<PAGE>
Registration No. 33-83652
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
POST-EFFECTIVE AMENDMENT NO. 3
TO FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
A. Exact name of trust: Separate Account Five
B. Name of depositor: ITT Hartford Life and Annuity Insurance Company
C. Complete address of depositor's principal executive offices:
P. O. Box 2999
Hartford, CT 06104-2999
D. Name and address of agent for service:
Scott K. Richardson, Esquire
ITT Hartford Life Insurance Companies
P. O. Box 2999
Hartford, CT 06104-2999
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/X/ on May 1, 1996 pursuant to paragraph (b) of Rule 485
/ / 60 days after filing pursuant to paragraph (a)(1) of Rule 485
/ / on May 1, 1996 pursuant to paragraph (a)(1) of Rule 485
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
E. Title and amount of securities being registered:
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant has registered an indefinite amount of securities. The Rule
24f-2 Notice for the Registrant's most recent fiscal year will be filed
on or about February 29, 1996.
F. Proposed maximum aggregate offering price to the public of the securities
being registered:
Not yet determined.
<PAGE>
G. Amount of filing fee: Paid
H. Approximate date of proposed public offering:
As soon as practicable after the effective date of this registration
statement.
The registrant hereby represents that it is relying on Section
(13)(i)(B) of Rule 6e-3(T).
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B AND PROSPECTUS
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
1. Cover page
2. Cover page
3. Not applicable
4. The Company; Distribution of the Contracts
5. Summary - The Separate Account; The Separate Account-
General
6. The Separate Account - General
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. Summary; The Separate Account - Portfolios; The
Contract-Application for a Contract; Contract Benefits and
Rights; Other Matters - Voting Rights, Dividends
11. Summary; The Separate Account - Portfolios
12. Summary; The Separate Account- Portfolios
13. Deductions and Charges; Distribution of the Contracts;
Federal Tax Considerations
14. The Contract - Application for a Contract
15. The Contract - Allocation of Premium
16. The Separate Account - Portfolios; The Contract -
Allocation of Premium
17. Summary; Contract Benefits and Rights - Account Value and
Amount Payable on Surrender of the Contract, Cancellation
and Examine Rights
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
18. The Separate Account - Portfolios; Deduction and Charges;
Federal Tax Considerations
19. Other Matters - Statement to Contract Owners
20. Not applicable
21. Contract Benefits and Rights - Contract Loans
22. Not applicable
23. Safekeeping of Separate Account Assets
24. Other Matters - Assignment
25. The Company
26. Not applicable
27. The Company
28. The Company
29. The Company
30. Not applicable
31. Not applicable
32. Not applicable
33. Not applicable
34. Not applicable
35. Distribution of Contracts
36. Not required by Form S-6
37. Not applicable
38. Distribution of the Contracts
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
39. The Company; Distribution of the Contracts
40. Not applicable
41. The Company; Distribution of the Contracts
42. Not applicable
43. Not applicable
44. The Contract - Allocation of Premium
45. Not applicable
46. Contract Benefits and Rights - Account Value
47. The Separate Account - Portfolio
48. Cover Page; The Company
49. Not applicable
50. The Separate Account - General
51. Summary; The Company; The Contract; Contract Benefits and
Rights; Other Matters - Beneficiary
52. The Separate Account - Portfolios, Investment Adviser
53. Federal Tax Considerations
54. Not applicable
55. Not applicable
56. Not required by Form S-6
57. Not required by Form S-6
58. Not required by Form S-6
59. Not required by Form S-6
<PAGE>
ITT HARTFORD
LIFE INSURANCE COMPANY
PUTNAM CAPITAL MANAGER LIFE
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE CONTRACTS
[LOGO]
This prospectus describes Putnam Capital Manager Life, a modified single
premium variable life insurance contract ("Contract" or "Contracts") offered
by ITT Hartford Life and Annuity Insurance Company ("ITT Hartford") to
applicants age 90 and under. The Contract lets the Contract Owner pay a single
premium and, subject to restrictions, additional premiums.
The Contract is a modified endowment contract for federal income tax
purposes, except in certain cases described under "Federal Tax
Considerations," page 23. A LOAN, DISTRIBUTION OR OTHER AMOUNT RECEIVED FROM A
MODIFIED ENDOWMENT CONTRACT DURING THE LIFE OF THE INSURED WILL BE TAXED TO
THE EXTENT OF ANY ACCUMULATED INCOME IN THE CONTRACT. ANY AMOUNTS THAT ARE
TAXABLE WITHDRAWALS WILL BE SUBJECT TO A 10% ADDITIONAL TAX, WITH CERTAIN
EXCEPTIONS.
Generally, the minimum initial premium ITT Hartford will accept is $10,000.
The initial premium will be allocated to the PCM Money Market Fund. After the
Right to Cancel Period has expired, the amount so allocated will be
transferred to the Funds specified in the Contract Owner's application. The
following underlying investment portfolios ("Funds") of Putnam Capital Manager
Trust are available under the Contracts: PCM Asia Pacific Growth Fund, PCM
Diversified Income Fund, PCM Global Asset Allocation Fund, PCM Global Growth
Fund, PCM Growth and Income Fund, PCM High Yield Fund, PCM Money Market Fund,
PCM New Opportunities Fund, PCM U.S. Government and High Quality Bond Fund,
PCM Utilities Growth and Income Fund, and PCM Voyager Fund.
There is no guaranteed minimum Account Value for a Contract. The Account
Value of a Contract will vary up or down to reflect the investment experience
of the Funds to which premiums have been allocated. The Contract Owner bears
the investment risk for all amounts so allocated. The Contract continues in
effect while the Cash Surrender Value is sufficient to pay the monthly charges
under the Contract ("Deduction Amount"). The Contract may terminate if the
Cash Surrender Value is insufficient to cover a Deduction Amount and, after
expiration of a specified period, no additional premium payments are made.
The Contracts provide for a Face Amount, which is the minimum death benefit
under the Contract. The death benefit ("Death Benefit") may be greater than
the Face Amount. The Account Value will, and under certain circumstances the
Death Benefit of the Contract may, increase or decrease based on the
investment experience of the Funds to which premiums have been allocated.
However, while the Contract is in force, the Death Benefit will never be less
than the Face Amount. At the death of the Insured, we will pay the death
proceeds ("Death Proceeds") to the beneficiary. The Death Proceeds equal the
Death Benefit less any Indebtedness under the Contract.
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IT MAY NOT BE ADVANTAGEOUS TO PURCHASE VARIABLE LIFE INSURANCE AS A
REPLACEMENT FOR YOUR CURRENT LIFE INSURANCE OR IF YOU ALREADY OWN A VARIABLE
LIFE INSURANCE CONTRACT.
------------------------------------------------------------------------------
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THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED BY THE CURRENT PROSPECTUSES OF
THE APPLICABLE ELIGIBLE FUNDS WHICH CONTAIN A FULL DESCRIPTION OF THOSE FUNDS.
ALL PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
------------------------------------------------------------------------------
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
------------------------------------------------------------------------------
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THE PRODUCTS DESCRIBED HEREIN ARE NOT DEPOSITS OF, OR GUARANTEED BY ANY BANK,
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
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The date of this Prospectus is May 1, 1996.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SPECIAL TERMS........................................................... 4
SUMMARY................................................................. 5
THE COMPANY............................................................. 7
THE SEPARATE ACCOUNT.................................................... 8
General............................................................... 8
Funds................................................................. 8
Investment Adviser.................................................... 9
THE CONTRACT............................................................ 10
Application for a Contract............................................ 10
Premiums.............................................................. 10
Allocation of Premiums................................................ 10
Accumulation Unit Values.............................................. 11
DEDUCTIONS AND CHARGES.................................................. 11
Monthly Deductions.................................................... 11
Annual Maintenance Fee................................................ 12
Taxes Charged Against the Separate Account............................ 13
Charges Against the Funds............................................. 13
Contingent Deferred Sales Charge...................................... 13
Premium Tax Charge.................................................... 13
CONTRACT BENEFITS AND RIGHTS............................................ 13
Death Benefit......................................................... 13
Account Value......................................................... 14
Transfer of Account Value............................................. 14
Contract Loans........................................................ 15
Amount Payable on Surrender of the Contract........................... 15
Partial Withdrawals................................................... 16
Benefits at Maturity.................................................. 16
Lapse and Reinstatement............................................... 16
Cancellation and Exchange Rights...................................... 16
Suspension of Valuation, Payments and Transfers....................... 17
LAST SURVIVOR CONTRACTS................................................. 17
OTHER MATTERS........................................................... 17
Voting Rights......................................................... 17
Statements to Contract Owners......................................... 18
Limit on Right to Contest............................................. 18
Misstatement as to Age and Sex........................................ 18
Payment Options....................................................... 18
Beneficiary........................................................... 20
Assignment............................................................ 20
Dividends............................................................. 20
EXECUTIVE OFFICERS AND DIRECTORS........................................ 21
DISTRIBUTION OF THE CONTRACTS........................................... 22
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS............................ 23
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
FEDERAL TAX CONSIDERATIONS.............................................. 23
General............................................................... 23
Taxation of ITT Hartford Life and the Separate Account................ 23
Income Taxation of Contract Benefits.................................. 24
Last Survivor Contracts............................................... 24
Modified Endowment Contracts.......................................... 24
Estate and Generation Skipping Taxes.................................. 24
Diversification Requirements.......................................... 25
Ownership of the Assets in the Separate Account....................... 25
Life Insurance Purchased for Use in Split Dollar Arrangements......... 26
Federal Income Tax Withholding........................................ 26
Non-Individual Ownership of Contracts................................. 26
Other................................................................. 26
Life Insurance Purchases by Nonresident Aliens and Foreign
Companies............................................................ 26
LEGAL PROCEEDINGS....................................................... 26
LEGAL MATTERS........................................................... 26
EXPERTS................................................................. 27
REGISTRATION STATEMENT.................................................. 27
APPENDIX A.............................................................. 28
</TABLE>
THE CONTRACTS MAY NOT BE AVAILABLE IN ALL STATES.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER OR OTHER PERSON IS AUTHORIZED
TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON.
3
<PAGE>
SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCOUNT VALUE: The current value of Accumulation Units plus the value of the
Loan Account under the Contract.
ACCUMULATION UNIT: An accounting unit of measure used to calculate the value of
a Sub-Account.
ANNUAL WITHDRAWAL AMOUNT: The amount of a surrender or partial withdrawal that
is not subject to the contingent deferred sales charge. This amount in any
Contract year is the greater of 10% of premiums or 100% of cumulative earnings
(Account Value less premiums paid).
CASH SURRENDER VALUE: The Account Value less any contingent deferred sales
charge and additional premium tax charge and all Indebtedness.
CODE: The Internal Revenue Code of 1986, as amended.
CONTRACT ANNIVERSARY: The yearly anniversary of the Contract Date.
CONTRACT DATE: A date not later than three business days after receipt of the
initial premium at ITT Hartford's Home Office.
CONTRACT OWNER: The person having rights to benefits under the Contract during
the lifetime of the Insured; the Contract Owner may or may not be the Insured.
CONTRACT YEARS: Annual periods computed from the Contract Date.
COVERAGE AMOUNT: The Death Benefit less the Account Value.
DEATH BENEFIT: The greater of (1) the Face Amount specified in the Contract or
(2) the Account Value on the date of death multiplied by a stated percentage as
specified in the Contract.
DEATH PROCEEDS: The amount that we will pay on the death of the Insured. This
equals the Death Benefit less any Indebtedness.
DEDUCTION AMOUNT: A deduction on the Contract Date and on each Monthly Activity
Date for the cost of insurance, a tax expense charge, an administrative charge
and a mortality and expense risk charge.
FACE AMOUNT: On the Contract Date, the initial Face Amount is the amount shown
on the Contract's Specifications page. Thereafter, the Face Amount is reduced by
any partial withdrawals.
FUNDS: Currently, the portfolios of Putnam Capital Manager Trust described on
page 8 of this Prospectus.
GUIDELINE SINGLE PREMIUM: The "Guideline Single Premium" as defined in Section
7702 of the Code.
HOME OFFICE: Currently located at 200 Hopmeadow Street, Simsbury, Connecticut;
however, the mailing address is P.O. Box 2999, Hartford, Connecticut 06104-2999.
INDEBTEDNESS: All monies owed to ITT Hartford by the Contract Owner. These
monies include all outstanding loans on the Contract, including any interest due
or accrued Deduction Amount or annual maintenance fee.
INSURED: The person on whose life the Contract is issued.
LOAN ACCOUNT: An account in ITT Hartford's General Account, established for any
amounts transferred from the Sub-Accounts for requested loans. The Loan Account
credits a fixed rate of interest of 4% per annum that is not based on the
investment experience of the Separate Account.
MONTHLY ACTIVITY DATE: The day of each month on which the Deduction Amount is
deducted from the Account Value of the Contract. Monthly Activity Dates occur on
the same day of the month as the Contract Date.
SEPARATE ACCOUNT: Separate Account Five, an account established by ITT Hartford
to separate the assets funding the Contracts from other assets of ITT Hartford.
SUB-ACCOUNT: The subdivisions of the Separate Account used to allocate a
Contract Owner's Account Value, less Indebtedness, among the Funds.
TRUST: Putnam Capital Manager Trust.
VALUATION DAY: Every day the New York Stock Exchange is open for trading. The
value of the Separate Account is determined at the close of the New York Stock
Exchange (currently 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
4
<PAGE>
SUMMARY
THE CONTRACT
The Contracts are life insurance contracts with death benefits, cash values,
and other traditional life insurance features. The Contracts are "variable."
Unlike the fixed benefits of ordinary whole life insurance, the Account Value
will, and the Death Benefit may, increase or decrease based on the investment
experience of the Funds to which premiums have been allocated. The Contracts are
credited with units ("Accumulation Units") to calculate cash values. The
Contract Owner may transfer the cash values among the Funds.
The Contracts can be issued on a single life or "last survivor" basis. For a
discussion of how last survivor Contracts operate differently from single life
Contracts, see "Last Survivor Contracts," page 17.
THE SEPARATE ACCOUNT AND THE FUNDS
Separate Account Five ("Separate Account") funds the variable life insurance
Contracts offered by this prospectus. ITT Hartford established the Separate
Account pursuant to Connecticut insurance law and organized as a unit investment
trust registered under the Investment Company Act of 1940. The Contracts
currently offer eleven (11) sub-accounts ("Sub-Accounts"), each investing
exclusively in a Fund. If an initial premium is submitted with an application
for a Contract, it will be allocated, within three business days of receipt at
ITT Hartford's Home Office, to the PCM Money Market Fund. After the expiration
of the Right to Cancel Period, the values in the PCM Money Market Fund will be
allocated to one or more of the Funds as specified in the Contract Owner's
application. See "The Contract -- Allocation of Premiums," page 10.
Currently, the Funds of Putnam Capital Manager Trust available under the
Contracts are: PCM Asia Pacific Growth Fund, PCM Diversified Income Fund, PCM
Global Asset Allocation Fund, PCM Global Growth Fund, PCM Growth and Income
Fund, PCM High Yield Fund, PCM Money Market Fund, PCM New Opportunities Fund,
PCM U.S. Government and High Quality Bond Fund, PCM Utilities Growth and Income
Fund, and PCM Voyager Fund. Applicants should read the prospectus for the Funds
accompanying this prospectus in connection with the purchase of a Contract. The
investment objectives of the Funds are as set forth in "The Separate Account,"
page 8.
Total fund operating expenses in 1995, including management fees, were .89%
for PCM Asia Pacific Growth Fund; .85% for PCM Diversified Income Fund; .84% for
PCM Global Asset Allocation Fund; .75% for PCM Global Growth Fund; .57% for PCM
Growth and Income Fund; .79% for PCM High Yield Fund; .57% for PCM Money Market
Fund; .84% for PCM New Opportunities Fund; .70% for PCM U.S. Government and High
Quality Bond Fund; .78% for PCM Utilities Growth and Income Fund; and .68% for
PCM Voyager Fund.
The investment adviser for all the Funds is Putnam Investment Management,
Inc. See "The Separate Account," page 8.
PREMIUMS
The Contract permits the Contract Owner to pay a large single premium and,
subject to restrictions, additional premiums. The Contract Owner may choose a
minimum initial premium of 80%, 90% or 100% of the Guideline Single Premium
(based on the Face Amount). Under current underwriting rules, which are subject
to change, Applicants between the ages of 35 and 80 who pay an initial premium
of 100% of the Guideline Single Premium are eligible for simplified underwriting
without a medical examination if they meet simplified underwriting standards as
evidenced in their responses in the application. For Contract Owners who pay an
initial premium of 80% or 90% of the Guideline Single Premium or who are below
age 35 or above age 80, standard underwriting applies, except that substandard
underwriting applies only in those cases that represent substandard risks
according to customary underwriting guidelines. Additional premiums are allowed
if they do not cause the Contract to fail to meet the definition of a life
insurance contract under Section 7702 of the Code. ITT Hartford may require
evidence of insurability for any additional premiums which increase the Coverage
Amount. Generally, the minimum initial premium ITT Hartford will accept is
$10,000. ITT Hartford may accept less than $10,000 under certain circumstances.
No premium will be accepted which does not meet the tax qualification guidelines
for life insurance under the Code.
5
<PAGE>
DEDUCTIONS AND CHARGES
On the Contract Date and on each Monthly Activity Date, ITT Hartford will
deduct a Deduction Amount from the Account Value. The Deduction Amount will be
made pro rata respecting each Sub-Account attributable to the Contract. The
Deduction Amount includes a cost of insurance charge, tax expense charge,
administrative charge and a mortality and expense risk charge. The monthly cost
of insurance charge is to cover ITT Hartford's anticipated mortality costs. In
addition, ITT Hartford will deduct monthly from the Account Value a tax expense
charge equal to an annual rate of 0.40% for the first ten Contract Years. This
charge compensates ITT Hartford for premium taxes imposed by various states and
local jurisdictions and for federal taxes imposed under Section 848 of the Code.
The charge includes a premium tax deduction of 0.25% and a federal tax deduction
of 0.15%. The premium tax deduction represents an average premium tax of 2.5% of
premiums over ten years. ITT Hartford will deduct from the Account Value
attributable to the Separate Account a monthly administrative charge equal to an
annual rate of 0.40%. This charge compensates ITT Hartford for administrative
expenses incurred in the administration of the Separate Account and the
Contracts. ITT Hartford will also deduct from the Account Value attributable to
the Separate Account a monthly charge equal to an annual rate of 0.90% for the
mortality risks and expense risks ITT Hartford assumes in relation to the
variable portion of the Contracts. If the Cash Surrender Value is not sufficient
to cover a Deduction Amount due on any Monthly Activity Date the Contract may
lapse. See "Deductions and Charges -- Monthly Deductions," page 11 and "Contract
Benefits and Rights -- Lapse and Reinstatement," page 16.
If the Account Value on a Contract Anniversary is less than $50,000, ITT
Hartford will deduct on such date an annual maintenance fee of $30. This fee
will help reimburse ITT Hartford for administrative and maintenance costs of the
Contracts. See "Deductions and Charges -- Annual Maintenance Fee," page 12.
ITT Hartford may set up a provision for income taxes against the assets of
the Separate Account. See "Deductions and Charges -- Taxes Charged Against The
Separate Account," page 13 and "Federal Tax Considerations," page 23.
Applicants should review the prospectuses for the Funds which accompany this
prospectus for a description of the charges assessed against the assets of the
Funds.
Upon surrender of the Contract and partial withdrawals in excess of the
Annual Withdrawal Amount, a contingent deferred sales charge may be assessed. In
Contract Years 1 through 3, this charge is 7.5% of surrendered Account Value
attributable to premiums paid. In Contract Years 4 through 5, this charge is 6%.
In Contract Years 6 through 7, this charge is 4%. In Contract Years 8 through 9,
this charge is 2%. After the 9th Contract Year, there is no charge. The
contingent deferred sales charge is imposed to cover a portion of the sales
expense incurred by ITT Hartford in distributing the Contracts. This expense
includes agents commissions, advertising and the printing of prospectuses. See
"Deductions and Charges -- Contingent Deferred Sales Charge," page 13.
During the first nine Contract Years, an additional premium tax charge will
be imposed on surrender or partial withdrawals. See "Deductions and Charges --
Premium Tax Charge," page 13.
For a discussion of the tax consequences of surrender of the Contract or a
partial withdrawal, see "Federal Tax Considerations," page 23.
DEATH BENEFIT
The Contracts provide for a Face Amount which is the minimum Death Benefit
under the Contract. The Death Benefit may be greater than the Face Amount. At
the death of the Insured, we will pay the Death Proceeds to the beneficiary. The
Death Proceeds equal the Death Benefit less any Indebtedness under the Contract.
See "Contract Benefits and Rights -- Death Benefit," page 13.
ACCOUNT VALUE
The Account Value of the Contract will increase or decrease to reflect the
investment experience of the Funds applicable to the Contract and deductions for
the monthly Deduction Amount. There is no minimum guaranteed Account Value and
the Contract Owner bears the risk of the investment in the Funds. See "Contract
Benefits and Rights -- Account Value," page 14.
6
<PAGE>
CONTRACT LOANS
A Contract Owner may obtain one or both of two types of cash loans from ITT
Hartford. Both types of loans are secured by the Contract. At the time a loan is
requested, the aggregate amount of all loans (including the currently applied
for loan) may not exceed 90% of the difference of the Account Value less any
contingent deferred sales charge and due and unpaid Deduction Amount. See
"Contract Benefits and Rights -- Contract Loans," page 15.
LAPSE
Under certain circumstances a Contract may terminate if the Cash Surrender
Value on any Monthly Activity Date is less than the required Monthly Deduction
Amount. ITT Hartford will give written notice to the Contract Owner and a 61 day
grace period during which additional amounts may be paid to continue the
Contract. See "Contract Benefits and Rights -- Contract Loans," page 15 and
"Lapse and Reinstatement," page 16.
CANCELLATION AND EXCHANGE RIGHTS
An applicant has a limited right to return his or her Contract for
cancellation. If the applicant returns the Contract, by mail or hand delivery,
to ITT Hartford or to the agent who sold the Contract, to be cancelled within 10
days after delivery of the Contract to the applicant (in certain cases, this
free-look period is longer), ITT Hartford will return to the applicant within 7
days thereafter the greater of the premiums paid for the Contract or the sum of
(1) the Account Value on the date the returned Contract is received by ITT
Hartford or its agent and (2) any deductions under Contract or by the Funds for
taxes, charges or fees.
In addition, once the Contract is in effect it may be exchanged during the
first 24 months after its issuance for a permanent life insurance contract on
the life of the Insured without submitting proof of insurability. See "Contract
Benefits and Rights -- Cancellation and Exchange Rights," page 16.
TAX CONSEQUENCES
The current Federal tax law generally excludes all death benefit payments
from the gross income of the Contract beneficiary. The Contracts generally will
be treated as modified endowment contracts. This status does not affect the
Contracts' classification as life insurance, nor does it affect the exclusion of
death benefit payments from gross income. However, loans, distributions or other
amounts received under a modified endowment contract are taxed to the extent of
accumulated income in the Contract (generally, the excess of Account Value over
premiums paid) and may be subject to a 10% penalty tax. See "Federal Tax
Considerations," page 23.
THE COMPANY
ITT Hartford Life and Annuity Insurance Company ("ITT Hartford"), formerly
ITT Life Insurance Corporation, was originally incorporated under the laws of
Wisconsin on January 9, 1956. ITT Hartford was redomiciled to Connecticut on May
1, 1996. It is a stock life insurance company engaged in the business of writing
both individual and group life insurance and annuities in all states including
the District of Columbia, except New York. The offices of ITT Hartford are
located in Minneapolis, Minnesota; however, its mailing address is P.O. Box 2999
Hartford, Connecticut 06104-2999.
ITT Hartford is a wholly owned subsidiary of Hartford Life Insurance
Company. ITT Hartford is ultimately 100% owned by Hartford Fire Insurance
Company, one of the largest multiple lines insurance carriers in the United
States. On December 20, 1995, Hartford Fire Insurance Company became an
independent, publicly traded corporation.
ITT Hartford is rated A+ (superior) by A.M. Best and Company, Inc. on the
basis of its financial soundness and operating performance. ITT Hartford is
rated AA+ by both Standard & Poor's and Duff and Phelps on the basis of its
claims paying ability.
These ratings do not apply to the performance of the Separate Account.
However, the contractual obligations under the Contracts are the general
corporate obligations of ITT Hartford. These ratings do apply to ITT Hartford's
ability to meet its insurance obligations under the contract.
7
<PAGE>
ITT Hartford is subject to Connecticut law governing insurance companies and
is regulated and supervised by the Connecticut Commissioner of Insurance. An
annual statement in a prescribed form must be filed with that Commissioner on or
before March 1 in each year covering the operations of ITT Hartford for the
preceding year and its financial condition on December 31 of such year. Its
books and assets are subject to review or examination by the Commissioner or his
agents at all times, and a full examination of its operations is conducted by
the National Association of Insurance Commissioners at least once in every four
years. In addition, ITT Hartford is subject to the insurance laws and
regulations of any jurisdiction in which it sells its insurance contracts. ITT
Hartford is also subject to various Federal and state securities laws and
regulations.
THE SEPARATE ACCOUNT
GENERAL
Separate Account Five ("Separate Account") is a separate account of ITT
Hartford established on August 17, 1994 pursuant to the insurance laws of the
State of Connecticut and organized as a unit investment trust registered with
the Securities and Exchange Commission under the Investment Company Act of 1940.
The Separate Account meets the definition of "separate account" under federal
securities law. Under Connecticut law, the assets of the Separate Account are
held exclusively for the benefit of Contract Owners and persons entitled to
payments under the Contracts. The assets for the Separate Account are not
chargeable with liabilities arising out of any other business which ITT Hartford
may conduct.
FUNDS
The underlying investment for the Contracts are shares of Putnam Capital
Manager Trust, an open-end series investment company with multiple portfolios
("Funds"). The assets of each Sub-Account of the Separate Account are invested
exclusively in one of the Funds. The underlying Funds corresponding to each
Sub-Account and their investment objectives are described below. ITT Hartford
reserves the right, subject to compliance with the law, to offer additional
funds with differing investment objectives. There is no assurance that any of
the Funds will achieve its stated objectives.
PCM ASIA PACIFIC GROWTH FUND
Seeks capital appreciation by investing primarily in securities of companies
located in Asia and in the Pacific Basin.
PCM DIVERSIFIED INCOME FUND
Seeks high current income consistent with capital preservation by investing
in the following three sections of the fixed income securities markets: U.S.
Government Sector, High Yield Sector (which invests primarily in what are
commonly referred to as "junk bonds"), and International Sector. See the Special
Considerations for investments in high yield securities described in the Fund
prospectus.
PCM GLOBAL ASSET ALLOCATION FUND
Seeks a high level of long-term total return consistent with preservation of
capital by investing in U.S. equities, international equities, U.S. fixed income
securities, and international fixed income securities.
PCM GLOBAL GROWTH FUND
Seeks capital appreciation through a globally diversified common stock
portfolio.
PCM GROWTH AND INCOME FUND
Seeks capital growth and current income by investing primarily in common
stocks that offer potential for capital growth, current income, or both.
8
<PAGE>
PCM HIGH YIELD FUND
Seeks high current income by investing primarily in high-yielding,
lower-rated fixed income securities (commonly referred to as "junk bonds"),
constituting a diversified portfolio which Putnam Investment Management, Inc.
("Putnam Management") believes does not involve undue risk to income or
principal. Capital growth is a secondary objective when consistent with high
current income. See the special considerations for investments in high yield
securities described in the Fund prospectus.
PCM MONEY MARKET FUND
Seeks to achieve as high a level of current income as is consistent with
preservation of capital and maintenance of liquidity by investing in
high-quality money market instruments.
PCM NEW OPPORTUNITIES FUND
Seeks long-term capital appreciation by investing principally in common
stocks of companies in sectors of the economy which Putnam Management believes
possess above-average long-term growth potential.
PCM U.S. GOVERNMENT AND HIGH QUALITY BOND FUND
Seeks current income consistent with preservation of capital by investing
primarily in securities issued or guaranteed as to principal and interest by the
U.S. Government or by its agencies or instrumentalities and in other debt
obligations rated at least A by Standard & Poor's or Moody's or, if not rated,
determined by Putnam Management to be of comparable quality.
PCM UTILITIES GROWTH AND INCOME FUND
Seeks capital growth and current income by concentrating its investments in
securities issued by companies in the public utilities industries.
PCM VOYAGER FUND
Aggressively seeks capital appreciation primarily from a portfolio of common
stocks which Putnam Management believes have potential for capital appreciation
which is significantly greater than that of market averages.
PCM Asia Pacific Growth Fund, PCM Diversified Income Fund, PCM Global Growth
Fund, PCM Growth and Income Fund, PCM High Yield Fund, PCM Money Market Fund,
PCM New Opportunities Fund, PCM Utilities Growth and Income Fund, and PCM
Voyager Fund are generally managed in styles similar to other open-end
investment companies which are 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 is contained in the accompanying
Trust Prospectus which should be read in conjunction with this Prospectus before
investing, and in the Trust Statement of Additional Information which may be
ordered without charge from Putnam Investor Services, Inc.
It is conceivable that in the future it may be disadvantageous for variable
annuity separate accounts and variable life insurance separate accounts to
invest in the Funds simultaneously. Although ITT Hartford and the Funds do not
currently foresee any such disadvantages either to variable annuity contract
owners or to variable life insurance policyowners, the Trust's Board of Trustees
intends to monitor events in order to identify any material conflicts between
such Contract Owners and policyowners 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 holders would
not bear any expenses attendant upon establishment of such separate funds.
INVESTMENT ADVISER
Putnam Management, One Post Office Square, Boston, Massachusetts, 02109,
serves as the investment manager for the Funds. An affiliate, The Putnam
Advisory Company, Inc., manages domestic and foreign
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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.
THE CONTRACT
APPLICATION FOR A CONTRACT
Individuals wishing to purchase a Contract must submit an application to ITT
Hartford. A Contract will be issued only on the lives of insureds age 90 and
under who supply evidence of insurability satisfactory to ITT Hartford.
Acceptance is subject to ITT Hartford's underwriting rules and ITT Hartford
reserves the right to reject an application for any reason. IF AN APPLICATION
FOR A CONTRACT IS REJECTED, THEN YOUR INITIAL PREMIUM WILL BE RETURNED ALONG
WITH AN ADDITIONAL AMOUNT FOR INTEREST, BASED ON THE CURRENT RATE BEING CREDITED
BY ITT HARTFORD. No change in the terms or conditions of a Contract will be made
without the consent of the Contract Owner.
The Contract will be effective on the Contract Date only after ITT Hartford
has received all outstanding delivery requirements and received the initial
premium. The Contract Date is the date used to determine all future cyclical
transactions on the Contract, e.g., Monthly Activity Date, Contract Months and
Contract Years. The Contract Date may be prior to, or the same as, the date the
Contract is issued ("Issue Date").
If the Coverage Amount is over the current limits established by ITT
Hartford, the initial payment will not be accepted with the application. In
other cases where we receive the initial payment with the application, we will
provide fixed conditional insurance during underwriting according to the terms
of a conditional receipt. The fixed conditional insurance will be the insurance
applied for, up to a maximum that varies by age. If no fixed conditional
insurance was in effect, on Contract delivery we will require a sufficient
payment to place the insurance in force.
PREMIUMS
The Contract permits the Contract Owner to pay a large single premium and,
subject to restrictions, additional premiums. The Contract Owner may choose a
minimum initial premium of 80%, 90% or 100% of the Guideline Single Premium
(based on the Face Amount). Under current underwriting rules, which are subject
to change, Applicants between ages 35 and 80 who pay an initial premium of 100%
of the Guideline Single Premium (subject to then current premium limits) are
eligible for simplified underwriting without a medical examination if they meet
simplified underwriting standards as evidenced in their responses in the
application. For Contract Owners who pay an initial premium of 80% or 90% of the
Guideline Single Premium or who are below age 35 or above age 80, standard
underwriting applies, except that substandard underwriting applies only in those
cases that represent substandard risks according to customary underwriting
guidelines. Additional premiums are allowed if they do not cause the Contract to
fail to meet the definition of a life insurance contract under Section 7702 of
the Code. ITT Hartford may require evidence of insurability for any additional
premiums which increase the Coverage Amount. Generally, the minimum initial
premium ITT Hartford will accept is $10,000. ITT Hartford may accept less than
$10,000 under certain circumstances. No premium will be accepted which does not
meet the tax qualification guidelines for life insurance under the Code.
ALLOCATION OF PREMIUMS
Within three business days of receipt of a completed application and the
initial premium at ITT Hartford's Home Office, ITT Hartford will allocate the
entire premium to the PCM Money Market Fund. After the expiration of the Right
To Cancel Period the Account Value in the PCM Money Market Fund will be
allocated among the Funds in whole percentages to purchase Accumulation Units in
the applicable Sub-Accounts as the Contract
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Owner directs in the application. Premiums received on or after the expiration
of the Right to Cancel Period will be allocated among the Sub-Accounts to
purchase Accumulation Units in such Sub-Accounts as directed by the Contract
Owner or, in the absence of directions, as specified in the original
application. The number of Accumulation Units in each Sub-Account to be credited
to a Contract (including the initial allocation to the PCM Money Market Fund)
will be determined first by multiplying the premium by the percentage to be
allocated to each Fund to determine the portion to be invested in the
Sub-Account. Each portion to be invested in each Sub-Account is then divided by
the Accumulation Unit Value of that particular Sub-Account next computed after
receipt of the payment.
ACCUMULATION UNIT VALUES
The Accumulation Unit Value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
Valuation Day by multiplying the Accumulation Unit Value of the particular
Sub-Account on the preceding Valuation Day by a "Net Investment Factor" for that
Sub-Account for the Valuation Period then ended. The Net Investment Factor for
each Sub-Account is the net asset value per share of the corresponding Fund at
the end of the Valuation Period (plus the per share dividends or capital gains
by that Fund if the ex-dividend date occurs in the Valuation Period then ended)
divided by the net asset value per share of the corresponding Fund at the
beginning of the Valuation Period. Applicants should refer to the prospectuses
for the Funds which accompany this prospectus for a description of how the
assets of each Fund are valued since such determination has a direct bearing on
the Accumulation Unit Value of the Sub-Account and therefore the Account Value
of a Contract. See ALSO, "Contract Benefits and Rights -- Account Value," page
14.
All valuations in connection with a Contract, e.g., with respect to
determining Account Value and Cash Surrender Value and in connection with
Contract Loans, or calculation of Death Benefits, or with respect to determining
the number of Accumulation Units to be credited to a Contract with each premium,
other than the initial premium, will be made on the date the request or payment
is received by ITT Hartford at its Home Office if such date is a Valuation Day;
otherwise such determination will be made on the next succeeding date which is a
Valuation Day.
DEDUCTIONS AND CHARGES
MONTHLY DEDUCTIONS
On the Contract Date, and on each Monthly Activity Date after the Contract
Date, ITT Hartford will deduct an amount ("Deduction Amount") to cover charges
and expenses incurred in connection with a Contract. Each monthly Deduction
Amount will be deducted pro rata from each Sub-Account attributable to the
Contract such that the proportion of Account Value of the Contract attributable
to each Sub-Account remains the same before and after the deduction. The
Deduction Amount will vary from month to month. If the Cash Surrender Value is
not sufficient to cover a Deduction Amount due on any Monthly Activity Date, the
Contract may lapse. See "Contract Benefits and Rights -- Lapse and
Reinstatement," page 16. The following is a summary of the monthly deductions
and charges which constitute the Deduction Amount:
COST OF INSURANCE CHARGE: The cost of insurance charge covers ITT
Hartford's anticipated mortality costs for standard and substandard risks.
Current cost of insurance rates are lower after the 10th Contract Year and are
based on whether 100%, 90% or 80% of the Guideline Single Premium has been paid.
The current cost of insurance charge will not exceed the guaranteed cost of
insurance charge. This charge is a guaranteed maximum monthly rate multiplied by
the Coverage Amount on the Contract Date or any Monthly Activity Date. For
standard risks, the guaranteed cost of insurance rate is based on the 1980
Commissioners Standard Ordinary Mortality Table, age last birthday). (Unisex
rates may be required in some states.) A table of guaranteed cost of insurance
rates per $1,000 will be included in each Contract; however, ITT Hartford
reserves the right to use rates less than those shown in the table. Substandard
risks will be charged at a higher cost of insurance rate that will not exceed
rates based on a multiple of the 1980 Commissioners Standard Ordinary Mortality
Table, age last birthday. The multiple will be based on the insured's
substandard rating.
The Coverage Amount is first set on the Contract Date and then on each
Monthly Activity Date. On such days, it is the Face Amount less the Account
Value subject to a Minimum Coverage Amount. The Coverage Amount remains level
between the Monthly Activity Dates.
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The Coverage Amount may be adjusted to continue to qualify the Contracts as
life insurance contracts under the current Federal tax law. Under that law, the
Minimum Coverage Amount is a stated percentage of the Account Value of the
Contract determined on each Monthly Activity Date. The percentages vary
according to the attained age of the Insured.
EXAMPLE:
Face Amount = $100,000
Account Value on the Monthly Activity Date = $30,000
Insured's attained age = 40
Minimum Coverage Amount percentage for age 40 = 150%
On the Monthly Activity Date, the Coverage Amount is $70,000. This is
calculated by subtracting the Account Value on the Monthly Activity Date
($30,000) from the Face Amount ($100,000), subject to a possible Minimum
Coverage Amount adjustment. This Minimum Coverage Amount is determined by taking
a percentage of the Account Value on the Monthly Activity Date. In this case,
the Minimum Coverage Amount is $45,000 (150% of $30,000). Since $45,000 is less
than the Face Amount less the Account Value ($70,000), no adjustment is
necessary. Therefore, the Coverage Amount will be $70,000.
Assume that the Account Value in the above example was $50,000. The Minimum
Coverage Amount would be $75,000 (150% of $50,000). Since this is greater than
the Face Amount less the Account Value ($50,000), the Coverage Amount for the
Contract Month is $75,000. (For an explanation of the Death Benefit, see
"Contract Benefits and Rights" on page 13.)
Because the Account Value and, as a result, the Coverage Amount under a
Contract may vary from month to month, the cost of insurance charge may also
vary on each Monthly Activity Date.
TAX EXPENSE CHARGE: ITT Hartford will deduct monthly from the Account Value
a tax expense charge equal to an annual rate of 0.40% for the first ten Contract
Years. This charge compensates ITT Hartford for premium taxes imposed by various
states and local jurisdictions and for federal taxes imposed under Section 848
of the Code. The charge includes a premium tax deduction of 0.25% and a federal
tax deduction of 0.15%. The 0.25% premium tax deduction over ten Contract Years
approximates ITT Hartford's average expenses for state and local premium taxes
(2.5%). Premium taxes vary, ranging from zero to more than 4.0%. The premium tax
deduction is made whether or not any premium tax applies. The deduction may be
higher or lower than the premium tax imposed. However, ITT Hartford does not
expect to make a profit from this deduction. The 0.15% federal tax deduction
helps reimburse ITT Hartford for approximate expenses incurred from federal
taxes under Section 848 of the Code. The federal tax deduction is a factor ITT
Hartford must use when computing the maximum sales load chargeable under
Securities and Exchange Commission rules.
ADMINISTRATIVE CHARGE: ITT Hartford will deduct monthly from the Account
Value attributable to the Separate Account an administrative charge equal to an
annual rate of 0.40%. This charge compensates ITT Hartford for administrative
expenses incurred in the administration of the Separate Account and the
Contracts.
MORTALITY AND EXPENSE RISK CHARGE: ITT Hartford will deduct monthly from
the Account Value attributable to the Separate Account a charge equal to an
annual rate of 0.90% for the mortality risks and expense risks ITT Hartford
assumes in relation to the variable portion of the Contracts. The mortality risk
assumed is that the cost of insurance charges specified in the Contract will be
insufficient to meet claims. ITT Hartford also assumes a risk that the Face
Amount (the minimum Death Benefit) will exceed the Coverage Amount on the date
of death plus the Account Value on the date ITT Hartford receives written notice
of death. The expense risk assumed is that expenses incurred in issuing and
administering the Contracts will exceed the administrative charges set in the
Contract. ITT Hartford may profit from the mortality and expense risk charge and
may use any profits for any proper purpose, including any difference between the
cost it incurs in distributing the Contracts and the proceeds of the contingent
deferred sales charge.
ANNUAL MAINTENANCE FEE
If the Account Value on a Contract Anniversary is less than $50,000, ITT
Hartford will deduct on such date an annual maintenance fee of $30. This fee
will help reimburse ITT Hartford for administrative and maintenance costs of the
Contracts. The sum of the monthly administrative charges and the annual
maintenance fee will not exceed the cost ITT Hartford incurs in providing
administrative services under the Contracts.
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TAXES CHARGED AGAINST THE SEPARATE ACCOUNT
Currently, no charge is made to the Separate Account for Federal income
taxes that may be attributable to the Separate Account. ITT Hartford may,
however, make such a charge in the future. Charges for other taxes, if any,
attributable to the Separate Account may also be made.
CHARGES AGAINST THE FUNDS
The Separate Account purchases shares of the Funds at net asset value. The
net asset value of the Fund shares reflects investment advisory fees and
administrative expenses already deducted from the assets of the Funds. These
charges are described in the prospectus for the Funds.
CONTINGENT DEFERRED SALES CHARGE
Upon surrender of the Contract and partial withdrawals in excess of the
Annual Withdrawal Amount, a contingent deferred sales charge may be assessed. In
Contract Years 1 through 3, this charge is 7.5% of surrendered Account Value
attributable to premiums paid. In Contract Years 4 through 5, this charge is 6%.
In Contract Years 6 through 7, this charge is 4%. In Contract Years 8 through 9,
this charge is 2%. After the 9th Contract Year, there is no charge.
In determining the contingent deferred sales charge and the additional
premium tax charge discussed below, any surrender or partial withdrawal during
the first ten Contract Years will be deemed first from earnings and then from
premiums paid. If an amount equal to all premiums paid has been withdrawn, no
charge will be assessed on a withdrawal of the remaining Account Value.
The contingent deferred sales charge is imposed to cover a portion of the
sales expense incurred by ITT Hartford in distributing the Contracts. This
expense includes agents commissions, advertising and the printing of
prospectuses.
See "Contract Benefits and Rights -- Amount Payable on Surrender of the
Contract," page 15.
PREMIUM TAX CHARGE
During the first nine Contract Years, an additional premium tax charge will
be imposed on surrender or partial withdrawals. The additional premium tax
charge is shown below, as a percent of Account Value, at the end of each
Contract Year:
<TABLE>
<CAPTION>
CONTRACT
YEAR RATE
-------- -----
<S> <C>
1 2.25%
2 2.00%
3 1.75%
4 1.50%
5 1.25%
6 1.00%
7 0.75%
8 0.50%
9 0.25%
10 + 0.00%
</TABLE>
After the ninth Contract Year, no additional premium tax charge will be
imposed.
CONTRACT BENEFITS AND RIGHTS
DEATH BENEFIT
While in force, the Contract provides for the payment of the Death Proceeds
to the named beneficiary when the Insured under the Contract dies. The Death
Proceeds payable to the beneficiary equal the Death Benefit less any loans
outstanding. The Death Benefit equals the greater of (1) the Face Amount or (2)
the Account Value multiplied by a specified percentage. The percentages vary
according to the attained age of
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the Insured and are specified in the Contract. Therefore, an increase in Account
Value may increase the Death Benefit. However, because the Death Benefit will
never be less than the Face Amount, a decrease in Account Value may decrease the
Death Benefit but never below the Face Amount.
EXAMPLES:
<TABLE>
<CAPTION>
A B
-------- --------
<S> <C> <C>
Face Amount: $100,000 $100,000
Insured's Age: 40 40
Account Value on Date of Death: 46,500 34,000
Specified Percentage: 250% 250%
</TABLE>
In Example A, the Death Benefit equals $116,250, i.e., the greater of
$100,000 (the Face Amount) or $116,250 (the Account Value at the Date of
Death of $46,500, multiplied by the specified percentage of 250%). This
amount less any outstanding loans constitutes the Death Proceeds which we
would pay to the beneficiary.
In Example B, the death benefit is $100,000, i.e., the greater of $100,000
(the Face Amount) or $85,000 (the Account Value of $34,000 multiplied by the
specified percentage of 250%).
All or part of the Death Proceeds may be paid in cash or applied under a
"Payment Option." See "Other Matters -- Payment Options," page 18.
ACCOUNT VALUE
The Account Value of a Contract will be computed on each Valuation Day. The
Account Value will vary to reflect the investment experience of the Funds, the
value of the Loan Account and the monthly Deduction Amounts. There is no minimum
guaranteed Account Value.
The Account Value of a particular Contract is related to the net asset value
of the Funds to which premiums on the Contract have been allocated. The Account
Value on any Valuation Day is calculated by multiplying the number of
Accumulation Units credited to the Contract in each Sub-Account as of the
Valuation Day by the Accumulation Unit Value of that Sub-Account and then
summing the result for all the Sub-Accounts credited to the Contract and the
value of the Loan Account. See "The Contract -- Accumulation Unit Values," page
11.
TRANSFER OF ACCOUNT VALUE
While the Contract remains in effect and subject to ITT Hartford's transfer
rules then in effect, the Contract Owner may request that part or all of the
Account Value of a particular Sub-Account be transferred to other Sub-Accounts.
ITT Hartford reserves the right to restrict the number of such transfers to no
more than 12 per Contract Year with no two transfers being made on consecutive
Valuation Days. However, there are no restrictions on the number of transfers at
the present time. Transfers may be made by written request or by calling toll
free 1-800-231-5453. Transfers by telephone may be made by the agent of record
or by the attorney-in-fact pursuant to a power of attorney. Telephone transfers
may not be permitted in some states. The policy of ITT Hartford and its agents
and affiliates is that they will not be responsible for losses resulting from
acting upon telephone requests reasonably believed to be genuine. ITT Hartford
will employ reasonable procedures to confirm that instructions communicated by
telephone are genuine; otherwise, ITT Hartford may be liable for any losses due
to unauthorized or fraudulent instructions. The procedures ITT Hartford follows
for transactions initiated by telephone include requirements that callers
provide certain information for identification purposes. All transfer
instructions by telephone are tape recorded.
ITT Hartford may modify the right to reallocate Account Value among the
Sub-Accounts if ITT Hartford determines, in its sole discretion, that the
exercise of that right by one or more Contract Owners is, or would be, to the
disadvantage of other Contract Owners. Any modification could be applied to
transfers to or from some or all of the Sub-Accounts and could include, but not
be limited to, the requirement of a minimum period between each transfer, not
accepting transfer requests of an agent acting under the power of attorney on
behalf of more than one Contract Owner, or limiting the dollar amount that may
be transferred among the Sub-Accounts at one time. These restrictions may be
applied in any manner reasonably designed to prevent any use of the transfer
right that ITT Hartford considers to be disadvantageous to other Contract
Owners.
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As a result of a transfer, the number of Accumulation Units credited to the
Sub-Account from which the transfer is made will be reduced by the number
obtained by dividing the amount transferred by the Accumulation Unit Value of
that Sub-Account on the Valuation Day ITT Hartford receives the transfer
request. The number of Accumulation Units credited to the Sub-Account to which
the transfer is made will be increased by the number obtained by dividing the
amount transferred by the Accumulation Unit Value of that Sub-Account on the
Valuation Day ITT Hartford receives the transfer request.
CONTRACT LOANS
While the Contract is in effect, a Contract Owner may obtain, without the
consent of the beneficiary (provided the designation of beneficiary is not
irrevocable), one or both of two types of cash loans from ITT Hartford. Both
types of loans are secured by the Contract. The aggregate loans (including the
currently applied for loan) may not exceed at the time a loan is requested 90%
of the Account Value less any contingent deferred sales charge and due and
unpaid Deduction Amount.
The loan amount will be transferred pro rata from each Sub-Account
attributable to the Contract (unless the Contract Owner specifies otherwise) to
the Loan Account. The amounts allocated to the Loan Account will bear interest
at a rate of 4% per annum (6% for "Preferred Loans"). The amount of the Loan
Account that equals the difference between the Account Value and the total of
all premiums paid under the Contract is considered a "Preferred Loan." The loan
interest rate that ITT Hartford will charge on all loans is 6% per annum. The
difference between the value of the Loan Account and the Indebtedness will be
transferred on a pro-rata basis from the Sub-Accounts to the Loan Account on
each Monthly Activity Date.
If the aggregate outstanding loan(s) secured by the Contract exceeds the
Account Value of the Contract less any contingent deferred sales charges and due
and unpaid Deduction Amount, ITT Hartford will give written notice to the
Contract Owner that unless ITT Hartford receives an additional payment within 61
days to reduce the aggregate outstanding loan(s) secured by the Contract, the
Contract may lapse.
All or any part of any loan secured by a Contract may be repaid while the
Contract is still in effect. When loan repayments or interest payments are made,
they will be allocated among the Sub-Account(s) in the same percentage as
premiums are allocated (unless the Contract Owner requests a different
allocation) and an amount equal to the payment will be deducted from the Loan
Account. Any outstanding loan at the end of a Grace Period must be repaid before
the Contract will be reinstated. See "Contract Benefits and Rights -- Lapse and
Reinstatement," page 16.
A loan, whether or not repaid, will have a permanent effect on the Account
Value because the investment results of each Sub-Account will apply only to the
amount remaining in such Sub-Accounts. The longer a loan is outstanding, the
greater the effect is likely to be. The effect could be favorable or
unfavorable. If the Sub-Accounts earn more than 4% per annum, the annual
interest rate for amounts held in the Loan Account, a Contract Owner's Account
Value will not increase as rapidly as it would have had no loan been made. If
the Sub-Accounts earn less than 4% per annum, the Contract Owner's Account Value
will be greater than it would have been had no loan been made. Also, if not
repaid, the aggregate outstanding loan(s) will reduce the Death Proceeds and
Cash Surrender Value otherwise payable.
AMOUNT PAYABLE ON SURRENDER OF THE CONTRACT
While the Contract is in effect, a Contract Owner may elect, without the
consent of the beneficiary (provided the designation of beneficiary is not
irrevocable), to fully surrender the Contract. Upon surrender, the Contract
Owner will receive the Cash Surrender Value determined as of the day ITT
Hartford receives the Contract Owner's written request or the date requested by
the Contract Owner whichever is later. The Cash Surrender Value equals the
Account Value less any contingent deferred sales charges and additional premium
tax charge and all Indebtedness. ITT Hartford will pay the Cash Surrender Value
of the Contract within seven days of receipt by ITT Hartford of the written
request or on the effective surrender date requested by the Contract Owner,
whichever is later. The Contract will terminate on the date of receipt of the
written request, or the date the Contract Owner requests the surrender to be
effective, whichever is later. For a discussion of the tax consequences of
surrendering the Contract, see "Federal Tax Considerations," page 23.
If the Contract Owner chooses to apply the surrender proceeds to a payment
option (see "Other Matters -- Payment Options," page 18), the contingent
deferred sales charge will not be imposed to the surrender proceeds applied to
the option. In other words, the surrender proceeds will equal the Cash
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<PAGE>
Surrender Value without reduction for the contingent deferred sales charge.
However, the additional premium tax charge, if applicable, will be deducted from
the surrender proceeds to be applied, and amounts withdrawn from Options 1, 5 or
6 will be subject to the contingent deferred sales charge, if applicable.
PARTIAL WITHDRAWALS
While the Contract is in effect, a Contract Owner may elect, by written
request, to make partial withdrawals from the Cash Surrender Value. The Cash
Surrender Value, after partial withdrawal, must at least equal ITT Hartford's
minimum amount rules then in effect; otherwise, the request will be treated as a
request for full surrender. The partial withdrawal will be deducted pro rata
from each Sub-Account, unless the Contract Owner instructs otherwise. The Face
Amount will be reduced proportionate to the reduction in the Account Value due
to the partial withdrawal. Partial withdrawals will be deemed to be first from
earnings, if any, and then from premiums paid. Partial withdrawals in excess of
the Annual Withdrawal Amount will be subject to the contingent deferred sales
charge and any additional premium tax charges. See "Deductions and Charges --
Contingent Deferred Sales Charge, Premium Tax Charge." For a discussion of the
tax consequences of partial withdrawals, see "Federal Tax Considerations," page
23.
BENEFITS AT MATURITY
If the Insured is living on the "Maturity Date" (the anniversary of the
Contract Date on which the Insured is age 100), on surrender of the Contract to
ITT Hartford, ITT Hartford will pay to the Contract Owner the Cash Surrender
Value. In such case, the Contract will terminate and ITT Hartford will have no
further obligations under the Contract. (The Maturity Date may be extended by
rider where approved, but see "Income Taxation of Contract Benefits.")
LAPSE AND REINSTATEMENT
The Contract will remain in effect until the Cash Surrender Value is
insufficient to cover a Deduction Amount due on a Monthly Activity Date. ITT
Hartford will notify the Contract Owner of the deficiency in writing and will
provide a 61 day period ("Grace Period") to pay an amount sufficient to cover
the Deduction Amount(s) due. The notice will indicate the amount that must be
paid.
The Contract will continue through the Grace Period, but if no payment is
forthcoming, it will terminate at the end of the Grace Period. If the person
insured under the Contract dies during the Grace Period, the Death Proceeds
payable under the Contract will be reduced by the Deduction Amount(s) due and
unpaid. See "Contract Benefits and Rights -- Death Benefit," page 13.
If the Contract lapses, the Contract Owner may apply for reinstatement of
the Contract by payment of the reinstatement premium (and any applicable
charges) shown in the Contract. A request for reinstatement may be made within
five years of lapse. If a loan was outstanding at the time of lapse, ITT
Hartford will require repayment of the loan before permitting reinstatement. In
addition, ITT Hartford reserves the right to require evidence of insurability
satisfactory to ITT Hartford.
CANCELLATION AND EXCHANGE RIGHTS
An Applicant has a limited right to return a Contract for cancellation. If
the Contract is returned, by mail or personal delivery to ITT Hartford or to the
agent who sold the Contract, to be cancelled within 10 days after delivery of
the Contract to the Contract Owner (a longer free-look period is provided in
certain cases), ITT Hartford will return to the Applicant within 7 days the
greater of premiums paid for the Contract or the sum of (1) the Account Value on
the date the returned Contract is received by ITT Hartford or its agent and (2)
any deductions under Contract or by the Funds for taxes, charges or fees.
Once the Contract is in effect, it may be exchanged during the first 24
months after its issuance, for a non-variable flexible premium adjustable life
insurance contract offered by ITT Hartford (or an affiliated company) on the
life of the Insured. No evidence of insurability will be required. The new
contract will have, at the election of the Contract Owner, either the same
Coverage Amount under the exchanged contract on the date of exchange or the same
Death Benefit. The effective date, issue date and issue age will be the same as
existed under the exchanged contract. If a contract loan was outstanding, the
entire loan must be repaid. There may be a cash adjustment required on the
exchange.
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SUSPENSION OF VALUATION, PAYMENTS AND TRANSFERS
ITT Hartford will suspend all procedures requiring valuation (including
transfers, surrenders and loans) on any day a national stock exchange is closed
or trading is restricted due to an existing emergency as defined by the
Securities and Exchange Commission, or on any day the Commission has ordered
that the right of surrender of the Contracts be suspended for the protection of
Contract Owners, until such condition has ended.
LAST SURVIVOR CONTRACTS
The Contracts are offered on a single life and "last survivor" basis.
Contracts sold on a last survivor basis operate in a manner almost identical to
the single life version. The most important difference is that the last survivor
version involves two Insureds and the Death Proceeds are paid on the death of
the last surviving Insured. The other significant differences between the last
survivor and single life versions are listed below:
1. The cost of insurance charges under the last survivor Contracts are
determined in a manner that reflects the anticipated mortality of the two
Insureds and the fact that the Death Benefit is not payable until the death
of the second Insured to die. See the last survivor illustrations in
"Appendix A," page 28.
2. To qualify for simplified underwriting under a last survivor
Contract, both Insureds must meet the simplified underwriting standards.
3. For a last survivor Contract to be reinstated, both Insureds must be
alive on the date of reinstatement.
4. The Contract provisions regarding misstatement of age or sex,
suicide and incontestability apply to either Insured.
5. Additional tax disclosures applicable to last survivor Contracts are
provided in "Federal Tax Considerations," page 23."
OTHER MATTERS
VOTING RIGHTS
In accordance with its interpretation of presently applicable law, ITT
Hartford will vote the shares of the Funds at regular and special meetings of
the shareholders of the Funds in accordance with instructions from Contract
Owners (or the assignee of the Contract, as the case may be) having a voting
interest in the Separate Account. The number of shares held in the Separate
Account which are attributable to each Contract Owner is determined by dividing
the Contract Owner's interest in each Sub-Account by the net asset value of the
applicable shares of the Funds. ITT Hartford will vote shares for which no
instructions have been given and shares which are not attributable to Contract
Owners (i.e. shares owned by ITT Hartford) in the same proportion as it votes
shares for which it has received instructions. If the Investment Company Act of
1940 or any rule promulgated thereunder should be amended, however, or if ITT
Hartford's present interpretation should change and, as a result, ITT Hartford
determines it is permitted to vote the shares of the Funds in its own right, it
may elect to do so.
The voting interests of the Contract Owner (or the assignee) in the Funds
will be determined as follows: Contract Owners may cast one vote for each full
or fractional Accumulation Unit owned under the Contract and allocated to a
Sub-Account the assets of which are invested in the particular Fund on the
record date for the shareholder meeting for that Fund. If, however, a Contract
Owner has taken a loan secured by the Contract, amounts transferred from the
Sub-Account(s) to the Loan Account in connection with the loan (see "Contract
Benefits and Rights -- Contract Loans," page 15) will not be considered in
determining the voting interests of the Contract Owner. Contract Owners should
review the prospectuses for the Funds which accompany this prospectus to
determine matters on which shareholders may vote.
ITT Hartford may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as to cause a change in the sub-classification or investment objective
of one or more of the Funds or to approve or disapprove an investment advisory
contract for the Funds.
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In addition, ITT Hartford itself may disregard voting instructions in favor
of changes initiated by a Contract Owner in the investment policy or the
investment adviser of the Funds if ITT Hartford reasonably disapproves of such
changes. A change would be disapproved only if the proposed change is contrary
to state law or prohibited by state regulatory authorities. If ITT Hartford does
disregard voting instructions, a summary of that action and the reasons for such
action will be included in the next periodic report to Contract Owners.
STATEMENTS TO CONTRACT OWNERS
ITT Hartford will maintain all records relating to the Separate Account and
the Sub-Accounts. At least once each Contract Year, ITT Hartford will send to
Contract Owners a statement showing the Coverage Amount and the Account Value of
the Contract (indicating the number of Accumulation Units credited to the
Contract in each Sub-Account and the corresponding Accumulation Unit Value), and
any outstanding loan secured by the Contract as of the date of the statement.
The statement will also show premium paid, and Deduction Amounts under the
Contract since the last statement, and any other information required by any
applicable law or regulation.
LIMIT ON RIGHT TO CONTEST
ITT Hartford may not contest the validity of the Contract after it has been
in effect during the Insured's lifetime for two years from the Issue Date. If
the Contract is reinstated, the two-year period is measured from the date of
reinstatement. Any increase in the Coverage Amount as a result of a premium is
contestable for 2 years from its effective date. In addition, if the Insured
commits suicide in the two-year period, or such period as specified in state
law, the benefit payable will be limited to the Account Value less any
Indebtedness.
MISSTATEMENT AS TO AGE AND SEX
If the age or sex of the Insured is incorrectly stated, the Death Benefit
will be appropriately adjusted as specified in the Contract.
PAYMENT OPTIONS
The surrender proceeds or Death Proceeds under the Contracts may be paid in
a lump sum or may be applied to one of ITT Hartford's payment options. The
minimum amount that may be applied under a payment option is $5,000 unless ITT
Hartford consents to a lesser amount. Under Options 2, 3 and 4, no surrender or
partial withdrawals are permitted after payments commence. Full surrender or
partial withdrawals may be made from Options 1 or 6, but they are subject to the
contingent deferred sales charge, if applicable. Only a full surrender is
allowed from Option 5. A surrender from Option 5 will also be subject to the
contingent deferred sales charge, if applicable.
We will pay interest of at least 3 1/2% per year on the Death Proceeds from
the date of the Insured's death to the date payment is made or a payment option
is elected. At such times, the proceeds are not subject to the investment
experience of the Separate Account.
The following options are available under the Contracts (ITT Hartford may
offer other payment options):
OPTION 1: INTEREST INCOME
This option offers payments of interest, at the rate we declare, on the
amount applied under this option. The interest rate will never be less than
3 1/2% per year.
OPTION 2: LIFE ANNUITY
A life annuity is an annuity payable during the lifetime of the payee and
terminating with the last payment preceding the death of the payee. This option
offers the largest payment amount of any of the life annuity options since there
is no guarantee of a minimum number of payments nor a provision for a death
benefit payable to a beneficiary.
It would be possible under this option for a payee to receive only one
annuity payment if he died prior to the due date of the second annuity payment,
two if he died before the date of the third annuity payment, etc.
OPTION 3: LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN
This annuity option is an annuity payable monthly during the lifetime of the
payee with the provision that payments will be made for a minimum of 120, 180 or
240 months, as elected. If, at the death of the payee, payments have been made
for less than the minimum elected number of months, then the present value as of
18
<PAGE>
the date of the payee's death, of any remaining guaranteed payments will be paid
in one sum to the beneficiary or beneficiaries designated unless other
provisions have been made and approved by ITT Hartford.
OPTION 4: JOINT AND LAST SURVIVOR ANNUITY
An annuity payable monthly during the joint lifetime of the payee and a
designated second person, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
Based on the options currently offered by ITT Hartford, the payee may elect that
the payment to the survivor be less than the payment made during the joint
lifetime of the payee and a designated second person.
It would be possible under this option for a payee and designated second
person to receive only one payment in the event of the common or simultaneous
death of the parties prior to the due date for the second payment and so on.
OPTION 5: PAYMENTS FOR A DESIGNATED PERIOD
An amount payable monthly for the number of years selected which may be from
5 to 30 years. Under this option, you may, at any time, request a full surrender
and receive, within seven days, the termination value of the Contract as
determined by ITT Hartford.
In the event of the payee's death prior to the end of the designated period,
the present value as of the date of the payee's death, of any remaining
guaranteed payments will be paid in one sum to the beneficiary or beneficiaries
designated unless other provisions have been made and approved by ITT Hartford.
Option 5 is an option that does not involve life contingencies.
OPTION 6: DEATH PROCEEDS REMAINING WITH ITT HARTFORD
Proceeds from the Death Benefit left with ITT Hartford. These proceeds will
remain in the Sub-Accounts 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.
VARIABLE AND FIXED ANNUITY PAYMENTS: When an annuity is effected, unless
otherwise specified, the surrender proceeds or Death Proceeds held in the
Sub-Accounts will be applied to provide a variable annuity based on the pro rata
amount in the various Sub-Accounts. Fixed annuities options are also available.
YOU SHOULD CONSIDER WHETHER THE ALLOCATION OF PROCEEDS AMONG SUB-ACCOUNTS OF THE
SEPARATE ACCOUNT FOR YOUR ANNUITY PAYMENTS ARE BASED ON THE INVESTMENT
ALTERNATIVE BEST SUITED TO YOUR RETIREMENT NEEDS.
VARIABLE ANNUITY: The Contract contains tables indicating the minimum
dollar amount of the first monthly payment under the optional variable forms of
annuity for each $1,000 of value of a Sub-Account. The first monthly payment
varies according to the form and type of variable payment annuity selected. The
Contract contains variable payment annuity tables derived from the 1983(a)
Individual Annuity Mortality Table with ages set back one year and with an
assumed investment rate ("A.I.R.") of 5% per annum. The total first monthly
variable annuity payment is determined by multiplying the proceeds value
(expressed in thousands of dollars) of a Sub-Account by the amount of the first
monthly payment per $1,000 of value obtained from the tables in the Contracts.
The amount of the first monthly variable annuity payment is divided by the
value of an annuity unit (an accounting unit of measure used to calculate the
value of annuity payments) for the appropriate Sub-Account no earlier than the
close of business on the fifth Valuation Day preceding the day on which the
payment is due in order to determine the number of annuity units represented by
the first payment. This number of annuity units remains fixed during the annuity
payment period, and in each subsequent month the dollar amount of the variable
annuity payment is determined by multiplying this fixed number of annuity units
by the current annuity unit value.
LEVEL VARIABLE ANNUITY PAYMENTS WOULD BE PRODUCED IF THE INVESTMENT RATE
REMAINED CONSTANT AND EQUAL TO THE A.I.R. IN FACT, PAYMENTS WILL VARY UP OR DOWN
AS THE INVESTMENT RATE VARIES UP OR DOWN RELATIVE TO THE A.I.R.
FIXED ANNUITY: Fixed annuity payments are determined by multiplying the
amount applied to the annuity by a rate to be determined by ITT Hartford which
is no less than the rate specified in the fixed payment annuity tables in the
Contract. The annuity payment will remain level for the duration of the annuity.
19
<PAGE>
ITT Hartford will make any other arrangements for income payments as may be
agreed on.
BENEFICIARY
The applicant names the beneficiary in the application for the Contract. The
Contract Owner may change the beneficiary (unless irrevocably named) during the
Insured's lifetime by written request to ITT Hartford. If no beneficiary is
living when the Insured dies, the Death Proceeds will be paid to the Contract
Owner if living; otherwise to the Contract Owner's estate.
ASSIGNMENT
The Contract may be assigned as collateral for a loan or other obligation.
ITT Hartford is not responsible for any payment made or action taken before
receipt of written notice of such assignment. Proof of interest must be filed
with any claim under a collateral assignment.
DIVIDENDS
No dividends will be paid under the Contracts.
20
<PAGE>
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
OTHER BUSINESS
PROFESSION, VOCATION
POSITION WITH ITT OR EMPLOYMENT FOR
HARTFORD, YEAR PAST 5 YEARS; OTHER
NAME, AGE OF ELECTION DIRECTORSHIPS
- ------------------------------- --------------------------------------- ------------------------------------------------
<S> <C> <C>
Joan M. Andrew, 38 Vice President, 1992 Vice President and Director, National Service
Center Operations (1992-Present), ITT Hartford.
Wendell J. Bossen, 62 Vice President, 1995** Vice President (1992), Hartford Life Insurance
Company; Executive Vice President (1984), Mutual
Benefit.
Gregory A. Boyko, 44 Vice President, 1995 Vice President and Controller (1995-Present),
Hartford Life Insurance Company; Chief Financial
Officer (1994-1995), IMG American Life; Senior
Vice President (1992-1994), Connecticut Mutual.
Peter W. Cummins, 59 Vice President, 1993 Vice President, Individual Annuity Operations
(1989-Present), Hartford Life Insurance Company.
Ann M. deRaismes, 45 Vice President, 1994 Vice President (1994-Present), Assistant Vice
President (1992), Director of Human Resources
(1991-Present), Hartford Life Insurance Company.
James R. Dooley, 59 Vice President, 1977 Vice President, Director Information Services
(1973-Present), ITT Hartford.
Timothy M. Fitch, 34 Vice President, 1995 Vice President (1995-Present); Assistant Vice
President (1993); Director (1991), Hartford
Life.
Donald R. Frahm, 64 Director, 1995* Chairman and Chief Executive Officer
(1988-Present), ITT Hartford Insurance Group,
Inc.
Bruce D. Gardner, 45 Director, 1991* Vice President (1996-Present), General Counsel
and Corporate Secretary (1991), Hartford Life
Insurance Company
Joseph H. Gareau, 49 Executive Vice President, 1993 Executive Vice President and Chief Investment
Chief Investment Officer, 1993 Officer (1993-Present), Hartford Life Insurance
Director, 1993* Company
Donald J. Gillette, 50 Vice President, 1993 Vice President, Director of Marketing
(1991-Present), ITT Hartford; MSI Insurance
(1986)
Lynda Godkin, 42 Associate General Counsel, 1995 Associate General Counsel and Corporate
Corporate Secretary, 1995 Secretary (1995-Present), Assistant General
Counsel and Secretary (1994), Counsel (1990),
Hartford Life Insurance Company
Lois W. Grady, 51 Vice President, 1993 Vice President (1993-Present), Assistant Vice
President (1988), Hartford Life Insurance
Company
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
OTHER BUSINESS
PROFESSION, VOCATION
POSITION WITH ITT OR EMPLOYMENT FOR
HARTFORD, YEAR PAST 5 YEARS; OTHER
NAME, AGE OF ELECTION DIRECTORSHIPS
- ------------------------------- --------------------------------------- ------------------------------------------------
David A. Hall, 42 Senior Vice President, 1993 Senior Vice President and Actuary
Actuary, 1993 (1993-Present), Hartford Life Insurance Company
<S> <C> <C>
Joseph Kanarek, 48 Vice President, 1994 Vice President (1991-Present), Director
Director, 1994* (1992-Present), Hartford Life Insurance Company
Robert A. Kerzner, 44 Vice President, 1994 Vice President (1994-Present), Regional Vice
President (1991), Life Sales Manager (1990),
Hartford Life Insurance Company.
LaVern L. Kohlhof, 66 Vice President, 1980 Vice President and Secretary (1980-Present), ITT
Secretary, 1980 Hartford
William B. Malchodi, Jr., 45 Vice President, 1994 Vice President (1994-Present), Director of Taxes
Director of Taxes, 1992 (1992-Present), Assistant General Counsel and
Assistant Director of Taxes (1986), Hartford
Insurance Group
Thomas M. Marra, 37 Executive Vice President, 1995 Senior Vice President (1994), Director of
Director, 1994* Individual Annuities (1991), Vice President
(1989), Hartford Life Insurance Company
Steven L. Matthiesen, 51 Vice President, 1984 Vice President, Director of New Business
(1984-Present), ITT Hartford
Joseph J. Noto, 44 Vice President, 1989 Vice President (1989-Present), Hartford Life
Insurance Company.
Craig D. Raymond, 32 Vice President, 1993 Vice President and Chief Actuary (1994-Present),
Chief Actuary, 1994 Vice President (1993), Assistant Vice President
(1992), Actuary (1989-1994), Hartford Life
Insurance Company
David T. Schrandt, 48 Vice President, 1987 Treasurer, 1987 Vice President, Treasurer and Controller
(1987-Present), ITT Hartford
Lowndes A. Smith, 55 President, 1993 President and Chief Executive Officer
Chief Executive Officer, 1993 (1993-Present), ITT Hartford; President and
Director, 1985* Chief Operating Officer (1989-Present), Hartford
Life Insurance Company
Lizabeth H. Zlatkus, 36 Vice President, 1994 Vice President, Director Business Operations
Director, 1994* (1994), Assistant Vice President, Director
Executive Operations (1992), Executive Staff
Assistant to President (1990), Hartford Life
Insurance Company
</TABLE>
- ------------------------
* Denotes year of election to Board of Directors
** ITT Hartford Affiliated Company
DISTRIBUTION OF THE CONTRACTS
ITT Hartford intends to sell the Contracts in all jurisdictions where it is
licensed to do business. The Contracts will be sold by life insurance sales
representatives who represent ITT Hartford and who are registered
representatives of Hartford Equity Sales Company, Inc. ("HESCO") or certain
other independent
22
<PAGE>
registered broker-dealers. Any sales representative or employee will have been
qualified to sell variable life insurance contracts under applicable Federal and
state laws. Each broker-dealer is registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and all are members of the
National Association of Securities Dealers, Inc.
Hartford Securities Distribution Company, Inc. ("HSD") serves as Principal
Underwriter for the securities issued with respect to the Separate Account. Both
HESCO and HSD are wholly-owned subsidiaries of Hartford Life Insurance Company.
The principal business address of HESCO and HSD is the same as ITT Hartford.
The maximum sales commission payable to ITT Hartford agents, independent
registered insurance brokers, and other registered broker-dealers is 6.0% of
initial and subsequent premiums. Additional annual compensation of no more than
0.75% of Account Value may be paid. From time to time, ITT Hartford may pay or
permit other promotional incentives, in cash or credit or other compensation.
ITT Hartford 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-advantaged and taxable instruments, customer profiles and hypothetical
purchase scenarios, financial management and tax and retirement planning, and
variable annuities and other investment alternatives, including comparisons
between the Contracts and the characteristics of and market for such
alternatives.
SAFEKEEPING OF THE SEPARATE
ACCOUNT'S ASSETS
The assets of the Separate Account are held by ITT Hartford. The assets of
the Separate Account are kept physically segregated and held separate and apart
from the General Account of ITT Hartford. ITT Hartford maintains records of all
purchases and redemptions of shares of the Fund. Additional protection for the
assets of the Separate Account is afforded by ITT Hartford's blanket fidelity
bond issued by Aetna Casualty and Surety Company, in the aggregate of $50
million, covering all of the officers and employees of ITT Hartford.
FEDERAL TAX CONSIDERATIONS
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE CONTRACT OWNER INVOLVED, LEGAL AND TAX ADVICE MAY BE
NEEDED BY A PERSON, EMPLOYER 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. This discussion
of Federal tax considerations is based upon ITT Hartford's understanding of
current Federal income tax laws as they are currently interpreted.
TAXATION OF ITT HARTFORD AND THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of ITT Hartford which is taxed as a
life insurance company under Subchapter L of the Internal Revenue Code ("Code").
Accordingly, the Separate Account will not be taxed as a "regulated investment
company" under Subchapter M of the Code. Investment income and realized capital
gains on the assets of the Separate Account (the underlying Funds) are
reinvested and are taken into account in determining the value of the
Accumulation Units (see "Contract Benefits and Rights -- Account Value," on page
14). As a result, such investment income and realized capital gains are
automatically applied to increase reserves under the Contract.
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<PAGE>
ITT Hartford does not expect to incur any Federal income tax on the earnings
or realized capital gains attributable to the Separate Account. Based upon this
expectation, no charge is currently being made to the Separate Account for
Federal income taxes. If ITT Hartford incurs income taxes attributable to the
Separate Account or determines that such taxes will be incurred, it may assess a
charge for such taxes against the Separate Account.
INCOME TAXATION OF CONTRACT BENEFITS
For Federal income tax purposes, the Contracts should be treated as life
insurance contracts under Section 7702 of the Code. The death benefit under a
life insurance contract is generally excluded from the gross income of the
beneficiary. Also, a life insurance Contract Owner is generally not taxed on
increments in the contract value until the Contract is partially or completely
surrendered. Section 7702 limits the amount of premiums that may be invested in
a Contract that is treated as life insurance. ITT Hartford intends to monitor
premium levels to assure compliance with the Section 7702 requirements.
During the first fifteen Contract Years, an "income first" rule generally
applies to distributions of cash required to be made under Code Section 7702
because of a reduction in benefits under the Contract.
The Maturity Date Extension Rider allows a Contract Owner to extend the
Maturity Date to the date of the Insured's death. If the Maturity Date of the
Contract is extended by rider, ITT Hartford believes that the Contract will
continue to be treated as a life insurance contract for federal income tax
purposes after the scheduled Maturity Date. However, due to the lack of specific
guidance on this issue, the result is not certain. If the Contract is not
treated as a life insurance contract for federal income tax purposes after the
scheduled Maturity Date, among other things, the Death Proceeds may be taxable
to the recipient. The Contract Owner should consult a qualified tax adviser
regarding the possible adverse tax consequences resulting from an extension of
the scheduled Maturity Date.
LAST SURVIVOR CONTRACTS
Although ITT Hartford believes that the last survivor Contracts are in
compliance with Section 7702 of the Code, the manner in which Section 7702
should be applied to certain features of a joint survivorship life insurance
contract is not directly addressed by Section 7702. In the absence of final
regulations or other guidance issued under Section 7702, there is necessarily
some uncertainty whether a last survivor Contract will meet the Section 7702
definition of a life insurance contract.
MODIFIED ENDOWMENT CONTRACTS
A life insurance contract is treated as a "modified endowment contract"
under Section 7702A of the Code if it meets the definition of life insurance in
Section 7702 but fails the "seven-pay" test of Section 7702A. The seven-pay test
provides that premiums cannot be paid at a rate more rapidly than that allowed
by the payment of seven annual premiums using specified computational rules
provided in Section 7702A(c). The large single premium permitted under the
Contract does not meet the specified computational rules for the "seven-pay
test" under Section 7702A(c). Therefore, the Contract will generally be treated
as a modified endowment contract for federal income tax purposes. However, an
exchange under Section 1035 of the Code of a life insurance contract issued
before June 21, 1988 will not cause the new Contract to be treated as a modified
endowment contract if no additional premiums are paid.
A contract that is classified as modified endowment contract is generally
eligible for the beneficial tax treatment accorded to life insurance. That is,
the death benefit is excluded from income and increments in value are not
subject to current taxation. However, a loan, distributions or other amounts
received from a modified endowment contract during the life of the Insured will
be taxed to the extent of any accumulated income in the contract (generally, the
excess of account value over premiums paid). Amounts that are taxable
withdrawals will be subject to a 10% additional tax, with certain exceptions.
All modified endowment contracts that are issued within any calendar year to
the same Contract Owner by one company or its affiliates shall be treated as one
modified endowment contract in determining the taxable portion of any loan or
distributions.
ESTATE AND GENERATION SKIPPING TAXES
When the Insured dies, the Death Proceeds will generally be includible in
the Contract Owner's estate for purposes of federal estate tax if the last
surviving Insured owned the Contract. If the Contract Owner was not
24
<PAGE>
the last surviving Insured, the fair market value of the Contract would be
included in the Contract Owner's estate upon the Contract Owner's death. Nothing
would be includible in the last surviving Insured's estate if he or she neither
retained incidents of ownership at death nor had given up ownership within three
years before death.
Federal estate tax is integrated with federal gift tax under a unified rate
schedule. In general, estates less than $600,000 will not incur a federal estate
tax liability. In addition, an unlimited marital deduction may be available for
federal estate and gift tax purposes. The unlimited marital deduction permits
the deferral of taxes until the death of the surviving spouse (when the Death
Proceeds would be available to pay taxes due and other expenses incurred).
If the Contract Owner (whether or not he or she is an Insured) transfers
ownership of the Contract to someone two or more generations younger, the
transfer may be subject to the generation-skipping transfer tax, the taxable
amount being the value of the Contract. The generation-skipping transfer tax
provisions generally apply to transfers which would be subject to the gift and
estate tax rules. Individuals are generally allowed an aggregate generation
skipping transfer exemption of $1 million. Because these rules are complex, the
Contract Owner should consult with a qualified tax adviser for specific
information if ownership is passing to younger generations.
DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable life insurance contract
(other than a pension plan policy) will not be treated as a life insurance
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 a life insurance 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 policy 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.
ITT Hartford monitors the diversification of investments in the separate
accounts and tests for diversification as required by the Code. ITT Hartford
intends to administer all contracts subject to the diversification requirements
in a manner that will maintain adequate diversification.
OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT
In order for a variable life insurance contract to qualify for tax deferral,
assets in the segregated asset accounts supporting the variable contract must be
considered to be owned by the insurance company and not by the variable contract
owner. The Internal Revenue Service ("IRS") has issued several rulings which
discuss investor control. The IRS has ruled that incidents of ownership by the
contract owner, such as the ability to select and control investments in a
separate account, will cause the contract owner to be treated as the owner of
the assets for tax purposes.
Further, in the explanation to the temporary Section 817 diversification
regulations, the Treasury Department noted that the temporary regulations "do
not provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor, rather
than the insurance company, to be treated as the owner of the assets in the
account." The explanation further indicates that "the temporary regulations
provide that in appropriate cases a segregated asset account may include
multiple sub-accounts, but do not specify the extent to which policyholders may
direct their investments to particular sub-accounts without being treated as the
owners of the underlying assets. Guidance on this and
25
<PAGE>
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, ITT 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. ITT 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.
LIFE INSURANCE PURCHASED FOR USE IN SPLIT DOLLAR ARRANGEMENTS
On January 26, 1996, the IRS released a technical advice memorandum ("TAM")
on the taxability of life insurance policies used in certain split dollar
arrangements. A TAM, issued by the National Office of the IRS, provides advice
as to the internal revenue laws, regulations, and related statutes with respect
to a specific set of facts and a specific taxpayer. In the TAM, among other
things, the IRS concluded that an employee was subject to current taxation on
the excess of the cash surrender value of the policy over the premiums to be
returned to the employer. Purchasers of life insurance policies to be used in
split dollar arrangements are strongly advised to consult with a qualified tax
adviser to determine the tax treatment resulting from such an arrangement.
FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the Contract
Owner, such amounts will be subject to federal income tax withholding and
reporting, pursuant to the Code.
NON-INDIVIDUAL OWNERSHIP OF CONTRACTS
Legislation has recently been proposed which would limit certain of the tax
advantages now afforded non-individual owners of life insurance contracts.
Prospective Contract Owners which are not individuals should consult a tax
adviser to determine the status of this proposed legislation and its potential
impact on the purchaser.
OTHER
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership, or receipt of Contract proceeds depend on the
circumstances of each Contract Owner or beneficiary. A tax adviser should be
consulted to determine the impact of these taxes.
LIFE INSURANCE PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
The discussion above provides general information regarding U.S. federal
income tax consequences to life insurance purchasers that are U.S. citizens or
residents. Purchasers that are not U.S. citizens or residents will generally be
subject to U.S. federal income tax and withholding on taxable distributions from
life insurance policies at a 30% rate, unless a lower treaty rate applies. In
addition, purchasers may be subject to state and/or municipal taxes and taxes
that may be imposed by the purchaser's country of citizenship or residence.
Prospective purchasers are advised to consult with a qualified tax advisor
regarding U.S. state, and foreign taxation with respect to a life insurance
policy purchase.
LEGAL PROCEEDINGS
There are no pending material legal proceedings affecting the Contracts, the
Separate Account or any of the Funds.
LEGAL MATTERS
Legal matters in connection with the issue and sale of flexible premium
variable life insurance contracts described in this Prospectus and the
organization of ITT Hartford, its authority to issue the Contracts under
26
<PAGE>
Connecticut law and the validity of the forms of the Contracts under Connecticut
law and legal matters relating to the Federal securities and income tax laws
have been passed on by Lynda Godkin, Associate General Counsel of ITT Hartford
Life Insurance Companies.
EXPERTS
The financial statements included in this Prospectus and elsewhere in the
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report hereon, and are included herein
in reliance upon the authority of said firm as experts in accounting and
auditing in giving said report. Reference is made to said report of ITT Hartford
Life and Annuity Insurance Company (the depositor), which includes an
explanatory paragraph with respect to changing the valuation method in
determining aggregate reserves for future benefits. The principal business
address of Arthur Andersen LLP is One Financial Plaza, Hartford, Connecticut
06103.
The hypothetical Contract illustrations included in this Prospectus and
Registration Statement have been approved by Michael Winterfield, FSA, MAAA,
Director, Individual Annuity Inforce Management, for ITT Hartford, and are
included in reliance upon his opinion as to their reasonableness.
REGISTRATION STATEMENT
A registration statement has been filed with the Securities and Exchange
Commission under the Securities Act of 1933 as amended. This Prospectus does not
contain all information set forth in the registration statement, its amendments
and exhibits, to all of which reference is made for further information
concerning the Separate Account, the Funds, ITT Hartford, and the Contracts.
27
<PAGE>
APPENDIX A
ILLUSTRATIONS OF BENEFITS
The tables in Appendix A illustrate the way in which a Contract operates.
They show how the death benefit and surrender value could vary over an extended
period of time assuming hypothetical gross rates of return equal to constant
after tax annual rates of 0%, 6% and 12%. The tables are based on an initial
premium of $10,000. A male age 45, a female age 55 and a male age 65 with Face
Amounts of $40,161, $33,334 and $19,380, respectively, are illustrated for the
single life Contract. The illustrations for the last survivor Contract assume
male and female of equal ages, including age 55 and 65 for Face Amounts of
$44,053 and $27,778.
The death benefit and surrender value for a Contract would be different from
those shown if the rates of return averaged 0%, 6% and 12% over a period of
years, but also fluctuated above or below those averages for individual Contract
Years. They would also differ if any Contract loan were made during the period
of time illustrated.
The tables reflect the deductions of current Contract charges and guaranteed
Contract charges for a single gross interest rate. The death benefits and
surrender values would change if the current cost of insurance charges change.
The amounts shown for the death benefit and surrender value as of the end of
each Contract Year take into account an average daily charge equal to an annual
charge of 0.75% of the average daily net assets of the Funds for investment
advisory and administrative services fees. The gross annual investment return
rates of 0%, 6% and 12% on the Fund's assets are equal to net annual investment
return rates (net of the 0.75% average daily charge) of -0.75%, 5.25% and
11.25%, respectively.
In addition, the death benefit and surrender value as of the end of each
Contract Year take into account the (1) tax expense charge equal to an annual
rate of 0.40% of Account Value for the first ten Contract Years; (2)
administrative charge equal to an annual rate of 0.40% of Account Value
attributable to the Separate Account; (3) mortality and expense risk charge
equal to an annual rate of 0.90% of Account Value attributable to the Separate
Account; and (4) any Contingent Deferred Sales Charge and premium tax charge
which may be applicable in the first nine Contract Years.
The hypothetical returns shown in the tables are without any tax charges
that may be attributable to the Separate Account in the future. In order to
produce after tax returns of 0%, 6%, and 12%, the Separate Account would have to
earn a sufficient amount in excess of 0% or 6% or 12% to cover any tax charges
(see "Deductions and Charges -- Charges Against The Separate Account -- Taxes,"
page 13).
The "Premium Paid Plus Interest" column of each table shows the amount which
would accumulate if the initial premium was invested to earn interest, after
taxes of 5% per year, compounded annually. ITT Hartford will furnish upon
request, a comparable illustration reflecting the proposed insureds age, risk
classification, Face Amount or initial premium requested, and reflecting
guaranteed cost of insurance rates. ITT Hartford will also furnish an additional
similar illustration reflecting current cost of insurance rates which may be
less than, but never greater than, the guaranteed cost of insurance rates.
28
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 45 MALE
INITIAL FACE AMOUNT: $40,161
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------- -------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- -------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,834 9,840 40,161 10,756 9,764 40,161
2 11,025 11,740 10,755 40,161 11,575 10,593 40,161
3 11,576 12,724 11,751 40,161 12,463 11,495 40,161
4 12,155 13,794 12,987 40,161 13,427 12,626 40,161
5 12,763 14,956 14,169 40,161 14,474 13,693 40,161
6 13,401 16,219 15,657 40,161 15,613 15,057 40,161
7 14,071 17,592 17,060 40,161 16,851 16,324 40,161
8 14,775 19,083 18,788 40,161 18,198 17,907 40,161
9 15,513 20,704 20,452 40,161 19,666 19,417 40,161
10 16,289 22,465 22,465 40,161 21,268 21,268 40,161
11 17,103 24,501 24,501 40,161 23,113 23,113 40,161
12 17,959 26,724 26,724 40,161 25,145 25,145 40,161
13 18,856 29,153 29,153 41,398 27,386 27,386 40,161
14 19,799 31,808 31,808 43,896 29,864 29,864 41,213
15 20,789 34,714 34,714 46,517 32,590 32,590 43,670
16 21,829 37,895 37,895 49,264 35,574 35,574 46,247
17 22,920 41,367 41,367 52,951 38,832 38,832 49,705
18 24,066 45,156 45,156 56,897 42,386 42,386 53,407
19 25,270 49,292 49,292 61,122 46,266 46,266 57,371
20 26,533 53,807 53,807 65,645 50,502 50,502 61,613
25 33,864 83,601 83,601 96,978 78,372 78,372 90,912
35 55,160 201,997 201,997 214,118 180,092 189,092 200,438
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 12%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
29
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 45 MALE
INITIAL FACE AMOUNT: $40,161
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------- -----------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,249 9,269 40,161 10,171 9,192 40,161
2 11,025 10,506 9,546 40,161 10,337 9,380 40,161
3 11,576 10,769 9,831 40,161 10,497 9,564 40,161
4 12,155 11,040 10,275 40,161 10,651 9,891 40,161
5 12,763 11,319 10,577 40,161 10,796 10,061 40,161
6 13,401 11,605 11,089 40,161 10,930 10,421 40,161
7 14,071 11,900 11,411 40,161 11,052 10,569 40,161
8 14,775 12,202 11,941 40,161 11,158 10,902 40,161
9 15,513 12,514 12,282 40,161 11,244 11,016 40,161
10 16,289 12,833 12,833 40,161 11,309 11,309 40,161
11 17,103 13,228 13,228 40,161 11,394 11,394 40,161
12 17,959 13,636 13,636 40,161 11,455 11,455 40,161
13 18,856 14,058 14,058 40,161 11,486 11,486 40,161
14 19,799 14,494 14,494 40,161 11,486 11,486 40,161
15 20,789 14,944 14,944 40,161 11,450 11,450 40,161
16 21,829 15,409 15,409 40,161 11,370 11,370 40,161
17 22,920 15,889 15,889 40,161 11,239 11,239 40,161
18 24,066 16,385 16,385 40,161 11,048 11,048 40,161
19 25,270 16,898 16,898 40,161 10,787 10,787 40,161
20 26,533 17,428 17,428 40,161 10,442 10,442 40,161
25 33,864 20,353 20,353 40,161 6,987 6,987 40,161
35 55,160 27,852 27,852 40,161 0 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 6%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
30
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 45 MALE
INITIAL FACE AMOUNT: $40,161
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------- -------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- -------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,665 8,698 40,161 9,586 8,649 40,161
2 11,025 9,340 8,404 40,161 9,169 8,291 40,161
3 11,576 9,026 8,118 40,161 8,747 7,925 40,161
4 12,155 8,721 7,990 40,161 8,319 7,699 40,161
5 12,763 8,425 7,720 40,161 7,883 7,312 40,161
6 13,401 8,138 7,657 40,161 7,438 7,113 40,161
7 14,071 7,860 7,401 40,161 6,980 6,696 40,161
8 14,775 7,591 7,353 40,161 6,506 6,461 40,161
9 15,513 7,330 7,111 40,161 6,013 6,002 40,161
10 16,289 7,076 7,076 40,161 5,498 5,717 40,161
11 17,103 6,865 6,865 40,161 4,978 5,211 40,161
12 17,959 6,659 6,659 40,161 4,427 4,673 40,161
13 18,856 6,459 6,459 40,161 3,843 4,100 40,161
14 19,799 6,264 6,264 40,161 3,221 3,488 40,161
15 20,789 6,073 6,073 40,161 2,558 2,833 40,161
16 21,829 5,888 5,888 40,161 1,845 2,127 40,161
17 22,920 5,707 5,707 40,161 1,075 1,361 40,161
18 24,066 5,531 5,531 40,161 237 526 40,161
19 25,270 5,360 5,360 40,161 0 0 0
20 26,533 5,193 5,193 40,161 0 0 0
25 33,864 4,420 4,420 40,161 0 0 0
35 55,160 3,145 3,145 40,161 0 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 0%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
31
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 55 FEMALE
INITIAL FACE AMOUNT: $33,334
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12.00% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS -------------------------------- --------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- -------- ---------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,834 9,840 33,334 10,727 9,736 33,334
2 11,025 11,740 10,755 33,334 11,517 10,537 33,334
3 11,576 12,724 11,751 33,334 12,378 11,411 33,334
4 12,155 13,794 12,987 33,334 13,317 12,517 33,334
5 12,763 14,956 14,169 33,334 14,343 13,564 33,334
6 13,401 16,219 15,657 33,334 15,464 14,909 33,334
7 14,071 17,592 17,060 33,334 16,688 16,163 33,334
8 14,775 19,083 18,788 33,334 18,025 17,735 33,334
9 15,513 20,704 20,452 33,334 19,487 19,238 33,334
10 16,289 22,465 22,465 33,334 21,088 21,088 33,334
11 17,103 24,501 24,501 33,334 22,940 22,940 33,334
12 17,959 26,736 26,736 33,334 24,991 24,991 33,334
13 18,856 29,218 29,218 34,478 27,270 27,270 33,334
14 19,799 31,946 31,946 37,377 29,804 29,804 34,891
15 20,789 34,928 34,928 40,517 32,585 32,585 37,799
16 21,829 38,190 38,190 43,919 35,625 35,625 40,969
17 22,920 41,765 41,765 47,195 38,958 38,958 44,023
18 24,066 45,686 45,686 50,712 42,614 42,614 47,301
19 25,270 49,992 49,992 54,492 46,627 46,627 50,824
20 26,533 54,687 54,687 59,609 51,004 51,004 55,594
25 33,864 85,841 85,841 90,992 80,060 80,060 84,864
35 55,160 208,273 208,273 218,687 192,260 192,260 201,873
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 12%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
32
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 55 FEMALE
INITIAL FACE AMOUNT: $33,334
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------- -----------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,249 9,269 33,334 10,142 9,164 33,334
2 11,025 10,506 9,546 33,334 10,279 9,324 33,334
3 11,576 10,769 9,831 33,334 10,412 9,480 33,334
4 12,155 11,040 10,275 33,334 10,539 9,781 33,334
5 12,763 11,319 10,577 33,334 10,661 9,928 33,334
6 13,401 11,605 11,089 33,334 10,774 10,266 33,334
7 14,071 11,900 11,411 33,334 10,875 10,394 33,334
8 14,775 12,202 11,941 33,334 10,959 10,704 33,334
9 15,513 12,514 12,282 33,334 11,021 10,793 33,334
10 16,289 12,833 12,833 33,334 11,055 11,055 33,334
11 17,103 13,228 13,228 33,334 11,106 11,106 33,334
12 17,959 13,636 13,636 33,334 11,127 11,127 33,334
13 18,856 14,058 14,058 33,334 11,117 11,117 33,334
14 19,799 14,494 14,494 33,334 11,073 11,073 33,334
15 20,789 14,944 14,944 33,334 10,988 10,988 33,334
16 21,829 15,409 15,409 33,334 10,854 10,854 33,334
17 22,920 15,889 15,889 33,334 10,656 10,656 33,334
18 24,066 16,385 16,385 33,334 10,375 10,375 33,334
19 25,270 16,898 16,898 33,334 9,991 9,991 33,334
20 26,533 17,428 17,428 33,334 9,479 9,479 33,334
25 33,864 20,353 20,353 33,334 3,955 3,955 33,334
35 55,160 27,852 27,852 33,334 0 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 6%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
33
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 55 FEMALE
INITIAL FACE AMOUNT: $33,334
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75 NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------- -----------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,665 8,698 33,334 9,558 8,593 33,334
2 11,025 9,340 8,404 33,334 9,112 8,179 33,334
3 11,576 9,026 8,118 33,334 8,662 7,761 33,334
4 12,155 8,721 7,990 33,334 8,209 7,486 33,334
5 12,763 8,425 7,720 33,334 7,750 7,053 33,334
6 13,401 8,138 7,657 33,334 7,283 6,810 33,334
7 14,071 7,860 7,401 33,334 6,803 6,352 33,334
8 14,775 7,591 7,353 33,334 6,305 6,073 33,334
9 15,513 7,330 7,111 33,334 5,782 5,568 33,334
10 16,289 7,076 7,076 33,334 5,230 5,230 33,334
11 17,103 6,865 6,865 33,334 4,665 4,665 33,334
12 17,959 6,659 6,659 33,334 4,061 4,061 33,334
13 18,856 6,459 6,459 33,334 3,419 3,419 33,334
14 19,799 6,264 6,264 33,334 2,733 2,733 33,334
15 20,789 6,073 6,073 33,334 1,997 1,997 33,334
16 21,829 5,888 5,888 33,334 1,200 1,200 33,334
17 22,920 5,707 5,707 33,334 324 324 33,334
18 24,066 5,531 5,531 33,334 0 0 0
19 25,270 5,360 5,360 33,334 0 0 0
20 26,533 5,193 5,193 33,334 0 0 0
25 33,864 4,420 4,420 33,334 0 0 0
35 55,160 3,145 3,145 33,334 0 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 0%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
34
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 65 MALE
INITIAL FACE AMOUNT: $19,380
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS -------------------------------- --------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- --------------- -------- ---------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,834 9,840 19,380 10,650 9,660 19,380
2 11,025 11,740 10,755 19,380 11,357 10,380 19,380
3 11,576 12,724 11,751 19,380 12,131 11,169 19,380
4 12,155 13,794 12,987 19,380 12,984 12,190 19,380
5 12,763 14,956 14,169 19,380 13,930 13,156 19,380
6 13,401 16,219 15,657 19,380 14,986 14,436 19,380
7 14,071 17,595 17,063 19,883 16,172 15,650 19,380
8 14,775 19,106 18,810 21,208 17,516 17,228 19,443
9 15,513 20,760 20,508 22,629 19,027 18,780 20,740
10 16,289 22,549 22,549 24,578 20,664 20,664 22,524
11 17,103 24,595 24,595 26,563 22,536 22,536 24,340
12 17,959 26,837 26,837 28,716 24,587 24,587 26,309
13 18,856 29,275 29,275 31,325 26,816 26,816 28,693
14 19,799 31,947 31,947 33,864 29,260 29,260 31,016
15 20,789 34,856 34,856 36,948 31,916 31,916 33,831
16 21,829 38,046 38,046 39,949 34,834 34,834 36,576
17 22,920 41,517 41,517 43,594 38,005 38,005 39,906
18 24,066 45,308 45,308 47,574 41,447 41,447 43,520
19 25,270 49,448 49,448 51,921 45,177 45,177 47,436
20 26,533 53,969 53,969 56,667 49,215 49,215 51,677
25 33,864 83,837 83,837 88,030 74,965 74,965 78,714
35 55,160 202,335 202,335 204,358 175,528 175,528 177,284
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 12%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
35
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 65 MALE
INITIAL FACE AMOUNT: $19,380
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------- -----------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,249 9,269 19,380 10,062 9,086 19,380
2 11,025 10,506 9,546 19,380 10,104 9,152 19,380
3 11,576 10,769 9,831 19,380 10,123 9,196 19,380
4 12,155 11,040 10,275 19,380 10,116 9,364 19,380
5 12,763 11,319 10,577 19,380 10,077 9,351 19,380
6 13,401 11,605 11,089 19,380 10,002 9,502 19,380
7 14,071 11,900 11,411 19,380 9,880 9,406 19,380
8 14,775 12,202 11,941 19,380 9,703 9,454 19,380
9 15,513 12,514 12,282 19,380 9,455 9,232 19,380
10 16,289 12,833 12,833 19,380 9,124 9,124 19,380
11 17,103 13,228 13,228 19,380 8,730 8,730 19,380
12 17,959 13,636 13,636 19,380 8,217 8,217 19,380
13 18,856 14,058 14,058 19,380 7,564 7,564 19,380
14 19,799 14,494 14,494 19,380 6,738 6,738 19,380
15 20,789 14,944 14,944 19,380 5,699 5,699 19,380
16 21,829 15,409 15,409 19,380 4,387 4,387 19,380
17 22,920 15,889 15,889 19,380 2,723 2,723 19,380
18 24,066 16,385 16,385 19,380 595 595 19,380
19 25,270 16,898 16,898 19,380 0 0 0
20 26,533 17,428 17,428 19,380 0 0 0
25 33,864 20,353 20,353 21,371 0 0 0
35 55,160 27,854 27,854 28,133 0 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 6%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
36
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 65 MALE
INITIAL FACE AMOUNT: $19,380
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS -------------------------- --------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- ------ ------- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,665 8,698 19,380 9,475 8,512 19,380
2 11,025 9,340 8,404 19,380 8,923 7,994 19,380
3 11,576 9,026 8,118 19,380 8,340 7,444 19,380
4 12,155 8,721 7,990 19,380 7,720 7,004 19,380
5 12,763 8,425 7,720 19,380 7,056 6,368 19,380
6 13,401 8,138 7,657 19,380 6,338 5,875 19,380
7 14,071 7,869 7,401 19,380 5,553 5,111 19,380
8 14,775 7,591 7,353 19,380 4,684 4,461 19,380
9 15,513 7,330 7,111 19,380 3,712 3,503 19,380
10 16,289 7,076 7,076 19,380 2,616 2,616 19,380
11 17,103 6,865 6,865 19,380 1,379 1,379 19,380
12 17,959 6,659 6,659 19,380 0 0 0
13 18,856 6,459 6,459 19,380 0 0 0
14 19,799 6,264 6,264 19,380 0 0 0
15 20,789 6,073 6,073 19,380 0 0 0
16 21,829 5,888 5,888 19,380 0 0 0
17 22,920 5,707 5,707 19,380 0 0 0
18 24,066 5,531 5,531 19,380 0 0 0
19 25,270 5,360 5,360 19,380 0 0 0
20 26,533 5,193 5,193 19,380 0 0 0
25 33,864 4,420 4,420 19,380 0 0 0
35 55,160 3,145 3,145 19,380 0 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE DIFFERENT
FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE CONTACT AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
37
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE / 55 FEMALE
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS -------------------------------- --------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- -------- ---------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,902 9,906 44,053 10,902 9,906 44,053
2 11,025 11,882 10,894 44,053 11,882 10,894 44,053
3 11,576 12,946 11,970 44,053 12,946 11,970 44,053
4 12,155 14,103 13,292 44,053 14,103 13,292 44,053
5 12,763 15,360 14,568 44,053 15,360 14,568 44,053
6 13,401 16,726 16,159 44,053 16,726 16,159 44,053
7 14,071 18,210 17,674 44,053 18,210 17,674 44,053
8 14,775 19,825 19,526 44,053 19,822 19,523 44,053
9 15,513 21,585 21,331 44,053 21,574 21,320 44,053
10 16,289 23,505 23,505 44,053 23,477 23,477 44,053
11 17,103 25,727 25,727 44,053 25,652 25,652 44,053
12 17,959 28,162 28,162 44,053 28,031 28,031 44,053
13 18,856 30,830 30,830 44,053 30,640 30,640 44,053
14 19,799 33,755 33,755 44,053 33,507 33,507 44,053
15 20,789 36,960 36,960 44,053 36,667 36,667 44,053
16 21,829 40,479 40,479 46,551 40,154 40,154 46,177
17 22,920 44,337 44,337 50,102 43,981 43,981 49,699
18 24,066 48,565 48,565 53,908 48,175 48,175 53,475
19 25,270 53,202 53,202 57,991 52,774 52,774 57,524
20 26,533 58,305 58,305 63,553 57,828 57,828 63,033
25 33,864 92,176 92,176 97,707 91,132 91,132 96,600
35 55,160 230,373 230,373 241,893 219,404 219,404 230,374
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 12%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
38
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE / 55 FEMALE
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ----------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- ------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,314 9,332 44,053 10,314 9,332 44,053
2 11,025 10,632 9,669 44,053 10,632 9,669 44,053
3 11,576 10,954 10,012 44,053 10,954 10,012 44,053
4 12,155 11,279 10,509 44,053 11,279 10,509 44,053
5 12,763 11,605 10,860 44,053 11,605 10,860 44,053
6 13,401 11,941 11,422 44,053 11,931 11,412 44,053
7 14,071 12,288 11,796 44,053 12,255 11,763 44,053
8 14,775 12,646 12,383 44,053 12,574 12,311 44,053
9 15,513 13,015 12,782 44,053 12,885 12,652 44,053
10 16,289 13,396 13,396 44,053 13,182 13,182 44,053
11 17,103 13,858 13,858 44,053 13,517 13,517 44,053
12 17,959 14,337 14,337 44,053 13,834 13,834 44,053
13 18,856 14,834 14,834 44,053 14,127 14,127 44,053
14 19,799 15,349 15,349 44,053 14,393 14,393 44,053
15 20,789 15,883 15,883 44,053 14,624 14,624 44,053
16 21,829 16,436 16,436 44,053 14,809 14,809 44,053
17 22,920 17,010 17,010 44,053 14,938 14,938 44,053
18 24,066 17,606 17,606 44,053 14,991 14,991 44,053
19 25,270 18,223 18,223 44,053 14,949 14,949 44,053
20 26,533 18,863 18,863 44,053 14,787 14,787 44,053
25 33,864 22,433 22,433 44,053 11,078 11,078 44,053
35 55,160 31,836 31,836 44,053 0 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 6%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
39
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE / 55 FEMALE
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS --------------------------- ---------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- ------ -------- ------- ------ -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,726 8,757 44,053 9,726 8,757 44,053
2 11,025 9,452 8,512 44,053 9,451 8,512 44,053
3 11,576 9,177 8,266 44,053 9,177 8,266 44,053
4 12,155 8,899 8,166 44,053 8,899 8,166 44,053
5 12,763 8,628 7,920 44,053 8,618 7,910 44,053
6 13,401 8,365 7,881 44,053 8,331 7,848 44,053
7 14,071 8,108 7,647 44,053 8,035 7,575 44,053
8 14,775 7,859 7,619 44,053 7,727 7,489 44,053
9 15,513 7,616 7,397 44,053 7,403 7,185 44,053
10 16,289 7,380 7,380 44,053 7,058 7,058 44,053
11 17,103 7,186 7,186 44,053 6,713 6,713 44,053
12 17,959 6,996 6,996 44,053 6,334 6,334 44,053
13 18,856 6,811 6,811 44,053 5,916 5,916 44,053
14 19,799 6,630 6,630 44,053 5,451 5,451 44,053
15 20,789 6,453 6,453 44,053 4,932 4,932 44,053
16 21,829 6,280 6,280 44,053 4,345 4,345 44,053
17 22,920 6,110 6,110 44,053 3,673 3,673 44,053
18 24,066 5,945 5,945 44,053 2,896 2,896 44,053
19 25,270 5,783 5,783 44,053 1,985 1,985 44,053
20 26,533 5,625 5,625 44,053 910 910 44,053
25 33,864 4,885 4,885 44,053 0 0 0
35 55,160 3,633 3,633 44,053 0 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 0%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
40
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE / 65 FEMALE
INITIAL FACE AMOUNT: $27,778
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------- -------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- -------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,897 9,902 27,778 10,897 9,902 27,778
2 11,025 11,862 10,875 27,778 11,862 10,875 27,778
3 11,576 12,903 11,927 27,778 12,902 11,926 27,778
4 12,155 14,037 13,227 27,778 14,021 13,211 27,778
5 12,763 15,274 14,483 27,778 15,229 14,439 27,778
6 13,401 16,623 16,057 27,778 16,535 15,969 27,778
7 14,071 18,094 17,558 27,778 17,948 17,413 27,778
8 14,775 19,698 19,399 27,778 19,482 19,185 27,778
9 15,513 21,447 21,193 27,778 21,155 20,902 27,778
10 16,289 23,354 23,354 27,778 22,988 22,988 27,778
11 17,103 25,561 25,561 27,778 25,115 25,115 27,778
12 17,959 27,981 27,981 29,940 27,485 27,485 29,409
13 18,856 30,632 30,632 32,776 30,076 30,076 32,182
14 19,799 33,537 33,537 35,550 32,914 32,914 34,889
15 20,789 36,721 36,721 38,925 36,007 36,007 38,168
16 21,829 40,211 40,211 42,222 39,396 39,396 41,367
17 22,920 44,035 44,035 46,238 43,088 43,088 45,243
18 24,066 48,227 48,227 50,639 47,104 47,104 49,460
19 25,270 52,820 52,820 55,462 51,466 51,466 54,040
20 26,533 57,887 57,887 60,782 56,231 56,231 59,043
25 33,864 91,514 91,514 96,090 86,546 86,546 90,874
35 55,160 228,720 228,720 231,007 203,577 203,577 205,613
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTACT AVERAGED 12%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
41
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE / 65 FEMALE
INITIAL FACE AMOUNT: $27,778
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------- -----------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,309 9,327 27,778 10,309 9,327 27,778
2 11,025 10,612 9,650 27,778 10,612 9,650 27,778
3 11,576 10,917 9,976 27,778 10,907 9,967 27,778
4 12,155 11,232 10,463 27,778 11,191 10,423 27,778
5 12,763 11,556 10,812 27,778 11,460 10,717 27,778
6 13,401 11,891 11,372 27,778 11,710 11,193 27,778
7 14,071 12,236 11,744 27,778 11,935 11,445 27,778
8 14,775 12,592 12,329 27,778 12,126 11,866 27,778
9 15,513 12,960 12,727 27,778 12,275 12,045 27,778
10 16,289 13,339 13,339 27,778 12,370 12,370 27,778
11 17,103 13,799 13,799 27,778 12,451 12,451 27,778
12 17,959 14,276 14,276 27,778 12,455 12,455 27,778
13 18,856 14,770 14,770 27,778 12,368 12,368 27,778
14 19,799 15,283 15,283 27,778 12,172 12,172 27,778
15 20,789 15,815 15,815 27,778 11,843 11,843 27,778
16 21,829 16,366 16,366 27,778 11,347 11,347 27,778
17 22,920 16,937 16,937 27,778 10,641 10,641 27,778
18 24,066 17,530 17,530 27,778 9,661 9,661 27,778
19 25,270 18,144 18,144 27,778 8,326 8,326 27,778
20 26,533 18,781 18,781 27,778 6,527 6,527 27,778
25 33,864 22,335 22,335 27,778 0 0 0
35 55,160 31,696 31,696 32,014 0 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 6%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
42
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE / 65 FEMALE
INITIAL FACE AMOUNT: $27,778
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS -------------------------- --------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
-------- -------------- ------ ------- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,721 8,752 27,778 9,721 8,752 27,778
2 11,025 9,432 8,493 27,778 9,432 8,493 27,778
3 11,576 9,147 8,236 27,778 9,129 8,220 27,778
4 12,155 8,869 8,136 27,778 8,809 8,077 27,778
5 12,763 8,599 7,891 27,778 8,466 7,760 27,778
6 13,401 8,336 7,852 27,778 8,095 7,614 27,778
7 14,071 8,080 7,619 27,778 7,687 7,230 27,778
8 14,775 7,831 7,592 27,778 7,232 6,996 27,778
9 15,513 7,589 7,370 27,778 6,716 6,499 27,778
10 16,289 7,354 7,354 27,778 6,122 6,122 27,778
11 17,103 7,161 7,161 27,778 5,457 5,457 27,778
12 17,959 6,972 6,972 27,778 4,673 4,673 27,778
13 18,856 6,787 6,787 27,778 3,747 3,747 27,778
14 19,799 6,606 6,606 27,778 2,652 2,652 27,778
15 20,789 6,430 6,430 27,778 1,349 1,349 27,778
16 21,829 6,257 6,257 27,778 0 0 0
17 22,920 6,088 6,088 27,778 0 0 0
18 24,066 5,923 5,923 27,778 0 0 0
19 25,270 5,762 5,762 27,778 0 0 0
20 26,533 5,604 5,604 27,778 0 0 0
25 33,864 4,866 4,866 27,778 0 0 0
35 55,160 3,619 3,619 27,778 0 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE CONTRACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE CONTRACT AVERAGED 0%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
43
<PAGE>
Report of Independent Public Accountants
To ITT Hartford Life & Annuity Insurance Company Putnam Capital Manager Trust
Separate Account Five and to the Owners of Units of Interest therein:
We have audited the accompanying statement of assets & liabilities of ITT
Hartford Life & Annuity Insurance Company Putnam Capital Manager Trust Separate
Account Five (the Account) as of December 31, 1995, and the related statement
of operations and the statement of changes in net assets for the period from
inception, January 10, 1995, to December 31, 1995. These financial statements
are the responsibility of the Account's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ITT Hartford Life & Annuity
Insurance Company Putnam Capital Manager Trust Separate Account Five as of
December 31, 1995, and the results of its operations and the changes in its net
assets for the period from inception January 10, 1995, to December 31, 1995, in
conformity with generally accepted accounting principles.
Hartford, Connecticut
February 20, 1996
ARTHUR ANDERSEN LLP
<PAGE>
<TABLE>
<CAPTION>
December 31, 1995 Voyager Global Asia Growth Global Asset High Yield
Fund Growth Pacific and Income Allocation Fund
Sub-Account Fund Growth Fund Fund Sub-Account
Sub-Account Fund Sub-Account Sub-Account
Sub-Account
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
.
PCM VOYAGER FUND
Shares 38,979,528
Cost $765,706,007
.
Market Value: $ 1,188,875,614 $ 0 $ 0 $ 0 $ 0 $ 0
.
PCM GLOBAL GROWTH FUND
Shares 29,418,709
Cost $364,270,097
.
Market Value: 0 446,576,005 0 0 0 0
.
PCM ASIA PACIFIC GROWTH FUND
Shares 1,032,036
Cost $10,315,625
.
Market Value: 0 0 10,557,732 0 0 0
.
PCM GROWTH AND INCOME FUND
Shares 97,577,342
Cost $1,574,120,024
.
Market Value: 0 0 0 2,094,985,523 0 0
.
PCM GLOBAL ASSET ALLOCATION
FUND
Shares 19,975,784
Cost $252,178,290
.
Market Value: 0 0 0 0 322,608,911 0
.
PCM HIGH YIELD FUND
Shares 22,523,796
Cost $248,243,947
.
Market Value: 0 0 0 0 0 278,619,355
.
PCM U.S. GOVERNMENT AND
HIGH QUALITY BOND FUND
Shares 40,964,872
Cost $489,468,596
.
Market Value: 0 0 0 0 0 0
.
PCM NEW OPPORTUNITIES FUND
Shares 15,552,682
Cost $196,209,968
.
Market Value: 0 0 0 0 0 0
.
PCM MONEY MARKET FUND
Shares 148,904,898
Cost $148,904,898
.
Market Value: 0 0 0 0 0 0
.
PCM UTILITIES GROWTH &
INCOME FUND
Shares 24,283,972
Cost $275,875,576
.
Market Value: 0 0 0 0 0 0
.
PCM DIVERSIFIED INCOME FUND
Shares 15,347,542
Cost $155,625,897
.
Market Value: 0 0 0 0 0 0
.
Due from Hartford Life 887,496 0 0 1,443,154 49,481 1,516,720
Insurance Company
.
Receivable from fund
shares sold 2 242,016 57,896 1 1 0
TOTAL ASSETS $1,189,763,112 $446,818,021 $10,615,628 $2,096,428,678 $322,658,393 $280,136,075
LIABILITIES
Due to Hartford Life 2 242,780 57,969 1 1 0
Insurance Company
.
Payable for fund 889,020 0 0 1,445,844 49,508 1,529,544
shares purchased
.
TOTAL LIABILITIES 889,022 242,780 57,969 1,445,845 49,509 1,529,544
NET ASSETS (VARIABLE $1,188,874,090 $446,575,241 $10,557,659 $2,094,982,833 $322,608,884 $278,606,531
ANNUITY CONTRACT
LIABILITIES)
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
December 31, 1995 U.S. Government New Money Utilities Diversified
and High Opportunities Market Growth and Income Fund
Quality Bond Fund Fund Income Fund Sub-Account
Fund Sub-Account Sub-Account Sub-Account
Sub-Account
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
.
PCM VOYAGER FUND
Shares 38,979,528
Cost $765,706,007
.
Market Value: $ 0 $ 0 $ 0 $ 0 $ 0
.
PCM GLOBAL GROWTH FUND
Shares 29,418,709
Cost $364,270,097
.
Market Value: 0 0 0 0 0
.
PCM ASIA PACIFIC GROWTH FUND
Shares 1,032,036
Cost $10,315,625
.
Market Value: 0 0 0 0 0
.
PCM GROWTH AND INCOME FUND
Shares 97,577,342
Cost $1,574,120,024
.
Market Value: 0 0 0 0 0
.
PCM GLOBAL ASSET ALLOCATION FUND
Shares 19,975,784
Cost $252,178,290
.
Market Value: 0 0 0 0 0
.
PCM HIGH YIELD FUND
Shares 22,523,796
Cost $248,243,947
.
Market Value: 0 0 0 0 0
.
PCM U.S. GOVERNMENT AND
HIGH QUALITY BOND FUND
Shares 40,964,872
Cost $489,468,596
.
Market Value: 562,857,344 0 0 0 0
.
PCM NEW OPPORTUNITIES FUND
Shares 15,552,682
Cost $196,209,968
.
Market Value: 0 243,088,411 0 0 0
.
PCM MONEY MARKET FUND
Shares 148,904,898
Cost $148,904,898
.
Market Value: 0 0 148,904,897 0 0
.
PCM UTILITIES GROWTH & INCOME FUND
Shares 24,283,972
Cost $275,875,576
.
Market Value: 0 0 0 322,491,144 0
.
PCM DIVERSIFIED INCOME FUND
Shares 15,347,542
Cost $155,625,897
.
Market Value: 0 0 0 0 169,283,385
.
Due from Hartford Life Insurance
Company 123,822 983,300 0 179,710 147,712
.
Receivable from fund shares sold 0 1 1,356,180 0 0
TOTAL ASSETS $562,981,166 $244,071,712 $150,261,077 $322,670,854 $169,431,097
LIABILITIES
Due to Hartford Life 0 1 1,356,373 0 0
Insurance
Company
.
Payable for fund shares purchased 124,661 986,212 0 176,551 147,041
.
TOTAL LIABILITIES 124,661 986,213 1,356,373 176,551 147,041
NET ASSETS (VARIABLE $562,856,505 $243,085,499 $148,904,704 $322,494,303 $169,284,056
ANNUITY CONTRACT
LIABILITIES)
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
<TABLE>
<CAPTION>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE -- ITT HARTFORD LIFE & ANNUITY INSURANCE COMPANY
Statement of Operations
For the period Voyager Global Asia Growth Global Asset High Yield
from inception, Fund Growth Pacific and Income Allocation Fund
January 10, 1995, Sub-Account Fund Growth Fund Fund Sub-Account
to December 31, 1995 Sub-Account Fund Sub-Account Sub-Account
Sub-Account*
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT
INCOME:
Dividends $ 30 $ 91 $ 0 $ 387 $ 192 $ 916
.
Net investment 30 91 0 387 192 916
income (loss)
.
Capital gains 224 170 0 100 0 0
income
.
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
.
Net realized gain 379 31 (36) 18 134 83
(loss) on
security
transactions
.
Net unrealized 129,891 24,935 1,006 192,416 14,176 8,329
appreciation
(depreciation) of
investments
during
the period
.
Net gains 130,270 24,966 970 192,434 14,310 8,412
(losses) on
investments
NET INCREASE $130,524 $25,227 $970 $192,921 $14,502 $9,328
(DECREASE) IN NET
ASSETS RESULTING
FROM OPERATIONS:
</TABLE>
<TABLE>
<CAPTION>
For the period U.S. Government New Money Utilities Diversified
from inception, and High Opportunities Market Growth and Income
January 10, 1995, Quality Fund Fund Income Fund Fund
to December 31, 1995 Bond Fund Sub-Account Sub-Account Sub-Account Sub-Account
Sub-Account
<S> <C> <C> <C> <C> <C>
INVESTMENT
INCOME:
Dividends $ 696 $ 1 $44,306 $ 543 $ 521
.
Net investment 696 1 44,306 543 521
income (loss)
.
Capital gains 0 31 0 0 0
income
.
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
.
Net realized gain 99 (213) 0 516 679
(loss) on
security
transactions
.
Net unrealized 11,545 150,716 0 25,411 5,068
appreciation
(depreciation) of
investments
during
the period
.
Net gains 11,644 150,503 0 25,927 5,747
(losses) on
investments
NET INCREASE $12,340 $150,535 $44,306 $26,470 $6,268
(DECREASE) IN NET
ASSETS RESULTING
FROM OPERATIONS:
</TABLE>
*From inception, May 1, 1995, to December 31, 1995.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE -- ITT HARTFORD LIFE &
ANNUITY INSURANCE COMPANY
Statement of Changes in Net Assets
For the Period from Voyager Global Asia Pacific Growth Global Asset High Yield
inception, January 10, Fund Growth Growth Fund and Income Allocation Fund
1995 to Sub- Fund Sub- Fund Fund Sub-
December 31, 1995 Account Sub- Account* Sub- Sub- Account
Account Account Account
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment $ 30 $ 91 $ 0 $ 387 $ 192 $ 916
income (loss)
.
Capital gains income 224 170 0 100 0 0
.
Net realized gain (loss) 379 31 (36) 18 134 83
on security
transactions
.
Net unrealized 129,891 24,935 1,006 192,416 14,176 8,329
appreciation
(depreciation) of
investments during
the period
.
Net increase (decrease) 130,524 25,227 970 192,921 14,502 9,328
in net assets resulting
from operations
.
UNIT TRANSACTIONS:
Purchases 0 0 0 0 0 0
.
Net transfers 1,365,625 527,767 52,584 2,340,814 215,112 268,388
.
Surrenders (21,100) (14,119) (10,314) (23,281) (13,604) (12,554)
.
Loan withdrawals 0 0 0 0 0 0
.
Cost of insurance (2,654) (849) (37) (4,246) (516) (334)
.
Net increase (decrease) 1,341,871 512,799 42,233 2,313,287 200,992 255,500
in net assets resulting
from unit transactions
.
Total increase (decrease) 1,472,395 538,026 43,203 2,506,208 215,494 264,828
in net assets
.
NET ASSETS:
Beginning of period 0 0 0 0 0 0
END OF PERIOD $1,472,395 $538,026 $43,203 $2,506,208 $215,494 $264,828
</TABLE>
<TABLE>
<CAPTION>
For the Period from U.S. Government New Money Utilities Diversified
inception, January 10, and High Opportunities Market Growth and Income
1995 to Quality Fund Fund Income Fund Fund
December 31, 1995 Bond Fund Sub-Account Sub- Sub- Sub-
Sub-Account Account Account Account
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment $ 696 $ 1 $44,306 $ 543 $ 521
income (loss)
.
Capital gains income 0 31 0 0 0
.
Net realized gain (loss) 99 (213) 0 516 679
on security
transactions
.
Net unrealized 11,545 150,716 0 25,411 5,068
appreciation
(depreciation) of
investments during
the period
.
Net increase (decrease) 12,340 150,535 44,306 26,470 6,268
in net assets resulting
from operations
.
UNIT TRANSACTIONS:
Purchases 0 0 10,030,006 0 0
.
Net transfers 238,607 1,436,274 (6,734,538) 287,063 112,303
.
Surrenders (13,066) (21,087) (30,724) (14,542) (12,286)
.
Loan withdrawals 0 0 (457,482) 0 0
.
Cost of insurance (443) (2,506) (10,286) (654) (204)
.
Net increase (decrease) 225,098 1,412,681 2,796,976 271,867 99,813
in net assets resulting
from unit transactions
.
Total increase (decrease) 237,438 1,563,216 2,841,282 298,337 106,081
in net assets
.
NET ASSETS:
Beginning of period 0 0 0 0 0
END OF PERIOD $237,438 $1,563,216 $2,841,282 $298,337 $106,081
</TABLE>
*From inception, May 1, 1995, to December 31, 1995.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
1. ORGANIZATION:
Putnam Capital Manager Trust Separate Account Five (the Account) is a separate
investment account within ITT Hartford Life & Annuity Insurance Company (the
Company) and is registered with the Securities and Exchange Commission (SEC) as
a unit investment trust under the Investment Company Act of 1940, as amended.
Both the Company and the Account are subject to supervision and regulation by
the Department of Insurance of the State of Connecticut and the SEC. The
account commenced operations on January 10, 1995. The Account invests deposits
by Variable annuity contractholders of the Company in various mutual funds (the
Funds) as directed by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the Account,
which are in accordance with generally accepted accounting principles in the
investment company industry:
A) SECURITY TRANSACTIONS Security transactions are recorded on the trade date
(date the order to buy or sell is executed). Cost of investments sold is
determined on the basis of identified cost. Dividend and capital gains income
are accrued as of the ex-dividend date. Capital gains income represents
dividends from the funds which are characterized as capital gains under tax
regulations.
B) SECURITY VALUATION The investment in shares of the Funds is valued at the
closing net asset value per share as determined by the appropriate Fund as of
December 31, 1995.
C) FEDERAL INCOME TAXES The operations of the Account form a part of, and are
taxed with, the total operations of the Company, which is taxed as an insurance
company under the Internal Revenue Code. Under current law, no federal income
taxes are payable with respect to the operations of the Account.
D) USE OF ESTIMATES The preparation of financial statements in conformity with
generally accepted accounting principle requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities as
of the date of the financial statements and the reported amounts of income and
expenses during the period. Operating results in the future could vary from the
amounts derived from management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes deductions for
mortality and expense undertakings, cost of insurance, administrative fees, and
state premium taxes. These charges are deducted through termination of units of
interest from applicable contract owners' accounts.
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE -- ITT HARTFORD LIFE &
ANNUITY INSURANCE COMPANY
Notes to Financial Statements
December 31, 1995
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Board of Directors of
ITT Hartford Life and Annuity Insurance Company:
We have audited the accompanying statutory balance sheets of ITT Hartford
Life and Annuity Insurance Company (a Wisconsin corporation and wholly-owned
subsidiary of Hartford Life Insurance Company) (the Company) as of December
31, 1995 and 1994, and the related statutory statements of income, changes in
capital and surplus, and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
statutory-basis financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
The Company presents its financial statements in conformity with statutory
accounting practices as described in Note 1 of notes to statutory financial
statements. When statutory financial statements are presented for purposes
other than for filing with a regulatory agency, generally accepted auditing
standards require that an auditors' report on them state whether they are
presented in conformity with generally accepted accounting principles. The
accounting practices used by the Company vary from generally accepted
accounting principles as explained and quantified in Note 1. In our opinion,
because the differences in accounting practices as described in Note 1 are
material, the statutory financial statements referred to above do not present
fairly, in accordance with generally accepted accounting principles, the
financial position of the Company as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for each of the three years in
the period ended December 31, 1995.
<PAGE>
However, in our opinion, the statutory financial statements referred to above
present fairly, in all material respects, the financial position of the
Company as of December 31, 1995 and 1994, and the results of operations and
its cash flows for each of the three years in the period ended December 31,
1995 in conformity with statutory accounting practices as described in Note 1.
As discussed in Note 1 of notes to statutory financial statements, the
Company changed its valuation method in determining aggregate reserves for
future benefits.
/s/ Arthur Andersen LLP
Hartford, Connecticut
January 24, 1996
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES
Premiums and Annuity Considerations $ 165,792 $ 442,173 $ 14,281
Annuity and Other Fund Deposits 1,087,661 608,685 1,986,140
Net Investment Income 78,787 29,012 7,970
Commissions and Expense Allowances on
Reinsurance Ceded 183,380 154,527 60,700
Reserve Adjustment on Reinsurance Ceded 1,879,785 1,266,926 0
Other Revenues 140,796 41,857 369,598
----------- ----------- -----------
TOTAL REVENUES 3,536,201 2,543,180 2,438,689
----------- ----------- -----------
BENEFITS AND EXPENSES
Death and Annuity Benefits 53,029 7,948 3,192
Surrenders and Other Benefit Payments 221,392 181,749 4,955
Commissions and Other Expenses 236,202 186,303 132,169
Increase in Reserves for Future Benefits 94,253 416,748 5,120
Increase in Liability for Premium
and Other Deposit Funds 460,124 182,934 281,024
Net Transfers to Separate Accounts 2,414,669 1,541,419 2,013,183
----------- ----------- -----------
TOTAL BENEFITS AND EXPENSES 3,479,669 2,517,101 2,439,643
----------- ----------- -----------
NET GAIN (LOSS) FROM OPERATIONS
BEFORE FEDERAL INCOME TAX EXPENSE 56,532 26,079 (954)
Federal Income Tax Expense 14,048 24,038 11,270
----------- ----------- -----------
NET GAIN (LOSS) FROM OPERATIONS 42,484 2,041 (12,224)
Net Realized Capital Gains (Losses) 374 (2) 877
----------- ----------- -----------
NET INCOME (LOSS) $ 42,858 $ 2,039 $ (11,347)
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of
these financial statements
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY BALANCE SHEETS
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------------
1995 1994
----------- ------------
<S> <C> <C>
ASSETS
Bonds $ 1,226,489 $ 798,501
Common Stocks 39,776 2,275
Policy Loans 22,521 20,145
Cash and Short-Term Investments 173,304 84,312
Other Invested Assets 13,432 2,519
----------- -----------
TOTAL CASH AND INVESTED ASSETS 1,475,522 907,752
----------- -----------
Investment Income Due and Accrued 18,021 12,757
Premium Balances Receivable 402 467
Receivables from Affiliates 8,182 2,861
Other Assets 25,907 13,749
Separate Account Assets 7,324,910 3,588,077
----------- -----------
TOTAL ASSETS $ 8,852,944 $ 4,525,663
----------- -----------
----------- -----------
LIABILITIES
Aggregate Reserves for Future Benefits $ 542,082 $ 447,284
Policy and Contract Claims 8,223 9,902
Liability for Premium and Other Deposit Funds 948,361 479,202
Asset Valuation Reserve 8,010 2,422
Payable to Affiliates 3,682 7,840
Other Liabilities (220,658) (100,349)
Separate Account Liabilities 7,324,910 3,588,077
----------- -----------
TOTAL LIABILITIES 8,614,610 4,434,378
----------- -----------
CAPITAL AND SURPLUS
Common Stock 2,500 2,500
Gross Paid-In and Contributed Surplus 226,043 114,109
Unassigned Funds 9,791 (25,324)
----------- -----------
TOTAL CAPITAL AND SURPLUS 238,334 91,285
----------- -----------
TOTAL LIABILITIES AND CAPITAL AND SURPLUS $ 8,852,944 $ 4,525,663
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------
1995 1994 1993
------------ ----------- -----------
<S> <C> <C> <C>
CAPITAL AND SURPLUS - BEGINNING OF YEAR $ 91,285 $ 88,693 $ 30,027
----------- ----------- -----------
Net Income (Loss) 42,858 2,039 (11,347)
Net Unrealized Gains (Losses) 1,709 (133) (1,198)
Change in Asset Valuation Reserve (5,588) (1,356) 135
Change in Non-Admitted Assets (1,944) (8,599) 1,076
Change in Reserve (calculation basis-see Note 1) 0 10,659 0
Aggregate Write-ins for Surplus (see Note 3) 8,080 (18) 0
Dividends to Shareholder (10,000) 0 0
Paid-in Surplus 111,934 0 70,000
----------- ----------- -----------
Change in Capital and Surplus 147,049 2,592 58,666
----------- ----------- -----------
CAPITAL AND SURPLUS - END OF YEAR $ 238,334 $ 91,285 $ 88,693
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of
these financial statements
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF CASH FLOW
($000)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------
1995 1994 1993
------------ ------------ -----------
<S> <C> <C> <C>
OPERATIONS
Premiums, Annuity Considerations and Fund
Deposits $ 1,253,511 $ 1,050,493 $ 2,000,492
Investment Income 78,328 24,519 5,594
Other Income 2,253,466 1,515,700 434,851
----------- ----------- -----------
Total Income 3,585,305 2,590,712 2,440,937
----------- ----------- -----------
Benefits Paid 277,965 181,205 8,215
Federal Income Taxes Paid on Operations 208,423 20,634 9,666
Other Expenses 2,664,385 1,832,905 2,231,477
----------- ----------- -----------
Total Benefits and Expenses 3,150,773 2,034,744 2,249,358
----------- ----------- -----------
NET CASH FROM OPERATIONS 434,532 555,968 191,579
PROCEEDS FROM INVESTMENTS
Bonds 287,941 87,747 88,334
Common Stocks 52 0 0
Other 28 40 23,638
----------- ----------- -----------
NET INVESTMENT PROCEEDS 288,021 87,787 111,972
----------- ----------- -----------
TAX ON CAPITAL GAINS 226 (96) 376
PAID-IN-SURPLUS 111,934 0 70,000
OTHER CASH PROVIDED 28,199 30,554 0
----------- ----------- -----------
TOTAL PROCEEDS 862,460 674,405 373,175
----------- ----------- -----------
COST OF INVESTMENTS ACQUIRED
Bonds 720,521 595,181 314,933
Common Stocks 35,794 808 567
Miscellaneous Applications 2,146 2,523 0
----------- ----------- -----------
TOTAL INVESTMENTS ACQUIRED 758,461 598,512 315,500
----------- ----------- -----------
OTHER CASH APPLIED
Dividends Paid to Stockholder 10,000 0 0
Other 5,007 24,813 24,626
----------- ----------- -----------
TOTAL OTHER CASH APPLIED 15,007 24,813 24,626
----------- ----------- -----------
TOTAL APPLICATIONS 773,468 623,325 340,126
----------- ----------- -----------
NET CHANGE IN CASH AND SHORT-TERM INVESTMENTS 88,992 51,080 33,049
CASH AND SHORT-TERM INVESTMENTS, BEGINNING OF YEAR 84,312 33,232 183
----------- ----------- -----------
CASH AND SHORT-TERM INVESTMENTS, END OF YEAR $ 173,304 $ 84,312 $ 33,232
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
(AMOUNTS IN THOUSANDS UNLESS OTHERWISE STATED)
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION
ITT Hartford Life and Annuity Insurance Company (ILA or the Company), formerly
known as ITT Life Insurance Corporation, is a wholly owned subsidiary of
Hartford Life Insurance Company (HLIC), which is an indirect subsidiary of ITT
Hartford Group, Inc. (ITT Hartford), formerly a wholly owned subsidiary of ITT
Corporation (ITT). On December 19, 1995, ITT Corporation distributed all the
outstanding shares of ITT Hartford Group to ITT shareholders of record in an
action known herein as the "Distribution". As a result of the Distribution, ITT
Hartford became an independent, publicly traded company.
ILA offers a complete line of ordinary and universal life insurance, individual
annuities and certain supplemental accident and health benefit coverages.
BASIS OF PRESENTATION
The accompanying ILA statutory basis financial statements were prepared in
conformity with statutory accounting practices prescribed or permitted by the
National Association of Insurance Commissioners (NAIC) and the Insurance
Department of the State of Wisconsin.
The preparation of financial statements in conformity with statutory accounting
principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilties and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reported period. Actual results could differ
from those estimates.
Statutory accounting practices and generally accepted accounting principles
(GAAP) differ in certain significant respects. These differences principally
involve:
(1) treatment of policy acquisition costs (commissions, underwriting and selling
expenses, premium taxes, etc.) which are charged to expense when incurred for
statutory purposes rather than on a pro-rata basis over the expected life of the
policy;
(2) recognition of premium revenues, which for statutory purposes are generally
recorded as collected or when due during the premium paying period of the
contract and which for GAAP purposes, generally, for universal life policies and
investment products, are only recorded for policy charges for the cost of
insurance, policy administration and surrender charges assessed to policy
account balances. Also, for GAAP purposes, premiums for traditional life
insurance policies are recognized as revenues when they are due from
policyholders and the retrospective deposit method is used in accounting for
universal life and other types of contracts where the payment pattern is
irregular or surrender charges are a significant source of profit. The
prospective deposit method is used for GAAP purposes where investment margins
are the primary source of profit;
(3) development of liabilities for future policy benefits, which for statutory
purposes predominantly use interest rate and mortality assumptions prescribed by
the NAIC which may vary considerably from interest and mortality assumptions
used for GAAP financial reporting;
(4) providing for income taxes based on current taxable income (tax return) only
for statutory purposes, rather than establishing additional assets or
liabilities for deferred Federal income taxes to recognize the tax effect
related to reporting revenues and expenses in different periods for financial
reporting and tax return purposes;
-1-
<PAGE>
(5) excluding certain GAAP assets designated as non-admitted assets (e.g., past
due agent's balances and furniture and equipment) from the balance sheet for
statutory purposes by directly charging surplus;
(6) establishing accruals for post-retirement and post-employment health care
benefits on an optional basis, immediate recognition or a twenty year phase-in
approach, whereas GAAP liabilities were established at date of adoption;
(7) establishing a formula reserve for realized and unrealized losses due to
default and equity risk associated with certain invested assets (Asset Valuation
Reserve); as well as the deferral and amortization of realized gains and losses,
motivated by changes in interest rates during the period the asset is held, into
income over the remaining life to maturity of the asset sold (Interest
Maintenance Reserve); whereas on a GAAP basis, no such formula reserve is
required and realized gains and losses are recognized in the period the asset is
sold;
(8) the reporting of reserves and benefits net of reinsurance ceded, where risk
transfer has taken place; whereas on a GAAP basis, reserves are reported gross
of reinsurance with reserve credits presented as recoverable assets;
(9) the reporting of fixed maturities at amortized cost, where GAAP requires
that fixed maturities be classified as "held-to-maturity", "available-for-sale"
or "trading", based on the Company's intentions with respect to the ultimate
disposition of the security and its ability to affect those intentions. The
Company's fixed maturities were classified on a GAAP basis as "available-for-
sale" and accordingly, these investments were reflected at fair value with the
corresponding impact included as a component of Stockholder's Equity designated
as "Unrealized Gain/Loss on Investments, Net of Tax". For statutory reporting
purposes, Net Unrealized Loss on Investments represents unrealized gains or
losses on common stock and other bonds reported at fair value; and
(10) separate account liabilties are valued on the Commissioner's Annuity
Reserve Valuation Method (CARVM), with the surplus generated recorded as a
liability to the general account (and a contra liability on the balance sheet of
the general account), whereas GAAP liabilities are valued at account value.
As of December 31, 1995, 1994 and 1993, the significant differences between
statutory and GAAP basis
net income and capital and surplus for the Company are summarized as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
GAAP Net Income: $ 38,821 $23,295 $ 6,071
Amortization and deferral
of policy acquisition costs (174,341) (117,863) (147,700)
Benefit reserve adjustment 31,392 30,912 14,059
Deferred taxes 2,801 (9,267) (7,123)
Separate accounts 146,635 75,941 110,547
Coinsurance 0 3,472 11,578
Other, net (2,450) (4,451) 1,221
Statutory Net Income (Loss) $ 42,858 $ 2,039 $(11,347)
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
1995 1994 1993
GAAP Capital and Surplus $ 455,541 $ 199,785 $ 198,408
<S> <C> <C> <C>
Deferred policy
acquisition costs (596,542) (422,201) (304,338)
Benefit reserve adjustment 74,782 85,191 43,621
Deferred taxes 1,493 13,257 13,706
Separate accounts 333,123 186,488 110,547
Asset valuation reserve (8,010) (2,422) (1,066)
Coinsurance 0 0 22,642
Unrealized gain (loss) on bonds (1,696) 21,918 0
Adjustment relating
to Lyndon contribution (41,277) 0 0
Other, net 20,920 9,269 5,173
Statutory Capital and Surplus $ 238,334 $ 91,285 $ 88,693
</TABLE>
AGGREGATE RESERVES AND LIABILITIES FOR PREMIUM AND OTHER DEPOSIT FUNDS
Aggregate reserves for payment of future life, health and annuity benefits were
computed in accordance with presently accepted actuarial standards. Reserves
for life insurance policies are generally based on the 1958 and 1980
Commissioner's Standard Ordinary Mortality Tables at various rates ranging from
2.5% to 6.0%. Accumulation and on-benefit annuity reserves are based
principally on Individual Annuity tables at various rates ranging from 2.5% to
8.75% and using the Commissioner's Annuity Reserve Valuation Method (CARVM).
Accident and health reserves are established using a two year preliminary term
method and morbidity tables based on Company experience.
ILA has established separate accounts to segregate the assets and liabilities of
certain annuity contracts that must be segregated from the Company's general
assets under the terms of the contracts. The assets consist primarily of
marketable securities reported at market value. Premiums, benefits and expenses
of these contracts are reported in the Statutory Statements of Income.
During 1994, the Company changed the valuation method on aggregate reserves for
future benefits resulting in a $10.7 million increase in surplus. The new
valuation method is in accordance with presently accepted actuarial standards.
INVESTMENTS
Investments in bonds are carried at amortized cost. Bonds which are deemed
ineligible to be held at amortized cost by the National Association of Insurance
Commissioners (NAIC) Securities Valuation Office (SVO) are carried at the
appropriate SVO published value. When a permanent reduction in the value of
publicly traded securities occurs, the decrease is reported as a realized loss
and the carrying value is adjusted accordingly. Common stocks are carried at
market value with the difference from cost reflected in surplus. Other invested
assets are generally recorded at fair value.
Changes in unrealized capital gains and losses on common stock are reported as
additions to or reductions of surplus. The Asset Valuation Reserve is designed
to provide a standardized reserve process for realized and unrealized losses due
to the default and equity risks associated with invested assets. The reserve
increased by $5,588, $1,356 and $135 in 1995, 1994 and 1993, respectively.
Additionally, the Interest Maintenance Reserve (IMR) captures net realized
capital gains and losses, net of applicable income taxes, resulting from changes
in interest rates and amortizes these gains or losses into income over the
remaining life of the mortgage loan or bond sold. Realized capital gains and
losses, net of taxes, not included in IMR are reported in the Statutory
Statements of Income. Realized investment gains and losses are determined
-3-
<PAGE>
on a specific identification basis. The amount of net capital gains reclassified
from the IMR was $39 in 1995 and the amount of net capital losses was $67 and
$264 in 1994 and 1993, respectively. The amount of income amortized was $256,
$114 and $178 in 1995, 1994 and 1993, respectively.
OTHER LIABILITIES
The amount reflected in other liabilities includes a receivable from the
separate accounts of $333.1, $186.5 million in 1995 and 1994, respectively. The
balances are classified in accordance with NAIC accounting practices.
2. INVESTMENTS:
(a) COMPONENTS OF NET INVESTMENT INCOME
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Interest income from fixed
maturity securities $ 76,100 $ 28,335 $ 7,541
Interest income from policy loans 1,504 454 124
Interest and dividends from
other investments 2,288 1,069 481
Gross investment income 79,892 29,858 8,146
Less: investment expenses 1,105 846 176
Net investment income $ 78,787 $ 29,012 $ 7,970
</TABLE>
(b) UNREALIZED GAINS (LOSSES) ON COMMON STOCKS
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Gross unrealized gains at
end of year $ 1,724 $ 75 $ 148
Gross unrealized losses at
end of year 0 (60) 0
Net unrealized gains 1,724 15 148
Balance at beginning of year 15 148 93
Change in net unrealized gains on
common stocks $ 1,709 $ (133) $ 55
</TABLE>
(c) UNREALIZED GAINS (LOSSES) ON BONDS AND SHORT-TERM INVESTMENTS
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Gross unrealized gains at
end of year $ 22,251 $ 986 $ 5,916
Gross unrealized losses at
end of year (1,374) (34,718) (684)
Net unrealized gains (losses)
after tax 20,877 (33,732) 5,232
Balance at beginning of year (33,732) 5,232 2,287
Change in net unrealized gains
(losses) on bonds and
short-term investments $ 54,609 $ (38,964) $ 2,945
</TABLE>
-4-
<PAGE>
(d) COMPONENTS OF NET REALIZED CAPITAL GAINS (LOSSES)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Bonds and short term investments $ 156 $ (101) $ (316)
Common stocks 52 0 0
Real estate and other 0 34 1,316
----
Realized gains (losses) 208 (67) 1,000
Capital gains (benefit) taxes (205) 2 386
----
Net realized capital gains (losses)
after tax 413 (69) 614
Less: IMR capital gains (losses) 39 (67) (263)
----
Net realized capital gains (losses) $ 374 $ (2) $ 877
</TABLE>
(e) OFF-BALANCE SHEET INVESTMENTS
The Company had no significant financial instruments with off-balance sheet risk
as of December 31, 1995 and 1994.
(f) CONCENTRATION OF CREDIT RISK
Excluding U.S. government and government agency investments, the Company is not
exposed to any significant concentration of credit risk.
(g) BONDS, SHORT-TERM AND COMMON STOCK INVESTMENTS
<TABLE>
<CAPTION>
1995
----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. government and government
agencies and authorities:
- - guaranteed and sponsored 44,268 14 (248) 44,034
- - guaranteed and
sponsored - asset backed 176,160 4,644 (682) 180,122
States, municipalities and
political subdivisions 16,948 38 (6) 16,980
International governments 5,402 441 0 5,843
Public utilities 108,083 1,652 (90) 109,645
All other corporate 374,058 8,145 (248) 381,955
All other
corporate - asset backed 410,197 5,841 (89) 415,949
Short-term investments 139,011 18 0 139,029
Certificates of deposit 91,373 1,458 (11) 92,820
Total 1,365,500 22,251 (1,374) 1,386,377
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
1995
----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Common Stock - Unaffiliated 2,668 555 0 3,223
Common Stock - Affiliated 35,384 1,169 0 36,553
Total Common Stock 38,052 1,724 0 39,776
</TABLE>
<TABLE>
<CAPTION>
1994
----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. government and government
agencies and authorities:
- - guaranteed and sponsored 175,925 0 (12,059) 163,866
- - guaranteed and
sponsored - asset backed 142,318 382 (4,911) 137,789
States, municipalities and
political subdivisions 10,409 0 (603) 9,806
International governments 2,248 0 (69) 2,179
Public utilities 29,509 31 (1,271) 28,269
All other corporate 257,301 246 (9,452) 248,095
All other
corporate - asset backed 112,390 327 (4,066) 108,651
Short-term investments 56,365 0 0 56,365
Certificates of deposit 68,401 0 (2,287) 66,114
Total 854,866 986 (34,718) 821,134
</TABLE>
<TABLE>
<CAPTION>
1994
----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Common Stock - Unaffiliated 2,260 75 (60) 2,275
</TABLE>
The amortized cost and estimated market value of bonds and short-term
investments at December 31, 1995 by management's anticipated maturity are shown
below. Asset backed securities are distributed to maturity year based on ILA's
estimate of the rate of future prepayments of principal over the remaining life
of the securities. Expected maturities differ from contractual maturities
reflecting borrowers' rights to call or prepay their obligations.
-6-
<PAGE>
<TABLE>
<CAPTION>
Estimated
Amortized Fair
Cost Value
Maturity
--------
<S> <C> <C>
Due in one year or less 439,793 442,327
Due after one year through five years 840,088 855,741
Due after five years through ten years 80,820 83,432
Due after ten years 4,799 4,877
Total 1,365,500 1,386,377
</TABLE>
Proceeds from sales of investments in bonds and short-term investments during
1995, 1994 and 1993 were $313,961, $117,912 and $333,023, respectively,
resulting in gross realized gains of $1,419, $518 and $937, respectively, and
gross realized losses of $1,263, $624 and $1,255, respectively, before
transfers to IMR. The Company had realized gains of $52 during 1995 from a
capital gain distribution.
(h) FAIR VALUE OF FINANCIAL INSTRUMENTS
<TABLE>
<CAPTION>
Balance sheet items: (in millions) 1995 1994
------------------ -----------------
Carrying Fair Carrying Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
Assets
Fixed maturites 1,366 1,386 855 821
Common stocks 40 40 2 2
Policy loans 23 23 20 20
Miscellaneous 13 13 2 2
Liabilities
Liabilities on investment contracts 1,031 981 534 526
</TABLE>
The carrying amounts for policy loans approximates fair value. The
liabilities are determined by forecasting future cash flows discounted at
current market rates.
3. RELATED PARTY TRANSACTIONS:
Transactions between the Company and its affiliates within ITT Hartford relate
principally to tax settlements, reinsurance, service fees, capital contributions
and payments of dividends.
On June 30, 1995, the assets of Lyndon Insurance Company were contributed to
ILA. As a result, ILA received approximately $365 million in fixed maturities,
equity securities and cash, $28 million in policy reserves, $187 million of
current tax liability, $26 million in IMR, $8 million in AVR (offset by an
aggregate write-in to surplus), and $4 million of other liabilities. The assets
in excess of liabilities of $112 were recorded as an increase to paid-in
surplus.
For additional information, see Note 5.
4. FEDERAL INCOME TAXES:
The Company is included in the consolidated Federal income tax return of ITT
Hartford and its includable subsidiaries. Allocation of taxes is based
primarily upon separate company tax return calculations with current credit for
net losses used in consolidation except that increases resulting from
consolidation are
-7-
<PAGE>
allocated in proportion to separate return amounts. Intercompany Federal income
tax balances are generally settled quarterly with Hartford Fire Insurance
Company (Hartford Fire), a subsidiary of ITT Hartford. Federal income taxes paid
by the Company were $215,921, $20,538, and $10,042 in 1995, 1994 and 1993,
respectively. The effective tax rate was 25%, 92%, and 1,181% in 1995, 1994, and
1993 respectively. The following schedule provides a reconciliation of the
effective tax rate (in millions).
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Tax provision (benefit) at US statutory rate 20 9 (1)
Tax acquisiton deferred costs 8 8 10
Statutory to tax reserves 3 5 0
Investments and other (17) 2 2
Federal income tax expense 14 24 11
</TABLE>
5. CAPITAL AND SURPLUS AND SHAREHOLDER DIVIDEND RESTRICTIONS:
The maximum amount of dividends which can be paid, without prior approval, by
State of Wisconsin insurance companies to shareholders is subject to
restrictions relating to statutory surplus. Dividends are paid as determined by
the Board of Directors and are not cumulative. ILA paid dividends of $10 million
to its parent, HLIC, in 1995. No dividends were paid in 1994 and 1993. As a
result of the distribution by ITT, the assets of ITT Lyndon Insurance Company
(Lyndon) were contributed to ILA in June 1995. Substantially all the business
was removed from Lyndon prior to the contribution. The amount of assets which
exceeded liabilities at the contribution date ($112 million) was included in
paid-in capital.
6. PENSION PLANS AND OTHER POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS:
The Company's employees are included in ITT Hartford's non-contributory defined
benefit pension plans. These plans provide pension benefits that are based on
years of service and the employee's compensation during the last ten years of
employment. The Company's funding policy is to contribute annually an amount
between the minimum funding requirements set forth in the Employee Retirement
Income Security Act of 1974 and the maximum amount that can be deducted for
Federal income tax purposes. Generally, pension costs are funded through the
purchase of HLIC's group pension contracts. Pension expense was $1,034, $1,211,
and $765 in 1995, 1994 and 1993, respectively. Liabilities for the plan are held
by Hartford Fire.
The Company also participates in ITT Hartford 's Investment and Savings Plan,
which includes a deferred compensation option under IRC section 401(k) and
an ESOP allocation under IRC section 404(k). The liabilities for these plans are
included in the financial statements of Hartford Fire. The cost to ILA was not
material in 1995, 1994 and 1993.
The Company's employees are included in Hartford Fire's contributory defined
health care and life insurance benefit plans. These plans provide health care
and life insurance benefits for retired employees. Substantially all employees
may become eligible for those benefits if they reach normal or early retirement
age while still working for the Company. The Company has prefunded a portion of
the health care and life insurance obligations through trust funds where such
prefunding can be accomplished on a tax effective basis. Amounts allocated by
Hartford Fire for post-retirement health care and life insurance benefits
expense (not including provisions for accrual of post-retirement benefit
obligations) are immaterial.
The assumed rate of future increases in the per capita cost of health care (the
health care trend rate) was 10.1% for 1995, decreasing ratably to 6% in the year
2001. Increasing the health care trend rates by one percent per year would have
an immaterial impact on the accumulated post-retirement benefit obligation and
the annual expense. The cost to ILA was not material in 1995, 1994 and 1993.
Post-employment benefits are primarily comprised of obligations to provide
medical and life insurance to employees on long term disability. Post-
employment benefit expense was not material in 1995, 1994 and 1993.
-8-
<PAGE>
7. REINSURANCE:
The Company cedes insurance to non-affiliated insurers in order to limit its
maximum loss. Such transfer does not relieve ILA of its primary liability. ILA
also assumes insurance from other insurers.
Life insurance net retained premiums were comprised of the following:
For the years ended december 31
-------------------------------
1995.00 1994.00 1993.00
Direct premiums 159,918 133,180 131,586
Premiums assumed 13,299 960 841
Premiums ceded 7,425 (308,033) 118,146
Premiums and annuity considerations 165,792 442,173 14,281
In December 1994 the Company ceded to a third party, on a modified coinsurance
basis, 80% of the variable annuity business written in 1994. The ceded business
includes both general and separate account liabilities. As a result of the
agreement ILA transferred approximately $1,352 million in assets and
liabilities. The financial impact of the cession was an increase of
approximately $15 million to net income and surplus.
In November 1994, the Company ceded, on a modified coinsurance basis, 30% of
the separate account variable annuity business distributed by Paine Webber to
Paine Webber Life Insurance Company (PWLIC). As a result of the agreement, ILA
transferred approximately $24 million in assets and liabilities to PWLIC. The
financial impact of the cession was an increase of approximately $765 to net
income and surplus.
In October 1994, the agreement, effective December 1990, which required ILA to
coinsure 90% of all existing and new business, excluding variable annuity
business, written by the Company to HLIC, was terminated. As a result of the
termination, ILA received approximately $430 million in assets and liabilities
from HLIC. The impact of the transaction was a decrease of approximately $15
million to net income and surplus.
In November 1993, ILA acquired, through an assumption reinsurance transaction,
substantially all of the individual fixed and variable annuity business of
Hartford Life and Accident, an affiliate. As a result of this transaction, the
assets and liabilities of the Company increased approximately $1 billion,
substantially all of which was transferred to the separate accounts of the
Company. The remaining assets and liabilities (approximately $41 million) were
transferred in October 1995. The impact of these transactions on net income and
surplus was not significant.
8. SEPARATE ACCOUNTS:
The Company maintains separate account assets and liabilties totaling $7.3
billion and $3.6 billion at December 31, 1995 and 1994, respectively. Separate
account assets are reported at fair value and separate account liabilities are
determined in accordance with the Commissioners Annuity Reserve Valuation
Method (CARVM), which approximates the market value less applicable surrender
charges. Separate account assets are segregated from other investments, the
policyholder assumes the investment risk, and the investment income and gains
and losses accrue directly to the policyholder. Separate account management
fees, net of minimum guarantees, were $72 million, $42 million, and $6 million
in 1995, 1994, and 1993, respectively.
-9-
<PAGE>
9. COMMITMENTS AND CONTINGENCIES:
As of December 31, 1995, the Company had no material contingent liabilities, nor
had the Company committed any surplus funds for any contingent liabilities or
arrangements. The Company is involved in various legal actions which have
arisen in the course normal of its business. In the opinion of management, the
ultimate liability with respect to such lawsuits as well as other contingencies
is not considered to be material in relation to the results of operations and
financial position of the Company.
Under insurance guaranty laws in most states, insurers doing business therein
can be assessed up to prescribed limits for policyholder losses incurred by
insolvent companies. The amount of any future assessments on ILA under these
laws cannot be reasonably estimated. Most of the laws do provide, however, that
an assessment may be excused or deferred if it would threaten an insurer's own
financial strength. Additionally, guaranty fund assessments are used to reduce
state premium taxes paid by the company in certain states. ILA paid guaranty
fund assessments of $1,684, $583, and $495 in 1995, 1994, and 1993,
respectively.
-10-
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
The prospectus consisting of _______ pages.
The undertaking to file reports.
The Rule 484 undertaking.
The signatures.
(1) The following exhibits included herewith correspond to those required by
paragraph A of the instructions for exhibits to Form N-8B-2.
(A1) Resolution of Board of Directors of the Company is incorporated
by reference to Post Effective Amendment No. 2, to the
Registration Statement File No. 33-83652 dated May 1, 1995.
(A2) Not Applicable.
(A3a) Principal Underwriting Agreement is incorporated herein.
(A3b) Forms of Selling Agreements is incorporated herein.
(A4) Not Applicable.
(A5) Form of Modified Single Premium Variable Life Insurance Policy is
incorporated by reference as stated above.
(A6a) Certificate of Incorporation of ITT Hartford Life and Annuity
Insurance Company is incorporated herein.
(A6b) Bylaws of ITT Hartford Life and Annuity Insurance Company is
incorporated herein.
(A7) Not Applicable.
(A8) Not Applicable.
(A9) Not Applicable.
<PAGE>
(A10) Form of Application for Modified Single Premium Variable Life
Insurance Policies is incorporated by reference as stated above.
(A11) Memorandum describing transfer and redemption procedures is
incorporated by reference as stated above.
(2) Opinion and consent of Lynda Godkin, Associate General Counsel is
incorporated herein.
(3) No financial statement will be omitted from the Prospectus pursuant to
Instruction 1 (b) or (c) of Part I.
(4) Not Applicable.
(5) Opinion and consent of Michael Winterfield, FSA, MAAA filed with this
Registration Statement.
(6) Consent of Arthur Andersen LLP, Independent Certified Public Accountant.
(7) Opinion and consent of counsel is incorporated by reference as Exhibit 2.
(8) Opinion and consent of actuary is incorporated by reference as Exhibit 5.
(9) Power of attorney is incorporated herein.
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
UNDERTAKING ON INDEMNIFICATION
Article VIII of the Bylaws of ITT Hartford Life and Annuity Insurance Company, a
Connecticut corporation, provides for indemnification of its officers, directors
and employees as follows:
SECTION 1. No person shall be liable to the Company for any loss or damage
suffered by it on account of any action taken or omitted to be taken by him as
director or officer of the Company, or of any other company, partnership, joint
venture, trust or other enterprise for which he serves as a director, officer or
employee at the request of the Company, in good faith, if such person (a)
exercised and used the same degree of care and skill as a prudent man would have
exercised or used under the circumstances in the conduct of his own affairs, or
(b) took or omitted to take such action in reliance upon advice of counsel for
the Company or upon statements made or information furnished by officers or
employees of the Company which he had reasonable grounds to believe to be true.
The foregoing shall not be exclusive of other rights and defenses to which he
may be entitled as a matter of law.
SECTION 2. The Company shall indemnify any person who was or is a party or
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, (other than one by or in the right of the Company) by reason
of the fact that he is or was a director, officer or employee of the company ,
or is or was serving at the request of the Company as a director, officer or
employee of another company, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonable y incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonable believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall no, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Company, and with respect to any criminal action or proceeding had reasonable
cause to believe that his conduct was unlawful.
SECTION 3. The Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, by or in the right of the Company to procure a judgment in
its favor by reason of the fact that he is or was a director, officer or
employee of the Company, or is or was serving at the request of the Company
<PAGE>
as a director, officer or employee of another company, partnership, joint
venture, trust or other enterprise against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit, 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, except that no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable
for negligence or misconduct in the performance of his duty to the Company
unless and only to the extent that the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability and in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses as such court shall deem
proper.
SECTION 4. Expenses, including attorneys' fees, incurred in defending a civil
or criminal action, suit or proceeding may be paid by the Company in advance of
the final disposition of such action, suit or proceeding, upon receipt of any
undertaking by or on behalf of the director or employee to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the Company as authorized hereby.
SECTION 5. The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any statute, bylaw, agreement, vote of shareholders or of disinterested
directors or otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer or employee and shall inure to
the benefit of the heirs, executors and administrators of such a person.
The registrant hereby undertakes that insofar as indemnification for liability
arising under the Securities Act of 1933 (the "Act") may be permitted to
directors, officers and controlling persons of the registrant, pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements pursuant to Rule 485(b) under the Securities Act of 1933 for
effectiveness of this Registration Statement and duly caused this Registration
Statement to be signed by the following persons in the capacities and on the
dates indicated.
ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY - PUTNAM CAPITAL MANAGER TRUST
SEPARATE ACCOUNT FIVE (Registrant)
By: /s/ Gregory A. Boyko
----------------------------------------------
Gregory A. Boyko, Vice President & Controller
ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY (Depositor)
By: /s/ Gregory A. Boyko
----------------------------------------------
Gregory A. Boyko, Vice President & Controller
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons and in the capacities and on
the dates indicated.
Donald R. Frahm, Director *
Bruce D. Gardner, Director *
Joseph H. Gareau, Executive Vice
President and Chief Investment
Officer, Director *
Joseph Kanarek, Vice President *By: /s/ Lynda Godkin
Director * --------------------
Thomas M. Marra, Executive Vice Lynda Godkin
President, Director * Attorney-in-Fact
Lowndes A. Smith, President,
Chief Operating Officer, Director * Dated: April 15, 1996
Lizabeth H. Zlatkus, Vice President ------------------
Director *
<PAGE>
[Exhibit 1A3a]
PRINCIPAL UNDERWRITER AGREEMENT
THIS AGREEMENT, dated as of the June 26, 1995, made by and between ITT HARTFORD
LIFE AND ANNUITY INSURANCE COMPANY ("ILA" or the "Sponsor"), a corporation
organized and existing under the laws of the State of Wisconsin, and HARTFORD
SECURITIES DISTRIBUTION COMPANY, INC. ("HSD"), a corporation organized and
existing under the laws of the State of Connecticut,
WITNESSETH:
WHEREAS, the Board of Directors of ILA has made provision for the establishment
of a separate account within ILA in accordance with the laws of the State of
Wisconsin, which separate account was organized and is established and
registered as a unit investment trust type investment company with the
Securities and Exchange Commission under the Investment Company Act of 1940
("1940 Act"), as amended, and which is designated ITT Hartford Life and Annuity
Insurance Company Separate Account Five (referred to as the "UIT"); and
WHEREAS, HSD offers to the public a certain Modified Single Premium Variable
Life Insurance Policy (the "Policy") issued by ILA with respect to the UIT units
of interest thereunder which are registered under the Securities Act of 1933
("1933 Act"), as amended; and
WHEREAS, HSD has previously agreed to act as distributor in connection with
offers and sales of the Policy under the terms and conditions set forth in this
Principal Underwriter Agreement.
NOW THEREFORE, in consideration of the mutual agreements made herein, ILA and
HSD agree as follows:
I.
HSD'S DUTIES
1. HSD, as successor principal underwriter to Hartford Equity Sales Company,
Inc. for the Policy, will use its best efforts to effect offers and sales
of the Policy through broker-dealers that are members of the National
Association of Securities Dealers, Inc. and whose registered
representatives are duly licensed as insurance agents of ILA. HSD is
responsible for compliance with all applicable requirements of the 1933
Act, as amended, the Securities Exchange Act of 1934 ("1934 Act"), as
amended, and the 1940 Act, as amended, and the rules and regulations
relating to the sales and distribution of the Policy, the need for which
arises out of its duties as principal underwriter of said Policy and
relating to the creation of the UIT.
<PAGE>
2. HSD agrees that it will not use any prospectus, sales literature, or any
other printed matter or material or offer for sale or sell the Policy if
any of the foregoing in any way represent the duties, obligations, or
liabilities of ILA as being greater than, or different from, such duties,
obligations and liabilities as are set forth in this Agreement, as it may
be amended from time to time.
3. HSD agrees that it will utilize the then currently effective prospectus
relating to the UIT's Policies in connection with its selling efforts.
As to the other types of sales materials, HSD agrees that it will use only
sales materials which conform to the requirements of federal and state
insurance laws and regulations and which have been filed, where necessary,
with the appropriate regulatory authorities.
4. HSD agrees that it or its duly designated agent shall maintain records of
the name and address of, and the securities issued by the UIT and held by,
every holder of any security issued pursuant to this Agreement, as required
by the Section 26(a)(4) of the 1940 Act, as amended.
5. HSD's services pursuant to this Agreement shall not be deemed to be
exclusive, and it may render similar services and act as an underwriter,
distributor, or dealer for other investment companies in the offering of
their shares.
6. In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations and duties hereunder on the part of
HSD, HSD shall not be subject to liability under a Policy for any act or
omission in the course, or connected with, rendering services hereunder.
II.
1. The UIT reserves the right at any time to suspend or limit the public
offering of the Policies upon 30 days' written notice to HSD, except where
the notice period may be shortened because of legal action taken by any
regulatory agency.
2. The UIT agrees to advice HSD immediately:
(a) Of any request by the Securities and Exchange Commission for amendment
of its 1933 Act registration statement or for additional information;
(b) Of the issuance by the Securities and Exchange Commission of any stop
order suspending the effectiveness of the 1933 Act registration
statement relating to units of interest issued with respect to the UIT
or of the initiation of any proceedings for that purpose;
<PAGE>
(c) Of the happening of any material event, if known, which makes untrue
any statement in said 1933 Act registration statement or which
requires a change therein in order to make any statement therein not
misleading.
ILA will furnish to HSD such information with respect to the UIT and the
Policies in such form and signed by such of its officers and directors and
HSD may reasonably request and will warrant that the statements therein
contained when so signed will be true and correct. ILA will also furnish,
from time to time, such additional information regarding the UIT's
financial condition as HSD may reasonably request.
III.
COMPENSATION
In accordance with an Expense Reimbursement Agreement between ILA and HSD, HSD
is obligated to reimburse HSD for all operating expenses associated with the
services provided on behalf of the UIT under this Principal Underwriter
Agreement. No additional compensation is payable in excess of that required
under the Expense Reimbursement Agreement.
IV.
RESIGNATION AND REMOVAL OF PRINCIPAL UNDERWRITER
HSD may resign as a Principal Underwriter hereunder, upon 120 days' prior
written notice to ILA. However, such resignation shall not become effective
until either the UIT has been completely liquidated and the proceeds of the
liquidation distributed through ILA to the Policy owners or a successor
Principal Underwriter has been designated and has accepted its duties.
V.
MISCELLANEOUS
1. This Agreement may not be assigned by any of the parties hereto without the
written consent of the other party.
2. All notices and other communications provided for hereunder shall be in
writing and shall be delivered by hand or mailed first class, postage
prepaid, addressed as follows:
(a) If to ILA - ITT Hartford Life and Annuity Insurance Company, P.O.
Box 2999, Hartford, Connecticut 06104.
(b) If to HSD - Hartford Securities Distribution Company, Inc., P.O.
Box 2999, Hartford, Connecticut 06104.
<PAGE>
or to such other address as HSD or ILA shall designate by written notice to
the other.
3. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which shall be deemed one
instrument, and an executed copy of this Agreement and all amendments
hereto shall be kept on file by the Sponsor and shall be open to inspection
any time during the business hours of the Sponsor.
4. This Agreement shall inure to the benefit of and be binding upon the
successor of the parties hereto.
5. This Agreement shall be construed and governed by and according to the laws
of the State of Connecticut.
6. This Agreement may be amended from time to time by the mutual agreement and
consent of the parties hereto.
7. (a) This Agreement shall become effective June 26, 1995 and shall continue
in effect for a period of two years from that date and, unless sooner
terminated in accordance with 7(b) below, shall continue in effect
from year to year thereafter provided that its continuance is
specifically approved at least annually by a majority of the members
of the Board of Directors of ILA.
(b) This Agreement (1) may be terminated at any time, without the payment
of any penalty, either by a vote of a majority of the members of the
Board of Directors of ILA on 60 days' prior written notice to HSD; (2)
shall immediately terminate in the event of its assignment and (3) may
be terminated by HSD on 60 days' prior written notice to ILA, but such
termination will not be effective until ILA shall have an agreement
with one or more persons to act as successor principal underwriter of
the Policies. HSD hereby agrees that it will continue to act as
successor principal underwriter until its successor or successors
assume such undertaking.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
(Seal) ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
BY: /s/ Thomas M. Marra
--------------------------
Thomas M. Marra
Senior Vice President
Attest: HARTFORD SECURITIES DISTRIBUTION
COMPANY, INC.
/s/ Lynda Godkin BY: /s/ George Jay
- ---------------- --------------------------
Lynda Godkin George Jay
Secretary Controller
<PAGE>
BROKER-DEALER SALES AND
SUPERVISION AGREEMENT
This Broker-Dealer Sales and Supervision Agreement ("Agreement")
dated ____________________ is made by and between Hartford Life Insurance
Company and ITT Hartford Life and Annuity Insurance Company (referred to
collectively as "Companies"), Hartford Securities Distribution Company, Inc.
("Distributor"), a broker-dealer registered with the Securities and Exchange
Commission ("SEC") under the Securities and Exchange Act of 1934 ("1934 Act")
and a member of the National Association of Securities Dealers, Inc. ("NASD")
and __________________________________, who is also a broker-dealer registered
with the SEC under the 1934 Act and a member of the NASD ("Broker-Dealer"), and
any and all undersigned insurance agency affiliates ("Affiliates") of Broker-
Dealer.
WHEREAS, Companies offer certain variable life insurance policies and variable
and modified guaranteed annuity contracts which are deemed to be securities
under the Securities Act of 1933 (the "Registered Products"); and
WHEREAS, Companies wish to appoint the Broker-Dealer and Affiliates as agents of
the Companies for the solicitation and procurement of applications for
Registered Products; and
WHEREAS, Distributor is the principal underwriter of the Registered Products;
and
WHEREAS, Distributor anticipates having registered representatives who are
associated with Broker-Dealer ("Registered Representatives"), who are NASD
registered and are duly licensed under applicable state insurance law and
appointed as life insurance agents of Companies solicit and sell the Registered
Products; and
WHEREAS, Distributor acknowledges that the Broker-Dealer will provide certain
supervisory and administrative services to Registered Representatives who are
associated with the Broker-Dealer in connection with the solicitation, service
and sale of the Registered Products; and
WHEREAS, Broker-Dealer agrees to provide the aforementioned supervisory services
to its Registered Representatives who have been appointed by the Companies to
sell the Registered Products.
NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties agree to the following:
I. APPOINTMENT OF THE BROKER-DEALER
The Companies hereby appoint Broker-Dealer as an agent of the Companies for
the solicitation and procurement of applications for the Registered Products
offered by the Companies, as outlined in Exhibit A attached herein, in all
states in which the Companies are authorized to do business and in which
Broker-Dealer or any Affiliates are properly licensed. Distributor hereby
authorizes Broker-Dealer under the securities laws to supervise Registered
Representatives in connection with the solicitation, service and sale of the
Registered Products.
II. AUTHORITY OF THE BROKER-DEALER
<PAGE>
Broker-Dealer has the authority to represent Distributor and Companies only
to the extent expressly granted in this Agreement. Broker-Dealer and any
Registered Representatives shall not hold themselves out to be employees of
Companies or Distributor in any dealings with the public. Broker-Dealer and
any Registered Representatives shall be independent contractors as to
Distributor or Companies. Nothing contained herein is intended to create a
relationship of employer and employee between Broker-Dealer and Distributor
or Companies or between Registered Representatives and Distributor or
Companies.
III. BROKER-DEALER REPRESENTATION
Broker-Dealer represents that it is a registered broker-dealer under the
1934 Act, a member in good standing of the NASD, and is registered as a
broker-dealer under state law to the extent necessary to perform the duties
described in this Agreement. Broker-Dealer represents that its Registered
Representatives, who will be soliciting applications for the Registered
Products, will be duly registered representatives associated with Broker-
Dealer and that they will be representatives in good standing with
accreditation as required by the NASD to sell the Registered Products.
Broker-Dealer agrees to abide by all rules and regulations of the NASD,
including its Rules of Fair Practice, and to comply with all applicable
state and federal laws and the rules and regulations of authorized
regulatory agencies affecting the sale of the Registered Products.
IV. BROKER-DEALER OBLIGATIONS
(a) TRAINING AND SUPERVISION
Broker-Dealer has full responsibility for the training and
supervision of all Registered Representatives associated with
Broker-Dealer and any other persons who are engaged directly or
indirectly in the offer or sale of the Registered Products. Broker-
Dealer shall, during the term of this Agreement, establish and
implement reasonable procedures for periodic inspection and
supervision of sales practices of its Registered Representatives.
If a Registered Representative ceases to be a Registered
Representative of Broker-Dealer, is disqualified for continued
registration or has their registration suspended by the NASD or
otherwise fails to meet the rules and standards imposed by Broker-
Dealer, Broker-Dealer shall immediately notify such Registered
Representative that he or she is no longer authorized to solicit
applications, on behalf of the Companies, for the sale of Registered
Products. Broker-Dealer shall immediately notify Distributor of
such termination or suspension.
(b) SOLICITATION
Broker-Dealer agrees to supervise its Registered Representatives so
that they will only solicit applications in states where the
Registered Products are approved for sale in accordance with
applicable state and federal laws. Broker-Dealer shall be notified
by Companies or Distributor of the availability of the Registered
Products in each state.
(c) NO CHURNING
Broker-Dealer and any Registered Representatives shall not make any
misrepresentation or incomplete comparison of products for the
purpose of inducing a policyholder to lapse, forfeit or surrender
its insurance in favor of purchasing a Registered Product.
(d) PROSPECTUS DELIVERY AND SUITABILITY REQUIREMENTS
Broker-Dealer shall ensure that its Registered Representatives
comply with the prospectus delivery requirements under the
Securities Act of 1933. In addition, Broker-Dealer shall ensure
that its Registered Representatives shall not make recommendations
to an applicant to purchase a Registered Product in the absence of
reasonable grounds to believe that the
2
<PAGE>
purchase is suitable for such applicant, as outlined in the
suitability requirements of the 1934 Act and the NASD Rules of Fair
Practice. Broker-Dealer shall ensure that each application
obtained by its Registered Representatives shall bear evidence of
approval by one of its principals indicating that the application
has been reviewed for suitability.
(e) PROMOTIONAL MATERIAL
Broker-Dealer and its Registered Representatives are not authorized
to provide any information or make any representation in connection
with this Agreement or the solicitation of the Registered Products
other than those contained in the prospectus or other promotional
material produced or authorized by Companies or Distributor.
Broker-Dealer agrees that if it develops any promotional material
for sales, training, explanatory or other purposes in connection
with the solicitation of applications for Registered Products,
including generic advertising and/or training materials which may be
used in connection with the sale of Registered Products, it will
obtain the prior written consent of Distributor, and where
appropriate, approval of Companies, such approval not to be
unreasonably withheld.
(f) RECORD KEEPING
Broker-Dealer is responsible for maintaining the records of its
Registered Representatives. Broker-Dealer shall maintain such other
records as are required of it by applicable laws and regulations.
The books, accounts and records maintained by Broker-Dealer that
relate to the sale of the Registered Products, or dealings with the
Companies, Distributor and/or Broker-Dealer shall be maintained so
as to clearly and accurately disclose the nature and details of each
transaction.
Broker-Dealer acknowledges that all the records maintained by
Broker-Dealer relating to the solicitation, service or sale of the
Registered Products subject to this Agreement, including but not
limited to applications, authorization cards, complaint files and
suitability reviews, shall be available to Companies and Distributor
upon request during normal business hours. Companies and
Distributor may retain copies of any such records which Companies
and Distributor, in their discretion, deems necessary or desirable
to keep.
(g) REFUND OF COMPENSATION
Broker-Dealer agrees to repay Companies the total amount of any
compensation which may have been paid to it within thirty (30)
business days of notice of the request for such refund should
Companies for any reason return any premium on a Registered Product
which was solicited by a Registered Representative of Broker-Dealer.
(h) PREMIUM COLLECTION
Broker-Dealer only has the authority to collect initial premiums
unless specifically set forth in the applicable commission schedule.
Unless previously authorized by Distributor, neither Broker-Dealer
nor any of its Registered Representatives shall have any right to
withhold or deduct any part of any premium it shall receive for
purposes of payment of commission or otherwise.
V. COMPANIES AND/OR DISTRIBUTOR OBLIGATIONS
(a) PROSPECTUS/PROMOTIONAL MATERIAL
Companies and/or Distributor will provide Broker-Dealer with
reasonable quantities of the currently effective prospectus for the
Registered Products and appropriate sales promotional
3
<PAGE>
material which has been filed with the NASD, and applicable state
insurance departments.
(b) COMPENSATION
Distributor will pay Broker-Dealer as full compensation for all
services rendered by Broker-Dealer under this Agreement, commissions
and/or service fees in the amounts, in the manner and for the period
of time as set forth in the Commission Schedules attached to this
Agreement or subsequently made a part hereof, and which are in
effect at the time such Registered Products are sold. The manner of
commission payments (I.E. fronted or trail) is not subject to change
after the effective date of a contract for which the compensation is
payable.
Distributor or Companies may change the Commission Schedules
attached to this Agreement at any time. Such change shall become
effective only when Distributor or Companies provide the Broker-
Dealer with written notice of the change. No such change shall
affect any contracts issued upon applications received by Companies
at Companies' Home Office prior to the effective date of such
change.
Distributor agrees to identify to Broker-Dealer for each such
payment, the name of the Registered Representative of Broker-Dealer
who solicited each contract covered by the payment. Distributor
will not compensate Broker-Dealer for any Registered Product which
is tendered for redemption after acceptance of the application. Any
chargebacks will be assessed against the Broker-Dealer of record at
the time of the redemption.
Distributor will only compensate Broker-Dealer or Affiliates, as
outlined below, for those applications accepted by Companies, and
only after receipt by Companies at Companies' Home Office or at such
other location as Companies may designate from time to time for its
various lines of business, of the required premium and compliance by
Broker-Dealer with any outstanding contract and prospectus delivery
requirements.
In the event that this Agreement terminates for fraudulent
activities or due to a material breach by the Broker-Dealer,
Distributor will only pay to Broker-Dealer or Affiliate commissions
or other compensation earned prior to discovery of events requiring
termination. No further commissions or other compensation shall
thereafter be payable.
(c) COMPENSATION PAYABLE TO AFFILIATES
If Broker-Dealer is unable to comply with state licensing
requirements because of a legal impediment which prohibits a non-
domiciliary corporation from becoming a licensed insurance agency or
prohibits non-resident ownership of a licensed insurance agency,
Distributor agrees to pay compensation to Broker-Dealer's
contractually affiliated insurance agency, a wholly-owned life
agency affiliate of Broker-Dealer, or a Registered Representative or
principal of Broker-Dealer who is properly state licensed. As
appropriate, any reference in this Agreement to Broker-Dealer shall
apply equally to such Affiliate. Distributor agrees to pay
compensation to an Affiliate subject to Affiliates agreement to
comply with the requirements of Exhibit B, attached hereto.
VI. TERMINATION
(a) This Agreement may be terminated by any party by giving thirty (30)
days' notice in writing to the other party.
(b) Such notice of termination shall be mailed to the last known address
of Broker-Dealer appearing on Companies' records, or in the event of
termination by Broker-Dealer, to the Home Office of Companies at
P.O. Box 2999, Hartford, Connecticut 06104-2999.
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<PAGE>
(c) Such notice shall be an effective notice of termination of this
Agreement as of the time the notice is deposited in the United
States mail or the time of actual receipt of such notice if
delivered by means other than mail.
(d) This Agreement shall automatically terminate without notice upon the
occurrence of any of the events set forth below:
(1) Upon the bankruptcy or dissolution of Broker-Dealer.
(2) When and if Broker-Dealer commits fraud or gross negligence in the
performance of any duties imposed upon Broker-Dealer by this
Agreement or wrongfully withholds or misappropriates, for Broker-
Dealer's own use, funds of Companies, its policyholders or
applicants.
(3) When and if Broker-Dealer materially breaches this Agreement or
materially violates state insurance or Federal securities laws and
administrative regulations of a state in which Broker-Dealer
transacts business.
(4) When and if Broker-Dealer fails to obtain renewal of a necessary
license in any jurisdiction, but only as to that jurisdiction.
(e) The parties agree that on termination of this Agreement, any
outstanding indebtedness to Companies shall become immediately due
and payable.
VII. GENERAL PROVISIONS
(a) COMPLAINTS AND INVESTIGATIONS
Broker-Dealer shall cooperate with Distributor and Companies in the
investigation and settlement of all complaints or claims against
Broker-Dealer and/or Distributor or Companies relating to the
solicitation or sale of the Registered Products under this
Agreement. Broker-Dealer, Distributor and Companies each shall
promptly forward to the other any complaint, notice of claim or
other relevant information which may come into either one's
possession. Broker-Dealer, Distributor and Companies agree to
cooperate fully in any investigation or proceeding in order to
ascertain whether Broker-Dealer's, Distributor's or Companies'
procedures with respect to solicitation or servicing is consistent
with any applicable law or regulation.
In the event any legal process or notice is served on Broker-Dealer
in a suit or proceeding against Distributor or Companies, Broker-
Dealer shall forward forthwith such process or notice to Companies
at its Home Office in Hartford, Connecticut, by certified mail.
(b) WAIVER
The failure of Distributor or Companies to enforce any provisions of
this Agreement shall not constitute a waiver of any such provision.
The past waiver of a provision by Distributor or Companies shall not
constitute a course of conduct or a waiver in the future of that
same provision.
(c) INDEMNIFICATION
Broker-Dealer shall indemnify and hold Distributor and Companies
harmless from any liability, loss or expense sustained by Companies
or the Distributor (including reasonable attorney fees) on account
of any acts or omissions by Broker-Dealer or persons employed or
appointed by Broker-Dealer, except to the extent Companies' or
Distributor's acts or omissions caused such
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<PAGE>
liability.
Indemnification by Broker-Dealer is subject to the conditions that
Distributor or Companies promptly notify Broker-Dealer of any claim
or suit made against Distributor or Companies, and that Distributor
or Companies allow Broker-Dealer to make such investigation,
settlement, or defense thereof as Broker-Dealer deems prudent.
Broker-Dealer expressly authorizes Companies to charge against all
compensation due or to become due to Broker-Dealer under this
Agreement any monies paid or liabilities incurred by Companies under
this Indemnification provision.
Distributor and Companies shall indemnify and hold Broker-Dealer
harmless from any liability, loss or expense sustained by the
Broker-Dealer (including reasonable attorney fees) on account of any
acts or omissions by Distributor or Companies, except to the extent
Broker-Dealer's acts or omissions caused such liability.
Indemnification by Distributor or Companies is subject to the
condition that Broker-Dealer promptly notify Distributor or
Companies of any claim or suit made against Broker-Dealer, and that
Broker-Dealer allow Distributor or Companies to make such
investigation, settlement, or defense thereof as Distributor or
Companies deems prudent.
(d) ASSIGNMENT
No assignment of this Agreement, or commissions payable hereunder,
shall be valid unless authorized in writing by Distributor. Every
assignment shall be subject to any indebtedness and obligation of
Broker-Dealer that may be due or become due to Companies and any
applicable state insurance regulations pertaining to such
assignments.
(e) OFFSET
Companies may at any time deduct, from any monies due under this
Agreement, every indebtedness or obligation of Broker-Dealer to
Companies or to any of its affiliates.
(f) CONFIDENTIALITY
Companies, Distributor and Broker-Dealer agree that all facts or
information received by any party related to a contract owner shall
remain confidential, unless such facts or information is required to
be disclosed by any regulatory authority or court of competent
jurisdiction.
(g) PRIOR AGREEMENTS
This Agreement terminates all previous agreements, if any, between
Companies, Distributor and Broker-Dealer. However, the execution of
this Agreement shall not affect any obligations which have already
accrued under any prior agreement.
(h) CHOICE OF LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Connecticut.
By executing this Broker-Dealer Sales and Supervision Agreement Specifications
Page, Broker-Dealer acknowledges that it has read this Agreement in its entirety
and is in agreement with the terms and conditions outlining the rights of
Distributor, Companies and Broker-Dealer and Affiliates under this Agreement.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement to be
effective as set forth above, upon the later of the execution date below or
approval of Distributor's registration by all appropriate state securities
commissions.
6
<PAGE>
BROKER-DEALER HARTFORD SECURITIES DISTRIBUTION
COMPANY INC.
By: By:
Title: Title:
Date: Date:
AFFILIATE (IF APPLICABLE) HARTFORD LIFE INSURANCE COMPANY
By: By:
Title: Title:
Date: Date:
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
By:
Title:
Date:
7
<PAGE>
EXHIBIT B
In accordance with Section V.(c) of the Broker-Dealer-Dealer Sales and
Supervision Agreement, no compensation is payable unless Broker-Dealer and
Registered Representative have first complied with all applicable state
insurance laws, rules and regulations. Distributor must ensure that any Broker-
Dealer with whom Distributor intends to enter into an Agreement and any
Registered Representatives meet the licensing and registration requirements of
the state(s) Broker-Dealer operates in and the NASD.
Companies are required by the Insurance Department in all 50 states to pay
compensation only to individuals and entities that are properly insurance
licensed and appointed. For registered products, Distributor must also comply
with NASD regulations that require Distributor to pay compensation to an NASD
registered Broker-Dealer. Distributor must comply with both state and NASD
requirements.
Distributor requires confirmation that Broker-Dealer holds current state
insurance licenses or markets insurance products through a contractual affiliate
or wholly owned life agency, which is properly insurance licensed. If Broker-
Dealer is properly state licensed then compensation may be paid to Broker-Dealer
in compliance with both state and NASD requirements.
If Broker-Dealer is not state insurance licensed and relies on the licensing of
a contractual affiliate or wholly owned life agency, the SEC has issued a number
of letters indicating that, under specific limited circumstances, it will take
"no action" against insurers (Distributor) paying compensation on registered
products to Broker-Dealer's contractual affiliate or wholly owned life agency.
At the request of Broker-Dealer, Distributor will provide copies of several of
these letters as well as a summary of their requirements.
If Broker-Dealer intends to rely on one of these "no-action" letters, legal
counsel for Broker-Dealer must confirm to Distributor in writing that all of the
circumstances of any one of the SEC no-action letters are applicable. Broker-
Dealer's counsel must summarize each point upon which the no-action relief was
granted and represent that Broker-Dealer's method of operation is identical or
meets the same criteria. Broker-Dealer's counsel must also confirm that, to the
best of counsel's knowledge, the SEC has not rescinded or modified its no-action
position since the letter was released.
The Broker-Dealer Sales and Supervision Agreement will not be finalized and no
new applications for registered products will be accepted or no new compensation
will be payable unless the appropriate proof of state licensing or no-action
relief is confirmed. In addition to a letter from Broker-Dealer's counsel,
copies of the following documentation is required:
-- life insurance licenses for all states in which Broker-Dealer holds
these licenses and intends to operate and/or;
-- life insurance licenses for any contractual affiliate or wholly owned
life agency; and
-- the SEC No-Action Letter that will be relied upon.
If you have any questions regarding these matters, please contact your Life
Licensing and Contracting representative.
8
<PAGE>
CERTIFICATE AMENDING AND RESTATING
THE CERTIFICATE OF INCORPORATION BY
ACTION OF THE BOARD OF DIRECTORS AND SHAREHOLDERS
1. The name of the Corporation is ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY.
2. The Certificate of Incorporation is amended and restated by the following
resolution of the Board of Directors and Shareholder of the Corporation.
RESOLVED, that the Certificate of Incorporation of the Corporation, as
supplemented and amended to date, is further amended and restated to read
as follows:
Section 1. The name of the Corporation is ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY.
Section 2. The address of the Registered Office of the Corporation is
Hartford Plaza, Hartford, Connecticut 06104-2999.
Section 3. The Corporation is a body politic and corporate and shall
have all the powers granted by the general statutes, as now
enacted or hereinafter amended, to corporations formed under
the Stock Corporation Act.
Section 4. The Corporation shall have the purposes and powers to write
any and all forms of insurance which any other corporation
now or hereafter chartered in Connecticut and empowered to
do an insurance business may now or hereafter lawfully do;
to accept and to cede reinsurance; to issue policies and
contracts for any kind or combination of kinds of insurance;
to issue policies or contracts either with or without
participation in profits; to acquire and hold any or all of
the shares or other securities of any insurance corporation
or any other kind of corporation; and to engage in any
lawful act or activity for which corporations may be formed
under the Stock Corporation Act. The corporation is
authorized to exercise the powers herein granted in any
state, territory or jurisdiction of the United States or in
any foreign country.
Section 5. The Corporation shall obtain a license from the insurance
commissioner prior to the commencement of business and shall
be subject to all general statutes applicable to insurance
companies.
Section 6. The aggregate number of shares which the corporation shall
have authority to issue is 3,000 shares consisting of one
class only, designated as Common Shares, of the par value of
$1,250.
Section 7. No shareholder shall, because of his ownership of shares,
have a preemptive or
<PAGE>
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other right to purchase, subscribe for, or take any part of
any shares or any part of the notes, debentures, bonds, or
other securities convertible into or carrying options or
warrants to purchase shares of this corporation issued,
optioned, or sold by it after its incorporation.
Section 8. The minimum amount of stated capital with which the
corporation shall commence business is One Thousand Dollars
($1,000.00).
Section 9. So much of the charter of said corporation is amended, as is
inconsistent herewith is repealed, provided such repeal
shall not invalidate or otherwise affect any action taken
pursuant to the charter of the corporation, in accordance
with its terms, prior to the effective date of such repeal.
3. The above resolution was passed by the Board of Directors and the
Shareholder of the Corporation. The number of shares entitled to vote
thereon was 3,000 and the vote required for adoption was 2,000 shares. The
vote favoring adoption was 3,000 which was the greatest vote needed to pass
the resolution.
4. The term of existence of the corporation shall be perpetual.
Dated at Simsbury, Connecticut this 30 day of April, 1996.
--
We hereby declare, under the penalties of false statement, that the statements
made in the foregoing Certificate are true.
ITT HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY
/s/ Lowndes A. Smith
-----------------------------
Lowndes A. Smith, President
/s/ Lynda Godkin
- ----------------------------------------
Lynda Godkin, Associate General Counsel
and Corporate Secretary
<PAGE>
AMENDED AND RESTATED BYLAWS
OF
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
EFFECTIVE MAY 1, 1996
<PAGE>
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ARTICLE I
Name - Home Office
SECTION 1. This company shall be named ITT Hartford and Annuity Life Insurance
Company.
SECTION 2. The Company may have such principal and other business offices,
either within or without the State of Connecticut, as the Board of Directors may
designate or as the business of the Company may require.
SECTION 3. The registered office of the Company is Hartford Plaza, Hartford,
Connecticut 06104-2999.
ARTICLE II
Stockholders' Meetings - Notice-Quorum-Right to Vote
SECTION 1. All meetings of the stockholders shall be held at the principal
business office of the Company unless the Board of Directors shall otherwise
provide and direct.
SECTION 2. The annual meeting of the stockholders shall be held on such day and
at such hour as the Board of Directors may decide. For cause the Board of
Directors may postpone or adjourn such annual meeting to any other time during
the year.
SECTION 3. Special meetings of the stockholders may be called by the Board of
Directors, the Executive Committee, the Chairman or Vice Chairman of the Board,
the President or any Vice President.
SECTION 4. Notice of stockholders' meetings shall be delivered to each
stockholder, either personally or by mail at his address as it appears on the
records of the Company, at least seven days prior to the meeting. The notice
shall state the place, date and time of the meeting and shall specify all
matters proposed to be acted upon at the meeting.
SECTION 5. At each annual meeting, the stockholders shall choose Directors as
hereinafter provided.
SECTION 6. Each stockholder shall be entitled to one vote at all meetings of
the Company for each share of stock held by such stockholder. Proxies may be
authorized by written power of attorney.
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SECTION 7. A majority of the total number of shares entitled to vote,
represented in person or by proxy, shall constitute a quorum.
SECTION 8. Each stockholder shall be entitled to a certificate of stock which
shall be signed by the President or a Vice President, and either the Treasurer
or an Assistant Treasurer of the Company, and shall bear the seal of the
Company, but such signatures and seal may be facsimile.
ARTICLE III
Directors-Meetings-Quorum
SECTION 1. The property, business and affairs of the Company shall be managed
by a board of not less than three nor more than twenty Directors, who shall be
chosen by the stockholders at each annual meeting. Vacancies occurring between
annual meetings may be filled by the affirmative vote of a majority of the
Directors then in office. Each Director shall hold office until the next annual
meeting of stockholders and until his successor is chosen and qualified.
SECTION 2. Meetings of the Board of Directors may be called by the direction of
the Chairman of the Board, the President, or any three Directors.
SECTION 3. Three days' notice of meetings of the Board of Directors shall be
given to each Director, either personally or by mail or telegraph, at his
residence or usual place of business, but notice may be waived, at any time, in
writing, and attendance of a Director at a meeting shall constitute a waiver of
notice of such meeting except where a Director attends a meeting and objects
thereat to the transaction of any business on grounds that the meeting was not
lawfully called or convened.
SECTION 4. A majority of the number of existing directorships, but not less than
two Directors, shall constitute a quorum.
ARTICLE IV
Election of Officer - Duties of Board of
Directors and Executive Committee
SECTION 1. The Board of Directors shall annually elect a President, a Secretary
and a Treasurer. It may elect a Chairman of the Board, a Vice Chairman of the
Board and such Vice Presidents, other Secretaries, Assistant Secretaries,
Assistant Treasurers and other officers as it may determine. All officer of the
Company shall hold office during the pleasure of the Board of Directors.
<PAGE>
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SECTION 2. The Directors may fill any vacancy among the officers by election
for the unexpired term.
SECTION 3. The Board of Directors may appoint from its own number an
Executive Committee of not less than five Directors. The Executive Committee may
exercise all powers vested in and conferred upon the Board of Directors at any
time when the Board is not in session. A majority of the members of said
Committee shall constitute a quorum. Meetings of the Committee shall be called
whenever the Chairman of the Board, the President or a majority of its members
shall request.
SECTION 4. The Board of Directors may annually appoint from its own number a
Finance Committee of not less than three Directors, whose duties shall be as
hereinafter provided.
SECTION 5. The Board of Directors may, at any time, appoint such other
committees, not necessarily from its own number, as it may deem necessary for
the proper conduct of the business of the Company, which committees shall have
only such powers and duties as are specifically assigned to them by the Board of
Directors or the Executive Committee.
For all meetings, forty-eight hours' notice shall be given but notice may be
waived, at any time, in writing, and attendance of a Director at a meeting shall
constitute a waiver of notice of such meeting except where a Director attends a
meeting and objects thereat to the transaction of any business on grounds that
the meeting was not lawfully called or convened.
SECTION 6. The Board of Directors may authorize corporate contributions, in such
amounts as it determines to be reasonable, for public welfare or for charitable,
scientific or educational purposes, subject to the limits and restrictions
imposed by law and to such rules and regulations consistent with law as it
makes.
ARTICLE V
Officers
Chairman of the Board
and
Vice Chairman of the Board
SECTION 1. The Chairman of the Board shall preside at the meetings of the
Board of Directors and the Executive Committee and, in the absence of the
Chairman of the Finance Committee, at the meetings of the Finance Committee.
In the absence or inability of the Chairman of the Board to so preside, the Vice
Chairman shall preside in his place if there be one, otherwise the President
shall preside.
<PAGE>
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SECTION 2. The Vice Chairman of the Board shall, in the absence of the Chairman
of the Board, exercise the powers and perform the duties of the Chairman of the
Board. He shall perform such other duties and have such other powers as may be
assigned to him by the Board of Directors.
President
SECTION 3. The President, unless the Board of Directors shall otherwise order
pursuant to Section 7 below, shall be the chief executive officer of the Company
and, subject to the control of the Board of Directors, shall in general
supervise and control all the business and affairs of the Company. Unless the
Board of Directors shall provide otherwise, he shall, when present, preside at
all meetings of the shareholders and shall preside at all meetings of the Board
of Directors unless the Board shall have elected a Chairman of the Board of
Directors. He shall have authority, subject to such rules as may be prescribed
by the Board of Directors, to appoint such agents and employees of the Company
as he shall deem necessary, to prescribe their powers, duties and compensation,
and to delegate authority to them. Such agents and employees shall hold office
at the discretion of the President. Except as otherwise provided in these
Bylaws or by resolution of the Board of Directors, the President shall have
authority to sign, execute and acknowledge, on behalf of the Company all
contracts, reports and other documents or instruments necessary or proper to be
executed in the course of the Company's regular business, or which shall be
authorized by resolution of the Board of Directors; and except as otherwise
provided by law or the Board of Directors, he may authorize any Vice President
or other officer or agent of the Company to sign, execute and acknowledge such
documents or instruments in his place and stead. In general, he shall perform
all duties incident to the office of the chief executive officer and such other
duties as may be prescribed by the Board of Directors from time to time.
If the President is not the chief executive officer, he shall have such duties
and authority as prescribed by the Board of Directors or the chief executive
officer.
SECTION 4. In the absence or inability of the President to perform his duties,
the Board or the Chairman thereof may designate a Vice President to exercise the
powers and perform the duties of the President during such absence or inability.
Secretary
SECTION 5. The Secretary shall keep a record of all the meetings of the
Company, of the Board of Directors and of the Executive Committee, and he shall
discharge all other duties specifically required of the Secretary by law.
<PAGE>
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The other Secretaries and the Assistant Secretaries shall perform such duties as
may be assigned to them by the Board of Directors or by their senior officers
and any Secretary or Assistant Secretary may affix the seal of the Company and
attest it and the signature of any officer to any and all instruments.
Treasurer
SECTION 6. The Treasurer shall keep, or cause to be kept, full and accurate
accounts of the Company. He shall see that the funds of the Company are
disbursed as may be ordered by the Board of Directors, the Finance Committee or
a duly authorized individual. He shall have charge of all moneys paid to the
Company and shall deposit such to the credit of the Company or in any other
properly authorized name, in such banks or depositories as may be designated in
a manner provided by these Bylaws. He shall also discharge all other duties
that may be required of him by law.
Other Officers
SECTION 7. The other officers shall perform such duties as may be assigned to
them by the President or the Board of Directors. The Board of Directors may
designate the Chairman of the Board or the Vice Chairman as the chief executive
officer of the Company. In such event that person shall assume all authority,
power, duties and responsibilities otherwise appointed to the President pursuant
to Section 3 above, and all references to the President in these Bylaws shall be
regarded as references to the Chairman of the Board or Vice Chairman, as the
case may be, as such chief executive officer, except where a contrary meaning is
clearly required, and provided that in no case shall that person be empowered in
place of the President to sign the certificates for shares of stock of the
Company.
ARTICLE VI
Finance Committee
SECTION 1. If a Finance Committee is established, it shall be the duty of that
committee to supervise the investment of the funds of the Company in securities
in which insurance companies are permitted by law to invest, and all other
matters connected with the management of investments. If no Finance Committee
is established, this duty shall be performed by the Board of Directors.
SECTION 2. All loans or purchases for the investment and reinvestment of the
funds of the Company shall be submitted for approval to the Finance Committee,
if not specifically approved by the Board of Directors.
<PAGE>
-7-
SECTION 3. Sale or transfer of any stocks or bonds shall be made upon
authorization of the Finance Committee unless specifically authorized by the
Board of Directors.
SECTION 4. Transfers of stock and registered bonds, deeds, leases, releases,
sales, mortgages chattel or real, assignments or partial releases of mortgages
chattel or real, and in general all instruments of defeasance of property and
all agreements or contracts affecting the same, except discharges of mortgages
and entries to foreclose the same as hereinafter provided, shall be authorized
by the Finance Committee or the Board of Directors, and be executed jointly for
the Company by two persons, to wit: the Chairman of the Board, the Vice
Chairman, the President or a Vice President, and a Secretary, the Treasurer or
an Assistant Treasurer, but may be acknowledged and delivered by either one of
those executing the instrument; provided, however, that either a Secretary, the
Treasurer, or an Assistant Treasurer alone, when authorized as aforesaid, or any
person specially authorized by the Finance Committee as attorney for the
Company, may make entry to foreclose any mortgage, and a Secretary, the
Treasurer or an Assistant Treasurer alone is authorized, without the necessity
of further authority, to discharge by deed or otherwise any mortgage on payment
to the Company of the principal, interest and all charges due.
SECTION 5. The Finance Committee may fix times and places for regular
meetings. No notice of regular meetings shall be necessary. Reasonable notice
shall be given of special meetings but the action of a majority of the Finance
Committee at any meeting shall be valid notwithstanding any defect in the notice
of such meeting.
SECTION 6. In the absence of specific authorization from the Board of
Directors or the Finance Committee, the Chairman of the Board, the President, a
Vice President or the Treasurer shall have the power to vote or execute proxies
for voting any shares held by the Company.
ARTICLE VII
Funds
SECTION 1. All monies belonging to the Company shall be deposited to the
credit of the Company, or in such other name as the Finance Committee, the
Chairman of the Finance Committee or such executive officers as are designated
by the Board of Directors shall direct, in such bank or banks as may be
designated from time to time by the Finance Committee, the Chairman of the
Finance Committee or by such executive officers as are designated by the Board
of Directors. Such monies shall be drawn only on checks or drafts signed by any
two executive officers of the Company, provided that the Board of Directors may
authorize the withdrawal of such monies by check or draft signed with the
facsimile signature of any one or more executive officers, and provided further,
that the Finance Committee may authorize such alternative methods of withdrawal
as it deems proper.
<PAGE>
-8-
The Board of Directors, the President, the Chairman of the Finance Committee, a
Vice President, or such executive officers as are designated by the Board of
Directors may authorize withdrawal of funds by checks or drafts drawn at offices
of the Company to be signed by Managers, General Agents, or employees of the
Company, provided that all such checks or drafts shall be signed by two such
authorized persons, except checks or drafts used for the payment of claims or
losses which need to be signed by only one such authorized person, and provided
further that the Board of Directors of the Company or executive officers
designated by the Board of Directors may impose such limitations or restrictions
upon the withdrawal of such funds as it deems proper.
ARTICLE VIII
Liability and Indemnity
SECTION 1. No person shall be liable to the Company for any loss or damage
suffered by it on account of any action taken or omitted to be taken by him as
director or officer of the Company, or of any other company, partnership, joint
venture, trust or other enterprise for which he serves as a director, officer
or employee at the request of the Company, in good faith, if such person (a)
exercised and used the same degree of care and skill as a prudent man would have
exercised or used under the circumstances in the conduct of his own affairs, or
(b) took or omitted to take such action in reliance upon advice of counsel for
the Company or upon statements made or information furnished by officers or
employees of the Company which he had reasonable grounds to believe to be true.
The foregoing shall not be exclusive of other rights and defenses to which he
may be entitled as a matter of law.
SECTION 2. The Company shall indemnify any person who was or is a party or
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, (other than one by or in the right of the Company) by reason
of the fact that he is or was a director, officer or employee of the Company, or
is or was serving at the request of the Company as a director, officer or
employee of another company, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or 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
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding had reasonable
cause to believe that his conduct was unlawful.
SECTION 3. The Company shall indemnify any person who was or is a party or is
threatened to
<PAGE>
-9-
be made a party to any threatened, pending or completed action, suit or
proceeding, by or in the right of the Company to procure a judgment in its
favor by reason of the fact that he is or was a director, officer or
employee of the Company, or is or was serving at the request of the Company as a
director, officer or employee of another company, partnership, joint venture,
trust or other enterprise against expenses, including attorneys' fees, actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit, 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, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Company unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability and in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as such court shall deem proper.
SECTION 4. Expenses, including attorneys' fees, incurred in defending a civil
or criminal action, suit or proceeding may be paid by the Company in advance of
the final disposition of such action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or employee to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the Company as authorized hereby.
SECTION 5. The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any statute, bylaw, agreement, vote of shareholders or of disinterested
directors or otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer or employee and shall inure to
the benefit of the heirs, executors and administrators of such a person.
ARTICLE IX
Amendment of Bylaws
SECTION 1. The Directors shall have power to adopt, amend and repeal such
bylaws as may be deemed necessary or appropriate for the management of the
property and affairs of the Company.
SECTION 2. The stockholders at any annual or special meeting may amend or
repeal these bylaws or adopt new ones if the notice of such meeting contains a
statement of the proposed alteration, amendment, repeal or adoption of the
substance thereof. Bylaws amended or adopted by the stockholders may be amended
or repealed by the Directors.
<PAGE>
-10-
ARTICLE X
Term of Existence
SECTION 1. The term of existence of the corporation shall be perpetual.
This is to certify that the foregoing is a true copy of the Bylaws of ITT
Hartford Life and Annuity Insurance Company in full force and effect on this
first day of May, 1996.
Attest:
- ---------------------------------
Gregory A. Boyko
Vice President
<PAGE>
[Exhibit 2]
March 15, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Separate Account Five ("Separate Account")
ITT Hartford Life and Annuity Insurance Company ("Company")
File No. 33-83652
------------------------------------------------------------
Dear Sir/Madam:
In my capacity as Associate General Counsel of the Company, I have supervised
the establishment of the Separate Account by the Board of Directors of the
Company as a separate account for assets applicable to Policies offered by the
Company pursuant to Wisconsin law. I have participated in the preparation of
the registration statement for the Separate Account on Form S-6 under the
Securities Act of 1933 and the Investment Company Act of 1940 with respect to
the Policies.
I am of the following opinion:
1. The Separate Account is a separate account of the Company validly existing
pursuant to Wisconsin law and the regulations issued thereunder.
2. The assets held in the Separate Account are not chargeable with liabilities
arising out of any other business the Company may conduct.
3. The Policies are legally issued and represent binding obligations of the
Company.
In arriving at the foregoing opinion, I have made such examination of the law
and examined such records and other documents as in my opinion as are necessary
or appropriate.
I hereby consent to the filing of this opinion as an exhibit to the registration
statement under the Securities Act of 1933.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
Associate General Counsel & Secretary
<PAGE>
[Exhibit 5]
March 1, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs;
This opinion is furnished in connection with the registration statement under
the Securities Act of 1933 as amended ("Securities Act"), of a certain modified
single premium variable life insurance policy (the "Policy") that will be
offered and sold by ITT Hartford Life and Annuity Insurance Company and certain
units of interest to be issued in connection with the Policy.
The hypothetical illustrations of the Policy used in this Registration Statement
accurately reflect reasonable estimates of projected performance of the Policy
under the stipulated rates of investment return, the contractual expense
deductions and guaranteed cost-of-insurance rates, and utilizing a reasonable
estimation for expected fund operating expenses.
I hereby consent to the use of this opinion as an exhibit to the Securities Act
Registration Statement on Form S-6 and to the reference to my name under the
heading "Experts" in the Prospectus included in the Securities Act Registration
Statement.
Very truly yours,
/s/ Michael Winterfield
Michael Winterfield, FSA, MAAA
Director Individual Annuity Inforce Management
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of
this Registration Statement File No. 33-83652 for ITT Hartford Life and
Annuity Insurance Company Separate Account Five on Form S-6.
/s/ Arthur Andersen LLP
Hartford, Connecticut
April 24, 1996
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
POWER OF ATTORNEY
Bruce D. Gardner
Joseph H. Gareau
Joseph Kanarek
Thomas M. Marra
Lowndes A. Smith
Lizabeth H. Zlatkus
do hereby jointly and severally authorize Lynda Godkin and/or Scott K.
Richardson to sign as their agent, any Registration Statement, pre-effective
amendment, post-effective amendment and any application for exemptive relief of
the ITT Hartford Life and Annuity Insurance Company under the Securities Act of
1933 and/or the Investment Company Act of 1940.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for
the purpose herein set forth.
/s/ Bruce D. Gardner Dated: 10/19/95
------------------------------ --------
Bruce D. Gardner
/s/ Joseph H. Gareau Dated: 10/19/95
------------------------------ --------
Joseph H. Gareau
/s/ Joseph Kanarek Dated: 10/19/95
------------------------------ --------
Joseph Kanarek
/s/ Thomas M. Marra Dated: 10/19/95
------------------------------ --------
Thomas M. Marra
/s/ Lowndes A. Smith Dated: 10/19/95
------------------------------ --------
Lowndes A. Smith
/s/ Lizabeth H. Zlatkus Dated: 10/19/95
------------------------------ --------
Lizabeth H. Zlatkus
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