<PAGE>
As filed with the Securities and Exchange Commission on December 17, 1997
File No. 333-36349
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE
AMENDMENT NO. 1
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 complete address of agent for service:
Marianne O'Doherty, Esq.
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
___ on May 1, 1998 pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
___ on May 1, 1998 pursuant to paragraph (a)(1) of Rule 485
___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
E. Title and amount of securities being registered: Pursuant to Rule 24f-2
under the Investment Company Act of 1940, the Registrant is registering an
indefinite amount of securities.
F. Proposed maximum aggregate offering price to the public of the securities
being registered: Not yet determined.
G. Amount of filing fee: Not applicable.
H. Approximate date of proposed public offering: As soon as practicable after
the effective date of this registration statement.
The registrant hereby amends this Registration Statement on such dates as may be
necessary to delay its effective date until the Registrant shall file a further
amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may determine.
<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 Policies
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 - The Funds; The Policy -
Application for a Policy; Policy Benefits and Rights; Other
Matters - Voting Rights, Dividends
11. Summary; The Separate Account - The Funds
12. Summary; The Separate Account- The Funds
13. Deductions and Charges; Distribution of the Policies;
Federal Tax Considerations
14. The Policy - Application for a Policy
15. The Policy - Allocation of Premium
16. The Separate Account - The Funds; The Policy - Allocation
of Premium
17. Summary; Policy Benefits and Rights - Account Value and
Amount Payable on Surrender of the Policy, Cancellation and
Examine Rights
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
18. The Separate Account - The Funds; Deduction and Charges;
Federal Tax Considerations
19. Other Matters - Statement to Policy Owners
20. Not applicable
21. Policy Benefits and Rights - Policy 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 Policies
36. Not required by Form S-6
37. Not applicable
38. Distribution of the Policies
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
39. The Company; Distribution of the Policies
40. Not applicable
41. The Company; Distribution of the Policies
42. Not applicable
43. Not applicable
44. The Policy - Allocation of Premium
45. Not applicable
46. Policy Benefits and Rights - Account Value
47. The Separate Account - The Funds
48. Cover Page; The Company
49. Not applicable
50. The Separate Account - General
51. Summary; The Company; The Policy; Policy Benefits and
Rights; Other Matters - Beneficiary
52. The Separate Account - The Funds, 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>
PART I
<PAGE>
DIRECTOR LIFE 2
MODIFIED SINGLE PREMIUM VARIABLE LIFE
INSURANCE POLICIES
ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY
P.O. BOX 2999
HARTFORD, CONNECTICUT 06104-2999
[LOGO] TELEPHONE: 1-800-231-5453
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This Prospectus describes Director Life, a modified single premium variable life
insurance Policy ("Policy" or "Policies") offered to applicants age 90 and under
by ITT Hartford Life and Annuity Insurance Company ("Hartford"). The Policy
allows the Policy Owner pay a single premium and, subject to restrictions,
additional premiums.
The Policy 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 POLICY. ANY SURRENDER AMOUNTS THAT ARE TAXABLE WILL BE SUBJECT TO
A 10% ADDITIONAL TAX, WITH CERTAIN EXCEPTIONS.
Generally, the minimum initial premium Hartford will accept is $10,000. The
initial premium will be allocated to HVA Money Market Fund, Inc. After the right
to cancel period has expired, the amount so allocated will be transferred to the
Funds specified in the Policy Owner's application. The Funds underlying the
Sub-Accounts currently available under the Policy are: Hartford Advisers Fund,
Inc., Hartford Bond Fund, Inc., Hartford Capital Appreciation Fund, Inc.,
Hartford Dividend and Growth Fund, Inc., Hartford Index Fund, Inc., Hartford
International Advisers Fund, Inc., Hartford International Opportunities Fund,
Inc., Hartford Mortgage Securities Fund, Inc., Hartford Small Company Fund,
Inc., Hartford Stock Fund, Inc., HVA Money Market Fund, Inc., and Hartford
MidCap Fund, Inc.
There is no guaranteed minimum Account Value for a Policy. The Account Value of
a Policy will vary up or down to reflect the investment experience of the Funds
to which premiums have been allocated. The Policy Owner bears the investment
risk for all amounts so allocated. The Policy continues in effect while the Cash
Surrender Value is sufficient to pay the monthly charges under the Policy
("Deduction Amount"). The Policy 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 received by Hartford.
The Policies provide for a Face Amount, which is the minimum death benefit under
the Policy. 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 Policy may, increase or decrease based on the investment
experience of the Funds to which premiums have been allocated. However, while
the Policy is in force, the Death Benefit will never be less than the Face
Amount. At the death of the Insured, Hartford will pay the Death Proceeds to the
beneficiary. The Death Proceeds equal the Death Benefit less any Indebtedness
under the Policy.
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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
POLICY.
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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 JANUARY 5, 1998.
<PAGE>
2 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SPECIAL TERMS......................................................... 4
SUMMARY............................................................... 6
THE COMPANY........................................................... 8
THE SEPARATE ACCOUNT.................................................. 8
General............................................................. 8
Funds............................................................... 8
Investment Adviser.................................................. 9
THE POLICY............................................................ 10
Application for a Policy............................................ 10
Premiums............................................................ 10
Allocation of Premiums.............................................. 10
Accumulation Unit Values............................................ 10
DEDUCTIONS AND CHARGES................................................ 11
Chart of Deductions and Charges..................................... 11
Cost of Insurance Charge............................................ 12
Administrative Charge............................................... 12
Annual Maintenance Fee.............................................. 12
Surrender Charge.................................................... 13
Policy Owner Options................................................ 13
Option 1.......................................................... 13
Option 2.......................................................... 13
Other Deductions or Charges......................................... 14
POLICY BENEFITS AND RIGHTS............................................ 14
Death Benefit....................................................... 14
Account Value....................................................... 14
Transfer of Account Value........................................... 15
Policy Loans........................................................ 15
Amount Payable on Surrender of the Policy........................... 16
Partial Surrenders.................................................. 16
Benefits at Maturity................................................ 16
Lapse and Reinstatement............................................. 16
Cancellation and Exchange Rights.................................... 16
Suspension of Valuation, Payments and Transfers..................... 17
LAST SURVIVOR POLICIES................................................ 17
OTHER MATTERS......................................................... 17
Voting Rights....................................................... 17
Statements to Policy Owners......................................... 18
Limit on Right to Contest........................................... 18
Misstatement as to Age and Sex...................................... 18
Payment Options..................................................... 18
Beneficiary......................................................... 19
Assignment.......................................................... 19
Dividends........................................................... 19
EXECUTIVE OFFICERS AND DIRECTORS...................................... 20
DISTRIBUTION OF THE POLICIES.......................................... 22
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS.......................... 23
FEDERAL TAX CONSIDERATIONS............................................ 23
General............................................................. 23
Taxation of Hartford and the Separate Account....................... 23
Income Taxation of Policy Benefits.................................. 23
Last Survivor Policies.............................................. 23
Modified Endowment Contracts........................................ 24
Estate and Generation Skipping Taxes................................ 24
</TABLE>
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 3
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<TABLE>
<CAPTION>
PAGE
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<S> <C>
Diversification Requirements........................................ 24
Ownership of the Assets in the Separate Account..................... 25
Life Insurance Purchased for Use in Split Dollar Arrangements....... 25
Federal Income Tax Withholding...................................... 25
Non-Individual Ownership of Policies................................ 25
Other............................................................... 25
Life Insurance Purchases by Nonresident Aliens and Foreign
Corporations....................................................... 25
LEGAL PROCEEDINGS..................................................... 25
LEGAL MATTERS......................................................... 25
EXPERTS............................................................... 26
REGISTRATION STATEMENT................................................ 26
APPENDIX A -- ILLUSTRATIONS OF BENEFITS............................... 27
</TABLE>
THE POLICIES AND OPTION 2 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.
<PAGE>
4 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCOUNT VALUE: The current value of the Sub-Accounts plus the value of the Loan
Account under the Policy.
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 surrender that is
not subject to the Surrender Charge. This amount in any Policy Year is the
greater of 10% of premiums or 100% of cumulative earnings (Account Value less
premiums paid).
ANNUITY UNIT: An accounting unit of measure used to calculate the amount of
annuity payments.
ATTAINED AGE: The Issue Age plus the number of fully completed Policy Years.
CASH SURRENDER VALUE: The Cash Value less all Indebtedness.
CODE: The Internal Revenue Code of 1986, as amended.
COVERAGE AMOUNT: The Death Benefit less the Account Value.
DEATH BENEFIT: The greater of (1) the Face Amount specified in the Policy or (2)
the Account Value on the date of death multiplied by a stated percentage as
specified in the Policy.
DEATH PROCEEDS: The amount that Hartford will pay on the death of the Insured.
This equals the Death Benefit less any Indebtedness.
DEDUCTION AMOUNT: A deduction on the Policy Date and on each Monthly Activity
Date for the cost of insurance, Tax Expense charges under Option 1, an
administrative charge and a mortality and expense risk charge.
FACE AMOUNT: On the Policy Date, the initial Face Amount is the amount shown on
the Policy's specifications page. Thereafter, the Face Amount is reduced by any
partial surrenders.
FUNDS: The registered investment management companies in which assets of the
Separate Account may be invested.
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 Hartford by the Policy Owner, including all
outstanding loans on the Policy, any interest due or accrued and any unpaid
Deduction Amount or annual maintenance fee arising during a grace period.
INSURED: The person on whose life the Policy is issued.
ISSUE AGE: As of the Policy Date, the Insured's age on Insured's last birthday.
LOAN ACCOUNT: An account in 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 that is not based on the investment experience
of the Separate Account.
MONTHLY ACTIVITY DATE: The day of each month on which deductions and charges are
subtracted from the Account Value of the Policy. Monthly Activity Dates occur on
the same day of the month as the Policy Date.
POLICY ANNIVERSARY: The anniversary of the Policy Date.
POLICY DATE: The date from which Policy Anniversaries and Policy Years are
measured.
POLICY OWNER: The owner of the Policy.
POLICY OWNER OPTIONS: The Policy Owner may elect one of two options offered by
Hartford to pay Mortality and Expense Risk charges and certain tax related
charges. The Policy Owner must elect the option at the time the Policy is issued
and the option cannot be changed once the Policy is issued. The following
options are available:
OPTION 1: ASSET BASED CHARGES: Under this option the Policy Owner elects to
pay a Mortality and Expense Risk charge that is deducted monthly from
Account Value at an annual rate of .90% in Policy Years 1 through 10 and at
an annual rate of .50% in Policy Years 11 and beyond; a Tax Expense charge
that is also deducted monthly at an annual rate of .40% for the first 10
Policy Years and an Unamortized Tax charge that is imposed during the first
9 Policy Years on surrenders or partial surrenders according to the rate set
forth in "Deductions and Charges -- Policy Owner Options -- Unamortized Tax
Charge," page 13. See "Deductions and Charges -- Policy Owner Options," page
13.
OPTION 2: FRONTED CHARGES: Under this option the Policy Owner elects to pay
a Mortality and Expense Risk charge that is deducted monthly from Account
Value at an annual rate of .65% in Policy Years 1 through 10 and an annual
rate of .50% in Policy Years 11 and beyond and a Tax Expense charge that is
deducted from any Premium payment in all Policy Years at an annual rate of
4.0%. This option is not available in all states. See "Deductions and
Charges -- Policy Owner Options," page 13.
POLICY YEAR: The twelve months between the Policy Anniversaries.
SEPARATE ACCOUNT: Separate Account Five, an account established by Hartford to
separate the assets funding the Policies from other assets of Hartford.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 5
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SUB-ACCOUNT: The subdivisions of the Separate Account used to allocate a Policy
Owner's Account Value, less Indebtedness, among the Funds.
SURRENDER CHARGE: A charge which may be assessed upon surrender of a Policy or
partial surrenders in excess of the Annual Withdrawal Amount.
VALUATION DAY: The date on which the Sub-Account is valued. The Valuation Day is
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.
<PAGE>
6 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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SUMMARY
THE POLICIES
The Policies are life insurance Policies with death benefits, cash values
and other traditional life insurance features. The Policies 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 premium payments have been allocated. The
Policies are credited with units ("Accumulation Units") to calculate Account
Values. The Policy Owner may transfer the Account Values among the Funds.
The Policies can be issued on either a single life or "last survivor" basis.
For a discussion of how last survivor Policies operate differently from single
life Policies, see "Last Survivor Policies," page 17.
THE SEPARATE ACCOUNT AND THE FUNDS
Separate Account Five ("Separate Account") funds the variable life insurance
Policies offered by this Prospectus. 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 Policies currently
offer Sub-Accounts, each investing exclusively in a Fund. The investment
objectives of the Funds are as set forth in "The Separate Account -- Funds,"
page 8. Applicants should read the Funds prospectus accompanying this Prospectus
in connection with the purchase of a Policy.
The following table shows annual Fund operating expenses for 1996:
ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets)
<TABLE>
<CAPTION>
MANAGEMENT OTHER
FEES EXPENSES
(ABSENT ANY (ABSENT ANY TOTAL FUND
FEE EXPENSE OPERATING
WAIVERS) REIMBURSEMENTS) EXPENSES(1)
----------- -------------- ----------
<S> <C> <C> <C>
Hartford Bond Fund............ 0.490% 0.030% 0.520%
Hartford Stock Fund........... 0.441% 0.016% 0.457%
HVA Money Market Fund......... 0.423% 0.021% 0.444%
Hartford Advisers Fund........ 0.615% 0.017% 0.632%
Hartford Capital Appreciation
Fund......................... 0.629% 0.017% 0.646%
Hartford Mortgage Securities
Fund......................... 0.424% 0.029% 0.453%
Hartford Index Fund........... 0.374% 0.019% 0.393%
Hartford International
Opportunities Fund........... 0.691% 0.095% 0.786%
Hartford Dividend & Growth
Fund......................... 0.709% 0.017% 0.726%
<CAPTION>
TOTAL FUND
MANAGEMENT OTHER OPERATING
FEES EXPENSES EXPENSES
----------- -------------- ----------
<S> <C> <C> <C>
Hartford International
Advisers Fund................ 0.746% 0.214% 0.960%
Hartford Small Company Fund... 0.730% 0.150% 0.880%
Hartford MidCap Fund (2)...... 0.577% 0.150% 0.727%
</TABLE>
- --------------------------
(1) For a complete description of the nature of the services provided in
consideration of the operating expenses deducted, please see the Fund
prospectuses.
(2) The MidCap Fund is a new Fund: Operating expenses are based on annualized
estimates of such expenses to be incurred in the fiscal year. HL Investment
Advisors, Inc. agreed to waive its fees for this Fund until the assets
(excluding assets contributed by companies affiliated with HL Investment
Advisors, Inc.) first reach $20 million. Without this waiver, the investment
advisory fee would be .575% annually. Total operating expense without the
waiver would be .90% annually.
The investment adviser for all the Funds is HL Investment Advisors, Inc., an
affiliate of Hartford. HL Investment Advisors, Inc. retains a sub-investment
adviser with respect to some of the Funds, and has entered into an investment
services agreement with respect to some of the Funds. See "The Separate
Account," page 8.
PREMIUMS
The Policy permits the Policy Owner to pay a large single premium and,
subject to restrictions, additional premiums. The Policy 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 may be eligible for
simplified underwriting without a medical examination if they meet simplified
underwriting standards. For applicants who are below age 35 or above age 80, or
who do not meet simplified underwriting eligibility, full underwriting applies,
except that substandard underwriting applies in those cases that represent
substandard risks according to customary underwriting guidelines.
DEDUCTIONS AND CHARGES
On the Policy Date and on each Monthly Activity Date, Hartford will deduct a
Deduction Amount from the Account Value. The Deduction Amount will be made pro
rata from each Sub-Account. The Deduction Amount includes a cost of insurance
charge, a Tax Expense charge under Option 1, an administrative charge and a
mortality and expense risk charge. If the Cash Surrender Value is not sufficient
to cover a Deduction Amount due on any Monthly Activity Date the Policy may
lapse. See "Deductions and Charges" page 11, and "Policy Benefits and Rights --
Lapse and Reinstatement," page 16.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 7
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If the Account Value on a Policy Anniversary or on any date the Policy is
surrendered is less than $50,000, Hartford will deduct an annual maintenance fee
of $30. See "Deductions and Charges -- Annual Maintenance Fee," page 12.
The Policy Owner may pay certain deductions and charges by electing one of
two available options at the time the Policy is issued. Once elected, the Policy
Owner Options cannot be changed:
Under Option 1:
- a Mortality and Expense Risk charge is deducted monthly from Account Value
at an annual rate of .90% in Policy Years 1 through 10 and at an annual
rate of .50% in Policy Years 11 and beyond.
- a Tax Expense charge is also deducted monthly at an annual rate of .40%
for the first ten Policy Years.
- an Unamortized Tax charge is imposed during the first nine Policy Years on
surrenders or partial surrenders according to the rate set forth in
"Deductions and Charges -- Policy Owner Options -- Unamortized Tax
Charge," page 13.
Under Option 2: (May not be available in all states)
- a Mortality and Expense Risk charge is deducted monthly from Account Value
at an annual rate of .65% in Policy Years 1 through 10 and an annual rate
of .50% in Policy Years 11 and beyond.
- a Tax Expense charge is deducted from any Premium payment in all Policy
Years at an annual rate of 4.0%.
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 14, and "Federal Tax Considerations," page 22.
Applicants should review the Funds prospectuses accompanying this Prospectus
for a description of the charges assessed against the assets of the Funds.
Upon surrender of the Policy and partial surrenders in excess of the Annual
Withdrawal Amount, a Surrender Charge may be assessed. See "Deductions and
Charges -- Surrender Charge," page 13.
For a discussion of the tax consequences of surrender, or a partial
surrender, of the Policy, see "Federal Tax Considerations," page 23.
DEATH BENEFIT
The Policies provide for a Face Amount which is the minimum Death Benefit
under the Policy. The Death Benefit may be greater than the Face Amount. At the
death of the Insured, Hartford will pay the Death Proceeds to the beneficiary of
the Policy. See "Policy Benefits and Rights -- Death Benefit," page 14.
ACCOUNT VALUE
The Account Value will increase or decrease to reflect the investment
experience of the Funds applicable to the Policy and deductions for the monthly
Deduction Amount. There is no minimum guaranteed Account Value and the Policy
Owner bears the risk of the investment in the Funds. See "Policy Benefits and
Rights -- Account Value," page 14.
POLICY LOANS
A Policy Owner may obtain one or both of two types of cash loans from
Hartford. Both types of loans are secured by the Policy. 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 Cash Value. See "Policy
Benefits and Rights -- Policy Loans," page 15.
LAPSE
A Policy may terminate if the Cash Surrender Value on any Monthly Activity
Date is less than the required monthly Deduction Amount. Hartford will give
written notice to the Policy Owner and a 61-day grace period during which
additional amounts may be paid to continue the Policy. See "Policy Benefits and
Rights -- Policy Loans," page 15, and "-- Lapse and Reinstatement," page 16.
CANCELLATION AND EXCHANGE RIGHTS
An Policy Owner has a limited right to return the Policy for cancellation.
If the Policy Owner returns the Policy, by mail or hand delivery, to Hartford or
to the agent who sold the Policy, to be canceled within ten days after delivery
of the Policy to the Policy Owner (in certain cases, this free-look period is
longer), Hartford will return to the Policy Owner, within seven days thereafter,
the greater of the premiums paid for the Policy, less any Indebtedness or the
sum of (1) the Account Value, less any Indebtedness, on the date the returned
Policy is received by Hartford or its agent and (2) any deductions under the
Policy or by the Funds for taxes, charges or fees.
In addition, once the Policy is in force, it may be exchanged during the
first 24 months after its issuance for a permanent life insurance Policy on the
life of the Insured without submitting proof of insurability. See "Policy
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 Policy beneficiary. The Policies generally will be
treated as modified
<PAGE>
8 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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endowment contracts. This status does not affect the Policies' 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
Policy (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 ("Hartford") is a stock life
insurance company engaged in the business of writing life insurance and
annuities, both individual and group, in all states of the United States, except
New York, and the District of Columbia. Hartford was formerly named ITT Hartford
Life and Annuity Insurance Company. Hartford was originally incorporated under
the laws of Wisconsin on January 9, 1956, and was subsequently redomiciled to
Connecticut. Its offices are located in Simsbury, Connecticut; however, its
mailing address is P.O. Box 2999, Hartford, CT 06104-2999. Hartford is a
subsidiary of Hartford Fire Insurance Company, one of the largest multiple lines
insurance carriers in the United States. Hartford is ultimately controlled by
The Hartford Financial Services Group, Inc., a Delaware corporation.
Hartford is rated A+ (superior) by A.M. Best and Company, Inc., on the basis
of its financial soundness and operating performance. Hartford is rated AA by
Standard & Poor's and AA+ by Duff and Phelps, on the basis of its claims paying
ability. These ratings do not apply to the investment performance of the
Sub-Accounts. The ratings apply to Hartford's ability to meet its insurance
obligations, including those described in this Prospectus.
THE SEPARATE ACCOUNT
GENERAL
Separate Account Five ("Separate Account") is a separate account of Hartford
established on August 17, 1994 pursuant to the insurance laws of the State of
Connecticut and it is 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 Policy Owners and persons entitled to
payments under the Policies. The assets of the Separate Account are not
chargeable with liabilities arising out of any other business which Hartford may
conduct.
FUNDS
The assets of each Sub-Account are invested exclusively in one of the Funds.
A Policy Owner may allocate premiums among the Funds. Policy Owners should
review the following brief descriptions of the investment objectives of the
Funds in connection with that allocation. Policy Owners are also advised to read
the Funds prospectus accompanying this Prospectus for more detailed information.
There is no assurance that any of the Funds will achieve its stated objectives.
HARTFORD ADVISERS FUND, INC.
Seeks maximum long-term total rate of return consistent with prudent
investment risk by investing in common stocks and other equity securities, bonds
and other debt securities and money market instruments.
HARTFORD BOND FUND, INC.
Seeks maximum current income consistent with preservation of capital by
investing primarily in fixed-income securities. Up to 20% of the total assets of
this Fund may be invested in debt securities rated in the highest category below
investment grade ("Ba" by Moody's Investor Services, Inc. or "BB" by Standard &
Poor's) or, if unrated, are determined to be of comparable quality by the Fund's
investment adviser. Securities rated below investment grade are commonly
referred to as "high yield-high risk securities" or "junk bonds." For more
information concerning the risks associated with investing in such securities,
please refer to the section in the accompanying prospectus for the Hartford
Funds entitled "Hartford Bond Fund, Inc. -- Investment Policies."
HARTFORD CAPITAL APPRECIATION FUND, INC.
Seeks growth of capital by investing in securities selected solely on the
basis of potential for capital appreciation; income, if any, is an incidental
consideration.
HARTFORD DIVIDEND AND GROWTH FUND, INC.
Seeks a high level of current income consistent with growth of capital and
reasonable investment risk.
HARTFORD INDEX FUND, INC.
Seeks to provide investment results which approximate the price and yield
performance of publicly traded common stocks in the aggregate, as represented by
the Standard & Poor's 500 Composite Stock Price Index.*
* "STANDARD & POOR'S-REGISTERED TRADEMARK-", "S&P-REGISTERED TRADEMARK-", "S&P
500-REGISTERED TRADEMARK-", "STANDARD & POOR'S 500", AND "500" ARE TRADEMARKS
OF THE MCGRAW-HILL COMPANIES, INC. AND HAVE BEEN LICENSED FOR USE BY HARTFORD
LIFE INSURANCE COMPANY. THE HARTFORD INDEX FUND, INC. ("INDEX FUND") IS NOT
SPONSORED, ENDORSED, SOLD OR PROMOTED BY STANDARD & POOR'S ("S&P") AND S&P
MAKES NO REPRESENTATION REGARDING THE ADVISABILITY OF INVESTING IN THE INDEX
FUND.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
HARTFORD INTERNATIONAL ADVISERS FUND, INC.
Seeks maximum long-term total rate of return consistent with prudent
investment risk by investing in a portfolio of equity, debt and money market
securities. Securities in which the Fund invests primarily will be denominated
in non-U.S. currencies and will be traded in non-U.S. markets.
HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.
Seeks long-term total rate of return consistent with prudent investment risk
through investment primarily in equity securities issued by non-U.S. companies.
HARTFORD MORTGAGE SECURITIES FUND, INC.
Seeks maximum current income consistent with safety of principal and
maintenance of liquidity by investing primarily in mortgage-related securities,
including securities issued by the Government National Mortgage Association.
HARTFORD SMALL COMPANY FUND, INC.
Seeks growth of capital by investing primarily in equity securities selected
on the basis of potential for capital appreciation. Under normal market and
economic conditions, at least 65% of the Fund's total assets are invested in
equity securities of companies which have less than $2 billion in market
capitalization.
HARTFORD STOCK FUND, INC.
Seeks long-term capital growth primarily through capital appreciation, with
income as a secondary consideration, by investing primarily in equity
securities.
HVA MONEY MARKET FUND, INC.
Seeks maximum current income consistent with liquidity and preservation of
capital.
HARTFORD MIDCAP FUND, INC.
Seeks to achieve long-term capital growth through capital appreciation by
investing primarily in equity securities.
All of the Funds are organized as corporations under the laws of the State
of Maryland and are registered as diversified open-end management companies
under the Investment Company Act of 1940. Each Fund continually issues an
unlimited number of full and fractional shares of beneficial interest in the
Fund. Such shares are offered to separate accounts, including the Separate
Account, established by Hartford or one of its affiliated companies specifically
to fund the Policies and other Policies issued by Hartford or its affiliates, as
permitted by the Investment Company Act of 1940.
It is conceivable that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Funds simultaneously. Although neither Hartford nor the Funds
currently foresee any such disadvantages either to variable life insurance
Policy Owners or variable annuity contract owners, the Funds' Board of Directors
intends to monitor events in order to identify any material conflicts between
variable life Policy Owners and variable annuity contract owners and to
determine what action, if any, should be taken in response thereto. If the Board
of Directors were to conclude that separate funds should be established for
variable life insurance and variable annuity separate accounts, Hartford will
bear the attendant expenses.
All investment income of, and other distributions to, each Sub-Account
arising from the applicable Fund are reinvested in shares of that Fund at net
asset value. The income and both realized gains or losses on the assets of each
Sub-Account are therefore separate and are credited to or charged against the
Sub-Account without regard to income, gains or losses from any other Sub-Account
or from any other business of Hartford. Hartford will purchase shares in the
Funds in connection with premiums allocated to the applicable Sub-Account in
accordance with Policy Owners' directions and will redeem shares in the Funds to
meet Policy obligations or make adjustments in reserves, if any. The Funds are
required to redeem Fund shares at net asset value and to make payment within
seven days.
Hartford reserves the right, subject to compliance with the law as then in
effect, to make additions to, deletions from or substitutions for the Separate
Account and its Sub-Accounts which fund the Policies. No substitution of
securities will take place without notice to and consent of Policy Owners and
without prior approval of the Securities and Exchange Commission to the extent
required by the Investment Company Act of 1940. Subject to Policy Owner
approval, Hartford also reserves the right to end the registration under the
Investment Company Act of 1940 of the Separate Account or any other separate
accounts of which it is the depositor and which may fund the Policies.
Each Fund is subject to investment restrictions which may not be changed
without the approval of a majority of the shareholders of the Fund. See the
Funds prospectuses accompanying this Prospectus.
INVESTMENT ADVISER
All of the Funds are sponsored by Hartford and are incorporated under the
laws of the State of Maryland. HL Investment Advisors, Inc. ("HL Advisors")
serves as the investment manager to each of the Funds.
Wellington Management Company, L.L.P. ("Wellington Management") serves as
sub-investment adviser for Hartford Advisers Fund, Hartford Capital Appreciation
Fund, Hartford Dividend and Growth Fund, Hartford International Advisers Fund,
Hartford International Opportunities Fund, Hartford Small Company Fund, Hartford
Stock Fund and Hartford MidCap Fund.
<PAGE>
10 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
In addition, HL Advisors has entered an investment services agreement with
Hartford Investment Management Company, Inc. ("HIMCO"), pursuant to which HIMCO
will provide certain investment services to Hartford Bond Fund, Hartford Index
Fund, Hartford Mortgage Securities Fund and HVA Money Market Fund.
A full description of the Funds, their investment policies and restrictions,
risks, charges and expenses and all other aspects of their operation is
contained in the accompanying Funds' prospectuses which should be read in
conjunction with this Prospectus before investing and in the Funds' Statement of
Additional Information which may be ordered from Hartford. The Funds may not be
available in all states.
THE POLICY
APPLICATION FOR A POLICY
Individuals wishing to purchase a Policy must submit an application to
Hartford. A Policy will be issued only on the lives of Insureds age 90 and under
who supply evidence of insurability satisfactory to Hartford. Acceptance is
subject to Hartford's underwriting rules and Hartford reserves the right to
reject an application for any reason. IF AN APPLICATION FOR A POLICY IS
REJECTED, THEN YOUR INITIAL PREMIUM WILL BE RETURNED ALONG WITH AN ADDITIONAL
AMOUNT FOR INTEREST, BASED ON THE CURRENT RATE BEING CREDITED BY HARTFORD. No
change in the terms or conditions of a Policy will be made without the consent
of the Policy Owner.
The Policy will be effective on the Policy Date only after Hartford has
received all outstanding delivery requirements and received the initial premium.
The Policy Date is the date used to determine all future cyclical transactions
on the Policy, e.g., Monthly Activity Date, Policy Months and Policy Years. The
Policy Date may be prior to, or the same as, the date the Policy is issued
("Issue Date").
If the Coverage Amount is over the current limits established by Hartford,
the initial payment will not be accepted with the application. In other cases
where Hartford receives the initial payment with the application, Hartford will
provide fixed conditional insurance during underwriting according to the terms
of conditional receipt established by Hartford. 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 Policy delivery, Hartford will
require a sufficient payment to place the insurance in force.
PREMIUMS
The Policy permits the Policy Owner to pay a large single premium and,
subject to restrictions, additional premiums. The Policy 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 may be eligible for simplified
underwriting without a medical examination if they meet simplified underwriting
standards as evidenced in their responses in the application. For applicants who
are below age 35 or above age 80, or who do not meet simplified underwriting
eligibility, full 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 Policy to fail to
meet the definition of a life insurance Policy under Section 7702 of the Code.
The amount and frequency of additional premium payments will affect the Cash
Value and the amount and duration of insurance. Hartford may require evidence of
insurability for any additional premiums which increase the Coverage Amount.
Generally, the minimum initial premium Hartford will accept is $10,000. Hartford
may accept less than $10,000 under certain circumstances. Premium which does not
meet the tax qualification guidelines for life insurance under the Code will not
be applied to the Policy.
ALLOCATION OF PREMIUMS
Within three business days of receipt of a completed application and the
initial premium payment at Hartford's Home Office, Hartford will allocate the
entire premium payment to HVA Money Market Fund, Inc. After the expiration of
the right to cancel period the Account Value in HVA Money Market Fund, Inc. will
be allocated among the Funds in whole percentages to purchase Accumulation Units
in the applicable Sub-Accounts as the Policy 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 Policy 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 Policy (including the initial allocation to
HVA Money Market Fund, Inc.) 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
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
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. Refer to the Funds' prospectuses accompanying 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 Policy. See also, "Policy
Benefits and Rights -- Account Value," page 14.
All valuations in connection with a Policy, e.g., with respect to
determining Account Value and Cash Surrender Value and in connection with Policy
Loans, or calculation of Death Benefits, or with respect to determining the
number of Accumulation Units to be credited to a Policy with each premium, other
than the initial premium, will be made on the date the request or payment is
received by 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
The deduction or charges associated with this Policy are subtracted,
depending on the type of deduction or charge, from Premium payments as they are
made, upon surrender or partial surrender of the Policy, on the Policy
Anniversary Date or on a monthly pro rated basis from each Sub-Account
("Deduction Amount").
Deductions are taken from Premium payments before allocations to the
Sub-Accounts are made. Monthly Deduction Amounts are subtracted on the Policy
Date and on each Monthly Activity Date after the Policy Date to cover charges
and expenses incurred in connection with a Policy. Each Deduction Amount will be
subtracted pro rata from each Sub-Account such that the proportion of Account
Value of the Policy 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 Policy may lapse. See "Policy Benefits and Rights --
Lapse and Reinstatement," page 16.
The Policy Owner may elect one of two options offered by Hartford to pay the
Mortality and Expense Risk charge, the Tax Expense charge and any Unamortized
Tax charge. Once selected, the option may not be changed. Option 2 may not be
available in all states.
The following chart illustrates the charges and deductions associated with
this Policy. For a more detailed discussion see the descriptions below:
<TABLE>
<CAPTION>
DEDUCTION OR CHARGE DEDUCTED FROM ALL POLICIES WHEN DEDUCTION IS MADE AMOUNT DEDUCTED
---------------------- ---------------------------------- ---------------------------------- ----------------------------------
<S> <C> <C> <C>
Cost of Insurance Yes Monthly Individualized depending on age,
sex and other factors
Administrative Charge Yes Monthly .25% of amounts allocated to the
Separate Account
Annual Maintenance Fee Only Policies with an Account On the Policy Anniversary Date or $30.00
Value of less than $50,000 on the upon surrender of the Policy
Policy Anniversary Date or date of
surrender
Surrender Charge Yes Upon surrender or partial A percentage of the amount
surrender of the Policy surrendered, depending on the
Policy Year, which is attributable
to premiums paid
Tax Expense Charge Yes Under Option 1: Monthly Under Option 1: .40% of Account
Under Option 2: Receipt of premium Value for Policy Years 1-10
payment Under Option 2: 4% of each premium
payment in all Policy Years
</TABLE>
<PAGE>
12 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEDUCTION OR CHARGE DEDUCTED FROM ALL POLICIES WHEN DEDUCTION IS MADE AMOUNT DEDUCTED
---------------------- ---------------------------------- ---------------------------------- ----------------------------------
<S> <C> <C> <C>
Mortality and Expense Yes Monthly Under Option 1: .90% of Account
Risk Charge Value in Policy Years 1-10 and
.50% for Policy Years 11 and
beyond.
Under Option 2: .65% of Account
Value in Policy Years 1-10 and
.50% for Policy years 11 and
beyond
Unamortized Tax Charge No, only under Option 1 Upon surrender or partial A percentage of the Account Value
surrender of the Policy depending on the Policy Year the
surrender takes place.
</TABLE>
COST OF INSURANCE CHARGE
The cost of insurance charge covers Hartford's anticipated mortality costs
for standard and substandard risks. Current cost of insurance rates are lower
after the tenth Policy Year and are based on whether 100%, 90% or 80% of the
Guideline Single Premium has been paid at issue. 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 Policy
Date or any Monthly Activity Date. For standard risks, the guaranteed cost of
insurance rate is 125% of the 1980 Commissioners Standard Ordinary Smoker/Non-
Smoker Mortality Table through age 90, grading down to 100% of the Commissioners
Standard Ordinary Smoker/ Non-Smoker Mortality Table at age 100 (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 Policy; however,
Hartford reserves the right to use rates less than those shown in the Table.
Substandard risks and Policies issued employing simplified underwriting
procedures 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
Smoker/ Non-Smoker Mortality Table (age last birthday). The multiple will be
based on the Insured's substandard rating.
The Coverage Amount is first set on the Policy 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. The Coverage Amount may be adjusted to continue to
qualify the Policies as life insurance Policies under the current federal tax
law. Under that law, the Minimum Coverage Amount is a stated percentage of the
Account Value of the Policy 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 = $70,000
Insured's attained age = 60
Minimum Coverage Amount percentage for age 60 = 30%
On the Monthly Activity Date, the Coverage Amount is $30,000. This is
calculated by subtracting the Account Value on the Monthly Activity Date
($70,000) 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 $21,000 (30% of $70,000). Since $21,000 is less
than the Face Amount less the Account Value ($30,000), no adjustment is
necessary. Therefore, the Coverage Amount will be $30,000.
Assume that the Account Value in the above example was $90,000. The Minimum
Coverage Amount would be $27,000 (30% of $90,000). Since this is greater than
the Face Amount less the Account Value ($10,000), the Coverage Amount for the
Policy Month is $27,000. (For an explanation of the Death Benefit, see "Policy
Benefits and Rights -- Death Benefit," page 14.)
Because the Account Value and, as a result, the Coverage Amount under a
Policy may vary from month to month, the cost of insurance charge may also vary
on each Monthly Activity Date.
ADMINISTRATIVE CHARGE
Hartford will deduct monthly from the Account Value attributable to the
Separate Account an administrative charge equal to an annual rate of 0.25%. This
charge compensates Hartford for administrative expenses incurred in the
administration of the Separate Account and the Policies.
ANNUAL MAINTENANCE FEE
If the Account Value on a Policy Anniversary or on the date the Policy is
surrendered is less than $50,000, Hartford will deduct on such date an annual
maintenance fee of $30. This fee will help reimburse Hartford for administrative
and maintenance costs of the Policies. The sum of the monthly administrative
charges and the annual maintenance fee will
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
not exceed the cost Hartford incurs in providing administrative services under
the Policies.
SURRENDER CHARGE
Upon surrender of the Policy or partial surrenders in excess of the Annual
Withdrawal Amount, a Surrender Charge may be assessed. In Policy Years 1 through
3, this charge is 7.5% of surrendered Account Value attributable to premiums
paid. In Policy Years 4 through 5, this charge is 6%. In Policy Years 6 through
7, this charge is 4%. In Policy Years 8 through 9, this charge is 2%. After the
ninth Policy Year, there is no charge.
In determining the Surrender Charge and any Unamortized Tax charge discussed
below, any surrender or partial surrender during the first ten Policy Years will
be deemed first from premiums paid and then from earnings. If an amount equal to
all premiums paid has been withdrawn, no charge will be assessed on a surrender
of the remaining Account Value.
The Surrender Charge is imposed to cover a portion of the sales expense
incurred by Hartford in distributing the Policies. This expense includes agents
commissions, advertising and the printing of prospectuses. See "Policy Benefits
and Rights -- Amount Payable on Surrender of the Policy," page 16.
POLICY OWNER OPTIONS
In addition to the deductions and charges described above, the Policy Owner,
at the time the Policy is issued, will elect one of two options described below
to pay charges relating to certain taxes and mortality and expense risk charges.
The option selected by the Policy Owner may affect Policy Value.
OPTION 1: ASSET-BASED CHARGES: Under this payment option, the Policy Owner
will pay:
MORTALITY AND EXPENSE RISK CHARGE: Hartford will deduct monthly from the
Account Value attributable to the Separate Account for Policy Years 1 through 10
a charge equal to an annual rate of 0.90% for the mortality risks and expense
risks Hartford assumes in relation to the variable portion of the Policies. In
Policy Years 11 and beyond, the charge drops to an annual rate of 0.50% for the
mortality risks and expense risks Hartford assumes in relation to the variable
portion of the Policies. The mortality risk assumed is that the cost of
insurance charges specified in the Policy will be insufficient to meet claims.
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 Hartford receives written notice of death. The expense risk assumed is
that expenses incurred in issuing and administering the Policies will exceed the
administrative charges set in the Policy. 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 Policies
and the proceeds of the Surrender Charge. The mortality and expense risk charge
is deducted while the Policy is in force, including the duration of a payment
option.
TAX EXPENSE CHARGE: Hartford will deduct monthly from the Account Value a
charge equal to an annual rate of 0.40% for the first ten Policy Years. This
charge compensates Hartford for premium taxes imposed by various states and
local jurisdictions and for the cost of capitalization of certain policy
acquisition expenses under Section 848 of the Code. The charge includes a
premium tax deduction of 0.25% and Section 848 costs of 0.15%. The 0.25% premium
tax deduction over ten Policy Years approximates 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, Hartford does not expect to make a profit from this deduction. The
0.15% charge helps reimburse Hartford for approximate expenses incurred from
federal taxes under Section 848 of the Code. The federal tax deduction is a
factor Hartford must use when computing the maximum sales load chargeable under
Securities and Exchange Commission rules.
UNAMORTIZED TAX CHARGE: Under this option, during the first nine Policy
Years, an Unamortized Tax charge will be imposed on surrender or partial
surrenders. The Unamortized Tax charge is shown below, as a percentage of
Account Value, at the end of each Policy Year:
<TABLE>
<CAPTION>
POLICY
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 Policy Year, no Unamortized Tax charge will be imposed.
OPTION 2: FRONTED CHARGES: Under this option, the Policy Owner will pay:
MORTALITY AND EXPENSE RISK CHARGE: In Policy Years 1 through 10, Hartford
will deduct monthly from the Account Value attributable to the Separate Account
a charge equal to an annual rate of 0.65% for the mortality risks and expense
risks Hartford assumes in relation to the variable portion of
<PAGE>
14 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
the Policies. In Policy Years 11 and beyond, the charge drops to an annual rate
of 0.50%. The mortality risk assumed is that the cost of insurance charges
specified in the Policy will be insufficient to meet claims. 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 Hartford
receives written notice of death. The expense risk assumed is that expenses
incurred in issuing and administering the Policies will exceed the
administrative charges set in the Policy. 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 Policies
and the proceeds of the Surrender Charge. The mortality and expense risk charge
is deducted while the Policy is in force, including the duration of a payment
option.
TAX EXPENSE CHARGE: Hartford will deduct from premium payments a tax expense
charge equal to an annual rate of 4.0% for all Policy Years. This charge
compensates Hartford for premium taxes imposed by various states and local
jurisdictions and for the cost of capitalization of certain policy acquisition
expenses under Section 848 of the Code. The charge includes a premium tax
deduction of 2.5% and a Section 848 cost of 1.5%. The premium tax deduction
approximates Hartford's average expenses for state and local premium taxes.
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, Hartford does not expect
to make a profit from this deduction. The 0.15% charge helps reimburse Hartford
for approximate expenses incurred from federal taxes under Section 848 of the
Code. The federal tax deduction is a factor Hartford must use when computing the
maximum sales load chargeable under Securities and Exchange Commission rules.
This Option may not be available in all states.
OTHER DEDUCTIONS OR CHARGES
CHARGES AGAINST THE FUNDS
The Separate Account purchases shares of the Funds at net asset value. The
net asset value of Fund shares reflects investment advisory fees and
administrative expenses already deducted from the assets of the Funds. These
charges are described in the Funds' prospectus accompanying this Prospectus.
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. 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.
POLICY BENEFITS AND RIGHTS
DEATH BENEFIT
While in force, the Policy provides for the payment of the Death Proceeds to
the named beneficiary when the Insured 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 the Insured and are specified in the Policy. 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 Hartford 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 Policy 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 Policy is related to the net asset value
of the Funds to which premiums on the Policy have been allocated. The Account
Value on any Valuation Day is calculated by multiplying the number of
Accumulation Units credited to the Policy 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 Policy and the value
of the Loan Account. See "The Policy -- Accumulation Unit Values," page 10.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 15
- --------------------------------------------------------------------------------
TRANSFER OF ACCOUNT VALUE
While the Policy remains in force, and subject to Hartford's transfer rules
then in effect, the Policy Owner may request that part or all of the Account
Value of a particular Sub-Account be transferred to other Sub-Accounts. Hartford
reserves the right to restrict the number of such transfers to no more than 12
per Policy 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 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. Hartford will employ
reasonable procedures to confirm that instructions communicated by telephone are
genuine; otherwise, Hartford may be liable for any losses due to unauthorized or
fraudulent instructions. The procedures 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.
Hartford will send the Policy Owner confirmation of the transfer within five
(5) days from the date of any instruction. It is the responsibility of the
Policy Owner to verify the accuracy of all confirmations of transfers and to
promptly advise Hartford of any inaccuracies within one business day of receipt
of the confirmation.
Hartford may modify the right to reallocate Account Value among the
Sub-Accounts if Hartford determines, in its sole discretion, that the exercise
of that right by one or more Policy Owners is, or would be, to the disadvantage
of other Policy 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 Policy 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 Hartford considers to be disadvantageous to other Policy Owners.
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 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 Hartford receives the transfer request.
POLICY LOANS
While the Policy is in effect, a Policy 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 Hartford. Both types
of loans are secured by the Policy. The aggregate loans (including the currently
applied for loan) may not exceed, at the time a loan is requested, 90% of the
Cash Value.
The loan amount will be transferred pro rata from each Sub-Account
attributable to the Policy (unless the Policy Owner specifies otherwise) to the
Loan Account. The amounts allocated to the Loan Account will earn interest at a
rate of 4% per annum (6% for "Preferred Loans"). The amount of the Loan Account
that equals the difference between the Cash Value and the total of all premiums
paid under the Policy is considered a "Preferred Loan." For exchanges which take
place according to IRC Section 1035(a) that have an outstanding loan at the time
of transfer, the difference between the Account Value and the total of all
premiums paid under the Policy is considered a Preferred Loan. The loan interest
rate that 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. The proceeds of a loan will be delivered to the Policy Owner
within seven business days of Hartford's receipt of the loan request.
If the aggregate outstanding loan(s) secured by the Policy exceeds the
Account Value of the Policy less any Surrender Charges and due and unpaid
Deduction Amount, Hartford will give written notice to the Policy Owner that,
unless Hartford receives an additional payment within 61 days to reduce the
aggregate outstanding loan(s) secured by the Policy, the Policy may lapse.
All or any part of any loan secured by a Policy may be repaid while the
Policy 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 Policy 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 Policy
will be reinstated. See "Policy 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
<PAGE>
16 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
more than the annual interest rate for amounts held in the Loan Account, a
Policy Owner's Account Value will not increase as rapidly as it would have had
no loan been made. If the Sub-Accounts earn less than the annual interest rate
for amounts held in the Loan Account, the Policy 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 POLICY
While the Policy is in force, a Policy Owner may elect, without the consent
of the beneficiary (provided the designation of beneficiary is not irrevocable),
to fully surrender the Policy. Upon surrender, the Policy Owner will receive the
Cash Surrender Value determined as of the day Hartford receives the Policy
Owner's written request or the date requested by the Policy Owner whichever is
later. The Cash Surrender Value equals the Account Value less any Surrender
Charges and Unamortized Tax charge and all Indebtedness. Hartford will pay the
Cash Surrender Value of the Policy within seven days of receipt by Hartford of
the written request or on the effective surrender date requested by the Policy
Owner, whichever is later. The Policy will terminate on the date of receipt of
the written request, or the date the Policy Owner requests the surrender to be
effective, whichever is later. For a discussion of the tax consequences of
surrendering the Policy, see "Federal Tax Considerations," page 23.
If the Policy Owner chooses to apply the surrender proceeds to a payment
option (see "Other Matters -- Payment Options," page 18), the Surrender Charge
will not be imposed to the surrender proceeds applied to the option. In other
words, the surrender proceeds will equal the Cash Surrender Value without
reduction for the Surrender Charge. However, any Unamortized Tax charge, if
applicable, will be deducted from the surrender proceeds to be applied. In
addition, any amounts withdrawn from payment Option 1, Option 5 or Option 6 will
be subject to a Surrender Charge, if applicable.
PARTIAL SURRENDERS
While the Policy is in effect, a Policy Owner may elect, by written request,
to make partial surrender from the Cash Surrender Value. The Cash Surrender
Value, after partial surrender, must at least equal Hartford's minimum amount
rules then in effect; otherwise, the request will be treated as a request for
full surrender. The partial surrender will be deducted pro rata from each
Sub-Account, unless the Policy Owner instructs otherwise. The Face Amount will
be reduced proportionate to the reduction in the Account Value due to the
partial surrender. Partial surrenders in excess of the Annual Withdrawal Amount
will be subject to a Surrender Charge and any Unamortized Tax charges. See
"Deductions and Charges -- Surrender Charge," page 13, and "Deductions and
Charges -- Policy Owner Option 1," page 13. For a discussion of the tax
consequences of partial surrenders, see "Federal Tax Considerations," page 23.
BENEFITS AT MATURITY
If the Insured is living on the "Maturity Date" (the anniversary of the
Policy Date on which the Insured is age 100), on surrender of the Policy to
Hartford, Hartford will pay to the Policy Owner the Cash Surrender Value. In
such case, the Policy will terminate and Hartford will have no further
obligations under the Policy. (The Maturity Date may be extended by rider where
approved, but see "Federal Tax Considerations -- Income Taxation of Policy
Benefits," page 23.)
LAPSE AND REINSTATEMENT
The Policy will remain in force until the Cash Surrender Value is
insufficient to cover a Deduction Amount due on a Monthly Activity Date.
Hartford will notify the Policy 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 Policy will continue through the grace period, but if no additional
premium payment is made, it will terminate at the end of the grace period. If
the person insured under the Policy dies during the grace period, the Death
Proceeds payable under the Policy will be reduced by the Deduction Amount(s) due
and unpaid. See "Policy Benefits and Rights -- Death Benefit," page 14.
If the Policy lapses, the Policy Owner may apply for reinstatement of the
Policy by payment of the reinstatement premium and any applicable charges. A
request for reinstatement may be made within five years of lapse. If a loan was
outstanding at the time of lapse, Hartford will require repayment of the loan
before permitting reinstatement. In addition, Hartford reserves the right to
require evidence of insurability satisfactory to Hartford.
CANCELLATION AND EXCHANGE RIGHTS
A Policy Owner has a limited right to return a Policy for cancellation. If
the Policy is returned, by mail or personal delivery to Hartford or to the agent
who sold the Policy, to be canceled within ten days after delivery of the Policy
to the Policy Owner (a longer free-look period is provided in certain cases),
Hartford will return to the Policy Owner, within seven days, the greater of
premiums paid for the Policy, less any Indebtedness or the sum of (1) the
Account Value less any Indebtedness on the date the returned Policy is received
by Hartford or its agent and (2) any deductions under Policy or by the Funds for
taxes, charges or fees.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 17
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Once the Policy is in effect, it may be exchanged, during the first 24
months after its issuance, for a non-variable flexible premium adjustable life
insurance Policy offered by Hartford (or an affiliated company) on the life of
the Insured. No evidence of insurability will be required. The new Policy will
have, at the election of the Policy Owner, either the same Coverage Amount as
under the exchanged Policy 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 Policy. If a Policy loan was outstanding, the entire loan must be
repaid. There may be a cash adjustment required on the exchange.
SUSPENSION OF VALUATION,
PAYMENTS AND TRANSFERS
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 Securities and Exchange
Commission has ordered that the right of surrender of the Policies be suspended
for the protection of Policy Owners, until such condition has ended.
LAST SURVIVOR POLICIES
The Policies are offered on both a single life and a "last survivor" basis.
Policies 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 Policies 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. See the last survivor illustrations in "Appendix A,"
page 27.
2. To qualify for simplified underwriting under a last survivor Policy, both
Insureds must meet the simplified underwriting standards.
3. For a last survivor Policy to be reinstated, both Insureds must be alive on
the date of reinstatement.
4. The Policy provisions regarding misstatement of age or sex, suicide and
incontestability apply to either Insured.
5. Additional tax disclosures applicable to last survivor Policies are provided
in "Federal Tax Considerations," page 23.
OTHER MATTERS
VOTING RIGHTS
In accordance with its interpretation of presently applicable law, Hartford
will vote the shares of the Funds at regular and special meetings of the
shareholders of the Funds in accordance with instructions from Policy Owners (or
the assignee of the Policy, as the case may be) having a voting interest in the
Separate Account. The number of shares held in the Separate Account which are
attributable to each Policy Owner is determined by dividing the Policy Owner's
interest in each Sub-Account by the net asset value of the applicable shares of
the Funds. Hartford will vote shares for which no instructions have been given
and shares which are not attributable to Policy Owners (i.e., shares owned by
Hartford) in the same proportion as it votes shares for which it has received
instructions. However, if the Investment Company Act of 1940 or any rule
promulgated thereunder should be amended, or if Hartford's present
interpretation should change and, as a result, 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 Policy Owner (or the assignee) in the Funds will
be determined as follows: Policy Owners may cast one vote for each full or
fractional Accumulation Unit owned under the Policy and allocated to a
Sub-Account, the assets of which are invested in the particular Fund on the
record date for the shareholder meeting for that Fund. If, however, a Policy
Owner has taken a loan secured by the Policy, amounts transferred from the Sub-
Account(s) to the Loan Account in connection with the loan (see "Policy Benefits
and Rights -- Policy Loans," page 15) will not be considered in determining the
voting interests of the Policy Owner. Policy Owners should review the Funds
prospectus accompanying this Prospectus to determine matters on which
shareholders may vote.
Hartford may, when required by state insurance regulatory authorities,
disregard Policy Owners' voting instructions if such instructions require that
the shares be voted so as to cause a change in the sub-classification or
investment objective of one or more of the Funds or to approve or disapprove an
investment advisory Policy for the Funds.
In addition, Hartford itself may disregard Policy Owners' voting
instructions in favor of changes initiated by a Policy Owner in the investment
policy or the investment adviser of the Funds if 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 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 Policy Owners.
<PAGE>
18 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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STATEMENTS TO POLICY OWNERS
Hartford will maintain all records relating to the Separate Account and the
Sub-Accounts. At least once each Policy Year, Hartford will send to Policy
Owners a statement showing the Coverage Amount and the Account Value of the
Policy (indicating the number of Accumulation Units credited to the Policy in
each Sub-Account and the corresponding Accumulation Unit Value) and any
outstanding loan secured by the Policy as of the date of the statement. The
statement will also show premium paid, and Deduction Amounts under the Policy
since the last statement, and any other information required by any applicable
law or regulation.
LIMIT ON RIGHT TO CONTEST
Hartford may not contest the validity of the Policy after it has been in
effect during the Insured's lifetime for two years from the Issue Date. If the
Policy is reinstated, the two-year period is measured from the date of
reinstatement. Any increase in the Coverage Amount as a result of a premium is
contestable for two years from its effective date. In addition, if the Insured
commits suicide in the two year period, or such period as specified in state
law, the benefit payable will be limited to the 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 Policy.
PAYMENT OPTIONS
The surrender proceeds or Death Proceeds under the Policies may be paid in a
lump sum or may be applied to one of Hartford's payment options. The minimum
amount that may be applied under a payment option is $5,000, unless Hartford
consents to a lesser amount. UNDER PAYMENT OPTIONS 2, 3 AND 4, NO SURRENDER OR
PARTIAL SURRENDERS ARE PERMITTED AFTER PAYMENTS COMMENCE. FULL OR PARTIAL
SURRENDERS MAY BE MADE FROM PAYMENT OPTION 1 OR OPTION 6, BUT THEY ARE SUBJECT
TO A SURRENDER CHARGE, IF APPLICABLE. ONLY A FULL SURRENDER IS ALLOWED FROM
PAYMENT OPTION 5. A SURRENDER FROM PAYMENT OPTION 5 WILL ALSO BE SUBJECT TO THE
SURRENDER CHARGE, IF APPLICABLE.
Hartford 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 Policies (Hartford may offer
other payment options):
OPTION 1 -- Interest Income
This option offers payments of interest, at the rate Hartford declares, 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 annuity payments 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 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 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 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 five to 30 years. Under this
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 19
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option, you may, at any time, request a full surrender and receive, within seven
days, the termination value of the Policies as determined by 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 Hartford.
Option 5 is an option that does not involve life contingencies.
OPTION 6 -- Death Proceeds Remaining with Hartford
Proceeds from the Death Benefit left with 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 Policies 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
Policiescontains variable payment annuity tables derived from the 1983a
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 Policy.
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 Hartford) which is
no less than the rate specified in the fixed payment annuity tables in the
Policy. The annuity payment will remain level for the duration of the annuity.
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 Policy. The
Policy Owner may change the beneficiary (unless irrevocably named) during the
Insured's lifetime by written request to Hartford. If no beneficiary is living
when the Insured dies, the Death Proceeds will be paid to the Policy Owner if
living; otherwise to the Policy Owner's estate.
ASSIGNMENT
The Policy may be assigned as collateral for a loan or other obligation.
Hartford is not responsible for any payment made or action taken before receipt
of written notice of such assignment. Proof of interest must be filed with any
claim under a collateral assignment.
DIVIDENDS
No dividends will be paid under the Policies.
<PAGE>
20 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST FIVE YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Wendell J. Bossen, 63 Vice President, 1995** Vice President (1992-Present), Hartford Life and Accident
Insurance Company; Vice President (1992-Present),
Hartford Life Insurance Company; President
(1992-Present), International Corporate Marketing Group,
Inc.; Executive Vice President (1984-1992), Mutual
Benefit.
Gregory A. Boyko, 45 Senior Vice President, Vice President & Controller (1995-1997), Hartford; Senior
Chief Financial Officer & Vice President, Chief Financial Officer & Treasurer
Treasurer, 1997 (1997-Present); Vice President & Controller (1995-1997),
Director, 1997* Hartford Life and Accident Insurance Company; Director
(1997-Present); Senior Vice President, Chief Financial
Officer & Treasurer (1997-Present); Vice President and
Controller (1995-1997), Hartford Life Insurance Company;
Senior Vice President, Chief Financial Officer &
Treasurer (1997-Present), Hartford Life, Inc.; Chief
Financial Officer (1994-1995), IMG American Life; Senior
Vice President (1992-1994), Connecticut Mutual Life
Insurance Company.
Peter W. Cummins, 60 Senior Vice President, 1997 Vice President (1993-1997), Hartford; Senior Vice
President, (1997-Present); Vice President (1989-1997),
Hartford Life and Accident Insurance Company; Senior
Vice President (1997-Present); Vice President
(1989-1997); Director of Broker Dealer Sales--ILAD
(1989-1992), Hartford Life Insurance Company.
Ann M. de Raismes, 46 Senior Vice President, 1997 Vice President (1994-1997), Hartford; Senior Vice
Director of Human Resources, President (1997-Present); Vice President (1994-1997);
1994 Assistant Vice President (1992-1994), Hartford Life and
Accident Insurance Company; Senior Vice President
(1997-Present); Vice President (1994-1997); Assistant
Vice President (1992-1994), Hartford Life Insurance
Company; Vice President, Human Resources (1997-Present),
Hartford Life, Inc.
James R. Dooley, 60 Vice President, 1993 Director, Information Services (1973-1997), Hartford Life
Insurance Company.
Timothy M. Fitch, 44 Vice President, 1995 Vice President(1995-Present); Actuary (1994-Present);
Actuary, 1997 Assistant Vice President (1992-1995), Hartford Life and
Accident Insurance Company; Vice President
(1995-Present); Actuary (1994-Present); Assistant Vice
President (1992-1995), Hartford Life Insurance Company.
J. Richard Garrett, 52 Vice President, 1994 Treasurer (1994-1997), Hartford; Vice President
Assistant Treasurer, 1997 (1993-Present); Assistant Treasurer (1997-Present);
Treasurer (1984-1997), Hartford Life and Accident
Insurance Company; Vice President, (1993-Present);
Assistant Treasurer (1997-Present); Treasurer
(1986-1997), Hartford Life Insurance Company; Vice
President (1997-Present), Hartford Life, Inc.
Donald J. Gillette, 51 Vice President, 1997 Assistant Vice President (1995-1997), Hartford; Assistant
Vice President (1995-1997), Hartford Life and Accident
Insurance Company; Assistant Vice President
(1995-Present), Hartford Life Insurance Company.
</TABLE>
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 21
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<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST FIVE YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Lynda Godkin, 43 Senior Vice President, 1997 Assistant General Counsel and Secretary (1994-1995),
General Counsel, 1996 Hartford; Director (1997-Present); Senior Vice President
Corporate Secretary, 1996 (1997-Present); General Counsel (1996-Present);
Director, 1997* Corporate Secretary (1995-Present); Associate General
Counsel (1995-1996); Assistant General Counsel and
Secretary (1994-1995); Counsel (1990-1994), Hartford
Life and Accident Company; Senior Vice President
(1997-Present); General Counsel (1996-Present);
Corporate Secretary (1995-Present); Director
(1997-Present); Associate General Counsel (1995-1996);
Assistant General Counsel and Secretary (1994-1995);
Counsel (1990-1994), Hartford Life Insurance Company;
Vice President and General Counsel (1997-Present),
Hartford Life, Inc.
Lois W. Grady, 52 Vice President, 1994 Vice President (1993-1997); Assistant Vice President
(1987-1993), Hartford Life and Accident Insurance
Company; Vice President (1993-Present); Assistant Vice
President (1987-1993), Hartford Life Insurance Company.
Christopher Graham, 46 Vice President, 1997 Vice President (1997-Present), Hartford Life Insurance
Company.
Stephen T. Joyce, 38 Vice President, 1997 Assistant Vice President (1995-1997), Hartford; Assistant
Vice President (1994-1997), Hartford Life and Accident
Insurance Company; Vice President (1997-Present);
Assistant Vice President (1994-1997), Hartford Life
Insurance Company.
Robert A. Kerzner, 45 Vice President, 1997 Vice President (1994-1997), Hartford Life and Accident
Insurance Company; Vice President (1994-Present);
Regional Vice President (1991-1994), Hartford Life
Insurance Company.
William B. Malchodi, Jr., 47 Vice President, 1994 Vice President (1994-Present); Director of Taxes
Director of Taxes, 1992 (1992-Present), Hartford Life and Accident Insurance
Company; Vice President (1994-Present); Director of
Taxes (1991-Present), Hartford Life Insurance Company.
Thomas M. Marra, 39 Executive Vice President Director, Senior Vice President (1993-1996); Director of Individual
Individual Life and Annuity Annuities (1991-1993), Hartford; Director
Division, 1993 (1994-Present); Executive Vice President (1995-Present);
Director, 1994* Director, Individual Life and Annuity Division
(1994-Present); Senior Vice President (1994-1995); Vice
President (1989-1994); Actuary (1987-1997), Hartford
Life Insurance Company; Executive Vice President,
Individual Life and Annuities (1997-Present), Hartford
Life, Inc.
Steven L. Mattieson, 52 Vice President, 1984 Director of New Business (1984-1997), Hartford.
C. Michael O'Halloran, 50 Vice President, 1997 Vice President (1997-Present), Hartford Life Insurance
Company; Corporate Secretary (1997-Present), Hartford
Life, Inc.; Senior Associate General Counsel
(1988-Present), Director of Corporate Law
(1994-Present), The Hartford Financial Services Group.
Craig R. Raymond, 36 Senior Vice President, 1997 Vice President (1993-1997); Assistant Vice President
Chief Actuary, 1994 (1992-1993); Actuary (1989-1994), Hartford; Senior Vice
President (1997-Present); Chief Actuary (1994-Present);
Vice President (1993-1997); Assistant Vice President
(1992-1993); Actuary (1989-1994), Hartford Life
Insurance Company; Vice President and Chief Actuary
(1997-Present), Hartford Life, Inc.
David T. Schrandt, 49 Vice President, 1987 Treasurer (1987-1997); Controller (1987-[1997]), Hartford.
</TABLE>
<PAGE>
22 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST FIVE YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Lowndes A. Smith, 58 President, 1989 Chief Operating Officer (1989-1997), Hartford; President
Chief Executive Officer, 1997 (1989-Present), Chief Executive Officer (1997-Present);
Director, 1985* Director (1981-Present); Chief Operating Officer
(1989-1997), Hartford Life Insurance Company; Chief
Executive Officer and President and Director
(1997-Present), Hartford Life, Inc.
Walter C. Welsh, 50 Senior Vice President, 1997 Senior Vice President (1997-Present); Vice President
(1995-1997); Assistant Vice President (1993-1995),
Hartford Life Insurance Company; Vice President,
Government Affairs (1997-Present), Hartford Life, Inc.
David M. Znamierowski, 37 Senior Vice President, 1997 Senior Vice President (1997-Present); Director, Risk
Management Strategy (1996-Present); Vice President
(1997), Hartford Life Insurance Company; Vice President,
Investment Strategy (1997-Present), Hartford Life, Inc.;
Vice President, Investment Strategy & Policy, Aetna Life
and Casualty.
</TABLE>
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
- ------------------------
* Denotes date of election to Board of Directors.
** The Hartford Financial Services Group, Inc. Affiliated Company.
DISTRIBUTION OF THE POLICIES
Hartford intends to sell the Policies in all jurisdictions where it is
licensed to do business. The Policies will be sold by life insurance sales
representatives who represent Hartford and who are registered representatives of
Hartford Equity Sales Company, Inc. ("HESCO") or certain other independent,
registered broker-dealers. Any sales representative or employee will have been
qualified to sell variable life insurance Policies under applicable federal and
state laws. Each broker-dealer is registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and all are members of the
National Association of Securities Dealers, Inc.
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 that of Hartford.
The maximum sales commission payable to 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, Hartford may pay or
permit other promotional incentives, in cash or credit or other compensation.
Hartford may provide information on various topics to Policy Owners and
prospective Policies 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
Policies 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 Hartford. The assets of the
Separate Account are kept physically segregated and held separate and apart from
the General Account of Hartford. 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 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 Hartford.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 23
- --------------------------------------------------------------------------------
FEDERAL TAX CONSIDERATIONS
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE POLICY OWNER INVOLVED, LEGAL AND TAX ADVICE MAY BE
NEEDED BY A PERSON, EMPLOYER, OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A
POLICY DESCRIBED HEREIN.
It should be understood that any detailed description of the federal income
tax consequences regarding the purchase of the Policy cannot be made in this
Prospectus and that special tax rules may be applicable with respect to certain
purchase situations not discussed herein. In addition, no attempt is made here
to consider any applicable state or other tax laws. For detailed information, a
qualified tax adviser should always be consulted. This discussion of federal tax
considerations is based upon Hartford's understanding of existing federal income
tax laws as they are currently interpreted.
TAXATION OF HARTFORD AND
THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford which is taxed as a life
insurance company under Subchapter L of the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, the Separate Account will not be taxed as a
"regulated investment company" under Subchapter M of the Code. Investment income
and realized capital gains on the assets of the Separate Account (the underlying
Funds) are reinvested and are taken into account in determining the value of the
Accumulation Units (see "Policy Benefits and Rights -- Account Value," page 14).
As a result, such investment income and realized capital gains are automatically
applied to increase reserves under the Policy.
Hartford does not expect to incur any federal income tax on the earnings or
realized capital gains attributable to the Separate Account. Based upon this
expectation, no charge is currently being made to the Separate Account for
federal income taxes. If Hartford incurs income taxes attributable to the
Separate Account or determines that such taxes will be incurred, it may assess a
charge for such taxes against the Separate Account.
INCOME TAXATION OF POLICY BENEFITS
For federal income tax purposes, the Policy should be treated as life
insurance Policies under Section 7702 of the Code. The death benefit under a
life insurance policy is generally excluded from the gross income of the
beneficiary. Also, a life insurance Policy owner is generally not taxed on
increments in the Policy value until the Policiesis partially or completely
surrendered. Section 7702 limits the amount of premiums that may be invested in
a Policy that is treated as life insurance. Hartford intends to monitor premium
levels to assure compliance with the Section 7702 requirements.
During the first 15 Policy years, an "income first" rule generally applies
to distributions of cash required to be made under Code Section 7702 because of
a reduction in benefits under the Policy.
The Maturity Date Extension Rider allows a Policy Owner to extend the
Maturity Date to the date of the Insured's death. If the Maturity Date of the
Policy is extended by rider, Hartford believes that the Policy will continue to
be treated as a life insurance Policy for federal income tax purposes after the
scheduled Maturity Date. However, due to the lack of specific guidance on this
issue, the result is not certain. If the Policy is not treated as a life
insurance Policy for federal income tax purposes after the scheduled Maturity
Date, among other things, the Death Proceeds may be taxable to the recipient.
The Policy Owner should consult a qualified tax adviser regarding the possible
adverse tax consequences resulting from an extension of the scheduled Maturity
Date.
LAST SURVIVOR POLICIES
Although Hartford believes that the last survivor Policies 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 policy 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 Policy will meet the Section 7702 definition of a life
insurance Policy.
MODIFIED ENDOWMENT CONTRACTS
A life insurance Policy 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
Policy does not meet the specified computational rules for the "seven-pay test"
under Section 7702A(c). Therefore, the Policy will generally be treated as a
modified endowment Policy for federal income tax purposes. However, an exchange
under Section 1035 of the Code of a life insurance Policy issued before June 21,
1988 will not cause the new Policy to be treated as a modified endowment Policy
if no additional premiums are paid and there is no change in the death benefit
as the result of the exchange.
<PAGE>
24 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
A Policy that is classified as modified endowment Policy 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, loans, distributions or other amounts
received from a modified endowment Policy during the life of the Insured will be
taxed to the extent of any accumulated income in the Policy (generally, the
excess of account value over premiums paid). Liquidations that are taxable 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 policy owner by one company or its affiliates shall be treated as one
modified endowment Policy 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 Policy owner's estate for purposes of federal estate tax if the last
surviving Insured owned the Policy. If the Policy Owner was not the last
surviving Insured, the fair market value of the Policy would be included in the
Policy Owner's estate upon the Policy 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 Policy Owner (whether or not he or she is an Insured) transfers
ownership of the Policy to someone two or more generations younger, the transfer
may be subject to the generation-skipping transfer tax, the taxable amount being
the value of the Policy. The generation-skipping transfer tax provisions
generally apply to transfers which would be subject to the gift and estate tax
rules. Individuals are generally allowed an aggregate generation skipping
transfer exemption of $1 million. Because these rules are complex, the Policy
Owner should consult with a qualified tax adviser for specific information if
ownership is passing to younger generations.
DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable life insurance Policy
(other than a pension plan policy) will not be treated as a life insurance
Policy for any period during which the investments made by the separate account
or underlying fund are not adequately diversified in accordance with regulations
prescribed by the Treasury Department. If a Policy is not treated as a life
insurance Policy, the Policy Owner will be subject to income tax on the annual
increases in cash value.
The Treasury Department has issued diversification regulations which
generally require, among other things, that no more than 55% of the value of the
total assets of the segregated asset account underlying a variable Policy is
represented by any one investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three investments, and no
more than 90% is represented by any four investments. In determining whether the
diversification standards are met, all securities of the same issuer, all
interests in the same real property project, and all interests in the same
commodity are each treated as a single investment. In addition, in the case of
government securities, each government agency or instrumentality shall be
treated as a separate issuer.
A separate account must be in compliance with the diversification standards
on the last day of each calendar quarter or within 30 days after the quarter
ends. If an insurance company inadvertently fails to meet the diversification
requirements, the company may comply within a reasonable period and avoid the
taxation of policy income on an ongoing basis. However, either the company or
the Policy Owner must agree to pay the tax due for the period during which the
diversification requirements were not met.
Hartford monitors the diversification of investments in the separate
accounts and tests for diversification as required by the Code. Hartford intends
to administer all Policies subject to the diversification requirements in a
manner that will maintain adequate diversification.
OWNERSHIP OF THE ASSETS IN
THE SEPARATE ACCOUNT
In order for a variable life insurance Policy to qualify for tax deferral,
assets in the segregated asset accounts supporting the variable Policy must be
considered to be owned by the insurance company and not by the variable Policy
owner. The Internal Revenue Service ("IRS") has issued several rulings which
discuss investor control. The IRS has ruled that incidents of ownership by the
Policy owner, such as the ability to select and control investments in a
separate account, will cause the Policy owner to be treated as the owner of the
assets for tax purposes.
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
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 25
- --------------------------------------------------------------------------------
treated as the owner of the assets in the account." The explanation further
indicates that "the temporary regulations provide that in appropriate cases a
segregated asset account may include multiple sub-accounts, but do not specify
the extent to which policyholders may direct their investments to particular
sub-accounts without being treated as the owners of the underlying assets.
Guidance on this and other issues will be provided in regulations or revenue
rulings under section 817(d), relating to the definition of "variable Policy."
The final regulations issued under Section 817 do not provide guidance regarding
investor control, and as of the date of this Prospectus, no other such guidance
has been issued. Further, Hartford does not know if or in what form such
guidance will be issued. In addition, although regulations are generally issued
with prospective effect, it is possible that regulations may be issued with
retroactive effect. Due to the lack of specific guidance regarding the issue of
investor control, there is necessarily some uncertainty regarding whether a
Policy Owner could be considered the owner of the assets for tax purposes.
Hartford reserves the right to modify the Policies, as necessary, to prevent
Policy owners from being considered the owners of the assets in the Separate
Account.
LIFE INSURANCE PURCHASED FOR USE IN
SPLIT DOLLAR ARRANGEMENTS
On January 26, 1996, the IRS released a technical advice memorandum ("TAM")
on the taxability of life insurance policies used in certain split dollar
arrangements. A TAM, issued by the National Office of the IRS, provides advice
as to the internal revenue laws, regulations, and related statutes with respect
to a specific set of facts and a specific taxpayer. In the TAM, among other
things, the IRS concluded that an employee was subject to current taxation on
the excess of the cash surrender value of the policy over the premiums to be
returned to the employer. Purchasers of life insurance policies to be used in
split dollar arrangements are strongly advised to consult with a qualified tax
adviser to determine the tax treatment resulting from such an arrangement.
FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the Policy owner,
such amounts will be subject to federal income tax withholding and reporting,
pursuant to the Code.
NON-INDIVIDUAL OWNERSHIP OF POLICIES
Legislation has recently been proposed which would limit certain of the tax
advantages now afforded non-individual owners of life insurance Policies.
Prospective Policy 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 Policy proceeds depend on the
circumstances of each Policy 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 adviser
regarding U.S., state, and foreign taxation with respect to a life insurance
policy purchase.
LEGAL PROCEEDINGS
There are no material legal proceedings pending to which the Separate
Account is a party.
LEGAL MATTERS
Legal matters in connection with the issue and sale of flexible premium
variable life insurance Policies described in this Prospectus and the
organization of Hartford, its authority to issue the Policies under Connecticut
law and the validity of the forms of the Policies under Connecticut law and
legal matters relating to the federal securities and income tax laws have been
passed on by Lynda Godkin, General Counsel of Hartford Life Insurance Companies.
EXPERTS
The audited 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 reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports. Reference is made to said report on the
statutory-basis financial statements of ITT Hartford Life and Annuity Insurance
Company which states the statutory-basis financial statements are presented in
accordance with statutory accounting practices prescribed or permitted by the
National Association of Insurance Commissioners and the State of Connecticut
Insurance Department, not presented
<PAGE>
26 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
in accordance with generally accepted accounting principles. Reference is made
to said report on the statutory-basis financial statements of ITT Hartford Life
and Annuity Insurance Company (the Depositor), which includes an explanatory
paragraph with respect to the change in valuation method in determining
aggregate reserves for future benefits in 1994, as discussed in Note 1 of Notes
to Statutory Financial Statements. The principal business address of Arthur
Andersen LLP is One Financial Plaza, Hartford, CT 06103.
The hypothetical Policy illustrations included in this Prospectus and the
registration statement with respect to the Separate Account have been approved
by Michael Winterfield, FSA, MAAA, Director, Individual Annuity Inforce
Management, for 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, Hartford, and the Policies.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 27
- --------------------------------------------------------------------------------
APPENDIX A
ILLUSTRATIONS OF BENEFITS
The tables in Appendix A illustrate the way in which a Policy 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 preferred age 45, a female preferred age 55 and a
male preferred age 65 with Face Amounts of $44,053, $34,014 and $20,000,
respectively, are illustrated for the single life preferred Policy for both
Policy Owner Option 1 and Policy Owner Option 2. The illustrations for the last
survivor preferred Policy assume male preferred and female preferred of equal
ages, including age 55 and 65 for Face Amounts of $45,454 and $28,329.
The death benefit and surrender value for a Policy 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 Policy
Years. They would also differ if any Policy loan were made during the period of
time illustrated.
The tables reflect the deductions of current Policy charges for Policy Owner
Option 1 and Policy Owner Option 2 and guaranteed Policy 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 Policy Year take into account an average daily charge equal to an annual
charge of 0.60% 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 0.60% average daily charge) of -0.60%, 5.40% and
11.40%, respectively.
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 -- Taxes Charged Against the Separate Account,"
page 14).
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.
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. 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.
<PAGE>
28 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,845 9,851 44,053 10,785 9,793 44,053
2 11,025 11,765 10,779 44,053 11,638 10,655 44,053
3 11,576 12,764 11,791 44,053 12,565 11,596 44,053
4 12,155 13,852 13,044 44,053 13,574 12,770 44,053
5 12,763 15,034 14,246 44,053 14,672 13,889 44,053
6 13,401 16,320 15,757 44,053 15,868 15,310 44,053
7 14,071 17,719 17,186 44,053 17,172 16,643 44,053
8 14,775 19,240 18,944 44,053 18,592 18,299 44,053
9 15,513 20,895 20,642 44,053 20,142 19,892 44,053
10 16,289 22,694 22,694 44,053 21,836 21,836 44,053
11 17,103 24,899 24,899 44,053 23,882 23,882 44,053
12 17,959 27,321 27,321 44,053 26,146 26,146 44,053
13 18,856 29,985 29,985 44,053 28,658 28,658 44,053
14 19,799 32,937 32,937 45,453 31,451 31,451 44,053
15 20,789 36,201 36,201 48,510 34,558 34,558 46,309
16 21,829 39,797 39,797 51,737 37,990 37,990 49,387
17 22,920 43,747 43,747 55,997 41,759 41,759 53,452
18 24,066 48,084 48,084 60,587 45,898 45,898 57,832
19 25,270 52,878 52,878 65,569 50,473 50,473 62,588
20 26,533 58,144 58,144 70,936 55,500 55,500 67,710
25 33,864 93,204 93,204 108,117 88,957 88,957 103,191
35 55,160 239,102 239,102 253,449 228,054 228,054 241,737
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 29
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,260 9,279 44,053 10,198 9,219 44,053
2 11,025 10,527 9,566 44,053 10,392 9,435 44,053
3 11,576 10,802 9,863 44,053 10,582 9,647 44,053
4 12,155 11,085 10,318 44,053 10,766 10,004 44,053
5 12,763 11,376 10,634 44,053 10,942 10,206 44,053
6 13,401 11,675 11,159 44,053 11,109 10,598 44,053
7 14,071 11,984 11,494 44,053 11,264 10,779 44,053
8 14,775 12,301 12,039 44,053 11,403 11,146 44,053
9 15,513 12,627 12,396 44,053 11,522 11,293 44,053
10 16,289 12,963 12,963 44,053 11,618 11,618 44,053
11 17,103 13,443 13,443 44,053 11,783 11,783 44,053
12 17,959 13,942 13,942 44,053 11,923 11,923 44,053
13 18,856 14,460 14,460 44,053 12,034 12,034 44,053
14 19,799 14,999 14,999 44,053 12,110 12,110 44,053
15 20,789 15,558 15,558 44,053 12,146 12,146 44,053
16 21,829 16,140 16,140 44,053 12,132 12,132 44,053
17 22,920 16,745 16,745 44,053 12,061 12,061 44,053
18 24,066 17,374 17,374 44,053 11,919 11,919 44,053
19 25,270 18,027 18,027 44,053 11,693 11,693 44,053
20 26,533 18,706 18,706 44,053 11,367 11,367 44,053
25 33,864 22,524 22,524 44,053 7,536 7,536 44,053
35 55,160 32,768 32,768 44,053 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
30 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,733 8,764 44,053 9,670 8,702 44,053
2 11,025 9,472 8,532 44,053 9,331 8,394 44,053
3 11,576 9,217 8,305 44,053 8,983 8,076 44,053
4 12,155 8,968 8,233 44,053 8,624 7,895 44,053
5 12,763 8,725 8,016 44,053 8,253 7,550 44,053
6 13,401 8,488 8,003 44,053 7,867 7,388 44,053
7 14,071 8,256 7,795 44,053 7,463 7,007 44,053
8 14,775 8,030 7,790 44,053 7,038 6,803 44,053
9 15,513 7,810 7,590 44,053 6,588 6,371 44,053
10 16,289 7,594 7,594 44,053 6,108 6,108 44,053
11 17,103 7,459 7,459 44,053 5,642 5,642 44,053
12 17,959 7,325 7,325 44,053 5,133 5,133 44,053
13 18,856 7,193 7,193 44,053 4,580 4,580 44,053
14 19,799 7,063 7,063 44,053 3,974 3,974 44,053
15 20,789 6,935 6,935 44,053 3,308 3,308 44,053
16 21,829 6,808 6,808 44,053 2,574 2,574 44,053
17 22,920 6,684 6,684 44,053 1,760 1,760 44,053
18 24,066 6,561 6,561 44,053 852 852 44,053
19 25,270 6,439 6,439 44,053 -- -- --
20 26,533 6,320 6,320 44,053 -- -- --
25 33,864 5,746 5,746 44,053 -- -- --
35 55,160 4,713 4,713 44,053 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0.00% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0.00%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 31
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,478 9,728 44,053 10,413 9,663 44,053
2 11,025 11,440 10,690 44,053 11,302 10,552 44,053
3 11,576 12,493 11,743 44,053 12,276 11,526 44,053
4 12,155 13,645 13,045 44,053 13,342 12,742 44,053
5 12,763 14,907 14,307 44,053 14,511 13,911 44,053
6 13,401 16,287 15,887 44,053 15,794 15,394 44,053
7 14,071 17,799 17,399 44,053 17,203 16,803 44,053
8 14,775 19,453 19,253 44,053 18,750 18,550 44,053
9 15,513 21,265 21,065 44,053 20,451 20,251 44,053
10 16,289 23,247 23,247 44,053 22,324 22,324 44,053
11 17,103 25,507 25,507 44,053 24,427 24,427 44,053
12 17,959 27,989 27,989 44,053 26,755 26,755 44,053
13 18,856 30,726 30,726 44,053 29,340 29,340 44,053
14 19,799 33,760 33,760 46,590 32,216 32,216 44,458
15 20,789 37,107 37,107 49,724 35,406 35,406 47,444
16 21,829 40,794 40,794 53,032 38,922 38,922 50,599
17 22,920 44,843 44,843 57,400 42,784 42,784 54,764
18 24,066 49,290 49,290 62,106 47,025 47,025 59,253
19 25,270 54,204 54,204 67,213 51,714 51,714 64,125
20 26,533 59,602 59,602 72,715 56,864 56,864 69,374
25 33,864 95,541 95,541 110,828 91,143 91,143 105,726
35 55,160 245,097 245,097 259,804 233,657 233,657 247,677
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
32 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,913 9,163 44,053 9,846 9,096 44,053
2 11,025 10,236 9,486 44,053 10,092 9,342 44,053
3 11,576 10,572 9,822 44,053 10,336 9,586 44,053
4 12,155 10,919 10,319 44,053 10,579 9,979 44,053
5 12,763 11,279 10,679 44,053 10,819 10,219 44,053
6 13,401 11,651 11,251 44,053 11,053 10,653 44,053
7 14,071 12,037 11,637 44,053 11,279 10,879 44,053
8 14,775 12,437 12,237 44,053 11,495 11,295 44,053
9 15,513 12,851 12,651 44,053 11,696 11,496 44,053
10 16,289 13,279 13,279 44,053 11,879 11,879 44,053
11 17,103 13,771 13,771 44,053 12,059 12,059 44,053
12 17,959 14,283 14,283 44,053 12,214 12,214 44,053
13 18,856 14,815 14,815 44,053 12,342 12,342 44,053
14 19,799 15,367 15,367 44,053 12,437 12,437 44,053
15 20,789 15,942 15,942 44,053 12,493 12,493 44,053
16 21,829 16,539 16,539 44,053 12,502 12,502 44,053
17 22,920 17,159 17,159 44,053 12,455 12,455 44,053
18 24,066 17,804 17,804 44,053 12,340 12,340 44,053
19 25,270 18,474 18,474 44,053 12,143 12,143 44,053
20 26,533 19,171 19,171 44,053 11,849 11,849 44,053
25 33,864 23,088 23,088 44,053 8,254 8,254 44,053
35 55,160 33,598 33,598 44,053 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 33
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,403 8,653 44,053 9,336 8,586 44,053
2 11,025 9,210 8,460 44,053 9,060 8,310 44,053
3 11,576 9,020 8,270 44,053 8,773 8,023 44,053
4 12,155 8,834 8,234 44,053 8,472 7,872 44,053
5 12,763 8,650 8,050 44,053 8,156 7,556 44,053
6 13,401 8,470 8,070 44,053 7,823 7,423 44,053
7 14,071 8,293 7,893 44,053 7,469 7,069 44,053
8 14,775 8,119 7,919 44,053 7,091 6,891 44,053
9 15,513 7,948 7,748 44,053 6,685 6,485 44,053
10 16,289 7,780 7,780 44,053 6,247 6,247 44,053
11 17,103 7,642 7,642 44,053 5,781 5,781 44,053
12 17,959 7,506 7,506 44,053 5,274 5,274 44,053
13 18,856 7,371 7,371 44,053 4,721 4,721 44,053
14 19,799 7,239 7,239 44,053 4,116 4,116 44,053
15 20,789 7,108 7,108 44,053 3,451 3,451 44,053
16 21,829 6,979 6,979 44,053 2,718 2,718 44,053
17 22,920 6,852 6,852 44,053 1,905 1,905 44,053
18 24,066 6,727 6,727 44,053 999 999 44,053
19 25,270 6,603 6,603 44,053 -- -- --
20 26,533 6,481 6,481 44,053 -- -- --
25 33,864 5,897 5,897 44,053 -- -- --
35 55,160 4,844 4,844 44,053 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0.00% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0.00%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
34 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,845 9,851 34,014 10,740 9,748 34,014
2 11,025 11,765 10,779 34,014 11,544 10,563 34,014
3 11,576 12,764 11,791 34,014 12,421 11,454 34,014
4 12,155 13,852 13,044 34,014 13,379 12,578 34,014
5 12,763 15,034 14,246 34,014 14,426 13,646 34,014
6 13,401 16,320 15,757 34,014 15,571 15,015 34,014
7 14,071 17,719 17,186 34,014 16,824 16,298 34,014
8 14,775 19,240 18,944 34,014 18,194 17,903 34,014
9 15,513 20,895 20,642 34,014 19,694 19,445 34,014
10 16,289 22,695 22,695 34,014 21,341 21,341 34,014
11 17,103 24,900 24,900 34,014 23,344 23,344 34,014
12 17,959 27,338 27,338 34,014 25,581 25,581 34,014
13 18,856 30,067 30,067 35,480 28,088 28,088 34,014
14 19,799 33,083 33,083 38,707 30,896 30,896 36,149
15 20,789 36,400 36,400 42,225 33,993 33,993 39,432
16 21,829 40,049 40,049 46,056 37,398 37,398 43,008
17 22,920 44,073 44,073 49,803 41,154 41,154 46,505
18 24,066 48,516 48,516 53,853 45,300 45,300 50,284
19 25,270 53,455 53,455 58,267 49,882 49,882 54,372
20 26,533 58,871 58,871 64,170 54,935 54,935 59,880
25 33,864 95,260 95,260 100,976 88,892 88,892 94,226
35 55,160 245,064 245,064 257,317 225,310 225,310 236,576
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 35
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,260 9,279 34,014 10,153 9,175 34,014
2 11,025 10,527 9,566 34,014 10,300 9,344 34,014
3 11,576 10,802 9,863 34,014 10,439 9,506 34,014
4 12,155 11,085 10,318 34,014 10,572 9,813 34,014
5 12,763 11,376 10,634 34,014 10,695 9,961 34,014
6 13,401 11,675 11,159 34,014 10,807 10,299 34,014
7 14,071 11,984 11,494 34,014 10,902 10,420 34,014
8 14,775 12,301 12,039 34,014 10,975 10,720 34,014
9 15,513 12,627 12,396 34,014 11,018 10,790 34,014
10 16,289 12,963 12,963 34,014 11,026 11,026 34,014
11 17,103 13,443 13,443 34,014 11,084 11,084 34,014
12 17,959 13,942 13,942 34,014 11,105 11,105 34,014
13 18,856 14,460 14,460 34,014 11,084 11,084 34,014
14 19,799 14,999 14,999 34,014 11,017 11,017 34,014
15 20,789 15,558 15,558 34,014 10,896 10,896 34,014
16 21,829 16,140 16,140 34,014 10,707 10,707 34,014
17 22,920 16,745 16,745 34,014 10,430 10,430 34,014
18 24,066 17,374 17,374 34,014 10,042 10,042 34,014
19 25,270 18,027 18,027 34,014 9,510 9,510 34,014
20 26,533 18,706 18,706 34,014 8,802 8,802 34,014
25 33,864 22,524 22,524 34,014 893 893 34,014
35 55,160 32,768 32,768 34,407 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
36 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,733 8,764 34,014 9,625 8,659 34,014
2 11,025 9,472 8,532 34,014 9,239 8,304 34,014
3 11,576 9,217 8,305 34,014 8,842 7,937 34,014
4 12,155 8,968 8,233 34,014 8,433 7,707 34,014
5 12,763 8,725 8,016 34,014 8,010 7,310 34,014
6 13,401 8,488 8,003 34,014 7,570 7,094 34,014
7 14,071 8,256 7,795 34,014 7,107 6,653 34,014
8 14,775 8,030 7,790 34,014 6,614 6,381 34,014
9 15,513 7,810 7,590 34,014 6,084 5,869 34,014
10 16,289 7,594 7,594 34,014 5,509 5,509 34,014
11 17,103 7,459 7,459 34,014 4,927 4,927 34,014
12 17,959 7,325 7,325 34,014 4,287 4,287 34,014
13 18,856 7,193 7,193 34,014 3,584 3,584 34,014
14 19,799 7,063 7,063 34,014 2,813 2,813 34,014
15 20,789 6,935 6,935 34,014 1,964 1,964 34,014
16 21,829 6,808 6,808 34,014 1,019 1,019 34,014
17 22,920 6,684 6,684 34,014 -- -- --
18 24,066 6,561 6,561 34,014 -- -- --
19 25,270 6,439 6,439 34,014 -- -- --
20 26,533 6,320 6,320 34,014 -- -- --
25 33,864 5,746 5,746 34,014 -- -- --
35 55,160 4,713 4,713 34,014 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0.00% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0.00%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 37
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,478 9,728 34,014 10,366 9,616 34,014
2 11,025 11,440 10,690 34,014 11,205 10,455 34,014
3 11,576 12,493 11,743 34,014 12,125 11,375 34,014
4 12,155 13,645 13,045 34,014 13,138 12,538 34,014
5 12,763 14,907 14,307 34,014 14,252 13,652 34,014
6 13,401 16,287 15,887 34,014 15,481 15,081 34,014
7 14,071 17,799 17,399 34,014 16,834 16,434 34,014
8 14,775 19,453 19,253 34,014 18,326 18,126 34,014
9 15,513 21,265 21,065 34,014 19,973 19,773 34,014
10 16,289 23,252 23,252 34,014 21,795 21,795 34,014
11 17,103 25,514 25,514 34,014 23,855 23,855 34,014
12 17,959 28,027 28,027 34,014 26,156 26,156 34,014
13 18,856 30,835 30,835 36,386 28,738 28,738 34,014
14 19,799 33,928 33,928 39,697 31,618 31,618 36,993
15 20,789 37,331 37,331 43,305 34,787 34,787 40,353
16 21,829 41,074 41,074 47,235 38,272 38,272 44,013
17 22,920 45,202 45,202 51,079 42,117 42,117 47,593
18 24,066 49,759 49,759 55,233 46,361 46,361 51,461
19 25,270 54,825 54,825 59,760 51,081 51,081 55,679
20 26,533 60,380 60,380 65,814 56,256 56,256 61,319
25 33,864 97,702 97,702 103,564 91,028 91,028 96,490
35 55,160 251,346 251,346 263,913 230,725 230,725 242,262
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
38 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,913 9,163 34,014 9,800 9,050 34,014
2 11,025 10,236 9,486 34,014 9,995 9,245 34,014
3 11,576 10,572 9,822 34,014 10,188 9,438 34,014
4 12,155 10,919 10,319 34,014 10,377 9,777 34,014
5 12,763 11,279 10,679 34,014 10,561 9,961 34,014
6 13,401 11,651 11,251 34,014 10,737 10,337 34,014
7 14,071 12,037 11,637 34,014 10,901 10,501 34,014
8 14,775 12,437 12,237 34,014 11,047 10,847 34,014
9 15,513 12,851 12,651 34,014 11,168 10,968 34,014
10 16,289 13,279 13,279 34,014 11,259 11,259 34,014
11 17,103 13,771 13,771 34,014 11,334 11,334 34,014
12 17,959 14,283 14,283 34,014 11,371 11,371 34,014
13 18,856 14,815 14,815 34,014 11,368 11,368 34,014
14 19,799 15,367 15,367 34,014 11,321 11,321 34,014
15 20,789 15,942 15,942 34,014 11,222 11,222 34,014
16 21,829 16,539 16,539 34,014 11,058 11,058 34,014
17 22,920 17,159 17,159 34,014 10,809 10,809 34,014
18 24,066 17,804 17,804 34,014 10,452 10,452 34,014
19 25,270 18,474 18,474 34,014 9,956 9,956 34,014
20 26,533 19,171 19,171 34,014 9,289 9,289 34,014
25 33,864 23,088 23,088 34,014 1,728 1,728 34,014
35 55,160 33,598 33,598 35,278 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 39
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,403 8,653 34,014 9,290 8,540 34,014
2 11,025 9,210 8,460 34,014 8,965 8,215 34,014
3 11,576 9,020 8,270 34,014 8,627 7,877 34,014
4 12,155 8,834 8,234 34,014 8,274 7,674 34,014
5 12,763 8,650 8,050 34,014 7,905 7,305 34,014
6 13,401 8,470 8,070 34,014 7,515 7,115 34,014
7 14,071 8,293 7,893 34,014 7,100 6,700 34,014
8 14,775 8,119 7,919 34,014 6,652 6,452 34,014
9 15,513 7,948 7,748 34,014 6,164 5,964 34,014
10 16,289 7,780 7,780 34,014 5,628 5,628 34,014
11 17,103 7,642 7,642 34,014 5,047 5,047 34,014
12 17,959 7,506 7,506 34,014 4,408 4,408 34,014
13 18,856 7,371 7,371 34,014 3,707 3,707 34,014
14 19,799 7,239 7,239 34,014 2,938 2,938 34,014
15 20,789 7,108 7,108 34,014 2,091 2,091 34,014
16 21,829 6,979 6,979 34,014 1,148 1,148 34,014
17 22,920 6,852 6,852 34,014 86 86 34,014
18 24,066 6,727 6,727 34,014 -- -- --
19 25,270 6,603 6,603 34,014 -- -- --
20 26,533 6,481 6,481 34,014 -- -- --
25 33,864 5,897 5,897 34,014 -- -- --
35 55,160 4,844 4,844 34,014 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0.00% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0.00%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
40 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,845 9,851 20,000 10,654 9,665 20,000
2 11,025 11,765 10,779 20,000 11,364 10,386 20,000
3 11,576 12,764 11,791 20,000 12,138 11,175 20,000
4 12,155 13,852 13,044 20,000 12,989 12,194 20,000
5 12,763 15,034 14,246 20,000 13,931 13,156 20,000
6 13,401 16,320 15,757 20,000 14,981 14,431 20,000
7 14,071 17,726 17,193 20,031 16,163 15,642 20,000
8 14,775 19,289 18,993 21,412 17,507 17,219 20,000
9 15,513 21,008 20,756 22,900 19,044 18,797 20,759
10 16,289 22,868 22,868 24,927 20,728 20,728 22,593
11 17,103 25,099 25,099 27,107 22,746 22,746 24,566
12 17,959 27,556 27,556 29,485 24,970 24,970 26,718
13 18,856 30,240 30,240 32,357 27,397 27,397 29,316
14 19,799 33,200 33,200 35,192 30,076 30,076 31,882
15 20,789 36,440 36,440 38,627 33,002 33,002 34,982
16 21,829 40,015 40,015 42,016 36,236 36,236 38,048
17 22,920 43,926 43,926 46,123 39,767 39,767 41,756
18 24,066 48,222 48,222 50,634 43,616 43,616 45,797
19 25,270 52,972 52,972 55,622 47,805 47,805 50,196
20 26,533 58,190 58,190 61,100 52,389 52,389 55,009
25 33,864 93,081 93,081 97,735 81,743 81,743 85,831
35 55,160 238,359 238,359 240,743 202,949 202,949 204,979
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 41
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,260 9,279 20,000 10,065 9,088 20,000
2 11,025 10,527 9,566 20,000 10,103 9,151 20,000
3 11,576 10,802 9,863 20,000 10,112 9,185 20,000
4 12,155 11,085 10,318 20,000 10,086 9,335 20,000
5 12,763 11,376 10,634 20,000 10,019 9,294 20,000
6 13,401 11,675 11,159 20,000 9,901 9,402 20,000
7 14,071 11,984 11,494 20,000 9,720 9,247 20,000
8 14,775 12,301 12,039 20,000 9,461 9,214 20,000
9 15,513 12,627 12,396 20,000 9,105 8,882 20,000
10 16,289 12,963 12,963 20,000 8,628 8,628 20,000
11 17,103 13,443 13,443 20,000 8,076 8,076 20,000
12 17,959 13,942 13,942 20,000 7,349 7,349 20,000
13 18,856 14,460 14,460 20,000 6,403 6,403 20,000
14 19,799 14,999 14,999 20,000 5,185 5,185 20,000
15 20,789 15,558 15,558 20,000 3,616 3,616 20,000
16 21,829 16,140 16,140 20,000 1,586 1,586 20,000
17 22,920 16,745 16,745 20,000 -- -- --
18 24,066 17,374 17,374 20,000 -- -- --
19 25,270 18,027 18,027 20,000 -- -- --
20 26,533 18,706 18,706 20,000 -- -- --
25 33,864 22,524 22,524 23,650 -- -- --
35 55,160 32,795 32,795 33,124 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
42 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,733 8,764 20,000 9,534 8,570 20,000
2 11,025 9,472 8,532 20,000 9,031 8,101 20,000
3 11,576 9,217 8,305 20,000 8,484 7,586 20,000
4 12,155 8,968 8,233 20,000 7,887 7,168 20,000
5 12,763 8,725 8,016 20,000 7,228 6,537 20,000
6 13,401 8,488 8,003 20,000 6,494 6,029 20,000
7 14,071 8,256 7,795 20,000 5,669 5,226 20,000
8 14,775 8,030 7,790 20,000 4,729 4,505 20,000
9 15,513 7,810 7,590 20,000 3,646 3,437 20,000
10 16,289 7,594 7,594 20,000 2,389 2,389 20,000
11 17,103 7,459 7,459 20,000 935 935 20,000
12 17,959 7,325 7,325 20,000 -- -- --
13 18,856 7,193 7,193 20,000 -- -- --
14 19,799 7,063 7,063 20,000 -- -- --
15 20,789 6,935 6,935 20,000 -- -- --
16 21,829 6,808 6,808 20,000 -- -- --
17 22,920 6,684 6,684 20,000 -- -- --
18 24,066 6,561 6,561 20,000 -- -- --
19 25,270 6,439 6,439 20,000 -- -- --
20 26,533 6,320 6,320 20,000 -- -- --
25 33,864 5,746 5,746 20,000 -- -- --
35 55,160 4,713 4,713 20,000 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0.00% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0.00%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 43
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,478 9,728 20,000 10,272 9,522 20,000
2 11,025 11,440 10,690 20,000 11,005 10,255 20,000
3 11,576 12,493 11,743 20,000 11,809 11,059 20,000
4 12,155 13,645 13,045 20,000 12,700 12,100 20,000
5 12,763 14,907 14,307 20,000 13,692 13,092 20,000
6 13,401 16,287 15,887 20,000 14,807 14,407 20,000
7 14,071 17,807 17,407 20,122 16,070 15,670 20,000
8 14,775 19,506 19,306 21,652 17,516 17,316 20,000
9 15,513 21,383 21,183 23,308 19,180 18,980 20,907
10 16,289 23,429 23,429 25,538 21,012 21,012 22,904
11 17,103 25,715 25,715 27,773 23,059 23,059 24,904
12 17,959 28,233 28,233 30,210 25,314 25,314 27,086
13 18,856 30,984 30,984 33,153 27,775 27,775 29,720
14 19,799 34,018 34,018 36,059 30,492 30,492 32,322
15 20,789 37,338 37,338 39,579 33,458 33,458 35,466
16 21,829 41,002 41,002 43,052 36,737 36,737 38,574
17 22,920 45,010 45,010 47,261 40,317 40,317 42,334
18 24,066 49,413 49,413 51,885 44,220 44,220 46,432
19 25,270 54,281 54,281 56,995 48,468 48,468 50,892
20 26,533 59,628 59,628 62,610 53,115 53,115 55,771
25 33,864 95,380 95,380 100,149 82,876 82,876 87,021
35 55,160 244,246 244,246 246,689 205,763 205,763 207,821
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
44 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,913 9,163 20,000 9,703 8,953 20,000
2 11,025 10,236 9,486 20,000 9,782 9,032 20,000
3 11,576 10,572 9,822 20,000 9,833 9,083 20,000
4 12,155 10,919 10,319 20,000 9,852 9,252 20,000
5 12,763 11,279 10,679 20,000 9,833 9,233 20,000
6 13,401 11,651 11,251 20,000 9,765 9,365 20,000
7 14,071 12,037 11,637 20,000 9,638 9,238 20,000
8 14,775 12,437 12,237 20,000 9,437 9,237 20,000
9 15,513 12,851 12,651 20,000 9,141 8,941 20,000
10 16,289 13,279 13,279 20,000 8,730 8,730 20,000
11 17,103 13,771 13,771 20,000 8,191 8,191 20,000
12 17,959 14,283 14,283 20,000 7,480 7,480 20,000
13 18,856 14,815 14,815 20,000 6,554 6,554 20,000
14 19,799 15,367 15,367 20,000 5,359 5,359 20,000
15 20,789 15,942 15,942 20,000 3,819 3,819 20,000
16 21,829 16,539 16,539 20,000 1,827 1,827 20,000
17 22,920 17,159 17,159 20,000 -- -- --
18 24,066 17,804 17,804 20,000 -- -- --
19 25,270 18,474 18,474 20,000 -- -- --
20 26,533 19,171 19,171 20,130 -- -- --
25 33,864 23,088 23,088 24,242 -- -- --
35 55,160 33,626 33,626 33,962 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 45
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,403 8,653 20,000 9,191 8,441 20,000
2 11,025 9,210 8,460 20,000 8,742 7,992 20,000
3 11,576 9,020 8,270 20,000 8,245 7,495 20,000
4 12,155 8,834 8,234 20,000 7,695 7,095 20,000
5 12,763 8,650 8,050 20,000 7,080 6,480 20,000
6 13,401 8,470 8,070 20,000 6,386 5,986 20,000
7 14,071 8,293 7,893 20,000 5,597 5,197 20,000
8 14,775 8,119 7,919 20,000 4,688 4,488 20,000
9 15,513 7,948 7,748 20,000 3,632 3,432 20,000
10 16,289 7,780 7,780 20,000 2,395 2,395 20,000
11 17,103 7,642 7,642 20,000 941 941 20,000
12 17,959 7,506 7,506 20,000 -- -- --
13 18,856 7,371 7,371 20,000 -- -- --
14 19,799 7,239 7,239 20,000 -- -- --
15 20,789 7,108 7,108 20,000 -- -- --
16 21,829 6,979 6,979 20,000 -- -- --
17 22,920 6,852 6,852 20,000 -- -- --
18 24,066 6,727 6,727 20,000 -- -- --
19 25,270 6,603 6,603 20,000 -- -- --
20 26,533 6,481 6,481 20,000 -- -- --
25 33,864 5,897 5,897 20,000 -- -- --
35 55,160 4,844 4,844 20,000 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0.00% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0.00%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
46 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,454
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,935 9,939 45,454 10,935 9,939 45,454
2 11,025 11,954 10,965 45,454 11,954 10,965 45,454
3 11,576 13,065 12,086 45,454 13,065 12,086 45,454
4 12,155 14,274 13,460 45,454 14,274 13,460 45,454
5 12,763 15,590 14,795 45,454 15,590 14,795 45,454
6 13,401 17,023 16,453 45,454 17,023 16,453 45,454
7 14,071 18,583 18,044 45,454 18,583 18,044 45,454
8 14,775 20,281 19,980 45,454 20,281 19,980 45,454
9 15,513 22,129 21,873 45,454 22,129 21,873 45,454
10 16,289 24,140 24,140 45,454 24,140 24,140 45,454
11 17,103 26,554 26,554 45,454 26,544 26,544 45,454
12 17,959 29,213 29,213 45,454 29,193 29,193 45,454
13 18,856 32,145 32,145 45,454 32,117 32,117 45,454
14 19,799 35,387 35,387 45,454 35,355 35,355 45,454
15 20,789 38,988 38,988 45,454 38,953 38,953 45,454
16 21,829 42,984 42,984 49,432 42,944 42,944 49,386
17 22,920 47,389 47,389 53,550 47,345 47,345 53,500
18 24,066 52,276 52,276 58,027 52,228 52,228 57,973
19 25,270 57,669 57,669 62,860 57,616 57,616 62,802
20 26,533 63,590 63,590 69,313 63,531 63,531 69,249
25 33,864 103,324 103,324 109,524 103,226 103,226 109,420
35 55,160 271,110 271,110 284,666 261,901 261,901 274,996
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 47
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,454
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,345 9,362 45,454 10,345 9,362 45,454
2 11,025 10,696 9,732 45,454 10,696 9,732 45,454
3 11,576 11,052 10,109 45,454 11,052 10,109 45,454
4 12,155 11,412 10,641 45,454 11,412 10,641 45,454
5 12,763 11,775 11,028 45,454 11,775 11,028 45,454
6 13,401 12,138 11,616 45,454 12,138 11,616 45,454
7 14,071 12,498 12,005 45,454 12,498 12,005 45,454
8 14,775 12,863 12,598 45,454 12,853 12,589 45,454
9 15,513 13,239 13,005 45,454 13,196 12,963 45,454
10 16,289 13,626 13,626 45,454 13,523 13,523 45,454
11 17,103 14,168 14,168 45,454 13,940 13,940 45,454
12 17,959 14,732 14,732 45,454 14,337 14,337 45,454
13 18,856 15,319 15,319 45,454 14,706 14,706 45,454
14 19,799 15,932 15,932 45,454 15,041 15,041 45,454
15 20,789 16,570 16,570 45,454 15,331 15,331 45,454
16 21,829 17,235 17,235 45,454 15,564 15,564 45,454
17 22,920 17,928 17,928 45,454 15,721 15,721 45,454
18 24,066 18,649 18,649 45,454 15,780 15,780 45,454
19 25,270 19,401 19,401 45,454 15,711 15,711 45,454
20 26,533 20,185 20,185 45,454 15,480 15,480 45,454
25 33,864 24,625 24,625 45,454 10,207 10,207 45,454
35 55,160 36,772 36,772 45,454 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
48 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,454
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,813 8,842 45,454 9,813 8,842 45,454
2 11,025 9,623 8,680 45,454 9,623 8,680 45,454
3 11,576 9,427 8,512 45,454 9,427 8,512 45,454
4 12,155 9,224 8,485 45,454 9,224 8,485 45,454
5 12,763 9,012 8,299 45,454 9,012 8,299 45,454
6 13,401 8,790 8,302 45,454 8,788 8,300 45,454
7 14,071 8,573 8,109 45,454 8,550 8,086 45,454
8 14,775 8,360 8,119 45,454 8,292 8,051 45,454
9 15,513 8,152 7,932 45,454 8,010 7,790 45,454
10 16,289 7,949 7,949 45,454 7,696 7,696 45,454
11 17,103 7,828 7,828 45,454 7,403 7,403 45,454
12 17,959 7,708 7,708 45,454 7,061 7,061 45,454
13 18,856 7,590 7,590 45,454 6,661 6,661 45,454
14 19,799 7,473 7,473 45,454 6,193 6,193 45,454
15 20,789 7,358 7,358 45,454 5,644 5,644 45,454
16 21,829 7,244 7,244 45,454 4,995 4,995 45,454
17 22,920 7,131 7,131 45,454 4,222 4,222 45,454
18 24,066 7,019 7,019 45,454 3,293 3,293 45,454
19 25,270 6,909 6,909 45,454 2,168 2,168 45,454
20 26,533 6,800 6,800 45,454 798 798 45,454
25 33,864 6,273 6,273 45,454 -- -- --
35 55,160 5,306 5,306 45,454 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS.. ACTUAL INVESTMENT RESULTS MAY BE MORE OR
LESS THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0.00% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0.00%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 49
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,454
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,565 9,815 45,454 10,565 9,815 45,454
2 11,025 11,624 10,874 45,454 11,624 10,874 45,454
3 11,576 12,785 12,035 45,454 12,785 12,035 45,454
4 12,155 14,059 13,459 45,454 14,059 13,459 45,454
5 12,763 15,455 14,855 45,454 15,455 14,855 45,454
6 13,401 16,985 16,585 45,454 16,985 16,585 45,454
7 14,071 18,663 18,263 45,454 18,663 18,263 45,454
8 14,775 20,502 20,302 45,454 20,502 20,302 45,454
9 15,513 22,518 22,318 45,454 22,518 22,318 45,454
10 16,289 24,731 24,731 45,454 24,731 24,731 45,454
11 17,103 27,206 27,206 45,454 27,201 27,201 45,454
12 17,959 29,934 29,934 45,454 29,924 29,924 45,454
13 18,856 32,945 32,945 45,454 32,932 32,932 45,454
14 19,799 36,279 36,279 45,454 36,265 36,265 45,454
15 20,789 39,986 39,986 46,385 39,970 39,970 46,366
16 21,829 44,086 44,086 50,699 44,068 44,068 50,679
17 22,920 48,605 48,605 54,924 48,585 48,585 54,902
18 24,066 53,617 53,617 59,516 53,596 53,596 59,492
19 25,270 59,149 59,149 64,473 59,125 59,125 64,447
20 26,533 65,222 65,222 71,092 65,195 65,195 71,063
25 33,864 105,975 105,975 112,334 105,930 105,930 112,286
35 55,160 278,067 278,067 291,970 268,761 268,761 282,199
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
50 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,454
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,995 9,245 45,454 9,995 9,245 45,454
2 11,025 10,400 9,650 45,454 10,400 9,650 45,454
3 11,576 10,815 10,065 45,454 10,815 10,065 45,454
4 12,155 11,240 10,640 45,454 11,240 10,640 45,454
5 12,763 11,672 11,072 45,454 11,672 11,072 45,454
6 13,401 12,110 11,710 45,454 12,110 11,710 45,454
7 14,071 12,551 12,151 45,454 12,551 12,151 45,454
8 14,775 13,002 12,802 45,454 12,993 12,793 45,454
9 15,513 13,469 13,269 45,454 13,430 13,230 45,454
10 16,289 13,955 13,955 45,454 13,857 13,857 45,454
11 17,103 14,510 14,510 45,454 14,292 14,292 45,454
12 17,959 15,089 15,089 45,454 14,707 14,707 45,454
13 18,856 15,692 15,692 45,454 15,096 15,096 45,454
14 19,799 16,320 16,320 45,454 15,453 15,453 45,454
15 20,789 16,974 16,974 45,454 15,767 15,767 45,454
16 21,829 17,656 17,656 45,454 16,027 16,027 45,454
17 22,920 18,366 18,366 45,454 16,214 16,214 45,454
18 24,066 19,106 19,106 45,454 16,307 16,307 45,454
19 25,270 19,877 19,877 45,454 16,276 16,276 45,454
20 26,533 20,681 20,681 45,454 16,089 16,089 45,454
25 33,864 25,234 25,234 45,454 11,191 11,191 45,454
35 55,160 37,691 37,691 45,454 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 51
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,454
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,481 8,731 45,454 9,481 8,731 45,454
2 11,025 9,356 8,606 45,454 9,356 8,606 45,454
3 11,576 9,225 8,475 45,454 9,225 8,475 45,454
4 12,155 9,084 8,484 45,454 9,084 8,484 45,454
5 12,763 8,932 8,332 45,454 8,932 8,332 45,454
6 13,401 8,769 8,369 45,454 8,767 8,367 45,454
7 14,071 8,608 8,208 45,454 8,585 8,185 45,454
8 14,775 8,450 8,250 45,454 8,382 8,182 45,454
9 15,513 8,294 8,094 45,454 8,152 7,952 45,454
10 16,289 8,141 8,141 45,454 7,888 7,888 45,454
11 17,103 8,018 8,018 45,454 7,595 7,595 45,454
12 17,959 7,896 7,896 45,454 7,253 7,253 45,454
13 18,856 7,776 7,776 45,454 6,854 6,854 45,454
14 19,799 7,657 7,657 45,454 6,386 6,386 45,454
15 20,789 7,539 7,539 45,454 5,837 5,837 45,454
16 21,829 7,423 7,423 45,454 5,189 5,189 45,454
17 22,920 7,308 7,308 45,454 4,419 4,419 45,454
18 24,066 7,194 7,194 45,454 3,493 3,493 45,454
19 25,270 7,082 7,082 45,454 2,371 2,371 45,454
20 26,533 6,971 6,971 45,454 1,006 1,006 45,454
25 33,864 6,435 6,435 45,454 -- -- --
35 55,160 5,450 5,450 45,454 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0.00% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0.00%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
52 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,329
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,929 9,933 28,329 10,929 9,933 28,329
2 11,025 11,928 10,939 28,329 11,928 10,939 28,329
3 11,576 13,002 12,024 28,329 13,002 12,024 28,329
4 12,155 14,158 13,345 28,329 14,158 13,345 28,329
5 12,763 15,407 14,614 28,329 15,403 14,610 28,329
6 13,401 16,767 16,200 28,329 16,747 16,180 28,329
7 14,071 18,251 17,714 28,329 18,202 17,666 28,329
8 14,775 19,868 19,569 28,329 19,782 19,483 28,329
9 15,513 21,632 21,378 28,329 21,507 21,253 28,329
10 16,289 23,558 23,558 28,329 23,404 23,404 28,329
11 17,103 25,918 25,918 28,329 25,721 25,721 28,329
12 17,959 28,547 28,547 30,546 28,328 28,328 30,312
13 18,856 31,435 31,435 33,636 31,193 31,193 33,377
14 19,799 34,615 34,615 36,693 34,349 34,349 36,410
15 20,789 38,100 38,100 40,386 37,806 37,806 40,075
16 21,829 41,942 41,942 44,039 41,618 41,618 43,700
17 22,920 46,158 46,158 48,467 45,790 45,790 48,080
18 24,066 50,832 50,832 53,374 50,349 50,349 52,867
19 25,270 55,979 55,979 58,779 55,353 55,353 58,121
20 26,533 61,648 61,648 64,730 60,803 60,803 63,844
25 33,864 99,852 99,852 104,845 95,844 95,844 100,637
35 55,160 261,965 261,965 264,585 239,065 239,065 241,456
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 53
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,329
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,338 9,356 28,329 10,338 9,356 28,329
2 11,025 10,669 9,706 28,329 10,669 9,706 28,329
3 11,576 10,987 10,045 28,329 10,987 10,045 28,329
4 12,155 11,304 10,535 28,329 11,290 10,520 28,329
5 12,763 11,631 10,885 28,329 11,571 10,826 28,329
6 13,401 11,968 11,448 28,329 11,824 11,306 28,329
7 14,071 12,315 11,823 28,329 12,042 11,551 28,329
8 14,775 12,674 12,410 28,329 12,212 11,951 28,329
9 15,513 13,044 12,811 28,329 12,321 12,090 28,329
10 16,289 13,425 13,425 28,329 12,352 12,352 28,329
11 17,103 13,958 13,958 28,329 12,391 12,391 28,329
12 17,959 14,513 14,513 28,329 12,320 12,320 28,329
13 18,856 15,092 15,092 28,329 12,118 12,118 28,329
14 19,799 15,695 15,695 28,329 11,753 11,753 28,329
15 20,789 16,323 16,323 28,329 11,186 11,186 28,329
16 21,829 16,977 16,977 28,329 10,361 10,361 28,329
17 22,920 17,659 17,659 28,329 9,198 9,198 28,329
18 24,066 18,370 18,370 28,329 7,585 7,585 28,329
19 25,270 19,110 19,110 28,329 5,365 5,365 28,329
20 26,533 19,882 19,882 28,329 2,323 2,323 28,329
25 33,864 24,252 24,252 28,329 -- -- --
35 55,160 36,210 36,210 36,573 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
54 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,329
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,807 8,836 28,329 9,807 8,836 28,329
2 11,025 9,596 8,654 28,329 9,596 8,654 28,329
3 11,576 9,362 8,448 28,329 9,361 8,447 28,329
4 12,155 9,132 8,395 28,329 9,098 8,362 28,329
5 12,763 8,908 8,196 28,329 8,800 8,090 28,329
6 13,401 8,688 8,201 28,329 8,458 7,973 28,329
7 14,071 8,473 8,010 28,329 8,061 7,600 28,329
8 14,775 8,263 8,022 28,329 7,594 7,356 28,329
9 15,513 8,057 7,837 28,329 7,038 6,820 28,329
10 16,289 7,855 7,855 28,329 6,369 6,369 28,329
11 17,103 7,736 7,736 28,329 5,611 5,611 28,329
12 17,959 7,617 7,617 28,329 4,677 4,677 28,329
13 18,856 7,500 7,500 28,329 3,531 3,531 28,329
14 19,799 7,384 7,384 28,329 2,125 2,125 28,329
15 20,789 7,270 7,270 28,329 398 398 28,329
16 21,829 7,156 7,156 28,329 -- -- --
17 22,920 7,045 7,045 28,329 -- -- --
18 24,066 6,934 6,934 28,329 -- -- --
19 25,270 6,825 6,825 28,329 -- -- --
20 26,533 6,717 6,717 28,329 -- -- --
25 33,864 6,195 6,195 28,329 -- -- --
35 55,160 5,236 5,236 28,329 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0.00% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0.0012%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 55
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,329
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,559 9,809 28,329 10,559 9,809 28,329
2 11,025 11,597 10,847 28,329 11,597 10,847 28,329
3 11,576 12,720 11,970 28,329 12,720 11,970 28,329
4 12,155 13,938 13,338 28,329 13,938 13,338 28,329
5 12,763 15,266 14,666 28,329 15,261 14,661 28,329
6 13,401 16,723 16,323 28,329 16,699 16,299 28,329
7 14,071 18,322 17,922 28,329 18,269 17,869 28,329
8 14,775 20,076 19,876 28,329 19,988 19,788 28,329
9 15,513 22,002 21,802 28,329 21,881 21,681 28,329
10 16,289 24,126 24,126 28,329 23,982 23,982 28,329
11 17,103 26,552 26,552 28,676 26,380 26,380 28,491
12 17,959 29,251 29,251 31,299 29,061 29,061 31,096
13 18,856 32,210 32,210 34,465 32,001 32,001 34,241
14 19,799 35,470 35,470 37,598 35,239 35,239 37,354
15 20,789 39,041 39,041 41,384 38,786 38,786 41,114
16 21,829 42,978 42,978 45,128 42,698 42,698 44,834
17 22,920 47,300 47,300 49,666 46,980 46,980 49,329
18 24,066 52,089 52,089 54,694 51,688 51,688 54,273
19 25,270 57,364 57,364 60,232 56,825 56,825 59,667
20 26,533 63,172 63,172 66,331 62,420 62,420 65,541
25 33,864 102,322 102,322 107,439 98,392 98,392 103,312
35 55,160 268,443 268,443 271,128 245,419 245,419 247,874
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
56 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,329
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,988 9,238 28,329 9,988 9,238 28,329
2 11,025 10,372 9,622 28,329 10,372 9,622 28,329
3 11,576 10,749 9,999 28,329 10,749 9,999 28,329
4 12,155 11,131 10,531 28,329 11,114 10,514 28,329
5 12,763 11,527 10,927 28,329 11,462 10,862 28,329
6 13,401 11,938 11,538 28,329 11,788 11,388 28,329
7 14,071 12,365 11,965 28,329 12,083 11,683 28,329
8 14,775 12,809 12,609 28,329 12,337 12,137 28,329
9 15,513 13,269 13,069 28,329 12,537 12,337 28,329
10 16,289 13,747 13,747 28,329 12,667 12,667 28,329
11 17,103 14,293 14,293 28,329 12,730 12,730 28,329
12 17,959 14,863 14,863 28,329 12,689 12,689 28,329
13 18,856 15,456 15,456 28,329 12,521 12,521 28,329
14 19,799 16,074 16,074 28,329 12,198 12,198 28,329
15 20,789 16,718 16,718 28,329 11,682 11,682 28,329
16 21,829 17,389 17,389 28,329 10,919 10,919 28,329
17 22,920 18,088 18,088 28,329 9,833 9,833 28,329
18 24,066 18,817 18,817 28,329 8,317 8,317 28,329
19 25,270 19,576 19,576 28,329 6,224 6,224 28,329
20 26,533 20,367 20,367 28,329 3,347 3,347 28,329
25 33,864 24,848 24,848 28,329 -- -- --
35 55,160 37,109 37,109 37,481 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 57
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,329
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,475 8,725 28,329 9,475 8,725 28,329
2 11,025 9,329 8,579 28,329 9,329 8,579 28,329
3 11,576 9,160 8,410 28,329 9,157 8,407 28,329
4 12,155 8,993 8,393 28,329 8,955 8,355 28,329
5 12,763 8,829 8,229 28,329 8,715 8,115 28,329
6 13,401 8,668 8,268 28,329 8,430 8,030 28,329
7 14,071 8,509 8,109 28,329 8,087 7,687 28,329
8 14,775 8,352 8,152 28,329 7,671 7,471 28,329
9 15,513 8,198 7,998 28,329 7,164 6,964 28,329
10 16,289 8,045 8,045 28,329 6,542 6,542 28,329
11 17,103 7,923 7,923 28,329 5,787 5,787 28,329
12 17,959 7,803 7,803 28,329 4,859 4,859 28,329
13 18,856 7,683 7,683 28,329 3,720 3,720 28,329
14 19,799 7,566 7,566 28,329 2,323 2,323 28,329
15 20,789 7,449 7,449 28,329 607 607 28,329
16 21,829 7,334 7,334 28,329 -- -- --
17 22,920 7,220 7,220 28,329 -- -- --
18 24,066 7,107 7,107 28,329 -- -- --
19 25,270 6,996 6,996 28,329 -- -- --
20 26,533 6,886 6,886 28,329 -- -- --
25 33,864 6,354 6,354 28,329 -- -- --
35 55,160 5,379 5,379 28,329 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0.00% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE
DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE
SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL
RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0.00%, BUT VARIED
ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE
MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
58 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------
PART I. FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
The following unaudited condensed consolidated financial statements of
Hartford Life Insurance Company and its subsidiaries (the "Company") have been
prepared in accordance with generally accepted accounting principles and
reflect, in the opinion of management, all adjustments which are of normal
recurring nature necessary to present fairly the financial position, the results
of operations and the cash flows for the periods presented. Certain
reclassifications of prior year results were made to conform to current
presentation. Interim results are not indicative of the results which may be
expected for any other interim period or the full year. Certain statements
contained in this discussion, other than statements of historical fact, are
forward-looking statements. These statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. The
forward-looking statements are made based upon management's expectations and
beliefs concerning future developments and their potential effect on the
Company. There can be no assurance that future developments will be in
accordance with management's expectations or that the effect of these future
developments on the Company will be those anticipated by management. Actual
results could differ materially from those expected by the Company, depending on
the outcome of certain factors, including those described with the
forward-looking statements. For a description of accounting policies, see Note 1
to Consolidated Financial Statements in the 1996 Form 10-K. The Company is an
indirect subsidiary of Hartford Life, Inc. ("HLI"). Accordingly, the financial
statements presented below are a partial disclosure of HLI's financial
statements. For a full disclosure of HLI's operations, refer to the HLI Form
10-Q, as filed with the Securities and Exchange Commission, for the quarter
ended September 30, 1997.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES 59
- --------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS)
<TABLE>
<CAPTION>
QUARTER
ENDED SIX MONTHS
SEPTEMBER ENDED
30, SEPTEMBER 30,
----------- ---------------
1997 1996 1997 1996
---- ---- ------ ------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenues
Premiums and other considerations............... $360 $319 $ 993 $1,262
Net investment income........................... 319 355 978 1,006
Net realized capital gains (losses)............. -- (202) 4 (203)
---- ---- ------ ------
Total Revenues................................ 679 472 1,975 2,065
---- ---- ------ ------
Benefits, Claims and Expenses
Benefits, claims and claim adjustment
expenses....................................... 318 447 970 1,235
Amortization of deferred policy acquisition
costs.......................................... 80 68 252 197
Dividends to policyholders...................... 47 63 119 410
Other insurance expenses........................ 105 58 295 256
---- ---- ------ ------
Total benefits, claims and expenses........... 550 636 1,636 2,098
---- ---- ------ ------
Income (loss) before income tax expense......... 129 (164) 339 (33)
Income tax expense (benefit).................... 48 (58) 121 (13)
---- ---- ------ ------
Net income (loss)................................. $ 81 $(106) $ 218 $ (20)
---- ---- ------ ------
---- ---- ------ ------
</TABLE>
<PAGE>
60 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
SEPTEMBER
30, DECEMBER 31,
1997 1996
----------- ------------
(UNAUDITED)
<S> <C> <C>
Assets
Investments:
Fixed maturities, available for sale, at fair
value (amortized cost $13,849 and $13,579)..... $14,046 $13,624
Equity securities, available for sale, at fair
value.......................................... 155 119
Mortgage loans, at outstanding balance.......... -- 2
Policy loans, at outstanding balance............ 3,747 3,836
Other investments, at cost...................... 48 54
----------- ------------
Total investments............................. 17,996 17,635
Cash............................................ 53 43
Premiums and amounts receivable................. 134 137
Reinsurance recoverable......................... 6,356 6,259
Accrued investment income....................... 359 407
Deferred policy acquisition costs............... 3,156 2,760
Deferred income tax............................. 431 474
Other assets.................................... 246 357
Separate account assets......................... 64,020 49,690
----------- ------------
Total assets.................................. $92,751 $77,762
----------- ------------
----------- ------------
Liabilities and Stockholders' Equity
Future policy benefits.......................... $ 3,124 $ 2,474
Other policyholder funds........................ 21,168 22,134
Other liabilities............................... 2,224 1,572
Separate account liabilities.................... 64,020 49,690
----------- ------------
Total liabilities............................. 90,536 75,870
----------- ------------
----------- ------------
Common stock -- authorized 1,000 shares, $5,690
par value, issued and outstanding 1,000
shares......................................... 6 6
Additional paid-in capital...................... 1,045 1,045
Unrealized gain on securities, net of tax....... 135 30
Retained earnings............................... 1,029 811
----------- ------------
Total stockholders' equity.................... 2,215 1,892
----------- ------------
Total liabilities and stockholders' equity...... $92,751 $77,762
----------- ------------
----------- ------------
</TABLE>
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES 61
- --------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------
1997 1996
-------- --------
(UNAUDITED)
<S> <C> <C>
Operating Activities:
Net income (loss)..................... $ 218 $ (20)
Adjustments to net income (loss):
Net realized capital (gains)
losses............................. (4) 203
Net increase in deferred policy
acquisition costs.................. (396) (399)
Net amortization of premium on fixed
maturities......................... 5 6
Increase in deferred income tax
benefit............................ (14) (188)
Decrease in premiums and amounts
receivable......................... 3 75
Decrease in other assets............ 169 15
Increase in reinsurance
recoverable........................ (310) (254)
Increase in liability for future
policy benefits.................... 650 278
Increase in other liabilities....... 131 116
Decrease in accrued investment
income............................. 48 --
-------- --------
Cash provided by (used for)
operating activities.............. 500 (168)
-------- --------
Investing Activities:
Purchases of fixed maturities
investments.......................... (4,628) (4,111)
Sales of fixed maturities
investments.......................... 3,039 2,450
Maturities and principal paydowns of
fixed maturities investments......... 1,643 2,124
Net sales (purchases) of other
investments.......................... 32 (339)
Net (purchases) sales of short-term
investments.......................... (70) 328
-------- --------
Cash provided by investing
activities........................ 16 452
-------- --------
Financing Activities:
Net disbursements for investment and
universal life-type contracts charged
from policyholder accounts........... (506) (316)
Capital contribution.................. -- 38
-------- --------
Cash used for financing
activities........................ (506) (278)
-------- --------
Net increase in cash.................. 10 6
Cash at beginning of period........... 43 46
-------- --------
Cash at end of period................... $ 53 $ 52
-------- --------
-------- --------
</TABLE>
<PAGE>
62 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1.HARTFORD LIFE INC. INITIAL PUBLIC OFFERING
On February 10, 1997, HLI, an indirect parent of the Company, filed a
registration statement with the Securities and Exchange Commission, as amended,
relating to the Initial Public Offering ("IPO") of up to 20% of HLI's Class A
common stock. Pursuant to the IPO on May 22, 1997, HLI sold to the public 26
million shares at $28.25 per share and received net proceeds of $687. Of the
proceeds, $527 was used to retire debt related to HLI's promissory notes
outstanding and the line of credit discussed in the note below with the
remaining $160 contributed to HLI's insurance subsidiaries to be used for
working capital and other general corporate purposes.
The 26 million shares sold from the IPO represent approximately 18.6% of the
equity ownership in HLI and approximately 4.4% of the combined voting power of
HLI's Class A and Class B Common Stock. The Hartford Financial Services Group,
Inc. ("The Hartford"), an indirect parent of HLI, owns all of the 114 million
outstanding shares of Class B Common Stock of HLI, representing 81.4% of the
equity ownership in HLI and approximately 95.6% of the combined voting power of
HLI's Class A and Class B Common Stock. Holders of Class A Common Stock
generally have identical rights to the holders of Class B Common Stock except
that the holders of Class A Common Stock are entitled to one vote per share
while holders of Class B Common Stock are entitled to five votes per share on
all matters submitted to a vote of the HLI stockholders.
NOTE 2.HARTFORD LIFE INC. DEBT OFFERING
On February 7, 1997, HLI declared a dividend of $1,184 payable to its direct
parent, Hartford Accident and Indemnity Company ("HA&I"). As a result, HLI
borrowed $1,084 on February 18, 1997, pursuant to a $1,300 line of credit, with
interest payable at the two-month Eurodollar rate plus 15 basis points, which,
together with a promissory note in the amount of $100, was paid as a dividend to
HA&I on February 20, 1997. Of the $1,184 dividend, $893 constituted a repayment
of the portion of HLI's third party indebtedness internally allocated, for
financial reporting purposes, to HLI's insurance subsidiaries (the "Allocated
Advances"). In addition, on April 4, 1997, HLI declared and paid a dividend of
$25 to its parent in the form of a promissory note. Subsequently, $12 of this
note was forgiven in the form of a capital contribution from HA&I.
On February 14, 1997, HLI filed a shelf registration statement for the
issuance and sale of up to $1.0 billion in the aggregate of senior debt
securities, subordinated debt securities and preferred stock. On June 17, 1997,
HLI issued $650 of unsecured redeemable long-term debt in the form of notes and
debentures. Of this amount, $200 was in the form of 6.90% notes due June 15,
2004, $200 of 7.10% notes due June 15, 2007, and $250 of 7.65% debentures due
June 15, 2027. Interest on each of the notes and debentures is payable
semi-annually on June 15 and December 15, of each year, commencing December 15,
1997. HLI also issued $50 of short-term debt in the form of commercial paper. Of
the proceeds from this issuance, $670 was used to retire the remaining balance
on the $1,300 line of credit with the remainder being used for working capital
and other general corporate purposes. Subsequently, HLI reduced the capacity of
the line of credit from $1,300 to $250, which will be primarily used to support
the commercial paper program.
NOTE 3.CONTINGENCIES
(A) LITIGATION
The Company is involved in pending and threatened litigation in the normal
course of its business in which claims for monetary and punitive damages have
been asserted. Although there can be no assurances, management, at the present
time, does not anticipate that the ultimate liability arising from such pending
or threatened litigation will have a material effect on the financial condition
or operating results of the Company.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES 63
- --------------------------------------------------------------------------------
ITEM 2. MANAGEMENT'S NARRATIVE ANALYSIS
OF RESULTS OF OPERATIONS
(IN MILLIONS)
QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
SEGMENT RESULTS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
QUARTER ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- --------------------
1997 1996 1997 1996
----- --------- --------- ---------
<S> <C> <C> <C> <C>
Annuity........................ $ 56 $ 40 $ 148 $ 110
Individual Life Insurance...... 15 11 38 30
Employee Benefits.............. 8 8 23 22
Guaranteed Investment
Contracts.................... -- (184) -- (214)
Corporate Operation............ 2 19 9 32
--- --------- --------- ---------
Net Income (Loss).............. $ 81 $ (106) $ 218 $ (20)
--- --------- --------- ---------
--- --------- --------- ---------
</TABLE>
Net income was $81 and $218 for the third quarter and nine months ended
September 30, 1997, as compared to a loss of $106 and $20 for the same periods
in 1996. Included in the results for the third quarter and nine months ended
September 30, 1996, are after-tax losses, primarily related to Closed Book GRC,
of $179 and $210. Excluding these after-tax losses, operating income increased
$8, or 11%, and $28, or 15%, for the third quarter and nine months ended
September 30, 1997, compared to the same periods in 1996. Net income in the
Annuity segment increased due to higher fee income on growing account values as
well as strong new business sales. Net income in the Individual Life Insurance
segment increased due to cost of insurance charges and other fee income on a
growing block of life insurance in-force. Guaranteed Investment Contracts
reported no net income in the third quarter of 1997 consistent with management's
expectations that net income (loss) subsequent to 1996 will be immaterial.
ANNUITY
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues........................ $ 336 $ 241 $ 924 $ 707
Expenses........................ 280 201 776 597
--------- --------- --------- ---------
Net Income...................... $ 56 $ 40 $ 148 $ 110
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
Revenues, which are primarily comprised of investment income and fees earned
on assets under management, grew $95 or 39%, to $336 in the third quarter of
1997 and $217 or 31%, to $924 for the nine months ended September 30, 1997,
compared to the same periods in 1996. This growth resulted from an increase in
the average account value, primarily driven by individual variable annuities, of
$15.4 billion, or 36%, to $57.9 billion as of September 30, 1997 from $42.5
billion as of September 30, 1996, as a result of strong sales and market
appreciation in the separate account assets. Individual annuity sales were
approximately $2.6 billion and $7.6 billion for the third quarter and nine
months ended September 30, 1997, respectively, as compared to sales of $2.4
billion and $7.4 billion, respectively, for the same periods in 1996. Growth in
the assets under management by this segment also resulted in increased expenses
related to other insurance expenses, amortization of deferred policy acquisition
costs and taxes. Expenses increased $79, or 39%, to $280 in the third quarter of
1997 and $179, or 30%, to $776 for the nine months ended September 30, 1997,
compared to the same periods in 1996. Net income increased $16, or 40%, to $56
in the third quarter of 1997 and $38, or 35%, to $148 for the nine months ended
September 30, 1997, compared to the same periods in 1996.
INDIVIDUAL LIFE INSURANCE
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues........................ $ 122 $ 107 $ 358 $ 323
Expenses........................ 107 96 320 293
--------- --------- --------- ---------
Net Income...................... $ 15 $ 11 $ 38 $ 30
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
Revenues increased $15, or 14%, to $122 in the third quarter of 1997 and
$35, or 11%, to $358 for the nine months ended September 30, 1997, over the
comparable periods in 1996. In the first quarter of 1996, a block of business
was assumed from Investors Equity which increased 1996 revenues by $9. Excluding
this transaction, year to date revenues increased $44, or 14% over prior year.
This growth was driven by increased cost of insurance charges and other fee
income earned on this growing block of business. Life insurance in-force grew
approximately $3 billion, or 6%, for September 30, 1997 over the prior period,
primarily due to sales of variable life products. Expenses in this segment
increased $11 or 11%, and $27 or 9%, for the third quarter and nine months ended
September 30, 1997, over the same periods in 1996, consistent with this growing
block of business. As a result, net income increased $4, or 36%, to $15 in the
third quarter of 1997 and $8, or 27%, to $38 for the nine months ended September
30, 1997, compared to the same periods in 1996.
<PAGE>
64 HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
- --------------------------------------------------------------------------------
EMPLOYEE BENEFITS
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues........................ $ 150 $ 223 $ 471 $ 976
Expenses........................ 142 215 448 954
--------- --------- --------- ---------
Net Income...................... $ 8 $ 8 $ 23 $ 22
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
Revenues declined $73, or 33%, to $150 in the third quarter of 1997 and
$505, or 52%, for the nine months ended September 30, 1997, as compared to the
same periods in 1996. This decline is mainly related to the passage of the
Health Insurance Portability and Accountability Act of 1996, which effectively
eliminated all future sales of leveraged COLI due to the phase out of the
interest deduction on policy loans by 1998. The Company continues to write
variable COLI. Expenses declined $73, or 34%, in the third quarter of 1997 and
$506, or 53%, for the nine months ended September 30, 1997, as compared to the
same periods in 1996. Significant declines in benefits, claims and claim
adjustment expenses and policyholder dividends are the result of the decline of
the block of COLI business. As a result, net income was unchanged for the third
quarter of 1997, as compared to the same periods in 1996 and increased $1, or
5%, for the nine months ended September 30, 1997, as compared to the same
periods in 1996.
GUARANTEED INVESTMENT CONTRACTS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
QUARTER ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- --------------------
1997 1996 1997 1996
----- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues....................... $ 62 $ (163) $ 196 $ (23)
Expenses....................... 62 21 196 191
--- --------- --------- ---------
Net Income (Loss).............. $ 0 $ (184) $ 0 $ (214)
--- --------- --------- ---------
--- --------- --------- ---------
</TABLE>
This segment reported no net income for the nine months ended September 30,
1997, as compared to losses of $184 and $214 for the same periods last year.
Exclusive of after-tax realized losses and other charges taken in the third
quarter of 1996 related to Closed Book GRC, this segment had an operating loss
of $15 and $45 for the third quarter and nine months ended September 30, 1996.
These results are consistent with management's expectations that net income
(loss) from Closed Book GRC in the years subsequent to 1996 will be immaterial
based on the Company's current projections for the performance of the assets and
liabilities associated with Closed Book GRC due to actions taken in the third
quarter of 1996. However, no assurance can be given that, under certain
unanticipated economic circumstances which results in the Company's assumptions
being proven inaccurate, further losses in respect of Closed Book GRC will not
occur in the future.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 65
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of ITT Hartford Life and Annuity Insurance Company:
We have audited the accompanying statutory-basis balance sheets of ITT Hartford
Life and Annuity Insurance Company (a Connecticut Corporation and wholly owned
subsidiary of Hartford Life Insurance Company) (the Company) as of December 31,
1996 and 1995, and the related statutory-basis statements of income, changes in
capital and surplus, and cash flows for each of the three years in the period
ended December 31, 1996. 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-basis
financial statements. When statutory-basis 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-basis 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, 1996 and 1995, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1996.
However, in our opinion, the statutory-basis financial statements referred to
above present fairly, in all material respects, the financial position of the
Company as of December 31, 1996 and 1995, and the results of its operations and
its cash flows for each of the three years in the period ended December 31, 1996
in conformity with statutory accounting practices as described in Note 1.
As discussed in Note 1 of notes to statutory financial statements, during 1994,
the Company changed its valuation method in determining aggregate reserves for
future benefits.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
February 10, 1997
<PAGE>
66 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
STATUTORY BASIS STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
------------------------------------
1996 1995 1994
---------- ---------- ----------
($000)
<S> <C> <C> <C>
Revenues
Premiums and Annuity Considerations............. $ 250,244 $ 165,792 $ 442,173
Annuity and Other Fund Deposits................. 1,897,347 1,087,661 608,685
Net Investment Income............................. 98,441 78,787 29,012
Commissions and Expense Allowances on
Reinsurance Ceded.............................. 370,637 183,380 154,527
Reserve Adjustment on Reinsurance Ceded......... 3,864,395 1,879,785 1,266,926
Other Revenues.................................. 161,906 140,796 41,857
---------- ---------- ----------
Total Revenues................................ 6,642,970 3,536,201 2,543,180
---------- ---------- ----------
Benefits and Expenses
Death and Annuity Benefits...................... 60,111 53,029 7,948
Surrenders and Other Benefit Payments........... 276,720 221,392 181,749
Commissions and Other Expenses.................. 491,720 236,202 186,303
Increase in Reserves for Future Benefits........ 27,351 94,253 416,748
Increase in Liability for Premium and Other
Deposit Funds.................................. 207,156 460,124 182,934
Net Transfers to Separate Accounts.............. 5,492,964 2,414,669 1,541,419
---------- ---------- ----------
Total Benefits and Expenses................... 6,556,022 3,479,669 2,517,101
---------- ---------- ----------
Net Gain from Operations Before Federal Income Tax
Expense.......................................... 86,948 56,532 26,079
Federal Income Tax Expense...................... 19,360 14,048 24,038
---------- ---------- ----------
Net Gain from Operations.......................... 67,588 42,484 2,041
Net Realized Capital Gains (Losses)............. 407 374 (2)
---------- ---------- ----------
Net Income........................................ $ 67,995 $ 42,858 $ 2,039
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 67
- --------------------------------------------------------------------------------
STATUTORY BASIS BALANCE SHEETS
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
------------------------
1996 1995
----------- ----------
<S> <C> <C>
($000)
Assets
Bonds........................................... $ 1,268,480 $1,226,489
Common Stocks................................... 44,996 39,776
Policy Loans.................................... 28,853 22,521
Cash and Short-Term Investments................. 176,830 173,304
Other Invested Assets........................... 2,858 13,432
----------- ----------
Total Cash and Invested Assets................ 1,522,017 1,475,522
----------- ----------
Investment Income Due and Accrued............... 14,555 18,021
Premium Balances Receivable..................... 373 402
Receivables from Affiliates..................... 257 8,182
Other Assets.................................... 19,099 25,907
Separate Account Assets......................... 14,619,324 7,324,910
----------- ----------
Total Assets.................................. $16,175,625 $8,852,944
----------- ----------
----------- ----------
Liabilities
Aggregate Reserves for Future Benefits.......... $ 571,970 $ 542,082
Policy and Contract Claims...................... 6,806 8,223
Liability for Premium and Other Deposit Funds... 1,155,143 948,361
Asset Valuation Reserve......................... 7,442 8,010
Payable to Affiliates........................... 10,022 3,682
Other Liabilities............................... (498,195) (220,658)
Separate Account Liabilities.................... 14,619,324 7,324,910
----------- ----------
Total Liabilities............................. 15,872,512 8,614,610
----------- ----------
Capital and Surplus
Common Stock.................................... 2,500 2,500
Gross Paid-In and Contributed Surplus........... 226,043 226,043
Unassigned Funds................................ 74,570 9,791
----------- ----------
Total Capital and Surplus..................... 303,113 238,334
----------- ----------
Total Liabilities and Capital and Surplus......... $16,175,625 $8,852,944
----------- ----------
----------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
68 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
STATUTORY BASIS STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER
31,
----------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
($000)
Capital and Surplus -- Beginning of Year......................................................... $238,334 $ 91,285 $ 88,693
-------- -------- --------
Net Income..................................................................................... 67,995 42,858 2,039
Change in Net Unrealized Capital (Losses) Gains on Common Stocks............................... (5,171) 1,709 (133)
Change in Asset Valuation Reserve.............................................................. 568 (5,588) (1,356)
Change in Non-Admitted Assets.................................................................. 1,387 (1,944) (8,599)
Change in Reserve (Valuation Basis)............................................................ -- -- 10,659
Aggregate Write-ins for Surplus................................................................ -- 8,080 (18)
Dividends to Shareholder....................................................................... -- (10,000) --
Paid-In Surplus................................................................................ -- 111,934 --
-------- -------- --------
Change in Capital and Surplus................................................................ 64,779 147,049 2,592
-------- -------- --------
Capital and Surplus -- End of Year............................................................... $303,113 $238,334 $ 91,285
-------- -------- --------
-------- -------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 69
- --------------------------------------------------------------------------------
STATUTORY BASIS STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-----------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
($000)
Operations
Premiums, Annuity Considerations and
Other Fund Deposits.................. $ 2,147,627 $ 1,253,511 $ 1,050,493
Net Investment Income................. 106,178 78,328 24,519
Other Revenues........................ 4,396,892 2,253,466 1,515,700
----------- ----------- -----------
Total Revenues...................... 6,650,697 3,585,305 2,590,712
----------- ----------- -----------
Benefits Paid......................... 338,998 277,965 181,205
Federal Income Taxes Paid on
Operations........................... 28,857 208,423 20,634
Other Expenses........................ 6,254,139 2,664,385 1,832,905
----------- ----------- -----------
Total Benefits and Expenses......... 6,621,994 3,150,773 2,034,744
----------- ----------- -----------
Net Cash from Operations............ 28,703 434,532 555,968
----------- ----------- -----------
Proceeds from Investments
Bonds................................. 871,019 287,941 87,747
Common Stocks......................... 72,100 52 --
Other................................. 10 28 40
----------- ----------- -----------
Total Investment Proceeds........... 943,129 288,021 87,787
----------- ----------- -----------
Taxes (Paid) Received on Capital (Gains)
Losses................................. (936) (226) 96
Paid-In Surplus......................... -- 111,934 --
Other Cash Provided..................... 41,998 28,199 30,554
----------- ----------- -----------
Total Proceeds...................... 1,012,894 862,460 674,405
----------- ----------- -----------
Cost of Investments Acquired Bonds...... 914,523 720,521 595,181
Common Stocks......................... 82,495 35,794 808
Miscellaneous Applications............ 130 2,146 2,523
----------- ----------- -----------
Total Investments Acquired.......... 997,148 758,461 598,512
----------- ----------- -----------
Other Cash Applied
Dividends Paid to Shareholders........ -- 10,000 --
Other................................. 12,220 5,007 24,813
----------- ----------- -----------
Total Other Cash Applied............ 12,220 15,007 24,813
----------- ----------- -----------
Total Applications................ 1,009,368 773,468 623,325
----------- ----------- -----------
Net Change in Cash and Short-Term
Investments............................ 3,526 88,992 51,080
Cash and Short-Term Investments,
Beginning of Year...................... 173,304 84,312 33,232
----------- ----------- -----------
Cash and Short-Term Investments, End of
Year................................... $ 176,830 $ 173,304 $ 84,312
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
70 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
(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
Hartford Life, Inc. ("Hartford Life"), which is ultimately owned by ITT Hartford
Group, Inc. ("The Hartford"), formerly a wholly owned subsidiary of ITT
Corporation ("ITT"). On February 10, 1997, The Hartford announced its plans to
sell up to 20% of Hartford Life to the public. On December 19, 1995, ITT
Corporation distributed all the outstanding shares of The Hartford to ITT
shareholders of record in an action known herein as the "Distribution". As a
result of the Distribution, The Hartford became an independent, publicly traded
company. During 1996, ILA re-domesticated from the State of Wisconsin to the
State of Connecticut.
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 State of
Connecticut Department of Insurance.
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 liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the 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;
(5) excluding certain GAAP assets designated as non-admitted assets (e.g., past
due agents' 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 option basis, using a twenty year phase-in approach, whereas
GAAP liabilities are required to be recorded;
(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;
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 71
- --------------------------------------------------------------------------------
(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, whereas 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, those investments were
reflected at fair value with the corresponding impact included as a
component of Stockholder's Equity designated as "Net unrealized capital
(loss)/ gain on investments, net of tax". For statutory reporting purposes,
Net Unrealized Capital Losses (Gains) on Common Stocks represent unrealized
losses (gains) on common stock reported at fair value; and
(10) separate account liabilities 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 and for the years ended December 31, 1996, 1995 and 1994, the
significant differences between statutory and GAAP basis net income and capital
and surplus for the Company are summarized as follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
GAAP Net Income................ $ 41,202 $ 38,821 $ 23,295
Amortization and deferral of
policy acquisition costs...... (341,572) (174,341) (117,863)
Change in unearned revenue
reserve....................... 55,504 32,300 24,494
Deferred taxes................. 2,090 2,801 (9,267)
Separate accounts.............. 306,978 146,635 75,941
Other, net..................... 3,793 (3,358) 5,439
----------- ----------- -----------
Statutory Net Income........... $ 67,995 $ 42,858 $ 2,039
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
GAAP Capital and Surplus....... $ 503,887 $ 455,541 $ 199,785
Deferred policy acquisition
costs......................... (938,114) (596,542) (422,201)
Unearned revenue reserve....... 130,148 74,644 42,344
Deferred taxes................. 12,823 1,493 13,257
Separate accounts.............. 640,101 333,123 186,488
Asset valuation reserve........ (7,442) (8,010) (2,422)
Unrealized gain (loss) on
bonds......................... 5,112 (1,696) 21,918
Adjustment relating to Lyndon
contribution (see Note 3)..... (41,277) (41,277) --
Other, net..................... (2,125) 21,058 52,116
----------- ----------- -----------
Statutory Capital and
Surplus....................... $ 303,113 $ 238,334 $ 91,285
----------- ----------- -----------
----------- ----------- -----------
</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 actuarial standards. Reserves for life
insurance policies are generally based on the 1958 and 1980 Commissioner's
Standard Ordinary Mortality Tables and various valuation rates ranging from 2.5%
to 5%. 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
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 Basis 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 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 net unrealized capital (losses)/gains on common stocks are
reported as (reductions)/additions of surplus. The Asset Valuation Reserve
("AVR") is designed to provide a standardized reserving process for realized and
unrealized losses due to default and equity risks associated with invested
assets. The reserve decreased by $568 in 1996 and increased by $5,588 and $1,356
in 1995 and 1994, 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 Basis Statements of Income. Realized investment gains and
losses are determined on a specific identification basis. The amount of net
capital gains reclassified from the IMR was $1,413 and
<PAGE>
72 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
$39 in 1996 and 1995, respectively, and the amount of net capital losses was $67
in 1994. The amount of income amortized was $392, $256 and $114 in 1996, 1995
and 1994, respectively.
OTHER LIABILITIES
The amount reflected in other liabilities includes a receivable from the
separate accounts of $640 million and $333 million as of December 31, 1996 and
1995, respectively. The balances are classified in accordance with NAIC
accounting practices.
2. INVESTMENTS
(A) COMPONENTS OF NET INVESTMENT INCOME
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Interest income from
bonds..................... $ 89,940 $ 76,100 $ 28,335
Interest income from policy
loans..................... 1,846 1,504 454
Interest and dividends from
other investments......... 7,864 2,288 1,069
--------- --------- ---------
Gross investment income.... 99,650 79,892 29,858
Less: investment
expenses.................. 1,209 1,105 846
--------- --------- ---------
Net investment income...... $ 98,441 $ 78,787 $ 29,012
--------- --------- ---------
--------- --------- ---------
</TABLE>
(B) COMPONENTS OF NET UNREALIZED CAPITAL (LOSSES)
GAINS ON COMMON STOCKS
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Gross unrealized capital gains
at end of year................ $ 713 $ 1,724 $ 75
Gross unrealized capital losses
at end of year................ (4,160) -- (60)
--------- --------- ---------
Net unrealized capital (losses)
gains......................... (3,447) 1,724 15
Balance at beginning of year... 1,724 15 148
--------- --------- ---------
Change in net unrealized
capital (losses) gains on
common stocks................. $ (5,171) $ 1,709 $ (133)
--------- --------- ---------
--------- --------- ---------
</TABLE>
(C) COMPONENTS OF NET UNREALIZED CAPITAL (LOSSES)
GAINS ON BONDS AND SHORT-TERM INVESTMENTS
<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Gross unrealized capital
gains at end of year... $ 11,821 $ 22,251 $ 986
Gross unrealized capital
losses at end of
year................... (3,842) (1,374) (34,718)
---------- ---------- ----------
Net unrealized capital
gains (losses) after
tax.................... 7,979 20,877 (33,732)
Balance at beginning of
year................... 20,877 (33,732) 5,232
---------- ---------- ----------
Change in net unrealized
capital (losses) gains
on bonds and short-term
investments............ $ (12,898) $ 54,609 $ (38,964)
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
(D) COMPONENTS OF NET REALIZED CAPITAL GAINS (LOSSES)
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Bonds and short-term
investments..................... $ 2,756 $ 156 $ (101)
Common stocks.................... 0 52 0
Real estate and other............ 0 0 34
--------- --------- ---------
Realized capital gains (losses).. 2,756 208 (67)
Capital gains taxes (benefit).... 936 (205) 2
--------- --------- ---------
Net realized capital gains
(losses) after tax.............. 1,820 413 (69)
Less: IMR capital gains
(losses)........................ 1,413 39 (67)
--------- --------- ---------
Net realized capital gains
(losses)........................ $ 407 $ 374 $ (2)
--------- --------- ---------
--------- --------- ---------
</TABLE>
(E) OFF-BALANCE SHEET INVESTMENTS
The Company had no significant financial instruments with off-balance sheet
risk as of December 31, 1996 and 1995.
(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.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 73
- --------------------------------------------------------------------------------
(G) BONDS, SHORT-TERM AND COMMON STOCK INVESTMENTS
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
----------------------------------
GROSS UNREALIZED
AMORTIZED --------------------
COST GAINS LOSSES
------------ --------- ---------
<S> <C> <C> <C>
U.S. government and government agencies and authorities:
(Guaranteed and sponsored)....................................................... $ 58,761 $ 6 $ (195)
(Guaranteed and sponsored) -- asset-backed....................................... 78,237 1,477 (609)
States, municipalities and political subdivisions.................................. 25,958 163 (2)
International governments.......................................................... 7,447 205 --
Public utilities................................................................... 70,116 396 (424)
All other corporate................................................................ 410,530 6,357 (1,355)
All other corporate -- asset-backed................................................ 485,953 2,654 (1,081)
Short-term investments............................................................. 148,094 -- (66)
Certificates of deposit............................................................ 83,378 563 (110)
Parents, subsidiaries and affiliates............................................... 48,100 -- --
------------ --------- ---------
Total bonds and short-term investments......................................... $ 1,416,574 $ 11,821 $ (3,842)
------------ --------- ---------
------------ --------- ---------
Common stock -- unaffiliated....................................................... $ 13,064 $ 713 $ 0
Common stock -- affiliated......................................................... 35,379 0 4,160
------------ --------- ---------
Total common stocks............................................................ $ 48,443 $ 713 $ 4,160
------------ --------- ---------
------------ --------- ---------
<CAPTION>
AS OF DECEMBER 31, 1995
----------------------------------
GROSS UNREALIZED
AMORTIZED --------------------
COST GAINS LOSSES
------------ --------- ---------
<S> <C> <C> <C>
U.S. government and government agencies and authorities:
(Guaranteed and sponsored)....................................................... $ 44,268 $ 14 $ (248)
(Guaranteed and sponsored) -- asset-backed....................................... 176,160 4,644 (682)
States, municipalities and political subdivisions.................................. 16,948 38 (6)
International governments.......................................................... 5,402 441 --
Public utilities................................................................... 108,083 1,652 (90)
All other corporate................................................................ 374,058 8,145 (248)
All other corporate -- asset-backed................................................ 410,197 5,841 (89)
Short-term investments............................................................. 139,011 18 --
Certificates of deposit............................................................ 91,373 1,458 (11)
------------ --------- ---------
Total bonds and short-term investments......................................... $ 1,365,500 $ 22,251 $ (1,374)
------------ --------- ---------
------------ --------- ---------
Common stock -- unaffiliated....................................................... $ 2,668 $ 555 $ --
Common stock -- affiliated......................................................... 35,384 1,169 --
------------ --------- ---------
Total common stocks............................................................ $ 38,052 $ 1,724 $ --
------------ --------- ---------
------------ --------- ---------
<CAPTION>
FAIR
VALUE
------------
<S> <C>
U.S. government and government agencies and authorities:
(Guaranteed and sponsored)....................................................... $ 58,572
(Guaranteed and sponsored) -- asset-backed....................................... 79,105
States, municipalities and political subdivisions.................................. 26,119
International governments.......................................................... 7,652
Public utilities................................................................... 70,088
All other corporate................................................................ 415,532
All other corporate -- asset-backed................................................ 487,526
Short-term investments............................................................. 148,028
Certificates of deposit............................................................ 83,831
Parents, subsidiaries and affiliates............................................... 48,100
------------
Total bonds and short-term investments......................................... $ 1,424,553
------------
------------
Common stock -- unaffiliated....................................................... $ 13,777
Common stock -- affiliated......................................................... 31,219
------------
Total common stocks............................................................ $ 44,996
------------
------------
FAIR
VALUE
------------
<S> <C>
U.S. government and government agencies and authorities:
(Guaranteed and sponsored)....................................................... $ 44,034
(Guaranteed and sponsored) -- asset-backed....................................... 180,122
States, municipalities and political subdivisions.................................. 16,980
International governments.......................................................... 5,843
Public utilities................................................................... 109,645
All other corporate................................................................ 381,955
All other corporate -- asset-backed................................................ 415,949
Short-term investments............................................................. 139,029
Certificates of deposit............................................................ 92,820
------------
Total bonds and short-term investments......................................... $ 1,386,377
------------
------------
Common stock -- unaffiliated....................................................... $ 3,223
Common stock -- affiliated......................................................... 36,553
------------
Total common stocks............................................................ $ 39,776
------------
------------
</TABLE>
The amortized cost and estimated market value of bonds and short-term
investments at December 31, 1996 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.
<TABLE>
<CAPTION>
ESTIMATED FAIR
MATURITY AMORTIZED COST VALUE
- --------------------------------------------------------------------------------------- -------------- -------------------
<S> <C> <C>
Due in one year or less................................................................ $ 478,095 $ 478,852
Due after one year through five years.................................................. 622,805 623,105
Due after five years through ten years................................................. 259,479 265,681
Due after ten years.................................................................... 56,195 56,915
-------------- -------------------
Total.............................................................................. $ 1,416,574 $ 1,424,553
-------------- -------------------
-------------- -------------------
</TABLE>
<PAGE>
74 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
Proceeds from sales of investments in bonds and short-term investments
during 1996, 1995 and 1994 were $668,078, $313,961 and $117,912, respectively,
resulting in gross realized gains of $3,675, $1,419 and $518, respectively, and
gross realized losses of $919, $1,263 and $619, 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 BALANCE SHEET ITEMS (IN MILLIONS):
<TABLE>
<CAPTION>
1996 1995
---------------------- ----------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Bonds and short-term investments................................................. $ 1,417 $ 1,425 $ 1,366 $ 1,386
Common stocks.................................................................... 45 45 40 40
Policy loans..................................................................... 29 29 23 23
Other invested assets............................................................ 3 3 13 13
LIABILITIES LIABILITIES ON INVESTMENT CONTRACTS.................................... $ 1,245 $ 1,191 $ 1,031 $ 981
</TABLE>
The carrying amounts for policy loans approximates fair value. The
liabilities are determined by forecasting future cash flows and discounting the
forecasted cash flows at current market rates.
3. RELATED PARTY TRANSACTIONS
Transactions between the Company and its affiliates within The 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 bonds and
short-term investments, common stocks 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 million were recorded
as an increase to paid-in surplus.
For additional information, see Note 5.
4. FEDERAL INCOME TAXES
The Company and The Hartford have entered into a tax sharing agreement under
which each member in the consolidated U.S. Federal income tax return will make
payments between them such that, with respect to any period, the amount of taxes
to be paid by the Company, subject to certain adjustments, generally will be
determined as though the Company were to file separate federal, state and local
income tax returns.
As long as The Hartford continues to beneficially own, directly or
indirectly, at least 80% of the combined voting power and 80% of the value of
the outstanding capital stock of Hartford Life, the Company will be included for
Federal income tax purposes in the consolidated group of which The Hartford is
the common parent. It is the current intention of The Hartford and its
subsidiaries to continue to file a single consolidated Federal income tax
return. The Company will continue to remit (receive from) The Hartford a current
income tax provision (benefit) computed in accordance with such tax sharing
agreement. Federal income taxes paid by the Company were $29,792, $215,921 and
$20,538 in 1996, 1995 and 1994, respectively. The effective tax rate was 22%,
25% and 92% in 1996, 1995 and 1994, respectively. The following schedule
provides a reconciliation of the tax provision at the U.S. Federal Statutory
rate to Federal income tax expense (in millions).
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- -----
<S> <C> <C> <C>
Tax provision at U.S. Federal statutory
rate..................................... $ 30 $ 20 $ 9
Tax deferred acquisition costs............ 27 8 8
Statutory to tax reserve differences...... -- 3 5
Unrealized (gain)/loss on separate
accounts................................. (21) (13) 2
Investments and other..................... (17) (4) --
--------- --------- ---
Federal income tax expense................ $ 19 $ 14 $ 24
--------- --------- ---
--------- --------- ---
</TABLE>
5.CAPITAL AND SURPLUS AND SHAREHOLDER
DIVIDEND RESTRICTIONS
The maximum amount of dividends which can be paid, without prior approval,
by State of Connecticut 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. No dividends were paid in 1996 or
1994. ILA paid dividends of $10 million to its parent, HLIC, in 1995. 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 surplus.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 75
- --------------------------------------------------------------------------------
6.PENSION PLANS AND OTHER POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS
The Company's employees are included in The 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
$358, $1,034, and $1,211 in 1996, 1995 and 1994, respectively. Liabilities for
the plan are held by The Hartford.
The Company also participates in The 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 The Hartford. The cost to ILA was not
material in 1996, 1995 and 1994.
The Company's employees are included in The Hartford'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
The Hartford 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 9.3% for 1996, 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
1996, 1995 and 1994.
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 1996, 1995 and 1994.
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:
<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Direct premiums............ $ 226,612 $ 159,918 $ 133,180
Premiums assumed........... 33,817 13,299 960
Premiums ceded............. (10,185) (7,425) 308,033
---------- ---------- ----------
Premiums and annuity
considerations............ $ 250,244 $ 165,792 $ 442,173
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
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, in
December 1994, 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 1994.
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 1994.
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 1994.
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 liabilities totaling $14.6
billion and $7.3 billion at December 31, 1996 and 1995, respectively. Separate
account assets are reported at fair value and separate account liabilities are
determined in accordance with CARVM, which approximates the market value less
applicable surrender charges. Separate account assets are segregated from other
investments, the policyholder assumes the investment risk,
<PAGE>
76 ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
and the investment income and gains and losses accrue directly to the
policyholder. Separate account management fees, net of minimum guarantees, were
$144 million, $72 million and $42 million in 1996, 1995 and 1994, respectively,
and are recorded as a component of other revenues on the Statutory Basis
Statements of Income.
9. COMMITMENTS AND CONTINGENCIES
As of December 31, 1996 and 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 normal course 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 $1,262, $1,684 and $583 in 1996, 1995 and 1994,
respectively. ILA incurred guaranteed fund expense of $548, $0 and $0 in 1996,
1995 and 1994, respectively.
<PAGE>
PART II
<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 ITT Hartford Life and Annuity
Insurance Company ("Hartford") authorizing the establishment of the
Separate Account. (1)
(A2) Not Applicable.
(A3a) Principal Underwriting Agreement. (2)
(A3b) Forms of Selling Agreements. (2)
(A3c) Not applicable.
(A4) Not Applicable.
(A5) Form of Modified Single Premium Variable Life Insurance Policy. (1)
(A6a) Certificate of Incorporation of Hartford. (3)
- --------------------------------------------
(1) Incorporated by reference to Post Effective No. 2, to the Registration
State File No. 33-83650, dated May 1, 1995.
(2) Incorporated by reference to Post Effective Amendment No. 3, to the
Registration Statement File No. 33-83650, dated May 1, 1996.
(3) Incorporated by reference to Post Effective Amendment No. 4, to the
Registration Statement File No. 33-83650, filed on April 14, 1997.
II-1
<PAGE>
(A6b) Bylaws of Hartford. (2)
(A7) Not Applicable.
(A8) Not Applicable.
(A9) Not Applicable.
(A10) Form of Application for Modified Single Premium Variable Life
Insurance Policies. (1)
(A11) Memorandum describing transfer and redemption procedures. (1)
(2) Opinion and consent of Lynda Godkin, Senior Vice President, General Counsel
and Corporate Secretary.
(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.
(6) Consent of Arthur Andersen LLP Independent Public Accountants
(7) Power of Attorney. (3)
(8) Not applicable.
II-2
<PAGE>
REPRESENTATION OF REASONABLENESS OF FEES
ITT Hartford Life and Annuity Insurance Company ("Hartford") hereby
represents that the aggregate fees and charges under the Policy are
reasonable in relation to the services rendered, the expenses expected to be
incurred, and the risks assumed by Hartford.
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file
with the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
UNDERTAKINGS AND REPRESENTATIONS AS REQUIRED BY RULE 6E-3(T)
1. Separate Account Five meets the definition of "Separate Account" under
Rule 6e-3(T).
2. Hartford undertakes to keep and make available to the Commission upon
request any documents used to support any representation as to the
reasonableness of fees.
UNDERTAKING ON INDEMNIFICATION
Under Section 33-772 of the Connecticut General Statutes, unless limited by
its certificate of incorporation, the Registrant must indemnify a director
who was wholly successful, on the merits or otherwise, in the defense of any
proceeding to which he was a party because he is or was a director of the
corporation against reasonable expenses incurred by him in connection with
the proceeding.
The Registrant may indemnify an individual made a party to a proceeding
because he is or was a director against liability incurred in the proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Registrant, and, with respect to any
criminal proceeding, had no reason to believe his conduct was unlawful. Conn.
Gen. Stat. Section 33-771(a). Additionally, pursuant to Conn. Gen. Stat.
Section 33-776, the Registrant may indemnify officers and employees or agents
for liability incurred and for any expenses to which they become subject by
reason of being or having been an employee or officer of the Registrant.
Connecticut law does not prescribe standards for the indemnification of
officers, employees and agents and expressly states that their
indemnification may be broader than the right of indemnification granted to
directors.
The foregoing statements are specifically made subject to the detailed
provisions of Section 33-770 et seq.
Notwithstanding the fact that Connecticut law obligates the Registrant to
indemnify only a director that was successful on the merits in a suit, under
Article III, Section 1 of the Registrant's bylaws, the Registrant must
indemnify both directors and officers of the Registrant for (1) any claims
and liabilities to which they become subject by reason of being or having
been a director or officer of the company and legal and (2) other expenses
incurred in defending against such claims, in each case, to the extent such
is consistent with statutory provisions.
Additionally, the directors and officers of Hartford and Hartford Securities
Distribution Company, Inc. ("HSD") are covered under a directors and officers
liability insurance policy issued to The Hartford Financial Services Group,
Inc. and its subsidiaries. Such policy will reimburse the Registrant for any
payments that it shall make to directors and officers pursuant to law and
will, subject to certain exclusions contained in the policy, further pay any
other costs, charges and expenses and settlements and judgments arising from
any proceeding involving any director or officer of the Registrant in his
past or present capacity as such, and for which he may be liable, except as
to any liabilities arising from acts that are deemed to be uninsurable.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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.
II-3
<PAGE>
INFORMATION REGARDING CERTAIN SALES LOADS, ADMINISTRATIVE,
MANAGEMENT AND OTHER FEES
Separate Account Five of ITT Hartford Life and Annuity Insurance Company was
established to separate the assets funding the Policies from other assets of
Hartford. In addition to the Policies described in this Prospectus the
Separate Account holds assets of several other Registration Statements. In
1995, the Separate Account received approximately $33,918,567 in policyholder
premiums. In the same year it charged policyholders approximately $273,433 in
sales load, administrative, management and other fees ("Separate Account
Charges"). In 1996 policyholder premium was $102,373,233 with the associated
Separate Account Charges equaled approximately $1,009,339. Year to date 1997
policyholder premium for the entire Separate Account equaled $85,768,272 with
Separate Account Charges for the same time period being $4,177,979
OFFICERS AND DIRECTORS
The principal underwriter for ITT Hartford Life and Annuity Insurance Company
Separate Account Five is Hartford Securities Distribution Company, Inc. The
following list is of Officers and Directors:
Name and Principal Positions and Offices
Business Address With Underwriter
------------------ -------------------------
Lowndes A. Smith President and Chief Executive Officer, Director
John P. Ginnetti Executive Vice President, Director
Thomas M. Marra Executive Vice President, Director
Peter W. Cummins Senior Vice President
Lynda Godkin Senior Vice President, General Counsel and
Corporate Secretary
Donald E. Waggaman, Jr. Treasurer
George R. Jay Controller
Paul E. Olson Supervising Registered Principal
James Cubanski Assistant Secretary
Stephen T. Joyce Assistant Secretary
Glen J. Kvadus Assistant Secretary
Edward M. Ryan, Jr. Assistant Secretary
Unless otherwise indicated, the principal business address of each of
the above individuals is P.O. Box 2999, Hartford, Connecticut 06104-2999.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and attested, all in the Town of Simsbury, and
State of Connecticut, on the 17th day of December, 1997.
ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY - SEPARATE ACCOUNT FIVE (Registrant)
By: /s/ Gregory A. Boyko
-----------------------------------------
Gregory A. Boyko, Senior Vice President, Chief
Financial Officer and Treasurer, Director
ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY (Depositor)
By: /s/ Gregory A. Boyko
-----------------------------------------
Gregory A. Boyko, Senior Vice President, Chief
Financial Officer and Treasurer, Director
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons and in the capacities and on
the dates indicated.
Gregory A. Boyko, Senior Vice
President, Chief Financial Officer and
Treasurer, Director *
Lynda Godkin, Senior Vice President
General Counsel and Corporate
Secretary, Director*
Thomas M. Marra, Executive Vice *By: /s/ Lynda Godkin
President and Director, Individual -------------------
Life and Annuity Division, Director * Lynda Godkin
Lowndes A. Smith, President and Attorney-In-Fact
Chief Executive Officer,
Director * Dated: December 17, 1997
------------------
II-4
<PAGE>
EXHIBIT INDEX
(2) Opinion and Consent of Lynda Godkin, General Counsel.
(5) Opinion and Consent of Michael Winterfield, FSA, MAAA.
(6) Consent of Arthur Andersen LLP, Independent Public Accountants.
<PAGE>
[LOGO]
HARTFORD LIFE
December 17, 1997 LYNDA GODKIN
Senior Vice President, General
Counsel & Corporate Secretary
Law Department
Board of Directors
ITT Hartford Life and Annuity Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: SEPARATE ACCOUNT FIVE
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
FILE NO. 333-36349
Dear Sir/Madam:
I have acted as General Counsel to ITT Hartford Life and Annuity
Insurance Company (the "Company"), a Connecticut insurance company, and ITT
Hartford Life and Annuity Insurance Company Separate Account Five (the
"Account") in connection with the registration of an indefinite amount of
securities in the form of modified single premium variable life insurance
contracts (the "Contracts") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended. I have examined such documents
(including the Form S-6 Registration Statement) and reviewed such questions
of law as I considered necessary and appropriate, and on the basis of such
examination and review, it is my opinion that:
1. The Company is a corporation duly organized and validly existing as a stock
life insurance company under the laws of the State of Connecticut and is
duly authorized by the Insurance Department of the State of Connecticut to
issue the Contracts.
2. The Account is a duly authorized and validly existing separate account
established pursuant to the provisions of Section 38a-433 of the
Connecticut Statutes.
3. To the extent so provided under the Contracts, that portion of the assets
of the Account equal to the reserves and other contract liabilities with
respect to the Account will not be chargeable with liabilities arising out
of any other business that the Company may conduct.
Hartford Life Insurance Companies
200 Hopmeadow Street
Simsbury, CT 06089
860 843 3153
860 843 8665 Fax
Mailing Address: P.O. Box 2999
Hartford, CT 06104-2999
<PAGE>
Board of Directors
ITT Hartford Life and Annuity Insurance Company
December 17, 1997
Page 2
4. The Contracts, when issued as contemplated by the Form S-6 Registration
Statement, will constitute legal, validly issued and binding obligations
of the Company.
I hereby consent to the filing of this opinion as an exhibit to the Form S-6
Registration Statement for the Contracts and the Account.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
<PAGE>
[LOGO]
HARTFORD LIFE
MICHAEL R. WINTERFIELD, FSA, MAAA
Assistant Vice President
Individual Annuity Product Management
December 17, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir:
This opinion is furnished in connection with the Form S-6 Registration
Statement under the Securities Act of 1933, as amended ("Securities Act"), of
a certain 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 the Form S-6
Registration Statement accurately reflect reasonable estimates of projected
performance of the Policy under the stipulated rates of investment return,
the contractual expense deductions and guaranteed cost-of-insurance rates,
and utilizing a reasonable estimation for expected fund operating expenses.
I hereby consent to the use of this opinion as an exhibit to the Form S-6
Registration Statement and to the reference to my name under the heading
"Experts" in the Prospectus included as a part of such Form S-6 Registration
Statement.
Very truly yours,
/s/ Michael Winterfield
Michael Winterfield, FSA, MAAA
Director Individual Annuity Inforce Management
Hartford Life
200 Hopmeadow Street
Simsbury, CT 06089
860 843 3153
860 843 8665 Fax
Mailing Address: P.O. Box 2999
Hartford, CT 06104-2999
<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. 333-36349 for ITT Hartford Life and
Annuity Insurance Company Separate Account Five on Form S-6.
/s/ Arthur Andersen LLP
Hartford, Connecticut
December 15, 1997
