<PAGE>
As filed with the Securities and Exchange Commission on April 15, 1998.
File No.333-36367
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-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: 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
--------
X 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 has registered an
indefinite amount of securities.
F. Proposed maximum aggregate offering price to the public of the securities
being registered: Not yet determined.
G. Amount of filing fee: Not applicable.
H. Approximate date of proposed public offering: As soon as practicable after
the effective date of this registration statement.
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
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 - Funds; The Policy-
Application for a Policy; Policy Benefits and
Rights; Other Matters - Voting Rights, Dividends
11. Summary; The Separate Account - Funds
12. Summary; The Separate Account - 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 - 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 - 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 - 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 - Funds, The Separate Account -
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>
PUTNAM HARTFORD CAPITAL MANAGER VARIABLE LIFE
MODIFIED SINGLE PREMIUM VARIABLE LIFE
INSURANCE POLICIES
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
P. O. BOX 2999
HARTFORD, CT 06104-2999
TELEPHONE (800) 231-5453
This Prospectus describes Putnam Hartford Capital Manager Variable Life, a
modified single premium variable life insurance policy ("Policy" or
"Policies") offered by Hartford Life and Annuity Insurance Company
("Hartford") to applicants age 90 and under. The Policy lets 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 43.
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 the Putnam Money Market Sub-Account.
After the Right to Cancel Period has expired, the amounts allocated will be
transferred to the Funds specified in the Policy Owner's application. The
underlying investment options (Funds) of Putnam Variable Trust currently
available under the Policy are:
<TABLE>
<S> <C>
Putnam Asia Pacific Growth Sub-Account - shares of Class IA of the Putnam VT
Asia Pacific Growth Fund of the Putnam
Variable Trust
Putnam Diversified Income Sub-Account - shares of Class IA of the Putnam VT
Diversified Income Fund Bond Fund of
the Putnam Variable Trust (a bond fund)
The George Putnam Fund Sub-Account - shares of Class IA of the Putnam VT
The George Putnam Fund of Boston of
the Putnam Variable Trust
Putnam Global Asset Allocation - shares of Class IA of the Putnam VT
Sub-Account Global Asset Allocation Fund of the
Putnam Variable Trust
Putnam Global Growth Sub-Account - shares of Class IA of the Putnam VT
Global Growth Fund of the Putnam
Variable Trust
Putnam Growth and Income Sub-Account - shares of Class IA of the Putnam VT
Growth and Income Fund of the Putnam
Variable Trust
Putnam Health Sciences Sub-Account - shares of Class IA of the Putnam VT
Health Sciences Fund of the Putnam
Variable Trust
Putnam High Yield Sub-Account - shares of Class IA of the Putnam VT
High Yield Fund of the Putnam Variable
Trust
Putnam International Growth Sub-Account - shares of Class IA of the Putnam VT
International Growth Fund of the
Putnam Variable Trust
Putnam International Growth and Income - shares of Class IA of the Putnam VT
Sub-Account International Growth and Income Fund
of the Putnam Variable Trust
Putnam International New Opportunities - shares of Class IA of the Putnam VT
Sub-Account International New Opportunities Fund of
the Putnam Variable Trust (an
international fund)
Putnam Investors Sub-Account - shares of Class IA of the Putnam VT
Investors Fund of the Putnam Variable
Trust
Putnam Money Market Sub-Account - shares of Class IA of the Putnam VT
Money Market Fund of the Putnam
Variable Trust
Putnam New Opportunities Sub-Account - shares of Class IA of the Putnam VT
New Opportunities Fund of the Putnam
Variable Trust (a capital appreciation
fund)
Putnam New Value Sub-Account - shares of Class IA of the Putnam VT
New Value Fund of the Putnam Variable
Trust
Putnam OTC & Emerging Growth - shares of Class IA of the Putnam VT
Sub-Account OTC & Emerging Growth Fund of the
Putnam Variable Trust
Putnam U.S. Government and High - shares of Class IA of the Putnam VT
Quality Bond Sub-Account U.S. Government and High Quality
Bond Fund of the Putnam Variable
Trust
Putnam Utilities Growth & Income - shares of Class IA of the Putnam VT
Sub-Account Utilities Growth and Income Fund of the
Putnam Variable Trust
Putnam Vista Sub-Account - shares of Class IA of the Putnam VT
Vista Fund of the Putnam Variable Trust
(a capital appreciation fund)
Putnam Voyager Sub-Account - shares of Class IA of the Putnam VT
Voyager Fund of the Putnam Variable
Trust (a capital appreciation fund)
</TABLE>
<PAGE>
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 allocated to the Funds. The Policy continues in effect as
long as 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
a Policy. The 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.
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.
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.
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.
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.
The date of this Prospectus is May 1, 1998.
<PAGE>
2
TABLE OF CONTENTS
Page
----
SPECIAL TERMS........................................................... 4
SUMMARY................................................................. 7
THE COMPANY............................................................. 11
THE SEPARATE ACCOUNT.................................................... 12
General........................................................ 12
Funds.......................................................... 12
Investment Adviser............................................. 16
THE POLICY............................................................. 16
Application for a Policy....................................... 16
Premiums....................................................... 17
Allocation of Premiums......................................... 17
Accumulation Unit Values....................................... 18
DEDUCTIONS AND CHARGES.................................................. 18
POLICY BENEFITS AND RIGHTS.............................................. 25
Death Benefit.................................................. 25
Account Value.................................................. 25
Transfer of Account Value...................................... 26
Policy Loans................................................... 27
Amount Payable on Surrender of the Policy...................... 28
Partial Surrenders............................................. 29
Benefits at Maturity........................................... 29
Lapse and Reinstatement........................................ 29
Cancellation and Exchange Rights............................... 30
Suspension of Valuation, Payments and Transfers................ 30
LAST SURVIVOR POLICIES.................................................. 30
OTHER MATTERS........................................................... 31
Voting Rights................................................... 31
Statements to Policy Owners..................................... 32
Limit on Right to Contest....................................... 32
Misstatement as to Age and Sex.................................. 32
Settlement Provisions........................................... 32
Beneficiary..................................................... 35
Assignment...................................................... 35
Dividends....................................................... 35
EXECUTIVE OFFICERS AND DIRECTORS........................................ 36
DISTRIBUTION OF THE POLICIES............................................ 41
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS............................ 42
FEDERAL TAX CONSIDERATIONS.............................................. 43
General............................................................ 43
Taxation of Hartford and the Separate Account...................... 43
Income Taxation of Policy Benefits................................. 43
<PAGE>
3
Page
----
Last Survivor Policies............................................. 44
Modified Endowment Contracts....................................... 44
Estate and Generation Skipping Taxes............................... 45
Diversification Requirements....................................... 45
Ownership of the Assets in the Separate Account.................... 46
Life Insurance Purchased for Use in Split Dollar Arrangements...... 47
Federal Income Tax Withholding..................................... 47
Non-Individual Ownership of Policies............................... 47
Other.............................................................. 48
Life Insurance Purchases by Nonresident Aliens
and Foreign Corporations.......................................... 48
LEGAL PROCEEDINGS....................................................... 48
LEGAL MATTERS........................................................... 48
EXPERTS................................................................. 48
REGISTRATION STATEMENT.................................................. 49
APPENDIX A.............................................................. 50
The Policies and/or Policy Owner 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
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.
Cash Value: The Account Value less any Surrender Charge and any Unamortized Tax
charge due upon surrender.
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 management investment companies in which assets of the
Separate Account may be invested.
<PAGE>
5
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: For a Policy issued to an individual, the Policy is the individual
Policy and any endorsements or riders. For a group Policy, the Policy is a
certificate evidencing a participatory interest in a group Policy and any
endorsements or riders. Any references in this Prospectus to a Policy includes
the certificate.
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
<PAGE>
6
surrenders according to the rate set forth in "Deductions and Charges-
Policy Owner Options - Unamortized Tax Charge" Page 23. See "Deductions
and Charges -- Policy Owner Options" page 22.
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 22.
Policy Year: The twelve months between Policy Anniversaries.
Separate Account: Separate Account Five, an account established by Hartford to
separate the assets funding the Policies from other assets of Hartford.
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
(generally 4:00 p.m. Eastern Time) on such days.
Valuation Period: The period between the close of business on successive
Valuation Days.
<PAGE>
7
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 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 30.
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 20 sub-accounts ("Sub-Accounts"), each investing exclusively in a Fund.
The investment objectives of the Funds are as set forth in "The Separate
Account," page 12. Applicants should read the Funds prospectuses accompanying
this Prospectus in connection with the purchase of a Policy.
The following table shows annual fund operating expenses for 1997:
Annual Fund Operating Expenses
(as a percentage of net assets)
- -------------------------------------------------------------------------------
Management Other Total
Fees Expenses Fund
(absent (absent Operating
any fee any Expenses
waivers) expense (1)(2)
reimburse-
ments)
- -------------------------------------------------------------------------------
Putnam VT Asia Pacific Growth Fund 0.800% 0.270% 1.070%
- -------------------------------------------------------------------------------
Putnam VT Diversified Income Fund 0.690% 0.110% 0.800%
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston
0.650% 0.360% 1.010%
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund 0.660% 0.110% 0.770%
- -------------------------------------------------------------------------------
Putnam VT Global Growth Fund 0.600% 0.150% 0.750%
- -------------------------------------------------------------------------------
Putnam VT Growth and Income Fund 0.470% 0.040% 0.510%
- -------------------------------------------------------------------------------
<PAGE>
8
- -------------------------------------------------------------------------------
Putnam VT Health Sciences Fund 0.700% 0.340% 1.040%
- -------------------------------------------------------------------------------
Putnam VT High Yield Fund 0.660% 0.060% 0.720%
- -------------------------------------------------------------------------------
Putnam VT International Growth Fund 0.800% 0.470% 1.270%
- -------------------------------------------------------------------------------
Putnam VT International Growth and Income
Fund 0.800% 0.320% 1.120%
- -------------------------------------------------------------------------------
Putnam VT International New Opportunities
Fund 1.200% 0.680% 1.890%
- -------------------------------------------------------------------------------
Putnam VT Investors Fund 0.650% 0.330% 0.980%
- -------------------------------------------------------------------------------
Putnam VT Money Market Fund 0.450% 0.090% 0.540%
- -------------------------------------------------------------------------------
Putnam VT New Opportunities Fund 0.580% 0.050% 0.630%
- -------------------------------------------------------------------------------
Putnam VT New Value Fund 0.700% 0.150% 0.850%
- -------------------------------------------------------------------------------
Putnam VT OTC & Emerging Growth Fund 0.700% 0.340% 1.040%
- -------------------------------------------------------------------------------
Putnam VT U.S. Government and High Quality
Bond Fund 0.610% 0.080% 0.690%
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund 0.670% 0.070% 0.740%
- -------------------------------------------------------------------------------
Putnam VT Vista Fund 0.650% 0.220% 0.870%
- -------------------------------------------------------------------------------
Putnam VT Voyager Fund 0.540% 0.050% 0.590%
- -------------------------------------------------------------------------------
(1)Management Fees generally represent the fees paid to the investment adviser
or its affiliate for investment and administrative services provided. Other
Expenses are expenses (other than Management Fees) which are deducted from
the fund including legal, accounting and custodian fees. 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 Management Fees and Other Expenses shown in the table above do not
reflect an expense limitation. After an expense limitation, Management
Fees, Other Expenses, and Total Fund Operating Expenses would have been:
<TABLE>
<S> <C> <C> <C>
Management Other Total Fund
Fees Expenses Operating Expenses
Putnam VT The George
Putnam Fund of Boston* 0.49% 0.36% 0.85%
Putnam VT Health
Sciences Fund* 0.56% 0.34% 0.90%
Putnam VT International
Growth Fund 0.73% 0.47% 1.20%
Putnam VT International
New Opportunities Fund 0.92% 0.68% 1.60%
Putnam VT Investors Fund* 0.52% 0.33% 0.85%
Putnam VT OTC & Emerging
Growth Fund* 0.56% 0.34% 0.90%
*Estimated Management Fees, Other Expenses, and Total Fund Operating Expenses.
</TABLE>
The investment adviser for all the Funds is Putnam Management. See "The Separate
Account," page 12.
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
<PAGE>
9
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 18, and "Policy Benefits and Rights --
Lapse and Reinstatement," page 29.
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 21.
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 10 Policy Years.
- - an Unamortized Tax charge 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 23.
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 25, and "Federal Tax Considerations," page 43.
Applicants should review the Funds' prospectuses accompanying this Prospectus
for a
<PAGE>
10
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 22.
For a discussion of the tax consequences of surrender of the Policy or a partial
surrender, see "Federal Tax Considerations," page 43.
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 25.
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 25.
Policy Loans
A Policy Owner may obtain one or both 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 Cash Value. See "Policy Benefits and Rights - Policy Loans,"
page 27.
Lapse
A Policy may terminate if the Cash Surrender Value on any Monthly Activity Date
is less than the required 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 27, and "Lapse and Reinstatement," page 29.
Cancellation and Exchange Rights
A Policy Owner has a limited right to return the Policy for cancellation. If the
Policy Owner returns the Policy 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
<PAGE>
11
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 effect, 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 30.
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 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 43.
THE COMPANY
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 and the
District of Columbia, except New York. Effective on January 1, 1998, Hartford's
name changed from ITT Hartford Life and Annuity Insurance Company to Hartford
Life and Annuity Insurance Company. Hartford was originally incorporated under
the laws of Wisconsin on January 9, 1956, and was subsequently redomiciled to
Connecticut. Its offices are located in Simsbury, Connecticut; however, its
mailing address is P. O. Box 2999, Hartford, CT 06104-2999. Hartford is a
subsidiary of Hartford Fire Insurance Company, one of the largest multiple lines
insurance carriers in the United States. Hartford is ultimately controlled by
The Hartford Financial Services Group, Inc., a Delaware corporation.
Hartford 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.
<PAGE>
12
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 underlying investment options for the Policies are shares of Class IA of the
Putnam Variable Trust, an open-end series investment company. The assets of each
Sub-Account of the Separate Account are invested exclusively in one of the
Funds. The underlying Funds corresponding to each Sub-Account and their
investment objectives are described below. Hartford reserves the right, subject
to compliance with the law, to close Funds or to offer additional funds with
differing investment objectives. There is no assurance that any of the Funds
will achieve its stated objectives. These Funds may not be available in all
states.
Putnam VT Asia Pacific Growth Fund
Seeks capital appreciation by investing primarily in securities of companies
located in Asia and in the Pacific Basin. The fund's investments will normally
include common stocks, preferred stocks, securities convertible into common
stocks or preferred stocks, and warrants to purchase common stocks or preferred
stocks.
Putnam VT Diversified Income Fund
Seeks high current income consistent with capital preservation by investing in
the following three sectors of the fixed income securities markets: a U.S.
Government Sector, a High Yield Sector (which invests primarily in what are
commonly known as "junk bonds"), and an International Sector. See the special
considerations for investments in high yield securities described in the Fund
prospectus.
Putnam VT The George Putnam Fund of Boston
Seeks to provide a balanced investment composed of a well-diversified portfolio
of stocks and bonds which will produce both capital growth and current income.
Putnam VT Global Asset Allocation Fund
Seeks a high level of long-term total return consistent with preservation of
capital by investing in U.S. equities, international equities, U.S. fixed income
securities, and international fixed income securities.
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13
Putnam VT Global Growth Fund
Seeks capital appreciation through a globally diversified portfolio of common
stocks.
Putnam VT Growth and Income Fund
Seeks capital growth and current income by investing primarily in common stocks
that offer potential for capital growth, current income, or both.
Putnam VT Health Sciences Fund
Seeks capital appreciation by investing at least 80% of its assets (other than
assets invested in U.S. government securities, short-term debt obligations, and
cash or money market instruments) in common stocks and other securities of
companies in the health sciences industries.
Putnam VT High Yield Fund
Seeks high current income and, when consistent with this objective, a secondary
objective of capital growth, by investing primarily in high-yielding,
lower-rated fixed income securities, constituting a portfolio which Putnam
Management believes does not involve undue risk to income or principal. See the
special considerations for investments in high yield securities described in the
Fund prospectus.
Putnam VT International Growth Fund
Seeks capital appreciation by investing primarily in equity securities of
companies located in a country other than the United States.
Putnam VT International Growth and Income Fund
Seeks capital growth, and a secondary objective of high current income by
investing primarily in common stocks that offer potential for capital growth and
may, when consistent with its investment objectives, invest in common stocks
that offer potential for current income. Under normal market conditions, the
fund expects to invest substantially all of its assets in securities principally
traded on markets outside the United States.
Putnam VT International New Opportunities Fund
Seeks long term capital appreciation by investing in companies that have
above-average growth prospects due to the fundamental growth of their market
sector. Under normal market conditions, the fund expects to invest substantially
all of its total assets other than cash or short-term investments held pending
investment, in common stocks,
<PAGE>
14
preferred stocks, convertible preferred stocks, convertible bonds and other
equity securities principally traded in securities markets outside the United
States.
Putnam VT Investors Fund
Seeks long-term growth of capital and any increased income that results from
this growth by investing primarily in common stocks that Putnam Management
believes afford the best opportunity for capital growth over the long term.
Putnam VT Money Market Fund
Seeks as high a rate of current income as Putnam Management believes is
consistent with preservation of capital and maintenance of liquidity by
investing in high-quality money market instruments.
Putnam VT New Opportunities Fund
Seeks long-term capital appreciation by investing principally in common stocks
of companies in sectors of the economy which Putnam Management believes possess
above-average long-term growth potential.
Putnam VT New Value Fund
Seeks long-term capital appreciation by investing primarily in common stocks
that Putnam Management believes are undervalued at the time of purchase and have
the potential for long-term capital appreciation.
Putnam VT OTC & Emerging Growth Fund
Seeks capital appreciation by investing primarily in common stocks that Putnam
Management believes have potential for capital appreciation significantly
greater than that of market averages.
Putnam VT U.S. Government and High Quality Bond Fund
Seeks current income consistent with preservation of capital by investing
primarily in securities issued or guaranteed as to principal and interest by the
U.S. Government or by its agencies or instrumentalities and in other debt
obligations rated at least A by a nationally recognized securities rating agency
such as Standard & Poor's or Moody's Investor Service, Inc. or, if not rated,
determined by Putnam Management to be of comparable quality.
Putnam VT Utilities Growth and Income Fund
Seeks capital growth and current income by concentrating its investments in debt
and equity securities issued by companies in the public utilities industries.
<PAGE>
15
Putnam VT Vista Fund
Seeks capital appreciation by investing in a diversified portfolio of common
stocks which Putnam Management believes have the potential for above-average
capital appreciation.
Putnam VT Voyager Fund
Seeks capital appreciation by investing primarily in common stocks of companies
that Putnam Management believes have potential for capital appreciation that is
significantly greater than that of market averages.
Putnam VT Asia Pacific Growth Fund, Putnam VT Diversified Income Fund, Putnam VT
The George Putnam Fund of Boston, Putnam VT Global Growth Fund, Putnam VT Growth
and Income Fund, Putnam VT Health Sciences Fund, Putnam VT High Yield Fund,
Putnam VT International Growth Fund, Putnam VT International Growth and Income
Fund, Putnam VT International New Opportunities Fund, Putnam VT Investors Fund,
Putnam VT Money Market Fund, Putnam VT New Opportunities Fund, Putnam VT New
Value Fund, Putnam VT OTC & Emerging Growth Fund, Putnam VT U.S. Government and
High Quality Bond Fund, Putnam VT Utilities Growth and Income Fund, Putnam VT
Vista Fund, and Putnam VT Voyager Fund are generally managed in styles similar
to other open-end investment companies which are managed by Putnam Management
and whose shares are generally offered to the public. These other funds managed
by Putnam Management may, however, employ different investment practices and may
invest in securities different from those in which their counterpart Funds
invest, and consequently will not have identical portfolios or experience
identical investment results.
The Funds are available only to serve as the underlying investment for variable
annuity and variable life policies. A full description of the Funds, their
investment objectives, policies and restrictions, risks, charges and expenses
and other aspects of their operation are contained in the accompanying Fund's
prospectuses, which should be read in conjunction with this Prospectus before
investing, and in the Funds Statement of Additional Information which may be
ordered without charge from Putnam Investor Services, Inc.
It is conceivable that in the future it may be disadvantageous for variable
annuity separate accounts and variable life insurance separate accounts to
invest in the Funds simultaneously. Although Hartford and the Funds do not
currently foresee any such disadvantages either to variable annuity contract
owners or to variable life insurance policy owners, the Trust's Board of
Trustees intends to monitor events in order to identify any material conflicts
between such contract owners and policy owners and to determine what action, if
any, should be taken in response thereto. If the Fund's Board of Trustees were
to conclude that separate funds should be established for variable life and
variable annuity separate accounts, the variable life policy owners and the
variable
<PAGE>
16
annuity contract owners would not bear any expenses attendant upon establishment
of such separate funds.
Investment Adviser
Putnam Management, One Post Office Square, Boston, MA 02109, serves as the
investment manager for the Funds. An affiliate, Putnam Advisory Company, Inc.,
manages domestic and foreign institutional accounts and mutual funds. Another
affiliate, Putnam Fiduciary Trust Company, provides investment advice to
institutional clients under its banking and fiduciary policies. Putnam
Management and its affiliates are wholly-owned subsidiaries of Marsh & McLennan
Companies, Inc., a publicly owned holding company whose principal businesses are
international insurance brokerage and employee benefit consulting.
Subject to the general oversight of the Trust's Board of Trustees, Putnam
Management manages the Funds' portfolios in accordance with their stated
investment objectives and policies, makes investment decisions for the Funds,
places orders to purchase and sell securities on behalf of the Funds and
administers the affairs of the Funds. For its services, the Funds pay Putnam
Management a quarterly fee. See the accompanying Funds prospectuses for a more
complete description of Putnam Management and the respective fees of the Funds.
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
<PAGE>
17
receives the initial payment with the application, Hartford will provide fixed
conditional insurance during underwriting according to the terms of a
conditional receipt. The fixed conditional insurance will be the insurance
applied for, up to a maximum that varies by age. If no fixed conditional
insurance was in effect, on 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 at Hartford's Home Office, Hartford will allocate the entire
premium to the Putnam Money Market Sub-Account. After the expiration of the
right to cancel period, the Account Value in the Putnam Money Market
Sub-Account 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 the Putnam Money
Market Sub-Account) is 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
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18
particular Sub-Account next computed after receipt of the premium payment.
Accumulation Unit Values
The Accumulation Unit Value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
Valuation Day by multiplying the Accumulation Unit Value of the particular
Sub-Account on the preceding Valuation Day by a "Net Investment Factor" for that
Sub-Account for the Valuation Period then ended. The Net Investment Factor for
each Sub-Account is the net asset value per share of the corresponding Fund at
the end of the Valuation Period (plus the per share dividends or capital gains
by that Fund if the ex-dividend date occurs in the Valuation Period then ended)
divided by the net asset value per share of the corresponding Fund at the
beginning of the Valuation Period. 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 25.
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 29.
The Policy Owner may elect one of two options offered by Hartford to pay the
Mortality
<PAGE>
19
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:
- -------------------------------------------------------------------------------
Deducted from All When Deduction is
Deduction or Charge Policies made Amount Deducted
- -------------------------------------------------------------------------------
Individualized
depending on age,
sex and other
Cost of Insurance Yes Monthly factors
- -------------------------------------------------------------------------------
.25% of amounts
Administrative allocated to the
Charge Yes Monthly Separate Account
- -------------------------------------------------------------------------------
Only Policies
with an Account
Value of less
than $50,000 on
the Policy On the Policy
Anniversary Date Anniversary Date
Annual Maintenance or date of or upon surrender
Fee surrender of the Policy $30.00
- -------------------------------------------------------------------------------
A percentage of
the amount
surrendered,
depending on the
Policy Year,
Upon surrender or which is
partial surrender attributable to
Surrender Charge Yes of the Policy premiums paid
- -------------------------------------------------------------------------------
Under Option 1:
.40% of Account
Value for Policy
Years 1-10
Under Option 1:
Monthly Under Option 2:
4% of each
Under Option 2: premium payment
Receipt of premium in all Policy
Tax Expense Charge Yes payment Years
===============================================================================
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20
- -------------------------------------------------------------------------------
Under Option 1:
.90% of Account
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
Mortality and years 11 and
Expense Risk Charge Yes Monthly beyond
- -------------------------------------------------------------------------------
A percentage of
the Account Value
depending on the
Upon surrender or Policy Year the
Unamortized Tax No, only under partial surrender surrender takes
Charge Option 1 of the Policy place.
- -------------------------------------------------------------------------------
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
Policies eligible for simplified underwriting, standard risks have a guaranteed
cost of insurance of 125% of the 1980 Commissioners Standard Ordinary
Smoker/Non-Smoker Mortality Table through age 90, grading down to 100% of the
1980 Commissioners Standard Ordinary Smoker/Non-Smoker Mortality Table at age
100 (age last birthday). For Policies not eligible for simplified underwriting,
standard risks have a guaranteed cost of insurance of 100% of the 1980
Commissioners Standard Ordinary Smoker/Non-Smoker Mortality Table. (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.
<PAGE>
21
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 25.)
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.
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22
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 not exceed the cost Hartford incurs in providing
administrative services under the Policies. Hartford reserves the right to
waive the Annual Maintenance Fee under certain conditions.
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 28.
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
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23
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 the 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 cost 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 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:
POLICY
YEAR RATE
---- ----
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%
After the ninth Policy Year, no Unamortized Tax charge will be imposed.
OPTION 2: FRONTED CHARGES: Under this option, the Policy Owner will pay:
<PAGE>
24
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 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 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 the Fund shares reflects investment advisory fees and
administrative expenses already deducted from the assets of the Funds. These
charges are described in the Funds' prospectuses accompanying this Prospectus.
<PAGE>
25
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 under the Policy 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:
A B
- -
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%
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 - Settlement Provisions," page 32.
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
<PAGE>
26
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 18.
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 a confirmation of the
transfer within five 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 30 days.
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.
<PAGE>
27
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 Code 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
<PAGE>
28
period must be repaid before the Policy will be reinstated. See "Policy Benefits
and Rights -- Lapse and Reinstatement," page 29.
A loan, whether or not repaid, will have a permanent effect on the Account Value
because the investment results of each Sub-Account will apply only to the amount
remaining in such Sub-Accounts. The longer a loan is outstanding, the greater
the effect is likely to be. The effect could be favorable or unfavorable. If the
Sub-Accounts earn more than 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
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 43.
If the Policy Owner chooses to apply the surrender proceeds to a payment option
(see "Other Matters -- Settlement Provisions," page 32), 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 any applicable Surrender Charge.
<PAGE>
29
Partial Surrenders
While the Policy is in force, a Policy Owner may elect, by written request, to
make partial surrenders from the Cash Surrender Value. The Cash Surrender Value,
after a 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 withdrawal 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 withdrawal. Partial surrenders in excess of the Annual Withdrawal Amount
will be subject to the Surrender Charge and any Unamortized Tax charges. See
"Deductions and Charges - Surrender Charge," page 22. For a discussion of the
tax consequences of partial surrenders, see "Federal Tax Considerations," page
43.
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 43.)
Lapse and Reinstatement
The Policy will remain in effect 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 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 payment is
forthcoming 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 25.
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.
<PAGE>
30
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 cancelled 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 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.
Once the Policy is in force, 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 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 50.
2. To qualify for simplified underwriting under a last survivor policy, both
Insureds
<PAGE>
31
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 43.
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 27) will not be considered in
determining the voting interests of the Policy Owner. Policy Owners should
review the Funds prospectuses 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
<PAGE>
32
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.
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 payment 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.
Settlement Provisions
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
<PAGE>
33
are permitted after payments commence. Full surrender or partial surrenders may
be made from payment Options 1 or 6, but they are subject to the 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
<PAGE>
34
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 option, you may, at any time, request a full
surrender and receive, within seven days, the termination value of the Policy 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: Policy Proceeds Settlement Option
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 surrenders 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 Policy
contains variable payment annuity tables derived from the 1983(a) Individual
Annuity Mortality Table, with ages set back one year and with an assumed
investment rate ("A.I.R.") of 5% per annum. The total first monthly variable
annuity payment is determined by multiplying the proceeds
<PAGE>
35
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>
36
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
NAME; AGE POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION
YEAR OF ELECTION OR EMPLOYMENT FOR PAST FIVE YEARS;
OTHER DIRECTORSHIPS
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Wendell J. Bossen Vice President, 1995** Vice President (1992-Present), Hartford Life and
64 Accident Insurance Company; Vice President
(1992-Present), Hartford Life Insurance
Company; President (1992-Present), International
Corporate Marketing Group, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
Gregory A. Boyko Senior Vice President, Chief Vice President & Controller (1995-1997), Hartford;
46 Financial Officer & Treasure Director (1997-Present); Senior Vice President,
1997 Chief Financial Officer & Treasurer (1997-
Director, 1997 * Present); Vice President & Controller (1995-
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 Senior Vice President, 1997 Vice President (1993-1997), Hartford; Senior Vice
60 President, (1997-Present); Vice President (1989-
1997), Hartford Life and Accident Insurance
Company; Senior Vice President (1997-Present);
Vice President (1989-1997); Senior Vice
President (1997-Present); Vice President (1989-
1997), Hartford Life Insurance Company.
- ----------------------------------------------------------------------------------------------------------------------------
Ann M. de Raismes Senior Vice President, 1997 Vice President (1994-1997), Hartford; Senior
47 Director of Human Resources, Vice President (1997-Present); Vice President
1994 (1994-1997); Assistant Vice President (1992-
1994); Director of Human Resources (1991-
Present), Hartford Life and Accident Insurance
Company; Senior Vice President (1997-Present);
Vice President (1994-1997); Assistant Vice
President (1992-1994); Director of Human
Resources (1991-Present), Hartford Life
Insurance Company; Vice President, Human
Resources (1997-Present), Hartford Life, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
James R. Dooley Vice President, 1993 Director, Information Services (1973-1997),
61 Hartford Life Insurance Company.
- ----------------------------------------------------------------------------------------------------------------------------
Timothy M. Fitch Vice President, 1995 Vice President (1995-Present); Actuary (1994-
45 Actuary, 1997 Present); Assistant Vice President (1992-1995),
Hartford Life and Accident Insurance Company;
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
37
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
NAME; AGE POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION
YEAR OF ELECTION OR EMPLOYMENT FOR PAST FIVE YEARS;
OTHER DIRECTORSHIPS
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Vice President (1995-Present); Actuary (1994-
Present); Assistant Vice President (1992-1995),
Hartford Life Insurance Company.
- ----------------------------------------------------------------------------------------------------------------------------
David T. Foy Vice President, 1998 Assistant Vice President (1995-1998), Hartford;
31 Vice President (1998-Present), Assistant Vice
President (1995-1998), Hartford Life Insurance
Company.
- ----------------------------------------------------------------------------------------------------------------------------
J. Richard Garrett Vice President, 1994 Treasurer (1994-1997), Hartford; Vice President
53 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 Vice President, 1997 Assistant Vice President (1995-1997), Hartford;
52 Assistant Vice President (1995-1997), Hartford
Life and Accident Insurance Company; Assistant
Vice President (1995-Present), Hartford Life
Insurance Company.
- ----------------------------------------------------------------------------------------------------------------------------
John P. Ginnetti Executive Vice President and Senior Vice President - Individual Life and Annuity
52 Director, Asset Management Division (1988-1994), Hartford; Director (1988-
Services, 1994 Present); Director (1988-Present); Executive Vice
Director, 1988 President & Director, Asset Management Services
(1994-Present); Senior Vice President - Individual
Life and Annuity Division (1988-1994), Hartford
Life and Accident Insurance Company; Executive
Vice President, Asset Management, Hartford Life,
Inc. (1997-Present).
- ----------------------------------------------------------------------------------------------------------------------------
William A. Senior Vice President, 1997 Senior Vice President (1997- Present), Hartford;
Godfrey, III Senior Vice President (1997-Present), Hartford
41 Life and Accident Insurance Company; Vice
President Information Technology (1997-Present),
Hartford Life, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
Lynda Godkin Senior Vice President, 1997 Assistant General Counsel and Secretary (1994-
44 General Counsel, 1996 1995), Hartford; Director (1997-Present); Senior
Corporate Secretary, 1996 Vice President (1997-Present); General Counsel
Director, 1997 * (1996-Present); Corporate Secretary (1995-
Present); Associate General Counsel (1995-
1996); Assistant General Counsel and Secretary
(1994-1995); Counsel (1990-1994), Hartford Life
and Accident Insurance Company; Senior Vice
President (1997-Present); General Counsel
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
38
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
NAME; AGE POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION
YEAR OF ELECTION OR EMPLOYMENT FOR PAST FIVE YEARS;
OTHER DIRECTORSHIPS
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(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 Senior Vice President, 1998 Vice President (1994-1998), Hartford; Senior Vice
53 Vice President, 1994 President (1998-Present); Vice President (1993-
1997); Assistant Vice President (1987-1993),
Hartford Life and Accident Insurance Company;
Senior Vice President (1998-Present); Vice
President (1994-1997); Assistant Vice President
(1987-1994), Hartford Life Insurance Company.
- ----------------------------------------------------------------------------------------------------------------------------
Christopher Graham Vice President, 1997
47
- ----------------------------------------------------------------------------------------------------------------------------
Mark E. Hunt Vice President, 1998 Assistant Vice President (1997-1998), Hartford;
37 Vice President (1998-Present), Hartford Life and
Accident Insurance Company.
- ----------------------------------------------------------------------------------------------------------------------------
Stephen T. Joyce Vice President, 1997 Assistant Vice President (1995-1997), Hartford;
39 Assistant Vice President (1994-1997), Hartford
Life and Accident Insurance Company; Vice
President (1997-Present); Assistant Vice
President (1994-1997), Hartford Life Insurance
Company.
- ----------------------------------------------------------------------------------------------------------------------------
Michael D. Keeler Vice President, 1998 Vice President (1998-Present); Hartford Life and
37 Accident Insurance Company.
- ----------------------------------------------------------------------------------------------------------------------------
Robert A. Kerzner Senior Vice President, 1998 Senior Vice President (1998-Present); Vice
46 Vice President, 1997 President (1994-1998), Hartford; Senior Vice
President (1998-Present); Vice President (1994-
1997); Regional Vice President (1991-1994),
Hartford Life Insurance Company.
- ----------------------------------------------------------------------------------------------------------------------------
David N. Levenson Vice President, 1998 Assistant Vice President (1997-1998), Hartford.
31
- ----------------------------------------------------------------------------------------------------------------------------
William B. Malchodi, Vice President, 1994 Vice President (1994-Present);
Jr. Director of Taxes (1992-1998), Hartford Life and
50 Accident Insurance Company; Vice President
(1994-Present); Director of Taxes (1991-1998),
Hartford Life Insurance Company.
- ----------------------------------------------------------------------------------------------------------------------------
Thomas M. Marra Executive Vice President, 1996 Senior Vice President (1993-1996); Director of
39 Director, Individual Life and Individual Annuities (1991-1993), Hartford;
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
39
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
NAME; AGE POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION
YEAR OF ELECTION OR EMPLOYMENT FOR PAST FIVE YEARS;
OTHER DIRECTORSHIPS
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Annuity Division, 1993 Director (1994-Present); Executive Vice President
Director, 1994* (1995-Present); Director, Individual Life and
Annuity Division (1994-Present); Senior Vice
President (1994-1995); Vice President (1989-
1994); Actuary (1987-1997), Hartford Life and
Accident Insurance Company; Director (1994-
Present); Executive Vice President (1995-
Present); Director, Individual Life and Annuity
Division (1994-Present); Senior Vice President
(1994-1995); Vice President (1989-1994); Actuary
(1987-1995), Hartford Life Insurance Company;
Executive Vice President, Individual Life and
Annuities (1997-Present), Hartford Life, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
Steven L. Matthieson Vice President, 1984 Director of New Business (1984-1997), Hartford.
53
- ----------------------------------------------------------------------------------------------------------------------------
C. Michael O'Halloran Vice President, 1997 Vice President (1997-Present), Hartford Life and
51 Accident Insurance Company; 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 Senior Vice President, 1997 Vice President (1993-1997); Assistant Vice
37 Chief Actuary, 1994 President (1992-1993); Actuary (1989-1994),
Hartford; Senior Vice President (1997-Present);
Chief Actuary (1995-Present); Vice President
(1993-1997); Actuary (1990-1995), Hartford Life
and Accident Insurance Company; 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 Vice President, 1987 Treasurer (1987-1997); Controller (1987-1997),
50 Hartford.
- ----------------------------------------------------------------------------------------------------------------------------
Lowndes A. Smith President, 1989 Chief Operating Officer (1989-1997), Hartford;
58 Chief Executive Officer Director (1981-Present); President (1989-
1997 Present); Chief Executive Officer (1997-Present);
Director, 1985 * Chief Operating Officer (1989-1997), Hartford Life
and Accident Insurance Company; Director (1981-
Present); President (1989-
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
40
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
NAME; AGE POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION
YEAR OF ELECTION OR EMPLOYMENT FOR PAST FIVE YEARS;
OTHER DIRECTORSHIPS
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Present), Chief Executive Officer (1997-Present);
Chief Operating Officer (1989-1997), Hartford Life Insurance
Company; Chief Executive Officer and President
and Director (1997-Present), Hartford Life, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
Raymond P. Welnicki Senior Vice President & Vice President (1993-1994), Hartford; Director
49 Director, Employee Benefit (1994-Present); Senior Vice President (1995-
Division, 1994 Present); Director, Employee Benefit Division
Director, 1994* (1997-Present); Vice President (1993-1995),
Hartford Life and Accident Insurance Company;
Senior Vice President, Employee Benefits (1997-
Present), Hartford Life, Inc.; Board of Directors,
Ethix Corp.
- ----------------------------------------------------------------------------------------------------------------------------
Walter C. Welsh Senior Vice President, 1997 Senior Vice President (1997-Present); Vice
51 President (1994-1997); Assistant Vice President
(1992-1995), Hartford Life and Accident
Insurance Company; Senior Vice President
(1997-Present); Vice President (1995-1997);
Assistant Vice President (1992-1995), Hartford
Life Insurance Company; Vice President,
Government Affairs (1997-Present), Hartford Life,
Inc.
- ----------------------------------------------------------------------------------------------------------------------------
Lizabeth H. Zlatkus Senior Vice President, 1997 Vice President (1994-1997); Assistant Vice
39 Director, 1994* President (1992-1994), Hartford; Director (1994-
Present); Senior Vice President (1997-Present);
Vice President (1994-1997); Assistant Vice
President (1992-1994), Hartford Life and Accident
Insurance Company; Vice President, Group Life
and Disability (1997-Present), Hartford Life, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
David M. Senior Vice President, 1997 Director (1998-Present); Senior Vice President
Znamierowski Director, 1998 (1997-Present), Hartford Life and Accident
38 Insurance Company; Director (1998-Present);
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 Company.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
<PAGE>
41
* Denotes date of election to Board of Directors of Hartford.
** Affiliated Company of The Hartford Financial Services Group, Inc.
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.
Broker-dealers or financial institutions are compensated according to a schedule
set forth by HSD and any applicable rules or regulations for variable insurance
compensation. Compensation is generally based on premium payments made by
policyholders or contract owners. This compensation is usually paid from the
sales charges described in this Prospectus.
In addition, a broker-dealer or financial institution may also receive
additional compensation for, among other things, training, marketing or other
services provided. HSD, its affiliates or Hartford may also make compensation
arrangements with certain broker-dealers or financial institutions based on
total sales by the broker-dealer or financial institution of insurance products.
These payments, which may be different for different broker-dealers or financial
institutions, will be made by HSD, its affiliates or Hartford out of their own
assets and will not effect the amounts paid by the policyholders or contract
owners to purchase, hold or surrender variable insurance products.
Hartford may provide information on various topics to Policy Owners and
prospective Policy 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
<PAGE>
42
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>
43
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 these Policies 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," on page 25). 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 Policies should be treated as life
insurance contracts under Section 7702 of the Code. The death benefit under a
life insurance contract is generally excluded from the gross income of the
beneficiary. Also, a life insurance Policy Owner is generally not taxed on
increments in the contract value
<PAGE>
44
until the Policy is partially or completely surrendered. Section 7702 limits the
amount of premiums that may be invested in a Policy that is treated as life
insurance. Hartford intends to monitor premium levels to assure compliance with
the Section 7702 requirements.
During the first fifteen Policy Years, an "income first" rule generally applies
to distributions of cash required to be made under Code Section 7702 because of
a reduction in benefits under the Policy.
The Maturity Date Extension Rider allows a Policy Owner to extend the Maturity
Date to the date of the 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 contract for federal income tax purposes after the scheduled
Maturity Date. However, due to the lack of specific guidance on this issue, the
result is not certain. If the Policy is not treated as a life insurance contract
for federal income tax purposes after the scheduled Maturity Date, among other
things, the Death Proceeds may be taxable to the recipient. The Policy Owner
should consult a qualified tax adviser regarding the possible adverse tax
consequences resulting from an extension of the scheduled Maturity Date.
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 contract is
not directly addressed by Section 7702. In the absence of final regulations or
other guidance issued under Section 7702, there is necessarily some uncertainty
whether a last survivor Contract will meet the Section 7702 definition of a life
insurance contract.
Modified Endowment Contracts
A life insurance contract is treated as a "modified endowment contract" under
Section 7702A of the Code if it meets the definition of life insurance in
Section 7702 but fails the "seven-pay" test of Section 7702A. The seven-pay test
provides that premiums cannot be paid at a rate more rapidly than that allowed
by the payment of seven annual premiums using specified computational rules
provided in Section 7702A(c). The large single premium permitted under the
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 contract for federal income tax purposes. However, an
exchange under Section 1035 of the Code of a life insurance contract issued
before June 21, 1988 will not cause the new Policy to be treated as a modified
endowment contract if no additional premiums are paid and there is no change in
the death benefit as the result of the exchange.
<PAGE>
45
A contract that is classified as modified endowment contract is generally
eligible for the beneficial tax treatment accorded to life insurance. That is,
the death benefit is excluded from income and increments in value are not
subject to current taxation. However, loans, distributions or other amounts
received from a modified endowment contract during the life of the Insured will
be taxed to the extent of any accumulated income in the contract (generally, the
excess of account value over premiums paid). Amounts that are taxable
withdrawals will be subject to a 10% additional tax, with certain exceptions.
All modified endowment contracts that are issued within any calendar year to the
same Policy Owner by one company or its affiliates shall be treated as one
modified endowment contract in determining the taxable portion of any loan or
distributions.
Estate and Generation Skipping Taxes
When the Insured dies, the Death Proceeds will generally be includible in the
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.
The federal estate tax is integrated with the federal gift tax under a unified
rate schedule and unified credit which shelters up to $625,000 (1998) from the
estate and gift tax. The Taxpayer Relief Act of 1997 gradually raises the credit
over the next eight years to $1,000,000. In addition, an unlimited marital
deduction may be available for federal estate and gift tax purposes. The
unlimited marital deduction permits the deferral of taxes until the death of the
surviving spouse (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 contract (other
than a pension plan policy) will not be treated as a life insurance contract for
any period
<PAGE>
46
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 contract,
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 contract is
represented by any one investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three investments, and no
more than 90% is represented by any four investments. In determining whether the
diversification standards are met, all securities of the same issuer, all
interests in the same real property project, and all interests in the same
commodity are each treated as a single investment. In addition, in the case of
government securities, each government agency or instrumentality shall be
treated as a separate issuer.
A separate account must be in compliance with the diversification standards on
the last day of each calendar quarter or within 30 days after the quarter ends.
If an insurance company inadvertently fails to meet the diversification
requirements, the company may comply within a reasonable period and avoid the
taxation of policy income on an ongoing basis. However, either the company or
the 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 contracts subject to the diversification requirements in a manner
that will maintain adequate diversification.
Ownership of the Assets in the Separate Account
In order for a variable life insurance contract to qualify for tax deferral,
assets in the segregated asset accounts supporting the variable contract must be
considered to be owned by the insurance company and not by the variable contract
owner. The Internal Revenue Service ("IRS") has issued several rulings which
discuss investor control. The IRS has ruled that certain incidents of ownership
by the contract owner, such as the ability to select and control investments in
a separate account, will cause the contract owner to be treated as the owner of
the assets for tax purposes.
Further, in the explanation to the temporary Section 817 diversification
regulations, the Treasury Department noted that the temporary regulations "do
not provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor, rather
than the insurance company, to be treated as the owner of the assets in the
account." The explanation further
<PAGE>
47
indicates that "the temporary regulations provide that in appropriate cases a
segregated asset account may include multiple sub-accounts, but do not specify
the extent to which policyholders may direct their investments to particular
sub-accounts without being treated as the owners of the underlying assets.
Guidance on this and other issues will be provided in regulations or revenue
rulings under section 817(d), relating to the definition of variable contract."
The final regulations issued under Section 817 did not provide guidance
regarding investor control, and as of the date of this Prospectus, no other such
guidance has been issued. Further, Hartford does not know if or in what form
such guidance will be issued. In addition, although regulations are generally
issued with prospective effect, it is possible that regulations may be issued
with retroactive effect. Due to the lack of specific guidance regarding the
issue of investor control, there is necessarily some uncertainty regarding
whether a Policy Owner could be considered the owner of the assets for tax
purposes. Hartford reserves the right to modify the contracts, as necessary, to
prevent Policy Owners from being considered the owners of the assets in the
separate accounts.
Life Insurance Purchased for Use in Split Dollar Arrangements
On January 26, 1996, the IRS released a technical advice memorandum ("TAM") on
the taxability of life insurance policies used in certain split dollar
arrangements. A TAM, issued by the National Office of the IRS, provides advice
as to the internal revenue laws, regulations, and related statutes with respect
to a specific set of facts and a specific taxpayer. In the TAM, among other
things, the IRS concluded that an employee was subject to current taxation on
the excess of the cash surrender value of the policy over the premiums to be
returned to the employer. Purchasers of life insurance policies to be used in
split dollar arrangements are strongly advised to consult with a qualified tax
adviser to determine the tax treatment resulting from such an arrangement.
Federal Income Tax Withholding
If any amounts are deemed to be current taxable income to the Policy Owner, such
amounts will be subject to federal income tax withholding and reporting,
pursuant to the Code.
Non-Individual Ownership of Policies
In certain circumstances, the Code limits the application of specific tax
advantages to individual owners of life insurance contracts. Prospective Policy
Owners which are not individuals should consult a qualified tax adviser to
determine the potential impact on the purchaser.
<PAGE>
48
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, Senior Vice President, General Counsel and Corporate Secretary of
Hartford.
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 the report on the statutory-basis financial
statements of Hartford Life and Annuity Insurance Company (formerly 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
<PAGE>
49
Department, and are not presented in accordance with generally accepted
accounting principles. The principal business address of Arthur Andersen LLP is
One Financial Plaza, Hartford, Connecticut 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 Product
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>
50
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 0.75% of the average daily net assets of the Funds for investment
advisory and administrative services fees. The gross annual investment return
rates of 0%, 6% and 12% on the Fund's assets are equal to net annual investment
return rates (net of the 0.75% average daily charge) of -0.75%, 5.25% and
11.25%, respectively.
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
25).
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
<PAGE>
51
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>
52 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% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,814 9,821 44,053 10,754 9,762 44,053
2 11,025 11,697 10,714 44,053 11,571 10,589 44,053
3 11,576 12,655 11,684 44,053 12,455 11,487 44,053
4 12,155 13,694 12,888 44,053 13,413 12,612 44,053
5 12,763 14,820 14,035 44,053 14,453 13,673 44,053
6 13,401 16,042 15,481 44,053 15,582 15,026 44,053
7 14,071 17,366 16,836 44,053 16,806 16,280 44,053
8 14,775 18,803 18,509 44,053 18,136 17,846 44,053
9 15,513 20,360 20,110 44,053 19,582 19,333 44,053
10 16,289 22,050 22,050 44,053 21,154 21,154 44,053
11 17,103 24,123 24,123 44,053 23,054 23,054 44,053
12 17,959 26,393 26,393 44,053 25,147 25,147 44,053
13 18,856 28,880 28,880 44,053 27,461 27,461 44,053
14 19,799 31,614 31,614 44,053 30,023 30,023 44,053
15 20,789 34,640 34,640 46,418 32,868 32,868 44,053
16 21,829 37,972 37,972 49,363 36,022 36,022 46,829
17 22,920 41,620 41,620 53,274 39,482 39,482 50,537
18 24,066 45,615 45,615 57,475 43,270 43,270 54,520
19 25,270 49,989 49,989 61,987 47,418 47,418 58,799
20 26,533 54,811 54,811 66,870 51,992 51,992 63,430
25 33,864 86,619 86,619 100,478 82,155 82,155 95,300
35 55,160 215,966 215,966 228,925 204,699 204,699 216,982
</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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 53
- --------------------------------------------------------------------------------
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% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,230 9,249 44,053 10,168 9,189 44,053
2 11,025 10,465 9,506 44,053 10,330 9,374 44,053
3 11,576 10,707 9,769 44,053 10,486 9,553 44,053
4 12,155 10,955 10,190 44,053 10,634 9,875 44,053
5 12,763 11,209 10,469 44,053 10,773 10,038 44,053
6 13,401 11,470 10,956 44,053 10,900 10,391 44,053
7 14,071 11,738 11,250 44,053 11,012 10,530 44,053
8 14,775 12,013 11,753 44,053 11,106 10,851 44,053
9 15,513 12,295 12,064 44,053 11,179 10,951 44,053
10 16,289 12,584 12,584 44,053 11,225 11,225 44,053
11 17,103 13,011 13,011 44,053 11,333 11,333 44,053
12 17,959 13,453 13,453 44,053 11,413 11,413 44,053
13 18,856 13,911 13,911 44,053 11,459 11,459 44,053
14 19,799 14,386 14,386 44,053 11,466 11,466 44,053
15 20,789 14,878 14,878 44,053 11,427 11,427 44,053
16 21,829 15,388 15,388 44,053 11,333 11,333 44,053
17 22,920 15,916 15,916 44,053 11,176 11,176 44,053
18 24,066 16,464 16,464 44,053 10,941 10,941 44,053
19 25,270 17,032 17,032 44,053 10,613 10,613 44,053
20 26,533 17,620 17,620 44,053 10,177 10,177 44,053
25 33,864 20,897 20,897 44,053 5,615 5,615 44,053
35 55,160 29,494 29,494 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>
54 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% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,718 8,749 44,053 9,655 8,688 44,053
2 11,025 9,443 8,504 44,053 9,302 8,366 44,053
3 11,576 9,175 8,265 44,053 8,941 8,034 44,053
4 12,155 8,914 8,180 44,053 8,569 7,841 44,053
5 12,763 8,659 7,951 44,053 8,186 7,484 44,053
6 13,401 8,411 7,927 44,053 7,789 7,311 44,053
7 14,071 8,169 7,708 44,053 7,374 6,919 44,053
8 14,775 7,933 7,693 44,053 6,939 6,704 44,053
9 15,513 7,703 7,484 44,053 6,479 6,263 44,053
10 16,289 7,479 7,479 44,053 5,991 5,991 44,053
11 17,103 7,334 7,334 44,053 5,515 5,515 44,053
12 17,959 7,191 7,191 44,053 4,999 4,999 44,053
13 18,856 7,050 7,050 44,053 4,437 4,437 44,053
14 19,799 6,912 6,912 44,053 3,824 3,824 44,053
15 20,789 6,775 6,775 44,053 3,152 3,152 44,053
16 21,829 6,641 6,641 44,053 2,412 2,412 44,053
17 22,920 6,509 6,509 44,053 1,593 1,593 44,053
18 24,066 6,379 6,379 44,053 681 681 44,053
19 25,270 6,251 6,251 44,053 -- -- --
20 26,533 6,124 6,124 44,053 -- -- --
25 33,864 5,522 5,522 44,053 -- -- --
35 55,160 4,449 4,449 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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 55
- --------------------------------------------------------------------------------
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% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,449 9,699 44,053 10,383 9,633 44,053
2 11,025 11,375 10,625 44,053 11,236 10,486 44,053
3 11,576 12,386 11,636 44,053 12,168 11,418 44,053
4 12,155 13,490 12,890 44,053 13,184 12,584 44,053
5 12,763 14,694 14,094 44,053 14,295 13,695 44,053
6 13,401 16,009 15,609 44,053 15,509 15,109 44,053
7 14,071 17,444 17,044 44,053 16,837 16,437 44,053
8 14,775 19,011 18,811 44,053 18,290 18,090 44,053
9 15,513 20,721 20,521 44,053 19,881 19,681 44,053
10 16,289 22,588 22,588 44,053 21,627 21,627 44,053
11 17,103 24,712 24,712 44,053 23,580 23,580 44,053
12 17,959 27,039 27,039 44,053 25,734 25,734 44,053
13 18,856 29,588 29,588 44,053 28,116 28,116 44,053
14 19,799 32,401 32,401 44,714 30,756 30,756 44,053
15 20,789 35,509 35,509 47,583 33,686 33,686 45,140
16 21,829 38,925 38,925 50,602 36,925 36,925 48,003
17 22,920 42,665 42,665 54,612 40,472 40,472 51,804
18 24,066 46,761 46,761 58,920 44,355 44,355 55,888
19 25,270 51,277 51,277 63,584 48,608 48,608 60,275
20 26,533 56,223 56,223 68,592 53,297 53,297 65,023
25 33,864 88,850 88,850 103,066 84,218 84,218 97,693
35 55,160 221,529 221,529 234,821 209,839 209,839 222,430
</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 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% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,884 9,134 44,053 9,817 9,067 44,053
2 11,025 10,176 9,426 44,053 10,031 9,281 44,053
3 11,576 10,479 9,729 44,053 10,243 9,493 44,053
4 12,155 10,791 10,191 44,053 10,450 9,850 44,053
5 12,763 11,114 10,514 44,053 10,651 10,051 44,053
6 13,401 11,447 11,047 44,053 10,844 10,444 44,053
7 14,071 11,790 11,390 44,053 11,027 10,627 44,053
8 14,775 12,146 11,946 44,053 11,196 10,996 44,053
9 15,513 12,512 12,312 44,053 11,347 11,147 44,053
10 16,289 12,891 12,891 44,053 11,477 11,477 44,053
11 17,103 13,329 13,329 44,053 11,599 11,599 44,053
12 17,959 13,783 13,783 44,053 11,693 11,693 44,053
13 18,856 14,253 14,253 44,053 11,755 11,755 44,053
14 19,799 14,740 14,740 44,053 11,779 11,779 44,053
15 20,789 15,245 15,245 44,053 11,758 11,758 44,053
16 21,829 15,768 15,768 44,053 11,685 11,685 44,053
17 22,920 16,311 16,311 44,053 11,549 11,549 44,053
18 24,066 16,873 16,873 44,053 11,338 11,338 44,053
19 25,270 17,455 17,455 44,053 11,037 11,037 44,053
20 26,533 18,059 18,059 44,053 10,630 10,630 44,053
25 33,864 21,421 21,421 44,053 6,280 6,280 44,053
35 55,160 30,243 30,243 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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 57
- --------------------------------------------------------------------------------
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% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,389 8,639 44,053 9,321 8,571 44,053
2 11,025 9,182 8,432 44,053 9,032 8,282 44,053
3 11,576 8,979 8,229 44,053 8,732 7,982 44,053
4 12,155 8,780 8,180 44,053 8,418 7,818 44,053
5 12,763 8,585 7,985 44,053 8,090 7,490 44,053
6 13,401 8,393 7,993 44,053 7,745 7,345 44,053
7 14,071 8,205 7,805 44,053 7,380 6,980 44,053
8 14,775 8,021 7,821 44,053 6,992 6,792 44,053
9 15,513 7,839 7,639 44,053 6,575 6,375 44,053
10 16,289 7,662 7,662 44,053 6,128 6,128 44,053
11 17,103 7,514 7,514 44,053 5,652 5,652 44,053
12 17,959 7,368 7,368 44,053 5,136 5,136 44,053
13 18,856 7,225 7,225 44,053 4,575 4,575 44,053
14 19,799 7,084 7,084 44,053 3,963 3,963 44,053
15 20,789 6,945 6,945 44,053 3,291 3,291 44,053
16 21,829 6,808 6,808 44,053 2,552 2,552 44,053
17 22,920 6,673 6,673 44,053 1,735 1,735 44,053
18 24,066 6,540 6,540 44,053 824 824 44,053
19 25,270 6,410 6,410 44,053 -- -- --
20 26,533 6,281 6,281 44,053 -- -- --
25 33,864 5,667 5,667 44,053 -- -- --
35 55,160 4,573 4,573 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>
58 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: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,814 9,821 34,014 10,709 9,718 34,014
2 11,025 11,697 10,714 34,014 11,477 10,497 34,014
3 11,576 12,655 11,684 34,014 12,311 11,345 34,014
4 12,155 13,694 12,888 34,014 13,218 12,420 34,014
5 12,763 14,820 14,035 34,014 14,207 13,429 34,014
6 13,401 16,042 15,481 34,014 15,284 14,731 34,014
7 14,071 17,366 16,836 34,014 16,458 15,934 34,014
8 14,775 18,803 18,509 34,014 17,736 17,447 34,014
9 15,513 20,360 20,110 34,014 19,129 18,881 34,014
10 16,289 22,050 22,050 34,014 20,651 20,651 34,014
11 17,103 24,123 24,123 34,014 22,502 22,502 34,014
12 17,959 26,396 26,396 34,014 24,560 24,560 34,014
13 18,856 28,926 28,926 34,133 26,858 26,858 34,014
14 19,799 31,735 31,735 37,130 29,433 29,433 34,437
15 20,789 34,816 34,816 40,388 32,289 32,289 37,455
16 21,829 38,196 38,196 43,926 35,420 35,420 40,734
17 22,920 41,913 41,913 47,362 38,866 38,866 43,919
18 24,066 46,005 46,005 51,066 42,658 42,658 47,351
19 25,270 50,545 50,545 55,094 46,837 46,837 51,053
20 26,533 55,507 55,507 60,503 51,435 51,435 56,065
25 33,864 88,547 88,547 93,860 82,050 82,050 86,974
35 55,160 221,396 221,396 232,466 202,127 202,127 212,234
</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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 59
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,230 9,249 34,014 10,123 9,145 34,014
2 11,025 10,465 9,506 34,014 10,238 9,283 34,014
3 11,576 10,707 9,769 34,014 10,343 9,412 34,014
4 12,155 10,955 10,190 34,014 10,440 9,683 34,014
5 12,763 11,209 10,469 34,014 10,526 9,794 34,014
6 13,401 11,470 10,956 34,014 10,597 10,091 34,014
7 14,071 11,738 11,250 34,014 10,650 10,170 34,014
8 14,775 12,013 11,753 34,014 10,678 10,425 34,014
9 15,513 12,295 12,064 34,014 10,673 10,447 34,014
10 16,289 12,584 12,584 34,014 10,630 10,630 34,014
11 17,103 13,011 13,011 34,014 10,631 10,631 34,014
12 17,959 13,453 13,453 34,014 10,590 10,590 34,014
13 18,856 13,911 13,911 34,014 10,501 10,501 34,014
14 19,799 14,386 14,386 34,014 10,362 10,362 34,014
15 20,789 14,878 14,878 34,014 10,161 10,161 34,014
16 21,829 15,388 15,388 34,014 9,886 9,886 34,014
17 22,920 15,916 15,916 34,014 9,515 9,515 34,014
18 24,066 16,464 16,464 34,014 9,023 9,023 34,014
19 25,270 17,032 17,032 34,014 8,376 8,376 34,014
20 26,533 17,620 17,620 34,014 7,537 7,537 34,014
25 33,864 20,897 20,897 34,014 -- -- --
35 55,160 29,494 29,494 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 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>
60 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: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,718 8,749 34,014 9,611 8,644 34,014
2 11,025 9,443 8,504 34,014 9,211 8,276 34,014
3 11,576 9,175 8,265 34,014 8,800 7,896 34,014
4 12,155 8,914 8,180 34,014 8,378 7,653 34,014
5 12,763 8,659 7,951 34,014 7,944 7,244 34,014
6 13,401 8,411 7,927 34,014 7,492 7,017 34,014
7 14,071 8,169 7,708 34,014 7,018 6,566 34,014
8 14,775 7,933 7,693 34,014 6,516 6,283 34,014
9 15,513 7,703 7,484 34,014 5,976 5,761 34,014
10 16,289 7,479 7,479 34,014 5,393 5,393 34,014
11 17,103 7,334 7,334 34,014 4,802 4,802 34,014
12 17,959 7,191 7,191 34,014 4,153 4,153 34,014
13 18,856 7,050 7,050 34,014 3,443 3,443 34,014
14 19,799 6,912 6,912 34,014 2,665 2,665 34,014
15 20,789 6,775 6,775 34,014 1,809 1,809 34,014
16 21,829 6,641 6,641 34,014 859 859 34,014
17 22,920 6,509 6,509 34,014 -- -- --
18 24,066 6,379 6,379 34,014 -- -- --
19 25,270 6,251 6,251 34,014 -- -- --
20 26,533 6,124 6,124 34,014 -- -- --
25 33,864 5,522 5,522 34,014 -- -- --
35 55,160 4,449 4,449 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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 61
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,449 9,699 34,014 10,336 9,586 34,014
2 11,025 11,375 10,625 34,014 11,139 10,389 34,014
3 11,576 12,386 11,636 34,014 12,017 11,267 34,014
4 12,155 13,490 12,890 34,014 12,980 12,380 34,014
5 12,763 14,694 14,094 34,014 14,036 13,436 34,014
6 13,401 16,009 15,609 34,014 15,195 14,795 34,014
7 14,071 17,444 17,044 34,014 16,467 16,067 34,014
8 14,775 19,011 18,811 34,014 17,864 17,664 34,014
9 15,513 20,721 20,521 34,014 19,399 19,199 34,014
10 16,289 22,588 22,588 34,014 21,090 21,090 34,014
11 17,103 24,712 24,712 34,014 22,995 22,995 34,014
12 17,959 27,050 27,050 34,014 25,114 25,114 34,014
13 18,856 29,660 29,660 34,999 27,481 27,481 34,014
14 19,799 32,541 32,541 38,074 30,132 30,132 35,255
15 20,789 35,702 35,702 41,415 33,056 33,056 38,346
16 21,829 39,168 39,168 45,044 36,263 36,263 41,703
17 22,920 42,981 42,981 48,569 39,791 39,791 44,965
18 24,066 47,178 47,178 52,368 43,674 43,674 48,479
19 25,270 51,833 51,833 56,498 47,954 47,954 52,270
20 26,533 56,922 56,922 62,045 52,662 52,662 57,402
25 33,864 90,803 90,803 96,252 84,007 84,007 89,048
35 55,160 227,038 227,038 238,390 206,948 206,948 217,296
</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>
62 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: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,884 9,134 34,014 9,770 9,020 34,014
2 11,025 10,176 9,426 34,014 9,935 9,185 34,014
3 11,576 10,479 9,729 34,014 10,094 9,344 34,014
4 12,155 10,791 10,191 34,014 10,248 9,648 34,014
5 12,763 11,114 10,514 34,014 10,393 9,793 34,014
6 13,401 11,447 11,047 34,014 10,529 10,129 34,014
7 14,071 11,790 11,390 34,014 10,649 10,249 34,014
8 14,775 12,146 11,946 34,014 10,748 10,548 34,014
9 15,513 12,512 12,312 34,014 10,819 10,619 34,014
10 16,289 12,891 12,891 34,014 10,856 10,856 34,014
11 17,103 13,329 13,329 34,014 10,871 10,871 34,014
12 17,959 13,783 13,783 34,014 10,844 10,844 34,014
13 18,856 14,253 14,253 34,014 10,773 10,773 34,014
14 19,799 14,740 14,740 34,014 10,651 10,651 34,014
15 20,789 15,245 15,245 34,014 10,471 10,471 34,014
16 21,829 15,768 15,768 34,014 10,218 10,218 34,014
17 22,920 16,311 16,311 34,014 9,873 9,873 34,014
18 24,066 16,873 16,873 34,014 9,409 9,409 34,014
19 25,270 17,455 17,455 34,014 8,795 8,795 34,014
20 26,533 18,059 18,059 34,014 7,994 7,994 34,014
25 33,864 21,421 21,421 34,014 -- -- --
35 55,160 30,243 30,243 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 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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 63
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,389 8,639 34,014 9,275 8,525 34,014
2 11,025 9,182 8,432 34,014 8,937 8,187 34,014
3 11,576 8,979 8,229 34,014 8,586 7,836 34,014
4 12,155 8,780 8,180 34,014 8,221 7,621 34,014
5 12,763 8,585 7,985 34,014 7,839 7,239 34,014
6 13,401 8,393 7,993 34,014 7,438 7,038 34,014
7 14,071 8,205 7,805 34,014 7,011 6,611 34,014
8 14,775 8,021 7,821 34,014 6,553 6,353 34,014
9 15,513 7,839 7,639 34,014 6,055 5,855 34,014
10 16,289 7,662 7,662 34,014 5,509 5,509 34,014
11 17,103 7,514 7,514 34,014 4,919 4,919 34,014
12 17,959 7,368 7,368 34,014 4,272 4,272 34,014
13 18,856 7,225 7,225 34,014 3,562 3,562 34,014
14 19,799 7,084 7,084 34,014 2,786 2,786 34,014
15 20,789 6,945 6,945 34,014 1,933 1,933 34,014
16 21,829 6,808 6,808 34,014 985 985 34,014
17 22,920 6,673 6,673 34,014 -- -- --
18 24,066 6,540 6,540 34,014 -- -- --
19 25,270 6,410 6,410 34,014 -- -- --
20 26,533 6,281 6,281 34,014 -- -- --
25 33,864 5,667 5,667 34,014 -- -- --
35 55,160 4,573 4,573 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>
64 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: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,814 9,821 20,000 10,623 9,634 20,000
2 11,025 11,697 10,714 20,000 11,295 10,319 20,000
3 11,576 12,655 11,684 20,000 12,025 11,064 20,000
4 12,155 13,694 12,888 20,000 12,822 12,030 20,000
5 12,763 14,820 14,035 20,000 13,700 12,928 20,000
6 13,401 16,042 15,481 20,000 14,673 14,126 20,000
7 14,071 17,367 16,837 20,000 15,761 15,243 20,000
8 14,775 18,836 18,542 20,908 16,990 16,706 20,000
9 15,513 20,455 20,204 22,297 18,396 18,150 20,052
10 16,289 22,202 22,202 24,201 19,964 19,964 21,761
11 17,103 24,297 24,297 26,241 21,845 21,845 23,593
12 17,959 26,598 26,598 28,461 23,911 23,911 25,585
13 18,856 29,105 29,105 31,143 26,159 26,159 27,991
14 19,799 31,862 31,862 33,774 28,634 28,634 30,353
15 20,789 34,871 34,871 36,963 31,328 31,328 33,208
16 21,829 38,181 38,181 40,091 34,299 34,299 36,015
17 22,920 41,792 41,792 43,883 37,533 37,533 39,410
18 24,066 45,748 45,748 48,036 41,046 41,046 43,099
19 25,270 50,081 50,081 52,586 44,859 44,859 47,103
20 26,533 54,858 54,858 57,601 48,990 48,990 51,440
25 33,864 86,509 86,509 90,835 75,359 75,359 79,127
35 55,160 215,307 215,307 217,461 181,841 181,841 183,660
</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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 65
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,230 9,249 20,000 10,034 9,059 20,000
2 11,025 10,465 9,506 20,000 10,041 9,090 20,000
3 11,576 10,707 9,769 20,000 10,014 9,089 20,000
4 12,155 10,955 10,190 20,000 9,951 9,201 20,000
5 12,763 11,209 10,469 20,000 9,842 9,119 20,000
6 13,401 11,470 10,956 20,000 9,679 9,182 20,000
7 14,071 11,738 11,250 20,000 9,449 8,978 20,000
8 14,775 12,013 11,753 20,000 9,135 8,889 20,000
9 15,513 12,295 12,064 20,000 8,717 8,495 20,000
10 16,289 12,584 12,584 20,000 8,170 8,170 20,000
11 17,103 13,011 13,011 20,000 7,534 7,534 20,000
12 17,959 13,453 13,453 20,000 6,709 6,709 20,000
13 18,856 13,911 13,911 20,000 5,649 5,649 20,000
14 19,799 14,386 14,386 20,000 4,296 4,296 20,000
15 20,789 14,878 14,878 20,000 2,565 2,565 20,000
16 21,829 15,388 15,388 20,000 339 339 20,000
17 22,920 15,916 15,916 20,000 -- -- --
18 24,066 16,464 16,464 20,000 -- -- --
19 25,270 17,032 17,032 20,000 -- -- --
20 26,533 17,620 17,620 20,000 -- -- --
25 33,864 20,897 20,897 21,942 -- -- --
35 55,160 29,519 29,519 29,814 -- -- --
</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>
66 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: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,718 8,749 20,000 9,520 8,555 20,000
2 11,025 9,443 8,504 20,000 9,002 8,072 20,000
3 11,576 9,175 8,265 20,000 8,442 7,544 20,000
4 12,155 8,914 8,180 20,000 7,830 7,113 20,000
5 12,763 8,659 7,951 20,000 7,158 6,469 20,000
6 13,401 8,411 7,927 20,000 6,412 5,948 20,000
7 14,071 8,169 7,708 20,000 5,575 5,133 20,000
8 14,775 7,933 7,693 20,000 4,623 4,400 20,000
9 15,513 7,703 7,484 20,000 3,529 3,320 20,000
10 16,289 7,479 7,479 20,000 2,261 2,261 20,000
11 17,103 7,334 7,334 20,000 795 795 20,000
12 17,959 7,191 7,191 20,000 -- -- --
13 18,856 7,050 7,050 20,000 -- -- --
14 19,799 6,912 6,912 20,000 -- -- --
15 20,789 6,775 6,775 20,000 -- -- --
16 21,829 6,641 6,641 20,000 -- -- --
17 22,920 6,509 6,509 20,000 -- -- --
18 24,066 6,379 6,379 20,000 -- -- --
19 25,270 6,251 6,251 20,000 -- -- --
20 26,533 6,124 6,124 20,000 -- -- --
25 33,864 5,522 5,522 20,000 -- -- --
35 55,160 4,449 4,449 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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 67
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,449 9,699 20,000 10,242 9,492 20,000
2 11,025 11,375 10,625 20,000 10,938 10,188 20,000
3 11,576 12,386 11,636 20,000 11,699 10,949 20,000
4 12,155 13,490 12,890 20,000 12,537 11,937 20,000
5 12,763 14,694 14,094 20,000 13,465 12,865 20,000
6 13,401 16,009 15,609 20,000 14,501 14,101 20,000
7 14,071 17,446 17,046 20,000 15,669 15,269 20,000
8 14,775 19,048 18,848 21,144 16,998 16,798 20,000
9 15,513 20,822 20,622 22,696 18,528 18,328 20,196
10 16,289 22,748 22,748 24,796 20,239 20,239 22,061
11 17,103 24,895 24,895 26,888 22,146 22,146 23,918
12 17,959 27,254 27,254 29,162 24,241 24,241 25,938
13 18,856 29,823 29,823 31,911 26,521 26,521 28,378
14 19,799 32,649 32,649 34,609 29,031 29,031 30,773
15 20,789 35,733 35,733 37,877 31,763 31,763 33,669
16 21,829 39,126 39,126 41,083 34,775 34,775 36,514
17 22,920 42,827 42,827 44,969 38,054 38,054 39,957
18 24,066 46,882 46,882 49,226 41,617 41,617 43,698
19 25,270 51,353 51,353 53,921 45,483 45,483 47,758
20 26,533 56,251 56,251 59,064 49,672 49,672 52,156
25 33,864 88,706 88,706 93,142 76,407 76,407 80,228
35 55,160 220,776 220,776 222,984 184,372 184,372 186,216
</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>
68 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: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,884 9,134 20,000 9,674 8,924 20,000
2 11,025 10,176 9,426 20,000 9,721 8,971 20,000
3 11,576 10,479 9,729 20,000 9,738 8,988 20,000
4 12,155 10,791 10,191 20,000 9,719 9,119 20,000
5 12,763 11,114 10,514 20,000 9,658 9,058 20,000
6 13,401 11,447 11,047 20,000 9,545 9,145 20,000
7 14,071 11,790 11,390 20,000 9,367 8,967 20,000
8 14,775 12,146 11,946 20,000 9,109 8,909 20,000
9 15,513 12,512 12,312 20,000 8,749 8,549 20,000
10 16,289 12,891 12,891 20,000 8,265 8,265 20,000
11 17,103 13,329 13,329 20,000 7,641 7,641 20,000
12 17,959 13,783 13,783 20,000 6,830 6,830 20,000
13 18,856 14,253 14,253 20,000 5,788 5,788 20,000
14 19,799 14,740 14,740 20,000 4,456 4,456 20,000
15 20,789 15,245 15,245 20,000 2,752 2,752 20,000
16 21,829 15,768 15,768 20,000 559 559 20,000
17 22,920 16,311 16,311 20,000 -- -- --
18 24,066 16,873 16,873 20,000 -- -- --
19 25,270 17,455 17,455 20,000 -- -- --
20 26,533 18,059 18,059 20,000 -- -- --
25 33,864 21,421 21,421 22,493 -- -- --
35 55,160 30,268 30,268 30,572 -- -- --
</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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 69
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,389 8,639 20,000 9,177 8,427 20,000
2 11,025 9,182 8,432 20,000 8,713 7,963 20,000
3 11,576 8,979 8,229 20,000 8,204 7,454 20,000
4 12,155 8,780 8,180 20,000 7,640 7,040 20,000
5 12,763 8,585 7,985 20,000 7,011 6,411 20,000
6 13,401 8,393 7,993 20,000 6,305 5,905 20,000
7 14,071 8,205 7,805 20,000 5,504 5,104 20,000
8 14,775 8,021 7,821 20,000 4,583 4,383 20,000
9 15,513 7,839 7,639 20,000 3,514 3,314 20,000
10 16,289 7,662 7,662 20,000 2,265 2,265 20,000
11 17,103 7,514 7,514 20,000 799 799 20,000
12 17,959 7,368 7,368 20,000 -- -- --
13 18,856 7,225 7,225 20,000 -- -- --
14 19,799 7,084 7,084 20,000 -- -- --
15 20,789 6,945 6,945 20,000 -- -- --
16 21,829 6,808 6,808 20,000 -- -- --
17 22,920 6,673 6,673 20,000 -- -- --
18 24,066 6,540 6,540 20,000 -- -- --
19 25,270 6,410 6,410 20,000 -- -- --
20 26,533 6,281 6,281 20,000 -- -- --
25 33,864 5,667 5,667 20,000 -- -- --
35 55,160 4,573 4,573 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>
70 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% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,904 9,909 45,454 10,904 9,909 45,454
2 11,025 11,886 10,898 45,454 11,886 10,898 45,454
3 11,576 12,953 11,976 45,454 12,953 11,976 45,454
4 12,155 14,110 13,299 45,454 14,110 13,299 45,454
5 12,763 15,367 14,575 45,454 15,367 14,575 45,454
6 13,401 16,730 16,163 45,454 16,730 16,163 45,454
7 14,071 18,209 17,672 45,454 18,209 17,672 45,454
8 14,775 19,813 19,513 45,454 19,813 19,513 45,454
9 15,513 21,551 21,297 45,454 21,551 21,297 45,454
10 16,289 23,436 23,436 45,454 23,436 23,436 45,454
11 17,103 25,706 25,706 45,454 25,689 25,689 45,454
12 17,959 28,198 28,198 45,454 28,159 28,159 45,454
13 18,856 30,935 30,935 45,454 30,876 30,876 45,454
14 19,799 33,944 33,944 45,454 33,872 33,872 45,454
15 20,789 37,267 37,267 45,454 37,186 37,186 45,454
16 21,829 40,954 40,954 47,098 40,864 40,864 46,995
17 22,920 45,021 45,021 50,874 44,922 44,922 50,763
18 24,066 49,493 49,493 54,937 49,384 49,384 54,817
19 25,270 54,444 54,444 59,344 54,324 54,324 59,214
20 26,533 59,862 59,862 65,250 59,731 59,731 65,107
25 33,864 95,891 95,891 101,645 95,679 95,679 101,420
35 55,160 244,542 244,542 256,769 235,932 235,932 247,729
</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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 71
- --------------------------------------------------------------------------------
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% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,314 9,332 45,454 10,314 9,332 45,454
2 11,025 10,633 9,670 45,454 10,633 9,670 45,454
3 11,576 10,955 10,013 45,454 10,955 10,013 45,454
4 12,155 11,278 10,509 45,454 11,278 10,509 45,454
5 12,763 11,601 10,856 45,454 11,601 10,856 45,454
6 13,401 11,922 11,403 45,454 11,922 11,403 45,454
7 14,071 12,238 11,746 45,454 12,238 11,746 45,454
8 14,775 12,557 12,295 45,454 12,545 12,282 45,454
9 15,513 12,886 12,653 45,454 12,838 12,606 45,454
10 16,289 13,223 13,223 45,454 13,111 13,111 45,454
11 17,103 13,707 13,707 45,454 13,467 13,467 45,454
12 17,959 14,210 14,210 45,454 13,797 13,797 45,454
13 18,856 14,733 14,733 45,454 14,095 14,095 45,454
14 19,799 15,276 15,276 45,454 14,352 14,352 45,454
15 20,789 15,840 15,840 45,454 14,558 14,558 45,454
16 21,829 16,426 16,426 45,454 14,700 14,700 45,454
17 22,920 17,035 17,035 45,454 14,757 14,757 45,454
18 24,066 17,668 17,668 45,454 14,705 14,705 45,454
19 25,270 18,325 18,325 45,454 14,514 14,514 45,454
20 26,533 19,007 19,007 45,454 14,146 14,146 45,454
25 33,864 22,840 22,840 45,454 7,825 7,825 45,454
35 55,160 33,093 33,093 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>
72 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% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,798 8,828 45,454 9,798 8,828 45,454
2 11,025 9,594 8,652 45,454 9,594 8,652 45,454
3 11,576 9,384 8,470 45,454 9,384 8,470 45,454
4 12,155 9,168 8,430 45,454 9,168 8,430 45,454
5 12,763 8,943 8,231 45,454 8,943 8,231 45,454
6 13,401 8,710 8,222 45,454 8,707 8,220 45,454
7 14,071 8,481 8,018 45,454 8,457 7,994 45,454
8 14,775 8,258 8,017 45,454 8,188 7,947 45,454
9 15,513 8,040 7,820 45,454 7,895 7,675 45,454
10 16,289 7,827 7,827 45,454 7,570 7,570 45,454
11 17,103 7,696 7,696 45,454 7,267 7,267 45,454
12 17,959 7,567 7,567 45,454 6,915 6,915 45,454
13 18,856 7,439 7,439 45,454 6,504 6,504 45,454
14 19,799 7,313 7,313 45,454 6,026 6,026 45,454
15 20,789 7,188 7,188 45,454 5,467 5,467 45,454
16 21,829 7,065 7,065 45,454 4,809 4,809 45,454
17 22,920 6,944 6,944 45,454 4,028 4,028 45,454
18 24,066 6,824 6,824 45,454 3,091 3,091 45,454
19 25,270 6,706 6,706 45,454 1,958 1,958 45,454
20 26,533 6,590 6,590 45,454 582 582 45,454
25 33,864 6,029 6,029 45,454 -- -- --
35 55,160 5,010 5,010 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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 73
- --------------------------------------------------------------------------------
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% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,535 9,785 45,454 10,535 9,785 45,454
2 11,025 11,558 10,808 45,454 11,558 10,808 45,454
3 11,576 12,676 11,926 45,454 12,676 11,926 45,454
4 12,155 13,898 13,298 45,454 13,898 13,298 45,454
5 12,763 15,233 14,633 45,454 15,233 14,633 45,454
6 13,401 16,692 16,292 45,454 16,692 16,292 45,454
7 14,071 18,287 17,887 45,454 18,287 17,887 45,454
8 14,775 20,028 19,828 45,454 20,028 19,828 45,454
9 15,513 21,931 21,731 45,454 21,931 21,731 45,454
10 16,289 24,010 24,010 45,454 24,010 24,010 45,454
11 17,103 26,336 26,336 45,454 26,325 26,325 45,454
12 17,959 28,890 28,890 45,454 28,866 28,866 45,454
13 18,856 31,697 31,697 45,454 31,661 31,661 45,454
14 19,799 34,788 34,788 45,454 34,746 34,746 45,454
15 20,789 38,208 38,208 45,454 38,162 38,162 45,454
16 21,829 41,999 41,999 48,299 41,948 41,948 48,240
17 22,920 46,170 46,170 52,173 46,114 46,114 52,109
18 24,066 50,787 50,787 56,374 50,725 50,725 56,305
19 25,270 55,867 55,867 60,896 55,799 55,799 60,821
20 26,533 61,428 61,428 66,957 61,353 61,353 66,875
25 33,864 98,399 98,399 104,303 98,277 98,277 104,174
35 55,160 250,936 250,936 263,483 242,338 242,338 254,456
</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>
74 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% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,965 9,215 45,454 9,965 9,215 45,454
2 11,025 10,339 9,589 45,454 10,339 9,589 45,454
3 11,576 10,720 9,970 45,454 10,720 9,970 45,454
4 12,155 11,107 10,507 45,454 11,107 10,507 45,454
5 12,763 11,499 10,899 45,454 11,499 10,899 45,454
6 13,401 11,894 11,494 45,454 11,894 11,494 45,454
7 14,071 12,290 11,890 45,454 12,290 11,890 45,454
8 14,775 12,693 12,493 45,454 12,681 12,481 45,454
9 15,513 13,110 12,910 45,454 13,065 12,865 45,454
10 16,289 13,542 13,542 45,454 13,435 13,435 45,454
11 17,103 14,039 14,039 45,454 13,806 13,806 45,454
12 17,959 14,555 14,555 45,454 14,153 14,153 45,454
13 18,856 15,091 15,091 45,454 14,470 14,470 45,454
14 19,799 15,648 15,648 45,454 14,747 14,747 45,454
15 20,789 16,227 16,227 45,454 14,975 14,975 45,454
16 21,829 16,828 16,828 45,454 15,141 15,141 45,454
17 22,920 17,452 17,452 45,454 15,225 15,225 45,454
18 24,066 18,101 18,101 45,454 15,204 15,204 45,454
19 25,270 18,775 18,775 45,454 15,047 15,047 45,454
20 26,533 19,475 19,475 45,454 14,719 14,719 45,454
25 33,864 23,406 23,406 45,454 8,738 8,738 45,454
35 55,160 33,922 33,922 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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 75
- --------------------------------------------------------------------------------
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% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,467 8,717 45,454 9,467 8,717 45,454
2 11,025 9,328 8,578 45,454 9,328 8,578 45,454
3 11,576 9,183 8,433 45,454 9,183 8,433 45,454
4 12,155 9,029 8,429 45,454 9,029 8,429 45,454
5 12,763 8,864 8,264 45,454 8,864 8,264 45,454
6 13,401 8,689 8,289 45,454 8,686 8,286 45,454
7 14,071 8,517 8,117 45,454 8,492 8,092 45,454
8 14,775 8,347 8,147 45,454 8,277 8,077 45,454
9 15,513 8,181 7,981 45,454 8,035 7,835 45,454
10 16,289 8,017 8,017 45,454 7,760 7,760 45,454
11 17,103 7,883 7,883 45,454 7,456 7,456 45,454
12 17,959 7,751 7,751 45,454 7,103 7,103 45,454
13 18,856 7,621 7,621 45,454 6,693 6,693 45,454
14 19,799 7,492 7,492 45,454 6,215 6,215 45,454
15 20,789 7,366 7,366 45,454 5,657 5,657 45,454
16 21,829 7,240 7,240 45,454 5,000 5,000 45,454
17 22,920 7,117 7,117 45,454 4,220 4,220 45,454
18 24,066 6,995 6,995 45,454 3,286 3,286 45,454
19 25,270 6,875 6,875 45,454 2,156 2,156 45,454
20 26,533 6,756 6,756 45,454 784 784 45,454
25 33,864 6,184 6,184 45,454 -- -- --
35 55,160 5,147 5,147 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>
76 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% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,898 9,903 28,329 10,898 9,903 28,329
2 11,025 11,860 10,872 28,329 11,860 10,872 28,329
3 11,576 12,890 11,914 28,329 12,890 11,914 28,329
4 12,155 13,994 13,184 28,329 13,994 13,184 28,329
5 12,763 15,184 14,394 28,329 15,178 14,389 28,329
6 13,401 16,477 15,912 28,329 16,451 15,887 28,329
7 14,071 17,883 17,349 28,329 17,822 17,288 28,329
8 14,775 19,412 19,115 28,329 19,303 19,007 28,329
9 15,513 21,074 20,822 28,329 20,911 20,658 28,329
10 16,289 22,881 22,881 28,329 22,668 22,668 28,329
11 17,103 25,096 25,096 28,329 24,810 24,810 28,329
12 17,959 27,550 27,550 29,479 27,223 27,223 29,129
13 18,856 30,249 30,249 32,367 29,890 29,890 31,982
14 19,799 33,214 33,214 35,207 32,819 32,819 34,788
15 20,789 36,452 36,452 38,639 36,018 36,018 38,179
16 21,829 40,012 40,012 42,013 39,535 39,535 41,512
17 22,920 43,908 43,908 46,104 43,373 43,373 45,542
18 24,066 48,186 48,186 50,596 47,554 47,554 49,933
19 25,270 52,914 52,914 55,561 52,132 52,132 54,739
20 26,533 58,107 58,107 61,012 57,101 57,101 59,957
25 33,864 92,786 92,786 97,425 88,736 88,736 93,173
35 55,160 236,587 236,587 238,954 215,115 215,115 217,267
</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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 77
- --------------------------------------------------------------------------------
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% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,308 9,326 28,329 10,308 9,326 28,329
2 11,025 10,606 9,644 28,329 10,606 9,644 28,329
3 11,576 10,890 9,949 28,329 10,890 9,949 28,329
4 12,155 11,171 10,403 28,329 11,155 10,388 28,329
5 12,763 11,460 10,716 28,329 11,397 10,654 28,329
6 13,401 11,757 11,239 28,329 11,607 11,091 28,329
7 14,071 12,062 11,572 28,329 11,779 11,290 28,329
8 14,775 12,376 12,114 28,329 11,899 11,639 28,329
9 15,513 12,699 12,468 28,329 11,954 11,724 28,329
10 16,289 13,032 13,032 28,329 11,926 11,926 28,329
11 17,103 13,509 13,509 28,329 11,894 11,894 28,329
12 17,959 14,004 14,004 28,329 11,745 11,745 28,329
13 18,856 14,519 14,519 28,329 11,453 11,453 28,329
14 19,799 15,053 15,053 28,329 10,985 10,985 28,329
15 20,789 15,609 15,609 28,329 10,299 10,299 28,329
16 21,829 16,186 16,186 28,329 9,332 9,332 28,329
17 22,920 16,785 16,785 28,329 7,999 7,999 28,329
18 24,066 17,408 17,408 28,329 6,178 6,178 28,329
19 25,270 18,055 18,055 28,329 3,701 3,701 28,329
20 26,533 18,727 18,727 28,329 334 334 28,329
25 33,864 22,501 22,501 28,329 -- -- --
35 55,160 32,596 32,596 32,923 -- -- --
</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>
78 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% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,792 8,822 28,329 9,792 8,822 28,329
2 11,025 9,567 8,625 28,329 9,567 8,625 28,329
3 11,576 9,319 8,406 28,329 9,318 8,405 28,329
4 12,155 9,077 8,341 28,329 9,042 8,306 28,329
5 12,763 8,840 8,130 28,329 8,731 8,022 28,329
6 13,401 8,609 8,123 28,329 8,376 7,893 28,329
7 14,071 8,383 7,920 28,329 7,968 7,508 28,329
8 14,775 8,162 7,922 28,329 7,489 7,252 28,329
9 15,513 7,947 7,727 28,329 6,921 6,704 28,329
10 16,289 7,736 7,736 28,329 6,242 6,242 28,329
11 17,103 7,606 7,606 28,329 5,472 5,472 28,329
12 17,959 7,477 7,477 28,329 4,526 4,526 28,329
13 18,856 7,351 7,351 28,329 3,368 3,368 28,329
14 19,799 7,226 7,226 28,329 1,951 1,951 28,329
15 20,789 7,102 7,102 28,329 211 211 28,329
16 21,829 6,981 6,981 28,329 -- -- --
17 22,920 6,861 6,861 28,329 -- -- --
18 24,066 6,742 6,742 28,329 -- -- --
19 25,270 6,625 6,625 28,329 -- -- --
20 26,533 6,509 6,509 28,329 -- -- --
25 33,864 5,953 5,953 28,329 -- -- --
35 55,160 4,944 4,944 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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 79
- --------------------------------------------------------------------------------
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% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,529 9,779 28,329 10,529 9,779 28,329
2 11,025 11,530 10,780 28,329 11,530 10,780 28,329
3 11,576 12,611 11,861 28,329 12,611 11,861 28,329
4 12,155 13,777 13,177 28,329 13,777 13,177 28,329
5 12,763 15,046 14,446 28,329 15,038 14,438 28,329
6 13,401 16,434 16,034 28,329 16,404 16,004 28,329
7 14,071 17,954 17,554 28,329 17,888 17,488 28,329
8 14,775 19,616 19,416 28,329 19,504 19,304 28,329
9 15,513 21,435 21,235 28,329 21,275 21,075 28,329
10 16,289 23,428 23,428 28,329 23,229 23,229 28,329
11 17,103 25,699 25,699 28,329 25,448 25,448 28,329
12 17,959 28,223 28,223 30,199 27,942 27,942 29,898
13 18,856 30,988 30,988 33,158 30,679 30,679 32,828
14 19,799 34,026 34,026 36,068 33,687 33,687 35,708
15 20,789 37,344 37,344 39,585 36,971 36,971 39,190
16 21,829 40,992 40,992 43,043 40,582 40,582 42,612
17 22,920 44,985 44,985 47,234 44,523 44,523 46,750
18 24,066 49,368 49,368 51,837 48,816 48,816 51,257
19 25,270 54,213 54,213 56,924 53,514 53,514 56,190
20 26,533 59,532 59,532 62,509 58,616 58,616 61,547
25 33,864 95,062 95,062 99,816 91,089 91,089 95,644
35 55,160 242,392 242,392 244,817 220,821 220,821 223,030
</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>
80 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% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,959 9,209 28,329 9,959 9,209 28,329
2 11,025 10,311 9,561 28,329 10,311 9,561 28,329
3 11,576 10,654 9,904 28,329 10,654 9,904 28,329
4 12,155 10,999 10,399 28,329 10,981 10,381 28,329
5 12,763 11,357 10,757 28,329 11,290 10,690 28,329
6 13,401 11,727 11,327 28,329 11,572 11,172 28,329
7 14,071 12,111 11,711 28,329 11,819 11,419 28,329
8 14,775 12,508 12,308 28,329 12,021 11,821 28,329
9 15,513 12,919 12,719 28,329 12,164 11,964 28,329
10 16,289 13,344 13,344 28,329 12,231 12,231 28,329
11 17,103 13,833 13,833 28,329 12,222 12,222 28,329
12 17,959 14,341 14,341 28,329 12,100 12,100 28,329
13 18,856 14,869 14,869 28,329 11,840 11,840 28,329
14 19,799 15,417 15,417 28,329 11,411 11,411 28,329
15 20,789 15,987 15,987 28,329 10,772 10,772 28,329
16 21,829 16,578 16,578 28,329 9,863 9,863 28,329
17 22,920 17,193 17,193 28,329 8,601 8,601 28,329
18 24,066 17,832 17,832 28,329 6,872 6,872 28,329
19 25,270 18,495 18,495 28,329 4,512 4,512 28,329
20 26,533 19,185 19,185 28,329 1,296 1,296 28,329
25 33,864 23,055 23,055 28,329 -- -- --
35 55,160 33,408 33,408 33,742 -- -- --
</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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 81
- --------------------------------------------------------------------------------
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% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- -------------- ------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,460 8,710 28,329 9,460 8,710 28,329
2 11,025 9,301 8,551 28,329 9,301 8,551 28,329
3 11,576 9,118 8,368 28,329 9,116 8,366 28,329
4 12,155 8,939 8,339 28,329 8,900 8,300 28,329
5 12,763 8,763 8,163 28,329 8,647 8,047 28,329
6 13,401 8,589 8,189 28,329 8,349 7,949 28,329
7 14,071 8,418 8,018 28,329 7,993 7,593 28,329
8 14,775 8,251 8,051 28,329 7,565 7,365 28,329
9 15,513 8,085 7,885 28,329 7,046 6,846 28,329
10 16,289 7,923 7,923 28,329 6,412 6,412 28,329
11 17,103 7,791 7,791 28,329 5,645 5,645 28,329
12 17,959 7,660 7,660 28,329 4,704 4,704 28,329
13 18,856 7,531 7,531 28,329 3,553 3,553 28,329
14 19,799 7,404 7,404 28,329 2,144 2,144 28,329
15 20,789 7,278 7,278 28,329 415 415 28,329
16 21,829 7,154 7,154 28,329 -- -- --
17 22,920 7,031 7,031 28,329 -- -- --
18 24,066 6,911 6,911 28,329 -- -- --
19 25,270 6,791 6,791 28,329 -- -- --
20 26,533 6,674 6,674 28,329 -- -- --
25 33,864 6,107 6,107 28,329 -- -- --
35 55,160 5,079 5,079 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>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To ITT Hartford Life and Annuity Insurance Company Putnam Capital
Manager Trust Separate Account Five and to the Owners of Units of
Interest therein:
We have audited the accompanying statement of assets and liabilities of ITT
Hartford Life and Annuity Insurance Company Putnam Capital Manager Trust
Separate Account Five (the Account) as of December 31, 1997, and the related
statement of operations for the year then ended and statements of changes in net
assets for the each of the two years in the period ended December 31, 1997.
These financial statements are the responsibility of the Account's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ITT Hartford Life and Annuity
Insurance Company Putnam Capital Manager Trust Separate Account Five as of
December 31, 1997, the results of its operations for the year then ended and the
changes in its net assets for each of the two years in the period ended December
31, 1997, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
February 16, 1998
<PAGE>
- --------------------------------------------------------------------------------
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
ASIA
PACIFIC DIVERSIFIED GLOBAL ASSET
GROWTH FUND INCOME FUND ALLOCATION FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- -----------------
<S> <C> <C> <C>
ASSETS
Investments:
Putnam VT Asia Pacific
Growth Fund
Shares 39,192
Cost $409,610
Market Value......... $ 360,568 -- --
Putnam VT Diversified
Income Fund
Shares 220,923
Cost $2,412,930
Market Value......... -- $2,498,643 --
Putnam VT Global Asset
Allocation Fund
Shares 167,002
Cost $2,779,091
Market Value......... -- -- $3,132,958
Putnam VT Global Growth
Fund
Shares 348,458
Cost $5,697,759
Market Value......... -- -- --
Putnam VT Growth and
Income Fund
Shares 865,166
Cost $20,237,142
Market Value......... -- -- --
Putnam VT High Yield
Fund
Shares 247,281
Cost $3,105,496
Market Value......... -- -- --
Putnam VT International
Growth Fund
Shares 26,962
Cost $294,404
Market Value......... -- -- --
Putnam VT International
Growth and Income Fund
Shares 31,389
Cost $348,543
Market Value......... -- -- --
Due From ITT Hartford
Life & Annuity
Insurance Company..... -- -- 31
Receivable from fund
shares sold........... -- 64 --
----------- ----------- -----------------
Total Assets........... 360,568 2,498,707 3,132,989
----------- ----------- -----------------
LIABILITIES
Due to ITT Hartford
Life & Annuity
Insurance Company..... 2 -- --
Payable for fund shares
purchased............. -- -- --
----------- ----------- -----------------
Total Liabilities...... 2 -- --
----------- ----------- -----------------
Net Assets (variable
life contract
liabilities).......... $ 360,566 $2,498,707 $3,132,989
----------- ----------- -----------------
----------- ----------- -----------------
Deferred life contracts
in the accumulation
period:
Individual Sub-Accounts:
Units Owned by
Participants.......... 37,853 178,602 181,430
Unit Price............. $ 9.525374 $13.990371 $17.268298
Contract Liability..... $ 360,566 $2,498,707 $3,132,989
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
GLOBAL GROWTH AND HIGH INTERNATIONAL GROWTH AND
GROWTH FUND INCOME FUND YIELD FUND GROWTH FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ----------- ------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Putnam VT Asia Pacific
Growth Fund
Shares 39,192
Cost $409,610
Market Value......... -- -- -- -- --
Putnam VT Diversified
Income Fund
Shares 220,923
Cost $2,412,930
Market Value......... -- -- -- -- --
Putnam VT Global Asset
Allocation Fund
Shares 167,002
Cost $2,779,091
Market Value......... -- -- -- -- --
Putnam VT Global Growth
Fund
Shares 348,458
Cost $5,697,759
Market Value......... $6,390,726 -- -- -- --
Putnam VT Growth and
Income Fund
Shares 865,166
Cost $20,237,142
Market Value......... -- $24,501,515 -- -- --
Putnam VT High Yield
Fund
Shares 247,281
Cost $3,105,496
Market Value......... -- -- $3,367,965 -- --
Putnam VT International
Growth Fund
Shares 26,962
Cost $294,404
Market Value......... -- -- -- $ 308,179 --
Putnam VT International
Growth and Income Fund
Shares 31,389
Cost $348,543
Market Value......... -- -- -- -- $ 361,910
Due From ITT Hartford
Life & Annuity
Insurance Company..... 213 -- 47 -- --
Receivable from fund
shares sold........... -- -- -- 23 --
----------- ------------ ----------- ------------- --------------
Total Assets........... 6,390,939 24,501,515 3,368,012 308,202 361,910
----------- ------------ ----------- ------------- --------------
LIABILITIES
Due to ITT Hartford
Life & Annuity
Insurance Company..... -- 86 -- -- 37
Payable for fund shares
purchased............. 209 -- 28 -- --
----------- ------------ ----------- ------------- --------------
Total Liabilities...... 209 86 28 -- 37
----------- ------------ ----------- ------------- --------------
Net Assets (variable
life contract
liabilities).......... $6,390,730 $24,501,429 $3,367,984 $ 308,202 $ 361,873
----------- ------------ ----------- ------------- --------------
----------- ------------ ----------- ------------- --------------
Deferred life contracts
in the accumulation
period:
Individual Sub-Accounts:
Units Owned by
Participants.......... 408,646 1,192,000 220,685 26,538 30,304
Unit Price............. $15.638791 $ 20.554886 $15.261496 $11.613622 $ 11.941331
Contract Liability..... $6,390,730 $24,501,429 $3,367,984 $ 308,202 $ 361,873
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
INTERNATIONAL NEW MONEY NEW
OPPORTUNITIES FUND MARKET FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------- ----------- ------------------
<S> <C> <C> <C>
ASSETS
Investments:
Putnam VT International
New Opportunities Fund
Shares 55,483
Cost $583,820
Market Value:........ $ 552,610 -- --
Putnam VT Money Market
Fund
Shares 4,369,477
Cost $4,369,477
Market Value:........ -- $4,369,477 --
Putnam VT New
Opportunities Fund
Shares 590,759
Cost $10,187,467
Market Value:........ -- -- $12,541,819
Putnam VT New Value
Fund
Shares 74,976
Cost $798,149
Market Value:........ -- -- --
Putnam VT U.S.
Government and High
Quality Fund
Shares 71,748
Cost $934,277
Market Value:........ -- -- --
Putnam VT Utilities
Growth & Income Fund
Shares 134,120
Cost $1,836,083
Market Value:........ -- -- --
Putnam VT Vista Fund
Shares 36,520
Cost $407,685
Market Value:........ -- -- --
Putnam VT Voyager Fund
Shares 347,145
Cost $11,091,194
Market Value:........ -- -- --
Due From ITT Hartford
Life & Annuity
Insurance Company..... -- 88 828
Receivable from fund
shares sold........... -- -- --
---------- ----------- ------------------
Total Assets........... 552,610 4,369,565 12,542,647
---------- ----------- ------------------
LIABILITIES
Due to ITT Hartford
Life & Annuity
Insurance Company..... -- -- --
Payable for fund shares
purchased............. -- 58 --
---------- ----------- ------------------
Total Liabilities...... -- 58 --
---------- ----------- ------------------
Net Assets (variable
annuity contract
liabilities).......... $ 552,610 $4,369,507 $12,542,647
---------- ----------- ------------------
---------- ----------- ------------------
Deferred life contracts
in the accumulation
period:
Individual Sub-Accounts:
Units Owned by
Participants.......... 55,319 3,749,175 634,437
Unit Price............. $9.989509 $ 1.165458 $ 19.769721
Contract Liability..... $ 552,610 $4,369,507 $12,542,647
GRAND TOTAL CONTRACT
LIABILITY (ALL
SUB-ACCOUNTS)..........
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT
AND UTILITIES
NEW HIGH QUALITY GROWTH AND
VALUE FUND BOND FUND INCOME FUND VISTA FUND VOYAGER FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- --------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Putnam VT International
New Opportunities Fund
Shares 55,483
Cost $583,820
Market Value:........ -- -- -- -- --
Putnam VT Money Market
Fund
Shares 4,369,477
Cost $4,369,477
Market Value:........ -- -- -- -- --
Putnam VT New
Opportunities Fund
Shares 590,759
Cost $10,187,467
Market Value:........ -- -- -- -- --
Putnam VT New Value
Fund
Shares 74,976
Cost $798,149
Market Value:........ $ 881,713 -- -- -- --
Putnam VT U.S.
Government and High
Quality Fund
Shares 71,748
Cost $934,277
Market Value:........ -- $ 962,859 -- -- --
Putnam VT Utilities
Growth & Income Fund
Shares 134,120
Cost $1,836,083
Market Value:........ -- -- $2,298,810 -- --
Putnam VT Vista Fund
Shares 36,520
Cost $407,685
Market Value:........ -- -- -- $ 449,928 --
Putnam VT Voyager Fund
Shares 347,145
Cost $11,091,194
Market Value:........ -- -- -- -- $13,566,417
Due From ITT Hartford
Life & Annuity
Insurance Company..... -- -- 506 -- 461
Receivable from fund
shares sold........... 1 121 -- -- --
----------- --------------- ----------- ----------- ------------
Total Assets........... 881,714 962,980 2,299,316 449,928 13,566,878
----------- --------------- ----------- ----------- ------------
LIABILITIES
Due to ITT Hartford
Life & Annuity
Insurance Company..... -- 122 -- 2 --
Payable for fund shares
purchased............. -- -- 389 -- --
----------- --------------- ----------- ----------- ------------
Total Liabilities...... -- 122 389 2 --
----------- --------------- ----------- ----------- ------------
Net Assets (variable
annuity contract
liabilities).......... $ 881,714 $ 962,858 $2,298,927 $ 449,926 $13,566,878
----------- --------------- ----------- ----------- ------------
----------- --------------- ----------- ----------- ------------
Deferred life contracts
in the accumulation
period:
Individual Sub-Accounts:
Units Owned by
Participants.......... 74,976 71,791 119,168 36,516 670,510
Unit Price............. $11.759921 $13.411936 $19.291514 $12.321288 $ 20.233655
Contract Liability..... $ 881,714 $ 962,858 $2,298,927 $ 449,926 $13,566,878
GRAND TOTAL CONTRACT
LIABILITY (ALL
SUB-ACCOUNTS).......... $76,547,547
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
ASIA
PACIFIC DIVERSIFIED GLOBAL ASSET
GROWTH FUND INCOME FUND ALLOCATION FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ---------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 6,828 $ 132,930 $ 69,277
----------- ----------- ---------------
CAPITAL GAINS INCOME..... -- 20,956 118,411
----------- ----------- ---------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 132 11,405 1,345
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (65,164) 14,728 222,497
----------- ----------- ---------------
Net gain (loss) on
investments......... (65,032) 26,133 223,842
----------- ----------- ---------------
Net increase
(decrease) in net
assets resulting
from operations..... $(58,204) $ 180,019 $411,530
----------- ----------- ---------------
----------- ----------- ---------------
</TABLE>
* From inception, January 2, 1997 to December 31, 1997.
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
GLOBAL GROWTH AND HIGH INTERNATIONAL GROWTH AND
GROWTH FUND INCOME FUND YIELD FUND GROWTH FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT* SUB-ACCOUNT*
----------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $104,380 $ 24,482 $165,816 $ 4,598 $10,865
----------- ----------- ----------- ------------- -------------
CAPITAL GAINS INCOME..... 112,272 789,799 19,228 -- --
----------- ----------- ----------- ------------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (747) (3,845) 1,555 (3) 145
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 425,520 2,878,520 177,334 13,775 13,367
----------- ----------- ----------- ------------- -------------
Net gain (loss) on
investments......... 424,773 2,874,675 178,889 13,772 13,512
----------- ----------- ----------- ------------- -------------
Net increase
(decrease) in net
assets resulting
from operations..... $641,425 $3,988,956 $363,933 $18,370 $24,377
----------- ----------- ----------- ------------- -------------
----------- ----------- ----------- ------------- -------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF OPERATIONS (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
INTERNATIONAL NEW MONEY NEW
OPPORTUNITIES FUND MARKET FUND OPPORTUNITIES FUND
SUB-ACCOUNT* SUB-ACCOUNT SUB-ACCOUNT
------------------ ----------- ------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 1,554 $263,015 $ --
-------- ----------- ------------------
CAPITAL GAINS INCOME..... -- -- --
-------- ----------- ------------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (129) -- 24,784
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (31,210) -- 2,122,853
-------- ----------- ------------------
Net gain (loss) on
investments......... (31,339) -- 2,147,637
-------- ----------- ------------------
Net increase
(decrease) in net
assets resulting
from operations..... $(29,785) $263,015 $ 2,147,637
-------- ----------- ------------------
-------- ----------- ------------------
</TABLE>
* From inception, January 2, 1997 to December 31, 1997.
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT AND UTILITIES
NEW HIGH QUALITY GROWTH AND
VALUE FUND BOND FUND INCOME FUND VISTA FUND VOYAGER FUND
SUB-ACCOUNT* SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT*
------------ ------------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $-- $41,593 $ 50,859 $ 33 $ 18,916
------------ ------- ----------- ----------- ------------
CAPITAL GAINS INCOME..... -- -- 69,354 -- 407,658
------------ ------- ----------- ----------- ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (7,183) 1,535 2,809 (8,009) 4,822
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 83,564 23,755 341,948 42,243 2,153,271
------------ ------- ----------- ----------- ------------
Net gain (loss) on
investments......... 76,381 25,290 344,757 34,234 2,158,093
------------ ------- ----------- ----------- ------------
Net increase
(decrease) in net
assets resulting
from operations..... $76,381 $66,883 $464,970 $34,267 $2,584,667
------------ ------- ----------- ----------- ------------
------------ ------- ----------- ----------- ------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
ASIA
PACIFIC DIVERSIFIED GLOBAL ASSET
GROWTH FUND INCOME FUND ALLOCATION FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ---------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 6,828 $ 132,930 $ 69,277
Capital gains income... -- 20,956 118,411
Net realized gain
(loss) on security
transactions.......... 132 11,405 1,345
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (65,164) 14,728 222,497
----------- ----------- ---------------
Net increase (decrease)
in net assets
resulting from
operations............ (58,204) 180,019 411,530
----------- ----------- ---------------
UNIT TRANSACTIONS:
Purchases.............. -- -- --
Net transfers.......... 79,345 672,116 1,228,080
Surrenders............. (6,561) (19,125) (73,245)
Net loan activity...... 10 13 (8,703)
Cost of insurance...... (2,368) (18,488) (16,817)
----------- ----------- ---------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 70,426 634,516 1,129,315
----------- ----------- ---------------
Total increase
(decrease) in net
assets................ 12,222 814,535 1,540,845
NET ASSETS:
Beginning of period.... 348,344 1,684,172 1,592,144
----------- ----------- ---------------
End of period.......... $360,566 $2,498,707 $3,132,989
----------- ----------- ---------------
----------- ----------- ---------------
</TABLE>
* From inception, January 2, 1997, to December 31, 1997.
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
GLOBAL GROWTH AND HIGH INTERNATIONAL GROWTH AND
GROWTH FUND INCOME FUND YIELD FUND GROWTH FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT* SUB-ACCOUNT*
----------- ------------ ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 104,380 $ 324,482 $ 165,816 $ 4,598 $ 10,865
Capital gains income... 112,272 789,799 19,228 -- --
Net realized gain
(loss) on security
transactions.......... (747) (3,845) 1,555 (3) 145
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 425,520 2,878,520 177,334 13,775 13,367
----------- ------------ ----------- ------------- -------------
Net increase (decrease)
in net assets
resulting from
operations............ 641,425 3,988,956 363,933 18,370 24,377
----------- ------------ ----------- ------------- -------------
UNIT TRANSACTIONS:
Purchases.............. -- -- -- 1,000 1,000
Net transfers.......... 2,514,584 8,374,826 1,399,456 298,426 346,481
Surrenders............. (102,670) (532,447) (72,741) (2,846) (3,498)
Net loan activity...... (72,872) (152,771) 3,935 (5,512) (5,432)
Cost of insurance...... (37,044) (129,399) (18,397) (1,236) (1,055)
----------- ------------ ----------- ------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 2,301,998 7,560,209 1,312,253 289,832 337,496
----------- ------------ ----------- ------------- -------------
Total increase
(decrease) in net
assets................ 2,943,423 11,549,165 1,676,186 308,202 361,873
NET ASSETS:
Beginning of period.... 3,447,307 12,952,264 1,691,798 -- --
----------- ------------ ----------- ------------- -------------
End of period.......... $6,390,730 $24,501,429 $3,367,984 $308,202 $361,873
----------- ------------ ----------- ------------- -------------
----------- ------------ ----------- ------------- -------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
INTERNATIONAL NEW MONEY NEW
OPPORTUNITIES FUND MARKET FUND OPPORTUNITIES FUND
SUB-ACCOUNT* SUB-ACCOUNT SUB-ACCOUNT
------------------ ------------- ------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 1,554 $ 263,015 $ --
Capital gains income... -- -- --
Net realized gain
(loss) on security
transactions.......... (129) -- 24,784
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (31,210) -- 2,122,853
-------- ------------- ------------------
Net increase (decrease)
in net assets
resulting from
operations............ (29,785) 263,015 2,147,637
-------- ------------- ------------------
UNIT TRANSACTIONS:
Purchases.............. 1,000 24,471,594 --
Net transfers.......... 594,284 (25,898,707) 3,948,752
Surrenders............. (6,019) (138,936) (264,042)
Net loan activity...... (4,621) (1,205,487) (71,438)
Cost of insurance...... (2,249) (47,389) (64,510)
-------- ------------- ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 582,395 (2,818,925) 3,548,762
-------- ------------- ------------------
Total increase
(decrease) in net
assets................ 552,610 (2,555,910) 5,696,399
NET ASSETS:
Beginning of period.... -- 6,925,417 6,846,248
-------- ------------- ------------------
End of period.......... $552,610 $ 4,369,507 $12,542,647
-------- ------------- ------------------
-------- ------------- ------------------
</TABLE>
* From inception, January 2, 1997, to December 31, 1997.
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT AND UTILITIES
NEW HIGH QUALITY GROWTH AND VISTA FUND
VALUE FUND BOND FUND INCOME FUND SUB- VOYAGER FUND
SUB-ACCOUNT* SUB-ACCOUNT SUB-ACCOUNT ACCOUNT* SUB-ACCOUNT
------------ ------------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ -- $ 41,593 $ 50,859 $ 33 $ 18,916
Capital gains income... -- -- 69,354 -- 407,658
Net realized gain
(loss) on security
transactions.......... (7,183) 1,535 2,809 (8,009) 4,822
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 83,564 23,755 341,948 42,243 2,153,271
------------ -------- ----------- ----------- ------------
Net increase (decrease)
in net assets
resulting from
operations............ 76,381 66,883 464,970 34,267 2,584,667
------------ -------- ----------- ----------- ------------
UNIT TRANSACTIONS:
Purchases.............. 1,000 -- -- 1,000 --
Net transfers.......... 822,347 290,877 842,138 425,017 4,061,985
Surrenders............. (9,033) (30,658) (45,296) (3,307) (284,657)
Net loan activity...... (5,472) 43,121 (11,744) (5,648) (36,310)
Cost of insurance...... (3,509) (5,318) (12,723) (1,403) (71,377)
------------ -------- ----------- ----------- ------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 805,333 298,022 772,375 415,659 3,669,641
------------ -------- ----------- ----------- ------------
Total increase
(decrease) in net
assets................ 881,714 364,905 1,237,345 449,926 6,254,308
NET ASSETS:
Beginning of period.... -- 597,953 1,061,582 -- 7,312,570
------------ -------- ----------- ----------- ------------
End of period.......... $881,714 $962,858 $2,298,927 $449,926 $13,566,878
------------ -------- ----------- ----------- ------------
------------ -------- ----------- ----------- ------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
ASIA
PACIFIC DIVERSIFIED GLOBAL ASSET
GROWTH FUND INCOME FUND ALLOCATION FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ---------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 2,103 $ 21,970 $ 16,598
Capital gains income... -- -- 10,892
Net realized gain
(loss) on security
transactions.......... 139 11,050 (60)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 15,115 65,917 117,195
----------- ----------- ---------------
Net increase (decrease)
in net assets
resulting from
operations............ 17,357 98,937 144,625
----------- ----------- ---------------
UNIT TRANSACTIONS:
Purchases.............. -- -- --
Net transfers.......... 292,487 1,527,357 1,263,299
Surrenders............. (3,336) (42,573) (25,561)
Net loan activity...... (19) (30) (1)
Cost of insurance...... (1,348) (5,600) (5,712)
----------- ----------- ---------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 287,784 1,479,154 1,232,025
----------- ----------- ---------------
Total increase
(decrease) in net
assets................ 305,141 1,578,091 1,376,650
NET ASSETS:
Beginning of period.... 43,203 106,081 215,494
----------- ----------- ---------------
End of period.......... $348,344 $1,684,172 $1,592,144
----------- ----------- ---------------
----------- ----------- ---------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL GROWTH AND HIGH MONEY NEW
GROWTH FUND INCOME FUND YIELD FUND MARKET FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ----------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 23,213 $ 190,521 $ 58,411 $ 208,905 $ --
Capital gains income... 33,815 86,385 -- -- --
Net realized gain
(loss) on security
transactions.......... 515 (249) 12,566 -- (8,438)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 242,512 1,193,437 76,806 -- 80,783
----------- ------------ ----------- ------------ ------------------
Net increase (decrease)
in net assets
resulting from
operations............ 300,055 1,470,094 147,783 208,905 72,345
----------- ------------ ----------- ------------ ------------------
UNIT TRANSACTIONS:
Purchases.............. -- 7,606 -- 33,859,102 7,159
Net transfers.......... 2,718,060 9,205,818 1,302,945 (28,335,131) 5,351,891
Surrenders............. (92,232) (177,135) (15,962) (82,757) (120,649)
Net loan activity...... (4,157) (14,121) (382) (1,520,254) (1,410)
Cost of insurance...... (12,445) (46,206) (7,414) (45,730) (26,304)
----------- ------------ ----------- ------------ ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 2,609,226 8,975,962 1,279,187 3,875,230 5,210,687
----------- ------------ ----------- ------------ ------------------
Total increase
(decrease) in net
assets................ 2,909,281 10,446,056 1,426,970 4,084,135 5,283,032
NET ASSETS:
Beginning of period.... 538,026 2,506,208 264,828 2,841,282 1,563,216
----------- ------------ ----------- ------------ ------------------
End of period.......... $3,447,307 $12,952,264 $1,691,798 $ 6,925,417 $6,846,248
----------- ------------ ----------- ------------ ------------------
----------- ------------ ----------- ------------ ------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
U.S. GOVERNMENT AND UTILITIES
HIGH QUALITY GROWTH AND
BOND FUND INCOME FUND VOYAGER FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------- ----------- ------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 23,073 $ 20,790 $ 48,841
Capital gains income... -- -- 94,981
Net realized gain
(loss) on security
transactions.......... (7) 2,502 (1,003)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (6,719) 95,368 192,061
-------- ----------- ------------
Net increase (decrease)
in net assets
resulting from
operations............ 16,347 118,660 334,880
-------- ----------- ------------
UNIT TRANSACTIONS:
Purchases.............. -- -- 7,606
Net transfers.......... 381,013 662,417 5,629,844
Surrenders............. (8,236) (10,864) (104,445)
Net loan activity...... (25,381) (1,571) (209)
Cost of insurance...... (3,228) (5,397) (27,501)
-------- ----------- ------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 344,168 644,585 5,505,295
-------- ----------- ------------
Total increase
(decrease) in net
assets................ 360,515 763,245 5,840,175
NET ASSETS:
Beginning of period.... 237,438 298,337 1,472,395
-------- ----------- ------------
End of period.......... $597,953 $1,061,582 $7,312,570
-------- ----------- ------------
-------- ----------- ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. ORGANIZATION:
Putnam Capital Manager Trust Separate Account Five (the Account) is a
separate investment account within ITT Hartford Life & Annuity Insurance Company
(the Company) and is registered with the Securities and Exchange Commission
(SEC) as a unit investment trust under the Investment Company Act of 1940, as
amended. Both the Company and the Account are subject to supervision and
regulation by the Department of Insurance of the State of Connecticut and the
SEC. The Account invests deposits by variable life contractholders of the
Company in the various mutual funds (the Funds) as directed by the
contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting principles
in the investment company industry:
A) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments sold is
determined on the basis of identified cost. Dividend and capital gains income
are accrued as of the ex-dividend date. Capital gains income represents
dividends from the Funds which are characterized as capital gains under tax
regulations.
B) SECURITY VALUATION--The investment in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate Fund as
of December 31, 1997.
C) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as an
insurance company under the Internal Revenue Code. Under current law, no federal
income taxes are payable with respect to the operations of the Account.
D) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the financial statements and the reported amounts
of income and expenses during the period. Operating results in the future could
vary from the amounts derived from management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND
RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes deductions
for mortality and expense undertakings, cost of insurance, administrative fees,
and state premium taxes. These charges are deducted through termination of units
of interest from applicable contract owners' accounts, in accordance with the
terms of the contracts.
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of ITT Hartford Life
and Annuity Insurance Company:
We have audited the accompanying statutory balance sheets of ITT Hartford Life
and Annuity Insurance Company (a Connecticut Corporation and wholly owned
subsidiary of Hartford Life Insurance Company) (the Company) as of December 31,
1997 and 1996, and the related statutory statements of income, changes in
capital and surplus, and cash flows for each of the three years in the period
ended December 31, 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
statutory financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
The Company presents its financial statements in conformity with statutory
accounting practices as described in Note 1 of notes to statutory financial
statements. When statutory financial statements are presented for purposes other
than for filing with a regulatory agency, generally accepted auditing standards
require that an auditors' report on them state whether they are presented in
conformity with generally accepted accounting principles. The accounting
practices used by the Company vary from generally accepted accounting principles
as explained and quantified in Note 1.
In our opinion, because the differences in accounting practices as described in
Note 1 are material, the statutory financial statements referred to above do not
present fairly, in accordance with generally accepted accounting principles, the
financial position of the Company as of December 31, 1997 and 1996, and the
results of its operations and its cash flows for each of three years in the
period ended December 31, 1997.
However, in our opinion, the statutory financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as of December 31, 1997 and 1996, and the results of operations and its cash
flows for each of the three years in the period ended December 31, 1997 in
conformity with statutory accounting practices as described in Note 1.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
January 27, 1998
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------
1997 1996 1995
---------- ---------- ----------
($000)
<S> <C> <C> <C>
Revenues
Premiums and annuity considerations............. $ 296,645 $ 250,244 $ 165,792
Annuity and other fund deposits................. 1,981,246 1,897,347 1,087,661
Net investment income........................... 102,285 98,441 78,787
Commissions and expense allowances on
reinsurance ceded.............................. 396,921 370,637 183,380
Reserve adjustment on reinsurance ceded......... 3,672,076 3,864,395 1,879,785
Other revenues.................................. 288,632 161,906 140,796
---------- ---------- ----------
Total Revenues................................ 6,737,805 6,642,970 3,536,201
---------- ---------- ----------
Benefits and Expenses
Death and annuity benefits...................... 66,013 60,111 53,029
Surrenders and other benefit payments........... 461,733 276,720 221,392
Commissions and other expenses.................. 564,240 491,720 236,202
Increase in aggregate reserves for future
benefits....................................... 33,213 27,351 94,253
Increase in liability for premium and other
deposit funds.................................. 640,006 207,156 460,124
Net transfers to Separate Accounts.............. 4,914,980 5,492,964 2,414,669
---------- ---------- ----------
Total Benefits and Expenses................... 6,680,185 6,556,022 3,479,669
---------- ---------- ----------
Net Gain from Operations Before Federal Income
Taxes............................................ 57,620 86,948 56,532
Federal income tax (benefit) expense............ (14,878) 19,360 14,048
---------- ---------- ----------
Net Gain from Operations.......................... 72,498 67,588 42,484
Net realized capital gains, after tax........... 1,544 407 374
---------- ---------- ----------
Net Income........................................ $ 74,042 $ 67,995 $ 42,858
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these statutory financial
statements.
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY BALANCE SHEETS
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
------------------------
1997 1996
----------- -----------
($000)
<S> <C> <C>
Assets
Bonds........................................... $ 1,501,311 $ 1,268,480
Common stocks................................... 64,408 44,996
Mortgage loans.................................. 85,103 0
Policy loans.................................... 36,533 28,853
Cash and short-term investments................. 309,432 176,830
Other invested assets........................... 20,942 2,858
----------- -----------
Total cash and invested assets................ 2,017,729 1,522,017
----------- -----------
Investment income due and accrued............... 15,878 14,555
Premium balances receivable..................... 389 373
Receivables from affiliates..................... 1,269 257
Other assets.................................... 22,788 19,099
Separate Account assets......................... 23,208,728 14,619,324
----------- -----------
Total Assets.................................. $25,266,781 $16,175,625
----------- -----------
----------- -----------
Liabilities
Aggregate reserves for future benefits.......... $ 605,183 $ 571,970
Policy and contract claims...................... 5,672 6,806
Liability for premium and other deposit funds... 1,795,149 1,155,143
Asset valuation reserve......................... 13,670 7,442
Payable to affiliates........................... 20,972 10,022
Other liabilities............................... (754,393) (498,195)
Separate Account liabilities.................... 23,208,728 14,619,324
----------- -----------
Total liabilities............................. 24,894,981 15,872,512
----------- -----------
Capital and Surplus
Common stock.................................... 2,500 2,500
Gross paid-in and contributed surplus........... 226,043 226,043
Unassigned funds................................ 143,257 74,570
----------- -----------
Total capital and surplus..................... 371,800 303,113
----------- -----------
Total liabilities, capital and surplus.......... $25,266,781 $16,175,625
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these statutory financial
statements.
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------
1997 1996 1995
--------- --------- ---------
($000)
<S> <C> <C> <C>
Capital and surplus -- beginning of year $ 303,113 $ 238,334 $ 91,285
--------- --------- ---------
Net income...................................... 74,042 67,995 42,858
Change in net unrealized capital gains (losses)
on common stocks and other invested assets..... 2,186 (5,171) 1,709
Change in asset valuation reserve............... (6,228) 568 (5,588)
Change in non-admitted assets................... (1,313) 1,387 (1,944)
Aggregate write-ins for surplus (See Note 3).... 0 0 8,080
Dividends to shareholder........................ 0 0 (10,000)
Paid-in surplus................................. 0 0 111,934
--------- --------- ---------
Change in capital and surplus................... 68,687 64,779 147,049
--------- --------- ---------
Capital and surplus -- end of year.............. $ 371,800 $ 303,113 $ 238,334
--------- --------- ---------
--------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these statutory financial
statements.
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------
1997 1996 1995
----------- ----------- -----------
($000)
<S> <C> <C> <C>
Operations
Premiums, annuity considerations and fund
deposits....................................... $ 2,277,874 $ 2,147,627 $ 1,253,511
Investment income............................... 101,991 106,178 78,328
Other income.................................... 4,381,718 4,396,892 2,253,466
----------- ----------- -----------
Total income.................................. 6,761,583 6,650,697 3,585,305
----------- ----------- -----------
Benefits Paid................................... 529,733 338,998 277,965
Federal income taxes (received) paid on
operations..................................... (14,499) 28,857 208,423
Other expenses.................................. 5,754,725 6,254,139 2,664,385
----------- ----------- -----------
Total benefits and expenses..................... 6,269,959 6,621,994 3,150,773
----------- ----------- -----------
Net cash from operations........................ 491,624 28,703 434,532
----------- ----------- -----------
Proceeds from Investments
Bonds........................................... 614,413 871,019 287,941
Common stocks................................... 11,481 72,100 52
Other........................................... 152 10 28
----------- ----------- -----------
Net investment proceeds....................... 626,046 943,129 288,021
----------- ----------- -----------
Taxes Paid on Capital Gains....................... 0 936 226
Paid-In Surplus................................... 0 0 111,934
Other Cash Provided............................. 0 41,998 28,199
----------- ----------- -----------
Total Proceeds................................ 1,117,670 1,012,894 862,460
----------- ----------- -----------
Cost of Investments Acquired
Bonds........................................... 848,267 914,523 720,521
Common stocks................................... 28,302 82,495 35,794
Mortgage loans.................................. 85,103 0 0
Miscellaneous applications...................... 18,548 130 2,146
----------- ----------- -----------
Total Investments Acquired.................... 980,220 997,148 758,461
----------- ----------- -----------
Other Cash Applied
Dividends paid to stockholders.................. 0 0 10,000
Other........................................... 4,848 12,220 5,007
----------- ----------- -----------
Total other cash applied...................... 4,848 12,220 15,007
----------- ----------- -----------
Total applications.......................... 985,068 1,009,368 773,468
----------- ----------- -----------
Net Change in Cash and Short-Term Investments..... 132,602 3,526 88,992
Cash and Short-Term Investments, Beginning of
Year........................................... 176,830 173,304 84,312
----------- ----------- -----------
Cash and Short-Term Investments, End of Year.... $ 309,432 $ 176,830 $ 173,304
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these statutory financial
statements.
<PAGE>
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO STATUTORY FINANCIAL STATEMENTS
DECEMBER 31, 1997
(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. ("HLI"), which is majority owned by The Hartford Financial
Services Group, Inc. ("The Hartford"), formerly a wholly owned subsidiary of ITT
Corporation ("ITT"). On February 10, 1997, HLI filed a registration statement,
as amended, with the Securities and Exchange Commission relating to the initial
public offering of HLI Class A Common Stock (the "Offering"). Pursuant to the
Offering on May 22, 1997, HLI sold to the public 26 million shares, representing
18.6% of the equity ownership of HLI. 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 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. The most significant estimates are
for determining the liability for aggregate reserves for future benefits and the
liability for premium and other deposit funds. Although some variability is
inherent in these estimates, management believes the amounts provided are
adequate.
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, for universal life policies and
investment products, generally, 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 recorded upon adoption of the applicable standard;
<PAGE>
- --------------------------------------------------------------------------------
(7) establishing a formula reserve for realized and unrealized losses due to
default and equity risk associated with certain invested assets (Asset
Valuation Reserve); as well as the deferral and amortization of realized
gains and losses, motivated by changes in interest rates during the period
the asset is held, into income over the remaining life to maturity of the
asset sold (Interest Maintenance Reserve); whereas on a GAAP basis, no such
formula reserve is required and realized gains and losses are recognized in
the period the asset is sold;
(8) the reporting of reserves and benefits net of reinsurance ceded, where risk
transfer has taken place; whereas on a GAAP basis, reserves are reported
gross of reinsurance with reserve credits presented as recoverable assets;
(9) the reporting of fixed maturities at amortized cost, 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 bonds were classified on a GAAP basis
as "available-for-sale" and accordingly, those investments and common stocks
were reflected at fair value with the corresponding impact included as a
component of Stockholder's Equity designated as "Net unrealized capital
gains (losses) on securities net of tax". For statutory reporting purposes,
Change in Net Unrealized Capital Gains (Losses) on Common Stocks and Other
Invested Assets includes the change in unrealized gains (losses) 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, 1997, 1996 and 1995, the
significant differences between statutory and GAAP basis net income and capital
and surplus for the Company are summarized as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------------ ---------- ----------
<S> <C> <C> <C>
GAAP Net Income............... $ 58,050 $ 41,202 $ 38,821
Amortization and
deferral of policy
acquisition costs............ (345,658) (341,572) (174,341)
Change in unearned revenue
reserve...................... 4,641 55,504 32,300
Deferred taxes................ 47,113 2,090 2,801
Separate accounts............. 282,818 306,978 146,635
Other, net.................... 27,078 3,793 (3,358)
------------ ---------- ----------
Statutory Net Income.......... $ 74,042 $ 67,995 $ 42,858
------------ ---------- ----------
------------ ---------- ----------
<CAPTION>
1997 1996 1995
------------ ---------- ----------
<S> <C> <C> <C>
GAAP Capital and
Surplus...................... $ 570,469 $ 503,887 $ 455,541
Deferred policy acquisition
costs........................ (1,283,771) (938,114) (596,542)
Unearned revenue reserve...... 134,789 130,148 74,644
Deferred taxes................ 64,522 12,823 1,493
Separate accounts............. 923,040 640,101 333,123
Asset valuation reserve....... (13,670) (7,442) (8,010)
Unrealized gains (losses) on
bonds........................ 13,943 5,112 (1,696)
Adjustment relating to Lyndon
contribution (see Note 3).... (41,277) (41,277) (41,277)
Other, net.................... 3,755 (2,125) 21,058
------------ ---------- ----------
Statutory Capital and
Surplus...................... $ 371,800 $ 303,113 $ 238,334
------------ ---------- ----------
------------ ---------- ----------
</TABLE>
AGGREGATE RESERVES FOR FUTURE BENEFITS AND LIABILITY 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 6%. 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 Statements of
Income.
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 fair value with the current year change in the
difference from cost reflected in surplus. Other invested assets are generally
recorded at fair value.
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 increased by $6,228 in 1997,
decreased by $568 in 1996 and increased by $5,588 in 1995. Additionally, the
Interest Maintenance Reserve
<PAGE>
- --------------------------------------------------------------------------------
("IMR") captures net realized capital gains and losses, net of applicable income
taxes, resulting from changes in interest rates and amortizes these gains or
losses into income over the remaining life of the mortgage loan or bond sold.
Realized capital gains and losses, net of taxes not included in IMR are reported
in the Statutory Statements of Income. Realized investment gains and losses are
determined on a specific identification basis. The amount of net capital losses
reclassified from the IMR was $719 in 1997 and the amount of net capital gains
reclassified was $1,413 and $39 in 1996 and 1995, respectively. The amount of
income amortized was $85, $392 and $256 in 1997, 1996 and 1995, respectively.
OTHER LIABILITIES
The amount reflected in other liabilities includes a receivable from the
separate accounts of $923 million and $640 million as of December 31, 1997 and
1996, respectively. The balances are classified in accordance with NAIC
accounting practices.
MORTGAGE LOANS
Mortgage loans, carried at cost, which approximates fair value, include
investments in assets backed by mortgage loan pools.
2. INVESTMENTS:
(A) COMPONENTS OF NET INVESTMENT INCOME
<TABLE>
<CAPTION>
1997 1996 1995
-------- ------- --------
<S> <C> <C> <C>
Interest income from bonds and
short-term investments....... $100,475 $89,940 $ 76,100
Interest income from policy
loans........................ 1,958 1,846 1,504
Interest and dividends from
other investments............ 1,005 7,864 2,288
-------- ------- --------
Gross investment income....... 103,438 99,650 79,892
Less: investment expenses..... 1,153 1,209 1,105
-------- ------- --------
Net investment income......... $102,285 $98,441 $ 78,787
-------- ------- --------
-------- ------- --------
</TABLE>
(B) COMPONENTS OF NET UNREALIZED CAPITAL GAINS (LOSSES) ON COMMON STOCKS
<TABLE>
<CAPTION>
1997 1996 1995
-------- ------- --------
<S> <C> <C> <C>
Gross unrealized capital gains at
end of year........................ $ 537 $ 713 $ 1,724
Gross unrealized capital losses at
end of year........................ (1,820) (4,160) 0
-------- ------- --------
Net unrealized capital (losses)
gains.............................. (1,283) (3,447) 1,724
Balance at beginning of year........ (3,447) 1,724 15
-------- ------- --------
Change in net unrealized capital
gains (losses) on common stocks.... $ 2,164 $(5,171) $ 1,709
-------- ------- --------
-------- ------- --------
</TABLE>
(C) COMPONENTS OF NET UNREALIZED CAPITAL GAINS (LOSSES) ON BONDS AND SHORT-TERM
INVESTMENTS
<TABLE>
<CAPTION>
1997 1996 1995
------- -------- --------
<S> <C> <C> <C>
Gross unrealized capital gains at
end of year........................ $23,357 $ 11,821 $ 22,251
Gross unrealized capital losses at
end of year........................ (1,906) (3,842) (1,374)
------- -------- --------
Net unrealized capital gains........ 21,451 7,979 20,877
Balance at beginning of year........ 7,979 20,877 33,732
------- -------- --------
Change in net unrealized capital
gains (losses) on bonds and
short-term investments............. $13,472 $(12,898) $ 54,609
------- -------- --------
------- -------- --------
</TABLE>
(D) COMPONENTS OF NET REALIZED CAPITAL GAINS
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- ------
<S> <C> <C> <C>
Bonds and short-term investments......... $ (120) $ 2,756 $ 56
Common stocks............................ 0 0 52
Real estate and other.................... 114 0 0
------- ------- ------
Realized capital (losses) gains.......... (6) 2,756 208
Capital gains (benefit) tax.............. (831) 936 (205)
------- ------- ------
Net realized capital gains, after tax.... 825 1,820 413
Less: IMR capital (losses) gains......... (719) 1,413 39
------- ------- ------
Net realized capital gains............... $ 1,544 $ 407 $ 374
------- ------- ------
------- ------- ------
</TABLE>
(E) OFF-BALANCE SHEET INVESTMENTS
The Company had no significant financial instruments with off-balance sheet
risk as of December 31, 1997 and 1996.
(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>
- --------------------------------------------------------------------------------
(G) BONDS, SHORT-TERM INVESTMENTS AND COMMON STOCKS
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
1997 COST GAINS LOSSES VALUE
- --------------------------------------------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
U.S. government and government agencies and
authorities:
Guaranteed and sponsored................... $ 11,114 $ 55 $ (51) $ 11,118
Guaranteed and sponsored -- asset-backed... 55,506 1,056 (269) 56,293
States, municipalities and political
subdivisions................................ 26,404 329 0 26,733
International governments.................... 7,609 500 0 8,109
Public utilities............................. 73,024 754 (132) 73,646
All other corporate.......................... 517,715 14,110 (704) 531,121
All other corporate -- asset-backed.......... 630,069 5,005 (739) 634,335
Short-term investments....................... 277,330 33 (8) 277,355
Certificates of deposit...................... 93,770 1,515 (3) 95,282
Parents, subsidiaries and affiliates......... 86,100 0 0 86,100
----------- ---------- ---------- -----------
Total bonds and short-term investments....... $ 1,778,641 $23,357 $(1,906) $ 1,800,092
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
</TABLE>
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED FAIR
1997 COST GAINS LOSSES VALUE
- --------------------------------------------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Common stock -- unaffiliated................. $ 30,307 $ 537 $ 0 $ 30,844
Common stock -- affiliated................... 35,384 0 (1,820) 33,564
----------- ---------- ---------- -----------
Total common stocks.......................... $ 65,691 $ 537 $(1,820) $ 64,408
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
</TABLE>
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
1997 COST GAINS LOSSES VALUE
- --------------------------------------------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
U.S. government and government agencies and
authorities:
Guaranteed and sponsored................... $ 58,761 $ 6 $ (195) $ 58,572
Guaranteed and sponsored -- asset-backed... 78,237 1,477 (609) 79,105
States, municipalities and political
subdivisions................................ 25,958 163 (2) 26,119
International governments.................... 7,447 205 0 7,652
Public utilities............................. 70,116 396 (424) 70,088
All other corporate.......................... 410,530 6,357 (1,355) 415,532
All other corporate -- asset-backed.......... 485,953 2,654 (1,081) 487,526
Short-term investments....................... 148,094 0 (66) 148,028
Certificates of deposit...................... 83,378 563 (110) 83,831
Parents, subsidiaries and affiliates......... 48,100 0 0 48,100
----------- ---------- ---------- -----------
Total bonds and short-term investments....... $ 1,416,574 $11,821 $(3,842) $ 1,424,553
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
</TABLE>
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED FAIR
1997 COST GAINS LOSSES VALUE
- --------------------------------------------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Common stock -- unaffiliated................. $ 13,064 $ 713 $ 0 $ 13,777
Common stock -- affiliated................... 35,379 0 (4,160) 31,219
----------- ---------- ---------- -----------
Total common stocks.......................... $ 48,443 $ 713 $(4,160) $ 44,996
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
</TABLE>
The amortized cost and estimated fair value of bonds and short-term
investments at December 31, 1997 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
<PAGE>
- --------------------------------------------------------------------------------
over the remaining life of the securities. Expected maturities differ from
contractual maturities reflecting borrowers' rights to call or prepay their
obligations.
<TABLE>
<CAPTION>
AMORTIZED ESTIMATED
MATURITY COST FAIR VALUE
- --------------------------------------------- ---------- -----------
<S> <C> <C>
Due in one year or less...................... $ 424,518 $ 696,203
Due after one year through five years........ 586,980 708,365
Due after five years through ten years....... 451,963 295,896
Due after ten years.......................... 315,180 99,628
---------- -----------
Total...................................... $1,778,641 $ 1,800,092
---------- -----------
---------- -----------
</TABLE>
Proceeds from sales of investments in bonds and short-term investments
during 1997, 1996 and 1995 were $367,626, $668,078 and $313,961, respectively,
resulting in gross realized gains of $964, $3,675 and $1,419, respectively, and
gross realized losses of $1,084, $919 and $1,263, 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>
1997 1996
------------------ ------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- ------- -------- -------
<S> <C> <C> <C> <C>
ASSETS
Bonds and short-term investments........... $1,778 $ 1,800 $1,417 $ 1,425
Common stocks.............................. 64 64 45 45
Policy loans............................... 37 37 29 29
Mortgage loans............................. 85 85 0 0
Other invested assets...................... 21 21 3 3
LIABILITIES
Liabilities on investment contracts........ $1,911 $ 1,835 $1,245 $ 1,191
</TABLE>
The carrying amounts for policy loans approximates fair value. The fair
value of liabilities on investment contracts 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. The Company has also invested in bonds
of its subsidiaries, Hartford Financial Services Corporation and HL Investment
Advisors, Inc., and common stock of its subsidiary, ITT Hartford Life, LTD.
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 HLI, 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 (received) paid by the Company were $(14,499), $29,792 and
$215,921 in 1997, 1996 and 1995, respectively. The effective tax rate was (26)%,
22% and 25% in 1997, 1996 and 1995, respectively. The following schedule
provides a reconciliation of the tax provision at the U.S. Federal Statutory
rate to Federal income tax (benefit) expense (in millions).
<TABLE>
<CAPTION>
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Tax provision at U.S. Federal statutory
rate........................................ $ 20 $ 30 $ 20
Tax deferred acquisition costs............... 25 27 8
Statutory to tax reserve differences......... 1 0 3
Unrealized gain on separate accounts......... (44) (21) (13)
Investments and other........................ (17) (17) (4)
----- ----- -----
Federal income tax (benefit) expense......... $ (15) $ 19 $ 14
----- ----- -----
----- ----- -----
</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 1997 or
1996. 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
<PAGE>
- --------------------------------------------------------------------------------
exceeded liabilities at the contribution date ($112 million) was included in
paid-in surplus.
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
$265, $358, and $1,034 in 1997, 1996 and 1995, 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 1997, 1996 and 1995.
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 8.5% for 1997, 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
1997, 1996 and 1995.
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 1997, 1996 and 1995.
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>
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Direct premiums................... $266,427 $226,612 $159,918
Premiums assumed.................. 51,630 33,817 13,299
Premiums ceded.................... (21,412) (10,185) (7,425)
-------- -------- --------
Premiums and annuity
considerations................... $296,645 $250,244 $165,792
-------- -------- --------
-------- -------- --------
</TABLE>
The Company cedes to RGA Reinsurance Company, on a modified coinsurance
basis, 80% of the variable annuity business written since 1994.
8. SEPARATE ACCOUNTS:
The Company maintains separate account assets and liabilities totaling $23.2
billion and $14.6 billion at December 31, 1997 and 1996, 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, and the investment
income and gains and losses accrue directly to the policyholder. Separate
account management fees, net of minimum guarantees, were $252 million, $144
million and $72 million in 1997, 1996 and 1995, respectively, and are recorded
as a component of other revenues on the Statutory Statements of Income.
9. COMMITMENTS AND CONTINGENCIES:
As of December 31, 1997 and 1996, 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 $1,544, $1,262 and $1,684 in 1997, 1996 and 1995,
respectively. ILA incurred guaranteed fund expense of $548 in 1997 and 1996 and
$0 in 1995.
<PAGE>
PART II
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
The prospectus consisting of 81 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 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)
(A4) Not Applicable.
(A5) Form of Modified Single Premium Variable Life Insurance Policy. (1)
(A6a) Certificate of Incorporation of Hartford.
(A6b) Bylaws of Hartford. (2)
(A7) Not Applicable.
- --------
(1) Incorporated by reference to Post Effective Amendment No. 2, to the
Registration Statement File No. 33-83652 dated May 1, 1995.
(2) Incorporated by reference to Post Effective Amendment No. 3, to the
Registration Statement File No. 33-83652, dated May 1, 1996.
<PAGE>
(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.
(8) Not applicable.
333-36367
IHLA/PCM Life
<PAGE>
REPRESENTATION OF REASONABLENESS OF FEES
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.
ss. 33-771(a). Additionally, pursuant to Conn. Gen. Stat. ss. 33-776, the
Registrant may indemnify officers and employees or agents for liability incurred
and for any expenses to which they becomes subject by reason of being or having
been an employees or officers of the Registrant. Connecticut law does not
prescribe standards for the indemnification of officers, employees and agents
and expressly states that their indemnification may be broader than the right of
indemnification granted to directors.
The foregoing statements are specifically made subject to the detailed
provisions of
<PAGE>
Section 33-770 et seq.
Notwithstanding the fact that Connecticut law obligates the Registrant to
indemnify a only a director that was successful on the merits in a suit, under
Article VIII, 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
directors or officers 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.
INFORMATION REGARDING CERTAIN SALES LOADS, ADMINISTRATIVE,
MANAGEMENT AND OTHER FEES
Separate Account Five of 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
<PAGE>
$102,373,233 with the associated Separate Account Charges equaled approximately
$2,077,269. In 1997 policyholder premium for the entire Separate Account equaled
$94,278,990 with Separate Account Charges for the same time period being
$4,874,894.
OFFICERS AND DIRECTORS
The principal underwriter for Hartford Life and Annuity Insurance Company
Separate Account Five is Hartford Securities Distribution Company, Inc. The
following is a list 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
Unless otherwise indicated, the principal business address of each the
above individuals is P. O. Box 2999, Hartford, Connecticut 06104-2999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it meets all of the requirements pursuant to Rule 485(b) under
the Securities Act of 1933 for effectiveness of this Registration Statement and
duly caused this Registration Statement to be signed by the following persons in
the capacities and on the dates indicated.
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
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: April 13, 1998
David M. Znamierowski, Senior -----------------
Vice President, Director*
IHLA/SPVL/PHCMVL/333-36367
<PAGE>
EXHIBIT INDEX
(1) (A6a) Certificate of Incorporation of Hartford.
(2) Opinion and Consent of Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary.
(5) Opinion and Consent of Michael Winterfield, FSA, MAAA.
(6) Consent of Arthur Andersen LLP, Independent Public Accountants.
(7) Power of Attorney.
<PAGE>
EXHIBIT 6(a)
FILING #0001734855 PG 03 OF OS VOL B-00133
FILED 07/11/1997 11:32 AM PAGE 03683
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
FIRST AMENDMENT TO AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION BY ACTIONS OF THE
BOARD OF DIRECTORS AND THE SOLE SHAREHOLDER
1. The name of the Corporation is ITT Hartford Life and Annuity Insurance
Company (the "Company").
2. The Amended and Restated Certificate of Incorporation of the Company (the
"Certificate of Incorporation") is further amended by the following
resolution:
RESOLVED, that the Certificate of Incorporation be further amended
by deleting Section 1 in its entirety and replacing it with the
following, such amendment to become effective at January 1, 1998.
All other sections of the Certificate of Incorporation shall remain
unchanged and continue in full force and effect:
Section 1. Effective January 1, 1998, the name of the Company
is HARTFORD LIFE AND ANNUITY INSURANCE COMPANY.
3. The above resolution was adopted by each of the Company's Board of
Directors and its sole shareholder. The number of shares of the Company's
common capital stock entitled to vote thereon was 3,000 and the vote
required for adoption was 2,000 shares. The vote favoring adoption was
3,000 shares, which was the greatest vote required to pass the resolution.
Dated at Simsbury, Connecticut this 30 day of June, 1997.
We hereby declare, under penalty of false statement, that the statements made
in the foregoing Certificate are true.
HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
/s/ Thomas M. Marra
-----------------------------------------
Thomas M. Marra, Executive Vice President
/s/ Lynda Godkin
-----------------------------------------
Lynda Godkin, Senior Vice President,
General Counsel and Corporate Secretary
<PAGE>
FILING #0001681641 PG 04 OF 05 VOL B-00105
FILED 12/31/1996 10:00 AM PAGE 00897
SECRETARY OF STATE
CONNECTICUT SECRETARY OF THE STATE
CERTIFICATE AMENDING
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
BY ACTIONS OF THE BOARD OF DIRECTORS AND THE SOLE SHAREHOLDER
1. The name of the Corporation is ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY.
2. The Amended and Restated Certificate of Incorporation is amended by the
following resolution of each of the Board of Directors and the Sole
Shareholder:
RESOLVED, that the Amended and Restated Certificate of
Incorporation of the Company, as supplemented and amended to
date, is hereby amended by striking out Section 9 in its entirety
and adding the following Sections 9 and 10. All other sections
of the Amended and Restated Certificate of Incorporation shall
remain unchanged and continue in full force and effect.
"Section 9. The Board of Directors may, at any time, appoint
from among its own members such committees as it
may deem necessary for the proper conduct of the
business of the Company. The Board of Directors
shall be unrestricted as to the powers it may
confer upon such committees."
"Section 10. So much of the charter of said corporation, as
amended, as is inconsistent herewith is repealed,
provided that such repeal shall not invalidate or
otherwise affect any action taken pursuant to the
charter of the corporation, in accordance with its
terms, prior to the effective date of such
repeal."
3. The above resolutions were passed by the Board of Directors and the Sole
Shareholder of the Corporation. The number of shares of the Corporation's
common capital stock entitled to vote thereon was 3,000 and the vote
required for adoption was 2,000 shares. The vote favoring adoption was
3,000 shares, which was the greatest vote required to pass the resolution.
<PAGE>
2
Dated at Simsbury, Connecticut this 30th day of December, 1996.
We hereby declare, under penalty of false statement, that the statements made in
the foregoing Certificate are true.
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
/s/Thomas M. Marra
------------------------------------
Thomas M. Marra, Executive Vice
President and Director - Individual
Life and Annuity Division
/s/Lynda Godkin
------------------------------------
Lynda Godkin, General Counsel and
Corporate Secretary
<PAGE>
CERTIFICATE AMENDING AND RESTATING
THE CERTIFICATE OF INCORPORATION BY
ACTION OF THE BOARD OF DIRECTORS AND SHAREHOLDERS
The name of the Corporation is ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY.
2. The Certificate of Incorporation is amended and restated by the following
resolution of the Board of Directors and Shareholder of the Corporation.
RESOLVED, that the Certificate of Incorporation of the Corporation, as
supplemented and amended to date, is further amended and restated to read
as follows:
Section 1. The name of the Corporation is ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY.
Section 2. The address of the Registered Office of the Corporation is
Hartford Plaza, Hartford, Connecticut 06104-2999.
Section 3. The Corporation is a body politic and corporate and shall
have all the powers granted by the general statutes, as now
enacted or hereinafter amended, to corporations formed under
the Stock Corporation Act.
Section 4. The Corporation shall have the purposes and powers to write
any and all forms of insurance which any other corporation
now or hereafter chartered in Connecticut and empowered to
do an insurance business may now or hereafter lawfully do;
to accept and to cede reinsurance; to issue policies and
contracts for any kind or combination of kinds of insurance;
to issue policies or contracts either with or without
participation in profits; to acquire and hold any or all of
the shares or other securities of any insurance corporation
or any other kind of corporation; and to engage in any
lawful act or activity for which corporations may be formed
under the Stock Corporation Act. The corporation is
authorized to exercise the powers herein granted in any
state, territory or jurisdiction of the United States or
in any foreign country.
Section 5. The Corporation shall obtain a license from the insurance
commissioner prior to the commencement of business and
shall be subject to all general statutes applicable to
insurance companies.
Section 6. The aggregate number of shares which the corporation shall
have authority to issue is 3,000 shares consisting of one
class only, designated as Common Shares, of the par value
of $1,250.
Section 7. No shareholder shall, because of his ownership of shares,
have a preemptive or other right to purchase, subscribe for,
or take any part of any shares or any
<PAGE>
2
part of the notes, debentures, bonds, or other securities
convertible into or carrying options or warrants to purchase
shares of this corporation issued, optioned, or sold by it
after its incorporation.
Section 8. The minimum amount of stated capital with which the
corporation shall commence business is One Thousand
Dollars ($1,000.00).
Section 9. So much of the charter of said corporation is amended, as is
inconsistent herewith is repealed, provided such repeal shall
not invalidate or otherwise affect any action taken pursuant
to the charter of the corporation, in accordance with its
terms, prior to the effective date of such repeal.
3. The above resolution was passed by the Board of Directors and the
Shareholder of the Corporation. The number of shares entitled to vote
thereon was 3,000 and the vote required for adoption was 2,000 shares.
The vote favoring adoption was 3,000 which was the greatest vote needed to
pass the resolution.
Dated at Simsbury, Connecticut this 30th day of April, 1996.
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing Certificate are true.
ITT HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY
/s/ Lowndes A. Smith
---------------------------------
Lowndes A. Smith, President
/s/ Lynda Godkin
----------------------------------
Lynda Godkin, General Counsel
and Corporate Secretary
<PAGE>
EXHIBIT 2
[LOGO]
Hartford Life
April 8, 1998 Lynda Godkin
Law Department
Board of Directors
Hartford Life and Annuity Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: SEPARATE ACCOUNT FIVE
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
FILE NO. 333-36367
Dear Sir/Madam:
I have acted as General Counsel to Hartford Life and Annuity Insurance Company
(the "Company"), a Connecticut insurance company, and Hartford Life and Annuity
Insurance Company 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.
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>
EXHIBIT 5
[LOGO]
Hartford Life
Michael R. Winterfield, FSA, MAAA
Assistant Vice President
Individual Annuity Product Management
April 8, 1998
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 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 utilizes 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 Product Management
IHLA/Director Life 2/PCM Life 2/DW Select Dimensions Life 2
<PAGE>
Exhibit 6
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. 333-36367 for Hartford Life and Annuity
Insurance Company Separate Account Five on Form S-6.
/s/ Arthur Andersen LLP
Hartford, Connecticut
April 13, 1998
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
POWER OF ATTORNEY
Gregory A. Boyko
Lynda Godkin
Thomas M. Marra
Lowndes A. Smith
David M. Znamierowski
do hereby jointly and severally authorize Lynda Godkin, Marianne O'Doherty,
and Leslie T. Soler to sign as their agent, any Registration Statement,
pre-effective amendment, post-effective amendment and any application for
exemptive relief of the Hartford Life and Annuity Insurance Company under the
Securities Act of 1933 and/or the Investment Company Act of 1940.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
/s/ Gregory A. Boyko Dated as of March 16, 1998
- ------------------------------ --------------------------
Gregory A. Boyko
/s/ Lynda Godkin Dated as of March 16, 1998
- ------------------------------ --------------------------
Lynda Godkin
/s/ Thomas M. Marra Dated as of March 16, 1998
- ------------------------------ --------------------------
Thomas M. Marra
/s/ Lowndes A. Smith Dated as of March 16, 1998
- ------------------------------ --------------------------
Lowndes A. Smith
/s/ David M. Znamierowski Dated as of March 16, 1998
- ------------------------------ --------------------------
David M. Znamierowski
