, trusts, limited
liability companies and partnerships. The annual net increase in the value
of the Contract is currently includable in the gross income of a non-natural
person, unless the non-natural person holds the Contract as an agent for a
natural person. There are additional exceptions from current inclusion for
(i) certain annuities held by structured settlement companies, (ii) certain
annuities held by an employer with respect to a terminated qualified
retirement plan and (iii) certain immediate annuities. A non-natural person
which is a tax-exempt entity for federal tax purposes will not be subject to
income tax as a result of this provision.
If the Contract Owner is not an individual, the primary Annuitant shall be
treated as the Contract Owner for purposes of making distributions which are
required to be made upon the death of the Contract Owner. If there is a
change in the primary Annuitant, such change shall be treated as the death
of the Contract Owner.
2. OTHER CONTRACT OWNERS (NATURAL PERSONS). A Contract Owner is not taxed on
increases in the value of the Contract until an amount is received or deemed
received, e.g., in the form of a lump sum payment (full or partial value of
a Contract) or as Annuity payments under the settlement option elected.
The provisions of Section 72 of the Code concerning distributions are
summarized briefly below. Also summarized are special rules affecting
distributions from Contracts obtained in a tax-free exchange for other
annuity contracts or life insurance contracts which were purchased prior to
August 14, 1982.
a. DISTRIBUTIONS PRIOR TO THE ANNUITY COM-
MENCEMENT DATE.
i. Total premium payments less amounts received which were not
includable in gross income equal the "investment in the contract"
under Section 72 of the Code.
ii. To the extent that the value of the Contract (ignoring any
surrender charges except on a full Surrender) exceeds the
"investment in the contract," such excess constitutes the "income
on the contract."
iii. Any amount received or deemed received prior to the Annuity
Commencement Date (e.g., upon a partial Surrender) is deemed to
come first from any such "income on the contract" and then from
"investment in the contract," and for these purposes such "income
on the contract" shall be computed by reference to any aggregation
rule in subparagraph 2.c. below. As a result, any such amount
received or deemed received (1) shall be includable in gross income
to the extent that such amount does not exceed any such "income on
the contract," and (2) shall not be includable in gross income to
the extent that such amount does exceed any such "income on the
contract." If at the time that any amount is received or deemed
received there is no "income on the contract" (e.g., because the
gross value of the Contract does not exceed the "investment in the
contract" and no aggregation rule applies), then such amount
received or deemed received will not be includable in gross income,
and will simply reduce the "investment in the contract."
iv. The receipt of any amount as a loan under the Contract or the
assignment or pledge of any portion of the value of the Contract
shall be treated as an amount received for purposes of this
subparagraph a. and the next subparagraph b.
v. In general, the transfer of the Contract, without full and adequate
consideration, will be treated as an amount received for purposes of
this subparagraph a. and the next subparagraph b. This transfer rule
does not apply, however, to certain transfers of property between
spouses or incident to divorce.
b. DISTRIBUTIONS AFTER ANNUITY COMMENCEMENT DATE. Annuity payments made
periodically after the Annuity Commencement Date are includable in gross
income to the extent the payments exceed the amount determined by the
application of the ratio of the "investment in the contract" to the
total amount of the payments to be made after the Annuity Commencement
Date (the "exclusion ratio").
i. When the total of amounts excluded from income by application of the
exclusion ratio is equal to the investment in the contract as of the
Annuity Commencement Date, any additional payments (including
Surrenders) will be entirely includable in gross income.
ii. If the annuity payments cease by reason of the death of the
Annuitant and, as of the date of death, the amount of annuity
payments excluded from gross income by the exclusion ratio does not
exceed the investment in the
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contract as of the Annuity Commencement Date, then the remaining
portion of unrecovered investment shall be allowed as a deduction
for the last taxable year of the Annuitant.
iii. Generally, non-periodic amounts received or deemed received after
the Annuity Commencement Date are not entitled to any exclusion
ratio and shall be fully includable in gross income. However, upon
a full Surrender after such date, only the excess of the amount
received (after any surrender charge) over the remaining
"investment in the contract" shall be includable in gross income
(except to the extent that the aggregation rule referred to in the
next subparagraph c. may apply).
c. AGGREGATION OF TWO OR MORE ANNUITY CONTRACTS. Contracts issued after
October 21, 1988 by the same insurer (or affiliated insurer) to the same
Contract Owner within the same calendar year (other than certain
contracts held in connection with a tax-qualified retirement
arrangement) will be treated as one annuity Contract for the purpose of
determining the taxation of distributions prior to the Annuity
Commencement Date. An annuity contract received in a tax-free exchange
for another annuity contract or life insurance contract may be treated
as a new Contract for this purpose. Hartford believes that for any
annuity subject to such aggregation, the values under the Contracts and
the investment in the contracts will be added together to determine the
taxation under subparagraph 2.a., above, of amounts received or deemed
received prior to the Annuity Commencement Date. Surrenders will first
be treated as surrenders of income until all of the income from all such
Contracts is withdrawn. As of the date of this Prospectus, there are no
regulations interpreting this provision.
d. 10% PENALTY TAX-- APPLICABLE TO CERTAIN SURRENDERS AND ANNUITY PAYMENTS.
i. If any amount is received or deemed received on the Contract (before
or after the Annuity Commencement Date), the Code applies a penalty
tax equal to ten percent of the portion of the amount includable in
gross income, unless an exception applies.
ii. The 10% penalty tax will not apply to the following distributions
(exceptions vary based upon the precise plan involved):
1. Distributions made on or after the date the recipient has
attained the age of 59 1/2.
2. Distributions made on or after the death of the holder or where
the holder is not an individual, the death of the primary
annuitant.
3. Distributions attributable to a recipient's becoming disabled.
4. A distribution that is part of a scheduled series of
substantially equal periodic payments for the life (or life
expectancy) of the recipient (or the joint lives or life
expectancies of the recipient and the recipient's Beneficiary).
5. Distributions of amounts which are allocable to the "investment
in the contract" prior to August 14, 1982 (see next subparagraph
e.).
e. SPECIAL PROVISIONS AFFECTING CONTRACTS OBTAINED THROUGH A TAX-FREE
EXCHANGE OF OTHER ANNUITY OR LIFE INSURANCE CONTRACTS PURCHASED PRIOR TO
AUGUST 14, 1982. If the Contract was obtained by a tax-free exchange of
a life insurance or annuity Contract purchased prior to August 14, 1982,
then any amount received or deemed received prior to the Annuity
Commencement Date shall be deemed to come (1) first from the amount of
the "investment in the contract" prior to August 14, 1982 ("pre-8/14/82
investment") carried over from the prior Contract, (2) then from the
portion of the "income on the contract" (carried over to, as well as
accumulating in, the successor Contract) that is attributable to such
pre-8/14/82 investment, (3) then from the remaining "income on the
contract" and (4) last from the remaining "investment in the contract."
As a result, to the extent that such amount received or deemed received
does not exceed such pre-8/14/82 investment, such amount is not
includable in gross income., In addition, to the extent that such amount
received or deemed received does not exceed the sum of (a) such
pre-8/14/82 investment and (b) the "income on the contract" attributable
thereto, such amount is not subject to the 10% penalty tax. In all other
respects, amounts received or deemed received from such post-exchange
Contracts are generally subject to the rules described in this
subparagraph 3.
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<PAGE>
f. REQUIRED DISTRIBUTIONS.
i. Death of Contract Owner or Primary Annuitant
Subject to the alternative election or spouse beneficiary provisions
in ii or iii below:
1. If any Contract Owner dies on or after the Annuity Commencement
Date and before the entire interest in the Contract has been
distributed, the remaining portion of such interest shall be
distributed at least as rapidly as under the method of
distribution being used as of the date of such death;
2. If any Contract Owner dies before the Annuity Commencement Date,
the entire interest in the Contract will be distributed within 5
years after such death; and
3. If the Contract Owner is not an individual, then for purposes of
1. or 2. above, the primary annuitant under the Contract shall
be treated as the Contract Owner, and any change in the primary
annuitant shall be treated as the death of the Contract Owner.
The primary annuitant is the individual, the events in the life
of whom are of primary importance in affecting the timing or
amount of the payout under the Contract.
ii.Alternative Election to Satisfy Distribution Requirements
If any portion of the interest of a Contract Owner described in i.
above is payable to or for the benefit of a designated beneficiary,
such beneficiary may elect to have the portion distributed over a
period that does not extend beyond the life or life expectancy of
the beneficiary. The election and payments must begin within a year
of the death.
iii. Spouse Beneficiary
If any portion of the interest of a Contract Owner is payable to or
for the benefit of his or her spouse, and the Annuitant or
Contingent Annuitant is living, such spouse shall be treated as the
Contract Owner of such portion for purposes of section i. above.
3. DIVERSIFICATION REQUIREMENTS. Section 817 of the Code provides that a
variable annuity contract will not be treated as an annuity contract for
any period during which the investments made by the Separate Account or
underlying fund are not adequately diversified in accordance with
regulations prescribed by the Treasury Department. If a Contract is not
treated as an annuity contract, the Contract Owner will be subject to
income tax on the annual increases in cash value.
The Treasury Department has issued diversification regulations which
generally require, among other things, that no more than 55% of the
value of the total assets of the segregated asset account underlying a
variable contract is represented by any one investment, no more than 70%
is represented by any two investments, no more than 80% is represented
by any three investments, and no more than 90% is represented by any
four investments. In determining whether the diversification standards
are met, all securities of the same issuer, all interests in the same
real property project, and all interests in the same commodity are each
treated as a single investment. In addition, in the case of government
securities, each government agency or instrumentality shall be treated
as a separate issuer.
A Separate Account must be in compliance with the diversification
standards on the last day of each calendar quarter or within 30 days
after the quarter ends. If an insurance company inadvertently fails to
meet the diversification requirements, the company may comply within a
reasonable period and avoid the taxation of contract income on an
ongoing basis. However, either the company or the Contract Owner must
agree to pay the tax due for the period during which the diversification
requirements were not met.
Hartford monitors the diversification of investments in the Separate
Accounts and tests for diversification as required by the Code. Hartford
intends to administer all contracts subject to the diversification
requirements in a manner that will maintain adequate diversification.
4. OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT. In order for a variable
annuity contract to qualify for tax deferral, assets in the segregated
asset accounts supporting the variable contract must be considered to be
owned by the insurance company and not by the variable contract owner.
The Internal Revenue Service ("IRS") has issued several rulings which
discuss investor control. The IRS has ruled that certain incidents of
ownership by the contract owner, such as the ability to select and
control investments in a Separate Account, will cause the contract owner
to be treated as the owner of the assets for tax purposes.
28 - PROSPECTUS
<PAGE>
Further, in the explanation to the temporary Section 817 diversification
regulations, the Treasury Department noted that the temporary
regulations "do not provide guidance concerning the circumstances in
which investor control of the investments of a segregated asset account
may cause the investor, rather than the insurance company, to be treated
as the owner of the assets in the Account." The explanation further
indicates that "the temporary regulations provide that in appropriate
cases a segregated asset account may include multiple sub-accounts, but
do not specify the extent to which policyholders may direct their
investments to particular sub-accounts without being treated as the
owners of the underlying assets. Guidance on this and other issues will
be provided in regulations or revenue rulings under Section 817(d),
relating to the definition of variable contract." The final regulations
issued under Section 817 did not provide guidance regarding investor
control, and as of the date of this prospectus, no other such guidance
has been issued. Further, Hartford does not know if or in what form such
guidance will be issued. In addition, although regulations are generally
issued with prospective effect, it is possible that regulations may be
issued with retroactive effect. Due to the lack of specific guidance
regarding the issue of investor control, there is necessarily some
uncertainty regarding whether a Contract Owner could be considered the
owner of the assets for tax purposes. Hartford reserves the right to
modify the contracts, as necessary, to prevent Contract Owners from
being considered the owners of the assets in the Separate Accounts.
FEDERAL INCOME TAX WITHHOLDING
The portion of a distribution which is taxable income to the recipient will be
subject to federal income tax withholding, pursuant to Section 3405 of the Code.
The application of this provision is summarized below:
1. NON-PERIODIC DISTRIBUTIONS. The portion of a non-periodic distribution which
constitutes taxable income will be subject to federal income tax withholding
unless the recipient elects not to have taxes withheld. If an election not
to have taxes withheld is not provided, 10% of the taxable distribution will
be withheld as federal income tax. Election forms will be provided at the
time distributions are requested. If the necessary election forms are not
submitted to Hartford, Hartford will automatically withhold 10% of the
taxable distribution.
2. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN ONE
YEAR). The portion of a periodic distribution which constitutes taxable
income will be subject to federal income tax withholding as if the recipient
were married claiming three exemptions. A recipient may elect not to have
income taxes withheld or have income taxes withheld at a different rate by
providing a completed election form. Election forms will be provided at the
time distributions are requested.
GENERAL PROVISIONS AFFECTING QUALIFIED RETIREMENT PLANS
The Contract may be used for a number of qualified retirement plans. If the
Contract is being purchased with respect to some form of qualified retirement
plan, please refer to Appendix I commencing on page 32 for information relative
to the types of plans for which it may be used and the general explanation of
the tax features of such plans.
ANNUITY PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
The discussion above provides general information regarding U.S. federal income
tax consequences to annuity purchasers that are U.S. citizens or residents.
Purchasers that are not U.S. citizens or residents will generally be subject to
U.S. federal income tax and withholding on annuity distributions at a 30% rate,
unless a lower treaty rate applies. In addition, purchasers may be subject to
state Premium Tax, other state and/or municipal taxes, and taxes that may be
imposed by the purchaser's country of citizenship or residence. Prospective
purchasers are advised to consult with a qualified tax adviser regarding U.S.,
state, and foreign taxation with respect to an annuity purchase.
MISCELLANEOUS
-------------------------------------------------------------------
HOW CONTRACTS ARE SOLD
Hartford Securities Distribution Company, Inc. ("HSD") serves as Principal
Underwriter for the securities issued with respect to the Separate Account. HSD
is an affiliate of Hartford. Hartford's parent company indirectly owns 100% of
HSD. The principal business address of HSD is the same as that of Hartford.
The securities will be sold by salesperson of HSD who represent Hartford as
insurance and variable annuity agents
29 - PROSPECTUS
<PAGE>
and who are registered representatives of Broker-Dealers who have entered into
distribution agreements with HSD.
HSD is registered with the Commission under the Securities Exchange Act of 1934
as a Broker-Dealer and is a member of the National Association of Securities
Dealers, Inc.
Commissions will be paid by Hartford and will not be more than 6% of premium
payments. From time to time, Hartford may pay or permit other promotional
incentives, in cash or credit or other compensation.
Broker-dealers or financial institutions are compensated according to a schedule
set forth by HSD and any applicable rules or regulations for variable insurance
compensation. Compensation is generally based on premium payments made by
policyholders or contract owners. This compensation is usually paid from the
sales charges described in this Prospectus.
In addition, a broker-dealer or financial institution may also receive
additional compensation for, among other things, training, marketing or other
services provided. HSD, its affiliates or Hartford may also make compensation
arrangements with certain broker-dealers or financial institutions based on
total sales by the broker-dealer or financial institution of insurance products.
These payments, which may be different for different broker-dealers or financial
institutions, will be made by HSD, its affiliates or Hartford out of their own
assets and will not effect the amounts paid by the policyholders or contract
owners to purchase, hold or Surrender variable insurance products.
YEAR 2000
The Year 2000 issue relates to the ability or inability of computer systems to
properly process information and data containing or related to dates beginning
with the year 2000 and beyond. The Year 2000 issue exists because, historically,
many computer systems that are in use today were developed years ago when a year
was identified using a two-digit field rather than a four-digit field. As
information and data containing or related to the century date are introduced to
computer hardware, software and other systems, date sensitive systems may
recognize the year 2000 as 1900, or not at all, which may result in computer
systems processing information incorrectly. This, in turn, may significantly and
adversely affect the integrity and reliability of information databases and may
result in a wide variety of adverse consequences to a company. In addition, Year
2000 problems that occur with third parties with which a company does business,
such as suppliers, computer vendors and others, may also adversely affect any
given company.
As an insurance and financial services company, Hartford has thousands of
individual and business customers that have purchased or invested in insurance
policies, annuities, mutual funds and other financial products. Nearly all of
these policies and products contain date sensitive data, such as policy
expiration dates, birth dates, premium payments dates and the like. In addition,
Hartford has business relationships with numerous third parties that affect
virtually all aspects of its business, including, without limitation, suppliers,
computer hardware and software vendors, insurance agents and brokers, securities
broker-dealers and other distributors of financial products.
Beginning in 1990, Hartford began working on making its computer systems Year
2000 ready, either by installing new programs or by replacing systems. In
January 1998, Hartford commenced a company-wide program to further identify,
assess and remediate the impact of Year 2000 problems in all of Hartford's
business segments. Hartford currently anticipates that this internal program
will be substantially completed by the end of 1998, and testing of computer
systems will continue through 1999.
In addition, as part of its Year 2000 program, Hartford is identifying third
parties with which it has significant business relations in order to attempt to
assess any potential impact on Hartford as a result of such third-party Year
2000 issues and remediation plans. Hartford currently anticipates that it will
substantially complete this evaluation by the end of 1998, and will conduct
systems testing with certain third parties through 1999. Hartford does not have
control over these third parties and, as a result, Hartford cannot currently
determine to what extent future operating results may be adversely affected by
the failure of these third parties to successfully address their Year 2000
issues. Hartford will continue to assess Year 2000 risk exposures related to its
own operations and its third-party relationships and is in the process of
developing contingency plans.
The costs of addressing the Year 2000 issue that have been incurred through the
six months ended June 30, 1998 have not been material to Hartford's financial
condition or results of operations. Hartford will continue to incur costs
related to its Year 2000 efforts and does not anticipate that the costs to be
incurred will be material to its financial condition or results of operations.
LEGAL MATTERS
There are no material legal proceedings pending to which the Separate Account is
a party.
Counsel with respect to federal laws and regulations applicable to the issue and
sale of the Contracts and with respect to Connecticut law is Lynda Godkin,
Senior Vice President, General Counsel and Corporate Secretary, Hartford Life
and Annuity Insurance Company, P.O. Box 2999, Hartford, Connecticut 06104-2999.
30 - PROSPECTUS
<PAGE>
EXPERTS
The audited financial statements and financial statement schedules included in
this registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports. The principal business address of Arthur
Andersen LLP is One Financial Plaza, Hartford, Connecticut 06103.
MORE INFORMATION
You may call your Representative if you have any questions or write or call us
at the address below:
Hartford Life and Annuity Insurance Company
Attn: Individual Annuity Services
P.O. Box 5085
Hartford, Connecticut 06102-5085
Telephone: 1-800-521-0538 (Contract Owners)
1-800-862-7155 (Investment Representatives)
31 - PROSPECTUS
<PAGE>
APPENDIX I
-------------------------------------------------------------------
INFORMATION REGARDING TAX-QUALIFIED PLANS
The tax rules applicable to tax-qualified contract owners, including
restrictions on contributions and distributions, taxation of distributions and
tax penalties, vary according to the type of plan as well as the terms and
conditions of the plan itself. Various tax penalties may apply to contributions
in excess of applicable limits, distributions prior to age 59 1/2 (subject to
certain exceptions), distributions which do not conform to applicable
commencement and minimum distribution rules, and certain other transactions with
respect to tax-qualified plans. Therefore, this summary does not attempt to
provide more than general information about the tax rules associated with use of
a Contract by a tax-qualified retirement plan. Contract owners, plan
participants and beneficiaries are cautioned that the rights and benefits of any
person to benefits may be controlled by the terms and conditions of the
tax-qualified retirement plan itself, regardless of the terms and conditions of
a Contract, but that Hartford is not bound by the terms and conditions of such
plans to the extent such terms conflict with a Contract, unless Hartford
specifically consents to be bound. Additionally, some tax-qualified retirement
plans are subject to distribution and other requirements which are not
incorporated into Hartford's administrative procedures. Contract owners,
participants and beneficiaries are responsible for determining that
contributions, distributions and other transactions comply with applicable law.
Because of the complexity of these rules, owners, participants and beneficiaries
are encouraged to consult their own tax advisors as to specific tax
consequences.
A. TAX-QUALIFIED PENSION OR PROFIT-SHARING PLANS
Provisions of the Code permit eligible employers to establish tax-qualified
pension or profit sharing plans (described in Section 401(a) and 401(k), if
applicable, and exempt from taxation under Section 501(a) of the Code), and
Simplified Employee Pension Plans (described in Section 408(k)). Such plans are
subject to limitations on the amount that may be contributed, the persons who
may be eligible to participate and the time when distributions must commence.
Employers intending to use these contracts in connection with tax-qualified
pension or profit-sharing plans should seek competent tax and other legal
advice.
B. TAX SHELTERED ANNUITIES UNDER SECTION 403(B)
Section 403(b) of the Code permits public school employees and employees of
certain types of charitable, educational and scientific organizations, as
specified in Section 501(c)(3) of the Code, to purchase annuity contracts, and,
subject to certain limitations, to exclude such contributions from gross income.
Generally, such contributions may not exceed the lesser of $10,000 (indexed) or
20% of an employee's "includable compensation" for such employee's most recent
full year of employment, subject to other adjustments. Special provisions under
the Code may allow some employees to elect a different overall limitation.
Tax-sheltered annuity programs under Section 403(b) are subject to a PROHIBITION
AGAINST DISTRIBUTIONS FROM THE CONTRACT ATTRIBUTABLE TO CONTRIBUTIONS MADE
PURSUANT TO A SALARY REDUCTION AGREEMENT, unless such distribution is made:
(1) after the participating employee attains age 59 1/2;
(2) upon separation from service;
(3) upon death or disability; or
(4) in the case of hardship (and in the case of hardship, any income
attributable to such contributions may not be distributed).
Generally, the above restrictions do not apply to distributions attributable to
cash values or other amounts held under a Section 403(b) contract as of December
31, 1988.
C. DEFERRED COMPENSATION PLANS UNDER SECTION 457
Employees and independent contractors performing services for eligible employers
may have contributions made to an Eligible Deferred Compensation Plan of their
employer in accordance with the employer's plan and Section 457 of the Code.
Section 457 places limitations on contributions to Eligible Deferred
Compensation Plans maintained by a State or other tax-exempt organization. For
these purposes, the term "State" means a State, a political sub-division of a
State, and an agency or instrumentality of a State or political sub-division of
a State. Generally, the limitation is 33 1/3% of includable compensation
(typically 25% of gross compensation) or, for 1998, $8,000 (indexed), whichever
is less. Such a plan may also provide for additional "catch-up" deferrals during
the three taxable years ending before a Participant attains normal retirement
age.
An employee electing to participate in an Eligible Deferred Compensation Plan
should understand that his or her rights and benefits are governed strictly by
the terms of the plan and that the employer is the legal owner of any contract
issued with respect to the plan. The employer, as owner of the contract(s),
retains all voting and redemption rights which may accrue to the contract(s)
issued with respect to the plan. The participating employee should look to the
terms of his or her plan for any charges in regard to participating therein
other than those disclosed in this Prospectus. Participants should also be aware
that effective August 20, 1996, the Small Business Job Protection Act of 1996
requires that all assets and income of an Eligible Deferred Compensation Plan
established by a governmental
32 - PROSPECTUS
<PAGE>
employer which is a State, a political subdivision of a State, or any agency or
instrumentality of a State or political subdivision of a State, must be held in
trust (or under certain specified annuity contracts or custodial accounts) for
the exclusive benefit of participants and their beneficiaries. Special
transition rules apply to such Eligible governmental Deferred Compensation Plans
already in existence on August 20, 1996, and provide that such plans need not
establish a trust before January 1, 1999. However, this requirement of a trust
does not apply to amounts under an Eligible Deferred Compensation Plan of a
tax-exempt (non-governmental) organization, and such amounts will be subject to
the claims of such tax-exempt employer's general creditors.
In general, distributions from an Eligible Deferred Compensation Plan are
prohibited under Section 457 of the Code unless made after the participating
employee attains age 70 1/2, separates from service, dies, or suffers an
unforeseeable financial emergency. Present federal tax law does not allow
tax-free transfers or rollovers for amounts accumulated in a Section 457 plan
except for transfers to other Section 457 plans in limited cases.
D. INDIVIDUAL RETIREMENT ANNUITIES UNDER SECTION 408
Section 408 of the Code permits eligible individuals to establish individual
retirement programs through the purchase of Individual Retirement Annuities
("IRAs"). IRAs are subject to limitations on the amount that may be contributed,
the contributions that may be deducted from taxable income, the persons who may
be eligible and the time when distributions may commence. Also, distributions
from certain qualified plans may be "rolled-over" on a tax-deferred basis into
an IRA.
The Contracts may be offered as SIMPLE IRAs in connection with a SIMPLE IRA plan
of an employer. Special rollover rules apply to SIMPLE IRAs. Amounts can be
rolled over from one SIMPLE IRA to another SIMPLE IRA. However, amounts can be
rolled over from a SIMPLE IRA to a regular IRA only after two years have expired
since the participant first commenced participation in your employer's SIMPLE
IRA plan. Amounts cannot be rolled over to a SIMPLE IRA from a qualified plan or
a regular IRA. Hartford is a non-designated financial institution.
Beginning in 1998, the Contracts may be offered as ROTH IRAs under Section 408A
of the Code. Contributions to a ROTH IRA are not deductible. Subject to special
limitations, a regular IRA may be converted into a ROTH IRA or a distribution
from a regular IRA may be rolled over to a ROTH IRA. However, a conversion or a
rollover from a regular IRA to a ROTH IRA is not excludable from gross income.
If certain conditions are met, qualified distributions from a ROTH IRA are
tax-free.
E. FEDERAL TAX PENALTIES AND WITHHOLDING
Distributions from retirement plans are generally taxed under Section 72 of the
Code. Under these rules, a portion of each distribution may be excludable from
income. The excludable amount is the portion of the distribution which bears the
same ratio as the after-tax contributions bear to the expected return.
1. Premature Distribution
Distributions from a tax-qualified plan before the Participant attains age
59 1/2 are generally subject to an additional penalty tax equal to 10% of
the taxable portion of the distribution. The 10% penalty does not apply to
distributions made after the employee's death, on account of disability, for
eligible medical expenses and distributions in the form of a life annuity
and, except in the case of an IRA, certain distributions after separation
from service after age 55. For these purposes, a life annuity means a
scheduled series of substantially equal periodic payments for the life or
life expectancy of the Participant (or the joint lives or life expectancies
of the Participant and Beneficiary).
In addition, effective for distributions made from an IRA after December 31,
1997, there is no such penalty tax on distributions that do not exceed the
amount of certain qualifying higher education expenses, as defined by
Section 72(t)(7) of the Code, or which are qualified first-time home buyer
distributions meeting the requirements of Section 72(t)(8) of the Code.
If you are a participant in a SIMPLE IRA plan, you should be aware that the
10% penalty tax discussed above is increased to 25% with respect to
non-exempt premature distributions made from your SIMPLE IRA during the
first two years following the date you first commenced participation in any
SIMPLE IRA plan of your employer.
2. Minimum Distribution Tax
If the amount distributed is less than the minimum required distribution for
the year, the Participant is subject to a 50% tax on the amount that was not
properly distributed.
An individual's interest in a tax-qualified retirement plan generally must
be distributed, or begin to be distributed, not later than April 1 of the
calendar year following the later of (i) the calendar year in which the
individual attains age 70 1/2 or (ii) the calendar year in which the
individual retires from service with the employer sponsoring the plan
("required beginning date"). However, the required beginning date for an
individual who is a five (5) percent owner (as defined in the Code), or who
is the owner of an IRA, is April 1
33 - PROSPECTUS
<PAGE>
of the calendar year following the calendar year in which the individual
attains age 70 1/2. The entire interest of the Participant must be
distributed beginning no later than the required beginning date over a
period which may not extend beyond a maximum of the life expectancy of the
Participant and a designated Beneficiary. Each annual distribution must
equal or exceed a "minimum distribution amount" which is determined by
dividing the account balance by the applicable life expectancy. This account
balance is generally based upon the account value as of the close of
business on the last day of the previous calendar year. In addition, minimum
distribution incidental benefit rules may require a larger annual
distribution.
If an individual dies before reaching his or her required beginning date,
the individual's entire interest must generally be distributed within five
years of the individual's death. However, this rule will be deemed
satisfied, if distributions begin before the close of the calendar year
following the individual's death to a designated Beneficiary (or over a
period not extending beyond the life expectancy of the beneficiary). If the
Beneficiary is the individual's surviving spouse, distributions may be
delayed until the individual would have attained age 70 1/2.
If an individual dies after reaching his or her required beginning date or
after distributions have commenced, the individual's interest must generally
be distributed at least as rapidly as under the method of distribution in
effect at the time of the individual's death.
3. Withholding
In general, distributions from IRAs and plans described in Section 457 of
the Code are subject to regular wage withholding rules. Periodic
distributions from other tax-qualified retirement plans that are made for a
specified period of 10 or more years or for the life or life expectancy of
the participant (or the joint lives or life expectancies of the participant
and beneficiary) are generally subject to federal income tax withholding as
if the recipient were married claiming three exemptions. The recipient of
periodic distributions may generally elect not to have withholding apply or
to have income taxes withheld at a different rate by providing a completed
election form.
Other distributions from such other tax-qualified retirement plans are
generally subject to mandatory income tax withholding at the flat rate of
20% unless such distributions are:
a) the non-taxable portion of the distribution;
b) required minimum distributions; or
c) direct transfer distributions.
Direct transfer distributions are direct payments to an IRA or to another
eligible retirement plan under Code section 401(a)(31).
34 - PROSPECTUS
<PAGE>
APPENDIX II -- OPTIONAL DEATH BENEFIT -- EXAMPLES
-------------------------------------------------------------------
EXAMPLE 1
____Assume that you deposited a premium payment of $100,000 on January 1, 1998.
If you made no Surrenders during the year, your Interest Accumulation Value on
January 1, 1999 would be $105,000, calculated as follows:
<TABLE>
<C> <S>
$100,000 Premium deposited on January 1, 1998
5,000 Interest accumulated at 5% per year on premiums
- --------
$105,000 Interest Accumulation Value on January 1, 1999.
</TABLE>
If you elected the Optional Death Benefit, you would be guaranteed a Death
Benefit payment equal to at least $105,000.
EXAMPLE 2
Assume that you deposited a premium payment of $100,000 on January 1, 1998.
If you Surrendered $10,000 on January 1, 1999 and your Contract Value
immediately prior to the partial Surrender was $100,000, your Interest
Accumulation Value on January 1, 1999 would be $94,500, calculated as follows:
<TABLE>
<C> <S>
$100,000 Premium deposited on January 1, 1998
5,000 Interest accumulated at 5% per year on premiums
($10,500) Adjustment for partial Surrender*
- ---------
$94,500 Interest Accumulation Value on January 1, 1999.
</TABLE>
- -------------------------------------------------
* The Adjustment for the partial Surrender reduces the Interest Accumulation
Value by an amount equal to the proportion of the partial Surrender to the
Contract Value prior to the partial Surrender. Therefore, in this example, the
$10,500 reduction to the Interest Accumulation Value is calculated by dividing
the amount of the Surrender, $10,000, by the Contract Value paid prior to the
Surrender, $100,000. This ratio (Surrender DIVIDED BY Contract Value prior to
Surrender) is multiplied by the Interest Accumulation Value prior to
Surrenders and results in the adjustment for the partial Surrender.
<TABLE>
<S> <C>
Interest Accumulation Value prior to Surrenders........ $105,000
Multiplied by ratio of Surrenders DIVIDED BY Contract
Value prior to Surrenders
($10,000 DIVIDED BY 100,000).......................... X .10
--------
Adjustment for the partial Surrender................... $ 10,500
</TABLE>
The Surrender reduced the Interest Accumulation Value by $10,500
($105,000-94,500).
- -------------------------------------------------
35 - PROSPECTUS
<PAGE>
TABLE OF CONTENTS TO
STATEMENT OF ADDITIONAL INFORMATION
-------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
- -----------------------------------------------------------
<S> <C>
Description of Hartford Life and Annuity
Insurance Company
- -----------------------------------------------------------
Safekeeping of Assets
- -----------------------------------------------------------
Independent Public Accountants
- -----------------------------------------------------------
Distribution of Contracts
- -----------------------------------------------------------
Calculation of Yield and Return
- -----------------------------------------------------------
Performance Comparisons
- -----------------------------------------------------------
Financial Statements
- -----------------------------------------------------------
</TABLE>
36 - PROSPECTUS
<PAGE>
This form must be completed for all tax sheltered annuities.
SECTION 403(b)(11) ACKNOWLEDGMENT FORM
- ---------------------------------------------------------------
The Putnam Variable Annuity Contract which you have recently purchased is
subject to certain restrictions imposed by the Tax Reform Act of 1986.
Contributions to the Contract after December 31, 1988 and any increases in cash
value after December 31, 1988 may not be distributed to you unless you have:
a. attained age 59 1/2,
b. separated from service,
c. died, or
d. become disabled.
Distributions of post December 31, 1988 contributions (excluding any income
thereon) may also be made if you have experienced a financial hardship.
Also, there may be a 10% penalty tax for distributions made prior to age 59 1/2
because of financial hardship or separation from service.
Also, please be aware that your 403(b) Plan may also offer other financial
alternatives other than the Hartford Variable Annuity. Please refer to your
Plan.
Please complete the following and return to:
Hartford Life and Annuity Insurance Company
Individual Annuity Services
P.O. Box 5085
Hartford, CT 06102-5085
Name of Contract Owner/Participant _____________________
Address ________________________________________________
City or Plan/School District ___________________________
Date: __________________________________________________
Contract No: ___________________________________________
Signature: _____________________________________________
- --------------------------------------------------------------------------------
To obtain a Statement of Additional Information, please complete the form below
and mail to:
Hartford Life and Annuity Insurance Company
Attn: Individual Annuity Services
P.O. Box 5085
Hartford, CT 06102-5085
Please send a Statement of Additional Information for [PRODUCT NAME] Variable
Annuity to me at the following address:
- -------------------------------------------------------
Name
- -------------------------------------------------------
Address
- -------------------------------------------------------
City/State Zip Code
<PAGE>
PART B
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT TWO
[PRODUCT NAME]
This Statement of Additional Information is not a Prospectus. The information
contained herein should be read in conjunction with the Prospectus.
To obtain a Prospectus, send a written request to Hartford Life and Annuity
Insurance Company, Attn: Annuity Marketing Services, P.O. Box 5085, Hartford,
CT 06102-5085.
Date of Prospectus: March 1, 1999
Date of Statement of Additional Information: March 1, 1999
333-
<PAGE>
2
TABLE OF CONTENTS
Section Page
- ------- ----
DESCRIPTION OF HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY............................................
SAFEKEEPING OF ASSETS.................................................
INDEPENDENT PUBLIC ACCOUNTANTS........................................
DISTRIBUTION OF CONTRACTS.............................................
CALCULATION OF YIELD AND RETURN.......................................
PERFORMANCE COMPARISONS...............................................
FINANCIAL STATEMENTS..................................................
<PAGE>
3
DESCRIPTION OF HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Hartford Life and Annuity Insurance Company is a stock life insurance company
engaged in the business of writing life insurance and annuities, both individual
and group, in all states of the United States and the District of Columbia,
except New York. Effective on January 1, 1998, Hartford's name changed from ITT
Hartford Life and Annuity Insurance Company to Hartford Life and Annuity
Insurance Company. Hartford was originally incorporated under the laws of
Wisconsin on January 9, 1956, and was subsequently redomiciled to Connecticut.
Its offices are located in Simsbury, Connecticut; however, its mailing address
is P.O. Box 2999, Hartford, CT 06104-2999. Hartford is a subsidiary of
Hartford Fire Insurance Company, one of the largest multiple lines insurance
carriers in the United States. Hartford is ultimately controlled by The
Hartford Financial Services Group, Inc., a Delaware corporation.
HARTFORD RATINGS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RATING AGENCY EFFECTIVE RATING BASIS OF RATING
DATE OF
RATING
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
A.M. Best and Company, 9/9/97 A+ Financial soundness and
Inc. operating performance.
- --------------------------------------------------------------------------------
Standard & Poor's 1/23/98 AA Insurer financial strength
- --------------------------------------------------------------------------------
Duff & Phelps 1/23/98 AA+ Claims paying ability
- --------------------------------------------------------------------------------
</TABLE>
SAFEKEEPING OF ASSETS
Title to the assets of the Separate Account is held by Hartford. The assets
are kept physically segregated and are held separate and apart from
Hartford's general corporate assets. Records are maintained of all purchases
and redemptions of Fund shares held in each of the Sub-Accounts.
INDEPENDENT PUBLIC ACCOUNTANTS
The audited financial statements and financial statement schedules included
in this registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm
as experts in giving said reports. The principal business address of Arthur
Andersen LLP is One Financial Plaza, Hartford, Connecticut 06103.
<PAGE>
4
DISTRIBUTION OF CONTRACTS
Hartford Securities Distribution Company, Inc. ("HSD") serves as Principal
Underwriter for the securities issued with respect to the Separate Account
and will offer the Contracts on a continous basis.
HSD is an affiliate of Hartford Life Insurance Company. Hartford's parent
company indirectly owns 100% of HSD. The principal business address of HSD
is the same as Hartford.
The securities will be sold by salespersons of HSD who represent Hartford as
insurance and Variable Annuity agents and who are registered representatives
of Broker-Dealers who have entered into distribution agreements with HSD.
HSD is registered with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 as a Broker-Dealer and is a member of the
National Association of Securities Dealers, Inc. ("NASD").
Commissions will be paid by Hartford and will not be more than 6% of premium
payments. From time to time, Hartford may pay or permit other promotion
incentives in cash or other compensation.
CALCULATION OF YIELD AND RETURN
YIELD OF THE PUTNAM MONEY MARKET SUB-ACCOUNT. As summarized in the Prospectus
under the heading "Performance Related Information," the yield of the
Sub-Account for a seven day period (the "base period") will be computed by
determining the "net change in value" of a hypothetical account having a balance
of one unit at the beginning of the period, dividing the net change in account
value by the value of the account at the beginning of the base period to obtain
the base period return, and multiplying the base period return by 365/7 with the
resulting yield figure carried to the nearest hundredth of one percent. Net
changes in value of a hypothetical account will include net investment income of
the account (accrued dividends as declared by the underlying funds, less expense
and Contract charges of the account) for the period, but will not include
realized gains or losses or unrealized appreciation or depreciation on the
underlying fund shares.
The effective yield is calculated by compounding the base period return by
adding 1, raising the sum to a power equal to 365/7 and subtracting 1 from the
result, according to the following formula:
365/7
Effective Yield = [(Base Period Return + 1) ] - 1
<PAGE>
5
THE PUTNAM MONEY MARKET SUB-ACCOUNT'S YIELD AND EFFECTIVE YIELD WILL VARY IN
RESPONSE TO FLUCTUATIONS IN INTEREST RATES AND IN THE EXPENSES OF THE
SUB-ACCOUNT. THE CURRENT YIELD AND EFFECTIVE YIELD REFLECT RECURRING CHARGES ON
THE SEPARATE ACCOUNT LEVEL, INCLUDING THE MAXIMUM ANNUAL MAINTENANCE FEE.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SUB-ACCOUNTS YIELD EFFECTIVE YIELD
- --------------------------------------------------------------------------------
<S> <C> <C>
Putnam Money Market * 3.94% 4.02%
- --------------------------------------------------------------------------------
</TABLE>
* Yield and effective yield for the seven day period ending December 31, 1997.
YIELDS OF PUTNAM GROWTH AND INCOME, PUTNAM GLOBAL ASSET ALLOCATION, PUTNAM HIGH
YIELD, PUTNAM UTILITIES GROWTH AND INCOME, PUTNAM U.S. GOVERNMENT AND HIGH
QUALITY BOND, AND PUTNAM DIVERSIFIED INCOME SUB-ACCOUNTS. As summarized in the
Prospectus under the heading "Performance Related Information," yields of the
above Sub-Accounts will be computed by annualizing a recent month's net
investment income, divided by a Fund share's net asset value on the last trading
day of that month. Net changes in the value of a hypothetical account will
assume the change in the underlying mutual fund's "net asset value per share"
for the same period in addition to the daily expense charge assessed, at the
sub-account level for the respective period. The Sub-Accounts' yields will vary
from time to time depending upon market conditions and, the composition of the
underlying funds' portfolios. Yield should also be considered relative to
changes in the value of the Sub-Accounts' shares and to the relative risks
associated with the investment objectives and policies of the underlying Fund.
THE YIELD REFLECTS RECURRING CHARGES ON THE SEPARATE ACCOUNT LEVEL, INCLUDING
THE ANNUAL MAINTENANCE FEE.
Yield calculations of the Sub-Accounts used for illustration purposes reflect
the interest earned by the Sub-Accounts, less applicable asset charges assessed
against a Contract Owner's account over the base period. Yield quotations based
on a 30 day period were computed by dividing the dividends and interests earned
during the period by the maximum offering price per unit on the last day of the
period, according to the following formula:
Example:
6
Current Yield Formula for the Sub-Account 2[((A-B)/(CD) + 1) - 1]
Where A = Dividends and interest earned during the period.
B = Expenses accrued for the period (net of reimbursements).
C = The average daily number of units outstanding during the period
that were entitled to receive dividends.
D = The maximum offering price per unit on the last day of the period.
<PAGE>
6
At any time in the future, yields and total return may be higher or lower
than past yields and there can be no assurance that any historical results
will continue.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SUB-ACCOUNTS YIELD
- --------------------------------------------------------------------------------
<S> <C>
Putnam Growth and Income ** 0.41%
- --------------------------------------------------------------------------------
Putnam Global Asset Allocation ** 1.08%
- --------------------------------------------------------------------------------
Putnam High Yield ** 7.61%
- --------------------------------------------------------------------------------
Putnam Utilities Growth and Income ** 1.67%
- --------------------------------------------------------------------------------
Putnam U.S. Government and High Quality Bond Fund ** 4.08%
- --------------------------------------------------------------------------------
Putnam Diversified Income ** 6.64%
- --------------------------------------------------------------------------------
</TABLE>
** Yield quotation based on a 30 day period ended December 31, 1997.
CALCULATION OF TOTAL RETURN. As summarized in the Prospectus under the heading
"Performance Related Information", total return is a measure of the change in
value of an investment in a Sub-Account over the period covered. The formula
for total return used herein includes three steps: (1) calculating the value of
the hypothetical initial investment of $1,000 as of the end of the period by
multiplying the total number of units owned at the end of the period by the unit
value per unit on the last trading day of the period; (2) assuming redemption at
the end of the period and deducting any applicable contingent deferred sales
charge and the $30.00 Annual Maintenance Fee (if applicable) and (3) dividing
this account value for the hypothetical investor by the initial $1,000
investment and annualizing the result for periods of less than one year. Total
return will be calculated for one year, five years, and ten years or some other
relevant periods if a Sub-Account has not been in existence for at least ten
years.
The following are the standardized average annual total return quotations for
the Sub-Accounts for the period ended December 31, 1997. No information is
included for the Putnam Research because as of December 31, 1997, the
Sub-Account had not commenced operations.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
SUB-ACCOUNTS INCEPTION DATE 1 YEAR 5 YEAR 10 YEAR OR SINCE
INCEPTION*
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Putnam Asia Pacific Growth 5/1/95 (23.89%) na (8.12%)
- ----------------------------------------------------------------------------------------------
Putnam Diversified Income 9/15/93 (3.12%) na 1.67%
- ----------------------------------------------------------------------------------------------
The George Putnam Fund na na na na
- ----------------------------------------------------------------------------------------------
Putnam Global Asset Allocation 2/1/88 9.01% 9.85% 8.17%
- ----------------------------------------------------------------------------------------------
Putnam Global Growth 5/1/90 3.74% 10.72% 6.29%
- ----------------------------------------------------------------------------------------------
Putnam Growth and Income 2/1/88 13.42% 14.21% 13.05%
- ----------------------------------------------------------------------------------------------
Putnam Health Sciences na na na na
- ----------------------------------------------------------------------------------------------
Putnam High Yield 2/1/88 3.75% 7.82% 7.42%
- ----------------------------------------------------------------------------------------------
Putnam International Growth 1/2/97 na na 5.51%
- ----------------------------------------------------------------------------------------------
Putnam International Growth and Income 1/2/97 na na 8.76%
- ----------------------------------------------------------------------------------------------
Putnam International New Opportunities 1/2/97 na na (10.50%)
- ----------------------------------------------------------------------------------------------
Putnam Investors na na na na
- ----------------------------------------------------------------------------------------------
Putnam New Opportunities 6/20/94 12.57% na 17.69%
- ----------------------------------------------------------------------------------------------
Putnam New Value 1/2/97 na na 6.97%
- ----------------------------------------------------------------------------------------------
Putnam OTC & Emerging Growth na na na na
- ----------------------------------------------------------------------------------------------
Putnam U.S. Government and High Quality Bond 2/1/88 (1.87%) 2.58% 4.74%
- ----------------------------------------------------------------------------------------------
Putnam Utilities Growth and Income Bond 5/1/92 16.33% 10.40% 9.99%
- ----------------------------------------------------------------------------------------------
Putnam Vista 1/2/97 na na 12.51%
- ----------------------------------------------------------------------------------------------
Putnam Voyager 2/1/88 15.76% 14.68% 14.46%
- ----------------------------------------------------------------------------------------------
Putnam Money Market 2/1/88 (5.24%) (0.76%) 1.27%
- ----------------------------------------------------------------------------------------------
</TABLE>
*Figures represent performance since inception for Sub-Accounts in existence for
less than 10 years, or performance for 10 years for Sub-Accounts in existence
for more than 10 years.
<PAGE>
7
In addition to the standardized total return, the Sub-Account may advertise a
non-standardized total return. This figure will usually be calculated for one
year, five years, and ten years or other periods. Non-standardized total return
is measured in the same manner as the standardized total return described above,
except that the contingent deferred sales charge and the Annual Maintenance Fee
are not deducted. Therefore, non-standardized total return for a Sub-Account is
higher than standardized total return for a Sub-Account.
The following are the non-standardized annualized total return quotations for
the Sub-Accounts for the period ended December 31, 1997. No information is
included for the Putnam Research because as of December 31, 1997, the
Sub-Account had not commenced operations.
NON-STANDARDIZED ANNUALIZED TOTAL RETURN FOR THE PERIOD ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
SUB-ACCOUNTS INCEPTION DATE 1 YEAR 5 YEAR 10 YEAR OR SINCE
INCEPTION*
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Putnam Asia Pacific Growth 5/1/95 (15.84%) na (3.17%)
- ----------------------------------------------------------------------------------------------
Putnam Diversified Income 9/15/93 5.88% na 5.94%
- ----------------------------------------------------------------------------------------------
The George Putnam Fund na na na na
- ----------------------------------------------------------------------------------------------
Putnam Global Asset Allocation 2/1/88 18.01% 13.01% 10.55%
- ----------------------------------------------------------------------------------------------
Putnam Global Growth 5/1/90 12.74% 13.64% 9.10%
- ----------------------------------------------------------------------------------------------
Putnam Growth and Income 2/1/88 22.42% 17.21% 15.01%
- ----------------------------------------------------------------------------------------------
Putnam Health Sciences na na na na
- ----------------------------------------------------------------------------------------------
Putnam High Yield 2/1/88 12.75% 11.01% 9.93%
- ----------------------------------------------------------------------------------------------
Putnam International Growth 1/2/97 na na 14.51%
- ----------------------------------------------------------------------------------------------
Putnam International Growth and Income 1/2/97 na na 17.76%
- ----------------------------------------------------------------------------------------------
Putnam International New Opportunities 1/2/97 na na (1.50%)
- ----------------------------------------------------------------------------------------------
Putnam Investors na na na na
- ----------------------------------------------------------------------------------------------
Putnam New Opportunities 6/20/94 21.57% na 21.18%
- ----------------------------------------------------------------------------------------------
Putnam New Value 1/2/97 na na 15.97%
- ----------------------------------------------------------------------------------------------
Putnam OTC & Emerging Growth na na na na
- ----------------------------------------------------------------------------------------------
Putnam U.S. Government and High Quality Bond 2/1/88 7.13% 6.12% 7.22%
- ----------------------------------------------------------------------------------------------
Putnam Utilities Growth and Income Bond 5/1/92 25.33% 13.66% 13.15%
- ----------------------------------------------------------------------------------------------
Putnam Vista 1/2/97 na na 21.51%
- ----------------------------------------------------------------------------------------------
Putnam Voyager 2/1/88 24.76% 17.59% 16.43%
- ----------------------------------------------------------------------------------------------
Putnam Money Market 2/1/88 3.76% 3.04% 4.05%
- ----------------------------------------------------------------------------------------------
</TABLE>
*Figures represent performance since inception for Sub-Accounts in existence for
less than 10 years, or performance for 10 years for Sub-Accounts in existence
for more than 10 years.
<PAGE>
8
At any time in the future, yields and total return may be higher or lower than
past yields and there can be no assurance that any historical results will
continue.
PERFORMANCE COMPARISONS
YIELD AND TOTAL RETURN. The total return and yield may also be used to
compare the performance of the Sub-Accounts against certain widely
acknowledged outside standards or indices for stock and bond market
performance. Index performance is not representative of the performance of
the Putnam Sub-Account to which it is compared and is not adjusted for
commissions and other costs. Portfolio holdings of the Putnam Sub-Account
will differ from those of the index to which it is compared. Performance
comparison indices include the following:
The Consumer Price Index, prepared by the U.S. Bureau of Labor Statistics, is
a commonly used measure of the rate of inflation. The index shows the average
change in the cost of selected consumer goods and services and does not
represent a return on an investment vehicle.
The Dow Jones Industrial Average is an unmanaged list of 30 common stocks
frequently used as a general measure of stock market performance. Its
performance figures reflect changes of market prices and reinvestment of all
distributions.
Lehman Brothers Corporate Bond Index is an unmanaged list of publicly issued,
fixed-rate, non-convertible investment-grade domestic corporate debt
securities frequently used as a general measure of the performance of
fixed-income securities. The average quality of bonds included in the index
may be higher than the average quality of those bonds in which a Fund may
customarily invest. The index does not include bonds in certain of the lower
rating classifications in which a Fund may invest. The performance figures
of the index reflect changes in market prices and reinvestment of all
interest payments.
<PAGE>
9
The Lehman Brothers Government Bond Index (the "SL Government Index") is a
measure of the market value of all public obligations of the U.S. Treasury;
all publicly issued debt of all agencies of the U.S. Government and all
quasi-federal corporations; and all corporate debt guaranteed by the U.S.
Government. Mortgage-backed securities, flower bonds and foreign targeted
issues are not included in the SL Government Index.
The Lehman Brothers Government/Corporate Bond Index (the "SL
Government/Corporate Index") is a measure of the market value of
approximately 5,300 bonds with a face value currently in excess of $1.3
trillion. To be included in the SL Government/Corporate Index, an issue must
have amounts outstanding in excess of $1 million, have at least one year to
maturity and be rated "Baa" or higher ("investment grade") by a nationally
recognized rating agency. The index does not include bonds in certain of the
lower-rating classifications in which a Fund may invest. Its performance
figures reflect changes in market prices and reinvestment of all interest
payments.
Morgan Stanley Capital International World Index is an unmanaged list of
approximately 1,450 equity securities listed on the stock exchanges of the
United States, Europe, Canada, Australia, New Zealand and the Far East, with
all values expressed in U.S. dollars. Performance figures reflect changes in
market prices and reinvestment of distributions net of withholding taxes.
The securities in the index change over time to maintain representativeness.
The NASDAQ-OTC Industrial Average (The "NASDAQ Index") is a market
value-weighted and unmanaged index showing the changes in the aggregate
market value of approximately 3,500 stocks relative to the base measure of
100.00 on February 5, 1971. The NASDAQ Index is composed entirely of common
stocks of companies traded over-the-counter and often through the National
Association of Securities Dealers Automated Quotations ("NASDAQ") system.
Only those over-the-counter stocks having only one market maker or traded on
exchanges are excluded. Its performance figures reflect changes of market
prices but do not reflect reinvestment of cash dividends.
Salomon Brothers Long-Term High-Grade Corporate Bond Index is an unmanaged
list of publicly traded corporate bonds having a rating of at least AA by
Standard & Poor's or Aa by Moody's and is frequently used as general measure
of the performance of fixed-income securities. The average quality of bonds
included in the index may be higher than the average quality of those bonds
in which a Fund may customarily invest. The index does not include bonds in
certain of the lower rating classifications in which a Fund may invest.
Performance figures for the index reflect changes of market prices and
reinvestment of all distributions.
The Salomon Brothers 7-10 Year Government Bond Index is an unmanaged list of
U.S. Government and government agency securities with maturities of 7 to 10
years. Performance figures for the index reflect changes of market prices
and reinvestment of all interest payments.
<PAGE>
10
The Standard & Poor's Composite Index of 500 stocks (the "S&P 500") is a
market value-weighted and unmanaged index showing changes in the aggregate
market value of 500 stocks relative to the base period 1941-43. The S&P 500
is composed almost entirely of common stocks of companies listed on the New
York Stock Exchange, although the common stocks of a few companies listed on
the American Stock Exchange or traded over-the-counter are included. The 500
companies represented include 400 industrial, 60 transportation and 40
financial services concerns. The S&P 500 represents about 80% of the market
value of all issues traded on the New York Stock Exchange. Its performance
figures reflect changes of market prices and reinvestment of all regular cash
dividends.
The Standard & Poor's 40 Utilities Index is unmanaged list of 40 utility
stocks. The Index assumes reinvestment of all distributions and reflects
changes in market prices but does not take into account brokerage commissions
or other fees. Putnam VT Utilities Growth and Income Fund's telephone and
electric utility stocks are generally held in the same proportion as the
telephone and electric stocks in the S&P Utilities Index. However, there are
some utility stocks held by the Fund that are not part of the Index.
<PAGE>
PART C
<PAGE>
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) All financial statements are included in Part A and Part B of the
Registration Statement.
(b) (1) Resolution of the Board of Directors of Hartford Life and
Annuity Insurance Company ("Hartford") authorizing the
establishment of the Separate Account.(1)
(2) Not applicable.
(3) (a) Principal Underwriter Agreement.(2)
(3) (b) Form of Dealer Agreement.(2)
(4) Form of Individual Flexible Premium Variable Annuity Contract.
(5) Form of Application.
(6) (a) Certificate of Incorporation of Hartford.(3)
(6) (b) Bylaws of Hartford.(1)
(7) Not applicable.
(8) Form of the participation agreement.(3)
(9) Opinion and Consent of Lynda Godkin, Senior Vice President,
General Counsel and Corporate Secretary.
- -----------------------------------
(1) Incorporated by reference to Post-Effective Amendment No. 2, to
the Registration Statement File No. 33-73572, dated May 1, 1995.
(2) Incorporated by reference to Post-Effective Amendment No. 3, to
the Registration Statement File No. 33-73572, dated April 29,
1996.
(3) Incorporated by reference to Post-Effective Amendment No. 8, to
the Registration Statement File No. 33-73572, filed on April 15,
1998.
<PAGE>
(10) Consent of Arthur Andersen LLP, Independent Public Accountants
will be provided by amendment.
(11) No financial statements are omitted.
(12) Not applicable.
(13) Not applicable.
(14) Not applicable.
(15) Copy of Power of Attorney.(3)
(16) Organizational Chart.
Item 25. Directors and Officers of the Depositor
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
NAME, AGE POSITION WITH HARTFORD
- ---------------------------------------------------------------------------
<S> <C>
Wendell J. Bossen Vice President
- ---------------------------------------------------------------------------
Gregory A. Boyko Senior Vice President, Director*
- ---------------------------------------------------------------------------
Peter W. Cummins Senior Vice President
- ---------------------------------------------------------------------------
Ann M. de Raismes Senior Vice President
- ---------------------------------------------------------------------------
James R. Dooley Vice President
- ---------------------------------------------------------------------------
Timothy M. Fitch Vice President
- ---------------------------------------------------------------------------
David T. Foy Senior Vice President and Treasurer
- ---------------------------------------------------------------------------
J. Richard Garrett Vice President and Assistant Treasurer
- ---------------------------------------------------------------------------
Donald J. Gillette Vice President
- ---------------------------------------------------------------------------
John P. Ginnetti Executive Vice President
- ---------------------------------------------------------------------------
William A. Godfrey, III Senior Vice President
- ---------------------------------------------------------------------------
Lynda Godkin Senior Vice President, General Counsel, and
Corporate Secretary, Director*
- ---------------------------------------------------------------------------
Lois W. Grady Senior Vice President
- ---------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
NAME, AGE POSITION WITH HARTFORD
- ---------------------------------------------------------------------------
<S> <C>
Christopher Graham Vice President
- ---------------------------------------------------------------------------
Mark E. Hunt Vice President
- ---------------------------------------------------------------------------
Stephen T. Joyce Vice President
- ---------------------------------------------------------------------------
Michael D. Keeler Vice President
- ---------------------------------------------------------------------------
Robert A. Kerzner Senior Vice President
- ---------------------------------------------------------------------------
David N. Levenson Vice President
- ---------------------------------------------------------------------------
William B. Malchodi, Jr. Vice President
- ---------------------------------------------------------------------------
Thomas M. Marra Executive Vice President and Director,
Investment Products Division, Director*
- ---------------------------------------------------------------------------
Steven L. Matthiesen Vice President
- ---------------------------------------------------------------------------
Michael C. O'Halloran Vice President
- ---------------------------------------------------------------------------
Daniel E. O'Sullivan Vice President
- ---------------------------------------------------------------------------
Craig D. Raymond Senior Vice President and Chief Actuary
- ---------------------------------------------------------------------------
David T. Schrandt Vice President
- ---------------------------------------------------------------------------
Lowndes A. Smith President and Chief Executive Officer,
Director*
- ---------------------------------------------------------------------------
Walter C. Welsh Senior Vice President
- ---------------------------------------------------------------------------
Raymond P. Welnicki Senior Vice President
- ---------------------------------------------------------------------------
Lizabeth H. Zlatkus Senior Vice President
- ---------------------------------------------------------------------------
David M. Znamierowski Senior Vice President, Director*
- ---------------------------------------------------------------------------
</TABLE>
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
*Denotes Board of Directors.
Item 26. Persons Controlled By or Under Common Control with the Depositor or
Registrant
Filed herewith as Exhibit 16.
3
<PAGE>
Item 27. Number of Contract Owners
As of November 30, 1998, there were 228,989 Contract Owners.
Item 28. Indemnification
Under Section 33-772 of the Connecticut General Statutes, unless
limited by its certificate of incorporation, the Registrant must
indemnify a director who was wholly successful, on the merits or
otherwise, in the defense of any proceeding to which he was a party
because he is or was a director of the corporation against reasonable
expenses incurred by him in connection with the proceeding.
The Registrant may indemnify an individual made a party to a proceeding
because he is or was a director against liability incurred in the proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Registrant, and, with respect to any
criminal proceeding, had no reason to believe his conduct was unlawful. Conn.
Gen. Stat. Section 33-771(a). Additionally, pursuant to Conn. Gen. Stat.
Section 33-776, the Registrant may indemnify officers and employees or agents
for liability incurred and for any expenses to which they becomes subject by
reason of being or having been an employees or officers of the Registrant.
Connecticut law does not prescribe standards for the indemnification of
officers, employees and agents and expressly states that their
indemnification may be broader than the right of indemnification granted to
directors.
The foregoing statements are specifically made subject to the detailed
provisions of Section 33-770 et seq.
Notwithstanding the fact that Connecticut law obligates the Registrant to
indemnify only a director that was successful on the merits in a suit, under
Article VIII, Section 2 of the Registrant's bylaws, the Registrant must
indemnify both directors and officers of the Registrant who are parties or
threatened to be parties to a legal proceeding by reason of his being or
having been a director or officer of the Registrant for any expenses if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the company, and with respect to criminal
proceedings, had no reason to believe his conduct was unlawful. Unless
otherwise mandated by a court, no indemnification shall be made if such
officer or director is adjudged to be liable for negligence or misconduct in
the performance of his duty to the Registrant.
Additionally, the directors and officers of Hartford and Hartford Securities
Distribution Company, Inc. ("HSD") are covered under a directors and officers
liability insurance policy issued to The Hartford Financial Services Group,
Inc. and its subsidiaries. Such
4
<PAGE>
policy will reimburse the Registrant for any payments that it shall make to
directors and officers pursuant to law and will, subject to certain
exclusions contained in the policy, further pay any other costs, charges and
expenses and settlements and judgments arising from any proceeding involving
any director or officer of the Registrant in his past or present capacity as
such, and for which he may be liable, except as to any liabilities arising
from acts that are deemed to be uninsurable.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
Item 29. Principal Underwriters
(a) HSD acts as principal underwriter for the following investment
companies:
Hartford Life Insurance Company - Separate Account One
Hartford Life Insurance Company - Separate Account Two
Hartford Life Insurance Company - Separate Account Two (DC Variable
Account I)
Hartford Life Insurance Company - Separate Account Two (DC Variable
Account II)
Hartford Life Insurance Company - Separate Account Two (QP Variable
Account)
Hartford Life Insurance Company - Separate Account Two (Variable Account
"A")
Hartford Life Insurance Company - Separate Account Two (NQ Variable
Account)
Hartford Life Insurance Company - Putnam Capital Manager Trust Separate
Account
Hartford Life Insurance Company - Separate Account Three
Hartford Life Insurance Company - Separate Account Five
Hartford Life and Annuity Insurance Company - Separate Account One
Hartford Life and Annuity Insurance Company - Putnam Capital Manager Trust
Separate Account Two
Hartford Life and Annuity Insurance Company - Separate Account Three
Hartford Life and Annuity Insurance Company - Separate Account Five
5
<PAGE>
Hartford Life and Annuity Insurance Company - Separate Account Six
American Maturity Life Insurance Company - Separate Account AMLVA
(b) Directors and Officers of HSD
Name and Principal Positions and Offices
Business Address With Underwriter
------------------ ---------------------
Lowndes A. Smith President and Chief Executive Officer,
Director
John P. Ginnetti Executive Vice President, Director
Thomas M. Marra Executive Vice President, Director
Peter W. Cummins Senior Vice President
Lynda Godkin Senior Vice President, General Counsel
and Corporate Secretary
Donald E. Waggaman, Jr. Treasurer
George R. Jay Controller
Unless otherwise indicated, the principal business address of each
the above individuals is P. O. Box 2999, Hartford, Connecticut
06104-2999.
Item 30. Location of Accounts and Records
All of the accounts, books, records or other documents required to be
kept by Section 31(a) of the Investment Company Act of 1940 and rules
thereunder are maintained by Hartford at 200 Hopmeadow Street,
Simsbury, Connecticut 06089.
Item 31. Management Services
All management contracts are discussed in Part A and Part B of this
Registration Statement.
Item 32. Undertakings
(a) The Registrant hereby undertakes to file a post-effective amendment
to this Registration Statement as frequently as is necessary to
ensure that the audited financial statements in the Registration
Statement are never more than 16 months old so long as payments
under the variable annuity Contracts may be accepted.
(b) The Registrant hereby undertakes to include either (1) as part of any
application to purchase a Contract offered by the Prospectus, a space
that an
6
<PAGE>
applicant can check to request a Statement of Additional
Information, or (2) a post card or similar written communication
affixed to or included in the Prospectus that the applicant can
remove to send for a Statement of Additional Information.
(c) The Registrant hereby undertakes to deliver any Statement of
Additional Information and any financial statements required to be
made available under this Form promptly upon written or oral request.
(d) Hartford hereby represents that the aggregate fees and charges under
the Contract are reasonable in relation to the services rendered, the
expenses expected to be incurred, and the risks assumed by Hartford.
The Registrant is relying on the no-action letter issued by the
Division of Investment Management to American Counsel of Life
Insurance, Ref. No. IP-6-88, November 28, 1988. Registrant has
complied with conditions one through four of the no-action letter.
7
<PAGE>
SIGNATURES
----------
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has caused this Registration Statement to be signed on
its behalf, in the City of Hartford, and State of Connecticut on this 21st
day of December, 1998.
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT TWO
(Registrant)
By: Peter W. Cummins *By: /s/ Marianne O'Doherty
-------------------------------------------- -----------------------
Peter W. Cummins, Senior Vice President* Marianne O'Doherty
Attorney-in-Fact
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
(Depositor)
By: Peter W. Cummins
--------------------------------------------
Peter W. Cummins, Senior Vice President*
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons and in the capacities and on
the dates indicated.
Gregory A. Boyko, Senior Vice President,
Director *
Lynda Godkin, Senior Vice President,
General Counsel, and Corporate Secretary, *By: /s/ Marianne O'Doherty
Director * ----------------------
Thomas M. Marra, Executive Vice Marianne O'Doherty
President, Director* Attorney-in-Fact
Lowndes A. Smith, President and
Chief Executive Officer, Director * Dated: December 21, 1998
David M. Znamierowski, Senior Vice President,
Director*
<PAGE>
EXHIBIT INDEX
(4) Form of Individual Flexible Premium Variable Annuity Contract.
(5) Form of Application - Request form.
(9) Opinion and Consent of Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary.
(16) Organizational Chart.
<PAGE>
INDIVIDUAL FLEXIBLE PREMIUM
VARIABLE ANNUITY CONTRACT
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Hartford, Connecticut 06104-2999
(a stock life insurance company, herein called the "Company")
We will pay the first of a series of Annuity payments to the Payee as of the
Annuity Commencement Date, if You, the Annuitant, or the Joint Annuitant, if
any, are living. The manner in which the dollar amount of annuity payments
is determined is described in this contract.
This contract is issued in consideration of the payment of the initial
premium payment.
This contract is subject to the laws of the jurisdiction where it is
delivered.
The Contract Specifications on Page 3 and the conditions and provisions on
this and the following pages are part of the contract.
RIGHT TO EXAMINE CONTRACT
We want You to be satisfied with the contract You have purchased. We urge
You to closely examine its provisions. If for any reason You are not
satisfied with Your purchase, You may cancel the contract by returning the
contract within ten days after You receive it. A written request for
cancellation must accompany the contract. In such event, We will pay You an
amount equal to the sum of (i) the difference between the premiums paid and
the amounts allocated to any Account under the contract and (ii) the Contract
Value on the date of surrender. You bear only the investment risk during the
period prior to Our receipt of request for cancellation.
Signed for the Company
/s/ Lynda Godkin /s/ Lowndes A. Smith
Lynda Godkin, SECRETARY Lowndes A. Smith, PRESIDENT
PREMIUM PAYMENTS ARE FLEXIBLE AS DESCRIBED HEREIN.
NONPARTICIPATING
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SUB-ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED
DOLLAR AMOUNT. DETAILS OF THE VARIABLE PROVISIONS ARE DESCRIBED UNDER
VALUATION PROVISIONS, PAGES 11 AND 12.
[LOGO]
LA-VA99 PRINTED IN U.S.A.
R389R0.FRM
<PAGE>
TABLE OF CONTENTS
PAGE
Contract Specifications 3
Definition of Certain Terms 4
Premium Payment Provisions 7
Transfers Between Accounts Provisions 7
Dollar Cost Averaging Provisions 8
Contract Control Provisions 8
General Provisions 9
Valuation Provisions 11
Surrender Provisions 12
Distribution at Time of Death Provisions 14
Calculation of the Death Benefit Provisions 14
Settlement Provisions 17
Annuity Tables 20
LA-VA99 Page 2 PRINTED IN U.S.A.
R390R0.FRM
<PAGE>
CONTRACT SPECIFICATIONS
<TABLE>
<S> <C> <C> <C>
CONTRACT NUMBER [SPECIMEN] CONTRACT ISSUE DATE [FEBRUARY 8, 1999]
NAME OF ANNUITANT [JAMES SCOTT] ANNUITY COMMENCEMENT DATE [JANUARY 1, 2029]
AGE OF ANNUITANT [35] INITIAL PREMIUM PAYMENT [$1,000]
SEX OF ANNUITANT [MALE] MINIMUM SUBSEQUENT PAYMENT $500
CONTINGENT ANNUITANT [PAUL SCOTT] MINIMUM FIXED ACCOUNT INTEREST RATE 3%
DESIGNATED BENEFICIARY [ANN SCOTT] (APPLIES TO ACCUMULATION PERIOD ONLY)
CONTRACT OWNER [JAMES SCOTT]
</TABLE>
DESCRIPTION OF BENEFITS
INDIVIDUAL FLEXIBLE PREMIUM VARIABLE ANNUITY CONTRACT
<TABLE>
<S> <C>
SEPARATE ACCOUNT: [HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT TWO]
ANNUAL WITHDRAWAL AMOUNT CONTRACT YEARS 1-7
------------------
15% OF PREMIUM PAYMENTS ON A
NONCUMULATIVE BASIS
AFTER CONTRACT YEAR 7
------------------
100% OF THE CONTRACT VALUE REDUCED BY THE
TOTAL OF ANY PREMIUM PAYMENTS MADE
DURING THE 7 YEARS PRIOR TO WITHDRAWAL;
AND
15% OF PREMIUM PAYMENTS MADE DURING THE 7
YEARS PRIOR TO WITHDRAWAL ON A
NONCUMULATIVE BASIS.
ANNUAL MAINTENANCE FEE: $0 IF THE CONTRACT VALUE IS $50,000 OR MORE
ON THE CONTRACT ANNIVERSARY.
$30 IF THE CONTRACT VALUE IS LESS THAN
$50,000 ON THE CONTRACT ANNIVERSARY.
MORTALITY AND EXPENSE RISK CHARGE: [1.35%] PER ANNUM OF THE DAILY SUB-ACCOUNTS
VALUE.
ADMINISTRATION CHARGE: [ .15% ] PER ANNUM OF THE DAILY SUB-ACCOUNTS
VALUE.
OPTIONAL DEATH BENEFIT CHARGE: [ .25% ] PER ANNUM OF THE DAILY SUB-ACCOUNTS
VALUE.
</TABLE>
LA-VA99-3 Page 3 PRINTED IN U.S.A.
<PAGE>
CONTINGENT DEFERRED SALES CHARGES:
SUBJECT TO THE ANNUAL WITHDRAWAL AMOUNT, SURRENDERS OF CONTRACT VALUES
ATTRIBUTABLE TO PREMIUM PAYMENTS MAY BE MADE SUBJECT TO A CONTINGENT DEFERRED
SALES CHARGE ("CHARGE"). THE LENGTH OF TIME FROM RECEIPT OF THE PREMIUM
PAYMENT TO THE TIME OF SURRENDER DETERMINES THE CHARGE.
DURING THE FIRST SEVEN CONTRACT YEARS, ALL SURRENDERS WILL BE FIRST FROM
PREMIUM PAYMENTS AND THEN FROM EARNINGS. IF AN AMOUNT EQUAL TO ALL PREMIUM
PAYMENTS HAS BEEN SURRENDERED, A CHARGE WILL NOT BE ASSESSED AGAINST THE
SURRENDER OF THE REMAINING CONTRACT VALUE.
AFTER THE SEVENTH CONTRACT YEAR, ALL SURRENDERS WILL FIRST BE FROM EARNINGS
AND THEN FROM PREMIUM PAYMENTS. A CHARGE WILL NOT BE ASSESSED AGAINST THE
SURRENDER OF EARNINGS. IF AN AMOUNT EQUAL TO ALL EARNINGS HAS BEEN
SURRENDERED, A CHARGE WILL NOT BE ASSESSED AGAINST PREMIUM PAYMENTS RECEIVED
MORE THAN SEVEN YEARS PRIOR TO SURRENDER, BUT WILL BE ASSESSED AGAINST
PREMIUM PAYMENTS RECEIVED LESS THAN SEVEN YEARS PRIOR TO SURRENDER. FOR THIS
PURPOSE, PREMIUM PAYMENTS WILL BE DEEMED TO BE SURRENDERED IN THE ORDER IN
WHICH THEY WERE RECEIVED.
THE CHARGE IS A PERCENTAGE OF THE AMOUNT SURRENDERED (NOT TO EXCEED THE
AGGREGATE AMOUNT OF THE PREMIUM PAYMENTS MADE) AND EQUALS:
<TABLE>
<CAPTION>
LENGTH OF TIME FROM PREMIUM PAYMENTS
CHARGE (NUMBER OF YEARS)
<S> <C>
7% 1
6% 2
6% 3
5% 4
4% 5
3% 6
2% 7
0% 8 AND THEREAFTER
</TABLE>
NO CONTINGENT DEFERRED SALES CHARGE WILL BE ASSESSED IF:
- THE CONTRACT TERMINATES DUE TO THE DEATH OF THE ANNUITANT OR CONTRACT OWNER
(AS APPLICABLE),
- ELIGIBILITY REQUIREMENTS ARE MET FOR THE WAIVER OF SURRENDER CHARGE,
- ONLY THE ANNUAL WITHDRAWAL AMOUNT IS TAKEN, OR
- AN ANNUITY OPTION IS ELECTED. (ANY SURRENDER OUT OF OPTION 6 MAY BE
SUBJECT TO CONTINGENT DEFERRED SALES CHARGES.)
VA99-3A Page 3 (Continued) PRINTED IN U.S.A.
R547R0.FRM
<PAGE>
DEFINITION OF ACCOUNT - Any of the Sub-Accounts or the Fixed Account(s).
CERTAIN TERMS
ACCUMULATION UNIT - An accounting unit of measure used to
calculate the value of a Sub-Account of this contract
before annuity payments begin.
ADMINISTRATIVE OFFICE OF THE COMPANY - Currently located
at 200 Hopmeadow St., Simsbury, CT 06089. All
correspondence concerning this contract should be sent to
our mailing address: Hartford Life Individual Annuity
Services, P.O. Box 5085, Hartford, CT 06102-5085.
ANNIVERSARY VALUE - The value equal to the Contract Value
as of a Contract Anniversary, increased by the dollar
amount of any premium payments made since that anniversary
and reduced by the dollar amount of any partial surrenders
since that anniversary. If the Contract Anniversary falls
on a non-Valuation Day (weekend or holiday), then the next
Valuation Day will be the Contract Anniversary for that
Contract Year.
ANNUAL WITHDRAWAL AMOUNT - The amount that can be withdrawn
in any Contract Year prior to incurring surrender charges.
ANNUAL MAINTENANCE FEE - An amount which, depending on the
amount of the Contract Value, may be deducted from the
value of the contract on each Contract Anniversary or upon
full surrender of this contract. The Annual Maintenance
Fee is shown on Page 3.
ANNUITANT - The person on whose life this contract is
issued. The Annuitant may not be changed. Also, see
Contingent Annuitant and Joint Annuitant.
ANNUITY - A contract issued by an insurance company that
provides, in consideration of premium payments, a series
of income payments. Your contract is a deferred Annuity
contract in which premium payments, less any partial
surrenders, accumulate until a full surrender is taken or
until the Annuity Commencement Date. Annuity payments
under Your contract will begin as of the Annuity
Commencement Date in accordance with the payment option
elected.
ANNUITY CALCULATION DATE - The date on which the first
annuity payment will be calculated. It will be no more
than five Valuation Days prior to the Annuity Commencement
Date.
ANNUITY COMMENCEMENT DATE - The date as of which Annuity
payments are to begin as described under Settlement
Provisions in this contract.
ANNUITY PAYMENT FREQUENCY - The frequency with which
Annuity payments will be made. The frequencies available
are monthly, quarterly, semi-annual, and annual.
ANNUITY UNIT - An accounting unit of measure used to
calculate the value of annuity payments under a variable
Annuity option.
ANNUITY UNIT FACTOR - A factor that neutralizes the
Assumed Investment Return ("AIR") when determining the
Annuity Unit Value. When the AIR is 3%, the daily factor
is 0.999919. When the AIR is 5%, the daily factor is
0.999866. And when the AIR is 6%, the daily factor is
0.999840.
VA99-4/5 Page 4 PRINTED IN U.S.A.
R548R0.FRM
<PAGE>
DEFINITION OF ASSUMED INVESTMENT RETURN ("AIR") - The investment return
CERTAIN TERMS upon which the variable Annuity payments in this contract
(CONTINUED) will be based. The annual rates available are 3%, 5%, and
6%. You may select one of these rates prior to the
Annuity Commencement Date.
BENEFICIARY - The person(s) entitled to receive benefits
as per the terms of the contract in the event of the death
of the Contract Owner or Annuitant, as applicable.
COMMUTED VALUE - The present value of the remaining
guaranteed Annuity Payments, under Option Six (Payment for
a Period Certain). The present value is computed using the
AIR for the Contract and the Annuity Unit value(s)
calculated as of the date that We receive a fully completed
request for surrender and, in the event of the Annuitant's
death, Due Proof of Death of the Annuitant.
CONTINGENT ANNUITANT - The person You designate who, upon
the Annuitant's death, prior to the Annuity Commencement
Date, becomes the Annuitant.
CONTRACT ANNIVERSARY - An anniversary of the Contract Issue
Date.
CONTRACT ISSUE DATE - The date as of which an Account is
established for You by Us. The Contract Issue Date is
shown on Page 3.
CONTRACT OWNER(s) - The owner(s) or holder of the contract.
CONTRACT VALUE - The aggregate value of the Sub-Accounts
and the Fixed Account(s) on any Valuation Day.
CONTRACT YEAR - A period of 12 months commencing with the
Contract Issue Date or any other anniversary thereafter.
DEATH BENEFIT - The amount that We will pay upon the death
of the Contract Owner or the Annuitant, as applicable.
DCA PROGRAM FIXED ACCOUNT(S) - Account(s) established to
be used for the Dollar Cost Averaging program(s). It is
part of the Our General Account.
DOLLAR COST AVERAGING ("DCA") - Systematic transfers from
one Account to any other available Accounts.
DUE PROOF OF DEATH - A certified death certificate, an
order of a court of competent jurisdiction, or any other
proof acceptable to Us.
FIXED ACCOUNT - Part of Our General Account to which all
or a part of the Contract Value may be allocated. Any
transfers, deductions or surrenders from the Fixed Account
will be accounted for on a first in, first out basis.
FUNDS - The securities which underlie Your Sub-Accounts.
VA99-4/5 Page 5 PRINTED IN U.S.A.
R549R0.FRM
<PAGE>
DEFINITION OF GENERAL ACCOUNT - All of Our assets other than those
CERTAIN TERMS allocated to the Separate Account.
(CONTINUED)
JOINT ANNUITANT - Upon annuitization, a person other than
the Annuitant on whose continuation of life Annuity
payments may be made. The contract will have a Joint
Annuitant only if the Annuity settlement option selected
provides for a survivor. The Joint Annuitant may not be
changed.
MAXIMUM ANNIVERSARY VALUE - The highest attained
Anniversary Value prior to the earlier of the date of death
or the decedent's 81st birthday.
NET ASSET VALUE PER SHARE - The value per share of any Fund
on any Valuation Day. This amount will never be less than
that required by the Securities and Exchange Commission.
PAYEE - The person, designated by You, to whom Annuity
payments will be made.
PREMIUM TAX - The amount of tax, if any, charged by a
federal, state, or other governmental entity on a
pro-rata basis from the Accounts at the time We pay the tax
to the applicable taxing authorities, at the time the
contract is surrendered or on the Annuity Commencement
Date.
SEPARATE ACCOUNT - An Account that We established to
separate the assets funding the variable benefits for
this type of contract from Our other assets. The assets
in the Separate Account are not chargeable with liabilities
arising out of any other business We may conduct. The name
of the Separate Account is shown on Page 3.
SUB-ACCOUNT - The subdivisions of the Separate Account
which are used to allocate Your Contract Value among the
corresponding Funds.
SURRENDER VALUE - The Contract Value prior to the Annuity
Commencement Date, less any applicable contingent deferred
sales charges, Premium Taxes, and/or Annual Maintenance
Fee.
VALUATION DAY - Every day the New York Stock Exchange is
open for trading. The value of the Separate Account is
determined at the close of the New York Stock Exchange
(generally 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD - The period of time between the close of
business on successive Valuation Days.
WE, US, OUR - The company referred to on the first page of
this contract.
YOU, YOUR - The Contract Owner(s).
VA99-6/7 Page 6 PRINTED IN U.S.A.
R550R0.FRM
<PAGE>
PREMIUM PREMIUM PAYMENTS
PAYMENT Premium payments are payable at the Administrative Office of
PROVISIONS the Company. Payments may be made by check or by any other
method that We deem acceptable.
The initial premium payment is shown on Page 3. This is a
flexible premium annuity. We may accept additional payments.
The additional payments must be at least equal to the minimum
subsequent premium payment shown on Page 3.
If you are exchanging from one of Our existing contracts, You
may be eligible for certain credits applied to the amount
exchanged. Eligibility for such credits will be extended to
all members of any class of business We designate.
ALLOCATION OF PREMIUM PAYMENTS
Premium payments will be allocated to each Account according
to Your instructions subject to Our minimum amount(s) then in
effect. Any subsequent premium payments will be allocated to
Accounts in accordance with the most recent premium allocation
instructions that We received.
TRANSFERS TRANSFERS BETWEEN SUB-ACCOUNTS
BETWEEN You may transfer Contract Values held in the Sub-Accounts into
ACCOUNTS other Sub-Accounts. We reserve the right to limit the number
PROVISIONS of transfers to no more than 12 per Contract Year with no two
transfers being made on consecutive Valuation Days.
The right to make transfers between Sub-Accounts is subject to
modification if We determine, in Our opinion, that exercising
that right by one or more Contract Owners is, or would be, to
the disadvantage of other Contract Owners. Any modification
could be applied to transfers to or from some or all of the
Sub-Accounts and could include, but not be limited to:
a) the requirement of a minimum time period between each
transfer;
b) not accepting transfer requests of an agent acting under a
power of attorney or on behalf of more than one Contract
Owner, or
c) limiting the dollar amount that may be transferred between
the Sub-Accounts by a Contract Owner at any one time.
Such restrictions may be applied in any manner reasonably
designed to prevent any use of the transfer right which is
considered by Us to be to the disadvantage of other Contract
Owners.
VA99-6/7 Page 7 PRINTED IN U.S.A.
R551R0.FRM
<PAGE>
TRANSFERS TRANSFERS BETWEEN THE FIXED ACCOUNT AND THE SUB-ACCOUNT(S)
BETWEEN The maximum amount transferable from the Fixed Account during
ACCOUNTS any Contract Year is the greater of:
PROVISIONS a) 30% of the Fixed Account value as of the last Contract
(CONTINUED) Anniversary, or
b) the greatest dollar value of any prior transfer from the
Fixed Account. This limitation does not apply to Dollar Cost
Averaging.
However, if any interest rate is renewed at a rate at least
one percentage point below the previous rate, You may
transfer a dollar amount up to 100% of the Fixed Account
dollar value receiving that reduced rate within 60 days of
notification of the interest rate decrease. We reserve the
right to defer transfers from the Fixed Account for up to
six months from the date of request.
Transfers may not be made from the Sub-Accounts into the
Fixed Account for the six month period following any
transfer from the Fixed Account into the other Sub-Accounts.
Additionally transfers may not be made into the DCA Program
Fixed Account(s) from either the Sub-Accounts or the Fixed
Account(s).
DOLLAR COST DOLLAR COST AVERAGING
AVERAGING From time to time, We may offer and You may enroll in a Dollar
PROVISIONS Cost Averaging Program (the "Program"). Prior to enrollment,
you may obtain the available account(s), duration(s), or
credited rates.
You may terminate participation in the Program at any time
by calling or writing Us. In such event, the remaining
balance in the DCA Fixed Account will be transferred to the
Account(s) designated by You.
CONTRACT ANNUITANT, CONTINGENT ANNUITANT, CONTRACT OWNER
CONTROL The Annuitant may not be changed.
PROVISIONS
The designations of Contract Owner and Contingent Annuitant
will remain in effect until You change them. The designation
of the Contract Owner may be changed during the lifetime of
the Annuitant by written notice to Us. The designation of
the Contingent Annuitant may be changed at any time during
the lifetime of the Annuitant and prior to the Annuity
Commencement Date by written notice to Us. If no Contingent
Annuitant has been named and the Contract Owner/Annuitant's
spouse is the Beneficiary, the Contract Owner/Annuitant's
spouse will be presumed to be the Contingent Annuitant.
OWNERSHIP
You have the sole power to exercise all the rights, options,
and privileges granted by this contract or permitted by Us
and to agree with Us to any change in or amendment to the
contract. Your rights will be subject to the rights of any
assignee of record with Us and of any irrevocably designated
Beneficiary. In the case of joint Contract Owners, each
Contract Owner alone may exercise all rights, options, and
privileges, except with respect to the surrender, partial
surrender, selection of an Annuity option, and change of
ownership.
VA99-8/9 Page 8 PRINTED IN U.S.A.
R552R0.FRM
<PAGE>
CONTRACT BENEFICIARY
CONTROLS The designated Beneficiary will remain in effect until You
PROVISIONS change it. The designated Beneficiary may be changed during the
(CONTINUED) lifetime of the Annuitant by written notice to Us at the
Administrative Office of the Company. If the designated
Beneficiary has been designated irrevocably, the designation
cannot be changed or revoked without such Beneficiary's written
consent. Upon receipt of written notice and consent, if
required by Us, the new designation will take effect as of the
date the notice is signed, whether or not the Annuitant or
Contract Owner is alive at the time of receipt. Any payments
made or other action taken by Us before the receipt of the
notice will not be subject to the requested change.
GENERAL THE CONTRACT
PROVISIONS This contract and the endorsements or riders, if any,
constitute the entire contract.
CONTRACT MODIFICATION
No modification of this contract will be made without the
signature of Our President, a Senior Vice President, Executive
Vice President, Vice President or Assistant Vice President. No
modification will affect the amount or term of any Annuity
begun prior to the modification unless it is required to
conform the contract to any federal or state statute. No
modification will affect the method by which the Contract Value
will be determined.
FUND MODIFICATION
We reserve the right, subject to any applicable law, to make
certain changes, including the right to add, eliminate or
substitute any investment options offered under the Contract.
MINIMUM VALUE STATEMENT
Any Surrender Values, death benefits, or settlement provisions
available under this contract equal or exceed those required by
the state in which the the contract is delivered.
NON-PARTICIPATION
This contract does not share in Our surplus earnings. That
portion of the Separate Account assets equal to the reserves
and other contract liabilities will not be chargeable with
liabilities arising out of any other business We may conduct.
MISSTATEMENT OF AGE AND SEX
If the age or sex of the Annuitant has been misstated, the
amount of the Annuity payable by Us will be adjusted based on
the correct information without changing the date of the first
payment. Any underpayments by Us will be made up immediately
and any overpayments will be charged against future amounts
becoming payable.
If the age of the Annuitant or Contract Owner has been
misstated, the amount of any death benefit payable will be
determined based upon the correct age of the Annuitant or
Contract Owner.
INCONTESTABILITY
We cannot contest this Contract.
VA99-8/9 Page 9 PRINTED IN U.S.A.
R553R0.FRM
<PAGE>
GENERAL REPORTS TO THE CONTRACT OWNER
PROVISIONS You will be sent copies of any shareholder reports of the Funds
(CONTINUED) and of any other notices, reports or documents required by law
to be delivered to You. At least annually, a statement of the
Contract Value will be sent to the You.
VOTING RIGHTS
We will notify You of any Fund shareholder's meetings at
which the shares held for Your account may be voted. We
will send proxy materials and instructions for You to vote
the shares held for Your account. We will arrange for the
handling and tallying of proxies received from Contract
Owners. We will vote the Fund shares held by Us in
accordance with the instructions received from Contract
Owners. You may attend any meeting, where shares held for
Your benefit, will be voted.
In the event that You give no instructions or leave the
manner of voting discretionary, we will vote such shares of
the appropriate fund in the same proportion as shares of
that Fund for which instructions have been received. Also,
We will vote the Fund shares in this proportionate manner
which are held by Us for Our own account. After Annuity
payments begin, the number of votes will decrease.
CHANGE IN THE OPERATION OF THE SEPARATE ACCOUNT
At Our election and subject to any necessary vote by persons
having the right to give instructions on the voting of the Fund
shares held by the Sub-Accounts, the Separate Account may be
operated as a management company under the Investment Company
Act of 1940 or any other form permitted by law, may be
deregistered under the Investment Company Act of 1940 in the
event registration is no longer required, or may be combined
with one or more Separate Accounts.
PROOF OF SURVIVAL
The payment of any Annuity benefit will be subject to evidence
that the Annuitant is alive on the date such payment is
otherwise due.
TAX QUALIFICATION
This Contract is intended to qualify as an Annuity contract for
federal income tax purposes. To that end, the provisions of
this contract are to be interpreted to ensure and maintain such
tax qualification, notwithstanding any other provisions to the
contrary. We reserve the right to amend this Contract to
conform to any changes in the tax qualification requirements
under the applicable provisions of the Internal Revenue Code.
VA99-10/11 Page 10 PRINTED IN U.S.A.
R554R0.FRM
<PAGE>
VALUATION NET PREMIUM PAYMENTS
PROVISIONS The net premium payment is equal to the premium payment minus
any applicable Premium Taxes. The net premium payment is
applied to purchase Fixed Account values or Sub-Account
Accumulation Units with respect to the Sub-Account(s) that You
have selected.
The number of Accumulation Units credited to each
Sub-Account is determined by dividing the Net Premium
payment allocated to a Sub-Account by the dollar value of
one Accumulation Unit for such Sub-Account. This is
computed in compliance with Securities and Exchange
Commission regulations. The number of Accumulation Units
will not be affected by any subsequent change in the value
of such Accumulation Units. The Accumulation Unit value in
any Sub-Account may increase or decrease from day to day as
described below.
We will determine the value of the Fixed Account(s) by
crediting interest to amounts allocated to the Fixed
Account(s). The Minimum Fixed Account Interest Rate is the
rate shown on Page 3, compounded annually. At Our
discretion, We may credit interest rates greater than the
Minimum Fixed Account Interest Rate. We may change the rate
or rates credited in accordance with applicable law.
NET INVESTMENT FACTOR
The net investment factor for each of the Sub-accounts is equal
to:
a) the Net Asset Value per Share of the corresponding Fund at
the end of the Valuation Period (plus the per share amount
of any unpaid dividends or capital gains by that Fund);
divided by
b) the Net Asset Value per Share of the corresponding Fund at
the beginning of the Valuation Period; minus
c) the mortality and expense risk charge and any applicable
administration charge, shown on Page 3 adjusted for the
number of days in the Valuation Period; minus
d) the Optional Death Benefit Charge, if applicable, shown on
Page 3, adjusted for the number of days in the Valuation
Period.
The General Account net investment factor is guaranteed to be
at least equal to the minimum Fixed Account Interest Rate shown
on Page 3.
ACCUMULATION UNIT VALUE
The value of an Accumulation Unit for each Sub-Account of the
Separate Account will vary to reflect the investment experience
of the applicable Funds. It will be determined by multiplying:
a) the value of the Accumulation Unit for that Sub-Account as
of the preceding Valuation Day by
b) the Net Investment Factor for that Sub-Account for the
Valuation Day for which the Accumulation Unit value is being
calculated.
The value of the Sub-Account as of each Valuation Day is then
determined by multiplying:
a) the number of Accumulation Units in that Sub-Account by
b) the Accumulation Unit value as of that Valuation Day.
VA99-10/11 Page 11 PRINTED IN U.S.A.
R555R0.FRM
<PAGE>
VALUATION ANNUITY UNIT VALUE
PROVISIONS The value of an Annuity Unit for each Sub-Account of the
(CONTINUED) Separate Account will vary to reflect the investment experience
of the applicable Funds. It will be determined by multiplying:
a) the value of the Annuity Unit for that Sub-Account as of the
preceding Valuation Day by;
b) the Net Investment Factor for that Sub-Account for the
Valuation Day for which the Annuity Unit value is being
calculated; and by
c) the Annuity Unit Factor.
ANNUAL MAINTENANCE FEE
During each year that this contract is in force prior to the
Annuity Commencement Date, the Annual Maintenance Fee, if
applicable, will be deducted on the Contract Anniversary.
The fee will be charged against the Contract Value by
reducing the Fixed Account value, and with respect to the
Sub-Accounts, the number of Accumulation Units held as of
that date. The fee will be charged on a pro-rata basis with
respect to each active Account. The number of Accumulation
Units deducted from each Sub-Account is determined by
dividing the pro-rata portion of the Annual Maintenance Fee
by the value of an Accumulation Unit for the applicable
Sub-Account.
SURRENDER FULL SURRENDER PRIOR TO THE ANNUITY COMMENCEMENT DATE
PROVISIONS At any time prior to the Annuity Commencement Date, You have
the right to terminate the contract by submitting a written
request to Us at the Administrative Office of the Company. In
such event, the Surrender Value of the contract may be taken
in the form of a cash settlement.
The Surrender Value of the contract is equal to the Contract
Value less:
a) any applicable Premium Taxes not previously deducted;
b) the Annual Maintenance Fee as specified on Page 3; and
c) any applicable contingent deferred sales charge shown on
Page 3.
PARTIAL SURRENDERS PRIOR TO THE ANNUITY COMMENCEMENT DATE
You may request, in writing or other means acceptable to Us,
a partial surrender of Contract Values at any time prior to
the Annuity Commencement Date provided the Contract Value
remaining after the surrender is at least equal to Our
minimum amount rules then in effect. If the remaining
Contract Value following such surrender is less than Our
minimum amount rules, We may terminate the contract and pay
the Surrender Value.
The contingent deferred sales charge will be assessed
against any Contract Values surrendered as described on Page
3. However, on a noncumulative basis, You may make partial
surrenders during any Contract Year, up to the Annual
Withdrawal Amount shown on Page 3 and the contingent
deferred sales charge will not be assessed against such
amounts. Surrender of Contract Values in excess of the
Withdrawal Amount and additional surrenders made in any
Contract Year will be subject to the contingent deferred
sales charge, as described on Page 3, if applicable.
Generally, for federal tax purposes, any surrenders will be
deemed to be first from earnings, to the extent that they
exist, and then from the premium payments.
A99-12/13 Page 12 PRINTED IN U.S.A.
R556R0.FRM
<PAGE>
SURRENDER WAIVER OF SURRENDER CHARGE
PROVISIONS We will waive any contingent deferred sales charge applicable
(CONTINUED) to a partial or full surrender of the Contract Value if the
covered person has met the requirements of Eligible Confinement
as described below. A covered person is:
a) the current Contract Owner if the Contract Owner has been
Contract Owner continuously since the date of issue and if
not confined at the time the contract was purchased; and
b) the Annuitant, if not confined at the time the contract was
purchased.
This benefit will be provided if the Contract Owner provides
written proof of confinement which is satisfactory to Us and
requests the partial surrender or full surrender of Account
Value within 91 days of the last day of confinement.
Confinement must be at the recommendation of a physician for
medically necessary reasons, for at least 180 consecutive
calendar days, to:
a) a hospital recognized as a general hospital by the proper
authority of the state in which it is located; or
b) a hospital recognized as a general hospital by the Joint
Commission on the Accreditation of Hospitals; or
c) a facility certified as a hospital by Medicare; or
d) a nursing home licensed by the state in which it is located
and which has a registered nurse on duty 24 hours a day; or
e) a facility certified by Medicare as a long term care
facility.
SURRENDER AFTER THE ANNUITY COMMENCEMENT DATE
This contract may only be surrendered for its Commuted Value,
less any applicable contingent deferred sales charge, after the
commencement of variable Annuity payments under option Six
(Payment for a Period Certain) which is described in the
Settlement Provisions.
PAYMENT ON SURRENDER - DEFERRAL OF PAYMENT
Payment on any request for surrender will be made as soon as
possible and with respect to Contract Values in the
Sub-Accounts, within seven days after the written request is
received by Us in good order. However, such payment may be
subject to postponement:
a) for any period during which the New York Stock Exchange is
closed or during which trading on the New York Stock
Exchange is restricted;
b) for any period during which an emergency exists as a result
of which (i) disposal of the securities held in the
Sub-Accounts is not reasonably practicable, or (ii) it is
not reasonably practicable for the value of the net assets
of the Separate Account to be fairly determined; and
c) for such other periods as the Securities and Exchange
Commission may, by order, permit for the protection of the
Contract Owners. The conditions under which trading will be
deemed to be restricted or any emergency will be deemed to
exist will be determined by rules and regulations of the
Securities and Exchange Commission.
We may defer payment of any amounts from the Fixed Account
for up to six months from the date of the request to
surrender. If We defer payment for more than 30 days, We
will pay interest of at least 3% per annum on the amount
deferred.
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<PAGE>
DISTRIBUTION DEATH BEFORE THE ANNUITY COMMENCEMENT DATE
AT TIME OF If the Contract Owner dies, and:
DEATH a) the joint Contract Owner is living, the joint Contract
PROVISIONS Owner will become the Beneficiary. In this case, the
rights of the designated Beneficiary are voided.
b) there is no surviving joint Contract Owner, the designated
Beneficiary will be the Beneficiary.
If the Annuitant dies, and:
a) is also the Contract Owner, the designated Beneficiary will
be the Beneficiary.
b) both the Contract Owner and the Contingent Annuitant are
living, the Contingent Annuitant will become the Annuitant.
The Contract will continue.
c) the Contract Owner is living, and there is no Contingent
Annuitant or the Contingent Annuitant is not living, the
Contract Owner will be the Beneficiary. In this case, the
rights of the designated Beneficiary are voided.
d) the Contract is owned by a corporation or other entity, the
Contract Owner will be the Beneficiary. In this case, the
rights of the designated Beneficiary are voided.
DEATH ON OR AFTER THE ANNUITY COMMENCEMENT DATE
If the Contract Owner dies, and the Annuitant is living, the
designated Beneficiary will become the Contract Owner.
If the Annuitant dies, the Contract Owner will be the
Beneficiary. If a Death Benefit is triggered, the rights of
the designated Beneficiary are voided. If the Annuitant who
is also the Contract Owner dies, the designated Beneficiary
will be the Beneficiary.
The Death Benefit will be calculated as of the date We receive
written notification of Due Proof of Death as in the manner
described in the settlement option then in effect.
CALCULATION CALCULATION OF THE DEATH BENEFIT
OF THE DEATH If a Death Benefit is triggered before the Annuity Commencement
BENEFIT Date, any Death Benefit payable will be calculated as of the
PROVISIONS date We receive written notification of Due Proof of Death.
If the calculated Death Benefit exceeds the Contract Value,
the difference will be allocated to the Sub-Account(s) in
accordance with the last Sub-Account allocation instructions
received from the Contract Owner.
During the time period between Our receipt of written
notification of Due Proof of Death and Our receipt of complete
settlement instructions from each Beneficiary, the calculated
Death Benefit amount will be subject to market fluctuations.
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<PAGE>
CALCULATION DEATH BENEFIT
OF THE DEATH The Death Benefit is the greatest of:
BENEFIT a) the Contract Value; or
PROVISIONS b) 100% of all premium payments made under the Contract,
(CONTINUED) reduced by the gross amount of any partial surrenders since
the Contract Issue Date; or
c) the Maximum Anniversary Value, as described below.
MAXIMUM ANNIVERSARY VALUE
The Maximum Anniversary Value is based on a series of
calculations on Contract Anniversaries, of Contract Values,
premium payments and partial surrenders.
As of the date We receive notification of Due Proof of
Death, We will calculate an Anniversary Value for each
Contract Anniversary prior to the decedent's death and 81st
birthday. The Anniversary Value is equal to the Contract
Value as of a Contract Anniversary, increased by the dollar
amount of any premium payments made since that anniversary
and reduced by the dollar amount of any partial surrenders
since that anniversary. The Maximum Anniversary Value is
equal to the greatest Anniversary Value attained from this
series of calculations.
OPTIONAL DEATH BENEFIT
If this contract has an Optional Death Benefit, a charge for
the benefit will appear on page 3. The benefit must be applied
for at the time of applying for the contract and cannot be
discontinued once the contract has been issued.
The Optional Death Benefit is the greatest of:
a) the Contract Value; or
b) 100% of all premium payments made under the Contract,
reduced by the dollar amount of any partial surrenders
since the Contract Issue Date; or
c) the Maximum Anniversary Value, as described above, or
d) the Interest accumulation value, as described below.
INTEREST ACCUMULATION VALUE
Prior to the decedent's death or 81st birthday, the interest
accumulation value is equal to total premium payments, less
proportional adjustments for partial surrenders, compounded
daily at an annual interest rate of 5.0%. The proportional
adjustment for partial surrenders is calculated by:
a) dividing the gross amount of the partial surrender by the
prior day's Contract Value, and
b) multiplying the result of (a) by the prior Valuation Day's
interest accumulation value.
On or after the decedent's date of death or 81st birthday,
the interest accumulation value will no longer compound.
After that date, the interest accumulation value will be
adjusted by adding any subsequent payments and subtracting
proportional adjustments, as described above, for partial
surrenders.
The interest accumulation value will be limited to 200% of all
premium payments minus proportional adjustments for partial
surrenders.
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<PAGE>
CALCULATION SETTLEMENT OF THE DEATH BENEFIT
OF THE DEATH The Death Benefit may be taken in one sum or under any of the
BENEFIT settlement options then being offered by Us subject, however,
PROVISIONS to the Distribution Requirements below.
(CONTINUED)
As of the date of receipt of complete disbursement
instructions from the Beneficiary, the amount to be paid or
applied to a selected settlement option will be computed.
When there is more than one Beneficiary, the amount will be
calculated for each Beneficiary's share of the proceeds and
paid or applied to a selected settlement option according to
and upon each Beneficiary's instructions. If the date of
receipt of complete instructions falls on a non-Valuation
Day, the amount will be computed on the next Valuation Day.
When payment is taken in one sum, payment will be mailed
within 7 days of Our receipt of complete instructions, except
when We are permitted to defer such payment under the
Investment Company Act of 1940.
DISTRIBUTION REQUIREMENTS
Subject to the Alternative Election or Spouse Beneficiary
provisions below,
a) If any Contract Owner dies before the Annuity Commencement
Date, the entire interest in the Contract will be
distributed within five years after such death; and
b) If any Contract Owner dies on or after the Annuity
Commencement Date and before the entire interest in the
Contract has been distributed, the remaining portion of such
interest will be distributed at least as rapidly as under
the method of distribution being used as of the date of such
death.
If the Contract Owner is not an individual, then for purposes
of the preceding paragraph a or b, the primary Annuitant will
be treated as the Contract Owner.
ALTERNATIVE ELECTION TO SATISFY DISTRIBUTION REQUIREMENTS
If any portion of the interest of a Contract Owner described
above is payable to or for the benefit of a designated
Beneficiary, and the Beneficiary elects after the Contract
Owner's death to have the benefit distributed over a period
that:
a) does not extend beyond such Beneficiary's life (or life
expectancy); and
b) does commence within one year of the date of death then for
purposes of satisfying the Distribution Requirements above,
the benefit will be treated as distributed entirely on the
date such periodic distributions begin.
SPOUSE BENEFICIARY
In the event of the death of a Contract Owner where the sole
Beneficiary is the Contract Owner's spouse and the Annuitant
(or Contingent Annuitant, if applicable) is alive, the
contract will continue with the spouse as the Contract
Owner, unless the spouse elects to be paid a Death Benefit
option. This provision will apply only once with respect to
this contract.
If the contract continues with the spouse as the Contract
Owner, the death benefit will be calculated on receipt of due
proof of death. If the Contract Value is less than the
calculated death benefit amount, the Contract Value will be
increased appropriately.
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<PAGE>
SETTLEMENT ANNUITY COMMENCEMENT DATE
PROVISIONS The Annuity Commencement Date is shown on Page 3. You may
change the date by notifying Us within 30 days prior to the
Annuity Commencement Date. This date will not be deferred
beyond the Valuation Day immediately following the later of:
a) the Annuitant's 90th birthday; or
b) the end of the tenth Contract Year unless the Contract Owner
elects a later Annuity Commencement Date subject to laws and
regulations then in effect and Our approval.
If this contract is issued to the trustee of a charitable
remainder trust, the Annuity Commencement Date may be deferred
to the Annuitant's 100 birthday.
ELECTION OF ANNUITY OPTION
You may elect, in writing, without deduction of any
contingent deferred sales charge, any one of the Annuity
options described below (except the seventh option - Annuity
Proceeds Settlement Option) or any Annuity option then being
offered by Us. The Annuity option may not be changed on or
after the Annuity Commencement Date.
In the absence of an election by You, the Contract Value will
be used to calculate a fixed dollar Annuity under the Third
Option (Life Annuity with 10 Years Period Certain).
Some of the options may not be available if this contract is
issued to qualify under Section 401, 403, or 408 of the
Internal Revenue Code of 1986 as amended. The third, fifth
and sixth options (Life Annuity with Payments for a Period
Certain, Joint and Last Survivor Life Annuity with Payments
for a Period Certain, and Payment for a Period Certain) will
be available only if the guaranteed payment period is less
than the life expectancy of the Annuitant at the time the
option becomes effective. Such life expectancy will be
computed under the mortality table then in use by Us.
ELECTION OF ANNUITY PAYMENT FREQUENCY
You may elect the Annuity Payment Frequency. Available
Annuity Payment Frequencies include: monthly, quarterly,
semi-annual, and annual. In the event that You do not elect
a payment frequency, Annuity payments will be made monthly.
Annuity payments will be made according to the Annuity
Payment Frequency selected. You may elect to change the
Annuity Payment Frequency of your payments within 30 days
prior to the anniversary of any Annuity Commencement Date.
ANNUITY CALCULATION AND PAYMENT DATES
The Annuity Calculation Date will be no more than five
Valuation Days prior to the Annuity Commencement Date. You
may elect a variable Annuity, a fixed dollar Annuity or a
combination fixed and variable Annuity. The election may not
change on or after the Annuity Commencement Date.
If you elect a variable Annuity, the Contract Value (less
applicable Premium Taxes) is applied pro-rata to Your selected
Sub-Account(s). If You elect a Fixed Annuity, Contract Values
will be applied to the Fixed Account. The Contract Value is
determined on the basis of the Accumulation Unit Value of each
Sub-Account and the value of the Fixed Account.
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<PAGE>
SETTLEMENT If You elect variable Annuity payments, Your election must
PROVISIONS specify the Assumed Investment Return upon which Your payments
(CONTINUED) are to be based. The available rates are 3%, 5%, and 6%.
If You elect a fixed Annuity payment, the payment will be the
guaranteed rates, based on 2.5% or the current rates, if
higher.
VARIABLE ANNUITY PAYMENTS - The contract contains tables
indicating the minimum dollar amount of the first monthly
payment under the optional forms of Annuity for each $1,000
of value of a Sub-Account under the contract. The first
monthly payment varies according to the variable Annuity
payment option selected.
The first Annuity payment is payable on the Annuity
Commencement Date. The remaining Annuity payments are
computed and payable as of the same day of the month as the
Annuity Commencement Date based on the elected Annuity
Payment Frequency.
The amount of the first variable Annuity payment is divided
by the Annuity Unit value for Your selected Sub-Account(s) as
of the Annuity Commencement Date. This number of Annuity
Units remains fixed for the selected Sub-Account during the
Annuity payment period. For each subsequent payment the
dollar amount of the Variable Annuity payment is determined
by multiplying the fixed number of Annuity Units by the
Annuity Unit value.
If subsequent payment dates fall on a non-Valuation Day
(weekend or holiday), the payment will be computed and
payable as of the prior Valuation Day. If the day of the
month elected does not occur in a given month (29th, 30th, or
31st), the payments will be computed and payable as of the
last Valuation Day of the month.
FIXED ANNUITY PAYMENTS - Fixed Annuity payments are
determined at annuitization by multiplying the value of the
Fixed Account (less applicable Premium Taxes) by a rate to be
determined by Us, which is no less than the rate specified in
the fixed Annuity payment tables in the contract. The fixed
Annuity payment will remain level for the duration of the
Annuity.
EXCHANGE "TRANSFER" OF ANNUITY UNITS
After the Annuity Commencement Date, You may exchange
"Transfer" the value of the Annuity Unit for a specified
Sub-Account for the dollar value of Annuity Units in another
Sub-Account. Transfers may be made between the Sub-Accounts
and from the Sub-Account(s) to the Fixed Account. No
transfers of Fixed Account Annuity dollars into a Sub-Account
are allowed. For limitation and modification guidelines see
"Transfers Between Sub-Accounts."
MINIMUM PAYMENT
The first payment must be at least equal to the minimum
payment amount according to Our rules then in effect. If at
any time, payments become less than the minimum payment
amount, We have the right to change the payment frequency to
meet the minimum payment requirements. If any payment amount
is less than the minimum annual payment amount, We may make
an alternative arrangement with You.
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<PAGE>
SETTLEMENT ANNUITY OPTIONS
PROVISIONS FIRST OPTION - Life Annuity - An Annuity payable during the
(CONTINUED) lifetime of the Annuitant, ceasing with the last payment due
prior to the death of the Annuitant.
SECOND OPTION - Life Annuity With a Cash Refund - An Annuity
payable during the lifetime of the Annuitant. At the death
of the Annuitant, any remaining value will be paid to the
Beneficiary. The remaining value equals the Contract Value,
less Premium Tax used to purchase Annuity units, minus the
sum of all Annuity payments made. This option is only
available for variable Annuity payments using the 5% Assumed
Investment Return and for fixed Annuity payments.
THIRD OPTION - Life Annuity with Payments for a Period
Certain - An Annuity payable for a fixed number of years and
for as long as the Annuitant is living. If at the death of
the Annuitant, payments have been made for less than the
period selected, the remaining payments will be made to the
Beneficiary. The Beneficiary may elect to receive the
present value of the remaining payments in one sum. To
calculate the present value for fixed Annuity payments, We
will use the same interest rate that was used to determine
the amount of the Annuity payments. To calculate the present
value of variable Annuity payments, we will use the AIR
elected by the Contract Owner when this Annuity option was
selected and the Annuity Unit value on the date of receipt of
Due Proof of Death.
FOURTH OPTION - Joint and Last Survivor Life Annuity - An
Annuity payable during the lifetimes of the Annuitant and the
Joint Annuitant and thereafter during the remaining lifetime
of the survivor. At the time of electing this Annuity
option, the Contract Owner may elect reduced payments over
the remaining lifetime of the survivor. Payments will cease
with the last payment prior to the death of the survivor.
FIFTH OPTION - Joint and Last Survivor Life Annuity with
Payments for a Period Certain - An Annuity during the
lifetimes of the Annuitant and the Joint Annuitant and
thereafter during the remaining lifetime of the survivor. At
the time of electing this Annuity option, the Contract Owner
may elect reduced payments over the remaining lifetime of the
survivor. If at the death of the survivor, payments have
been made for less than the period selected, the remaining
payments will be made to the Beneficiary. The Beneficiary
may elect to receive the present value of the remaining
payments in one sum. To calculate the present value for fixed
Annuity payments, We will use the same interest rate that was
used to determine the amount of the Annuity payments. To
calculate the present value of variable Annuity payments, we
will use the AIR elected by the Contract Owner when this
Annuity option was selected and the Annuity Unit value on the
date of receipt of Due Proof of Death.
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<PAGE>
SETTLEMENT SIXTH OPTION - Payment for a Period Certain - An Annuity
PROVISION payable for a fixed number of years with periods of 10 years
(CONTINUED) or greater available at any time and periods of less than 10
years available on or after the second Contract Anniversary.
Payments will be made for the period and frequency selected
unless You surrender this contract after payments have
commenced by submitting a written request to Us (only
available with variable annuity payments). The amount
available to You is the Commuted Value, less any applicable
contingent deferred sales charge.
If at the death of the Annuitant, payments have been made for
less than the period selected, the remaining payments will be
made to the Beneficiary. The Beneficiary may elect to
receive the present value of the remaining payments in one
sum. To calculate the present value for fixed Annuity
payments, We will use the same interest rate that was used to
determine the amount of the Annuity payments. To calculate
the present value of variable Annuity payments, we will use
the AIR elected by the Contract Owner when this Annuity
option was selected and the Annuity Unit value on the date of
receipt of Due Proof of Death.
SEVENTH OPTION - Annuity Proceeds Settlement Option -
Proceeds from the Death Benefit can be left with Us for a
period not to exceed five years from the date of the Contract
Owner's or the Annuitant's death prior to the Annuity
Commencement Date. The proceeds will remain in the
Sub-Account(s) to which they were allocated at the time of
death unless the Beneficiary elects to reallocate them. Full
or partial withdrawals may be made at any time. In the event
of withdrawals, the remaining value will equal the Contract
Value of the proceeds left with Us, minus any withdrawals.
ANNUITY TABLES DESCRIPTION OF TABLES
The attached tables show the minimum dollar amount of the
first monthly payment for each $1,000 applied to fixed dollar
Annuity payments, and the actual first monthly payment for
each $1,000 applied to variable Annuity payments. Under the
First and Second Options, the amount of each payment will
depend upon the age and sex of the Annuitant at the time the
first payment is due. Under the Fourth and Fifth Options,
the amount of the first payment will depend upon the sex of
both Annuitants and their ages at the time the first payment
is due.
Sex will not be used to determine the amount of the Annuity
payable if this contract is issued to qualify under certain
sections of the Internal Revenue Code. If sex is used to
determine the amount of Annuity payable, the Annuity tables
at the end of this contract will provide rates of payment for
male Annuitants and female Annuitants.
The variable payment Annuity tables for the First through
Fifth Options are based on the 1983a Individual Annuity
Mortality Table projected to the year 2000 using Projection
Scale G and the Assumed Investment Return. The table for the
Sixth Option is based on an Assumed Investment Return.
The fixed payment Annuity tables for the First through Fifth
Options are based on the 1983a Individual Annuity Mortality
Table projected to the year 2000 using Projection Scale G and
an interest rate of 2.5%. The table for the Sixth Option is
based on an interest rate of 2.5%. per annum.
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<PAGE>
ANNUITY TABLES The Annuity tables for the First through Fifth Options are age
(CONTINUED) dependent. If the first Annuity payment is made before 2000,
the amount of that payment will be based on the Annuitant's
then-attained age (i.e., age as of last birthday). For
Annuity payments beginning after 2000, the amount of the
first payment will be based on an age a specified number of
years younger than the Annuitant's then-attained age. The
age setback is as follows:
DATE OF FIRST PAYMENT AGE SETBACK
Prior to 2005 1 year
2005 - 2014 2 years
2015 - 2019 3 years
2020 - 2029 4 years
2030 - 2039 5 years
2040 or later 6 years
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<PAGE>
ANNUITY TABLES FOR
FIXED PAYMENTS,
BASED ON A 2 1/2% ASSUMED INVESTMENT RETURN
AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000 APPLIED
Fixed Dollar Annuity payments will not vary and are guaranteed as to fixed
dollar amount. Payments for any available Annuity Payment Frequency, Period
Certain, age, or combination of ages not shown will be quoted upon request. The
Second Option (Life Annuity with a Cash Refund) is not available with the 2 1/2%
Assumed Investment Return.
FIRST AND THIRD OPTIONS - SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
MALE ANNUITANT FEMALE ANNUITANT
MONTHLY PAYMENTS GUARANTEED MONTHLY PAYMENTS GUARANTEED
Age None 120 180 240 None 120 180 240
- ------- ---------- ------------ ------------ ------------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.05 $3.05 $3.04 $3.03 $2.88 $2.88 $2.88 $2.87
40 3.25 3.24 3.23 3.21 3.04 3.03 3.03 3.02
45 3.49 3.48 3.45 3.42 3.23 3.22 3.22 3.20
50 3.80 3.77 3.73 3.68 3.47 3.46 3.45 3.42
51 3.87 3.84 3.79 3.73 3.53 3.52 3.50 3.47
52 3.94 3.91 3.86 3.79 3.59 3.57 3.56 3.52
53 4.02 3.98 3.93 3.85 3.65 3.64 3.61 3.58
54 4.10 4.06 4.00 3.91 3.72 3.70 3.67 3.63
55 4.19 4.14 4.07 3.97 3.79 3.77 3.74 3.69
56 4.28 4.22 4.15 4.04 3.86 3.84 3.80 3.75
57 4.37 4.31 4.23 4.10 3.94 3.91 3.87 3.81
58 4.48 4.41 4.31 4.17 4.02 3.99 3.94 3.88
59 4.59 4.51 4.40 4.23 4.10 4.07 4.02 3.94
60 4.70 4.61 4.49 4.30 4.20 4.16 4.10 4.01
61 4.83 4.72 4.58 4.37 4.29 4.25 4.18 4.08
62 4.96 4.84 4.67 4.44 4.40 4.35 4.27 4.15
63 5.10 4.96 4.77 4.50 4.51 4.45 4.36 4.22
64 5.25 5.09 4.87 4.57 4.62 4.56 4.46 4.30
65 5.41 5.23 4.97 4.64 4.75 4.67 4.55 4.37
66 5.59 5.37 5.08 4.70 4.88 4.79 4.66 4.45
67 5.77 5.51 5.18 4.76 5.03 4.92 4.76 4.52
68 5.97 5.66 5.29 4.82 5.18 5.05 4.87 4.59
69 6.18 5.82 5.39 4.87 5.34 5.19 4.98 4.66
70 6.40 5.98 5.49 4.92 5.52 5.34 5.09 4.73
75 7.76 6.85 5.97 5.12 6.64 6.21 5.67 5.02
80 9.67 7.73 6.32 5.23 8.29 7.20 6.15 5.19
</TABLE>
FOURTH OPTION - JOINT AND LAST SURVIVOR ANNUITY
<TABLE>
<CAPTION>
AGE AGE OF FEMALE
OF
MALE 35 40 45 50 55 60 65 70 75 80 85 90
-------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $2.74 $2.81 $2.87 $2.92 $2.96 $2.99 $3.01 $3.03 $3.04 $3.04 $3.05 $3.05
40 2.78 2.87 2.95 3.02 3.08 3.13 3.17 3.20 3.22 3.23 3.24 3.24
45 2.81 2.92 3.02 3.12 3.22 3.30 3.36 3.40 3.44 3.46 3.47 3.48
50 2.83 2.95 3.08 3.22 3.35 3.46 3.56 3.64 3.70 3.74 3.76 3.78
55 2.85 2.98 3.13 3.29 3.46 3.63 3.79 3.91 4.01 4.08 4.13 4.15
60 2.86 3.00 3.16 3.35 3.56 3.79 4.01 4.21 4.38 4.51 4.59 4.64
65 2.87 3.01 3.19 3.39 3.64 3.92 4.22 4.52 4.80 5.02 5.18 5.29
70 2.87 3.02 3.20 3.42 3.69 4.02 4.39 4.81 5.23 5.61 5.91 6.12
75 2.88 3.03 3.21 3.44 3.73 4.09 4.52 5.05 5.64 6.23 6.76 7.15
80 2.88 3.03 3.22 3.46 3.75 4.13 4.62 5.23 5.98 6.82 7.66 8.36
85 2.88 3.03 3.22 3.46 3.77 4.16 4.67 5.35 6.24 7.32 8.52 9.66
90 2.88 3.04 3.23 3.47 3.77 4.17 4.71 5.42 6.41 7.69 9.25 10.91
</TABLE>
VA99SXD2.5 Page 22 Printed in U.S.A.
R566R0.FRM
<PAGE>
ANNUITY TABLES FOR
VARIABLE PAYMENTS,
BASED ON A 2 1/2% ASSUMED INVESTMENT RETURN
(CONTINUED)
FIFTH OPTION - JOINT AND LAST SURVIVOR ANNUITY WITH 10 YEAR PERIOD CERTAIN
<TABLE>
<CAPTION>
AGE AGE OF FEMALE
OF
MALE 35 40 45 50 55 60 65 70 75 80 85 90
-------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $2.74 $2.81 $2.87 $2.92 $2.96 $2.99 $3.01 $3.02 $3.04 $3.04 $3.05 $3.05
40 2.78 2.87 2.95 3.02 3.08 3.13 3.17 3.20 3.22 3.23 3.23 3.24
45 2.81 2.92 3.02 3.12 3.22 3.29 3.36 3.40 3.43 3.45 3.47 3.47
50 2.83 2.95 3.08 3.22 3.35 3.46 3.56 3.64 3.70 3.73 3.75 3.76
55 2.85 2.98 3.13 3.29 3.46 3.63 3.78 3.91 4.01 4.07 4.11 4.13
60 2.86 3.00 3.16 3.35 3.56 3.78 4.01 4.21 4.37 4.49 4.56 4.59
65 2.87 3.01 3.19 3.39 3.64 3.91 4.21 4.51 4.78 4.98 5.11 5.18
70 2.87 3.02 3.20 3.42 3.69 4.01 4.38 4.79 5.19 5.53 5.76 5.89
75 2.88 3.03 3.21 3.44 3.72 4.08 4.51 5.01 5.56 6.07 6.46 6.68
80 2.88 3.03 3.22 3.45 3.75 4.12 4.59 5.17 5.85 6.54 7.10 7.46
85 2.88 3.03 3.22 3.46 3.76 4.14 4.63 5.27 6.04 6.88 7.61 8.09
90 2.88 3.03 3.22 3.46 3.76 4.15 4.66 5.32 6.14 7.07 7.92 8.51
</TABLE>
SIXTH OPTION - PAYMENTS FOR A PERIOD CERTAIN
<TABLE>
<CAPTION>
- --------- ----------- -------- ----------- -------- ----------- -------- ----------- -------- ------------ ------- ------------
NO. OF AMOUNT OF NO. OF AMOUNT OF NO. OF AMOUNT OF NO. OF AMOUNT OF NO. OF AMOUNT OF NO. AMOUNT OF
YEARS MONTHLY YEARS MONTHLY YEARS MONTHLY YEARS MONTHLY YEARS MONTHLY OF MONTHLY
PAYMENTS PAYMENTS PAYMENTS PAYMENTS PAYMENTS YEARS PAYMENTS
- --------- ----------- -------- ----------- -------- ----------- -------- ----------- -------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5 $17.70 10 $9.39 15 $6.64 20 $5.27 25 $4.46 30 $3.93
6 14.93 11 8.64 16 6.30 21 5.08 26 4.34
7 12.95 12 8.02 17 6.00 22 4.90 27 4.22
8 11.47 13 7.49 18 5.73 23 4.74 28 4.12
9 10.32 14 7.03 19 5.49 24 4.60 29 4.02
</TABLE>
VA99SXD2.5 Page 23 Printed in U.S.A.
R567R0.FRM
<PAGE>
ANNUITY TABLES FOR
VARIABLE PAYMENTS,
BASED ON A 3% ASSUMED INVESTMENT RETURN
AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000 APPLIED
The second and subsequent annuity payments under a variable annuity are based on
the investment experience of a Separate Account and are not guaranteed as to
fixed dollar amount. Payments for any available Annuity Payment Frequency,
Period Certain, age, or combination of ages not shown will be quoted upon
request. The Second Option (Life Annuity with a Cash Refund) is not available
with the 3% Assumed Investment Return.
FIRST AND THIRD OPTIONS - SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
MALE ANNUITANT FEMALE ANNUITANT
MONTHLY PAYMENTS GUARANTEED MONTHLY PAYMENTS GUARANTEED
AGE NONE 120 180 240 NONE 120 180 240
- ------- --------- ----------- ------------ ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.35 $3.35 $3.34 $3.33 $3.18 $3.18 $3.18 $3.17
40 3.54 3.53 3.52 3.50 3.33 3.33 3.32 3.31
45 3.78 3.76 3.74 3.71 3.52 3.51 3.50 3.49
50 4.08 4.05 4.01 3.95 3.76 3.75 3.73 3.70
51 4.15 4.12 4.07 4.01 3.81 3.80 3.78 3.75
52 4.23 4.19 4.14 4.06 3.87 3.86 3.84 3.80
53 4.30 4.26 4.20 4.12 3.93 3.92 3.89 3.85
54 4.38 4.34 4.27 4.18 4.00 3.98 3.95 3.91
55 4.47 4.42 4.35 4.24 4.07 4.04 4.01 3.96
56 4.56 4.50 4.42 4.30 4.14 4.11 4.08 4.02
57 4.66 4.59 4.50 4.37 4.22 4.19 4.15 4.08
58 4.76 4.68 4.58 4.43 4.30 4.26 4.22 4.15
59 4.87 4.78 4.67 4.50 4.38 4.35 4.29 4.21
60 4.98 4.89 4.76 4.56 4.47 4.43 4.37 4.28
61 5.11 5.00 4.85 4.63 4.57 4.52 4.45 4.35
62 5.24 5.11 4.94 4.69 4.67 4.62 4.54 4.42
63 5.38 5.23 5.04 4.76 4.78 4.72 4.63 4.49
64 5.54 5.36 5.13 4.83 4.90 4.83 4.72 4.56
65 5.70 5.50 5.23 4.89 5.03 4.94 4.82 4.63
66 5.87 5.63 5.34 4.95 5.16 5.06 4.92 4.70
67 6.06 5.78 5.44 5.01 5.30 5.19 5.02 4.78
68 6.25 5.93 5.54 5.07 5.45 5.32 5.13 4.85
69 6.46 6.08 5.64 5.12 5.62 5.46 5.24 4.92
70 6.69 6.24 5.74 5.17 5.80 5.61 5.35 4.98
75 8.05 7.10 6.21 5.36 6.92 6.46 5.91 5.26
80 9.97 7.97 6.56 5.47 8.57 7.45 6.39 5.42
</TABLE>
FOURTH OPTION - JOINT AND LAST SURVIVOR ANNUITY
<TABLE>
<CAPTION>
AGE AGE OF FEMALE
OF
MALE 35 40 45 50 55 60 65 70 75 80 85 90
-------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.04 $3.11 $3.16 $3.21 $3.25 $3.28 $3.30 $3.32 $3.33 $3.34 $3.34 $3.35
40 3.08 3.16 3.24 3.31 3.37 3.42 3.46 3.49 3.51 3.52 3.53 3.53
45 3.11 3.21 3.31 3.41 3.50 3.58 3.64 3.69 3.72 3.74 3.76 3.77
50 3.13 3.25 3.37 3.50 3.62 3.74 3.84 3.92 3.98 4.02 4.05 4.06
55 3.15 3.27 3.41 3.57 3.74 3.90 4.06 4.19 4.29 4.36 4.41 4.43
60 3.16 3.29 3.45 3.63 3.84 4.06 4.28 4.48 4.65 4.78 4.87 4.92
65 3.17 3.31 3.47 3.67 3.91 4.19 4.48 4.78 5.06 5.29 5.46 5.56
70 3.17 3.32 3.49 3.71 3.97 4.29 4.66 5.07 5.49 5.88 6.18 6.39
75 3.18 3.32 3.50 3.73 4.01 4.36 4.79 5.31 5.90 6.49 7.02 7.42
80 3.18 3.33 3.51 3.74 4.03 4.40 4.88 5.49 6.24 7.08 7.92 8.63
85 3.18 3.33 3.51 3.75 4.05 4.43 4.94 5.62 6.50 7.58 8.78 9.92
90 3.18 3.33 3.52 3.75 4.05 4.45 4.98 5.70 6.68 7.96 9.52 11.18
</TABLE>
VA99SXD3 Page 24 Printed in U.S.A.
R568R0.FRM
<PAGE>
ANNUITY TABLES FOR
VARIABLE PAYMENTS,
BASED ON A 3% ASSUMED INVESTMENT RETURN
(CONTINUED)
FIFTH OPTION - JOINT AND LAST SURVIVOR ANNUITY WITH 10 YEAR PERIOD CERTAIN
<TABLE>
<CAPTION>
AGE AGE OF FEMALE
OF
MALE 35 40 45 50 55 60 65 70 75 80 85 90
-------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.04 $3.11 $3.16 $3.21 $3.25 $3.28 $3.30 $3.32 $3.33 $3.34 $3.34 $3.34
40 3.08 3.16 3.24 3.31 3.37 3.42 3.46 3.49 3.51 3.52 3.53 3.53
45 3.11 3.21 3.31 3.41 3.50 3.58 3.64 3.69 3.72 3.74 3.75 3.76
50 3.13 3.25 3.37 3.50 3.62 3.74 3.84 3.92 3.97 4.01 4.03 4.05
55 3.15 3.27 3.41 3.57 3.74 3.90 4.05 4.18 4.28 4.35 4.39 4.40
60 3.16 3.29 3.45 3.63 3.83 4.05 4.27 4.47 4.64 4.76 4.83 4.86
65 3.17 3.31 3.47 3.67 3.91 4.18 4.48 4.77 5.04 5.24 5.38 5.45
70 3.17 3.31 3.49 3.70 3.97 4.28 4.65 5.05 5.45 5.79 6.02 6.16
75 3.18 3.32 3.50 3.72 4.00 4.35 4.77 5.27 5.82 6.32 6.71 6.94
80 3.18 3.32 3.51 3.73 4.02 4.39 4.86 5.43 6.10 6.79 7.35 7.70
85 3.18 3.33 3.51 3.74 4.04 4.41 4.90 5.53 6.30 7.12 7.85 8.33
90 3.18 3.33 3.51 3.74 4.04 4.42 4.93 5.58 6.40 7.32 8.16 8.74
</TABLE>
SIXTH OPTION - PAYMENTS FOR A PERIOD CERTAIN
<TABLE>
<CAPTION>
- --------- ----------- -------- ----------- -------- ----------- -------- ----------- -------- ------------ ------- ------------
NO. OF AMOUNT OF NO. OF AMOUNT OF NO. OF AMOUNT OF NO. OF AMOUNT OF NO. OF AMOUNT OF NO. AMOUNT OF
YEARS MONTHLY YEARS MONTHLY YEARS MONTHLY YEARS MONTHLY YEARS MONTHLY OF MONTHLY
PAYMENTS PAYMENTS PAYMENTS PAYMENTS PAYMENTS YEARS PAYMENTS
- --------- ----------- -------- ----------- -------- ----------- -------- ----------- -------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5 $17.91 10 $9.61 15 $6.87 20 $5.51 25 $4.71 30 $4.18
6 15.14 11 8.86 16 6.53 21 5.32 26 4.59
7 13.16 12 8.24 17 6.23 22 5.15 27 4.47
8 11.68 13 7.71 18 5.96 23 4.99 28 4.37
9 10.53 14 7.26 19 5.73 24 4.84 29 4.27
</TABLE>
VA99SXD3 Page 25 Printed in U.S.A.
R569R0.FRM
<PAGE>
ANNUITY TABLES FOR
VARIABLE PAYMENTS,
BASED ON A 5% ASSUMED INVESTMENT RETURN
AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000 APPLIED
Second and subsequent Annuity payments under a variable annuity are based on the
investment experience of a Separate Account and are not guaranteed as to fixed
dollar amount. Payments for any available Annuity Payment Frequency, Period
Certain, age, or combination of ages not shown will be quoted upon request.
FIRST, SECOND, AND THIRD OPTIONS - SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
MALE ANNUITANT FEMALE ANNUITANT
MONTHLY PAYMENTS GUARANTEED MONTHLY PAYMENTS GUARANTEED
AGE NONE 120 180 240 CASH REFUND NONE 120 180 240 CASH REFUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $4.63 $4.62 $4.61 $4.60 $4.60 $4.48 $4.48 $4.47 $4.47 $4.46
40 4.80 4.78 4.77 4.74 4.74 4.60 4.60 4.59 4.58 4.58
45 5.02 4.99 4.96 4.91 4.92 4.77 4.75 4.74 4.72 4.72
50 5.30 5.25 5.20 5.13 5.16 4.98 4.96 4.94 4.90 4.91
51 5.36 5.31 5.26 5.18 5.21 5.03 5.01 4.98 4.94 4.95
52 5.43 5.38 5.31 5.23 5.27 5.08 5.06 5.03 4.99 5.00
53 5.51 5.45 5.37 5.28 5.33 5.14 5.11 5.08 5.03 5.05
54 5.58 5.52 5.44 5.33 5.39 5.20 5.17 5.13 5.08 5.10
55 5.67 5.59 5.50 5.38 5.46 5.26 5.23 5.19 5.13 5.16
56 5.75 5.67 5.57 5.44 5.53 5.33 5.29 5.25 5.18 5.21
57 5.85 5.75 5.64 5.49 5.60 5.40 5.36 5.31 5.24 5.27
58 5.95 5.84 5.72 5.55 5.68 5.48 5.43 5.37 5.29 5.34
59 6.05 5.94 5.80 5.61 5.76 5.56 5.51 5.44 5.35 5.41
60 6.17 6.04 5.88 5.67 5.85 5.65 5.59 5.51 5.41 5.48
61 6.29 6.14 5.96 5.73 5.94 5.74 5.67 5.59 5.47 5.55
62 6.42 6.25 6.05 5.78 6.04 5.84 5.76 5.67 5.53 5.63
63 6.56 6.37 6.14 5.84 6.14 5.95 5.86 5.75 5.59 5.72
64 6.71 6.49 6.23 5.90 6.24 6.06 5.96 5.84 5.66 5.81
65 6.87 6.62 6.32 5.96 6.36 6.18 6.07 5.93 5.72 5.91
66 7.05 6.75 6.41 6.01 6.47 6.31 6.18 6.02 5.79 6.01
67 7.23 6.89 6.51 6.06 6.60 6.46 6.30 6.11 5.85 6.12
68 7.43 7.03 6.60 6.11 6.73 6.61 6.43 6.21 5.92 6.23
69 7.65 7.18 6.69 6.16 6.87 6.77 6.57 6.31 5.98 6.35
70 7.87 7.33 6.79 6.21 7.01 6.95 6.71 6.42 6.04 6.48
75 9.25 8.14 7.21 6.38 7.85 8.08 7.53 6.94 6.29 7.25
80 11.20 8.97 7.53 6.47 8.92 9.75 8.47 7.37 6.43 8.27
</TABLE>
FOURTH OPTION - JOINT AND LAST SURVIVOR ANNUITY
<TABLE>
<CAPTION>
AGE AGE OF FEMALE
OF
MALE 35 40 45 50 55 60 65 70 75 80 85 90
-------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $4.35 $4.40 $4.44 $4.48 $4.52 $4.55 $4.57 $4.59 $4.60 $4.61 $4.62 $4.63
40 4.38 4.44 4.50 4.56 4.61 4.66 4.70 4.73 4.75 4.77 4.78 4.79
45 4.41 4.48 4.56 4.64 4.72 4.79 4.85 4.90 4.94 4.97 4.99 5.00
50 4.42 4.51 4.61 4.71 4.82 4.93 5.02 5.10 5.17 5.21 5.25 5.27
55 4.44 4.54 4.65 4.78 4.92 5.07 5.21 5.34 5.45 5.53 5.58 5.62
60 4.45 4.55 4.68 4.83 5.01 5.21 5.41 5.61 5.78 5.92 6.02 6.08
65 4.46 4.57 4.71 4.88 5.09 5.33 5.60 5.89 6.17 6.40 6.58 6.70
70 4.47 4.58 4.73 4.91 5.14 5.43 5.78 6.17 6.58 6.97 7.29 7.52
75 4.47 4.59 4.74 4.94 5.19 5.51 5.91 6.41 6.98 7.57 8.11 8.53
80 4.48 4.59 4.75 4.95 5.21 5.56 6.01 6.60 7.33 8.16 9.00 9.72
85 4.48 4.60 4.76 4.96 5.23 5.60 6.08 6.73 7.60 8.66 9.86 11.01
90 4.48 4.60 4.76 4.97 5.25 5.62 6.12 6.82 7.79 9.05 10.61 12.27
</TABLE>
VA99SXD5 Page 26 Printed in U.S.A.
R570R0.FRM
<PAGE>
ANNUITY TABLES FOR
VARIABLE PAYMENTS,
BASED ON A 5% ASSUMED INVESTMENT RETURN
(CONTINUED)
FIFTH OPTION - JOINT AND LAST SURVIVOR ANNUITY WITH 10 YEAR PERIOD CERTAIN
<TABLE>
<CAPTION>
AGE AGE OF FEMALE
OF
MALE 35 40 45 50 55 60 65 70 75 80 85 90
-------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $4.35 $4.40 $4.44 $4.48 $4.52 $4.55 $4.57 $4.59 $4.60 $4.61 $4.62 $4.62
40 4.38 4.44 4.50 4.56 4.61 4.66 4.70 4.73 4.75 4.77 4.78 4.78
45 4.41 4.48 4.56 4.64 4.72 4.79 4.85 4.90 4.93 4.96 4.98 4.99
50 4.42 4.51 4.61 4.71 4.82 4.93 5.02 5.10 5.16 5.20 5.23 5.24
55 4.44 4.53 4.65 4.78 4.92 5.07 5.21 5.33 5.44 5.51 5.55 5.58
60 4.45 4.55 4.68 4.83 5.01 5.20 5.41 5.60 5.76 5.89 5.97 6.01
65 4.46 4.57 4.71 4.88 5.08 5.33 5.60 5.88 6.14 6.35 6.49 6.57
70 4.47 4.58 4.73 4.91 5.14 5.42 5.76 6.14 6.52 6.86 7.10 7.24
75 4.47 4.59 4.74 4.93 5.18 5.49 5.89 6.36 6.88 7.37 7.75 7.98
80 4.47 4.59 4.75 4.95 5.20 5.54 5.97 6.52 7.16 7.82 8.36 8.70
85 4.48 4.60 4.75 4.95 5.22 5.57 6.03 6.62 7.35 8.14 8.83 9.29
90 4.48 4.60 4.75 4.96 5.23 5.58 6.05 6.68 7.46 8.34 9.13 9.68
</TABLE>
SIXTH OPTION - PAYMENTS FOR A PERIOD CERTAIN
<TABLE>
<CAPTION>
- --------- ----------- -------- ----------- -------- ----------- -------- ----------- -------- ------------ ------- ------------
No. of Amount of No. of Amount of No. of Amount of No. of Amount of No. of Amount of No. Amount of
Years Monthly Years Monthly Years Monthly Years Monthly Years Monthly of Monthly
Payments Payments Payments Payments Payments Years Payments
- --------- ----------- -------- ----------- -------- ----------- -------- ----------- -------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5 $18.74 10 $10.51 15 $7.82 20 $6.51 25 $5.76 30 $5.28
6 15.99 11 9.77 16 7.49 21 6.33 26 5.65
7 14.02 12 9.16 17 7.20 22 6.17 27 5.54
8 12.56 13 8.64 18 6.94 23 6.02 28 5.45
9 11.42 14 8.20 19 6.71 24 5.88 29 5.36
</TABLE>
VA99SXD5 Page 27 Printed in U.S.A.
R571R0.FRM
<PAGE>
ANNUITY TABLES FOR
VARIABLE PAYMENTS,
BASED ON A 6% ASSUMED INVESTMENT RETURN
AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000 APPLIED
Second and subsequent Annuity payments under a variable annuity are based on the
investment experience of a Separate Account and are not guaranteed as to fixed
dollar amount. Payments for any available Annuity Payment Frequency, Period
Certain, age, or combination of ages not shown will be quoted upon request. The
Second Option (Life Annuity with a Cash Refund) is not available with the 6%
Assumed Investment Return.
FIRST AND THIRD OPTIONS - SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
MALE ANNUITANT FEMALE ANNUITANT
MONTHLY PAYMENTS GUARANTEED MONTHLY PAYMENTS GUARANTEED
AGE NONE 120 180 240 NONE 120 180 240
- ------- --------- ----------- ------------ ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
35 $5.31 $5.30 $5.29 $5.27 $5.17 $5.17 $5.16 $5.15
40 5.46 5.45 5.43 5.40 5.28 5.27 5.26 5.25
45 5.67 5.64 5.60 5.56 5.43 5.42 5.40 5.38
50 5.94 5.89 5.83 5.75 5.63 5.60 5.58 5.54
51 6.00 5.94 5.88 5.80 5.67 5.65 5.62 5.58
52 6.07 6.00 5.93 5.84 5.72 5.70 5.66 5.62
53 6.14 6.07 5.99 5.89 5.78 5.75 5.71 5.66
54 6.22 6.14 6.05 5.94 5.84 5.80 5.76 5.70
55 6.30 6.21 6.11 5.99 5.90 5.86 5.81 5.75
56 6.38 6.28 6.18 6.04 5.96 5.92 5.87 5.80
57 6.47 6.36 6.24 6.09 6.03 5.98 5.92 5.85
58 6.57 6.45 6.32 6.14 6.10 6.05 5.98 5.90
59 6.67 6.54 6.39 6.19 6.18 6.12 6.05 5.95
60 6.78 6.64 6.47 6.25 6.27 6.20 6.12 6.01
61 6.90 6.74 6.55 6.30 6.36 6.28 6.19 6.06
62 7.03 6.84 6.63 6.36 6.46 6.37 6.26 6.12
63 7.17 6.96 6.71 6.41 6.56 6.46 6.34 6.18
64 7.32 7.07 6.80 6.47 6.67 6.56 6.42 6.24
65 7.48 7.20 6.88 6.52 6.79 6.66 6.51 6.30
66 7.66 7.33 6.97 6.57 6.92 6.77 6.59 6.36
67 7.84 7.46 7.06 6.62 7.06 6.89 6.69 6.42
68 8.04 7.60 7.15 6.67 7.21 7.01 6.78 6.48
69 8.25 7.74 7.24 6.71 7.37 7.14 6.88 6.54
70 8.48 7.89 7.33 6.75 7.54 7.28 6.97 6.59
75 9.86 8.68 7.73 6.91 8.67 8.08 7.47 6.83
80 11.81 9.47 8.04 7.00 10.35 8.99 7.89 6.96
</TABLE>
FOURTH OPTION - JOINT AND LAST SURVIVOR ANNUITY
<TABLE>
<CAPTION>
AGE AGE OF FEMALE
OF
MALE 35 40 45 50 55 60 65 70 75 80 85 90
-------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $5.05 $5.09 $5.13 $5.16 $5.19 $5.22 $5.25 $5.27 $5.28 $5.29 $5.30 $5.30
40 5.08 5.13 5.18 5.23 5.28 5.32 5.36 5.39 5.41 5.43 5.45 5.45
45 5.10 5.16 5.23 5.30 5.37 5.43 5.49 5.54 5.58 5.61 5.64 5.65
50 5.11 5.19 5.27 5.36 5.46 5.56 5.65 5.73 5.80 5.85 5.88 5.91
55 5.13 5.21 5.31 5.42 5.55 5.69 5.82 5.95 6.06 6.14 6.20 6.24
60 5.14 5.23 5.34 5.48 5.64 5.82 6.01 6.20 6.37 6.52 6.62 6.69
65 5.15 5.24 5.36 5.52 5.71 5.94 6.20 6.47 6.75 6.99 7.17 7.30
70 5.16 5.26 5.38 5.55 5.77 6.04 6.36 6.74 7.15 7.54 7.86 8.10
75 5.16 5.26 5.40 5.58 5.81 6.11 6.50 6.98 7.54 8.13 8.67 9.10
80 5.17 5.27 5.41 5.60 5.84 6.17 6.60 7.17 7.89 8.71 9.55 10.28
85 5.17 5.27 5.42 5.61 5.86 6.21 6.68 7.31 8.16 9.22 10.41 11.56
90 5.17 5.28 5.42 5.61 5.88 6.23 6.72 7.40 8.36 9.62 11.16 12.81
</TABLE>
VA99SXD6 Page 28 Printed in U.S.A.
R572R0.FRM
<PAGE>
ANNUITY TABLES FOR
VARIABLE PAYMENTS,
BASED ON A 6% ASSUMED INVESTMENT RETURN
(CONTINUED)
FIFTH OPTION - JOINT AND LAST SURVIVOR ANNUITY WITH 10 YEAR PERIOD CERTAIN
<TABLE>
<CAPTION>
AGE AGE OF FEMALE
OF
MALE 35 40 45 50 55 60 65 70 75 80 85 90
-------- -------- ------- -------- -------- -------- ------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $5.05 $5.09 $5.13 $5.16 $5.19 $5.22 $5.25 $5.26 $5.28 $5.29 $5.30 $5.30
40 5.08 5.13 5.18 5.23 5.28 5.32 5.36 5.39 5.41 5.43 5.44 5.44
45 5.10 5.16 5.23 5.30 5.37 5.43 5.49 5.54 5.58 5.61 5.62 5.63
50 5.11 5.19 5.27 5.36 5.46 5.56 5.65 5.72 5.79 5.83 5.86 5.88
55 5.13 5.21 5.31 5.42 5.55 5.69 5.82 5.94 6.04 6.12 6.17 6.19
60 5.14 5.23 5.34 5.47 5.63 5.82 6.01 6.19 6.36 6.48 6.56 6.61
65 5.15 5.24 5.36 5.52 5.71 5.93 6.19 6.46 6.71 6.92 7.07 7.14
70 5.16 5.25 5.38 5.55 5.76 6.03 6.35 6.71 7.08 7.42 7.66 7.79
75 5.16 5.26 5.40 5.57 5.80 6.10 6.47 6.93 7.43 7.91 8.29 8.51
80 5.17 5.27 5.41 5.59 5.83 6.15 6.56 7.09 7.71 8.35 8.88 9.21
85 5.17 5.27 5.41 5.60 5.84 6.17 6.62 7.19 7.90 8.67 9.34 9.78
90 5.17 5.27 5.41 5.60 5.85 6.19 6.64 7.25 8.01 8.86 9.63 10.16
</TABLE>
SIXTH OPTION - PAYMENTS FOR A PERIOD CERTAIN
<TABLE>
<CAPTION>
- --------- ----------- -------- ----------- -------- ----------- -------- ----------- -------- ------------ ------- ------------
No. of Amount of No. of Amount of No. of Amount of No. of Amount of No. of Amount of No. Amount of
Years Monthly Years Monthly Years Monthly Years Monthly Years Monthly of Monthly
Payments Payments Payments Payments Payments Years Payments
- --------- ----------- -------- ----------- -------- ----------- -------- ----------- -------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5 $19.17 10 $10.97 15 $8.31 20 $7.04 25 $6.32 30 $5.87
6 16.42 11 10.24 16 7.99 21 6.86 26 6.21
7 14.46 12 9.63 17 7.71 22 6.70 27 6.11
8 13.00 13 9.12 18 7.46 23 6.56 28 6.02
9 11.87 14 8.69 19 7.24 24 6.43 29 5.94
</TABLE>
VA99SXD6 Page 29 Printed in U.S.A.
R573R0.FRM
<PAGE>
INDIVIDUAL FLEXIBLE PREMIUM
VARIABLE ANNUITY CONTRACT
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
P.O. Box 2999
Hartford, Connecticut 06104-2999
ADMINISTRATIVE OFFICE:
Attn: Individual Annuity Services
P.O. Box 5085
Hartford, CT 06102-5085
[LOGO]
LA-VA99 Printed in U.S.A.
R391R0.FRM
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
COUNTRYWIDE VERSION (EXCEPT NY) U.S.P.S.-First Class or Hartford Life - IAS
REQUEST FOR Express-Mail to: P.O. Box 5085
VARIABLE ANNUITY Hartford, CT 06102-5085
/ /Hartford Life Insurance Company Private Express Mail Hartford Life - IAS
/ /Hartford Life and Annuity Insurance Company [LOGO] 200 Hopmeadow Street
Hartford Life Simsbury, CT 06089
- -----------------------------------------------------------------------------------------------------------------------------------
1. CONTRACT OWNER Ownership Type: / /Individual / /Trust / /UGMA / /UTMA / /CRT / /NRA / /Corporation / /Other
/ /Mr. / /Mrs. / /Ms. SEX:/ /M / /F U.S. CITIZEN / /Yes / /No
- -----------------------------------------------------------------------------------------------------------------------------------
First Name MI Last Name
- -----------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL OWNER INFORMATION (IE, NAME OF TRUST/CORPORATION)
- -----------------------------------------------------------------------------------------------------------------------------------
Social Security Number/TIN Date of Birth Daytime Telephone Number
- -----------------------------------------------------------------------------------------------------------------------------------
Street Address City State ZIP
- -----------------------------------------------------------------------------------------------------------------------------------
2. JOINT CONTRACT OWNER (If any) Date of Birth Social Security Number/TIN
/ /Mr. / /Mrs. / /Ms. SEX:/ /M / /F U.S. CITIZEN / /Yes / /No
- -----------------------------------------------------------------------------------------------------------------------------------
First Name MI Last Name Relationship to Contract Owner
- -----------------------------------------------------------------------------------------------------------------------------------
3. ANNUITANT (If different from Contract Owner) / /Any Trustee or Successor Date of Birth Social Security Number/TIN
(for Unallocated Qualified Plans only)
/ /Mr. / /Mrs. / /Ms. SEX:/ /M / /F
- -----------------------------------------------------------------------------------------------------------------------------------
First Name MI Last Name Daytime Telephone Number
- -----------------------------------------------------------------------------------------------------------------------------------
Street Address City State ZIP
- -----------------------------------------------------------------------------------------------------------------------------------
4. CONTINGENT ANNUITANT (If applicable) Date of Birth Social Security Number/TIN
/ /Mr. / /Mrs. / /Ms. SEX:/ /M / /F
- -----------------------------------------------------------------------------------------------------------------------------------
First Name MI Last Name
- -----------------------------------------------------------------------------------------------------------------------------------
5. BENEFICIARY(IES) (Unless indicated otherwise, proceeds will be divided equally. Please attach a separate sheet to add
additional beneficiaries.)
- -----------------------------------------------------------------------------------------------------------------------------------
/ /Primary RELATIONSHIP TO CONTRACT OWNER Date of Birth Social Security Number/TIN
%
- -----------------------------------------------------------------------------------------------------------------------------------
First Name MI Last Name
- -----------------------------------------------------------------------------------------------------------------------------------
/ /Primary / /Contingent RELATIONSHIP TO CONTRACT OWNER Date of Birth Social Security Number/TIN
%
- -----------------------------------------------------------------------------------------------------------------------------------
First Name MI Last Name
- -----------------------------------------------------------------------------------------------------------------------------------
6. PURCHASE PAYMENT (Make check payable to HARTFORD LIFE INSURANCE COMPANY)
Monies remitted via: / /Check / /Wire / /1035(a) Exchange / /Transfer / /Rollover $
---------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
7. PLAN PAYMENT TYPE (Complete Section A OR B)
A. NON QUALIFIED / /Initial Purchase / / 1035(a) Tax-Free Exchange Cost Basis $
(please provide Cost Basis) ---------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
B. QUALIFIED / /New Contribution / / Transfer / /Rollover Contribution for tax year
-----------
- -----------------------------------------------------------------------------------------------------------------------------------
INDIVIDUALLY OWNED EMPLOYER PLAN - / / Allocated / / Unallocated
- -----------------------------------------------------------------------------------------------------------------------------------
/ / Traditional IRA / /403(b) / / SEP IRA / / 401(k) / /401(a) / /Keogh/HR-10
/ / Custodial IRA / /Roth / / SIMPLE IRA (Non-DFI only) / / Other:
-----------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Form HL-15657 Printed in U.S.A.
<PAGE>
- --------------------------------------------------------------------------------
8. RATE LOCK - 90 DAY FIXED ACCOUNT/DCA BONUS 1035 EXCHANGE/TRANSFER RATE LOCK
/ / YES %
----------------
IF RATE LOCK IS NOT SELECTED, THE RATE WILL BE DETERMINED WHEN HARTFORD
LIFE RECEIVES THE FUNDS. ESTIMATED DOLLAR AMOUNT $
------------------
- --------------------------------------------------------------------------------
9. FUND SELECTION (The invested amount will be allocated as selected here. If
choosing the Custom Designed Allocation Program or Dollar Cost Averaging
Program, complete the appropriate enrollment form.) PLEASE NOTE: WHOLE
PERCENTAGES ONLY.
% % %
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
100%
- -------------------------------------------------------------------------------
10. SPECIAL REMARKS
-----------------------------------------------------------
- -------------------------------------------------------------------------------
11. OWNERS(S) ACKNOWLEDGEMENTS
Will the annuity applied for replace one or more existing annuity or life
insurance contracts? / / No / /Yes - If Yes, please explain in Special
Remarks, section 10.
Have you purchased another deferred annuity issued by Hartford Life during the
current calendar year? / /No / /Yes
THE FOLLOWING STATES REQUIRE INSURANCE TO ACKNOWLEDGE A FRAUD WARNING STATEMENT.
PLEASE REFER TO THE FRAUD WARNING STATEMENT FOR YOUR STATE AS INDICATED BELOW.
CHECK THE APPROPRIATE BOX PERTAINING TO YOUR RESIDENT STATE, SIGN AND DATE AT
THE BOTTOM OF SECTION 11.
/ / ARKANSAS Any person who knowingly presents a false or fraudulent claim
for payment of a loss or benefit or knowingly presents false information in
an application for insurance is guilty of a crime and may be subject to
fines and confinement in prison.
/ / ARIZONA Upon your written request we will provide you, within a
reasonable period of time, reasonable, factual information regarding the
benefits and provisions of the annuity contract for which you are applying.
If for any reason you are not satisfied with the contract, you may return
the contract within ten days after you receive it. If the contract you are
applying for is a variable annuity, you will receive an amount equal to the
sum of (i) the difference between the premiums paid and the amounts
allocated to any account under the contract and (ii) the Contract Value on
the date the returned contract is received by our company or our agent.
/ / COLORADO It is unlawful to knowingly provide false, incomplete,
misleading facts or information to an insurance company for the purpose of
defrauding or attempting to defraud the company. Penalties may include
imprisonment, fines, denial of insurance, and civil damages. Any insurance
company or agent of an insurance company who knowingly provides false,
incomplete or misleading facts or information to a policyholder or claimant
for the purpose of defrauding or attempting to defraud the policyholder or
claimant with regard to a settlement or award payable from insurance
proceeds shall be reported to the Colorado Division of Insurance within the
Department of Regulatory Services.
/ / FLORIDA Any person who knowingly and with intent to injure, defraud or
deceive any insurer files a statement of claim or an application containing
any false, incomplete or misleading information is guilty of a felony of
the third degree.
/ / KENTUCKY Any person who, knowingly and with intent to defraud any
insurance company or other person, files an application for insurance
containing any materially false information or conceals, for the purpose of
misleading, information concerning any fact thereto commits a fraudulent
act, which is a crime.
/ / MAINE It is a crime to knowingly provide false, incomplete or misleading
information to an insurance company for the purpose of defrauding the
company. Penalties may include imprisonment, fines or a denial of
insurance benefits.
/ / NEW JERSEY Any person who includes any false or misleading information on
an application for an insurance policy is subject to criminal and civil
penalties.
/ / NEW MEXICO Any person who knowingly presents a false or fraudulent claim
for payment of a loss or benefit or knowingly presents false information in
an application for insurance is guilty of a crime and may be subject to
civil fines and criminal penalties.
/ / OHIO Any person who, with intent to defraud or knowing that he/she is
facilitating a fraud against an insurer, submits an application or files
a claim containing a false or deceptive statement is guilty of insurance
fraud.
/ / PENNSYLVANIA Any person who knowingly and with intent to defraud any
insurance company or other person files an application for insurance or
statement of claim con-taining any materially false information or
conceals, for the purpose of misleading, information concerning any fact
material thereto commits a fraudulent insurance act, which is a crime and
subjects such person to criminal and civil penalties.
I/we hereby represent my/our answers to the above questions to be true and
correct to the best of my/our knowledge and belief. I/WE UNDERSTAND THAT
ANNUITY PAYMENTS OR SURRENDER VALUES, WHEN BASED UPON THE INVESTMENT EXPERIENCE
OF A SEPARATE ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO A FIXED DOLLAR
AMOUNT.
/ / RECEIPT OF A VARIABLE ANNUITY AND FUND PROSPECTUS IS HEREBY ACKNOWLEDGED.
If not checked, the appropriate prospectus will be mailed to you. Signed at:
*
--------------------------------------------
/ /
- --------- -------- --------------------------------------------
State Date Contract Owner Signature (Trustee/Custodian,
if applicable)
----------------------------------------------
Joint Contract Owner Signature (if applicable)
* IF THE STATE ABOVE IS DIFFERENT THAN RESIDENCE STATE, PLEASE SUBMIT A POLICY
SITUS FORM.
- --------------------------------------------------------------------------------
12. REGISTERED REPRESENTATIVE ACKNOWLEDGEMENTS
Do you, as agent, have reason to believe the
contract requested for will replace existing -----------------------------
annuities or insurance? / /Yes / /No Licensed Agent Signature
- --------------------------------------------------------------------------------
First Name MI Last Name
- --------------------------------------------------------------------------------
Broker/Dealer Broker/Dealer Street Address City State ZIP
- --------------------------------------------------------------------------------
Business Telephone Number Fax Number Licensed Agent SSN
- --------------------------------------------------------------------------------
Broker/Dealer Client Account Number License I.D (Florida Agents Only)
-------------------------------------- -----------------------------------
Select Program: / / A / / B / / C / / D
Form HL-15657 Printed in U.S.A.
<PAGE>
Exhibit 9
December 21, 1998
LYNDA GODKIN
SENIOR VICE PRESIDENT, GENERAL COUNSEL &
CORPORATE SECRETARY
Board of Directors
Hartford Life and Annuity Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: HARTFORD LIFE AND ANNUITY INSURANCE COMPANY PUTNAM CAPITAL MANAGER TRUST
SEPARATE ACCOUNT TWO
Dear Sir/Madam:
I have acted as General Counsel to Hartford Life and Annuity Insurance
Company (the "Company"), a Connecticut insurance company, and Hartford Life
and Annuity Insurance Company Putnam Capital Manager Trust Separate Account
Two (the "Account") in Connecticut with the registration of an indefinite
amount of securities in the form of flexible premium variable annuity
insurance contracts (the "Contracts") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended. I have examined
such documents (including the Form N-4 Registration Statement) and reviewed
such questions of law as I considered necessary and appropriate, and on the
basis of such examination and review, it is my opinion that:
1. The Company is a corporation duly organized and validly existing as a
stock life insurance company under the laws of the State of Connecticut
and is duly authorized to by the Insurance Department of the State of
Connecticut to issue the Contacts.
2. The Account is a duly authorized and existing separate account established
pursuant to the provisions of Section 38a-433 of the Connecticut Statutes.
3. To the extent so provided under the Contracts, that portion of the assets
of the Account equal to the reserves and other contract liabilities with
respect to the Account will not be chargeable with liabilities arising out
of any other business that the Company may conduct.
4. The Contracts, when issued as contemplated by the Form N-4 registration
statement, will constitute legal, validly issued and binding obligations
of the Company.
I hereby consent to the filing of this opinion as an exhibit to the Form N-4
Registration Statement for the Contracts and the Account.
Sincerely yours,
/s/ Lynda Godkin
Lynda Godkin
<PAGE>
Exhibit 16
<TABLE>
<CAPTION>
<S> <C>
THE HARTFORD
The Hartford Financial Services Group, Inc.
(Delaware)
|
- -------------------------------------------------------------------------------------------------------------
Nutmeg Insurance Company The Hartford Investment
(Connecticut) Management Company
| (Delaware)
Hartford Fire Insurance Company |
(Connecticut) Hartford Investment
| Services, Inc.
Hartford Accident and Indemnity Company (Connecticut)
(Connecticut)
|
Hartford Life, Inc.
(Delaware)
|
Hartford Life and Accident Insurance Company
(Connecticut)
|
|
|
- -------------------------------------------------------------------------------------------------------------
Alpine Life Hartford Financial Hartford Life American Maturity ITT Hartford Canada
Insurance Services Life Insurance Company Life Insurance Holdings, Inc.
Company Insurance Co. (Connecticut) Company (Canada)
(New Jersey) (Connecticut) | (Connecticut) |
| | |
| AML Financial, Inc. |
| (Connecticut) Hartford Life
| Insurance Company
| of Canada
| (Canada)
|
|
- -------------------------------------------------------------------------------------------------------------
Hartford Life and Annuity ITT Hartford International Hartford Financial Services Royal Life
Insurance Company Life Reassurance Corporation Corporation Insurance
(Connecticut) (Connecticut) (Delaware) Company of
| | America
| | (Connecticut)
| |
ITT Hartford Life, Ltd. |
(Bermuda) |
|
|
- -------------------------------------------------------------------------------------------------------------
MS Fund HL Funding HL Investment Hartford Hartford Securities Hartford-Comp. Emp.
America Company, Inc. Advisors, Inc. Equity Sales Distribution Benefit Service
1993-K, Inc. (Connecticut) (Connecticut) Company, Inc. Company, Inc. Company
(Delaware) | (Connecticut) (Connecticut) (Connecticut)
|
Hartford Investment
Financial Services
Company
(Delaware)
</TABLE>
