<PAGE>
As filed with the Securities and Exchange Commission on April 11, 2000.
File No. 333-36349
811-08770
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 5 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
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, 2000 pursuant to paragraph (b) of Rule 485
-----
60 days after filing pursuant to paragraph (a)(1) of Rule 485
-----
on 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
<TABLE>
<CAPTION>
ITEM NO. OF FORM N-8B-2 CAPTION IN PROSPECTUS
----------------------- ---------------------
<S> <C>
1. Cover Page
2. Cover Page
3. Not Applicable
4. Statement of Additional Information -
Distribution of the Policies
5. About Us - Separate Account Five
6. About Us - Separate Account Five
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. About Us - Separate Account Funds; The Funds
11. About Us - Separate Account Funds; The Funds
12. About Us - The Funds
13. Fee Table; Charges and Deductions
14. Premiums
15. Premiums
16. Premiums
17. Making Withdrawals From Your Policy
18. About Us - The Funds; Charges and Deductions
19. Your Policy - Policy Rights
20. Not Applicable
21. Loans
22. Not Applicable
23. Not Applicable
24. Not Applicable
25. About Us - Hartford Life and Annuity Insurance
Company
26. Not Applicable
27. About Us - Hartford Life and Annuity Insurance
Company
28. Statement of Additional Information - General
Information and History
29. About Us - Hartford Life and Annuity Insurance
Company
30. Not Applicable
31. Not Applicable
32. Not Applicable
33. Not Applicable
34. Not Applicable
<PAGE>
35. Statement of Additional Information -
Distribution of the Policies
36. Not required by Form S-6
37. Not Applicable
38. Statement of Additional Information -
Distribution of the Policies
39. Statement of Additional Information -
Distribution of the Policies
40. Not Applicable
41. Statement of Additional Information -
Distribution of the Policies
42. Not Applicable
43. Not Applicable
44. Premiums
45. Not Applicable
46. Premiums; Making Withdrawals From Your Policy
47. About Us - The Funds
48. Cover Page; About Us - Hartford Life and Annuity
Insurance Company
49. Not Applicable
50. About Us - Separate Account Five
51. Not Applicable
52. About Us - The Funds
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
</TABLE>
<PAGE>
<TABLE>
<S> <C>
DIRECTOR LIFE
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICIES
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
P.O. BOX 2999
HARTFORD, CONNECTICUT 06104-2999
TELEPHONE: 1-800-231-5453 [LOGO]
</TABLE>
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This Prospectus describes information you should know before you purchase
Series II of Director Life. Please read it carefully.
Director Life Series II is a modified single premium variable life insurance
policy. It is:
x Modified single premium, because you make one single premium payment, and
under certain limited circumstances, you may make additional premium
payments.
x Variable, because the value of your life insurance policy will fluctuate with
the performance of the underlying funds.
- --------------------------------------------------------------------------------
At purchase, you allocate your payments to "Sub-Accounts" or subdivisions of our
Separate Account, an account that keeps your life insurance policy assets
separate from our company assets. These Sub-Accounts then purchase shares of
mutual funds set up exclusively for variable annuity or variable life insurance
products. These funds are not the same mutual funds that you buy through your
stockbroker or through a retail mutual fund. They may have similar investment
strategies and the same portfolio managers as retail mutual funds. This life
insurance policy offers you funds with investment strategies ranging from
conservative to aggressive and you may pick those funds that meet your
investment style.
The following Sub-Accounts are available under the Policy:
<TABLE>
<CAPTION>
SUB-ACCOUNT PURCHASES SHARES OF:
<S> <C>
Hartford Advisers Fund Sub-Account Class IA of Hartford Advisers HLS Fund, Inc.
Hartford Bond Fund Sub-Account Class IA of Hartford Bond HLS Fund, Inc.
Hartford Capital Appreciation Fund Sub-Account Class IA of Hartford Capital Appreciation HLS Fund, Inc.
Hartford Dividend and Growth Fund Sub-Account Class IA of Hartford Dividend and Growth HLS Fund, Inc.
Hartford Global Health Fund Sub-Account Class IA of Hartford Global Health HLS Fund of Hartford
Series Fund, Inc.
Hartford Global Leaders Fund Sub-Account Class IA of Hartford Global Leaders HLS Fund of Hartford
Series Fund, Inc.
Hartford Global Technology Fund Sub-Account Class IA of Hartford Global Technology HLS Fund of
Hartford Series Fund, Inc.
Hartford Growth and Income Fund Sub-Account Class IA of Hartford Growth and Income HLS Fund of
Hartford Series Fund, Inc.
Hartford High Yield Fund Sub-Account Class IA of Hartford High Yield HLS Fund of Hartford
Series Fund, Inc.
Hartford Index Fund Sub-Account Class IA of Hartford Index HLS Fund, Inc.
Hartford International Advisers Fund Sub-Account Class IA of Hartford International Advisers HLS
Fund, Inc.
Hartford International Opportunities Fund Sub-Account Class IA of Hartford International Opportunities HLS
Fund, Inc.
Hartford MidCap Fund Sub-Account Class IA of Hartford MidCap HLS Fund, Inc.
Hartford Mortgage Securities Fund Sub-Account Class IA of Hartford Mortgage Securities HLS Fund, Inc.
Hartford Money Market Fund Sub-Account Class IA of Hartford Money Market HLS Fund, Inc.
Hartford Small Company Fund Sub-Account Class IA of Hartford Small Company HLS Fund, Inc.
Hartford Stock Fund Sub-Account Class IA of Hartford Stock HLS Fund, Inc.
</TABLE>
If you decide to buy this life insurance policy, you should keep this prospectus
for your records. Although we file the Prospectus with the Securities and
Exchange Commission, the Commission doesn't approve or disapprove these
securities or determine if the information is
<PAGE>
truthful or complete. Anyone who represents that the Securities and Exchange
Commission ("SEC") does these things may be guilty of a criminal offense.
You can call us at 1-800-231-5453 to ask us questions. The Statement of
Additional Information contains more information about this life insurance
policy and, like this prospectus, is filed with the Securities and Exchange
Commission.
We file other information with the Securities and Exchange Commission. You may
read and copy any document we file at the SEC's public reference room in
Washington, DC 20549-6009. Please call the SEC at 1-800-SEC-0330 for further
information. Our SEC filings, including this prospectus, are also available to
the public at the SEC's website at (HTTP://WWW.SEC.GOV).
This life insurance policy IS NOT:
- a bank deposit or obligation
- federally insured
- endorsed by any bank or governmental agency
- available for sale in all states
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PROSPECTUS DATED: MAY 1, 2000
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 3
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SUMMARY OF BENEFITS AND RISKS 4
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FEE TABLE 5
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ABOUT US 7
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Hartford Life and Annuity Insurance Company 7
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Separate Account Five 7
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The Funds 7
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CHARGES AND DEDUCTIONS 9
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YOUR POLICY 11
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PREMIUMS 12
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DEATH BENEFITS AND POLICY VALUES 13
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MAKING WITHDRAWALS FROM YOUR POLICY 15
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LOANS 16
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LAPSE AND REINSTATEMENT 16
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FEDERAL TAX CONSIDERATIONS 17
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LEGAL PROCEEDINGS 19
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OTHER MATTERS 19
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GLOSSARY OF SPECIAL TERMS 20
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</TABLE>
<PAGE>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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SUMMARY OF BENEFITS AND RISKS
BENEFITS OF YOUR POLICY
FLEXIBILITY -- The policy is designed to be flexible to meet your specific life
insurance needs. You have the flexibility to choose your premium payment,
settlement options and investment options.
RIGHT TO EXAMINE -- For a limited time, usually 10 days after you receive your
life insurance policy, you may cancel it without paying a surrender charge. A
longer period may be provided in certain states.
CASH VALUES -- Your policy has a cash value. The value of your policy will
fluctuate with the performance of the underlying funds.
DEATH BENEFIT -- You designate a beneficiary who will receive the Death Benefit
if you die while the policy is in force. The policy pays a minimum Death
Benefit, called the "Face Amount." The actual Death Benefit may be larger than
the Face Amount if the underlying funds of the policy perform well.
INVESTMENT OPTIONS -- Your policy offers a choice of investment options. You may
transfer money among your investment options, subject to the restrictions
described in this prospectus and the funds' prospectuses.
SURRENDERS -- At any time, you may surrender all or part of your policy. Each
year you may surrender the greater of up to 10% of your premium payments or 100%
of your Account Value minus premiums paid without being charged a surrender
charge. (See "Risks of Your Policy" below)
LOANS -- You can take a loan on the policy. Your policy provides for two types
of cash loans. Your policy secures the loans. Loans may not exceed 90% of the
policy's cash value.
SETTLEMENT OPTIONS -- You may choose to receive surrender or death benefit
proceeds over a period of time by using one of our settlement options.
WHAT DOES YOUR PREMIUM PAYMENT PAY FOR?
Your premium payment pays for insurance coverage, it acts as an investment in
the Sub-Accounts, and it pays for sales charges, premium taxes and
administrative fees.
RISKS OF YOUR POLICY
INVESTMENT PERFORMANCE -- The value of your policy will fluctuate with the
performance of its underlying funds. Your investment options may decline in
value, or they may not perform to your expectations. Your policy values in the
Sub-Accounts are not guaranteed.
UNSUITABLE FOR SHORT-TERM SAVINGS -- The policy is designed for long-term
financial planning. You should not purchase the policy if you will need your
premium payment in a short time.
RISK OF LAPSE -- Your policy could terminate if the value of the policy becomes
so low that it cannot support the policy's monthly charges and fees. If this
occurs, we will notify you in writing. You will then have a 61-day grace period
to pay additional amounts to prevent the policy from terminating.
LOANS -- Taking a loan from your policy may increase the risk that your policy
will terminate, may have a permanent effect on the policy's Account Value, and
may reduce the death benefit proceeds.
SURRENDER AND PARTIAL SURRENDERS -- You may have to pay tax on the money you
take out and, if you take money out before you are 59 1/2 you may have to pay a
federal income tax penalty.
TRANSFER LIMITATIONS -- We reserve the right to limit the size of transfers and
to limit the number and frequency of transfers among your investment options.
ADVERSE TAX CONSEQUENCES -- Under current tax law, your Beneficiaries will
receive the Death Benefit free of federal income tax. However, you may be
required to pay federal income tax if you receive any loans, surrenders or other
amounts from the policy, and you may also be subject to a 10% federal income
penalty tax if you take money out prior to age 59 1/2.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 5
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FEE TABLE
The following tables describes the MAXIMUM fees and expenses that you will pay
when buying, owning, and surrendering the policy. The first table describes the
maximum fees and expenses that you will pay at the time that you surrender the
policy.
SURRENDER FEES
<TABLE>
<CAPTION>
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED POLICIES FROM WHICH CHARGE IS DEDUCTED
<S> <C> <C> <C>
Surrender Charges When you fully or A percentage of the amount All, if the surrender is subject to a
partially surrender surrendered, not to exceed the charge.
your policy. premium payments, depending on
the Policy Year, in which the
premium payment was made.
The percentage is as follows:
Policy Year Percentage
1 7.5%
2 7.5%
3 7.5%
4 6%
5 6%
6 4%
7 4%
8 2%
9 2%
10+ 0%
Unamortized Tax Upon surrender or A percentage of the Account Only policies which elect Option 1.
Charge partial surrender of Value depending on the Policy
the policy. Year the surrender takes place.
The percentage is as follows:
Policy Year Percentage
1 2.25%
2 2.00%
3 1.75%
4 1.50%
5 1.25%
6 1.00%
7 0.75%
8 0.50%
9 0.25%
10+ 0.00%
</TABLE>
<PAGE>
6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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The next table describes the MAXIMUM fees and expenses that you will pay
periodically during the time that you own the policy, not including Fund fees
and expenses.
ANNUAL CHARGES OTHER THAN FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED POLICIES FROM WHICH CHARGE IS DEDUCTED
<S> <C> <C> <C>
Cost of Insurance Monthly. Individualized depending on age, All
Charges sex and other factors.
Mortality and Expense Monthly. - Under Option 1: All
Risk Charge .90% (annualized) of
Sub-Account Value in Policy
Years 1-10 and .50%
(annualized) for Policy Years
11 and beyond
- Under Option 2:
.65% (annualized) of
Sub-Account Value in Policy
Years 1-10 and .50%
(annualized) for Policy Years
11 and beyond
Tax Expense Charge Under Option 1: - Under Option 1:
Monthly. .40% (annualized) of Account
Value for Policy Years 1-10
Under Option 2: - Under Option 2: All
Receipt of Premium 4% of each premium payment in
Payment. all Policy Years
Annual Maintenance On Policy Anniversary $30.00 Only policies with an Account Value of
Fee Date or upon surrender less than $50,000 on the Policy
of the policy. Anniversary Date or date of surrender.
Administrative Charge Monthly. .25% (annualized) of Sub-Account All
Value
</TABLE>
The next table describes the Fund fees and expenses that you will pay
periodically during the time that you own the policy. More detail concerning
each Fund's fees and expenses is contained in the prospectus for each Fund.
ANNUAL FUND OPERATING EXPENSES
AS OF THE FUND'S YEAR END
(As a percentage of net assets)
<TABLE>
<CAPTION>
TOTAL FUND
OPERATING EXPENSES
MANAGEMENT FEES OTHER EXPENSES (INCLUDING ANY
(INCLUDING ANY (INCLUDING ANY WAIVERS AND ANY
WAIVERS) REIMBURSEMENTS) REIMBURSEMENTS)
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
Hartford Advisers HLS Fund 0.63% 0.02% 0.65%
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Hartford Bond HLS Fund 0.49% 0.03% 0.52%
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Hartford Capital Appreciation HLS Fund 0.64% 0.02% 0.66%
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Hartford Dividend and Growth HLS Fund 0.65% 0.03% 0.68%
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Hartford Global Health HLS Fund (1) 0.85% 0.25% 1.10%
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Hartford Global Leaders HLS Fund 0.74% 0.12% 0.86%
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Hartford Global Technology HLS Fund (1) 0.85% 0.25% 1.10%
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Hartford Growth and Income HLS Fund 0.78% 0.04% 0.82%
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Hartford High Yield HLS Fund 0.66% 0.06% 0.72%
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Hartford Index HLS Fund 0.40% 0.03% 0.43%
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Hartford International Advisers HLS Fund 0.76% 0.09% 0.85%
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Hartford International Opportunities HLS Fund 0.69% 0.09% 0.78%
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Hartford MidCap HLS Fund 0.76% 0.03% 0.79%
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Hartford Money Market HLS Fund 0.45% 0.02% 0.47%
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Hartford Mortgage Securities HLS Fund 0.45% 0.03% 0.48%
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Hartford Small Company HLS Fund 0.75% 0.03% 0.78%
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Hartford Stock HLS Fund 0.46% 0.02% 0.48%
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</TABLE>
(1) Hartford Global Health HLS Fund and Hartford Global Technology HLS Fund are
new Funds. "Total Fund Operating Expenses" are based on annualized estimates
of such expenses to be incurred during the current fiscal year.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 7
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ABOUT US
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Hartford Life and Annuity Insurance Company is a stock life insurance company
engaged in the business of writing life insurance and annuities, both individual
and group, in all states of the United States, the District of Columbia and
Puerto Rico, except New York. On January 1, 1998, Hartford's name changed from
ITT Hartford Life and Annuity Insurance Company to Hartford Life and Annuity
Insurance Company. We were originally incorporated under the laws of Wisconsin
on January 9, 1956, and subsequently redomiciled to Connecticut. Our offices are
located in Simsbury, Connecticut; however, our mailing address is P.O. Box 2999,
Hartford, CT 06104-2999. We are ultimately controlled by The Hartford Financial
Services Group, Inc., one of the largest financial service providers in the
United States.
HARTFORD'S RATINGS
<TABLE>
<CAPTION>
EFFECTIVE DATE
RATING AGENCY OF RATING RATING BASIS OF RATING
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
A.M. Best and Company, Inc. 1/1/99 A+ Financial performance
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Standard & Poor's 8/1/99 AA Insurer financial strength
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Duff & Phelps 7/1/99 AA+ Claims paying ability
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</TABLE>
SEPARATE ACCOUNT FIVE
The Sub-Accounts are subdivisions of our separate account, called Separate
Account Five. The Separate Account was established to keep your life insurance
policy assets separate from our company assets. The investment performance of
the Separate Account is independent from the investment performance of
Hartford's other assets. Hartford's other assets are utilized to pay our
insurance obligations under the policy. Your assets in the Separate Account are
held exclusively for your benefit and the benefit of other policy owners and may
not be used for any other liability of Hartford. Separate Account Five was
established on August 17, 1994 under the laws of Connecticut.
THE FUNDS
Hartford HLS Funds are sponsored and administered by Hartford Life Insurance
Company. HL Investment Advisors, LLC ("HL Advisors") serves as the investment
adviser to each of the Hartford HLS Funds. Wellington Management Company, LLP
("Wellington Management") and Hartford Investment Management Company ("HIMCO")
serve as sub-investment advisors and provide day to day investment services.
Each Hartford HLS Fund, except for Hartford Global Health HLS Fund, Hartford
Global Leaders HLS Fund, Hartford Global Technology HLS Fund, Hartford Growth
and Income HLS Fund and Hartford High Yield HLS Fund, is a separate Maryland
corporation registered with the Securities and Exchange Commission as an
open-end management investment company. Hartford Global Leaders HLS Fund,
Hartford Growth and Income HLS Fund and Hartford High Yield HLS Fund are
diversified series of Hartford Series Fund, Inc., a Maryland corporation, also
registered with the Securities and Exchange Commission as an open-end management
investment company. Hartford Global Health HLS Fund and Hartford Global
Technology HLS Fund are non-diversified series of Hartford Series Fund, Inc. The
shares of each Fund have been divided into Class IA and Class IB. Only Class IA
shares are available in this product.
We do not guarantee the investment results of any of the underlying Funds. Since
each underlying Fund has different investment objectives, each is subject to
different risks. These risks and the Funds' expenses are more fully described in
the accompanying Funds' prospectus and Statement of Additional Information. The
Funds' prospectus should be read in conjunction with this Prospectus before
investing.
The Funds may not be available in all states.
The investment goals of each of the Funds are as follows:
HARTFORD ADVISERS HLS FUND -- Seeks maximum long-term total rate of return by
investing in common stocks and other equity securities, bonds and other debt
securities, and money market instruments. Sub-advised by Wellington Management.
HARTFORD BOND HLS FUND -- Seeks maximum current income consistent with
preservation of capital by investing primarily in investment grade fixed-income
securities. Up to 20% of the total assets of this Fund may be invested in debt
securities rated in the highest category below investment grade ("Ba" by Moody's
Investor Services, Inc. or "BB" by Standard & Poor's) or, if unrated, are
determined to be of comparable quality by the Fund's investment adviser.
Securities rated below investment grade are commonly referred to as "high
yield-high risk securities" or "junk bonds." For more information concerning the
risks associated with investing in such securities, please refer to the section
in the accompanying prospectus for the Funds entitled "Hartford Bond HLS Fund,
Inc." Sub-advised by HIMCO.
HARTFORD CAPITAL APPRECIATION HLS FUND -- Seeks growth of capital by investing
in equity securities selected solely on the basis of potential for capital
appreciation. Sub-advised by Wellington Management.
HARTFORD DIVIDEND AND GROWTH HLS FUND -- Seeks a high level of current income
consistent with growth of capital by investing primarily in dividend paying
equity securities. Sub-advised by Wellington Management.
HARTFORD GLOBAL HEALTH HLS FUND -- Seeks long-term capital appreciation by
investing in equity securities of health care companies worldwide. Sub-advised
by Wellington Management.
HARTFORD GLOBAL LEADERS HLS FUND -- Seeks growth of capital by investing
primarily in equity securities issued by high quality growth companies worldwide
that, in the opinion of Wellington Management, are leaders within their
respective industries as indicated by an established market presence and
<PAGE>
8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
strong competitive position on a global, regional or country basis. Sub-advised
by Wellington Management.
HARTFORD GLOBAL TECHNOLOGY HLS FUND -- Seeks long-term capital appreciation by
investing in equity securities technology companies worldwide. Sub-advised by
Wellington Management.
HARTFORD GROWTH AND INCOME HLS FUND -- Seeks growth of capital and current
income by investing primarily in equity securities with earnings growth
potential and steady or rising dividends. Sub-advised by Wellington Management.
HARTFORD HIGH YIELD HLS FUND -- Seeks high current income by investing in
non-investment grade fixed-income securities. Growth of capital is a secondary
objective. Securities rated below investment grade are commonly referred to as
"high yield-high risk securities" or "junk bonds." For more information
concerning the risks associated with investing in such securities, please refer
to the section in the accompanying prospectus for the Funds entitled "Hartford
High Yield HLS Fund." Sub-advised by HIMCO.
HARTFORD INDEX HLS FUND -- Seeks to provide investment results that approximate
the price and yield performance of publicly traded common stocks in the
aggregate, as represented by the Standard & Poor's 500 Composite Stock Price
Index.* Sub-advised by HIMCO.
HARTFORD INTERNATIONAL ADVISERS HLS FUND -- Seeks maximum long-term total return
by investing in a portfolio of equity, debt and money market securities.
Securities in which the Fund invests primarily will be denominated in non-U.S.
currencies and will be traded in non-U.S. markets. Sub-advised by Wellington
Management.
HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND -- Seeks growth of capital by
investing primarily in equity securities issued by non-U.S. companies.
Sub-advised by Wellington Management.
HARTFORD MIDCAP HLS FUND -- Seeks to achieve long-term capital growth through
capital appreciation by investing primarily in equity securities of companies
with market capitalizations within the range represented by the Standard &
Poor's MidCap 400 Index. Sub-advised by Wellington Management.
HARTFORD MONEY MARKET HLS FUND -- Seeks maximum current income consistent with
liquidity and preservation of capital. Sub-advised by HIMCO.
HARTFORD MORTGAGE SECURITIES HLS FUND -- Seeks maximum current income consistent
with safety of principal and maintenance of liquidity by investing primarily in
mortgage-related securities. Sub-advised by HIMCO.
HARTFORD SMALL COMPANY HLS FUND -- Seeks growth of capital by investing
primarily in equity securities within the range represented by the Russell 2000
Index selected on the basis of potential for capital appreciation. Sub-advised
by Wellington Management.
HARTFORD STOCK HLS FUND -- Seeks long-term growth by investing primarily in
equity securities. Sub-advised by Wellington Management.
MIXED AND SHARED FUNDING -- Shares of the Funds may be sold to our other
separate accounts and our insurance company affiliates or other unaffiliated
insurance companies to serve as the underlying investment for both variable
annuity contracts and variable life insurance policies, a practice known as
"mixed and shared funding." As a result, there is a possibility that a material
conflict may arise between the interests of policy owners, owners of other
policies or owners of variable annuity contracts with values allocated to one or
more of these other separate accounts investing in any one of the Funds. In the
event of any such material conflicts, we will consider what action may be
appropriate, including removing the Fund from the Separate Account or replacing
the Fund with another underlying fund. There are certain risks associated with
mixed and shared funding, as disclosed in the Funds' prospectus.
VOTING RIGHTS -- We are the legal owners of all Fund shares held in the Separate
Account and we have the right to vote at the Fund's shareholder meetings. To the
extent required by federal securities laws or regulations, we will:
- - Notify you of any Fund shareholders' meeting if the shares held for your
policy may be voted.
- - Send proxy materials and a form of instructions that you can use to tell us
how to vote the Fund shares held for your policy.
- - Arrange for the handling and tallying of proxies received from policy owners.
- - Vote all Fund shares attributable to your policy according to instructions
received from you, and
- - Vote all Fund shares for which no voting instructions are received in the same
proportion as shares for which instructions have been received.
If any federal securities laws or regulations, or their present interpretation,
change to permit us to vote Fund shares on our own, we may decide to do so. You
may attend any Shareholder Meeting at which shares held for your policy may be
voted. After we begin to make annuity payouts to you, the number of votes you
have will decrease.
ADMINISTRATIVE SERVICES -- Hartford has entered into agreements with the
investment advisers or distributors of many of the Funds. Under the terms of
these agreements, Hartford provides administrative services and the Funds pay a
fee to Hartford that is usually based on an annual percentage of the average
daily net assets of the Funds. These agreements may be different for each Fund
or each Fund family.
* "STANDARD & POOR'S," "S&P-REGISTERED TRADEMARK-," "S&P
500-REGISTERED TRADEMARK-," "STANDARD & POOR'S 500," AND "500" ARE TRADEMARKS
OF THE MCGRAW-HILL COMPANIES, INC. AND HAVE BEEN LICENSED FOR USE BY HARTFORD.
THE INDEX FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY STANDARD &
POOR'S AND STANDARD & POOR'S MAKES NO REPRESENTATION REGARDING THE
ADVISABILITY OF INVESTING IN THE INDEX FUND.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
CHARGES AND DEDUCTIONS
The deductions 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.
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 so 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 "
Lapse and Reinstatement".
The deductions and charges associated with your policy are listed below.
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. The current cost
of insurance charge will not exceed the guaranteed cost of insurance charge. The
guaranteed cost of insurance charge is a guaranteed maximum monthly rate,
multiplied by the Coverage Amount on the Policy Date or any Monthly Activity
Date. A table of guaranteed maximum 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. For standard risks that require full
underwriting, the guaranteed maximum cost of insurance rate is 100% of the 1980
Commissioner's Standard Ordinary Smoker/Nonsmoker Sex Distinct Age Last Birthday
Mortality Table (1980 CSO Table). For standard risks eligible for simplified
underwriting, the guaranteed cost of insurance rate is 125% of the 1980 CSO
table through age 90, grading to 100% of the 1980 CSO Table at age 100.
Substandard risks will be assessed a higher guaranteed maximum cost of insurance
rate that will not exceed rates based on a multiple of the 1980 CSO Table. The
multiple will be based on the Insured's substandard rating. Unisex rates may be
required in some states.
Your Coverage Amount is first set on the date we issue your policy and then on
each Monthly Activity Date. The Coverage Amount is the Death Benefit minus the
Account Value. There is a Minimum Coverage Amount. It 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 "Death
Benefit and Policy Values".)
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.
POLICY OWNER OPTIONS
You, 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 you may affect your Account Value.
OPTION 1 -- ASSET-BASED CHARGES -- Under this payment option, you will pay:
MORTALITY AND EXPENSE RISK CHARGE -- For assuming mortality and expense risks
under the policy, we deduct monthly from Sub-Account Value for Policy Years 1
through 10 a charge equal to an annual rate of 0.90%. In Policy Years 11 and
beyond, the charge drops to an annual rate of 0.50%. The mortality and expense
risk charge is broken into charges for mortality risks and for expense risks:
MORTALITY RISK -- The mortality risk we assume is that the cost of insurance
charges specified in the policy will be insufficient to pay claims. We also
assume a risk that the Death Proceeds will exceed: (1) the Coverage Amount on
the date of death; and (2) your policy's Account Value on the date we receive
written notice of death.
EXPENSE RISK -- The expense risk we assume is that expenses we incur in issuing
and administering your policy will exceed the administrative charges.
We may profit from the mortality and expense risk charge and may use any profits
for any proper purpose, including any difference between the cost we incur in
distributing the policies and
<PAGE>
10 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
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 settlement
option.
TAX EXPENSE CHARGE -- During the first ten years of your policy, we deduct a
monthly charge equal to an annual rate of 0.40% from your Account Value. This
tax expense charge compensates us for certain expenses including:
- - Premium taxes imposed by various states and local jurisdictions.
A premium tax deduction of 0.25% of the Account Value is deducted over ten
Policy Years and approximates our 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, we do not expect to make
a profit from this deduction.
- - The cost of the capitalization of certain policy acquisition expenses under
Section 848 of the Internal Revenue Code.
During your first ten Policy Years, we deduct a charge of 0.15% of Account
Value. This charge helps reimburse us for the approximate expenses we incur from
federal taxes we pay under Section 848 of the Internal Revenue Code.
UNAMORTIZED TAX CHARGE -- Under Option 1, during the first nine Policy Years, an
Unamortized Tax charge is imposed on surrender or partial surrenders. The
Unamortized Tax charge is shown below, as a percentage of amount surrendered,
during each Policy Year:
<TABLE>
<CAPTION>
POLICY YEAR RATE
<S> <C> <C>
- -------------------------
1 2.25%
- -------------------------
2 2.00%
- -------------------------
3 1.75%
- -------------------------
4 1.50%
- -------------------------
5 1.25%
- -------------------------
6 1.00%
- -------------------------
7 0.75%
- -------------------------
8 0.50%
- -------------------------
9 0.25%
- -------------------------
10+ 0.00%
- -------------------------
</TABLE>
After the ninth Policy Year, no Unamortized Tax charge will be imposed.
OPTION 2 -- FRONTED CHARGES -- Under this option, you will pay:
MORTALITY AND EXPENSE RISK CHARGE -- For assuming mortality and expense risks
under the policy, we will deduct monthly from Sub-Account Value for Policy Years
1 through 10 a charge equal to an annual rate of 0.65%. In Policy Years 11 and
beyond, the charge drops to an annual rate of 0.50%. The mortality and expense
risk charge is broken into charges for mortality risks and for expense risks:
MORTALITY RISK -- The mortality risk we assume is that the cost of insurance
charges specified in the policy will be insufficient to pay claims. We also
assume a risk that your policy's Death Benefit will exceed: (1) the Coverage
Amount on the date of death; and (2) your policy's Account Value on the date we
receive written notice of death.
EXPENSE RISK -- The expense risk we assume is that expenses we incur in issuing
and administering the Policies will exceed the administrative charges set in the
policy.
TAX EXPENSE CHARGE -- We deduct a charge equal to 4.0% from all premium
payments. This charge compensates us for certain expenses including:
- - Premium taxes imposed by various states and local jurisdictions.
A premium tax deduction of 2.5% of premium approximates our 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, we do not expect to make a profit from this deduction.
- - The cost of the capitalization of certain policy acquisition expenses under
Section 848 of the Internal Revenue Code.
The charge of 1.5% of premium payments helps reimburse us for the approximate
expenses we incur from federal taxes we pay under Section 848 of the Internal
Revenue Code.
This Option may not be available in all states.
OTHER CHARGES
ANNUAL MAINTENANCE FEE -- The annual maintenance fee is a flat fee that is
deducted from your Account Value to reimburse us for expenses relating to the
maintenance of the policy. The annual $30 charge is deducted on a Policy
Anniversary or when the policy is fully surrendered if the Account Value at
either of those times is less than $50,000. We reserve the right to waive the
annual maintenance fee under other conditions.
ADMINISTRATIVE CHARGE -- We will deduct a monthly administrative charge from
Sub-Account Value equal to an annual rate of 0.25%. This charge compensates us
for expenses incurred in the administration of the Separate Account and the
policy.
SURRENDER CHARGE -- We may charge you a Surrender Charge when you surrender
amounts invested in your policy. We assess a Surrender Charge on amounts
surrendered in any Policy Year that exceed the greater of 10% of the premiums
you have
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
paid into your policy or 100% of your Account Value minus premiums paid. If the
amount you paid has been in your policy:
x For Policy Years 1, 2, and 3, the charge is 7.5%.
x For Policy Years 4 and 5, the charge is 6%.
x For Policy Years 6 and 7, the charge is 4%.
x For Policy Years 8 and 9, the charge is 2%.
x For Policy Years 10 and beyond, the charge is 0%.
In determining the Surrender Charge, any surrender or partial surrender during
the first ten Policy Years will first come from premiums paid and then from
earnings. If an amount equal to all premiums paid has been withdrawn, no
Surrender Charge will be assessed on the remaining Account Value.
The Surrender Charge is imposed to cover a portion of the sales expense incurred
by us in distributing the Policies. This expense includes commissions,
advertising and the printing of prospectuses.
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.
YOUR POLICY
- --------------------------------------------------------------------------------
POLICY RIGHTS
POLICY OWNER, OR "YOU" -- As long as your policy is in force, you may exercise
all rights under the policy while the Insured is alive and a beneficiary has not
been irrevocably named.
BENEFICIARY -- You name the beneficiary in the application for the policy. You
may change the beneficiary (unless irrevocably named) during the Insured's
lifetime by written request to us. 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 -- You may assign your policy as collateral for a loan or other
obligation. Until you notify us in writing, we are not responsible for any
payment made or action taken. We are not responsible for the validity of any
assignment.
STATEMENTS TO POLICY OWNERS -- We will send you a statement at least once each
year, showing:
- - the current Account Value, Cash Surrender Value and Face Amount;
- - the premiums paid, monthly deduction amounts and any loans since your last
statement;
- - the amount of any Indebtedness;
- - any notifications required by the provisions of your policy; and
- - any other information required by the Insurance Department of the state where
your policy was delivered.
LIMIT ON RIGHT TO CONTEST -- During the Insured's lifetime, we may not contest
the validity of the policy after it has been in force for two years from the
date we issue the policy. 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 within two years from the date
we issue the policy, or such period as specified in state law, the benefit
payable will be limited to the Account Value minus 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.
POLICY LIMITATIONS
DIVIDENDS -- No dividends will be paid under the policy.
TRANSFERS OF ACCOUNT VALUE -- While the policy remains in force, and subject to
our transfer rules then in effect, you may request that part or all of the
Account Value of a particular Sub-Account be transferred to other Sub-Accounts.
We reserve the right to restrict the number of these 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 us toll free
1-800-231-5453. Transfers by telephone may be made by the agent of record or by
an attorney-in-fact pursuant to a power of attorney. Telephone transfers may not
be permitted in some states. Hartford, its agents or affiliates will not be
responsible for losses resulting from acting upon telephone requests reasonably
believed to be genuine. We will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. The procedures we follow for
transactions initiated by telephone include requirements that callers provide
certain information for identification purposes. All transfer instructions
received by telephone are tape-recorded. We will send you a confirmation of the
transfer within five days from the date of any transfer.
It is your responsibility to verify the accuracy of all confirmations and to
promptly advise us of any inaccuracies within 30 days of receipt.
CHANGES TO POLICY OR SEPARATE ACCOUNT
SUBSTITUTIONS, ADDITIONS, OR DELETIONS OF FUNDS -- We reserve the right, subject
to any applicable law, to make certain changes to the Funds offered under your
policy. We may, in our sole discretion, establish new Funds. New Funds will be
made available to existing policyholders as we determine appropriate.
<PAGE>
12 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
We may also close one or more Funds to additional payments or transfers from
existing Sub-Accounts.
We reserve the right to eliminate the shares of any of the Funds for any reason
and to substitute shares of another registered investment company for the shares
of any Fund already purchased or to be purchased in the future by the Separate
Account. To the extent required by the Investment Company Act of 1940 (the "1940
Act"), substitutions of shares attributable to your interest in a Fund will not
be made until we have the approval of the Commission and we have notified you of
the change.
In the event of any change, we may, by appropriate endorsement, make any changes
in the policy necessary or appropriate to reflect the modification. If we decide
that it is in the best interest contracts owners, the Separate Account may be
operated as a management company under the 1940 Act or any other form permitted
by law, may be de-registered under the 1940 Act in the event such registration
is no longer required, or may be combined with one or more other Separate
Accounts.
SEPARATE ACCOUNT TAXES -- Currently, there is no charge for federal income taxes
that may be attributable to the Separate Account. However, we reserve the right
to make such a charge in the future. Charges for other taxes, if any,
attributable to the Separate Account may also be made.
OTHER BENEFITS OF YOUR POLICY
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 policy 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.
- - 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 "Statement of Additional
Information."
- - To qualify for simplified underwriting under a last survivor policy, both
Insureds must meet the simplified underwriting standards.
- - For a last survivor policy to be reinstated, both Insureds must be alive on
the date of reinstatement.
- - The policy provisions regarding misstatement of age or sex, suicide and
incontestability apply to either Insured.
- - The younger Insured's attained age is used to calculate the Minimum Death
Benefit to ensure that the policy continues to qualify as life insurance.
- - Additional tax disclosures applicable to last survivor policies are provided
in "Federal Tax Considerations."
PREMIUMS
- --------------------------------------------------------------------------------
APPLICATION FOR A POLICY -- To purchase a policy you must submit an application
to us. A policy will be issued only on the lives of Insureds age 90 and under
who supply evidence of insurability satisfactory to us. Acceptance is subject to
our underwriting rules and we reserve the right to reject an application for any
reason. If your application for a policy is rejected, then your initial premium
payment will be returned along with an additional amount for interest, based on
the current rate being credited by us. Other than those described in this
prospectus, no change in the terms or conditions of a policy will be made
without your consent. Generally, the minimum initial premium we accept is
$10,000. We may accept less than $10,000 under certain circumstances.
Your policy is effective after we receive all outstanding delivery requirements
and receive your initial premium. The date your policy becomes effective is
called the Policy Date. This date is the date used to determine all future
cyclical transactions on your policy. The Policy Date may be prior to, or the
same as, the date your policy is issued ("Issue Date").
If your Coverage Amount is over then current limits established by us, we will
not accept your initial premium payment with your application. In other cases
where we receive the initial payment with the application, we will provide fixed
conditional insurance during underwriting according to the terms of conditional
receipt established by us. 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, then on policy delivery we will require a sufficient
payment to place the insurance in force.
PREMIUM PAYMENTS -- You pay a single premium and, subject to restrictions,
additional premiums. You may choose a minimum initial premium of 80%, 90% or
100% of the Guideline Single Premium (based on the Face Amount).
UNDERWRITING RULES OF YOUR POLICY
- - Under current underwriting rules, which are subject to change, if you are
between ages 35 and 80, you may be eligible for simplified underwriting
without a medical examination if you meet simplified underwriting standards.
- - If you are below age 35 or above age 80, or 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.
Your policy allows for additional premium payments so long as the additional
premiums do not cause the policy to fail to meet
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
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. We may require evidence of
insurability for any additional premiums that increase the Coverage Amount.
Premiums, which do not meet the tax qualification guidelines for life insurance
under the Internal Revenue Code, will not be applied to your policy.
ALLOCATION OF PREMIUMS -- Within three business days of receipt of your
completed application and your initial premium payment at our Home Office, we
allocate your entire premium payment to the Money Market Sub-Account.
We will then allocate the Account Value in the Money Market Sub-Account to the
Sub-Accounts according to the premium allocations you specify in your policy
application. The allocation is made upon the expiration of the right to examine
policy period, or the date we receive the final requirement to put the policy in
force, whichever is later.
ACCUMULATION UNITS -- The premiums you allocate to the Sub-Accounts are used to
purchase Accumulation Units in such Sub-Accounts. We determine the number of
Accumulation Units of each Sub-Account by dividing the amount of premium you
have allocated to the Sub-Account by the accumulation unit value of that
particular Sub-Account.
ACCUMULATION UNIT VALUES -- The accumulation unit value for each Sub-Account
varies to reflect the investment experience of the applicable underlying Fund.
To determine the current accumulation unit value, we take the prior Valuation
Day's accumulation unit value and multiply it by the Net Investment Factor for
the Valuation Period then ended.
The Net Investment Factor is used to measure the investment performance of a
Sub-Account from one Valuation Day to the next. The Net Investment Factor for
each Sub-Account equals:
- - The net asset value per share of each Fund held in the Sub-Account at the end
of the current Valuation Period; divided by
- - The net asset value per share of each Fund held in the Sub-Account at the
beginning of the Valuation Period.
You should refer to the Funds' prospectuses accompanying this Prospectus for a
description of how the assets of each Fund are valued, since these
determinations have a direct bearing on the Accumulation Unit Value of the
Sub-Account and therefore the Account Value of a policy.
All valuations in connection with a policy, will be made on the date your
request or payment is received by us before the close of the New York Stock
Exchange on any Valuation Day at our Home Office. Otherwise a valuation will be
made on the next date which is a Valuation Day.
ACCOUNT VALUE -- Each policy has an Account Value. There is no minimum
guaranteed Account Value. A policy's Account Value equals the policy's value in
all of the Sub-Accounts and any amounts in the Loan Account.
The Account Value of your policy is related to the net asset value of the Funds
to which your have allocated your premiums. The Account Value on any Valuation
Day is calculated by multiplying the number of Accumulation Units by the
Accumulation Unit Value and then totaling the results for all the Sub-Accounts.
The Account Value of a policy changes on a daily basis and is computed on each
Valuation Day. Therefore, your Account Value varies to reflect the investment
performance of the underlying Funds, the value of the Loan Account and the
monthly Deduction Amounts.
SUSPENSION OF VALUATION, PAYMENTS AND TRANSFERS -- We will suspend all
procedures requiring valuation (including transfers, surrenders and loans) when:
- - the New York Stock Exchange is closed;
- - trading on the New York Stock Exchange is restricted by the SEC;
- - the SEC permits and orders postponement; or
- - the SEC determines that an emergency exists to restrict valuation.
DEATH BENEFITS AND POLICY VALUES
- --------------------------------------------------------------------------------
DEATH BENEFIT -- While in force, your policy provides for the payment of the
Death Proceeds to the beneficiary when the Insured under the policy dies. You
must notify us in writing as soon as possible after the death of the Insured.
The Death Proceeds payable to the beneficiary equal the Death Benefit less any
loans outstanding.
We will pay interest of at least 3 1/2% per year on the Death Proceeds from the
date of the Insured's death to the date payment is made or a settlement option
is elected. At such times, the proceeds are not subject to the investment
experience of the Separate Account.
The Death Benefit equals the greater of:
- - the Face Amount; or
- - the Account Value multiplied by a specified percentage.
The percentage varies according to the attained age of the Insured and is
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. This is illustrated in the following examples:
<PAGE>
14 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
EXAMPLES:
<TABLE>
<CAPTION>
A B
<S> <C> <C> <C>
- --------------------------------------------------------
Face Amount $100,000 $100,000
- --------------------------------------------------------
Insured's Age 40 40
- --------------------------------------------------------
Account Value on Date of Death $ 46,500 $ 34,000
- --------------------------------------------------------
Specified Percentage 250% 250%
- --------------------------------------------------------
</TABLE>
In Example A, the Death Benefit equals $116,250, I.E., the greater of $100,000
(the Face Amount) or $116,250 (the Account Value at the Date of Death of
$46,500, multiplied by the specified percentage of 250%). This amount less any
outstanding loans constitutes the Death Proceeds which we would pay to the
beneficiary.
In Example B, the death benefit is $100,000, I.E., the greater of $100,000 (the
Face Amount) or $85,000 (the Account Value of $34,000, multiplied by the
specified percentage of 250%).
DEATH BENEFIT POLICY PROCEEDS -- Proceeds from the Death Benefit left with us
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.
All or part of the Death Proceeds may be paid in cash or applied under a
Settlement Option.
SETTLEMENT OPTIONS -- The surrender proceeds or Death Proceeds under your policy
may be paid in a lump sum or may be applied to one of our settlement options.
The minimum amount that may be applied under a settlement option is $5,000,
unless we consent to a lesser amount. UNDER SETTLEMENTS OPTIONS LIFE ANNUITY,
LIFE ANNUITY WITH 120, 180, OR 240 MONTHLY PAYMENTS CERTAIN AND JOINT AND LAST
SURVIVOR ANNUITY, NO SURRENDER OR PARTIAL SURRENDERS ARE PERMITTED AFTER
PAYMENTS START. FULL SURRENDER OR PARTIAL SURRENDERS MAY BE MADE FROM THE
INTEREST INCOME SETTLEMENT OPTION, PAYMENTS FOR A DESIGNATED PERIOD SETTLEMENT
OPTION OR THE DEATH BENEFIT POLICY PROCEEDS, BUT THEY ARE SUBJECT TO THE
SURRENDER CHARGE, IF APPLICABLE. THERE MAY BE ADVERSE TAX CONSEQUENCES FOR
PARTIAL SURRENDERS FROM PAYMENTS FOR A DESIGNATED PERIOD SETTLEMENT OPTION.
PLEASE CHECK WITH YOUR TAX ADVISOR BEFORE REQUESTING A PARTIAL SURRENDER.
The following settlement options are available under your policy:
OPTION 1 -- INTEREST INCOME
This option offers payments of interest, at the rate we declare, on the amount
applied under this settlement option. The interest rate will never be less than
3 1/2% per year.
OPTION 2 -- LIFE ANNUITY
Death Proceeds are used to purchase a variable annuity where we make annuity
payments as long as the annuitant is living. When the annuitant dies, we stop
making annuity payments. A payee would receive only one annuity payment if the
annuitant dies after the first payment, two annuity payments if the annuitant
dies after the second payment, and so forth.
OPTION 3 -- LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN
We make monthly annuity payments during the lifetime of the annuitant but
annuity payments are at least guaranteed for a minimum of 120, 180 or 240
months, as you elect. If, at the death of the annuitant, annuity payments have
been made for less than the minimum elected number of months, then the
beneficiary can either receive the present value (as of the date of the
annuitant's death) of the remaining payments in one sum or continue annuity
payments for the remaining period certain.
OPTION 4 -- JOINT AND LAST SURVIVOR LIFE ANNUITY
We will make annuity payments as long as the annuitant and joint annuitant are
living. When one annuitant dies, we continue to make annuity payments until that
second annuitant dies. The annuitant may elect that the payment be less than the
payment made during the joint lifetime of the annuitants. When choosing this
option, you must decide what will happen to the annuity payments after the first
annuitant dies.
Under this option, it is possible for an annuitant and joint annuitant to
receive only one payment in the event of the common or simultaneous death of the
annuitants prior to the date of the second payment.
OPTION 5 -- PAYMENTS FOR A DESIGNATED PERIOD
We will make annuity payments for the number of years that you select. You can
select between 5 years and 30 years. Under this option, you may, at any time,
request a full surrender and receive the Cash Surrender Value of your policy.
VARIABLE AND FIXED ANNUITY PAYMENTS -- When the settlement option you select
involves an annuity, unless you specify otherwise, the surrender proceeds or
Death Proceeds provide a variable annuity. Fixed annuity options are also
available.
VARIABLE ANNUITY -- Your policy contains tables indicating the minimum dollar
amount of the first monthly payment under a variable annuity for each $1,000 of
value of a Sub-Account. Your first monthly payment varies with the annuity
option chosen and specific parameters chosen by you. 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 assumed investment rate is the investment return
used to calculate subsequent variable annuity payments.
We determine the total first monthly variable annuity payment by multiplying the
Death Proceeds (expressed in thousands of dollars) in 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 your first monthly variable annuity payment is divided by the
value of an annuity unit 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. This determines the number of annuity units represented by the
first payment. This number of annuity units remains fixed during the
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 15
- --------------------------------------------------------------------------------
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 assumed investment rate. Payments will vary
up or down as the investment rate varies up or down relative to the assumed
investment rate.
FIXED ANNUITY PAYMENTS -- You will receive equal fixed annuity payments
throughout the annuity payment period. We determine fixed annuity payment
amounts by multiplying the amount applied to the annuity by an annuity rate. The
annuity rate is set by us and is not less than the rate specified in the fixed
payment annuity tables in your policy.
Hartford will make any other arrangements for income payments as may be agreed
on.
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 us, we will pay you the Cash Surrender Value. In such case, the
policy will terminate and we 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."
CHARGES AND POLICY VALUES -- Your policy value decreases due to the deduction of
policy charges. Policy value may increase or decrease depending on investment
performance. Fluctuations in your Account Value may have an effect on your Death
Benefit. If your policy lapses, your policy terminates and no Death Benefit will
be paid.
MAKING WITHDRAWALS FROM YOUR POLICY
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SURRENDERS -- While your policy is in force, you may, without the consent of the
beneficiary (provided the designation of beneficiary is not irrevocable), fully
surrender your policy. Upon surrender, you receive the Cash Surrender Value
determined as of the day we receive your request or the date requested by you,
whichever is later. The Cash Surrender Value equals the Account Value less any
Surrender Charges and any Unamortized Tax charge and all Indebtedness. We pay
the Cash Surrender Value of the policy within seven days of our receipt of your
written request or on the effective surrender date requested by you, whichever
is later. Your policy will terminate on the date of our receipt of the written
request, or the date you request the surrender to be effective, whichever is
later. For a discussion of the tax consequences of surrendering your policy, see
"Federal Tax Considerations".
If you choose to apply the surrender proceeds to a settlement option, 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, amounts you withdraw from the Interest Income settlement
option, the Payments for a Designated Period settlement option or the Death
Benefit Policy Proceeds are subject to any applicable Surrender Charge.
PARTIAL SURRENDERS -- While your policy is in force, you may elect, by written
request, to make partial surrenders from the Cash Surrender Value. The Cash
Surrender Value, after partial surrender, must at least equal our minimum amount
rules then in effect; otherwise, the request will be treated as a request for
full surrender. The partial surrenders will be deducted pro rata from each
Sub-Account, unless the you instruct otherwise. The Face Amount will be reduced
proportionate to the reduction in the Account Value due to the partial
surrender. Partial surrenders in excess of the greater of 10% of premiums or
100% of Account Value less premiums paid will be subject to the Surrender Charge
and any Unamortized Tax charges. For a discussion of the tax consequences of
partial surrenders, see "Federal Tax Considerations".
RIGHT TO EXAMINE -- You have a limited right to return your policy for
cancellation. You may deliver or mail the policy to us or to the agent from whom
it was purchased any time during your free look period. Your free look period
begins on the day you get your policy and ends ten days after you get it (or
longer in some states). In such event, the policy will be rescinded and we will
pay an amount equal to the greater of the premiums paid for the policy less any
Indebtedness or the sum of: i) the Account Value less any Indebtedness, on the
date the returned policy is received by us or the agent from whom it was
purchased; and, ii) any deductions under the policy or charges associated with
the Separate Account. If your policy is replacing another policy, your free look
period and the amount paid to you upon the return of your policy vary by state.
RIGHT TO EXCHANGE -- Once the policy is in effect, it may be exchanged, during
the first 24 months after its issuance, for a non-variable flexible premium
adjustable life insurance policy offered by us (or an affiliated company) on the
life of the Insured. No evidence of insurability will be required. The new
policy will have, at your election, either the same Coverage Amount as under the
exchanged policy on the date of exchange or the same Death Benefit. The
effective date, issue date and issue age will be the same as existed under the
exchanged policy. If a policy loan was outstanding, the entire loan must be
repaid. The exchange is subject to adjustments in payments and Account Values to
reflect variances, if any, in the payments and Account Values under this policy
and the new policy.
<PAGE>
16 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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LOANS
AVAILABILITY OF LOANS -- At any time while the policy is in force, you, without
the consent of the beneficiary, (provided the designation of beneficiary is not
irrevocable) may borrow against the policy by assigning it as sole security to
us. Two types of cash loans are available. Any new loan taken together with any
existing Indebtedness may not exceed 90% of the Cash Value. The minimum loan
amount that we will allow is $25.00.
The proceeds of a loan will be delivered to you within seven business days of
our receipt of the loan request.
Unless you specify otherwise, all loan amounts will be transferred pro rata
basis from each Sub-Account to the Loan Account. The difference between the
value of the Loan Account and the Indebtedness will be transferred on a pro-rata
basis from the Sub-Accounts to the Loan Account on each Monthly Activity Date.
If total Indebtedness equals or exceeds the Account Value of the policy on any
Monthly Activity Date, we will give you written notice that, unless we receive
an additional payment within 61 days to reduce the aggregate outstanding loan(s)
secured by the policy, the policy may lapse. See "Lapse and Reinstatement."
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."
LOAN REPAYMENTS -- You can repay all or any part of a loan at any time while
your policy is in force. The amount of your policy loan repayment will be
deducted from the Loan Account. It will be allocated among the Sub-Accounts in
the same percentage as premiums are allocated. Any outstanding loan at the end
of a grace period must be repaid before the policy will be reinstated.
EFFECT OF LOANS ON ACCOUNT VALUE -- A loan, whether or not repaid, has a
permanent effect on your Account Value. This effect occurs because the
investment result of each Sub-Account applies only to the amount remaining in
such Sub-Accounts. The longer a loan is outstanding, the greater the effect on
your Account Value 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, your Account Value will not increase as
rapidly as it would have had no loan been made. If the Sub-Accounts earn less
than the Loan Account, then your Account Value will be greater than it would
have been had no loan been made. If not repaid, the aggregate amount of the
outstanding Indebtedness will reduce the Death Proceeds and the Cash Surrender
Value otherwise payable. For a discussion of the consequences of retaining a
loan against the policy, see "Federal Tax Considerations".
CREDITED INTEREST -- Any amounts in the Loan Account will be credited with
interest at an annual rate of 4.0%. The annual rate for Preferred Loans is 6%.
POLICY LOAN RATES -- The loan interest rate that we will charge on all loans is
6% per annum.
LAPSE AND REINSTATEMENT
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LAPSE -- Your policy will remain in force until the Cash Surrender Value is
insufficient to cover the Deduction Amount due on a Monthly Activity Date. We
will notify you of the default in writing, warning you that your policy is in
danger of terminating.
GRACE PERIOD -- Your policy provides a 61-day grace period to pay an amount
sufficient to cover the Deduction Amounts due. The notice will indicate the
amount that must be paid.
The policy will continue through the grace period, but if no additional premium
payment is made, it will terminate at the end of the grace period. If the person
Insured under the policy dies during the grace period, the Death Proceeds
payable under the policy will be reduced by the Deduction Amount(s) due and
unpaid. See "Death Benefits and Policy Values."
REINSTATEMENT -- If your policy lapses, you may apply for reinstatement of the
policy by payment of the reinstatement premium shown in the policy and any
applicable charges. A request for reinstatement may be made within five years of
lapse. If a loan is outstanding at the time of lapse, we require repayment of
the loan before permitting reinstatement. In addition, we reserve the right to
require evidence of insurability satisfactory to Hartford.
The Account Value on the reinstatement date will reflect:
- - the Cash Value at the time of termination; plus
- - Net Premiums derived from premiums paid at the time of reinstatement; minus
- - the Monthly Deduction Amounts that were due and unpaid during the Policy Grace
Period; plus
- - the Surrender Charge at the time of reinstatement.
The surrender charge is based on the duration from the original policy date as
through the policy has never lapsed.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 17
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FEDERAL TAX CONSIDERATIONS
GENERAL
Since federal tax law is complex, the tax consequences of purchasing this policy
will vary depending on your situation. You may need tax or legal advice to help
you determine whether purchasing this policy is right for you.
Our general discussion of the tax treatment of this policy is based on our
understanding of federal income tax laws as they are currently interpreted. A
detailed description of all federal income tax consequences regarding the
purchase of this policy cannot be made in the prospectus. We also do not discuss
state, municipal or other tax laws that may apply to this policy. For detailed
information, you should consult with a qualified tax adviser familiar with your
situation.
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 Right -- Account Value"). 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 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 Policy 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.
A policy that is classified as modified endowment contract is eligible for
certain aspects of 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 policy (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.
<PAGE>
18 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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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 $675,000 (2000) from the
estate and gift tax. The Taxpayer Relief Act of 1997 gradually raises the credit
over the next six 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, as adjusted for inflation. 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
The Code requires that investments supporting your policy be adequately
diversified. Code Section 817 provides that a variable life insurance contract
will not be treated as a life insurance contract for any period during which the
investments made by the separate account or underlying fund are not adequately
diversified. If a contract is not treated as a life insurance contract, the
policy owner will be subject to income tax on annual increases in cash value.
The Treasury Department's diversification regulations 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 the
case of government securities, each government agency or instrumentality is
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 still comply within a reasonable period and avoid
the taxation of contract 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.
We monitor the diversification of investments in the separate accounts and test
for diversification as required by the Code. We intend to administer all
policies subject to the diversification requirements in a manner that will
maintain adequate diversification.
OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT
In order for a variable life insurance contract to qualify for tax deferral,
assets in the separate accounts supporting the contract must be considered to be
owned by the insurance company and not by the policy owner. It is unclear under
what circumstances an investor is considered to have enough control over the
assets in the separate account to be considered the owner of the assets for tax
purposes.
The IRS has issued several rulings discussing investor control. These rulings
say that certain incidents of ownership by the policy owner, such as the ability
to select and control investments in a separate account, will cause the policy
owner to be treated as the owner of the assets for tax purposes.
In its explanation of the diversification regulations, the Treasury Department
recognized that the temporary regulations "do not provide guidance concerning
the circumstances in which investor control of the investments of a segregated
asset account may cause the investor, rather than the insurance company, to be
treated as the owner of the assets in the account." The explanation further
indicates that "the temporary regulations provide that in appropriate cases a
segregated asset account may include multiple sub-accounts, but do not specify
the extent to which policyholders may direct their investments to particular
sub-accounts without being treated as the owners of the underlying assets.
Guidance on this and other issues will be provided in regulations or revenue
rulings under Section 817(d), relating to the definition of variable contract."
The final regulations issued under Section 817 did not provide guidance
regarding investor control, and as of the date of this prospectus, guidance has
yet to be issued. We do not know if additional guidance will be issued. If
guidance is issued, we do not know if it will have a retroactive effect.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 19
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Due to the lack of specific guidance on investor control, there is some
uncertainty about when a policy owner is considered the owner of the assets for
tax purposes. We reserve the right to modify the policy, as necessary, to
prevent you from being considered the owner of assets in the separate account.
TAX DEFERRAL DURING ACCUMULATION PERIOD
Under existing provisions of the Code, except as described below, any increase
in an Owner's Investment Value is generally not taxable to the Policy Owner
unless amounts are received (or are deemed to be received) under the Policy
prior to the Insured's death. If the Policy is surrendered or matures, the
amount received will be includable in the Policy Owner's income to the extent
that it exceeds the Policy Owner's "investment in the contract." (If there is
any debt at the time of a surrender, then such debt will be treated as an amount
distributed to the Owner.) The "investment in the contract" is the aggregate
amount of premium payments and other consideration paid for the Policy, less the
aggregate amount received previously under the Policy to the extent such amounts
received were excluded from gross income. Since this Policy is a modified
endowment contract, partial withdrawals (or other such amounts deemed to be
distributed) from the Policy constitute income to the Policy Owner for Federal
income tax purposes.
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.
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.
OTHER MATTERS
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LEGAL MATTERS -- Legal matters in connection with the issue and sale of modified
single 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.
<PAGE>
20 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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GLOSSARY OF 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: A unit of measure we use 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 your Account Value minus premiums paid.
ANNUITY UNIT: A unit of measure we use to calculate the amount of annuity
payments.
CASH SURRENDER VALUE: The policy's Cash Value minus all Indebtedness.
CASH VALUE: The policy's Account Value minus 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 we will pay on the death of the Insured. This
equals the Death Benefit minus any Indebtedness.
DEDUCTION AMOUNT: A charge 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 Face Amount is the amount shown on the
policy's Specifications page. Thereafter, the Face Amount is reduced in
proportion to any partial surrenders.
HARTFORD, WE OR US: Hartford Life and Annuity Insurance Company.
HOME OFFICE: Currently located at 200 Hopmeadow Street, Simsbury, Connecticut;
however, the mailing address is P.O. Box 2999, Hartford, Connecticut 06104-2999.
INDEBTEDNESS: Monies you owe us, 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 our 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 any deductions or charges
are subtracted from Account Value of your policy. Monthly Activity Dates occur
on the same day of the month as the Policy Anniversary.
POLICY ANNIVERSARY: The yearly anniversary of the Policy Date.
POLICY DATE: The issue date of the policy.
POLICY LOAN RATE: The interest rate charged on policy loans.
POLICY OWNER OR YOU: The owner of the policy.
POLICY YEAR: The twelve months between Policy Anniversaries.
SUB-ACCOUNT VALUE: The current value of the Sub-Accounts.
SURRENDER CHARGE: A charge which may be assessed upon surrender of the 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>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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STATEMENT OF ADDITIONAL INFORMATION
SEPARATE ACCOUNT FIVE
This Statement of Additional Information is not a prospectus. To obtain a
prospectus, write to us at P.O. Box 2999, Hartford, CT 06104-2999, or call us at
1-800-231-5453.
DATE OF PROSPECTUS: MAY 1, 2000
DATE OF STATEMENT OF ADDITIONAL INFORMATION: MAY 1, 2000
<PAGE>
2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
GENERAL INFORMATION AND HISTORY 3
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SERVICES 5
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EXPERTS 5
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DISTRIBUTION OF THE POLICIES 5
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ADDITIONAL INFORMATION ABOUT CHARGES 6
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ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES AND CASH SURRENDER VALUES 7
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FINANCIAL STATEMENTS SA-1
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</TABLE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 3
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GENERAL INFORMATION AND HISTORY
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY -- Hartford Life and Annuity
Insurance Company is a stock life insurance company engaged in the business of
writing life insurance and annuities, both individual and group, in all states
of the United States, the District of Columbia and Puerto Rico, except New York.
On January 1, 1998, Hartford's name changed from ITT Hartford Life and Annuity
Insurance Company to Hartford Life and Annuity Insurance Company. We were
originally incorporated under the laws of Wisconsin on January 9, 1956, and
subsequently redomiciled to Connecticut. Our offices are located in Simsbury,
Connecticut; however, our mailing address is P.O. Box 2999, Hartford, CT
06104-2999. We are ultimately controlled by The Hartford Financial Services
Group, Inc., one of the largest financial service providers in the United
States.
The following table shows a brief description of the business experience of
officers and directors of Hartford Life and Annuity Insurance Company:
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS PROFESSION,
HARTFORD; VOCATION OR EMPLOYMENT FOR PAST
NAME YEAR OF ELECTION FIVE YEARS; OTHER DIRECTORSHIPS
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
David A. Carlson Vice President, 1999 Assistant Vice President and Director of Taxes
(1998-1999), Hartford; Assistant Vice President and
Director of Taxes (1998-1999), Hartford; CIGNA Corporation
(1975-1998)
Peter W. Cummins Senior Vice President, 1997 Vice President (1993-1997), Hartford; Senior Vice
President, (1997-Present); Vice President (1989-1997),
Hartford Life and Accident Insurance Company; Senior Vice
President (1997-Present); Vice President (1989-1997);
Senior Vice President (1997-Present); Vice President
(1989-1997), Hartford Life Insurance Company.
Timothy M. Fitch Vice President, 1995 Vice President (1995-Present); Actuary (1994-Present);
Actuary, 1997 Assistant Vice President (1992-1995), Hartford Life and
Accident Insurance Company; Vice President (1995-Present);
Actuary (1994-Present); Assistant Vice President
(1992-1995), Hartford Life Insurance Company.
Mary Jane B. Fortin Vice President & Chief Vice President & Chief Accounting Office (1998-Present),
Accounting Officer, 1998 Hartford Life Insurance Company; Vice President & Chief
Accounting Officer, (1998-Present), Royal Life Insurance
Company of America; Vice President & Chief Accounting
Officer (1998-Present) Alpine Life Insurance Company;
Chief Accounting Officer (1997-Present), Hartford
Life, Inc.; Director, Finance (1995-1997), Value
Health, Inc.; Senior Manager (1993-1995), Coopers and
Lybrand; Audit Manager (1993-1996) Arthur Andersen & Co.
David T. Foy Senior Vice President, Chief Senior Vice President (1998-present), Vice President
Financial Officer & (1998), Assistant Vice President (1995-1998), Hartford;
Treasurer, 1998 Senior Vice President (1998-Present), Hartford Life and
Director, 1999* Accident Insurance Company; Director, Strategic Planning
Corporate Finance (1995-1996), IA Product Development
(1994-1995), Hartford; Various Actuarial Roles (1989-1993)
Milliman & Robertson
</TABLE>
<PAGE>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS PROFESSION,
HARTFORD; VOCATION OR EMPLOYMENT FOR PAST
NAME YEAR OF ELECTION FIVE YEARS; OTHER DIRECTORSHIPS
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Lynda Godkin Senior Vice President, 1997 Assistant General Counsel and Secretary (1994-1995),
General Counsel, 1996 Hartford; Director (1997-Present); Senior Vice President
Corporate Secretary, 1996 (1997-Present); General Counsel (1996-Present); Corporate
Director, 1997* 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 (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
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.
Stephen T. Joyce Senior Vice President, 1999 Vice President (1997-1999), Assistant Vice President
(1995-1997), Hartford; Assistant Vice President
(1994-1997), Hartford Life and Accident Insurance Company;
Vice President (1997-Present); Vice President (1997-1999)
Assistant Vice President (1994-1997), Hartford Life
Insurance Company.
Michael D. Keeler Vice President, 1998 Vice President (1998-Present); Hartford Life and Accident
Insurance Company; Vice President (1995-1997), Providian
Insurance; Supervisor/Manager (1985-1995), U.S. West
Communications.
Robert A. Kerzner Senior Vice President, 1998 Director of Individual Life (1998-Present); Vice President
(1994-1998), Hartford; Senior Vice President
(1998-Present); Vice President (1994-1997); Regional Vice
President (1991-1994), Hartford Life Insurance Company.
Thomas M. Marra President, 2000 Executive Vice President (1996-2000), Senior Vice
Director, 1994* President (1993-1996); Hartford; Director (1994-Present);
Executive Vice President (1995-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); Senior Vice President (1994-1995); Vice
President (1989-1994); Actuary (1987-1995), Hartford Life
Insurance Company; Chief Operating Officer (2000-present),
Executive Vice President, Individual Life and Annuities
(1997-2000), Hartford Life, Inc.
Craig R. Raymond Senior Vice President, 1997 Vice President (1993-1997); Assistant Vice President
Chief Actuary, 1994 (1992-1993); Actuary (1989-1994), Hartford; Senior Vice
President (1997-Present); Chief Actuary (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.
</TABLE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 5
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS PROFESSION,
HARTFORD; VOCATION OR EMPLOYMENT FOR PAST
NAME YEAR OF ELECTION FIVE YEARS; OTHER DIRECTORSHIPS
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Lowndes A. Smith Chief Executive Officer, 1997 President (1989-2000), Chief Operating Officer
Director, 1985* (1989-1997), Hartford; Director (1981-Present); President
(1989-Present); Chief Executive Officer (1997-Present);
Chief Operating Officer (1989-1997), Hartford Life and
Accident Insurance Company; Director (1985-Present);
President (1989-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.
David M. Znamierowski Senior Vice President & Vice President (1997) Senior Vice President (1997)
Chief Investment Officer, Director, Risk Management Strategy (1996) Director (1998),
1997 Hartford; Director (1998-Present); Senior Vice President
Director, 1998 (1997-Present); Hartford Life and Accident Insurance
Company; Vice President, Investment Strategy
(1997-Present), Hartford Life, Inc.; Vice President,
Investment Strategy & Policy (1991-1996), Aetna Life and
Casualty.
</TABLE>
- ---------
* Denotes date of election to Board of Directors of Hartford.
Unless otherwise indicated, the principal business address of each of the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
SEPARATE ACCOUNT FIVE was established as a separate account under Connecticut
law on August 17, 1994. The Separate Account is classified as a unit investment
trust registered with the Securities and Exchange Commission under the
Investment Company Act of 1940.
SERVICES
- --------------------------------------------------------------------------------
SAFEKEEPING OF 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.
EXPERTS
- --------------------------------------------------------------------------------
INDEPENDENT PUBLIC ACCOUNTANTS -- The audited financial statements included in
this registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports. Reference is made to the report on the statutory
financial statements of Hartford Life and Annuity Insurance Company which states
the statutory financial statements are presented in accordance with statutory
accounting practices prescribed or permitted by the National Association of
Insurance Commissioners and the State of Connecticut Insurance Department, 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.
ACTUARIAL EXPERT -- The hypothetical Policy illustrations included in this
Statement of Additional Information and the registration statement with respect
to the Separate Account have been approved by Deanne Osgood, FSA, MAAA, Vice
President & Director of Individual Annuity Product Management, for Hartford, and
are included in reliance upon her opinion as to their reasonableness.
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.
<PAGE>
6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
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 affiliates of Hartford. The principal business address of
HESCO and HSD is the same as that of Hartford.
The following table shows officers and directors of HSD:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITIONS AND OFFICES
<S> <C>
- -----------------------------------------------------------------
David A. Carlson Vice President
- -----------------------------------------------------------------
Peter W. Cummins Senior Vice President
- -----------------------------------------------------------------
David T. Foy Director
- -----------------------------------------------------------------
Lynda Godkin Senior Vice President, General
Counsel and Corporate Secretary
- -----------------------------------------------------------------
George R. Jay Controller
- -----------------------------------------------------------------
Robert A. Kerzner Executive Vice President
- -----------------------------------------------------------------
Thomas M. Marra Executive Vice President, Director
- -----------------------------------------------------------------
Paul E. Olson Supervising Registered Principal
- -----------------------------------------------------------------
Lowndes A. Smith President and Chief Executive
Officer, Director
- -----------------------------------------------------------------
</TABLE>
The maximum sales commission payable to Hartford agents, independent registered
insurance brokers, and other registered broker-dealers is 7.0% of initial and
subsequent premiums.
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 the 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 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.
ADDITIONAL INFORMATION ABOUT CHARGES
- --------------------------------------------------------------------------------
UNDERWRITING PROCEDURES -- To purchase a policy you must submit an application
to us. Generally, the minimum initial premium we accept is $10,000. A policy
will be issued only on the lives of insureds age 90 and under who supply
evidence of insurability satisfactory to us. Acceptance is subject to our
underwriting rules and we reserve the right to reject an application for any
reason. No change in the terms or conditions of a policy will be made without
your consent.
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. The current cost
of insurance charge will not exceed the guaranteed cost of insurance charge. The
guaranteed cost of insurance charge is a guaranteed maximum monthly rate,
multiplied by the Coverage Amount on the Policy Date or any Monthly Activity
Date. A table of guaranteed maximum 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. For standard risks that require full
underwriting, the guaranteed maximum cost of insurance rate is 100% of the 1980
Commissioner's Standard Ordinary Smoker/Nonsmoker Sex Distinct Age Last Birthday
Mortality Table (1980 CSO Table). For standard risks eligible for simplified
underwriting, the guaranteed cost of insurance rate is 125% of the 1980 CSO
table through age 90, grading to 100% of the 1980 CSO Table at age 100.
Substandard risks will be assessed a higher guaranteed maximum cost of insurance
rate that will not exceed rates based on a multiple of the 1980 CSO Table. The
multiple will be based on the insured's substandard rating. Unisex rates may be
required in some states.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION 7
- --------------------------------------------------------------------------------
ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES
AND CASH SURRENDER VALUES
The tables 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 age 45, a female age 55 and a male age 65 with Face Amounts of $44,053,
$34,014 and $20,001, 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 and female of
equal ages, including age 55 and 65 for Face Amounts of $45,872 and $28,491.
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 0.73% 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 annual charge of 0.73% described above) of -0.73%,
5.27% and 11.27%, 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
"Changes to Policy or Separate Account -- Separate Account Taxes").
The "Premium Paid Plus Interest" column of each table shows the amount which
would accumulate if the initial premium was invested to earn interest, after
taxes of 5% per year, compounded annually.
Hartford will furnish upon request, a comparable illustration reflecting the
proposed Insureds age, risk classification, Face Amount or initial premium
requested, and reflecting guaranteed cost of insurance rates. Hartford will also
furnish an additional similar illustration reflecting current cost of insurance
rates which may be less than, but never greater than, the guaranteed cost of
insurance rates.
<PAGE>
8 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
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 12.00% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 10,500 10,885 9,860 44,053 10,803 9,780 44,053
2 11,025 11,815 10,799 44,053 11,641 10,628 44,053
3 11,576 12,827 11,823 44,053 12,551 11,551 44,053
4 12,155 13,929 13,090 44,053 13,539 12,706 44,053
5 12,763 15,129 14,310 44,053 14,614 13,801 44,053
6 13,401 16,435 15,840 44,053 15,782 15,194 44,053
7 14,071 17,856 17,292 44,053 17,054 16,496 44,053
8 14,775 19,403 19,076 44,053 18,437 18,115 44,053
9 15,513 21,087 20,804 44,053 19,945 19,665 44,053
10 16,289 22,919 22,889 44,053 21,589 21,559 44,053
11 17,103 25,115 25,085 44,053 23,574 23,544 44,053
12 17,959 27,523 27,493 44,053 25,769 25,739 44,053
13 18,856 30,171 30,141 44,053 28,199 28,169 44,053
14 19,799 33,101 33,071 45,679 30,897 30,867 44,053
15 20,789 36,337 36,307 48,691 33,898 33,868 45,423
16 21,829 39,897 39,867 51,866 37,217 37,187 48,382
17 22,920 43,803 43,773 56,067 40,858 40,828 52,298
18 24,066 48,087 48,057 60,589 44,852 44,822 56,513
19 25,270 52,786 52,786 65,454 49,233 49,203 61,049
20 26,533 57,975 57,975 70,729 54,040 54,040 65,928
25 33,864 92,392 92,392 107,175 86,113 86,113 99,891
35 55,160 234,269 234,269 248,324 218,202 218,202 231,293
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
STATEMENT OF ADDITIONAL INFORMATION 9
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
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 6.00% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 10,500 10,298 9,286 44,053 10,215 9,206 44,053
2 11,025 10,573 9,582 44,053 10,396 9,409 44,053
3 11,576 10,857 9,887 44,053 10,572 9,607 44,053
4 12,155 11,150 10,352 44,053 10,741 9,950 44,053
5 12,763 11,451 10,677 44,053 10,901 10,135 44,053
6 13,401 11,760 11,213 44,053 11,051 10,511 44,053
7 14,071 12,080 11,559 44,053 11,188 10,674 44,053
8 14,775 12,408 12,116 44,053 11,308 11,022 44,053
9 15,513 12,747 12,485 44,053 11,407 11,149 44,053
10 16,289 13,095 13,065 44,053 11,482 11,452 44,053
11 17,103 13,563 13,533 44,053 11,623 11,593 44,053
12 17,959 14,048 14,018 44,053 11,737 11,707 44,053
13 18,856 14,551 14,521 44,053 11,821 11,791 44,053
14 19,799 15,074 15,044 44,053 11,868 11,838 44,053
15 20,789 15,616 15,586 44,053 11,871 11,841 44,053
16 21,829 16,179 16,149 44,053 11,824 11,794 44,053
17 22,920 16,764 16,734 44,053 11,716 11,686 44,053
18 24,066 17,370 17,340 44,053 11,534 11,504 44,053
19 25,270 18,000 17,970 44,053 11,264 11,234 44,053
20 26,533 18,654 18,624 44,053 10,891 10,861 44,053
25 33,864 22,316 22,286 44,053 6,745 6,715 44,053
35 55,160 32,050 32,020 44,053 -- -- --
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
10 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
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% (-0.73% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
1 10,500 9,711 8,734 44,053 9,628 8,659 44,053
2 11,025 9,401 8,478 44,053 9,222 8,316 44,053
3 11,576 9,100 8,228 44,053 8,810 7,965 44,053
4 12,155 8,807 8,117 44,053 8,390 7,731 44,053
5 12,763 8,523 7,876 44,053 7,962 7,355 44,053
6 13,401 8,248 7,805 44,053 7,523 7,117 44,053
7 14,071 7,980 7,571 44,053 7,069 6,703 44,053
8 14,775 7,720 7,497 44,053 6,598 6,403 44,053
9 15,513 7,468 7,270 44,053 6,104 5,937 44,053
10 16,289 7,222 7,192 44,053 5,585 5,555 44,053
11 17,103 7,041 7,011 44,053 5,079 5,049 44,053
12 17,959 6,863 6,833 44,053 4,533 4,503 44,053
13 18,856 6,688 6,658 44,053 3,946 3,916 44,053
14 19,799 6,518 6,488 44,053 3,309 3,279 44,053
15 20,789 6,351 6,321 44,053 2,617 2,587 44,053
16 21,829 6,187 6,157 44,053 1,860 1,830 44,053
17 22,920 6,027 5,997 44,053 1,027 997 44,053
18 24,066 5,871 5,841 44,053 106 76 44,053
19 25,270 5,717 5,687 44,053 -- -- --
20 26,533 5,567 5,537 44,053 -- -- --
25 33,864 4,863 4,833 44,053 -- -- --
35 55,160 3,661 3,631 44,053 -- -- --
- ----------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% 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%, 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>
STATEMENT OF ADDITIONAL INFORMATION 11
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
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% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
1 10,500 10,518 9,738 44,053 10,431 9,651 44,053
2 11,025 11,490 10,710 44,053 11,306 10,526 44,053
3 11,576 12,555 11,775 44,053 12,262 11,482 44,053
4 12,155 13,722 13,092 44,053 13,308 12,678 44,053
5 12,763 15,001 14,371 44,053 14,454 13,824 44,053
6 13,401 16,401 15,971 44,053 15,709 15,279 44,053
7 14,071 17,936 17,506 44,053 17,085 16,655 44,053
8 14,775 19,617 19,387 44,053 18,593 18,363 44,053
9 15,513 21,459 21,229 44,053 20,249 20,019 44,053
10 16,289 23,478 23,448 44,053 22,070 22,040 44,053
11 17,103 25,727 25,697 44,053 24,112 24,082 44,053
12 17,959 28,195 28,165 44,053 26,369 26,339 44,053
13 18,856 30,916 30,886 44,053 28,870 28,840 44,053
14 19,799 33,928 33,898 46,820 31,649 31,619 44,053
15 20,789 37,245 37,215 49,908 34,734 34,704 46,543
16 21,829 40,895 40,865 53,163 38,136 38,106 49,576
17 22,920 44,899 44,869 57,471 41,867 41,837 53,590
18 24,066 49,292 49,262 62,107 45,961 45,931 57,910
19 25,270 54,109 54,109 67,095 50,451 50,451 62,559
20 26,533 59,428 59,428 72,502 55,410 55,410 67,600
25 33,864 94,709 94,709 109,861 88,297 88,297 102,424
35 55,160 240,141 240,141 254,549 223,734 223,734 237,158
- --------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
12 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
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% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 10,500 9,950 9,174 44,053 9,864 9,094 44,053
2 11,025 10,282 9,502 44,053 10,096 9,316 44,053
3 11,576 10,627 9,847 44,053 10,327 9,547 44,053
4 12,155 10,983 10,353 44,053 10,555 9,925 44,053
5 12,763 11,353 10,723 44,053 10,778 10,148 44,053
6 13,401 11,736 11,306 44,053 10,995 10,565 44,053
7 14,071 12,134 11,704 44,053 11,203 10,773 44,053
8 14,775 12,545 12,315 44,053 11,399 11,169 44,053
9 15,513 12,972 12,742 44,053 11,579 11,349 44,053
10 16,289 13,414 13,384 44,053 11,740 11,710 44,053
11 17,103 13,894 13,864 44,053 11,895 11,865 44,053
12 17,959 14,391 14,361 44,053 12,024 11,994 44,053
13 18,856 14,908 14,878 44,053 12,124 12,094 44,053
14 19,799 15,444 15,414 44,053 12,189 12,159 44,053
15 20,789 16,000 15,970 44,053 12,212 12,182 44,053
16 21,829 16,578 16,548 44,053 12,186 12,156 44,053
17 22,920 17,178 17,148 44,053 12,101 12,071 44,053
18 24,066 17,800 17,770 44,053 11,945 11,915 44,053
19 25,270 18,447 18,417 44,053 11,703 11,673 44,053
20 26,533 19,117 19,087 44,053 11,361 11,331 44,053
25 33,864 22,875 22,845 44,053 7,440 7,410 44,053
35 55,160 32,862 32,832 44,053 -- -- --
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
STATEMENT OF ADDITIONAL INFORMATION 13
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
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% (-0.73% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
1 10,500 9,383 8,650 44,053 9,297 8,569 44,053
2 11,025 9,142 8,426 44,053 8,955 8,253 44,053
3 11,576 8,906 8,208 44,053 8,604 7,929 44,053
4 12,155 8,676 8,125 44,053 8,243 7,718 44,053
5 12,763 8,451 7,914 44,053 7,869 7,367 44,053
6 13,401 8,230 7,871 44,053 7,480 7,151 44,053
7 14,071 8,015 7,665 44,053 7,074 6,761 44,053
8 14,775 7,805 7,619 44,053 6,647 6,484 44,053
9 15,513 7,599 7,417 44,053 6,195 6,041 44,053
10 16,289 7,398 7,368 44,053 5,713 5,683 44,053
11 17,103 7,213 7,183 44,053 5,206 5,176 44,053
12 17,959 7,031 7,001 44,053 4,660 4,630 44,053
13 18,856 6,853 6,823 44,053 4,072 4,042 44,053
14 19,799 6,679 6,649 44,053 3,435 3,405 44,053
15 20,789 6,509 6,479 44,053 2,743 2,713 44,053
16 21,829 6,342 6,312 44,053 1,986 1,956 44,053
17 22,920 6,179 6,149 44,053 1,154 1,124 44,053
18 24,066 6,019 5,989 44,053 233 203 44,053
19 25,270 5,863 5,833 44,053 -- -- --
20 26,533 5,709 5,679 44,053 -- -- --
25 33,864 4,991 4,961 44,053 -- -- --
35 55,160 3,764 3,734 44,053 -- -- --
- --------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% 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%, 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>
14 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
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 12.00% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
1 10,500 10,885 9,860 34,014 10,758 9,736 34,014
2 11,025 11,815 10,799 34,014 11,547 10,536 34,014
3 11,576 12,827 11,823 34,014 12,407 11,409 34,014
4 12,155 13,929 13,090 34,014 13,344 12,514 34,014
5 12,763 15,129 14,310 34,014 14,368 13,558 34,014
6 13,401 16,435 15,840 34,014 15,485 14,900 34,014
7 14,071 17,856 17,292 34,014 16,706 16,150 34,014
8 14,775 19,403 19,076 34,014 18,038 17,718 34,014
9 15,513 21,087 20,804 34,014 19,495 19,216 34,014
10 16,289 22,919 22,889 34,014 21,091 21,061 34,014
11 17,103 25,115 25,085 34,014 23,032 23,002 34,014
12 17,959 27,542 27,512 34,014 25,195 25,165 34,014
13 18,856 30,257 30,227 35,703 27,616 27,586 34,014
14 19,799 33,250 33,220 38,902 30,331 30,301 35,486
15 20,789 36,539 36,509 42,385 33,328 33,298 38,660
16 21,829 40,152 40,122 46,174 36,620 36,590 42,113
17 22,920 44,132 44,102 49,869 40,248 40,218 45,480
18 24,066 48,521 48,491 53,858 44,248 44,218 49,114
19 25,270 53,366 53,366 58,169 48,663 48,633 53,042
20 26,533 58,704 58,704 63,987 53,497 53,497 58,311
25 33,864 94,437 94,437 100,103 86,061 86,061 91,224
35 55,160 240,127 240,127 252,133 215,604 215,604 226,384
- --------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
STATEMENT OF ADDITIONAL INFORMATION 15
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
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 6.00% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
1 10,500 10,298 9,286 34,014 10,171 9,162 34,014
2 11,025 10,573 9,582 34,014 10,304 9,318 34,014
3 11,576 10,857 9,887 34,014 10,429 9,466 34,014
4 12,155 11,150 10,352 34,014 10,547 9,758 34,014
5 12,763 11,451 10,677 34,014 10,654 9,891 34,014
6 13,401 11,760 11,213 34,014 10,749 10,212 34,014
7 14,071 12,080 11,559 34,014 10,826 10,315 34,014
8 14,775 12,408 12,116 34,014 10,880 10,596 34,014
9 15,513 12,747 12,485 34,014 10,903 10,646 34,014
10 16,289 13,095 13,065 34,014 10,889 10,859 34,014
11 17,103 13,563 13,533 34,014 10,924 10,894 34,014
12 17,959 14,048 14,018 34,014 10,918 10,888 34,014
13 18,856 14,551 14,521 34,014 10,868 10,838 34,014
14 19,799 15,074 15,044 34,014 10,770 10,740 34,014
15 20,789 15,616 15,586 34,014 10,615 10,585 34,014
16 21,829 16,179 16,149 34,014 10,389 10,359 34,014
17 22,920 16,764 16,734 34,014 10,073 10,043 34,014
18 24,066 17,370 17,340 34,014 9,640 9,610 34,014
19 25,270 18,000 17,970 34,014 9,059 9,029 34,014
20 26,533 18,654 18,624 34,014 8,295 8,265 34,014
25 33,864 22,316 22,286 34,014 -- -- --
35 55,160 32,050 32,020 34,014 -- -- --
- --------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
16 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
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% (-0.73% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
1 10,500 9,711 8,734 34,014 9,584 8,619 34,014
2 11,025 9,401 8,478 34,014 9,130 8,233 34,014
3 11,576 9,100 8,228 34,014 8,669 7,837 34,014
4 12,155 8,807 8,117 34,014 8,200 7,555 34,014
5 12,763 8,523 7,876 34,014 7,720 7,131 34,014
6 13,401 8,248 7,805 34,014 7,227 6,836 34,014
7 14,071 7,980 7,571 34,014 6,715 6,366 34,014
8 14,775 7,720 7,497 34,014 6,176 5,992 34,014
9 15,513 7,468 7,270 34,014 5,604 5,448 34,014
10 16,289 7,222 7,192 34,014 4,990 4,960 34,014
11 17,103 7,041 7,011 34,014 4,368 4,338 34,014
12 17,959 6,863 6,833 34,014 3,691 3,661 34,014
13 18,856 6,688 6,658 34,014 2,956 2,926 34,014
14 19,799 6,518 6,488 34,014 2,156 2,126 34,014
15 20,789 6,351 6,321 34,014 1,282 1,252 34,014
16 21,829 6,187 6,157 34,014 316 286 34,014
17 22,920 6,027 5,997 34,014 -- -- --
18 24,066 5,871 5,841 34,014 -- -- --
19 25,270 5,717 5,687 34,014 -- -- --
20 26,533 5,567 5,537 34,014 -- -- --
25 33,864 4,863 4,833 34,014 -- -- --
35 55,160 3,661 3,631 34,014 -- -- --
- --------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% 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%, 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>
STATEMENT OF ADDITIONAL INFORMATION 17
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
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 12.00% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 10,500 10,518 9,738 34,014 10,384 9,604 34,014
2 11,025 11,490 10,710 34,014 11,208 10,428 34,014
3 11,576 12,555 11,775 34,014 12,112 11,332 34,014
4 12,155 13,722 13,092 34,014 13,104 12,474 34,014
5 12,763 15,001 14,371 34,014 14,195 13,565 34,014
6 13,401 16,401 15,971 34,014 15,395 14,965 34,014
7 14,071 17,936 17,506 34,014 16,715 16,285 34,014
8 14,775 19,617 19,387 34,014 18,169 17,939 34,014
9 15,513 21,459 21,229 34,014 19,770 19,540 34,014
10 16,289 23,478 23,448 34,014 21,538 21,508 34,014
11 17,103 25,730 25,700 34,014 23,535 23,505 34,014
12 17,959 28,233 28,203 34,014 25,761 25,731 34,014
13 18,856 31,025 30,995 36,609 28,255 28,225 34,014
14 19,799 34,095 34,065 39,890 31,043 31,013 36,320
15 20,789 37,468 37,438 43,462 34,111 34,081 39,568
16 21,829 41,173 41,143 47,349 37,482 37,452 43,103
17 22,920 45,256 45,226 51,139 41,196 41,166 46,550
18 24,066 49,758 49,728 55,231 45,290 45,260 50,272
19 25,270 54,727 54,727 59,652 49,810 49,780 54,293
20 26,533 60,201 60,201 65,618 54,759 54,759 59,687
25 33,864 96,845 96,845 102,655 88,091 88,091 93,376
35 55,160 246,250 246,250 258,561 220,691 220,691 231,725
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
18 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
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 6.00% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
1 10,500 9,950 9,174 34,014 9,817 9,051 34,014
2 11,025 10,282 9,502 34,014 10,000 9,220 34,014
3 11,576 10,627 9,847 34,014 10,179 9,399 34,014
4 12,155 10,983 10,353 34,014 10,353 9,723 34,014
5 12,763 11,353 10,723 34,014 10,521 9,891 34,014
6 13,401 11,736 11,306 34,014 10,680 10,250 34,014
7 14,071 12,134 11,704 34,014 10,825 10,395 34,014
8 14,775 12,545 12,315 34,014 10,951 10,721 34,014
9 15,513 12,972 12,742 34,014 11,051 10,821 34,014
10 16,289 13,414 13,384 34,014 11,120 11,090 34,014
11 17,103 13,894 13,864 34,014 11,169 11,139 34,014
12 17,959 14,391 14,361 34,014 11,179 11,149 34,014
13 18,856 14,908 14,878 34,014 11,147 11,117 34,014
14 19,799 15,444 15,414 34,014 11,069 11,039 34,014
15 20,789 16,000 15,970 34,014 10,935 10,905 34,014
16 21,829 16,578 16,548 34,014 10,733 10,703 34,014
17 22,920 17,178 17,148 34,014 10,443 10,413 34,014
18 24,066 17,800 17,770 34,014 10,040 10,010 34,014
19 25,270 18,447 18,417 34,014 9,494 9,464 34,014
20 26,533 19,117 19,087 34,014 8,769 8,739 34,014
25 33,864 22,875 22,845 34,014 770 740 34,014
35 55,160 32,862 32,832 34,504 -- -- --
- ----------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
STATEMENT OF ADDITIONAL INFORMATION 19
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
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% (-0.73% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
1 10,500 9,383 8,650 34,014 9,251 8,527 34,014
2 11,025 9,142 8,426 34,014 8,860 8,166 34,014
3 11,576 8,906 8,208 34,014 8,459 7,794 34,014
4 12,155 8,676 8,125 34,014 8,046 7,533 34,014
5 12,763 8,451 7,914 34,014 7,619 7,131 34,014
6 13,401 8,230 7,871 34,014 7,174 6,857 34,014
7 14,071 8,015 7,665 34,014 6,707 6,409 34,014
8 14,775 7,805 7,619 34,014 6,211 6,057 34,014
9 15,513 7,599 7,417 34,014 5,676 5,533 34,014
10 16,289 7,398 7,368 34,014 5,097 5,067 34,014
11 17,103 7,213 7,183 34,014 4,476 4,446 34,014
12 17,959 7,031 7,001 34,014 3,799 3,769 34,014
13 18,856 6,853 6,823 34,014 3,064 3,034 34,014
14 19,799 6,679 6,649 34,014 2,265 2,235 34,014
15 20,789 6,509 6,479 34,014 1,392 1,362 34,014
16 21,829 6,342 6,312 34,014 429 399 34,014
17 22,920 6,179 6,149 34,014 -- -- --
18 24,066 6,019 5,989 34,014 -- -- --
19 25,270 5,863 5,833 34,014 -- -- --
20 26,533 5,709 5,679 34,014 -- -- --
25 33,864 4,991 4,961 34,014 -- -- --
35 55,160 3,764 3,734 34,014 -- -- --
- --------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% 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%, 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>
20 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12.00% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 10,500 10,885 9,860 20,001 10,672 9,652 20,001
2 11,025 11,815 10,799 20,001 11,366 10,359 20,001
3 11,576 12,827 11,823 20,001 12,122 11,130 20,001
4 12,155 13,929 13,090 20,001 12,952 12,127 20,001
5 12,763 15,129 14,310 20,001 13,868 13,064 20,001
6 13,401 16,435 15,840 20,001 14,887 14,308 20,001
7 14,071 17,856 17,292 20,177 16,031 15,481 20,001
8 14,775 19,408 19,081 21,543 17,328 17,012 20,001
9 15,513 21,111 20,828 23,010 18,814 18,537 20,507
10 16,289 22,951 22,921 25,016 20,450 20,420 22,290
11 17,103 25,157 25,127 27,169 22,413 22,383 24,205
2 17,959 27,585 27,555 29,515 24,572 24,542 26,292
13 18,856 30,233 30,203 32,349 26,926 26,896 28,811
14 19,799 33,152 33,122 35,140 29,522 29,492 31,293
15 20,789 36,342 36,312 38,522 32,352 32,322 34,293
16 21,829 39,857 39,827 41,850 35,478 35,448 37,252
17 22,920 43,699 43,669 45,884 38,887 38,857 40,830
18 24,066 47,915 47,885 50,310 42,598 42,568 44,727
19 25,270 52,540 52,540 55,167 46,632 46,602 48,963
20 26,533 57,649 57,649 60,530 51,010 51,010 53,560
25 33,864 91,677 91,677 96,260 79,130 79,130 83,086
35 55,160 232,039 232,039 234,359 194,188 194,188 196,129
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
STATEMENT OF ADDITIONAL INFORMATION 21
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6.00% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
1 10,500 10,298 9,286 20,001 10,082 9,075 20,001
2 11,025 10,573 9,582 20,001 10,107 9,125 20,001
3 11,576 10,857 9,887 20,001 10,101 9,145 20,001
4 12,155 11,150 10,352 20,001 10,060 9,279 20,001
5 12,763 11,451 10,677 20,001 9,975 9,222 20,001
6 13,401 11,760 11,213 20,001 9,838 9,316 20,001
7 14,071 12,080 11,559 20,001 9,637 9,149 20,001
8 14,775 12,408 12,116 20,001 9,355 9,091 20,001
9 15,513 12,747 12,485 20,001 8,973 8,741 20,001
10 16,289 13,095 13,065 20,001 8,467 8,437 20,001
11 17,103 13,563 13,533 20,001 7,880 7,850 20,001
12 17,959 14,048 14,018 20,001 7,111 7,081 20,001
13 18,856 14,551 14,521 20,001 6,117 6,087 20,001
14 19,799 15,074 15,044 20,001 4,842 4,812 20,001
15 20,789 15,616 15,586 20,001 3,205 3,175 20,001
16 21,829 16,179 16,149 20,001 1,093 1,063 20,001
17 22,920 16,764 16,734 20,001 -- -- --
18 24,066 17,370 17,340 20,001 -- -- --
19 25,270 18,000 17,970 20,001 -- -- --
20 26,533 18,654 18,624 20,001 -- -- --
25 33,864 22,316 22,286 23,431 -- -- --
35 55,160 32,077 32,047 32,397 -- -- --
- ----------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
22 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.73% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
1 10,500 9,711 8,734 20,001 9,493 8,537 20,001
2 11,025 9,401 8,478 20,001 8,921 8,043 20,001
3 11,576 9,100 8,228 20,001 8,308 7,510 20,001
4 12,155 8,807 8,117 20,001 7,647 7,043 20,001
5 12,763 8,523 7,876 20,001 6,927 6,395 20,001
6 13,401 8,248 7,805 20,001 6,135 5,799 20,001
7 14,071 7,980 7,571 20,001 5,254 4,975 20,001
8 14,775 7,720 7,497 20,001 4,261 4,124 20,001
9 15,513 7,468 7,270 20,001 3,127 3,027 20,001
10 16,289 7,222 7,192 20,001 1,822 1,792 20,001
11 17,103 7,041 7,011 20,001 317 287 20,001
12 17,959 6,863 6,833 20,001 -- -- --
13 18,856 6,688 6,658 20,001 -- -- --
14 19,799 6,518 6,488 20,001 -- -- --
15 20,789 6,351 6,321 20,001 -- -- --
16 21,829 6,187 6,157 20,001 -- -- --
17 22,920 6,027 5,997 20,001 -- -- --
18 24,066 5,871 5,841 20,001 -- -- --
19 25,270 5,717 5,687 20,001 -- -- --
20 26,533 5,567 5,537 20,001 -- -- --
25 33,864 4,863 4,833 20,001 -- -- --
35 55,160 3,661 3,631 20,001 -- -- --
- --------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% 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%, 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>
STATEMENT OF ADDITIONAL INFORMATION 23
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12.00% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 10,500 10,518 9,738 20,001 10,290 9,510 20,001
2 11,025 11,490 10,710 20,001 11,008 10,228 20,001
3 11,576 12,555 11,775 20,001 11,795 11,015 20,001
4 12,155 13,722 13,092 20,001 12,664 12,034 20,001
5 12,763 15,001 14,371 20,001 13,631 13,001 20,001
6 13,401 16,401 15,971 20,001 14,714 14,284 20,001
7 14,071 17,936 17,506 20,267 15,938 15,508 20,001
8 14,775 19,623 19,393 21,781 17,337 17,107 20,001
9 15,513 21,484 21,254 23,418 18,949 18,719 20,654
10 16,289 23,510 23,480 25,626 20,732 20,702 22,597
11 17,103 25,771 25,741 27,832 22,722 22,692 24,539
12 17,959 28,259 28,229 30,236 24,911 24,881 26,654
13 18,856 30,973 30,943 33,141 27,298 27,268 29,209
14 19,799 33,964 33,934 36,001 29,930 29,900 31,725
15 20,789 37,233 37,203 39,466 32,800 32,770 34,767
16 21,829 40,835 40,805 42,876 35,970 35,940 37,768
17 22,920 44,772 44,742 47,010 39,426 39,396 41,397
18 24,066 49,092 49,062 51,546 43,189 43,159 45,348
19 25,270 53,832 53,832 56,523 47,279 47,249 49,642
20 26,533 59,066 59,066 62,019 51,719 51,719 54,304
25 33,864 93,931 93,931 98,627 80,230 80,230 84,241
35 55,160 237,744 237,744 240,121 196,886 196,886 198,854
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
24 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6.00% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS --------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
1 10,500 9,950 9,174 20,001 9,721 8,962 20,001
2 11,025 10,282 9,502 20,001 9,786 9,022 20,001
3 11,576 10,627 9,847 20,001 9,823 9,057 20,001
4 12,155 10,983 10,353 20,001 9,827 9,207 20,001
5 12,763 11,353 10,723 20,001 9,790 9,172 20,001
6 13,401 11,736 11,306 20,001 9,703 9,285 20,001
7 14,071 12,134 11,704 20,001 9,555 9,143 20,001
8 14,775 12,545 12,315 20,001 9,330 9,113 20,001
9 15,513 12,972 12,742 20,001 9,007 8,797 20,001
10 16,289 13,414 13,384 20,001 8,566 8,536 20,001
11 17,103 13,894 13,864 20,001 7,991 7,961 20,001
12 17,959 14,391 14,361 20,001 7,238 7,208 20,001
13 18,856 14,908 14,878 20,001 6,263 6,233 20,001
14 19,799 15,444 15,414 20,001 5,011 4,981 20,001
15 20,789 16,000 15,970 20,001 3,402 3,372 20,001
16 21,829 16,578 16,548 20,001 1,325 1,295 20,001
17 22,920 17,178 17,148 20,001 -- -- --
18 24,066 17,800 17,770 20,001 -- -- --
19 25,270 18,447 18,417 20,001 -- -- --
20 26,533 19,117 19,087 20,073 -- -- --
25 33,864 22,875 22,845 24,018 -- -- --
35 55,160 32,889 32,859 33,217 -- -- --
- ------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
STATEMENT OF ADDITIONAL INFORMATION 25
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.73% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
1 10,500 9,383 8,650 20,001 9,152 8,435 20,001
2 11,025 9,142 8,426 20,001 8,635 7,958 20,001
3 11,576 8,906 8,208 20,001 8,074 7,438 20,001
4 12,155 8,676 8,125 20,001 7,460 6,983 20,001
5 12,763 8,451 7,914 20,001 6,784 6,347 20,001
6 13,401 8,230 7,871 20,001 6,031 5,760 20,001
7 14,071 8,015 7,665 20,001 5,184 4,947 20,001
8 14,775 7,805 7,619 20,001 4,219 4,105 20,001
9 15,513 7,599 7,417 20,001 3,109 3,017 20,001
10 16,289 7,398 7,368 20,001 1,819 1,789 20,001
11 17,103 7,213 7,183 20,001 314 284 20,001
12 17,959 7,031 7,001 20,001 -- -- --
13 18,856 6,853 6,823 20,001 -- -- --
14 19,799 6,679 6,649 20,001 -- -- --
15 20,789 6,509 6,479 20,001 -- -- --
16 21,829 6,342 6,312 20,001 -- -- --
17 22,920 6,179 6,149 20,001 -- -- --
18 24,066 6,019 5,989 20,001 -- -- --
19 25,270 5,863 5,833 20,001 -- -- --
20 26,533 5,709 5,679 20,001 -- -- --
25 33,864 4,991 4,961 20,001 -- -- --
35 55,160 3,764 3,734 20,001 -- -- --
- ----------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% 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%, 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>
26 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12.00% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
1 10,500 10,953 9,926 45,872 10,953 9,926 45,872
2 11,025 11,957 10,938 45,872 11,957 10,938 45,872
3 11,576 13,049 12,041 45,872 13,049 12,041 45,872
4 12,155 14,237 13,393 45,872 14,237 13,393 45,872
5 12,763 15,528 14,704 45,872 15,528 14,704 45,872
6 13,401 16,932 16,333 45,872 16,932 16,333 45,872
7 14,071 18,458 17,890 45,872 18,458 17,890 45,872
8 14,775 20,116 19,785 45,872 20,116 19,785 45,872
9 15,513 21,917 21,632 45,872 21,917 21,632 45,872
10 16,289 23,874 23,844 45,872 23,874 23,844 45,872
11 17,103 26,212 26,182 45,872 26,212 26,182 45,872
12 17,959 28,783 28,753 45,872 28,783 28,753 45,872
13 18,856 31,617 31,587 45,872 31,616 31,586 45,872
14 19,799 34,748 34,718 45,872 34,747 34,717 45,872
15 20,789 38,220 38,190 45,872 38,219 38,189 45,872
16 21,829 42,076 42,046 48,387 42,076 42,046 48,387
17 22,920 46,331 46,301 52,353 46,330 46,300 52,353
18 24,066 51,016 51,016 56,627 51,016 51,016 56,627
19 25,270 56,214 56,214 61,272 56,213 56,213 61,272
20 26,533 61,913 61,913 67,484 61,912 61,912 67,484
25 33,864 100,011 100,011 106,011 100,011 100,011 106,011
35 55,160 257,190 257,190 270,049 250,799 250,799 263,338
- --------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
STATEMENT OF ADDITIONAL INFORMATION 27
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6.00% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ---------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------
1 10,500 10,362 9,349 45,872 10,362 9,349 45,872
2 11,025 10,699 9,705 45,872 10,699 9,705 45,872
3 11,576 11,041 10,068 45,872 11,041 10,068 45,872
4 12,155 11,385 10,584 45,872 11,385 10,584 45,872
5 12,763 11,731 10,954 45,872 11,731 10,954 45,872
6 13,401 12,075 11,524 45,872 12,075 11,524 45,872
7 14,071 12,422 11,899 45,872 12,416 11,893 45,872
8 14,775 12,780 12,487 45,872 12,749 12,455 45,872
9 15,513 13,150 12,887 45,872 13,069 12,807 45,872
10 16,289 13,531 13,501 45,872 13,372 13,342 45,872
11 17,103 14,036 14,006 45,872 13,760 13,730 45,872
12 17,959 14,560 14,530 45,872 14,125 14,095 45,872
13 18,856 15,106 15,076 45,872 14,459 14,429 45,872
14 19,799 15,673 15,643 45,872 14,755 14,725 45,872
15 20,789 16,263 16,233 45,872 15,003 14,973 45,872
16 21,829 16,876 16,846 45,872 15,189 15,159 45,872
17 22,920 17,513 17,483 45,872 15,294 15,264 45,872
18 24,066 18,176 18,146 45,872 15,293 15,263 45,872
19 25,270 18,865 18,835 45,872 15,156 15,126 45,872
20 26,533 19,581 19,551 45,872 14,847 14,817 45,872
25 33,864 23,610 23,580 45,872 8,933 8,903 45,872
35 55,160 34,446 34,416 45,872 -- -- 45,872
- -------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
28 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.73% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
1 10,500 9,771 8,789 45,872 9,771 8,789 45,872
2 11,025 9,512 8,578 45,872 9,512 8,578 45,872
3 11,576 9,249 8,364 45,872 9,249 8,364 45,872
4 12,155 8,983 8,279 45,872 8,983 8,279 45,872
5 12,763 8,710 8,049 45,872 8,710 8,049 45,872
6 13,401 8,442 7,990 45,872 8,428 7,977 45,872
7 14,071 8,181 7,762 45,872 8,134 7,718 45,872
8 14,775 7,927 7,699 45,872 7,823 7,598 45,872
9 15,513 7,680 7,477 45,872 7,490 7,291 45,872
10 16,289 7,440 7,410 45,872 7,127 7,097 45,872
11 17,103 7,264 7,234 45,872 6,783 6,753 45,872
12 17,959 7,092 7,062 45,872 6,390 6,360 45,872
13 18,856 6,924 6,894 45,872 5,942 5,912 45,872
14 19,799 6,758 6,728 45,872 5,426 5,396 45,872
15 20,789 6,596 6,566 45,872 4,830 4,800 45,872
16 21,829 6,437 6,407 45,872 4,137 4,107 45,872
17 22,920 6,281 6,251 45,872 3,321 3,291 45,872
18 24,066 6,128 6,098 45,872 2,350 2,320 45,872
19 25,270 5,979 5,949 45,872 1,185 1,155 45,872
20 26,533 5,832 5,802 45,872 -- -- --
25 33,864 5,140 5,110 45,872 -- -- --
35 55,160 3,945 3,915 45,872 -- -- --
- --------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% 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%, 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>
STATEMENT OF ADDITIONAL INFORMATION 29
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12.00% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
1 10,500 10,583 9,803 45,872 10,583 9,803 45,872
2 11,025 11,627 10,847 45,872 11,627 10,847 45,872
3 11,576 12,771 11,991 45,872 12,771 11,991 45,872
4 12,155 14,023 13,393 45,872 14,023 13,393 45,872
5 12,763 15,394 14,764 45,872 15,394 14,764 45,872
6 13,401 16,894 16,464 45,872 16,894 16,464 45,872
7 14,071 18,537 18,107 45,872 18,537 18,107 45,872
8 14,775 20,335 20,105 45,872 20,335 20,105 45,872
9 15,513 22,303 22,073 45,872 22,303 22,073 45,872
10 16,289 24,458 24,428 45,872 24,458 24,428 45,872
11 17,103 26,861 26,831 45,872 26,861 26,831 45,872
12 17,959 29,504 29,474 45,872 29,504 29,474 45,872
13 18,856 32,419 32,389 45,872 32,419 32,389 45,872
14 19,799 35,643 35,613 45,872 35,643 35,613 45,872
15 20,789 39,220 39,190 45,872 39,220 39,190 45,872
16 21,829 43,185 43,155 49,663 43,185 43,155 49,663
17 22,920 47,553 47,523 53,734 47,553 47,523 53,734
18 24,066 52,363 52,363 58,122 52,363 52,363 58,122
19 25,270 57,697 57,697 62,890 57,697 57,697 62,890
20 26,533 63,547 63,547 69,265 63,547 63,547 69,265
25 33,864 102,651 102,651 108,809 102,651 102,651 108,809
35 55,160 263,978 263,978 277,176 257,419 257,419 270,290
- --------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
30 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6.00% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
1 10,500 10,012 9,232 45,872 10,012 9,232 45,872
2 11,025 10,404 9,624 45,872 10,404 9,624 45,872
3 11,576 10,805 10,025 45,872 10,805 10,025 45,872
4 12,155 11,213 10,583 45,872 11,213 10,583 45,872
5 12,763 11,628 10,998 45,872 11,628 10,998 45,872
6 13,401 12,047 11,617 45,872 12,047 11,617 45,872
7 14,071 12,474 12,044 45,872 12,468 12,038 45,872
8 14,775 12,918 12,688 45,872 12,887 12,657 45,872
9 15,513 13,378 13,148 45,872 13,300 13,070 45,872
10 16,289 13,856 13,826 45,872 13,701 13,671 45,872
11 17,103 14,374 14,344 45,872 14,106 14,076 45,872
12 17,959 14,912 14,882 45,872 14,489 14,459 45,872
13 18,856 15,472 15,442 45,872 14,842 14,812 45,872
14 19,799 16,054 16,024 45,872 15,160 15,130 45,872
15 20,789 16,658 16,628 45,872 15,431 15,401 45,872
16 21,829 17,287 17,257 45,872 15,643 15,613 45,872
17 22,920 17,941 17,911 45,872 15,776 15,746 45,872
18 24,066 18,620 18,590 45,872 15,807 15,777 45,872
19 25,270 19,327 19,297 45,872 15,707 15,677 45,872
20 26,533 20,061 20,031 45,872 15,441 15,411 45,872
25 33,864 24,193 24,163 45,872 9,885 9,855 45,872
35 55,160 35,306 35,276 45,872 -- -- 45,872
- --------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
STATEMENT OF ADDITIONAL INFORMATION 31
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.73% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
1 10,500 9,442 8,703 45,872 9,442 8,703 45,872
2 11,025 9,249 8,526 45,872 9,249 8,526 45,872
3 11,576 9,052 8,343 45,872 9,052 8,343 45,872
4 12,155 8,847 8,286 45,872 8,847 8,286 45,872
5 12,763 8,633 8,085 45,872 8,633 8,085 45,872
6 13,401 8,422 8,055 45,872 8,408 8,042 45,872
7 14,071 8,215 7,856 45,872 8,168 7,811 45,872
8 14,775 8,012 7,822 45,872 7,908 7,720 45,872
9 15,513 7,813 7,627 45,872 7,622 7,440 45,872
10 16,289 7,619 7,589 45,872 7,305 7,275 45,872
11 17,103 7,440 7,410 45,872 6,959 6,929 45,872
12 17,959 7,264 7,234 45,872 6,566 6,536 45,872
13 18,856 7,092 7,062 45,872 6,116 6,086 45,872
14 19,799 6,924 6,894 45,872 5,599 5,569 45,872
15 20,789 6,758 6,728 45,872 5,003 4,973 45,872
16 21,829 6,596 6,566 45,872 4,309 4,279 45,872
17 22,920 6,437 6,407 45,872 3,494 3,464 45,872
18 24,066 6,281 6,251 45,872 2,525 2,495 45,872
19 25,270 6,128 6,098 45,872 1,361 1,331 45,872
20 26,533 5,979 5,949 45,872 -- -- --
25 33,864 5,273 5,243 45,872 -- -- --
35 55,160 4,054 4,024 45,872 -- -- --
- --------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% 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%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
32 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12.00% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 10,500 10,946 9,920 28,491 10,946 9,920 28,491
2 11,025 11,930 10,911 28,491 11,930 10,911 28,491
3 11,576 12,986 11,978 28,491 12,986 11,978 28,491
4 12,155 14,123 13,281 28,491 14,120 13,278 28,491
5 12,763 15,363 14,541 28,491 15,339 14,517 28,491
6 13,401 16,715 16,117 28,491 16,652 16,056 28,491
7 14,071 18,188 17,621 28,491 18,070 17,505 28,491
8 14,775 19,794 19,465 28,491 19,606 19,278 28,491
9 15,513 21,545 21,261 28,491 21,279 20,996 28,491
10 16,289 23,453 23,423 28,491 23,113 23,083 28,491
11 17,103 25,749 25,719 28,491 25,349 25,319 28,491
12 17,959 28,320 28,290 30,302 27,871 27,841 29,822
13 18,856 31,145 31,115 33,325 30,651 30,621 32,796
14 19,799 34,253 34,223 36,308 33,709 33,679 35,731
15 20,789 37,654 37,624 39,913 37,055 37,025 39,278
16 21,829 41,400 41,370 43,469 40,741 40,711 42,778
17 22,920 45,494 45,464 47,768 44,770 44,740 47,008
18 24,066 49,962 49,932 52,460 49,166 49,136 51,624
19 25,270 54,869 54,869 57,612 53,957 53,957 56,654
20 26,533 60,294 60,294 63,308 59,200 59,200 62,159
25 33,864 96,607 96,607 101,437 92,775 92,775 97,413
35 55,160 248,012 248,012 250,492 228,729 228,729 231,016
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
STATEMENT OF ADDITIONAL INFORMATION 33
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6.00% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
1 10,500 10,356 9,343 28,491 10,356 9,343 28,491
2 11,025 10,672 9,679 28,491 10,672 9,679 28,491
3 11,576 10,976 10,004 28,491 10,976 10,004 28,491
4 12,155 11,289 10,489 28,491 11,262 10,463 28,491
5 12,763 11,611 10,836 28,491 11,525 10,751 28,491
6 13,401 11,944 11,395 28,491 11,759 11,211 28,491
7 14,071 12,287 11,765 28,491 11,954 11,435 28,491
8 14,775 12,641 12,348 28,491 12,100 11,810 28,491
9 15,513 13,006 12,743 28,491 12,183 11,922 28,491
10 16,289 13,382 13,352 28,491 12,184 12,154 28,491
11 17,103 13,881 13,851 28,491 12,186 12,156 28,491
12 17,959 14,400 14,370 28,491 12,074 12,044 28,491
13 18,856 14,939 14,909 28,491 11,823 11,793 28,491
14 19,799 15,500 15,470 28,491 11,401 11,371 28,491
15 20,789 16,083 16,053 28,491 10,766 10,736 28,491
16 21,829 16,689 16,659 28,491 9,859 9,829 28,491
17 22,920 17,318 17,288 28,491 8,596 8,566 28,491
18 24,066 17,973 17,943 28,491 6,858 6,828 28,491
19 25,270 18,654 18,624 28,491 4,482 4,452 28,491
20 26,533 19,362 19,332 28,491 1,239 1,209 28,491
25 33,864 23,344 23,314 28,491 -- -- 28,491
35 55,160 34,054 34,024 34,394 -- -- 28,491
- ----------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
34 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.73% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
1 10,500 9,765 8,783 28,491 9,765 8,783 28,491
2 11,025 9,485 8,554 28,491 9,485 8,554 28,491
3 11,576 9,195 8,314 28,491 9,183 8,304 28,491
4 12,155 8,913 8,215 28,491 8,856 8,162 28,491
5 12,763 8,639 7,983 28,491 8,496 7,850 28,491
6 13,401 8,373 7,924 28,491 8,094 7,660 28,491
7 14,071 8,114 7,698 28,491 7,640 7,247 28,491
8 14,775 7,862 7,635 28,491 7,116 6,909 28,491
9 15,513 7,616 7,415 28,491 6,505 6,329 28,491
10 16,289 7,378 7,348 28,491 5,783 5,753 28,491
11 17,103 7,204 7,174 28,491 4,965 4,935 28,491
12 17,959 7,033 7,003 28,491 3,972 3,942 28,491
13 18,856 6,865 6,835 28,491 2,766 2,736 28,491
14 19,799 6,701 6,671 28,491 1,300 1,270 28,491
15 20,789 6,540 6,510 28,491 -- -- --
16 21,829 6,382 6,352 28,491 -- -- --
17 22,920 6,227 6,197 28,491 -- -- --
18 24,066 6,076 6,046 28,491 -- -- --
19 25,270 5,927 5,897 28,491 -- -- --
20 26,533 5,781 5,751 28,491 -- -- --
25 33,864 5,094 5,064 28,491 -- -- --
35 55,160 3,908 3,878 28,491 -- -- --
- --------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% 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%, 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>
STATEMENT OF ADDITIONAL INFORMATION 35
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12.00% (11.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
1 10,500 10,577 9,797 28,491 10,577 9,797 28,491
2 11,025 11,600 10,820 28,491 11,600 10,820 28,491
3 11,576 12,705 11,925 28,491 12,705 11,925 28,491
4 12,155 13,908 13,278 28,491 13,902 13,272 28,491
5 12,763 15,227 14,597 28,491 15,198 14,568 28,491
6 13,401 16,674 16,244 28,491 16,605 16,175 28,491
7 14,071 18,262 17,832 28,491 18,136 17,706 28,491
8 14,775 20,005 19,775 28,491 19,810 19,580 28,491
9 15,513 21,917 21,687 28,491 21,648 21,418 28,491
10 16,289 24,015 23,985 28,491 23,683 23,653 28,491
11 17,103 26,380 26,350 28,491 25,999 25,969 28,491
12 17,959 29,023 28,993 31,054 28,600 28,570 30,602
13 18,856 31,919 31,889 34,153 31,453 31,423 33,654
14 19,799 35,105 35,075 37,211 34,592 34,562 36,668
15 20,789 38,591 38,561 40,906 38,027 37,997 40,308
16 21,829 42,431 42,401 44,552 41,810 41,780 43,900
17 22,920 46,628 46,598 48,959 45,945 45,915 48,242
18 24,066 51,209 51,209 53,769 50,458 50,458 52,981
19 25,270 56,272 56,272 59,085 55,408 55,408 58,178
20 26,533 61,835 61,835 64,927 60,793 60,793 63,832
25 33,864 99,076 99,076 104,029 95,271 95,271 100,034
35 55,160 254,352 254,352 256,895 234,883 234,883 237,231
- ----------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
36 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6.00% (5.27% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
1 10,500 10,006 9,226 28,491 10,006 9,226 28,491
2 11,025 10,377 9,597 28,491 10,377 9,597 28,491
3 11,576 10,740 9,960 28,491 10,738 9,958 28,491
4 12,155 11,118 10,488 28,491 11,087 10,457 28,491
5 12,763 11,510 10,880 28,491 11,417 10,787 28,491
6 13,401 11,917 11,487 28,491 11,723 11,293 28,491
7 14,071 12,339 11,909 28,491 11,996 11,566 28,491
8 14,775 12,777 12,547 28,491 12,225 11,995 28,491
9 15,513 13,232 13,002 28,491 12,396 12,166 28,491
10 16,289 13,705 13,675 28,491 12,494 12,464 28,491
11 17,103 14,216 14,186 28,491 12,521 12,491 28,491
12 17,959 14,748 14,718 28,491 12,437 12,407 28,491
13 18,856 15,302 15,272 28,491 12,219 12,189 28,491
14 19,799 15,876 15,846 28,491 11,838 11,808 28,491
15 20,789 16,474 16,444 28,491 11,252 11,222 28,491
16 21,829 17,096 17,066 28,491 10,405 10,375 28,491
17 22,920 17,742 17,712 28,491 9,217 9,187 28,491
18 24,066 18,413 18,383 28,491 7,574 7,544 28,491
19 25,270 19,112 19,082 28,491 5,320 5,290 28,491
20 26,533 19,838 19,808 28,491 2,236 2,206 28,491
25 33,864 23,922 23,892 28,491 -- -- 28,491
35 55,160 34,906 34,876 35,254 -- -- 28,491
- ----------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
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>
STATEMENT OF ADDITIONAL INFORMATION 37
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE (VERS. 3)
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0.00% (-0.73%) NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ----------------------------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
1 10,500 9,435 8,698 28,491 9,435 8,698 28,491
2 11,025 9,222 8,500 28,491 9,222 8,500 28,491
3 11,576 8,997 8,293 28,491 8,984 8,280 28,491
4 12,155 8,778 8,221 28,491 8,717 8,164 28,491
5 12,763 8,563 8,020 28,491 8,415 7,880 28,491
6 13,401 8,353 7,989 28,491 8,067 7,715 28,491
7 14,071 8,148 7,792 28,491 7,664 7,327 28,491
8 14,775 7,946 7,757 28,491 7,189 7,015 28,491
9 15,513 7,749 7,564 28,491 6,622 6,460 28,491
10 16,289 7,556 7,526 28,491 5,941 5,911 28,491
11 17,103 7,378 7,348 28,491 5,126 5,096 28,491
12 17,959 7,204 7,174 28,491 4,137 4,107 28,491
13 18,856 7,033 7,003 28,491 2,935 2,905 28,491
14 19,799 6,865 6,835 28,491 1,476 1,446 28,491
15 20,789 6,701 6,671 28,491 -- -- --
16 21,829 6,540 6,510 28,491 -- -- --
17 22,920 6,382 6,352 28,491 -- -- --
18 24,066 6,227 6,197 28,491 -- -- --
19 25,270 6,076 6,046 28,491 -- -- --
20 26,533 5,927 5,897 28,491 -- -- --
25 33,864 5,226 5,196 28,491 -- -- --
35 55,160 4,016 3,986 28,491 -- -- --
- --------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% 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%, 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 Hartford Life and Annuity Insurance Company
Separate Account Five and to the Owners of Units of Interest therein:
We have audited the accompanying statements of assets and liabilities of
Hartford Life and Annuity Insurance Company Separate Account Five (Bond Fund,
Stock Fund, Money Market Fund, Advisers Fund, Capital Appreciation Fund,
Mortgage Securities Fund, Index Fund, International Opportunities Fund, Dividend
and Growth Fund, International Advisers Fund, Small Company Fund, MidCap Fund,
Growth and Income Fund, Global Leaders Fund and High Yield Fund) (collectively,
the Account) as of December 31, 1999, and the related statements of operations
and the statements of changes in net assets for the periods presented. These
financial statements are the responsibility of the Account's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Account as of December 31,
1999, and the results of their operations and the changes in their net assets
for the periods presented in conformity with generally accepted accounting
principles.
Hartford, Connecticut
February 17, 2000 ARTHUR ANDERSEN LLP
SA-1
<PAGE>
SEPARATE ACCOUNT FIVE -- HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Statements of Assets & Liabilities
- --------------------------------------------------------------------------------
<TABLE>
December 31, 1999 Bond Fund Stock Fund Money Market Advisers Capital Mortgage Index Fund
Sub-Account Sub-Account Fund Fund Appreciation Securities Sub-Account
Sub-Account Sub-Account Fund Fund
Sub-Account Sub-Account
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments
-----------------------------------------------------------------------------------------------------------------------------------
HARTFORD BOND HLS FUND, INC. -
CLASS IA
Shares 7,719,146
Cost $8,086,111
..................................................................................................................................
Market Value $7,671,769 $ -- $ -- $ -- $ -- $ -- $ --
-----------------------------------------------------------------------------------------------------------------------------------
HARTFORD STOCK HLS FUND, INC. -
CLASS IA
Shares 10,582,563
Cost $51,760,070
..................................................................................................................................
Market Value -- 75,637,682 -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
HARTFORD MONEY MARKET HLS
FUND, INC. - CLASS IA
Shares 21,162,511
Cost $21,162,511
..................................................................................................................................
Market Value -- -- 21,162,511 -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
HARTFORD ADVISERS HLS FUND, INC.
-CLASS IA
Shares 27,392,045
Cost $65,975,867
..................................................................................................................................
Market Value -- -- -- 81,211,223 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
HARTFORD CAPITAL APPRECIATION HLS
FUND, INC. - CLASS IA
Shares 11,637,066
Cost $45,242,186
..................................................................................................................................
Market Value -- -- -- -- 70,932,432 -- --
-----------------------------------------------------------------------------------------------------------------------------------
HARTFORD MORTGAGE SECURITIES HLS
FUND, INC. - CLASS IA
Shares 1,868,313
Cost $2,011,720
..................................................................................................................................
Market Value -- -- -- -- -- 1,942,099 --
-----------------------------------------------------------------------------------------------------------------------------------
HARTFORD INDEX HLS FUND, INC. -
CLASS IA
Shares 5,084,840
Cost $13,243,433
..................................................................................................................................
Market Value -- -- -- -- -- -- 21,299,277
-----------------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life and
Annuity Insurance Company -- -- 79,850 3,257 -- -- --
..................................................................................................................................
Receivable from fund shares sold -- 4,373 -- -- 2,296 -- --
..................................................................................................................................
Total Assets 7,671,769 75,642,055 21,242,361 81,214,480 70,934,728 1,942,099 21,299,277
..................................................................................................................................
LIABILITIES:
Due to Hartford Life and Annuity
Insurance Company -- 4,093 -- -- 3,806 -- 197
..................................................................................................................................
Payable for fund shares purchased -- -- 78,989 3,116 -- -- --
..................................................................................................................................
TOTAL LIABILITIES -- 4,093 78,989 3,116 3,806 -- 197
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $7,671,769 $75,637,962 $21,163,372 $81,211,364 $70,930,922 $1,942,099 $21,299,080
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-2
<PAGE>
SEPARATE ACCOUNT FIVE -- HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Statements of Assets & Liabilities (continued)
- --------------------------------------------------------------------------------
<TABLE>
December 31, 1999 International Dividend and International Small MidCap Growth and Global
Opportunities Growth Fund Advisers Fund Company Fund Income Leaders
Fund Sub-Account Sub-Account Fund Sub-Account Fund Fund
Sub-Account Sub-Account Sub-Account Sub-Account
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments
--------------------------------------------------------------------------------------------------------------------------------
HARTFORD INTERNATIONAL
OPPORTUNITIES HLS FUND, INC. -
CLASS IA
Shares 10,810,593
Cost $14,642,754
...............................................................................................................................
Market Value $20,279,970 $ -- $ -- $ -- $ -- $ -- $ --
--------------------------------------------------------------------------------------------------------------------------------
HARTFORD DIVIDEND AND GROWTH HLS
FUND, INC. - CLASS IA
Shares 16,919,650
Cost $28,590,115
...............................................................................................................................
Market Value -- 36,357,418 -- -- -- -- --
--------------------------------------------------------------------------------------------------------------------------------
HARTFORD INTERNATIONAL ADVISERS
HLS FUND, INC. - CLASS IA
Shares 3,493,615
Cost $4,009,746
...............................................................................................................................
Market Value -- -- 4,879,501 -- -- -- --
--------------------------------------------------------------------------------------------------------------------------------
HARTFORD SMALL COMPANY HLS
FUND, INC. - CLASS IA
Shares 2,695,999
Cost $3,442,968
...............................................................................................................................
Market Value -- -- -- 5,898,244 -- -- --
--------------------------------------------------------------------------------------------------------------------------------
HARTFORD MIDCAP HLS FUND, INC. -
CLASS IA
Shares 1,974,262
Cost $3,065,877
...............................................................................................................................
Market Value -- -- -- -- 4,054,145 -- --
--------------------------------------------------------------------------------------------------------------------------------
HARTFORD GROWTH AND INCOME HLS
FUND - CLASS IA
Shares 758,263
Cost $973,025
...............................................................................................................................
Market Value -- -- -- -- -- 1,085,563 --
--------------------------------------------------------------------------------------------------------------------------------
HARTFORD GLOBAL LEADERS HLS FUND
-CLASS IA
Shares 775,652
Cost $1,177,654
...............................................................................................................................
Market Value -- -- -- -- -- -- 1,483,743
--------------------------------------------------------------------------------------------------------------------------------
HARTFORD HIGH YIELD HLS FUND -
CLASS IA
Shares 392,104
Cost $410,645
Market Value -- -- -- -- -- -- --
--------------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life and
Annuity Insurance Company -- 267 -- -- -- -- --
...............................................................................................................................
Receivable from fund shares sold 2,049 -- -- 6,922 9,396 -- --
...............................................................................................................................
Total Assets 20,282,019 36,357,685 4,879,501 5,905,166 4,063,541 1,085,563 1,483,743
...............................................................................................................................
LIABILITIES:
Due to Hartford Life and Annuity
Insurance Company 2,138 -- 94 6,993 9,397 -- --
...............................................................................................................................
TOTAL LIABILITIES 2,138 -- 94 6,993 9,397 -- --
--------------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $20,279,881 $36,357,685 $4,879,407 $ 5,898,173 $4,054,144 $1,085,563 $ 1,483,743
--------------------------------------------------------------------------------------------------------------------------------
<S> <C>
December 31, 1999 High Yield
Fund
Sub-Account
----------------------------------------------------------
ASSETS:
Investments
----------------------------------------------------------------------
HARTFORD INTERNATIONAL
OPPORTUNITIES HLS FUND, INC. -
CLASS IA
Shares 10,810,593
Cost $14,642,754
................................
Market Value $ --
----------------------------------------------------------------------------------
HARTFORD DIVIDEND AND GROWTH HLS
FUND, INC. - CLASS IA
Shares 16,919,650
Cost $28,590,115
................................
Market Value --
----------------------------------------------------------------------------------------------
HARTFORD INTERNATIONAL ADVISERS
HLS FUND, INC. - CLASS IA
Shares 3,493,615
Cost $4,009,746
................................
Market Value --
----------------------------------------------------------------------------------------------------------
HARTFORD SMALL COMPANY HLS
FUND, INC. - CLASS IA
Shares 2,695,999
Cost $3,442,968
................................
Market Value --
----------------------------------------------------------------------------------------------------------------------
HARTFORD MIDCAP HLS FUND, INC. -
CLASS IA
Shares 1,974,262
Cost $3,065,877
................................
Market Value --
--------------------------------------------------------------------------------------------------------------------------------
HARTFORD GROWTH AND INCOME HLS
FUND - CLASS IA
Shares 758,263
Cost $973,025
................................
Market Value --
--------------------------------------------------------------------------------------------------------------------------------
HARTFORD GLOBAL LEADERS HLS FUND
-CLASS IA
Shares 775,652
Cost $1,177,654
................................
Market Value --
--------------------------------------------------------------------------------------------------------------------------------
HARTFORD HIGH YIELD HLS FUND -
CLASS IA
Shares 392,104
Cost $410,645
Market Value 394,013
--------------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life and
Annuity Insurance Company --
................................
Receivable from fund shares sold --
................................
Total Assets 394,013
................................
LIABILITIES:
Due to Hartford Life and Annuity
Insurance Company --
................................
TOTAL LIABILITIES --
--------------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $394,013
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-3
<PAGE>
SEPARATE ACCOUNT FIVE -- HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Statements of Assets & Liabilities (continued)
<TABLE>
----------------------------------------------------------------------------------
December 31, 1999 Units Unit Contract
Owned by Price Liability
Participants
<S> <C> <C> <C>
----------------------------------------------------------------------------------
Deferred Annuity Contracts in the
Accumulation Period:
Group Sub-Accounts:
Bond Fund Sub-Account 5,304,549 $1.446262 $ 7,671,769
.................................................................................
Stock Fund Sub-Account 21,819,711 3.466497 75,637,962
.................................................................................
Money Market Fund Sub-Account 16,383,083 1.291782 21,163,372
.................................................................................
Advisers Fund Sub-Account 31,824,493 2.551851 81,211,364
.................................................................................
Capital Appreciation Fund Sub-Account 23,314,341 3.042373 70,930,922
.................................................................................
Mortgage Securities Fund Sub-Account 1,346,482 1.442350 1,942,099
.................................................................................
Index Fund Sub-Account 6,268,571 3.397757 21,299,080
.................................................................................
International Opportunities Fund
Sub-Account 9,743,731 2.081326 20,279,881
.................................................................................
Dividend and Growth Fund Sub-Account 13,488,800 2.695398 36,357,685
.................................................................................
International Advisers Fund Sub-Account 2,558,005 1.907505 4,879,407
.................................................................................
Small Company Fund Sub-Account 2,737,744 2.154392 5,898,173
.................................................................................
MidCap Fund Sub-Account 2,029,925 1.997189 4,054,144
.................................................................................
Growth and Income Fund Sub-Account 774,198 1.402176 1,085,563
.................................................................................
Global Leaders Fund Sub-Account 748,239 1.982981 1,483,743
.................................................................................
High Yield Fund Sub-Account 362,505 1.086917 394,013
.................................................................................
GRAND TOTAL $354,289,177
----------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-4
<PAGE>
SEPARATE ACCOUNT FIVE -- HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Statements of Operations
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended Bond Fund Stock Fund Money Advisers Capital Mortgage Index Fund
December 31, 1999 Sub-Account Sub-Account Market Fund Appreciation Securities Sub-Account
Fund Sub-Account Fund Fund
Sub-Account Sub-Account Sub-Account
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 419,600 $ 516,388 $767,397 $1,692,849 $ 215,458 $108,544 $ 201,102
..........................................................................................................................
Capital gains income 45,235 4,959,958 353 5,512,773 3,330,568 -- 289,134
..........................................................................................................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
..........................................................................................................................
Net realized (loss) gain on
security transactions (6,510) (5,932) -- (30,425) 32,011 (10,251) 4,046
..........................................................................................................................
Net unrealized (depreciation)
appreciation of investments
during the period (605,391) 6,441,388 -- 239,692 15,536,343 (65,765) 3,066,971
..........................................................................................................................
Net (loss) gain on investments (611,901) 6,435,456 -- 209,267 15,568,354 (76,016) 3,071,017
---------------------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS $(147,066) $11,911,802 $767,750 $7,414,889 $19,114,380 $32,528 $3,561,253
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-5
<PAGE>
SEPARATE ACCOUNT FIVE -- HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Statements of Operations (continued)
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended International Dividend International Small MidCap Growth and Global
December 31, 1999 Opportunities and Advisers Company Fund Income Leaders
Fund Growth Fund Fund Fund Sub-Account Fund Fund
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 193,868 $ 582,664 $ 86,268 $ -- $ -- $ 2,731 $ 1,956
...........................................................................................................................
Capital gains income -- 1,358,573 -- 8,748 170,046 6,287 7,635
...........................................................................................................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
...........................................................................................................................
Net realized gain (loss) on
security transactions 76,436 (21,433) 5,981 58,301 (659) (648) (838)
...........................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 5,566,961 (111,720) 820,238 2,189,838 851,495 106,011 303,116
...........................................................................................................................
Net gain (loss) on investments 5,643,397 (133,153) 826,219 2,248,139 850,836 105,363 302,278
----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $5,837,265 $1,808,084 $912,487 $2,256,887 $1,020,882 $ 114,381 $ 311,869
----------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Year Ended High Yield
December 31, 1999 Fund
Sub-Account
----------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 22,004
................................
Capital gains income 7
................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
................................
Net realized gain (loss) on
security transactions 197
................................
Net unrealized appreciation
(depreciation) of investments
during the period (16,392)
................................
Net gain (loss) on investments (16,195)
----------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 5,816
----------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-6
<PAGE>
SEPARATE ACCOUNT FIVE -- HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended Bond Fund Stock Fund Money Market Advisers Capital Mortgage Index Fund
December 31, 1999 Sub-Account Sub-Account Fund Fund Appreciation Securities Sub-Account
Sub-Account Sub-Account Fund Fund
Sub-Account Sub-Account
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 419,600 $ 516,388 $ 767,397 $ 1,692,849 $ 215,458 $ 108,544 $ 201,102
..................................................................................................................................
Capital gains income 45,235 4,959,958 353 5,512,773 3,330,568 -- 289,134
..................................................................................................................................
Net realized (loss) gain on
security transactions (6,510) (5,932) -- (30,425) 32,011 (10,251) 4,046
..................................................................................................................................
Net unrealized (depreciation)
appreciation of investments
during the period (605,391) 6,441,388 -- 239,692 15,536,343 (65,765) 3,066,971
..................................................................................................................................
Net (decrease) increase in net
assets resulting from
operations (147,066) 11,911,802 767,750 7,414,889 19,114,380 32,528 3,561,253
..................................................................................................................................
UNIT TRANSACTIONS:
Purchases 20,022 20,079 48,649,661 70 20,492 -- --
..................................................................................................................................
Net transfers 1,893,700 10,958,293 (39,998,316) 12,656,798 4,057,125 114,902 2,416,134
..................................................................................................................................
Surrenders (533,322) (2,535,149) (860,950) (2,572,156) (1,687,173) (366,384) (717,510)
..................................................................................................................................
Net loan activity (41,245) (241,644) (2,124,911) (271,016) (156,498) (100,182) (86,764)
..................................................................................................................................
Cost of insurance (108,110) (977,799) (322,782) (1,125,122) (872,690) (33,794) (293,219)
..................................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 1,231,045 7,223,780 5,342,702 8,688,574 1,361,256 (385,458) 1,318,641
..................................................................................................................................
Net increase (decrease) in net
assets 1,083,979 19,135,582 6,110,452 16,103,463 20,475,636 (352,930) 4,879,894
..................................................................................................................................
NET ASSETS:
Beginning of period 6,587,790 56,502,380 15,052,920 65,107,901 50,455,286 2,295,029 16,419,186
-----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $7,671,769 $75,637,962 $21,163,372 $81,211,364 $70,930,922 $1,942,099 $21,299,080
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-7
<PAGE>
SEPARATE ACCOUNT FIVE -- HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended International Dividend and International Small MidCap Growth and Global
December 31, 1999 Opportunities Growth Fund Advisers Fund Company Fund Income Leaders
Fund Sub-Account Sub-Account Fund Sub-Account Fund Fund
Sub-Account Sub-Account Sub-Account Sub-Account
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 193,868 $ 582,664 $ 86,268 $ -- $ -- $ 2,731 $ 1,956
...............................................................................................................................
Capital gains income -- 1,358,573 -- 8,748 170,046 6,287 7,635
...............................................................................................................................
Net realized gain (loss) on
security transactions 76,436 (21,433) 5,981 58,301 (659) (648) (838)
...............................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 5,566,961 (111,720) 820,238 2,189,838 851,495 106,011 303,116
...............................................................................................................................
Net increase in net assets
resulting from operations 5,837,265 1,808,084 912,487 2,256,887 1,020,882 114,381 311,869
...............................................................................................................................
UNIT TRANSACTIONS:
Purchases 30,000 30,000 55 20,000 20,000 20,000 --
...............................................................................................................................
Net transfers (115,619) 1,862,826 395,265 1,247,576 2,225,928 845,861 1,093,472
...............................................................................................................................
Surrenders (415,482) (1,252,128) (63,881) (42,122) (26,590) (5,249) (7,549)
...............................................................................................................................
Net loan activity (67,371) (88,629) (22,926) (20,135) (2,563) (25,056) 7,303
...............................................................................................................................
Cost of insurance (253,665) (551,075) (66,079) (60,079) (31,836) (8,077) (7,337)
...............................................................................................................................
Net (decrease) increase in net
assets resulting from unit
transactions (822,137) 994 242,434 1,145,240 2,184,939 827,479 1,085,889
...............................................................................................................................
Net increase in net assets 5,015,128 1,809,078 1,154,921 3,402,127 3,205,821 941,860 1,397,758
...............................................................................................................................
NET ASSETS:
Beginning of period 15,264,753 34,548,607 3,724,486 2,496,046 848,323 143,703 85,985
--------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $20,279,881 $36,357,685 $4,879,407 $5,898,173 $4,054,144 $1,085,563 $1,483,743
--------------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Year Ended High Yield
December 31, 1999 Fund
Sub-Account
----------------------------------------------------------
OPERATIONS:
Net investment income $ 22,004
................................
Capital gains income 7
................................
Net realized gain (loss) on
security transactions 197
................................
Net unrealized appreciation
(depreciation) of investments
during the period (16,392)
................................
Net increase in net assets
resulting from operations 5,816
................................
UNIT TRANSACTIONS:
Purchases 20,000
................................
Net transfers 346,031
................................
Surrenders (3,575)
................................
Net loan activity 4,381
................................
Cost of insurance (3,224)
................................
Net (decrease) increase in net
assets resulting from unit
transactions 363,613
................................
Net increase in net assets 369,429
................................
NET ASSETS:
Beginning of period 24,584
----------------------------------------------------------------------
END OF PERIOD $394,013
----------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-8
<PAGE>
SEPARATE ACCOUNT FIVE -- HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended Bond Fund Stock Fund Money Market Advisers Capital Mortgage
December 31, 1998 Sub-Account Sub-Account Fund Fund Appreciation Securities
Sub-Account Sub-Account Fund Fund
Sub-Account Sub-Account
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 310,867 $ 425,157 $ 563,092 $ 1,280,919 $ 268,384 $ 139,853
...................................................................................................................
Capital gains income -- 1,195,486 190 1,465,098 2,761,262 --
...................................................................................................................
Net realized gain (loss) on
security transactions 337 (29,330) -- (9,456) 28,295 1,924
...................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 62,577 10,654,625 -- 8,649,288 3,751,151 (25,693)
...................................................................................................................
Net increase in net assets
resulting from operations 373,781 12,245,938 563,282 11,385,849 6,809,092 116,084
...................................................................................................................
UNIT TRANSACTIONS:
Purchases 46,311 16,926 62,062,192 32,794 16,742 --
...................................................................................................................
Net transfers 3,067,527 13,961,989 (54,690,953) 15,334,793 4,545,203 589,382
...................................................................................................................
Surrenders (107,425) (1,506,358) (1,724,767) (1,683,040) (1,471,654) (31,118)
...................................................................................................................
Net loan activity (11,064) (140,475) (2,052,054) (407,150) (324,672) (8,665)
...................................................................................................................
Cost of insurance (33,445) (260,595) (112,624) (328,975) (284,868) (11,916)
...................................................................................................................
Net increase in net assets
resulting from unit
transactions 2,961,904 12,071,487 3,481,794 12,948,422 2,480,751 537,683
...................................................................................................................
Net increase in net assets 3,335,685 24,317,425 4,045,076 24,334,271 9,289,843 653,767
...................................................................................................................
NET ASSETS:
Beginning of period 3,252,105 32,184,955 11,007,844 40,773,630 41,165,443 1,641,262
--------------------------------------------------------------------------------------------------------------------
END OF PERIOD $6,587,790 $56,502,380 $ 15,052,920 $65,107,901 $50,455,286 $2,295,029
--------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Year Ended Index Fund
December 31, 1998 Sub-Account
----------------------------------------------------------------
OPERATIONS:
Net investment income $ 132,802
................................
Capital gains income 272,547
................................
Net realized gain (loss) on
security transactions (21,988)
................................
Net unrealized appreciation
(depreciation) of investments
during the period 2,904,724
................................
Net increase in net assets
resulting from operations 3,288,085
................................
UNIT TRANSACTIONS:
Purchases 10,249
................................
Net transfers 3,377,452
................................
Surrenders (708,786)
................................
Net loan activity (138,230)
................................
Cost of insurance (86,318)
................................
Net increase in net assets
resulting from unit
transactions 2,454,367
................................
Net increase in net assets 5,742,452
................................
NET ASSETS:
Beginning of period 10,676,734
-------------------------------------------------------------------------------
END OF PERIOD $16,419,186
----------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-9
<PAGE>
SEPARATE ACCOUNT FIVE -- HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
For the Year Ended International Dividend and International Small MidCap Growth and Global
December 31, 1998 Opportunities Growth Fund Advisers Fund Company Fund Income Leaders
Fund Sub-Account Sub-Account Fund Sub-Account Fund Fund
Sub-Account Sub-Account Sub-Account** Sub-Account***
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 198,529 $ 544,970 $ 285,452 $ -- $ 4 $ 542 $ 101
...........................................................................................................................
Capital gains income 823,226 871,742 67,948 17,778 -- -- 2,088
...........................................................................................................................
Net realized (loss) gain on
security transactions (4,950) 1,267 567 (1,718) (3,505) 16 4
...........................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 562,948 2,960,422 13,314 272,458 133,792 6,525 2,975
...........................................................................................................................
Net increase in net assets
resulting from operations 1,579,753 4,378,401 367,281 288,518 130,291 7,083 5,168
...........................................................................................................................
UNIT TRANSACTIONS:
Purchases 11 10,000 -- -- -- 1,000 2,000
...........................................................................................................................
Net transfers 2,336,307 8,163,378 1,048,999 1,383,287 645,414 135,859 78,949
...........................................................................................................................
Surrenders (500,386) (866,498) (98,488) (109,974) (4,632) (172) (105)
...........................................................................................................................
Net loan activity (71,420) (327,128) (36,658) (44,570) (11,492) -- --
...........................................................................................................................
Cost of insurance (89,406) (185,670) (20,129) (10,508) (2,955) (67) (27)
...........................................................................................................................
Net increase in net assets
resulting from unit
transactions 1,675,106 6,794,082 893,724 1,218,235 626,335 136,620 80,817
...........................................................................................................................
Net increase in net assets 3,254,859 11,172,483 1,261,005 1,506,753 756,626 143,703 85,985
...........................................................................................................................
NET ASSETS:
Beginning of period 12,009,894 23,376,124 2,463,481 989,293 91,697 -- --
...........................................................................................................................
END OF PERIOD $15,264,753 $34,548,607 $3,724,486 $2,496,046 $848,323 $143,703 $85,985
----------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Year Ended High Yield
December 31, 1998 Fund
Sub-Account***
-------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 451
................................
Capital gains income --
................................
Net realized (loss) gain on
security transactions --
................................
Net unrealized appreciation
(depreciation) of investments
during the period (240)
................................
Net increase in net assets
resulting from operations 211
................................
UNIT TRANSACTIONS:
Purchases 2,000
................................
Net transfers 22,414
................................
Surrenders (29)
................................
Net loan activity --
................................
Cost of insurance (12)
................................
Net increase in net assets
resulting from unit
transactions 24,373
................................
Net increase in net assets 24,584
................................
NET ASSETS:
Beginning of period --
................................
END OF PERIOD $24,584
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
**From inception, June 1, 1998 to December 31, 1998.
***From inception, September 30, 1998 to December 31, 1998.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-10
<PAGE>
SEPARATE ACCOUNT FIVE -- HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Notes to Financial Statements
December 31, 1999
1. ORGANIZATION:
Separate Account Five (the Account) is a separate investment account within
Hartford Life & Annuity Insurance Company (the Company) and is registered with
the Securities and Exchange Commission (SEC) as a unit investment trust under
the Investment Company Act of 1940, as amended. Both the Company and the Account
are subject to supervision and regulation by the Department of Insurance of the
State of Connecticut and the SEC. The Account invests deposits by variable life
contractholders of the Company in various mutual funds (the Funds) as directed
by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the Account,
which are in accordance with generally accepted accounting principles in the
investment company industry:
A) SECURITY TRANSACTIONS -- Security transactions are recorded on the trade date
(date the order to buy or sell is executed). Realized gains and losses on the
sales of securities are computed on the basis of identified cost of the fund
shares sold. Dividend and capital gains income is accrued as of the ex-dividend
date. Capital gains income represents those dividends from the Funds which are
characterized as capital gains under tax regulations.
B) SECURITY VALUATION -- The investments in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate Fund as
of December 31, 1999.
C) UNIT TRANSACTIONS -- Unit transactions are executed based on the unit values
calculated at the close of the business day.
D) FEDERAL INCOME TAXES -- The operations of the Account form a part of, and are
taxed with, the total operations of the Company, which is taxed as an insurance
company under the Internal Revenue Code. Under current law, no federal income
taxes are payable with respect to the operations of the Account.
E) USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the financial statements and the reported amounts
of income and expense 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:
Certain amounts are deducted from the contracts, as described below:
A) COST OF INSURANCE CHARGE -- In accordance with the terms of the contracts,
the Company makes deductions for costs of insurance to cover the Company's
anticipated mortality costs. Because a policy's account value and death benefit
may vary from month to month, the cost of insurance charge may also vary.
B) MORTALITY AND EXPENSE RISK CHARGE -- The Company will make deductions at a
maximum annual rate of 0.90% of the contract's value for the mortality and
expense risks which the company undertakes. These expenses are included in
surrenders for benefit payments and fees on the accompanying statements of
changes in net assets.
C) TAX EXPENSE CHARGE -- If applicable, the Company will make deductions at a
maximum rate of 4.0% of the contract's value to meet premium tax requirements.
An additional tax charge based on a percentage of the contract's value may be
assessed to partial withdrawals or surrenders. These expenses are included in
surrenders for benefit payments and fees on the accompanying statements of
changes in net assets.
D) ADMINISTRATIVE CHARGE -- The Company will make deductions to cover
administrative expenses at a maximum annual rate of 0.25% of the contract's
value. These expenses are included in surrenders for benefit payments and fees
on the accompanying statements of changes in net assets.
E) ANNUAL MAINTENANCE FEE -- An annual maintenance fee in the amount of $30 may
be deducted from the contract's value each contract year. However, this fee is
not applicable to contracts with values of $50,000 or more, as determined on the
most recent contract anniversary. These expenses are included in surrenders for
benefit payments and fees on the accompanying statements of changes in net
assets.
SA-11
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------------------
To the Board of Directors of
Hartford Life and Annuity Insurance Company:
We have audited the accompanying statutory balance sheets of Hartford Life and
Annuity Insurance Company (a Connecticut Corporation and wholly owned subsidiary
of Hartford Life Insurance Company) (the Company) as of December 31, 1999 and
1998, and the related statutory statements of operations, changes in capital and
surplus, and cash flows for each of the three years in the period ended December
31, 1999. These statutory 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 auditing standards generally accepted
in the United States. 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 2 of notes to statutory financial
statements. When financial statements are presented for purposes other than for
filing with a regulatory agency, auditing standards generally accepted in the
United States require that an auditors' report on them state whether they are
presented in conformity with accounting principles generally accepted in the
United States. The accounting practices used by the Company vary from accounting
principles generally accepted in the United States as explained and quantified
in Note 2.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the statutory financial statements referred to above do not present
fairly, in conformity with accounting principles generally accepted in the
United States, the financial position of the Company as of December 31, 1999 and
1998, or the results of its operations or its cash flows for each of the three
years in the period ended December 31, 1999.
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, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999 in conformity
with statutory accounting practices as described in Note 2.
Hartford, Connecticut
January 31, 2000 ARTHUR ANDERSEN LLP
F-1
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
BALANCE SHEETS
(STATUTORY BASIS)
($000)
--------------------------------------------------------
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
<S> <C> <C>
- ------------------------------------------------------------------------------------------------
<CAPTION>
1999 1998
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Bonds $ 1,465,815 $ 1,453,792
Common stocks 42,430 40,650
Mortgage loans 63,784 59,548
Policy loans 59,429 47,212
Cash and short-term investments 267,579 469,955
- ------------------------------------------------------------------------------------------------
Other invested assets 2,892 2,188
- ------------------------------------------------------------------------------------------------
Total cash and invested assets 1,901,929 2,073,345
Investment income due and accrued 21,069 20,126
Other assets 39,576 45,691
Separate account assets 44,865,042 32,876,278
- ------------------------------------------------------------------------------------------------
TOTAL ASSETS $46,827,616 $35,015,440
- ------------------------------------------------------------------------------------------------
LIABILITIES
Aggregate reserves for future benefits $ 591,621 $ 579,140
Policy and contract claim liabilities 7,677 5,667
Liability for premium and other deposit funds 1,969,262 2,011,672
Asset valuation reserve 4,935 21,782
Payable to affiliates 14,084 19,271
Accrued expense allowances and other amounts due from
separate accounts (1,377,927) (1,173,513)
Remittances and items not allocated 111,582 87,449
Other liabilities 118,464 111,182
Separate account liabilities 44,865,042 32,876,278
- ------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 46,304,740 34,538,928
- ------------------------------------------------------------------------------------------------
CAPITAL AND SURPLUS
Common stock 2,500 2,500
Gross paid-in and contributed surplus 226,043 226,043
Unassigned funds 294,333 247,969
- ------------------------------------------------------------------------------------------------
TOTAL CAPITAL AND SURPLUS 522,876 476,512
- ------------------------------------------------------------------------------------------------
TOTAL LIABILITIES, CAPITAL AND SURPLUS $46,827,616 $35,015,440
- ------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statutory basis financial
statements.
F-2
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
(STATUTORY BASIS)
($000)
--------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
<CAPTION>
1999 1998 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Premiums and annuity considerations $ 621,789 $ 469,343 $ 296,645
Annuity and other fund deposits 2,991,363 2,051,251 1,981,246
Net investment income 122,322 129,982 102,285
Commissions and expense allowances on reinsurance ceded 379,905 444,241 396,921
Reserve adjustment on reinsurance ceded 1,411,342 3,185,590 3,672,076
Fee income 647,565 448,260 290,675
Other revenues 842 9,930 (2,043)
- -------------------------------------------------------------------------------------------------------
TOTAL REVENUES 6,175,128 6,738,597 6,737,805
- -------------------------------------------------------------------------------------------------------
BENEFITS AND EXPENSES
Death and annuity benefits 47,372 43,152 65,961
Disability and other benefits 6,270 6,352 7,532
Surrenders and other fund withdrawals 1,250,813 739,663 454,417
Commissions 467,338 435,994 470,334
Increase (Decrease) in aggregate reserves for future
benefits 12,481 (10,711) 33,213
(Decrease) Increase in liability for premium and other
deposit funds (47,852) 218,642 640,840
General insurance expenses 192,196 190,979 77,237
Net transfers to separate accounts 4,160,501 4,956,007 4,914,980
Other expenses 35,385 22,091 15,671
- -------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES 6,124,504 6,602,169 6,680,185
- -------------------------------------------------------------------------------------------------------
NET GAIN FROM OPERATIONS
Before federal income tax (benefit) expense 50,624 136,428 57,620
Federal income tax (benefit) expense (10,231) 35,887 (14,878)
- -------------------------------------------------------------------------------------------------------
NET GAIN FROM OPERATIONS 60,855 100,541 72,498
Net realized capital (losses) gains, after tax (36,428) 2,085 1,544
- -------------------------------------------------------------------------------------------------------
NET INCOME $ 24,427 $ 102,626 $ 74,042
- -------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statutory basis financial
statements.
F-3
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
(STATUTORY BASIS)
($000)
--------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
<CAPTION>
1999 1998 1997
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK
Beginning and end of year $ 2,500 $ 2,500 $ 2,500
- -------------------------------------------------------------------------------------------------
GROSS PAID-IN AND CONTRIBUTED SURPLUS
Beginning and end of year 226,043 226,043 226,043
- -------------------------------------------------------------------------------------------------
UNASSIGNED FUNDS
Balance, beginning of year 247,969 143,257 74,570
Net income 24,427 102,626 74,042
Change in net unrealized capital gains on common stocks
and other invested assets 2,258 1,688 2,186
Change in asset valuation reserve 16,847 (8,112) (6,228)
Change in non-admitted assets 6,557 (1,277) (1,313)
Credit on reinsurance ceded (3,725) 9,787 --
- -------------------------------------------------------------------------------------------------
Balance, end of year 294,333 247,969 143,257
- -------------------------------------------------------------------------------------------------
CAPITAL AND SURPLUS,
End of year $522,876 $476,512 $371,800
- -------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statutory basis financial
statements.
F-4
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
(STATUTORY BASIS)
($000)
--------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
<CAPTION>
1999 1998 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Premiums and annuity considerations $3,613,217 $2,520,655 $2,277,874
Net investment income 122,998 127,425 101,991
Fee income 647,565 448,260 290,675
Other income 1,799,323 3,644,704 4,091,043
- -------------------------------------------------------------------------------------------------------
Total income 6,183,103 6,741,044 6,761,583
- -------------------------------------------------------------------------------------------------------
Benefits paid 1,303,801 790,051 529,733
Federal income tax (recoveries) payments (8,815) 25,780 (14,499)
Net transfers to separate accounts 4,364,914 5,222,144 5,199,354
Other expenses 669,525 626,240 547,692
- -------------------------------------------------------------------------------------------------------
Total benefits and expenses 6,329,425 6,664,215 6,262,280
- -------------------------------------------------------------------------------------------------------
NET CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES (146,322) 76,829 499,303
- -------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
PROCEEDS FROM INVESTMENTS SOLD
Bonds 753,358 633,926 614,413
Common stocks 939 34,010 11,481
Mortgage loans 53,704 85,275 --
Other 1,490 19,990 152
- -------------------------------------------------------------------------------------------------------
NET INVESTMENT PROCEEDS 809,491 773,201 626,046
- -------------------------------------------------------------------------------------------------------
COST OF INVESTMENTS ACQUIRED
Bonds 804,947 586,913 848,267
Common stocks 464 7,012 28,302
Mortgage loans 57,665 59,702 85,103
Other 14,211 11,847 26,227
- -------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS ACQUIRED 877,287 665,474 987,899
- -------------------------------------------------------------------------------------------------------
NET CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES $ (67,796) $ 107,727 $ (361,853)
- -------------------------------------------------------------------------------------------------------
FINANCING AND MISCELLANEOUS ACTIVITIES
Net other cash provided (used) 11,742 (24,033) (4,848)
- -------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED FOR) FINANCING
AND MISCELLANEOUS ACTIVITIES 11,742 (24,033) (4,848)
- -------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and short-term investments (202,376) 160,523 132,602
Cash and short-term investments, beginning of year 469,955 309,432 176,830
- -------------------------------------------------------------------------------------------------------
CASH AND SHORT-TERM INVESTMENTS, END OF YEAR $ 267,579 $ 469,955 $ 309,432
- -------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statutory basis financial
statements.
F-5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(STATUTORY BASIS)
DECEMBER 31, 1999
(AMOUNTS IN THOUSANDS UNLESS OTHERWISE STATED)
- --------------------------------------------------------------------------------
1. ORGANIZATION AND DESCRIPTION OF BUSINESS:
Hartford Life and Annuity Insurance Company (the "Company") is a wholly owned
subsidiary of Hartford Life Insurance Company ("HLIC"), which is an indirect
subsidiary of Hartford Life, Inc. ("HLI"). HLI is indirectly majority owned by
The Hartford Financial Services Group, Inc. ("The Hartford"). 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 approximately 18.6% of the
equity ownership of HLI.
In 1998, the Company changed its name to Hartford Life and Annuity Insurance
Company from ITT Hartford Life and Annuity Insurance Company.
The Company offers a complete line of fixed and variable annuities, as well as
variable, universal and traditional individual life insurance.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF PRESENTATION
The accompanying statutory basis financial statements of the Company 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. Certain reclassifications have
been made to prior year financial information to conform to the current year
presentation.
Current prescribed statutory accounting practices include accounting
publications of the NAIC, as well as state laws, regulations and general
administrative rules. Permitted statutory accounting practices encompass
accounting practices approved by state insurance departments. The Company does
not follow any permitted statutory accounting practices that have a material
effect on statutory surplus, statutory net income or risk-based capital.
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 periods. Actual results could
differ from those estimates. The most significant estimates include those used
in 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 VERSUS GAAP
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, etc.) which are charged to expense when incurred for statutory
purposes rather than on a pro-rata basis over the expected life and gross
profit stream of the policy for GAAP purposes;
(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 only consist of charges assessed to policy
account balances for cost of insurance, policy administration and
surrenders. When policy charges received relate to coverage or services to
be provided in the future, the charges are recognized as revenue on a
pro-rata basis over the expected life and gross profit stream of the policy.
Also, for GAAP purposes, premiums for traditional life insurance policies
are recognized as revenues when they are due from policyholders;
(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 under GAAP;
(4) providing for income taxes based on current taxable income 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 or required under GAAP;
(5) excluding certain assets designated as non-admitted assets (e.g., negative
Interest Maintenance Reserve, and past due agents' balances) from the
balance sheet for statutory purposes by directly charging surplus;
(6) the calculation of post retirement benefits obligation which, for statutory
accounting, excludes non-vested employees whereas GAAP liabilities include a
provision for such employees; statutory and GAAP accounting permit either
immediate recognition of the liability or straight-line amortization of the
liability over a period not to exceed 20 years. For GAAP, The Hartford's
obligation was immediately recognized, whereas for statutory accounting, the
obligation is being recognized ratably over a 20 year period;
F-6
<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) for statutory purposes; as well as the deferral and
amortization of realized gains and losses, caused 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) for
statutory purposes; 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 for
statutory purposes; 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 for statutory purposes,
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 separate component of Stockholder's
Equity; as well as the change in the basis of the Company's other invested
assets, which consist primarily of limited partnership investments, which is
recognized as income under GAAP and as a change in surplus under statutory
accounting; and
(10) statutory accounting calculates separate account liabilities using
prescribed actuarial methodologies, which approximate the market value of
separate account assets less applicable surrender charges. The separate
account surplus generated by these reserving methods is recorded as an
amount due to or from the separate account on the statutory basis balance
sheet, with changes reflected in the statutory basis results of operations.
On a GAAP basis, separate account assets and liabilities are held at fair
value.
As of and for the years ended December 31, the significant differences between
Statutory and GAAP basis net income and capital and surplus for the Company are
as follows:
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
----------------------------------------
GAAP Net Income $ 75,654 $ 74,525 $ 58,050
Deferral and amortization of policy
acquisition costs, net (272,171) (331,882) (345,657)
Change in unearned revenue reserve (64,915) 23,118 4,058
Deferred taxes 57,833 2,476 47,092
Separate account expense allowance 214,388 259,287 282,818
Asset impairments and write-downs (17,250) 17,250 --
Benefit reserve adjustment 11,491 5,360 24,666
Gain on commutation of reinsurance
(Note 4) -- 52,026 --
Prepaid reinsurance premium (3,524) -- --
Statutory voluntary reserve (6,286) -- --
Other, net 29,207 466 3,015
----------------------------------------
STATUTORY NET INCOME $ 24,427 $ 102,626 $ 74,042
----------------------------------------
GAAP Stockholder's Equity $ 676,428 $ 648,097 $ 570,469
Deferred policy acquisition costs (1,887,824) (1,615,653) (1,283,771)
Unearned revenue reserve 95,965 160,951 134,789
Deferred taxes 122,105 68,936 64,522
Separate account expense allowance 1,398,030 1,183,642 924,355
Asset impairments and write-downs -- 17,250 --
Unrealized losses (gains) on
investments 26,292 (24,955) (21,451)
Benefit reserve adjustment 81,111 69,233 16,378
Asset valuation reserve (4,935) (21,782) (13,670)
Adjustment relating to Lyndon
contribution (Note 4) -- -- (23,671)
Prepaid reinsurance premium (7,728) (4,204) --
Statutory voluntary reserve (6,286) -- --
Other, net 29,718 (5,003) 3,850
----------------------------------------
STATUTORY CAPITAL AND SURPLUS $ 522,876 $ 476,512 $ 371,800
----------------------------------------
</TABLE>
F-7
<PAGE>
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 applicable 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 the Commissioners Annuity Reserve Valuation Method
("CARVM").
The Company has established separate accounts to segregate the assets and
liabilities of certain life insurance and annuity contracts that must be
segregated from the Company's general assets under the terms of its contracts.
The assets consist primarily of marketable securities and are reported at market
value. Premiums, benefits and expenses of these contracts are reported in the
statutory basis statements of operations.
An analysis of Annuity Actuarial Reserves and Deposit Liabilities by Withdrawal
Characteristics as of December 31, 1999 (including general and separate account
liabilities) is as follows:
<TABLE>
<CAPTION>
% of
Amount Total
<S> <C> <C>
--------------------
Subject to discretionary withdrawal:
--------------------
With market value adjustment $ 4,564 0.0%
At book value less current surrender charge of 5% or more 1,427,302 3.2%
At market value 42,431,996 95.4%
--------------------
Total with adjustment or at market value 43,863,862 98.6%
At book value without adjustment (minimal or no charge or
adjustment): 573,583 1.3%
Not subject to discretionary withdrawal: 34,816 0.1%
--------------------
Total, gross 44,472,261 100.0%
Reinsurance ceded --
------------
Total, net $44,472,261
------------
</TABLE>
INVESTMENTS
Investments in bonds are carried at amortized cost. Bonds that 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 reduction in
the value of a security is deemed to be unrecoverable, the decline in value is
reported as a realized loss and the carrying value is adjusted accordingly.
Short-term investments consist of money market funds and are stated at cost,
which approximates fair value. Common stocks are carried at fair value with the
current year change in the difference from cost reflected in surplus. Mortgage
loans, which are carried at cost and approximate fair value, include investments
in assets backed by mortgage loan pools. 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 AVR balances were $4,935 and $21,782
as of December 31, 1999 and 1998, respectively. Additionally, the Interest
Maintenance Reserve ("IMR") captures net realized capital gains and losses, net
of applicable income taxes, resulting from changes in interest rates and
amortizes these gains or losses into income over the life of the bond or
mortgage sold. The IMR balance as of December 31, 1999 is an asset balance of
$981 and is reflected as a component of non-admitted assets in Unassigned Funds
in accordance with statutory accounting practices. The IMR balance as of
December 31, 1998 is a liability balance of $452 and is reflected as an other
liability. The net capital (losses) gains transferred to the IMR in 1999, 1998
and 1997 were $(1,255), $852 and $(719), respectively. The amount of income
(expense) amortized from the IMR in 1999, 1998 and 1997 included in the
Company's Statements of Operations, was $178, $(207), and $(85), respectively.
Realized capital gains and losses, net of taxes, not included in the IMR are
reported in the statutory basis statements of operations. Realized investment
gains and losses are determined on a specific identification basis.
CODIFICATION
The NAIC adopted the Codification of Statutory Accounting Principles in March
1998. The proposed effective date for this statutory accounting guidance is
January 1, 2001. It is expected that Connecticut, the Company's domiciliary
state, will adopt these accounting standards and, therefore, the Company will
make the necessary accounting and reporting changes required for implementation.
The Company has not yet determined the impact that these new accounting
standards will have on its statutory basis financial statements.
F-8
<PAGE>
3. INVESTMENTS:
(A) COMPONENTS OF NET INVESTMENT INCOME
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
-----------------------------
Interest income from bonds and short-term investments $113,646 $123,370 $100,475
Interest income from policy loans 3,494 3,133 1,958
Interest and dividends from other investments 6,371 4,482 1,005
-----------------------------
Gross investment income 123,511 130,985 103,438
Less: investment expenses 1,189 1,003 1,153
-----------------------------
NET INVESTMENT INCOME $122,322 $129,982 $102,285
-----------------------------
</TABLE>
(B) COMPONENTS OF NET UNREALIZED CAPITAL (LOSSES) GAINS ON BONDS AND
SHORT-TERM INVESTMENTS
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
-----------------------------
Gross unrealized capital gains $ 561 $ 10,905 $23,357
Gross unrealized capital losses (6,441) (833) (1,906)
-----------------------------
Net unrealized capital (losses) gains (5,880) 10,072 21,451
Balance, beginning of year 10,072 21,451 7,979
-----------------------------
CHANGE IN NET UNREALIZED CAPITAL (LOSSES) GAINS ON BONDS AND
SHORT-TERM INVESTMENTS $(15,952) $(11,379) $13,472
-----------------------------
</TABLE>
(C) COMPONENTS OF NET UNREALIZED CAPITAL GAINS (LOSSES) ON COMMON STOCKS
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
--------------------------
Gross unrealized capital gains $2,508 $ 2,204 $ 537
Gross unrealized capital losses (24) (1,871) (1,820)
--------------------------
Net unrealized capital gains (losses) 2,484 333 (1,283)
Balance, beginning of year 333 (1,283) (3,447)
--------------------------
CHANGE IN NET UNREALIZED CAPITAL GAINS ON COMMON STOCKS $2,151 $ 1,616 $ 2,164
--------------------------
</TABLE>
(D) COMPONENTS OF NET REALIZED CAPITAL (LOSSES) GAINS
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
--------------------------
Bonds and short-term investments $(37,959) $1,314 $ (120)
Common stocks 104 1,624 421
Other invested assets 172 (1) (307)
--------------------------
Realized capital (losses) gains (37,683) 2,937 (6)
Capital gains benefit -- -- (831)
--------------------------
Net realized capital (losses) gains (37,683) 2,937 825
Less: amounts transferred to the IMR (1,255) 852 (719)
--------------------------
NET REALIZED CAPITAL (LOSSES) GAINS $(36,428) $2,085 $1,544
--------------------------
</TABLE>
Sales and maturities of investments in bonds and short-term investments for the
years ended December 31, 1999, 1998 and 1997 resulted in proceeds of $1,367,027,
$1,354,563 and $1,435,820, gross realized capital gains of $1,106, $1,705, and
$964 and gross realized capital losses of $39,065, $391, and $1,084,
respectively, before transfers to the IMR. Sale of common stocks for the years
ended December 31, 1999, 1998 and 1997 resulted in proceeds of $939, $33,088,
and $10,168, gross realized capital gains of $115, $1,688, and $421 and gross
realized capital losses of $11, $64, and $0, respectively.
(E) DERIVATIVE INVESTMENTS
The Company had no significant derivative holdings as of December 31, 1999, 1998
or 1997.
(F) CONCENTRATION OF CREDIT RISK
Excluding U.S. government and government agency investments, the Company is not
exposed to any significant concentrations of credit risk in fixed maturities of
a single issuer greater than 10% of capital and surplus as of December 31, 1999.
F-9
<PAGE>
(G) BONDS, SHORT-TERM INVESTMENTS AND COMMON STOCKS
<TABLE>
<CAPTION>
1999
----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
<S> <C> <C> <C> <C>
----------------------------------------------
U.S. government and government agencies and authorities:
-- Guaranteed and sponsored $ 4,768 $ 1 $ (37) $ 4,732
-- Guaranteed and sponsored -- asset backed 170,746 -- -- 170,746
States, municipalities and political subdivisions 10,401 -- (48) 10,353
International governments 7,351 94 (15) 7,430
Public utilities 18,413 92 (73) 18,432
All other corporate -- excluding asset-backed 592,233 374 (6,194) 586,413
All other corporate -- asset-backed 539,688 -- -- 539,688
Short-term investments 228,105 -- -- 228,105
Certificates of deposit 5,158 -- (74) 5,084
Parents, subsidiaries and affiliates 117,057 -- -- 117,057
----------------------------------------------
TOTAL BONDS AND SHORT-TERM INVESTMENTS $1,693,920 $561 $(6,441) $1,688,040
----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
<S> <C> <C> <C> <C>
--------------------------------------------
Common stock -- unaffiliated $ 4,562 $1,105 $ (24) $ 5,643
Common stock -- affiliated 35,384 1,403 -- 36,787
--------------------------------------------
TOTAL COMMON STOCKS $39,946 $2,508 $ (24) $42,430
--------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1999
----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
<S> <C> <C> <C> <C>
----------------------------------------------
U.S. government and government agencies and authorities:
-- Guaranteed and sponsored $ 4,982 $ 35 $ (2) $ 5,015
-- Guaranteed and sponsored -- asset-backed 75,615 -- -- 75,615
States, municipalities and political subdivisions 10,402 415 -- 10,817
International governments 7,466 568 -- 8,034
Public utilities 94,475 1,330 (39) 95,766
All other corporate -- excluding asset-backed 607,679 8,473 (792) 615,360
All other corporate -- asset-backed 505,900 -- -- 505,900
Short-term investments 343,783 -- -- 343,783
Certificates of deposit 130,216 84 -- 130,300
Parents, subsidiaries and affiliates 117,057 -- -- 117,057
----------------------------------------------
TOTAL BONDS AND SHORT-TERM INVESTMENTS $1,897,575 $10,905 $(833) $1,907,647
----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
<S> <C> <C> <C> <C>
--------------------------------------------
Common stock -- unaffiliated $ 4,933 $ 290 $ (50) $ 5,173
Common stock -- affiliated 35,384 1,914 (1,821) 35,477
--------------------------------------------
TOTAL COMMON STOCKS $40,317 $2,204 $(1,871) $40,650
--------------------------------------------
</TABLE>
The amortized cost and estimated fair value of bonds and short-term investments
as of December 31, 1999 by estimated maturity year are shown below. Asset-backed
securities, including mortgage-backed securities and collaterialized mortgage
obligations, are distributed to maturity year based on the Company's estimates
of the rate of
F-10
<PAGE>
future prepayments of principal over the remaining lives of the securities.
Expected maturities differ from contractual maturities due to call or prepayment
provisions.
<TABLE>
<CAPTION>
Amortized Estimated
Maturity Cost Fair Value
<S> <C> <C>
--------------------------
One year or less $ 545,290 $ 543,397
Over one year through five years 692,881 690,476
Over five years through ten years 370,835 369,548
Over ten years 84,914 84,619
--------------------------
TOTAL $1,693,920 $1,688,040
--------------------------
</TABLE>
Bonds with a carrying value of $10,457 were on deposit as of December 31, 1999
with various regulatory authorities as required.
(H) FAIR VALUE OF FINANCIAL INSTRUMENTS-BALANCE SHEET ITEMS (IN MILLIONS):
<TABLE>
<CAPTION>
1999 1998
------------------------------------------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
<S> <C> <C> <C> <C>
------------------------------------------------------
ASSETS
Bonds and short-term investments $1,694 $1,688 $1,898 $1,908
Common stocks 42 42 41 41
Policy loans 59 59 47 47
Mortgage loans 64 64 60 60
Other invested assets 3 3 2 2
LIABILITIES
Deposit funds and other benefits $2,051 $2,017 $2,078 $2,053
</TABLE>
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments: fair value of bonds, short-term
investments, common stock, and other invested assets approximate those
quotations published by the NAIC; policy loans and mortgage loans carrying
amounts approximates fair value; and fair value of liabilities on deposit funds
and other benefits is determined by forecasting future cash flows and
discounting the forecasted cash flows at current market rates.
4. REINSURANCE:
The Company cedes insurance to other insurers in order to limit its maximum
losses. Such transfer does not relieve the Company of its primary liability to
the policyholder. Failure of reinsurers to honor their obligations could result
in losses to the Company. The Company reduces this risk by evaluating the
financial condition of reinsurers and monitoring for possible concentrations of
credit risk.
The Company cedes significant portions of its variable annuity business written
since 1994 to RGA Reinsurance Company ("RGA"). Certain core annuity products
were excluded from this reinsurance arrangement beginning in the second quarter
of 1999 and, as such, the amounts ceded to RGA have declined significantly.
In 1995, The Hartford was "spun-off" from ITT Industries, Inc. and became its
own, autonomous entity. In conjunction with this spin-off, the assets and
liabilities of Lyndon Insurance Company (Lyndon) were merged into the Company.
The statutory net assets contributed to the Company as a result of this
transaction were approximately $112 million and were reflected as an increase in
Gross Paid-In and Contributed Surplus at December 31, 1995. This amount was
approximately $41 million lower than the value of net assets contributed on a
GAAP basis.
The majority of the business written in Lyndon was assumed from an unaffiliated
insurer. In 1998, this unaffiliated insurer recaptured the inforce blocks of
business it had been ceding to the Company through Lyndon. In conjunction with
this commutation transaction, the Company transferred statutory basis reserves
of $26,404. Additionally, the Company received fair value consideration for the
bonds it transferred which exceeded the statutory statement value of these
assets by $25,622. As a result of this activity, the Company recognized a
pre-tax gain from this transaction of $52,026 in its 1998 Statements of
Operations.
There were no material reinsurance recoverables from reinsurers outstanding as
of and for the years ended, December 31, 1999 and 1998.
F-11
<PAGE>
The effect of reinsurance as of and for the years ended December 31, is
summarized as follows:
<TABLE>
<CAPTION>
1999 Direct Assumed Ceded Net
<S> <C> <C> <C> <C>
------------------------------------------------------
Aggregate Reserves for Future
Benefits $ 784,502 $ 53 $ (192,934) $ 591,621
Policy and Contract Claim
Liabilities $ 7,827 $ 203 $ (353) $ 7,677
Premium and Annuity Considerations $ 674,219 $ 1,261 $ (53,691) $ 621,789
Annuity and Other Fund Deposits $6,195,917 $ -- $(3,204,554) $2,991,363
Death, Annuity, Disability and
Other Benefits $ 65,251 $ 1,104 $ (12,713) $ 53,642
Surrenders $2,541,449 $ -- $(1,290,636) $1,250,813
</TABLE>
<TABLE>
<CAPTION>
1998 Direct Assumed Ceded Net
<S> <C> <C> <C> <C>
------------------------------------------------------
Aggregate Reserves for Future
Benefits $ 713,375 $ 50 $ (134,285) $ 579,140
Policy and Contract Claim
Liabilities $ 5,895 $ 85 $ (313) $ 5,667
Premium and Annuity Considerations $ 483,328 $24,954 $ (38,939) $ 469,343
Annuity and Other Fund Deposits $6,461,470 $ -- $(4,410,219) $2,051,251
Death, Annuity, Disability and
Other Benefits $ 64,331 $ 1,574 $ (16,401) $ 49,504
Surrenders $1,481,797 $ -- $ (742,134) $ 739,663
</TABLE>
<TABLE>
<CAPTION>
1997 Direct Assumed Ceded Net
<S> <C> <C> <C> <C>
------------------------------------------------------
Premium and Annuity Considerations $ 266,427 $51,630 $ (21,412) $ 296,645
Annuity and Other Fund Deposits $6,515,347 $ -- $(4,534,101) $1,981,246
Death, Annuity, Disability and
Other Benefits $ 79,779 $ 839 $ (7,126) $ 73,492
Surrenders $ 882,094 $ -- $ (427,677) $ 454,417
</TABLE>
5. RELATED PARTY TRANSACTIONS:
Transactions between the Company and its affiliates, relate principally to tax
settlements, reinsurance, insurance coverages, rental and service fees, capital
contributions and payments of dividends. In addition, certain affiliated
insurance companies purchased group annuity contracts from the Company to fund
pension costs and claim annuities to settle casualty claims. Substantially all
general insurance expenses related to the Company, including rent and benefit
plan expenses, are initially paid by The Hartford. Direct expenses are allocated
using specific identification and indirect expenses are allocated using other
applicable methods. Indirect expenses include those for corporate areas which,
depending on type, are allocated based on either a percentage of direct expenses
or on utilization.
The Company has also invested in bonds of its affiliates, Hartford Financial
Services Corporation and HL Investment Advisors, Inc., and common stock of its
subsidiary, Hartford Life, LTD.
For additional information, see Notes 4, 6, and 8.
6. 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 filing separate Federal, state and local
income tax returns.
As long as The Hartford continues to own 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 affiliated group of
which The Hartford is the common parent. The Hartford and its non-life
subsidiaries filed a single consolidated Federal income tax return for 1998 and
1997 and intend to file a separate consolidated Federal income tax return for
1999. The life insurance companies filed a separate consolidated Federal income
tax return for 1998 and 1997 and intend to file a separate consolidated Federal
income tax return for 1999. Federal income taxes (received) paid by the Company
for operations and capital gains (losses) were $(8,815), $25,780, and $(14,499)
in 1999, 1998 and 1997, respectively. The effective tax rate was (73)%, 27%, and
(28)% in 1999, 1998 and 1997, respectively.
F-12
<PAGE>
The following schedule provides a reconciliation of the tax provision (including
realized capital gains(losses)) at the U.S. Federal Statutory rate to Federal
income tax (benefit) expense (in millions):
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
------------------
Tax provision at U.S. Federal Statutory rate $ 5 $48 $ 20
Tax deferred acquisition costs 31 25 25
Statutory to tax reserve differences (7) 8 1
Investments (31) (60) (61)
Other (8) 15 (1)
------------------
FEDERAL INCOME TAX (BENEFIT) EXPENSE $(10) $36 $(16)
------------------
</TABLE>
7. CAPITAL AND SURPLUS AND SHAREHOLDER DIVIDEND RESTRICTIONS:
The maximum amount of dividends which can be paid to shareholders by Connecticut
domiciled insurance companies, without prior approval, is generally restricted
to the greater of 10% of surplus as of the preceding December 31st or the net
gain from operations for the previous year. Dividends are paid as determined by
the Board of Directors and are not cumulative. No dividends were paid in 1999,
1998 or 1997. The amount available for dividend in 2000 is approximately
$60,855.
8. PENSION, RETIREMENT, AND OTHER POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS:
All employees that work for The Hartford's life insurance companies 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 Hartford'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,
as amended, and the maximum amount that can be deducted for U.S. Federal income
tax purposes. Generally, pension costs are funded through the purchase of group
pension contracts sold by affiliates. The costs that were allocated to the
Company for pension related expenses were $762, $1,045 and $840 for 1999, 1998
and 1997, respectively.
Employees of The Hartford's life insurance companies are also provided, through
The Hartford, certain health care and life insurance benefits for eligible
retired employees. The contribution for health care benefits depends on the
retiree's date of retirement and years of service. In addition, this benefit
plan has a defined dollar cap, which limits average company contributions. The
Hartford 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. Postretirement health care and life insurance benefits
expense allocated to the Company was not material to the results of operations
for 1999, 1998 or 1997.
The assumed rate in the per capita cost of health care (the health care trend
rate) was 7.1% for 1999, decreasing ratably to 5.0% in the year 2003. Increasing
the health care trend rates by one percent per year would have an immaterial
impact on the accumulated postretirement benefit obligation and the annual
expense. To the extent that the actual experience differs from the inherent
assumptions, the effect will be amortized over the average future service of
covered employees.
Substantially all of The Hartford's life insurance companies' employees are
eligible to participate in The Hartford's Investment and Savings Plan. Under
this plan, designated contributions, which may be invested in Class A Common
Stock of HLI or certain other investments, are matched to a limit of 3% of
compensation.
9. SEPARATE ACCOUNTS:
The Company maintains separate account assets totaling $44.9 billion and $32.9
billion as of December 31, 1999 and 1998, respectively. Separate account assets
are segregated from other investments and reported at fair value. Separate
account liabilities are determined in accordance with prescribed actuarial
methodologies, which approximate the market value less applicable surrender
charges. The resulting surplus is recorded in the general account statement of
operations as a component of Net Transfers to Separate Accounts. The Company's
separate accounts are non-guaranteed, wherein the policyholder assumes
substantially all the investment risk and rewards. Investment income (including
investment gains and losses) and interest credited to policyholders on separate
account assets are not separately reflected in the statutory statements of
operations.
Separate account management fees, net of minimum guarantees, were $493 million,
$363 million, and $252 million in 1999, 1998 and 1997, respectively, and are
recorded as a component of fee income on the Company's statutory basis
Statements of Operations.
F-13
<PAGE>
10. COMMITMENTS AND CONTINGENT LIABILITIES:
(A) LITIGATION
The Company is involved in pending and threatened litigation in the normal
course of its business in which claims for alleged economic and punitive damages
have been asserted. Some of these cases have been filed as purported class
actions and some cases have been filed in certain jurisdictions that permit
punitive damage awards disproportionate to the actual damages incurred. Although
there can be no assurances, at the present time, the Company does not anticipate
that the ultimate liability, arising from such pending or threatened litigation,
will have a material adverse effect on the statutory capital and surplus of the
Company.
(B) GUARANTY FUNDS
Under insurance guaranty fund laws in each state, the District of Columbia and
Puerto Rico, insurers licensed to do business can be assessed by state insurance
guaranty associations for certain obligations of insolvent insurance companies
to policyholders and claimants. Recent regulatory actions against certain large
life insurers encountering financial difficulty have prompted various state
insurance guaranty associations to begin assessing life insurance companies for
the deemed losses. Most of these laws do provide, however, that an assessment
may be excused or deferred if it would threaten an insurer's solvency and
further provide annual limits on such assessments. Part of the assessments paid
by the Company pursuant to these laws may be used as credits for a portion of
the associated premium taxes. The Company paid guaranty fund assessments of
approximately $523, $1,043 and $1,544 in 1999, 1998, and 1997, respectively, of
which $318, $995, and $548 in 1999, 1998 and 1997, respectively were estimated
to be creditable against premium taxes.
(C) TAX MATTERS
The Company's Federal income tax returns are routinely audited by the Internal
Revenue Service ("IRS"). The Company's 1997 and 1996 Federal income tax returns
are currently under audit by the IRS. As of March 31, 2000, the audit was in its
initial stage and no material issues had been raised.
F-14
<PAGE>
PART C
<PAGE>
OTHER INFORMATION
Item 27. Exhibits
(a) Resolution of the Board of Directors of Hartford Life and Annuity
Insurance Company ("Hartford") authorizing the establishment of
the Separate Account. (1)
(b) Not Applicable.
(b) Principal Underwriting Agreement. (2)
(c) Form of Modified Single Premium Variable Life Insurance
Policy. (1)
(d) Form of Application for Modified Single Premium Variable Life
Insurance Policies. (1)
(f) Certificate of Incorporation of Hartford (3) and Bylaws
of Hartford. (2)
(g) Form of Reinsurance Contract. (4)
(h) Form of Participation Agreement. (4)
(i) Not Applicable.
(j) Not Applicable.
(k) Opinion and consent of Lynda Godkin, Senior Vice President,
General Counsel and Corporate Secretary.
- --------------------------------
(1) Incorporated by reference to Post-Effective Amendment No. 2 to the
Registration Statement on Form S-6, File No. 33-83650, of Hartford Life
and Annuity Insurance Company filed with the Securities and Exchange
Commission on May 1, 1995.
(2) Incorporated by reference to Post-Effective Amendment No. 3 to the
Registration Statement on Form S-6, File No. 33-83650, of Hartford Life
and Annuity Insurance Company filed with the Securities and Exchange
Commission on May 1, 1996.
(3) Incorporated by reference to Post-Effective Amendment No. 2 to the
Registration Statement on Form S-6, File No. 333-36349, of Hartford Life
and Annuity Insurance Company filed with the Securities and Exchange
Commission on August 4, 1998.
(4) Incorporated by reference to Post-Effective Amendment No. 4 to the
Registration Statement on Form S-6, File No. 333-36349, of Hartford Life
and Annuity Insurance Company filed with the Securities and Exchange
Commission on August 14, 1999.
<PAGE>
(l) Opinion and Consent of Deanne Osgood, FSA, MAAA.
(m) Not Applicable.
(n) Consent of Arthur Andersen LLP, Independent Public Accountants.
(o) No financial statement will be omitted.
(p) Not Applicable.
(q) Memorandum describing transfer and redemption procedures. (1)
(r) Power of Attorney.
(s) Organizational Chart.
Item 28. Officers and Directors.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
NAME POSITION WITH HARTFORD
- --------------------------------------------------------------------------------------------------
<S> <C>
- --------------------------------------------------------------------------------------------------
David A. Carlson Vice President
- --------------------------------------------------------------------------------------------------
Peter W. Cummins Senior Vice President
- --------------------------------------------------------------------------------------------------
Bruce W. Ferris Vice President
- --------------------------------------------------------------------------------------------------
Timothy M. Fitch Vice President & Actuary
- --------------------------------------------------------------------------------------------------
Mary Jane B. Fortin Vice President & Chief Accounting Officer
- --------------------------------------------------------------------------------------------------
David T. Foy Senior Vice President, Chief Financial Officer and
Treasurer, Director*
- --------------------------------------------------------------------------------------------------
Lynda Godkin Senior Vice President, General Counsel, and
Corporate Secretary, Director*
- --------------------------------------------------------------------------------------------------
Lois W. Grady Senior Vice President
- --------------------------------------------------------------------------------------------------
Stephen T. Joyce Senior Vice President
- --------------------------------------------------------------------------------------------------
Michael D. Keeler Vice President
- --------------------------------------------------------------------------------------------------
Robert A. Kerzner Senior Vice President
- --------------------------------------------------------------------------------------------------
Thomas M. Marra President, Director*
- --------------------------------------------------------------------------------------------------
Steven L. Matthiesen Vice President
- --------------------------------------------------------------------------------------------------
Deanne Osgood Vice President
- --------------------------------------------------------------------------------------------------
Craig R. Raymond Senior Vice President and Chief Actuary
- --------------------------------------------------------------------------------------------------
Lowndes A. Smith Chief Executive Officer, Director*
- --------------------------------------------------------------------------------------------------
David M. Znamierowski Senior Vice President and Chief Investment Officer,
Director*
- --------------------------------------------------------------------------------------------------
</TABLE>
Unless otherwise indicated, the principal business address of each of the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
- ---------------------------------------------------
* Denotes Board of Directors of Hartford.
<PAGE>
Item 29. Persons Controlled By or Under Common Control with the Depositor or
Registrant
Filed herewith as Exhibit (s).
Item 30: Indemnification
<PAGE>
Sections 33-770 to 33-778, inclusive, of the Connecticut General
Statutes ("CGS") provide that a corporation may provide indemnification
of or advance expenses to a director, officer, employee or agent.
Reference is hereby made to Section 33-771(e) of CGS regarding
indemnification of directors and Section 33-776(d) of CGS regarding
indemnification of officers, employees and agents of Connecticut
corporations. These statutes provide, in general, that Connecticut
corporations incorporated prior to January 1, 1997 shall, except to the
extent that their certificate of incorporation expressly provides
otherwise, indemnify their directors, officers, employees and agents
against "liability" (defined as the obligation to pay a judgment,
settlement, penalty, fine, including an excise tax assessed with
respect to an employee benefit plan, or reasonable expenses incurred
with respect to a proceeding) when (1) a determination is made pursuant
to Section 33-775 that the party seeking indemnification has met the
standard of conduct set forth in Section 33-771 or (2) a court has
determined that indemnification is appropriate pursuant to Section
33-774. Under Section 33-775, the determination of and the
authorization for indemnification are made (a) by the disinterested
directors, as defined in Section 33-770(3); (b) by special counsel; (c)
by the shareholders; or (d) in the case of indemnification of an
officer, agent or employee of the corporation, by the general counsel
of the corporation or such other officer(s) as the board of directors
may specify. Also, Section 33-772 provides that a corporation shall
indemnify an individual who was wholly successful on the merits or
otherwise against reasonable expenses incurred by him in connection
with a proceeding to which he was a party because he was a director of
the corporation. In the case of a proceeding by or in the right of the
corporation or with respect to conduct for which the director, officer,
agent or employee was adjudged liable on the basis that he received a
financial benefit to which he was not entitled, indemnification is
limited to reasonable expenses incurred in connection with the
proceeding against the corporation to which the individual was named a
party.
Under the Depositor's bylaws, the Depositor must indemnify both
directors and officers of the Depositor for (1) any claims and
liabilities to which they become subject by reason of being or having
been directors or officers of the Depositor and (2) legal and other
expenses incurred in defending against such claims, in each case, to
the extent such is consistent with statutory provisions.
Section 33-777 of CGS specifically authorizes a corporation to procure
indemnification insurance on behalf of an individual who was a
director, officer, employer or agent of the corporation. Consistent
with the statute, the directors and officers of the Depositor and
Hartford Securities Distribution Company, Inc. ("HSD") are covered
under a directors and
<PAGE>
officers liability insurance policy issued to The Hartford Financial
Services Group, Inc. and its subsidiaries.
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.
<PAGE>
Item 31. Principal Underwriters
(a) HSD acts as principal underwriter for the following investment
companies:
Hartford Life Insurance Company - Separate Account One
Hartford Life Insurance Company - Separate Account Two
Hartford Life Insurance Company - Separate Account Two (DC
Variable Account I)
Hartford Life Insurance Company - Separate Account Two (DC
Variable Account II)
Hartford Life Insurance Company - Separate Account Two (QP
Variable Account)
Hartford Life Insurance Company - Separate Account Two (Variable
Account "A")
Hartford Life Insurance Company - Separate Account Two (NQ
Variable Account)
Hartford Life Insurance Company - Putnam Capital Manager Trust
Separate Account
Hartford Life Insurance Company - Separate Account Three Hartford
Life Insurance Company - Separate Account Five Hartford Life
Insurance Company - Separate Account Seven Hartford Life and
Annuity Insurance Company - Separate Account
One
Hartford Life and Annuity Insurance Company - Putnam Capital
Manager Trust Separate Account Two
Hartford Life and Annuity Insurance Company - Separate Account
Three
Hartford Life and Annuity Insurance Company - Separate Account
Five
<PAGE>
Hartford Life and Annuity Insurance Company - Separate Account
Six
Hartford Life and Annuity Insurance Company - Separate Account
Seven
Hart Life Insurance Company VA - Separate Account One
Hart Life Insurance Company VL - Separate Account Two
American Maturity Life Insurance Company - Separate Account AMLVA
Servus Life Insurance Company of America VA - Separate Account
One
Servus Life Insurance Company of America VL - Separate Account
Two
(b) Directors and Officers of HSD
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address With Underwriter
------------------ ---------------------
<S> <C>
David A. Carlson Vice President
Peter W. Cummins Senior Vice President
David T. Foy Treasurer
Lynda Godkin Senior Vice President, General Counsel and
Corporate Secretary
George R. Jay Controller
Robert A. Kerzner Executive Vice President
Thomas M. Marra Executive Vice President, Director
Paul E. Olson Supervising Registered Principal
Lowndes A. Smith President and Chief Executive Officer, Director
</TABLE>
Unless otherwise indicated, the principal business address of each of the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
Item 32. Location of Accounts and Records
All of the accounts, books, records or other documents required to be
kept by Section 31(a) of the Investment Company Act of 1940 and rules
thereunder, are maintained by Hartford at 200 Hopmeadow Street,
Simsbury, Connecticut 06089.
Item 33. Management Services
All management contracts are discussed in Part A and Part B of this Registration
Statement.
Item 34. Representation of Reasonableness of Fees
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment Company
Act, the Registrant certifies that it meets all of the requirements for
effectiveness of this registration statement under rule 485(b) under the
Securities Act and has duly caused this registration statement to be signed on
its behalf by the undersigned, duly authorized, in the Town of Simsbury, and
State of Connecticut on the 11th day of April, 2000.
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
SEPARATE ACCOUNT FIVE
(Registrant)
*By: David T. Foy *By: /s/ Marianne O'Doherty
--------------------------------------- ------------------------
David T. Foy, Senior Vice President & Treasurer Marianne O'Doherty
Attorney-In-Fact
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
(Depositor)
*By: David T. Foy
---------------------------------------
David T. Foy, Senior Vice President & Treasurer
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.
David T. Foy, Senior Vice President, Chief
Financial Officer and Treasurer, Director*
Lynda Godkin, Senior Vice President, General *By: /s/ Marianne O'Doherty
Counsel and Corporate Secretary, Director* ----------------------
Thomas M. Marra, President, Director* Marianne O'Doherty
Lowndes A. Smith, Chief Executive Officer, Attorney-In-Fact
Director*
David M. Znamierowski, Senior Vice President Dated: April 11, 2000
and Chief Investment Officer, Director*
<PAGE>
EXHIBIT INDEX
1.1 Opinion and Consent of Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary.
1.2 Opinion and Consent of Deanne Osgood, FSA, MAAA.
1.3 Consent of Arthur Andersen LLP, Independent Public Accountants.
1.4 Power of Attorney.
1.5 Organizational Chart.
<PAGE>
April 6, 2000
[LOGO]
LYNDA GODKIN, SENIOR VICE PRESIDENT,
GENERAL COUNSEL & CORPORATE SECRETARY
Board of Directors
Hartford Life Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: SEPARATE ACCOUNT FIVE
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
FILE NO. 333-36349
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 policies (the "Policies") 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 Policies.
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 Policies, 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 Policies, when issued as contemplated by the Form S-6 Registration
Statement, will constitute legal, validly issued and binding obligations
of the Company.
<PAGE>
Board of Directors
April 6, 2000
Page 2
I hereby consent to the filing of this opinion as an exhibit to the Form S-6
Registration Statement for the Policies and the Account.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
<PAGE>
[LOGO]
DEANNE OSGOOD, FSA, MAAA
Vice President & Director of
Individual Annuity Product Management
April 6, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: SEPARATE ACCOUNT FIVE
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
FILE NO. 333-36349
Dear Sir/Madam:
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 utilizing a
reasonable estimation for expected fund operating expenses.
I hereby consent to the use of this opinion as an exhibit to the Form S-6
Registration Statement and to the reference to my name under the heading
"Experts" in the Statement of Additional Information included as a part of such
Form S-6 Registration Statement.
Very truly yours,
/s/ Deanne Osgood
Deanne Osgood, FSA, MAAA
Vice President & Director of Individual Annuity Product Management
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
Registration Statement File No. 333-36349 for Hartford Life and Annuity
Insurance Company Separate Account Five on Form S-6.
/s/ Arthur Andersen LLP
Hartford, Connecticut
April 7, 2000
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
POWER OF ATTORNEY
David T. Foy
Lynda Godkin
Thomas M. Marra
Lowndes A. Smith
David M. Znamierowski
do hereby jointly and severally authorize Lynda Godkin, Christine Repasy,
Marianne O'Doherty, Thomas S. Clark and Marta Czekajewski 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, and do hereby ratify such signatures heretofore made by such
persons.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
/s/ David T. Foy
- -------------------------------- Dated as of January 15, 2000
David T. Foy
/s/ Lynda Godkin
- -------------------------------- Dated as of January 15, 2000
Lynda Godkin
/s/ Thomas M. Marra
- -------------------------------- Dated as of January 15, 2000
Thomas M. Marra
/s/ Lowndes A. Smith
- -------------------------------- Dated as of January 15, 2000
Lowndes A. Smith
/s/ David M. Znamierowski
- -------------------------------- Dated as of January 15, 2000
David M. Znamierowski
<PAGE>
ORGANIZATIONAL CHART
<TABLE>
<CAPTION>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
---------------------------------------------
NUTMEG INSURANCE COMPANY |
(CONNECTICUT) THE HARTFORD INVESTMENT
| MANAGEMENT COMPANY
HARTFORD FIRE INSURANCE COMPANY (DELAWARE)
(CONNECTICUT) |
| |
HARTFORD ACCIDENT AND INDEMNITY COMPANY HARTFORD INVESTMENT
(CONNECTICUT) SERVICES, INC.
| (CONNECTICUT)
HARTFORD LIFE, INC.
(DELAWARE)
|
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
(CONNECTICUT)
|
|
|
-------------------------------------------------------------------------------------------------------------------------
| | | | | | | | |
HARTFORD LIFE | | | | | | PLANCO PLANCO
INTERNATIONAL, LTD.| | | | | | FINANCIAL INCORPORATED
(CONNECTICUT) | | | | | | SERVICES, (PENNSYLVANIA)
| | | | | | INCORPORATED
| | | | | | (PENNSYLVANIA)
| | | | | |
| HART LIFE HARTFORD FINANCIAL HARTFORD LIFE HARTFORD AMERICAN
| INSURANCE SERVICES LIFE INSURANCE COMPANY FINANCIAL MATURITY LIFE
| COMPANY INSURANCE COMPANY (CONNECTICUT) SERVICES, LLC INSURANCE COMPANY
| (CONNECTICUT) (CONNECTICUT) | (DELAWARE) (CONNECTICUT)
| | | |
| ------------------------------------- | AML FINANCIAL, INC.
| | | | | (CONNECTICUT)
|SERVUS LIFE HARTFORD HARTFORD |
| INSURANCE INTERNATIONAL LIFE AND |
| COMPANY LIFE REASSURANCE ANNUITY INSURANCE |
|(CONNECTICUT) CORPORATION COMPANY |
| (CONNECTICUT) (CONNECTICUT) |
| | |
| | |
| HARTFORD |
| LIFE, LTD. |
| (BERMUDA) |
| |
| |
----------| -----------------------------------------------------------------------
| | | | |
INTERNATIONAL HL INVESTMENT HARTFORD HARTFORD SECURITIES HARTFORD-COMPREHENSIVE
CORPORATE ADVISORS, LLC EQUITY SALES DISTRIBUTION EMPLOYEE
MARKETING GROUP, INC. (CONNECTICUT) COMPANY, INC. COMPANY, INC. BENEFIT SERVICE
(CONNECTICUT) | (CONNECTICUT) (CONNECTICUT) COMPANY
| | (CONNECTICUT)
| |
THE EVERGREEN HARTFORD INVESTMENT
GROUP, INC. FINANCIAL SERVICES
(NEW YORK) COMPANY
(DELAWARE)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
----------------------------------------------------------------------------------------------------------------------------
| | |
| | Hartford Accidental and Indemnity Company
| | (Connecticut)
| | |
| | Hartford Life, Inc
| | (Delaware)
| | |
| | Hartford Life and Accident Insurance Company
| | (Connecticut)
| | |
| | HARTFORD LIFE
| | -------INTERNATIONAL LTD.
| | | (CONNECTICUT)
| | | |
| | | ITT HARTFORD
| | | ----SUDAMERICANA
| | | | HOLDING S.A.
| | | | (ARGENTINA)
| | | |------------------------------------------------------
| | | | | |
| | | | ITT HARTFORD GALICIA INSTITUTO DE
| | | | SEGUROS VIDA COMPANIA SALTA COMPANIA DE
| | | |------DE VIDA S.A. DE SEGUROS S.A. SEGUROS DE VIDA S.A.
| | | | (URUGUAY) (ARGENTINA) (ARGENTINA)
| | | |
| | ICATU | | HARTFORD
| | HARTFORD | |---SEGUROS DE VIDA S.A.
| | SEGUROS S.A.----------| | (ARGENTINA)
| | (BRAZIL) |
| | | |
| | | | HARTFORD
| | -- ----------| |-------SEGUROS DE
| | | | | RETIRO S.A.
| | | | | (ARGENTINA)
|-----------|----------------|-------------------|--------------------------------------------------------------------------
| | | | |
| | | ICATU HARTFORD | CONSULTORA DE CAPITALES
| | | FUNDO DE PENSAO | S.A. SOCIEDAD GERENTE
| | | (BRAZIL) |----DE FONDOS COMUNES
| | | | | DE ENVERSION
| | | | | (ARGENTINA)
| | | ICATU HARTFORD |
| | | CAPITALIZACAO S.A. | CLARIDAD
| | | (BRAZIL) | ADMINISTRADORA DE
| | | | |---FONDOS DE JUBILACIONES
| | | BRAZILCAP | Y PENSIONES S.A.
| | | CAPITALIZACAO S.A. | (ARGENTINA)
| | | (BRAZIL) |
| | | |
| | -------------------------- |
| |--------------- | |
| | | |
HARTFORD FIRE HARTFORD FIRE | |------- SEGPOOL S.A.
INTERNATIONAL------------INTERNATIONAL, LTD. | | (ARGENTINA)
(GERMANY) GMBH (CONNECTICUT) | |
(WEST GERMANY) | |
| |
ICATU HARTFORD | | THESIS S.A.
ADMINISTRACAO | |-------- (ARGENTINA)
DE BENEFICIOS LTDA-- | |
(BRAZIL) |
|
|
|
|--------- U.O.R., S.A.
(ARGENTINA)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(DELAWARE)
|
NUTMEG INSURANCE COMPANY
(CONNECTICUT)
|
HARTFORD FIRE INSURANCE COMPANY
(CONNECTICUT)
|
- --------------------------------------------------------------------------------------------------------------------------------|
| |
THE HARTFORD INTERNATIONAL |
|-----------------------------------------------------------------------FINANCIAL SERVICES GROUP, INC. |
| | | (DELAWARE) |
| | | ----------------------|----------------- |
| | | | | | | |
ZWOLSCHE | | ITT HARTFORD LONDON AND | HARTFORD |
ALGEMEENE N.V. | | INTERNATIONAL, LTD. EDINBURGH | EUROPE, INC. |
(NETHERLANDS) | | (U.K.) INSURANCE GROUP, LTD.| (DELAWARE) |
| | | (U.K.) | |
| | | | | |
| | | ------------- | |
| | | | | |
| ITT ASSURANCES HARTFORD INTERNATIONAL | LONDON AND -THE HARTFORD |
| S.A. INSURANCE CO., N.V. |--- EDINBURGH INTERNATIONAL |
| ZWOLSCHE ALGEMEENE (FRANCE) (BELGIUM) | INSURANCE CO., LTD. FINANCIAL |
|----SCHADEVERZEKERING | | (U.K.) SERVICES |
--------| N.V.----------------------------------- | | | GROUP CIA |
| | (NETHERLANDS) | | | | DE SEGUROS Y |
Z.A. | | | | EXCESS INSURANCE REASEGUROS S.A.|
- --VERZEKERINGEN | | | | COMPANY LTD. (SPAIN) |
| N.V. | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| (BELGIUM) |------HERVERZEKERING B.V. | | | |
| | -----| (NETHERLANDS) | | | LONDON AND |
| | | | | | |--- EDINBURGH LIFE |
| Z.A. LUX S.A. | | | | ASSURANCE CO., LTD. |
| (LUXEMBURG) | ZWOLSCHE ALGEMEENE | | | (U.K.) |
| |--LEVENS-VERZEKERING N.V.------------ | | | |
| | (NETHERLANDS) | | | | |
- ----------------|------------------------------------|------------|------|--------------|---------------------------------------|
| | | | | | |
| -------- | | | | |
| | | | | | | |
| ZWOLSCHE | ZWOLSCHE ALGEMEENE ZWOLSCHE ALGEMEENE | | | |
| ALGEMEENE |-----HYPOTHEKEN N.V. BELEGGINGEN III B.V. | | | |
| EUROPA B.V. | (NETHERLANDS) (NETHERLANDS) | | | |
| (NETHERLANDS) | ---------- | | |
- --------| | | | | |
| EXPLOITATIEMAAT- BELEGGINGSMAAT- | | |
|----- SCHAPPIJ SCHAPPIJ | | |
| BUIZERDLAAN B.V. BUIZERDLAAN B.V. | | |
| (NETHERLANDS) (NETHERLANDS) | | |
| | | |
| | | -----
| HOLLAND | |-------------------------- |
|---- BELEGGINGSGROEP B.V. | | | |
(NETHERLANDS) | |----------------- | |
| -------| | | |
| | | | | |
| | | | | |
F.A. KNIGHT | MACALISTER & LONDON AND | HARTFORD FIRE
& SON N.V. | DUNDAS, LTD. EDINBURGH | INTERNATIONAL
(BELGIUM) | (SCOTLAND) TRUSTEES, LTD. | SERVICIOS
| (U.K.) | (SPAIN)
------------------------- -----------
| | |
FENCOURT QUOTEL LONDON AND
PRINTERS, LTD. INSURANCE EDINBURGH
(U.K.) SYSTEMS, LTD. SERVICES, LTD.
(U.K.) (U.K.)
|
EUROSURE
INSURANCE
MARKETING, LTD.
(U.K.)
</TABLE>
