<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NORTH AMERICAN
GOVERNMENT
MONEY SECURITIES
MARKET PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
----------------- ---------------
<S> <C> <C>
ASSETS:
Investments in Dean
Witter Select
Dimensions Funds:
Money Market
Portfolio
Shares 22,976
Cost $22,976
Market Value....... $22,976 --
North American
Government
Securities Portfolio
Shares 107
Cost $1,077
Market Value....... -- $1,087
Balanced Growth
Portfolio
Shares 256
Cost $3,641
Market Value....... -- --
Utilities Portfolio
Shares 1,417
Cost $23,944
Market Value....... -- --
Dividend Growth
Portfolio
Shares 5,732
Cost $113,070
Market Value....... -- --
Value-Added Market
Portfolio
Shares 1,238
Cost $23,865
Market Value....... -- --
Growth Portfolio
Shares 71
Cost $1,040
Market Value....... -- --
American Value
Portfolio
Shares 1,503
Cost $28,854
Market Value....... -- --
Global Equity
Portfolio
Shares 1,888
Cost $25,508
Market Value....... -- --
Developing Growth
Portfolio
Shares 2,042
Cost $39,099
Market Value....... -- --
Due from Hartford Life
Insurance Company..... -- --
Receivable from fund
shares sold........... -- --
------- ------
Total Assets........... 22,976 1,087
------- ------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- --
Payable for fund shares
purchased............. -- --
------- ------
Total Liabilities...... -- --
------- ------
Net Assets (variable
life contract
liabilities).......... $22,976 $1,087
------- ------
------- ------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 50
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
DIVIDEND VALUE-ADDED AMERICAN GLOBAL
BALANCED UTILITIES GROWTH MARKET GROWTH VALUE EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in Dean
Witter Select
Dimensions Funds:
Money Market
Portfolio
Shares 22,976
Cost $22,976
Market Value....... -- -- -- -- -- -- --
North American
Government
Securities Portfolio
Shares 107
Cost $1,077
Market Value....... -- -- -- -- -- -- --
Balanced Growth
Portfolio
Shares 256
Cost $3,641
Market Value....... $4,187 -- -- -- -- -- --
Utilities Portfolio
Shares 1,417
Cost $23,944
Market Value....... -- $26,511 -- -- -- -- --
Dividend Growth
Portfolio
Shares 5,732
Cost $113,070
Market Value....... -- -- $126,388 -- -- -- --
Value-Added Market
Portfolio
Shares 1,238
Cost $23,865
Market Value....... -- -- -- $23,762 -- -- --
Growth Portfolio
Shares 71
Cost $1,040
Market Value....... -- -- -- -- $1,301 -- --
American Value
Portfolio
Shares 1,503
Cost $28,854
Market Value....... -- -- -- -- -- $35,027 --
Global Equity
Portfolio
Shares 1,888
Cost $25,508
Market Value....... -- -- -- -- -- -- $27,735
Developing Growth
Portfolio
Shares 2,042
Cost $39,099
Market Value....... -- -- -- -- -- -- --
Due from Hartford Life
Insurance Company..... -- -- -- -- -- -- --
Receivable from fund
shares sold........... -- -- -- -- -- -- --
------ ------------ ------------ ------------ ------ ------------ ------------
Total Assets........... 4,187 26,511 126,388 23,762 1,301 35,027 27,735
------ ------------ ------------ ------------ ------ ------------ ------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- -- -- -- -- -- --
Payable for fund shares
purchased............. -- -- -- -- -- -- --
------ ------------ ------------ ------------ ------ ------------ ------------
Total Liabilities...... -- -- -- -- -- -- --
------ ------------ ------------ ------------ ------ ------------ ------------
Net Assets (variable
life contract
liabilities).......... $4,187 $26,511 $126,388 $23,762 $1,301 $35,027 $27,735
------ ------------ ------------ ------------ ------ ------------ ------------
------ ------------ ------------ ------------ ------ ------------ ------------
<CAPTION>
DEVELOPING
GROWTH
PORTFOLIO
SUB-ACCOUNT
------------
<S> <C>
ASSETS:
Investments in Dean
Witter Select
Dimensions Funds:
Money Market
Portfolio
Shares 22,976
Cost $22,976
Market Value....... --
North American
Government
Securities Portfolio
Shares 107
Cost $1,077
Market Value....... --
Balanced Growth
Portfolio
Shares 256
Cost $3,641
Market Value....... --
Utilities Portfolio
Shares 1,417
Cost $23,944
Market Value....... --
Dividend Growth
Portfolio
Shares 5,732
Cost $113,070
Market Value....... --
Value-Added Market
Portfolio
Shares 1,238
Cost $23,865
Market Value....... --
Growth Portfolio
Shares 71
Cost $1,040
Market Value....... --
American Value
Portfolio
Shares 1,503
Cost $28,854
Market Value....... --
Global Equity
Portfolio
Shares 1,888
Cost $25,508
Market Value....... --
Developing Growth
Portfolio
Shares 2,042
Cost $39,099
Market Value....... $42,486
Due from Hartford Life
Insurance Company..... --
Receivable from fund
shares sold........... --
------------
Total Assets........... 42,486
------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... --
Payable for fund shares
purchased............. --
------------
Total Liabilities...... --
------------
Net Assets (variable
life contract
liabilities).......... $42,486
------------
------------
</TABLE>
---------------------------------------------------- 51
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
EMERGING DIVERSIFIED
MARKETS INCOME
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------ ------------
<S> <C> <C>
ASSETS:
Investments in Dean
Witter Select
Dimensions Funds:
Emerging Market
Portfolio
Shares 83
Cost $1,015
Market Value....... $659 --
Diversified Income
Portfolio
Shares 3,192
Cost $32,583
Market Value....... -- $31,695
Mid-Cap Growth
Portfolio
Shares 516
Cost $5,473
Market Value....... -- --
Investments in Morgan
Stanley Universal
Funds:
High Yield Portfolio
Shares 97
Cost $1,068
Market Value....... -- --
Mid-Cap Portfolio
Shares 68
Cost $1,032
Market Value....... -- --
Emerging Markets Debt
Fund
Shares 2,420
Cost $22,689
Market Value....... -- --
Investments in Van
Kampen Funds:
Strategic Stock Fund
Shares 87
Cost $1,000
Market Value....... -- --
Enterprise Fund
Shares 47
Cost $1,000
Market Value....... -- --
Due from Hartford Life
Insurance Company..... -- --
Receivable from fund
shares sold........... -- --
----- ------------
Total Assets........... 659 31,695
----- ------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- --
Payable for fund shares
purchased............. -- --
----- ------------
Total Liabilities...... -- --
----- ------------
Net Assets (variable
life contract
liabilities).......... $659 $31,695
----- ------------
----- ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 52
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
MID-CAP EMERGING
GROWTH HIGH YIELD MID-CAP MARKETS DEBT STRATEGIC STOCK ENTERPRISE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ ------------ ------------- ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in Dean
Witter Select
Dimensions Funds:
Emerging Market
Portfolio
Shares 83
Cost $1,015
Market Value....... -- -- -- -- -- --
Diversified Income
Portfolio
Shares 3,192
Cost $32,583
Market Value....... -- -- -- -- -- --
Mid-Cap Growth
Portfolio
Shares 516
Cost $5,473
Market Value....... $6,120 -- -- -- -- --
Investments in Morgan
Stanley Universal
Funds:
High Yield Portfolio
Shares 97
Cost $1,068
Market Value....... -- $1,006 -- -- -- --
Mid-Cap Portfolio
Shares 68
Cost $1,032
Market Value....... -- -- $1,006 -- -- --
Emerging Markets Debt
Fund
Shares 2,420
Cost $22,689
Market Value....... -- -- -- $14,765 -- --
Investments in Van
Kampen Funds:
Strategic Stock Fund
Shares 87
Cost $1,000
Market Value....... -- -- -- -- $1,033 --
Enterprise Fund
Shares 47
Cost $1,000
Market Value....... -- -- -- -- -- $1,060
Due from Hartford Life
Insurance Company..... -- -- -- -- -- --
Receivable from fund
shares sold........... -- -- -- -- -- --
------ ------ ------ ------------- ------ ------
Total Assets........... 6,120 1,006 1,006 14,765 1,033 1,060
------ ------ ------ ------------- ------ ------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- -- -- -- -- --
Payable for fund shares
purchased............. -- -- -- -- -- --
------ ------ ------ ------------- ------ ------
Total Liabilities...... -- -- -- -- -- --
------ ------ ------ ------------- ------ ------
Net Assets (variable
life contract
liabilities).......... $6,120 $1,006 $1,006 $14,765 $1,033 $1,060
------ ------ ------ ------------- ------ ------
------ ------ ------ ------------- ------ ------
</TABLE>
---------------------------------------------------- 53
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ ------------- -----------
<S> <C> <C> <C>
INDIVIDUAL DEFERRED ANNUITY
CONTRACTS IN THE ACCUMULATION
PERIOD:
Money Market Portfolio........... 21,164 $ 1.085641 $ 22,976
North American Government
Securities Portfolio............ 100 10.866400 1,087
Balanced Portfolio............... 327 12.817596 4,187
Utilities Portfolio.............. 1,761 15.051545 26,511
Dividend Growth Portfolio........ 9,458 13.363243 126,388
Value-Added Market Portfolio..... 1,829 12.991413 23,762
Growth Portfolio................. 100 13.000700 1,301
American Value Portfolio......... 2,121 16.515884 35,027
Global Equity Portfolio.......... 2,408 11.515729 27,735
Developing Growth Portfolio...... 3,237 13.126689 42,486
Emerging Markets Portfolio....... 100 6.586700 659
Diversified Income Portfolio..... 2,859 11.084591 31,695
Mid-Cap Growth Portfolio......... 489 12.514755 6,120
-----------
SUB-TOTAL........................ 349,934
-----------
GROUP DEFERRED ANNUITY CONTRACTS IN
THE ACCUMULATION PERIOD:
High Yield Portfolio............. 100 10.053100 1,006
Mid-Cap Portfolio................ 100 10.058200 1,006
Emerging Markets Debt
Portfolio....................... 2,177 6.783341 14,765
Strategic Stock Portfolio........ 100 10.329000 1,033
Enterprise Portfolio............. 100 10.596300 1,060
-----------
SUB-TOTAL........................ 18,870
-----------
GRAND TOTAL........................ $ 368,804
-----------
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 54
----------------------------------------------------
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
NORTH AMERICAN
GOVERNMENT
MONEY MARKET SECURITIES
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------- ---------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $1,723 $47
------ ---
Net investment income
(loss).............. 1,723 47
------ ---
CAPITAL GAINS INCOME..... -- --
------ ---
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... -- --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ -- (2)
------ ---
Net gain (loss) on
investments......... -- (2)
------ ---
Net increase
(decrease) in net
assets resulting
from operations..... $1,723 $45
------ ---
------ ---
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 56
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
DIVIDEND VALUE-ADDED AMERICAN GLOBAL
BALANCED UTILITIES GROWTH MARKET GROWTH VALUE EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $108 $ 310 $ 1,991 $ 170 -$- $ 167 $ 388
----- ------ ------------ ----- ----- ------------ ------
Net investment income
(loss).............. 108 310 1,991 170 -- 167 388
----- ------ ------------ ----- ----- ------------ ------
CAPITAL GAINS INCOME..... 86 273 4,319 331 34 1,308 96
----- ------ ------------ ----- ----- ------------ ------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... -- 2 5,289 (3) -- 5,367 5,127
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 338 2,358 9,599 (249) 118 3,491 2,441
----- ------ ------------ ----- ----- ------------ ------
Net gain (loss) on
investments......... 338 2,360 14,888 (252) 118 8,858 7,568
----- ------ ------------ ----- ----- ------------ ------
Net increase
(decrease) in net
assets resulting
from operations..... $532 $2,943 $21,198 $ 249 $152 $10,333 $8,052
----- ------ ------------ ----- ----- ------------ ------
----- ------ ------------ ----- ----- ------------ ------
<CAPTION>
DEVELOPING
GROWTH
PORTFOLIO
SUB-ACCOUNT
------------
<S> <C>
INVESTMENT INCOME:
Dividends.............. $ 76
------
Net investment income
(loss).............. 76
------
CAPITAL GAINS INCOME..... 58
------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (34)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 1,841
------
Net gain (loss) on
investments......... 1,807
------
Net increase
(decrease) in net
assets resulting
from operations..... $1,941
------
------
</TABLE>
---------------------------------------------------- 57
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EMERGING DIVERSIFIED
MARKETS INCOME
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------ ------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 9 $ 1,650
------------ ------------
Net investment income
(loss).............. 9 1,650
------------ ------------
CAPITAL GAINS INCOME..... 2 42
------------ ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (1,107) --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (281) (947)
------------ ------------
Net gain (loss) on
investments......... (1,388) (947)
------------ ------------
Net increase
(decrease) in net
assets resulting
from operations..... $(1,377) $ 745
------------ ------------
------------ ------------
</TABLE>
* From inception, April 1, 1998, to December 31, 1998.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 58
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
MID-CAP EMERGING
GROWTH HIGH YIELD MID-CAP MARKETS DEBT STRATEGIC STOCK ENTERPRISE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT* SUB-ACCOUNT* SUB-ACCOUNT* SUB-ACCOUNT* SUB-ACCOUNT*
------------ ------------- ------------- ------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 39 $ 57 $ 2 $ 1,756 --$ --$
----- --- --- ------------- ----- -----
Net investment income
(loss).............. 39 57 2 1,756 -- --
----- --- --- ------------- ----- -----
CAPITAL GAINS INCOME..... 53 11 29 -- -- --
----- --- --- ------------- ----- -----
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... -- -- -- (60) -- --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 236 (62) (26) (7,924) 33 60
----- --- --- ------------- ----- -----
Net gain (loss) on
investments......... 236 (62) (26) (7,984) 33 60
----- --- --- ------------- ----- -----
Net increase
(decrease) in net
assets resulting
from operations..... $328 $ 6 $ 5 $(6,228) $ 33 $ 60
----- --- --- ------------- ----- -----
----- --- --- ------------- ----- -----
</TABLE>
* From inception, April 1, 1998, to December 31, 1998.
---------------------------------------------------- 59
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
NORTH AMERICAN
GOVERNMENT
MONEY MARKET SECURITIES
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 1,723 $ 47
Capital gains income... -- --
Net realized gain
(loss) on security
transactions.......... -- --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ -- (2)
------------- ------
Net increase (decrease)
in net assets
resulting from
operations............ 1,723 45
------------- ------
UNIT TRANSACTIONS:
Purchases.............. 164,406 --
Net transfers.......... (54,386) --
Surrenders for benefit
payments and fees..... (110,832) --
Loan withdrawals....... -- --
Cost of insurance...... (302) --
------------- ------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (1,114) --
------------- ------
Total increase
(decrease) in net
assets................ 609 45
NET ASSETS:
Beginning of period.... 22,367 1,042
------------- ------
End of period.......... $ 22,976 $1,087
------------- ------
------------- ------
</TABLE>
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NORTH AMERICAN
GOVERNMENT
MONEY MARKET SECURITIES
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 950 $ 30
Capital gains income... -- --
Net realized gain
(loss) on security
transactions.......... -- --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ -- 12
------------- ------
Net increase (decrease)
in net assets
resulting from
operations............ 950 42
------------- ------
UNIT TRANSACTIONS:
Purchases.............. 259,950 1,000
Net transfers.......... (237,803) --
Surrenders for benefit
payments and fees..... (491) --
Loan withdrawals....... -- --
Cost of insurance...... (239) --
------------- ------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 21,417 1,000
------------- ------
Total increase
(decrease) in net
assets................ 22,367 1,042
NET ASSETS:
Beginning of period.... -- --
------------- ------
End of period.......... $ 22,367 $1,042
------------- ------
------------- ------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 60
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
DIVIDEND VALUE-ADDED AMERICAN GLOBAL
BALANCED UTILITIES GROWTH MARKET GROWTH VALUE EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 108 $ 310 $ 1,991 $ 170 $-- $ 167 $ 388
Capital gains income... 86 273 4,319 331 34 1,308 96
Net realized gain
(loss) on security
transactions.......... -- 2 5,289 (3) -- 5,367 5,127
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 338 2,358 9,599 (249) 118 3,491 2,441
------ ------------ ------------ ------------ ------ ------------ ------------
Net increase (decrease)
in net assets
resulting from
operations............ 532 2,943 21,198 249 152 10,333 8,052
------ ------------ ------------ ------------ ------ ------------ ------------
UNIT TRANSACTIONS:
Purchases.............. -- -- -- -- -- -- --
Net transfers.......... -- 22,647 1,712 22,647 -- (20,608) (37,288)
Surrenders for benefit
payments and fees..... (50) (225) (3,479) (212) -- (2,132) (2,292)
Loan withdrawals....... -- -- 1,673 -- -- 1,673 1,723
Cost of insurance...... (18) (86) (674) (80) -- (164) (222)
------ ------------ ------------ ------------ ------ ------------ ------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (68) 22,336 (768) 22,355 -- (21,231) (38,079)
------ ------------ ------------ ------------ ------ ------------ ------------
Total increase
(decrease) in net
assets................ 464 25,279 20,430 22,604 152 (10,898) (30,027)
NET ASSETS:
Beginning of period.... 3,723 1,232 105,958 1,158 1,149 45,925 57,762
------ ------------ ------------ ------------ ------ ------------ ------------
End of period.......... $4,187 $26,511 $126,388 $23,762 $1,301 $35,027 $27,735
------ ------------ ------------ ------------ ------ ------------ ------------
------ ------------ ------------ ------------ ------ ------------ ------------
<CAPTION>
DEVELOPING
GROWTH
PORTFOLIO
SUB-ACCOUNT
------------
<S> <C>
OPERATIONS:
Net investment income
(loss)................ $ 76
Capital gains income... 58
Net realized gain
(loss) on security
transactions.......... (34)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 1,841
------------
Net increase (decrease)
in net assets
resulting from
operations............ 1,941
------------
UNIT TRANSACTIONS:
Purchases.............. --
Net transfers.......... 21,315
Surrenders for benefit
payments and fees..... (510)
Loan withdrawals....... --
Cost of insurance...... (192)
------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 20,613
------------
Total increase
(decrease) in net
assets................ 22,554
NET ASSETS:
Beginning of period.... 19,932
------------
End of period.......... $42,486
------------
------------
</TABLE>
<TABLE>
<CAPTION>
DIVIDEND VALUE-ADDED AMERICAN GLOBAL
BALANCED UTILITIES GROWTH MARKET GROWTH VALUE EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 17 $ 18 $ 729 $ 10 $ 1 $ 33 $ 111
Capital gains income... 3 4 37 2 5 22 2
Net realized gain
(loss) on security
transactions.......... -- -- 49 -- -- 64 58
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 208 210 3,719 146 143 2,682 (214)
------ ------------ ------------ ------ ------ ------------ ------------
Net increase (decrease)
in net assets
resulting from
operations............ 228 232 4,534 158 149 2,801 (43)
------ ------------ ------------ ------ ------ ------------ ------------
UNIT TRANSACTIONS:
Purchases.............. 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Net transfers.......... 2,500 -- 102,911 -- -- 43,968 58,859
Surrenders for benefit
payments and fees..... (4) -- (607) -- -- (138) (256)
Loan withdrawals....... -- -- (1,647) -- -- (1,653) (1,700)
Cost of insurance...... (1) -- (233) -- -- (53) (98)
------ ------------ ------------ ------ ------ ------------ ------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 3,495 1,000 101,424 1,000 1,000 43,124 57,805
------ ------------ ------------ ------ ------ ------------ ------------
Total increase
(decrease) in net
assets................ 3,723 1,232 105,958 1,158 1,149 45,925 57,762
NET ASSETS:
Beginning of period.... -- -- -- -- -- -- --
------ ------------ ------------ ------ ------ ------------ ------------
End of period.......... $3,723 $ 1,232 $105,958 $1,158 $1,149 $45,925 $57,762
------ ------------ ------------ ------ ------ ------------ ------------
------ ------------ ------------ ------ ------ ------------ ------------
<CAPTION>
DEVELOPING
GROWTH
PORTFOLIO
SUB-ACCOUNT
------------
<S> <C>
OPERATIONS:
Net investment income
(loss)................ $ 7
Capital gains income... --
Net realized gain
(loss) on security
transactions.......... 8
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 1,546
------------
Net increase (decrease)
in net assets
resulting from
operations............ 1,561
------------
UNIT TRANSACTIONS:
Purchases.............. 1,000
Net transfers.......... 17,580
Surrenders for benefit
payments and fees..... (151)
Loan withdrawals....... --
Cost of insurance...... (58)
------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 18,371
------------
Total increase
(decrease) in net
assets................ 19,932
NET ASSETS:
Beginning of period.... --
------------
End of period.......... $19,932
------------
------------
</TABLE>
---------------------------------------------------- 61
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EMERGING DIVERSIFIED
MARKETS INCOME
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 9 $ 1,650
Capital gains income... 2 42
Net realized gain
(loss) on security
transactions.......... (1,107) --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (281) (947)
------------ ------------
Net increase (decrease)
in net assets
resulting from
operations............ (1,377) 745
------------ ------------
UNIT TRANSACTIONS:
Purchases.............. -- --
Net transfers.......... 1,107 22,647
Surrenders for benefit
payments and fees..... 1 (367)
Loan withdrawals....... -- --
Cost of insurance...... -- (137)
------------ ------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 1,108 22,143
------------ ------------
Total increase
(decrease) in net
assets................ (269) 22,888
NET ASSETS:
Beginning of period.... 928 8,807
------------ ------------
End of period.......... $ 659 $ 31,695
------------ ------------
------------ ------------
</TABLE>
* From inception, April 1, 1998, to December 31, 1998.
HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
EMERGING DIVERSIFIED
MARKETS INCOME
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 3 $ 348
Capital gains income............. -- 2
Net realized gain (loss) on
security transactions........... -- --
Net unrealized appreciation
(depreciation) of investments
during the period............... (75) 59
------ ------
Net increase (decrease) in net
assets resulting from
operations...................... (72) 409
------ ------
UNIT TRANSACTIONS:
Purchases........................ 1,000 1,000
Net transfers.................... -- 7,487
Surrenders for benefit payments
and fees........................ -- --
Loan withdrawals................. -- (66)
Cost of insurance................ -- (23)
------ ------
Net increase (decrease) in net
assets resulting from unit
transactions.................... 1,000 8,398
------ ------
Total increase (decrease) in net
assets.......................... 928 8,807
NET ASSETS:
Beginning of period.............. -- --
------ ------
End of period.................... $ 928 $8,807
------ ------
------ ------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
---------------------------------------------------- 62
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
MID-CAP EMERGING
GROWTH HIGH YIELD MID-CAP MARKETS DEBT STRATEGIC STOCK ENTERPRISE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT* SUB-ACCOUNT* SUB-ACCOUNT* SUB-ACCOUNT* SUB-ACCOUNT*
------------ ------------- ------------- ------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 39 $ 57 $ 2 $ 1,756 -$- $--
Capital gains income... 53 11 29 -- -- --
Net realized gain
(loss) on security
transactions.......... -- -- -- (60) -- --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 236 (62) (26) (7,924) 33 60
------ ------ ------ ------------- ------ ------
Net increase (decrease)
in net assets
resulting from
operations............ 328 6 5 (6,228) 33 60
------ ------ ------ ------------- ------ ------
UNIT TRANSACTIONS:
Purchases.............. -- 1,000 1,000 1,000 1,000 1,000
Net transfers.......... -- -- -- 20,208 -- --
Surrenders for benefit
payments and fees..... (84) -- 1 (155) -- --
Loan withdrawals....... -- -- -- -- -- --
Cost of insurance...... (30) -- -- (60) -- --
------ ------ ------ ------------- ------ ------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... (114) 1,000 1,001 20,993 1,000 1,000
------ ------ ------ ------------- ------ ------
Total increase
(decrease) in net
assets................ 214 1,006 1,006 14,765 1,033 1,060
NET ASSETS:
Beginning of period.... 5,906 -- -- -- -- --
------ ------ ------ ------------- ------ ------
End of period.......... $6,120 $1,006 $1,006 $14,765 $1,033 $1,060
------ ------ ------ ------------- ------ ------
------ ------ ------ ------------- ------ ------
</TABLE>
<TABLE>
<CAPTION>
MID-CAP
GROWTH
PORTFOLIO
SUB-ACCOUNT
------------
<S> <C>
OPERATIONS:
Net investment income (loss)..... $ 23
Capital gains income............. --
Net realized gain (loss) on
security transactions........... --
Net unrealized appreciation
(depreciation) of investments
during the period............... 411
------
Net increase (decrease) in net
assets resulting from
operations...................... 434
------
UNIT TRANSACTIONS:
Purchases........................ 1,000
Net transfers.................... 4,498
Surrenders for benefit payments
and fees........................ --
Loan withdrawals................. (19)
Cost of insurance................ (7)
------
Net increase (decrease) in net
assets resulting from unit
transactions.................... 5,472
------
Total increase (decrease) in net
assets.......................... 5,906
NET ASSETS:
Beginning of period.............. --
------
End of period.................... $5,906
------
------
</TABLE>
---------------------------------------------------- 63
----------------------------------------------------
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. ORGANIZATION:
Separate Account Five (the Account) is a separate investment account with
Hartford Life 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). Cost of investments
sold is determined on the basis of identified cost. 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 Morgan Stanley Dean
Witter Select Dimensions Investment Series, the Morgan Stanley Universal
Funds, Inc. and Van Kampen American Capital Life Investment Trust Mutual
Funds is valued at the closing net asset value per share as determined by
the appropriate Fund as of December 31, 1998.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as an
insurance company under the Internal Revenue Code. Under current law, no
federal income taxes are payable with respect to the operations of the
Account.
d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the financial statements and the reported
amounts of income and expenses during the period. Operating results in
the future could vary from the amounts derived from management's
estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
a) COST OF INSURANCE CHARGE--In accordance with terms of the contracts, the
Company makes deductions for costs of insurance to cover the Company's
anticipated mortality cost. 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 UNDERTAKINGS--The Company, as issuer of variable
annuity contracts, provides the mortality and expense undertakings and,
with respect to the Account, receives a maximum annual fee of 0.90% of
the Account's average daily net assets. The Company also provides
administrative services and receives an annual fee of 0.40% of the
Account's average daily net assets. These expenses are reflected in
Surrenders for benefit payments and fees on the accompanying statements
of changes in net assets.
c) DEDUCTION OF ANNUAL MAINTENANCE FEE--Annual maintenance fees are deducted
through termination of units of interest from applicable contract owner's
accounts, in accordance with the terms of the contracts. These expenses
are reflected in Surrenders for benefit payments and fees on the
accompanying statements of changes in net assets.
d) TAX EXPENSE CHARGE--The Company will deduct monthly from the account
value a tax expense charge equal to an annual rate of 0.40% for the first
ten years. During the first nine policy years, a premium tax charge will
be imposed on full or partial surrenders at a maximum rate of 2.25%.
These expenses are reflected in Surrenders for benefit payments and fees
on the accompanying statements of changes in net assets.
______________________________________ 64 ______________________________________
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
TO HARTFORD LIFE 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 Insurance Company Separate Account Five (Money Market Portfolio,
North American Government Securities Portfolio, Balanced Portfolio, Utilities
Portfolio, Dividend Growth Portfolio, Value-Added Market Portfolio, Growth
Portfolio, American Value Portfolio, Global Equity Portfolio, Developing Growth
Portfolio, Emerging Markets Portfolio, Diversified Income Portfolio, Mid-Cap
Growth Portfolio, High Yield Portfolio, Mid-Cap Portfolio, Emerging Markets Debt
Portfolio, Strategic Stock Portfolio, and Enterprise Portfolio), (collectively,
the Account) as of December 31, 1998, 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,
1998, 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 15, 1999 ARTHUR ANDERSEN LLP
______________________________________ 65 ______________________________________
